NEITHER THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE
WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY
LAWS. THIS NOTE AND THE SECURITIES ISSUABLE UPON
CONVERSION OF THIS NOTE MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
SECURITIES.
SECURED CONVERTIBLE PROMISSORY NOTE
$4,000,000
December
8, 2006
Chicago,
Illinois
1.
Agreement to Pay . FOR VALUE RECEIVED,
MEDIRECT LATINO INC. a Florida corporation ("Borrower") hereby
promises to pay to the order of GRANITE CREEK FLEXCAP I, L.P.,
a Delaware limited partnership, its successors and assigns
("Lender"), the principal sum of Four Million Dollars
($4,000,000) (the "Loan"), or so much thereof that may be
advanced pursuant to that certain Loan and Security Agreement
dated as of December 8, 2006 ("Loan Agreement") by and among
Borrower, Agent and Lenders (as each is defined in the Loan
Agreement), at the place and in the manner hereinafter
provided, together with interest thereon at the rate or rates
described below, and any and all other amounts which may be
due and payable hereunder from time to time.
2.
Interest Rate.
2.1
Interest Prior to Default . Unless an event
of default shall have occurred, interest shall accrue on the
outstanding principal balance of this Note from the date
hereof through June 8, 2010 ("Maturity Date"), at an annual
rate equal to the twelve percent (12.00%) (the "Interest
Rate").
2.2
Interest After Default . From and after the
Maturity Date or upon the occurrence and during the
continuance of an Event of Default, interest shall accrue on
the balance of principal remaining unpaid during any such
period at an annual rate ("Default Rate") equal to eighteen
percent (18%); provided, however, in no event shall the
Default Rate exceed the maximum rate permitted by
law. The interest accruing under this paragraph
shall be immediately due and payable by Borrower to the holder
of this Note upon demand and shall be additional indebtedness
evidenced by this Note.
2.3
Interest Calculation . Interest on this Note
shall be calculated on the basis of a 360-day year and the
actual number of days elapsed in any portion of a month in
which interest is due.
2.4
Regulatory Limitations on Payment of Interest
. In no event shall Lender be entitled to interest
exceeding the maximum rate permitted by law or under the
applicable regulations promulgated by the United States Small
Business Administration (the "SBA"). If any excess
interest is provided for or shall be adjudicated to be so
provided for in this Note, or if any payment or other
consideration under this Note, the Loan Agreement or any other
transaction document contemplated in connection with the Loan
is determined by the SBA to exceed the amount permitted under
applicable regulations promulgated by the SBA, then in such
event: (i) the provisions of this paragraph shall
govern and control; (ii) Borrower shall not be obligated to
pay the amount of such interest or other payment or
consideration to the extent that it is in excess of the
maximum amount permitted by law, and the same shall be
construed as a mutual mistake of the parties; and (iii) any
such excess which may have been collected or attributed shall,
at the option of Lender, be subtracted from the then unpaid
principal amount hereof or refunded to Borrower.
3.
Payment Terms .
3.1
Principal and Interest . Payments of
principal and interest due under this Note, if not sooner
declared to be due in accordance with the provisions hereof or
converted into the Borrower's shares pursuant to Section 6
hereof, shall be made as follows:
(a) Interest
accruing on the principal balance of this Note from time to
time shall be due and payable monthly, in advance, commencing
on December 15, 2006 and on the fifteenth day of each calendar
month thereafter and on the Maturity Date.
(b) The
unpaid principal balance of this Note, if not sooner paid or
declared to be due in accordance with the terms hereof,
together with all accrued and unpaid interest thereon and any
other amounts due and payable hereunder or under any other
Transaction Documents, shall be due and payable in full on the
Maturity Date.
3.2
Application of Payments . All payments and
prepayments on account of the indebtedness evidenced by this
Note shall be applied in accordance with the terms and
provisions of the Loan Agreement.
3.3
Method of Payments . All payments of
principal and interest hereunder shall be paid by automatic
debit, wire transfer, check or in coin or currency which, at
the time or times of payment, is the legal tender for public
and private debts in the United States of America and shall be
made to the Lender's Payment Account or such other place as
the Lender shall from time to time identify in writing, and in
the absence of such appointment, then at the offices of Lender
at 222 West Adams, Suite 1980, Chicago, Illinois
60606. Payment made by check shall be deemed paid
on the date such check is delivered to the Lender's Payment
Account or the Lender receives such check; provided, however,
that if such check is subsequently returned unpaid due to
insufficient funds or otherwise, the payment shall not be
deemed to have been made and shall continue to bear interest
until collected.
3.4
Prepayment . Except
for conversions pursuant to Section 6 hereof, this Note may be
prepaid, in whole only, without penalty or premium, at any
time and from time to time; provided, however that any
prepayment of all of the principal balance of the Loan shall
include accrued interest on the Loan to the date of prepayment
and payment in full of all other Obligations then due and
payable.
4.
Security . This Note is secured by the
Collateral. Reference is hereby made to the Loan Agreement
(which is incorporated herein by reference as fully and with
the same effect as if set forth herein at length) for a
statement of the covenants and agreements contained therein, a
statement of the rights, remedies, and security afforded
thereby, and all matters therein contained.
5.
Events of Default . The occurrence of an Event of
Default under the Loan Agreement shall constitute an "Event of
Default" under this Note.
6.
Conversion . The Lender shall have the right
to convert, subject to the terms, conditions and provisions of
this Note, the outstanding principal and interest due under
this Note as of the date of the Conversion Notice (defined
below), into shares of Common Stock of the Borrower upon five
(5) days written notice (hereinafter referred to as
"Conversion Notice"). In the event the principal
and interest due under this Note from time to time, or any
portion thereof, is to be converted, the Lender shall
surrender this Note to the Borrower during usual business
hours together with the Conversion Notice specifying that the
Lender elects to convert this Note into
|
