EXHIBIT 10.3
GUIDED THERAPEUTICS,
INC.
NOTE PURCHASE
AGREEMENT
(June-July 2008 Bridge Notes)
THIS NOTE PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of July 7, 2008, by and among GUIDED THERAPEUTICS, INC., a
Delaware corporation (the "Company"), and each of the persons
listed on Schedule I attached hereto and made a part hereof,
and their respective permitted successors and assigns (each such
person, a "Noteholder" and, collectively, the "Noteholders").
WITNESSETH:
WHEREAS, the Noteholders are willing to lend the Company, in the
aggregate, Six Hundred, Twenty Five Thousand Dollars ($625,000.00)
on the terms and conditions set forth in this Agreement and in the
Notes (defined below);
WHEREAS, the aggregate amount so advanced to the Company by the
Noteholders shall be funded in three separate tranches as described
herein; and
WHEREAS, the Company is willing to issue warrants to the
Noteholders as described herein;
NOW, THEREFORE, the Parties hereto agree as follows:
ARTICLE I DEFINITIONS
Section 1.1
Definitions . In addition to other terms which may be
defined herein, the following terms, as used in this Agreement,
shall have the following meanings:
(a) "Acts" has the meaning
set forth in Section 5.1(c).
(b) "Agreement" means this
Agreement, as the same may be amended, restated, supplemented, or
otherwise modified from time to time.
(c) "Common Stock" means
the Company's common stock, par value $.001 per share.
(d) "Event of Default" has
the meaning given such term in Section 6.1.
(e) "Insolvency Event"
means any of the bankruptcy, liquidation, dissolution or cessation
of operations of the Company, provided that, in the case of any
involuntary bankruptcy or liquidation proceeding, the Company shall
have ninety days to stay such proceeding.
(f) "Loan Documents"
means this Agreement and each of the Notes, as the same may be
amended, restated, supplemented, or otherwise modified from time to
time.
(g) "Maturity Date" has the
meaning set forth in Section 2.3.
(h) "Notes" shall mean each
Promissory Note, substantially in the form attached hereto as
Exhibit A and made a part hereof, issued pursuant to the
terms of this Agreement, as such Notes may be amended, restated,
supplemented, or otherwise modified from time to time.
(i) "Obligations"
means all of the obligations of the Company under the Loan
Documents for the payment of the outstanding principal amount of
the Notes and all interest accrued thereon.
(j) "Securities"
means each of the Notes and each of the Warrants, whenever issued
hereunder or pursuant to the terms hereof, and, upon any exercise
of any rights under any Warrant, the shares of Common Stock issued
upon exercise of such Warrant.
(k) "Warrants" means the
warrants, each substantially in the form of Exhibit B
attached hereto and made a part hereof, issued to the Noteholders
in accordance with Section 2.6 of this Agreement.
ARTICLE II SALE OF THE NOTES
Section 2.1
Sale of Notes .
(a)
First
Tranche . On May 23, 2008, contemporaneously with the execution
of this Agreement, the Company shall issue and sell to each
Noteholder, and each Noteholder shall purchase from the Company, a
Note with the principal amount set forth opposite such Noteholder's
name in the following table (with the aggregate principal amount of
the Notes to be issued contemporaneously with the execution of this
Agreement to be One Hundred Thousand Dollars ($100,000))
(the "First Tranche Notes"):
|
NOTEHOLDER
|
PRINCIPAL
AMOUNT
|
|
Ressler & Tesh, PLLC
|
$100,000.00
|
(b)
Second
Tranche . On June 6, 2008, the Company shall issue and sell to
each Noteholder, and each Noteholder shall purchase from the
Company, a Note with the principal amount set forth opposite such
Noteholder's name in the following table (with the aggregate
principal amount of the Notes to be issued on such date to be
Two Hundred Thousand Dollars ($200,000)) (the "Second
Tranche Notes"):
|
NOTEHOLDER
|
PRINCIPAL
AMOUNT
|
|
Richard Blumberg and designated investors
|
$200,000.00
|
(c)
Third
Tranche . On July 7, 2008, the Company shall issue and sell to
each Noteholder, and each Noteholder shall purchase from the
Company, a Note with the principal amount set forth opposite such
Noteholder's name in the following table (with the aggregate
principal amount of the Notes to be issued on such date to be
Thirty Four Thousand Dollars ($34,000)) (the "Third Tranche
Notes"):
|
NOTEHOLDER
|
PRINCIPAL
AMOUNT
|
|
Dr. George Goll
|
$3,000.00
|
|
Jill T. Gentile
|
$6,000.00
|
|
Gregory S. Petrie
|
$10,000.00
|
|
Mark E. Brennan & Maureen C. Brennan, Jt. Tenants WROS
|
$15,000.00
|
(d)
Forth
Tranche . On the dates indicated below, the Company shall issue
and sell to each Noteholder, and each Noteholder shall purchase
from the Company, a Note with the principal amount set forth
opposite such Noteholder's name in the following table (with the
aggregate principal amount of the Notes to be issued on such date
to be Two Hundred Ninety One Thousand Dollars ($291,000))
(the "Forth Tranche Notes"):
|
NOTEHOLDER
|
PRINCIPAL
AMOUNT
|
DATE
ISSUED
|
|
Michael Moore
|
$50,000.00
|
June 18, 2008
|
|
Benny H. Screws
|
$26,000.00
|
June 27, 2008
|
|
The Sternfeld Family Trust
|
$50,000.00
|
July 7, 2008
|
|
L. Peter Reininger
|
$15,000.00
|
June 27, 2008
|
|
John C. Imhoff (Jr.)
|
$100,000.00
|
July 3, 2008
|
|
J. E. Funderburke
|
$50,000.00
|
July 7, 2008
|
Section 2.2 Purchase Price . The
aggregate purchase price for the Notes purchased pursuant hereto
shall be 100% of the principal amount thereof, or an aggregate of
Six Hundred Twenty Five Thousand and 00/100 Dollars
($625,000.00) (the "Purchase Price").
Section 2.3 Interest . The
outstanding principal balance of each Note shall bear interest at a
rate of sixteen percent (16%) per annum, which shall be payable in
one lump sum on the first anniversary of the respective date of
issuance of each Note (such Note's "Maturity Date") ( i.e.,
the Notes issued contemporaneously with the execution of this
Agreement will have a Maturity Date of the first anniversary of the
date of execution of this Agreement and Notes issued on May 23,
2008, June 6, 2008, June 18, 2008, June 27, 2008, July 3, 2008 and
July 7, 2008, will have a Maturity Date of the first anniversary of
such respective dates). Interest on each of the Notes shall be
calculated on the basis of a year of 365 days, for the actual
number of days elapsed during which the Notes are outstanding.
Section 2.4 Repayment of Principal
. The principal amount of each Note shall be due and payable in
full on its respective Maturity Date; provided, however, that the
Company, in its sole discretion, may prepay all or any part of the
principal amount of the Notes at any time, without premium or
penalty. Any payments made under the Notes will be applied first to
accrued and unpaid interest, if any, and next to repayment of
outstanding principal.
Section 2.5 Pari Passu Nature of
Obligations on Notes . Each Noteholder agrees that it and the
other Noteholders shall share, on a pari passu basis and
pro rata based upon the amount of outstanding principal and
accrued interest under each Noteholder's respective Notes in
relation to the total amount of outstanding principal and accrued
interest under all Noteholders' Notes, all payments with respect to
the Obligations made by the Company or received by any Noteholder
from any source. In furtherance of such pari passu sharing,
each of the parties hereto agrees that:
(a)
If any
Noteholder receives any payment or collection whatsoever with
respect to the Obligations, such Noteholder shall immediately
forward to each of the other Noteholders such other Noteholder's
respective share of such payment or collection, and, until such
time as such payment is made, the Noteholder receiving such excess
amounts shall hold such excess in trust for the benefit of the
other Noteholders.
(b)
Each of
the Noteholders agrees to cooperate with the other Noteholders in
determining which of them is entitled to receive any payments and
collections on the Obligations, including, without limitation, by
providing upon reasonable request a reasonable accounting of any
payments received with respect to the Obligations.
(c)
The
Company agrees that it will not prefer or favor one Noteholder over
any other Noteholder and that it will make payment to the
Noteholders on the Obligations strictly on the pari passu
basis described herein.
(d)
If any one
or more Noteholders fails or refuses for whatever reason to share
with other Noteholders any payments or collections such Noteholder
receives in excess of the amount it is entitled to receive under
this Article II, the Company shall not be liable for such
amount.
Section 2.6 Warrants .
Contemporaneously with the issuance by the Company of each Note
pursuant to Section 2.1 above, the Company shall also issue to the
Noteholder a Warrant to purchase a number of shares of Common Stock
equal to thirty percent (30%) of the principal amount of such Note
divided by $0.65.
Section 2.7 Subsequent Financing .
The Company intends, although there can be no assurance, to effect
an additional financing as promptly as practicable after the date
of this Agreement. In the event the Company effects an additional
financing prior to February 1, 2009, whether through the issuance
of additional debt or equity, the Noteholders will be given the
opportunity to participate in such additional financing by rolling
over the outstanding principal and interest under their Notes into
the new securities to be issued pursuant to the additional
financing. For the avoidance of doubt, nothing in this Section 2.7
shall be construed to obligate a Noteholder to so participate in an
additional financing.
ARTICLE III CLOSING
Section 3.1 Initial Closing . The
closing of the purchase and sale of the all the Tranche Notes shall
take place contemporoaneously with the execution of this
Agreement.
Section 3.2 Deliveries at Closing
. At each closing, the Company shall deliver a Note and a Warrant
to each of the Noteholders, and each of the Noteholders will pay
its respective portion of the Purchase Price to the Company to be
paid on such date, in immediately available funds via wire transfer
in accordance with the Company's instructions or certified check
made payable to the Company.
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE
COMPANY
The Company hereby represents and warrants to the Noteholders as
follows:
Section 4.1 Organization and Standing;
Charter and Bylaws . The Company is a corporation duly
organized and validly existing under the laws of, and is in good
standing in, the State of Delaware. The Company has the corporate
power and authority to own and operate its properties and assets
and to carry on its business as presently conducted.
Section 4.2 Corporate Power . The
Company has the corporate power and authority to enter into the
Loan Documents and the Warrants and to carry out and perform its
other obligations under the terms thereof.
Section 4.3 Authorization . All
corporate action on the part of the Company and its directors,
officers and stockholders necessary for the authorization,
execution, delivery and performance of all obligations of the
Company under the Loan Documents and the Warrants, for the
authorization, issuance and delivery by the Company of the Notes,
for the authorization, issuance and delivery of the Warrants and
for the authorization, issuance and delivery of the Common Stock
issuable upon exercise of any rights under any Warrant, has been
taken. This Agreement constitutes the valid and binding obligation
of the Company and is enforceable against the Company in accordance
with its terms, except as enforceability may be limited by
bankruptcy, insolvency or other laws affecting the enforcement of
creditors' rights generally, and except that the availability of
the remedy of specific performance or other equitable relief is
subject to the discretion of the court before which any proceeding
therefor may be brought.
Section 4.4 Compliance with Other
Instruments . The Company is not, except as set forth in
Schedule 4.4 hereto, in violation of any term of (a) its
Certificate of Incorporation or Bylaws, (b) any provision of any
material mortgage, indenture, contract, agreement or instrument to
which it is a party or by which it or its assets are bound, or (c)
any judgment, decree or order binding upon the Company. The
execution, delivery and performance of and compliance with the Loan
Documents, the issuance of the Notes, the issuance of the Warrants,
and the issuance of Common Stock upon exercise of any Warrant, will
not result in any such violation or be in conflict with or
constitute a default under any of the terms or provisions of any
document described in the first sentence of this section.
ARTICLE V REPRESENTATIONS OF THE NOTEHOLDERS
Section 5.1 Each of the Noteholders
hereby, severally, represents and warrants to the Company as
follows:
(a) the Securities will be
held by such Noteholder for investment for such Noteholder's own
account and not with a view to, or for, resale, transfer, or
distribution;
(b) such Noteholder has no
intention of participating directly or indirectly in a distribution
of the Securities;
(c) such Noteholder
understands that the Securities being issued have not been
registered under the Securities Act of 1933, as amended, or the
Georgia Securities Act of 1973, as amended (collectively, the
"Acts"), or any other applicable blue sky law, by reason of special
exemptions thereunder, including pursuant to an exemption under
Section 10-5-9(13) of the Georgia Securities Act of 1973, as
amended, that depend upon the investment intent of such Noteholder
as represented to in this Section 5.1;
(d) such Noteholder has
such knowledge and experience in financial and business matters
that such Noteholder is capable of evaluating the risks and merits
of its investment in the Company and has the capacity to protect
its own interests in connection with the investment in the
Company;
(e) such Noteholder has
evaluated the risks of investing in the Securities and has
determined that the Securities are a suitable investment for such
Noteholder;
(f) such Noteholder
understands that, by reason of the exemptions to be relied upon in
connection with the issuance of the Securities, the Securities
issued to such Noteholder will not be freely transferable, that any
proposed sale or other transfer of such Noteholder may be
prohibited and will in any event be subject to significant
restrictions, and that any documents representing the Securities
will bear a legend to such effect, and a stop-transfer order with
respect to such Securities will be placed with the Company's
transfer agent (or noted in the Company's records if the Company
acts as its own transfer agent);
(g) such Noteholder
understands and agrees that the Company may, if it desires, refuse
to transfer the Securities in order to insure compliance with the
Acts and any applicable blue sky law unless (i) a registration
statement under the Acts and any applicable blue sky law is then in
effect with respect to the Securities; or (ii) such Noteholder's
request for transfer is accompanied by a written opinion from legal
counsel reasonably satisfactory to the Company to the effect that
exemptions from registration under the Acts and any other
applicable blue sky law are available with respect to the proposed
transfer and that no such registration is required; or (iii) such
Noteholder's request for transfer is accompanied by no-action
letters or their then-equivalent with respect to such transfer
issued by the staff of the Securities and Exchange Commission and
the applicable state securities commissions;
(h) such Noteholder
understands and agrees that such Noteholder must bear the economic
risk of the Securities for an indefinite period of time because,
among other reasons, the Securities have not been registered under
the Acts or any other applicable blue sky law; and
(i) such Noteholder
is an "accredited investor" within the meaning of Regulation D
promulgated by the Securities and Exchange Commission under the
Securities Act of 1933, as amended.
Section 5.2 Authorization . Each
Noteholder has the capacity, power, and authority to perform its
obligations under the Loan Documents and the Warrants. All action
on the part of each Noteholder necessary for the authorization,
execution, delivery and performance of all obligations of the
Noteholder under this Agreement has been taken. The Loan Documents
constitute each Noteholder's valid and binding obligation, except
as enforceability may be limited by bankruptcy, insolvency or other
laws affecting the enforcement of creditors' rights generally, and
except that the availability of the remedy of specific performance
or other equitable relief is subject to the discretion of the court
before which any proceeding therefor may be brought.
ARTICLE VI EVENTS OF DEFAULT
Section 6.1 Event of Default . An
"Event of Default" means the occurrence of any one or more of the
following:
(a)
The
Company shall fail to pay any of the Obligations within five days
after the date on which same becomes due and payable;
(b)
The
Company shall fail to perform any material covenant contained
hereunder or in the other Loan Documents and such failure shall
continue for a period in excess of thirty (30) days after written
notice and demand for cure is received by the Company from any of
the Noteholders; or
(c)
an
Insolvency Event shall occur.
Section 6.2 Remedies . During the
continuation of any Event of Default, the Noteholders shall have
all such rights as are available at law or in equity or in any of
the Loan Documents. All such remedies shall be cumulative.
Moreover, during the continuation of any Event of Default, those
Noteholders holding more than 66% of the aggregate outstanding
principal amount of the Notes may, by written notice to the
Company, accelerate the unpaid principal amount of the Notes and
any accrued but unpaid interest under Section 2.3, whereupon such
Obligations shall become immediately due and payable. Any term,
condition, or provision of this Agreement or the other Loan
Documents to the contrary notwithstanding, each Noteholder agrees
that, before taking any action against the Company, it will confer
with the other Noteholders and negotiate in good faith to join each
of the Noteholder's respective actions against the Company relating
to the Loan Documents or the Obligations into one suit or action.
Only upon the failure of such conferences and negotiations to
result in a litigation strategy uniform among all of the
Noteholders may any one Noteholder bring an action against the
Company relating to the Loan Documents or the Obligations.
ARTICLE VII MISCELLANEOUS
Section 7.1 Governing Law; SUBMISSION TO
JURISDICTION . This Agreement shall be governed by and
construed under the laws of the State of Georgia. ANY LEGAL ACTION
OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, THE NOTES, OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE SUPERIOR COURT OF
FULTON COUNTY, GEORGIA, OR IN ANY COURT OF THE UNITED STATES OF
AMERICA FOR THE NORTHERN DISTRICT OF GEORGIA, AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH NOTEHOLDER AND THE COMPANY HEREBY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVE TRIAL BY JURY, AND EACH
NOTEHOLDER AND THE COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION
OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
Section 7.2 Successors and Assigns
. The provisions of this Agreement shall inure to the benefit of,
and be binding upon, the successors, assigns, heirs, executors and
administrators of the Noteholders and the Company. None of the
Company, on the one hand, or a Noteholder, on the other, shall have
the right to assign its respective rights and obligations under
this Agreement without the consent of the other.
Section 7.3 Entire Agreement;
Amendment . The Loan Documents and the Warrants constitute the
complete understanding and agreement among the parties with regard
to the subject matter thereof. No Loan Document or any term therein
may be amended, waived, discharged or terminated orally, but only
by a written instrument signed by the Company and those Noteholders
holding more than fifty percent of the outstanding principal amount
of all Notes. Any such amendments, waivers, discharges, or
terminations shall be binding upon all Noteholders; provided,
however, that no changes to the definition of Maturity Date, the
principal amount of the Notes, the number of shares represented by
each Warrant or the interest rates provided for herein will be
effective unless evidenced in a writing signed by the Company and
all of the Noteholders.
Section 7.4 Notices . All notices,
requests, demands, waivers and other communications required or
permitted to be given under this Agreement or any other Loan
Document shall be in writing and shall be deemed to have been duly
given if (a) delivered personally, (b) mailed by certified or
registered mail with postage prepaid, (c) sent by next-day or
overnight mail or delivery or (d) sent by facsimile as follows:
if to the Company, at the following
address or such other address as the Company shall have furnished
to the Noteholders in writing:
Guided Therapeutics, Inc.
4955 Avalon Ridge Parkway, Suite 300
Norcross, Georgia 30071
Attn: Mark Faupel
Fax: 770-242-3178
Phone: 770-242-8723
if to a Noteholder, at the address for
such Noteholder shown on Schedule I , or at such other
address as such Noteholder shall have furnished to the Company and
the other Noteholders in writing.
All such notices, requests, demands, waivers and other
communications shall be deemed to have been received (a) if by
personal delivery, on the day after such delivery, (b) if by
certified or registered mail, on the seventh business day after the
mailing thereof, (c) if by next day or overnight mail or delivery,
on the day delivered, (d) if by facsimile, on the next day
following the day on which such telecopy was sent, provided that
copy is also sent by certified or registered mail.
Section 7.5 Counterparts . This
Agreement may be executed in any numbe
