UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report
(Date of earliest event reported):
| (Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation) |
(Commission File No.) | (IRS Employer Identification No.) |
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| (Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2 ).
Emerging
growth company
If an emerging
growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
| Item 1.01. | Entry into a Material Definitive Agreement. |
Officer Stock Purchases
On October 28, 2021, Modular Medical, Inc. (the “Company”) entered into purchase agreements with Ellen O’Connor (Lynn) Vos, the Company’s Chief Executive Officer, and Paul DiPerna, the Chairman of the Company’s board of directors and its President, Chief Financial Officer and Treasurer, providing for the sale and issuance by the Company of 92,592 shares of the Company’s common stock, par value $0.001 per share at the closing market price on October 28, 2021 of $2.70 per share. The Company received proceeds of approximately $250,000 from the sale of the shares, comprising $150,000 from Ms. Vos and $100,000 from Mr. DiPerna.
Credit Facility and Security Agreement
On October 28, 2021, the Company issued a secured promissory note (the “Note”) to Manchester Explorer, L.P. (“Manchester”) that provides the Company with a $3,000,000 revolving credit facility with all amounts being drawn down by the Company thereunder being due and payable, subject to acceleration in the event of a default, on March 15, 2022 (the “Maturity Date”). Interest at the rate of 12% is payable on each drawn down without regard to the draw down date or the date when interest is paid. As of the date of this current report on Form 8-K there have been no borrowings under the Note.
The principal amount of the Note and interest due thereon is payable to Manchester no later than the earlier of: (i) the Maturity Date and (ii) the date on which the Company has received proceeds in excess of $12,000,000 from a transaction or series of related transactions occurring prior to the Maturity Date, which such transactions constitute equity financings or other issuances of the Company's equity securities. Provided that no Event of Default (as such term is defined in the Note) has occurred, on any date prior to the Maturity Date, upon no less than three days written notice by the Company specifying the draw amount, Manchester will advance the draw amount to the Company. No draw amount can be in an amount less than $100,000 or exceed an amount equal to $3,000,000 minus the aggregate principal amount outstanding under the Note at the time of such draw request. If an Event of Default occurs and is continuing, Manchester may declare all of the Note, including any interest and other amounts due, to be due and payable immediately.
In connection with the issuance of the Note, on October 28, 2021, the Company entered into a Security Agreement with Manchester (the “Security Agreement”) under which the Company granted Manchester a continuing and unconditional first priority security interest in and to any and all of the Company’s property of any kind or description, tangible or intangible, wheresoever located and whether now existing or hereafter arising or acquired.
The foregoing summary of the terms of the Note and the Security Agreement (collectively, the “Note Documents”) should be read in conjunction with the forms of such agreements and documents filed as exhibits to this Current Report on Form 8-K under Item 9.01, which contain all of the terms and conditions of the Note Documents.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off Balance Sheet Arrangement of the Registrant. |
The disclosure in Item 1.01 and Exhibits 10.27 and 10.28 of this Current Report on Form 8-K are incorporated herein by reference.
| Item 3.02. | Unregistered Sales of Equity Securities. |
The disclosure in Item 1.01 with respect to the issuance of the shares of Common Stock (the “Securities”) is incorporated by reference into this Item 3.02. The Securities were issued in a private placement exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) thereof.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits: |
| Exhibit No. | Description | |
| 10.27 | Promissory Note dated October 28, 2021 | |
| 10.28 | Security Agreement dated October 28, 2021 | |
| 10.29 | Form of Common Stock Purchase Agreement dated October 28, 2021 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Modular Medical, Inc. | |
| Date: October 29, 2021 | /s/ Ellen O’Connor Vos |
Chief Executive Officer |
Exhibit 10.27
PROMISSORY NOTE
| October 28, 2021 | US$3,000,000 |
FOR VALUE RECEIVED, MODULAR MEDICAL, INC., a corporation incorporated under the laws of the State of Nevada and located at 16722 W. Bernardo Drive, San Diego, California 92127 (the “Borrower”), hereby promises to pay to the order of Manchester Explorer, L.P., a limited partnership organized under the laws of the State of Delaware and located at 2 Calle Candina, No. 1701, San Juan, Puerto Rico 00907, or its successors or assigns (the “Lender”), the amount then outstanding hereunder but not to exceed the principal amount of Three Million United States Dollars (US$3,000,000), by no later than March 15, 2022 (the “Maturity Date”), subject to the accelerated payment obligation set forth in Section 2.2. This Promissory Note, as may be amended or supplemented from time to time, shall be referred to herein as the “Note.”
1. Defined Terms. For purposes of this Note, except as otherwise expressly provided or otherwise defined elsewhere in this Note, or unless the context otherwise requires, the capitalized terms in this Note shall have the meanings assigned to them as follows:
1.1 “Assets” means all of the properties and assets of the Person in question, as the context may so require, whether real, personal or mixed, tangible or intangible, wherever located, whether now owned or hereafter acquired.
1.2 “Bankruptcy Law” shall have the meaning given to it in Section 3.1.
1.3 “Borrower” shall have the meaning given to it in the preamble hereof.
1.4 “Business Day” shall mean any day other than a Saturday, Sunday or a legal holiday on which federal banks are authorized or required to be closed for the conduct of commercial banking business.
1.5 “Claim” means any Proceedings, Judgments, Obligations, threats, losses, damages, deficiencies, settlements, assessments, charges, costs and expenses of any nature or kind.
1.6 “Consent” means any consent, approval, order or authorization of, or any declaration, filing or registration with, or any application or report to, or any waiver by, or any other action (whether similar or dissimilar to any of the foregoing) of, by or with, any Person, which is necessary in order to take a specified action or actions, in a specified manner and/or to achieve a specific result.
1.7 “Contract” means any written or oral contract, agreement, order or commitment of any nature whatsoever, including, any sales order, purchase order, lease, sublease, license agreement, services agreement, loan agreement, mortgage, security agreement, guarantee, management contract, employment agreement, consulting agreement, partnership agreement, shareholders agreement, buy-sell agreement, option, warrant, debenture, subscription, call or put.
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1.8 “Custodian” shall have the meaning given to it in Section 3.1.
1.9 “Encumbrance” means any lien, security interest, pledge, mortgage, easement, leasehold, assessment, tax, covenant, restriction, reservation, conditional sale, prior assignment, or any other encumbrance, claim, burden or charge of any nature whatsoever.
1.10 “Event of Default” shall have the meaning given to it in Section 3.1.
1.11 “GAAP” means generally accepted accounting principles, methods and practices set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants, and statements and pronouncements of the Financial Accounting Standards Board, or of such other Person as may be approved by a significant segment of the U.S. accounting profession, in each case as of the date or period at issue, and as applied in the U.S. to U.S. companies.
1.12 “Governmental Authority” means any foreign, federal, state or local government, or any political subdivision thereof, or any court, agency or other body, organization, group, stock market or exchange exercising any executive, legislative, judicial, quasi-judicial, regulatory or administrative function of government.
1.13 “Interest Rate” shall have the meaning given to it in Section 2.2.
1.14 “Judgment” means any order, writ, injunction, fine, citation, award, decree, or any other judgment of any nature whatsoever of any Governmental Authority.
1.15 “Law” means any provision of any law, statute, ordinance, code, constitution, charter, treaty, rule or regulation of any Governmental Authority.
1.16 “Lender” shall have the meaning given to it in the preamble hereof.
1.17 “Maturity Date” shall have the meaning given to it in the preamble hereof.
1.18 “Material Adverse Effect” hall mean: (i) a material adverse change in, or a material adverse effect upon, the Assets, business, prospects, properties, financial condition or results of operations of the Borrower; (ii) a material impairment of the ability of the Borrower to perform any of its Obligations under any of the Transaction Documents; or (iii) a material adverse effect on: (A) any material portion of the “Collateral” (as such term is defined in the Security Agreement); (B) the legality, validity, binding effect or enforceability against the Borrower of any of the Transaction Documents; (C) the perfection or priority of any Encumbrance granted to Lender under any Transaction Documents; or (D) the rights or remedies of the Lender under any of the Transaction Documents. For purposes of determining whether any of the foregoing changes, effects, impairments, or other events have occurred, such determination shall be made by Lender, in its sole discretion.
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1.19 “Material Equity Holder” shall have the meaning given to it in Section 4.12.
1.20 “Note” shall have the meaning given to it in the preamble hereof.
1.21 “Obligations” means, now existing or in the future, any debt, liability or obligation of any nature whatsoever (including any required performance of any covenants or agreements), whether secured, unsecured, recourse, nonrecourse, liquidated, unliquidated, accrued, voluntary or involuntary, direct or indirect, absolute, fixed, contingent, ascertained, unascertained, known, unknown, whether or not jointly owed with others, whether or not from time to time decreased or extinguished and later decreased, created or incurred, or obligations existing or incurred under this Note or any other Transaction Documents, or any other agreement between any of the Borrower and the Lender, as such obligations may be amended, supplemented, converted, extended or modified from time to time.
1.22 “Ordinary Course of Business” means the ordinary course of business of the Person in question, consistent with past custom and practice (including with respect to quantity, quality and frequency).
1.23 “Organizational Documents” shall have the meaning given to it in Section 4.3.
1.24 “Permit” means any license, permit, approval, waiver, order, authorization, right or privilege of any nature whatsoever, granted, issued, approved or allowed by any Governmental Authority.
1.25 “Person” means any individual, sole proprietorship, joint venture, partnership, company, corporation, association, cooperation, trust, estate, Governmental Authority, or any other entity of any nature whatsoever.
1.26 “Proceeding” means any demand, claim, suit, action, litigation, investigation, audit, study, arbitration, administrative hearing, or any other proceeding of any nature whatsoever.
1.27 “Security Agreement” means that certain Security Agreement, dated as October __, 2021, as amended from time to time, between the Borrower to the Lender.
1.28 “Tax” means (i) any foreign, federal, state or local income, profits, gross receipts, franchise, sales, use, occupancy, general property, real property, personal property, intangible property, transfer, fuel, excise, accumulated earnings, personal holding company, unemployment compensation, social security, withholding taxes, payroll taxes, or any other tax of any nature whatsoever, (ii) any foreign, federal, state or local organization fee, qualification fee, annual report fee, filing fee, occupation fee, assessment, rent, or any other fee or charge of any nature whatsoever, or (iii) any deficiency, interest or penalty imposed with respect to any of the foregoing.
1.29 “Tax Return” means any tax return, filing, declaration, information statement or other form or document required to be filed in connection with or with respect to any Tax.
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1.30 “Transaction Documents” means this Note any and all documents or instruments executed or to be executed by the Borrower in connection with this Note, any other promissory notes issued by the Borrower to the Lender, the Security Agreement, together with all modifications, amendments, extensions, future advances, renewals, and substitutions thereof.
2. Draws; Payments of Principal and Interest.
2.1 Draws. Provided that not Event of Default has occurred, on any date prior to the Maturity Date, upon no less than three days written notice from the Borrower specifying the requested amount (the “Draw Amount”), the Lender shall advance the Draw Amount to the Borrower in accordance with such wire instructions as the Borrower shall specify in writing to the Lender. No Draw Amount shall be in an amount less than one hundred thousand United States Dollars ($100,000) or exceed an amount equal to Three Million United States Dollars (US$3,000,000) minus the aggregate principal amount outstanding hereunder at the time of such draw request. All Draw Amounts advanced hereunder shall be recorded on Exhibit A hereto.
2.2 Payment of Principal and Interest. The principal amount of this Note and any interest thereon shall be paid to the Lender no later than the earlier of (i) Maturity Date and (ii) the date on which the Borrower shall have received proceeds in excess of $12,000,000.00 from a transaction or series of related transactions occurring prior to the Maturity Date, which such transactions constitute equity financings or other issuances of the Company’s equity securities.
2.3 Interest. Any Draw Amounts borrowed hereunder shall bear a single interest payment of twelve percent (12.00%) of the applicable Draw Amount which shall be fully earned upon the advance of such Draw Amount.
2.4 General Payment Provisions. All payments of principal and interest shall be made shall be made in lawful money of the United States of America by certified bank check or wire transfer to such account as the Lender may designate by written notice to the Borrower in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a Business Day, the same shall instead be due on the next succeeding Business Day.
2.5 Optional Prepayment. The Borrower may pre-pay any amounts outstanding under this Note without penalty at any time.
3. Defaults and Remedies.
3.1 Events of Default. An “Event of Default” means: (i) a failure to make payment of principal or interest on this Note, following notice of such failure and a five (5) day opportunity to cure; (ii) a failure by the Borrower to comply with any material provision of this Note following notice of such failure and a five (5) day opportunity to cure; (iii) any written warranty, representation, certificate or statement of the Borrower and/or the Pledgor in this Note or any other Transaction Document or any other agreement with the Lender shall be false or misleading in any material respect when made or deemed made; (iv) the Borrower, pursuant to or within the meaning of any Bankruptcy Law (as defined herein): (A) commences a voluntary case; (B) consents to the entry of an order for relief against it in an involuntary case; (C) consents to the appointment of a Custodian (as defined herein) of it or for all or substantially all of its property; (D) makes a general assignment for the benefit of its creditors; or (E) admits in writing that it is generally unable to pay its debts as the same become due; or (v) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for relief against the Borrower in an involuntary case; (B) appoints a Custodian of the Borrower for all or substantially all of its property; or (C) orders the liquidation of the Borrower, and the order or decree remains unstayed and in effect for sixty (60) days. “Bankruptcy Law” means Title 11, U.S. Code, or any similar Federal or state law for the relief of debtors. The term “Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.
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3.2 Remedies. If an Event of Default occurs and is continuing, the Lender, may declare all of this Note, including any interest and other amounts due, to be due and payable immediately. The Lender shall have all rights available to it at law or in equity. The Lender, may assess reasonable attorneys’ fees, paralegals’ fees and costs and expenses incurred or anticipated by the Lender in collecting or enforcing payment hereof (whether such fees, costs or expenses are incurred in negotiations, all trial and appellate levels, administrative proceedings, bankruptcy proceedings or otherwise), and together with all other sums due by the Borrower hereunder, all without any relief whatsoever from any valuation or appraisement laws, and payment thereof may be enforced and recovered in whole or in part at any time by one or more of the remedies provided to the Lender at law, in equity, or under this Note.
4. Representations and Warranties.
4.1 Organization. The Borrower is a corporation duly incorporated, validly existing and in good standing under the Laws of Nevada, and has the full power and authority and all necessary certificates, licenses, approvals and Permits to: (i) enter into and execute this Note and the Transaction Documents and to perform all of its Obligations hereunder and thereunder; and (ii) own and operate its Assets and properties and to conduct and carry on its business as and to the extent now conducted. The Borrower is duly qualified to transact business and is in good standing as a foreign corporation in each jurisdiction where the character of its business or the ownership or use and operation of its Assets or properties requires such qualification. The exact legal name of the Borrower is as set forth in the preamble to this Note, and the Borrower does not currently conduct, nor has the Borrower, during the last five (5) years conducted, business under any other name or trade name.
4.2 Authority and Approval of Agreement; Binding Effect. The execution and delivery by the Borrower of this Note and the Transaction Documents, and the performance by the Borrower of all of its Obligations hereunder and thereunder, has been duly and validly authorized and approved by the Borrower and, its members and managers pursuant to all applicable Laws and no other action or Consent on the part of its manager, members or any other Person is necessary or required by the Borrower to execute this Note and the Transaction Documents, consummate the transactions contemplated herein and therein, perform all of Obligations hereunder and thereunder. This Note and each of the Transaction Documents have been duly and validly executed by the Borrower (and the officer executing this Note and all such other Transaction Documents is duly authorized to act and execute same on behalf of the Borrower) and constitute the valid and legally binding agreements of the Borrower, enforceable against the Borrower in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.
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4.3 Organizational Documents. The Borrower has furnished to the Lender true, complete and correct copies of its by-laws, certificate of incorporation or similar organizational and governing documents (the “Organizational Documents”). Except for the Organizational Documents there are no other shareholder agreements, voting agreements or other Contracts of any nature or kind that restrict, limit or in any manner impose Obligations on the governance of the Borrower.
4.4 No Conflicts; Consents and Approvals. The execution, delivery and performance of this Note and the Transaction Documents, and the consummation of the transactions contemplated hereby and thereby will not: (i) constitute a violation of or conflict with the Organizational Documents of the Borrower; (ii) constitute a violation of, or a default or breach under (either immediately, upon notice, upon lapse of time, or both), or conflicts with, or gives to any other Person any rights of termination, amendment, acceleration or cancellation of, any provision of any Contract to which the Borrower is a party or by which any of its Assets or properties may be bound; (iii) constitute a violation of, or a default or breach under (either immediately, upon notice, upon lapse of time, or both), or conflicts with, any Judgment; (iv) constitute a violation of, or conflict with, any Law (including United States federal and state securities Laws); or (v) result in the loss or adverse modification of, or the imposition of any fine, penalty or other Encumbrance with respect to, any Permit granted or issued to, or otherwise held by or for the use of, the Borrower or any of its Assets. The Borrower is not in violation of its Organizational Documents and the Borrower is not in default or breach (and no event has occurred which with notice or lapse of time or both could put the Borrower in default or breach) under, and the Borrower has not taken any action or failed to take any action that would give to any other Person any rights of termination, amendment, acceleration or cancellation of, any Contract to which the Borrower is a party or by which any property or Assets of the Borrower is bound or affected. The business of the Borrower is not being conducted, and shall not be conducted so long as the Lender holds this Note, in violation of any Law. Except as specifically contemplated by this Note, the Borrower is not required to obtain any Consent of, from, or with any Governmental Authority, or any other Person, in order for it to execute, deliver or perform any of its Obligations under this Note or the Transaction Documents in accordance with the terms hereof or thereof, or to issue and sell the Securities in accordance with the terms hereof. All Consents which the Borrower is required to obtain pursuant to the immediately preceding sentence have been obtained or effected on or prior to the date hereof. The Borrower is not aware of any facts or circumstances which might give rise to any of the foregoing.
4.5 Absence of Litigation or Adverse Matters. No condition, circumstance, event, agreement, document, instrument, restriction, litigation or Proceeding (or threatened litigation or Proceeding or basis therefor) exists which: (i) could adversely affect the validity or priority of the Encumbrances granted to the Lender under the Transaction Documents; (ii) could adversely affect the ability of the Borrower to perform its Obligations under the Transaction Documents; (iii) would constitute a default under any of the Transaction Documents; (iv) would constitute such a default with the giving of notice or lapse of time or both; or (v) would constitute or give rise to a Material Adverse Effect. In addition: (vi) there is no Proceeding before or by any Governmental Authority or any other Person, pending, or the best of the Borrower’s knowledge, threatened or contemplated by, against or affecting the Borrower, its business or Assets; (vii) there are no outstanding Judgments against or affecting the Borrower, its business or Assets; (viii) the Borrower is not in breach or violation of any Contract; and (ix) the Borrower has not received any material complaint from any customer, supplier, vendor or employee.
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4.6 Title to Assets. The Borrower has good and marketable title to, or a valid leasehold interest in, all of its Assets which are material to the business and operations of the Borrower as presently conducted, free and clear of all Encumbrances or restrictions on the transfer or use of same. Except as would not have a Material Adverse Effect, the Borrower’s Assets are in good operating condition and repair, ordinary wear and tear excepted, and are free of any latent or patent defects which might impair their usefulness, and are suitable for the purposes for which they are currently used and for the purposes for which they are proposed to be used.
4.7 Compliance with Laws. To the knowledge of the Borrower and its officers, the Borrower is and at all times has been in full compliance with all Laws. The Borrower has not received any notice that it is in violation of, has violated, or is under investigation with respect to, or has been threatened to be charged with, any violation of any Law.
4.8 Labor and Employment Matters. The Borrower is not involved in any labor dispute or, to the knowledge of the Borrower, is any such dispute threatened. To the knowledge of the Borrower and its officers, none of the employees of the Borrower is a member of a union and the Borrower believes that its relations with its employees are good. To the knowledge of the Borrower and its officers, the Borrower has complied in all material respects with all Laws relating to employment matters, civil rights and equal employment opportunities.
4.9 Tax Matters. The Borrower has made and timely filed all Tax Returns required by any jurisdiction to which it is subject, and each such Tax Return has been prepared in compliance with all applicable Laws, and all such Tax Returns are true and accurate in all respects. Except and only to the extent that the Borrower has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported Taxes, the Borrower has timely paid all Taxes shown or determined to be due on such Tax Returns, except those being contested in good faith, and the Borrower has set aside on its books provision reasonably adequate for the payment of all Taxes for periods subsequent to the periods to which such Tax Returns apply. There are no unpaid Taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Borrower know of no basis for any such claim. The Borrower has withheld and paid all Taxes to the appropriate Governmental Authority required to have been withheld and paid in connection with amounts paid or owing to any Person. There is no Proceeding or Claim for refund now in progress, pending or threatened against or with respect to the Borrower regarding Taxes.
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4.10 Permits. The Borrower possesses all Permits necessary to conduct its business, and the Borrower has not received any notice of, or is otherwise involved in any Proceedings relating to, the revocation or modification of any such Permits. All such Permits are valid and in full force and effect and the Borrower is in full compliance with the respective requirements of all such Permits.
4.11 Illegal Payments. Neither the Borrower, nor any manager, director, officer, agent, employee or other Person acting on behalf of the Borrower has, in the course of his or her actions for, or on behalf of, the Borrower: (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.
4.12 Related Party Transactions. Except for arm’s length transactions pursuant to which the Borrower made payments in the Ordinary Course of Business upon terms no less favorable than the Borrower could obtain from third parties, none of the officers, managers, directors or employees of the Borrower, nor any equity holder who own, legally or beneficially, five percent (5%) or more of the ownership interests of the Borrower (each a “Material Equity Holder”), is presently a party to any transaction with the Borrower (other than for services as employees, officers and directors), including any Contract providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from, any officer, manager, director or such employee or Material Equity Holder or, to the best knowledge of the Borrower, any other Person in which any officer, manager, director, or any such employee or Material Equity Holder has a substantial or material interest in or of which any officer, director or employee of the Borrower or Material Equity Holder is an officer, manager, director, trustee or partner. There are no Claims or disputes of any nature or kind between the Borrower and any officer, manager, director or employee of the Borrower or any Material Equity Holder, or between any of them, relating to the Borrower and its business.
During the course of this Note, Borrower is only to continue secured obligations, and no other secured obligations of Borrower are permitted without first obtaining express permission or notice from Lender.
4.13 Internal Accounting Controls. The Borrower maintains a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to Assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for Assets is compared with the existing Assets at reasonable intervals and appropriate action is taken with respect to any differences.
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4.14 Seniority. No indebtedness or other equity or security of the Borrower is senior to this Note in right of payment, whether with respect to interest or upon liquidation or dissolution, or otherwise, except only purchase money security interests (which are senior only as to underlying Assets covered thereby). Further, this Note is secured by all assets and intellectual property of Borrower.
4.15 Brokerage Fees. There is no Person acting on behalf of the Borrower who is entitled to or has any claim for any brokerage or finder’s fee or commission in connection with the execution of this Note or the consummation of the transactions contemplated hereby.
4.16 Full Disclosure. All the representations and warranties made by the Borrower herein, and all of the financial statements, schedules, certificates, confirmations, agreements, contracts, and other materials submitted to the Lender in connection with or in furtherance of this Note or pertaining to the transaction contemplated herein, whether made or given by the Borrower, its agents or representatives, are complete and accurate, and do not omit any information required to make the statements and information provided, in light of the transaction contemplated herein and in light of the circumstances under which they were made, not misleading, accurate and meaningful.
5. Covenants.
5.1 Legal Existence. The Borrower shall at all times preserve and maintain its: (i) existence and good standing in the jurisdiction of its organization; and (ii) its qualification to do business and good standing in each jurisdiction where the nature of its business makes such qualification necessary, and shall at all times continue as a going concern in the business which the Borrower is presently conducting.
5.2 Seniority. While any amounts remain outstanding under this Note, without the prior written consent of the Lender, the Borrower shall not permit any indebtedness of the Borrower to be senior to this Note in right of payment, whether with respect to interest or upon liquidation or dissolution, or otherwise, except only purchase money security interests (which are senior only as to underlying Assets covered thereby).
5.3 Tax Liabilities. The Borrower shall at all times pay and discharge all Taxes upon, and all Claims (including claims for labor, materials and supplies) against the Borrower or any of its properties or Assets, before the same shall become delinquent and before penalties accrue thereon, unless and to the extent that the same are being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP are being maintained.
5.4 Notice of Proceedings. The Borrower shall, promptly, but not more than five (5) days after knowledge thereof shall have come to the attention of any officer of the Borrower, give written notice to the Lender of all threatened or pending Proceedings before any Governmental Authority or otherwise affecting the Borrower or any of its Assets.
5.5 Material Adverse Effect. The Borrower shall, promptly, but not more than five (5) days after knowledge thereof shall have come to the attention of any officer of the Borrower, give written notice to the Lender of any event, circumstance, fact or other matter that could in any way have or be reasonably expected to have a Material Adverse Effect.
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5.6 Notice of Default. The Borrower shall, promptly, but not more than five (5) days after the commencement thereof, give notice to the Lender in writing of the occurrence of any “Event of Default” (as such term is defined in any of the Transaction Documents) or of any event which, with the lapse of time, the giving of notice or both, would constitute an Event of Default hereunder or under any other Transaction Documents.
5.7 Maintain Property. The Borrower shall at all times maintain, preserve and keep all of its Assets in good repair, working order and condition, normal wear and tear excepted, and shall from time to time, as the Borrower deem appropriate in its reasonable judgment, make all needful and proper repairs, renewals, replacements, and additions thereto so that at all times the efficiency thereof shall be fully preserved and maintained. The Borrower shall permit the Lender to examine and inspect such Assets at all reasonable times upon reasonable notice during business hours. During the continuance of any Event of Default hereunder or under any Transaction Documents, the Lender shall, at the Borrower’s expense, have the right to make additional inspections without providing advance notice.
5.8 Maintain Insurance. The Borrower shall at all times insure and keep insured with insurance companies acceptable to Lender, all insurable property owned by the Borrower which is of a character usually insured by companies similarly situated and operating like properties, against loss or damage from environmental, fire and such other hazards or risks as are customarily insured against by companies similarly situated and operating like properties; and shall similarly insure employers’, public and professional liability risks.
6. Lost or Stolen Note. Upon notice to the Borrower of the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of an indemnification undertaking by the Lender to the Borrower in a form reasonably acceptable to the Borrower and, in the case of mutilation, upon surrender and cancellation of the Note, the Borrower shall execute and deliver a new Note of like tenor and date and in substantially the same form as this Note.
7. Governing Law. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the laws of the State of New York, without giving effect to provisions thereof regarding conflict of laws. Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of the state and federal courts sitting in New York County in the State of New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by sending by certified mail or overnight courier a copy thereof to such party at the address indicated in the preamble hereto and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
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8. Indemnity and Expenses. The Borrower agrees:
8.1 To indemnify and hold harmless the Lender and each of its partners, employees, agent and affiliates from and against any and all claims, damages, demands, losses, obligations, judgments and liabilities (including, without limitation, attorneys’ fees and expenses) in any way arising out of or in connection with this Note; and
8.2 To pay and reimburse the Lender upon demand for all costs and expenses (including, without limitation, attorneys’ fees and expenses) that the Lender may incur in connection with (i) the exercise or enforcement of any rights or remedies (including, but not limited to, collection) granted hereunder or otherwise available to it (whether at law, in equity or otherwise), or (ii) the failure by the Borrower to perform or observe any of the provisions hereof. The provisions of this Section shall survive the execution and delivery of this Note, the repayment of any or all of the principal or interest owed pursuant hereto, and the termination of this Note.
9. Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note, at law or in equity.
10. Specific Shall Not Limit General; Construction. No specific provision contained in this Note shall limit or modify any more general provision contained herein. This Note shall be deemed to be jointly drafted by the Borrower and the Lender and shall not be construed against any person as the drafter hereof.
11. Failure or Indulgence Not Waiver. No failure or delay on the part of this Note in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.
12. Notice. Notice shall be given to each party at the address indicated in the preamble or at such other address as provided to the other party in writing.
[signature page follows]
| 11 |
IN WITNESS WHEREOF, the parties have caused this Note to be executed on and as of as of the date first written above.
| Borrower | ||
| By: | /s/ Ellen O’Connor Vos | |
| Name: Ellen O’Connor Vos | ||
| Title: CEO | ||
Date: October 28, 2021
Principal Amount: Up To $3,000,000
[ signature page to Promissory Note]
| 12 |
EXHIBIT A
REVOLVING BORROWING SCHEDULE
| Draw Amount/Principal Borrowed | Date Borrowed | Date Repaid |
| 13 |
Exhibit 10.28
SECURITY AGREEMENT
THIS SECURITY AGREEMENT dated as of October 28, 2021 (this “Agreement”), is made by Modular Medical, Inc., a corporation organized under the laws of Nevada (the “Borrower”), having an address of 16722 W. Bernardo Drive, San Diego, California 92127, in favor of Manchester Explorer, L.P. (together with its successors and permitted assigns, the “Lender”).
WITNESSETH:
WHEREAS, the Borrower is indebted to Lender pursuant to a Promissory Note dated as of October 28, 2021, in an amount of up to $3,000,000.00 (together with any and all extensions, renewals, or modifications thereof, the “Note”), executed by the Borrower in favor of the Lender;
WHEREAS, the Note evidences loans (the “Loans”) being made by the Lender to the Borrower pursuant to the Note; and
WHEREAS, the Borrower desires to secure its obligations under the Note by granting the Lender a security interest as provided in this Agreement.
NOW, THEREFORE, in consideration of the promises contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement agree as follows:
1. Definitions. In addition to the terms defined elsewhere in this Agreement, capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Note.
2. Grant of Security Interest. As security for the full and punctual payment of the principal amount under the Note (including amounts representing accrued interest on the Note) when due and payable (whether upon stated maturity or otherwise), the Borrower does hereby pledge, assign, transfer and deliver to the Lender a continuing and unconditional security interest in and to any and all property of the Borrower, of any kind or description, tangible or intangible, wheresoever located and whether now existing or hereafter arising or acquired, including but not limited to, all of the following (all of which property, along with the products and proceeds therefrom, are individually and collectively referred to as the “Collateral”):
(a) All goods (and embedded computer programs and supporting information included within the definition of “goods” under the Uniform Commercial Code as adopted and in effect in the State of New York, as amended from time to time (the “Code”)) and equipment now owned or hereafter acquired, including, without limitation, all laboratory equipment, computer equipment, office equipment, machinery, fixtures, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing, and all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing, wherever located;
(b) All inventory now owned or hereafter acquired, including, without limitation, all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products including such inventory as is temporarily out of the Borrower’s custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance proceeds, resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above, and the Borrower’s books relating to any of the foregoing;
(c) All contract rights and general intangibles, including Intellectual Property, now owned or hereafter acquired, including, without limitation, goodwill, license agreements, franchise agreements, blueprints, drawings, purchase orders, customer lists, route lists, infringements, claims, software, computer programs, computer disks, computer tapes, literature, reports, catalogs, design rights, income tax refunds, payment intangibles, commercial tort claims, payments of insurance and rights to payment of any kind;
(d) All now existing and hereafter arising accounts, contract rights, royalties, license rights, license fees and all other forms of obligations owing to the Borrower arising out of the sale or lease of goods, the licensing of technology or the rendering of services by the Borrower (subject, in each case, to the contractual rights of third parties to require funds received by Borrower to be expended in a particular manner), whether or not earned by performance, and any and all credit insurance, guaranties, and other security therefor, as well as all merchandise returned to or reclaimed by the Borrower and the Borrower’s books relating to any of the foregoing;
(e) All documents, cash, deposit accounts, letters of credit (whether or not the letter of credit is evidenced by a writing), certificates of deposit, instruments, promissory notes, chattel paper (whether tangible or electronic) and investment property, including, without limitation, all securities, whether certificated or uncertificated, security entitlements, securities accounts, commodity contracts and commodity accounts, and all financial assets held in any securities account or otherwise, wherever located, now owned or hereafter acquired and the Borrower’s books relating to the foregoing; and
(f) Any and all claims, rights and interests in any of the above and all substitutions for, additions and accessions to and proceeds thereof, including, without limitation, insurance, condemnation, requisition or similar payments and proceeds of the sale or licensing of Intellectual Property.
3. Indebtedness Secured. This Agreement and the security interests granted herein secure the following obligations (collectively, the “Obligations”): (a) the obligations of Borrower to Lender under the Note; (b) any and all advances or expenditures made by Lender pursuant to the terms of this Agreement; (c) attorneys’ fees, court costs, and other amounts which may be due under the Note or this Agreement; (d) any and all other indebtedness of the Borrower to Lender, now existing or hereafter arising, of whatever class or nature, individually or collectively, whether direct or indirect, joint or several, absolute or contingent, due or to become due, and whether or not now contemplated by the parties, including future advances; and (e) any and all extensions, renewals, and modifications of any of the foregoing.
4. Authorization To File Financing Statements. The Borrower hereby irrevocably authorizes the Lender at any time and from time to time to file in any filing office in any Uniform Commercial Code jurisdiction any initial financing statements and amendments to this Agreement that: (a) indicate the Collateral, and (b) provide any other information required by part 5 of Article 9 of the Code of New York or such other jurisdiction for the sufficiency or filing office acceptance of any financing statement or amendment, including whether the Borrower is an organization, the type of organization and any organizational identification number issued to the Borrower.
5. Relation to Other Security Documents. The provisions of this Agreement supplement and are cumulative with, and not in lieu of, the provisions of any and all other security agreements, mortgages, assignments, and other security documents executed by the Borrower or any third party in favor of the Lender as security for the Obligations; provided that the Borrower will (i) provide a list of all other secured lenders (“Other Lenders”) and (ii) obtain an intercreditor agreement from each Other Lender that the Lender’s security interest is pari passu to their security interest with respect to seniority. For the avoidance of doubt, the Borrower and the Lender acknowledge that the rights and obligations of the parties hereto are subject and to be considered to be a first lien, top of the capital structure, and to be considered, at the time of the Note, the only secured obligation of the Borrower.
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6. Representations and Warranties Concerning Borrower’s Legal Status. The Borrower hereby represents and warrants to the Lender as follows: (a) the Borrower’s exact legal name is that indicated in this Agreement and on the signature page hereof, (b) the Borrower is an organization of the type, and is organized in the jurisdiction, set forth above in this Agreement, and (c) the Borrower’s place of business and mailing address is the address set forth above.
7. Covenants Concerning Borrower’s Legal Status. The Borrower covenants with the Lender as follows: (a) without providing at least thirty (30) days prior written notice to the Lender, the Borrower will not change its name, its place of business or, if more than one, chief executive office, or its mailing address or organizational identification number if it has one, (b) if the Borrower does not have an organizational identification number and later obtains one, the Borrower will forthwith notify the Lender of such organizational identification number, and (c) the Borrower will not change its type of organization, jurisdiction of organization, or other legal structure.
8. Covenants Concerning Collateral, etc. The Borrower further covenants with the Lender as follows: (a) the Collateral will be kept at the address of the Borrower set forth above, and the Borrower will not remove the Collateral from such location, without providing at least thirty (30) days prior written notice to the Lender, (b) except for Permitted Liens, the Borrower shall be the owner of the Collateral free from any right or claim of any other person or any lien, security interest or other encumbrance, and the Borrower shall defend the same against all claims and demands of all persons at any time claiming the same or any interests in this Agreement adverse to the Lender, (c) the Borrower shall not pledge, mortgage or create, or suffer to exist any right of any person in or claim by any person to the Collateral, or any security interest, lien or other encumbrance in the Collateral in favor of any person, other than the Lender, (d) the Borrower will permit the Lender, or its designee, to inspect the Collateral at any reasonable time, (e) the Borrower will pay promptly or cause to be paid when due all taxes, assessments, governmental charges and levies upon the Collateral or incurred in connection with the use or operation of such Collateral or incurred in connection with this Agreement (not including those taxes, assessments, charges or levies which are being diligently contested in good faith and by appropriate proceedings, and such contest operates to suspend collection of such contested taxes, assessments, charges and levies) and (f) no transfer or license to any Intellectual Property will be made without the Lender’s prior written consent.
9. Insurance. The Borrower will maintain or cause to be maintained insurance with respect to the Collateral pursuant to the terms of the Note.
10. Collateral Protection Expenses; Preservation of Collateral.
(a) Expenses Incurred by the Lender. In the Lender’s discretion, if the Borrower fails to do so, the Lender may discharge taxes and other encumbrances at any time levied or placed on any of the Collateral, make repairs under this Agreement and pay any necessary filing fees or insurance premiums. The Borrower agrees to reimburse the Lender on demand for all expenditures so made. The Lender shall have no obligation to the Borrower to make any such expenditures, nor shall the making of such expenditures be construed as a waiver or cure any Event of Default.
(b) Lender’s Obligations and Duties. Anything in this Agreement to the contrary notwithstanding, the Borrower shall remain obligated and liable under each contract or agreement comprised in the Collateral to be observed or performed by the Borrower thereunder. The Lender shall not have any obligation or liability under any such contract or agreement by reason of or arising out of this Agreement or the receipt by the Lender of any payment relating to any of the Collateral, nor shall the Lender be obligated in any manner to perform any of the obligations of the Borrower under any such contract or agreement, to make inquiry as to the nature or sufficiency of any payment received by the Lender in respect of the Collateral or as to the sufficiency of any performance by any party under any such contract or agreement, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to the Lender or to which the Lender may be entitled at any time or times.
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11. Rights and Remedies. If an Event of Default shall have occurred and be continuing, the Lender, without any other notice to or demand upon the Borrower, shall have in any jurisdiction in which enforcement hereof is sought, in addition to all other rights and remedies, the rights and remedies of a secured party under the Code and any additional rights and remedies as may be provided to a secured party in any jurisdiction in which Collateral is located, including, without limitation, the right to take possession of the Collateral, and for that purpose the Lender may, so far as the Borrower can give authority therefor, enter upon any premises on which the Collateral may be situated and remove the same therefrom. The Lender may in its discretion require the Borrower to assemble all or any part of the Collateral at such location or locations within the jurisdiction(s) of the Borrower’s principal office(s) or at such other locations as the Lender may reasonably designate. Unless the Collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, the Lender shall give to the Borrower at least five (5) Business Days’ prior written notice of the time and place of any public sale of Collateral or of the time after which any private sale or any other intended disposition is to be made. The Borrower hereby acknowledges that five (5) Business Days’ prior written notice of such sale or sales shall be reasonable notice. In addition, the Borrower waives any and all rights that it may have to a judicial hearing in advance of the enforcement of any of the Lender’s rights and remedies hereunder, including, without limitation, its right following an Event of Default to take immediate possession of the Collateral and to exercise its rights and remedies with respect to this Agreement.
12. Standards for Exercising Rights and Remedies. To the extent that applicable law imposes duties on the Lender to exercise remedies in a commercially reasonable manner, the Borrower acknowledges and agrees that it is not commercially unreasonable for the Lender: (a) to fail to incur expenses reasonably deemed significant by the Lender to prepare Collateral for disposition or otherwise to fail to complete raw material or work in process into finished goods or other finished products for disposition, (b) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (c) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (d) to contact other persons, whether or not in the same business as the Borrower, for expressions of interest in acquiring all or any portion of the Collateral, (e) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the collateral is of a specialized nature, (f) to dispose of Collateral by using Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of assets, (g) to dispose of assets in wholesale rather than retail markets, (h) to disclaim disposition warranties, or (i) to the extent deemed appropriate by the Lender, to obtain the services of brokers, consultants, and other professionals to assist the Lender in the collection or disposition of any of the Collateral. The Borrower acknowledges that the purpose of this Section is to provide non-exhaustive indications of what actions or omissions by the Lender would fulfill the Lender’s duties under the Code of New York or any other relevant jurisdiction in the Lender’s exercise of remedies against the Collateral and that other actions or omissions by the Lender shall not be deemed to fail to fulfill such duties solely on account of not being indicated in this Section. Without limitation upon the foregoing, nothing contained in this Section shall be construed to grant any rights to the Borrower or to impose any duties on the Lender that would not have been granted or imposed by this Agreement or by applicable law in the absence of this Section.
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13. No Waiver by Lender, etc. The Lender shall not be deemed to have waived any of its rights and remedies in respect of the Obligations or the Collateral unless such waiver shall be in writing and signed by the Lender. No delay or omission on the part of the Lender in exercising any right or remedy shall operate as a waiver of such right or remedy or any other right or remedy. A waiver on any one occasion shall not be construed as a bar to or waiver of any right or remedy on any future occasion. All rights and remedies of the Lender with respect to the Obligations or the Collateral, whether evidenced hereby or by any other instrument or papers, shall be cumulative and may be exercised singularly, alternatively, successively or concurrently at such time or at such times as the Lender deems expedient.
14. Suretyship Waivers by Borrower. The Borrower waives demand, notice, protest, notice of acceptance of this Agreement, notice of loans made, credit extended, Collateral received or delivered or other action taken in reliance hereon and all other demands and notices of any description. With respect to both the Obligations and the Collateral, the Borrower assents to any extension or postponement of the time of payment or any other indulgence, to any substitution, exchange or release of or failure to perfect any security interest in any Collateral, to the addition or release of any party or person primarily or secondarily liable, to the acceptance of partial payment thereon and the settlement, compromising or adjusting of any thereof, all in such manner and at such time or times as the Lender may deem advisable. The Lender shall have no duty for the collection or protection of the Collateral or any income from the Collateral, the preservation of rights against prior parties, or the preservation of any rights pertaining to this Agreement. The Borrower further waives any and all other suretyship defenses.
15. Marshalling. The Lender shall not be required to marshal any present or future collateral security (including but not limited to the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such collateral security or other assurances of payment in any particular order, and all of its rights and remedies hereunder and in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights and remedies, however existing or arising. To the extent that it lawfully may, the Borrower hereby agrees that it will not invoke any law relating to the marshalling of collateral which might cause delay in or impede the enforcement of the Lender’s rights and remedies under this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, the Borrower hereby irrevocably waives the benefits of all such laws.
16. Proceeds of Dispositions; Expenses. The Borrower shall pay to the Lender on demand any and all expenses, including reasonable attorneys’ fees and disbursements, incurred or paid by the Lender in protecting, preserving, or enforcing the Lender’s rights and remedies under or in respect of any of the Obligations or any of the Collateral. After deducting all of said expenses, the residue of any proceeds of collection or sale or other disposition of Collateral shall, to the extent actually received in cash, be applied to the payment of the Obligations in such order or preference as the Lender may determine, proper allowance and provision being made for any Obligations not then due. In the absence of final payment and satisfaction in full of all of the Obligations, the Borrower shall remain liable for any deficiency.
17. Overdue Amounts. Until paid, all amounts due and payable by the Borrower hereunder shall be a debt secured by the Collateral and shall bear, whether before or after judgment, interest at the “Default Rate” if any provided for in the Note; otherwise at the interest rate provided for in the Note.
18. Governing Law; Consent to Jurisdiction. THIS AGREEMENT IS INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The Borrower agrees that any action or claim arising out of any dispute in connection with this Agreement, any rights or obligations hereunder or the performance or enforcement of such rights or obligations may be brought in the courts of the State of New York or any Federal court sitting in the State of New York and consents to the nonexclusive jurisdiction of such court and to service of process in any such suit being made upon the Borrower by mail at the address set forth above. The Borrower hereby waives any objection that it may now or hereafter have to the venue of any such suit or any such court or that such suit is brought in an inconvenient court.
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19. Waiver of Jury Trial. THE BORROWER WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OR ENFORCEMENT OF ANY SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law, the Borrower waives any right which it may have to claim or recover in any litigation referred to in the preceding sentence any special, exemplary, punitive or consequential damages or any damages other than, or in addition to, actual damages. The Borrower (i) certifies that neither the Lender nor any representative, agent or attorney of the Lender has represented, expressly or otherwise, that the Lender would not, in the event of litigation, seek to enforce the foregoing waivers or other waivers contained in this Agreement and (ii) acknowledges that, in making the Loans evidenced by the Note, the Lender is relying upon, among other things, the waivers and certifications contained in this Section.
20. Miscellaneous. The headings of each section of this Agreement are for convenience only and shall not define or limit the provisions thereof. This Agreement and all rights and obligations hereunder shall be binding upon the Borrower and its successors and permitted assigns, and shall inure to the benefit of the Lender and its successors and permitted assigns. If any term of this Agreement shall be held to be invalid, illegal or unenforceable, the validity of all other terms hereof shall in no way be affected thereby, and this Agreement shall be construed and be enforceable as if such invalid, illegal or unenforceable term had not been included in this Agreement. The Borrower acknowledges receipt of a copy of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, intending to be legally bound, the Borrower has caused this Agreement to be duly executed as of the date first above written.
| BORROWER: | ||
| MODULAR MEDICAL, INC. | ||
| By: | /s/ Ellen O’Connor Vos | |
| Name: Ellen O’Connor Vos | ||
| Title: CEO | ||
| LENDER: | ||
| MANCHESTER EXPLORER, L.P. | ||
| By: | /s/ James E. Besser | |
| Name: James E. Besser | ||
| Title: Managing Member | ||
[Signature Page to Security Agreement]
Exhibit 10.29
COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement (this “Agreement”) made as of October 28, 2021, is entered into by and between the investor set forth on the signature page hereof (the “Investor”) and Modular Medical, Inc. a Nevada corporation (the “Company”).
The Company and the Investor hereby agree as follows:
1. The Investor will purchase from the Company and the Company will issue and sell to the Investor the number of shares of common stock (the “Shares”) of the Company set forth on Schedule A hereto at the purchase price of $2.70 per Share.
2. The completion of the purchase and sale of the Shares (the “Closing”) shall occur on October 29, 2021. At the Closing, the Company shall deliver to the Investor, using customary book-entry procedures, the number of Shares set forth on Schedule A, and the Investor shall deliver, or cause to be delivered, to the Company, by wire transfer funds in the full amount of the purchase price for the Shares being purchased. The Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and will bear a restrictive legend.
3. Representations and Warranties of the Company
(i) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada.
(ii) The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and to consummate the transactions contemplated hereby, including the issuance of the Shares in accordance with the terms hereof.
(iii) This Agreement constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms
(iv) The Shares, when issued, sold and delivered in accordance with the terms of this Agreement and upon payment of the consideration set forth in this Agreement, will be duly and validly issued, fully paid and non-assessable.
4. Representations and Warranties of the Investor
(i) The Investor has the knowledge and experience necessary to evaluate the merits and risks associated with the purchase of the Shares and has carefully reviewed and understands the risks of, and other considerations relating to, the purchase of Shares. The Investor has adequate means of providing for Investor’s current and anticipated financial needs and contingencies, is able to bear the economic risks of the investment for an indefinite period of time and has no need for liquidity of the investment in the Shares.
(ii) The Investor is acquiring the Shares for investment for his, her or its own account and not with the view to, or for resale in connection with, any distribution thereof. The Investor understands and acknowledges that the offering and sale of the Shares has not been registered under the Securities Act or any state securities laws, by reason of a specific exemption from the registration provisions of the Securities Act and applicable state securities laws, which depends upon, among other things, the bona fide nature of the investment intent as expressed herein.
(iii) The Investor understands that there are substantial restrictions on the transferability of the Shares.
(iv) This Agreement constitutes a valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms.
5. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of California, without giving effect to the principles of conflicts of law.
6. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties.
SIGNATURE PAGE FOLLOWS
SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT
| Name of Investor: | ||
| By: | ||
| Print Name: | ||
| Title: | ||
| Address: | ||
| Tax ID No.: | ||
| Contact Name: | ||
| Telephone: | ||
| Name in which book-entry should be made (if different): | ||
| MODULAR MEDICAL, INC. | |
| By: | |
| Print Name: | |
| Title: | |
SCHEDULE A
Name of Investor:
Price per Share: $
Number of Shares Purchased:
Aggregate Purchase Price:
Cover |
Oct. 28, 2021 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Amendment Flag | false |
| Document Period End Date | Oct. 28, 2021 |
| Entity File Number | 000-49671 |
| Entity Registrant Name | MODULAR MEDICAL, INC. |
| Entity Central Index Key | 0001074871 |
| Entity Tax Identification Number | 87-0620495 |
| Entity Incorporation, State or Country Code | NV |
| Entity Address, Address Line One | 16772 W. Bernardo Drive |
| Entity Address, City or Town | San Diego |
| Entity Address, State or Province | CA |
| Entity Address, Postal Zip Code | 92127 |
| City Area Code | 858 |
| Local Phone Number | 800-3500 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Entity Emerging Growth Company | true |
| Elected Not To Use the Extended Transition Period | false |