ORIGINAL ISSUE DISCOUNT SECURED CONVERTIBLE PROMISSORY NOTE DUE MAY 9, 2021
Exhibit 4.2
NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY
A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
Original Issue
Date: _________, 2020
Original Principal
Amount: $_______
Purchase Price:
$________
ORIGINAL
ISSUE DISCOUNT SECURED CONVERTIBLE PROMISSORY NOTE
DUE
MAY 9, 2021
THIS
ORIGINAL ISSUE DISCOUNT SENIOR SECURED CONVERTIBLE PROMISSORY NOTE
is a duly authorized and validly issued debt obligation of GoIP
Global, Inc., a Colorado corporation (the “Company” or the
“Borrower”), having its
principal place of business at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, designated as its Original Issue Discount Senior
Secured Convertible Promissory Note due May 9, 2021 (the
“Note”).
FOR
VALUE RECEIVED, the Company promises to pay to KORR Value, LP or its registered assigns
(the “Holder”), or shall have
paid pursuant to the terms hereunder, the principal sum of $______
and any other sums due hereunder on May 9, 2021 (the
“Maturity
Date”), or such earlier date as this Note is required
or permitted to be repaid as provided hereunder, and to pay
interest to the Holder on the aggregate unconverted and then
outstanding principal amount of this Note in accordance with the
provisions hereof. This Note is subject to the following additional
provisions:
Section
1. Definitions.
For the purposes hereof, in addition to the terms defined elsewhere
in this Note, (a) capitalized terms not otherwise defined herein
shall have the meanings set forth in the Purchase Agreement and (b)
the following terms shall have the following meanings:
“Alternate Conversion
Price” means the greater of (i) $0.01 or (ii) 75% of
the average VWAP of the Common Stock for the immediately preceding
five (5) Trading Days on the Trading Market on the date of
conversion.
“Beneficial Ownership
Limitation” shall have the meaning set forth in
Section
4(d).
“Business Day” means any
day except any Saturday, any Sunday, any day which is a federal
legal holiday in the United States or any day on which the New York
Federal Reserve Bank is closed.
“Buy-In” shall have the
meaning set forth in Section 4(c)(v).
“Change of Control
Transaction” means the occurrence after the date
hereof of any of (a) an acquisition after the date hereof by an
individual or legal entity or “group” (as described in
Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective
control (whether through legal or beneficial ownership of capital
stock of the Company, by contract or otherwise) of in excess of
fifty percent (50%) of the voting securities of the Company (other
than by means of conversion or exercise of the Note and the
Securities issued together with the Note), (b) the Company merges
into or consolidates with any other Person, or any Person merges
into or consolidates with the Company and, after giving effect to
such transaction, the stockholders of the Company immediately prior
to such transaction own less than fifty-one percent (51%) of the
aggregate voting power of the Company or the successor entity of
such transaction, (c) the Company sells or transfers all or
substantially all of its assets to another Person and the
stockholders of the Company immediately prior to such transaction
own less than fifty-one percent (51%) of the aggregate voting power
of the acquiring entity immediately after the transaction, (d) a
replacement at one time or within a three year period of more than
one-half of the members of the Board of Directors which is not
approved by a majority of those individuals who are members of the
Board of Directors on the Original Issue Date (or by those
individuals who are serving as members of the Board of Directors on
any date whose nomination to the Board of Directors was approved by
a majority of the members of the Board of Directors who are members
on the date hereof), or (e) the execution by the Company of an
agreement to which the Company is a party or by which it is bound,
providing for any of the events set forth in clauses (a) through
(d) above.
“Conversion” shall have
the meaning ascribed to such term in Section 4. “Conversion Date” shall
have the meaning set forth in Section 4(a)(i).
“Conversion
Price” shall have the meaning set forth in
Section
4(b).
“Conversion Shares” means,
collectively, the shares of Common Stock issuable upon conversion
of this Note in accordance with the terms hereof.
“Distribution” shall have
the meaning set forth in Section 5(c).
“Event of
Default” shall have the meaning set forth in
Section
6(a).
“Equity Conditions” means,
during the period in question, (a) the Company shall have duly
honored all conversions and redemptions scheduled to occur or
occurring by virtue of one or more Notices of Conversion of the
Holder, if any, (b) the Company shall have paid all liquidated
damages and other amounts owing to the Holder in respect of
this
Note,
(c) the Common Stock is trading on a Trading Market and all of the
shares issuable pursuant to the Transaction Documents are listed or
quoted for trading on such Trading Market (and the Company
believes, in good faith, that trading of the Common Stock on a
Trading Market will continue uninterrupted for the foreseeable
future), (d) there is a sufficient number of authorized but
unissued and otherwise unreserved shares of Common Stock for the
issuance of all of the shares issuable pursuant to the Transaction
Documents,
(e) there
is no existing Event of Default or no existing event which, with
the passage of time or the giving of notice, would constitute an
Event of Default, (f) the issuance of the shares in question to the
Holder would not violate the limitations set forth in Section 4(d)
herein, and (g) there has been no public announcement of a pending
or proposed Fundamental Transaction or Change of Control
Transaction that has not been consummated, and (h) the Holder is
not in possession of any information provided by the Company that
constitutes, or may constitute, material non-public
information.
“Late Fees” shall have the
meaning set forth in Section 2(d).
“Mandatory Default Amount”
means either, at the Holder’s discretion (i) the conversion
of the outstanding principal amount of this Note, plus all accrued
and unpaid interest hereon, converted at the Conversion Price or
(ii) the payment of 120% of the outstanding principal amount of
this Note and accrued and unpaid interest hereon, in addition to,
for both (i) and (ii) above, the payment of all other amounts,
costs, expenses and liquidated damages due in respect of this
Note.
“New York Courts” shall
have the meaning set forth in Section 8(d).
“Note
Register” shall have the meaning set forth in
Section
2(c).
“Notice of Conversion”
shall have the meaning set forth in Section 4(a)(i).
“Optional
Redemption” shall have the meaning set forth in
Section 6(a).
“Optional Redemption
Amount” means the sum of (a) 110% of the then
outstanding principal amount of the Note, (b) accrued but unpaid
interest and (c) all liquidated damages and other amounts due in
respect of the Note.
“Optional Redemption Date”
shall have the meaning set forth in Section
2(e).
“Optional Redemption
Notice” shall have the meaning set forth in Section
2(e).
“Optional Redemption Notice
Date” shall have the meaning set forth in
Section 2(e).
“Optional Issue Date”
any
transfers of any Note and regardless of the number of instruments
which may be issued to evidence such
Note.
“Purchase Agreement” means
the Securities Purchase Agreement, dated as of May 8, 2020, among
the Company and the original Holder, as amended, modified or
supplemented from time to time in accordance with its
terms.
“Purchase Rights” shall
have the meaning set forth in Section 5(b).
“Required Minimum” means,
as of any date after the consummation of the Reverse Stock Split,
the number of shares of Common Stock that is two times the number
of shares of Common Stock may be converted into at such time by all
Notes then outstanding. The initial reserve shall be 2,000,000
shares of Common Stock.
“Share Delivery Date”
shall have the meaning set forth in Section 4(c)(ii).
Section
2.
Interest, Prepayment and
Conversion.
a) Payment
of Interest in Cash. The Company shall pay interest to the
Holder on the aggregate unconverted and then outstanding principal
amount of this Note at the rate of eight percent (8%) per annum,
payable quarterly on January 1, April 1, July 1 and October 1,
beginning on the first such date after the Original Issue Date, on
each Conversion Date (as to that principal amount then being
converted), on each Optional Redemption Date (as to that principal
amount then being redeemed) and on the Maturity Date (each such
date, an “Interest
Payment Date”) (if any Interest Payment Date is not a
Business Day, then the applicable payment shall be due on the next
succeeding Business Day), in cash.
b)
Intentionally
Omitted.
c) Interest
Calculations. Interest shall be calculated on the basis of a
360-day year, consisting of twelve 30 calendar day periods, and
shall accrue daily commencing on the Original Issue Date until
payment in full of the outstanding principal, together with all
accrued and unpaid interest, liquidated damages and other amounts
which may become due hereunder, has been made. Interest shall cease
to accrue with respect to any principal amount converted, provided
that, the Company actually delivers the Conversion Shares within
the time period required by Section 4(c)(ii) herein. Interest
hereunder will be paid to the Person in whose name this Note is
registered on the records of the Company regarding registration and
transfers of this Note (the “Note
Register”).
d) All
overdue accrued and unpaid interest to be paid hereunder shall
entail a late fee at an interest rate equal to the lesser of 20%
per annum or the maximum rate permitted by applicable law (the
“Late
Fees”) which shall accrue daily from the date such
interest is due hereunder through and including the date of actual
payment in full. Interest hereunder will be paid to the Person in
whose name this Note is registered on the records of the Company
regarding registration and transfers of this Note (the
“Note
Register”).
e) Optional Redemption. At any
time after the Original Issue Date and before the Maturity Date,
the Company may, deliver a written notice to the Holder (an
“Optional Redemption
Notice” and the date such notice is deemed delivered
hereunder, the “Optional Redemption Notice
Date”) of its irrevocable election to redeem all of
the then outstanding principal amount of this Note for cash in an
amount equal to the Optional Redemption Amount on the
20th calendar day following
the Optional Redemption Notice Date (such date, the “Optional
Redemption Date”, such 20 day period, the “Optional Redemption
Period” and such redemption, the “Optional Redemption”).
The Optional Redemption Amount is payable in full on the Optional
Redemption Date. The Company may only effect an Optional Redemption
if each of the Equity Conditions shall have been met (unless waived
in writing by the Holder) on each Trading Day during the period
commencing on the Optional Redemption Notice Date through to the
Optional Redemption Date and through and including the date payment
of the Optional Redemption Amount is actually made in full. If any
of the Equity Conditions shall cease to be satisfied at any time
during the Optional Redemption Period, then the Holder may elect to
nullify the Optional Redemption Notice by notice to the Company
within 3 Trading Days after the first day on which any such Equity
Condition has not been met (provided that if, by a provision of the
Transaction Documents, the Company is obligated to notify the
Holder of the non- existence of an Equity Condition, such notice
period shall be extended to the third Trading Day after proper
notice from the Company) in which case the Optional Redemption
Notice shall be null and void, ab initio.
f) SBA
Loan Redemption. From the date hereof until the date that
the Notes are no longer outstanding, upon any issuance by the
Company or any of its Subsidiaries of Indebtedness evidenced by a
Small Business Administration loan (a “SBA Financing”), the
Holder shall have the right, upon one (1) day written notice (the
“SBA Financing
Redemption Date”), to require the Company to use 50%
of the gross proceeds received in such SBA Financing, to the extent
not prohibited under the terms of the SBA Financing (the
“SBA Financing
Redemption Amount”), to redeem the Note at the
Optional Redemption Amount (the “SBA Financing
Redemption”). The SBA Financing Redemption Amount
payable on the SBA Financing Redemption Date shall be paid in
cash.
g) Redemption
Procedure. The Company covenants and agrees that it will
honor all Notices of Conversion tendered from the time of delivery
of the Optional Redemption Notice or SBA Financing Notice through
the date all amounts owing thereon are due and paid in full. If any
portion of the payment pursuant to an Optional Redemption or SBA
Redemption shall not be paid by the Company by the applicable due
date, Late Fees shall accrue until such amount is paid in full. The
Company’s determination to pay an Optional Redemption or SBA
Financing Redemption in cash shall be applied ratably to all of the
holders of the then outstanding Notes based on their (or their
predecessor’s) initial purchases of Notes pursuant to the
Purchase Agreement. Notwithstanding anything herein contained to
the contrary, if any portion of the Optional Redemption Amount
remains unpaid after such date, the Holder may elect, by written
notice to the Company given at any time thereafter, to invalidate
such Optional Redemption, ab initio, and, the Company shall have no
further right to exercise such Optional Redemption.
Section 3.
Registration of Transfers and
Exchanges.
a) Different
Denominations. This Note is exchangeable for an equal
aggregate principal amount of Notes of different authorized
denominations, as requested by the Holder surrendering the same. No
service charge will be payable for such registration of transfer or
exchange.
b) Investment
Representations. This Note has been issued subject to
certain investment representations of the original Holder set forth
in the Purchase Agreement and may be transferred or exchanged only
in compliance with the Purchase Agreement and applicable federal
and state securities laws and regulations.
c) Reliance
on Note Register. Prior to due presentment for transfer to
the Company of this Note, the Company and any agent of the Company
may treat the Person in whose name this Note is duly registered on
the Note Register as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether or
not this Note is overdue, and neither the Company nor any such
agent shall be affected by notice to the contrary.
Section 4. Conversion. At any
time after the Original Issue Date until this Note is no longer
outstanding, this Note shall be convertible, in whole or in part,
into shares of Common Stock at the option of the Holder, at any
time and from time to time (subject to the conversion limitations
set forth in Section 4(d) hereof). The Holder shall effect
conversions by delivering to the Company a Notice of Conversion,
the form of which is attached hereto as Annex A (each, a
“Notice of
Conversion”), specifying therein the principal amount
of this Note to be converted and the date on which such conversion
shall be effected (such date, the “Conversion Date”). If no
Conversion Date is specified in a Notice of Conversion, the
Conversion Date shall be the date that such Notice of Conversion is
deemed delivered hereunder. To effect conversions hereunder, the
Holder shall not be required to physically surrender this Note to
the Company unless the entire principal amount of this Note, plus
all accrued and unpaid interest thereon, has been so converted.
Conversions hereunder shall have the effect of lowering the
outstanding principal amount of this Note in an amount equal to the
applicable conversion. The Holder and the Company shall maintain
records showing the principal amount(s) converted and the date of
such conversion(s). The Company may deliver an objection to any
Notice of Conversion within two Business Days of delivery of such
Notice of Conversion. In the event of any dispute or discrepancy,
the records of the Company shall be controlling and determinative
in the absence of manifest error. The Holder, and any assignee by acceptance of
this Note, acknowledge and agree that, by reason of the provisions
of this paragraph, following conversion of a portion of this Note,
the unpaid and unconverted principal amount of this Note may be
less than the amount stated on the face hereof.
a) Conversion
Price. The conversion price in effect on any Conversion Date
shall be equal to $0.25 after the Reverse Stock Split, subject to
adjustment herein (the “Conversion Price”).
Notwithstanding the foregoing, at any time during the continuance
of any Event of Default, the Conversion Price in effect shall be
equal to the Alternate Conversion Price. If at any time the
Conversion Price as determined hereunder for any conversion would
be less than the par value of the Common Stock, then at the sole
discretion of the Holder, the Conversion Price hereunder may equal
such par value for such conversion and the Conversion Amount for
such conversion may be increased to include Additional Principal,
where “Additional Principal” means such additional
amount to be added to the Principal Amount to the extent necessary
to cause the number of conversion shares issuable upon such
conversion to equal the same number of conversion shares as would
have been issued had the Conversion Price not been adjusted by the
Holder to the par value price. In the event the Borrower has a DTC
“Chill” on its shares, the Holder may convert the Note
at the Alternate Conversion Price while that “Chill” is
in effect. All such determinations to be appropriately adjusted for
any stock dividend, stock split, stock combination,
reclassification or similar transaction that proportionately
decreases or increases the Common Stock during such measuring
period.
b)
Mechanics of
Conversion.
i. Conversion
Shares Issuable Upon Conversion of Principal Amount. The
number of Conversion Shares issuable upon a conversion hereunder
shall be determined by the quotient obtained by dividing (x) the
outstanding principal amount of this Note to be converted by (y)
the Conversion Price.
ii. Delivery
of Certificate Upon Conversion. Not later than three Trading
Days after each Conversion Date (the “Share Delivery Date”),
the Company shall deliver, or cause to be delivered, to the Holder
(A) a certificate or certificates representing the Conversion
Shares representing the number of Conversion Shares being acquired
upon the conversion of this Note and (B) a bank check in the amount
of accrued and unpaid interest (if the Purchaser has elected or is
required to pay accrued interest in cash).
iii. Failure
to Deliver Certificates. If, in the case of any Notice of
Conversion, such certificate or certificates are not delivered to
or as directed by the applicable Holder by the Share Delivery Date,
the Holder shall be entitled to elect by written notice to the
Company at any time on or before its receipt of such certificate or
certificates, to rescind such Conversion, in which event the
Company shall promptly return to the Holder any original Note
delivered to the Company and the Holder shall promptly return to
the Company the Common Stock certificates issued to such Holder
pursuant to the rescinded Conversion Notice.
iv. Obligation
Absolute; Partial Liquidated Damages. The Company’s
obligations to issue and deliver the Conversion Shares upon
conversion of this Note in accordance with the terms hereof are
absolute and unconditional, irrespective of any action or inaction
by the Holder to enforce the same, any waiver or consent with
respect to any provision hereof, the recovery of any judgment
against any Person or any action to enforce the same, or any
setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other Person of any
obligation to the Company or any violation or alleged violation of
law by the Holder or any other Person, and irrespective of any
other circumstance which might otherwise limit such obligation of
the Company to the Holder in connection with the issuance of such
Conversion Shares; provided, however, that such delivery
shall not operate as a waiver by the Company of any such action the
Company may have against the Holder. If the Company fails for any
reason to deliver to the Holder such certificate or certificates
pursuant to Section 4(c)(ii) by the Share Delivery Date, the
Company shall pay to the Holder, in cash, as liquidated damages and
not as a penalty, for each $1,000 of principal amount being
converted
$5 per
Trading Day (increasing to $10 per Trading Day on the fifth
(5th) Trading Day after such
liquidated damages begin to accrue) for each Trading Day after such
Share Delivery Date until such certificates are delivered or Holder
rescinds such conversion. Nothing herein shall limit a
▇▇▇▇▇▇’s right to pursue actual damages or declare an Event
of Default pursuant to Section 6 hereof for the Company’s
failure to deliver Conversion Shares within the period specified
herein and the Holder shall have the right to pursue all remedies
available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive
relief. The exercise of any such rights shall not prohibit the
Holder from seeking to enforce damages pursuant to any other
Section hereof or under applicable law.
v. Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon
Conversion. In addition to any other rights available to the
Holder, if the Company fails for any reason to deliver to the
Holder such certificate or certificates by the Share Delivery Date
pursuant to Section 4(c)(ii), and if after such Share Delivery Date
the Holder is required by its brokerage firm to purchase (in an
open market transaction or otherwise), or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to
deliver in satisfaction of a sale by the Holder of the Conversion
Shares which the Holder was entitled to receive upon the conversion
relating to such Share Delivery Date (a “Buy-In”), then the
Company shall (A) pay in cash to the Holder (in addition to any
other remedies available to or elected by the Holder) the amount,
if any, by which (x) the Holder’s total purchase price
(including any brokerage commissions) for the Common Stock so
purchased exceeds (y) the product of (1) the aggregate number of
shares of Common Stock that the Holder was entitled to receive from
the conversion at issue multiplied by (2) the actual sale price at
which the sell order giving rise to such purchase obligation was
executed (including any brokerage commissions) and (B) at the
option of the Holder, either reissue (if surrendered) this Note in
a principal amount equal to the principal amount of the attempted
conversion (in which case such conversion shall be deemed
rescinded) or deliver to the Holder the number of shares of Common
Stock that would have been issued if the Company had timely
complied with its delivery requirements under Section 4(c)(ii). For
example, if the Holder purchases Common Stock having a total
purchase price of $11,000 to cover a Buy-In with respect to an
attempted conversion of this Note with respect to which the actual
sale price of the Conversion Shares (including any brokerage
commissions) giving rise to such purchase obligation was a total of
$10,000 under clause (A) of the immediately preceding sentence, the
Company shall be required to pay the Holder $1,000. The Holder
shall provide the Company written notice indicating the amounts
payable to the Holder in respect of the Buy-In and, upon request of
the Company, evidence of the amount of such loss. Nothing herein
shall limit a ▇▇▇▇▇▇’s right to pursue any other remedies
available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive
relief with respect to the Company’s failure to timely
deliver certificates representing shares of Common Stock upon
conversion of this Note as required pursuant to the terms
hereof.
vi. Reservation
of Shares Issuable Upon Conversion. The Company covenants
that it will at all times after the consummation of the Reverse
Stock Split reserve and keep available out of its authorized and
unissued shares of Common Stock a number of shares of Common Stock
at least equal to 100% of the Required Minimum (to be adjusted
monthly) for the sole purpose of issuance upon conversion of this
Note and payment of interest on this Note, each as herein provided,
free from preemptive rights or any other actual contingent purchase
rights of Persons other than the Holder (and the other holders of
the Note), not less than such aggregate number of shares of the
Common Stock as shall (subject to the terms and conditions set
forth in the Purchase Agreement) be issuable (taking into account
the adjustments and restrictions of Section 5) upon the conversion
of the then outstanding principal amount of this Note and payment
of interest hereunder. The Company covenants that all shares of
Common Stock that shall be so issuable shall, upon issue, be duly
authorized, validly issued, fully paid and
nonassessable.
vii. Fractional
Shares. No fractional shares or scrip representing
fractional shares shall be issued upon the conversion of this Note.
As to any fraction of a share which the Holder would otherwise be
entitled to purchase upon such conversion, the Company shall at its
election, either pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by the
Conversion Price or round up to the next whole share.
viii. Transfer
Taxes and Expenses. The issuance of certificates for shares
of the Common Stock on conversion of this Note shall be made
without charge to the Holder hereof for any documentary stamp or
similar taxes that may be payable in respect of the issue or
delivery of such certificates, provided that, the Company shall not
be required to pay any tax that may be payable in respect of any
transfer involved in the issuance and delivery of any such
certificate upon conversion in a name other than that of the Holder
of this Note so converted and the Company shall not be required to
issue or deliver such certificates unless or until the Person or
Persons requesting the issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid. The
Company shall pay all Transfer Agent fees required for same-day
processing of any Notice of Conversion.
c) ▇▇▇▇▇▇’s
Conversion Limitations. The Company shall not effect any
conversion of this Note, and a Holder shall not have the right to
convert any portion of this Note, to the extent that after giving
effect to the conversion set forth on the applicable Notice of
Conversion, the Holder (together with the Holder’s
Affiliates, and any Persons acting as a group together with the
Holder or any of the Holder’s Affiliates) (such Persons,
“Attribution
Parties”)) would beneficially own in excess of the
Beneficial Ownership Limitation (as defined below). For purposes of
the foregoing sentence, the number of shares of Common Stock
beneficially owned by the Holder and its Affiliates and Attribution
Parties shall include the number of shares of Common Stock issuable
upon conversion of this Note with respect to which such
determination is being made, but shall exclude the number of shares
of Common Stock which are issuable upon (i) conversion of the
remaining, unconverted principal amount of this Note beneficially
owned by the Holder or any of its Affiliates or Attribution Parties
and (ii) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Company subject to a
limitation on conversion or exercise analogous to the limitation
contained herein beneficially owned by the Holder or any of its
Affiliates. Except as set forth in the preceding sentence, for
purposes of this Section
4(d), beneficial ownership shall be calculated in accordance
with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder. To the extent that the
limitation contained in this Section 4(d) applies, the
determination of whether this Note is convertible (in relation to
other securities owned by the Holder together with any Affiliates
and Attribution Parties) and of which principal amount of this Note
is convertible shall be in the sole discretion of the Holder, and
the submission of a Notice of Conversion shall be deemed to be the
Holder’s determination of whether this Note may be converted
(in relation to other securities owned by the Holder together with
any Affiliates) and which principal amount of this Note is
convertible, in each case subject to the Beneficial Ownership
Limitation. To ensure compliance with this restriction, the Holder
will be deemed to represent to the Company each time it delivers a
Notice of Conversion that such Notice of Conversion has not
violated the restrictions set forth in this paragraph and the
Company shall have no obligation to verify or confirm the accuracy
of such determination. In addition, a determination as to any group
status as contemplated above shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. For purposes of this Section 4(d), in determining
the number of outstanding shares of Common Stock, the Holder may
rely on the number of outstanding shares of Common Stock as stated
in the most recent of the following: (i) the Company’s most
recent periodic or annual report filed with the Commission, as the
case may be, (ii) a more recent public announcement by the Company,
or (iii) a more recent written notice by the Company or the
Company’s transfer agent setting forth the number of shares
of Common Stock outstanding. Upon the written or oral request of a
Holder, the Company shall within one Trading Day confirm orally and
in writing to the Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of
Common Stock shall be determined after giving effect to the
conversion or exercise of securities of the Company, including this
Note, by the Holder or its Affiliates or Attribution Parties since
the date as of which such number of outstanding shares of Common
Stock was reported. The “Beneficial Ownership
Limitation” shall be 9.99% of the number of shares of
the Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock issuable upon conversion of this
Note held by the Holder. The Holder may increase or decrease the
Beneficial Ownership Limitation provisions of this Section 4(d),
provided that the Beneficial Ownership Limitation in no event
exceeds 9.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of
shares of Common Stock upon conversion of this Note held by the
Holder and the Beneficial Ownership Limitation provisions of this
Section 4(d) shall continue to apply. Any increase in the
Beneficial Ownership Limitation will not be effective until the
61st day after such notice is delivered to the Company. The
Beneficial Ownership Limitation provisions of this paragraph shall
be construed and implemented in a manner otherwise than in strict
conformity with the terms of this Section 4(d) to correct this
paragraph (or any portion hereof) which may be defective or
inconsistent with the intended Beneficial Ownership Limitation
contained herein or to make changes or supplements necessary or
desirable to properly give effect to such limitation. The
limitations contained in this paragraph shall apply to a successor
holder of this Note.
Section 5. Certain
Adjustments.
a) Stock
Dividends and Stock Splits. If the Company, at any time
while this Note is outstanding: (i) pays a stock dividend or
otherwise makes a distribution or distributions payable in shares
of Common Stock on shares of Common Stock or any Common Stock
Equivalents (which, for avoidance of doubt, shall not include any
shares of Common Stock issued by the Company upon conversion of, or
payment of interest on, the Note), (ii) subdivides outstanding
shares of Common Stock into a larger number of shares, (iii)
combines (including by way of a reverse stock split) outstanding
shares of Common Stock into a smaller number of shares or (iv)
issues, in the event of a reclassification of shares of the Common
Stock, any shares of capital stock of the Company, then the
Conversion Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding
any treasury shares of the Company) outstanding immediately before
such event, and of which the denominator shall be the number of
shares of Common Stock outstanding immediately after such event.
Any adjustment made pursuant to this Section shall become effective
immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and
shall become effective immediately after the effective date in the
case of a subdivision, combination or re-classification. The
provisions of this Section shall not apply upon the consummation of
the Reverse Stock Split.
b) Subsequent
Equity Sales. If, at any time while this Note is
outstanding, the Company or any Subsidiary, as applicable, sells or
grants any option to purchase or sells or grants any right to
reprice, or otherwise disposes of or issues (or announces any sale,
grant or any option to purchase or other disposition), any Common
Stock or Common Stock Equivalents entitling any Person to acquire
shares of Common Stock at an effective price per share that is
lower than the then Conversion Price (such lower price, the
“Base Conversion
Price” and such issuances, collectively, a
“Dilutive
Issuance”) (if the holder of the Common Stock or
Common Stock Equivalents so issued shall at any time, whether by
operation of purchase price adjustments, reset provisions, floating
conversion, exercise or exchange prices or otherwise, or due to
warrants, options or rights per share which are issued in
connection with such issuance, be entitled to receive shares of
Common Stock at an effective price per share that is lower than the
Conversion Price, such issuance shall be deemed to have occurred
for less than the Conversion Price on such date of the Dilutive
Issuance), then the Conversion Price shall be reduced to equal the
Base Conversion Price. Such adjustment shall be made whenever such
Common Stock or Common Stock Equivalents are issued.
Notwithstanding the foregoing, no adjustment will be made under
this Section 5(b) in respect of an Exempt Issuance. If the Company
enters into a Variable Rate Transaction, despite the prohibition
set forth in the Purchase Agreement, the Company shall be deemed to
have issued Common Stock or Common Stock Equivalents at the lowest
possible conversion price at which such securities may be converted
or exercised. The Company shall notify the Holder in writing, no
later than 1 Business Day following the issuance of any Common
Stock or Common Stock Equivalents subject to this Section 5(b),
indicating therein the applicable issuance price, or applicable
reset price, exchange price, conversion price and other pricing
terms (such notice, the “Dilutive Issuance
Notice”). For purposes of clarification, whether or
not the Company provides a Dilutive Issuance Notice pursuant to
this Section 5(b), upon the occurrence of any Dilutive Issuance,
the Holder is entitled to receive a number of Conversion Shares
based upon the Base Conversion Price on or after the date of such
Dilutive Issuance, regardless of whether the Holder accurately
refers to the Base Conversion Price in the Notice of
Conversion.
c) Subsequent
Rights Offerings. In addition to any adjustments pursuant to
Section 5(a) above,
if at any time the Company grants, issues or sells any Common Stock
Equivalents or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of
shares of Common Stock (the “Purchase Rights”), then
the Holder will be entitled to acquire, upon the terms applicable
to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the number of
shares of Common Stock acquirable upon complete conversion of this
Note (without regard to any limitations on exercise hereof,
including without limitation, the Beneficial Ownership Limitation)
immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale
of such Purchase Rights (provided, however, to the extent that the
Holder’s right to participate in any such Purchase Right
would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in
such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such
extent) and such Purchase Right to such extent shall be held in
abeyance for the Holder until such time, if ever, as its right
thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).
d) Pro
Rata Distributions. During such time as this Note is
outstanding, if the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets)
to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of
cash, stock or other securities, property or options by way of a
dividend, spin off, reclassification, corporate rearrangement,
scheme of arrangement or other similar transaction) (a
"Distribution"), at
any time after the issuance of this Note, then, in each such case,
the Holder shall be entitled to participate in such Distribution to
the same extent that the Holder would have participated therein if
the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Note (without regard to any
limitations on exercise hereof, including without limitation, the
Beneficial Ownership Limitation) immediately before the date of
which a record is taken for such Distribution, or, if no such
record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the participation in such
Distribution (provided, however, to the extent that the
Holder's right to participate in any such Distribution would result
in the Holder exceeding the Beneficial Ownership Limitation, then
the Holder shall not be entitled to participate in such
Distribution to such extent (or in the beneficial ownership of any
shares of Common Stock as a result of such Distribution to such
extent) and the portion of such Distribution shall be held in
abeyance for the benefit of the Holder until such time, if ever, as
its right thereto would not result in the Holder exceeding the
Beneficial Ownership Limitation).
e) Fundamental
Transaction. If, at any time while this Note is outstanding,
(i) the Company effects any merger or consolidation of the Company
with or into another Person, (ii) the Company effects any sale of
all or substantially all of its assets in one transaction or a
series of related transactions, (iii) any tender offer or exchange
offer (whether by the Company or another Person) is completed
pursuant to which holders of Common Stock are permitted to tender
or exchange their shares for other securities, cash or property, or
(iv) the Company effects any reclassification of the Common Stock
or any compulsory share exchange pursuant to which the Common Stock
is effectively converted into or exchanged for other securities,
cash or property (in any such case, a “Fundamental
Transaction”), then, upon any subsequent conversion of
this Note, the Holder shall have the right to receive, for each
Conversion Share that would have been issuable upon such conversion
immediately prior to the occurrence of such Fundamental
Transaction, the same kind and amount of securities, cash or
property as it would have been entitled to receive upon the
occurrence of such Fundamental Transaction if it had been,
immediately prior to such Fundamental Transaction, the holder of 1
share of Common Stock (the “Alternate
Consideration”). For purposes of any such conversion,
the determination of the Conversion Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of 1 share of
Common Stock in such Fundamental Transaction, and the Company shall
apportion the Conversion Price among the Alternate Consideration in
a reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property
to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to
the Alternate Consideration it receives upon any conversion
of this Note following such Fundamental Transaction. To the extent
necessary to effectuate the foregoing provisions, any successor to
the Company or surviving entity in such Fundamental Transaction
shall issue to the Holder a new Note consistent with the foregoing
provisions and evidencing the Holder’s right to convert such
Note into Alternate Consideration. The terms of any agreement
pursuant to which a Fundamental Transaction is effected shall
include terms requiring any such successor or surviving entity to
comply with the provisions of this Section 5(e) and insuring that
this Note (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.
f) Calculations.
All calculations under this Section 5 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 5, the number of shares
of Common Stock deemed to be issued and outstanding as of a given
date shall be the sum of the number of shares of Common Stock
(excluding any treasury shares of the Company) issued and
outstanding.
g)
Notice to the
Holder.
i. Adjustment
to Conversion Price. Whenever the Conversion Price is
adjusted pursuant to any provision of this Section 5, the Company shall
promptly deliver to each Holder a notice setting forth the
Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.
ii. Notice
to Allow Conversion by ▇▇▇▇▇▇. If (A) the Company shall
declare a dividend (or any other distribution in whatever form) on
the Common Stock, (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock,
(C) the Company shall authorize the granting to all holders of the
Common Stock of rights or warrants to subscribe for or purchase any
shares of capital stock of any class or of any rights, (D) the
approval of any stockholders of the Company shall be required in
connection with any reclassification of the Common Stock, any
consolidation or merger to which the Company is a party, any sale
or transfer of all or substantially all of the assets of the
Company, or any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property or (E) the
Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in
each case, the Company shall cause to be filed at each office or
agency maintained for the purpose of conversion of this Note, and
shall cause to be delivered to the Holder at its last address as it
shall appear upon the Note Register, at least twenty (20) calendar
days prior to the applicable record or effective date hereinafter
specified (or such shorter period as is reasonably possible, but
not less than ten (10) calendar days, if twenty (20) calendar days
is not reasonably possible), a notice stating (x) the date on which
a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not
to be taken, the date as of which the holders of the Common Stock
of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date
on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the
Common Stock of record shall be entitled to exchange their shares
of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange, provided that the failure to
deliver such notice or any defect therein or in the delivery
thereof shall not affect the validity of the corporate action
required to be specified in such notice. To the extent that any
notice provided hereunder constitutes, or contains, material, non-
public information regarding the Company or any of the
Subsidiaries, the Company shall simultaneously file such notice
with the Commission pursuant to a Current Report on Form 8-K or if
it is not subject to the reporting requirements of the Commission,
a press release. The Holder shall remain entitled to convert this
Note during the 20-day period commencing on the date of such notice
through the effective date of the event triggering such notice
except as may otherwise be expressly set forth herein.
Section 6.
Events of Default.
a) “Event
of Default” means, wherever used herein, any of the
following events (whatever the reason for such event and whether
such event shall be voluntary or involuntary or effected by
operation of law or pursuant to any judgment, decree or order of
any court, or any order, rule or regulation of any administrative
or governmental body):
i. any
default in the payment of (A) the principal amount of any Note or
(B) interest, liquidated damages and other amounts owing to a
Holder on any Note, as and when the same shall become due and
payable (whether on a Conversion Date or the Maturity Date or by
acceleration or otherwise) which default, solely in the case of an
interest payment or other default under clause (B) above, is not
cured within five (5) Trading days;
ii. the
Company shall fail to observe or perform any other covenant or
agreement contained in the Note (other than a breach by the Company
of its obligations to deliver shares of Common Stock to the Holder
upon conversion, which breach is addressed in clause (ix) below)
which failure is not cured, if possible to cure, within the earlier
to occur of (A) five (5) Trading Days after notice of such failure
sent by the Holder or by any other Holder to the Company and (B)
ten (10) Trading Days after the Company has become or should have
become aware of such failure;
iii. a
default or event of default (subject to any grace or cure period
provided in the applicable agreement, document or instrument) shall
occur under
(A) any
of the Transaction Documents or (B) any other material agreement,
lease, document or instrument to which the Company or any
Subsidiary is obligated (and not covered by clause (v)
below);
iv.
the Company
experiences a Material Adverse Effect;
v. any
Person shall breach any agreement delivered to the initial Holders
pursuant to Section 2.2 of the Purchase Agreement;
vi. any
representation or warranty made in this Note, any other Transaction
Documents, any written statement pursuant hereto or thereto or any
other report, financial statement or certificate made or delivered
to the Holder or any other Holder shall be untrue or incorrect in
any material respect as of the date when made or deemed
made;
vii. the
Company or any Subsidiary shall default on any of its obligations
under any mortgage, credit agreement or other facility, indenture
agreement, factoring agreement or other instrument under which
there may be issued, or by which there may be secured or evidenced,
any indebtedness for borrowed money or money due under any long
term leasing or factoring arrangement that (a) involves an
obligation greater than $100,000, whether such indebtedness now
exists or shall hereafter be created, and (b) results in such
indebtedness becoming or being declared due and payable prior to
the date on which it would otherwise become due and
payable;
viii. the
Company or any Significant Subsidiary (as such term is defined in
Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy
Event;
ix. the
Common Stock shall not be eligible for listing or quotation for
trading on a Trading Market and shall not become eligible to resume
listing or quotation for trading thereon or on any other Trading
Market within five (5) Trading Days, or the transfer of shares of
Common Stock through the Depository Trust Company System is no
longer available or “chilled”;
x. the
Company shall be a party to any Change of Control Transaction or
shall agree to sell or dispose of all or in excess of fifty percent
(50%) of its assets in one transaction or a series of related
transactions (whether or not such sale would constitute a Change of
Control Transaction and, in either case, the Note is not repaid in
connection with such transaction in accordance with Section 2(d)(i)
hereof;
xi. the
Company shall fail for any reason to deliver certificates to a
Holder prior to the fifth Trading Day after a Conversion Date or
the Company shall provide at any time notice to the Holder,
including by way of public announcement, of the Company’s
intention to not honor requests for conversions of the Note in
accordance with the terms hereof;
xii. the
Company fails to be in compliance with Rule 144(c)(1) (or Rule
144(i)(2), if applicable);
xiii. any
monetary judgment, writ or similar final process shall be entered
or filed against the Company, any Subsidiary or any of their
respective property or other assets for more than $100,000, and
such judgment, writ or similar final process shall remain
unvacated, unbonded or unstayed for a period of
forty-five
(45)
calendar days;
xiv. enter
into any transaction or arrangement structured in accordance with,
based upon, or related or pursuant to, in whole or in part, Section
3(a)(l0) of the Securities Act;
(ii) Remedies
Upon Event of Default. If any Event of Default occurs, the
outstanding principal amount of this Note, plus accrued but unpaid
interest, liquidated damages and other amounts owing in respect
thereof through the date of acceleration, shall become, at the
Holder’s election, immediately due and payable in cash
pursuant to clause of the Mandatory Default Amount. Commencing on
the occurrence of any Event of Default and for as long an Event of
Default is not cured, the interest rate on this Note as set forth
in Section 2 above shall accrue at an interest rate equal to 20%
per annum or the maximum rate permitted under applicable law. Upon
the payment in full of the Mandatory Default Amount, the Holder
shall promptly surrender this Note to or as directed by the
Company. In connection with such acceleration described herein, the
Holder need not provide, and the Company hereby waives, any
presentment, demand, protest or other notice of any kind, and the
Holder may immediately and without expiration of any grace period
enforce any and all of its rights and remedies hereunder and all
other remedies available to it under applicable law. Such
acceleration may be rescinded and annulled by ▇▇▇▇▇▇ at any time
prior to payment hereunder and the Holder shall have all rights as
a holder of the Note until such time, if any, as the Holder
receives full payment pursuant to this Section 6(b). No such
rescission or annulment shall affect any subsequent Event of
Default or impair any right consequent thereon. No such rescission
or annulment shall affect any subsequent Event of Default or impair
any right consequent thereon; and in addition to any other rights
and remedies available to the Holder in an Event of Default, the
Conversion Price in effect on any Conversion Date shall be equal to
the Alternate Conversion Price, subject to adjustment herein,
without any notice or any action taken by the Holder. The Borrower
shall pay the Holder hereof costs of collection, including
reasonable attorneys’ fees.
Section
7 Intentionally
Omitted.
Section 8. Miscellaneous.
a) Notices.
Any and all notices or other communications or deliveries to be
provided by the Holder hereunder, including, without limitation,
any Notice of Conversion, shall be in writing and delivered
personally, by facsimile, or sent by a nationally recognized
overnight courier service, addressed to the Company, at the address
set forth above, or such other facsimile number or address as the
Company may specify for such purposes by notice to the Holder
delivered in accordance with this Section 8(a). Any and all
notices or other communications or deliveries to be provided by the
Company hereunder shall be in writing and delivered personally, by
facsimile, or sent by a nationally recognized overnight courier
service addressed to each Holder at the facsimile number or address
of the Holder appearing on the books of the Company, or if no such
facsimile number or address appears on the books of the Company, at
the principal place of business of such Holder, as set forth in the
Purchase Agreement. Any notice or other communication or deliveries
hereunder shall be deemed given and effective on the earliest of
(i) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number set forth on the
signature pages attached hereto prior to 5:30 p.m. (New York City
time) on any date, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via
facsimile at the facsimile number set forth on the signature pages
attached hereto on a day that is not a Trading Day or later than
5:30 p.m. (New York City time) on any Trading Day, (iii) the second
Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service or (iv) upon actual
receipt by the party to whom such notice is required to be
given.
b) Absolute
Obligation. Except as expressly provided herein, no
provision of this Note shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal
of, liquidated damages and accrued interest, as applicable, on this
Note at the time, place, and rate, and in the coin or currency,
herein prescribed. This Note is a direct debt obligation of the
Company. This Note ranks pari passu with all other Notes
now or hereafter issued under the terms set forth herein except
such Notes shall be subordinated to any Notes issued to funds
managed by Arena Investors LP.
c) Lost
or Mutilated Note. If this Note shall be mutilated, lost,
stolen or destroyed, the Company shall execute and deliver, in
exchange and substitution for and upon cancellation of a mutilated
Note, or in lieu of or in substitution for a lost, stolen or
destroyed Note, a new Note for the principal amount of this Note so
mutilated, lost, stolen or destroyed, but only upon receipt of
evidence of such loss, theft or destruction of such Note, and of
the ownership hereof, reasonably satisfactory to the
Company.
d) Governing
Law. All questions concerning the construction, validity,
enforcement and interpretation of this Note shall be governed by
and construed and enforced in accordance with the internal laws of
the State of New York, without regard to the principles of conflict
of laws thereof. Each party agrees that all legal proceedings
concerning the interpretation, enforcement and defense of the
transactions contemplated by any of the Transaction Documents
(whether brought against a party hereto or its respective
Affiliates, directors, officers, shareholders, employees or agents)
shall be commenced in the state and federal courts sitting in the
City of New York, Borough of Manhattan (the “New York Courts”). Each
party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any
dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), 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 such New York Courts, or such New York Courts are
improper or inconvenient venue for such proceeding. Each party
hereby irrevocably waives personal service of process and consents
to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Note 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 other
manner permitted by applicable law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Note or the transactions
contemplated hereby. If any party shall commence an action or
proceeding to enforce any provisions of this Note, then the
prevailing party in such action or proceeding shall be reimbursed
by the other party for its attorneys' fees and other costs and
expenses incurred in the investigation, preparation and prosecution
of such action or proceeding.
e) Waiver.
Any waiver by the Company or the Holder of a breach of any
provision of this Note shall not operate as or be construed to be a
waiver of any other breach of such provision or of any breach of
any other provision of this Note. The failure of the Company or the
Holder to insist upon strict adherence to any term of this Note on
one or more occasions shall not be considered a waiver or deprive
that party of the right thereafter to insist upon strict adherence
to that term or any other term of this Note on any other occasion.
Any waiver by the Company or the Holder must be in
writing.
f) Certain
Transactions and Confidentiality. The restrictions on the
sale of any Securities issued to the Holder pursuant to the
Transaction Documents, including any prohibition on Short Sales,
shall be subject to the provisions of Section 4.11 of the Purchase
Agreement, the provisions of which are incorporated herein by
reference.
g) Severability.
If any provision of this Note is invalid, illegal or unenforceable,
the balance of this Note shall remain in effect, and if any
provision is inapplicable to any Person or circumstance, it shall
nevertheless remain applicable to all other Persons and
circumstances. If it shall be found that any interest or other
amount deemed interest due hereunder violates the applicable law
governing usury, the applicable rate of interest due hereunder
shall automatically be lowered to equal the maximum rate of
interest permitted under applicable law. The Company covenants (to
the extent that it may lawfully do so) that it shall not at any
time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay, extension or usury law or
other law which would prohibit or forgive the Company from paying
all or any portion of the principal of or interest on this Note as
contemplated herein, wherever enacted, now or at any time hereafter
in force, or which may affect the covenants or the performance of
this Note, and the Company (to the extent it may lawfully do so)
hereby expressly waives all benefits or advantage of any such law,
and covenants that it will not, by resort to any such law, hinder,
delay or impede the execution of any power herein granted to the
Holder, but will suffer and permit the execution of every such as
though no such law has been enacted.
h) 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 and any of the other Transaction Documents at law or in
equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the
Holder’s right to pursue actual and consequential damages for
any failure by the Company to comply with the terms of this Note.
The Company covenants to the Holder that there shall be no
characterization concerning this instrument other than as expressly
provided herein. Amounts set forth or provided for herein with
respect to payments, conversion and the like (and the computation
thereof) shall be the amounts to be received by the Holder and
shall not, except as expressly provided herein, be subject to any
other obligation of the Company (or the performance thereof). The
Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder and that the
remedy at law for any such breach may be inadequate. The Company
therefore agrees that, in the event of any such breach or
threatened breach, the Holder shall be entitled, in addition to all
other available remedies, to an injunction restraining any such
breach or any such threatened breach, without the necessity of
showing economic loss and without any bond or other security being
required. The Company shall provide all information and
documentation to the Holder that is requested by the Holder to
enable the Holder to confirm the Company’s compliance with
the terms and conditions of this Note.
i) Next
Business Day. Whenever any payment or other obligation
hereunder shall be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business
Day.
j) Headings.
The headings contained herein are for convenience only, do not
constitute a part of this Note and shall not be deemed to limit or
affect any of the provisions hereof.
*********************
(Signature Pages Follow)
IN WITNESS WHEREOF,
the Company has caused this Note to be duly executed by a duly
authorized officer as of the date first above
indicated.
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By:__________________________________________
Name:
Title:
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...-
-,
. <,
"
ANNEX
A - NOTICE OF CONVERSION
The
undersigned hereby elects to convert principal under the Original
Issue Discount Senior Secured Convertible Promissory Note due May
9, 2021 of GoIP Global, Inc., a Colorado corporation (the
“Company”), into shares of
common stock (the “Common Stock”), of the
Company according to the conditions hereof, as of the date written
below. If shares of Common Stock are to be issued in the name of a
person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto and is delivering
herewith such certificates and opinions as reasonably requested by
the Company in accordance therewith. No fee will be charged to the
holder for any conversion, except for such transfer taxes, if
any.
By the
delivery of this Notice of Conversion the undersigned represents
and warrants to the Company that its ownership of the Common Stock
does not exceed the amounts specified under Section 4 of this Note, as
determined in accordance with Section 13(d) of the Exchange
Act.
The
undersigned agrees to comply with the prospectus delivery
requirements under the applicable securities laws in connection
with any transfer of the aforesaid shares of Common
Stock.
Conversion Information
Date to Effect
Conversion:
Interest Amount of
Note to be Converted:
Outstanding
Principal: Outstanding Interest: Principal Amount of Note to be
Converted:
Conversion Price Calculations:
Total
Shares of Common Stock to be Issued:
Outstanding
Principal After
Conversion:
Outstanding
Interest After Conversion:
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DWAC
Instructions Broker:
DTC#:
Account:
Account Name:
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Physical
Delivery
Issue
to: Address:
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Entity
Name:
Signatory
Name: Title:
Signature:
Schedule
1 CONVERSION SCHEDULE
This
Original Issue Discount Senior Secured Convertible Promissory Note
due on May 9, 2021 in the original principal amount of $275,000.00
is issued by GoIP Global, Inc., a Colorado corporation. This
Conversion Schedule reflects conversions made under Section 4 of the above
referenced Note.
Dated:
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Date of
Conversion
(or for
first entry, Original Issue Date)
|
Amount
of Conversion
|
Aggregate Principal
Amount Remaining Subsequent to Conversion
(or
original Principal Amount)
|
Company
Attest
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