12% NOTE DUE JUNE 22, 2018

Exhibit 10.2

12% NOTE

DUE JUNE 22, 2018

Issue Date:	March 23, 2018
Principal:	$1,000,000.00
Purchase Price:	$900,000.00

FOR VALUE RECEIVED, the undersigned, DPW Holdings, Inc., a Delaware corporation with offices at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Maker"), promises to pay to _______________, a ____________ limited liability company with an address at _____________________ (including any assignee, "Payee"), on June 22, 2018 (the "Due Date"), the principal amount of One Million Dollars ($1,000,000) in lawful money of the United States of America (the "Principal”) together with all accrued but unpaid interest.

Maker acknowledges that this Note has been issued at a 10% original issue discount.

This Note bears simple interest (the "Interest") at the annual rate of twelve percent (12%) (the “Rate”), payable, in arrears, on the Interest Payment Dates (as defined in Section 1 below), until Maker pays the Principal and all accrued but unpaid Interest (collectively, the “Obligations”) in full.

1.          Interest.  Maker will pay Interest, in arrears, on the twenty-third day of each month until paid in full (the "Interest Payment Dates") commencing on April 23, 2018.  Interest on this Note will accrue from the issue date stated above.  If an Interest Payment Date falls on a date that is not a Business Day (as defined below), the Interest due on such day shall be payable on the next succeeding Business Day.  Interest will be computed on a 360-day year of twelve 30-day months.  A “Business Day” is any day other than a Saturday or a Sunday or a day on which commercial banking institutions in New York, New York are authorized by law to be closed.

2.          Method of Payment.  Maker will pay Principal and Interest in money of the United States that at the time of payment is legal tender for the payment of public and private debts.  Maker may, however, pay Principal and Interest by its check, subject to collection, or by wire transfer to ▇▇▇▇▇’s account.  If less than the then outstanding Principal is paid, this Note shall be surrendered only for notation by Maker of the Principal payment made and returned to Payee.

3.          No Security.          This Note is unsecured by any assets of the Maker but is guaranteed by one of its principals.

4.          Maker’s Covenants.  Maker covenants and agrees that from and after the date hereof and until the date of repayment in full of the Obligations, it shall comply with the following covenants:

(a)        Payment of Obligations.  Maker will pay the indebtedness evidenced by this Note according to its terms.

 

(i)         Notice of Default.  Maker will give written notice to Payee of the occurrence of any Event of Default (as defined below) under this Note promptly upon the occurrence thereof.

(j)         Obligation to Continue Filing Public Reports and Maintain Exchange Listing.  Maker will not, without the prior written consent of Payee, take any action that will relieve it from its obligation to continue to file reports pursuant to the Exchange Act or any other applicable federal or state securities law or result in the delisting of the Common Stock from the NYSE American.

  

5.          Reorganization of Maker.  If Maker is party to a merger, consolidation or a transaction in which it is not the surviving or continuing entity or transfers or leases all or substantially all its assets, the person who is the surviving or continuing entity or is the transferee or lessee of such assets shall assume the terms of this Note and the Obligations.

6.          Events of Default.  The occurrence or existence of any one or more of the following events or conditions (regardless of the reason) shall constitute an "Event of Default":

 

(i)          Any material adverse change in the Maker’s business, operations, assets, liabilities, prospects for repayment, properties, condition (financial or otherwise) or results of operations, or any of its subsidiaries, or any litigation or governmental proceeding or investigation brought or threatened against Maker or any of its subsidiaries, or any executive officer or key employee of Maker or any of its subsidiaries, which materially adversely affects the business, operations, assets, liabilities, prospects for repayment, properties, condition (financial or otherwise) or results of operations of Maker or any of its subsidiaries;

(j)          A case or proceeding shall have been commenced against Maker or any of its subsidiaries (each a “Proceeding Company”) in a court having competent jurisdiction seeking a decree or order in respect of a Proceeding Company (i) under Title 11 of the United States Code, as now constituted or hereafter amended, or any other applicable federal, state or foreign bankruptcy or other similar law; (ii) appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) of a Proceeding Company, or any of its properties; or (iii) ordering the winding-up or liquidation of the affairs of a Proceeding Company, and such case or proceeding shall remain unstayed or undismissed for a period of thirty (30) consecutive days  or such court shall enter a decree or order granting the relief sought in such case or proceeding; or

“Change in Control” means the occurrence of any of the following events: (i) Any Person, other than Maker, its affiliates or any Maker employee benefit plan (including any trustee of such plan acting as trustee), is or becomes the beneficial owner, directly or indirectly, of Maker’s securities representing more than fifty percent (50%) of the combined voting power of the then outstanding securities entitled to vote generally in the election of Maker’s directors (“Voting Securities”); or (ii) Individuals who constitute Maker’s Board of Directors (the “Incumbent Directors”), as of the beginning of any twenty-four (24) month period commencing with the date hereof, cease for any reason to constitute at least a majority of the directors.  Notwithstanding the foregoing, any individual becoming a director subsequent to the beginning of such period, whose election or nomination for election by Maker’s shareholders, was approved by a vote of at least two-thirds (2/3) of the directors then comprising the Incumbent Directors, shall be considered an Incumbent Director; or (iii) Consummation by Maker of a recapitalization, reorganization, merger, consolidation or other similar transaction (a “Business Combination”), with respect to which all or substantially all of the individuals and entities who were the beneficial owners of Maker’s voting securities (the “Voting Securities”) immediately prior to such Business Combination (the “Incumbent Shareholders”) do not, following consummation of all transactions intended to constitute part of such Business Combination, beneficially own, directly or indirectly, fifty percent (50%) or more of the Voting Securities of the corporation, business trust or other entity resulting from or being the surviving entity in such Business Combination (the “Surviving Entity”), in substantially the same proportion as their ownership of such Voting Securities immediately prior to such Business Combination; or (iv) Consummation of a complete liquidation or dissolution of Maker, or the sale or other disposition of all or substantially all of Maker’s assets, other than to a corporation, business trust or other entity with respect to which, following consummation of all transactions intended to constitute part of such sale or disposition, more than fifty percent (50%) of the combined Voting Securities is then owned beneficially, directly or indirectly, by the Incumbent Shareholders in substantially the same proportion as their ownership of the Voting Securities immediately prior to such sale or disposition.  For purposes of this definition, the following terms shall have the meanings set forth as follows: (A) “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act; and (B) “Person” shall have the meaning as used in Sections 13(d) and 14(d) of the Exchange Act.

 

7.          Rights and Remedies upon an Event of Default.  Upon the occurrence of any Event of Default, the Obligations will be immediately due and payable in full and Payee at any time thereafter may at its option accelerate the maturity of the Obligations.  Upon the occurrence of any such Event of Default, Payee will have the following rights and remedies:

   

  

If any deficiency remains after the payments as set forth above, Maker shall remain liable to Payee for such deficiency.

8.          Limitation of Interest Payments.  Nothing contained in this Note or in any other agreement between Maker and Payee requires Maker to pay or Payee to accept Interest in an amount that would subject Maker to any penalty or forfeiture under the laws of the Commonwealth of Pennsylvania.  Should Payee receive any payment, which is or would be more than that permitted to be charged under such laws, such payment shall have been and shall be deemed to have been made in error and shall automatically be applied to reduce the Principal outstanding on this Note.

9.          Miscellaneous.

 

(f)         Modification of Note or Waiver of Terms.  No modification or waiver of any of the provisions of this Note shall be effective unless in writing and signed by Maker and Payee and then only to the extent set forth in such writing, or shall any such modification or waiver be applicable except in the specific instance for which it is given.  This Note may not be discharged orally but only in writing duly executed by ▇▇▇▇▇.

(g)        Notice.  All offers, acceptances, notices, requests, demands and other communications under this Note shall be in writing and, except as otherwise provided in this Note or in the loan agreement between the Parties of even date (the “Loan Agreement”), shall be deemed to have been given only: (i) when delivered in person; (ii) one (1) day  after deposit with a nationally recognized overnight courier service;  or, (iii) five (5) days after having been mailed by certified or registered mail prepaid, to the Parties at their respective addresses first set forth above, or at such other address as may be given in writing in future by either party to the other.  Notice may also be given via electronic or facsimile transmission to a Party who provides such Party’s fax number or email address to the other Party and shall be deemed to have been given if receipt of such communication is confirmed by the recipient.

(h)        Transfer.  This Note shall be transferable only on the books of Maker upon delivery thereof duly endorsed by Payee or by ▇▇▇▇▇’s duly authorized attorney or representative, or accompanied by proper evidence of succession, assignment, or authority to transfer.  In all cases of transfer by an attorney, executor, administrator, guardian, or other legal representative, duly authenticated evidence of its or its authority shall be produced.  Upon any registration of transfer, Maker shall deliver a new Note or Notes to the person entitled thereto.  Notwithstanding the foregoing, Maker shall have no obligation to cause this Note to be transferred on its books to any person if, in the reasonable opinion of counsel to Maker, such transfer does not comply with the provisions of the Act and the rules and regulations thereunder and/or applicable state securities laws.

(i)          Presumptions.  Maker hereby represents and acknowledges that relating to the negotiation of this Note it has been represented by its own counsel, who has reviewed this Note and advised it as to the legal significance and consequences of entering into this Note and has participated in the drafting hereof.  Therefore, this Note shall be construed without regard to any presumption or rule requiring that it be construed against any one party causing this Note or any part hereof to be drafted.

(j)          Waivers.

 (i)          Waiver of Trial by Jury.  TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW, MAKER AND PAYEE HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THIS NOTE OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS NOTE.  EACH PARTY REPRESENTS AND WARRANTS THAT IT/HE HAS REVIEWED THIS WAIVER WITH ITS/HIS LEGAL COUNSEL AND THAT IT/HE KNOWINGLY AND VOLUNTARILY WAIVES ITS/HIS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

 

             (ii)          Marshaling of Assets.  Maker hereby waives, to the extent permitted by law, the benefit of all appraisal, valuation, stay, extension, reinstatement and redemption laws now in force and those hereafter in force and all rights of marshaling in the event of any sale hereunder of the Collateral by Payee or any part or any interest therein.

 (iii)          Successors and Assigns.  This Note shall be binding upon Maker, its successors, assigns and transferees, and shall inure to the benefit of and be enforceable by ▇▇▇▇▇ and ▇▇▇▇▇’s successors and assigns.

(l)          Severability.  If one or more of the provisions or portions of this Note shall be deemed by any court or quasi-judicial authority to be invalid, illegal or unenforceable in any respect, the invalidity, illegality or unenforceability of the remaining provisions, or portions of provisions contained herein shall not in any way be affected or impaired thereby.

(m)        Gender.  The use of the masculine pronouns or similar terms shall be deemed to include the feminine and neuter genders as well and vice versa and the use of the singular pronouns shall be deemed to include the plural as well and vice versa.

 

 

IN WITNESS WHEREOF, Maker has caused this Note to be executed on its behalf by an officer thereunto duly authorized as of the date set forth above.

  

	DPW Holdings, Inc.
	A Delaware corporation
	By:
		▇▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇, Chief Executive Officer

Agreed and Accepted:

 

 

By:
	_________________, Managing Member