Amendment to Subscription Agreement, 8% Convertible Promissory Note and Common Stock Purchase Warrant
Exhibit 3.2
Amendment to
8% Convertible Promissory Note and Common Stock Purchase
Warrant
This
Amendment to Subscription Agreement (the "Subscription
Agreement"), 8% Convertible Promissory Note (the
"Convertible
Note") and Common Stock Purchase Warrant (the "Warrant")
and, with the Subscription Agreement and the Convertible Note,
collectively, “Agreement”)
is made as of this 15th day of November, 2016, by and between Level
Brands, Inc., a North Carolina corporation formerly known as Level
Beauty Group, Inc. (the “Company”),
and the Purchaser identified on the signature page hereto (the
“Purchaser”).
This Agreement amends certain sections of the Convertible Note and
the Warrant issued by the Company to Purchaser on the issuance date
set forth on the signature page hereto (“Issuance
Date”) as it relates to a purchase of the Convertible
Note and Warrant by the undersigned pursuant to the Company’s
Confidential Offering Documents for Accredited Investors dated
September 12, 2016 (the “Offering
Documents”). All terms not otherwise defined herein
shall have the same meaning as in the Offering
Documents.
Recitals
A. Pursuant
to the Offering Documents, the undersigned Purchaser (i) purchased
the Convertible Note in principal amount set forth on the signature
page hereto, which is convertible into a number of shares of the
Company’s Common Stock (the “Shares”),
and (ii) was issued a Warrant for the number of Shares as set forth
on the signature page hereto.
B. The
parties desire to amend the Conversion Price of the Convertible
Note and Exercise Price of the Warrant to set a fixed price for
both including lowering the Fixed Conversion Price of the
Convertible Note from $1.50 to $1.00 per Share. A copy of the
blacklined changes to such sections are attached hereto as
Exhibit
A.
Agreement
NOW THEREFORE, in consideration of the
premises and mutual covenants herein contained, the parties agree
as follows:
1.
Convertible Note. Section 4(a)
of the Convertible Note is hereby deleted in its entirety and the
following Section 4(a) shall be inserted in lieu
thereof:
(a) In
the event of a firm commitment initial public offering of the
Company's securities resulting in gross proceeds to the Company of
at least $10,000,000 (the "Initial Public
Offering") prior to July 1, 2017, on the closing date of the
Initial Public Offering (the "IPO Closing
Date"), the outstanding principal amount of this Note and
all accrued interest due hereunder may be converted by Lender, in
whole or in part (the "Conversion")
into the shares (the “Conversion
Shares”) of the Borrower’s common stock (the
"Common
Stock") at a conversion price (the “IPO Conversion
Price”) equal to $1.00 per share. If no Initial Public
Offering occurs prior to July 1, 2017, the conversion price
("Fixed
Conversion Price") will be $1.00 per share. The IPO
Conversion Price and the Fixed Conversion Price are collectively
referred to as the "Conversion
Price". In all instances the Conversion Price is subject to
adjustment as hereinafter set forth.
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2.
Warrant. Section 1.2 of the
Warrant is hereby deleted in its entirety and the following Section
1.2 shall be inserted in lieu thereof:
1.2 Exercise
Price. The exercise price ("Exercise
Price") shall be $1.56 per share. In all instances the
Exercise Price is subject to adjustment as hereinafter set
forth.
3.
General. All other provisions
in the Convertible Note and Warrant shall remain unchanged and be
in full force and effect. All provisions in the Offering Documents
(including the summary descriptions under the subheadings
“Conversion” and “Description of Warrants”
under “OFFERING”) which are not reflective of the
amendments set forth in this Agreement shall be deemed amended
hereby and be interpreted consistent with this Agreement. This
Agreement shall be deemed to be effective as of the Issuance Date.
This Agreement may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original and,
all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered
electronically, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as
if such facsimile signature were the original thereof.
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the day and date first above
written.
Level
Beauty Group, Inc.
By:
____________________________
Xxxxxx
X. Xxxxxxxxxx,
Chief
Executive Officer
Name of
Purchaser: [ ]
Signature of Purchaser:
_____________________________
Principal Amount of
Convertible Note: $__________
Note
No: _______________________
No. of
Warrants: ___________
Warrant
No: _____________________
Issuance Date:
______________, 2016
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Exhibit
A
Changes
to Convertible Note, Section 4(a):
In the
event of a firm commitment initial public offering of the Company's
securities resulting in gross proceeds to the Company of at least
$10,000,000 (the "Initial Public
Offering") prior to July 1, 2017, on the closing date of the
Initial Public Offering (the "IPO Closing
Date"), the outstanding principal amount of this Note and
all accrued interest due hereunder may be converted by Lender, in
whole or in part (the "Conversion")
into the shares (the “Conversion
Shares”) of the Borrower’s common stock (the
"Common
Stock") at a conversion price (the “IPO Conversion
Price”) equal to $1.00 per share. If no Initial Public
Offering occurs prior to July 1, 2017, the conversion price
("Fixed
Conversion Price") will be $1.00 per share. The IPO
Conversion Price and the Fixed Conversion Price are collectively
referred to as the "Conversion
Price". In all instances the Conversion Price is subject to
adjustment as hereinafter set forth.
Changes
to Warrant, Section 1.2:
Exercise Price. The exercise price ("Exercise
Price") shall be $1.56 per share. In all instances the
Exercise Price is subject to adjustment as hereinafter set
forth.
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