AMENDMENT TO SECURED CONVERTIBLE PROMISSORY NOTE
Exhibit 4.19
AMENDMENT TO
This Amendment
(the “Amendment”) to that
certain Secured Convertible Promissory Note (the
“Note”)
issued to the undersign (the “Holder”) pursuant to that
certain Securities Purchase Agreement (the “Agreement’), by and among
root9B Holdings, Inc. (f/k/a root9B Technologies, Inc.), a Delaware
corporation (the “Company”) and the
Purchasers (as defined therein), is entered into effective as of
December 22, 2016 (the “Effective Date”).
Capitalized terms used in this Amendment that are not otherwise
defined herein shall have the respective meanings assigned to them
in the Note.
RECITALS
Whereas, the
Company desires to raise additional capital pursuant to the
Agreement;
Whereas, the
Company and the Holder have agreed to amend the Note as set forth
herein;
Whereas,
pursuant to Section 11 of the Note, the Note may be amended only
with the written consent of the Company and the Holder;
and
Whereas, the
Holder and the Company desire to amend the Note as set forth
herein.
AGREEMENT
Now, Therefore, in consideration of the foregoing and of the
mutual promises and conditions hereinafter set forth, the parties
hereto agree as follows:
A.
Amendment of Section 1(a).
Section 1(a) of the Note is hereby amended and restated as
follows:
“(a)
Repayment.
(i)
Repayment upon Maturity
Date. If this Note is not earlier converted pursuant to
Section 2, the entire then-outstanding and unpaid principal amount
of this Note, together with any accrued but unpaid interest thereon
(the “Outstanding Amount”), shall be due and payable
upon the earlier to occur of (i) _________, 2019 (the
“Maturity Date”), and (ii) following the occurrence of
an Event of Default (as defined below), when such amounts are
declared due and payable by the Holder in accordance with the terms
hereof. All payments shall be made, at the Holder’s option,
in either (i) lawful money of the United States of America at such
place as the Holder hereof may from time to time designate in
writing to the Company or (ii) shares of the Company’s common
stock, par value $0.001 (the “Common Stock”) pursuant
to Section 2(b) below. Subject to Section 2 below, interest shall
accrue on this Note but shall not be due and payable until the
Maturity Date.
(ii)
Optional Repayment Upon a
Minimum Threshold Sale. In the event that the Company
consummates a Minimum Threshold Sale (as defined below), then
Holder shall have the one-time right, exercisable by delivering to
the Company written notice (the “Optional Repayment
Notice”)at any time during the Option Period (as
defined below), to demand repayment of an amount equal to up to
twenty-five percent (25%) of the Outstanding Amount (which amount
shall be specified in the Optional Repayment Notice) (the
“Minimum Threshold
Repayment”), in cash at such place as the Holder
hereof may designate in writing to the Company, with such payment
to be made within three (3) business days of receipt of the
Optional Repayment Notice. Notwithstanding anything to the contrary
contained herein, including, but not limited to, Section 1(c)
below, any such Optional Repayment shall not be subject to any
prepayment penalty. For the avoidance of doubt, the right to demand
the Minimum Threshold Repayment shall expire upon the expiration of
the Option Period.
(iii)
Optional Repayment Upon a
Maximum Threshold Sale. In the event that the Company
consummates a Maximum Threshold Sale (as defined below), then
Holder shall have the one-time right, exercisable by delivering to
the Company an Optional Repayment Notice during the Option Period,
to demand repayment of an amount equal to up to fifty percent (50%)
of the Outstanding Amount (which amount shall be specified in the
Optional Repayment Notice) (the “Maximum Threshold
Repayment”), in cash at such place as the Holder
hereof may designate in writing to the Company, with such payment
to be made within three (3) business days of receipt of the
Optional Repayment Notice. Notwithstanding anything to the contrary
contained herein, including, but not limited to, Section 1(c)
below, any such Optional Repayment shall not be subject to any
prepayment penalty. For the avoidance of doubt, the right to demand
the Maximum Threshold Repayment shall expire upon the expiration of
the Option Period. ”
B.
Amendment of Section 1(f).
Section 1(f) of the Note is hereby amended and restated as
follows:
“(f)
Definitions.
(i)
“Interest Conversion
Rate” means a per share price equal to 85% of the
quotient of the sum of the VWAP of the Common Stock as of each
Trading Day during the five (5) consecutive Trading Day period
ending and including the Trading Day ended immediately prior to the
Additional Closing Date, divided by five (5), but in no event less
than $0.80 per share.
(ii)
“Interest
Payment” means an amount equal to any accrued but
unpaid interest under this Note as of each Payment
Date.
(iii)
“IPSA
Sale” means a sale of substantially all of the assets
of IPSA (as defined below).
(iv)
“Maximum Threshold
Sale” means an IPSA Sale from which the Company
receives cash proceeds of not less than $10,000,000 at the closing
of such transaction (exclusive of any earn out amounts, milestone
payments or similar contingent payments).
(v)
“Minimum Threshold
Sale” means an IPSA Sale from which the Company
receives cash proceeds of not less than $8,000,000 and not greater
than $9,999,999 at the closing of such transaction (exclusive of
any earn out amounts, milestone payments or similar contingent
payments).
(vi)
“Option
Period” means the 30 calendar day period following
either a Minimum Threshold Sale or Maximum Threshold Sale, as
applicable.
(vii)
“Payment
Date” means each March 31, June 30, September 30 and
December 31, commencing December 31, 2016 or, in each case, if such
day is not a business day, the first business day immediately
thereafter until the earlier of (i) the Outstanding Amount is
repaid pursuant to Section 1(a) or (ii) the Outstanding Amount is
converted pursuant to Section 2.
(viii)
“Trading
Day” means a day on which the principal Trading Market
is open for trading.
(ix)
“Trading
Market” means any of the following markets or
exchanges on which the Common Stock is listed or quoted for trading
on the date in question: the NYSE MKT, the Nasdaq Capital Market,
the Nasdaq Global Market, the Nasdaq Global Select Market, the New
York Stock Exchange, the OTC Bulletin Board or the “Pink
Sheets” published by Pink OTC Markets, Inc. (or a similar
organization or agency succeeding to its functions of reporting
prices) (or any successors to any of the foregoing).
(x)
“VWAP”
means, for any date, the price determined by the first of the
following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted
average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is
then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New
York City time)), (b) if the OTC Bulletin Board is not a Trading
Market, the volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the OTC Bulletin
Board, (c) if the Common Stock is not then listed or quoted for
trading on the OTC Bulletin Board and if prices for the Common
Stock are then reported in the “Pink Sheets” published
by Pink OTC Markets, Inc. (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent
bid price per share of the Common Stock so reported, or (d) in all
other cases, the fair market value of a share of Common Stock as
determined by an independent appraiser selected in good faith by
the Holders of a majority in interest of the Securities then
outstanding and reasonably acceptable to the Company, the fees and
expenses of which shall be paid by the Company.
C.
Full Force and Effect. All of
the provisions of the Note are ratified and confirmed except as
modified by this Amendment.
D.
Counterpart. This Amendment may
be executed in counterparts, each of which shall be deemed an
original but all of which together shall be deemed one original.
PDF or facsimile copies of manually executed signature pages to
this Amendment are fully binding and enforceable without the need
for delivery of the original manually executed signature
page.
E.
Governing Law. This Amendment
shall be governed by the laws of the state of Delaware, without
giving effect to conflict of law principles.
F.
Cooperation. Each party hereto
agrees to execute and deliver such additional documents and
instruments and to perform such additional acts as any party may
reasonably request or as may be reasonably necessary or appropriate
to effectuate, consummate and perform any other terms, provisions,
or conditions of this Amendment.
[Remainder of page intentionally left blank. Signature page
follows.]
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective authorized signatories as of
the Effective Date.
|
|
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE
PAGES FOR PURCHASER FOLLOWS]
Agreed
to and accepted:
