Contract
NEITHER THIS NOTE NOR THE SECURITIES THAT MAY BE ISSUED BY THE BORROWER UPON CONVERSION HEREOF (COLLECTIVELY, THE “SECURITIES”) HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THE SECURITIES NOR ANY INTEREST OR PARTICIPATION THEREIN MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED: (I) IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE 1933 ACT, OR APPLICABLE STATE SECURITIES LAWS; OR (II) IN THE ABSENCE OF AN OPINION OF COUNSEL, IN A FORM ACCEPTABLE TO THE ISSUER, THAT REGISTRATION IS NOT REQUIRED UNDER THE 1933 ACT OR; (III) UNLESS SOLD, TRANSFERRED OR ASSIGNED PURSUANT TO RULE 144 UNDER THE 1933 ACT.
12% CONVERTIBLE NOTE
MATURITY DATE OF AUGUST 26, 2015
$150,000 AUGUST 26, 2014 *THE “ISSUANCE DATE”
FOR VALUE RECEIVED, Liberty Star Uranium & Metals Corp., a Nevada Corporation (the “Company”) doing business in Tucson, AZ hereby promises to pay to the order of JSJ Investments Inc., an accredited investor and Texas Corporation, or its assigns (the “Holder”) the principal amount of One Hundred and Fifty Thousand Dollars ($150,000), on demand of the Holder at any time on or after August 26, 2015 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of Twelve Percent (12%) per annum (the “Interest Rate”) from the date hereof (the “Issuance Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise; provided, that any amount of principal or interest on this Note which is not paid when due shall bear interest at such rate on the unpaid principal balance hereof plus Default Interest from the due date thereof until the same is paid in full. Interest shall commence accruing on the Issuance Date, shall be computed on the basis of a 365-day year and the actual number of days elapsed and shall accrue daily and, after the Maturity Date, compound quarterly.
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Pre-Payment of Principal. Until the One Hundred and Twentieth Day (120) the Company may prepay the principal at a cash redemption premium of 140% without the Holder’s consent; from the 120th day to the One Hundred and Fiftieth Day (150), the Company may pay the principal at a cash redemption premium of 150% without the Holder’s consent. After the 150th day, up to and upon the Maturity Date, this note has a cash redemption premium of 150% of the principal amount only upon approval and acceptance by JSJ Investments Inc. This last provision only may be exercised if the consent of the Holder is obtained. |
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“Conversion Amount” means the sum of (A) the outstanding principal amount of this Note to be converted with respect to which this determination is being made, (B) outstanding Interest; and (C) outstanding Default Interest, if any, on unpaid interest and principal, if so included at the Holder’s sole discretion. | |
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“Conversion Price” means a 45% discount to the average of the daily VWAP prices for the previous Ten (10) trading days before the date of conversion. | |
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“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof. | |
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“Shares” means the Shares of common stock of the Company into which any outstanding balance on this Note may be converted upon submission of a Conversion Notice. |
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Exhibit 1
Unless otherwise agreed in writing by both parties, at no time will the Lender convert any amount of the note into common stock that would result in the Lender owning more than 4.99% of the common stock outstanding.
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Mechanics of Conversion. The conversion of this Note shall be conducted in the following manner: |
i. | Holder's Conversion Requirements. To convert this Note into shares of Common Stock on any date 181 days or more after the Note issuance, set forth in the Conversion Notice by the Holder (the "Conversion Date"), the Holder hereof shall transmit by email, facsimile or otherwise deliver, for receipt on or prior to 11:59 p.m., Eastern Time on such date or on the next business day (the "Conversion Date"), a copy of a fully executed notice of conversion in the form attached hereto as Exhibit 1 to the Company. |
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Other Rights of Holders: Reorganization, Reclassification, Consolidation, Merger or Sale. Any recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially all of the Company's assets to another Person or other transaction which is effected in such a way that holders of Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock is referred to herein as "Organic Change." Prior to the consummation of any (i) Organic Change or (ii) other Organic Change following which the Company is not a surviving entity, the Company will secure from the Person purchasing such assets or the successor resulting from such Organic Change (in each case, the "Acquiring Entity") a written agreement (in form and substance reasonably satisfactory to the Holder) to deliver to Holder in exchange for this Note, a security of the Acquiring Entity evidenced by a written instrument substantially similar in form and substance to this Note, and reasonably satisfactory to the Holder. Prior to the consummation of any other Organic Change, the Company shall make appropriate provision (in form and substance reasonably satisfactory to the Holders of a majority of the Conversion Amount of the Notes then outstanding) to ensure that each of the Holders will thereafter have the right to acquire and receive in lieu of or in addition to (as the case may be) the shares of Common Stock immediately theretofore acquirable and receivable upon the conversion of such Holder's Note, such shares of stock, securities or assets that would have been issued or payable in such Organic Change with respect to or in exchange for the number of shares of Common Stock which would have been acquirable and receivable upon the conversion of such Holder's Note as of the date of such Organic Change (without taking into account any limitations or restrictions on the convertibility of the Note). All provisions of this Note must be included to the satisfaction of Holder in any new Note created pursuant to this section. |
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7. | Voting Rights. Holders of this Note shall have no voting rights, except as required by law. |
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9. | Default and Remedies. |
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Accredited Investor. Holder represents that it is an "accredited investor" as that term is defined under United States securities laws . |
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Governing Law. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the laws of the State of Texas, without giving effect to provisions thereof regarding conflict of laws. Each party hereby irrevocably submits to the non-exclusive jurisdiction of the state and federal courts sitting in Texas for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein , and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding , any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by sending by certified mail or overnight courier a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT ORANY TRANSACTION CONTEMPLATED HEREBY. |
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Remedies , Characterizations, Other Obligations, Breaches and Injunctive Relief . The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note, at law or in equity (including a decree of specific performance and/or other injunctive relief), and no remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit a Holder's right to pursue actual damages for any failure by the Company to comply with the terms of this Note. The Company covenants to each Holder of Notes 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 thereof and shall not, except as expressly provided herein , be subject to any other obligation of the Company (or the performance thereof). |
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Failure or Indulgence Not Waiver. No failure or delay on the part of this Note in the exercise of any power , right or privilege hereunder shall operate as a waiver thereof , nor shall any single or partial exercise of any such power , right or privilege preclude other or further exercise thereof or of any other right, power or privilege . | |
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Specific Shall Not Limit General ; Construction. No specific provision contained in this Note shall limit or modify any more general provision contained herein. This Note shall be deemed to be jointly drafted by the Company and all Holders and shall not be construed against any person as the drafter hereof. |
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COMPANY: | Liberty Star Uranium & Metals Corp. |
Signature: | /s/ Xxxxx X. Xxxxxxx |
By: | Xxxxx X. Xxxxxxx |
Title: | CEO |
Address: | 0000 X. Xxxxxx Xxxx |
Tucson, Arizona, 85712 | |
Email: | xxxxxxxx@xxxxxxxxxxxxxxxxxxx.xxx |
Phone: | 000-000-0000 |
HOLDER: JSJ Investments Inc.
Signature: /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx, President
JSJ Investments Inc.
0000 Xxxxx
Xxxxx Xxxxx, Xxxxx 000
Xxxxxx XX 00000
000-000-0000
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Conversion Notice
Reference is made to the Convertible Note issued by Liberty Star Uranium & Metals Corp. (the "Note"), dated August 26, 2014 in the principal amount of $150,000 with 12% interest. This note currently holds a principal balance of $150,000 and accrued interest in the amount of $ __________________. The features of conversion stipulates a Conversion Price equal to a 45% discount of the average of the three daily VWAP prices for the previous ten (10) trading days before the date of conversion, pursuant to the provisions of Section 2(a)(2) in the Note.
In accordance with and pursuant to the Note, the undersigned hereby elects to convert $ of the PRINCIPAL/INTEREST balance of the Note, indicated below into shares of Common Stock (the "Common Stock"), of the Company, by tendering the Note specified as of the date specified below. The undersigned represents that it is an “accredited investor” as that term is defined under United States securities laws.
Date of Conversion: ________________________________
Please confirm the following information:
Conversion Amount: $ ____________________________
Conversion Price: $__________________ (________ % discount from $______________________________ )
Number of Common Stock to be issued: ___________________________________________________________
Current Issued/Outstanding: __________________________________________________________________
PLEASE ISSUE THE COMMON STOCK INTO WHICH THE NOTE IS BEING CONVERTED IN THE NAME OF THE HOLDER OF THE NOTE AND TRANSFER THE SHARES ELECTRONICALLY TO: [BROKER INFORMATION]
HOLDER AUTHORIZATION:
JSJ INVESTMENTS INC.
0000 XXXXX
XXXXX XXXXX, XXXXX 000
XXXXXX, XX 00000
000-000-0000
Tax ID: 00-0000000
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Tax ID: 00-0000000
Xxxxxx Xxxxx, President
Date:
PLEASE BE ADVISED, pursuant to Section 2(e)(2) of the Note, "Upon receipt by the Company of a copy of the Conversion Notice, the Company shall as soon as practicable, but in no event later than two(2) Business Day after receipt of such Conversion Notice, SEND, VIA EMAIL, FACSIMILE OR OVERNIGHT COURIER, A CONFIRMATION OF RECEIPT OF SUCH CONVERSION NOTICE TO SUCH HOLDER INDICATING THAT THE COMPANY WILL PROCESS SUCH CONVERSION NOTICE in accordance with the terms herein. Within three (3) Business Days after the date of the Conversion Confirmation, the Company shall have issued and electronically transferred the shares to the Broker indicated in the Conversion Notice; should the Company be unable to transfer the shares electronically, they shall, within two (2) Business Days after the date of the Conversion Confirmation, have surrendered to FedEx for delivery the next day to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder, for the number of shares of Common Stock to which the Holder shall be entitled."
Signature:
Xxxxx Xxxxxxx
CEO
Liberty Star Uranium & Metals
Corp.
Or
Xxxxxxxx Xxxxxxx
Chief Accountant
Liberty Star Uranium
& Metals Corp.
Or
Xxxx X'Xxxxxx
Board Director
Liberty Star Uranium &
Metals Corp.
Or
Xxxx Xxxxx
Board Director
Liberty Star Uranium &
Metals Corp.
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