CONVERTIBLE SECURED PROMISSORY NOTE AND LOAN AGREEMENT
Exhibit
10.2
Amount of
the Note: _____________________
Date of
the Note: __________, 2009
Payee:
____________________________________________
FOR VALUE RECEIVED, the undersigned,
Gen2Media Corporation (the "Maker") promises to pay to the order of the Payee,
(“defined as the Payee or any Holder in due course of this Note), at such place
as the Payee may from time to time designate to the Maker in writing, in legal
tender of the United States, the amount of the Note, upon the following
terms:
1. The
Principal Amount of the Note shall be due and payable in full, at the earlier of (a) when Maker
concludes an equity financing in the minimum amount of $1 million; or (b) 12
months from the date hereof.
2. Interest
shall accrue on this Note in the amount of 12% per annum, on the principal
balance outstanding from time to time. Xxxxx may elect to have the interest paid
on this Note monthly, rather than accrue, by giving written notice to
Maker.
3. Payee,
or the holder of this Note shall have the option, but not the obligation, at any
time during the term hereof, to convert this Note (including principal and any
accrued interest) into either common or preferred stock of Maker, on any one, (at the sole
election of Payee) of the following terms: (a) an exercise price of
25 cents per share of Class “A” common stock of Maker, (b) an exercise price
that is in the form of the type of security (common or preferred), but with a
30% discount, to the price or plan of financing that Maker undertakes for the
contemplated $5 million equity financing that Maker is undertaking; or (c) in
the event the Company is sold prior to any such financing being completed, Payee
or holder may convert into equity at a 30% discount of the price paid per share
in any such sale of the Company. The Payee may elect any of these three options,
at any time during the term or prior to repayment of this loan, by providing
written notice to Maker. However, in the event that the Company does
not successfully conclude a financing, in minimum amount of $1 million, within
12 months of the date hereof, or is not sold during said time period, than the
Payee shall have the additional option to convert this debt into Class “A”
common stock at the price of 13 cents per share.
4. As
additional consideration for the making of this loan, Maker does hereby grant
and issue to Payee, a 20% equity “kicker”, in the form of a warrant to purchase
Class “A” Common Shares, at an exercise price of 1/10th of 1
xxxxx per share (.001) (8,000 common shares per every $10,000 loaned hereunder),
fully vested at the time of the funding of the Loan referenced herein, and
exercisable at any time within 12 months from the date hereof, and said warrant
may be exercised in a cashless manner. Additionally, in the event the Company
conducts its next financing round at a valuation that is less than 25 cents per
share, the Payee shall receive additional “make good” warrants to bring the
total equity kicker to the full 20% value of its loan, exercisable at the same
par value. If the financing round is done in preferred stock and not common, the
value make good warrants shall be based on the underlying common if convertible,
or the valuation of the Company per share, as reflected in said
financing. The equity kicker provided in this paragraph shall be
cumulative to any other interest or rights of Lender herein.
5. In
further consideration of this Note, and pursuant to a separate Security
Agreement that is executed simultaneously herewith, Maker hereby grants a
security interest in all assets of Maker to secure performance hereunder,
including, without limitation, all furniture, fixtures, equipment, accounts
receivable, contract rights, patents, trademarks or other intellectual property,
now owned or hereafter acquired, wherever located. Maker shall file a UCC-1
Financing Statement upon the closing of the loan in a timely manner. All Payees
participating in this debt financing shall be covered pro-rata by the
protections under the security agreement, regardless of the time or day of any
individual fundings, and this agreement shall also act as an inter-creditor
agreement with regard to this Note, and even though the Company may have
multiple parties participate in this debt financing, each party shall stand
equal in terms of timing and in terms of the Security Interest granted hereby,
pro-rated to the amount of each Payees loan. Maker shall maintain a list of all
assets, and where the same are located from time to time, and make such list
available for inspection on reasonable written notice by Payee, and shall fully
insure any and all such assets against loss or damage, in a sufficient amount to
fully cover the reasonable value of such collateral.
6. If,
at any time, any monies due hereunder are not paid when due, or any other
conditions hereof are not met, time being of the essence, Maker shall be in
default. In such event, Payee shall have all rights and remedies
available to it under Florida law, and in the event that Payee is required to
take any legal action to collect upon, or otherwise enforce this Note, Maker
agrees to pay all costs of collection of this Note including a reasonable
attorney's fee, and all costs, expenses and attorney's fee for any retrial,
rehearing or appeals on failure to pay any principal, interest or other sums due
under this Note on the due date thereof. In the event of default,
this Note and all sums due hereunder shall bear interest at the highest lawful
rate of interest permitted in the State of Florida from and after the date when
such sums are due. The interest payable or agreed to be paid
hereunder shall not exceed the highest lawful rate of interest permitted in the
state of Florida, and if, inadvertently, there is such excess sum, it shall be
applied to reduce the Principal Amount.
7. This
Note shall be construed and enforced according to the laws of Florida. This Note
may not be changed orally, but only by an agreement in writing, signed by the
party against whom enforcement of any waiver, change, modification or discharge
is sought.
8. Xxxxx
hereby agrees to loan the sum of ____________________________ under
the terms and conditions of this Agreement, and agrees to terms and conditions
set forth herein. Payee represents to Maker that he or she is an accredited and
sophisticated investor, is fully aware of the risks associated with the loan
that is being made hereby, and has had full and ample opportunity to review any
and all pertinent financial and operational information relative to Maker, and
has had the opportunity to seek and obtain any and all legal or financial advice
or counsel relative to the making of this type of loan.
| “Maker” | “Payee” | ||||
| Gen2Media Corp. | |||||
| By: |
/s/
|
/s/
|
|||
|
Xxxxxx
Xxxxxxxx
|
|||||
|
Chief
Financial Officer
|
|
