CONVERTIBLE PROMISSORY NOTE AMENDMENT
Exhibit 10.1
THIS CONVERTIBLE PROMISSORY
NOTE AMENDMENT (this “Amendment”)
is entered into as of May 21, 2017, by and between root9B Holdings,
Inc., a Delaware corporation (formerly known as Premier Alliance
Group, Inc.) (the “Company”
or “Borrower”)
and the various noteholders that participated in the
Company’s prior
convertible note offering (the “Noteholders”).
WHEREAS, the Noteholders
currently hold various convertible promissory notes (the
“Convertible
Notes”) which were
issued by the Company between October 2014 and November 2014,
representing a remaining aggregate principal amount of One Million
Six Hundred Thousand Dollars ($1,600,000); and
WHEREAS, the Company and
the Noteholders previously entered into Note Extension Agreements,
dated as of October 28, 2015, in order to extend the Maturity Date
(as defined in the Convertible Notes) of the Outstanding Principal
of the Convertible Notes to May 21, 2016; and
WHEREAS, the Company and
the Noteholders previously entered into Note Extension Agreements,
dated as of April 18, 2016, in order to extend the Maturity Date of
the Outstanding Principal of the Convertible Notes to May 21, 2017;
and
WHEREAS, the Company and
the Noteholders desire to enter into this Amendment in order to
extend the Maturity Date of the Outstanding Principal of the
Convertible Notes and reduce the Conversion Price (as defined in
the Convertible Notes), upon the terms and conditions as set forth
herein; and
WHEREAS, the Company and
the Noteholder intend for, and explicitly agree that, this
Amendment shall be deemed an “exchange offer” within
the meaning of Section 3(a)(9) of the Securities Act of 1933, as
amended and recapitalization under Rule 144(d)(3).
NOW, THEREFORE, in consideration of the mutual promises and
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, each of the parties agree with
the others as follows:
1. Maturity
Date. The Maturity Date of the Convertible Notes is hereby
extended to May 21, 2018.
2.
Interest Rate.
Section 1.1 of the Convertible Notes is hereby amended, restated
and replaced in its entirety with the following:
1.1
Interest Rate. Interest on this
Note shall be simple interest and accrue (i) from the Issue Date
through May 21, 2017, at the annual rate of ten percent (10%) per
annum, and (ii) from May 22, 2017 until the Maturity Date, at the
annual rate of fifteen percent (15%) per annum. All computations of
interest payable hereunder shall be on the basis of a 365-day year
and actual days elapsed in the period for which such interest is
payable. Interest will be payable in cash according to the
following schedule:
| May 24, 2017: | $ [●] (representing accrued interest through May 21, 2017) |
| May 30,
2017: |
$ [●] (representing a non-refundable prepayment of interest through November 20, 2017) |
| November 21, 2017 | $ [●] (representing a non-refundable prepayment of interest through May 21, 2018) |
3. Conversion
Price. Section 2.1(a) of the Convertible Notes is hereby
amended, restated and replaced in its entirety with the
following:
(a)
For so long as this
Convertible Note remains outstanding and not fully paid, the Holder
shall have the right, but not the obligation, to convert all or any
portion of the then aggregate outstanding Principal Amount of this
Convertible Note, together with any accrued and unpaid interest
thereon, into shares of Common Stock of the Borrower or its
successor in interest (the “Conversion Shares”),
subject to the terms and conditions set forth in this Article II,
at the rate of $8.00 per share of Company’s common stock par
value $0.001 (the “Common Stock”) (as may be adjusted
as provided herein, the “Conversion Price”). The Holder
may exercise such right by delivery to the Borrower of a written
Notice of Conversion pursuant to Section 2.2.
4.
Notices. Section
4.2 of the Convertible Notes is hereby amended, restated and
replaced in its entirety with the following:
4.2
Notices. All notices, demands,
requests, consents, approvals, and other communications required or
permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in
the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service
with charges prepaid, or (iv) transmitted by hand delivery,
electronic mail or facsimile, addressed as set forth below or to
such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon
hand delivery, electronic mail or delivery by facsimile, with
accurate confirmation generated by the transmitting facsimile
machine, if sent by electronic mail with confirmed receipt, at the
address or number designated below (if delivered on a business day
during normal business hours where such notice is to be received),
or the first business day following such delivery (if delivered
other than on a business day during normal business hours where
such notice is to be received) or (b) on the second business day
following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such
mailing, whichever shall first occur.
If to
the Borrower:
000 X.
Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx,
XX 00000
Attention: Chief
Operating Officer
With a
copy to:
DLA
Piper LLP (US)
0000
Xxxx Xxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
00000
Attention: Xxxxxx
X. Xxxxxxx, Esq.
If to
the Noteholder:
At the
address set forth on the Noteholder’s Signature to the
Purchase Agreement
5.
Mandatory
Redemption. The
Convertible Notes shall be repaid by the Borrower in the event that
the Borrower, after May 21, 2017, raises at least an aggregate of
$16,000,000 in capital through the issuance of debt, equity, or a
combination thereof, without premium or penalty and upon 30
days’ prior written notice to the Holder.
6. Further
Assurances. Each Party hereto, without additional
consideration, shall cooperate, shall take such further action and
shall execute and deliver such further documents as may be
reasonably requested by the other Party hereto in order to carry
out the provisions and purposes of this Amendment.
7. Counterparts.
This Amendment may be signed in counterparts with the same effect
as if the signature on each counterpart were upon the same
instrument. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing
(or on whose behalf such signature is executed) with the same force
and effect as if such facsimile or “.pdf” signature page were an original
thereof.
8. Headings.
The headings of articles and sections in this Amendment are
provided for convenience only and will not affect its construction
or interpretation.
9. Waiver.
Neither any failure nor any delay by any party in exercising any
right, power or privilege under this Amendment or any of the
documents referred to in this Amendment will operate as a waiver of
such right, power or privilege, and no single or partial exercise
of any such right, power or privilege will preclude any other or
further exercise of such right, power or privilege.
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10. Severability.
The invalidity or unenforceability of any provisions of this
Amendment pursuant to any applicable law shall not affect the
validity of the remaining provisions hereof, but this Amendment
shall be construed as if not containing the provision held invalid
or unenforceable in the jurisdiction in which so held, and the
remaining provisions of this Amendment shall remain in full force
and effect. If the Amendment may not be effectively construed as if
not containing the provision held invalid or unenforceable, then
the provision contained herein that is held invalid or
unenforceable shall be reformed so that it meets such requirements
as to make it valid or enforceable.
11. Governing
Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York, without giving
effect to the choice of law principles thereof.
12. Effect
of this Extension Agreement. Except as expressly
modified or amended hereby, the terms and rights contained in the
Convertibles Notes shall remain unchanged, are not waived and shall
remain in full force and effect.
[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, the parties hereto have caused this Convertible
Promissory Note Amendment to be duly executed by their respective
authorized signatories as of the date first indicated
above.
|
By:
______________________
Name:
Xxxxxxx Xxxx
Title:
Chief Financial Officer
|
Address
for Notice:
000 X.
Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx
Xxxxxxx, XX 00000
Attention:
Chief Operating Officer
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|
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[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
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[NOTEHOLDER
SIGNATURE PAGES TO
CONVERTIBLE
PROMISSORY NOTE EXTENSION AGREEMENT]
IN
WITNESS WHEREOF, the undersigned has caused this Convertible
Promissory Note Amendment to be duly executed by it authorized
signatory as of the date first indicated above.
|
NOTEHOLDER
By:
Name:
Title:
|
Address
for Notice
|
Principal
Amount of
Convertible
Promissory Notes: _____________
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