Contract
EXHIBIT
4.7
NEITHER
THIS NOTE NOR ANY SHARES OF STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES
LAWS OF ANY STATE. NEITHER THIS NOTE NOR ANY SHARES OF STOCK ISSUABLE UPON
CONVERSION OF THIS NOTE MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THIS NOTE
OR SHARES OF STOCK ISSUABLE UPON CONVERSION OF THIS NOTE UNDER SUCH ACT UNLESS
SUCH REGISTRATION IS NOT REQUIRED PURSUANT TO A VALID EXEMPTION THEREFROM UNDER
THE ACT.
THE ISSUE
PRICE OF THIS NOTE IS $400,000.00 (THE "ISSUE PRICE"). THE
AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS NOTE IS $60,000.00 (the "OID AMOUNT"). THE
ISSUE DATE OF THIS NOTE IS NOVEMBER 30, 2009.
Original
Issue Discount Secured Convertible Promissory Note
| $460,000.00 | November 30, 2009 |
FOR VALUE
RECEIVED, the undersigned Lenco Mobile Inc., a Delaware corporation (referred to
herein as "Borrower" or
the "Company"), promises
to pay to the order of Agile Opportunity Fund LLC, its successors or assigns
(the "Lender"), the
principal sum of Four Hundred Sixty Thousand and 00/100 Dollars ($460,000.00)
(the "Face Amount") on
November 29, 2010 (the "Maturity Date"), together with
interest on the Issue Price of this Note at a rate equal to eighteen percent
(18%) per annum calculated on the basis of a 360 day year (the "Interest
Rate"). Interest shall be payable on the last day of each
month commencing on December 31, 2009. Notwithstanding any other provision
hereof, interest paid or becoming due hereunder and any other payments hereunder
which may constitute interest shall in no event exceed the maximum rate
permitted by applicable law.
Interest
and any other amounts due hereunder are payable in lawful money of the United
States of America to the Lender at the address set forth in that certain
Securities Purchase and Amendment Agreement by the Borrower, AdMax Media Inc.,
its wholly owned subsidiary, and the Lender dated as of the date hereof (the
"Securities Purchase
Agreement") and pursuant to which this Note is issued. All capitalized
terms not otherwise defined herein shall have the respective meanings as set
forth in the Securities Purchase Agreement. This Note is secured by
the Security Agreement and the Pledge Agreement.
Section
1. Conversion.
(a) At any
time from the original issue date hereof through the date that this Note is paid
in full, Lender shall have the right, in its sole discretion, to convert the
principal balance of this Note then outstanding plus accrued but unpaid
interest, in whole or in part, into shares (each, a "Conversion Share") of Common
Stock at a conversion price equal to $3.25 per Conversion Share, subject to
adjustment as provided in Section 2 herein (the "Conversion
Price").
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(b) Lender
may convert this Note at the then applicable Conversion Price by the surrender
of this Note (properly endorsed) to the Company at the principal office of the
Borrower, together with the form of Notice of Conversion attached hereto as
Annex
A (a "Notice of
Conversion") duly completed, dated and executed, specifying therein the
Convertible Principal Balance and/or outstanding interest to be
converted. The "Conversion Date" shall be the date that such Notice
of Conversion and this Note is duly provided to Borrower hereunder (or, at
Xxxxxx's option, the next interest payment date with respect to Xxxxxx's
conversion of any scheduled interest payment). In the event that the
Lender shall specify a name or names other than that of the Lender to receive
any of the Conversion Shares issuable upon such exercise of the conversion
option, the Notice of Conversion also shall be accompanied by payment of all
transfer taxes payable upon the issuance of the Conversion Shares to such
specified person(s).
(c) On the
date of receipt by the Company of the duly completed, dated and executed Notice
of Conversion, this Note and applicable transfer taxes, if any, all in
accordance with Section 1(b) with respect to a conversion of any
portion of this Note, the Lender (and any person(s) receiving Conversion
Shares in lieu of the Lender) shall be deemed to have become the holder of
record for all purposes of the Conversion Shares to which such valid conversion
relates.
(d) As soon
as practicable, but not in excess of five business days, after the valid
conversion of any portion of this Note, the Company, at the Company’s expense
(including the payment by Company of any applicable issuance and similar taxes,
but excluding the transfer taxes referred to in Section 1(b)), will cause
to be issued in the name of and delivered to the Lender (and/or such other
person(s) identified in the Notice of Conversion with respect to such
conversion), certificates evidencing the number of duly authorized, validly
issued, fully paid and non-assessable Conversion Shares to which the Lender
(and/or such other person(s) identified in such Notice of Conversion, shall
be entitled to receive upon the conversion), as adjusted to reflect the effects,
if any, of the anti-dilution provisions of Section 2, such certificates to
be in such reasonable denominations as Lender may request when delivering the
Notice of Conversion.
(e) If less
than the entire Convertible Principal Balance of this Note is being converted,
the Company shall execute and deliver to the Lender a new replacement Note
(dated as of the date hereof) evidencing a face amount which is the percentage
of the original Face Amount equal to the portion of the Convertible Principal
Balance that has not been so converted.
Section
2. Conversion Price
Adjustment.
(a) If the
Borrower, at any time while this Note is outstanding, (i) shall pay a stock
dividend or otherwise make a distribution or distributions on shares of its
Common Stock or any other equity or equity equivalent securities payable in
shares of Common Stock, (ii) subdivide outstanding shares of Common Stock
into a larger number of shares, (iii) combine (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares,
or (iv) issue by reclassification of shares of the Common Stock any shares
of capital stock of the Borrower, then the Conversion Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common
Stock (excluding treasury shares, if any) outstanding before such event and of
which the denominator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding after such event. Any adjustment made
pursuant to this paragraph shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or
reclassification.
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(b) In case
of any consolidation or merger of the Borrower with or into another entity or
the conveyance of all or substantially all of the assets of the Borrower to
another entity (collectively, an "Organic Change"), this Note
shall thereafter be convertible (to the extent such conversion is permitted
hereunder) into the number of shares of Common Stock or other securities or
property to which a holder of the number of shares of Common Stock of the
Borrower deliverable upon conversion of this Note would have been entitled had
this Note been converted immediately prior to such Organic Change and held until
after the closing of such Organic Change; and, in any such case, appropriate
adjustment shall be made in the application of the provisions herein set forth
with respect to the rights and interest thereafter of Lender or any subsequent
holder of this Note, to the end that the provisions set forth herein shall be
thereafter applicable, as nearly as reasonably may be, in relation to any shares
of Common Stock or other property thereafter deliverable upon the conversion of
this Note.
Section
3. Reservation of
Stock. The
Borrower covenants that it will at all times reserve and keep available out of
its authorized and unissued shares of Common Stock solely for the purpose of
issuance upon conversion of this Note as herein provided, free from preemptive
rights or any other actual contingent purchase rights of persons other than the
Lender, not less than such number of shares of the Common Stock as shall be
issuable upon the conversion of the outstanding Face Amount of this Note and
accrued and unpaid interest hereunder. If at any time, the Company
does not have available an amount of authorized but unissued Common Stock or
Common Stock held in treasury necessary to satisfy any conversion of all amounts
outstanding under this Note, the Company shall call and hold a special meeting
of its stockholders within 90 days of the occurrence of any shortfall in
authorized shares for the purpose of approving an increase in the number of
shares of authorized Common Stock to an amount sufficient to enable conversion
all amounts outstanding under this Note, subject in all respects to compliance
with the requirements of Section 14 of the Securities Exchange Act of 1934
to which the Borrower is subject. The Board of Directors of the
Company shall recommend that stockholders vote in favor of increasing the number
of authorized shares of Common Stock at any such meeting. The
Borrower covenants that all shares of Common Stock that may be issuable upon
conversion of this Note shall, upon issue, be duly and validly authorized,
issued and fully paid and nonassessable. No consent of any other
party and no consent, license, approval or authorization of, or registration or
declaration with, any governmental authority, bureau or agency is required in
connection with the execution, delivery or performance by the Borrower, or the
validity or enforceability of this Note other than such as have been met or
obtained. The execution, delivery and performance of this Note and all other
agreements and instruments executed and delivered or to be executed and
delivered pursuant hereto or thereto or the securities issuable upon conversion
of this will not violate any provision of any existing law or regulation or any
order or decree of any court, regulatory body or administrative agency or the
certificate of incorporation or by-laws of the Borrower or any mortgage,
indenture, contract or other agreement to which the Borrower is a party or by
which the Borrower or any property or assets of the Borrower may be
bound.
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Section
4. No Fractional
Shares. Upon
a conversion hereunder, the Borrower shall not be required to issue stock
certificates representing fractions of shares of Common Stock, and in lieu of
any fractional shares which would otherwise be issuable, the Borrower shall
issue the next highest whole number of shares of Common Stock, as the case may
be.
Section
5. Redemption. If
at any time while this Note shall be outstanding, the Company shall consummate:
(i) the closing of a financing in excess of three million dollars
($3,000,000); or (ii) a Sale of the Company, then the Company shall deliver
a written notice to the Lender of the pending consummation of any transaction
described in clauses (i) or (ii) of this Section 5 (each, a
"Liquidity Event")
fifteen (15) days prior thereto and shall, at the sole option of the
Lender, redeem this Note in full immediately following the closing of such
Liquidity Event (the "Repayment
Date") by paying the entire outstanding Face Amount of this Note,
together with accrued interest. For the purpose of clarification, after delivery
of a notice of a Liquidity Event as provided for in this Section, the Lender
shall continue to be entitled to effectuate conversions as contemplated under
this Note until such time as the redemption under this Section is
consummated.
Section
6. Transferability. This
Note and any of the rights granted hereunder are freely transferable by the
Lender, in its sole discretion, subject to federal and state securities law
restrictions, if any.
Section
7. Event of
Default. (a)
In the event that any one of the following events shall occur (whatever the
reason and whether it shall be voluntary or involuntary or effected by operation
of law or pursuant to any judgment, decree or order of any court, or any order,
rule or regulation of any administrative or governmental body):
(i) Any
default in the payment of the principal of, interest on or other charges in
respect of this Note or the Original Note, as and when the same shall become due
and payable (whether on a Conversion Date or the Maturity Date or by
acceleration or otherwise);
(ii) The
Borrower or AdMax shall fail to observe or perform any other material covenant,
agreement or warranty contained in, or otherwise commit any breach or default of
any provision of this Note, the Original Note or any Loan Document to which it
is a party, and such failure or breach shall continue to exist for a period of
10 days following delivery of Holder's written notice to Borrower of such
failure or breach (unless the underlying breach or default was subject to notice
and an opportunity to cure under the Loan Documents in which case no additional
notice or cure period shall be afforded);
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(iii) The
Borrower or AdMax, shall commence, or there shall be commenced against the
Borrower or AdMax any applicable bankruptcy or insolvency laws as now or
hereafter in effect or any successor thereto, or the Borrower or AdMax commences
any other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Borrower or
AdMax or there is commenced against the Borrower or AdMax any such bankruptcy,
insolvency or other proceeding which remains undismissed for a period of 60
days; or the Borrower or AdMax is adjudicated insolvent or bankrupt; or any
order of relief or other order approving any such case or proceeding is entered;
or the Borrower or AdMax suffers any appointment of any custodian, private or
court appointed receiver or the like for it or any substantial part of its
property which continues undischarged or unstayed for a period of 60 days; or
the Borrower or AdMax makes a general assignment for the benefit of creditors;
or the Borrower or AdMax shall fail to pay or shall state that it is unable to
pay or shall be liable to pay, its debts as they become due or by any act or
failure to act expressly indicate its consent to, approval of or acquiescence in
any of the foregoing; or any corporate or other action is taken by the Borrower
or AdMax for the purpose of effecting any of the foregoing; or
(iv) The
Borrower or AdMax shall default (subject to all applicable cure periods) in any
of its secured obligations under any other note or any mortgage, credit
agreement or other facility, indenture agreement, factoring agreement or other
instrument under which there may be issued, or by which there may be secured or
evidenced any indebtedness for borrowed money or money due under any leasing or
factoring arrangement of the Borrower, whether such indebtedness now exists or
shall hereafter be created and such default shall result in such indebtedness
becoming or being declared due and payable prior to the date on which it would
otherwise become due and payable, then, in any such event, a default by Borrower
shall be deemed to occur under this Note, which, unless such default is cured
(in the case of clause (i) or (ii) of this
paragraph (a) only) by Borrower within five business days from
delivery of notice (an "Event of Default Notice") to Borrower of such default,
shall be deemed, for the purposes of this Note, to be an "Event of
Default."
(b) Following
and during continuation of an uncured Event of Default, the Interest Rate shall
increase to 24.99% per annum immediately following such Event of Default; provided, that the
Interest Rate shall thereafter automatically revert back to the prior Interest
Rate upon all Events of Default being cured to the satisfaction of Lender,
effective on the date that Lender accepts such cure. Notwithstanding
the foregoing, in the event Borrower fails to pay all amounts due hereunder on
or before the Maturity Date, beginning on the day after the Maturity Date, the
OID Amount and the Face Amount of this Note payable by Borrower shall be
increased pro rata for each month or fraction thereof after the Maturity Date
that this Note remains unpaid. Upon the occurrence of an Event of Default
hereunder, the entire Face Amount of this Note together with any accrued but
unpaid interest shall automatically become due and payable. The
failure of the Lender to exercise any of its rights hereunder in any particular
instance shall not constitute a waiver of the same or of any other right in that
or any subsequent instance with respect to the Lender or any subsequent
holder. The Lender need not provide and the Borrower hereby waives
any presentment, demand, protest or other notice of any kind, and the Lender may
immediately and without expiration of any grace period enforce any and all of
its rights and remedies hereunder and all other remedies available to it under
applicable law.
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Section
8. Registration
Rights. The
Lender is entitled to certain registration rights with respect to the Common
Stock issuable upon conversion of this Note as set forth in the Securities
Purchase Agreement.
Section
9. Notices. Any
and all notices, requests, documents or other communications or deliveries
required or permitted to be given or delivered hereunder shall be delivered in
accordance with the notice provisions of the Securities Purchase
Agreement.
Section
10. Usury. To
the extent it may lawfully do so, the Company hereby agrees not to insist upon
or plead or in any manner whatsoever claim, and will resist any and all efforts
to be compelled to take the benefit or advantage of, usury laws wherever
enacted, now or at any time hereafter in force, in connection with any claim,
action or proceeding that may be brought by the Lender in order to enforce any
right or remedy under any Loan Document. Notwithstanding any
provision to the contrary contained in any Loan Document, it is expressly agreed
and provided that the total liability of the Company under the Loan Documents
for payments in the nature of interest shall not exceed the maximum lawful rate
authorized under applicable law (the "Maximum Rate"), and, without
limiting the foregoing, in no event shall any rate of interest or default
interest, or both of them, when aggregated with any other sums in the nature of
interest that the Company may be obligated to pay under the Loan Documents
exceed such Maximum Rate. It is agreed that if the maximum contract
rate of interest allowed by law and applicable to the Loan Documents is
increased or decreased by statute or any official governmental action subsequent
to the date hereof, the new maximum contract rate of interest allowed by law
will be the Maximum Rate applicable to the Loan Documents from the effective
date forward, unless such application is precluded by applicable
law. If under any circumstances whatsoever, interest in excess of the
Maximum Rate is paid by the Company to Lender with respect to indebtedness
evidenced by the Loan Documents, such excess shall be applied by Lender to the
unpaid principal balance of any such indebtedness or be refunded to the Company,
the manner of handling such excess to be at Xxxxxx’s election.
Section
11. Governing Law; Waiver of
Jury Trial. This
Note and the provisions hereof are to be construed according to and are governed
by the laws of the State of New York, without regard to principles of conflicts
of laws thereof. Xxxxxxxx agrees that the New York State Supreme
Court located in the County of Nassau, State of New York shall have exclusive
jurisdiction in connection with any dispute concerning or arising out of this
Note, the Loan Documents, or otherwise relating to the parties
relationship. In any action, lawsuit or proceeding brought to enforce
or interpret the provisions of this Note, the Loan Documents and/or arising out
of or relating to any dispute between the parties, the Lender shall be entitled
to recover all of its costs and expenses relating collection and enforcement of
this Note (including without limitation, reasonable attorney’s fees and
disbursements) in addition to any other relief to which the Lender may be
entitled.
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THE
BORROWER HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF
OR IN ANY WAY RELATING TO THIS NOTE.
Section
12. Successors and
Assigns. Subject
to applicable securities laws, this Note and the rights and obligations
evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and assigns of Lender.
Section
13. Reimbursement of
Expenses. The
Company shall reimburse the Lender for any reasonable legal fees and
disbursements incurred by the Lender in enforcement of or protection of any of
its rights under this Note.
Section
14. Amendment. This
Note may be modified or amended or the provisions hereof waived only with the
written consent of the Lender and the Company.
Section
15. Severability. Wherever
possible, each provision of this Note shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this Note
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Note.
[Remainder
of Page Intentionally Left Blank]
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IN
WITNESS WHEREOF, the Borrower has caused this Original Issue Discount Secured
Convertible Promissory Note to be duly executed by a duly authorized officer as
of the date first above indicated.
|
By: /s/ Xxxxxxx
Xxxxxxxxx
Name:
Xxxxxxx Xxxxxxxxx
Title:
CEO
|
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ANNEX A
NOTICE OF
CONVERSION
To Be
Executed by the Lender
in Order
to Convert Promissory Note
The
undersigned Lender hereby elects to convert $__________ principal (equal to
$______ Face Amount less, if Conversion Date is prior to Maturity Date, $____
unamortized OID Amount, capitalized terms used as defined in the Note) and
$_____ interest currently outstanding and owed under the Original Issue Discount
Secured Convertible Promissory Note issued to Agile Opportunity Fund, LLC at
a Conversion Price of $___ (the "Note") and to purchase
___________ shares of Common Stock issuable upon conversion of such Note, and
requests that certificates for such securities shall be issued in the name
of:
_________________________________________________
(please
print or type name and address)
_________________________________________________
(please
insert social security or other identifying number)
and be
delivered as follows:
_________________________________________________
(please
print or type name and address)
_________________________________________________
(please
insert social security or other identifying number)
Lender
Name: ______________________________________
By:
______________________________________________
Name:
Title:
Conversion
Date: ___________________________________
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