Contract
Exhibit 10.2
THIS
NOTE AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE
ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.
|
US
$___________
|
|
Date of
Issuance: _____________________
|
FOR
VALUE RECEIVED, SMART SERVER, INC., a Nevada corporation doing
business as XXXX.xxx (the "Company"), hereby
unconditionally promises to pay to the order of ___________________
(the "Holder"), or their
permitted assigns, the aggregate principal sum of
_____________________($________) (the "Principal Amount"),
together with interest on the unpaid principal balance of this
Convertible Note (this "Note") at a rate equal
to nine and one-half percent (9.5%) (computed on the basis of the
actual number of days elapsed in a 360-day year) per annum (the
"Interest
Rate"). Interest shall accrue from the date hereof and shall
continue to accrue on the outstanding principal balance of this
Note until paid in full or converted as provided herein. Except as
expressly provided herein, all payments of principal and interest
by the Company under this Note shall be made in United States
dollars in immediately available funds to the account specified by
the Holder.
1. Definitions. Unless the context
otherwise requires, when used herein the following terms shall have
the meanings indicated:
(a) "Affiliate" means, with
respect to any person or entity, any person or entity which
directly or indirectly controls, is controlled by or is under
common control with such person or entity, as applicable. As used
in this definition, "control" (including, with correlative
meanings, "controlled by" and "under common control with") shall
mean possession, directly or indirectly of power to direct or cause
the direction of management or policies (whether through ownership
of securities or partnership or other ownership interests, by
contract or otherwise).
(b) "Maturity Date" means
November 1, 2020.
(c) "Outstanding Balance"
means all outstanding principal under the Note and any accrued and
unpaid interest thereon.
(d) "Person" means an
individual, corporation, partnership, limited liability company,
trust, business trust, association, joint stock company, joint
venture, sole proprietorship, unincorporated organization,
governmental authority or any other form of entity not specifically
listed herein.
(e) "Qualified Financing"
means an equity financing of at least One Million Five Hundred
Thousand Dollars ($1,500,000.00) (excluding the conversion of the
Note).
2. Transfer. This Note is
transferable and assignable by the Holder to any Person previously
approved, in writing, by the Company; provided, however, that no approval
shall be required in connection with any transfer or assignment of
this Note to an Affiliate of the Holder in compliance with
applicable securities laws. The Company agrees to issue from time
to time a replacement Note in the form hereof to facilitate such
approved transfers and assignments. In addition, after delivery of
an indemnity in form and substance reasonably satisfactory to the
Company, the Company also agrees to promptly issue a replacement
Note if this Note is lost, stolen, mutilated or
destroyed.
3. Payment of Principal and Interest;
Prepayment.
(a) Interest on this
Note shall accrue from the date hereof and shall be payable,
annually in arrears, beginning on October 31, 2017, unless prepaid
pursuant to Section 3(b) below or earlier converted pursuant to
Section 4 below.
(b) The Company
shall may, at its option, at any time, and without penalty, prepay
all or any portion of the principal amount or accrued but unpaid
interest on this Note without the prior written consent of the
Holder.
(a) Qualified Financing. Commencing
upon the closing of a Qualified Financing through the Maturity
Date, the Holder shall have the right, at its option, to convert
the Outstanding Balance, in whole and not in part, into fully-paid
and non-assessable shares of Common Stock of the Company at a
conversion price equal to the lesser of (i) $1.50 and (ii) one
hundred percent (100%) of the price per share at which the
securities of the Company are in the Qualified Financing (such
price per share, the "Conversion
Price").
(b) Maturity. In the event that a
Qualified Financing has not occurred by the Maturity Date, the
Holder, in its sole option, may elect to (i) have the Outstanding
Balance repaid by the Company in cash; or (ii) as soon as
practicable following the Maturity Date, convert such Outstanding
Balance into Common Stock of the Company at the Conversion Price,
which shall be $1.50 if no Qualified Financing has occurred prior
to the Maturity Date.
(c) Pay-off upon Conversion. If the
Outstanding Balance is converted in full pursuant to Section 4(a)
or 4(b) above, then such principal and interest shall be deemed to
have been paid in full by the Company on the date of such
conversion.
(d) Conversion Mechanics. In
connection with conversion of the Note pursuant to Sections 4(a)
and 4(b) above, the Holder shall surrender the Note, duly endorsed
without recourse, representation or warranty, at the principal
office of the Company. At its expense, the Company shall, as soon
as practicable thereafter, issue and deliver to the Holder at such
principal office a certificate or certificates for the equity
securities (bearing such legends as may be required), together with
a check payable to the Holder for any cash amounts payable as
described in subsection (e) below.
(e) No Fractional Shares. No
fractional equity securities shall be issued upon conversion of
this Note. In lieu of the Company issuing any fractional equity
securities to the Holder upon the conversion of this Note, the
Company shall pay to the Holder an amount in cash equal to the
product obtained by multiplying the Conversion Price applied to
effect such conversion by the fraction of an equity security not
issued pursuant to the previous sentence. Upon conversion of this
Note in full and the payment of the amounts specified in this Note,
the Company shall be released from all of its obligations and
liabilities under this Note.
(f) Payment Process. All payments
to be made by the Company shall be made without set-off, recoupment
or counterclaim and free and clear of and without any deduction of
any kind for any taxes, levies, fees, deductions, withholdings,
restrictions or conditions of any nature.
5. Adjustments for Certain Structural
Events.
(a) Splits and Combinations. If the
Company combines its outstanding equity securities into a smaller
number of equity securities, the Conversion Price in effect
immediately before the combination will be proportionately
increased, as of the effective date of the combination, as follows:
(i) the number of equity securities issuable to the Holder
hereunder immediately before the effective date of the combination
will be adjusted so that the Holder, if converted on or after that
date, will receive the number of equity securities that the Holder
would have owned and been entitled to receive as a result of the
combination had the Note been converted immediately before that
date; and (ii) the Conversion Price in effect immediately before
such adjustment will be adjusted by multiplying the Conversion
Price by a fraction, the numerator of which is the aggregate number
of equity securities issuable to the Holder upon conversion of this
Note immediately before such adjustment, and the denominator of
which is the aggregate number of equity securities issuable to the
Holder upon conversion of this Note immediately thereafter. If the
Company subdivides its outstanding equity securities, the number of
equity securities issuable upon conversion hereunder will be
proportionally increased and the Conversion Price in effect before
the subdivision will be proportionately decreased, as of the
effective date of the subdivision, as follows: (A) the number of
equity securities issuable to the Holder upon the conversion of
this Note immediately before the effective date of the subdivision
will be adjusted so that the Holder, if converted on or after that
date, will receive the number of equity securities that the Holder
would have owned and been entitled to receive as a result of the
subdivision had the Note been converted immediately before that
date; and (B) the Conversion Price in effect immediately before the
adjustment will be adjusted by multiplying the Conversion Price by
a fraction, the numerator of which is the aggregate number of
equity securities issuable to the Holder upon conversion of this
Note immediately before such adjustment, and the denominator of
which is the aggregate number of equity securities issuable to the
Holder upon conversion of this Note immediately
thereafter.
(b) Reorganization, Recapitalization,
Merger. If there occurs any reorganization,
recapitalization, reclassification, merger, or statutory conversion
to another form of business entity involving the Company in which
the equity securities of the Company are converted into or
exchanged for other securities (other than a transaction covered by
Section 5(a), then Lender will receive upon conversion of this
Note, in lieu of the equity securities of the Company immediately
theretofore issuable upon conversion of this Note, for the
aggregate Conversion Price in effect prior thereto, the kind and
amount of other securities receivable upon such reorganization,
recapitalization, reclassification, merger, or statutory conversion
to another form of business entity, by the holders of the number of
equity securities of the Company for which this Note could have
been converted immediately prior to such reorganization,
recapitalization, reclassification, merger, or statutory conversion
to another form of business entity.
6. Event of
Default.
The
occurrence of any of the following events shall constitute an
"Event of
Default" hereunder:
(a) the failure of the
Company to make any payment of principal or interest on this Note
when due, whether at maturity, upon acceleration or
otherwise;
(b) (i) the Company or
a subsidiary of the Company (a "Subsidiary") makes a
determination to discontinue (or does cease to conduct) business,
makes an assignment for the benefit of creditors or admits in
writing its inability to pay its debts generally as they become
due; (ii) an order, judgment or decree is entered adjudicating the
Company or a Subsidiary as bankrupt or insolvent; (iii) any order
for relief with respect to the Company or a Subsidiary is entered
under the U.S. Bankruptcy Code or any other applicable bankruptcy
or insolvency law; (iv) the Company or a Subsidiary petitions or
applies to any tribunal for the appointment of a custodian,
trustee, receiver or liquidator of the Company or a Subsidiary or
of any substantial part of the assets of the Company or a
Subsidiary commences any proceeding relating to it under any
bankruptcy, reorganization, arrangement, insolvency, readjustment
of debt, dissolution or liquidation law of any jurisdiction; or (v)
any such petition or application in (iv) above is filed, or any
such proceeding is commenced, against the Company or a Subsidiary
and either (x) the Company or such Subsidiary by any act indicates
its approval thereof, consents thereto or acquiesces therein or (y)
such petition, application or proceeding is not dismissed within
sixty (60) days;
(c) unless waived by
the Holder, if the Company fails to observe or perform in any
material respect any of its covenants contained in the Note and
such failure continues for more than thirty (30) days after
delivery of written notice thereof;
(d) unless waived by
the Holder, the Company's material breach of any other term or
provision in this Note and such failure continues for more than
thirty (30) days after delivery of written notice thereof;
or
(e) the Company's
indebtedness for borrowed money is accelerated as a result of a
default or breach under any agreement for such borrowed money,
including but not limited to loan agreements, or material breach
under any real property lease agreements and material capital
equipment lease agreements, by which the Company is bound or
obligated, which breach is not cured by the Company within the
applicable time periods thereof.
Upon
the occurrence of any Event of Default, the Outstanding Balance
under this Note shall become immediately due and payable upon
election of the Holder. Upon the occurrence of any Event of
Default, the Holder may, in addition to declaring all amounts due
hereunder to be immediately due and payable, pursue any available
remedy, whether at law or in equity, including, without limitation,
exercising its rights under this Note. If an Event of Default
occurs, the Company shall pay to the Holder the reasonable
attorneys' fees and disbursement and all other reasonable
out-of-pocket costs incurred by the Holder in order to collect
amounts due and owing under this Note or otherwise to enforce the
Holder's rights and remedies hereunder.
7. Amendments in Writing. Any term
of this Note may be amended, modified (including, without
limitation, any extension of the Maturity Date, to change the
conversion price or to cause the Note to be pre-payable) or waived
upon the written consent of the Company and the Holder. No such
waiver or consent in any one instance shall be construed to be a
continuing waiver or a waiver in any other instance unless it
expressly so provides.
8. No Rights as a Stockholder.
This Note does not by itself entitle the Holder to any voting
rights or other rights as a stockholder of the Company. In the
absence of conversion of this Note, no provisions of this Note, and
no enumeration herein of the rights or privileges of the Holder,
shall cause the Holder to be a stockholder of the Company for any
purpose.
9. Waivers. The Company hereby
forever waives presentment, demand, presentment for payment,
protest, notice of protest, notice of dishonor of this Note and all
other demands and notices in connection with the delivery,
acceptance, performance and enforcement of this Note.
10. Governing Law; Jurisdiction;
Venue. This Note, and all matters arising directly and
indirectly herefrom (the "Covered Matters"), shall
be governed in all respects by the laws of the State of Nevada as
such laws are applied to agreements between parties in the State of
Nevada. The Company irrevocably submits to the personal
jurisdiction of the courts of the State of Nevada and the United
States District Court located nearest the Company's principal place
of business for the purpose of any suit, action, proceeding or
judgment relating to or arising out of the Covered Matters. Service
of process on the Company in connection with any such suit, action
or proceeding may be served on the Company anywhere in the world by
the same methods as are specified for the giving of notices under
this Note. The Company irrevocably consents to the jurisdiction of
any such court in any such suit, action or proceeding and to the
laying of venue in such court. The Company irrevocably waives any
objection to the laying of venue of any such suit, action or
proceeding brought in such courts and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum.
11. Notices. All notices and other
communications given or made pursuant to this Note shall be in
writing and shall be deemed effectively given (a) upon personal
delivery to the party to be notified; (b) when sent by confirmed
electronic mail or facsimile if sent during normal business hours
of the recipient, and if not so confirmed, then on the next
business day; (c) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage
prepaid; or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent
to the Holder at the address set forth on the books and records of
the Company or at such other place as may be designated by the
Holder in writing to the Company in accordance with the provisions
of this Section 11, and to the Company at the Company's principal
place of business, or to such e-mail address, facsimile number or
address as subsequently modified by written notice in accordance
with the provisions of this Section 11.
12. Successors and Assigns. This
note shall be binding upon the successors or assigns of the Company
and shall inure to the benefit of the successors and permitted
assigns of the Holder.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
|
|
a Nevada corporation doing business as XXXX.xxx
|
|
|
By:____________________________
Name:
Title:
Address:
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000
|
|
|
|
{39827741;1}
[Signature Page to
Convertible Promissory Note]
