Exhibit No. 10.2
NEITHER THEISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THISCERTIFICATENOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLEHAVE BEEN REGISTEREDUNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,TRANSFERRED OR ASSIGNED INTHE ABSENCE OF (A) AN EFFECTIVEREGISTRATION STATEMENT FORTHE SECURITIES UNDER THESECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL(WHICH COUNSELSHALL BE SELECTEDBY THE HOLDER), IN AGENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIREDUNDER SAID ACT.NOTWITHSTANDINGTHE FOREGOING,THE SECURITIES MAY BEPLEDGEDIN CONNECTION WITH A BONAFIDE MARGIN ACCOUNT OROTHERLOAN OR FINANCINGARRANGEMENT SECURED BY THESECURITIES.
| Principal Amount: $65,000.00 | Issue Date: January 14, 2019 |
| Purchase Price: $65,000.00 | |
CONVERTIBLE PROMISSORY NOTE
FOR VALUERECEIVED,ORBITAL TRACKING CORP., a Nevada corporation (hereinaftercalled the“Borrower”), hereby promises to pay to the order ofPOWER UPLENDING GROUP LTD., a Virginia corporation, or registered assigns(the“Holder”) the sum of $65,000.00 together with any interest as set forth herein, onJanuary14, 2020 (the “Maturity Date”), and topay interest on the unpaid principalbalance hereof at the rate of twelve percent (12%)(the “Interest Rate”)perannum from the datehereof (the “Issue Date”)until the same becomes due and payable, whether at maturity or upon acceleration or byprepaymentor otherwise. ThisNote may not be prepaid inwholeor inpart except as otherwiseexplicitly set forth herein. Any amount of principal orinterest onthisNote which is not paid when due shall bear interest at the rate oftwenty two percent (22%) perannum from the duedate thereof until the same is paid (“DefaultInterest”). Interest shall be computed on the basis of a 365 day year and the actual number of days elapsed.Interestshall commence accruing on theIssue Date but shall not bepayableuntilthe Note becomes payable(whetheratMaturity Date orupon acceleration or byprepayment). All payments due hereunder (totheextent not converted into common stock, $0.0001 par value per share (the “Common Stock”) in accordance with the terms hereof) shall be made in lawful money of theUnited States of America. All payments shall be made at such address asthe Holder shall hereafter givetothe Borrowerby written notice made inaccordancewith the provisions of thisNote. Each capitalized term used herein, and not otherwise defined, shall havethe meaning ascribed theretoin that certain Securities Purchase Agreement dated the datehereof, pursuant to whichthis Note was originally issued (the “Purchase Agreement”).
ThisNoteis free from all taxes, liens, claims and encumbrances with respecttothe issue thereof and shall not be subject topreemptive rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.
The following terms shall apply to this Note:
ARTICLE I. CONVERSIONRIGHTS
1.1Conversion Right.The Holder shall have the right from time to time, and at anytime during the period beginning on thedate which isone hundred eighty (180) days following the date ofthisNote and ending on the later of: (i) the Maturity Date and (ii) thedate of payment of the Default Amount(as defined in Article III), each in respect of the remaining outstanding principal amount of this Noteto convert all or anypartof the outstanding and unpaid principalamount ofthis Note intofully paid and non-assessable shares of Common Stock, as such Common Stockexists onthe Issue Date, oranyshares of capital stock or othersecurities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversionprice (the “Conversion Price”) determined as provided herein (a “Conversion”);provided,however, that in no event shall the Holder be entitled toconvert any portion of this Note in excess of that portion of this Note upon conversion ofwhich the sum of(1)thenumber ofshares ofCommon Stock beneficially owned by the Holder and its affiliates (otherthan shares of CommonStock which may bedeemed beneficially owned through the ownership ofthe unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation onconversionorexercise analogous tothe limitationscontained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion ofthis Note with respect to which the determination of this proviso is being made, would result inbeneficial ownership by theHolder and its affiliates ofmore than 4.99% of the outstanding shares of Common Stock. For purposes ofthe proviso to the immediately preceding sentence,beneficialownership shallbe determined in accordance with Section 13(d) ofthe Securities Exchange Act of 1934, as amended(the “Exchange Act”), andRegulations 13D-G thereunder, except as otherwiseprovidedin clause (1) of such proviso.Thebeneficial ownership limitations on conversion as set forth inthe sectionmay NOT be waivedby the Holder. The number of shares of Common Stock tobeissued upon eachconversionof thisNote shall be determined by dividing the Conversion Amount (as defined below)by the applicable Conversion Pricethen ineffecton the datespecified inthe noticeofconversion, inthe formattached hereto asExhibit A(the “Notice of Conversion”), deliveredto the Borrower bytheHolder in accordance with Section 1.4 below;provided thatthe Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) tothe Borrower before 6:00 p.m., NewYork,New York time onsuch conversion date (the “Conversion Date”); however, if theNotice of Conversion is sent after 6:00pm, New York, New York time the Conversion Date shall be thenext business day.Theterm “Conversion Amount”means, withrespect to anyconversion ofthis Note, the sum of (1) the principal amount of thisNote to be converted insuch conversionplus (2) at theHolder’s option, accrued and unpaid interest, if any, on such principalamount at theinterestratesprovided inthis Note to the ConversionDate,plus(3) at the Holder’s option,Default Interest, ifany, on theamounts referred to inthe immediately preceding clauses (1) and/or (2)plus(4) at theHolder’s option, any amounts owed to the Holder pursuant to Sections 1.4 hereof.
1.2Conversion Price. Theconversion price (the “Conversion Price”) shall equal the Variable Conversion Price (as defined herein) (subject to equitable adjustmentsby the Borrower relating totheBorrower’s securities or the securities of any subsidiary ofthe Borrower,combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “Variable ConversionPrice” shallmean61% multiplied by theMarket Price(asdefined herein) (representing a discount rate of 39%). “Market Price” means the lowest TradingPrice (as defined below) forthe CommonStock during the fifteen (15) Trading Day period ending on the latestcomplete Trading Day prior to theConversion Date. “Trading Price” means, forany security as of anydate, theclosingbid price onthe OTCQB, OTCQX, Pink Sheets electronic quotation system orapplicable trading market(the “OTC”) as reportedby a reliable reporting service (“Reporting Service”) designated by theHolder (i.e. Bloomberg) or, if theOTCis not the principal trading market for suchsecurity, the closing bidpriceof suchsecurity on the principal securitiesexchangeor trading market where such security is listed ortraded or, ifnoclosing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any marketmakers for suchsecurity that are listed in the “pinksheets”. If the Trading Price cannot be calculated for such security on suchdate inthemanner provided above,the Trading Price shall bethefairmarket value asreasonably determined by theBorrower. “Trading Day” shall mean any day on which the Common Stock istradable for any period on the OTC, or ontheprincipal securities exchange or othersecurities market on which the Common Stock is then being traded.
1.3Authorized Shares. The Borrower covenants that during theperiod the conversion rightexists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights,to provide for the issuance of Common Stock upon the fullconversion ofthisNote issued pursuant tothe Purchase Agreement.TheBorrower is required at all times to have authorized and reserved sixtimes thenumber ofshares thatwouldbe issuable upon full conversion of theNote (assumingthatthe 4.99% limitation set forth in Section 1.1 is not in effect)(based on the respective ConversionPriceof the Note(as defined inSection 1.2)ineffect fromtime totime,initially3,995,901,(the “Reserved Amount”). The Reserved Amount shall be increased (or decreased withthe writtenconsentof the Holder) fromtime to time in accordance with the Borrower’s obligations hereunder. The Borrower represents that upon issuance, such shares will beduly and validly issued, fullypaid and non-assessable.Inaddition, ifthe Borrower shall issue any securities or make any changetoits capital structure which would change the number ofshares ofCommon Stock into which the Notes shall beconvertible at the then current Conversion Price, theBorrower shall at the sametimemake proper provision so thatthereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, forconversionof theoutstanding Note. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of thisNote,and (ii) agreesthat its issuance of thisNoteshall constitute full authority to its officers and agents who are charged with the duty ofexecutingstock certificatesto execute and issue the necessary certificates forsharesofCommon Stock inaccordance with the terms andconditions of this Note.
If,atany time the Borrower does not maintain the Reserved Amount it will beconsidered an Event of Default under Section 3.2 of the Note.
1.4Method of Conversion.
(a)MechanicsofConversion.Asset forth inSection 1.1 hereof, from time to time, and at any time during the period beginning onthe date which is one hundredeighty (180) days following the date of this Note and ending on the later of: (i) theMaturity Date and(ii) the date ofpayment ofthe Default Amount, this Note may beconverted by the Holder inwholeor inpart at anytime from time to time after the Issue Date, by (A) submitting to the Borrower aNotice of Conversion (byfacsimile, e-mail or other reasonable means of communication dispatched onthe Conversion Date prior to 6:00p.m., New York, New York time) and (B) subject to Section 1.4(b), surrendering this Noteat the principal office of the Borrower (upon payment infull of any amounts owed hereunder).
(b)Surrender ofNoteUpon Conversion. Notwithstanding anything tothe contrary set forthherein, upon conversion ofthis Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire unpaid principalamountof thisNote is soconverted. TheHolder and the Borrower shall maintain records showing the principal amount so converted and the dates of such conversions or shall use such othermethod, reasonably satisfactory to the Holder andthe Borrower, so as nottorequire physical surrender ofthis Note upon each such conversion.
(c)Delivery of Common Stock UponConversion. Upon receiptby the Borrowerfrom the Holder of a facsimiletransmission or e-mail (or other reasonablemeansof communication) of aNotice of Conversion meeting therequirementsforconversion asprovided in this Section 1.4, the Borrower shall issue and deliver or causeto be issued and delivered to or upon the order ofthe Holder certificates fortheCommon Stock issuable upon suchconversion within two (2) business days after such receipt (the “Deadline”) (and, solely inthe case of conversion of the entire unpaidprincipal amount hereof, surrender ofthisNote) in accordance withthe termshereofand the Purchase Agreement.Upon receipt bytheBorrowerof aNoticeofConversion, the Holder shall bedeemed to be the holderof record of the Common Stock issuable upon suchconversion, the outstanding principal amount and the amount of accrued and unpaid interest on thisNote shall be reducedto reflect such conversion, and, unless the Borrower defaults on its obligations hereunder, all rights with respecttothe portion of thisNote being soconvertedshallforthwith terminate except the rightto receive theCommon Stock orother securities, cash or other assets, asherein provided, on suchconversion. If the Holder shall havegiven aNoticeof Conversion asprovided herein, the Borrower’s obligation to issue and deliverthe certificates for Common Stock shall be absolute and unconditional, irrespective ofthe absence ofany action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery ofanyjudgmentagainst anyperson orany action toenforce the same, any failure or delay in the enforcement of any other obligation ofthe Borrower tothe holder ofrecord, orany setoff, counterclaim,recoupment, limitation or termination, or anybreach or allegedbreachbythe Holder of any obligation to the Borrower, and irrespective of anyother circumstance whichmight otherwise limit such obligation of the Borrower to the Holder in connection with such conversion.
(d)Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion,providedthe Borroweris participating in the Depository Trust Company (“DTC”)Fast Automated SecuritiesTransfer (“FAST”) program, upon request of theHolder and its compliance withtheprovisions set forth herein, the Borrower shall use its besteffortstocauseitstransfer agent to electronically transmit the Common Stock issuable upon conversionto the Holderby crediting the account of Holder’s Prime Broker with DTC through its Deposit and Withdrawal at Custodian (“DWAC”) system.
(e)FailuretoDeliver Common StockPrior to Deadline. Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline duetoaction and/or inaction of the Borrower, the Borrower shall pay tothe Holder$2,000 per day incash, foreach day beyond the Deadline that the Borrower failsto deliver such CommonStock (the “Failto Deliver Fee”); provided; however that the Fail to Deliver Fee shall not be due if the failure is a result of a third party (i.e., transfer agent; andnottheresult ofany failure to pay such transfer agent)despite thebest efforts ofthe Borrower toeffect delivery ofsuch Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which ithas accrued or, attheoption ofthe Holder (by written noticetothe Borrower bythe firstdayof the month following the month in which it has accrued), shall be added to the principal amount ofthisNote, in which event interest shall accruethereon in accordance with the terms ofthis Note and such additional principalamount shall be convertible intoCommon Stock inaccordancewith the terms ofthis Note. The Borrower agrees that the righttoconvert is a valuable right tothe Holder. The damages resulting from a failure,attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly,the parties acknowledge that the liquidated damages provision contained inthis Section 1.4(e) are justified.
1.5Concerning the Shares. The shares of Common Stock issuable uponconversion ofthis Notemay not be sold or transferred unless:(i) such shares are sold pursuant to an effectiveregistration statement underthe Act or (ii)the Borrower or its transfer agent shall havebeen furnished with an opinion of counsel(which opinion shall bein form, substance and scope customary for opinions ofcounsel incomparable transactions) tothe effect that the shares to be sold or transferred may be sold ortransferredpursuant to an exemption from such registration (such asRule144 or a successor rule) (“Rule 144”); or (iii) such shares aretransferredto an “affiliate” (as defined inRule 144) of the Borrowerwho agrees tosell or otherwisetransfer the shares only in accordance with this Section 1.5 and who is anAccredited Investor (as defined inthe Purchase Agreement).
Any restrictive legend on certificates representing shares of Common Stock issuable upon conversion ofthis Note shall be removed and the Borrowershall issue to the Holder anew certificate therefore freeof any transfer legend iftheBorrower or itstransfer agent shall havereceivedanopinion ofcounsel fromHolder’s counsel, in form,substance and scope customary for opinions of counsel in comparable transactions, tothe effectthat(i) a public sale ortransfer of such Common Stock may be made without registration under the Act, which opinion shall be acceptedby the Company so that the sale or transfer iseffected; or (ii) inthe case ofthe Common Stock issuable uponconversionofthis Note, such security is registered for sale by theHolderunder an effective registrationstatement filedunder the Act; or otherwise may be sold pursuantto an exemption from registration. In the eventthat the Company does not reasonably accept the opinion of counselprovidedby the Holder with respect tothe transfer of Securities pursuant to an exemption from registration (such as Rule 144), at the Deadline, it willbe considered anEvent of Default pursuant to Section 3.2 of the Note.
1.6Effect of Certain Events.
(a)EffectofMerger, Consolidation, Etc.Atthe option ofthe Holder, thesale, conveyance or disposition of all or substantially all of the assets of the Borrower, the effectuationby the Borrower of atransactionor series of related transactions inwhich more than 50% ofthe voting power ofthe Borrower is disposed of, orthe consolidation, merger or other business combination ofthe Borrower with or into any other Person (as defined below) or Personswhen theBorrowerisnot the survivor shall be deemed tobean Event of Default (as defined in Article III) pursuant to whichthe Borrower shall be required topay to the Holder upon the consummation of and as a conditionto such transaction an amount equal to the Default Amount (as defined in Article III). “Person” shall mean any individual, corporation, limited liabilitycompany,partnership, association,trust or other entity or organization.
(b)Adjustment DuetoMerger, Consolidation, Etc.If, at any timewhen this Note is issued andoutstanding and priorto conversion of allof the Note, there shall be any merger, consolidation,exchangeof shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock oftheBorrower shall bechanged into the same or a differentnumberof shares ofanother class orclassesofstock or securities of theBorroweroranother entity, or incase of any sale or conveyance of all or substantially all ofthe assets ofthe Borrower other than inconnection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of thisNote,upon the basis and upon theterms and conditions specified herein and inlieuof the shares ofCommon Stock immediately theretofore issuable upon conversion, such stock, securities or assets which theHolder would have been entitledtoreceive in such transaction had thisNotebeenconvertedin full immediately prior to such transaction (without regard to any limitations onconversion set forth herein), and inany such caseappropriate provisions shall bemade with respect totherights and interests ofthe Holder ofthisNoteto the end that the provisions hereof (including, without limitation, provisions foradjustment of theConversion Price and ofthe number of sharesissuableupon conversion of the Note) shall thereafterbe applicable, as nearly asmay bepracticable inrelation to any securities or assetsthereafter deliverable upon theconversionhereof.The Borrowershall not affect any transaction described in this Section 1.6 (b) unless (a) it first gives,tothe extentpracticable,ten (10)days prior written notice (but inany event atleast five(5) days prior written notice) of the record date of the special meeting of shareholdersto approve,or ifthere isno such record date,theconsummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall beentitled to convert this Note) and(b) the resulting successor or acquiringentity(if not the Borrower) assumes by written instrumentthe obligations of this Note. The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.
(c)Adjustment DuetoDistribution. If the Borrower shall declare ormake any distribution ofits assets (or rights toacquire its assets)to holders ofCommon Stock as adividend, stock repurchase, by way ofreturnofcapital or otherwise(including any dividend or distribution to the Borrower’s shareholders incash orshares (or rights to acquire shares) ofcapital stock of asubsidiary (i.e., a spin-off) (a “Distribution”),then the Holder of thisNote shall beentitled, upon any conversion of thisNote after thedate of record fordetermining shareholders entitledto such Distribution,to receive the amount of such assets which would have been payable to the Holder withrespect to theshares of Common Stock issuable upon suchconversion had suchHolderbeenthe holder of such shares ofCommonStock on the record date for the determination of shareholdersentitled to such Distribution.
1.7 Prepayment. Notwithstanding anything tothe contrary containedin this Note, at anytime during the periods set forth onthe table immediately following thisparagraph (the “Prepayment Periods”), theBorrower shall havethe right,exercisableonnot more than three (3) Trading Dayspriorwritten notice to the Holder of the Note to prepaythe outstanding Note (principal and accrued interest), in full, inaccordancewith thisSection1.7. Any notice ofprepayment hereunder (an “Optional Prepayment Notice”) shall be deliveredto the Holder of the Note at its registered addresses and shall state:(1) that the Borrower is exercising its right toprepay the Note, and (2)the date ofprepayment which shall benot more than three (3)TradingDays fromthe date ofthe Optional Prepayment Notice. Onthe date fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall makepayment ofthe Optional Prepayment Amount (as defined below) to Holder, or upon the direction of the Holder as specified by theHolderin a writing to the Borrower (which directionshall to be sent to Borrower by theHolder atleast one (1)businessday prior tothe Optional Prepayment Date).Ifthe Borrower exercises itsright to prepay the Note, the Borrower shall make payment to the Holder of an amount incash equal to the percentage (“Prepayment Percentage”) as set forth inthe table immediately following thisparagraphopposite the applicable Prepayment Period, multipliedbythe sumof: (w) thethen outstanding principal amount ofthis Noteplus (x) accrued andunpaid interest on the unpaid principal amount of thisNote to the Optional Prepayment Dateplus(y) Default Interest, if any, on the amounts referred to in clauses (w) and (x)plus (z) any amounts owed tothe Holder pursuant to Section1.4 hereof (the “Optional Prepayment Amount”). If the Borrower delivers an Optional PrepaymentNoticeand failsto pay the Optional Prepayment Amount duetothe Holder of the Note within two (2) business days following theOptional Prepayment Date,the Borrower shall forever forfeit its righttoprepay theNote pursuant tothisSection 1.7.
| Prepayment Period | | Prepayment Percentage | |
| 1. The period beginning on the Issue Date and ending on the date which is thirty (30) days following the Issue Date. | | | 115 | % |
| 2. The period beginning on the date which is thirty-one (31) days following the Issue Date and ending on the date which is sixty (60) days following the Issue Date. | | | 120 | % |
| 3. The period beginning on the date which is sixty-one (61) days following the Issue Date and ending on the date which is ninety (90) days following the Issue Date. | | | 125 | % |
| 4. The period beginning on the date that is ninety-one (91) day from the Issue Date and ending one hundred twenty (120) days following the Issue Date. | | | 130 | % |
| 5. The period beginning on the date that is one hundred twenty-one (121) day from the Issue Date and ending one hundred fifty (150) days following the Issue Date. | | | 135 | % |
| 6. The period beginning on the date that is one hundred fifty-one (151) day from the Issue Date and ending one hundred eighty (180) days following the Issue Date. | | | 140 | % |
After the expiration of one hundredeighty (180)daysfollowingthe Issue Date, the Borrower shall have no right of prepayment.
ARTICLE II. CERTAIN COVENANTS
2.1Sale ofAssets. So long asthe Borrower shall have anyobligationunder thisNote, the Borrower shall not, without the Holder’s written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business. Anyconsent to the disposition ofany assets maybe conditioned on aspecified use of the proceeds ofdisposition.
ARTICLE III.EVENTS OF DEFAULT
If any of the following events ofdefault (each, an “Event of Default”) shall occur:
3.1Failureto Pay Principal and Interest.TheBorrower failsto paythe principalhereof or interestthereon when due onthisNote, whether atmaturity or upon acceleration and such breach continues for a period of five (5) days after written noticefrom the Holder.
3.2Conversionand the Shares.The Borrower failsto issue shares of Common Stock to theHolder(or announces or threatens in writingthat it will not honor its obligation todo so) upon exerciseby the Holder of the conversion rights of theHolder in accordance with the terms ofthisNote, failsto transfer or cause its transfer agenttotransfer(issue) (electronically or in certificated form) any certificate for shares of Common Stock issuedto the Holder upon conversion of or otherwise pursuant to thisNote as and when required by this Note, the Borrower directs itstransferagent not totransfer or delays, impairs, and/orhindersits transfer agent in transferring (or issuing) (electronically or incertificatedform)any certificate forshares of CommonStock to be issuedto the Holder upon conversion of or otherwise pursuant to this Note as and when required bythisNote, or fails to remove (or directs itstransfer agent not to remove orimpairs, delays, and/or hinders itstransfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversionof or otherwise pursuant to this Note as and when required by this Note(or makes any written announcement, statement or threat that it does not intend to honor the obligations described in thisparagraph) and any such failure shall continueuncured (or any written announcement, statement orthreatnotto honor its obligations shall not be rescinded in writing) for two (2) business days after the Holder shall have delivered aNotice of Conversion. It is an obligation ofthe Borrower to remain current in itsobligations to itstransfer agent. Itshall be an event ofdefault of thisNote, if a conversion of thisNote is delayed, hindered or frustrated duetoa balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any fundsto the Borrower’s transfer agent inorder to process aconversion,such advancedfunds shall bepaidby the Borrower to the Holder withinforty-eight (48) hours of a demand from the Holder.
3.3Breach of Covenants. The Borrower breaches anymaterial covenant or othermaterial term orcondition contained inthis Note and any collateral documents including but not limited to the Purchase Agreement and such breach continues for a period oftwenty (20)daysafter written notice thereof to the Borrower from the Holder.
3.4Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement orcertificate given inwriting pursuant hereto or in connection herewith (including, without limitation,the Purchase Agreement), shall be false or misleading in any material respect when made and thebreachof which has (or with thepassageof time will have) a material adverseeffecton the rights of the Holderwith respect to this Note orthe Purchase Agreement.
3.5Receiver orTrustee. The Borrower orany subsidiary oftheBorrower shall make an assignment for the benefit of creditors, or apply for orconsent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.
3.6Bankruptcy. Bankruptcy, insolvency, reorganization orliquidation proceedings or other proceedings, voluntary or involuntary, for reliefunder any bankruptcylawor any law for the relief of debtors shall be instituted by or against the Borrower orany subsidiary of the Borrower.
3.7Delisting of Common Stock. The Borrower shall failto maintain the listing of the Common Stock on at least one ofthe OTC (which specifically includes the quotation platforms maintained bythe OTC Markets Group) or anequivalentreplacement exchange, the NasdaqNational Market, theNasdaq SmallCap Market, the NewYork Stock Exchange, or the American Stock Exchange.
3.8Failure to Comply with theExchange Act. TheBorrower shall failto comply with the reporting requirements of the Exchange Act; and/ortheBorrower shall cease to be subject tothe reporting requirementsof the Exchange Act.
3.9Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.
3.10Cessation of Operations. Any cessation of operationsby Borrower orBorrower admits it isotherwise generally unable topay its debts assuch debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “goingconcern” shall not be anadmission that theBorrower cannotpayits debts asthey become due.
3.11Financial Statement Restatement. The restatement ofany financial statements filedbythe Borrower with the SEC at any time after 180 days after theIssuanceDate for any date or perioduntilthis Note is no longer outstanding, if the result of such restatement would,by comparison to the un-restated financial statement, haveconstituted amaterial adverse effect onthe rights of the Holder with respect to this Note or the Purchase Agreement.
3.12Replacement ofTransfer Agent. In the event thattheBorrower proposesto replace its transfer agent, the Borrower failstoprovide,prior to the effective date of suchreplacement,a fullyexecuted Irrevocable Transfer AgentInstructionsin a form asinitially delivered pursuanttothe Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount)signed by the successor transfer agent to Borrower and the Borrower.
3.13Cross-Default. Notwithstanding anything to the contrary contained inthisNote orthe other related orcompanion documents, abreach ordefault by theBorrower ofany covenant or other term or condition contained in any of theOther Agreements,after the passage of allapplicable notice and cure orgrace periods, shall, at the option of the Holder,be considered adefault under thisNote andthe Other Agreements,in whichevent the Holder shall beentitled (but inno event required) to apply all rights and remedies of the Holder under the terms of thisNote and the Other Agreementsbyreason of a default under said Other Agreement or hereunder. “Other Agreements” means, collectively, all agreements andinstruments between, among or by: (1) the Borrower, and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including, without limitation, promissorynotes;provided, however, the term “Other Agreements” shall not include the related orcompanion documents to this Note. Each ofthe loan transactions will be cross-defaulted with each other loantransaction and with allother existing and future debt of Borrower to the Holder.
Upon the occurrence and duringthecontinuationofany Event of Default specified in Section 3.1 (solelywith respect tofailure to paythe principalhereof orinterest thereonwhen due at theMaturity Date), the Note shall become immediately due and payable and the Borrowershall paytotheHolder, in full satisfaction of its obligations hereunder, an amountequal to the Default Amount (as definedherein). UPON THEOCCURRENCEANDDURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED INSECTION3.2,THE NOTESHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THEBORROWER SHALL PAY TO THEHOLDER,INFULL SATISFACTION OF ITS OBLIGATIONSHEREUNDER,ANAMOUNT EQUALTO:(Y) THEDEFAULT AMOUNT (AS DEFINED HEREIN); MULTIPLIED BY(Z)TWO(2). Upon the occurrence and during the continuation of any Event of Default specified in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due on this Note or upon acceleration), 3.3, 3.4, 3.7, 3.8, 3.10, 3.11, 3.12, 3.13, and/or 3.14 exercisable through the delivery of written notice to the Borrower by such Holders (the “Default Notice”), and upon the occurrence of an Event of Default specified the remaining sections of Articles III (other than failure to pay the principal hereof or interest thereon at the Maturity Date specified in Section 3,1 hereof), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the greater of (i) 150%times thesum of (w) the then outstanding principal amount of this Noteplus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment Date”)plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x)plus(z) any amounts owed to the Holder pursuant to Section 1.4(e) hereof (the then outstanding principal amount of this Note to the date of paymentplus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Amount”) and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity.
Ifthe Borrower failsto pay the Default Amount within five (5) business days of written noticethat such amount is due and payable,then the Holder shall havethe right atany time, solong asthe Borrower remains in default (and so long and to the extent that there are sufficient authorized shares), to require the Borrower, upon written notice, to immediately issue, in lieu ofthe DefaultAmount,thenumber ofshares ofCommon Stock ofthe Borrower equal to the Default Amount dividedbythe Conversion Price then in effect.
ARTICLEIV. MISCELLANEOUS
4.1Failure orIndulgence Not Waiver. No failure ordelay onthe part ofthe Holder in the exercise of any power, right or privilege hereunder shall operate as a waiverthereof, nor shall any single orpartial exercise of any such power, right or privilege preclude other or further exercisethereofor of any other right, power orprivileges. All rights and remedies existing hereunder are cumulativeto, and not exclusive of, any rights or remedies otherwise available.
4.2Notices. Allnotices, 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)depositedin the mail, registered orcertified, return receipt requested, postage prepaid, (iii) deliveredby reputable air courier service with chargesprepaid,or (iv) transmitted byhand delivery,telegram,or facsimile, addressed as set forth below orto such other address as such party shall have specifiedmost recentlybywritten notice.Any notice orother communication required or permittedto be givenhereundershall be deemedeffective (a) upon hand delivery or delivery byfacsimile,withaccurate confirmation generated by the transmitting facsimile machine, 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 suchnotice is tobe received) or (b) on the second business day following the date of mailing by expresscourier service, fullyprepaid, addressed to such address, or upon actual receipt of suchmailing, whichever shall first occur. The addresses for suchcommunications shall be:
If to the Borrower, to:
ORBITAL TRACKING CORP.
PO Box 14823
Pittsburgh, PA 15234
Attn: Theresa Carlise,
Chief Financial Officer, Secretary and Treasurer
Email:tcarlise@orbitaltracking.com
If to the Holder:
POWER UP LENDING GROUP LTD.
111 Great Neck Road, Suite 214 Great Neck, NY 11021
Attn: CurtKramer, Chief Executive Officer
e-mail: info@poweruplending.com
Withacopy by fax only to (which copy shall notconstitute notice):
Naidich Wurman LLP
111 Great Neck Road, Suite 216
Great Neck, NY 11021
Attn: Allison Naidich
facsimile: 516-466-3555
e-mail: allison@nwlaw.com
4.3Amendments.This Note and any provision hereof may only be amendedbyan instrument in writing signed bythe Borrower and the Holder. Theterm“Note” and all reference thereto, asused throughoutthisinstrument, shall mean this instrument (andthe other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented,thenas soamended or supplemented.
4.4Assignability.This Note shall be binding upon the Borrowerandits successors and assigns, and shall inure to be the benefit ofthe Holder and its successors and assigns.Each transferee ofthis Note must be an“accredited investor” (as defined in Rule 501(a) of the Securities and Exchange Commission). Notwithstanding anything in this Noteto the contrary, thisNote may bepledged as collateral in connection with abona fide margin account or other lending arrangement; and may be assigned by the Holder without the consent of the Borrower.
4.5Cost ofCollection. If default is made inthe payment ofthis Note, the Borrower shall pay the Holder hereofcosts of collection, including reasonable attorneys’ fees.
4.6Governing Law.This Note shall begovernedby andconstrued in accordance with the laws of the State of Virginia without regardto principles ofconflicts of laws. Any action brought by eitherparty againsttheother concerning the transactions contemplatedby thisNoteshall be broughtonly inthe state courtsofNew York or inthe federal courtslocated in the Eastern District of New York. The parties tothis Note hereby irrevocably waive any objectionto jurisdiction and venue ofany action instituted hereunder and shall not assert any defensebased on lack ofjurisdiction orvenue orbased uponforum non conveniens. The Borrower and Holder waivetrial by jury. Theprevailing party shall be entitled to recover from the other party its reasonable attorney’s feesand costs. In the event thatanyprovisionofthis Note or any other agreement delivered in connection herewith is invalid or unenforceable underany applicable statute orruleof law,then such provision shallbe deemed inoperative to theextent that itmay conflict therewith andshall bedeemed modified to conform with such statute or rule of law. Any suchprovision whichmay prove invalid or unenforceable under any law shallnotaffectthe validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consentsto process being served in any suit, action or proceeding in connection withthis Note, any agreement or any otherdocument deliveredinconnection with this Noteby mailing acopy thereof viaregistered orcertified mail orovernight delivery (with evidence of delivery) to suchpartyat theaddress ineffect fornotices to itunder thisNoteand agreesthat such service shallconstitutegood and sufficient service of process and noticethereof. Nothingcontained herein shall bedeemed to limit in any wayany right toserve process in any other manner permitted by law.
4.7Purchase Agreement. By its acceptance ofthis Note, eachparty agrees to be bound by the applicable terms of the Purchase Agreement.
4.8Remedies. The Borrower acknowledges that a breachby it of itsobligationshereunder will cause irreparable harmto the Holder, by vitiatingtheintent and purpose ofthe transaction contemplatedhereby.Accordingly, the Borrower acknowledgesthat the remedy at law for abreachof its obligations underthis Note will be inadequate and agrees, inthe event of abreach orthreatened breachby the Borrower ofthe provisionsof this Note, thatthe Holder shall be entitled, in additiontoall other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing anybreach ofthis Note andto enforce specifically theterms and provisionsthereof, without the necessity of showing economic loss and without any bond or other security being required.
IN WITNESS WHEREOF, Borrower has causedthis Notetobe signed in itsname by its duly authorized officer this on January 14, 2019
| ORBITAL TRACKING CORP. | |
| | | |
| By: | /s/ Theresa Carlise | |
| | Theresa Carlise | |
| | Chief Financial Officer, Secretary and Treasurer | |
EXHIBIT A -- NOTICE OF CONVERSION
The undersigned hereby elects to convert$ principal amount ofthe Note (defined below) into that number ofshares ofCommon Stock tobe issued pursuant tothe conversion ofthe Note (“Common Stock”) asset forth below, ofORBITAL TRACKING CORP., a Nevada corporation (the “Borrower”) according tothe conditionsofthe convertible note of the Borrower dated as of January 11, 2019 (the “Note”), as of the date writtenbelow. No fee will be charged tothe Holder for any conversion,except for transfer taxes, if any.
BoxChecked as to applicable instructions:
| | [ ] | TheBorrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversionto the account of the undersigned or its nomineewith DTCthroughits Deposit Withdrawal Agent Commission system (“DWACTransfer”). |
| | | |
| | | Name of DTC Prime Broker: |
| | | Account Number: |
| | | |
| | [ ] | The undersigned hereby requests thatthe Borrower issue acertificateorcertificates for the number of shares of Common Stock set forth below (whichnumbers arebased on theHolder’s calculation attached hereto) inthe name(s) specified immediately below or, if additional space is necessary, on an attachment hereto: |
POWER UP LENDING GROUPLTD.
111 Great Neck Road, Suite 214
Great Neck, NY 11021
Attention: Certificate Delivery
e-mail: info@poweruplendinggroup.com
| Date of conversion: | | | | |
| Applicable Conversion Price: | | $ | | |
| Number of shares of common stock to be issued pursuant to conversion of the Notes: |
|
|
|
|
| Amount of Principal Balance due remaining under the Note after this conversion: | | | | |
| POWER UP LENDING GROUPLTD. | |
| | | |
| By: | | |
| Name: | Curt Kramer | |
| Title: | Chief Executive Officer | |
| Date: | | |
