Exhibit 10.9
Note:December3,2014
NEITHERTHESESECURITIESNORTHESECURITIESINTOWHICHTHESESECURITIESARECONVERTIBLEHAVEBEENREGISTEREDWITHTHESECURITIESANDEXCHANGECOMMISSIONINRELIANCEUPONANEXEMPTIONFROMREGISTRATIONUNDERTHESECURITIESACTOF1933,ASAMENDED(THE“SECURITIESACT”),AND,ACCORDINGLY,MAYNOTBEOFFEREDORSOLDEXCEPTPURSUANTTOANEFFECTIVE REGISTRATIONSTATEMENTUNDERTHESECURITIESACTORPURSUANTTOANAVAILABLEEXEMPTIONFROM,ORINATRANSACTIONNOTSUBJECTTO,THEREGISTRATIONREQUIREMENTSOFTHESECURITIESACT.
THISNOTEDOESNOTREQUIREPHYSICALSURRENDEROFTHENOTEINTHEEVENTOFAPARTIALREDEMPTIONORCONVERSION.ASARESULT,FOLLOWINGANYREDEMPTIONORCONVERSIONOFANYPORTIONOFTHISNOTE,THEOUTSTANDINGPRINCIPALAMOUNT REPRESENTEDBYTHISNOTEMAYBELESSTHANTHEPRINCIPALAMOUNTANDACCRUEDINTERESTSETFORTHBELOW.
10%CONVERTIBLEPROMISSORYNOTE
OF
LIBERTY STAR URANIUM & METALSCORP.
IssuanceDate:December3,2014
TotalFaceValueof Note:$210,000
OriginalIssueDiscount:$10,000
THISNOTEisadulyauthorizedConvertiblePromissoryNoteofLibertyStarUranium&MetalsCorp.,acorporationdulyorganizedandexistingunderthelawsoftheStateofNevada(the“Company”),designatedas the Company's 10%Convertible Promissory Note dueDecember3, 2016 (“Maturity Date”) in the principal amount of $210,000 (the“Note”).
FORVALUERECEIVED,theCompanyherebypromisestopaytotheorderofTangiersInvestmentGroup,LLCoritsregisteredassignsorsuccessors-in-interest(“Holder”)theprincipalsumofupto$210,000andtopay“guaranteed”interestontheprincipalbalancehereof(which principalbalance shall beincreasedbythe Holder’spaymentof additionalconsiderationassetforthhereinandwhichincreaseshallalsoincludetheproratedamountoftheoriginalissue discount inconnection withHolderspayment of additionalconsideration)at the rate of10%,all ofwhich“guaranteed”interest shall bedeemedearnedas of thedate ofeach suchpayment ofadditionalconsiderationbytheHolderontheMaturityDate,totheextentsuchprincipalamountand“guaranteed”interest havebeenrepaid orconverted into theCompany's Common Stock,
$0.00001parvalue per share(the“Common Stock”), inaccordancewiththetermshereof.
Theinitial purchasepricewill be$105,000 of consideration uponexecution oftheNotePurchaseAgreementand all supportingdocumentation.Thesum of$100,000 shall be remittedanddeliveredto the Company,and$5,000 shall beretainedbythePurchaserthroughanoriginalissuediscount fordue diligence andlegal billsrelated to thistransaction.
$210,000 Convertible Note
Liberty Star Uranium & Metals Corp.
Tangiers Investment Group, LLC
ThepartiesmayagreetotheHolderadvancinganadditionalamount of upto $105,000 (up to theface value ofthis Note) in minimumtranches of $55,000 within 270daysof execution ofthisNote.Theprincipal sum(includingtheproratedamount of theoriginal issuediscount)owedbythe Companyshall beprorated to theamountofconsiderationpaidbytheHolder andonlytheconsiderationreceived bytheCompany,plusprorated“guaranteed”interest andotherfees andprorated original issuediscount,shall be deemedowedbythe Company.Theoriginal issuediscount issetat 5%ofanyconsiderationpaid. TheCompanyis notresponsibleto repayanyunfundedportion ofthis Note.Inaddition to the“guaranteed” interestreferencedabove,and inthe Event ofDefault pursuant toSection2(e), additionalinterest willaccruefrom the date oftheEvent ofDefaultat therateequal to the lower of20% perannumor thehighestratepermittedbylaw(the“Default Rate”).
ThisNotemaybeprepaidaccordingtothefollowingschedule:Between1and90daysfromthedateofexecution,thisNotemaybeprepaidfor110%offacevalueplusaccruedinterest.Between91and180daysfromthe date ofexecution, thisNote may beprepaidfor 130%offacevalue plusaccruedinterest.After 180days from thedateofexecution until theDueDate, this Notemay not beprepaid without writtenconsentfromthe Holder.Wheneveranyamountexpressed to be due by the terms of this Note is due onanydaywhich is not aBusinessDay(asdefinedbelow), the same shallinstead be due on the next succeedingdaywhich is aBusinessDay.
Forpurposeshereofthe followingtermsshall havethemeaningsascribedto thembelow:
“BusinessDay”shallmeananydayotherthanaSaturday,SundayoradayonwhichcommercialbanksintheCityofNewYorkareauthorizedorrequiredbylaworexecutiveordertoremainclosed.
“ConversionPrice”shallbeequalto62.5%oftheaverageofthevolumeweightedaveragepricesoftheCompany’scommonstockduringthe5tradingdayspriortothedateonwhichHolderelectstoconvertallorpartoftheNote.IftheCompanyisplacedon“chilled” status with the Depository Trust Company(“DTC”), the discount shallbeincreased by5% until suchchill isremedied. If the Companyis notDepositsandWithdrawalat Custodian (“DWAC”)eligiblethrough theirTransfer Agentand theDepository TrustCompany’s (“DTC”)FastAutomatedSecuritiesTransfer(“FAST”)system,thediscountwillbeincreasedby 5%. Inthecaseofboth, thediscount shall be a cumulative10%.
“PrincipalAmount”shallrefertothesumof(i)theoriginalprincipalamountofthisNoteadvanced(includingtheproratedamountoftheoriginalissuediscount),(ii)allaccruedbutunpaidinteresthereunder,and(iii)any defaultpaymentsowing underthe Note butnot previously paid oradded to the Principal Amount.
“TradingDay”shallmean adayon whichthereistradingon the PrincipalMarket.
$210,000 Convertible Note
Liberty Star Uranium & Metals Corp.
Tangiers Investment Group, LLC
“UnderlyingShares”meansthesharesofcommonstockintowhichtheNoteisconvertible(includinginterestorprincipalpaymentsincommonstockassetforthherein)inaccordancewith thetermshereof.
Thefollowingtermsandconditionsshall applytothis Note:
Section 1.00Conversion.
(a) ConversionRight.Subjecttothetermshereofandrestrictionsandlimitationscontainedherein,theHoldershallhavetheright,attheHolder'soption,atanytimewhichis6monthsormoreafteradvanceoffunds,toconverttheoutstandingPrincipalAmountandinterestunderthisNote inwhole orinpart withrespectonly totheportionofPrincipal Amountadvancedat least 6 months priorto conversion.
(b) ThedateofanyConversionNoticehereunderandanyPaymentDateshallbe referred toherein as the“ConversionDate”.
(i) StockCertificatesorDWAC.TheCompanywilldelivertotheHolder,orHolder’sauthorizeddesignee,nolaterthan2Trading DaysaftertheConversionDate,acertificateorcertificatesrepresenting thenumberofshares ofCommonStockbeingacquired upontheconversionof thisNote.Thecertificate(s)shallbefreeofrestrictivelegendsandtradingrestrictionsas longas a correspondinglegal opinion is suppliedbya licensedattorney,whichauthorizestheremoval of therestricted legend. The Holder shallberesponsible to obtain its ownlegal opinion and willbearanycostsassociated with thelegal opinion. Inlieuofdeliveringphysicalcertificatesrepresentingtheshares of Common Stockissuable uponconversionofthisNote,providedtheCompany'stransferagent is participatingin theDepositoryTrust Company(“DTC”)FastAutomatedSecuritiesTransfer(“FAST”)program, uponrequest of theHolder, the Companyshall use commerciallyreasonableefforts tocause itstransferagent toelectronically transmitsuchsharesissuableuponconversionto theHolder(or itsdesignee),bycrediting theaccount of the Holder’s (or suchdesignee’s) prime broker with DTCthrough itsDeposits andWithdrawalatCustodian(“DWAC”)program(providedthatthesametimeperiodsherein as forstock certificatesshallapply).
(ii) Charges,Expenses.IssuanceofCommon StocktoHolder, or anyofitsassignees,upontheconversionofthisNoteshallbemadewithoutchargetotheHolderforanyissuancefee,transfertax,postage/mailingchargeoranyotherexpensewithrespect totheissuanceof suchCommon Stock. Company shallpayallTransferAgentfees incurredfrom theissuance ofthe Commonstock to Holderandacknowledges that this is amaterialobligation of this Note.
IftheCompanyfailstodelivertotheHoldersuchcertificateorcertificates(orsharesthroughDTC)pursuanttothisSection (freeofanyrestrictionsontransferorlegends)priorto3Trading DaysaftertheConversionDate,theCompanyshall payto theHolder as liquidateddamagesan amountequal to $500perday,until suchcertificate orcertificatesaredelivered,provided,however,that suchliquidateddamageswill not be payableby theCompanyifthedelay iscausedbyanActof God orothereventoutside of thecontrolof theCompany.The Companyacknowledgesthat it would be extremely difficult orimpracticable to determine theHolder’s actualdamagesandcostsresulting from afailuretodeliverthe Common Stockand the inclusionhereinofany suchadditionalamounts are theagreed upon liquidateddamages representing areasonableestimate of thosedamagesandcosts. Suchliquidateddamages will beautomaticallyadded to the Principal Amount oftheNote.
$210,000 Convertible Note
Liberty Star Uranium & Metals Corp.
Tangiers Investment Group, LLC
(c) ReservationandIssuanceofUnderlyingSecurities.TheCompanycovenantsthatitwillatalltimesreserveandkeepavailableoutofitsauthorizedandunissuedCommonStocksolelyfor thepurpose of issuance uponconversionof this Note (andrepayments in CommonStock),freefrompreemptiverights or any other actualcontingentpurchaserights ofpersons otherthan theHolder,notless thanonetimes thenumberofshares ofCommonStockas shall be issuable (taking intoaccount theadjustmentsunder thisSection 1 but withoutregard to any ownershiplimitationscontainedherein)upon the conversion of this Noteto Common Stock (the“RequiredReserve”).Theseshares shall be reserved inproportion with theconsiderationactually receivedbythe Companyand thetotalsharesreserved will beincreased withfuturepayments ofconsideration byHolder toensure theRequiredReserve is met. The Companycovenants thatallsharesof CommonStockthatshallbeissuablewill,uponissue,be dulyauthorized,validlyissued,fully-paid,non-assessableandfreely-tradable.Iftheamountofshares onreserveat theTransferAgentfor thisNote inHolder’sname shalldrop below theRequiredReserve,the Companywill,within2businessdaysofwrittennotificationfromHolder,instruct theTransferAgent toincrease the number ofsharessothat theRequiredReserveis met. The Companyagrees that thisis amaterialterm of this Noteand anybreach of thiswillresultina default of the Note.
(d) ConversionLimitation.TheHolderwillnotsubmitaconversiontotheCompanythatwouldresultintheHolderowningmorethan9.99%ofthethentotaloutstandingshares of theCompany(“RestrictedOwnershipPercentage”).
Section 2.00 Defaults andRemedies.
(e) EventsofDefault.An“EventofDefault”is:(i)adefaultinpaymentofanyamountduehereunderwhichdefaultcontinuesformorethan5businessdaysaftertheduedate; (ii)adefaultinthetimelyissuanceofunderlyingsharesuponandinaccordancewithtermshereof,which default continues for 3BusinessDaysafterthe Companyhasfailed to issueshares ordeliver stockcertificateswithin the3rdday following the Conversion Date; (iii) failure by the Companyfor 3days after noticehas beenreceivedbythe Companyto complywithany materialprovision ofthe NotePurchaseAgreement; (iv)failureofthe Company to remaincompliant with DTC, thusincurring a“chilled”status with DTC; (v) if the Company is subject toanyBankruptcyEvent; (vi)anyfailureof the Company to satisfy its“filing” obligationsunder therulesand guidelinesissuedby OTCMarkets NewsService, OTCMarkets.comand theiraffiliates;(vii)anyfailureof the Company toprovide theHolderwithinformation related to thecorporatestructure including, but notlimitedto, the number of authorizedandoutstandingshares,publicfloat,etc. within 1dayofrequestby Holder; (viii)failureto havesufficient number ofauthorizedbutunissuedshares of theCompany’sCommon Stock available foranyconversion;(ix)failure ofCompany’s Common Stock to maintain abidprice in itstradingmarketwhich occurs foratleast 3consecutive Trading Days; (x) any delisting for anyreason;(xi)failurebyCompany to payanyofitsTransferAgent fees or tomaintain aTransfer Agentofrecord; (xii) any trading suspension imposedbytheSecuritiesand Exchange Commissionunder Sections 12(j) or 12(k) of the 1934Act;(xiii) anybreach ofSection 1.00 (c); or (xiv) any defaultafteranycure periodunder, oracceleration prior to maturity of,anymortgage, indentureorinstrumentunder which theremay be issued or bywhichtheremaybesecured orevidencedanyindebtedness for moneyborrowedby the Company inexcess of $100,000 or for moneyborrowedtherepayment ofwhich isguaranteedbythe Companyin excess of $100,000,whether suchindebtedness or guarantee now exists orshall becreated hereafter, whichcauses amaterialadverse effect on theHolder.
$210,000 Convertible Note
Liberty Star Uranium & Metals Corp.
Tangiers Investment Group, LLC
Remedies.IfanEventofDefaultoccursandiscontinuingwithrespecttotheNote,theHoldermaydeclareallofthethenoutstandingPrincipalAmountofthisNote, includingany interest duethereon, to bedueandpayableimmediately withoutfurtheraction ornotice.Intheeventof suchacceleration,the amountdueandowing totheHolder shallaccrueinterest on any unpaid principalfromandaftertheoccurrenceand during thecontinuanceofan Event ofDefaultat arate of 20%.The Companyacknowledges that it would beextremelydifficult orimpracticable todetermine the Holder’sactualdamagesandcostsresultingfromanEvent ofDefaultandany suchadditional amountsare theagreed uponliquidateddamagesrepresenting areasonableestimate of thosedamagesandcosts. Theremediesunder this Note shall be cumulative and automatically added to theprincipalvalue oftheNote.
Section 3.00General.
(f) PaymentofExpenses.TheCompanyagreestopayallreasonablechargesandexpenses,includingattorneys'feesandexpenses,whichmayberequiredto beincurredbytheHolder in successfully enforcing this Noteand/orcollectinganyamount due underthis Note.
(g) Assignment,Etc.TheHoldermayassignortransferthisNotetoanytransfereeatitssolediscretion.ThisNoteshallbebindingupontheCompany anditssuccessorsandshall inure to thebenefit of the Holderand itssuccessorsand permittedassigns.
(h) GoverningLaw;Jurisdiction.
(i) GoverningLaw.ThisnotewillbegovernedbyandconstruedinaccordancewiththelawsofthestateofCaliforniawithoutregardtoanyconflictsoflawsorprovisionsthereofthatwouldotherwiserequire theapplicationofthe law ofany otherjurisdiction.
(ii) JuryTrial.Thepartiesagreetotrialbyjurywithrespecttoanylitigationbasedon,orarisingoutof,under,orinconnectionwith,thisnotetobeheld inSanDiegoCounty,California.
$210,000 Convertible Note
Liberty Star Uranium & Metals Corp.
Tangiers Investment Group, LLC
IN WITNESS WHEREOF,the Company has caused this Convertible Promissory Note to be duly executed on the day and inthe year first above written.
| | LIBERTY STAR URANIUM & METALS CORP. |
| | | |
| | Name: | |
| | Title: | CEO |
| | Date: | 12.3.2014 |
ThisNoteisacknowledgedas: NoteofDecember3,2014
$210,000 Convertible Note
Liberty Star Uranium & Metals Corp.
Tangiers Investment Group, LLC
EXHIBIT A –FORMOFCONVERSION NOTICE
(TobeexecutedbytheHolderinordertoconvertthatcertain$210,000ConvertiblePromissoryNoteidentifiedastheNote)
| DATE: | ________________________ |
| | |
| FROM: | TangiersInvestmentGroup,LLC |
| | Re: | $210,000ConvertiblePromissoryNote(this“Note”) originallyissuedbyLibertyStarUranium&MetalsCorp.,aNevadacorporation,toTangiersInvestmentGroup,LLConDecember3,2014. |
TheundersignedonbehalfofTangiersInvestmentGroup,LLC,herebyelectstoconvert $ of theaggregateoutstandingPrincipalAmount(asdefinedintheNote)indicated belowofthisNoteintosharesofCommonStock,$0.00001 parvaluepershare, ofLIBERTYSTARURANIUM &METALSCORP.(the“Company”)according totheconditionshereof,as ofthedatewrittenbelow.Ifshares aretobeissuedinthenameofaperson otherthanundersigned,theundersignedwillpay alltransfertaxes payablewithrespecttheretoandisdelivering herewithsuchcertificatesandopinionsasreasonablyrequestedbytheCompany inaccordance therewith.Nofeewillbechargedtotheholderforanyconversion,exceptfor suchtransfertaxes,ifany.Theundersignedrepresentsasof thedatehereofthat,aftergivingeffecttotheconversionofthisNote pursuanttothisConversion Notice,theundersignedwillnotexceedthe“RestrictedOwnershipPercentage” containedinthisNote.Theundersignedrepresents andwarrantsthatit isan“accreditedinvestor”asdefinedunderUSSecuritiesLaws.
| Conversion information: | ____________________________________________ |
| | Date to Effect Conversion |
| | |
| | ____________________________________________ |
| | Aggregate Principal Amount of Note Being Converted |
| | |
| | ____________________________________________ |
| | Aggregate Interest on Amount Being Converted |
| | |
| | ____________________________________________ |
| | Number of Shares of Common Stock to be Issued |
| | |
| | ____________________________________________ |
| | Applicable Conversion Price |
| | |
| | ____________________________________________ |
| | Signature |
| | |
| | ____________________________________________ |
| | Name |
| | |
| | ____________________________________________ |
| | Address |
$210,000 Convertible Note
Liberty Star Uranium & Metals Corp.
Tangiers Investment Group, LLC
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