NEITHERTHEISSUANCEANDSALEOFTHESECURITIESREPRESENTEDBY THISNOTE NORTHE SECURITIES TO WHICH THESE SECURITIES ARECONVERTIBLEHAVE BEEN REGISTERED UNDER THE SECURITIESACT OF1933,AS AMENDED,OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRA'NSFERRED OR ASSIGNED (I) THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933,AS AMENDED, OR (B) AN OPTION.\ OFCOUNSEL (WHICH COUNSEL SHALL BESELECTED BY THE HOLDER), IN A GENERA.LLYACCEPTABLEFORM, THAT REGISTRATIONIS NOT REQUIRED UNDER SAIDACT OR (II) UNLESS SOLD PU RSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING THE SECURITIES MAY BEPLEDGED IN CONNECTIONWITH ABONA FIDEMARGINACCOUNT OROTHER LOAN OR FINANCING ARRANGEMET SECURED BY THE SECURITIES.
PrincipalAmount:$20,000
Date:February5,2014(TackingBacktoFebruary16, 2012)
SeriesBravo
CONVERTIBLEPROMISSORY.NOTE
NYXIO Technologies Corp., (hereinafter called the "Borrower "or "NYXO"), hereby promises to pay to the order of WHC Capital, LLC, Series Bravo. a Delaware Limited Liability Company, or its registered assigns (the "Holder") the sum of $20,000, together with any interest as set forth herein, on February 5, 2015 (the "Maturity Date") and to pay interest on the unpaid principal balance hereof at the rate of Six percent (6%) (the "Interest Rate") per annum from the date hereof (the "Issue Date") until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise.This Note shall serve in lieu of (and tack back to) $20,000 of principal convertible debt owing to ICG USA LLC pursuant to that certain $200.000 Convertible Promissory Note dated February · 16. 1012 (attached hereto) and incorporate all interests and charges contemplated therein.
ThisNotemaynotbeprepaidin wholeorinpartexceptasotherwiseexplicitlysetforthherein.Anyamount ofprincipalorintereston this Notewhich is not paid when dueshall bear interestat the rate oftwentytwo percent(22%) perannum fromthe due date thereof until the same is paid ("DefaultInterest"). Interest shall commenceaccruingonthedate that the Note is fully paid and shallbecomputedonthebasis of a365-day yearandtheactualnumber ofdays elapsed. Allpayments due hereunder(totheextentnotconverted intocommon stock) shallbemade inlawfulmoney of the UnitedStates ofAmerica.
AllpaymentsshallbemadeatsuchaddressastheHoldershallhereaftergiveto the Borrower by writtennotice made in accordance with the provision s of this Note. Whenever anyamount expressed to bedue by the terms of this Note isdueon anyday whichisnot a businessday. thesame shallinstead be due on the nextsucceeding day "·whichis a business dayand, in the case ofany interestpayment day which is not thedateon which this Note is paid ill full,the extension of the duedatethereof shallnot be taken into account for purposes ofdetermining the amountof interest due onsuchdate.Asused in thisNote,the term ''businessday" shall mean anyday other than aSaturday. Sundayor aday on\\'hich commercialbanksin the cityofNew York,New York are authorized or required bylaw or executiveorderto remain closed.Each capitalized term used herein and not otherwisedefined, shallhave the meaningascribed thereto in the supportingdocuments ofsamedate (attachedhereto).
ThisNoteisfreefromalltaxes,liens.claimsandencumbranceswithrespecttotheissue thereofandshall not be subjecttopreemptiverightsor othersimilarrights of shareholders ofthe Borrowerandwill notimpose personalliability uponthe holder thereof.
ThefollowingtermsshallapplytothisNote:
ARTICLE I.CONVERSIONRIGHTS
1.1ConversionRight.TheHoldershallhavetherightandatanytimeduringtheperiod beginning on the date ofthis Notetoconvertall orany panof the outstandingand unpaidprincipalamount of this Noteintofullypaidand non-assessableshares ofCommon Stock. assuch Common Stockexistson the Issue Date,or anyshares of capitalstockorother securitiesoftheBorrower intowhichsuch Common Stockshall hereafter be changed or reclassifiedat theconversion price (the''Conversion Price"')determinedasprovided herein(a "Conversion ");provided,however, that in noevent shall theHolderbeentitled toconvertany portion ofthis Note inexcessofthat portion of thisNote uponconversion of which thesum of ( I) the number ofsharesof CommonStockbeneficially Owned bythe Holder and itsaffiliates(other than shares of Common Stockwhichmaybe deemed beneficiallyOwnedthrough theownership of the unconverted portion ofthe Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitationon conversionorexercise analogous to the limitations contained herein) and(2) the number of shares of Common Stock issuableupon theconversion ofthe portion of this Note withrespect to which the determination of this proviso is being made,would resultin beneficial ow11ership by the Holder and its affiliates of more than 4.99% of theoutstandingsharesof Common Stock. For purposesof theproviso totheimmediatelypreceding sentence, beneficial ownership shall be determined in accordancewith Section 13(d) of the Securities ExchangeAct of1934, as amended (the"ExchangeAct'')and Regulations 130-Gthereunder except as otherwise provided in clause (1) of such proviso ,provided,further,however, that thelimitations on conversion may bewaived by the Holder upon at theelection of the Holder not less than 6 1days' prior notice to the Borrower and the provisionsof the conversion limitation shall continue toapplyuntil such 6lstday(or suchlaterdate, asdetermined by theHolder, as may bespecified insuchnoticeof waiver). The number ofshares of CommonStock to be issued upon each conversion ofthis Noteshall bedetermined by dividing the Conversion Amount(as defined below) by the applicableConversion Price then ineffect on the date specifiedin the notice of conversion, (the''Noticeof Conversion"),delivered tothe BorrowerbytheHolder in accordancewith the Sections below ; providedthatthe Notice ofConversion is submitted by facsimile ore-mail (or byother meansresulting in, or reasonablyexpected to result in, notice)totheBorrowerbefore 6:00 p.m.. New York, New Yorktime on suchconversion date (the'"ConversionDate'').
Theterm"ConversionAmount"means,withrespecttoanyconversionofthisNote, thesum of (1) the principal amount ofthis Note to beconverted insuchconversionplus(2) atthe Borrower's option accrued and unpaid interest if any. on such principal amount at theinterest rates provided in this Noteto the Conversion Date,plus (3) at the Borrowers option,DefaultInterest if any, onthe amounts referredto in the immediately precedingclauses (1) and/or(2 )plus(4) at the Holder'soption,any amountsowed to the Holder.
1.2ConversionPrice.
(a) Calculation of ConversionPrice.Holder,atitsdiscretion,shallhavetherightto convertthisNoteinitsentiretyorinpart(s) intocommonstockof the Company valuedata Forty Five Percent (45%)discount offthe averageoftheThree (3)lowest intra-daytrading prices forthe Company'scommon stock during theThirty (30)tradingdays immediately preceding aconversion date.as reportedby Quotestream.
(b) ConversionPriceDuringMajorAnnouncements.Notwithstandinganythingcontainedintheprecedingsection to the contrary.in the event the Borrower (i)makes a publicannouncement thatit intends to consolidateormerge with any other corporation (other than amerger in which the Borrower isthe surviving orcontinuing corporationand its capital stock isunchanged ) or sellor transfer all or substantially all of the assets of the Borrower or (ii) any person.group or entity (including the Borrower ) publicly announces a tender offer to purchase50% ormore of theBorrower· Common Stock (or any other takeover scheme)(the date of theannouncement referred to in clause (i) or (ii) is hereinafter referred to as the "Announcement Date"), then the Conversion Price shall, effective upon the Announcement Date and continuing through the Adjusted Conversion Price Termination Date (as defined below) be equal to thelower of(x) the Conversion Price which would have been applicableforaConversion occurringon the Announcement Date and(y)the ConversionPrice that would otherwise be ineffect. From and after the AdjustedConversion PriceTerminationDate, the Conversion Price shallbe determined as setforth inthis Section. For purposes hereof. "Adjusted Conversion Price Termination Date'' shall mean, with respect to any proposedtransaction or tender offer (or takeoverscheme) forwhich a public announcement ascontemplated by this Section hasbeen made thedate upon which the Borrower (in the case ofclause (i) above)or the person. group or entity(in the case ofclause (ii) above·) consummates or publiclyannounces the termination or abandonment of the proposed transaction or tender offer (or takeover scheme) which caused thisSection l.2(b) tobecomeoperative.
1.3AuthorizedShares.TheBorrowercovenantsthatduringtheperiodtheconversionrightexists,theBorrowerwillreserve fromits authorized andunissued Common Stock a sufficientnumberof shares, freefrom preemptiverights, to provide for theissuanceofCommon Stock upon thefull conversion of this Note. The Borrower is requiredat all times to haveauthorizedandreserved five timesthe number of shares that is actually issuableuponfull conversionof the Note (based onthe Conversion Price of the Notes in effect fromtime to time)(the ''Reserved Amount"). TheReservedAmountshall be increasedfrom time to timein accordance with the Borrower's obligations.
TheBorrowerrepresentsthatuponissuance,suchshareswillbedulyandvalidlyissued, fullypaid and non-assessableIn addition, if the Borrower shallissueany securities or make any change to its capital structure which wouldchange the numberof sharesofCommon Stockintowhich the Notes shall beconvertibleat thethen current ConversionPrice, the Borrower shall at the sametime make properprovision so that thereafter thereshall be a sufficient numberofshares ofCommon Stockauthorizedand reservedfree from preemptive rights forconversion of the outstanding Notes.
The Borrower(i)acknowledgesthat it has irrevocably instructed its transfer agenttoissuecertificatesfortheCommonStockissuableuponconversionofthisNote and(ii) agrees thatits issuance of thisNote shall constitutefull authority toitsofficersandagents whoare charged with the dutyof executing stockcertificates toexecute and issue the necessary certificates for shares of Common Stock in accordance with theterms and conditionsof thisNote.If, atany time theBorrower does not maintain the Reserved Amount itwill beconsideredanEvent of Default as defined in this Note.
1.4 MethodofConversion.
(a) Mechanics ofConversion.ThisNotemaybeconvertedbytheHolderin wholeorinpartatanytimefromtimeto timeafter theIssueDate, by(A) submitting to theBorrower a Notice ofConversion (by facsimile,e-mailorother reasonablemeans ofcommunicationdispatched on theConversion Dateprior to 6:00p.m., NewYork, NewYork time).
(b) SurrenderofNoteUponConversion.Notwithstandinganythingto thecontrarysetforthherein,uponconversion of this Noteinaccordance withthetermshereof, the Holdershallnot be required to physicallysurrender thisNote to theBorrower unless the entire unpaidprincipalamountof this Noteis so converted. The Holder and theBorrowershall maintainrecords showing the principal amountso converted and thedates ofsuch conversionsor shalluse such other methodreasonablysatisfactoryto the Holder and theBorrower,so as not to require physical surrender of this Note uponeach such conversion. In theevent ofanydispute ordiscrepancy, such records ofthe Borrower shallprimafa cie.be controlling anddeterminativein the absenceofmanifest error. Notwithstanding the foregoing. ifany portionof this Note is convened as aforesaid,theHoldermay not transferthis Note unless the Holder first physicallysurrenders thisNoteto the Borrower, whereupon theBorrowerwill forthwith issue anddeliver upontheorder of theHolder a newNoteof like tenor, registered as the Holder (uponpaymentbythe Holder of any applicabletransfer taxes) may request,representing in the aggregate the remaining unpaid principalamount of thisNote. The Holderand anyassignee, byacceptanceofthisNote, acknowledgeand agreethat by reason of theprovisionsof thisparagraph. following conversion ofa portion ofthisNote,theunpaid and unconverted principal amountofthisNoterepresented by thisNote may be less thanthe amount statedon the face hereof.
(c) PaymentofTaxes.TheBorrowershallnotberequiredtopayanytaxwhichmaybepayable in respectof any transfer involved in the issueand deliveryof sharesof CommonStockorother securitiesor propertyonconversion of thisNote ina nameother than that ofthe Holder(or in street name). and the Borrower shallnot be required toissueor deliveranysuchsharesorother securities or propertyunless anduntilthe personor persons (other than the Holderor thecustodian in whose streetnamesuchshares are to be held forthe Holder's account) requesting the issuancethereofshallhavepaid tothe Borrower the amountof any such tax or shallhave established tothe satisfactionof the Borrowerthat such tax has been paid.
(d) DeliveryofCommon StockUpon Conversion.UponreceiptbytheBorrowerfromtheHolderofafacsimiletransmissionor e-mail (or other reasonable means of communication) of a Noticeof Conversion meeting the requirements forconversion asprovidedinthisSection, the Borrowershall issueanddeliver or cause to be issuedanddelivered toorupon theorder ofthe Holder certificates for the Common Stock issuableuponsuch conversion withinFive(5) business days after such receipt (the ''Deadline") (and, solely in thecase ofconversion of theentireunpaidprincipal amounthereof,surrender of this Note) in accordance with thetermshereof and the Purchase Agreement.
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(e) Obligation ofBorrowertoDeliverCommonStock.UponreceiptbytheBorrower ofa NoticeofConversiontheHoldershallbedeemedtobetheholder of record ofthe Common Stockissuable uponsuch conversiontheoutstandingprincipal amount andthe amountof accrued andunpaid interest onthisNote shall bereduced to reflect such conversion and. unless the Borrowerdefaultson its obligationsunder thisArticle I, allrights withrespectto the portion ofthisNotebeingso converted shallforthwith terminate exceptthe rightto receive theCommonStock orothersecurities, cashorotherassets, asherein providedon such conversion. If theHoldershall havegiven a Notice ofConversion as providedherein the Borrower's obligation to issue and deliver thecertificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same. any waiver or consent with respect to any provision thereof, the recovery of any judgment againstany person orany actionto enforcethesame,anyfailureordelayinthe enforcement of any other obligation of the Borrower to the holder of record , or any setoff, counterclaim, recoupment , limitation or termination ,or anybreach oralleged breach bytheHolder ofany obligationto the Borrower, and irrespectiveof any other circumstance whichmight otherwise limit suchobligation ofthe Borrower to the Holder inconnection with suchconversion.The ConversionDatespecified in theNoticeofConversion shall bethe Conversion Date so long as theNotice ofConversionis received bytheBorrowerbefore 6:00 p.m.,New York, NewYork time on such date.
(f) DeliveryofCommonStockbyElectronicTransfer. In lieuofdeliveringphysical certificatesrepresentingtheCommonStockissuableuponconversion, providedthe Borrower is participating in the Depository TrustCompany ("DTC") Fast Automated Securities Transfer ("FAST") program , uponrequest of theHolder and its compliancewith theprovisionscontainedin Section 1.1 and inthis Section 1.4, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by creditingthe account ofHolder's Broker with DTC through its Deposit Withdrawal Agent Commission("DWAC ") system.
(g)FailuretoDeliverCommonStockPriortoDeadline.WithoutinanywaylimitingtheHoldersrighttopursueotherremedies includingactualdamages and or equitablerelief, the parties agree thatif delivery ofthe Common Stock issuable upon conversion of this Note is not delivered bythe Deadline (other than a failure due tothe circumstances described in Section 1.3 above, which failureshall begovernedby such Section) theBorrowershallpayto the Holder$2.000perday in cash for each daybeyond the Deadline that the Borrowerfails to deliver such Common Stock. Such cashamount shall bepaidto Holder by the fifthday of the monthfollowing themonthin whichit has accrued or, at the option of the Holder (by written noticeto theBorrower by the firstdayof the monthfollowingthemonth inwhichit hasaccrued), shallbe added to the principalamountof thisNote, inwhich eventinterest shall accruethereon in accordancewith the termsof thisNote and suchadditional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borroweragrees that the right to convertis a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate,interference"'withsuchconversionright are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained in this Section are justified. Any delay or failure of performance by the Borrower hereunder shall be excused if and to the extent caused by Force Majeure. For purposes of this agreement, Force Majeure shall mean a cause or event that is not reasonably foreseeable and/or caused by the Borrower. Including acts of God, fires, floods, explosions, riots wars, hurricanes, etc.
1.5 Concerning theShares. ThesharesofCommonStockissuableuponconversion thesale.conveyanceordispositionofallorsubstantiallyallof theassets oftheBorrower, the effectuationby the Borrowerof a transactionor series of related transactionsin which more than 50% ofthe votingpowerof the Borrower is disposed of, or theconsolidation ,merger or other business combination of the Borrower with or into any other Person (asdefined below) or Persons when the Borrower isnot the survivor shalleither:(i) be deemedtobean Event of Default(as defined in Article III)pursuant to whichthe Borrower shall be required to pay to the Holder uponthe consummationof and as a condition to such transaction an amountequal to the Default Amount (as defined inArticle III) or(ii) betreatedpursuantto Sectionl.6(b) hereof. "Person'· shall mean any individual, corporation limited liability company partnership association, trust or other entity or organization.
(b) AdjustmentDuetoMerger.Consolidation.Etc.If,atanytimewhenthisNoteis issued and outstanding and prior to conversionof all of the Notes,there shallbe anymerger, consolidation , exchange ofshares, recapitalization, reorganization , or othersimilarevent. as aresult of which shares of CommonStock of the Borrower shall be changed into thesame oradifferent number of shares of another classor classes of stock or securitiesofthe Borrower or anotherentity, or in case ofanysale or conveyance of allorsubstantially all ofthe assets of the Borrower otherthan in connectionwith a plan of completeliquidation of the Borrower, then the Holder of thisNote shall thereafterha\'ethe right to receiveupon conversion of thisNote,upon the basisandupon the terms andconditions specified hereinand in lieu of the shares ofCommon Stockimmediately theretofore issuable uponconversion, such stock. securities orassets which the Holder would have been entitled to receive insuch transactionhad this Notebeen convened in full immediately priorto such transaction(withoutregardto anylimitations on conversion set forthherein), and in any suchcase appropriate provisions shall bemade ·withrespect to therightsandinterestsof theHolder of this Notetothe endthat the provisionshereof (including, withoutlimitation. provisions foradjustment of the Conversion Price and ofthe numberofsharesissuableuponconversion ofthe Note) shall thereafter beapplicable asnearly asmaybe practicable inrelation toany securities or assets thereafter deliverable upon the conversionhereof.The Borrowershall not affect anytransactiondescribed in thisSection 1 .6(b) unless (a) itfirstgives. to the extent practicable , thirty(30) days prior written notice (but inany event atleastfifteen (15) days priorwritten notice) of therecord date of the special meeting of shareholders to approve, or ifthereisno such recorddate,theconsummationof, suchmerger. consolidation, exchange ofshares, recapitalization,reorganization or othersimilar eventor sale of assets (during whichtimethe Holdershallbe entitled to convert thisNote) and (b)the resulting successor or acquiring entity (if not the Borrower)assumes bywritten instrument the obligations of thisSection 1.6(b) Theabove provisions shallsimilarlyapplyto successive consolidations,mergers,sales,transfers or share exchanges.
(c) AdjustmentDuetoDistribution.IftheBorrowershalldeclareor makeanydistributionof its assets (or rightsto acquire its assets) toholders of Common Stock as a dividend. stock repurchase, by way of return ofcapital or otherwise (including any dividendordistribution to the Borrower 'sshareholders incash or shares (orrights to acquireshares) ofcapitalstock of a subsidiary (i.e., aspin-off))(a "Distribution"),thentheHolder of thisNote shall beentitled,upon anyconversion of this Note after the date of record for determining shareholders entitled to such Distribution to receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversionhad suchHolder been the holder of such sharesof CommonStock onthe recorddate for the determination of shareholders entitled to such Distribution.
(d) Adjustment Due to Dilutive Issuance. If at any time when any Notes are issued and outstanding, the Borrower issues or sells, or in accordance with this Section hereof is deemed to have issued or sold , any shares of Common Stock for no consideration or for a consideration per share (before deduction of reasonable expenses or commissions or underwriting discounts or allowances in connection therewith) less than the Conversion Price in effect on the date of such issuance (or deemed issuance) of such shares of Common Stock (a "Dilutive Issuance"), then immediately upon the Dilutive Issuance, the Conversion Price will be reduced to the amount of the consideration per share received by the Borrower in such Dilutive Issuance.
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The Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or grants any warrants, rights or options (not including employee stock option plans), whether or not immediately exercisable, to subscribe for or to purchase Common Stock or other securities convertible into or exchangeable for Common Stock ("Convertible Securities") (such warrants, rights and options to purchase Common Stock or Convertible Securities are hereinafter referred to as "Options") and the price per share for which Common Stock is issuable upon the exercise of such Options is less than the Conversion Price then in effect, then the Conversion Price shall be equal to such price per share. For purposes of the preceding sentence, the "price per share for which Common Stock is issuable upon the exercise of such Options" is determined by dividing (i) the total amount. if any, received or receivable by the Borrower asconsiderationfortheissuanceorgrantingofallsuchOptions,plustheminimumaggregateamountofadditionalconsideration,if any,payableto the Borrower upon the exercise of all such Options, plus, in the caseof Convertible Securities issuable upon theexercise ofsuchOptions, the minimum aggregate amount ofadditional consideration payable upon the conversion orexchange thereof atthe time suchConvertible Securitiesfirstbecomeconvertibleor exchangeableby (ii) the maximum total numberof sharesofCommonStock issuable upon the exercise of allsuchOptions(assuming full conversion of Convertible Securities,if applicable). Nofurther adjustment to theConversion Price will be madeupon the actual issuance ofsuchCommon Stock upon the exercise ofsuch Options or upon the conversion or exchange ofConvertible Securities issuableuponexercise ofsuch Op6ons.
Additionally,theBorrowershallbedeemedtohaveissuedorsoldsharesofCommonStockiftheBorrowerin any manner issuesor sells any Convertible Securities,whether or not immediately convertible (other than where the same are issuable upon the exerciseof Options), and theprice per share for which Common Stock is issuableupon such conversion orexchange is lessthan theConversionPrice then ineffect, then the Conversion Price shallbe equal to suchpriceper share. For thepurposes of the precedingsentence,the "price per share for which Common Stock is issuable upon such conversion orexchange" is determined bydividing(i) the totalamount, ifany, received orreceivableby the Borrower as consideration for theissuance orsaleof all suchConvertibleSecurities, plus the minimum aggregate amount of additional consideration , ifany, payable tothe Borrowerupon the conversion or exchangethereofat the timesuch ConvertibleSecuritiesfirst become convertible orexchangeable by(ii)the maximum total number ofsharesofCommon Stock issuable upon theconversion orexchange ofall suchConvertibleSecurities.No furtheradjustment to the Conversion Price will be made uponthe actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities.
(e) PurchaseRights.If,atanytimewhenanyNotesareissuedand outstanding,theBorrowerissuesany convertible securities or rights to purchase stock, warrants, securities or other property(the "Purchase Rights") pro rata to the record holders ofany class of Common Stock, then the Holder of this Note will be entitled toacquire, upon the terms applicable to such PurchaseRights,the aggregatePurchase Rights which suchHolder could have acquired if such Holder had held the number ofshares of CommonStockacquirable upon completeconversion of this Note (without regardtoany limitationson conversioncontained herein)immediately before the date on which arecord is taken for thegrant issuance or sale or such PurchaseRights or ifnosuch record is taken the date as of \\·hich the record holders of Common Stock are tobe determinedfor the gran t, issue or sale of such Purchase Rights.
(f) NoticeofAdjustments.Upontheoccurrenceofeachadjustment orreadjustmentoftheConversionPriceasaresult of the events describedinthisSection1.6, the Borrower .at itsexpense, shallprompt l y compute such adjustment or readjustment and prepareand furnish to the Holder of a certificate setting forth such adjustment or readjustment and showingindetail thefacts upon whichsuch adjustment orreadjustment is based . The Borrowershall, upon the writtenrequest atany time ofthe Holder, furnishtosuch Holder a like certificate setting forth (i) such adjustment or readjustment(ii) the ConversionPrice at the time in effect and (iii) thenumber of shares of Common Stockand the amount, if any, of othersecuritiesor property which at the timewould be receivedupon conversionof the Note.
1.7TradingMarketLimitations.Unlesspermittedbytheapplicablerulesandregulationsoftheprincipalsecurities market on which the Co1mnon Stock is then listed or traded, in noeventshall the Borrowerissue upon conversion ofor otherwise pursuant to this Note and the other Notes issued pursuant to the Purchase Agreement more than the maxim.um numberorshares of Common Stock thatthe Borrower can issue pursuant to any rule of theprincipal United States securities market on which the Common Stock is then traded (the'Maximum Share Amount''}, which shall be 4.99% ofthe total shares outstanding ontheClosing Date (asdefined inthe PurchaseAgreement) , subjectto equitable adjustment from time totime for stock splits, stock dividends combinations capital reorganizations and similar events relating to the CommonStock occurring after the date hereof. Once the Maximum Share Amount has been issued,ifthe Borrowerfails toeliminateanyprohibitions underapplicable laworthe rules or regulations of any stock exchange. interdealer quotation system or other self-regulatory organization withjurisdiction over the Borrower or any of its securitieson theBorrower 's ability to issuesharesofCommon Stock inexcess of the MaximumShare Amount,in lieu of any furtherright to convert thisNote, this will be considered an Eventof Default under Section 3.3 ofthe Note.
1.8StatusasShareholder.UponsubmissionofaNoticeofConversionbyaHolder(i)thesharescoveredthereby(otherthantheshares.ifany.which cannot be issued because their issuance would exceed such Holder 's allocated portion of the ReservedAmountor Maximum Share Amount) shall be deemedconverted into shares of Common Stockand (ii)the Holder's rights asa Holder of suchconvertedportion of thisNote shall cease andterminate, exceptingonly the right to receive ce11ificates for such shares ofCommon Stock and to any remedies provided hereinor otherwise availableat law or inequity to such Holderbecauseor a failureby theBorrower to comply with the terms of this Note. Notwithstandingthe foregoing.if a Holderhasnot receivedcertificates for all shares of Common Stock prior to the tenth(10th) businessdayafter theexpirationof the Deadline withrespect to a conversion ofanyportion of this Note for any reason , then (unless the Holder otherwise elects to retain its status as a holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Notewith respect to such unconverted portions of chis Note and the Borrowershall, as soonas practicable. return such unconverted Noteto the Holder or, if the Note has not been surrenderedadjust its records to reflect that such portionof this Note has not been converted in all cases the Holder shall retain all of its rights and remedies (including, without limitation. (i) the right to receive Conversion Default Payments pursuant to Section l .3 to the extent required thereby for such Conversion Default and any subsequent ConversionDefaultand (ii) the tight to have the Conversion Price with respect to subsequent conversions determinedin accordance with Section1.3) for the Borrower's failure to convert this Note.
1.9Prepayment.MakermayprepaythisNote,inaccordancewiththefollowingschedule:Ifwithin180calendardaysofthe execution ofthis Note, $135% of all outstandingprincipaland interest in one payment.After 180calendar daysor this Note being executed, anyprepayments mustbeapprovedbyboth parties in writing.
ARTICLEILCERTAINCOVENANTS
2.1 DistributionsonCapitalStock.Solong astheBorrowershallhaveany obligationunderthisNote,theBorrower shall not without the Holder's written consent (a) pay, declare or set apart for such payment , any dividend or other distribution (whether in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect or its capital stock except for distributions pursuant to any shareholders· rights plan which is approved by a majority of the Borrower’s disinterested directors.
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2.2 Restriction on Stock Repurchases. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder's written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Borrower or any warrants, rights or options to purchase or acquire any such shares.
2.3 Borrowings. So long as the Borrower shall have any obligation under this Note , the Borrower shall not, without the Holder's written consent, create, incur, assume guarantee, endorse, contingently agree to purchase or otherwise become liable upon the obligation of any person, firm, partnership, joint venture or corporation, except by the endorsement of negotiable instruments for deposit or collection, or suffer to exist any liability for borrowed money. except (a) borrowings in existence or committed on the date hereof and of which the Borrower has informed Holder in writing prior to the date hereof, (b) indebtedness to trade creditors or financial institutions incurred in the ordinary course of business or (c) borrowings, the proceeds of which shall be used to repay this Note.
2.4 SaleofAssets.SolongastheBorrowershallhaveanyobligationunderthisNote,theBorrowershallnot, without theHolder'swrittenconsent, sell, leaseorotherwise dispose ofanysignificant portion of itsassets outside the ordinarycourseof business. Any consenttothedisposition of any assetsmay be conditioned ona specified use ofthe proceedsof disposition.
2.5 AdvancesandLoans.SolongastheBorrowershall haveanyobligation underthisNote,theBorrowershallnot,withoutthe Holder'swritten consent, lend money, give credit ormake advancestoanyperson,firm,jointventure or corporationincluding, without limitation, officers. Directors, employees subsidiaries and affiliates of the Borrower, except loans, credits or advances (a) in existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof (b) made in the ordinary courseof business or(c)not inexcessof $100,000.
ARTICLEIII.EVENTSOFDEFAULT
Ifanyofthefollowingeventsofdefault(each,an.EventofDefault")shalloccur:
3.1FailuretoPayPrincipalorInterest. TheBorrower failstopaytheprincipal hereoforinterest thereon when dueonthisNote whetherat maturity upon acceleration or otherwise.
3.2Conversion and the Shares. The Borrowerfailsto issueshares of CommonStocktotheHolder(orannouncesorthreatensinwritingthat itwill not honor itsobligation todo so) upon exercise bythe Holder of the conversion rights of the Holder in accordancewiththe terms ofthis Note, fails to transferor causeits transferagent to transfer (issue) (electronically or in certificated form) any certificate forsharesof Common Stock issued to the Holder upon conversion of or otherwise pursuant to thisNoteas and when requiredby thisNote,the Borrower directs its transfer agent notto transfer or delays,impairs,and/orhinders its transfer agent intransferring (or issuing)(electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder uponconversion of or otherwise pursuant to this Note as and when required by this Note. or fails to remove (or directs its transfer agent not toremove orimpairs.delays,and/or hindersits transferagent 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 uponconversionof or otherwise pursuant to this Note as and when required by this Note (or makes anywrittenannouncement. statement or threat that it does not intend to honor the obligations describedin this paragraph ) and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligationsshallnotbe rescindedin writing)for three(3)business days after the Holdershall havedelivered a Notice of Conversion. It is an obligation of the Borrower toremain current in its obligations to itstransferagent.It shall be an event of default of this Note if a conversionof this Note is delayed hindered or frustrated due to a balance owedby the Borrower to its transfer agent.Ifatthe option of theHolder,theHolder advances anyfundstothe Borrower's transfer agent in order to process a conversion such advancedfunds shall be paid by the Borrower to the Holder within forty eight(48) hours of a demand from theHolder.
3.3Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any collateral documents including but not limited to the Purchase Agreement and such breach continues for a period of ten (l0) days after written notice thereof to the Borrower from the Holder.
3.4 Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement. statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.
3.5 Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent 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.
3.6 Judgments.Anymoneyjudgment,writorsimilarprocessshallbeentered orfiledagainsttheBorrower or anysubsidiaryof the Borrower or any ofits property or other assets for morethan$50,000, andshall remain unvacated ,unbonedorunstayed for a period of considered a default under this Note and the Other Agreements , in which event theHolder shall be entitled (butin no event required) to apply all rights and remedies of the Holderunder the terms ofthisNote and the Other Agreements by reason ofa default under said Other Agreement or hereunder."Other Agreements" means. Collectively all agreements and instruments between among orby(1) theBorrower, and. or for the benefit of. (2) the Holderand any affiliateof theHolder, including, withoutlimitation, promissory notes: provided ,however, the term"Other Agreements" shall not include the related or companion documents to this Note. Eachofthe loantransactions willbecross-defaultedwith eachother loan transaction andwith all otherexisting and future debtof Borrower cothe Holder.
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UpontheoccurrenceandduringthecontinuationofanyEventofDefaultspecifiedinSection3.l(solely withrespecttofailure10 paythe principal hereof or interestthereonwhen due at the Maturity Date),theNote shall become immediately dueand payableand the Borrower shall pay to the Holder, in fullsatisfaction of its obligations hereunder an amount equal to the Default Sum (as defined herein). UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME MEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER. IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER AN A MOUNT EQUAL TO: (Y) THE DEFAULT SUM (AS DEFINED HEREIN): MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default specified in Sections 3.l (solely with respect to failure to pay the principal hereof or interest thereon when due on this Note upon a Trading Market Prepayment Event pursuant to Section 1.7 or upon acceleration). 3.3. 3.4, 3.6. 3.8. 3.9, 3.1 1. 3.12. 3.13. 3.14. and/or 3.l5 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 1Il (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 the sum of (w) the then outstanding principal amount of this Note plus (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 Sections 1.3 and l.4(g) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the "Default Sum") or (ii) the "parity value of the Default Sum to be prepaid. where parity, value means (a) the highest number of shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum in accordancewith Article I, treating the Trading Day immediately preceding theMandatory Prepayment Dateasthe'"Conversion Date" for purposes of determining the lowest applicableConversion Price, unless the Default Event arises as a result of a breachinrespect of a specific Conversion Datein which case such ConversionDate shall be the Conversion Date). multiplied by (b) the highest Closing Price for the CommonStock during the periodbeginning on the date offirst occurrence of the Event ofDefault and ending one day prior to the Mandatory Prepayment Date (the "Default Amount ') andallother amounts payable hereundershallimmediately become due and payableall 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.
IftheBorrowerfailstopaytheDefaultAmountwithinfive(5)businessdaysof written noticethat such amount is dueandpayable, then theHolder shallhave the rightatany time. solongas theBorrower remains indefault(and so long and totheextentthat there are sufficient reference thereto, as usedthroughoutthis instrument.shall mean thisinstrument (and the other Notes issuedpursuantto the Purchase Agreement)as originally executed , or if later amended orsupplemented , then asso amended or supplemented .
4.4 Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure co be the benefit of the Holder and its successors and assigns. Each transferee of this Note must be an "accredited investor" (as defined in Rule 501 (a) of the 1933 Act). Notwithstanding anything in this Note to the contrary this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.
4.5 Cost of Collection. If default is made in the payment of this Note the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys' fees.
4.6 Governing Law. This Note shall be governed by and consm1ed in accordance with the laws of the State of New York without regard to principles of conflicts of la\YS. Any action brought by either party against the other concerning the transactions contemplated by this Note shal1 be brought only in the state courts of New York or in the federal courts located in the state and county of Nassau. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue orbaseduponforumnonconveniens.TheBorrower andHolderwaivetrialbyjury.Theprevailingparty shallbe entitledtorecover from theother partyits reasonable attorney's feesandcosts. Intheeventthat any provision or this Noteor any otheragreement delivered inconnection here with is in validorunenforceable underanyapplicable statute orruleoflaw thensuchprovisionshall bedeemed inoperative to theextentthat it mayconflicttherewith and shall bedeemed modified toconform with such state or rule oflaw. Any suchprovisionwhich mayproveinvalid or unenforceableunderanylaw shallnotaffect the validity or enforceability of any other provision of any agreement.Each party herebyirrevocably waivespersonal service of process and consents to process being served inanysuit, action orproceedingin connection withthisAgreementor any otherTransaction Documentby mailing a copy thereofvia registeredor certifiedmail or Overnight delivery(with evidenceof delivery) tosuchparty attheaddress ineffect for notices to it under thisAgreement andagrees thatsuchserviceshallconstitutegood andsufficientserv1ce ofprocess andnotice thereof. Nothing contained herein shall bedeemedto limit in any way any righttoserve process in any other manner permitted by law.
4.7 Certain Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding principal amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest, the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Borrower and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the Holder from the receipt of a cash payment without the opportunity to convert this Note into shares of Common Stock.
4.8 PurchaseAgreement. ByitsacceptanceofthisNote,eachpartyagreestobeboundbytheapplicable terms of the Purchase Agreement Notice of Corporate Events. Except asotherwiseprovided below, theHolder of this Noteshall have norights as aHolderofCommon Stockunless and only to the extent that itconvertsthisNoteinto CommonStock. The Borrower shall provide the Holder with prior notification of any meeting of the Borrower's shareholders (and copies of proxy materials andother information sent to shareholders). In the event of any taking by the Borrower of arecord of its shareholders for the purpose ofdetermining shareholders whoareentitled to receive payment of any dividend orother distribution, any right tosubscribefor, purchase or otherwise acquire (including by way ofmerger,consolidation,reclassification or recapitalization) anyshare of any classor anyother securities orproperty, or to receive any other right , or forthe purpose ofdeterminingshareholders who areentitled to vote in connection with any proposedsale, lease orconveyance ofall or substantially all of the assets of the Borrower or anyproposed liquidation dissolutionor winding up of the Borrower,theBorrower shall mail anotice to the Holder atleast twenty (20)days prior to therecorddate specified therein (or thirty(30)daysprior to the consummation of the transaction orevent, whichever is earlier), of the date on which any suchrecord is to be taken for the purpose of such dividenddistributionrightor other event and a brief statement regarding the amount and character of suchdividend,distribution, right or other event to the extent known atsuchtime.The Borrower shall make apublic announcement ofany event requiringnotification to the Holder hereunder substantially simultaneously with the notification to the Holder in accordance with the terms of this Section4.9.
4.10Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. According l y, the Borrower acknowledges that the remedy at law for a breach of its obligations under this Note ·will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Note. that the Holder shall be entitled, in addition to all 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 any breach of this Note and to enforce specifically the terms and provisions thereof without the necessity of showing economic loss and without any bond or other security being required.
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IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer:
NYXO TechnologiesCorp.
/s/ Giorgio Johnson
Giorgio Johnson
CEO/President
2/5/2014
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