NEITHER THEISSUANCEANDSALEOFTHESECURITIESREPRESENTEDBY THIS NOTENORTHESECURITIESINTOWHICHTHESESECURITIESARE CONVERTIBLEHAVEBEEN REGISTEREDUNDER fl'HE SECURITIES ACT OF1933, AS AMENDED,OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFEREDFOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I)INTHE ABSENCE OF (A)AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR(B) ANOPINION OFCOUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM,THAT REGISTRATION ISNOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TORULE144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BEPLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNTOR OTHERLOANOR FINANCING ARRANGEMENTSECURED BY THE SECURITIES.
Principal Amount:$10,000
Date: February7,2014
Series Bravo
CONVERTIBLE PROMISSORYNOTE
NYXIO Technologies Corp.,(hereinaftercalledthe "Borrower"or"NYXO"), herebypromises to pay to theorderofWHCCapital, LLC,Series Bravo, aDelaware LimitedLiability Company, or itsregistered assigns (the"Holder") thesum of $10,000, together with any interest as set forth herein, on February 7, 2015 (the "MaturityDate"),and to pay interest on the unpaid principalbalance hereof at the rate ofSix percent (6%) (the "Interest Rate") per annum from the date hereof (the "Issue Date")until the same becomes dueand payable,whether atmaturity or upon acceleration or byprepayment or otherwise.
This Notemay notbeprepaidinwholeorinpartexceptasotherwiseexplicitly setforth herein.Anyamountof principalorinterest on this Notewhich isnot paidwhendueshall bearinterest at therate oftwenty two percent (22%)per annum from theduedate thereof u ti! the same is paid ("Default Interest").Interestshall commenceaccruing on thedate that the Note is fully paid andshall be computed on the basisofa 365-day year and the actual number of days elapsed.Allpaymentsdue hereunder (to the extent not converted into commonstock) shall be made inlawfulmoney of the United States of America.
Al lpayments shallbe madeat suchaddressasthefoldershallhereafter giveto theBorrower by written notice made in accordancewith theprovisions of this Note.Whenever any amountexpressedto be dueby the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest paymentdatewhich is not the date on which this Note is paid in full,theextension of the due datethereof shall not be taken into account forpurposes of determiningtheamount of interest due on such date. As used inthisNote, the term"businessday" shall mean any dayotherthanaSaturday,Sundayor a day on which commercial banks in the cityof New York, New York are authorized or required by law or executive order to remain closed. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in the supporting documents of same date (attachedhereto).
This Noteisfreefromalltaxes,liens,claims andencumbranceswithrespecttotheissuethereofandshallnotbe subject to preemptive rightsor othersimilar rightsof shareholders of the Borrowerand will not impose personal liability upontheholderthereof.
The followingtermsshallapply tothisNote:
ARTICLE I.CONVERSION RIGHTS
l.1Conversion Right.TheHoldershallhavetherightandatanytimeduring theperiodbeginning on the dateof this Noteto convert all or anypart ofthe outstanding and unpaid principal amount of this Noteinto fully paid and non- assessable shares of Common Stock, as such Common Stock existson theIssue ate, or anyshares of capital stock orother securitiesofthe Borrower intowhich such Common Stock shall hereafter be changed or reclassifiedat the conversionprice (the "ConversionPrice") determined asprovided herein (a"Conversion ");provided,however, that in noevent shall the Holder be entitled to convert anyportion of this Note i n excess of that portion ofthis Note upon conversion of whichthesumof (1) thenumber of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through. the ownership of the unconvertedportion of the Notes or the unexercisedor unconvertedportion ofany other security of the Borrower subject toa limitation onconversion or exercise analogous to the l imitations contained herein)and(2) thenumber of shares of Common Stock issuableupon theconversion ofthe portion of thisNotewithrespect to which the determination ofthis proviso isbeing made, would resultin beneficial ownershipby the Holder and itsaffiliates of more than 4.99% of the outstandingshares of CommonStock. For purposes of the proviso totheimmediately preceding sentence, beneficialownership shallbe determined in accordance withSection 13(d) of the Securities ExchangeAct of 1934, as amended (the "Exchange Act"), and Regulations 13D-Gthereunder, except as otherwise provided inclause (1) ofsuch proviso,provided, further, however, thatthe limitations on conversion may bewaivedby the Holderupon, atthe election ofthe Holder, not less than61 days' prior noticeto the Borrower , andthe provisions of the conversion limitationshall continue to apply until such 61st day (or such later date, as determined by the Holder, as may be specified insuch notice of waiver). The number ofshares of CommonStock to beissuedupon each conversion of thisNote shall bedeterminedbydividing the Conversion Amount (asdefined below)by theapplicable Conversion Price then ineffect on the date specified inthe notice of conversion, (the "Notice of Conversion"), delivered tothe Borrower bythe Holder in accordance withthe Sections below; provided thattheNotice of Conversionissubmitted by facsimile or e-mail (or by othermeans resulting in, or reasonably expected to resultin, notice) to theBorrower before 6:00p.m., New York,New York time onsuch conversion date (the"ConversionDate").
The term"ConversionAmount"means, withrespect toany conversionof thisNote,thesum of the principal amount of thisNote to be convertedin such conversion plus(2) at theBorrower 's option, accrued andunpaid interest, ifany, on such principalamount at theinterest rates provided in this Note to theConversion Date,plus(3) atthe Borrower'soption, Default Interest, if any, onthe amounts referred toin the immediately preceding clauses (1) and/or (2)plus(4) at the Holder 's option , any amounts owed to the Holder.
1.2Conversion Price.
(a) Calculation of Conversion Price. Holder,at itsdiscretion,shall havethe rightto convert this Notein itsentirety orin part(s)intocommonstockoftheCompanyvalued at a Forty Five Percent (45%)discountoff theaverageof the three(3) lowestintra-day trading prices for theCompany's commonstock during the Thirty(30) trading daysimmediately preceding a co version
date, asreported byQuotestream.
(b) ConversionPriceDuringMajorAnnouncements. Notwithstandinganythingcontainedin theprecedingsection tothe contrary, in theevent theBorrower (i) makesa publicannouncement that it intends to consolidateor merge with anyother corporation (other thana merger in which the Borroweristhe surviving or continuingcorporationand its capital stock is unchanged) or sellor transfer all or substantially all of the assets ofthe Borrower or (ii) any person group or entity (including the Borrower) publicly announces a tender offer to purchase 50% or more of theBorrower's Common Stock (or anyother takeover scheme) (the date ofthe announcement referred to in clause (i) or (ii) is hereinafter referred toas the"Announcement Date"), then the ConversionPrice shall, effective upon the Announcement Date and continuing through te AdjustedConversion Price TerminationDate (as definedbelow), be equal to the lower of (x) the ConversionPrice which would have been applicablefor a Conversion occurring onthe AnnouncementDate and (y)the ConversionPrice that would otherwise bein effect. From and after the Adjusted Conversion PriceTermination Date, theConversion Price shallbe determined as setforth in thisSection. For purposes hereof,"Adjusted ConversionPrice Termination Date" shallmean, with respectto any proposedtransactionor tender offer (or takeover scheme) forwhich a public announcement ascontemplated bythis Sectionhas been made,the date upon which the Borrower (in the case of clause (i) above) or the person, groupor entity (in the case of clause(ii)above)consummates or publicly announces the termination or abandonment ofthe proposedtransactionor tender offer (or takeover scheme) which caused this Section l .2(b) tobecome operative.
1.3Authorized Shares. TheBorrower covenantsthatduringtheperiod theconversion right exists, theBorrower willreserve fromitsauthorized andunissuedCommonStock a sufficient numberof shares, free from preemptiverights,to provide for theissuanceof Common Stock upon the full conversion of this No e.TheBorrower is required at all ties to haveauthorized andreserved fivetimesthe number of shares thatis actually issuable uponfull conversion of the Note (based on the Conversion Price of the Notes in effect from time to time)(the "Reserved Amount"). The Reserved Amount shall be increased from time to time in accordance with the Borrower 's obligations.
The Borrowerrepresents thatupon issuance, such shareswill beduly and validlyissued, fullypaidandnon-assessable.Inaddition,if the Borrower shall issueanysecurities or make any change toits capital structurewhichwouldchange the number of shares ofCommon Stock into which the Notesshallbe convertible at the then currentConversionPrice, the Borrower shallat thesame time make proper provision so that thereafterthere shall be a sufficientnumber of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of theoutstandingNotes.
The Borrower(i)acknowledgesthatit hasirrevocably instructed its transferagentto issuecertificatesfor theCommon Stockissuable upon conversion of this Note, and (ii)agrees that its issuance of this Note shall constitutefullauthorityto its officers and agents who are charged with the duty ofexecuting stock certificatestoexecute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.
If,atanytimetheBorrowerdoesnotmaintaintheReserved Amount itwillbe considered an Event of Default as defined in this Note.
(b) Surrenderof NoteUponConversion.Notwithstandinganything to thecontrary setforth herein, uponconversion ofthis Notein accordance withtheterm 1 hereof,
the Holdershall notbe requiredto physicallysurrender thisNote totheBorrowerunlessthe entire unpaid principalamount of this Noteis so converted. The Holder and the Borrower shall maintainrecords showing the principalamountso converted and the dates of such conversions or shall use such othermethod, reasonably satisfactory to the Holderand the Borrower, so as not to require physical surrender of this Note upon each such conversion. In the event of any dispute ordiscrepancy, such records of the Borrowershall,prima facie,be controlling anddeterminativein the absence ofmanifest error. Notwithstanding the foregoing, ifany portion ofthis Note is converted as aforesaid,the Holder may not transfer thisNoteunless theHolderfirstphysically surrendersthis Note tothe Borrower, whereupon the Borrowerwill forthwith issue anddeliverupon the order of the Holder a newNote of like tenor, registered as the Holder (upon payment by the Holder ofany applicabletransfer taxes)may request, representing in the aggrega1ie the remaining unpaidprincipalamount of thisNote.The Holder andany assignee, by acceptance of this Note, acknowledge and agree that, byreason ofthe provisions ofthis paragraph, following conversion of a portion of this Note, the unpaidand unconverted principal amount of this Note represented by this Notemay beless than theamount stated on the face hereof.
(c) Payment ofTaxes.The Borrowershall notbe requiredtopayanytax whichmay bepayable inrespect of any transfer involved in the issueand delivery of shares ofCommon Stock orothersecurities or propertyon conversion of this Note in a name otherthanthat of the Holder (or in streetname),and the Borrower shallnotberequired to issue ordeliver any such shares orother securities or propertyunlessanduntil the person or persons(other than the Holder or the custodianinwhose street name suchshares are to be heldforthe Holder 'saccount)requesting the issuance thereofshall have paid totheBorrower the amount of any such tax or shall have established tothe satisfactionof the Borrower that such tax has been pail::l.
(d) Delivery of Common Stock Upon Conversion.UponreceiptbytheBorrowerfrom theHolder ofa facsimiletransmissionore-mail (orother reasonablemeans of communication) ofa Notice of Conversion meeting the requirements for conversion as providedin thisSection, the Borrower shall issue and deliver orcause to beissuedand delivered toor upon the order of the Holdercertificates forthe CommonStock issua8leupon such conversion withinThree (3) business days after such receipt (the "Deadline") (and, solely
inthecase ofconversionof theentire unpaidprincipalamounthereof,surrender of thisNote)in accordance with the terms hereof and the Purchase Agreement.
(e) Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower's obligation to issue and deliver the certificates 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 against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, l imitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the Borrower before 6:00 p.m., New York, New York time, on such date.
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(f) Delivery of CommonStockby Electronic Transfer. Inlieu of deliveringphysicalcertificates representingtheCommonStockissuableuponconversion, providedtheBorrowerisparticipating in theDepository TrustCompany ("DTC") Fast Automated Securities Transfer ("FAST")program ,upon request oftheHolder and its compliance with the provisions contained in Section I.I and in this Section 1.4, theBorrower shall useits bestefforts to causeits transferagent to electronically transmit the Common Stock issuableupon conversionto the Holder bycrediting theaccountof Holder's Broker withDTC throughits Deposit WithdrawalAgent Commission("DWAC") system.
(g) Failure to Deliver Common Stock Prior 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 (other than a failure due to the circumstances described in Section 1.3 above, which failure shall be governed by such Section) the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a fail u re, 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 i n 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 the Shares. ThesharesofCommonStockissuableuponconversion of this Notemaynotbesold ortransferred unless(i) suchsharesare soldpursuant to an effective registration statement under the Act or (ii) the Borrower or itstransfer agent shall have been furnished with an opinion of counsel (whichopinion shallbein form,substance andscope customary for opinions ofcounsel incomparable transactions) totheeffect that the shares to besold ortransferred may be soldor transferred pursuant to an exemption from suchregistration or (iii) suchshares are sold or transferred pursuant to Rule 144under the Act (or asuccessor rule)("Rule144") or (iv)such shares are transferred to an"affiliate" (as defined in Rule144)of theBorrower who agrees tosellor otherwisetransferthe shares onlyin accordance with this Section1 .5andwho is an Accredited Investor. Except as otherwise providedherein (and subject tothe removal provisions setforth below), until such time asthe shares of CommonStock issuable upon conversion of this Note have been registered under theAct or otherwise may be sold pursuantto Rule 144 without anyrestriction asto thenumber ofsecuritiesasof a particular date thatcan then be immediatelysold, each certificate for shares of Common Stockissuable uponconversion of this Note thathas not been so included in an effectiveregistrationstatement orthat has not been soldpursuant to aneffectiveregistrationstatement oran exemption that permitsremoval of thelegend , shall bear a legendsubstantially in thefollowing form, as appropriate:
"NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTEDBYTHIS CERTIFICATENORTHESECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEENREGISTERED UNDER THE SECURITIESACTOF1933,ASAMENDED, OR APPLICABLESTATE SECURITIESLAWS.THE SECURITIESMAY NOT BE OFFERED FORSALE,SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCEOF (A) ANEFFECTIVE REGISTRATIONSTATEMENT FORTHE SECURITIES UNDER THE SECURITIES ACTOF1933, ASAMENDED, OR (B) ANOPINION OF COUNSEL (WHICH COUNSELSHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIREDUNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE144A UNDER SAIDACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES."
The legendsetforthaboveshallbe removedand the Borrower shallissue tothe Holderanewcertificatethereforefreeof any transfer legend if(i) the Borrower orits transfer agent shall havereceived an opinion ofcounsel, in form, substance and scope customary for opinions ofcounselin comparable transactions , to the effect that a public sale or transferof such Common Stock may be made without registrationunder the Act,which opinion shall be accepted by the Company so that the sale or transfer is effectedor (i i) in thecaseof the Common Stock issuableuponconversion ofthis Note, such security is registered for sale by the Holder under an effective registration statement filed under theAd orotherwisemaybe sold pursuant to Rule 144withoutany restriction as to thenumber ofsecuritiesas of a particular date thatcan then be immediatelysold Inthe event that the Company does not accept the opinionofcounsel providedby the Buyerwithrespect to the transferofSecurities pursuant to anexemption from registration,such as Ru le144or RegulationS, at the Dead line, it will be consideredan Event of Defaultpursuant to this note.
1.6Effect of Certain Events.
(a) Effect of Merger, Consolidation,Etc.At theoptionoftheHolder, thesale,conveyanceordispositionofallorsubstantiallyalloftheassetsoftheBorrower,the effectuation by the Borrower ofa transactionor series of related transactions in which more than 50%ofthe votingpower oftheBorrower is disposed of, or the consolidation , merger or other business combination of the Borrower withor into any other Person (as defined below) or Personswhen the Borrower is not the survivor shalleither: (i) bedeemed tobe an Eventof Default(as defined in Article III) pursuant to whichthe Borrower shallberequired to pay to the Holder upon the consummation of and as a condition to such transaction an amountequalto theDefault Amount (asdefinedinArticle III) or (ii) betreated pursuant to Section l.6(b) hereof. "Person" shall mean any individual corporation, limited liability company, partnership, association, trustorother entity or organization.
(b) Adjustment Due to Merger, Consolidation,Etc.If,atany timewhen thisNote isissued andoutstanding and prior to conversionof all ofthe Notes, there shall be anymerger, consolidation , exchangeof shares, recapitalization , reorganization,orothersimilar event, as a result of which sharesof Common Stock of theBorrower shall be changed into the same or a different numberof shares of another class or classes ofstock or securities of the Borrower or another entity,or in caseof any sale or conveyanceof all or substantially all of the assetsofthe Borrower other than in connection with aplan ofcomplete liquidation of the Borrower,then the Holder ofthis Note shall thereafter have the right to receiveupon conversion of this Note, upon the basisandupon theterms and conditions specified herein and in lie of the shares ofCommonStock immediatelytheretofore issuable upon conversion, suchstock, securities orassets whichthe Holder would have been entitled to receivein suchtransaction had this Notebeen convertedin full immediately priorto such transaction (withoutregard to any limitations on conversionset forth herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without l imitation , provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this Section l.6(b) unless (a) it first gives, to the extent practicable, thirty (30) days prior written notice (but in any event at least fifteen (15) days prion written notice) of the record date of the special meeting of shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation , exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Section l.6(b). The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.
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(c) AdjustmentDuetoDistribution.IftheBorrowershall declareor makeany distributionofits assets(or rightsto acquireits assets) to holders of Common Stock asa dividend , stockrepurchase , by wayof returnof capitalor otherwise (including any dividend or distribution to theBorrower'sshareholdersin cash or shares (or rightsto acquire shares) of capital stock of a subsidiary (i.e.,aspin-off)) (a "Distribution"), then the Holder of thisNote shallbe entitled , uponany conversion of this Note afterthe date of record for determining shareholders entitled tosuch Distribution , to receive the amount ofsuch assets which wouldhave been payable to theHolder with respect to the shares of Common Stock issuable uponsuch conversion had such Holder been theholder of such shares ofCommon Stockon therecord date for the determination of shareholders entitled to such Distribution.
(d) Adjustment Due to Dilutive Issuance. If, atany timewhenany Notesareissuedandoutstanding, theBorrower issues orsells, or in accordance with this Section hereof is deemed to have issued or sold, any shares of Common Stockfor no consideration or for a consideration per share (before deduction of reasonable expenses or commissions or underwriting discounts or allowances in connection therewith) less thanthe Conversion Price in effect on the date of such issuance (or deemed issuance) of such shares of CommonStock(a "DilutiveIssuance "), then immediately upon the DilutiveIssuance, the Conversion Pricewill be reduced to the amount of the consideration per share received by the Borrowerinsuch Dilutive Issuance.
The Borrowershallbe deemedtohaveissuedorsold sharesof CommonStockifthe Borroweri nany manner issues or grants any warrants, rights or options (not includingemployee stock option plans) , whether or notimmediately exercisable, tosubscribe foror to purchase CommonStock or other securities convertibleinto or exchangeable for Common Stock ("Convertible Securities") (suchwarrants, rights and options to purchase CommonStock or Convertible Securities are hereinafterreferred to as "Options") and the price per share for which Common Stock is issuable upon the exercise of such Options is lessthan the Conversion Price then in effect, then the ConversionPriceshall be equal to suchprice per share. For purposes of the precedingsentence, the "price per share for which CommonStock is issuableuponthe exerciseof suchOptions" is determinedby dividing (i) thetotalamount, ifany, received or receivable by the Borrower as consideration for the issuance or granting of all such Options, plus the minimum aggregate amount of additional consideration , ifany, payable totheBorrowerupon the exercise of allsuchOptions, plus, inthe case of Convertible Securities issuableupon theexercise ofsuch Options, theminimum aggregate amountof additional consideration payable uponthe conversionor exchange thereof at the time suchConvertible Securities first become convertible or exchangeable, by(ii) the maxim um total number ofshares of Common Stock issuable upon the exercise of all such Options (assuming full conversion of Convertible Securities, if applicable). Nofurther adjustment to the Conversion Price willbe made upon theactual issuanceof such Common Stock upon theexercise of such Options or upon theconversion orexchange of Convertible Securities issuable upon exercise of such Options.
Additionally, theBorrowershallbedeemed tohaveissuedorsold shares ofCommonStockifthe Borrower inanymannerissuesorsells anyConvertible Securities, whether or not immediately convertible (other than where the same are issuable upon the exercise of Options), andthe price per sharefor which Common Stockis issuable upon such conversion or exchange is less thanthe Conversion Pricethen in effect, thenthe Conversion Priceshallbe equal to suchpriceper share. Forthe purposes of the preceding sentence, the "price pershare forwhich CommonStock is issuable upon suchconversion orexchange" is determined by dividing (i) the total amount, if an , received or receivable bythe Borrower as consideration for the issuance or saleof all such Convertible Securities, plus the minimum aggregate amountofadditional consideration ,if any, payableto theBorroweruponthe conversion or exchange thereof at the time such Convertible Securitiesfirst become convertible or exchangeable, by (ii) the maximumtotal numberof shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities. No further adjustment tothe Conversion Price willbe made upon the actualissuance of such CommonStock upon conversion orexchange of suchConvertible Securities.
(e) Purchase Rights. If, at any time when any Notes are issued and outstanding, the Borrower issues any convertible securities or rights to purchase stock, warrants, securities or other property (the "Purchase Rights") pro rata to the record holders of any class of Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations on conversion contained herein) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.
(f) Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described in this Section 1.6, the Borrower, at its expense, shall promptly compute such adjustment or readjustment and prepare and furnish to the Holder of a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Borrower shall, upon the written request at any time of the Holder, furnish to such Holder a like certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion of the Note.
1.6 Trading Market Limitations. Unless permitted by the applicable rules and regulations of the principal securities market on which the Common Stock is then listed or traded , in no event shall the Borrower issue upon conversion of or otherwise pursuant to this Note and the other Notes issued pursuant to the Purchase Agreement more than the maximum number of shares of Common Stock that the Borrower can issue pursuant to any rule of the principal United States securities market on which the Common Stock is then traded (the "Maxi mum Share Amount"), which shall be 4.99% of the total shares outstanding on the Closing Date (as defined i n the Purchase Agreement), subject to equitable adjustment from time to time for stock splits, stock dividends, combinations, capital reorganizations and similar events relating to the Common Stock occurring after the date hereof. Once the Maxim um Share Amount has been issued, if the Borrower fails to eliminate any prohibitions under applicable law or the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction over the Borrower or any of its securities on the Borrower's ability to issue shares of Common Stock in excess of the Maximum Share Amount, in lieu of any further right to convert this Note, this will be considered an Event of Default under Section 3.3 of the Note.
1.7 Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than the shares, if any, which cannot be issued because their issuance would exceed such Holder's allocated portion of the Reserved Amount or Maxi mum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder's rights as a Holder of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received certificates for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect to a conversion of any portion 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 Note with respect to such unconverted portions of this Note and the Borrower shall, as soon as practicable , return such unconverted Note to the Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of 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 1.3 to the extent required thereby for such Conversion Default and any subsequent Conversion Default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section 1.3) for the Borrower's failure to convert thisNote.
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1.8 Prepayment. Maker may prepay this Note, in accordance with the following schedule: Ifwith in 180 calendar days of the execution of this Note, $135% of all outstand ing principal and interest in one payment;. After 180 calendar days of this Note being executed, any prepayments must be approved by both parties in writing.
ARTICLE II. CERTAIN COVENANTS
2.1 Distri butions on Capital Stock. So long as the Borrower shall have any obl igation under this Note, the Borrower shall not without the Holder's written consent (a) pay, declare or set apart for such payment, any dividend or other d istribution (whether in cash, property or other secu rities) on shares of capital stock other than d ividends on shares of Common Stock solely in the form of additional shares of Common Stock or (b) directly or indirectly or through any subsid iary make any other payment or distribution in respect of its capital stock except for distributions pursuant to any shareholders' rights plan wh ich is approved by a majority of the Borrower's d isinterested d irectors.
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, repu rchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise) i n any one transaction or series of related transactions any shares of capital stock of the Borrower or any warrants, rights or options to pu rchase or acqu ire any such shares.
2.3 Borrowings. So long as the Borrower sball have any obligation under this Note, the Borrower shall not, without the Holder 's written consent, create, incur, assume guarantee , endorse, contingentl y agree to pure ase or otherwise become liable upon the obl igation 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 l iabil ity for borrowed money, except (a) borrowings in existence or comm itted on the date hereof and of wh ich the Borrower has i nformed Holder in writing prior to the date hereof, (b) indebtedness to trade cred itors or financial institutions incurred in the ord inary course of business or (c) borrowi ngs, the proceeds of which shall be used to repay this Note.
2.4 Sale of Assets. So long as the Borrower shall have any obligation under this Note, 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. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.
2.5 Advances and Loans. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder's written consent, lend money, give credit or make advances to any person , firm, joint venture or corporation, including, without l im itation , officers, d irectors, employees, subsidiaries and affi l iates of the Borrower, Jxcept loans, credits or advances (a) i n existence or comm itted on the date hereof and which the Borrower has inform ed Holder i n writing prior to the date hereof, (b) made in the ordinary course of busi ness or (c) not in excess of $100,000.
ARTICLE III. EVENTS OF DEFAULT
If any of the following events of default (each, an "Event of Default") shall occur:
3.1 Failure to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise.
3.2 Conversion and the Shares. The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obl igation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronicall y or in certificated form) any certificate for shares of Common Stoc issued to the Holder upon conversion of or otherwise pursuant to this Note as and when requ ired by this Note, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronicall y or in certificated form) any certificate for shares of Common Stock to be issued to the Ho der upon conversion of or otherwise pursuant to this Note as and when requ ired by this Note , or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withd raw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when req u ired by this Note (or makes any written announcement , statement dr threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncu red (or any written announcement , statement or threat not to honor its obligations shall not be rescinded in writing) for three (3) business days after the Holder shall have delivered a Notice of Conversion. It is an ob igation of the Borrower to remain current in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of thi s Note is delayed , hindered or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower 's transfer agent in order to process a conversion , such advanced funds shall be paid by the Borrower to the Holder within forty eight (48) hours of a demand from the Holder.
3.3 Breach of Covenants. The Borrower breaches any material covelilant or other material term or condition contained in this Note and any collateral documents including but not l im ited to the Purchase Agreement and such breach continues for a period of ten (10) 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 giten in
writing pursuant hereto or in connection herewith (including, without limitation, the PJrchase Agreement) , shall be false or mislead ing in any material respect when made and the breach of wh ich 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 subsid iary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appo'ntment of a receiver or trustee for it or for a substantial part of its property or business, or such a Feceiver or trustee shall otherwise be appointed .
3.6 Judgments. Any money judgment , writ or similar process shall be entered or fi l ed against the Borrower or any subsidiary of the Borrower or any of its property or other assets for more than $50,000, and shall remain unvacated , un bonded or unstayed for a period of twenty (20) days un less otherwise consented to by the Holder, which consent will not be unreasonabl y withheld.
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3.7 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings , voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower. ,
3.8 Delisti ng of Common Stock. The Borrower shall fail to maintain the
l isting of the Common Stock on at least one of the OTCBB or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock Exchange.
3.9 �� Fai l ure to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requi rements of the Exchange Act; and/or the Borrower shall cease to be subject to the reporting req uirements of the Exchange Act.
3.10 Liq uidation. Any dissolution, liquidation, or winding up of Borrower or any su bstantial portion of its busi ness.
3. l l Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it i s otherwise generally unable to pay its debts as such debts become due, provided, however , that any d isclosure of the Borrower 's ability to contin ue as a "going concern" shall not be an admission that the Borrower cannot pay its debts as they become due.
3.12 Maintenance of Assets. The failure by Borrower to maintain any material intellectual property rights, personal , real property or other assets which are necessary to conduct its business (whether now or in the future).
3.13 Financial Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC for any date or period from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement would , by comparison to the original financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or supporting documents.
3.14 Reverse Splits. The Borrower effectuates a reverse split of its Common Stock without at least twenty (20) days prior written notice to the Holder.
3.15 Replacement of Transfer Agent. Inthe event that the Borrower proposes to replace its transfer agent, the Borrower fai ls to provide, prior to the effective date of such
replacement , a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pu rsuant to the Purchase Agreement (including but not limited to the provision to
i rrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.
3.16 Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default by the Borrower!of any covenant or other term or condition contained in any of the Other Agreements , after the passage of all applicable notice and cure or grace periods, shall, at the option of the Borrower, be considered a default under this Note and the Other Agreements, in which event the Holder shall be entitled (but i n no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder . "Other Agreements" means, collectively, all agreements and instruments between , among or by: (1) the Borrower , and, or for the benefit of, (2) the Holder and any affi liate of the Holder, including, without limitation , promissory notes; provided, however, the term "Other Agreements" shall not include the related or companion documents to this Note. Each of the loan transactions will be cross-defaulted with each other loan transaction and with all other existing and future debt of Borrower to the Holder.
Upon the occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due at the Maturity Date), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, i n full satisfaction 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 IMMEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT 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 3.1 (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, 3.11, 3.12, 3.13, 3.14, and/or 3. 15 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 tjhe 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 llli!.§ the amounts referred to i 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 mean s (a) the highest number of shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum in accordance with Article I, treating the Trading Day immediately preceding the Mandatory Prepayment Date as the "Conversion Date" for purposes of determining the lowest applicable Conversion Price, unless the Default Event arises as a result of a breach in respect of a specific Conversion Date in which case such Conversion Date shall be the Conversion Date), multiplied by (b) the highest Closing Price for the Common Stock du ring the period beginning on the date of first occurrence of the Event of Default and ending one day prior to the Mandatory Prepayment Date (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 l imitation, 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.
If the Borrower fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any time, so long as the 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 of the Default Amount, the number of shares of Common Stock of the Borrower equal to the
Default Amount divided by the Conversion Price then in effect.
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ARTICLE IV. MISCELLANEOUS
4.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.
4.2 Notices.All notices, 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) deposited in the mail, registered or certified, return receipt requested , postage prepaid, (i ii) delivered by reputable air courier service with charges prepaid , or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate conformation 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 such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:
If to the Borrower, to:
_________________
_________________
_________________
Attn: Facsimile:
If to the Holder:
WHC Capital, LLC.
303 Merrick Road,
Suite 504
Lyn brook, NY. 11563 Facsimile: 212.574.3326
4.3 Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term "Note" and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended orsupplemented, then as so amended or supplemented.
4.4 Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to 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 50 I (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 construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note shall 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 or based upon forum non convenience. The Borrower and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other pa11y its reasonable attorney's fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each pa11y hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve 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.
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4.8 Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.
4.9 Notice of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the extent t at it converts this Note into Common Stock. The Borrower shall provide the Holder with prior notification of any meeting of the Borrower's shareholders (and copies of proxy materials and other information sent to shareholders) . In the event of any ,taking by the Borrower of record of its shareholders for the purpose of determining shareholders who are entitled to receive payment of any dividend or other distribution, any right to subscribe for. purchase or otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any, share of any class or any other securities or property, or to receive any other right , or for the purpose of determining shareholders who are entitled to vote in connection with any proposed sale, lease or convenince of also substantially all of the assets of the Borrower .or any proposed liquidation dissolution or withing up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days prior to the record date specified thereµi (or thirty (30) days prior of the consummation of the transaction or event, whichever is earlier), of the date on which an such record is to be taken for the purpose of such divitlend, distrilmtion, right or other event and a brief statement regarding the amount and character of such dividend, distribution, right or1 other event to the extent known at such time. The Borrower shall me a public announcement of any event requiring notification to the Holder hereunder substantially simultaneously with the notification to the Holder in accordance with the terms of this Section 4.9.
4. l 0 Remedies. 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. Accordingly ,, 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 rellledies at Jaw 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 .
IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer :
NYXO Technologies Corp.
/s/ Giorgio Johnson
Giogio Johnson
CEO
2/7/2014
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