AMENDMENT TOSECUREDCONVERTIBLEPROMISSORYNOTE
This AmendmenttoSecuredConvertiblePromissoryNote(this"Amendment ")is enteredintoasofJanuary22, 2016 (the"Effective Date"),by and between TYPENEX Co INVESTMENT,LLC, a Utah limited liability company("Lender"),and AVALANCHE INTERNATIONAL,CORP., aNevada corporation("Borrower").Capitalizedterms used in this Amendment withoutdefinition shall havethe meanings givento them in the Note(as defined below).
A. BorrowerpreviouslyissuedtoLenderaSecuredConvertiblePromissoryNote datedMay29,2015intheoriginalprincipalamount of $252,500.00(the"Note,"and together with all other documents enteredintoinconjunction therewith,the"Transaction Documents").
B. | Borrower hasrequestedtoamendtheNoteassetforthherein. |
C. Lenderhasagreed, subjecttothe terms,amendments,conditions and understandingsexpressedinthisAmendment,tomakesuchamendmentsto theNote.
NOW, THEREFORE,forgoodandvaluableconsideration,thereceiptandsufficiency of whichishereby acknowledged,thepartiesagreeasfollows:
1. Recitals.Eachofthepartiesheretoacknowledgesandagreesthattherecitalsset forthaboveinthisAmendmentaretrueandaccurateand are herebyincorporated into and made a partof thisAmendment.
2. LimitationsonConversions.FromandaftertheEffectiveDateofthisAmendment,andforaperiod ofninety (90) daysthereafter(the"Conversion Limitation Period"),Lender agrees that theaggregate Conversion Amount of all Lender Conversions made by Lender during (a) thefirst thirty (30)days of the Conversion LimitationPeriod, (b) the second thirty(30) daysof the ConversionLimitation Period, and(c) the third thirty (30) daysof theConversion Limitation Period (each such thirty (30) day period, a"Conversion LimitationMonth")(and, for the avoidance of doubt, Lender maysubmit any number ofLender ConversionNotices duringanyConversion Limitation Month so long as the aggregate Conversion Amountin all such Lender Conversion Notices submitted duringsuchConversion LimitationMonth doesnotexceed theapplicable Maximum Monthly Conversion Amount (as defined hereafter)), determined basedon thedate(s)anyLender Conversion Notices are delivered to Borrower, willnot exceed an amount equal to ten percent (10%) of the Conversion Eligible Outstanding Balance ofthe Note as of thedate of this Amendment (the"Maximum MonthlyConversionAmount");provided, however,that if the aggregate ConversionAmount forallLender Conversion Notices submittedby Lenderin a ConversionLimitation Month is lessthan the Maximum Monthly ConversionAmount for theapplicable ConversionLimitation Month, then in the following Conversion Limitation Month or Conversion Limitation Months the Maximum Monthly Conversion Amount shall increasebyanamountequaltothe difference between theMaximum Monthly Conversion Amount for the ConversionLimitation Month in which Lender's aggregate Conversion Amountswere less than theMaximumMonthly Conversion Amount andtheaggregate of Lender's Conversion Amounts submittedfor
Conversion duringsuchConversionLimitationMonth.Forillustrationpurposesonly,ifthe MaximumMonthlyConversionAmountwere$25,000.00 for a givenConversionLimitation Month and the aggregate of all Conversion Amountssubmitted by Lender during such Conversion Limitation Month were $20,000.00, then the MaximumMonthly Conversion Amount for the next ConversionLimitation Month wouldincrease to $30,000.00. Notwithstanding the foregoing, Lender's obligations set forth in this Section 2 shall immediately and automatically terminate upon the earlier of (x) the conclusion of the Conversion Limitation Period,(y) the occurrenceof an Event of Default under the Note or Borrower's breach of this Amendmentor the Transaction Documents at any time after the Effective Date of this Amendment, or (z) Borrower's failure to comply with its covenants set forth in Section 4 below.
3. Prepayment.Notwithstandinganything to thecontraryintheNote,Borrowerand LenderacknowledgeandagreethatBorrowermayat anytimeon orafter theEffectiveDatefor so longas the Note remains outstandingprepaytheOutstanding Balanceof the Notein accordancewiththe provisions set forth in Section 1 of the Note.
4. FilingObligations.BorrowercovenantsandagreesthatonorbeforeJanuary27, 2016,itshallhavefiledallreportsrequiredto befiled withthe United States Securitiesand Exchange Commission pursuant to Sections 13 or15(d) of the Securities Exchange Act of1934, as amended,and shallhave ensured that adequate current public information withrespect to Borrower, as requiredin accordance with Rule144 of the Securities Act of 1933, as amended, is publicly available.
5. AffirmationofConversionEligibleOutstandingBalance.TheConversionEligibleOutstandingBalanceoftheNoteasoftheEffective Date of this Amendment is hereby deemed and affirmedto beequal to $125,000.00. Forthe avoidance of doubt, the foregoing Conversion Eligible Outstanding Balance includesapplicationof theDefault Effect with respect to two (2) Major Defaults. Accordingly, Borrower and Lender furtheracknowledge andconfirm that Lendermay still apply the Default Effect with respectto one (1) Major Default and three (3) Minor Defaultsfollowing the Effective Date.
6. ConditionalityofAmendment. BorrowerunderstandsandagreesthatthelimitationonLenderConversionssetforthin Section 2aboveand all other amendments to theNoteset forth in this Amendment areconditioned on and subject to Borrower's compliance with its covenant set forth inSection4 above as well as Borrower's continued compliancewiththe terms of the Noteand the other Transaction Documents. Borrower further understands and agrees that suchamendment shallimmediatelyand automatically terminate (andbe deemedto be voidab initiofor all purposes) and all of the original terms of the Noteshall be immediately restored as if the Notewasnever amended bythis Amendment if Borrower fails to file all required reports on orbeforeJanuary 27, 2016,as set forth in moredetail inSection 4 above, or upon the occurrenceof any Event of Default under the Noteor any other TransactionDocument after the date hereof.Notwithstanding theforegoing, the affirmation of the Conversion Eligible Outstanding Balance setforth in Section 5 above shall survive any termination of this Amendment.
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7. RepresentationsandWarranties.InordertoinduceLendertoenterintothisAmendment,Borrower,foritself,andforitsaffiliates, successors andassigns, hereby acknowledges, represents, warrants andagreesas follows:
(a) Borrowerhasfull powerandauthoritytoenterintothisAmendmentand toincurandperformallobligationsandcovenantscontainedherein, all of which havebeen duly authorized by all properand necessaryaction. Noconsent, approval, filingor registration with or notice to any governmentalauthority is required as a condition tothe validityof this Amendment or the performanceof any of the obligations of Borrower hereunder.
(b) Thereisno factknowntoBorrowerorwhichshouldbeknownto Borrowerwhich Borrower hasnot disclosed toLender onorpriorto thedate of thisAmendment which wouldor couldmaterially and adversely affectthe understanding ofLender expressed in this Amendmentor any representation, warranty, or recital contained in this Amendment.
(c) Exceptasexpressly setforthinthisAmendment,Borroweracknowledges andagrees thatneither theexecutionanddeliveryof thisAmendment norany of the terms, provisions, covenants, or agreements containedinthis Amendment shall in any mannerrelease, impair, lessen,modify, waive, orotherwise affect the liability and obligations of Borrower under the terms of the TransactionDocuments.
(d) Borrowerhasnodefenses,affirmativeorotherwise,rightsofsetoff,rightsofrecoupment,claims,counterclaims,actionsorcauses of actionofanykindor nature whatsoever against Lender, directly orindirectly, arising out of, based upon, orinanymanner connected with, the transactionscontemplated hereby, whether knownor unknown, which occurred,existed, wastaken,permitted, orbegun priorto theexecutionofthisAmendment and occurred,existed, was taken, permitted or begun in accordance with, pursuant to,orbyvirtueof any of theterms orconditions oftheTransaction Documents. Totheextent any suchdefenses,affirmativeor otherwise, rightsofsetoff, rightsofrecoupment, claims, counterclaims, actions orcauses ofaction exist or existed, such defenses,rights, claims, counterclaims, actions and causes of action are hereby waived, dischargedand released. Borrower herebyacknowledges andagrees thatthe execution ofthisAmendmentby Lendershall not constitute an acknowledgment ofor admission by Lender ofthe existenceof any claimsor of liability for any matter orprecedent uponwhichany claim or liability may be asserted.
(e) BorrowerrepresentsandwarrantsthatasofthedatehereofnoEventsof Defaultorothermaterialbreachesexistunder the Transaction Documents or have occurred prior to the date hereof.
8. CertainAcknowledgments.Eachofthepartiesacknowledgesandagreesthatno propertyorcashconsiderationofanykindwhatsoeverhasbeenorshall be givenby Lenderto Borrower in connection with any amendment to the Note granted herein.
9. OtherTermsUnchanged.TheNote,asamendedbythisAmendment,remainsand continuesinfullforceandeffect,constituteslegal,valid, and binding obligationsofeach ofthe parties, andis in allrespects agreedto, ratified, andconfirmed.Any reference to the Note after the date of this Amendment is deemed to be a reference to the Note as amended by this Amendment.Ifthere is a conflict between the terms ofthis Amendment and theNote,the terms of this Amendment shall control.Noforbearance orwaiver maybeimpliedbythis Amendment. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shallnotoperate as awaiver of, or as an amendment to,any right,power, orremedy of LenderundertheNote,asin effectprior to thedate hereof.
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10. NoReliance.BorroweracknowledgesandagreesthatneitherLendernoranyofitsofficers,directors,members,managers,equityholders,representativesoragentshasmade any representations orwarranties to Borrower or any of its agents, representatives, officers, directors, oremployees except asexpressly setforthin thisAmendment andthe Transaction Documentsand, in makingits decision to enter into the transactionscontemplated bythis Amendment, Borrower is not relying onany representation, warranty, covenant or promise of Lender oritsofficers,directors, members,managers, equity holders, agentsor representatives other than as set forth in this Amendment.
11. Counterparts.This Amendmentmaybeexecutedinanynumberofcounterparts, eachofwhichshallbedeemed anoriginal,butallofwhichtogethershall constitute one instrument. The parties hereto confirmthat any electronic copyof another party's executed counterpart of this Amendment (orsuch party's signature pagethereof) willbedeemed tobe an executed original thereof.
12. FurtherAssurances.Eachpartyshalldoandperformorcausetobedoneand performed,allsuchfurtheractsand things, andshallexecuteand deliverall such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Amendment andthe consummation of the transactions contemplated hereby.
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IN WITNESSWHEREOF,theundersignedhaveexecutedthisAmendmentasofthedate setforthabove.
BORROWER:
AVALANCHE INTERNATIONAL, CORP.
By:/s/ Phillip Mansour Name: Phillip Mansour Title: CEO | |
LENDER:
TYPENEX CO-INVESTMENT, LLC
By: Red Cliffs Investments, Inc., its Manager
By:/s/ John M. Fife John M. Fife, President |
[Signature PagetoAmendmenttoSecuredConvertiblePromissoryNote]
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