NEITHERTHISNOTENORTHESECURITIESTHATAREISSUABLETOTHE LENDERUPONCONVERSIONHEREOF(COLLECTIVELY,THE"SECURITIES") HAVEBEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), ORTHE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THESECURITIES NOR ANY INTEREST OR PARTICIPATION THEREIN MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED ORASSIGNED: (I) IN THEABSENCEOF (A)AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE1933ACT AND COMPLIANCE WITH APPLICABLE STATE SECURITIESLAWS,ORB)AN OPINION OF COUNSEL,IN A FORMREASONABLYACCEPTABLE TO THE ISSUER, THAT REGISTRATIONIS NOT REQUIRED UNDER THE 1933 ACT; OR(Il)UNLESS SOLD, TRANSFERRED OR ASSIGNED PURSUANT TO RULE 144 UNDER THE 1933 ACT.
BYACCEPTINGTHISOBLIGATION,THELENDERREPRESENTSAND WARRANTSTHATITISNOTAUNITEDSTATESPERSON(OTHERTHANAN EXEMPTRECIPIENT DESCRIBED IN SECTION 6049(B)(4) OF THE INTERNAL REVENUE CODE AND REGULATIONS THEREUNDER) AND THAT ITIS NOT ACTING FOR OR ON BEHALF OF A UNITES STATES PERSON(OTHER THANAN EXEMPT RECIPIENT DESCRIBED IN SECTION 6049(B)(4)OFTHE INTERNAL REVENUE CODEAND THE REGULATIONS THEREUNDER).
SENIOR SECURED REVOLVING CONVERTIBLE PROMISSORY NOTE
| Issuance Date: March 31, 2016 | | US$1,300,000 |
| | | |
| Effective Date: April 5, 2016 | | |
FORVALUERECEIVED,THE STAFFING GROUP LTD.,acorporation incorporated under the laws of the State of Nevada, whose address is 3773 Howard Hughes Parkway, Suite 500S, Las Vegas, Nevada 89169 (the“Borrower”),promisestopaytotheorderofTCAGLOBALCREDITMASTER FUND, LP(hereinafter, togetherwithany holder hereof,“Lender”),whose address is 3960 Howard Hughes Parkway, Suite 500, Las Vegas, Nevada 89169, on or before the six (6) month anniversary of the Effective Date or such later date as agreed upon after the date hereof in a signed writing by the Lender (the “Revolving Loan Maturity Date”),the lesser of: (i) One Million Three Hundred Thousand and No/100 United States Dollars (US$1,300,000); or (ii) the aggregate principal amount outstanding under and pursuant to that certain Senior Secured Revolving Credit Facility Agreement, dated as of March 31, 2016 and effective as of April 5, 2016, executed by and among the Borrower, as borrower, an additional Credit Party, as guarantor, and the Lender, as lender (as amended, restated, supplemented or modified from time to time, the “Credit Agreement”), togetherwith interest (computed on the actual numberof days elapsed on the basisof a 360 day year)on the aggregate principalamountof all RevolvingLoans outstandingfromtime totime, as provided intheCreditAgreement.Capitalized wordsandphrases nototherwise defined herein shall have the meanings assigned thereto in the Credit Agreement.
This Revolving Convertible Promissory Note (the “Note”) evidences a portion of the aggregate Revolving Loans incurred by Borrower under and pursuant to the Credit Agreement, to which reference is hereby made for a statement of the terms and conditions under which the Revolving Loan Maturity Date or any payment hereon may be accelerated. The holder of this Note is entitled to all of the benefits and security provided for in the Loan Documents, of even date herewith. All Revolving Loans shall be repaid by Borrower, or any person liable for the payment of this Note, on the Revolving Loan Maturity Date, unless payable sooner pursuant to the provisions of the Credit Agreement.
PrincipalandinterestshallbepaidtoLenderassetforthintheCreditAgreement,orat suchotherplaceas the holder of this Note shalldesignate in writingto Borrower.Each Revolving Loan made by Lender, and all payments on account of the principal and interest thereof shall be recorded onthe books andrecords of Lender and the principal balanceas shown on such books andrecords, or any copy thereof certifiedby an officer of Lender, shall be rebuttable presumptive evidence of the principal amount owing hereunder.
ExceptforsuchnoticesasmayberequiredunderthetermsoftheCreditAgreement, theBorrower, or any person liable for the payment of this Note,waivespresentment,demand,notice,protest,and all other demands, or notices, in connection with thedelivery, acceptance, performance, default, or enforcement of this Note,and assentstoany extension orpostponement of the timeof payment oranyotherindulgence.
Borrowershallbesolelyresponsibleforthepaymentofanyandalldocumentarystamps andothertaxesapplicabletothefullface amountof this Note.
TheRevolvingLoanevidencedherebyhasbeenmadeand/orissuedandthisNotehas beendeliveredatLender'smainofficesetforth above. This Noteshallbegoverned and construedinaccordancewiththelaws of theState of Nevada, in which state itshallbeperformed, andshall bebinding uponBorrower, or any person liable for the payment of this Note,anditslegalrepresentatives, successors,and assigns.Wherever possible, each provision of the Credit Agreement and this Note shallbeinterpreted in such manner as tobeeffectiveandvalidunder applicable law, but if anyprovision oftheCredit Agreement or this Note shallbeprohibited by or beinvalid under such law, such provision shall be severable, and be ineffective totheextent ofsuch prohibition or invalidity, without invalidatingthe remainingprovisions of the Credit Agreementor this Note.
Nothing herein contained, nor in any instrument or transaction relating hereto, shall be construed or so operate as to require the Borrower, or any person liable for the payment of this Note, to pay interest in an amount or at a rate greater than the highest rate permissible under applicable law. By acceptance hereof, Lender hereby warrants and represents to Borrower that Lender has no intention of charging a usurious rate of interest. Should any interest or other charges paid by Borrower, or any parties liable for the payments made pursuant to this Note result in the computation or earning of interest in excess of the highest rate permissible under applicable law, any and all such excess shall be and the same is hereby waived by the holder hereof. Lender shall make adjustments in the Note or Credit Agreement, as applicable, as necessary to ensure that Borrower will not be required to pay further interest in excess of the
amount permitted by applicable law. All such excess shall be automatically credited against and in reduction of the outstanding principal balance. Any portion of such excess which exceeds the outstanding principal balance shall be paid by the holder hereof to the Lender and any parties liable for the payment of this Note, it being the intent of the parties hereto that under no circumstances shall Borrower, or any party liable for the payments hereunder, be required to pay interest in excess of the highest rate permissible under applicable law.
THE HOLDER IS A NON-U.S. PERSON AS THAT TERM IS DEFINED IN THE UNITED STATES INTERNAL REVENUE CODE. IT IS HEREBY AGREED AND UNDERSTOOD THAT THE OBLIGATIONS HEREUNDER MAY BE SOLD OR RESOLD ONLY TO NON-U.S. PERSONS. THE INTEREST PAYABLE HEREUNDER IS PAYABLE ONLY OUTSIDE THE UNITED STATES. ANY U.S. PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAW.
AtanytimeandfromtimetotimewhilethisNoteisoutstanding, thisNotemaybe,at thesole optionofthe Lenderupon an Event of Default,convertibleinto sharesof thecommon stock,par value $0.001 per share(the“Common Stock”) ofBorrower, in accordance with the terms and conditions set forth below.
(a) VoluntaryConversion.AtanytimewhilethisNoteisoutstanding,theLendermay, at its sole option upon an Event of Default,convertalloranyportion ofthe outstanding principal, accrued andunpaid interest, and any other sumsdue and payable hereunder or under theCredit Agreement (such totalamount,the“Conversion Amount”) into shares of Common Stockof theBorrower (the“ConversionShares”)in an amount of sharesequalto: (i) the ConversionAmount (the numerator);divided by(ii) eighty-five percent (85%) ofthe lowestdaily volume weighted average price of the Borrower's Common Stock duringthe five (5) Business Days immediately prior to the Conversion Date,which price shall be indicated in the conversion notice (in the form attached hereto asExhibit A, the “Conversion Notice”) (thedenominator)(the “Conversion Price”). The Lender shall submit a ConversionNotice indicating the Conversion Amount, the number of Conversion Shares issuable uponsuch conversion, and where the Conversion Shares should be delivered.
(b) The Lender's Conversion Limitations.The Borrower shall not affect any conversion of this Note, and the Lender shall not have the right to convert any portion of this Note, to the extent that after giving effect to the conversion set forth on the Conversion Notice submitted by the Lender, the Lender (together with the Lender's Affiliates and any Persons acting as a group together with the Lender or any of the Lender's Affiliates) would beneficially own shares of Common Stock in excess of the Beneficial Ownership Limitation (as defined herein). To ensure compliance with this restriction, prior to delivery of any Conversion Notice, the Lender shall have the right to request that the Borrower provide to the Lender a written statement of the percentage ownership of the Borrower's Common Stock that would be beneficially owned by the Lender and its Affiliates in the Borrower if the Lender converted such portion of this Note then intended to be converted by Lender. The Borrower shall, within two (2) Business Days of such request, provide Lender with the requested information in a written statement, and the Lender shall be entitled to rely on such written statement from the Borrower
in issuing its Conversion Notice and ensuring that its ownership of the Borrower's Common Stock is not in excess of the Beneficial Ownership Limitation. The restriction described in this Section may be waived by Lender, in whole or in part, upon notice from the Lender to the Borrower to increase such percentage.
ForpurposesofthisNote,the“BeneficialOwnershipLimitation”shallbe 4.99%ofthenumberofsharesofCommonStockoutstandingimmediately aftergivingeffect to the issuanceofshares of Common Stock issuableupon conversion ofthis Note.Thelimitations contained in this Section shall apply toa successor holder ofthis Note.For purposes ofthis Note,“Person”meansanindividual, a limited liabilitycompany, a partnership, a joint venture,a corporation, a trust,an unincorporated organization or agovernment or any departmentor agency thereof.
(c) Mechanics of Conversion.The conversion of this Note shall be conducted in the following manner:
(1) To convert this Note into shares of Common Stock on any date set forth in the Conversion Notice by the Lender (the “Conversion Date”), the Lender shall transmit by facsimile or electronic mail (or otherwise deliver) a copy of the fully executed Conversion Notice to the Borrower (or, under certain circumstances as set forth below, by delivery of the Conversion Notice to the Borrower's transfer agent).
(2) Upon receipt by the Borrower of a copy of a Conversion Notice, the Borrower shall as soon as practicable, but in no event later than two (2) Business Days after receipt of such Conversion Notice, send, via facsimile or electronic mail (or otherwise deliver) a confirmation of receipt of such Conversion Notice (the “Conversion Confirmation”)to the Lender indicating that the Borrower will process such Conversion Notice in accordance with the terms herein. In the event the Borrower fails to issue its Conversion Confirmation within said two (2) Business Day time period, the Lender shall have the absolute and irrevocable right and authority to deliver the fully executed Conversion Notice to the Borrower's transfer agent, and pursuant to the terms of the Credit Agreement, the Borrower's transfer agent shall issue the applicable Conversion Shares to Lender as hereby provided. Within five (5) Business Days after the date of the Conversion Confirmation (or the date of the Conversion Notice, if the Borrower tails to issue the Conversion Confirmation), provided that the Borrower's transfer agent is participating in the Depository Trust Company’s (“DTC”) Fast Automated Securities Transfer (“FAST”) program, the Borrower shall cause the transfer agent to (or, if for any reason the Borrower fails to instruct or cause its transfer agent to so act, then pursuant to the Credit Agreement, the Lender may request and require the Borrower's transfer agent to) electronically transmit the applicable Conversion Shares to which the Lender shall be entitled by crediting the account of the Lender's prime broker with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system, and provide proof satisfactory to the Lender of such delivery. In the event that the Borrower's transfer agent is not participating in the DTC FAST program and is not otherwise DWAC eligible, within five (5) Business Days after the date of the Conversion Confirmation (or the date of the Conversion Notice, if the Borrower fails to issue the Conversion Confirmation), the Borrower shall instruct and cause its transfer agent to (or, if for any reason the Borrower fails to instruct or cause its transfer agent to so act, then pursuant to the Credit Agreement, the Lender may request and require the Borrower's transfer agent to)
issue and surrender to a nationally recognized overnight courier for delivery to the address specified in the Conversion Notice, a certificate, registered in the name of the Lender, or its designees, for the number of Conversion Shares to which the Lender shall be entitled. To effect conversions hereunder, the Lender shall not be required to physically surrender this Note to the Borrower unless the entire principal amount of this Note, plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable Conversion Amount. The Lender and the Borrower shall maintain records showing the principal amount(s) converted and the date of such conversion(s). The Lender, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof.
(3) ThePerson(s)entitledtoreceivethesharesofCommon StockissuableuponaconversionofthisNoteshall betreated forall purposesas the record holder(s) of such shares of CommonStock as of the Conversion Date.
(4) If in the case of any Conversion Notice, the certificate or certificates are not delivered to or as directed by the Lender by the date required hereby, the Lender shall be entitled to elect by written notice to the Borrower at any time on or before its receipt of such certificate or certificates, to rescind such Conversion Notice, in which event the Borrower shall promptly return to the Lender any original Note delivered to the Borrower and the Lender shall promptly return to the Borrower the Common Stock certificates representing the principal amount of this Note unsuccessfully tendered for conversion to the Borrower.
(5) The Borrower's obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Lender to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any person or entity or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Lender or any other person or entity of any obligation to the Borrower or any violation or alleged violation of law by the Lender or any other person or entity, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Lender in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the Borrower of any such action the Borrower may have against the Lender. In the event the Lender of this Note shall elect to convert any or all of the outstanding principal amount hereof and accrued but unpaid interest thereon in accordance with the terms of this Note, the Borrower may not refuse conversion based on any claim that the Lender or anyone associated or affiliated with the Lender has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Lender, restraining and or enjoining conversion of all or part of this Note shall have been sought and obtained, and the Borrower posts a surety bond for the benefit of the Lender in the amount of 150% of the outstanding principal amount of this Note, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to such Lender to the extent it obtains judgment. In the absence of such injunction, the BorrowershallissueConversionSharesuponaproperlynoticedconversion.Ifthe
BorrowerfailsforanyreasontodelivertotheLendersuchcertificateorcertificates representingConversionSharespursuanttotiming and delivery requirementsof this Note, the Borrower shall pay to such Lender, in cash, as liquidateddamagesand not as a penalty, for each $1,000 of principal amount being converted, $1.00 per day for eachday after the date by which such certificates should have been delivered until such certificates are delivered. Nothing herein shall limitaLender's righttopursue actualdamagesordeclarean Event of Default pursuant to the Credit Agreement, this Note or any agreement securing the indebtednessunder thisNote forthe Borrower's failuretodeliver Conversion Shareswithin the period specified herein andsuch Lender shall have the right to pursue all remedies availableto it hereunder, at law or in equity, including,withoutlimitation, a decree of specific performance and/orinjunctive relief.The exerciseof anysuchrights shallnotprohibit the Lender from seeking to enforce damages pursuant to anyother Section hereof or under applicable law. Nothingherein shall prevent the Lender from having the Conversion Sharesissued directly by the Borrower's transfer agent in accordance with the Credit Agreement, in the event for any reason the Borrower fails to issueor deliver, or cause its transfer agent to issueand deliver, the Conversion Sharesto the Lenderupon exercise of Lender's conversion rights hereunder.
(6) The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Lender hereof for any documentary stamp or similar taxes, or any other issuance or transfer fees of any nature or kind that may be payable in respect of the issue or delivery of such certificates, any such taxes or fees, if payable, to be paid by the Borrower.
(7) Borrower shall take all action reasonably necessary to at all times have authorized, and reserved for the purpose of issuance, such number of shares of Common Stock as shall be necessary to effect the full conversion of the Note in accordance with its terms (the “Share Reserve”). If at any time the Share Reserve is insufficient to effect the full conversion of the Note then outstanding, Borrower shall increase the Share Reserve accordingly. If Borrower does not have sufficient authorized and unissued shares of Common Stock available to increase the Share Reserve, Borrower shall call and hold a special meeting of the shareholders within forty-five (45) days of such occurrence, or take action by the written consent of the holders of a majority of the outstanding shares of Common Stock, if possible, for the sole purpose of increasing the number of shares authorized to an amount of shares equal to three (3) times the Conversion Shares. Borrower’s management shall recommend to the shareholders to vote in favor of increasing the number of shares of Common Stock authorized.
(d) AdjustmentstoConversionPrice.
(1) If the Borrower,atanytime whilethis Noteisoutstanding:(i)paysastockdividendorotherwisemakesadistributionor distributionspayableinshares of Common Stock on outstandingshares of Common Stock,(ii)subdivides outstanding shares of Common Stockinto alarger number ofshares,(iii)combines (includingby way of areverse stocksplit)outstanding shares of Common Stock into asmaller number of shares, or (iv) issues,in the eventofareclassification ofshares of Common Stock, any shares of capital stock of the Borrower, then the Conversion Price shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock (excluding any treasury
sharesoftheBorrower)outstandingimmediatelybeforesuchevent,andthe denominatorofwhichshallbethenumberofsharesofCommonStockoutstandingimmediately aftersuch event. Any adjustment made pursuant to this Sectionshall become effective immediately aftertherecord dateforthe determination of stockholdersentitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case ofasubdivision, combination, orre-classification.
(2) If,atanytimewhilethisNoteisoutstanding:(i)theBorrowereffectsanymergerorconsolidationoftheBorrowerwith orinto anotherPerson, (ii) the Borrowereffectsanysale of all orsubstantiallyall ofits assets in one transactionor a series of related transactions,(iii)any tenderoffer or exchangeoffer (whetherby the Borrower or another Person) is completedpursuant to which holdersof Common Stock are permitted to tender or exchange their shares for other securities, cash or property,or (iv) the Borrower effects anyreclassification of theCommon Stock or any compulsory share exchange pursuant to whichthe Common Stock is effectively converted into or exchangedforother securities, cashor property (inany such case, a“Fundamental Transaction”),thenupon any subsequent conversion ofthisNote, the Lendershall have the right to receive,for each ConversionShare thatwould have been issuable upon such conversion immediately prior to the occurrence ofsuch FundamentalTransaction, the same kind and amount of securities,cash or property as itwouldhave been entitled toreceive upon the occurrence of such Fundamental Transactionif it had been, immediately priorto such Fundamental Transaction, the holderof one(1)share of Common Stock(the“Alternate Consideration”).For purposesofanysuchconversion, the determination ofthe Conversion Price shallbe appropriately adjusted to apply to such Alternate Considerationbased on the amount ofAlternate Consideration issuable inrespectof one(1) share of Common Stock in such FundamentalTransaction,and theBorrower shall apportion theConversion Price among the AlternateConsideration ina reasonablemanner reflecting the relative value of any different components of the Alternate Consideration.If holdersof Common Stock aregivenany choiceas to the securities, cashorproperty to bereceivedin a Fundamental Transaction, then the Lender shall be given the same choice as totheAlternate Consideration itreceivesupon any conversion of this Note following suchFundamental Transaction.To the extent necessaryto effectuatethe foregoing provisions, anysuccessor to the Borrower orsurvivingentity insuch Fundamental Transaction shall issue to the Lender a new note consistent with the foregoing provisions and evidencingthe Lender's right to convert such noteinto Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction iseffected shall include terms requiring any suchsuccessor or surviving entity to complywith the provisionsof this Section andinsuring that this Note (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a FundamentalTransaction.
(3) WhenevertheConversionPriceis adjustedpursuanttoanyprovisionofthisNote,theBorrowershallpromptlydeliverto Lendera noticesetting forth theConversionPrice aftersuchadjustment andsettingforth a brief statement of the facts requiring such adjustment.
(4) If: (A) the Borrower shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Borrower shall declare a special nonrecurring
cash dividend on or a redemption of the Common Stock, (C) the Borrower shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Borrower shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Borrower is a party, any sale or transfer of all or substantially all of the assets of the Borrower, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Borrower shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Borrower, then, in each case, the Borrower shall cause to be filed at each office or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Lender at its last address as it shall appear upon the Borrower's records, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating: (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined, or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. The Lender is entitled to convert this Note during the 10-day period commencing on the date of such notice through the effective date of the event triggering such notice.
(e) Make-Whole Rights. Upon liquidation by the Lender of Conversion Shares issued pursuant to a Conversion Notice, provided that the Lender realizes a net amount from such liquidation equal to less than the Conversion Amount specified in the relevant Conversion Notice (such net realized amount, the “Realized Amount”), the Company shall issue to the Lender additional shares of the Company’s Common Stock equal to: (i) the Conversion Amount specified in the relevant Conversion Notice;minus(ii) the Realized Amount, as evidenced by a reconciliation statement from the Lender (a “Sale Reconciliation”) showing the Realized Amount from the sale of the Conversion Shares;divided by(iii) the average volume weighted average price of the Company’s Common Stock during the five (5) Business Days immediately prior to the date upon which the Lender delivers notice (the “Make-Whole Notice”) to the Company that such additional shares are requested by the Lender (the “Make-Whole Stock Price”) (such number of additional shares to be issued, the “Make-Whole Shares”). Upon receiving the Make-Whole Notice and Sale Reconciliation evidencing the number of Make-Whole Shares requested, the Company shall instruct its transfer agent to issue certificates representing the Make-Whole Shares, which Make-Whole Shares shall be issued and delivered in the same manner and within the same time frames as set forth herein. The Make-Whole Shares, when issued, shall be deemed to be validly issued, fully paid, and non-assessable shares of the Company’s Common Stock. Following the sale of the Make-Whole Shares by the Lender: (i) in the event that the Lender receives net proceeds from such sale which, when added to the Realized Amount from the prior relevant Conversion Notice, is less than the Conversion Amount specified in the relevant Conversion Notice, the Lender shall deliver an additional Make-Whole Notice to the Company following the procedures provided previously in this
paragraph, and such procedures and the delivery of Make-Whole Notices and issuance of Make-Whole Shares shall continue until the Conversion Amount has been fully satisfied; and (ii) in the event that the Lender received net proceeds from the sale of Make-Whole Shares in excess of the Conversion Amount specified in the relevant Conversion Notice, such excess amount shall be applied to satisfy any and all amounts owed hereunder in excess of the Conversion Amount specified in the relevant Conversion Notice.
[-signature page follows-]
INWITNESSWHEREOF,theBorrowerhasexecutedthisNoteasofthedatesetforth above.
THE STAFFING GROUP LTD.
By: ______________________________
Name: Kimberly Thompson
Title: Chief Executive Officer
STATE OF ________________ )
) SS.
COUNTY OF ______________ )
The undersigned, a Notary Public in and for the said County, in the State aforesaid, DO HEREBY CERTIFY that Kimberly Thompson, Chief Executive Officer of The Staffing Group Ltd., a Nevada corporation, who is personally known to me to be the same person whose name is subscribed to the foregoing, appeared before me this day in person and acknowledged that he/she signed and delivered the said instrument as his/her own free and voluntary act and as the free and voluntary act of said corporation, for the uses and purposes therein set forth.
GIVEN under my hand and notarial seal this _____ day of ________________, 20____.
______________________________________
Notary Public
My Commission Expires:
______________________________________
[Signature Page to Revolving Promissory Note]
CONSENT AND AGREEMENT
The undersigned, referred to in the foregoing senior secured revolving convertible promissory note as a guarantor, hereby consents and agrees to said senior secured revolving convertible promissory note and to the payment of the amounts contemplated therein, documents contemplated thereby and to the provisions contained therein relating to conditions to be fulfilled and obligations to be performed by it pursuant to or in connection with said revolving promissory note to the same extent as if the undersigned were a party to said senior secured revolving convertible promissory note.
GUARANTOR:
STAFF FUND I, LLC
By: _____________________________
Name: Kimberly Thompson
Title: Manager
STATE OF ________________ )
) SS.
COUNTY OF ______________ )
The undersigned, a Notary Public in and for the said County, in the State aforesaid, DO HEREBY CERTIFY that Kimberly Thompson, Manager of Staff Fund I, LLC, a Nevada limited liability company, who is personally known to me to be the same person whose name is subscribed to the foregoing, appeared before me this day in person and acknowledged that he/she signed and delivered the said instrument as his/her own free and voluntary act and as the free and voluntary act of said corporation, for the uses and purposes therein set forth.
GIVEN under my hand and notarial seal this _____ day of ________________, 20____.
______________________________________
Notary Public
My Commission Expires:
______________________________________
[Signature Page to Revolving Promissory Note]
EXHIBITA
NOTICE OF CONVERSION
The undersigned hereby elects to convert principal and/or interest under the Revolving Convertible Promissory Note (the “Note”) of The Staffing Group Ltd., a corporation incorporated under the laws of the State of Nevada (the “Company”), into shares of common stock, par value $0.001 per share (the “Common Shares”), of the Company in accordance with the conditions of the Note, as of the date written below.
Based solely on information provided by the Company to Lender, the undersigned represents and warrants to the Company that its ownership of the Common Shares does not exceed the Beneficial Ownership Limitation as specified under the Note.
| Conversion Calculations | | | |
| Effective Date of Conversion: | | | |
| Principal Amount and/or Interest to be Converted: | | | |
| Number of Common Shares to be Issued: | | | |
[HOLDER]
By:
Name:
Title:
Address:
4847-5749-5343, v. 1
