Exhibit 10.2
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. 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.
Principal Amount: $600,000.00 (U.S. Dollars) Issue Date: February 29, 2016
CONVERTIBLE PROMISSORY NOTE
FOR VALUE RECEIVED, Empire Global Corp., a Delaware Corporation, (hereinafter
called "Borrower"), hereby promises to pay to the order of the Investor a
New York Limited Liability Company (the "Holder"), without demand, the sum of
Seven Hundred and Fifty Thousand Dollars ($600,000.00) ("Principal Amount"),
with interest accruing thereon, on February 28, 2017 (the "Maturity Date"), if
not sooner paid or modified as described herein.
This Note has been entered into pursuant to the terms of a Securities Purchase
Agreement by and among the Borrower and the Holder, dated of even date herewith
(the "Securities Purchase Agreement") for an aggregate Principal Amount of
$600,000.00. All payment obligations hereunder shall be owed and payable in
United States Dollars, payor to be responsible for any and all currency exchange
and transmission fees and charges.
Unless otherwise separately defined herein, each capitalized term used in this
Note shall have the same meaning as set forth in the Securities Purchase
Agreement.
ARTICLE I
GENERAL PROVISIONS
1.1 Interest Rate. Subject to Sections 1.2 and 4.8 hereof, interest payable
on this Note shall accrue from the date of this Note on the outstanding
Principal Amount at a rate per annum (the "Interest Rate") of twelve
percent (12%). Accrued and unpaid interest on the outstanding Principal
Amount shall compound monthly and is due in cash on a date that is
three (3) months from the date of this Note, and thereafter on each
three (3) month anniversary as set forth in this Section 1.1.
For the avoidance of doubt, accrued and unpaid interest shall be due in
cash on the following dates:
May 30, 2016
Aug. 31, 2016
Nov. 30, 2016
1.2 Principal Payments. The outstanding Principal Amount of this Note, plus
all and accrued interest thereon, unless paid in full earlier as
1
described in this Note whether by acceleration or otherwise, shall be
payable on the Maturity Date, February 28, 2017, one year after the
date that this Note is issued.
1.3 Payment Grace Period. The Borrower shall not have any grace period to
pay any monetary amounts due under this Note. After the Maturity Date
and during the pendency of an Event of Default (as defined in Article
III) a default interest rate of twenty-two percent (22%) per annum
shall be in effect. Such interest shall be immediately due and payable.
1.4 Conversion Privileges. The Conversion Rights set forth in Article II
and Article III shall remain in full force and effect immediately from
the date hereof and until the Note is paid in full regardless of the
occurrence of an Event of Default.
1.5 Application of Payments. Payments made by Borrower to Holder, whether by
conversion or in cash, unless otherwise designated by Holder shall be
applied (i) first against amounts owed by Borrower to Holder other than
Principal Amount or interest, then (ii) to accrued interest, and lastly
(iii) to Principal Amounts. Any Principal Amount, interest and any
other sum arising under this Note and the Transaction Documents that
remains outstanding as of the Maturity Date shall be due and payable on
the Maturity Date.
1.6 Miscellaneous. Interest on this Note shall be calculated on the basis of
a 365-day year and the actual number of days elapsed. Principal and
interest on this Note and other payments in connection with this Note
shall be payable at the Holder's offices as designated above in lawful
money of the United States of America in immediately available funds or
as permitted hereby with shares of Common Stock, without set-off,
deduction or counterclaim. Upon assignment of the interest of Holder in
this Note, Borrower shall instead make its payment pursuant to the
assignee's instructions upon receipt of written notice thereof.
ARTICLE II
CONVERSION RIGHTS
The Holder shall have the right to convert the principal and any interest due
under this Note into Shares of the Borrower's Common Stock, $0.0001 par value
per share ("Common Stock") as set forth below.
2.1 Conversion into the Borrower's Common Stock.
(a) The Holder shall have the right from a date which is 180 days after the
date of the issuance of this Note and then at any time until this Note
is fully paid, to convert any outstanding and unpaid principal portion
of this Note less any portion against which the Borrower has permissibly
exercised its Optional Redemption as hereinafter defined, and accrued
but unpaid interest, at the election of the Holder (the date of giving
of such notice of conversion being a "Conversion Date") into fully paid
and non-assessable shares of Common Stock as such stock exists on the
date of issuance of this Note, or any shares of capital stock of
Borrower into which such Common Stock shall hereafter be changed or
reclassified, at the Conversion Price as defined in Section 2.1(b)
hereof, determined as provided herein. Upon delivery to the Borrower of
a completed Notice of Conversion, a form of which is annexed hereto as
Exhibit A, Borrower shall issue and deliver to the Holder within five
2
(5) business days after the Conversion Date (such fifth day being the
"Delivery Date") that number of shares of Common Stock for the portion
of the Note converted in accordance with the foregoing. The Holder will
not be required to surrender the Note to the Borrower until the Note
has been fully converted or satisfied. The number of shares of Common
Stock to be issued upon each conversion of this Note shall be
determined by dividing that portion of the principal of the Note and
interest, if any, to be converted, by the Conversion Price.
(b) Except as otherwise provided herein, the Conversion Price shall
be $0.85.
(c) The Conversion Price and number and kind of shares or other securities
to be issued upon conversion determined pursuant to Section 2.1(b),
shall be subject to adjustment from time to time upon the happening of
certain events while this conversion right remains outstanding, as
follows:
(i) Merger, Sale of Assets, etc. If (A) the Borrower effects any merger
or consolidation of the Borrower with or into another entity, (B)
the Borrower effects any sale of all or substantially all of its
assets in one or a series of related transactions, (C) any tender
offer or exchange offer (whether by the Borrower or another entity)
is completed pursuant to which holders of Common Stock are permitted
to tender or exchange their shares for other securities, cash or
property, (D) the Borrower consummates a stock purchase agreement or
other business combination (including, without limitation, a
reorganization, recapitalization, spin-off or scheme of arrangement)
with one or more persons or entities whereby such other persons or
entities acquire more than 50% of the outstanding shares of Common
Stock (not including any shares of Common Stock held by such other
persons or entities making or party to, or associated or affiliated
with the other persons or entities making or party to, such stock
purchase agreement or other business combination), (E) any "person"
or "group" (as these terms are used for purposes of Sections 13(d)
and 14(d) of the 1934 Act) is or shall become the "beneficial owner"
(as defined in Rule 13d-3 under the 1934 Act), directly or
indirectly, of 50% of the aggregate Common Stock of the Borrower),
or (F) the Borrower effects any reclassification of the Common Stock
or any compulsory share exchange pursuant to which the Common Stock
is effectively converted into or exchanged for other securities,
cash or property (other than a reverse merger) (in any such case, a
"Fundamental Transaction"), this Note, as to the unpaid principal
portion thereof and accrued interest thereon, if any, shall
thereafter be deemed to evidence the right to convert into such
number and kind of shares or other securities and property as would
have been issuable or distributable on account of such Fundamental
Transaction, upon or with respect to the securities subject to the
conversion right immediately prior to such Fundamental Transaction.
The foregoing provision shall similarly apply to successive
Fundamental Transactions of a similar nature by any such successor
or purchaser. Without limiting the generality of the foregoing, the
anti-dilution provisions of this Section shall apply to such
securities of such successor or purchaser after any such Fundamental
Transaction.
(ii) Reclassification, etc. If the Borrower at any time shall, by
reclassification or otherwise, change the Common Stock into the same
or a different number of securities of any class or classes that may
3
be issued or outstanding, this Note, as to the unpaid principal
portion thereof and accrued interest thereon, shall thereafter be
deemed to evidence the right to purchase an adjusted number of such
securities and kind of securities as would have been issuable as the
result of such change with respect to the Common Stock immediately
prior to such reclassification or other change.
(iii) Stock Splits, Combinations and Dividends. If the shares of Common
Stock are subdivided or combined into a greater or smaller number of
shares of Common Stock, or if a dividend is paid on the Common Stock
in shares of Common Stock, the Conversion Price shall be
proportionately reduced in case of subdivision of shares or stock
dividend or proportionately increased in the case of combination of
shares, in each such case by the ratio which the total number of
shares of Common Stock outstanding immediately after such event
bears to the total number of shares of Common Stock outstanding
immediately prior to such event.
(iv) Share Issuance. So long as this Note is outstanding, if the
Borrower shall issue any Common Stock except for the Excepted
Issuances (as defined in the Securities Purchase Agreement), prior
to the complete conversion or payment of this Note, for a
consideration per share that is less than the Conversion Price that
would be in effect at the time of such issue, then, and thereafter
successively upon each such issuance, the Conversion Price shall be
reduced to such other lower issue price. For purposes of this
adjustment, the issuance of any security or debt instrument of the
Borrower carrying the right to convert such security or debt
instrument into Common Stock or of any warrant, right or option to
purchase Common Stock shall result in an adjustment to the
Conversion Price upon the issuance of the above-described security,
debt instrument, warrant, right, or option and again upon the
issuance of shares of Common Stock upon exercise of such conversion
or purchase rights if such issuance is at a price lower than the
then applicable Conversion Price. Common Stock issued or issuable by
the Borrower for no consideration will be deemed issuable or to have
been issued for $0.0001 per share of Common Stock. Notwithstanding
the foregoing, no adjustment to the Conversion Price shall be made
pursuant to this subsection 2.1(c)(iv) as a result of the issuance
of shares of Common Stock pursuant to Section 2.1(c)(ii) hereof. The
reduction of the Conversion Price described in this paragraph is in
addition to the other rights of the Holder described in the
Securities Purchase Agreement.
(d) Whenever the Conversion Price is adjusted pursuant to Section 2.1(c)
above, the Borrower shall promptly, but not later than the fifth (5th)
business day after the effectiveness of the adjustment, provide notice
to the Holder setting forth the Conversion Price after such adjustment
and setting forth a statement of the facts requiring such adjustment.
Failure to provide the foregoing notice is an Event of Default under
this Note.
(e) From and after the Reservation Approval (as described in the Securities
Purchase Agreement), Borrower will reserve from its authorized and
unissued Common Stock not less than an amount of Common Stock equal to
150% of the amount of shares of Common Stock issuable upon the full
conversion of this Note. Thereafter, if additional shares of Common
Stock are issuable upon conversion of the Note or as a result of the
application of the provisions of the Securities Purchase Agreement and
4
Section 2.1(c)(iv) of this Note, the Borrower will not be in default of
its reservation obligations provided that at all times not less than
100% of the amount of Common Stock necessary to allow each holder of a
Note to be able to convert all such outstanding Note, interest and
Warrant Shares are reserved. Borrower represents that upon issuance,
such shares will be duly and validly issued, fully paid and
non-assessable. Borrower agrees that its issuance of this Note shall
constitute full authority to its officers, agents, and transfer agents
who are charged with the duty of executing and issuing stock
certificates to execute and issue the necessary certificates for shares
of Common Stock upon the conversion of this Note.
2.2 Method of Conversion. This Note may be converted by the Holder in whole
or in part as described in Section 2.1(a) hereof and the Securities
Purchase Agreement. Upon partial conversion of this Note, a new Note
containing the same date and provisions of this Note shall, at the
request of the Holder, be issued by the Borrower to the Holder for the
principal balance of this Note and interest which shall not have been
converted or paid, upon surrender of the existing Note. No fractional
shares shall be issued upon conversion of this Note and the number of
shares of Conversion Stock to be issued shall be rounded up to the
nearest whole share.
2.3 Maximum Conversion. The Holder shall not be entitled to convert on a
Conversion Date that amount of the Note in connection with that number
of shares of Common Stock which would be in excess of the sum of (i)
the number of shares of Common Stock beneficially owned by the Holder
and its affiliates on a Conversion Date, (ii) any Common Stock issuable
in connection with the unconverted portion of the Note, and (iii) the
number of shares of Common Stock issuable upon the conversion of the
Note with respect to which the determination of this provision is being
made on a Conversion Date, which would result in beneficial ownership
by the Holder and its affiliates of more than 9.99% of the outstanding
shares of Common Stock of the Borrower on such Conversion Date. For the
purposes of the provision to the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and
Regulation 13d-3 thereunder. Subject to the foregoing, the Holder shall
not be limited to aggregate conversions of 9.99%. The Holder shall have
the authority to determine whether the restriction contained in this
Section 2.3 will limit any conversion hereunder and the extent such
limitation applies and to which convertible or exercisable instrument
or part thereof such limitation applies.
The Holder may waive the conversion limitation described in this
Section 2.3, in whole or in part, upon and effective after 61 days
prior written notice to the Borrower. The determination of the
beneficial ownership by the Holder and its affiliates shall be made by
the Holder, in its sole and absolute discretion, and the Holder shall
hold the Borrower harmless against any and all damages arising out of
or in connection with any conversion of this Note in violation of this
Section 2.3. Notwithstanding anything in this Agreement or the
Transaction Documents to the contrary, if Holder elects to convert all
or a portion of this Note into shares of Common Stock that, when
issued, would violate the restrictions described in this paragraph and
either (i) the Borrower issues shares of Common Stock as exercised by
Holder in excess of 9.99%, or (ii) Holder does not waive the
restrictions described in this paragraph and the Borrower complies with
the restrictions described in this paragraph, neither action by the
5
Borrower shall be considered an Event of Default under this Note or any
other Transaction Document or otherwise give to Holder any additional
rights whether contemplated herein or otherwise.
Notwithstanding anything herein to the contrary, if Holder does not
waive the restrictions described in this Paragraph and Holder attempts
to convert all or a portion of this Note in excess of the amount
permitted above, the Borrower's compliance with the above restriction
shall not be considered an Event of Default under this Note or
otherwise give to Holder any additional rights.
2.4 Mandatory and Optional Redemption. Provided an Event of Default or an
event which with the passage of time or the giving of notice could
become an Event of Default has not occurred, unless such Event of
Default has been timely cured, the Borrower will have the option of
prepaying ("Optional Redemption") the outstanding obligations under
this Note, including principal, accrued interest and any other fees or
other amounts owed hereunder (the "Note Obligations"), in whole or
in part, pursuant to the terms of this section as follows:
(i) At any time before 180 days after the issuance date of this Note,
Borrower shall have the right to prepay the Note Obligations at 130%
of such Note Obligations;
(ii) At any time after 180 days after the issuance of this Note, on any
day that the average closing price for Borrower's common stock over
the previous 10 trading days, as listed by Bloomberg, is:
(i) below $1.30 per share, upon demand by the Holder Borrower shall
be required to buy the Note in its entirety at 130% of the Note
Obligations;
(ii) between $1.30 and $2 per share, Borrower shall have the right to
buy up to 90% of the outstanding Note Obligations from the
Holder at 130% of such Note Obligations;
(iii) between $2 and $3 per share, Borrower shall have the right to
buy up to 50% of the outstanding Note Obligations from the
Holder at 130% of such Note Obligations; or
(iv) exceeds $3 per share, Borrower shall have the right to buy up to
25% of the outstanding Note Obligations from the Holder at 140%
of such Note Obligations.
Upon exercising its Optional Redemption, Borrower shall pay to the Holder a sum
of money equal to one hundred percent (100%) of the Note Obligations to be
redeemed, accrued or payable to the Holder arising under this Note or any
Transaction Document through the Redemption Payment Date as defined below (the
"Redemption Amount"). Subject to the satisfaction of conditions set forth in
Section 2.4(a) and 2.4(b)(ii),(iii) or (iv) the Borrower's election to exercise
its Optional Redemption must be exercised by notice in writing ("Notice of
Redemption") a form of which is annexed hereto as Exhibit B. The Notice of
Redemption shall specify the date for such Optional Redemption (the "Redemption
Payment Date"), which date shall be no less than fifteen (15) business days
after the Notice of Redemption date (the "Redemption Period"); the Section of
the Note which triggers the Optional Redemption; and where applicable, the
closing Trade Prices for ten (10) trading days prior to the date of the Notice
of Redemption.
6
A Notice of Redemption shall not be effective with respect to any portion of the
Principal Amount for which the Holder has previously delivered an election to
convert for conversions initiated or made by the Holder prior to the Redemption
Period and the during the Redemption Period that portion of the Note subject to
the Redemption Notice cannot be converted. On the Redemption Payment Date, the
Redemption Amount, less any portion of the Redemption Amount against which the
Holder has permissibly exercised its conversion rights, shall be paid in
immediately available funds to the Holder. In the event the Borrower fails to
pay the Redemption Amount on the Redemption Payment Date or does not rescind the
Redemption Notice no less than five (5) business days prior to the Redemption
Payment Date as set forth herein, then (i) such Notice of Redemption will be
null and void, (ii) Borrower will have no right to deliver another Notice of
Redemption, and (iii) Borrower's failure may be deemed by Holder to be a
non-curable Event of Default. A Notice of Redemption may be cancelled by the
Holder during the Redemption Period, if at any time during the Redemption Period
an Event of Default, or an event which with the passage of time or giving of
notice could become an Event of Default (whether or not such Event of Default
has been cured), has occurred. During the Optional Redemption Period, the
Borrower must abide by all of its obligations to the Note Holder.
ARTICLE III
EVENT OF DEFAULT
The occurrence of any of the following events of default ("Event of Default")
shall, at the option of the Holder hereof, make all sums of principal and
interest then remaining unpaid hereon and all other amounts payable hereunder
immediately due and payable, upon demand, without presentment or grace period,
all of which hereby are expressly waived, except as set forth below:
3.1 Failure to Pay Principal or Interest. The Borrower fails to pay any
principal or interest under this Note when due.
3.2 Breach of Covenant. If the Borrower or any Subsidiary breaches any
material covenant or other material term or condition of the Securities
Purchase Agreement, Transaction Documents or this Note, except for a
breach of payment (which shall be applicable pursuant to Section 3.1),
in any material respect and such breach, if subject to cure, continues
for a period of twenty (20) days.
3.3 Breach of Representations and Warranties. Any material representation
or warranty of the Borrower made herein, in the Securities Purchase
Agreement, or the Transaction Documents shall be false or misleading in
any material respect as of the date made and the Closing Date.
3.4 Liquidation. Any dissolution, liquidation or winding up by Borrower or
a Subsidiary of a substantial portion of their business.
3.5 Cessation of Operations. Any cessation of operations by Borrower or a
Subsidiary unless such Subsidiary's operations are transferred to
Borrower or an Affiliate.
3.6 Maintenance of Assets. The failure by Borrower or any Subsidiary to
maintain any material intellectual property rights, personal, real
property, equipment, leases or other assets which are necessary to
conduct its business (whether now or in the future) and such breach is
not cured with fifteen (15) days after written notice to the Borrower
from the Holder.
7
3.7 Receiver or Trustee. The Borrower or any Subsidiary shall make an
assignment for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial part
of its property or business; or such a receiver or trustee shall
otherwise be appointed.
3.8 Judgments. Any money judgment, writ or similar final process shall be
entered or made in a non-appealable adjudication against Borrower or
any Subsidiary or any of its property or other assets for more than
$100,000 in excess of the Borrower's insurance coverage, unless stayed
vacated or satisfied within thirty (30) days.
3.9 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings or relief under any bankruptcy law or
any law, or the issuance of any notice in relation to such event, for
the relief of debtors shall be instituted by or against the Borrower or
any Subsidiary and not discharged within forty-five (45) days.
3.10 Delisting. From and after the initial trading, listing or quotation of
the Common Stock on a Principal Market, an event resulting in the
Common Stock no longer being traded, listed or quoted on a Principal
Market; failure to comply with the requirements for continued quotation
on a Principal Market; or notification from a Principal Market that the
Borrower is not in compliance with the conditions for such continued
quotation and such non-compliance continues for thirty (30) days
following such notification.
3.11 Non-Payment. A default by the Borrower or any Subsidiary under any one
or more obligations in an aggregate monetary amount in excess of
$250,000 for more than thirty (30) days after the due date, unless the
Borrower or such Subsidiary is contesting the validity of such
obligation in good faith; provided, however, that any such default not
in excess of $50,000 shall not be counted for purposes of calculating
the $250,000 aggregate amount.
3.12 Stop Trade. An SEC or judicial stop trade order or Principal Market
suspension that lasts for ten (10) or more consecutive trading days.
3.13 Failure to Deliver Common Stock or Replacement Note. Borrower's
failures to timely deliver Common Stock to the Holder pursuant to and
in the form required by this Note, the Securities Purchase Agreement,
and the Warrant or, if required, a replacement Note following a partial
conversion.
3.14 Reservation Default. Failure by the Borrower to have reserved for
issuance upon conversion of the Note or upon exercise of the Warrants,
the number of shares of Common Stock as required in the Securities
Purchase Agreement, this Note and the Warrants, and such failure
continues for a period of thirty (30) business days.
3.15 Financial Statement Restatement. The restatement after the date hereof
of any financial statements filed by the Borrower with the Securities
and Exchange Commission or delivered to Holder 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 unrestated financial statements, have constituted a
Material Adverse Effect. For the avoidance of doubt, any restatement
related to new accounting pronouncements, including without limitation,
for derivative accounting shall not constitute a default under this
Section 3.15.
8
3.16 Event Described in Securities Purchase Agreement. The occurrence of an
Event of Default as described in the Securities Purchase Agreement or
any other Transaction Document that, if susceptible to cure, is not
cured during any designated cure period.
3.17 Notification Failure. A failure by Borrower to notify Holder of any
material event of which Borrower is obligated to notify Holder pursuant
to the terms of this Note, the Securities Purchase Agreement or any
other Transaction Document.
3.18 Cross Default. A default by the Borrower of a material term, covenant,
warranty or undertaking of any other agreement to which the Borrower
and Holder are parties, or the occurrence of an event of default under
any such other agreement to which Borrower and Holder are parties which
is not cured after any required notice and/or cure period.
3.19 Other Note Default. The occurrence of an Event of Default under any
Other Note or Transactional Document related to this Note.
ARTICLE IV
MISCELLANEOUS
4.1 Failure or Indulgence Not Waiver. No failure or delay on the part of
the parties hereto 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 privilege.
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, (iii) delivered by reputable air courier
service with charges prepaid, or (iv) transmitted by hand delivery,
telegram, facsimile, or email 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 confirmation 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 first 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:
9
i. if to the Borrower to:
Empire Global Corp., a Delaware corporation (the "Company")
Attn.: Michele Ciavarella, CEO
Suite 701 - 130 Adelaide Street, West
Toronto, Ontario, Canada M5H 2K4
with a copy (which shall not constitute notice) to:
Julian L. Doyle, LLB Beard Winter, LLP
Facsimile: (416) 593-7760
Email: ceo.emgl@emglcorp.com,
and
ii. if to the Holder to:
Investor (the "Holder")
Attn.:
with a copy (which shall not constitute notice) by fax only to
Investor's Counsel
4.3 Amendment Provision. The term "Note" and all reference thereto, as used
throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, 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 the benefit of the Holder
and its successors and assigns. This Note shall not be assignable by
either the Holder or the Borrower without prior written approval of the
other party.
4.5 Cost of Collection. If default is made in the payment of this Note,
Borrower shall pay the Holder hereof reasonable 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
conflicts of laws principles that would result in the application of
the substantive laws of another jurisdiction. Any action brought by
either party against the other concerning the transactions contemplated
by this Agreement must be brought only in the civil or state courts of
New York or in the federal courts located in the State and county of
New York. Both parties and the individual signing this Agreement on
behalf of the Borrower agree to submit to the jurisdiction of such
courts. The prevailing party shall be entitled to recover from the
other party its reasonable attorney's fees and costs. In the event that
any provision of this Note 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 unenforceability of any other provision of
this Note. Nothing contained herein shall be deemed or operate to
preclude the Holder from bringing suit or taking other legal action
against the Borrower in any other jurisdiction to collect on the
Borrower's obligations to Holder, to realize on any collateral or any
other security for such obligations, or to enforce a judgment or other
10
decision in favor of the Holder. This Note shall be deemed an
unconditional obligation of Borrower for the payment of money and,
without limitation to any other remedies of Holder, may be enforced
against Borrower by summary proceeding pursuant to New York Civil
Procedure Law and Rules Section 3213 or any similar rule or statute in
the jurisdiction where enforcement is sought. For purposes of such rule
or statute, any other document or agreement to which Holder and
Borrower are parties or which Borrower delivered to Holder, which may
be convenient or necessary to determine Holder's rights hereunder or
Borrower's obligations to Holder are deemed a part of this Note,
whether or not such other document or agreement was delivered together
herewith or was executed apart from this Note.
4.7 Waiver of Jury Trial. Borrower (by execution of this Note) and Holder
(by acceptance of this Note) agree that any suit, action, or
proceeding, whether claim or counterclaim, brought or instituted by or
against Borrower or Holder, or any successor or assign of Borrower or
Holder, on or with respect to this Note, or which in any way relates,
directly or indirectly, to the obligations of Borrower to Holder under
this Note, or the dealings of the parties with respect thereto, shall
be tried only by a court and not by a jury. BORROWER AND HOLDER HEREBY
EXPRESSLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION,
OR PROCEEDING. Borrower and Holder acknowledge and agree that this
provision is a specific and material aspect of the agreement between
the parties and that Holder would not enter into the transaction
contemplated hereby with Borrower of this provision were not part of
their agreement.
4.8 Maximum Payments. Nothing contained herein shall be deemed to establish
or require the payment of a rate of interest or other charges in excess
of the maximum rate permitted by applicable law. In the event that the
rate of interest required to be paid or other charges hereunder exceed
the maximum rate permitted by applicable law, any payments in excess of
such maximum rate shall be credited against amounts owed by the
Borrower to the Holder and thus refunded to the Borrower.
4.9 Non-business Days. Whenever any payment or any action to be made shall
be due on a Saturday, Sunday or a public holiday under the laws of the
State of New York, such payment may be due or action shall be required
on the next succeeding business day and, for such payment, such next
succeeding day shall be included in the calculation of the amount of
accrued interest payable on such date.
4.10 Facsimile Signature. In the event that the Borrower's signature is
delivered by facsimile transmission, PDF, electronic signature or other
similar electronic means, such signature shall create a valid and
binding obligation of the Borrower with the same force and effect as if
such signature page were an original thereof.
4.11 Shareholder Status. The Holder shall not have rights as a shareholder
of the Borrower with respect to unconverted portions of this Note.
However, the Holder will have the rights of a shareholder of the
Borrower with respect to the shares of Common Stock to be received
after delivery by the Holder of a Conversion Notice to the Borrower.
(Signature Page Follows)
11
IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an
authorized officer as of the 29 day of February 2016.
BORROWER: INVESTOR:
EMPIRE GLOBAL CORP.
By:__________________________ By:___________________________
Print: Michele Ciavarella Print:
Its: Chairman and CEO Its: Managing Member
12
EXHIBIT A - NOTICE OF CONVERSION
(To be executed by the Registered Holder in order to convert the Note)
The undersigned hereby elects to convert $_____________ of the principal and
$_________ of the interest, fees or other charges due on the Note issued by
Empire Global Corp. into Shares of Common Stock of Equity Global Corp. (the
"Borrower") according to the conditions set forth in such Note, as of the date
written below.
Date of Conversion: _________________________________
Conversion Price: _________________________________
Number of Shares of Common Stock Beneficially Owned on the Conversion Date: Less
than 5% of the outstanding Common Stock of Equities Global Corp.
Shares To Be Delivered: _____________________________
The undersigned represents that the representations and warranties contained in
Section 3.2 of the Securities Purchase Agreement are true and accurate as of the
Date of Conversion above set forth.
Signature: _____________________________
Print Name: _____________________________
Address: _____________________________
_____________________________
_____________________________
_____________________________
13
EXHIBIT B - NOTICE OF REDEMPTION
(To be executed by the Borrower in order to redeem the Note in whole or in part)
The undersigned hereby elects to redeem $_____________ of the principal and
$_________ of the interest, fees or other charges due on the Note issued by
Empire Global Corp. (the "Borrower") according to the conditions set forth in
such Note, as of the date written below.
Date of Redemption Notice: _________________________________
Redemption Payment Date: _________________________________
Triggering Section (circle): 2.4(ii) / 2.4(iii) / 2.4 (iv)
Closing Trade Prices for ten (10) trading days prior to the date of this
Redemption Notice:
Day 1: ______
Day 2: ______
Day 3: ______
Day 4: ______
Day 5: ______
Day 6: ______
Day 7: ______
Day 8: ______
Day 9: ______
Day 10: ______
The undersigned represents that the representations and warranties contained in
Section 3.1 of the Securities Purchase Agreement are true and accurate as of the
Redemption Payment Date above set forth.
Signature: _____________________________
Print Name: _____________________________
Address: _____________________________
_____________________________
_____________________________
_____________________________