exhibit_10-2
NEITHER THIS PROMISSORY NOTE (THIS “NOTE”) NOR THE
SECURITIES THAT ARE ISSUABLE UPON CONVERSION HEREOF (COLLECTIVELY,
THE “SECURITIES”) HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, 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; OR
(B) AN OPINION OF COUNSEL (REASONABLY ACCEPTABLE TO THE COMPANY),
IN AN ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933; OR (II) UNLESS SOLD, TRANSFERRED OR
ASSIGNED PURSUANT TO RULE 144 UNDER THE SECURITIES ACT OF
1933.
THIS NOTE IS ONE OF A SERIES OF PROMISSORY NOTES BEING ISSUED BY
THE COMPANY, EACH OF WHICH NOTES IS IDENTICAL EXCEPT FOR ONE OR
MORE OF THE IDENTITY OF THE HOLDER THEREOF, THE PRINCIPAL AMOUNT,
AND THE DATE OF ISSUANCE. THE COMPANY AND THE HOLDER, BY THEIR
ACCEPTANCE OF THIS NOTE, ACKNOWLEDGE AND AGREE THAT ANY AMENDMENT
OF THE TERMS AND PROVISIONS OF THIS NOTE IS SUBJECT TO THE APPROVAL
OF REGISTERED HOLDERS HOLDING IN THE AGGREGATE MORE THAN 50% OF THE
OUTSTANDING PRINCIPAL AMOUNT OF THE PROMISSORY NOTES COMPRISING THE
SERIES OF WHICH THIS NOTE IS A PART.
SERIES A CONVERTIBLE PROMISSORY NOTE
RIVULET MEDIA, INC.
|
$_______________ (the
“Principal
Amount”)
|
______________, 20__
|
FOR
VALUE RECEIVED, Rivulet Media, Inc., a Delaware corporation (the
“Company”),
promises to pay to ___________________________ (the
“Holder”), the
Principal Amount, together with interest at the rate of five
percent (5%), under the terms and provisions as set forth
below.
1.
Definitions.
As used in this Note, the following terms, unless the context
otherwise requires, have the following meanings:
1.1 “Common
Stock” means the common stock of the
Company.
1.2 “Conversion
Amount” means the outstanding Principal Amount and all
accrued but unpaid interest.
1.3 “Conversion
Date” means the date on which this Note is converted
into Conversion Shares.
1.4 “Conversion
Shares” means the Common Stock to be received upon
conversion of this Note pursuant to conversion under Section 4.1
below.
1.5 “Note
Issuance Date” means the date set forth at the top of
this Note.
1.6 “Required
Holders” means holders of promissory
notes of the Series, the aggregate outstanding principal amount of
which represents more than 50% of the aggregate outstanding
principal amount of all of the promissory notes comprising the
Series.
1.7 “Transaction
Agreements” means this Note, any Subscription
Agreement entered into with respect to this Note, and all other
documents executed and delivered in connection with the
foregoing.
2.1 Maturity
Date. Unless earlier converted pursuant to Section 4.1
below, the outstanding Principal Amount and all accrued interest on
this Note shall be due and payable on the date that is two (2)
years from the Note Issuance Date (the “Maturity Date”).
2.2 Interest.
This Note bears simple interest at the rate of five percent (5%)
per annum. No interest payments are due until the Maturity
Date.
3.
Security.
This Note is unsecured.
4.
Conversion.
The Principal Amount and accrued interest of this Note is
convertible into Common Stock as follows:
4.1 Automatic
and Elective Conversion.
4.1.1 Elective
Conversion by Holder. Holder
shall have the right, upon providing written notice to the Company,
to convert all or any portion of the then outstanding principal
amount of, and all accrued but unpaid interest on, this Note into
Common Stock at a conversion price of $0.40 per share (the
“Elective Conversion
Price”). If Holder elects
to convert all or any part of this Note, then Holder shall
surrender this Note to the Company at the principal address of the
Company within three (3) Business Days of such notice. In the
event that only a portion of this Note is being converted, the
Company shall issue a replacement Note representing the remaining
principal amount of the Note that has not been
converted.
4.1.2 Automatic
Conversion. Unless
earlier converted pursuant to Section 4.1.1 above, should the
closing price of the Common Stock as reflected on the OTC Market reach $0.60 or higher, then the
outstanding Principal Amount and all accrued interest on this Note
shall, automatically and without any action on the part of the
Holder or the Company, convert into that number of shares of Common
Stock that results by dividing (i) the Conversion Amount by (ii)
$0.40 (the “Automatic Conversion
Price”). This Note
shall be cancelled effective upon such automatic conversion and all
rights of the Holder and all obligations of the Company with
respect to payment of principal and interest under this Note shall
immediately cease and terminate effective at the
closing.
4.2 Effectiveness
of Conversion. Any conversion
pursuant to Section 4.1.1 shall be deemed to have been
effected as of the close of business on the date on which this Note
is surrendered at the principal office of the Company. Any
conversion pursuant to Section 4.1.2 shall be deemed to have been
effected as of the close of business on the date on which
the closing price of the Common Stock as reflected on the
OTC Market first reaches $0.60 or
higher. At such time as the conversion has been effected, the
rights of Holder under this Note, to the extent of the conversion,
shall cease, and Holder shall thereafter be deemed to have become
the holder of record of the shares of Common Stock issuable upon
such conversion.
4.3 Issuance
of Certificates. As soon as is
reasonably practicable after a conversion has been effected, the
Company shall deliver to Holder (i) a certificate or
certificates representing the number of shares of Common Stock
(excluding any fractional share) issuable by reason of such
conversion pursuant to this Section 4, each in such name or
names and such denomination or denominations as Holder has
specified.
4.4 No
Fractional Shares. If any
fractional share of Common Stock would, except for the provisions
hereof, be deliverable upon conversion of this Note, the Company,
in lieu of delivering such fractional share, shall pay an amount
equal to the value of such fractional share as determined by the
Elective Conversion Price or the Automatic Conversion Price, as
applicable.
4.5 Reservation
of Shares Issuable Upon Conversion. The Company covenants
that it will at all times reserve and keep available out of its
authorized and unissued shares of Common Stock, solely for the
purpose of issuance upon conversion of this Note, as herein
provided, free from preemptive rights or any other actual
contingent purchase rights of persons other than the Holder, not
less than such number of shares of the Common Stock as will be
issuable upon either the automatic or elective conversion of this
Note. The Company covenants that all shares of Common Stock issued
upon conversion of this Note will be duly and validly authorized,
issued, fully paid, and non-assessable.
4.6 Transfer
Taxes. The issuance of certificates for shares of the Common
Stock on conversion of this Note shall be made without charge to
the Holder for any documentary stamp or similar taxes that may be
payable in respect of the issue or delivery of such certificate
only if the Company is not required to pay any tax that may be
payable in respect of any transfer involved in the issuance and
delivery of any such certificate upon conversion. If Conversion
Shares are to be issued in the name of a person other than the
Holder, the Holder will pay all transfer taxes payable with respect
thereto the Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company
that such tax has been paid and will deliver such certificates and
opinions as reasonably requested by the Company. No fee will be
charged to the Holder for any conversion, except for such transfer
taxes, if any.
5.
Notes
Comprising a Series.
The Company
and Holder acknowledge and agree that this Note is one of a series
of promissory notes (the “Series”)
issued by the Company, each of which promissory notes is identical
except for one or more of the identity of the Holder thereof, the
principal amount, and the date of issuance. The Company and the
Holder, by their acceptance of this Note, acknowledge and agree
that any amendment of the terms and provisions of this Note is
subject to the approval of the Required
Holders.
6.1 Event
of Default. “Event of
Default” means any one or more of the following events
(whatever the reason and whether it shall be voluntary or
involuntary or effected by operation of law or pursuant to any
judgment, decree, or order of any court, or any order, rule or
regulation of any administrative or governmental
body):
6.1.1 failure
by the Company to pay the outstanding Principal Amount and all
accrued but unpaid interest on or before the Maturity Date, and
such default is not cured within five (5) days;
6.1.2 any
default of any provision of this Note or the other Transaction
Agreements other than a failure to pay addressed by section 6.1.1
above, and such default is not cured within thirty (30) days of the
receipt of notice of the default; or
6.1.3 (i)
the Company commences a case, as debtor, under any applicable
bankruptcy or insolvency laws as now or hereafter in effect or any
successor thereto, or the Company commences any other proceeding
under any reorganization, arrangement, adjustment of debt, relief
of debtors, dissolution, insolvency, or liquidation or similar law
of any jurisdiction whether now or hereafter in effect relating to
the Company, or (ii) there is commenced a case against the Company,
under any applicable bankruptcy or insolvency laws, as now or
hereafter in effect or any successor thereto, which remains
undismissed for a period of ninety (90) days; or (iii) the Company
is adjudicated by a court of competent jurisdiction insolvent or
bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or (iv) the Company suffers any
appointment of any custodian, receiver, trustee, or the like for it
or any substantial part of its property which continues
undischarged or unstayed for a period of ninety (90) days; or (v)
the Company makes a general assignment for the benefit of
creditors; or (vi) the Company shall fail to pay, or shall state
that it is unable to pay, or shall be unable to pay, its debts
generally as they become due; or (vii) any corporate or other
action is taken by the Company for the purpose of effecting any of
the foregoing.
6.2 Remedies
Upon Event of Default.
6.2.1 If
any Event of Default occurs, the outstanding Principal Amount plus
accrued interest shall become, at the Holder’s election,
immediately due and payable in cash. The Holder need not provide,
and the Company hereby waives, any presentment, demand, protest, or
other notice or demands of any kind, and the Holder may immediately
and without expiration of any grace period enforce any and all of
its rights and remedies hereunder and all other remedies available
to it under applicable law. Such declaration may be rescinded and
annulled by Holder at any time prior to payment hereunder and the
Holder shall have all rights as a Holder until such time, if any,
as the full payment under this Section shall have been received by
it.
6.2.2 Alternatively,
in the event of an Event of Default, the Holder may elect an
Elective Conversion as described in Section 4.1.
7.
Transfer
Restrictions.
7.1 Except
for a Permitted Transfer described below, the Holder may not sell,
transfer, convey, or assign the Note unless and until:
7.1.1 it
has first given written notice to the Company, describing briefly
the manner of any such proposed transfer;
7.1.2 it
has provided the Company, at the Holder’s sole expense, an
opinion of counsel which opinion is satisfactory to the Company, in
its reasonable discretion, that such transfer can be made without
compliance with the registration requirements of the Securities Act
of 1933 and applicable state securities laws; and
7.1.3 the
Company, in its sole an absolute discretion, has given written
approval of the transfer.
Any
attempted transfer of Note in violation of the preceding sentence
is void and of no force or effect.
7.2 The
Holder, however, may without the consent of the company effect a
transfer of this Note as described below (a “Permitted Transfer”):
7.2.1 a
transfer directly to or in trust for the primary benefit of the
Holder, the spouse of the Holder, and/or the issue of the Holder
and/or her spouse; or
7.2.2 in
the event of the death of the Holder, a transfer from the name of
the deceased Holder to the name of either the personal
representative of the deceased Holder’s estate or the nominee
of such personal representative and any subsequent transfer to the
heirs or legatees of the deceased.
8.
Currency;
Payments. All references herein to “dollars” or
“$” are to U.S. dollars, and all payments of principal
and interest on this Note shall be made in lawful money of the
United States of America in immediately available funds. If the
date on which any such payment is required to be made pursuant to
the provisions of this Note occurs on a Saturday or Sunday or legal
holiday observed in the State of Arizona such payments shall be due
and payable on the immediately succeeding date which is not a
Saturday or Sunday or legal holiday so observed.
9.
Right
of Prepayment. The Company may prepay the Principal Amount
and accrued interest of this Note, in whole or in part at any
time.
10.1 Time
of Essence. Time is of the essence with respect to the
Company’s duties and obligations under this Note.
“Business Day”
means a day other than a Saturday, Sunday, or a day observed as a
legal holiday by the United States government or the State of
Arizona.
10.2 Amendments
and Waivers. No amendment or waiver
of any provision of this Note, nor consent to any departure by the
Company herefrom, will be effective unless the same is in writing
and signed by the Required Holders and the Company, and then such
waiver or consent will be effective only in the specific instance
and for the specific purpose for which
given, provided,
however, that no such
amendment, waiver, or consent may reduce the principal amount
hereof or the rate of interest payable hereunder, or delay the date
on which any amount of interest or principal is due and payable
hereunder, unless the Holder shall have agreed to such amendment,
waiver or consent.
10.3 Severability.
If one or more provisions of this Note are held to be unenforceable
under applicable law, such provision shall be excluded from this
Note and the balance of the Note shall be interpreted as though
such provision were so excluded and shall be enforceable in
accordance with its terms. The parties agree to replace such
illegal, void, invalid, or unenforceable provision of this Note
with a legal, valid, and enforceable provision that shall achieve,
to the extent possible, the economic, business, and other purposes
of such illegal, void, invalid or unenforceable
provision.
10.4 Attorneys’
Fees and Costs. Each party shall bear its own expenses in
connection with the issuance of this Note; provided, however, that if any action at
law or in equity is necessary to enforce or interpret the terms of
this Note, the prevailing party shall be entitled to its reasonable
attorneys’ fees, costs, and disbursements in addition to any
other relief to which such party may be entitled.
10.5 Entire
Agreement. This Note, together with the Transaction
Agreements delivered in connection herewith, constitutes the entire
agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior and contemporaneous
negotiations, agreements, and understandings (including any
“term sheets” or similar documents).
10.6 Notices.
Any notice or communication required or permitted by this Agreement
shall be given in writing and addressed as follows:
|
If to Holder:
________________________________________
________________________________________
________________________________________
________________________________________
Email:
__________________________________
|
If to the Company:
Rivulet Media, Inc.
Attention:
Mike Witherill, President
1206
East Warner Road, Suite 101-I
Gilbert,
Arizona 85296
email:
mw@rivuletfilms.com
|
The
parties agree to submit notices first in PDF format via electronic
mail via the addresses above. Thereafter, notices shall be served
personally, by overnight express delivery service by a nationally
recognized courier, or first-class, certified mail, return receipt
requested, postage pre-paid. If sent personally or by delivery
service, notice shall be deemed delivered upon actual receipt. If
sent by first-class,
certified mail, return receipt requested, notice shall be deemed
delivered the earlier of seventy-two (72) hours after mailing or
the date on the return receipt, a refusal being deemed a delivery
on the date of refusal. If the party to whom any such notice is
sent has relocated without leaving a forwarding address, then the
notice shall be deemed delivered on the date the notice-receipt is
returned stating that the same was undeliverable at such address.
Any party may give notification to the other party in any manner
described above for change of address for the sending of
notices.
10.7 Successors
and Assigns. This Note shall be binding upon and inure to
the benefit of the Company and the Holder and their respective
successors and permitted assigns. The Company may not voluntarily
or involuntarily transfer, convey, or assign this Note, or any of
its duties or obligations hereunder, without the Holder’s
prior written consent, which may be withheld for any reason, or for
no reason at all. As used herein, the term “Holder”
shall mean and include the successors and permitted assigns of the
Holder.
10.8 Absolute
Obligation. Except as expressly provided herein, no
provision of this Note shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the Principal
Amount and accrued interest of this Note at the time, place, and
rate, and in the currency, herein prescribed. This Note is a direct
debt obligation of the Company.
10.9 Lost
or Mutilated Note. If this Note shall be mutilated, lost,
stolen, or destroyed, the Company shall execute and deliver, in
exchange and substitution for and upon cancellation of a mutilated
Note, or in lieu of or in substitution for a lost, stolen, or
destroyed Note, a new Note for the Principal Amount of this Note so
mutilated, lost, stolen, or destroyed but only upon receipt of
evidence of such loss, theft, or destruction of such Note, and of
the ownership hereof, and indemnity, if requested, all reasonably
satisfactory to the Holder.
10.10 Headings.
The headings contained herein are for convenience only, do not
constitute a part of this Note, and shall not be deemed to limit or
affect any of the provisions hereof.
10.11 Governing
Law; Jurisdiction and Venue. This Note is to be governed by
and interpreted in accordance with the laws of the State of
Delaware. Any legal action or proceeding with respect to this Note
or any document related hereto shall be brought in Maricopa County,
Arizona in any court of competent jurisdiction, and, by execution
and delivery of this Note, the Company and the Holder hereby accept
the jurisdiction and venue of such courts.
The
Company has caused this Note to be executed as of the date first
written above.
|
COMPANY
|
|
Rivulet Media, Inc.,
|
|
a Delaware corporation
|
|
|
|
|
|
By: _______________________________
|
|
Name: Michael Witherill
|
|
Title: President
|
|
|
|
HOLDER
|
|
If an individual:
|
|
|
|
__________________________________
|
|
Printed Name: ______________________
|
|
|
|
If an entity:
|
|
__________________________________
|
|
a(n) ______________________________
|
|
|
|
By: _______________________________
|
|
Name: ____________________________
|
|
Title: ______________________________
|