Exhibit 10.2

 

THIS CONVERTIBLE promissory note (this “NOTE”) AND THE SECURITIES ISSUABLE UPON
CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR THE SECURITIES
ISSUABLE UPON CONVERSION HEREOF MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR
(B) IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER SECURITIES ACT OF
1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS.

 

CONVERTIBLE promissory note

 

$[___________] _______, 2016

 

FOR VALUE RECEIVED, Brown Technical Media Corp. (the “Company”), a Texas
Corporation, promises to pay to __________________________ (the “Holder”), the
principal amount of ____________ Dollars ($___________).

 

This Note is one of a series of substantially identical notes in the aggregate
principal amount of up to $75,000 issuable by the Company (collectively the
“Notes”). The Notes are otherwise being issued on the terms set forth in the
“Terms of Convertible Promissory Note Offering” distributed by the Company on or
about _______, 2016. Each of the Notes shall rank on a parity with the other
Notes in right of payment. All payments made by the Company with respect to any
of the Notes shall be made pro rata to the holders of all of the Notes in
accordance with the respective principal amounts outstanding thereunder.

 

Unless this Note is earlier converted pursuant to Article 2, the principal
amount of this Note and all accrued and unpaid interest hereon shall be payable
in full on December 31, 2016.

 

This Note shall bear interest at the rate of 10% per annum, compounded annually.

 

This Note is subject to the following provisions, terms and conditions:

 

Article 1
PREPAYMENT

 

Section 1.1           Prepayment. This Note may be prepaid by the Company in
whole or in part.

 

Article 2
CONVERSION

 

Section 2.1           Optional Conversion upon Qualified Equity Financing. If,
at any time while this Note shall be outstanding, the Company shall conclude a
future equity financing where at least $500,000 in new cash (i.e., not including
amounts converted under the Notes) is raised from accredited investors (a
“Qualified Financing”), the entire unpaid principal amount of and accrued
interest on this Note shall be eligible to be converted into shares of the
equity security issued by the Company in a Qualified Financing at a price per
share equal to 75% of the price per share paid by the purchasers of the security
issued in the Qualified Financing and otherwise on the same terms as the
security issued in the Qualified Financing. The Holder shall give written notice
to the Company prior to the initial closing of the Qualified Financing as to
whether the Holder elects that this Note convert into the securities issued in
the Qualified Financing and the amount that the Holder wishes to convert.

 

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Section 2.2           Optional Conversion upon Other Equity Financing. If, at
any time while this Note shall be outstanding, the Company shall conclude an
equity financing that is not a Qualified Financing (each, a “Non-Qualified
Financing”), the Holder, at the Holder’s sole option, may elect in writing to
convert all the outstanding principal of and accrued interest on this Note into
the shares of equity securities issued in connection with the Non-Qualified
Financing (the “Non-Qualified Financing Securities”) at a price per share equal
to 75% of the price per share paid by the purchasers of the security issued in
the Non-Qualified Financing. The Non-Qualified Financing Securities shall
otherwise be issued on the same terms and conditions that apply to the
Non-Qualified Financing.

 

Section 2.3           Surrender of Note; Issuance of Stock Certificates. As
promptly as practicable after the conversion of this Note as provided in
Sections 2.1 through 2.2 above, the Holder shall surrender this Note to the
Company for cancellation, whereupon the Company shall, as applicable, issue and
deliver to the Holder, in the name of the Holder, a certificate or certificates
for the number of shares issuable upon the conversion of this Note as set forth
in Sections 2.1 or 2.2.

 

Section 2.4           Notice by the Company. The Company shall notify the Holder
of a Qualified Financing or Non-Qualified Financing, as applicable, in writing
at least 10 days prior to the initial closing of such event.

 

Section 2.5           No Fractional Shares. If conversion to this Note would
result in the issuance of a fractional share, the amount payable under this Note
that therefore cannot be applied to the purchase of the shares purchasable upon
conversion shall be paid to the holder in cash.

 

Article 3
COVENANTS

 

Section 3.1           Negative Covenants. The Company hereby agrees that, as
long as this Note shall remain outstanding, the Company shall not take any of
the following actions without the consent of the holders of at least a majority
of the outstanding principal amount of the Notes (the “Requisite Holders”):

 

(a)               The Company shall not incur additional indebtedness for
borrowed money in excess of $100,000, except for (i) any indebtedness already
existing as of the date hereof, and (ii) the indebtedness under the Notes.

 

(b)               The Company shall not enter into any agreement that would
impair, interfere with or conflict with the Company’s obligations hereunder.

 

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(c)               The Company shall not sell, lease, transfer or otherwise
dispose of (including, without limitation, through licensing or partnering
arrangements) any material assets of the Company, other than in the ordinary
course of business.

 

(d)               The Company shall not declare or pay any dividends or make any
distributions of cash, property or securities of the Company with respect to any
shares of its common stock, preferred stock or any other class or series of its
stock, or, directly or indirectly (except for repurchases of common stock by the
Company in accordance with the terms of employee benefit plans or written
agreement between the Company and any of its employees approved by the Board of
Directors of the Company), redeem, purchase, or otherwise acquire for any
consideration any shares of its common stock or any other class of its stock.

 

Article 4
REMEDIES OF HOLDER IN EVENT OF DEFAULT

 

Section 4.1           Events of Default Defined. Any of the following that shall
occur and be continuing for any reason whatsoever (and whether such occurrence
shall be voluntary or involuntary or come about or be effected by operation of
law or otherwise) shall constitute an event of default (each an “Event of
Default”):

 

(a)               any default occurs in the payment of any principal of or
accrued interest on this Note when due and such failure continues uncured for at
least 10 days after written notice thereof is received by the Company from the
Requisite Holders; or

 

(b)               the Company shall fail to perform or observe any covenant or
agreement set forth in this Note in any material respect and such failure
continues uncured for at least 30 days after written notice thereof is received
by the Company from the Requisite Holders; or

 

(c)               if an order, judgment or decree is entered adjudicating the
Company bankrupt or insolvent; or if the Company shall commence any case,
proceeding or other action relating to it in bankruptcy or seeking
reorganization, liquidation, dissolution, winding-up, arrangement, composition
or readjustment of its debts, or for any other relief, under any bankruptcy,
insolvency, reorganization, liquidation, dissolution, arrangement, composition,
readjustment of debt or other similar act or law of any jurisdiction, domestic
or foreign, now or hereafter existing; or if the Company shall apply for a
receiver, custodian or trustee of it or for all or a substantial part of its
property; or

 

(d)               if any case, proceeding or other action against the Company
shall be commenced in bankruptcy or seeking reorganization, liquidation,
dissolution, winding-up, arrangement, composition or readjustment of its debts,
or any other relief, under any bankruptcy, insolvency, reorganization,
liquidation, dissolution, arrangement, composition, readjustment of debt or
other similar act or law of any jurisdiction, domestic or foreign, now or
hereafter existing; or if a receiver, custodian or trustee of the Company or for
all or a substantial part of its properties shall be appointed; or if a warrant
of attachment, execution or distraint, or similar process, shall be issued
against any substantial part of the property of the Company; and if, in each
such case, such condition shall continue for a period of 90 days undismissed,
undischarged or unbonded.

 

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Section 4.2           Remedies. When any Event of Default described in Section
4.1 has occurred, then the Requisite Holders may, by notice in writing sent by
registered or certified mail to the Company, declare the entire principal amount
and all interest accrued and unpaid on this Note to be, and this Note and all
other Notes shall thereupon become, forthwith due and payable, without any
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived. No course of dealing on the part of the holder of this
Note or the Requisite Holders nor any delay or failure on the part of the holder
of this Note or the Requisite Holders to exercise any right shall operate as a
waiver of such right or otherwise prejudice such holder’s rights, powers and
remedies. The holder of this Note shall not, absent the approval of the
Requisite Holders, be entitled to invoke the acceleration remedy set forth in
this Section 4.2.

 

Article 5

AMENDMENTS, WAIVERS AND CONSENTS

 

Section 5.1           Amendment and Waiver. Any provision of the Notes,
including this Note, may be amended, modified or supplemented, and waiver or
consents to departures from the provisions of the Notes may be given, if the
Company and the Requisite Holders consent thereto. Such consent may be effected
by any available legal means, including without limitation at a special or
regular meeting, by written consent or otherwise. Notwithstanding anything to
the contrary set forth herein, any provision of this Note may also be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may be given, the result of which shall not materially or
adversely affect any other holder of the Notes, upon the written agreement of
the Company and the holder of this Note.

 

Section 5.2           Effect of Amendment or Waiver. Any amendment,
modification, supplement or waiver effected in accordance with Section 5.1 shall
apply to and be binding upon the holder of this Note, upon each future holder of
this Note and upon the Company, whether or not this Note shall have been marked
to indicate such amendment, modification, supplement or waiver. No such
amendment, modification, supplement or waiver shall extend to or affect any
obligation not expressly amended, modified, supplemented or waived or impair any
right consequent thereon.

 

Article 6
TRANSFER, ETC.

 

Section 6.1           Instruments of Transfer. This Note, if presented or
surrendered for exchange or transfer, shall, if so required by the Company, be
accompanied by a written instrument or instruments of transfer and investment
representations, in form satisfactory to the Company, duly executed by the
registered holder.

 

Section 6.2           Loss, Theft, etc. Upon receipt of evidence satisfactory to
the Company of the loss, theft, mutilation or destruction of this Note, and in
the case of such loss, theft or destruction upon delivery of a bond of indemnity
in such form and amount as shall be reasonably satisfactory to the Company, or
in the event of such mutilation upon surrender and cancellation of this Note,
the Company shall make and deliver without expense to the holder thereof, a new
Note, of like tenor, in lieu of such lost, stolen, destroyed or mutilated Note.
At the discretion of the Company, the Company may accept in lieu of a bond of
indemnity, the affidavit of the holder that sets forth the fact of loss, theft
or destruction and of his or her ownership of this Note at the time of such
loss, theft or destruction as satisfactory evidence thereof and no further
indemnity shall be required as a condition to the execution and delivery of a
new Note other than the written agreement of such owner to indemnify the
Company.

 

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Section 6.3           Person Deemed Owner. Prior to due presentation of this
Note for registration of transfer, the Company may deem and treat the person in
whose name this Note shall be issued as the absolute owner of this Note (whether
or not this Note shall be overdue and notwithstanding any notation of ownership
or other writing hereon) for the purpose of receiving payment of or on account
of the principal thereof and interest due thereon and for all other purposes,
and the Company shall not be affected by any notice to the contrary.

 

Article 7
MISCELLANEOUS

 

Section 7.1           Section and Other Headings. The section and other headings
contained in this Note are for reference purposes only and shall not affect the
meaning or interpretation of this Note.

 

Section 7.2           Notice. All notices given hereunder shall be in writing,
shall be sent in accordance with Section 10(a) of the Subscription Agreement
entered into by the Holder relating to the purchase of this Note.

 

Section 7.3           Governing Law. This Note shall be governed by, and
construed and enforced in accordance with, the laws of the State of Texas.

 

IN WITNESS WHEREOF, the Company has caused this Note to be signed by a duly
authorized officer as of the day and year first above written.

 

BROWN TECHNICAL MEDIA CORP.

 

By: /s/ Noah Davis

      Noah Davis

      President and Chief Executive Officer

 

 

 

 

 

 

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