Exhibit 10.3

 

CONVERTIBLE PROMISSORY NOTE

Effective Date: April 9, 2015 U.S. $107,500.00

 

FOR VALUE RECEIVED, Thinspace Technology, Inc., a Delaware corporation
(“Borrower”), promises to pay to St. George Investments LLC, a Utah limited
liability company, or its successors or assigns (“Lender”), $107,500.00 and any
interest, fees, charges, and late fees on the date that is twelve (12) months
after the Purchase Price Date (as defined below) (the “Maturity Date”) in
accordance with the terms set forth herein and to pay interest on the
Outstanding Balance at the rate of eight percent (8%) per annum from the
Purchase Price Date until the same is paid in full. This Convertible Promissory
Note (this “Note”) is issued and made effective as of April 9, 2015 (the
“Effective Date”). This Note is issued pursuant to that certain Securities
Purchase Agreement dated April 9, 2015, as the same may be amended from time to
time, by and between Borrower and Lender (the “Purchase Agreement”). All
interest calculations hereunder shall be computed on the basis of a 360-day year
comprised of twelve (12) thirty (30) day months, shall compound daily and shall
be payable in accordance with the terms of this Note. Certain capitalized terms
used herein are defined in Attachment 1 attached hereto and incorporated herein
by this reference.

This Note carries an OID of $5,000.00. In addition, Borrower agrees to pay
$2,500.00 to Lender to cover Lender’s legal fees, accounting costs, due
diligence, monitoring and other transaction costs incurred in connection with
the purchase and sale of this Note (the “Transaction Expense Amount”), all of
which amount is included in the initial principal balance of this Note. The
purchase price for this Note shall be $100,000.00 (the “Purchase Price”),
computed as follows: $107,500.00 original principal balance, less the OID, less
the Transaction Expense Amount. The Purchase Price shall be payable by Lender by
wire transfer of immediately available funds.

1.                  Payment; Prepayment. All payments owing hereunder shall be
in lawful money of the United States of America or Conversion Shares (as defined
below), as provided for herein, and delivered to Lender at the address furnished
to Borrower for that purpose. All payments shall be applied first to (a) costs
of collection, if any, then to (b) fees and charges, if any, then to (c) accrued
and unpaid interest, and thereafter, to (d) principal. Notwithstanding the
foregoing, so long as Borrower has not received a Conversion Notice (as defined
below) from Lender where the applicable Conversion Shares have not yet been
delivered and so long as no Event of Default has occurred since the Effective
Date (whether declared by Lender or undeclared), then Borrower shall have the
right, exercisable on not less than five (5) Trading Days prior written notice
to Lender to prepay the Outstanding Balance of this Note, in full, in accordance
with this Section 1. Any notice of prepayment hereunder (an “Optional Prepayment
Notice”) shall be delivered to Lender at its registered address and shall state:
(y) that Borrower is exercising its right to prepay this Note, and (z) the date
of prepayment, which shall be not less than five (5) Trading Days from the date
of the Optional Prepayment Notice. On the date fixed for prepayment (the
“Optional Prepayment Date”), Borrower shall make payment of the Optional
Prepayment Amount (as defined below) to or upon the order of Lender as may be
specified by Lender in writing to Borrower. If Borrower exercises its right to
prepay this Note, Borrower shall make payment to Lender of an amount in cash
equal to 125% multiplied by the then Outstanding Balance of this Note if prior
to 180 days from the Effective Date, and 130% multiplied by the then Outstanding
Balance of this Note any time 180 days after the Effective Date (the “Optional
Prepayment Amount”). In the event Borrower delivers the Optional Prepayment
Amount to Lender prior to the Optional Prepayment Date or without delivering an
Optional Prepayment Notice to Lender as set forth herein without Lender’s prior
written consent, the Optional Prepayment Amount shall not be deemed to have been
paid to Lender until the Optional Prepayment Date. In the event Borrower
delivers the Optional Prepayment Amount without an Optional Prepayment Notice,
then the Optional Prepayment Date will be deemed to be the date that is five (5)
Trading Days from the date that the Optional Prepayment Amount was delivered to
Lender. In addition, if Borrower delivers an Optional Prepayment Notice and
fails to pay the Optional Prepayment Amount due to Lender within two (2) Trading
Days following the Optional Prepayment Date, Borrower shall forever forfeit its
right to prepay this Note.

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2.                  Security. This Note is unsecured.

3.                  Conversion.

3.1.            Conversion Price. Subject to the adjustments set forth herein,
the conversion price (the “Conversion Price”) for each Conversion (as defined
below) shall be equal to the product of 65% (the “Conversion Factor”) multiplied
by the lowest Closing Bid Price in the twenty (20) Trading Days immediately
preceding the applicable Conversion. Additionally, if at any time after the
Effective Date, Borrower is not DWAC Eligible, then the then-current Conversion
Factor will automatically be reduced by 5% for all future Conversions. If at any
time after the Effective Date, the Conversion Shares are not DTC Eligible, then
the then-current Conversion Factor will automatically be reduced by an
additional 5% for all future Conversions. Finally, in addition to the Default
Effect, if any Major Default occurs after the Effective Date, the Conversion
Factor shall automatically be reduced for all future Conversions by an
additional 5% for each of the first three (3) Major Defaults that occur after
the Effective Date (for the avoidance of doubt, each occurrence of any Major
Default shall be deemed to be a separate occurrence for purposes of the
foregoing reductions in Conversion Factor, even if the same Major Default occurs
three (3) separate times). For example, the first time Borrower is not DWAC
Eligible, the Conversion Factor for future Conversions thereafter will be
reduced from 65% to 60% for purposes of this example. Following such event, the
first time the Conversion Shares are no longer DTC Eligible, the Conversion
Factor for future Conversions thereafter will be reduced from 60% to 55% for
purposes of this example. If, thereafter, there are three (3) separate
occurrences of a Major Default pursuant to Section 4.1(a), then for purposes of
this example the Conversion Factor would be reduced by 5% for the first such
occurrence, and so on for each of the second and third occurrences of such Major
Default.

3.2.            Conversions. Lender has the right at any time after the Purchase
Price Date until the Outstanding Balance has been paid in full, including
without limitation until any Optional Prepayment Date (even if Lender has
received an Optional Prepayment Notice), at its election, to convert (each
instance of conversion is referred to herein as a “Conversion”) all or any part
of the Outstanding Balance less any amounts specified in outstanding and valid
Optional Prepayment Notices into shares (“Conversion Shares”) of fully paid and
non-assessable common stock, $0.001 par value per share (“Common Stock”), of
Borrower as per the following conversion formula: the number of Conversion
Shares equals the amount being converted (the “Conversion Amount”) divided by
the Conversion Price. Conversion notices in the form attached hereto as Exhibit
A (each, a “Conversion Notice”) may be effectively delivered to Borrower by any
method of Lender’s choice (including but not limited to facsimile, email, mail,
overnight courier, or personal delivery), and all Conversions shall be cashless
and not require further payment from Lender. Borrower shall deliver the
Conversion Shares from any Conversion to Lender in accordance with Section 8
below.

4.                  Defaults and Remedies.

4.1.            Defaults. The following are events of default under this Note
(each, an “Event of Default”): (a) Borrower shall fail to pay any principal,
interest, fees, charges, or any other amount when due and payable hereunder; or
(b) Borrower shall fail to deliver any Conversion Shares in accordance with the
terms hereof; or (c) a receiver, trustee or other similar official shall be
appointed over Borrower or a material part of its assets and such appointment
shall remain uncontested for twenty (20) days or shall not be dismissed or
discharged within sixty (60) days; or (d) Borrower shall become insolvent or
generally fails to pay, or admits in writing its inability to pay, its debts as
they become due, subject to applicable grace periods, if any; or (e) Borrower
shall make a general assignment for the benefit of creditors; or (f) Borrower
shall file a petition for relief under any bankruptcy, insolvency or similar law
(domestic or foreign); or (g) an involuntary proceeding shall be commenced or
filed against Borrower; or (h) Borrower shall default or otherwise fail to
observe or perform any covenant, obligation, condition or agreement of Borrower
contained herein or in any other Transaction Document (as defined in the
Purchase Agreement), other than those specifically set forth in this Section
4.1; or (i) any representation, warranty or other statement made or furnished by
or on behalf of Borrower to Lender herein, in any Transaction Document, or
otherwise in connection with the issuance of this Note shall be false,
incorrect, incomplete or misleading in any material respect when made or
furnished; or (j) Borrower shall (i) terminate its status as an issuer required
to file reports under the 1934 Act (as defined in the Purchase Agreement) even
if the 1934 Act or the rules and regulations thereunder would permit such
termination, or (ii) become delinquent in its filing requirements as a
fully-reporting issuer registered with the SEC or shall fail to timely file all
required quarterly and annual reports and any other filings that are necessary
to enable Lender to sell Conversion Shares pursuant to Rule 144 under the
Securities Act of 1933, as amended (“Rule 144”); or (k) Borrower shall fail to
maintain the Share Reserve as required under the Purchase Agreement; or (l)
Borrower effectuates a reverse split of its Common Stock without twenty (20)
Trading Days prior written notice to Lender; or (m) any money judgment, writ or
similar process shall be entered or filed against Borrower or any subsidiary of
Borrower or any of its property or other assets for more than $100,000.00, and
shall remain unvacated, unbonded or unstayed for a period of twenty (20)
calendar days unless otherwise consented to by Lender; or (n) Borrower shall
fail to deliver to Lender original signature pages to all Transaction Documents
within five (5) Trading Days of the Purchase Price Date; or (o) Borrower shall
fail to be DWAC Eligible.

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4.2.            Remedies. Upon the occurrence of any Event of Default, Borrower
shall within one (1) Trading Day deliver written notice thereof via facsimile,
email or reputable overnight courier (with next day delivery specified) (an
“Event of Default Notice”) to Lender. At any time and from time to time after
the earlier of Lender’s receipt of an Event of Default Notice and Lender
becoming aware of the occurrence of any Event of Default, Lender may accelerate
this Note by written notice to Borrower, with the Outstanding Balance becoming
immediately due and payable in cash at the Mandatory Default Amount.
Notwithstanding the foregoing, at any time following the occurrence of any Event
of Default, Lender may, at its option, elect to increase the Outstanding Balance
by applying the Default Effect (subject to the limitation set forth below) via
written notice to Borrower without accelerating the Outstanding Balance, in
which event the Outstanding Balance shall be increased as of the date of the
occurrence of the applicable Event of Default pursuant to the Default Effect,
but the Outstanding Balance shall not be immediately due and payable unless so
declared by Lender (for the avoidance of doubt, if Lender elects to apply the
Default Effect pursuant to this sentence, it shall reserve the right to declare
the Outstanding Balance immediately due and payable at any time and no such
election by Lender shall be deemed to be a waiver of its right to declare the
Outstanding Balance immediately due and payable as set forth herein unless
otherwise agreed to by Lender in writing). Notwithstanding the foregoing, upon
the occurrence of any Event of Default described in clauses (c), (d), (e), (f)
or (g) of Section 4.1, the Outstanding Balance as of the date of acceleration
shall become immediately and automatically due and payable in cash at the
Mandatory Default Amount, without any written notice required by Lender. At any
time following the occurrence of any Event of Default, upon written notice given
by Lender to Borrower, interest shall accrue on the Outstanding Balance
beginning on the date the applicable Event of Default occurred at an interest
rate equal to the lesser of eighteen percent (18%) per annum or the maximum rate
permitted under applicable law (“Default Interest”). Additionally, following the
occurrence of any Event of Default, Borrower may, at its option, pay any
Conversion in cash instead of Conversion Shares by paying to Lender on or before
the applicable Delivery Date (as defined below) a cash amount equal to the
number of Conversion Shares set forth in the applicable Conversion Notice
multiplied by the highest intra-day trading price of the Common Stock that
occurs during the period beginning on the date the applicable Event of Default
occurred and ending on the date of the applicable Conversion Notice. In
connection with acceleration described herein, Lender need not provide, and
Borrower hereby waives, any presentment, demand, protest or other notice of any
kind, and Lender 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 acceleration may be rescinded and
annulled by Lender at any time prior to payment hereunder and Lender shall have
all rights as a holder of the Note until such time, if any, as Lender receives
full payment pursuant to this Section 4.2. No such rescission or annulment shall
affect any subsequent Event of Default or impair any right consequent thereon.
Nothing herein shall limit Lender’s right to pursue any other remedies available
to it at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to Borrower’s failure to
timely deliver Conversion Shares upon Conversion of the Notes as required
pursuant to the terms hereof.

4.3.            Cross Default. A breach or default by Borrower of any covenant
or other term or condition contained in any Other Agreements shall, at the
option of Lender, be considered an Event of Default under this Note, in which
event Lender shall be entitled (but in no event required) to apply all rights
and remedies of Lender under the terms of this Note.

5.                  Unconditional Obligation; No Offset. Borrower acknowledges
that this Note is an unconditional, valid, binding and enforceable obligation of
Borrower not subject to offset, deduction or counterclaim of any kind. Borrower
hereby waives any rights of offset it now has or may have hereafter against
Lender, its successors and assigns, and agrees to make the payments or
Conversions called for herein in accordance with the terms of this Note.

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6.                  Waiver. No waiver of any provision of this Note shall be
effective unless it is in the form of a writing signed by the party granting the
waiver. No waiver of any provision or consent to any prohibited action shall
constitute a waiver of any other provision or consent to any other prohibited
action, whether or not similar. No waiver or consent shall constitute a
continuing waiver or consent or commit a party to provide a waiver or consent in
the future except to the extent specifically set forth in writing.

7.                  Adjustment of Conversion Price. Without limiting any
provision hereof, if Borrower at any time on or after the Effective Date
subdivides (by any stock split, stock dividend, recapitalization or otherwise)
one or more classes of its outstanding shares of Common Stock into a greater
number of shares, the Conversion Price in effect immediately prior to such
subdivision will be proportionately reduced. Without limiting any provision
hereof, if Borrower at any time on or after the Effective Date combines (by
combination, reverse stock split or otherwise) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, the
Conversion Price in effect immediately prior to such combination will be
proportionately increased. Any adjustment pursuant to this Section 7 shall
become effective immediately after the effective date of such subdivision or
combination. If any event requiring an adjustment under this Section 7 occurs
during the period that a Conversion Price is calculated hereunder, then the
calculation of such Conversion Price shall be adjusted appropriately to reflect
such event.

8.                  Method of Conversion Share Delivery. On or before the close
of business on the third (3rd) Trading Day following the date of delivery of a
Conversion Notice (the “Delivery Date”), Borrower shall, provided it is DWAC
Eligible at such time, deliver or cause its transfer agent to deliver the
applicable Conversion Shares electronically via DWAC to the account designated
by Lender in the applicable Conversion Notice. If Borrower is not DWAC Eligible,
it shall deliver to Lender or its broker (as designated in the Conversion
Notice), via reputable overnight courier, a certificate representing the number
of shares of Common Stock equal to the number of Conversion Shares to which
Lender shall be entitled, registered in the name of Lender or its designee. For
the avoidance of doubt, Borrower has not met its obligation to deliver
Conversion Shares by the Delivery Date unless Lender or its broker, as
applicable, has actually received the certificate representing the applicable
Conversion Shares no later than the close of business on the relevant Delivery
Date pursuant to the terms set forth above.

9.                  Conversion Delays. If Borrower fails to deliver Conversion
Shares in accordance with the timeframe stated in Section 8, Lender, at any time
prior to selling all of those Conversion Shares, may rescind in whole or in part
that particular Conversion attributable to the unsold Conversion Shares, with a
corresponding increase to the Outstanding Balance (any returned amount will tack
back to the Purchase Price Date for purposes of determining the holding period
under Rule 144). In addition, for each Conversion, in the event that Conversion
Shares are not delivered by the fourth Trading Day (inclusive of the day of the
Conversion), a late fee equal to the greater of (a) $500.00 and (b) 2% of the
applicable Conversion Share Value rounded to the nearest multiple of $100.00
(but in any event the cumulative amount of such late fees for each Conversion
shall not exceed 200% of the applicable Conversion Share Value) will be assessed
for each day after the third Trading Day (inclusive of the day of the
Conversion) until Conversion Share delivery is made; and such late fee will be
added to the Outstanding Balance (such fees, the “Conversion Delay Late Fees”).
For illustration purposes only, if Lender delivers a Conversion Notice to
Borrower pursuant to which Borrower is required to deliver 100,000 Conversion
Shares to Lender and on the Delivery Date such Conversion Shares have a
Conversion Share Value of $20,000.00 (assuming a Closing Trade Price on the
Delivery Date of $0.20 per share of Common Stock), then in such event a
Conversion Delay Late Fee in the amount of $500.00 per day (the greater of
$500.00 per day and $20,000.00 multiplied by 2%, which is $400.00) would be
added to the Outstanding Balance of the Note until such Conversion Shares are
delivered to Lender. For purposes of this example, if the Conversion Shares are
delivered to Lender twenty (20) days after the applicable Delivery Date, the
total Conversion Delay Late Fees that would be added to the Outstanding Balance
would be $10,000.00 (20 days multiplied by $500.00 per day). If the Conversion
Shares are delivered to Lender one hundred (100) days after the applicable
Delivery Date, the total Conversion Delay Late Fees that would be added to the
Outstanding Balance would be $40,000.00 (100 days multiplied by $500.00 per day,
but capped at 200% of the Conversion Share Value).

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10.              Ownership Limitation. Notwithstanding anything to the contrary
contained in this Note or the other Transaction Documents, if at any time Lender
shall or would be issued shares of Common Stock under any of the Transaction
Documents, but such issuance would cause Lender (together with its affiliates)
to beneficially own a number of shares exceeding 4.99% of the number of shares
of Common Stock outstanding on such date (including for such purpose the shares
of Common Stock issuable upon such issuance) (the “Maximum Percentage”), then
Borrower must not issue to Lender shares of Common Stock which would exceed the
Maximum Percentage. For purposes of this section, beneficial ownership of Common
Stock will be determined pursuant to Section 13(d) of the 1934 Act. The shares
of Common Stock issuable to Lender that would cause the Maximum Percentage to be
exceeded are referred to herein as the “Ownership Limitation Shares”. Borrower
will reserve the Ownership Limitation Shares for the exclusive benefit of
Lender. From time to time, Lender may notify Borrower in writing of the number
of the Ownership Limitation Shares that may be issued to Lender without causing
Lender to exceed the Maximum Percentage. Upon receipt of such notice, Borrower
shall be unconditionally obligated to immediately issue such designated shares
to Lender, with a corresponding reduction in the number of the Ownership
Limitation Shares. Notwithstanding the forgoing, the term “4.99%” above shall be
replaced with “9.99%” at such time as the Market Capitalization is less than
$10,000,000.00. Notwithstanding any other provision contained herein, if the
term “4.99%” is replaced with “9.99%” pursuant to the preceding sentence, such
increase to “9.99%” shall remain at 9.99% until increased, decreased or waived
by Lender as set forth below. By written notice to Borrower, Lender may
increase, decrease or waive the Maximum Percentage as to itself but any such
waiver will not be effective until the 61st day after delivery thereof. The
foregoing 61-day notice requirement is enforceable, unconditional and
non-waivable and shall apply to all affiliates and assigns of Lender.

11.              Payment of Collection Costs. If this Note is placed in the
hands of an attorney for collection or enforcement prior to commencing
arbitration or legal proceedings, or is collected or enforced through any
arbitration or legal proceeding, or Lender otherwise takes action to collect
amounts due under this Note or to enforce the provisions of this Note, then
Borrower shall pay the costs incurred by Lender for such collection, enforcement
or action including, without limitation, attorneys’ fees and disbursements.
Borrower also agrees to pay for any costs, fees or charges of its transfer agent
that are charged to Lender pursuant to any Conversion or issuance of shares
pursuant to this Note.

12.              Opinion of Counsel. In the event that an opinion of counsel is
needed for any matter related to this Note, Lender has the right to have any
such opinion provided by its counsel. Lender also has the right to have any such
opinion provided by Borrower’s counsel.

13.              Governing Law. This Note shall be construed and enforced in
accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the internal
laws of the State of Utah, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of Utah or any other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of Utah. The provisions set forth in the Purchase Agreement
to determine the proper venue for any disputes are incorporated herein by this
reference.

14.              Resolution of Disputes.

14.1.        Arbitration of Disputes. By its acceptance of this Note, each party
agrees to be bound by the Arbitration Provisions (as defined in the Purchase
Agreement) set forth as an exhibit to the Purchase Agreement.

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14.2.        Calculation Disputes. Notwithstanding the Arbitration Provisions,
in the case of a dispute as to any Calculation (as defined in the Purchase
Agreement), such dispute will be resolved in the manner set forth in the
Purchase Agreement.

15.              Cancellation. After repayment or conversion of the entire
Outstanding Balance, this Note shall be deemed paid in full, shall automatically
be deemed canceled, and shall not be reissued.

16.              Amendments. The prior written consent of both parties hereto
shall be required for any change or amendment to this Note.

17.              Assignments. Borrower may not assign this Note without the
prior written consent of Lender. This Note and any shares of Common Stock issued
upon conversion of this Note may be offered, sold, assigned or transferred by
Lender without the consent of Borrower.

18.              Time is of the Essence. Time is expressly made of the essence
with respect to each and every provision of this Note and the documents and
instruments entered into in connection herewith.

19.              Notices. Whenever notice is required to be given under this
Note, unless otherwise provided herein, such notice shall be given in accordance
with the subsection of the Purchase Agreement titled “Notices.”

20.              Liquidated Damages. Lender and Borrower agree that in the event
Borrower fails to comply with any of the terms or provisions of this Note,
Lender’s damages would be uncertain and difficult (if not impossible) to
accurately estimate because of the parties’ inability to predict future interest
rates, future share prices, future trading volumes and other relevant factors.
Accordingly, Lender and Borrower agree that any fees, balance adjustments,
Default Interest or other charges assessed under this Note are not penalties but
instead are intended by the parties to be, and shall be deemed, liquidated
damages (under Lender’s and Borrower’s expectations that any such liquidated
damages will tack back to the Purchase Price Date for purposes of determining
the holding period under Rule 144).

21.              Waiver of Jury Trial. EACH OF LENDER AND BORROWER IRREVOCABLY
WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS
AGREEMENT OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS
WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER
COMMON LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH
PARTY HERETO ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING
SUCH PARTY’S RIGHT TO DEMAND TRIAL BY JURY.

22.              Par Value Adjustments. If at any time Lender delivers a
Conversion Notice to Borrower and as of such date the Conversion Price is less
than the Par Value, then the Conversion Amount and the Outstanding Balance will
each be deemed to have increased immediately prior to the delivery of the
Conversion Notice in an amount equal to the Par Value Adjustment Amount (the
“Par Value Adjustment”). The number of Conversion Shares deliverable pursuant to
any relevant Conversion Notice following a Par Value Adjustment shall be equal
to (a) the Adjusted Conversion Amount, divided by (b) the Par Value. Lender and
Borrower also agree that the Par Value Adjustment shall occur automatically and
without further action by Lender. In the event of a Par Value Adjustment, Lender
will use a Conversion Notice in substantially the form attached hereto as
Exhibit B.

[Remainder of page intentionally left blank; signature page follows]

 

 

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IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed as of the
Effective Date.

 

  BORROWER:       Thinspace Technology, Inc.           By:  /s/ Jay Christopher
Bautista     Name: Jay Christopher Bautista
Title: CEO

 

 

ACKNOWLEDGED, ACCEPTED AND AGREED:

LENDER:

St. George Investments LLC

 

By: Fife Trading, Inc., Manager

 

 

By: /s/ John M. Fife

 

 John M. Fife, President

 

 

 

 

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ATTACHMENT 1

DEFINITIONS

 

For purposes of this Note, the following terms shall have the following
meanings:

A1.               “Adjusted Conversion Amount” means, with respect to any given
Conversion Amount subject to a Par Value Adjustment, the sum of the Conversion
Amount plus the Par Value Adjustment Amount.

A2.               “Approved Stock Plan” means any stock option plan which has
been approved by the board of directors of Borrower and is in effect as of the
Purchase Price Date, pursuant to which Borrower’s securities may be issued to
any employee, officer or director for services provided to Borrower.

A3.               “Bloomberg” means Bloomberg L.P. (or if that service is not
then reporting the relevant information regarding the Common Stock, a comparable
reporting service of national reputation selected by Lender and reasonably
satisfactory to Borrower).

A4.               “Closing Bid Price” and “Closing Trade Price” means the last
closing bid price and last closing trade price, respectively, for the Common
Stock on its principal market, as reported by Bloomberg, or, if its principal
market begins to operate on an extended hours basis and does not designate the
closing bid price or the closing trade price (as the case may be) then the last
bid price or last trade price, respectively, of the Common Stock prior to
4:00:00 p.m., New York time, as reported by Bloomberg, or, if its principal
market is not the principal securities exchange or trading market for the Common
Stock, the last closing bid price or last trade price, respectively, of the
Common Stock on the principal securities exchange or trading market where the
Common Stock is listed or traded as reported by Bloomberg, or if the foregoing
do not apply, the last closing bid price or last trade price, respectively, of
the Common Stock in the over-the-counter market on the electronic bulletin board
for the Common Stock as reported by Bloomberg, or, if no closing bid price or
last trade price, respectively, is reported for the Common Stock by Bloomberg,
the average of the bid prices, or the ask prices, respectively, of any market
makers for the Common Stock as reported by OTC Markets Group, Inc., and any
successor thereto. If the Closing Bid Price or the Closing Trade Price cannot be
calculated for the Common Stock on a particular date on any of the foregoing
bases, the Closing Bid Price or the Closing Trade Price (as the case may be) of
the Common Stock on such date shall be the fair market value as mutually
determined by Lender and Borrower. If Lender and Borrower are unable to agree
upon the fair market value of the Common Stock, then such dispute shall be
resolved in accordance with the procedures in Section 14.2. All such
determinations shall be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during such period.

A5.               “Deemed Issuance” means an issuance of Common Stock that shall
be deemed to have occurred on the latest possible permitted date pursuant to the
terms hereof in the event Borrower fails to deliver Conversion Shares as and
when required pursuant to Section 8 of the Note.

A6.               “Default Effect” means multiplying the Outstanding Balance as
of the date the applicable Event of Default occurred by (a) 15% for each
occurrence of any Major Default, or (b) 5% for each occurrence of any Minor
Default, and then adding the resulting product to the Outstanding Balance as of
the date the applicable Event of Default occurred, with the sum of the foregoing
then becoming the Outstanding Balance under this Note as of the date the
applicable Event of Default occurred; provided that the Default Effect may only
be applied three (3) times hereunder with respect to Major Defaults and three
(3) times hereunder with respect to Minor Defaults; and provided further that
the Default Effect shall not apply to any Event of Default pursuant to Section
4.1(b) hereof.

A7.               “DTC” means the Depository Trust Company.

A8.               “DTC Eligible” means, with respect to the Common Stock, that
such Common Stock is eligible to be deposited in certificate form at the DTC,
cleared and converted into electronic shares by the DTC and held in the name of
the clearing firm servicing Lender’s brokerage firm for the benefit of Lender.

 

8

 

 

A9.               “DTC/FAST Program” means the DTC’s Fast Automated Securities
Transfer program.

A10.           “DWAC” means the DTC’s Deposit/Withdrawal at Custodian system.

A11.           “DWAC Eligible” means that (a) Borrower’s Common Stock is
eligible at DTC for full services pursuant to DTC’s operational arrangements,
including without limitation transfer through DTC’s DWAC system, (b) Borrower
has been approved (without revocation) by the DTC’s underwriting department, (c)
Borrower’s transfer agent is approved as an agent in the DTC/FAST Program, (d)
the Conversion Shares are otherwise eligible for delivery via DWAC; (e) Borrower
has previously delivered all Conversion Shares to Lender via DWAC; and (f)
Borrower’s transfer agent does not have a policy prohibiting or limiting
delivery of the Conversion Shares via DWAC.

A12.           “Excluded Securities” means any shares of Common Stock, options,
or convertible securities issued or issuable in connection with any Approved
Stock Plan; provided that the option term, exercise price or similar provisions
of any issuances pursuant to such Approved Stock Plan are not amended, modified
or changed on or after the Purchase Price Date.

A13.           “Major Default” means any Event of Default occurring under
Sections 4.1(a) (payments), 4.1(j) (SEC reporting), or 4.1(l) (Share Reserve) of
this Note.

A14.           “Mandatory Default Amount” means the greater of (a) the
Outstanding Balance divided by the Conversion Price on the date the Mandatory
Default Amount is demanded, multiplied by the VWAP on the date the Mandatory
Default Amount is demanded, or (b) the Outstanding Balance following the
application of the Default Effect.

A15.           “Market Capitalization” means the product equal to (a) the
average VWAP of the Common Stock for the immediately preceding fifteen (15)
Trading Days, multiplied by (b) the aggregate number of outstanding shares of
Common Stock as reported on Borrower’s most recently filed Form 10-Q or Form
10-K.

A16.           “Minor Default” means any Event of Default that is not a Major
Default.

A17.           “OID” means an original issue discount.

A18.           “Other Agreements” means, collectively, (a) all existing and
future agreements and instruments between, among or by Borrower (or an
affiliate), on the one hand, and Lender (or an affiliate), on the other hand,
and (b) any financing agreement or a material agreement that affects Borrower’s
ongoing business operations.

A19.           “Outstanding Balance” means as of any date of determination, the
Purchase Price, as reduced or increased, as the case may be, pursuant to the
terms hereof for payment, Conversion, offset, or otherwise, plus the OID, the
Transaction Expense Amount, accrued but unpaid interest, collection and
enforcements costs (including attorneys’ fees) incurred by Lender, transfer,
stamp, issuance and similar taxes and fees related to Conversions, and any other
fees or charges (including without limitation Conversion Delay Late Fees)
incurred under this Note.

A20.           “Par Value” means the par value of the Common Stock on any
relevant date of determination. The Par Value as of the Effective Date is
$0.001.

A21.           “Par Value Adjustment Amount” means an amount added to both the
Conversion Amount and the Outstanding Balance pursuant to Section 22, calculated
as follows: (a) the number of Conversion Shares deliverable under a particular
Conversion Notice (prior to any Par Value Adjustment) multiplied by the Par
Value, less (b) the Conversion Amount (prior to any Par Value Adjustment). For
illustration purposes only, if for a given Conversion, the Conversion Amount was
$20,000, the Conversion Price was $0.0008 and the Par Value was $0.001 then the
Par Value Adjustment Amount would be $5,000.00 (25,000,000 Conversion Shares
($20,000.00/$0.0008) multiplied by the Par Value of $0.001 ($25,000.00) minus
the Conversion Amount of $20,000.00 equals $5,000.00).

A22.           “Purchase Price Date” means the date the Purchase Price is
delivered by Lender to Borrower.

A23.           “Trading Day” means any day on which the Common Stock is traded
or tradable for any period on the Common Stock’s principal market, or on the
principal securities exchange or other securities market on which the Common
Stock is then being traded.

A24.           “VWAP” means the volume weighted average price of the Common
stock on the principal market for a particular Trading Day or set of Trading
Days, as the case may be, as reported by Bloomberg.

 

9

 

EXHIBIT A

St. George Investments LLC

303 East Wacker Drive, Suite 1040

Chicago, Illinois 60601

 

Thinspace Technology, Inc. Date: __________________

Attn: Christopher Bautista, CEO

12555 Orange Drive, Suite 216

Davie, FL 33330

 

CONVERSION NOTICE

 

The above-captioned Lender hereby gives notice to Thinspace Technology, Inc., a
Delaware corporation (the “Borrower”), pursuant to that certain Convertible
Promissory Note made by Borrower in favor of Lender on April 9, 2015 (the
“Note”), that Lender elects to convert the portion of the Note balance set forth
below into fully paid and non-assessable shares of Common Stock of Borrower as
of the date of conversion specified below. Said conversion shall be based on the
Conversion Price set forth below. In the event of a conflict between this
Conversion Notice and the Note, the Note shall govern, or, in the alternative,
at the election of Lender in its sole discretion, Lender may provide a new form
of Conversion Notice to conform to the Note. Capitalized terms used in this
notice without definition shall have the meanings given to them in the Note.

A. Date of Conversion: ___________

B. Conversion #: ________________

C. Conversion Amount: ___________

D.Conversion Price: _______________

E.Conversion Shares: _______________ (C divided by D)

F.Remaining Outstanding Balance of Note: ____________*

* Subject to adjustments for corrections, defaults, interest and other
adjustments permitted by the Transaction Documents (as defined in the Purchase
Agreement), the terms of which shall control in the event of any dispute between
the terms of this Conversion Notice and such Transaction Documents.

 

Please transfer the Conversion Shares electronically (via DWAC) to the following
account:

Broker: Address:

DTC#:

Account #:

Account Name:

 

To the extent the Conversion Shares are not able to be delivered to Lender
electronically via the DWAC system, deliver all such certificated shares to
Lender via reputable overnight courier after receipt of this Conversion Notice
(by facsimile transmission or otherwise) to:

_____________________________________

_____________________________________

_____________________________________

 

Sincerely,

 

Lender:

 

St. George Investments LLC

 

By: Fife Trading, Inc., Manager

 

 

By:

John M. Fife, President

 

10

 

 

EXHIBIT B

St. George Investments LLC

303 East Wacker Drive, Suite 1040

Chicago, Illinois 60601

 

Thinspace Technology, Inc. Date: __________________

Attn: Christopher Bautista, CEO

12555 Orange Drive, Suite 216

Davie, FL 33330

 

CONVERSION NOTICE

 

The above-captioned Lender hereby gives notice to Thinspace Technology, Inc., a
Delaware corporation (the “Borrower”), pursuant to that certain Convertible
Promissory Note made by Borrower in favor of Lender on April 9, 2015 (the
“Note”), that Lender elects to convert the portion of the Note balance set forth
below into fully paid and non-assessable shares of Common Stock of Borrower as
of the date of conversion specified below. Said conversion shall be based on the
Conversion Price set forth below. In the event of a conflict between this
Conversion Notice and the Note, the Note shall govern, or, in the alternative,
at the election of Lender in its sole discretion, Lender may provide a new form
of Conversion Notice to conform to the Note. Capitalized terms used in this
notice without definition shall have the meanings given to them in the Note.

A. Date of Conversion: ____________

B. Conversion #: ____________

C. Conversion Amount: ____________

D.Par Value Adjustment Amount: _______________

E.Adjusted Conversion Amount: _______________ (C plus D)

F.Conversion Price: _______________ (Par Value)

G.Conversion Shares: _______________ (E divided by F)

H.Remaining Outstanding Balance of Note: ____________*

* Subject to adjustments for corrections, defaults, interest and other
adjustments permitted by the Transaction Documents (as defined in the Purchase
Agreement), the terms of which shall control in the event of any dispute between
the terms of this Conversion Notice and such Transaction Documents.

 

Please transfer the Conversion Shares electronically (via DWAC) to the following
account:

Broker: Address:

DTC#:

Account #:

Account Name:

 

To the extent the Conversion Shares are not able to be delivered to Lender
electronically via the DWAC system, deliver all such certificated shares to
Lender via reputable overnight courier after receipt of this Conversion Notice
(by facsimile transmission or otherwise) to:

_____________________________________

_____________________________________

_____________________________________

 

Sincerely,

 

Lender:

 

St. George Investments LLC

 

By: Fife Trading, Inc., Manager

 

 

By:

 

John M. Fife, President

 

 

 

11

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