Exhibit 10.1

 

AMENDMENT NO. 2 TO

SECURED CONVERTIBLE PROMISSORY NOTE

 

This Amendment No. 2 to the $250,000 aggregate principal amount 8% Secured
Convertible Promissory Note (the “Note”) dated as of August 15, 2011, is entered
into to be effective as of the 30th day of January, 2012, by and among Next 1
Interactive, Inc., a Nevada corporation, (the “Company”), and the holder of the
Note, signatory hereto (the “Holder”).

 

WHEREAS, the Holder and the Company desire to amend the terms of the Note to
clarify the certain terms of the Note.

 

NOW THEREFORE, in consideration of the above, and for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

 

1.1Article II of the Note shall be amended and restated as follows:

 

Section 2.1 Conversion. The Holder shall have the right, from time to time,
commencing on the Issue Date, to convert any part of the outstanding interest or
principal amount of this Note into fully paid and non-assessable shares of
Series A 10% Cumulative Convertible Preferred Stock (the “Preferred Stock”) of
the Maker (the “Conversion Stock”) on a one for one basis as provided herein.
Promptly after delivery to Maker of a Notice of Conversion of Convertible Note
in the form attached hereto as Exhibit “1” that is completed and duly executed
by the Holder assigns (a “Conversion Notice”), the Maker shall issue and deliver
to Holder that number of shares of Preferred Stock for that portion of this Note
that is to be converted as set forth in the Conversion Notice.

 

No fraction of a share of Preferred Stock or scrip representing a fraction of a
share of Preferred Stock will be issued upon conversion, but the number of
shares of Preferred Stock issuable shall be rounded to the nearest whole share.
The date on which the Notice of Conversion is given (the “Conversion Date”)
shall be deemed to be the date on which the Holder faxes (and receives
confirmation of delivery for) the Notice of Conversion duly executed to the
Maker. Facsimile delivery of the Notice of Conversion shall be accepted by the
Maker at facsimile number 1-888 693-0961, Attn.: [William Kerby, Chief Executive
Officer and Chairman]. Certificates representing the Preferred Stock upon
conversion will be delivered to the Holder within ten (10) Trading Days (as
defined below) (“Delivery Due Date”) from the date the Notice of Conversion is
received by the Maker. Delivery of shares of Preferred Stock upon conversion to
Holder shall be made to the address specified by the Holder in the Notice of
Conversion.

 

Section 2.2 [Reserved]

Section 2.3 [Reserved]

 

Section 2.4. Conversion Price; Adjustment. Upon any conversion of this Note, the
conversion price will be determined as follows:

 

 

 

  

(a) Shareholder Rights. Nothing contained in this Note shall be construed as
conferring upon the Holder or any other person or entity the right to vote or to
consent or to receive notice as a shareholder in respect of meeting of
shareholders for the election of directors of the Maker or any other matters or
any rights whatsoever as a shareholder of the Maker; and no dividends shall be
payable or accrued in respect of this Note.

 

(b) Adjustment. Upon the occurrence of a stock split or stock dividend, the
number of shares of Preferred Stock issuable upon conversion of the Note shall
be equitably adjusted.

 

(c) Reorganization, Reclassification, Merger, Consolidation or Disposition of
Assets. In case the Maker shall reorganize its capital, reclassify its capital
stock, consolidate or merge with or into another corporation (where the Maker is
not the surviving corporation or where there is a change in or distribution with
respect to the Preferred Stock of the Maker), or sell, transfer or otherwise
dispose of all or substantially all its property, assets or business to another
corporation and, pursuant to the terms of such reorganization, reclassification,
merger, consolidation or disposition of assets, shares of common stock of the
successor or acquiring corporation, or any cash, shares of stock or other
securities or property of any nature whatsoever (including warrants or other
subscription or purchase rights) in addition to or in lieu of common stock of
the successor or acquiring corporation (“Other Property”), are to be received by
or distributed to the holders of Preferred Stock of the Maker, then Holder shall
have the right thereafter to receive, upon conversion of this Note, the number
of shares of preferred stock of the successor or acquiring corporation or of the
Maker, if it is the surviving corporation, and Other Property receivable upon or
as a result of such reorganization, reclassification, merger, consolidation or
disposition of assets by a holder of the number of shares of Preferred Stock
into which this Note is convertible immediately prior to such event. In case of
any such reorganization, reclassification, merger, consolidation or disposition
of assets, Maker shall use it commercially reasonable best efforts to cause the
successor or acquiring corporation (if other than the Maker) to assume the
observance and performance of each and every covenant and condition of this Note
to be performed and observed by the Maker and all the obligations and
liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined in good faith by resolution of the Board of Directors
of the Maker) in order to provide for adjustments of the number of shares of
preferred stock into which this Note is convertible which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section
2.4(c). For purposes of this Section 2.4(c), “preferred stock of the successor
or acquiring corporation” shall include stock of such corporation of any class
which is not preferred as to dividends or assets over any other class of stock
of such corporation and which is not subject to redemption and shall also
include any evidences of indebtedness, shares of stock or other securities which
are convertible into or exchangeable for any such stock, either immediately or
upon the arrival of a specified date or the happening of a specified event and
any warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 2.4(c) shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.

1. (d) Notice of Adjustment. Whenever the number of shares of Preferred Stock or
number or kind of securities or other property issuable upon the conversion of
this Note or the Conversion Price is adjusted, as herein provided, the Maker
shall promptly mail by registered or certified mail, return receipt requested,
to the Holder of this Note notice of such adjustment or adjustments setting
forth the number of shares of Preferred Stock (and other securities or property)
issuable upon the conversion of this Note and the Conversion Price of such
shares of Preferred Stock (and other securities or property) after such
adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was made.
Such notice, in the absence of manifest error, shall be conclusive evidence of
the correctness of such adjustment.

 

 

2. Section 2.5. Notice of Corporate Action. If at any time:

 

(a) the Maker shall take a record of the holders of its Preferred Stock for the
purpose of entitling them to receive a dividend or other distribution, or any
right to subscribe for or purchase any evidences of its indebtedness, any shares
of stock of any class or any other securities or property, or to receive any
other right, or

 

(b) there shall be any capital reorganization of the Maker, any reclassification
or recapitalization of the capital stock of the Maker or any consolidation or
merger of the Maker with, or any sale, transfer or other disposition of all or
substantially all the property, assets or business of the Maker to, another
corporation or,

 

(c) there shall be a voluntary or involuntary dissolution, liquidation or
winding up of the Maker;

3. then, in any one or more of such cases, the Maker shall give to Holder (i) at
least thirty (30) days’ prior written notice of the date on which a record date
shall be selected for such dividend, distribution or right or for determining
rights to vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least
thirty (30) days’ prior written notice of the date when the same shall take
place. Such notice in accordance with the foregoing clause also shall specify
(x) the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, the date on which the holders of Preferred
Stock shall be entitled to any such dividend, distribution or right, and the
amount and character thereof, and (y) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Preferred Stock shall be
entitled to exchange their shares of Preferred Stock for securities or other
property deliverable upon such disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to Holder
at the last address of Holder appearing on the books of the Maker and delivered
in accordance with Section 5.1.

 

Section 2.6. Restrictions on Securities. This Note has been issued by the Maker
pursuant to the exemption from registration under the Securities Act of 1933, as
amended (the “Act”). None of this Note or the shares of Preferred Stock issuable
upon conversion of this Note may be offered, sold or otherwise transferred
unless (i) they first shall have been registered under the Act and applicable
state securities laws or (ii) the Maker shall have been furnished with an
opinion of legal counsel (in form, substance and scope reasonably acceptable to
Maker) to the effect that such sale or transfer is exempt from the registration
requirements of the Act. Each certificate for shares of Preferred Stock issuable
upon conversion of this Note that have not been so registered and that have not
been sold pursuant to an exemption that permits removal of the applicable
legend, shall bear a legend substantially in the following form, as appropriate:

 

 

 

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”). THE SECURITIES REPRESENTED HEREBY MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER THE
ACT AND APPLICABLE STATE SECURITIES LAWS, OR SUCH OFFERS, SALES AND TRANSFERS
ARE MADE PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THOSE LAWS.

 

Upon the request of Holder to remove the foregoing legend from the stock
certificate, if any, representing any shares of Preferred Stock issuable upon
conversion of this Note, the Maker shall remove the foregoing legend from such
certificate or issue to Holder a new stock certificate free of any transfer
legend if (a) with such request, the Maker shall have received an opinion of
counsel, reasonably satisfactory to the Maker in form, substance and scope, to
the effect that any such legend may be removed from such stock certificate or
(b) a registration statement under the Act covering such securities is in
effect.

 

Section 2.7. Reservation of Preferred Stock.

4. (a) The Maker covenants that during the period the Note is outstanding, it
will reserve from its authorized and unissued Preferred Stock a sufficient
number of shares to provide for the issuance of Preferred Stock of the Maker
upon the Conversion of the Note. The Maker further covenants that its issuance
of this Note shall constitute full authority to its officers who are charged
with the duty of executing stock certificates to execute and issue the necessary
stock certificates for shares of Preferred Stock of the Maker issuable upon the
conversion of this Note. The Maker will take all such reasonable action as may
be necessary to assure that such shares of Preferred Stock may be issued as
provided herein without violation of the Act or applicable state laws, or of any
requirements of the OTCBB (or such other principal market upon which the
Preferred Stock of the Maker may be listed or quoted).

5. (b) The Maker shall not by any action, including, without limitation,
amending its articles of incorporation or through any reorganization, transfer
of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Note, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all such actions as may
be necessary or appropriate to protect the rights of Holder against impairment.
Without limiting the generality of the foregoing, the Maker will (a) take all
such action as may be necessary or appropriate in order that the Maker may
validly and legally issue fully paid and nonassessable shares of Preferred Stock
upon the conversion of this Note, and (b) use its commercially reasonable best
efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be necessary to enable
the Maker to perform its obligations under this Note.

 

 

6. (c) Upon the request of Holder, the Maker will at any time during the period
this Note is outstanding acknowledge in writing, in form reasonably satisfactory
to Holder, the continuing validity of this Note and the obligations of the Maker
hereunder.

7. (d) Before taking any action which would result in an adjustment in the
number of shares of Preferred Stock into which this Note is convertible or in
the Conversion Price, the Maker shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.

8. (e) If at any time the Maker does not have a sufficient number of authorized
and available shares of Preferred Stock for issuance upon conversion of the
Note, then the Maker shall call and hold a special meeting of its Board of
Directors within forty-five (45) days of that time for the sole purpose of
increasing the number of authorized shares of Preferred Stock.

 

1.2 Section 3.1 of the Note shall be amended and restated as follows:

 

Section 3.1. The Holder represents and warrants to the Maker:

 

(a) The Holder of this Note, by acceptance hereof, agrees that this Note is
being acquired for investment and that such Holder will not offer, sell or
otherwise dispose of this Note or the Preferred Stock issuable upon conversion
hereof except under circumstances that will not result in a violation of the Act
or any applicable state securities laws or similar laws relating to the sale of
securities;

 

(b) That Holder understands that none of this Note or the Preferred Stock
issuable upon conversion hereof have been registered under the Act in reliance
upon the exemptions from the registration provisions of the Act and any
continued reliance on such exemption is predicated on the representations of the
Holder set forth herein;

 

(c) Holder (i) has adequate means of providing for his current needs and
possible contingencies, (ii) has no need for liquidity in this investment, (iii)
is able to bear the substantial economic risks of an investment in this Note for
an indefinite period, (iv) at the present time, can afford a complete loss of
such investment, and (v) does not have an overall commitment to investments
which are not readily marketable that is disproportionate to Holder’s net worth,
and Holder’s investment in this Note will not cause such overall commitment to
become excessive;

 

(d) Holder is an “accredited investor” (as defined in Regulation D promulgated
under the Act) and the Holder’s total investment in this Note does not exceed
10% of the Holder’s net worth; and

 

(e) Holder recognizes that an investment in the Maker involves significant risks
and only investors who can afford the loss of their entire investment should
consider investing in the Maker and this Note.

 

 

1.3 Sections 3.2(b), (c), (d) and (e) of the Note shall be amended and restated
as follows:

 

 

 

(a) Authorization; Enforcement. (i) The Maker has all requisite corporate power
and authority to enter into and perform this Note and to consummate the
transactions contemplated hereby and to issue the Preferred Stock, in accordance
with the terms hereof, (ii) the execution and delivery of this Note by the Maker
has been duly authorized by the Maker’s Board of Directors and no further
consent or authorization of the Maker, its Board of Directors, or its
shareholders is required, (iii) this Note has been duly executed and delivered
by the Maker by its authorized representative, and such authorized
representative is the true and official representative with authority to sign
this Note and the other documents executed in connection herewith and bind the
Maker accordingly, and (iv) this Note constitutes, a legal, valid and binding
obligation of the Maker enforceable against the Maker in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
reorganization, moratorium, liquidation, conservatorship, receivership or
similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general application.

 

(b) Capitalization. As of the date hereof, the authorized capital stock of the
Maker consists of 500,000,000 shares of Common Stock, $0.00001 par value per
share, of which 393,094,134 shares are issued and outstanding and 100,000,000
shares of preferred stock of which 3,000,000 shares of Preferred Stock are
authorized and 809,611 shares of Preferred Stock are issued and outstanding. No
shares of Preferred Stock of the Maker are subject to preemptive rights or any
other similar rights.

 

(c) Issuance of Shares. The Conversion Shares are duly authorized and reserved
for issuance and, upon conversion of the Note, will be validly issued, fully
paid and non-assessable, and free from all taxes, liens, claims and encumbrances
with respect to the issue thereof (except for those imposed by the federal and
state securities laws of the United States) and shall not be subject to
preemptive rights or other similar rights of shareholders of the Maker and will
not impose personal liability upon the Holder.

 

(d) Acknowledgment of Dilution. The Maker understands and acknowledges the
potentially dilutive effect to the Common Stock upon the issuance of the
Conversion Shares upon conversion of this Note.

 

1.4 Exhibit 1 of the Note shall be amended and restated so that it appears as
set forth in Exhibit 1 attached hereto.

 

1.5 All other terms and provisions of the Note in direct conflict with the
amendments specifically set forth herein are hereby amended to conform to these
amendments; and except for these amendments, all other terms and conditions of
the Note shall remain unamended hereby and in full force and effect.

 

1.6 This Amendment, together with the Note, embodies the entire agreement and
understanding between the Company and the Holder relating to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.

 

 

 

1.7 If any provision of this Amendment, or the application of such provisions to
any Person or circumstance, shall be held invalid, the remainder of this
Amendment, or the application of such provision to Persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.

 

1.8 This Amendment may be executed in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed an original, but all of which taken together shall constitute
one and the same agreement. A facsimile transmission of this signed Amendment
shall be legal and binding on all parties hereto.

 

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the parties hereto have duly caused this Amendment to be
executed and delivered on the date first written above.

 

NEXT 1 INTERACTIVE, INC.   DONALD P. MONACO INSURANCE TRUST                    
    By:     By:     Title:     Title:    

 

 

 

 

EXHIBIT 1

 

CONVERSION NOTICE

 

 

(To be executed by the Holder in order to Convert the Note)

 

TO:

 

 

The undersigned hereby irrevocably elects to convert US$______________ of the
principal amount of the above Note into shares of Preferred Stock of Next 1
Interactive, Inc., according to the conditions stated therein, as of the
Conversion Date written below. If shares are to be issued in the name of a
person other than the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto and is delivering herewith such certificates and
opinions as reasonably requested by the Maker in accordance therewith. No fee
will be charged to the Holder for any conversion, except for such transfer
taxes, if any.

 

Conversion Date: ___________________________________________     Signature:
___________________________________________     Name:
___________________________________________     Address:
___________________________________________      
___________________________________________     Tax I.D. or Soc. Sec. No:
 ___________________________________________

 

Principal Amount to be converted

US$________________________________________

 

Amount of Note unconverted:

US$________________________________________

 

Number of shares of Preferred Stock to be issued: ________________________