CONVERTIBLE PROMISSORY NOTE

 

Effective Date: May 29, 2019 U.S. $115,000.00

 

FOR VALUE RECEIVED, KinerjaPay Corp., a Delaware corporation (“Borrower”),
promises to pay to Iliad Research and Trading, L.P., a Utah limited partnership,
or its successors or assigns (“Lender”), $115,000.00 and any interest, fees,
charges, and late fees accrued hereunder on the date that is twelve (12) months
after the Purchase Price Date (the “Maturity Date”) in accordance with the terms
set forth herein and to pay interest on the Outstanding Balance at the rate of
ten percent (10%) per annum from the Purchase Price Date until the same is paid
in full. 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. This
Convertible Promissory Note (this “Note”) is issued and made effective as of May
29, 2019 (the “Effective Date”). This Note is issued pursuant to that certain
Securities Purchase Agreement dated May 29, 2019, as the same may be amended
from time to time, by and between Borrower and Lender (the “Purchase
Agreement”). Certain capitalized terms used herein are defined in Attachment 1
attached hereto and incorporated herein by this reference.

 

This Note carries an OID of $10,000.00. In addition, Borrower agrees to pay
$5,000.00 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 fully earned and 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: $115,000.00 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.

 

1.1. Payment. 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 or bank account 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.

 

1.2. Prepayment. Notwithstanding the foregoing, Borrower shall have the right to
prepay all or any portion of the Outstanding Balance (less such portion of the
Outstanding Balance for which Borrower has received a Conversion Notice (as
defined below) from Lender where the applicable Conversion Shares have not yet
been delivered). 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 portion of the Outstanding Balance Borrower elects to repay.

 

2. Security. This Note is unsecured.

 

3. Redemption.

 

3.1. Conversion Price. Subject to the adjustments set forth herein, the
conversion price for each Conversion (as defined below) shall be calculated
pursuant to the following formula: 60% multiplied by the lowest Closing Trade
Price during the twenty (20) Trading Days immediately preceding the applicable
Conversion (the “Conversion Price”).

 

   

   

 

3.2. Redemptions. Beginning on the date that is six (6) months after the
Purchase Price Date, Lender shall have the right, exercisable at any time in its
sole and absolute discretion, to redeem all or any portion of the Note (such
amount, the “Redemption Amount”) by providing Borrower with a notice
substantially in the form attached hereto as Exhibit A (each, a “Redemption
Notice”, and each date on which Lender delivers a Redemption Notice, a
“Redemption Date”). Payments of each Redemption Amount may be made (a) in cash,
or (b) by converting such Redemption Amount into shares of Common Stock (the
“Conversion Shares”) in accordance with this Section 3.2 (each, a “Conversion”)
per the following formula: the number of Conversion Shares equals the portion of
the applicable Redemption Amount being converted divided by the Conversion
Price, or (c) by any combination of the foregoing, so long as the cash is
delivered to Lender on the third (3rd) Trading Day immediately following the
applicable Redemption Date and the Conversion Shares are delivered to Lender on
or before the applicable Delivery Date (as defined below). Notwithstanding the
foregoing, Borrower will not be entitled to elect a Conversion with respect to
any portion of any applicable Redemption Amount and shall be required to pay the
entire amount of such Redemption Amount in cash, if on the applicable Redemption
Date there is an Equity Conditions Failure, and such failure is not waived in
writing by Lender. Notwithstanding that failure to repay this Note in full by
the Maturity Date is an Event of Default, the Redemption Dates shall continue
after the Maturity Date pursuant to this Section 3.2 until the Outstanding
Balance is repaid in full.

 

3.3. Allocation of Redemption Amounts. Following its receipt of a Redemption
Notice, Borrower may either ratify Lender’s proposed allocation in the
applicable Redemption Notice or elect to change the allocation by written notice
to Lender by email or fax within twenty-four (24) hours of its receipt of such
Redemption Notice, so long as the sum of the cash payments and the amount of
Conversions equal the applicable Redemption Amount. If Borrower fails to notify
Lender of its election to change the allocation prior to the deadline set forth
in the previous sentence, it shall be deemed to have ratified and accepted the
allocation set forth in the applicable Redemption Notice prepared by Lender.
Borrower acknowledges and agrees that the amounts and calculations set forth
thereon are subject to correction or adjustment because of error, mistake, or
any adjustment resulting from an Event of Default or other adjustment permitted
under the Transaction Documents (an “Adjustment”). Furthermore, no error or
mistake in the preparation of such notices, or failure to apply any Adjustment
that could have been applied prior to the preparation of a Redemption Notice may
be deemed a waiver of Lender’s right to enforce the terms of any Note, even if
such error, mistake, or failure to include an Adjustment arises from Lender’s
own calculation. Borrower shall deliver the Conversion Shares from any
Conversion to Lender in accordance with Section 8 below on or before each
applicable Delivery Date. If Borrower elects to pay a Redemption Amount in cash,
such payment must be delivered on the second Trading Day immediately following
the Redemption Date. If Borrower elects to make a payment in cash and fails to
make such payment by the required due date on two (2) separate occasions,
Borrower shall lose the right to make payments of Redemption Amounts in cash in
the future without Lender’s written consent.

 

4. Defaults and Remedies.

 

4.1. Defaults. The following are events of default under this Note (each, an
“Event of Default”): (a) Borrower fails to pay any principal, interest, fees,
charges, or any other amount when due and payable hereunder; (b) Borrower fails
to deliver any Conversion Shares in accordance with the terms hereof; (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;
(d) Borrower becomes 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; (e) Borrower makes a general assignment for the benefit of
creditors; (f) Borrower files a petition for relief under any bankruptcy,
insolvency or similar law (domestic or foreign); (g) an involuntary bankruptcy
proceeding is commenced or filed against Borrower; (h) Borrower or any pledgor,
trustor, or guarantor of this Note defaults or otherwise fails to observe or
perform any covenant, obligation, condition or agreement of Borrower or such
pledgor, trustor, or guarantor 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 and Section 4 of the Purchase Agreement; (i) any
representation, warranty or other statement made or furnished by or on behalf of
Borrower or any pledgor, trustor, or guarantor of this Note to Lender herein, in
any Transaction Document, or otherwise in connection with the issuance of this
Note is false, incorrect, incomplete or misleading in any material respect when
made or furnished; (j) the occurrence of a Fundamental Transaction without
Lender’s prior written consent; (k) Borrower fails to maintain the Share Reserve
(as defined in the Purchase Agreement); (l) Borrower effectuates a reverse split
of its Common Stock without twenty (20) Trading Days prior written notice to
Lender; (m) any money judgment, writ or similar process is 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; (n) Borrower fails to be DWAC Eligible; (o) Borrower fails to observe
or perform any covenant set forth in Section 4 of the Purchase Agreement; or (p)
Borrower, any affiliate of Borrower, or any pledgor, trustor, or guarantor of
this Note breaches any covenant or other term or condition contained in any
Other Agreements.

 

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4.2. Remedies. At any time and from time to time after Lender becomes 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 twenty-two percent (22%) per annum or the maximum rate permitted under
applicable law (“Default Interest”). For the avoidance of doubt, Lender may
continue making Conversions (as defined below) at any time following an Event of
Default until such time as the Outstanding Balance is paid in full. 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 Note as required
pursuant to the terms hereof.

 

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 upon Subdivision or Combination of Common
Stock. 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 Redemption Conversion Price is calculated hereunder,
then the calculation of such Redemption 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 each Redemption Date (the “Delivery
Date”), Borrower shall, provided it is DWAC Eligible at such time and such
Conversion Shares are eligible for delivery via DWAC, deliver or cause its
transfer agent to deliver the applicable Conversion Shares electronically via
DWAC to the account designated by Lender in the applicable Redemption Notice. If
Borrower is not DWAC Eligible or such Conversion Shares are not eligible for
delivery via DWAC, it shall deliver to Lender or its broker (as designated in
the Redemption 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. Moreover, and
notwithstanding anything to the contrary herein or in any other Transaction
Document, in the event Borrower or its transfer agent refuses to deliver any
Conversion Shares without a restrictive securities legend to Lender on grounds
that such issuance is in violation of Rule 144 under the Securities Act of 1933,
as amended (“Rule 144”), Borrower shall deliver or cause its transfer agent to
deliver the applicable Conversion Shares to Lender with a restricted securities
legend, but otherwise in accordance with the provisions of this Section 8. In
conjunction therewith, Borrower will also deliver to Lender a written
explanation from its counsel or its transfer agent’s counsel opining as to why
the issuance of the applicable Conversion Shares violates Rule 144.

 

9. Conversion Delays. If Borrower fails to deliver Conversion Shares in
accordance with the timeframe stated in Section 8, Lender may at any time prior
to receiving the applicable Conversion Shares rescind in whole or in part such
Conversion, 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 third
(3rd) Trading Day (inclusive of the day of the Conversion), a late fee equal to
2% of the applicable Conversion Share Value rounded to the nearest multiple of
$100.00 but with a floor of $500.00 per day (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
(3rd) 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”).

 

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10. Restriction on Equity Sales. If at any time after the date that is six (6)
months from the Purchase Price Date, Borrower is unable to issue Common Stock to
Lender as result of any lock-up or other agreement or restriction prohibiting
the issuance of Common Stock for a certain period of time, then the Outstanding
Balance will automatically be increased by three percent (3%) for each thirty
(30) day period that Borrower is prohibited from issuing Common Stock (which
increase shall be pro-rated for any partial period). For the avoidance of doubt,
such increase to the Outstanding Balance shall be in addition to all other
rights and remedies available to Lender under this Note and the other
Transaction Documents and shall not be in lieu of, nor deemed to be a waiver of
any other rights or remedies available to Lender under this Note or any of the
other Transaction Documents, including without limitation calling an Event of
Default if Borrower fails to deliver Conversion Shares in accordance with the
terms of this Note.

 

11. Ownership Limitation. Notwithstanding anything to the contrary contained in
this Note or the other Transaction Documents, Borrower shall not effect any
conversion of this Note to the extent that after giving effect to such
conversion 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”). For purposes of this
section, beneficial ownership of Common Stock will be determined pursuant to
Section 13(d) of the 1934 Act. 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.

 

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.

 

13. Governing Law; Venue. 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
jurisdiction) that would cause the application of the laws of any jurisdiction
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. Arbitration of Disputes. By its issuance or 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.

 

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. 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.”

 

19. 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).

 

20. Severability. If any part of this Note is construed to be in violation of
any law, such part shall be modified to achieve the objective of Borrower and
Lender to the fullest extent permitted by law and the balance of this Note shall
remain in full force and effect.

 

[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:         KinerjaPay Corp.     By: [ex10-7_001.jpg]   Edwin Ng, Chief
Executive Officer

 

ACKNOWLEDGED, ACCEPTED AND AGREED:

 

LENDER:

 

Iliad Research and Trading, L.P.

 

By: Iliad Management, LLC, its General Partner

 

By: Fife Trading, Inc., its Manager

 

  By:         John M. Fife, President  

 

[Signature Page to Convertible Promissory Note]

 

   

   

 

ATTACHMENT 1

 

DEFINITIONS

 

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

 

A1.”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, L.P. (“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. All such
determinations shall be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during such period.

 

A2.”Conversion Share Value” means the product of the number of Conversion Shares
deliverable pursuant to any Redemption Notice multiplied by the Closing Trade
Price of the Common Stock on the Delivery Date for such Conversion.

 

A3.”Default Effect” means multiplying the Outstanding Balance as of the date the
applicable Event of Default occurred by (a) fifteen percent (15%) for each
occurrence of any Major Default, or (b) five percent (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.

 

A4.”DTC” means the Depository Trust Company or any successor thereto.

 

A5.”DTC/FAST Program” means the DTC’s Fast Automated Securities Transfer
program.

 

A6.”DWAC” means the DTC’s Deposit/Withdrawal at Custodian system.

 

A7.”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 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; and (e) Borrower’s transfer agent
does not have a policy prohibiting or limiting delivery of the Conversion Shares
via DWAC.

 

A8.”Equity Conditions Failure” means that any of the following conditions has
not been satisfied on any given Redemption Date: (a) with respect to the
applicable date of determination all of the Conversion Shares would be freely
tradable under Rule 144 or without the need for registration under any
applicable federal or state securities laws (in each case, disregarding any
limitation on conversion of this Note); (b) no Event of Default shall have
occurred or be continuing hereunder; (c) the average and median daily dollar
volume of the Common Stock on its principal market for the previous twenty (20)
and two hundred (200) Trading Days shall be greater than $75,000.00; (d) the
five (5) day VWAP of the Common Stock is greater than or equal to $0.25; and (e)
the Market Capitalization is greater than or equal to $10,000,000.00.

 

Attachment 1 to Convertible Promissory Note, Page 1

   

 

A9.”Fundamental Transaction” means that (a) (i) Borrower or any of its
subsidiaries shall, directly or indirectly, in one or more related transactions,
consolidate or merge with or into (whether or not Borrower or any of its
subsidiaries is the surviving corporation) any other person or entity, or (ii)
Borrower or any of its subsidiaries shall, directly or indirectly, in one or
more related transactions, sell, lease, license, assign, transfer, convey or
otherwise dispose of all or substantially all of its respective properties or
assets to any other person or entity, or (iii) Borrower or any of its
subsidiaries shall, directly or indirectly, in one or more related transactions,
allow any other person or entity to make a purchase, tender or exchange offer
that is accepted by the holders of more than 50% of the outstanding shares of
voting stock of Borrower (not including any shares of voting stock of Borrower
held by the person or persons making or party to, or associated or affiliated
with the persons or entities making or party to, such purchase, tender or
exchange offer), or (iv) Borrower or any of its subsidiaries shall, directly or
indirectly, in one or more related transactions, consummate a stock or share
purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with any
other person or entity whereby such other person or entity acquires more than
50% of the outstanding shares of voting stock of Borrower (not including any
shares of voting stock of Borrower held by the other persons or entities making
or party to, or associated or affiliated with the other persons or entities
making or party to, such stock or share purchase agreement or other business
combination), or (v) Borrower or any of its subsidiaries shall, directly or
indirectly, in one or more related transactions, reorganize, recapitalize or
reclassify the Common Stock, other than an increase in the number of authorized
shares of Borrower’s Common Stock, or (b) any “person” or “group” (as these
terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act and the
rules and regulations promulgated thereunder) is or shall become the “beneficial
owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of
50% of the aggregate ordinary voting power represented by issued and outstanding
voting stock of Borrower.

 

A10.”Major Default” means any Event of Default occurring under Sections 4.1(a),
4.1(k), or 4.1(o).

 

A11.”Mandatory Default Amount” means the Outstanding Balance following the
application of the Default Effect.

 

A12.”Market Capitalization” means a number 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.

 

A13.”Minor Default” means any Event of Default that is not a Major Default.

 

A14.”OID” means an original issue discount.

 

A15.”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.

 

A16.”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.

 

A17.”Purchase Price Date” means the date the Purchase Price is delivered by
Lender to Borrower.

 

A18.”Trading Day” means any day on which the New York Stock Exchange (or such
other principal market for the Common Stock) is open for trading.

 

A19.”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.

 

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Attachment 1 to Convertible Promissory Note, Page 2

   

 

EXHIBIT A

 

Iliad Research and Trading, L.P.

303 East Wacker Drive, Suite 1040

Chicago, Illinois 60601

 

KinerjaPay Corp.   Date: _________ Attn: Edwin Witarsa Ng     JI Multatuli, No.
8A Clyde Road     Medan, Indonesia 20151    

 

REDEMPTION NOTICE

 

The above-captioned Lender hereby gives notice to KinerjaPay Corp., a Delaware
corporation (the “Borrower”), pursuant to that certain Convertible Promissory
Note made by Borrower in favor of Lender on May 29, 2019 (the “Note”), that
Lender elects to redeem a portion of the Note in Conversion Shares or in cash as
set forth below. In the event of a conflict between this Redemption 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 Redemption
Notice to conform to the Note. Capitalized terms used in this notice without
definition shall have the meanings given to them in the Note.

 

REDEMPTION INFORMATION

 

  A. Redemption Date: ____________, 201_   B. Redemption Amount: ____________  
C. Portion of Redemption Amount to be Paid in Cash: ____________   D. Portion of
Redemption Amount to be Converted into Common Stock: ____________ (B minus C)  
E. Redemption Conversion Price: _______________   F. Conversion Shares:
_______________ (D divided by E)   G. 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 Redemption Notice and such Transaction Documents.

 

Please transfer the Conversion Shares, if applicable, 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 Redemption Notice
(by facsimile transmission or otherwise) to:

 

_____________________________________

_____________________________________

_____________________________________

 

Sincerely,

 

Lender:

 

Iliad Research and Trading, L.P.

 

By: Iliad Management, LLC, its General Partner

 

By: Fife Trading, Inc., its Manager

 

  By:         John M. Fife, President  

 

Exhibit A to Convertible Promissory Note, Page 1