Exhibit 10.11

 

THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE WERE NOT
ISSUED IN A TRANSACTION REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(“SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS. THIS NOTE AND THE
SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS
COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS OR, IN THE OPINION OF COUNSEL TO THE COMPANY,
IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH
LAWS.

 

LIVEDEAL, INC.

 

CONVERTIBLE NOTE

 

U.S. $_____ Date of Issuance:  __________, 20__

 

FOR VALUE RECEIVED, LiveDeal, Inc., a Nevada corporation (“Company”), hereby
promises to pay to the order of __________, a[n] __________ (“Purchaser”), the
aggregate principal sum of _____ and No/100 Dollars ($_____) (the “Principal”)
in lawful currency of the United States of America, subject to the provisions
contained herein. This Convertible Note (this “Note”) is one of the Notes
described in the Note Purchase Agreement dated as of January ___, 2014, by and
between the Company and Purchaser (as amended from time to time, the “Purchase
Agreement”). The Company and Purchaser shall be collectively referred to as the
“Parties”. Unless otherwise expressly provided in this Note, initially
capitalized words or terms used in this Note shall have the meanings set forth
in the Purchase Agreement.

 

ARTICLE 1
PAYMENT

 

1.1              Maturity Date. The Principal and any other amounts payable to
Purchaser hereunder, shall be due and payable to Purchaser on the Maturity Date.

 

1.2              Interest. Interest will accrue from the date hereof on the
Principal amount at the rate of eight percent (8.00%) per annum until all
Obligations under this Note are paid in full or until the conversion of the
Principal pursuant to Article 2 of this Note. If the Principal is not converted
pursuant to Article 2 of this Note, interest shall be paid with the Principal
amount and all other Obligations on the Maturity Date. If the Principal is
converted pursuant to Article 2 of this Note, interest accrued through the date
of conversion and all other Obligations shall be paid on the date of conversion
in accordance with Article 2 of this Note.

 

1.3              Payment. All payments under this Note shall be made by check or
wire transfer of immediately available funds and in lawful money of the United
States of America at __________, or at such other place as Purchaser may from
time to time designate in writing to the Company. Payments will be credited
first, to costs of collection and other charges for which the Company is
responsible pursuant to this Note, second, to accrued but unpaid interest, and
the remainder to Principal.

 

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1.4              Prepayment. The Company shall have the option to prepay this
Note, together with accrued but unpaid interest, in whole or in part, at any
time without premium or penalty.

 

ARTICLE 2
CONVERSION

 

2.1              Right to Convert into Common Stock; Conversion Price. Subject
to Section 2.5 below, so long as any Principal due under this Note is
outstanding, pursuant to Section 2.2 below, Purchaser may elect to convert, or
the Company may cause the immediate conversion of, all or any portion of the
Principal and accrued but unpaid interest into (a) that number of shares of the
common stock of the Company (the “Common Stock”) as is obtained by dividing the
dollar amount of the Principal and accrued but unpaid interest by the applicable
Conversion Price per share of Common Stock (the “Conversion Shares”), and (b) a
Warrant exercisable for a period of five (5) years, commencing on the Conversion
Date (as defined below), for a number of shares of Common Stock equal to the
number of Conversion Shares issuable upon conversion pursuant to clause (a) next
preceding at an initial exercise price equal to one hundred ten percent (110%)
of the Conversion Price then in effect. Subject to adjustment as provided in
Section 2.3 hereof, the “Conversion Price” shall be an amount equal to seventy
percent (70%) of the lesser of: (i) the closing bid price of the Common Stock on
the Effective Date; or (ii) the 10-day volume weighted average closing bid price
for the Common Stock, in each case as listed on NASDAQ for the ten (10) Business
Days immediately preceding the date of the notice of conversion (the “Average
Price”); provided, however, that in no event shall the Average Price per share
be less than $1.00. For example, if the Average Price is $0.50 per share, then
for purposes of calculating the Conversion Price, the Average Price per share
would be $1.00 per share instead of $0.50 per share.

 

2.2              Mechanics of Conversion.

 

(a)                Unless earlier converted at the election of the Company
pursuant to clause (b) below, Purchaser may cause the conversion of this Note by
delivering to the Company an executed notice of conversion in the form attached
hereto as Exhibit A (the “Notice of Conversion”).

 

(b)               The Company may cause the conversion of this Note by
delivering to Purchaser a Notice of Conversion.

 

(c)                After delivery of the Notice of Conversion, the Company and
Purchaser shall agree to a date for such conversion which, in no event, shall be
later than three (3) business days following the date of the Notice of
Conversion (the “Conversion Date”). On or before the Conversion Date, Purchaser
shall surrender the Note for conversion and the Company shall denote in its
corporate records the ownership by Purchaser of the Conversion Shares, effective
as of close of business on the Conversion Date. Effective as of close of
business on the Conversion Date (i) the rights of Purchaser with respect to the
Principal, together with all other amounts due hereunder to Purchaser shall
cease, (ii) Purchaser shall be treated for all purposes as having become the
record holder of such Conversion Shares, and (iii) such conversion shall be at
the Conversion Price then in effect. The issuance of Common Stock upon
conversion of this Note shall be made without charge to Purchaser for any tax in
respect of such issuance, and such Conversion Shares shall be issued in such
names as may be directed by Purchaser.

 

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(d)               In the event of a partial conversion of this Note, all of the
applicable provisions hereof shall apply in respect of the portion of this Note
that is converted into Conversion Shares, and this Note shall be restated to
reflect the amount that remains due and payable hereunder, which shall be
subject to subsequent conversion in accordance with the terms and conditions
hereof.

 

2.3              Adjustment of Conversion Price. Subject to Section 2.4 hereof,
the Conversion Price and number and kind of Conversion Shares or other
securities to be issued upon conversion determined pursuant to Section 2.1 shall
be subject to adjustment from time to time upon the happening of certain events
while this conversion right remains outstanding, as follows:

 

(a)                Merger, Sale of Assets, etc. If Company at any time shall
consolidate with or merge into or sell or convey all or substantially all its
assets to any other corporation or other entity, this Note shall thereafter be
deemed to evidence the right to purchase such number and kind of shares or other
securities and property as would have been issuable or distributable on account
of such consolidation, merger, sale or conveyance, upon or with respect to the
securities subject to the conversion or purchase right immediately prior to such
consolidation, merger, sale or conveyance. The foregoing provision shall
similarly apply to successive transactions of a similar nature by any such
successor or purchaser. Without limiting the generality of the foregoing, the
anti-dilution provisions of this Section 2.3 shall apply to such securities of
such successor or purchaser after any such consolidation, merger, sale or
conveyance.

 

(b)               Reclassification. If Company at any time shall, by
reclassification or otherwise, change the Common Stock into the same or a
different number of securities of any class or classes that may be issued or
outstanding, this Note shall thereafter be deemed to evidence the right to
purchase an adjusted number of such securities and kind of securities as would
have been issuable as the result of such change with respect to the Common Stock
immediately prior to such reclassification or other change.

 

(c)                Stock Splits, Combinations and Dividends. If the shares of
Common Stock are subdivided or combined into a greater or smaller number of
shares of Common Stock, or if a dividend is paid on the Common Stock in shares
of Common Stock, the Conversion Price shall be proportionately reduced in case
of subdivision of shares or stock dividend or proportionately increased in the
case of combination of shares, in each such case by the ratio which the total
number of shares of Common Stock outstanding immediately after such event bears
to the total number of shares of Common Stock outstanding immediately prior to
such event.

 

(d)               Dilutive Share Issuances. So long as this Note is outstanding,
if the Company shall issue or agree to issue any shares of Common Stock for a
consideration (or deemed price) less than the Conversion Price in effect at the
time of such issue, then, and thereafter successively upon each such issue, the
Conversion Price shall be reduced to such other lower issue price. For purposes
of this adjustment, the issuance of any security carrying the right to convert
or exchange such security into shares of Common Stock or of any warrant, right
or option to purchase Common Stock shall result in an adjustment to the
Conversion Price upon the issuance of the above-described security and again
upon the issuance of shares of Common Stock upon exercise of such conversion or
purchase rights if such issuance is at a price lower than the then applicable
Conversion Price. Notwithstanding the foregoing, in no event shall the
Conversion Price be reduced below $0.70 per share pursuant to this Section
2.3(d). For the sake of clarity, no adjustment shall be made to the Conversion
Price pursuant to this Section 2.3(d) in respect of any Excluded Issuance, and
the provisions of this Section 2.3(d) are in addition to (not in lieu of) the
provisions set forth in Section 12.13 of the Purchase Agreement.

 

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2.4              Adjustment Notices. Whenever the Conversion Price is adjusted
as provided in Section 2.3, Company shall promptly deliver to Purchaser written
notice setting forth the revised Conversion Price with a statement of facts
regarding the adjustment and the computation thereof.

 

2.5              Limitation on Conversion Pending Stockholder Approval.
Purchaser’s right to convert the Principal due and payable under this Note into
shares of Common Stock is expressly subject to the limitations and conditions
set forth in Section 12.12 of the Purchase Agreement.

 

ARTICLE 3
COVENANTS OF COMPANY

 

3.1              Payment of Principal; Conversion. The Company hereby covenants
and agrees that it shall pay or cause to be paid all amounts due hereunder on
the Maturity Date or, if applicable prior to the Maturity Date, the Company
shall effect or cause to be effected any conversion of the Principal into
Conversion Shares.

 

3.2              Reserves. During the period the conversion right exists, the
Company shall at all times reserve and keep available, out of its authorized but
unissued Common Stock, solely for the purpose of issue upon conversion of this
Note, such number of shares of Common Stock as shall then be issuable upon the
conversion of this Note. The Company covenants that all such shares of Common
Stock shall, upon issuance, be duly and validly issued, fully paid and
non-assessable.

 

ARTICLE 4
DEFAULT; ACCELERATION

 

4.1              Events of Default. The occurrence of any Event of Default under
the Purchase Agreement shall constitute an “Event of Default” hereunder.

 

4.2              Acceleration.

 

(a)                Upon the occurrence of any Event of Default, the entire
outstanding balance of the Principal and any other amounts payable to Purchaser
hereunder shall become immediately due and payable to Purchaser, without any
demand of or notice to the Company.

 

(b)               Upon the occurrence of any Event of Default, Purchaser may
exercise all rights and remedies available to it under any or all of the
Transaction Documents or otherwise and may apply any of funds of either the
Company in its possession to the outstanding indebtedness under this Note.

 

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4.3              Costs of Collection. The Company hereby, jointly and severally,
agree to pay all costs of collection, including attorneys’ fees and expenses,
whether or not suit is filed, and all costs of suit and preparation for suit
(whether at trial or appellate level), in the event any amount of the Principal
or other amount owing hereunder is not paid when due, or to exercise any other
right or remedy hereunder, or in the event Purchaser is made party to any claim,
case, action or other proceeding because of the existence of the Principal, or
if at any time Purchaser should incur any attorneys’ fees or expenses in any
proceeding under any federal bankruptcy law (or any similar state or federal
law) in connection with the Principal.

 

ARTICLE 5
GENERAL PROVISIONS

 

5.1              Remedies Cumulative and Continuing. All powers and remedies of
Purchaser hereunder with respect to an Event of Default shall, to the extent
permitted by law, be deemed cumulative and not exclusive of any other thereof or
of any other power or remedy available to Purchaser, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Note, and every power and remedy given by this Note
or by applicable law to Purchaser may be exercised from time to time, and as
often as shall be deemed expedient by Purchaser.

 

5.2              Replacement; Exchange. Upon receipt of evidence reasonably
satisfactory to the Company of the ownership and the loss, theft, destruction or
mutilation of this Note, the Company shall execute and deliver a new Note of
like kind in lieu of and in substitution for the lost, stolen, destroyed or
mutilated Note. This Note may be exchanged by surrender hereof at the office of
the Company maintained for that purpose, and the Company shall execute and
deliver in exchange herefor the Note or Notes which Purchaser making the
exchange shall be entitled to receive.

 

5.3              Choice of Law. This Note shall be governed by and construed in
accordance with the laws of the State of Nevada, without regard to principles of
conflict of laws. The parties hereto hereby declare that it is their intention
that this Agreement shall be regarded as made under the laws of the State of
Nevada and that the laws of said State shall be applied in interpreting its
provisions in all cases where legal interpretation shall be required.

 

5.4              Notices. All notices, requests, consents and other
communications required or permitted under this Agreement shall be in writing
and shall be delivered personally or by reputable overnight courier (e.g.,
Federal Express) or mailed first class, postage prepaid, registered or certified
mail:

 

  (a) If to Purchaser, to:     __________     __________     __________    
Attn:  __________     Facsimile:  __________

 

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Any party may change the address to which notices intended for it shall be sent
by a notice to the other party given in the manner specified in this Section
5.4. Such notices and communications shall for all purposes of this Agreement be
treated as being effective or having been given when delivered if delivered
personally or by courier or, if sent by mail, when received.

 

5.5              Assignment. This Agreement shall be binding upon the Company
and Purchaser and its successors and assigns. Neither the Company nor Purchaser
shall not make any assignment of its rights under this Agreement, the Notes, the
Warrants or other Transaction Documents or subject this Agreement, the Notes,
the Warrants or other Transaction Documents or its rights hereunder to any lien
or security interest of any kind whatsoever; and any such assignment, lien or
security interest shall be absolutely void and unenforceable as against
Purchaser.

 

5.6              Cooperation; Further Action. Each Party to this Note shall,
without further consideration, execute and deliver any further or additional
instruments and perform any acts which may become reasonably necessary to
effectuate and carry out the purposes of this Note.

 

5.7              Severability. In the event any term or provision of this Note
is declared to be invalid or illegal, for any reason, this Note shall remain in
full force and effect and the same shall be interpreted as though such invalid
and illegal provision were not a part hereof.

 

5.8              Amendments. This Note may not be altered or amended, and no
right under this Note may be waived, except by a writing executed by the Parties
to this Note or except as otherwise provided in this Note. No waiver of any
term, provision, or condition of this Note, in any one or more instances, shall
be deemed or construed as a further or continuing waiver of any such term,
provision, or condition, or as a waiver of any other term, provision, or
condition of this Note.

 

5.9              Integration. This Note and the other Transaction Documents
constitute and embodies the full and complete understanding and agreement of the
parties hereto and supersedes all prior understandings, whether oral or written.

 

5.10             Captions; Number and Gender. The captions, headings and
arrangements used in this Agreement are for convenience only and shall not in
any way affect, modify, control, or limit the meaning or applicability of such
article or section. Words used herein, regardless of the number or gender
stated, shall be deemed to refer to the singular or plural, or to the masculine,
feminine or neuter, respectively, all as the context may admit.

 

 

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

 

 

 

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IN WITNESS WHEREOF, the undersigned have executed this Note as of the date first
set forth above.

 

 

COMPANY:

 

LIVEDEAL, INC., a Nevada corporation

      By: /s/   Name:     Its:  

 

 

PURCHASER:

 

_______________

      By: /s/   Name:     Its:  

 

 

 

[Signature Page – Convertible Note]

 

 

 

 

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Exhibit A

 

Form of Conversion Notice

 

Re:Convertible Note (the “Note”) issued by LiveDeal, Inc., a Nevada corporation
(the “Company”), dated __________, 20__, in the original principal amount of
$__________.

 

Effective as of the date written below, the undersigned hereby [provides notice
of its election to automatically covert / irrevocably elects to convert]
$____________ of the unpaid principal amount on the Note into shares of the
common stock of Company according to the terms and conditions set forth in the
Note. If interests are to be issued in the name of a person or entity other than
the undersigned, the undersigned hereby agrees to pay all transfer taxes payable
with respect thereto.

 

 

Date of Conversion:                                                  

 

Signature:                                                                    

 

Name:                                                                           

 

 

If applicable, name and address of person or entity other than the undersigned
to which Conversion Shares are to be registered and delivered:

 

Name:                                                                          

 

Address:                                                                     

 

                                                                                     

 

Social Security or Tax I.D. Number _____________

 

 

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