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Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this “Agreement”), dated February 27, 2014,
is entered into by and between American Restaurant Concepts, Inc., a Florida
corporation (the “Company”), and Seenu G. Kasturi, an individual (“Purchaser”).
 
R E C I T A L S:

WHEREAS, Purchaser desires to purchase, and the Company desires to sell, shares
of the Company’s common stock on the terms and conditions set forth herein.
 
NOW, THEREFORE, in consideration of the foregoing premises and representations,
warranties, covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
hereby agree as follows:
 
1.             Purchase and Sale of Securities.
 
(a)           Purchase of Common Stock.  Subject to the terms and conditions
hereof, Purchaser agrees to purchase, and the Company agrees to sell, 206,061
shares (“Shares”) of the Company’s Class A common stock, $.01 par value per
share (“Common Stock”), for a total purchase price of $340,000 (the
“Transaction”).  The purchase price shall be paid by Purchaser in accordance
with the terms of a promissory note to be issued to the Company by Purchaser
substantially in the form attached hereto as Exhibit A (the “Promissory
Note”).  All references to “dollar” or “$” are references to U.S. Dollars.
 
(b)           Placement Agent and Finder Fees.  The Company reserves the right
to pay reasonable placement agent and finder fees consisting of cash, securities
identical to the Shares or such other consideration as the Company deems
appropriate.

(c)           Closing.   The closing of the Transaction (the “Closing”) shall
take place at a time, on a date and at a place to be determined by the Company
in its sole discretion.  At or prior to the Closing: (i) Purchaser shall deliver
to the Company one completed and duly executed copy of this Agreement and the
Promissory Note, and (ii) the Company shall execute this Agreement.  After the
Closing, the Company will issue to Purchaser one or more certificates for the
Shares duly executed by the Company, together with a copy of Purchaser’s
executed Agreement countersigned by the Company.
 
2.             Representations and Warranties of Purchaser.  Purchaser
represents and warrants to the Company as follows:
 
(a)           Organization and Qualification.  If Purchaser is an entity: (i)
Purchaser is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization, with the corporate or other entity
power and authority to own and operate its business as presently conducted,
except where the failure to be or have any of the foregoing would not have a
material adverse effect on Purchaser, and (ii) Purchaser is duly qualified as a
foreign corporation or other entity to do business and is in good standing in
each jurisdiction where the character of its properties owned or held under
lease or the nature of their activities makes such qualification necessary,
except for such failures to be in good standing or so qualified as would not
have a material adverse effect Purchaser.
 

 

 

 

 
(b)           Authority; Validity and Effect of Agreement.
 
(i)           If Purchaser is an entity: (A) Purchaser has the requisite
corporate or other entity power and authority to execute and deliver this
Agreement and perform its obligations under this Agreement, and (B) the
execution and delivery of this Agreement by Purchaser, the performance by
Purchaser of its obligations hereunder and all other necessary corporate or
other entity action on the part of Purchaser have been duly authorized by its
board of directors or similar governing body, and shareholders or similar
interest holders, if necessary, and no other corporate or other entity
proceedings on the part of Purchaser is necessary for Purchaser to execute and
deliver this Agreement and perform its obligations hereunder.
 
(ii)          This Agreement has been duly and validly authorized, executed and
delivered by Purchaser and, assuming it has been duly and validly executed and
delivered by the Company, constitutes a legal, valid and binding obligation of
Purchaser, in accordance with its terms.
 
(c)           No Conflict; Required Filings and Consents.  Neither the execution
and delivery of this Agreement by Purchaser nor the performance by Purchaser of
its obligations hereunder will: (i) if Purchaser is an entity, conflict with
Purchaser’s articles of incorporation or bylaws, or other similar organizational
documents; (ii) violate any statute, law, ordinance, rule or regulation,
applicable to Purchaser or any of the properties or assets of Purchaser; or
(iii) violate, breach, be in conflict with or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or permit the termination of any provision of, or result in the termination of,
the acceleration of the maturity of, or the acceleration of the performance of
any obligation of Purchaser under, or result in the creation or imposition of
any lien upon any properties, assets or business of Purchaser under, any
material contract or any order, judgment or decree to which Purchaser is a party
or by which it or any of its assets or properties is bound or encumbered except,
in the case of clauses (ii) and (iii), for such violations, breaches, conflicts,
defaults or other occurrences that, individually or in the aggregate, would not
have a material adverse effect on its obligation to perform its covenants under
this Agreement.
 
(d)           Accredited Investor.  Purchaser is an “accredited investor” as
that term is defined in Rule 501(a) of Regulation D under the Securities Act of
1933, as amended (the “Securities Act”).  If Purchaser is an entity, Purchaser
was not formed for the specific purpose of acquiring the Shares, and, if it was,
all of Purchaser’s equity owners are “accredited investors” as defined above.
 
(e)           Foreign Investors. If Purchaser is not a United States person (as
defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as
amended), Purchaser hereby represents that it has satisfied itself as to the
full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Shares or any use of this Agreement, including:
(i) the legal requirements within its jurisdiction for the purchase of the
Shares, (ii) and foreign exchange restrictions applicable to such purchase,
(iii) any governmental or other consents that may need to be obtained, and (iv)
the income tax and other tax consequences, if any, that may be relevant to the
purchase, holding, redemption, sale or transfer of the Shares. Such Purchaser’s
subscription and payment for, and continued beneficial ownership of, the Shares
will not violate any applicable securities or other laws of Purchaser’s
jurisdiction.
 

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(f)           No Government Review.  Purchaser understands that neither the
United States Securities and Exchange Commission (“SEC”) nor any securities
commission or other governmental authority of any state, country or other
jurisdiction has approved the issuance of the Shares or passed upon or endorsed
the merits of the Shares or this Agreement, or confirmed the accuracy of,
determined the adequacy of, or reviewed this Agreement.
 
(g)           Investment Intent.  The Shares are being acquired for Purchaser’s
own account for investment purposes only, not as a nominee or agent and not with
a view to the resale or distribution of any part thereof, and Purchaser has no
present intention of selling, granting any participation in or otherwise
distributing the same.  By executing this Agreement, Purchaser further
represents that Purchaser does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to such
person or third person with respect to any of the Shares.
 
(h)           Restricted Securities.  Purchaser understands that the Shares: (i)
are “restricted securities” as such term is defined under Rule 144 of the
Securities Act, (ii) have not been registered under the Securities Act or
registered or qualified under any state securities law, and (iii) may not be,
directly or indirectly, sold, transferred, offered for sale, pledged,
hypothecated or otherwise disposed of without registration under the Securities
Act and registration or qualification under applicable state securities laws or
the availability of an exemption therefrom.  In any case where such an exemption
is relied upon by Purchaser from the registration requirements of the Securities
Act and the registration or qualification requirements of such state securities
laws, Purchaser shall furnish the Company with an opinion of counsel stating
that the proposed sale or other disposition of such securities may be effected
without registration under the Securities Act and will not result in any
violation of any applicable state securities laws relating to the registration
or qualification of securities for sale, such counsel and opinion to be
satisfactory to the Company.  Purchaser acknowledges that it is able to bear the
economic risks of an investment in the Shares for an indefinite period of time,
and that its overall commitment to investments that are not readily marketable
is not disproportionate to its net worth.
 
(i)            Investment Experience.  Purchaser has such knowledge,
sophistication and experience in financial, tax and business matters in general,
and investments in securities in particular, that it is capable of evaluating
the merits and risks of this investment in the Shares, and Purchaser has made
such investigations in connection herewith as it deemed necessary or desirable
so as to make an informed investment decision without relying upon the Company
for legal or tax advice related to this investment.  In making its decision to
acquire the Shares, Purchaser has not relied upon any information other than
information contained in this Agreement.
 

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(j)            Access to Information.  Purchaser acknowledges that it has had
access to and has reviewed all documents and records relating to the Company,
including but not limited to the Company’s filings with the SEC, that it has
deemed necessary for it to make an informed investment decision with respect to
the Shares.  Purchaser acknowledges that the Company may concurrently issue
other securities that are identical to or different from the Shares for a
purchase price consisting of cash, services or other consideration that may be
materially different from the purchase price of the Shares and that such
securities may have rights, preferences and privileges senior to those of the
Shares.  Purchaser acknowledges that it has had the opportunity to ask
representatives of the Company questions and request additional information
regarding the terms and conditions of the investment and the finances,
operations, business and prospects of the Company, that it has had any and all
such questions and requests answered to its satisfaction, and that it
understands the risks and other considerations relating to its investment in the
Shares.
 
(k)           Reliance on Representations. Purchaser understands that the Shares
are being offered and sold to it in reliance upon specific exemptions from the
registration requirements of the federal and state securities laws and that the
Company is relying in part upon the truth and accuracy of, and such Purchaser’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of Purchaser to acquire the
Shares.  Purchaser represents and warrants to the Company that any information
that Purchaser has heretofore furnished or furnishes herewith to the Company is
complete and accurate, and further represents and warrants that it will notify
and supply corrective information to the Company immediately upon the occurrence
of any change therein occurring prior to the Company’s issuance of the
Shares.  Within five (5) days after receipt of a request from the Company,
Purchaser will provide such information and deliver such documents as may
reasonably be necessary to comply with any and all laws and regulations to which
the Company is subject.
 
(l)            No General Solicitation.  Purchaser is unaware of, and in
deciding to purchase the Shares is in no way relying upon, and did not become
aware of the opportunity to purchase the Shares through or as a result of, any
form of general solicitation or general advertising including, without
limitation, any article, notice, advertisement or other communication published
in any newspaper, magazine or similar media, or broadcast over television or
radio or the internet, in connection with the Transaction.
 
(m)          Legends.  The certificates evidencing the Shares shall have
endorsed thereon a legend substantially in the form set forth below (and
appropriate notations thereof will be made in the Company’s stock transfer
books), and stop transfer instructions reflecting these restrictions on transfer
will be placed with the transfer agent, if any, of the Shares:
 
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES
LAWS.  THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT AND REGISTRATION OR
QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN
AVAILABLE EXEMPTION THEREFROM.  NO TRANSFER OF THE SECURITIES REPRESENTED HEREBY
MAY BE MADE IN THE ABSENCE OF SUCH REGISTRATION OR QUALIFICATION UNLESS THERE
SHALL HAVE BEEN DELIVERED TO THE ISSUER A WRITTEN OPINION OF UNITED STATES
COUNSEL OF RECOGNIZED STANDING, IN FORM AND SUBSTANCE SATISFACTORY TO THE
ISSUER, TO THE EFFECT THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION OF
SUCH SECURITIES UNDER THE SECURITIES ACT AND REGISTRATION OR QUALIFICATION UNDER
APPLICABLE STATE SECURITIES LAWS.
 

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THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO AND TRANSFERABLE ONLY IN
ACCORDANCE WITH THE TERMS OF THAT CERTAIN SECURITIES PURCHASE AGREEMENT DATED
FEBRUARY 27, 2014 BY AND BETWEEN THE COMPANY AND SEENU G. KASTURI AND THAT
CERTAIN PROMISSORY NOTE DATED FEBRUARY 27, 2014 ISSUED BY SEENU G. KASTURI IN
FAVOR OF THE COMPANY, COPIES OF EACH OF WHICH ARE ON FILE AT THE PRINCIPAL
EXECUTIVE OFFICE OF THE COMPANY.  NO TRANSFER OR PLEDGE OF THE SECURITIES
REPRESENTED HEREBY MAY BE MADE EXCEPT IN ACCORDANCE WITH AND SUBJECT TO THE
PROVISIONS OF SAID SECURITIES PURCHASE AGREEMENT AND PROMISSORY NOTE.  BY
ACCEPTANCE OF THIS CERTIFICATE, ANY HOLDER, TRANSFEREE OR PLEDGEE HEREOF AGREES
TO BE BOUND BY ALL OF THE PROVISIONS OF THE SECURITIES PURCHASE AGREEMENT AND
PROMISSORY NOTE.
 
(n)           Placement Agent and Finder’s Fees. No agent, broker, investment
banker, finder, financial advisor or other person acting on behalf of Purchaser
or under its authority is or will be entitled to any broker’s or finder’s fee or
any other commission or similar fee, directly or indirectly, in connection with
the Transaction, and no person is entitled to any fee or commission or like
payment in respect thereof based in any way on agreements, arrangements or
understanding made by or on behalf of Purchaser.
 
3.             Representations and Warranties of the Company.  The Company
represents and warrants to Purchaser as follows:
 
(a)           Organization and Qualification.  The Company is duly organized,
validly existing and in good standing under the laws of the State of Florida,
with the corporate power and authority to own and operate its business as
presently conducted, except where the failure to be or have any of the foregoing
would not have a material adverse effect on the Company.  The Company is duly
qualified as a foreign corporation or other entity to do business and is in good
standing in each jurisdiction where the character of its properties owned or
held under lease or the nature of their activities makes such qualification
necessary, except for such failures to be so qualified or in good standing as
would not have a material adverse effect on the Company.
 

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(b)          Authority; Validity and Effect of Agreement.
 
(i)           The Company has the requisite corporate power and authority to
execute and deliver this Agreement, perform its obligations under this
Agreement, and engage in the Transaction.  The execution and delivery of this
Agreement by the Company, the performance by the Company of its obligations
hereunder, the Transaction and all other necessary corporate action on the part
of the Company have been duly authorized by its board of directors, and no other
corporate proceedings on the part of the Company is necessary to authorize this
Agreement or the Transaction.  This Agreement has been duly and validly executed
and delivered by the Company and, assuming that it has been duly authorized,
executed and delivered by Purchaser, constitutes a legal, valid and binding
obligation of the Company, in accordance with its terms, subject to the effects
of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
 
(ii)          The Shares have been duly authorized and, when issued and paid for
in accordance with this Agreement, will be: (A) validly issued, fully paid and
non-assessable shares of Common Stock with no personal liability resulting
solely from the ownership of such shares, and (B) free and clear of all liens,
charges, restrictions, claims and encumbrances imposed by or through the
Company, other than the restrictions imposed upon the Shares under applicable
federal and state securities laws.
 
(c)           No Conflict; Required Filings and Consents.  Neither the execution
and delivery of this Agreement by the Company nor the performance by the Company
of its obligations hereunder will: (i) conflict with the Company’s articles of
incorporation or bylaws; (ii) violate any statute, law, ordinance, rule or
regulation, applicable to the Company or any of the properties or assets of the
Company; or (iii) violate, breach, be in conflict with or constitute a default
(or an event which, with notice or lapse of time or both, would constitute a
default) under, or permit the termination of any provision of, or result in the
termination of, the acceleration of the maturity of, or the acceleration of the
performance of any obligation of, the Company, or result in the creation or
imposition of any lien upon any properties, assets or business of the Company
under, any material contract or any order, judgment or decree to which the
Company is a party or by which it or any of its assets or properties is bound or
encumbered except, in the case of clauses (ii) and (iii), for such violations,
breaches, conflicts, defaults or other occurrences that, individually or in the
aggregate, would not have a material adverse effect on the Company’s obligation
to perform its covenants under this Agreement.
 
(d)           Placement Agent and Finder’s Fees.  Except as provided in Section
1(b), neither the Company nor any of its respective officers, directors,
employees or managers, has employed any broker, finder, advisor or consultant,
or incurred any liability for any investment banking fees, brokerage fees,
commissions or finders’ fees, advisory fees or consulting fees in connection
with the Transaction for which the Company has or could have any liability.

4.             Indemnification.  Purchaser agrees to indemnify, defend and hold
harmless the Company and its respective affiliates and agents from and against
any and all demands, claims, actions or causes of action, judgments,
assessments, losses, liabilities, damages or penalties and reasonable attorneys’
fees and related disbursements incurred by the Company that arise out of or
result from a breach of any representations, warranties, covenants or agreements
made by Purchaser herein, and Purchaser agrees that in the event of any breach
of any representations or warranties made by Purchaser herein, the Company may,
at its option, forthwith rescind the sale of the Shares to Purchaser.
 

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5.             Confidential Information.  Purchaser shall not disclose and shall
maintain the confidentiality of (and shall cause its affiliates, directors,
officers, employees, agents and representatives to not disclose and to maintain
the confidentiality of) any non-public information which relates to the
business, legal or financial affairs of the Company (the “Confidential
Information”). Purchaser shall use at least the same degree of care to safeguard
and to prevent the disclosure, publication or dissemination of the Confidential
Information as it employs to avoid unauthorized disclosure, publication or
dissemination of its own information of a similar nature, but in no case less
than reasonable care. In the event that Purchaser, (or any affiliate, director,
officer, employee, agent or representative of Purchaser) is requested or
required (by oral question, interrogatory, request for information or documents,
subpoena, civil investigative demand or similar process) to disclose any
Confidential Information, Purchaser shall: (a) notify the Company promptly so
that the Company may seek a protective order or other appropriate remedy, and
(b) cooperate with the Company in any effort the Company undertakes to obtain a
protective order or other remedy.  In the event that no such protective order or
other remedy is obtained, the applicable party shall disclose to the person
compelling disclosure only that portion of the Confidential Information which
such party is advised by counsel is legally required and shall exercise
reasonable efforts to obtain reliable assurance that confidential treatment is
accorded the Confidential Information so disclosed.
 
6.             Public Announcements.  Purchaser shall not, without the prior
written consent of the Company, directly or indirectly, make any statements,
public announcements or release to trade publications or the press with respect
to the subject matter of this Agreement.
 
7.             Entire Agreement.  This Agreement contains the entire agreement
between the parties and supersedes all prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereto,
and no party shall be liable or bound to any other party in any manner by any
warranties, representations, guarantees or covenants except as specifically set
forth in this Agreement.  Neither party relied upon any representation or
warranty, whether written or oral, made by the other party or any of its
officers, directors, employees, agents or representatives, in making its
decision to enter into this Agreement.
 
8.             Amendment and Modification.  This Agreement may not be amended,
modified or supplemented except by an instrument or instruments in writing
signed by the party against whom enforcement of any such amendment, modification
or supplement is sought.
 
9.             Extensions and Waivers.  The parties hereto entitled to the
benefit of a term or provision may: (a) extend the time for the performance of
any of the obligations or other acts of the parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document, certificate or writing delivered pursuant hereto, or (c) waive
compliance with any obligation, covenant, agreement or condition contained
herein.  Any agreement on the part of a party to any such extension or waiver
shall be valid only if set forth in an instrument or instruments in writing
signed by the party against whom enforcement of any such extension or waiver is
sought.  No failure or delay on the part of any party hereto in the exercise of
any right hereunder shall impair such right or be construed to be a waiver of,
or acquiescence in, any breach of any representation, warranty, covenant or
agreement.  No waiver by either party hereto of any breach or default of any of
the representations, warranties, covenants or agreements set forth herein will
be deemed a waiver as to any subsequent or similar breach or default.
 

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10.           Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, provided, however, that Purchaser may not assign its rights or delegate
its obligations under this Agreement without the express prior written consent
of the Company.  Except as provided in Sections 4 and 5 and as specifically
provided elsewhere herein, nothing in this Agreement, express or implied, is
intended to confer upon any person other than the parties hereto (or their
respective successors and assigns) any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
 
11.           Survival of Representations, Warranties and Covenants.  The
representations and warranties contained herein shall survive the Closing and
shall thereupon terminate 24 months from the Closing.  All covenants and
agreements contained herein that by their terms contemplate actions following
the Closing shall survive the Closing and remain in full force and effect in
accordance with their terms.
 
12.           Headings; Definitions.  The Section headings contained in this
Agreement are inserted for convenience of reference only and will not affect the
meaning or interpretation of this Agreement.  All references to “Sections”
contained herein mean Sections of this Agreement unless otherwise stated.  All
capitalized terms defined herein are equally applicable to both the singular and
plural forms of such terms, and any pronoun shall include the corresponding
masculine, feminine and neuter.
 
13.           Severability.  If any provision of this Agreement or the
application thereof to any person or circumstance is held to be invalid or
unenforceable to any extent, the remainder of this Agreement shall remain in
full force and effect and shall be reformed to render the Agreement valid and
enforceable while reflecting to the greatest extent permissible the intent of
the parties hereto.
 
14.           Notices.  All notices hereunder shall be sufficiently given for
all purposes hereunder if in writing and delivered personally, sent by
documented overnight delivery service or, to the extent receipt is confirmed,
telecopy, telefax or other electronic transmission service to the appropriate
address or number as set forth below:
 
If to the Company:
 
American Restaurant Concepts, Inc.
212 Guilbeau Road
Lafayette, LA 70506
Attention:  Chief Financial Officer
Fax: (888) 821-4205
 

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If to Purchaser:
 
To Purchaser at the address set forth on the Company’s books and records.

15.           Governing Law.  This Agreement shall be governed by and construed
in accordance with the State of Florida, without regard to the laws that might
otherwise govern under applicable principles of conflicts of laws thereof.

16.           Arbitration. Any dispute or claim arising out of or in relation to
this Agreement, or the interpretation, making, performance, breach or
termination thereof, shall be finally and exclusively settled by binding
arbitration under the commercial arbitration rules of the American Arbitration
Association by an arbitrator or arbitrators chosen by the Company in its sole
and absolute discretion.  The arbitration shall take place at a site to be
chosen by the Company in its sole and absolute discretion.  The decision of the
arbitrator(s) shall be conclusively binding upon the parties and final, and such
decision shall be enforceable as a judgment in any court of competent
jurisdiction.  The parties hereto shall share equally the costs of the
arbitration; provided, however, that the prevailing party shall be entitled to
recover its share of such costs.
 
17.           Counterparts.  This Agreement may be executed and delivered
electronically in two or more counterparts, each of which shall be deemed to be
an original, but all of which together shall constitute one and the same
agreement.

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IN WITNESS WHEREOF, intending to be legally bound, the parties hereto have
executed this Agreement as of the date first above written.
 

  PURCHASER         /s/ Seenu G. Kasturi     Seenu G. Kasturi      
AMERICAN RESTAURANT CONCEPTS, INC.
        By:  /s/ Richard W. Akam        Richard W. Akam     Chief Executive
Officer

 

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EXHIBIT A

FORM OF PROMISSORY NOTE

 

$[_________________].00 Dated:  February [___], 2014   

 
FOR VALUE RECEIVED, the undersigned, Seenu G. Kasturi, an individual
(“Borrower”), promises to pay to the order of American Restaurant Concepts,
Inc., a Florida corporation (“Lender”), in immediately available funds at the
address of Lender set forth in the Securities Purchase Agreement (as defined
below), or at such other location as Lender may designate in writing from time
to time, the principal amount of $[________________].00 together with interest
computed in the manner set forth below, in accordance with the following terms:
 
1.             Terms of Repayment.  The principal amount of this Note shall be
due and payable in four equal quarterly installments (each an “Installment
Payment”) in accordance with the following schedule:
 
(a)           $[_______________] on or before June 30, 2014;
 
(b)           $[_______________] on or before September 30, 2014;
 
(c)           $[_______________] on or before December 31, 2014; and
 
(d)           $[_______________] on or before March 31, 2015 (the “Maturity
Date).
 
Interest on the outstanding principal balance of this Note shall accrue at the
rate of six percent (6%) per annum, and all accrued but unpaid interest
outstanding on the date an Installment Payment is due (each, an “Installment
Date”) shall be due and payable on that Installment Date.  Borrower shall have
the right to prepay the principal amount of this Note, in whole or in part,
together with any accrued but unpaid interest due on such principal amount, at
any time without penalty.  Unless otherwise agreed or required by applicable
law, all payments will be applied first to any charges, costs, expenses or late
fees then owed to Lender, next to accrued but unpaid interest, with any balance
applied to principal.
 
2.             Event of Default.  An “Event of Default” under this Note means
the occurrence of any of the following events (whether the reason for such event
of default shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body): (i) nonpayment of any
principal and interest when and as due under the terms of this Note; (ii) any
other material breach of the terms of this Note; (iii) the institution of any
proceedings by or against Borrower under any law relating to bankruptcy,
insolvency, reorganization or other form of debtor relief or Borrower’s making
an assignment for the benefit of creditors, or the appointment of a receiver,
trustee, conservator or other judicial representative for Borrower or any of its
respective properties; or (iv) an event of bankruptcy or insolvency of
Borrower.  Lender shall provide Borrower with written notice upon the occurrence
of an Event of Default and, provided the default is not cured within thirty (30)
days of the stated Event of Default, the entire principal and accrued interest
under this Note shall accelerate and become immediately due and payable.  Upon
the occurrence of an Event of Default, which occurrence is not cured within the
notice provisions, Borrower agrees to pay, and shall pay, all costs and expenses
(including attorney’s fees and expenses) reasonably incurred by Lender in
connection with the preservation and enforcement of Lender’s rights hereunder.
 

 

 

 

 
3.             Rights Under Securities Purchase Agreement.  This Note has been
issued pursuant to that certain Securities Purchase Agreement, dated February
[___], 2014, by and between the Lender and Borrower (the “Securities Purchase
Agreement”), and Lender and Borrower are entitled to all the rights and
benefits, and subject to all the obligations, thereunder.
 
4.             Agreements of Borrower.  Borrower and any other party now or
hereafter liable for the payment of this Note, in whole or in part, hereby
severally: (i) waive demand, presentment for payment, notice of nonpayment,
protest, notice of protest, notice of intent to accelerate, notice of
acceleration and all other notice, filing of suit and diligence in collecting
this Note, (ii) agree to the release of any party primarily or secondarily
liable hereon, (iii) agree that Lender shall not be required to first institute
suit or exhaust its remedies hereon against Borrower or others liable or to
become liable hereon or to enforce its rights against them, and (iv) consent to
any extension or postponement of time of payment of this Note and to any other
indulgence with respect hereto without notice thereof to any of them.
 
5.             Maximum Interest Rate.  Any interest rate provided for hereunder
that exceeds the maximum interest rate permitted by applicable law shall be
reduced to such maximum interest rate and any interest in excess of such maximum
rate paid to Lender shall be applied to reduce the principal balance of this
Note so that in no event shall Lender receive or be entitled to receive interest
in excess of the maximum amount permitted by applicable law.
 
6.             Amendments.  This Note may not be amended, modified or
supplemented except by an instrument or instruments in writing signed by the
party against whom enforcement of any such amendment, modification or supplement
is sought.  Any amendment effected in accordance with this Section 6 shall be
binding upon Lender, each future holder and Borrower.  No waivers of, or
exceptions to, any term, condition or provision of this Note, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, condition or provision.
 
7.             Successors and Assigns.  This Note shall bind Borrower and its
successors and assigns, and the benefits hereof shall inure to the benefit of
Lender and its successors and assigns; provided, however, that Borrower may not
transfer, pledge, hypothecate or assign this Note or any interest herein without
the prior written consent of Lender.  All references in this Note to “Borrower”
and “Lender” shall be deemed to apply to Borrower and Lender, respectively, and
to their respective successors and assigns.
 
8.             Severability.  If any provision of this Note or the application
thereof to any person or circumstance is held to be invalid or unenforceable to
any extent, the remainder of this Note shall remain in full force and effect and
shall be reformed to render this Note valid and enforceable while reflecting to
the greatest extent permissible the intent of the parties hereto.
 
9.             Governing Law.  This Note shall be governed by and construed in
accordance with the laws of the State of Florida, without regard to the laws
that might otherwise govern under applicable principles of conflicts of laws
thereof.
 
The undersigned has executed this Note as of the date set forth above.
 

 
BORROWER
 
[______________________________________]
 
Seenu G. Kasturi

 

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