Exhibit 10.2

 

NEITHER THIS SECURITY NOR THE SECURITIES UNDERLYING THIS SECURITY HAVE BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

 

THIS NOTE IS, AND THE UNDERLYING SHARES OF COMMON STOCK ARE, SUBJECT TO THE
TERMS OF A VOTING AGREEMENT AND PROXY DATED AS OF THE DATE HEREOF, BY AND AMONG
THE COMPANY AND THE OTHER PARTIES THERETO (THE “VOTING AGREEMENT”).

 

Original Issue Date: December 31, 2019

 

$9,000,000

 

3% CONVERTIBLE Promissory Note

DUE December 31, 2021

 

FOR VALUE RECEIVED, Cuentas Inc., a Florida corporation (the “Company”), having
its principal place of business at 200 S. Biscayne Blvd., Suite 5500, Miami,
Florida 33131, promises to pay to CIMA Telecom, Inc., a Florida corporation (the
“Holder”), or shall have paid pursuant to the terms hereunder, the principal sum
of $9,000,000 on December 31, 2020 (the “Maturity Date”) or such earlier date as
this 3% Convertible Promissory Note (this “Debenture”) is required or permitted
to be repaid as provided hereunder, and to pay interest to the Holder on the
aggregate unconverted and then outstanding principal amount of this Debenture in
accordance with the provisions hereof. This Debenture is subject to the
following additional provisions:

 

Section 1. Definitions. For the purposes hereof, in addition to the terms
defined elsewhere in this Debenture, (a) capitalized terms not otherwise defined
herein shall have the meanings set forth in the Purchase Agreement and (b) the
following terms shall have the following meanings:

 

“Alternate Consideration” shall have the meaning set forth in Section 5(b).

 

“Bankruptcy Event” means any of the following events: (a) the Company commences
a case or other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or
similar law of any jurisdiction relating to the Company, (b) there is commenced
against the Company any such case or proceeding that is not dismissed within 60
days after commencement, (c) the Company is adjudicated insolvent or bankrupt or
any order of relief or other order approving any such case or proceeding is
entered, (d) the Company suffers any appointment of any custodian or the like
for it or any substantial part of its property that is not discharged or stayed
within 60 calendar days after such appointment, (e) the Company makes a general
assignment for the benefit of creditors, (f) the Company calls a meeting of its
creditors with a view to arranging a composition, adjustment or restructuring of
its debts, (g) the Company admits in writing that it is generally unable to pay
its debts as they become due, or (h) the Company, by any act or failure to act,
expressly indicates its consent to, approval of or acquiescence in any of the
foregoing or takes any corporate or other action for the purpose of effecting
any of the foregoing.

 

 

 

 

“Business Day” means any day except any Saturday, any Sunday, any day which is a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.

 

“Conversion” shall have the meaning ascribed to such term in Section 4(a).

 

“Conversion Date” shall have the meaning set forth in Section 4(a).

 

“Conversion Shares” means, collectively, the shares of Common Stock issuable
upon conversion of this Debenture in accordance with the terms hereof.

 

“Debenture Register” shall have the meaning set forth in Section 3(a).

 

“Fundamental Transaction” shall have the meaning set forth in Section 5(b).

 

“New York Courts” shall have the meaning set forth in Section 7(d).

 

“Notice of Conversion” shall have the meaning set forth in Section 4(a).

 

“Original Issue Date” means the date of the first issuance of the Debentures,
regardless of any transfers of any Debenture and regardless of the number of
instruments which may be issued to evidence such Debentures.

 

“Purchase Agreement” means that certain Note Purchase Agreement dated as of the
hereof, by and between the Company and the Holder, as may be amended, restated,
modified or supplemented from time to time.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

 

“Share Delivery Date” means the date that is two (2) Trading Days after the
Conversion Date.

 

“Successor Entity” shall have the meaning set forth in Section 5(b).

 

“Trading Day” means a day on which the principal Trading Market is open for
trading.

 

“Trading Market” means any of the following markets or exchanges on which the
Common Stock is listed or quoted for trading on the date in question: the NYSE
American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global
Select Market, the New York Stock Exchange, OTCQB or OTCQX (or any successors to
any of the foregoing).

 

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Section 2. Interest.

 

a) Payment of Interest in Cash. The Company shall pay interest to the Holder on
the outstanding principal amount of this Debenture at an interest rate of 3% per
annum (the “Interest Rate”), payable upon the Maturity Date (or, if the Maturity
Date is not a Business Day, then the applicable payment shall be due on the next
succeeding Business Day) or such earlier date on which the Holder has
accelerated the obligations hereunder after an Event of Default, in cash, should
the Holder hereof not convert the principal and interest due under this
Debenture in accordance with the terms hereof.

 

b) Interest Calculations. Interest shall be calculated based on a year of 360
days, by multiplying the principal amount due under this Debenture by the
Interest Rate as contemplated above; provided if the amounts set forth above are
not paid when due, all amounts outstanding hereunder shall bear an interest rate
of 6% per annum until paid in full.

 

c) Prepayment. Except as otherwise set forth in this Debenture, the Company may
not prepay any portion of the principal amount of this Debenture without the
prior written consent of the Holder.

 

Section 3. Registration of Transfers and Exchanges.

 

a) Debenture Register. The Company shall cause to be kept at its principal
corporate office a register (herein sometimes referred to as the “Debenture
Register”) in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of this Debenture and of
transfers of this Debenture. The Secretary of the Company is hereby appointed
“Debenture registrar” for the purpose of registering this Debenture and
transfers of this Debenture as herein provided.

 

b) Different Denominations. This Debenture is exchangeable for an equal
aggregate principal amount of Debentures of different authorized denominations,
as requested by the Holder surrendering the same. No service charge will be
payable for such registration of transfer or exchange.

 

c) Reliance on Debenture Register. Prior to due presentment for transfer to the
Company of this Debenture, the Company and any agent of the Company may treat
the Person in whose name this Debenture is duly registered on the Debenture
Register as the owner hereof for the purpose of receiving payment as herein
provided and for all other purposes, whether or not this Debenture is overdue,
and neither the Company nor any such agent shall be affected by notice to the
contrary.

 

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Section 4. Conversion.

 

a) Voluntary Conversion. At any time on or before the Maturity Date, CIMA may
elect in its sole and absolute discretion to convert all unpaid principal and
accrued and unpaid interest under the Debenture into Common Stock equal to
twenty-five percent (25%) of the fully-diluted outstanding shares of Common
Stock of the Company as of December 31, 2019 (the “Conversion”), without taking
into account the Warrant issued to CIMA. For the avoidance of doubt, the right
to convert the Debenture into Common Stock is an option, to be exercised at the
sole discretion of the Holder, and is not a requirement, nor is the Holder
required to elect to convert the Debenture into Common Stock at any specific
time following the issuance hereof. The Holder shall effect conversions by
delivering to the Company a Notice of Conversion, the form of which is attached
hereto as Annex A (each, a “Notice of Conversion”), specifying therein the date
on which such conversion shall be effected (such date, the “Conversion Date”).
If no Conversion Date is specified in a Notice of Conversion, the Conversion
Date shall be the date that such Notice of Conversion is deemed delivered
hereunder. No ink-original Notice of Conversion shall be required, nor shall any
medallion guarantee (or other type of guarantee or notarization) of any Notice
of Conversion form be required. To effect conversions hereunder, the Holder
shall be required to physically surrender this Debenture to the Company in which
case the Holder shall surrender this Debenture as promptly as is reasonably
practicable after such conversion (without delaying the Company’s obligation to
deliver the shares on the Share Delivery Date). The Company may deliver an
objection to any Notice of Conversion within one (1) Business Day of delivery of
such Notice of Conversion. In the event of any dispute or discrepancy, the
records of the Holder shall be controlling and determinative in the absence of
manifest error.

 

b) Mechanics of Conversion.

 

i. Conversion Shares Issuable Upon Conversion of Principal Amount. The number of
Conversion Shares issuable upon a conversion hereunder shall be calculated as
set forth above.

 

ii. Delivery of Conversion Shares Upon Conversion. The Company shall deliver, or
cause to be delivered, to the Holder the Conversion Shares not later than the
Share Delivery Date.

 

iii. Failure to Deliver Conversion Shares. If, in the case of any Notice of
Conversion, such Conversion Shares are not delivered to or as directed by the
applicable Holder by the Share Delivery Date, the Holder shall be entitled to
elect by written notice to the Company at any time on or before its receipt of
such Conversion Shares, to rescind such Conversion, in which event the Company
shall promptly return to the Holder any original Debenture delivered to the
Company and the Holder shall promptly return to the Company the Conversion
Shares issued to such Holder pursuant to the rescinded Conversion Notice.

 

iv. Obligation Absolute; Partial Liquidated Damages. The Company’s obligations
to issue and deliver the Conversion Shares upon conversion of this Debenture in
accordance with the terms hereof are absolute and unconditional, irrespective of
any action or inaction by the Holder to enforce the same, any waiver or consent
with respect to any provision hereof, the recovery of any judgment against any
Person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the
Holder or any other Person of any obligation to the Company or any violation or
alleged violation of law by the Holder or any other Person, and irrespective of
any other circumstance which might otherwise limit such obligation of the
Company to the Holder in connection with the issuance of such Conversion Shares;
provided, however, that such delivery shall not operate as a waiver by the
Company of any such action the Company may have against the Holder. Nothing
herein shall limit a Holder’s right to pursue actual damages or declare an Event
of Default pursuant to Section 6 hereof for the Company’s failure to deliver
Conversion Shares within the period specified herein and the Holder shall have
the right to pursue all remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief. The exercise of any such rights shall not prohibit the Holder
from seeking to enforce damages pursuant to any other Section hereof or under
applicable law.

 

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v. Reservation of Shares Issuable Upon Conversion. The Company covenants that it
will at all times reserve and keep available out of its authorized and unissued
shares of Common Stock for the sole purpose of issuance upon conversion of this
Debenture, each as herein provided, free from preemptive rights or any other
actual contingent purchase rights of Persons other than the Holder, not less
than such aggregate number of shares of the Common Stock as shall be issuable
upon the Conversion. The Company covenants that all shares of Common Stock that
shall be so issuable shall, upon issue, be duly authorized, validly issued,
fully paid and nonassessable.

 

vi. Transfer Taxes and Expenses. The issuance of Conversion Shares on conversion
of this Debenture shall be made without charge to the Holder hereof for any
documentary stamp or similar taxes that may be payable in respect of the issue
or delivery of such Conversion Shares, provided that the Company shall not be
required to pay any tax that may be payable in respect of any transfer involved
in the issuance and delivery of any such Conversion Shares upon conversion in a
name other than that of the Holder of this Debenture so converted and the
Company shall not be required to issue or deliver such Conversion Shares unless
or until the Person or Persons requesting the issuance thereof shall have paid
to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid. The Company shall pay
all transfer agent fees required for same-day processing of any Notice of
Conversion and all fees to the Depository Trust Company.

 

Section 5. Certain Adjustments.

 

a) Fundamental Transaction. If, at any time while this Debenture is outstanding,
(i) the Company, directly or indirectly, in one or more related transactions
effects any merger or consolidation of the Company with or into another Person,
(ii) the Company, directly or indirectly, effects any sale, lease, license,
assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct
or indirect, purchase offer, tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders of Common
Stock are permitted to sell, tender or exchange their shares for other
securities, cash or property and has been accepted by the holders of 50% or more
of the outstanding Common Stock, (iv) the Company, directly or indirectly, in
one or more related transactions effects any reclassification, reorganization or
recapitalization of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property, or (v) the Company, directly or indirectly, in one
or more related transactions consummates a stock or share purchase agreement or
other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person whereby
such other Person acquires more than 50% of the outstanding shares of Common
Stock (not including any shares of Common Stock held by the other Person or
other Persons making or party to, or associated or affiliated with the other
Persons making or party to, such stock or share purchase agreement or other
business combination) (each a “Fundamental Transaction”), then, upon any
subsequent conversion of this Debenture, the Holder shall have the right to
receive, for each Conversion Share that would have been issuable upon such
conversion immediately prior to the occurrence of such Fundamental Transaction,
the number of shares of Common Stock of the successor or acquiring corporation
or of the Company, if it is the surviving corporation, and any additional
consideration (the “Alternate Consideration”) receivable as a result of such
Fundamental Transaction by a holder of the number of shares of Common Stock for
which this Debenture is convertible immediately prior to such Fundamental
Transaction. For purposes of any such conversion, the determination of the
conversion consideration shall be appropriately adjusted to apply to such
Alternate Consideration based on the amount of Alternate Consideration issuable
in respect of one (1) share of Common Stock in such Fundamental Transaction, and
the Company shall apportion the conversion consideration among the Alternate
Consideration in a reasonable manner reflecting the relative value of any
different components of the Alternate Consideration. The Company shall cause any
successor entity in a Fundamental Transaction in which the Company is not the
survivor (the “Successor Entity”) to assume in writing all of the obligations of
the Company under this Debenture in accordance with the provisions of this
Section 5(e) pursuant to written agreements in form and substance reasonably
satisfactory to the Holder and approved by the Holder (without unreasonable
delay) prior to such Fundamental Transaction.

 

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b) Calculations. All calculations under this Section 5 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 5, the number of shares of Common Stock deemed to be issued and
outstanding as of a given date shall be the sum of the number of shares of
Common Stock (excluding any treasury shares of the Company) issued and
outstanding.

 

c) Notice to the Holder.

 

i. Adjustment to Number of Conversion Shares. Whenever the Conversion Shares is
adjusted pursuant to any provision of this Section 5, the Company shall promptly
deliver to each Holder a notice setting forth the Conversion Shares after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment.

 

ii. Notice to Allow Conversion by Holder. If (A) the Company shall declare a
dividend (or any other distribution in whatever form) on the Common Stock, (B)
the Company shall declare a special nonrecurring cash dividend on or a
redemption of the Common Stock, (C) the Company shall authorize the granting to
all holders of the Common Stock of rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights, (D) the
approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which
the Company is a party, any sale or transfer of all or substantially all of the
assets of the Company, or any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property or (E) the Company shall
authorize the voluntary or involuntary dissolution, liquidation or winding up of
the affairs of the Company, then, in each case, the Company shall cause to be
filed at each office or agency maintained for the purpose of conversion of this
Debenture, and shall cause to be delivered to the Holder at its last address as
it shall appear upon the Debenture Register, at least twenty (20) calendar days
prior to the applicable record or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to
be taken, the date as of which the holders of the Common Stock of record to be
entitled to such dividend, distributions, redemption, rights or warrants are to
be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange, provided that the
failure to deliver such notice or any defect therein or in the delivery thereof
shall not affect the validity of the corporate action required to be specified
in such notice. To the extent that any notice provided hereunder constitutes, or
contains, material, non-public information regarding the Company or any of the
Subsidiaries, the Company shall simultaneously file such notice with the
Commission pursuant to a Current Report on Form 8-K. The Holder shall remain
entitled to convert this Debenture during the 20-day period commencing on the
date of such notice through the effective date of the event triggering such
notice except as may otherwise be expressly set forth herein. A filing with the
Commission on the EDGAR system that provides such information shall be deemed to
comply with this notice.

 

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Section 6. Events of Default.

 

a) “Event of Default” means, wherever used herein, any of the following events
(whatever the reason for such event and whether such event shall be voluntary or
involuntary or 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. any default in the payment of (A) the principal amount of any Debenture or
(B) interest, liquidated damages and other amounts owing to a Holder on any
Debenture, as and when the same shall become due and payable (whether on a
Conversion Date or the Maturity Date or by acceleration or otherwise) which
default, solely in the case of an interest payment or other default under clause
(B) above, is not cured within 3 Trading Days;

 

ii. the Company or any Significant Subsidiary (as such term is defined in Rule
1-02(w) of Regulation S-X) shall be subject to a Bankruptcy Event;

 

iii. the Company shall fail for any reason to deliver Conversion Shares to a
Holder prior to the fifth Trading Day after a Conversion Date pursuant to
Section 4(c);

 

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iv. a material breach by the Company of the representations, warranties,
covenants, or terms and conditions as set forth in any of the Transaction
Agreements (as such term is defined in the Purchase Agreement), which default is
not cured within 3 Trading Days; or

v. the Company fails to (A) amend and restate its Articles of Incorporation of
the Company and/or (B) amend and restate its Bylaws of the Company, as soon as
practicable following the Closing.

 

b) Remedies Upon Event of Default. If any Event of Default occurs while this
Debenture is outstanding, the entire outstanding principal amount of this
Debenture, plus accrued but unpaid interest, and other amounts owed in respect
thereof through the date of such Event of Default, shall become, at the Holder’s
election (which election shall not be required in the case of an Event of
Default under Section 6(a)(i) or (ii)), immediately due and payable in cash, and
the Holder may exercise any and all other remedies granted to it at law, in
equity or otherwise. Upon the occurrence of an Event of Default hereunder, the
Company shall pay all reasonable attorneys’ fees and court costs incurred by the
Holder in enforcing and collecting the Debenture.

 

Section 7. Miscellaneous.

 

a) Notices. Any and all notices or other communications or deliveries to be
provided by the Holder hereunder, including, without limitation, any Notice of
Conversion, shall be in writing and delivered personally, by facsimile, by email
attachment, or sent by a nationally recognized overnight courier service,
addressed to the Company, at the address set forth above, or such other
facsimile number, email address, or address as the Company may specify for such
purposes by notice to the Holder delivered in accordance with this Section
7(a).  Any and all notices or other communications or deliveries to be provided
by the Company hereunder shall be in writing and delivered personally, by
facsimile, by email attachment, or sent by a nationally recognized overnight
courier service addressed to each Holder at the facsimile number, email address
or address of the Holder appearing on the books of the Company, or if no such
facsimile number or email attachment or address appears on the books of the
Company, at the principal place of business of such Holder, as set forth in the
Purchase Agreement.  Any notice or other communication or deliveries hereunder
shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number or email attachment to the email address set forth on the
signature pages attached hereto prior to 5:30 p.m. (New York City time) on any
date, (ii) the next Trading Day after the date of transmission, if such notice
or communication is delivered via facsimile at the facsimile number or email
attachment to the email address set forth on the signature pages attached hereto
on a day that is not a Trading Day or later than 5:30 p.m. (New York City time)
on any Trading Day, (iii) the second Trading Day following the date of mailing,
if sent by U.S. nationally recognized overnight courier service or (iv) upon
actual receipt by the party to whom such notice is required to be given.

 

b) Absolute Obligation. Except as expressly provided herein, no provision of
this Debenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, liquidated damages and
accrued interest, as applicable, on this Debenture at the time, place, and rate,
and in the coin or currency, herein prescribed. This Debenture is a direct debt
obligation of the Company. This Debenture ranks pari passu with all other
Debentures now or hereafter issued under the terms set forth herein. 

 

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c) Lost or Mutilated Debenture. If this Debenture shall be mutilated, lost,
stolen or destroyed, the Company shall execute and deliver, in exchange and
substitution for and upon cancellation of a mutilated Debenture, or in lieu of
or in substitution for a lost, stolen or destroyed Debenture, a new Debenture
for the principal amount of this Debenture so mutilated, lost, stolen or
destroyed, but only upon receipt of evidence of such loss, theft or destruction
of such Debenture, and of the ownership hereof, reasonably satisfactory to the
Company.

 

d) Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Debenture shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Florida, without regard to the principles of conflict of laws thereof. Each
party agrees that all legal proceedings concerning the interpretation,
enforcement and defense of the transactions contemplated by any of the
Transaction Documents (whether brought against a party hereto or its respective
Affiliates, directors, officers, shareholders, employees or agents) shall be
commenced in the state and federal courts, in each case sitting in Miami-Dade
County, Florida (and any appellate courts thereof). Each party hereto hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the sitting in Miami-Dade County, Florida (and any appellate
courts thereof) for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any term of this Debenture), and
hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such Proceeding is improper or is an inconvenient venue for such Proceeding.
Each party hereby irrevocably waives personal service of process and consents to
process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Debenture
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any other manner permitted by law. Each
party hereto hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Debenture or the transactions contemplated
hereby. If any party shall commence an action or proceeding to enforce any
provisions of this Debenture, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorney’s fees and
other costs and expenses incurred in the investigation, preparation and
prosecution of such action or proceeding.

 

e) Waiver. Any waiver by the Company or the Holder of a breach of any provision
of this Debenture shall not operate as or be construed to be a waiver of any
other breach of such provision or of any breach of any other provision of this
Debenture. The failure of the Company or the Holder to insist upon strict
adherence to any term of this Debenture on one or more occasions shall not be
considered a waiver or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Debenture on any other
occasion. Any waiver by the Company or the Holder must be in writing.

 

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f) Severability. If any provision of this Debenture is invalid, illegal or
unenforceable, the balance of this Debenture shall remain in effect, and if any
provision is inapplicable to any Person or circumstance, it shall nevertheless
remain applicable to all other Persons and circumstances. If it shall be found
that any interest or other amount deemed interest due hereunder violates the
applicable law governing usury, the applicable rate of interest due hereunder
shall automatically be lowered to equal the maximum rate of interest permitted
under applicable law. The Company covenants (to the extent that it may lawfully
do so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law or other law which would prohibit or forgive the Company from paying
all or any portion of the principal of or interest on this Debenture as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Debenture, and the
Company (to the extent it may lawfully do so) hereby expressly waives all
benefits or advantage of any such law, and covenants that it will not, by resort
to any such law, hinder, delay or impede the execution of any power herein
granted to the Holder, but will suffer and permit the execution of every such as
though no such law has been enacted.

 

g) Remedies, Characterizations, Other Obligations, Breaches and Injunctive
Relief.  The remedies provided in this Debenture shall be cumulative and in
addition to all other remedies available under this Debenture and any of the
other Transaction Documents at law or in equity (including a decree of specific
performance and/or other injunctive relief), and nothing herein shall limit the
Holder’s right to pursue actual and consequential damages for any failure by the
Company to comply with the terms of this Debenture.  The Company covenants to
the Holder that there shall be no characterization concerning this instrument
other than as expressly provided herein. Amounts set forth or provided for
herein with respect to payments, conversion and the like (and the computation
thereof) shall be the amounts to be received by the Holder and shall not, except
as expressly provided herein, be subject to any other obligation of the Company
(or the performance thereof). The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the Holder and that the
remedy at law for any such breach may be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the Holder
shall be entitled, in addition to all other available remedies, to an injunction
restraining any such breach or any such threatened breach, without the necessity
of showing economic loss and without any bond or other security being required.
The Company shall provide all information and documentation to the Holder that
is requested by the Holder to enable the Holder to confirm the Company’s
compliance with the terms and conditions of this Debenture.

 

h) Next Business Day. Whenever any payment or other obligation hereunder shall
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day.

 

i) Headings. The headings contained herein are for convenience only, do not
constitute a part of this Debenture and shall not be deemed to limit or affect
any of the provisions hereof.

 

Section 8. Disclosure. Upon receipt or delivery by the Company of any notice in
accordance with the terms of this Debenture, unless the Company has in good
faith determined that the matters relating to such notice do not constitute
material, nonpublic information relating to the Company or its Subsidiaries, the
Company shall within four (4) Business Days after such receipt or delivery
publicly disclose such material, nonpublic information on a Current Report on
Form 8-K or otherwise. In the event that the Company believes that a notice
contains material, non-public information relating to the Company or its
Subsidiaries, the Company so shall indicate to the Holder contemporaneously with
delivery of such notice, and in the absence of any such indication, the Holder
shall be allowed to presume that all matters relating to such notice do not
constitute material, nonpublic information relating to the Company or its
Subsidiaries.

 

*********************

 

(Signature Page Follows)

 

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IN WITNESS WHEREOF, the Company has caused this Debenture to be duly executed by
a duly authorized officer as of the date first above indicated.

 

  CUENTAS INC.           By:   /s/ Arik Maimon     Name: Arik Maimon     Title:
Chief Executive Officer     Facsimile No.:        Email: arik@cuentas.com

 

 

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ANNEX A

 

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert principal under the 3% Convertible
Debenture due December 31, 2021 of Cuentas Inc., a Florida corporation (the
“Company”), into shares of common stock (the “Common Stock”), of the Company
according to the conditions hereof, as of the date written below. No fee will be
charged to the holder for any conversion, except for such transfer taxes, if
any.

 

Conversion calculations:

Date to Effect Conversion: December 31, 2019

 

Principal Amount of Debenture to be Converted: $9,000,000

 

Number of shares of Common Stock to be issued: 25% of the fully-diluted
outstanding shares of Common Stock of the Company as of December 31, 2019.

 

Signature:  /s/ Juan M. Gomez         Name: Juan M. Gomez, Chief Executive
Officer  

 

Address for Delivery of Common Stock Certificates:   CIMA Telecom, Inc. 1728
Coral Way Coral Gables, FL 33145

 

Or   DWAC Instructions:   Broker No:_________________ Account No:_______________

 

 

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