Exhibit 10.2

 

EXECUTION VERSION

 

THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT. BEGINNING NO LATER THAN 10
DAYS AFTER THE ISSUE DATE OF THIS NOTE, USELL.COM, INC., A DELAWARE CORPORATION,
LOCATED AT 171 MADISON AVENUE, 17TH FLOOR, NEW YORK, NEW YORK 10016, SHALL
PROMPTLY MAKE AVAILABLE TO THE HOLDER OR HOLDERS OF THIS NOTE UPON REQUEST THE
INFORMATION DESCRIBED IN TREASURY REGULATION SECTION 1.1275-3(b)(1)(i).

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR (B) AN OPINION OF COUNSEL, IN A
GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER
SAID ACT.

 

THIS NOTE IS REGISTERED WITH THE AGENT PURSUANT TO SECTION 13.5(b) OF THE
PURCHASE AGREEMENT (AS DEFINED BELOW). TRANSFER OF ALL OR ANY PORTION OF THIS
NOTE IS PERMITTED SUBJECT TO THE PROVISIONS SET FORTH IN SUCH SECTION 13.5 WHICH
REQUIRE, AMONG OTHER THINGS, THAT NO TRANSFER IS EFFECTIVE UNTIL THE TRANSFEREE
IS REFLECTED AS SUCH ON THE REGISTRY MAINTAINED WITH THE AGENT PURSUANT TO SUCH
SECTION 13.5(b).

 

FOURTH AMENDED AND RESTATED SECURED TERM NOTE

 

FOR VALUE RECEIVED, each of USELL.COM, INC., a Delaware corporation (“USELL”)
BST DISTRIBUTION, INC., a New York corporation (“BST”), WE SELL CELLULAR LLC, a
Delaware limited liability company (“WE SELL”; together with USELL and BST, the
“Companies” and each a “Company”), hereby promises to pay to
____________________, a Delaware limited liability company (the “Holder”) or its
registered assigns or successors in interest, the sum of SIX MILLION TWENTY-NINE
THOUSAND TWO HUNDRED NINETEEN DOLLARS AND SEVEN CENTS ($6,029,219.07), together
with any accrued and unpaid interest hereon subject to the terms and conditions
set forth herein.

 

Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in that certain Note Purchase Agreement, dated as January
13, 2017 (as amended, restated, modified and/or supplemented from time to time,
the “Purchase Agreement”) among Companies, the Holder, each other Purchaser and
_______________________, as agent for the Purchasers (the “Agent” and together
with the Purchasers (including the Holder), collectively, the “Creditor
Parties”), pursuant to which this Fourth Amended and Restated Secured Term Note
was issued.

 

 

 

 

The following term shall apply to this Fourth Amended and Restated Secured Term
Note (this “Note”):

 

“Maturity Date” shall mean January 13, 2020.

 

ARTICLE I

 

CONTRACT RATE AND AMORTIZATION

 

1.1          Contract Rate. Subject to Sections 1.7 and 2.9, interest payable on
the outstanding principal amount of this Note (the “Principal Amount”) shall
accrue at a rate per annum equal to sixteen percent (16%). Interest shall be (i)
calculated on the basis of a 365 day year and the actual number of days elapsed,
and (ii) payable monthly, in arrears, commencing on July 2, 2018, and on the
first business day of each consecutive calendar month thereafter through and
including the Maturity Date, and on the Maturity Date, whether by acceleration
or otherwise (each, an “Interest Payment Date”). Interest on the Principal
Amount of this Note that is payable on July 2, 2018, August 1, 2018 and
September 4, 2018 shall, in lieu of the payment thereof in cash, be paid by
adding such interest to the Principal Amount of this Note on such Interest
Payment Date (all such interest added to the Principal Amount of this Note, a
“PIK Amount”). For all purposes of this Note, all PIK Amounts shall be treated
as Principal Amounts and all references in this Note to the Principal Amount of
this Note shall include all PIK Amounts.

 

1.2          Contract Rate Payments. The Contract Rate shall be paid on each
Interest Payment Date with respect to the number of days from, but excluding,
the prior Interest Payment Date (or the issuance date with respect to the first
Interest Payment Date) through and including the applicable Interest Payment
Date. Interest shall also be paid in cash on the date of any payment or
prepayment of this Note with respect to the Principal Amount being paid at such
time.

 

1.3          Principal Payments. The outstanding Principal Amount together with
any accrued and unpaid interest and any and all other unpaid amounts which are
then owing by Companies to the Holder under this Note, the Purchase Agreement
and/or any other Related Agreement shall be due and payable on the Maturity
Date, whether by acceleration or otherwise.

 

1.4          Optional Prepayment. Companies may redeem the outstanding principal
balance of this Note in whole, but not in part, at any time after July 13, 2018,
upon at least fifteen (15) days’ prior written notice delivered to Agent and the
Holder, at the prepayment price of the Applicable Percentage (as hereafter
defined) of the outstanding Principal Amount of this Note so redeemed plus all
accrued but unpaid interest hereunder. For purposes hereof, the term “Applicable
Percentage” shall mean (a) if such prepayment occurs prior to November 16, 2018,
100% and (b) if such prepayment occurs on or after November 16, 2018, 103%.

 

To exercise its right to prepay this Note as provided in this Section 1.4,
Companies must deliver written notice of such election to the Agent and each
Purchaser at least fifteen (15) days prior to the repayment date, as set forth
in such notice, and Companies must take the same action with respect to all of
the holders of any other Notes.

 

1.5          Mandatory Prepayment Events. Unless waived in writing by the Agent,
Companies shall prepay this Note (a) from the net proceeds of any incurrence of
Indebtedness or other capital

 

 

 

 

(e)          Bankruptcy. Any Company or any of its Subsidiaries shall (i) apply
for, consent to or suffer to exist the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of all
or a substantial part of its property, (ii) make a general assignment for the
benefit of creditors, (iii) commence a voluntary case under the federal
bankruptcy laws (as now or hereafter in effect), (iv) be adjudicated a bankrupt
or insolvent, (v) file a petition seeking to take advantage of any other law
providing for the relief of debtors, (vi) acquiesce to, without challenge within
fifteen (15) days of the filing thereof, or failure to have dismissed, within
forty-five (45) days, any petition filed against it in any involuntary case
under such bankruptcy laws, or (vii) take any action for the purpose of
effecting any of the foregoing;

 

Judgments. Attachments or levies are made upon any Company’s or any of its
Subsidiary’s assets or a judgment is rendered against any Company or any of its
Subsidiaries or any of its or their property involving a liability which is in
excess of $100,000 in the aggregate with any other such liability (other than
liability covered under available insurance) or could reasonably be expected to
have a Material Adverse Effect and which shall not have been vacated,
discharged, stayed or bonded within thirty (30) days from the entry thereof;

 

(g)          Insolvency. Any Company or any of its Subsidiaries shall admit in
writing its inability, or be generally unable, to pay its debts as they become
due or cease operations of its present business;

 

(h)          Change of Control. A Change of Control (as defined below) shall
occur with respect to any Company or any Guarantor, unless the Agent shall have
expressly consented to such Change of Control in writing. A “Change of Control”
shall mean (i) any event or circumstance as a result of which any “Person” or
“group” (as such terms are defined in Sections 13(d) and 14(d) of the Exchange
Act, as in effect on the date hereof), other than a Holder of a Note, is or
becomes the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under
the Exchange Act), directly or indirectly, of 20% or more on a fully diluted
basis of the then outstanding voting equity interests of any Company or any
Guarantor (other than a “Person” or “group” that beneficially owns 20% or more
of such outstanding voting equity interests of any Company or any Guarantor as
of the Closing Date), (ii) any event or circumstance as a result of which USELL
shall at any time own less than 100% of all issued and outstanding equity
interests of any of the following entities: HD Capital Holdings LLC, Upstream
Phone Company USA, Inc., BST Distribution, Inc. and/or Upstream Holdings, Inc.,
(iii) any event or circumstance as a result of which BST Distribution, Inc.
shall at any time own less than 100% of all issued an outstanding equity
interests of We Sell Cellular, LLC, (iv) any change in the composition of the
Board of Directors of any Company or any Guarantor (the “Board”) such that the
Continuing Directors (as defined below) cease for any reason to constitute at
least a majority of the Board (as used herein, “Continuing Directors” means
those individuals who as of the Closing Date constituted the Board and each
other director that was elected by at least 66 2/3% of the Continuing Directors,
or as applicable, such director’s nomination for election to the Board is
recommended by 66 2/3% of the Continuing Directors), (v) any Company or any of
the Guarantors merges or consolidates with, or sells all or substantially all of
its assets to, any other Person, or (vi) the consummation of a purchase, tender
or exchange offer made to, and accepted by, the holders of more than a majority
of the outstanding shares of common stock of any Company or any Guarantor.
Notwithstanding the foregoing or anything contained herein to the contrary,
clause (i) of this Section 1.6(h) shall not apply to those Persons or “groups”
listed on Schedule 1.6(h) hereto, provided that such Persons or “groups” do not
beneficially own 50% or more on a fully diluted basis of the then outstanding
voting equity interests of any Company or any Guarantor;

 

 

 

 

(i)          Failure of Liens. The Agent’s lien on any Collateral deemed
material by Agent shall fail or cease to be a first priority validly perfected
security interest; or

 

(ii)          Breach of Covenant. The Company or any of its Subsidiaries
breaches any covenant set forth in Section 5 or 8 of the Purchase Agreement.

 

1.7          Default Interest. On and after April 1, 2018, Companies shall pay
additional interest on the outstanding Principal Amount of this Note, at a rate
per annum which is determined by adding five percent (5.0%) per annum to the
Contract Rate (“Default Interest Rate”), and all outstanding obligations under
this Note, the Purchase Agreement and each other Related Agreement, including
unpaid interest, shall continue to accrue interest at the Default Interest Rate
until such time as all Liabilities are indefeasibly paid in full.

 

1.8          Acceleration. If any Event of Default shall have occurred and be
continuing, (a) if such event is an Event of Default specified in Section
1.6(e), all of the Notes at the time outstanding shall automatically become
immediately due and payable together with interest accrued thereon, without any
requirement of presentment, demand, protest or notice of any kind, all of which
are hereby waived, and (b) if such event is not an Event of Default specified in
Section 1.6(e) (as a result of which the Notes have already been accelerated),
the Agent or the holders of a majority of the outstanding principal amount of
the Notes may at their option, by notice in writing to Companies, declare all of
the Notes to be, and all of the Notes shall thereupon be and become, immediately
due and payable together with interest accrued thereon, without any requirement
of further presentment, demand, protest or other notice of any kind, all of
which are hereby waived and with the consent of the Creditor Parties, the Agent
shall exercise on behalf of the Creditor Parties (including the holders of all
of the Notes) all rights and remedies available to them under the Security
Agreement and any other Related Agreement.

 

ARTICLE II

 

MISCELLANEOUS

 

2.1          Cumulative Remedies. The remedies under this Note shall be
cumulative.

 

2.2          Failure or Indulgence Not Waiver. No failure or delay on the part
of the Holder (or the Agent on behalf of the Holder) hereof in the exercise of
any power, right or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, power or
privilege. All rights and remedies existing hereunder are cumulative to, and not
exclusive of, any rights or remedies otherwise available.

 

2.3          Notices. Any notice herein required or permitted to be given shall
be given in writing in accordance with the terms of the Purchase Agreement.

 

2.4          Amendment Provision. The term “Note” and all references thereto, as
used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented, and any successor instrument as such successor instrument may be
amended or supplemented.

 

 

 

 

2.5          Assignability. This Note shall be binding upon each Company and its
successors and assigns, and shall inure to the benefit of the Holder and its
successors and assigns, and may be assigned by the Holder in accordance with the
requirements of the Purchase Agreement. No Company may assign any of its
obligations under this Note without the prior written consent of the Holder, any
such purported assignment without such consent being null and void.

 

2.6          Cost of Collection. In case of the occurrence of an Event of
Default under this Note, Companies shall pay the Holder (and the Agent on behalf
of the Holder) the Holder’s (and the Agent’s) costs of collection, including
reasonable fees associated with the hiring of experts and reasonable attorneys’
fees.

 

2.7          Governing Law, Jurisdiction and Waiver of Jury Trial.

 

(a)          THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW.

 

(b)          EACH COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE AND/OR
FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY
COMPANY, ON THE ONE HAND, AND THE HOLDER AND/OR ANY OTHER CREDITOR PARTY, ON THE
OTHER HAND, PERTAINING TO THIS NOTE OR ANY OF THE OTHER RELATED AGREEMENTS OR TO
ANY MATTER ARISING OUT OF OR RELATED TO THIS NOTE OR ANY OF THE RELATED
AGREEMENTS; PROVIDED, THAT EACH COMPANY ACKNOWLEDGES THAT ANY APPEALS FROM THOSE
COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE COUNTY OF NEW
YORK, STATE OF NEW YORK; AND FURTHER PROVIDED, THAT NOTHING IN THIS NOTE SHALL
BE DEEMED OR OPERATE TO PRECLUDE THE HOLDER AND/OR ANY OTHER CREDITOR PARTY FROM
BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION WHERE ANY
OF THE COLLATERAL IS LOCATED TO COLLECT THE LIABILITIES (AS DEFINED IN THE
SECURITY AGREEMENT), TO REALIZE ON THE COLLATERAL (AS DEFINED IN THE SECURITY
AGREEMENT) OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT
OR OTHER COURT ORDER IN FAVOR OF THE HOLDER AND/OR ANY OTHER CREDITOR PARTY.
EACH COMPANY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN
ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH COMPANY HEREBY WAIVES
ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON CONVENIENS. EACH COMPANY HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR
SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE
MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH COMPANY AT THE ADDRESS
SET FORTH IN THE PURCHASE AGREEMENT

 

AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH
COMPANY’S ACTUAL RECEIPT THEREOF OR FIVE (5) DAYS AFTER DEPOSIT IN THE U.S.
MAIL, PROPER POSTAGE PREPAID.

 

 

 

 

(c)          EACH COMPANY DESIRES THAT ITS DISPUTES BE RESOLVED BY A JUDGE
APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE
BENEFITS OF THE JUDICIAL SYSTEM AND/OR OF ARBITRATION, EACH COMPANY HERETO
WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE
HOLDER AND/OR ANY OTHER CREDITOR PARTY, ON THE ONE HAND, AND EACH COMPANY, ON
THE OTHER HAND, ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS NOTE, ANY OTHER
RELATED AGREEMENT OR THE TRANSACTIONS RELATED HERETO OR THERETO.

 

2.8          Severability. In the event that any provision of this Note is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any such provision which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision of this
Note.

 

2.9          Maximum Payments. Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law. In the event that the rate of
interest required to be paid or other charges hereunder exceed the maximum rate
permitted by such law, any payments in excess of such maximum rate shall be
credited against amounts owed by Companies to the Holder and thus refunded to
Companies.

 

2.10  Security Interest. The Agent, for the ratable benefit of the Creditor
Parties, has been granted a security interest in certain assets of Companies and
the Guarantors as more fully described in the Security Agreement and the other
Related Agreements.

 

2.11   Construction; Counterparts. Each party acknowledges that its legal
counsel participated in the preparation of this Note and, therefore, stipulates
that the rule of construction that ambiguities are to be resolved against the
drafting party shall not be applied in the interpretation of this Note to favor
any party against the other. Unless the context otherwise requires, (i) words in
the singular or plural include the singular and plural and pronouns stated in
either the masculine, the feminine or neuter gender shall include the masculine,
feminine and neuter, (ii) the words “hereof,” “herein” and words to similar
effect refer to this Note in its entirety, and (iii) the use of the word
“including” in this Note shall be by way of example rather than limitation. This
Note may be executed by the parties hereto in one or more counterparts, each of
which shall be deemed an original and all of which when taken together shall
constitute one and the same instrument. Any signature delivered by a party by
facsimile or electronic transmission shall be deemed to be an original signature
hereto.

 

 

 

 

2.12 Registered Obligation. This Note shall be registered (and such registration
shall thereafter be maintained) as set forth in Section 13.5(b) of the Purchase
Agreement. Notwithstanding any document, instrument or agreement relating to
this Note to the contrary, transfer of this Note (or the right to any payments
of principal or stated interest thereunder) may only be effected by (i)
surrender of this Note and either the reissuance by Companies of this Note to
the new holder or the issuance by Companies of a new instrument to the new
holder or (ii) registration of such holder as an assignee in accordance with
Section 13.5 of the Purchase Agreement.

 

2.13 Amendment and Restatement. This Note amends and restates in its entirety
the Third Amended and Restated Secured Term Note made by Companies in favor of
Holder, as of July 2, 2018, in the original principal amount of $5,547,600 (the
“Prior Note”). This Note does not constitute a novation of the Prior Note and
all amounts outstanding as of the date hereof under the Prior Note shall remain
outstanding under this Note.

 

[Balance of page intentionally left blank; signature page follows]

 

 

 

 

IN WITNESS WHEREOF, each Company has caused this Fourth Amended and Restated
Secured Term Note to be signed in its name effective as of this 1’ day of
October, 2018.

 

  USELL.COM, INC       By:       Name : Nikhil Raman
Title Chief Executive Officer

 

  BST DISTRIBUTION, INC.       By:       Name: Brian Tepfer
Title: Chief Executive Officer

  

  WE SELL CELLULAR LLC       By:         

 

Name Nikhil Raman

Title: Manager

 

 

SIGNATURE PAGE TO

FOURTH AMENDED AND RESTATED
SECURED TERM NOTE

 

 

 

 

IN WITNESS WHEREOF, each Company has caused this Fourth Amended and Restated
Secured Term Note to be signed in its name effective as of this 1st day of
October, 2018.

 

  USELL.COM, INC.       By:       Name: Nikhil Raman
Title: Chief Executive Officer

 

  BST DISTRIBUTION, INC.       By:       Name: Brian Tepfer
Title: Chief Executive Officer

  

  WE SELL CELLULAR LLC       By:        

 

Name: Nikhil Raman

Title: Manager

 

 

SIGNATURE PAGE TO

FOURTH AMENDED AND RESTATED
SECURED TERM NOTE