Exhibit 10.2

 

 

 

 

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THIS INSTRUMENT CONTAINS AN AFFIDAVIT OF CONFESSION OF JUDGMENT PROVISION WHICH
CONSTITUTES A WAIVER OF IMPORTANT RIGHTS BORROWER MAY HAVE AND ALLOWS THE HOLDER
TO OBTAIN A JUDGMENT AGAINST BORROWER WITHOUT ANY FURTHER NOTICE. NEITHER THE
ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES 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 (B) AN OPINION OF COUNSEL
(WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE PURCHASE AGREEMENT)),
IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE 144A OR REGULATION S UNDER SAID
ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY THE SECURITIES. Principal Amount: $222,222.00 Issue Date: November 8, 2018
Actual Amount of Purchase Price: $200,000.00 SENIOR CONVERTIBLE PROMISSORY NOTE
FOR VALUE RECEIVED, WESTMOUNTAIN COMPANY, a Colorado corporation (hereinafter
called the “Borrower” or the “Company”), hereby promises to pay to the order of
FIRSTFIRE GLOBAL OPPORTUNITIES FUND LLC, a Delaware limited liability company,
or registered assigns (the “Holder”), in the form of lawful money of the United
States of America, the principal sum of $222,222.00, which amount is the
$200,000.00 actual amount of the purchase price (the “Consideration”) hereof
plus an original issue discount in the amount of $22,222.00 (the “OID”) (subject
to adjustment herein) (the “Principal Amount”) and to pay interest on the unpaid
Principal Amount hereof at the rate of eight percent (8%) (the “Interest Rate”)
per annum from the date hereof (the “Issue Date”) until the same becomes due and
payable, whether at maturity or upon acceleration or by prepayment or otherwise,
as further provided herein. The maturity date shall be twelve (12) months from
the Issue Date (each a “Maturity Date”), and is the date upon which the
principal sum, the OID, as well as any accrued and unpaid interest and other
fees, shall be due and payable. It is further acknowledged and agreed that the
Principal Amount owed by Borrower under this Note shall be increased by the
amount of all expenses incurred by the Holder relating to the conversion of this
Note into shares of Common Stock. All such expenses shall be deemed added to the
Principal Amount hereunder to the extent such expenses are paid by the Holder.
This Note may not be prepaid or repaid in whole or in part except as otherwise
explicitly set forth herein. This Note shall be a senior obligation of the
Company, with priority over all future Indebtedness (as defined below) of the
Company as provided for herein. Interest shall commence accruing on the date
that the Note is fully funded and shall be computed on the basis of a 365-day
year and the actual number of days elapsed. Any Principal Amount or interest on
this Note which is not paid when due shall bear interest at the rate of the
lesser of (i) fifteen percent (15%) per annum and (ii) the maximum amount
permitted by law from the due date thereof until the same is paid (“Default
Interest”). All payments due hereunder (to the extent not converted into shares
of common stock, $0.001 par value per share, of the Borrower (the “Common
Stock”) in accordance with the terms hereof) shall be made in lawful money of
the United States of America. All payments shall be made at such address as the
Holder shall hereafter give to the Borrower by written notice made in accordance
with the provisions of this Note. Whenever any amount expressed to be due by the
terms of this Note is due on any day which is not a business day, the same shall
instead be due on the next succeeding day which is a business day and, in the
case of any interest payment date which is not the date on which this Note is
paid in full, the extension of the due date thereof shall not be taken into
account for purposes of determining the amount of interest due on such date.
Each capitalized term used herein, and not otherwise defined, shall have the
meaning ascribed thereto in that certain Securities Purchase Agreement, dated as
of the Issue Date, pursuant to which this Note was originally issued (the
“Purchase Agreement”). As used in this Note, the term “business day” shall mean
any day other than a Saturday, Sunday or a day on which commercial banks in the
city of New York, New York are authorized or required by law or executive order
to remain closed. As used herein, the term “Trading Day” means any day that
shares of Common Stock are listed for trading or quotation on the OTCBB (as
defined in the Purchase Agreement), any tier of the NASDAQ Stock Market, the New
York Stock Exchange or the NYSE American. This Note is free from all taxes,
liens, claims and encumbrances with respect to the issue thereof and shall not
be subject to preemptive rights or other similar rights of shareholders of the
Borrower and will not impose personal liability upon the holder thereof. The
following terms shall apply to this Note: ARTICLE I. CONVERSION RIGHTS 1.1
Conversion Right. The Holder shall have the right, at any time on or after the
Issue Date, to convert all or any portion of the then outstanding and unpaid
Principal Amount and interest (including any Default Interest) into fully paid
and non-assessable shares of Common Stock, as such Common Stock exists on the
Issue Date, or any shares of capital stock or other securities of the Borrower
into which such Common Stock shall hereafter be changed or reclassified, at the
Conversion Price (as defined below) determined as provided herein (a
“Conversion”); provided, however, that in no event shall the Holder be entitled
to convert any portion of this Note in excess of that portion of this Note upon
conversion of which the sum of (1) the number of shares of Common Stock
beneficially owned by the Holder and its affiliates (other than shares of Common
Stock which may be deemed beneficially owned through the ownership of the
unconverted portion of this Note or the unexercised or unconverted portion of
any other security of the Borrower subject to a limitation on conversion or
exercise analogous to the limitations contained herein) and (2) the number of
Conversion Shares issuable upon the conversion of the portion of this Note with
respect to which the determination of this proviso is being made, would result
in beneficial ownership by the Holder and its affiliates of more than 4.99% of
the then outstanding shares of Common Stock. For purposes of the proviso set
forth in the immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended (the “1934 Act”), and Regulations 13D-G thereunder, except as
otherwise provided in clause (1) of such proviso, provided, however, that the
limitations on conversion may be waived (up to 9.99%) by the Holder upon, at the
election of the Holder, not less than 61 days’ prior notice to the Borrower, and
the provisions of the conversion limitation shall continue to apply until such
61st day (or such later date, as determined by the Holder, as may be specified
in such notice of waiver). The number of Conversion Shares to be issued upon
each conversion of this Note shall be determined by dividing the Conversion
Amount (as defined below) by the applicable Conversion Price then in effect on
the date specified in the notice of conversion, in the form attached hereto as
Exhibit A (the “Notice of Conversion”), delivered to the Borrower by the Holder
in accordance with Section 1.4 below; provided that the Notice of Conversion is
submitted by facsimile or e-mail (or by other means resulting in, or reasonably
expected to result in, notice) to the Borrower before 4:00 p.m., New York, New
York time on such conversion date (the “Conversion Date”). The term “Conversion
Amount” means, with respect to any conversion of this Note, the sum of (1) the
Principal Amount of this Note to be converted in such conversion plus (2) at the
Holder’s option, accrued and unpaid interest, if any, on such Principal Amount
at the Interest Rate to the Conversion Date, plus (3) at the Holder’s option,
Default Interest, if any, on the amounts referred to in the immediately
preceding clauses (1) and/or (2). 1.2 Conversion Price. (a) Calculation of
Conversion Price. The per share conversion price into which Principal Amount and
interest (including any Default Interest) under this Note shall be convertible
into shares of Common Stock hereunder (the “Conversion Price”) shall be equal to
$0.25 (the “Fixed Conversion Price”), provided, further, that at any time on or
after the date which is six (6) months after the Issue Date, the Conversion
Price shall equal the lower of (i) the Fixed Conversion Price or (ii) 65%
multiplied by the lowest traded price of the Common Stock during the twenty (20)
consecutive Trading Day period immediately preceding the Trading Day that the
Company receives a Notice of Conversion (the “Alternate Conversion Price”); and
provided, further, however, and notwithstanding the above calculation of the
Alternate Conversion Price or any other calculation of Conversion Price pursuant
to this Section 1.2, if the lowest traded price of the Common Stock is less than
the Conversion Price on the date following the Conversion Date (the “Free
Trading Share Receipt Date”) on which the Holder actually receives from the
Company or its transfer agent Conversion Shares issuable pursuant to this
Section 1 which are immediately upon receipt unrestricted and freely tradable by
the Holder either by way of (A) registration under the 1933 Act or (B) pursuant
to Rule 144 under the 1933 Act (or a successor rule) (“Rule 144”), Rule 144A
under the 1933 Act (or a successor rule) (“Rule 144A”) or Regulation S under the
1933 Act (or a successor rule) (“Regulation S”), then the Conversion Price shall
be deemed to have been retroactively adjusted, as of the Conversion Date, to a
price equal to 60% multiplied by the lowest traded price of the Common Stock on
the Free Trading Shares Receipt Date (the “Free Trading Shares Receipt Date
Conversion Price”), and the Company shall, on the Trading Day following the Free
Trading Share Receipt Date, issue to the Holder additional shares of
unrestricted, freely tradable Common Stock equal to the difference between (Y)
the number of Conversion Shares receivable upon conversion of the applicable
Conversion Amount at the Conversion Price and (Z) the number of Conversion
Shares receivable upon conversion of the applicable Conversion Amount at the
Free Trading Shares Receipt Date Conversion Price (subject to the beneficial
ownership limitations contained in Section 1.1, such that the additional shares
shall be issued in tranches if required to comply with such beneficial ownership
limitations); and provided, further, however, and notwithstanding the above
calculation of the Conversion Price, if, prior to the repayment or conversion of
this Note, in the event the Borrower consummates a registered or unregistered
primary offering of its securities for capital raising purposes (a “Primary
Offering”), the Holder shall have the right, in its discretion, to (x) demand
repayment in full of an amount equal to any outstanding Principal Amount and
interest (including Default Interest) under this Note as of the closing date of
the Primary Offering or (y) convert any outstanding Principal Amount and
interest (including any Default Interest) under this Note into Common Stock at
the closing of such Primary Offering at a Conversion Price equal to the lower of
(i) the Conversion Price and (ii) a 20% discount to the offering price to
investors in the Primary Offering. The Borrower shall provide the Holder no less
than ten (10) business days’ notice of the anticipated closing of a Primary
Offering and an opportunity to exercise its conversion rights in connection
therewith. (b) Conversion Price During Major Announcements. Notwithstanding
anything contained in Section 1.2(a) to the contrary, in the event the Borrower
(i) makes a public announcement that it intends to be acquired by, consolidate
or merge with any other corporation or entity (other than a merger in which the
Borrower is the surviving or continuing corporation and its capital stock is
unchanged) or sell or transfer all or substantially all of the assets of the
Borrower or (ii) any person, group or entity (including the Borrower) publicly
announces a tender offer to purchase 50% or more of the Common Stock (or any
other takeover scheme) (any such transaction referred to in clause (i) or (ii)
being referred to herein as a “Change in Control” and the date of the
announcement referred to in clause (i) or (ii) is being referred to herein as
the “Announcement Date”), then the Conversion Price shall, effective upon the
Announcement Date and continuing through the Adjusted Conversion Price
Termination Date (as defined below), be equal to the lower of (x) the Conversion
Price and (y) a 25% discount to the Acquisition Price (as defined below). From
and after the Adjusted Conversion Price Termination Date, the Conversion Price
shall be determined as set forth in Section 1.2(a). For purposes hereof,
“Adjusted Conversion Price Termination Date” shall mean, with respect to any
proposed Change in Control for which a public announcement as contemplated by
this Section 1.2(b) has been made, the date upon which the Borrower (in the case
of clause (i) above) or the person, group or entity (in the case of clause (ii)
above) consummates or publicly announces the termination or abandonment of the
proposed Change in Control which caused this Section 1.2(b) to become operative.
For purposes hereof, “Acquisition Price” shall mean a price per share of Common
Stock derived by dividing (x) the total consideration (in cash, equity, earn-out
or similar payments or otherwise) paid or to be paid to the Borrower or its
shareholders in the Change in Control transaction by (y) the number of
authorized shares of Common Stock outstanding as of the business day prior to
the Announcement Date. 1.3 Authorized and Reserved Shares. The Borrower
covenants that at all times until the Note is satisfied in full, the Borrower
will reserve from its authorized and unissued Common Stock a sufficient number
of shares, free from preemptive rights, to provide for the issuance of a number
of Conversion Shares equal to the greater of: (a) 15,000,000 shares of Common
Stock or (b) the sum of (i) the number of Conversion Shares issuable upon the
full conversion of this Note (assuming no payment of Principal Amount or
interest) as of any issue date (taking into consideration any adjustments to the
Conversion Price pursuant to Section 2 hereof or otherwise) multiplied by (ii)
three (3) (the “Reserved Amount”). In the event that the Borrower shall be
unable to reserve the entirety of the Reserved Amount (the “Reserve Amount
Failure”), the Borrower shall promptly take all actions necessary to increase
its authorized share capital to accommodate the Reserved Amount (the “Authorized
Share Increase”), including without limitation, all board of directors actions
and approvals and promptly (but no less than 60 days following the calling and
holding a special meeting of its shareholders no more than 60 days following the
Reserve Amount Failure to seek approval of the Authorized Share Increase via the
solicitation of proxies. Notwithstanding the foregoing, in no event shall the
Reserved Amount be lower than the initial Reserved Amount, regardless of any
prior conversions. The Borrower represents that upon issuance, the Conversion
Shares will be duly and validly issued, fully paid and non-assessable. In
addition, if the Borrower shall issue any securities or make any change to its
capital structure which would change the number of Conversion Shares into which
this Note shall be convertible at the then current Conversion Price, the
Borrower shall at the same time make proper provision so that thereafter there
shall be a sufficient number of shares of Common Stock authorized and reserved,
free from preemptive rights, for conversion of this Note. The Borrower (i)
acknowledges that it has irrevocably instructed its transfer agent to issue
certificates for the Conversion Shares or instructions to have the Conversion
Shares issued as contemplated by Section 1.4(f) hereof, and (ii) agrees that its
issuance of this Note shall constitute full authority to its officers and agents
who are charged with the duty of executing stock certificates or cause the
Company to electronically issue shares of Common Stock to execute and issue the
necessary certificates for the Conversion Shares or cause the Conversion Shares
to be issued as contemplated by Section 1.4(f) hereof in accordance with the
terms and conditions of this Note. If, at any time the Borrower does not
maintain the Reserved Amount it will be considered an Event of Default under
this Note. 1.4 Method of Conversion. (a) Mechanics of Conversion. This Note may
be converted by the Holder in whole or in part, on any Trading Day, at any time
on or after the Issue Date, by submitting to the Borrower a Notice of Conversion
(by facsimile, e-mail or other reasonable means of communication dispatched on
the Conversion Date prior to 4:00 p.m., New York, New York time). Any Notice of
Conversion submitted after 4:00 p.m., New York, New York time, shall be deemed
to have been delivered and received on the next Trading Day. (b) Surrender of
Note Upon Conversion. Notwithstanding anything to the contrary set forth herein,
upon conversion of this Note in accordance with the terms hereof, the Holder
shall not be required to physically surrender this Note to the Borrower unless
the entire unpaid Principal Amount is so converted. The Holder and the Borrower
shall maintain records showing the Principal Amount so converted and the dates
of such conversions or shall use such other method, reasonably satisfactory to
the Holder and the Borrower, so as not to require physical surrender of this
Note upon each such conversion. In the event of any dispute or discrepancy, such
records of the Borrower shall, prima facie, be controlling and determinative in
the absence of manifest error. Notwithstanding the foregoing, if any portion of
this Note is converted as aforesaid, the Holder may not transfer this Note
unless the Holder first physically surrenders this Note to the Borrower,
whereupon the Borrower will forthwith issue and deliver upon the order of the
Holder a new Note of like tenor, registered as the Holder (upon payment by the
Holder of any applicable transfer taxes) may request, representing in the
aggregate the remaining unpaid Principal Amount of this Note. The Holder and any
assignee, by acceptance of this Note, acknowledge and agree that, by reason of
the provisions of this paragraph, following conversion of a portion of this
Note, the unpaid and unconverted Principal Amount of this Note represented by
this Note may be less than the amount stated on the face hereof. (c) Payment of
Taxes. The Borrower shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issue and delivery of shares of Common
Stock or other securities or property on conversion of this Note in a name other
than that of the Holder (or in street name), and the Borrower shall not be
required to issue or deliver any such shares or other securities or property
unless and until the person or persons (other than the Holder or the custodian
in whose street name such shares are to be held for the Holder’s account)
requesting the issuance thereof shall have paid to the Borrower the amount of
any such tax or shall have established to the satisfaction of the Borrower that
such tax has been paid. (d) Delivery of Common Stock Upon Conversion. Upon
receipt by the Borrower from the Holder of a facsimile transmission or e-mail
(or other reasonable means of communication) of a Notice of Conversion meeting
the requirements for conversion as provided in this Section 1.4, the Borrower
shall issue and deliver or cause to be issued and delivered to or upon the order
of the Holder certificates for the Conversion Shares (or cause the electronic
delivery of the Conversion Shares as contemplated by Section 1.4(f) hereof)
within one (1) Trading Day after such receipt (the “Deadline”) (and, solely in
the case of conversion of the entire unpaid Principal Amount and interest
(including any Default Interest) under this Note, surrender of this Note). If
the Company shall fail for any reason or for no reason to issue to the Holder on
or prior to the Deadline a certificate for the number of Conversion Shares or to
which the Holder is entitled hereunder and register such Conversion Shares on
the Company’s share register or to credit the Holder’s balance account with DTC
(as defined below) for such number of Conversion Shares to which the Holder is
entitled upon the Holder’s conversion of this Note (a “Conversion Failure”),
then, in addition to all other remedies available to the Holder, (i) the Company
shall pay in cash to the Holder on each day after the Deadline and during such
Conversion Failure an amount equal to 2.0% of the product of (A) the sum of the
number of Conversion Shares not issued to the Holder on or prior to the Deadline
and to which the Holder is entitled and (B) the closing sale price of the Common
Stock on the Trading Day immediately preceding the last possible date which the
Company could have issued such Conversion Shares to the Holder without violating
this Section 1.4(d); and (ii) the Holder, upon written notice to the Company,
may void its Notice of Conversion with respect to, and retain or have returned,
as the case may be, any portion of this Note that has not been converted
pursuant to such Notice of Conversion; provided that the voiding of an Notice of
Conversion shall not affect the Company’s obligations to make any payments which
have accrued prior to the date of such notice. In addition to the foregoing, if
on or prior to the Deadline the Company shall fail to issue and deliver a
certificate to the Holder and register such Conversion Shares on the Company’s
share register or credit the Holder’s balance account with DTC for the number of
Conversion Shares to which the Holder is entitled upon the Holder’s exercise
hereunder or pursuant to the

 

 

   

 

 

 

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Company’s obligation pursuant to clause (ii) below, and if on or after such
Trading Day the Holder purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Holder of
shares of Common Stock issuable upon such exercise that the Holder anticipated
receiving from the Company, then the Company shall, within two (2) Trading Days
after the Holder’s request and in the Holder’s discretion, either (i) pay cash
to the Holder in an amount equal to the Holder’s total purchase price (including
brokerage commissions and other reasonable and customary out-of-pocket expenses,
if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at
which point the Company’s obligation to deliver such certificate (and to issue
such Conversion Shares) or credit such Holder’s balance account with DTC for
such Conversion Shares shall terminate, or (ii) promptly honor its obligation to
deliver to the Holder a certificate or certificates representing such Conversion
Shares or credit such Holder’s balance account with DTC and pay cash to the
Holder in an amount equal to the excess (if any) of the Buy-In Price over the
product of (A) such number of shares of Common Stock, times (B) the closing
sales price of the Common Stock on the date of exercise. Nothing shall limit the
Holder’s right to pursue any other remedies available to it hereunder, at law or
in equity, including, without limitation, a decree of specific performance
and/or injunctive relief with respect to the Company’s failure to timely deliver
certificates representing the Conversion Shares (or to electronically deliver
such Conversion Shares) upon the conversion of this Note as required pursuant to
the terms hereof. (e) Obligation of Borrower to Deliver Common Stock. Upon
receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to
be the holder of record of the Conversion Shares issuable upon such conversion,
the outstanding Principal Amount and the amount of accrued and unpaid interest
(including any Default Interest) under this Note shall be reduced to reflect
such conversion, and, unless the Borrower defaults on its obligations under this
Article I, all rights with respect to the portion of this Note being so
converted shall forthwith terminate except the right to receive the Common Stock
or other securities, cash or other assets, as herein provided, on such
conversion. If the Holder shall have given a Notice of Conversion as provided
herein, the Borrower’s obligation to issue and deliver the certificates for the
Conversion Shares (or cause the electronic delivery of the Conversion Shares as
contemplated by Section 1.4(f) hereof) shall be absolute and unconditional,
irrespective of the absence of any action by the Holder to enforce the same, any
waiver or consent with respect to any provision thereof, the recovery of any
judgment against any person or any action to enforce the same, any failure or
delay in the enforcement of any other obligation of the Borrower to the holder
of record, or any setoff, counterclaim, recoupment, limitation or termination,
or any breach or alleged breach by the Holder of any obligation to the Borrower,
and irrespective of any other circumstance which might otherwise limit such
obligation of the Borrower to the Holder in connection with such conversion. The
Conversion Date specified in the Notice of Conversion shall be the Conversion
Date so long as the Notice of Conversion is received by the Borrower before 6:00
p.m., New York, New York time, on such date. (f) Delivery of Conversion Shares
by Electronic Transfer. In lieu of delivering physical certificates representing
the Conversion Shares issuable upon conversion hereof, provided the Borrower is
participating in the Depository Trust Company (“DTC”) Fast Automated Securities
Transfer or Deposit/Withdrawal at Custodian programs, upon request of the Holder
and its compliance with the provisions contained in Section 1.1 and in this
Section 1.4, the Borrower shall use its best efforts to cause its transfer agent
to electronically transmit the Conversion Shares issuable upon conversion hereof
to the Holder by crediting the account of Holder’s Prime Broker with DTC through
its Deposit Withdrawal Agent Commission system. 1.5 Concerning the Shares. The
Conversion Shares issuable upon conversion of this Note may not be sold or
transferred unless (i) such shares are sold pursuant to an effective
registration statement under the 1933 Act or (ii) the Borrower or its transfer
agent shall have been furnished with an opinion of counsel (which opinion shall
be the Legal Counsel Opinion (as defined in the Purchase Agreement)) to the
effect that the shares to be sold or transferred may be sold or transferred
pursuant to an exemption from such registration or (iii) such shares are sold or
transferred pursuant to Rule 144, Rule 144A or Regulation S or (iv) such shares
are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who
agrees to sell or otherwise transfer the shares only in accordance with this
Section 1.5 and who is an Accredited Investor (as defined in the Purchase
Agreement). Except as otherwise provided in the Purchase Agreement (and subject
to the removal provisions set forth below), until such time as the Conversion
Shares have been registered under the 1933 Act or otherwise may be sold pursuant
to Rule 144, Rule 144A or Regulation S without any restriction as to the number
of securities as of a particular date that can then be immediately sold, each
certificate for the Conversion Shares that has not been so included in an
effective registration statement or that has not been sold pursuant to an
effective registration statement or an exemption that permits removal of the
legend, shall bear a legend substantially in the following form, as appropriate:
“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES 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 (B) AN OPINION
OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE PURCHASE
AGREEMENT)), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE 144A OR REGULATION
S UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.” The legend set forth above shall be
removed and the Company shall issue to the Holder a certificate for the
applicable Conversion Shares without such legend upon which it is stamped or (as
requested by the Holder) issue the applicable Conversion Shares by electronic
delivery by crediting the account of such holder’s broker with DTC, if, unless
otherwise required by applicable state securities laws: (a) such Conversion
Shares are registered for sale under an effective registration statement filed
under the 1933 Act or otherwise may be sold pursuant to Rule 144, Rule 144A or
Regulation S without any restriction as to the number of securities as of a
particular date that can then be immediately sold, or (b) the Company or the
Holder provides the Legal Counsel Opinion (as contemplated by and in accordance
with Section 4(m) of the Purchase Agreement) to the effect that a public sale or
transfer of such Conversion Shares may be made without registration under the
1933 Act, which opinion shall be accepted by the Company so that the sale or
transfer is effected. The Company shall be responsible for the fees of its
transfer agent and all DTC fees associated with any such issuance. The Holder
agrees to sell all Conversion Shares, including those represented by a
certificate(s) from which the legend has been removed, in compliance with
applicable prospectus delivery requirements, if any. In the event that the
Company does not accept the opinion of counsel provided by the Holder with
respect to the transfer of Conversion Shares pursuant to an exemption from
registration, such as Rule 144, Rule 144A or Regulation S, at the Deadline,
notwithstanding that the conditions of Rule 144, Rule 144A or Regulation S, as
applicable, have been met, it will be considered an Event of Default under this
Note. 1.6 Effect of Certain Events. (a) Effect of Merger, Consolidation, Etc. At
the option of the Holder, the sale, conveyance or disposition of all or
substantially all of the assets of the Borrower, or the consolidation, merger or
other business combination of the Borrower with or into any other Person (as
defined below) or Persons when the Borrower is not the survivor shall either:
(i) be deemed to be an Event of Default pursuant to which the Borrower shall be
required to pay to the Holder upon the consummation of and as a condition to
such transaction an amount equal to the Default Amount (defined in Section 3.23)
or (ii) be treated pursuant to Section 1.6(b) hereof. “Person” shall mean any
individual, corporation, limited liability company, partnership, association,
trust or other entity or organization. (b) Adjustment Due to Merger,
Consolidation, Etc. If, at any time when this Note is issued and outstanding and
prior to conversion of all of this Note, there shall be any merger,
consolidation, exchange of shares, recapitalization, reorganization, or other
similar event, as a result of which shares of Common Stock of the Borrower shall
be changed into the same or a different number of shares of another class or
classes of stock or securities of the Borrower or another entity, or in case of
any sale or conveyance of all or substantially all of the assets of the Borrower
other than in connection with a plan of complete liquidation of the Borrower,
then the Holder of this Note shall thereafter have the right to receive upon
conversion of this Note, upon the basis and upon the terms and conditions
specified herein and in lieu of the shares of Common Stock immediately
theretofore issuable upon conversion, such stock, securities or assets which the
Holder would have been entitled to receive in such transaction had this Note
been converted in full immediately prior to such transaction (without regard to
any limitations on conversion set forth herein), and in any such case
appropriate provisions shall be made with respect to the rights and interests of
the Holder of this Note to the end that the provisions hereof (including,
without limitation, provisions for adjustment of the Conversion Price and of the
number of shares issuable upon conversion of the Note) shall thereafter be
applicable, as nearly as may be practicable in relation to any securities or
assets thereafter deliverable upon the conversion hereof. The Borrower shall not
effectuate any transaction described in this Section 1.6(b) unless (a) it first
gives, to the extent practicable, at least thirty (30) days prior written notice
(but in any event at least fifteen (15) days prior written notice) of the record
date of the special meeting of shareholders to approve, or if there is no such
record date, the consummation of, such merger, consolidation, exchange of
shares, recapitalization, reorganization or other similar event or sale of
assets (during which time the Holder shall be entitled to convert this Note) and
(b) the resulting successor or acquiring entity (if not the Borrower) assumes by
written instrument the obligations of this Section 1.6(b). The above provisions
shall similarly apply to successive consolidations, mergers, sales, transfers or
share exchanges. (c) Adjustment Due to Distribution. If the Borrower shall
declare or make any distribution of its assets (or rights to acquire its assets)
to holders of Common Stock as a dividend, stock repurchase, by way of return of
capital or otherwise (including any dividend or distribution to the Borrower’s
shareholders in cash or shares (or rights to acquire shares) of capital stock of
a subsidiary (i.e., a spin-off)) (a “Distribution”), then the Holder of this
Note shall be entitled, upon any conversion of this Note after the date of
record for determining shareholders entitled to such Distribution, to receive
the amount of such assets which would have been payable to the Holder with
respect to the shares of Common Stock issuable upon such conversion had such
Holder been the holder of such shares of Common Stock on the record date for the
determination of shareholders entitled to such Distribution. (d) Purchase
Rights. If, at any time when all or any portion of this Note is issued and
outstanding, the Borrower issues any convertible securities or rights to
purchase stock, warrants, securities or other property (the “Purchase Rights”)
pro rata to the record holders of any class of Common Stock, then the Holder of
this Note will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which such Holder could have
acquired if such Holder had held the number of shares of Common Stock acquirable
upon complete conversion of this Note (without regard to any limitations on
conversion contained herein) immediately before the date on which a record is
taken for the grant, issuance or sale of such Purchase Rights or, if no such
record is taken, the date as of which the record holders of Common Stock are to
be determined for the grant, issue or sale of such Purchase Rights. (e) Dilutive
Issuance. If the Borrower, at any time while this Note or any amounts due
hereunder are outstanding, issues, sells or grants (or has issued, sold or
granted as of the Issue Date, as the case may be) any option to purchase, or
sells or grants any right to reprice, or otherwise disposes of, or issues (or
has sold or issued, as the case may be, or announces any sale, grant or any
option to purchase or other disposition), any Common Stock or other securities
convertible into, exercisable for, or otherwise entitle any person or entity the
right to acquire, shares of Common Stock (including, without limitation, upon
conversion of this Note, and any convertible notes or warrants outstanding as of
or following the Issue Date), in each or any case at an effective price per
share that is lower than the then Conversion Price (such lower price, the “Base
Conversion Price” and such issuances, collectively, a “Dilutive Issuance”) (it
being agreed that if the holder of the Common Stock or other securities so
issued shall at any time, whether by operation of purchase price adjustments,
reset provisions, floating conversion, exercise or exchange prices or otherwise,
or due to warrants, options or rights per share which are issued in connection
with such issuance, be entitled to receive shares of Common Stock at an
effective price per share that is lower than the Conversion Price, such issuance
shall be deemed to have occurred for less than the Conversion Price on such date
of the Dilutive Issuance), then the Conversion Price shall be reduced, at the
option of the Holder, to a price equal the Base Conversion Price. If the Company
enters into a Variable Rate Transaction, despite the prohibition set forth in
the Purchase Agreement, the Company shall be deemed to have issued Common Stock
or Common Stock Equivalents at the lowest possible price per share at which such
securities could be issued in connection with such Variable Rate Transaction.
Such adjustment shall be made whenever such Common Stock or other securities are
issued. Notwithstanding the foregoing, no adjustment will be made under this
Section 1.6(e) in respect of an Exempt Issuance. In the event of an issuance of
securities involving multiple tranches or closings, any adjustment pursuant to
this Section 1.6(e) shall be calculated as if all such securities were issued at
the initial closing. An “Exempt Issuance” shall mean the issuance of (a) shares
of Common Stock or other securities to officers or directors of the Company
pursuant to any stock or option or similar equity incentive plan duly adopted
for such purpose, by a majority of the non-employee members of the Company’s
Board of Directors or a majority of the members of a committee of non-employee
directors established for such purpose in a manner which is consistent with the
Company’s prior business practices; (b) securities issued pursuant to a merger,
consolidation, acquisition or similar business combination approved by a
majority of the disinterested directors of the Company, provided that any such
issuance shall only be to a Person (or to the equity holders of a Person) which
is, itself or through its subsidiaries, an operating company or an owner of an
asset in a business synergistic with the business of the Company and shall
provide to the Company additional benefits in addition to the investment of
funds, but shall not include a transaction in which the Company is issuing
securities primarily for the purpose of raising capital or to an entity whose
primary business is investing in securities; (c) securities issued pursuant to
any equipment loan or leasing arrangement, real property leasing arrangement or
debt financing from a bank or similar financial institution approved by a
majority of the disinterested directors of the Company; or (d) securities issued
with respect to which the Holder waives its rights in writing under this Section
1.6(e). (f) Notice of Adjustments. Upon the occurrence of each adjustment or
readjustment of the Conversion Price as a result of the events described in this
Section 1.6, the Borrower, at its expense, shall promptly compute such
adjustment or readjustment and prepare and furnish to the Holder a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Borrower shall, upon
the written request at any time of the Holder, furnish to such Holder a like
certificate setting forth (i) such adjustment or readjustment, (ii) the
Conversion Price at the time in effect and (iii) the number of shares of Common
Stock and the amount, if any, of other securities or property which at the time
would be received upon conversion of the Note. 1.7 [Intentionally Omitted]. 1.8
Status as Shareholder. Upon submission of a Notice of Conversion by a Holder,
(i) the Conversion Shares covered thereby (other than the Conversion Shares, if
any, which cannot be issued because their issuance would exceed such Holder’s
allocated portion of the Reserved Amount or Maximum Share Amount) shall be
deemed converted into shares of Common Stock and (ii) the Holder’s rights as a
Holder of such converted portion of this Note shall cease and terminate,
excepting only the right to receive certificates for such shares of Common Stock
and to any remedies provided herein or otherwise available at law or in equity
to such Holder because of a failure by the Borrower to comply with the terms of
this Note. Notwithstanding the foregoing, if a Holder has not received
certificates for all shares of Common Stock prior to the tenth (10th) business
day after the expiration of the Deadline with respect to a conversion of any
portion of this Note for any reason, then (unless the Holder otherwise elects to
retain its status as a holder of Common Stock by so notifying the Borrower) the
Holder shall regain the rights of a Holder of this Note with respect to such
unconverted portions of this Note and the Borrower shall, as soon as
practicable, return such unconverted Note to the Holder or, if the Note has not
been surrendered, adjust its records to reflect that such portion of this Note
has not been converted. In all cases, the Holder shall retain all of its rights
and remedies for the Borrower’s failure to convert this Note. 1.9 Prepayment.
Notwithstanding anything to the contrary contained in this Note, at any time
prior to or as of (but not following) the earlier of the (i) the first
Conversion Date hereunder and (ii) the 180th calendar day after the Issue Date,
the Borrower shall have the right, exercisable on not less than one (1) Trading
Days prior written notice to the Holder of the Note, to prepay the outstanding
Principal Amount and interest (including any Default Interest) then due under
this Note, in whole or in part, in accordance with this Section 1.9. Any notice
of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to
the Holder of the Note at its registered addresses and shall state: (1) that the
Borrower is exercising its right to prepay the Note, and (2) the date of
prepayment which shall be not more than one (1) Trading Days from the date of
the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional
Prepayment Date”), the Borrower shall make payment of the amounts designated
below to or upon the order of the Holder as specified by the Holder in writing
to the Borrower at least one (1) business day prior to the Optional Prepayment
Date. If the Borrower exercises its right to prepay the Note at any time within
the initial 180 calendar days following the Issue Date, the Borrower shall make
payment to the Holder of an amount in cash equal to the sum of: (w) 120%
multiplied by the Principal Amount then outstanding plus (x) accrued and unpaid
interest on the Principal Amount to the Optional Prepayment Date plus (y)
Default Interest, if any, on the amounts referred to in clauses (w) and (x).
1.10 Repayment from Proceeds. While any portion of the outstanding Principal
Amount and interest (including Default Interest) under this Note are due and
owing, if the Company receives cash proceeds from any source or series of
related or unrelated sources, including but not limited to, from payments from
customers, the issuance of equity or debt, the conversion of outstanding
warrants of the Borrower, the issuance of securities pursuant to an equity line
of credit of the Borrower or the sale of assets, the Borrower shall, within one
(1) business day of Borrower’s receipt of such proceeds, inform the Holder of
such receipt, following which the Holder shall have the right in its sole
discretion to require the Borrower to immediately apply all or any portion of
such proceeds to repay all or any portion of the outstanding Principal Amount
and interest (including any Default Interest) then due under this Note. Failure
of the Borrower to comply with this provision shall constitute an Event of
Default. In the event that such proceeds are received by the Holder prior to the
Maturity Date, the required prepayment shall be subject to the terms of Section
1.9 herein. ARTICLE II. RANKING AND CERTAIN COVENANTS 2.1 Ranking and Security.
The obligations of the Borrower under this Note shall rank senior with respect
to any and all Indebtedness incurred as of or following the Issue Date. 2.2
Other Indebtedness. So long as the Borrower shall have any obligation under this
Note, the Borrower shall not (directly or indirectly through any Subsidiary or
affiliate) incur or suffer to exist or guarantee any Indebtedness that is senior
to or pari passu with (in priority of payment and performance) the Borrower’s
obligations hereunder. As used in this Section 2.2, the term “Borrower” means
the Borrower and any Subsidiary of the Borrower. As used herein, the term
“Indebtedness” means (a) all indebtedness of the Borrower for borrowed money or
for the deferred purchase price of property or services, including any type of
letters of credit, but not including deferred purchase price obligations in
place as of the Issue Date and as disclosed in the SEC Documents or obligations
to trade creditors incurred in the ordinary course of business, (b) all
obligations of the Borrower evidenced by notes, bonds, debentures or other
similar instruments, (c) purchase money indebtedness hereafter incurred by the
Borrower to finance the purchase of fixed or capital assets, including all
capital lease obligations of the Borrower which do not exceed the purchase price
of the assets funded, (d) all guarantee obligations of the Borrower in respect
of obligations of the kind referred to in clauses (a) through (c) above that the
Borrower would not be permitted to incur or enter into, and (e) all obligations
of the kind referred to in clauses (a) through (d) above that the Borrower is
not permitted to incur or enter into that are secured and/or unsecured by (or
for which the holder of such obligation has an existing right, contingent or
otherwise, to be secured and/or unsecured by) any lien or encumbrance on
property (including accounts and contract rights) owned by the Borrower, whether
or not the Borrower has assumed or become liable for the payment of such
obligation. 2.3 Distributions on Capital Stock. So long as the Borrower shall
have any obligation under this Note, the Borrower shall not without the Holder’s
written consent (a) pay, declare or set apart for such payment, any dividend or
other distribution (whether in cash, property or other securities) on shares of
capital stock other than dividends on shares of Common Stock solely in the form
of additional shares of Common Stock or (b) directly or indirectly or through
any subsidiary make any other payment or distribution in respect of its capital
stock except for distributions pursuant to any shareholders’ rights plan which
is approved by a majority of the Borrower’s disinterested directors. 2.4
Restriction on Stock Repurchases and Debt Repayments. So long as the Borrower
shall have any obligation under this Note, the Borrower shall not without the
Holder’s written consent redeem, repurchase or otherwise acquire (whether for
cash or in exchange for property or other securities or otherwise) in any one
transaction or series of related transactions any shares of capital stock of the
Borrower or any warrants, rights or options to purchase or acquire any such
shares, or repay any pari passu or subordinated indebtedness of Borrower. 2.5
Sale of Assets. So long as the Borrower shall have any obligation under this
Note, the Borrower shall not, without the Holder’s written consent, sell, lease
or otherwise dispose of any significant portion of its assets outside the
ordinary course of business. Any consent to the disposition of any assets may be
conditioned on a specified use of the proceeds of disposition. 2.6 Advances and
Loans; Affiliate Transactions. So long as the Borrower shall have any obligation
under this Note, the Borrower shall not, without the Holder’s written consent,
lend money, give credit, make advances to or enter into any transaction with any
person, firm, joint venture or corporation, including, without limitation,
officers, directors, employees, subsidiaries and affiliates of the Borrower,
except loans, credits or advances (a) in existence or committed on the Issue
Date and which the Borrower has informed Holder in writing prior to the Issue
Date, (b) in regard to transactions with unaffiliated third parties, made in the
ordinary course of business or (c) in regard to transactions with unaffiliated
third parties, not in excess of $100,000. So long as the Borrower shall have any
obligation under this Note, the Borrower shall not, without the Holder’s written
consent, repay any affiliate (as defined in Rule 144) of the Borrower in
connection with any indebtedness or accrued amounts owed to any such party. 2.7
Section 3(a)(9) or 3(a)(10) Transaction. So long as this Note is outstanding,
the Borrower shall not enter into any transaction or arrangement structured in
accordance with, based upon, or related or pursuant to, in whole or in part,
either Section 3(a)(9) of the Securities Act (a “3(a)(9) Transaction”) or
Section 3(a)(l0) of the Securities Act (a “3(a)(l0) Transaction”). In the event
that the Borrower does enter into, or makes any issuance of Common Stock related
to a 3(a)(9) Transaction or a 3(a)(l0) Transaction while this note is
outstanding, a liquidated damages charge of 25% of the outstanding principal
balance of this Note, but not less than Twenty Five Thousand Dollars ($25,000),
will be assessed and will become immediately due and payable to the Holder at
its election in the form of a cash payment or added to the balance of this Note
(under Holder's and Borrower's expectation that this amount will tack back to
the Issue Date). 2.8 Preservation of Business and Existence, etc. So long as the
Borrower shall have any obligation under this Note, the Borrower shall not,
without the Holder’s written consent, change the nature of its business or sell,
divest, or change the structure of any material assets other than in the
ordinary course of business. In addition, so long as the Borrower shall have any
obligation under this Note, the Borrower shall maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, its existence, rights and
privileges, and become or remain, and cause each of its Subsidiaries (other than
dormant Subsidiaries that have no or minimum assets) to become or remain, duly
qualified and in good standing in each jurisdiction in which the character of
the properties owned or leased by it or in which the transaction of its business
makes such qualification necessary. Furthermore, so long as the Borrower shall
have any obligation under this Note, the Borrower shall not, without the
Holder’s written consent, solicit any offers for, respond to any unsolicited
offers for, or conduct any negotiations with, any other person or entity with
respect to any Variable Rate Transaction or investment. 2.9 Noncircumvention.
The Company hereby covenants and agrees that the Company will not, by amendment
of its Certificate or Articles of Incorporation or Bylaws, or through any
reorganization, transfer of assets, consolidation, merger, scheme of
arrangement, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Note, and will at all times in good faith carry out all the provisions
of this Note and take all action as may be required to protect the rights of the
Holder. 2.10 Lost,

 

   

 

 

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Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Note, and, in the case of loss, theft or destruction, of any
indemnification undertaking by the Holder to the Company in customary form and,
in the case of mutilation, upon surrender and cancellation of this Note, the
Company shall execute and deliver to the Holder a new Note. ARTICLE III. EVENTS
OF DEFAULT It shall be considered an event of default if any of the following
events listed in this Article III (each, an “Event of Default”) shall occur: 3.1
Failure to Pay Principal or Interest. The Borrower fails to pay the Principal
Amount hereof or interest thereon when due on this Note, whether at maturity,
upon acceleration or otherwise, or fails to fully comply with Section 1.10 of
this Note. 3.2 Conversion and the Shares. The Borrower (i) fails to issue
Conversion Shares to the Holder (or announces or threatens in writing that it
will not honor its obligation to do so) upon exercise by the Holder of the
conversion rights of the Holder in accordance with the terms of this Note, (ii)
fails to transfer or cause its transfer agent to transfer (issue)
(electronically or in certificated form) any certificate for the Conversion
Shares issuable to the Holder upon conversion of or otherwise pursuant to this
Note as and when required by this Note, (iii) reserve the Reserved Amount at all
times, or (iii) the Borrower directs its transfer agent not to transfer or
delays, impairs, and/or hinders its transfer agent in transferring (or issuing)
(electronically or in certificated form) any certificate for the Conversion
Shares issuable to the Holder upon conversion of or otherwise pursuant to this
Note as and when required by this Note, or fails to remove (or directs its
transfer agent not to remove or impairs, delays, and/or hinders its transfer
agent from removing) any restrictive legend (or to withdraw any stop transfer
instructions in respect thereof) on any certificate for any Conversion Shares
issued to the Holder upon conversion of or otherwise pursuant to this Note as
and when required by this Note (or makes any written announcement, statement or
threat that it does not intend to honor the obligations described in this
paragraph) and any such failure shall continue uncured (or any written
announcement, statement or threat not to honor its obligations shall not be
rescinded in writing) for two (2) Trading Days after the Holder shall have
delivered a Notice of Conversion. It is an obligation of the Borrower to remain
current in its obligations to its transfer agent. It shall be an Event of
Default of this Note, if a conversion of this Note is delayed, hindered or
frustrated due to a balance owed by the Borrower to its transfer agent. If at
the option of the Holder, the Holder advances any funds to the Borrower’s
transfer agent in order to process a conversion, such advanced funds shall be
paid by the Borrower to the Holder within forty eight (48) hours of a demand
from the Holder. 3.3 Breach of Agreements and Covenants. The Borrower breaches
any material agreement, covenant or other material term or condition contained
in the Purchase Agreement, this Note, the Warrant described in the Purchase
Agreement, the Irrevocable Transfer Agent Instructions or in any agreement,
statement or certificate given in writing pursuant hereto or in connection
herewith or therewith. 3.4 Breach of Representations and Warranties. Any
representation or warranty of the Borrower made in the Purchase Agreement, this
Note, the Warrant described in the Purchase Agreement, the Irrevocable Transfer
Agent Instructions or in any agreement, statement or certificate given in
writing pursuant hereto or in connection herewith or therewith shall be false or
misleading in any material respect when made and the breach of which has (or
with the passage of time will have) a material adverse effect on the rights of
the Holder with respect to this Note or the Purchase Agreement. 3.5 Receiver or
Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment
for the benefit of creditors, or apply for or consent to the appointment of a
receiver or trustee for it or for a substantial part of its property or
business, or such a receiver or trustee shall otherwise be appointed. 3.6
Judgments. Any money judgment, writ or similar process shall be entered or filed
against the Borrower or any subsidiary of the Borrower or any of its property or
other assets for more than $100,000, and shall remain unvacated, unbonded or
unstayed for a period of twenty (20) days unless otherwise consented to by the
Holder, which consent will not be unreasonably withheld. 3.7 Bankruptcy.
Bankruptcy, insolvency, reorganization or liquidation proceedings or other
proceedings, voluntary or involuntary, for relief under any bankruptcy law or
any law for the relief of debtors shall be instituted by or against the Borrower
or any subsidiary of the Borrower. 3.8 Delisting of Common Stock. The Borrower
shall fail to maintain the listing of the Common Stock on at least one of the
Over the Counter Bulletin Board, the OTCQB Market, any level of the OTC Markets,
or any level of the Nasdaq Stock Market or the New York Stock Exchange
(including the NYSE American). 3.9 Failure to Comply with the 1934 Act. At any
time after the Issue Date, the Borrower shall fail to comply with the reporting
requirements of the 1934 Act and/or the Borrower shall cease to be subject to
the reporting requirements of the 1934 Act. It shall be an Event of Default
under this Section 3.9 if the Borrower shall file any Notification of Late
Filing on Form 12b-25 with the SEC. 3.10 Liquidation. Any dissolution,
liquidation, or winding up of Borrower or any substantial portion of its
business. 3.11 Cessation of Operations. Any cessation of operations by Borrower
or Borrower admits it is otherwise generally unable to pay its debts as such
debts become due, provided, however, that any disclosure of the Borrower’s
ability to continue as a “going concern” shall not be an admission that the
Borrower cannot pay its debts as they become due. 3.12 Maintenance of Assets.
The failure by Borrower to maintain any material intellectual property rights,
personal, real property or other assets which are necessary to conduct its
business (whether now or in the future). 3.13 Financial Statement Restatement.
The restatement of any financial statements filed by the Borrower with the SEC
for any date or period from two years prior to the Issue Date of this Note and
until this Note is no longer outstanding, if the result of such restatement
would, by comparison to the unrestated financial statement, have constituted a
material adverse effect on the rights of the Holder with respect to this Note or
the Purchase Agreement. 3.14 Reverse Splits. The Borrower effectuates a reverse
split of its Common Stock without twenty (20) days prior written notice to the
Holder. 3.15 Replacement of Transfer Agent. In the event that the Borrower
proposes to replace its transfer agent, the Borrower fails to provide, prior to
the effective date of such replacement, a fully executed Irrevocable Transfer
Agent Instructions in a form as initially delivered pursuant to the Purchase
Agreement (including but not limited to the provision to irrevocably reserve
shares of Common Stock in the Reserved Amount) signed by the successor transfer
agent to Borrower and the Borrower. 3.16 DTC “Chill”. The DTC places a “chill”
(i.e. a restriction placed by DTC on one or more of DTC’s services, such as
limiting a DTC participant’s ability to make a deposit or withdrawal of the
security at DTC) on any of the Borrower’s securities. 3.17 Illegality. Any court
of competent jurisdiction issues an order declaring this Note, the Purchase
Agreement or any provision hereunder or thereunder to be illegal. 3.18. DWAC
Eligibility. In addition to the Event of Default in Section 3.16, the Common
Stock is otherwise not eligible for trading through the DTC’s Fast Automated
Securities Transfer or Deposit/Withdrawal at Custodian programs. 3.19
Cross-Default. The declaration of an event of default by any lender or other
extender of credit to the Company under any notes, loans, agreements or other
instruments of the Company evidencing any Indebtedness of the Company (including
those filed as exhibits to or described in the Company’s filings with the SEC),
after the passage of all applicable notice and cure or grace periods. 3.20
Variable Rate Transactions; Dilutive Issuances. The Borrower (i) issues shares
of Common Stock (or convertible securities or Purchase Rights) pursuant to an
equity line of credit of the Company or otherwise in connection with a Variable
Rate Transaction (whether now existing or entered into in the future), (ii)
adjusts downward the “floor price” at which shares of Common Stock (or
convertible securities or Purchase Rights) may be issued under an equity line of
credit or otherwise in connection with a Variable Rate Transaction (whether now
existing or entered into in the future), or (iii) a Dilutive Issuance is
triggered as provided in this Note. 3.21 Bid Price. The Borrower shall lose the
“bid” price for its Common Stock ($0.0001 on the “Ask” with zero market makers
on the “Bid” per Level 2) and/or a market (including the OTC Pink, OTCQB or an
equivalent replacement marketplace or exchange). 3.22 Unavailability of Rule
144. If, at any time on or after the date which is six (6) months after the
Issue Date, the Holder is unable to (i) obtain a standard “144 legal opinion
letter” from an attorney reasonably acceptable to the Holder, the Holder’s
brokerage firm (and respective clearing firm), and the Borrower’s transfer agent
in order to facilitate the Holder’s conversion of any portion of the Note into
free trading shares of the Borrower’s Common Stock pursuant to Rule 144, and/or
(ii) thereupon deposit such shares into the Holder’s brokerage account. 3.23
Rights and Remedies Upon an Event of Default. Upon the occurrence and during the
continuation of any Event of Default specified in this Article III, this Note
shall become immediately due and payable and the Borrower shall pay to the
Holder, in full satisfaction of its obligations hereunder, an amount (the
“Default Amount”) equal to the Principal Amount then outstanding plus accrued
interest (including any Default Interest) through the date of full repayment
multiplied by 150%. Holder may, in its sole discretion, determine to accept
payment part in Common Stock and part in cash. For purposes of payments in
Common Stock, the conversion formula set forth in Section 1.2 shall apply. Upon
an uncured Event of Default, all amounts payable hereunder shall immediately
become due and payable, all without demand, presentment or notice, all of which
hereby are expressly waived by the Borrower, together with all costs, including,
without limitation, legal fees and expenses, of collection, and the Holder shall
be entitled to exercise all other rights and remedies available at law or in
equity, including, without limitation, those set forth in Section 3.24 below.
3.24 Holder’s Right to Confession of Judgment. Upon the occurrence and during
the continuation of any Event of Default, and in addition to any other right or
remedy of the Holder hereunder, under the Purchase Agreement or otherwise at law
or in equity, the Borrower hereby irrevocably authorizes and empowers Holder or
its legal counsel, each as the Borrower’s attorney-in-fact, to appear ex parte
and without notice to the Borrower to confess judgment against the Borrower for
the unpaid amount of this Note as evidenced by the Affidavit of Confession of
Judgment signed by the Borrower as of the Issue Date and to be completed by the
Holder or its counsel pursuant to the foregoing power of attorney (which power
is coupled with an interest), a copy of which is attached as Exhibit B hereto
(the “Affidavit”). The Affidavit shall set forth the amount then due hereunder,
plus attorney’s fees and cost of suit, and to release all errors, and waive all
rights of appeal. The Borrower waives the right to contest Holder’s rights under
this Section 3.24, including without limitation the right to any stay of
execution and the benefit of all exemption laws now or hereafter in effect. No
single exercise of the foregoing right and power to confess judgment will be
deemed to exhaust such power, whether or not any such exercise shall be held by
any court to be invalid, voidable, or void, and such power shall continue
undiminished and may be exercised from time to time as the Holder may elect
until all amounts owing on this Note have been paid in full. ARTICLE IV.
MISCELLANEOUS 4.1 Failure or Indulgence Not Waiver. No failure or delay on the
part of the Holder 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 privileges. All rights and remedies of the Holder
existing hereunder are cumulative to, and not exclusive of, any rights or
remedies otherwise available. 4.2 Notices. All notices, demands, requests,
consents, approvals, and other communications required or permitted hereunder
shall be in writing and, unless otherwise specified herein, shall be (i)
personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier
service with charges prepaid, or (iv) transmitted by hand delivery, telegram,
e-mail or facsimile, addressed as set forth below or to such other address as
such party shall have specified most recently by written notice. Any notice or
other communication required or permitted to be given hereunder shall be deemed
effective (a) upon hand delivery or delivery by e-mail or facsimile, with
accurate confirmation generated by the transmitting facsimile machine, at the
address or number designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the second
business day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications shall be: If
to the Borrower, to: WESTMOUNTAIN COMPANY 3463 Magic Drive, Suite 120 San
Antonio, TX 78229 Attention: James Garvin e-mail: j.garvin@cytobioscience.com If
to the Holder: FIRSTFIRE GLOBAL OPPORTUNITIES FUND LLC 1040 First Avenue, Suite
190 New York, NY 10022 Attention: Eli Fireman e-mail: eli@firstfirecapital.com
With a copy by e-mail only to (which copy shall not constitute notice): ANTHONY
L.G., PLLC 330 Clematis Street, Suite 217 West Palm Beach, FL 33401 Attn: Chad
Friend, Esq., LL.M. e-mail: CFriend@AnthonyPLLC.com 4.3 Amendments. This Note
and any provision hereof may only be amended by an instrument in writing signed
by the Borrower and the Holder. The term “Note” and all reference 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. 4.4 Assignability. This Note shall be binding upon the Borrower
and its successors and assigns, and shall inure to be the benefit of the Holder
and its successors and assigns. Neither the Borrower nor the Holder shall assign
this Note or any rights or obligations hereunder without the prior written
consent of the other. Notwithstanding the foregoing, the Holder may assign its
rights hereunder to any “accredited investor” (as defined in Rule 501(a) of the
1933 Act) in a private transaction from the Holder or to any of its
“affiliates”, as that term is defined under the 1934 Act, without the consent of
the Borrower. Notwithstanding anything in this Note to the contrary, this Note
may be pledged as collateral in connection with a bona fide margin account or
other lending arrangement. The Holder and any assignee, by acceptance of this
Note, acknowledge and agree that following conversion of a portion of this Note,
the unpaid and unconverted principal amount of this Note represented by this
Note may be less than the amount stated on the face hereof.. 4.5 Cost of
Collection. If default is made in the payment of this Note, the Borrower shall
pay the Holder hereof costs of collection, including reasonable attorneys’ fees.
4.6 Governing Law; Venue; Attorney’s Fees. This Note shall be governed by and
construed in accordance with the laws of the State of Nevada without regard to
principles of conflicts of laws. Any action brought by either party against the
other concerning the transactions contemplated by this Note or any other
agreement, certificate, instrument or document contemplated hereby shall be
brought only in the state courts or federal courts located in the state and
county of New York. The Borrower hereby irrevocably waives any objection to
jurisdiction and venue of any action instituted hereunder and shall not assert
any defense based on lack of jurisdiction or venue or based upon forum non
conveniens. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTIONS
CONTEMPLATED HEREBY. Each party hereby irrevocably waives personal service of
process and consents to process being served in any suit, action or proceeding
in connection with this Note or any other agreement, certificate, instrument or
document contemplated hereby or thereby 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 Note 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. The prevailing party in
any action or dispute brought in connection with this the Note or any other
agreement, certificate, instrument or document contemplated hereby or thereby
shall be entitled to recover from the other party its reasonable attorney’s fees
and costs. 4.7 Certain Amounts. Whenever pursuant to this Note the Borrower is
required to pay an amount in excess of the outstanding Principal Amount (or the
portion thereof required to be paid at that time) plus accrued and unpaid
interest plus Default Interest on such interest, the Borrower and the Holder
agree that the actual damages to the Holder from the receipt of cash payment on
this Note may be difficult to determine and the amount to be so paid by the
Borrower represents stipulated damages and not a penalty and is intended to
compensate the Holder in part for loss of the opportunity to convert this Note
and to earn a return from the sale of shares of Common Stock acquired upon
conversion of this Note at a price in excess of the price paid for such shares
pursuant to this Note. The Borrower and the Holder hereby agree that such amount
of stipulated damages is not plainly disproportionate to the possible loss to
the Holder from the receipt of a cash payment without the opportunity to convert
this Note into shares of Common Stock. 4.8 Purchase Agreement. The Company and
the Holder shall be bound by the applicable terms of the Purchase Agreement and
the documents entered into in connection herewith and therewith. 4.9 Notice of
Corporate Events. Except as otherwise provided below, the Holder of this Note
shall have no rights as a Holder of Common Stock unless and only to the extent
that it converts this Note into Common Stock. The Borrower shall provide the
Holder with prior notification of any meeting of the Borrower’s shareholders
(and copies of proxy materials and other information sent to shareholders). In
the event of any taking by the Borrower of a record of its shareholders for the
purpose of determining shareholders who are entitled to receive payment of any
dividend or other distribution, any right to subscribe for, purchase or
otherwise acquire (including by way of merger, consolidation, reclassification
or recapitalization) any share of any class or any other securities or property,
or to receive any other right, or for the purpose of determining shareholders
who are entitled to vote in connection with any Change in Control or any
proposed liquidation, dissolution or winding up of the Borrower, the Borrower
shall mail a notice to the Holder, at least twenty (20) days prior to the record
date specified therein (or thirty (30) days prior to the consummation of the
transaction or event, whichever is earlier), of the date on which any such
record is to be taken for the purpose of such dividend, distribution, right or
other event, and a brief statement regarding the amount and character of such
dividend, distribution, right or other event to the extent known at such time.
The Borrower shall make a public announcement of any event requiring
notification to the Holder hereunder substantially simultaneously with the
notification to the Holder in accordance with the terms of this Section 4.9.
4.10 Remedies. The Borrower acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder, by vitiating the intent and
purpose of the transaction contemplated hereby. Accordingly, the Borrower
acknowledges that the remedy at law for a breach of its obligations under this
Note will be inadequate and agrees, in the event of a breach or threatened
breach by the Borrower of the provisions of this Note, that the Holder shall be
entitled, in addition to all other available remedies at law or in equity, and
in addition to the penalties assessable herein, to an injunction or injunctions
restraining, preventing or curing any breach of this Note and to enforce
specifically the terms and provisions thereof, without the necessity of showing
economic loss and without any bond or other security being required. 4.11
Construction; Headings. This Note shall be deemed to be jointly drafted by the
Company and all the Holder and shall not be construed against any person as the
drafter hereof. The headings of this Note are for convenience of reference and
shall not form part of, or affect the interpretation of, this Note. 4.12 Usury.
To the extent it may lawfully do so, the Company hereby agrees not to insist
upon or plead or in any manner whatsoever claim, and will resist any and all
efforts to be compelled to take the benefit or advantage of, usury laws wherever
enacted, now or at any time hereafter in force, in connection with any action or
proceeding that may be brought by the Holder in order to enforce any right or
remedy under this Note. Notwithstanding any provision to the contrary contained
in this Note, it is expressly agreed and provided that the total liability of
the Company under this Note for payments which under the applicable law are in
the nature of interest shall not exceed the maximum lawful rate authorized under
applicable law (the “Maximum Rate”), and, without limiting the foregoing, in no
event shall any rate of interest or default interest, or both of them, when
aggregated with any other sums which under the applicable law in the nature of
interest that the Company may be obligated to pay under this Note exceed such
Maximum Rate. It is agreed that if the maximum contract rate of interest allowed
by applicable law and applicable to this Note is increased or decreased by
statute or any official governmental action subsequent to the Issue Date, the
new maximum contract rate of interest allowed by law will be the Maximum Rate
applicable to this Note from the effective date thereof forward, unless such
application is precluded by applicable law. If under any circumstances
whatsoever, interest in excess of the Maximum Rate is paid by the Company to the
Holder with respect to indebtedness evidenced by this the Note, such excess
shall be applied by the Holder to the unpaid principal balance of any such
indebtedness or be refunded to the Company, the manner of handling such excess
to be at the Holder’s election. 4.13 Severability. In the event that any
provision of this Note is invalid or unenforceable under any applicable statute
or rule of law (including any judicial ruling), 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. 4.14 Terms of
Future Financings. So long as this Note is outstanding, upon any issuance by the
Borrower or any of its subsidiaries of any security, or amendment to a security
that was originally issued before the Issue Date, with any term that the Holder
reasonably believes is more favorable to the holder of such security or with a
term in favor of the holder of such security that the Holder reasonably believes
was not similarly provided to the Holder in this Note, then (i) the Borrower
shall notify the Holder of such additional or more favorable term within one (1)
business day of the issuance and/or amendment (as applicable) of the respective
security, and (ii) such term, at Holder’s option, shall become a part of the
transaction documents with the Holder (regardless of whether the Borrower
complied with the notification provision of this Section 4.14). The types of
terms contained in another security that may be more favorable to the holder of
such security include, but are not limited to, terms addressing conversion
discounts, prepayment rate, conversion lookback periods, interest rates, and
original issue discounts. If Holder elects to have the term become a part of the
transaction documents with the Holder, then the Borrower shall immediately
deliver acknowledgment of such adjustment in form and substance reasonably
satisfactory to the Holder (the “Acknowledgment”) within one (1) business days
of Borrower’s receipt of request from Holder (the “Adjustment Deadline”),
provided that Borrower’s failure to timely provide the Acknowledgement shall not
affect the automatic amendments contemplated hereby. If the Acknowledgement is
not delivered by the Adjustment Deadline, then $1,000.00 per day shall be added
to the balance of the Note for each day beyond the Adjustment Deadline that the
Borrower fails to deliver such Acknowledgement. In addition, the Holder shall
have the right, at any time until the Note is satisfied in its entirety, and
upon written notice to the Borrower, to purchase an additional convertible
promissory note from the Borrower, with the exact same terms and conditions as
provided in this Note (with the understanding that the Borrower shall execute
the form of this Note and all related transaction documents with updated dates
within three (3) business days after the Holder exercises such right).
[signature page follows] IN WITNESS WHEREOF, Borrower has caused this Note to be
signed in its name by its duly authorized officer on November 8, 2018.
WESTMOUNTAIN COMPANY By: Name: James Garvin Title: Chief Executive Officer
EXHIBIT A -- NOTICE OF CONVERSION The undersigned hereby elects to convert
$______________ principal amount of the Note (defined below) into that number of
shares of Common Stock to be issued pursuant to the conversion of the Note
(“Common Stock”) as set forth below, of WESTMOUNTAIN COMPANY, a Colorado
corporation (the “Borrower”), according to the conditions of the Senior
Convertible Promissory Note of the Borrower dated as of November 8, 2018 (the
“Note”), as of the date written below. No fee will be charged to the Holder for
any conversion, except for transfer taxes, if any. Box Checked as to applicable
instructions: . The Borrower shall electronically transmit the Common Stock
issuable pursuant to this Notice of Conversion to the account of the undersigned
or its nominee with DTC through its Deposit Withdrawal Agent Commission system
(“DWAC Transfer”). Name of DTC Prime Broker: Account Number: . The undersigned
hereby requests that the Borrower issue a certificate or certificates for the
number of shares of Common Stock set forth below (which numbers are based on the
Holder’s calculation attached hereto) in the name(s) specified immediately below
or, if additional space is necessary, on an attachment hereto: FIRSTFIRE GLOBAL
OPPORTUNITIES FUND LLC 1040 First Avenue, Suite 190 New York, NY 10022 Attn: Eli
Fireman e-mail: eli@firstfirecapital.com Date of Conversion: Applicable
Conversion Price: $ Costs Incurred by the Undersigned to Convert the Note into
Shares of Common Stock: $ _________________ Number of Shares of Common Stock to
be Issued Pursuant to Conversion of the Note: Amount of Principal Balance Due
remaining Under the Note after this conversion: By: Name: Title: Date: EXHIBIT B
Affidavit of Confession of Judgment SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
----------------------------------------------------------------------- X
FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC, Index No. Plaintiff, AFFIDAVIT OF
CONFESSION OF - against - JUDGMENT WESTMOUNTAIN COMPANY, and JAMES GARVIN,
Defendants.
----------------------------------------------------------------------- X STATE
OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) James Garvin (“Affiliate”), being duly
sworn, hereby deposes and says: 1. I am the Chief Executive Officer of defendant
WESTMOUNTAIN COMPANY (the “Company”) (together with Affiliate, an individual,
the “Borrower”). As such, I am fully familiar with all the facts and
circumstances recited herein on personal knowledge. Borrower has its principal
place of business at 3463 Magic Drive, Suite 120, San Antonio, TX 78229. On
behalf of the Borrower, and as an individual, I hereby confess judgment in favor
of FirstFire Global Opportunities Fund, LLC (“FirstFire”), residing at 1040
First Avenue, Suite 190, New York, New York, 10022, in the amount of the Default
Amount (as defined in the senior convertible promissory note in the original
principal amount of $222,222.00 between the parties, dated November 8, 2018 (the
“Note”)), less any payments made on or after the date of this affidavit of
confession of judgment, plus interest a default interest rate of fifteen percent
(15%) percent per annum on said amount. In no event shall interest payable
hereunder exceed the maximum permissible under applicable law. 2. I hereby
authorize the Supreme Court of the State of New York to enter judgment against
Borrower in the amount of in the amount of the Default Amount plus a default
interest rate of fifteen percent (15%) per annum on said amount from the date of
any default, plus the costs and attorneys’ fees that are set forth below, less
any payments made on or after the date of this affidavit of confession of
judgment, upon Borrower’s failure for any reason to timely make any payment to
FirstFire called for by the Note, due to Borrower’s breach of Section 3.1 of the
Note (failure to pay Principal or Interest) or due to Borrower’s breach of its
obligations that it owes to FirstFire pursuant to Sections 3.2-3.22 of the Note.
3. In order to secure these obligations, Borrower agreed to simultaneously
deliver with the execution of the Note this Affidavit of Confession of Judgment.
4. The sums confessed pursuant to this affidavit of confession of judgment are
justly due and owing to FirstFire under the following circumstances: Borrower
entered into the Note pursuant to which Borrower promised to pay to the order of
FirstFire the Default Amount plus interest as provided for therein. The amounts
confessed by this affidavit represent a convertible note investment by FirstFire
in Borrower and arise out of Borrower’s breach of its obligations under the
Note. 5. Borrower agrees to pay any and all costs and expenses incurred by
FirstFire in enforcing the terms of this affidavit of confession of judgment,
including reasonable attorneys’ fees and expenses at the rate of $475.00 per
hour that FirstFire incurs or is billed for in connection with enforcing the
terms of the affidavit of confession of judgment, entering any Judgment,
collecting upon said Judgment, and defending or prosecuting any appeals. By:
_________________________________ Name: James Garvin, an individual WESTMOUNTAIN
COMPANY By: _________________________________ Name: James Garvin Title: Chief
Executive Officer STATE OF _____________ ) ss.: COUNTY OF _____________ )
ACKNOWLEDGMENT On _________, 2018, before me personally came
________________________________________, to me known, who, by me duly sworn,
did depose and say that deponent is an officer of WESTMOUNTAIN COMPANY, the
corporation described in, and which executed the foregoing affidavit of
confession of judgment, that deponent knows the seal of the corporation, that
the seal affixed to the affidavit of confession of judgment is the corporation’s
seal, that it was affixed by order of the board of directors of the corporation
and that deponent signed deponent’s name by like order.
_____________________________ Notary Public SEAL: [Signature Page to Affidavit
of Confession of Judgment]

 

 

   

 

 

 

 

 

ARTICLE IV. MISCELLANEOUS

 

4.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the
Holder 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 privileges. All rights and remedies of the Holder existing
hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.

 

4.2 Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (i) personally served, (ii) deposited in
the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, e-mail or facsimile, addressed as set
forth below or to such other address as such party shall have specified most
recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by e-mail or facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:

If to the Borrower, to:

 

 

WESTMOUNTAIN COMPANY

3463 Magic Drive, Suite 120

San Antonio, TX 78229

Attention: James Garvin

 

 

If to the Holder:

 

 

FIRSTFIRE GLOBAL OPPORTUNITIES FUND LLC

1040 First Avenue, Suite 190

New York, NY 10022

Attention: Eli Fireman

With a copy by e-mail only to (which copy shall not constitute notice):

 

 

ANTHONY L.G., PLLC

330 Clematis Street, Suite 217

West Palm Beach, FL 33401

Attn: Chad Friend, Esq., LL.M.

 

 

4.3 Amendments. This Note and any provision hereof may only be amended by an
instrument in writing signed by the Borrower and the Holder. The term “Note” and
all reference 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.

 

4.4 Assignability. This Note shall be binding upon the Borrower and its
successors and assigns, and shall inure to be the benefit of the Holder and its
successors and assigns. Neither the Borrower nor the Holder shall assign this
Note or any rights or obligations hereunder without the prior written consent of
the other. Notwithstanding the foregoing, the Holder may assign its rights
hereunder to any “accredited investor” (as defined in Rule 501(a) of the 1933
Act) in a private transaction from the Holder or to any of its “affiliates”, as
that term is

 

 

   

 

 

 

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  By:  /s/ James Garvin   Name: James Garvin, an individual              
WESTMOUNTAIN COMPANY               By:  /s/ James Garvin   Name: James Garvin  
Title: Chief Executive Officer

 

 

 

   

 

 

 

 

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