Exhibit 10.1

 

NEITHER THIS NOTE NOR THE SECURITIES THAT ARE ISSUABLE UPON CONVERSION HEREOF OR
UPON EXCHANGE HEREUNDER (COLLECTIVELY, THE “SECURITIES”) HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THE SECURITIES NOR ANY INTEREST
OR PARTICIPATION THEREIN MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED:
(I) IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE 1933 ACT OR APPLICABLE STATE SECURITIES LAWS; OR (II) IN THE ABSENCE
OF AN OPINION OF COUNSEL, IN A FORM ACCEPTABLE TO THE ISSUER, THAT REGISTRATION
IS NOT REQUIRED UNDER THE 1933 ACT OR; (III) UNLESS SOLD, TRANSFERRED OR
ASSIGNED PURSUANT TO RULE 144 UNDER THE 1933 ACT.

 

CONVERTIBLE PROMISSORY NOTE

 

Issuance Date: August 2, 2017 US$ 256,410

 

FOR VALUE RECEIVED, TECHNOVATIVE GROUP, INC., a Delaware Corporation (the
“Company”) located at Unit 701, 7/F, Tower 2, Silvercord, 30 Canton Road, Tsim
Sha Tsui, KLN, Hong Kong hereby promises to pay to the order of LIANG MEIHUA
located at Flat B, 30/F, Tower 6, Sorrento, No. 1 Austin Road West, Tsim Sha
Tsui, Hong Kong or its successors or assigns (the “Holder”), the principal
amount of HKD$2,000,000 on or prior to one (1) year after the issuance of this
Note (the “Maturity Date”), in accordance with the terms hereof. This
Convertible Promissory Note (this note, and all notifications, extensions,
future advances, supplements, and renewals thereof, and any substitutions
therefor, hereinafter referred to as the “Note” together with other notes that
are issued pursuant to the Loan Agreement, the “Notes”) was issued pursuant to
the Loan Agreement, dated as of the even date hereof (the “Loan Agreement”),
entered into by and between the Company and the Holder. Capitalized terms not
otherwise defined herein shall have the meanings ascribed to them in the Loan
Agreement.

 

1.        Payments of Principal and Interest.

 

(a)       Payment of Principal. The principal amount of this Note shall be paid
to the Holder on or prior to the Maturity Date.

 

(b)       Payment of Interest. This Note shall be interest free and shall not
accrue any interest. Upon the occurrence of an Event of Default, the Note shall
bear interest at the lesser of (i) the compounded rate of five (5%) percent per
year until such Event of Default is cured or (ii) the maximum permitted under
applicable law.

 

(c)       General Payment Provisions. So long as a Holder or any of its nominees
shall be the holder of any Note, and notwithstanding anything contained
elsewhere in this Note to the contrary, all sums of principal, interest or
otherwise becoming due on this Note shall be made in lawful money of the United
States of America by certified bank check or wire transfer to such account as
the Holder may designate by written notice to the Company no later than 4:00
p.m. New York time, on the date such payment is due, without the presentation or
surrender of such Note or the making of any notation thereon. Any payment made
after 4:00 p.m. New York time, on a Business Day will be deemed made on the next
following Business Day. 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 Business Day, and interest shall be payable on any
principal so extended for the period of such extension. All amounts payable
under this Note shall be paid free and clear of, and without reduction by reason
of, any deduction, set-off or counterclaim. The Company will afford the benefits
of this Section to the Holder and to each other Person holding this Note. For
purposes of this Note, “Business Day” shall mean any day other than a Saturday,
Sunday or a day on which commercial banks in the State of New York are
authorized or required by law or executive order to remain closed.

 

 

 

 

(d)       Optional Prepayment. At any time prior to the Maturity Date, the
Company may pre-pay this Note without penalty and, upon such prepayment in full,
the Holder shall have no further rights under this Note, including no rights of
conversion.

 

2.        Conversion of Note.

 

(a)       Mandatory Conversion. On the date when the Company consummates a
Qualified Financing (as defined below), all or any portion of the outstanding
and unpaid principal and interest of this Note shall automatically convert into
fully paid and non- assessable shares of the Company’s $.001 par value per share
common stock (the “Common Stock”) at a conversion price equal to the per share
price of the Qualified Securities (as defined below), subject to adjustment to
reflect forward or reverse stock splits, recapitalizations, stock dividends as
set forth herein (the “Mandatory Conversion Price”). The number of shares of
Common Stock to be issued as a result of the automatic conversion of the Note
(the “Conversion Shares”) shall be calculated by dividing: (x) all or any
portion of the outstanding and unpaid principal and interest of this Note, by
(y) the Mandatory Conversion Price. For the purpose of this Note, the term
“Qualified Financing” is defined as the sale for cash by the Company of any
equity or convertible securities (“Qualified Securities”) generating aggregate
gross proceeds of at least $10,000,000.

 

(b)       Optional Conversion. If no Qualified Financing is consummated prior to
the Maturity Date (as extended by the Holder from time to time) and as long as
there remains outstanding principal or interest of this Note, the Holder shall
have the right, within 30 days after the Maturity Date (as extended by the
Holder from time to time) of this Note, to convert all or any portion of the
outstanding and unpaid principal and interest of this Note into Conversion
Shares at a conversion price of $0.10 per Share.

 

(c)       Mechanics of Holders Conversion. The conversion of this Note shall be
conducted in the following manner:

 

(i)       Subject to Section 2(b) hereof, this Note may be converted by the
Holder in whole or in part at any time from time to time after the Issuance
Date, by (A) submitting to the Company a Notice of Conversion in the form of
Exhibit A (by facsimile, e-mail or other reasonable means of communication
dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time)
and (B) surrendering this Note at the principal office of the Company.
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 Company unless the entire unpaid
principal amount of this Note is so converted. The Holder and the Company 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 Company, 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 Company 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 Company,
whereupon the Company 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 and interest of this Note represented
by this Note may be less than the amount stated on the face hereof. At such time
as such conversion has been effected, the rights of the Holder of this Note as
the Holder of such Note shall cease (with respect to the amount so converted),
and the Person or Persons in whose name or names any certificate or certificates
for the Common Stock are to be issued upon such conversion shall be deemed to
have become the holder or holders of record of the Common Stock represented
thereby.

 

 2 

 

 

(ii)       As soon as possible after the conversion has been effected, the
Company or acquirer shall deliver to the converting holder a certificate or
certificates representing the Conversion Shares issuable by reason of such
conversion in such name or names and such denomination or denominations as the
converting holder has specified.

 

(iii)       No fraction of shares or scrip representing fractions of shares will
be issued on conversion. Upon any conversion of the entire outstanding principal
of and interest on this Note, the number of shares or other securities issuable
shall be rounded up to the nearest whole number.

 

(iv)       The issuance of certificates for Conversion Shares upon conversion of
this Note shall be made without charge to the holder hereof in respect thereof
or other cost incurred by the Company or acquirer in connection with such
conversion and the related issuance of Conversion Shares.

 

(v)       Neither the Company nor acquirer shall close its books against the
transfer of this Note in any manner which interferes with the timely conversion
of this Note. The Company shall assist and cooperate with any holder of this
Note required to make any governmental filings or obtain any governmental
approval prior to or in connection with the conversion of this Note (including,
without limitation, making any filings required to be made by the Company).

 

(vi)       The Company or its acquirer shall at all times reserve and keep
available out of its authorized but unissued shares of the common stock, solely
for the purpose of issuance upon conversion hereunder, such number of shares of
other type of capital securities of the Company or its acquirer issuable upon
conversion. All Conversion Shares which are so issuable shall, when issued, be
duly authorized and validly issued, fully paid and nonassessable and free from
all taxes, liens and charges. The Company or its acquirer shall take all such
actions as may be necessary to assure that all such Conversion Shares may be so
issued without violation of any applicable law or governmental regulation or any
requirements of any domestic securities exchange upon which such shares of
capital stock are quoted.

 

3.       Adjustment to the Conversion Price.

 

(a)       Adjustment Due to Merger, Consolidation, Etc. At the option of the
Holder, the sale, conveyance or disposition of all or substantially all of the
assets of the Company, the effectuation by the Company of a transaction or
series of related transactions in which more than 50% of the voting power of the
Borrower is disposed of, or the consolidation, merger or other business
combination of the Company with or into any other Person or Persons when the
Company is not the survivor shall be treated pursuant to Section 3(b) hereof.
“Person” shall mean any individual, corporation, limited liability company,
partnership, association, trust or other entity or organization.

 

 3 

 

 

(b)       Adjustment Due to Merger, Consolidation, Etc. If, at any time when
this Note is issued and outstanding, 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 Company shall be changed into
the same or a different number of shares of another class or classes of stock or
securities of the Company or another entity, or in case of any sale or
conveyance of all or substantially all of the assets of the Company other than
in connection with a plan of complete liquidation of the Company, 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 of Conversion
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.

 

(c)       Purchase Rights. If, at any time when the Note is issued and
outstanding, the Company 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
Debenture 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 units of Conversion Shares
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.

 

4.        Transfer, Exchange and Replacement.

 

(a)       Transfer. This Note has not been and is not being registered under the
provisions of the Act or any state securities laws and this Note may not be
transferred prior to the end of the holding period applicable to sales under
Rule 144 unless in accordance with applicable law and unless (1) the transferee
is an “accredited investor” (as defined in Regulation D under the Securities
Act) and (2) the holder shall have delivered to the Company an opinion of
counsel, reasonably satisfactory in form, scope and substance to the Company, to
the effect that this Note may be sold or transferred without registration under
the Act. Prior to any such transfer, such transferee shall have represented in
writing to the Company that such transferee has requested and received from the
Company all information relating to the business, properties, operations,
condition (financial or other), results of operations or prospects of the
Company deemed relevant by such transferee, and that such transferee has been
afforded the opportunity to ask questions of the Company concerning the
foregoing. Upon surrender of any Note for registration of transfer or for
exchange to the Company at its principal office, the Company at its sole expense
will execute and deliver in exchange therefor a new Note or Notes, as the case
may be, as requested by the holder or transferee, which aggregate principal
amount is equal the unpaid principal amount of such Note, registered as such
holder or transferee may request, dated so that there will be no loss of
interest on the Note and otherwise of like tenor; provided that this Note may
not be transferred by Holder to any Person other than Holder’s affiliates
without the prior written consent of the Company (which consent shall not be
unreasonably withheld or delayed). The issuance of new Notes shall be made
without charge to the holder(s) of the surrendered Note for any issuance tax in
respect thereof or other cost incurred by the Company in connection with such
issuance, provided that each holder of the Note shall pay any transfer taxes
associated therewith. The Company shall be entitled to regard the registered
holder of this Note as the holder of the Note so registered for all purposes
until the Company or its agent, as applicable, is required to record a transfer
of this Note on its register.

 

 4 

 

 

(b)       Replacement. Upon notice to the Company of the loss, theft,
destruction or mutilation of this Note, and, in the case of loss, theft or
destruction, of an indemnification undertaking by the Holder to the Company in a
form reasonably acceptable to the Company and, in the case of mutilation, upon
surrender and cancellation of the Note, the Company shall execute and deliver a
new Note of like tenor and date and in substantially the same form as this Note;
provided, however, the Company shall not be obligated to re-issue a Note if the
Holder contemporaneously requests the Company to convert such remaining
principal amount and interest into Common Stock.

 

5.        Defaults and Remedies.

 

(a)       Events of Default. An “Event of Default” means any of the following
events which is not cured within 10 business days (the “Cure Period”) provided
however that such Cure Period is not applicable to paragraph (i) below:

 

(i)       failure by the Company to pay any principal amount or interest due
hereunder within thirty (30) Business Days of the date such payment is due;

 

(ii)       the Company shall:

 

(1)        make a general assignment for the benefit of its creditors;

 

(2)        apply for or consent to the appointment of a receiver, trustee,
assignee, custodian, sequestrator, liquidator or similar official for itself or
any of its assets and properties;

 

(3)        commence a voluntary case for relief as a debtor under the United
States Bankruptcy Code;

 

(4)        file with or otherwise submit to any governmental authority any
petition, answer or other document seeking: (A) reorganization, (B) an
arrangement with creditors or (C) to take advantage of any other present or
future applicable law respecting bankruptcy, reorganization, insolvency,
readjustment of debts, relief of debtors, dissolution or liquidation;

 

(5)        file or otherwise submit any answer or other document admitting or
failing to contest the material allegations of a petition or other document
filed or otherwise submitted against it in any proceeding under any such
applicable law, or

 

(6)        be adjudicated a bankrupt or insolvent by a court of competent
jurisdiction;

 

(iii)       any receiver, trustee, assignee, custodian, sequestrator, liquidator
or other official shall be appointed with respect to the Company, or shall be
appointed to take or shall otherwise acquire possession or control of all or a
substantial part of the assets and properties of the Company, and any of the
foregoing shall continue unstayed and in effect for any period of sixty (60)
days;

 

(iv)       any material breach by the Company of any of its representations or
warranties under the Loan Agreement; or

 

(v)       any default, whether in whole or in part, shall occur in the due
observance or performance of any obligations or other covenants, terms or
provisions to be performed under this Note or the Loan Agreement which is not
cured by the Company within the Cure Period after receipt of written notice
thereof.

 

 5 

 

 

(b)       Remedies. Holder of the Note at its option may declare all principal
and accrued and unpaid interest thereon and all other amounts payable under this
Note immediately due and payable; provided, however, that this Note shall
automatically become due and payable without any declaration in the case of an
Event of Default specified in clause (ii) of Section 6(a) above.

 

6.        Amendment and Waiver. The provisions of this Note may not be modified,
amended or waived, without a written amendment executed by the Company and
holders of the Notes consisting of a majority of the outstanding principal
amount.

 

7.        Voting Rights. Upon Conversion into the Common Stock the Holder shall
have the voting rights applicable to the Common Stock consistent with the
Company’s Articles of Incorporation and By-laws.

 

8.        Investment Representations. This Note has been issued subject to
certain investment representations of the original Holder set forth in the Loan
Agreement and may be transferred or exchanged only in compliance with the Loan
Agreement and applicable federal and state securities laws and regulations.

 

9.        Cancellation. After all principal owed on this Note has been paid in
full, this Note shall automatically be deemed canceled, shall be surrendered to
the Company for cancellation and shall not be re-issued.

 

10.        Waiver of Notice. To the extent permitted by law, the Company hereby
waives demand, notice, protest and all other demands and notices in connection
with the delivery, acceptance, performance, default or enforcement of this Note.

 

11.        Governing Law. This Note shall be construed and enforced in
accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the laws of
the State of Delaware, without giving effect to provisions thereof regarding
conflict of laws. Each party hereto hereby irrevocably submits to the
non-exclusive jurisdiction of the state and federal courts sitting in the State
of Florida for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereto hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by sending by certified mail or overnight courier a copy thereof to
such party at the address indicated in the preamble hereto 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 manner permitted by law. EACH PARTY HERETO 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 HEREWITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

12.        Remedies, Characterizations, Other Obligations, Breaches and
Injunctive Relief.

 

The remedies provided in this Note shall be cumulative and in addition to all
other remedies available under this Note, at law or in equity.

 

 6 

 

 

13.        Specific Shall Not Limit General; Construction. No specific provision
contained in this Note shall limit or modify any more general provision
contained herein. This Note shall be deemed to be jointly drafted by the Company
and the Holder and shall not be construed against any person as the drafter
hereof

 

14.        Failure or Indulgence Not Waiver. No failure or delay on the part of
this Note 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.

 

15.        Assignments. The Holder may assign, participate, transfer or
otherwise convey this Note and any of its rights or obligations hereunder or
interest herein, in whole or part, to any other Person and this Note shall inure
to the benefit of the Payee’s successors and assigns. The Company shall not
assign or delegate this Note or any of its liabilities or obligations hereunder
without the prior written consent from the Holder.

 

16.        Notice. Notice shall be given to each party at the address indicated
in the preamble hereto or at such other address as provided to the other party
in writing.

 

[-Signature Page Follows-]

 

 7 

 

 

IN WITNESS WHEREOF, the Company has caused this Note to be executed on and as of
the Issuance Date.

 

  TECHNOVATIVE GROUP, INC.         By: /s/ Lin Kuan Liang Nicolas   Name: Lin
Kuan Liang Nicolas   Title: Chief Executive Officer

 

[-Signature Page to Convertible Promissory Note-]

 

 8 

 

 

EXHIBIT A

 

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert $_______________ amount of the Note
(defined below) into that number of shares of Common Stock (“Common Stock”) to
be issued pursuant to the conversion of the Note as set forth below, of
Technovative Group, Inc., a Delaware corporation (the “Company”) according to
the conditions of the convertible promissory note of the Company dated as
of___________ (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.

 

The undersigned hereby requests that the Company 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:

 

              

 

 

 Date of Conversion:

          Applicable Conversion Price:           Number of Shares of Common
Stock to be issued pursuant to Conversion of the Note:           Amount of
Principal due remaining under the Note after this conversion:  

 

HOLDER         By:   Name: Liang Meihua   Title:     Date: August 2, 2017  

 

 

9