EXHIBIT 10.2

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

SEARCHCORE, INC.

 

CONVERTIBLE NOTE

 

Issuance Date: January 22, 2015

Original Principal Amount: $55,000

Note No. SRER-1

Consideration Paid at Close: $50,000

 

FOR VALUE RECEIVED, SearchCore, Inc., a Nevada corporation (the "Company"),
hereby promises to pay to the order of Vista Capital Investments, LLC or
registered assigns (the "Holder") the amount set out above as the Original
Principal Amount (as reduced pursuant to the terms hereof pursuant to
redemption, conversion or otherwise, the "Principal") when due, whether upon the
Maturity Date (as defined below), acceleration, redemption or otherwise (in each
case in accordance with the terms hereof) and to pay interest ("Interest") on
any outstanding Principal at the applicable Interest Rate from the date set out
above as the Issuance Date (the "Issuance Date") until the same becomes due and
payable, upon the Maturity Date or acceleration, conversion, redemption or
otherwise (in each case in accordance with the terms hereof).

 

The Original Principal Amount is $55,000 (fifty five thousand dollars) plus
accrued and unpaid interest and any other fees. The consideration is $50,000
(fifty thousand dollars) payable by wire transfer (there exists a $5,000
original issue discount (the “OID”)). The Holder shall pay $50,000 of
consideration upon closing of this Note. For purposes hereof, the term
“Outstanding Balance” means the Original Principal Amount, as reduced or
increased, as the case may be, pursuant to the terms hereof for conversion,
breach hereof or otherwise, plus any accrued but unpaid interest, collection and
enforcements costs, and any other fees or charges incurred under this Note.

 

(1) GENERAL TERMS

 

(a) Payment of Principal. The "Maturity Date" shall be one year from the date of
payment of the consideration, as may be extended at the option of the Holder in
the event that, and for so long as, an Event of Default (as defined below) shall
not have occurred and be continuing on the Maturity Date (as may be extended
pursuant to this Section 1) or any event shall not have occurred and be
continuing on the Maturity Date (as may be extended pursuant to this Section 1)
that with the passage of time and the failure to cure would result in an Event
of Default.

 

 
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(b) Interest. Interest shall accrue at a rate of twelve percent (12%) per annum
(“Interest Rate”) beginning on the Issuance Date to the outstanding Principal
amount. Interest hereunder shall be paid on the Maturity Date (or sooner as
provided herein) to the Holder or its assignee in whose name this Note is
registered on the records of the Company regarding registration and transfers of
Notes in cash or converted into Common Stock at the Conversion Price provided
the Equity Conditions are satisfied.

 

(c) Security. This Note shall not be secured by any collateral or any assets
pledged to the Holder.

 

(2) EVENTS OF DEFAULT.

 

(a) An “Event of Default”, wherever used herein, means any one of the following
events (whatever the reason and whether it shall be voluntary or involuntary or
effected by operation of law or pursuant to any judgment, decree or order of any
court, or any order, rule or regulation of any administrative or governmental
body):

 

(i) The Company's failure to pay to the Holder any amount of Principal,
Interest, or other amounts when and as due under this Note (including, without
limitation, the Company's failure to pay any redemption payments or amounts
hereunder);

 

(ii) A Conversion Failure as defined in section 3(b)(ii)

 

(iii) The Company or any subsidiary of the Company shall commence, or there
shall be commenced against the Company or any subsidiary of the Company under
any applicable bankruptcy or insolvency laws as now or hereafter in effect or
any successor thereto, or the Company or any subsidiary of the Company commences
any other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Company or any
subsidiary of the Company or there is commenced against the Company or any
subsidiary of the Company any such bankruptcy, insolvency or other proceeding
which remains undismissed for a period of 61 days; or the Company or any
subsidiary of the Company is adjudicated insolvent or bankrupt; or any order of
relief or other order approving any such case or proceeding is entered; or the
Company or any subsidiary of the Company suffers any appointment of any
custodian, private or court appointed receiver or the like for it or any
substantial part of its property which continues undischarged or unstayed for a
period of sixty one (61) days; or the Company or any subsidiary of the Company
makes a general assignment for the benefit of creditors; or the Company or any
subsidiary of the Company shall fail to pay, or shall state that it is unable to
pay, or shall be unable to pay, its debts generally as they become due; or the
Company or any subsidiary of the Company shall call a meeting of its creditors
with a view to arranging a composition, adjustment or restructuring of its
debts; or the Company or any subsidiary of the Company shall by any act or
failure to act expressly indicate its consent to, approval of or acquiescence in
any of the foregoing; or any corporate or other action is taken by the Company
or any subsidiary of the Company for the purpose of effecting any of the
foregoing;

 

(iv) The Common Stock is suspended or delisted from trading on the OTCQB market
or the pink sheets market maintained by OTC Markets, Inc. for more than ten (10)
consecutive trading days (the “Primary Market”).

 

 
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(v) The Company loses its status as “DTC Eligible” for more than ten (10)
consecutive trading days.

 

(vi) The Company shall become late or delinquent in its periodic report filing
requirements as a fully-reporting issuer registered with the Securities &
Exchange Commission for more than ten (10) consecutive trading days.

 

(b) Upon the occurrence of any Event of Default, the outstanding balance shall
immediately increase to 120% of the outstanding balance immediately prior to the
occurrence of the Event of Default (the “Default Effect”). The Default Effect
shall automatically apply upon the occurrence of an Event of Default without the
need for any party to give any notice or take any other action.

 

(3) CONVERSION OF NOTE. This Note shall be convertible into shares of the
Company's Common Stock, on the terms and conditions set forth in this Section 3.

 

(a) Conversion Right. Subject to the provisions of Section 3(c), at any time
after 120 days following the Issuance Date, the Holder shall be entitled to
convert any portion of the outstanding and unpaid Conversion Amount (as defined
below) into fully paid and nonassessable shares of Common Stock in accordance
with Section 3(b), at the Conversion Price (as defined below). The number of
shares of Common Stock issuable upon conversion of any Conversion Amount
pursuant to this Section 3(a) shall be equal to the quotient of dividing the
Conversion Amount by the Conversion Price. The Company shall not issue any
fraction of a share of Common Stock upon any conversion. If the issuance would
result in the issuance of a fraction of a share of Common Stock, the Company
shall round such fraction of a share of Common Stock up to the nearest whole
share. The Company shall pay any and all transfer agent fees, legal fees, costs
and any other fees or costs that may be incurred or charged in connection with
the issuance of shares of the Company’s Common Stock to the Holder arising out
of or relating to the conversion of this Note.

 

(i) "Conversion Amount" means the portion of the outstanding balance and
interest to be converted, plus any penalties, redeemed or otherwise with respect
to which this determination is being made.

 

(ii) "Conversion Price" shall equal 90% of the low traded price of the Company’s
common stock for the twenty (20) consecutive trading days immediately preceding
the applicable Conversion Date on which the Holder elects to convert all or part
of this Note, subject to adjustment as provided in this Note.

 

(b) Mechanics of Conversion.

 

(i) Optional Conversion. To convert any Conversion Amount into shares of Common
Stock on any date (a "Conversion Date"), the Holder shall (A) transmit by email,
facsimile (or otherwise deliver), for receipt on or prior to 4:59 p.m., New
York, NY Time, on such date, a copy of an executed notice of conversion in the
form attached hereto as Exhibit A (the "Conversion Notice") to the Company. On
or before the third trading day following the date of receipt of a Conversion
Notice (the "Share Delivery Date"), the Company shall (A) if legends are not
required to be placed on certificates of Common Stock pursuant to the then
existing provisions of Rule 144 of the Securities Act of 1933 (“Rule 144”) and
provided that the Transfer Agent is participating in the Depository Trust
Company's ("DTC") Fast Automated Securities Transfer Program, credit such
aggregate number of shares of Common Stock to which the Holder shall be entitled
to the Holder's or its designee's balance account with DTC through its Deposit
Withdrawal Agent Commission system or (B) if the Transfer Agent is not
participating in the DTC Fast Automated Securities Transfer Program, issue and
deliver to the address as specified in the Conversion Notice, a certificate,
registered in the name of the Holder or its designee, for the number of shares
of Common Stock to which the Holder shall be entitled which certificates shall
not bear any restrictive legends unless required pursuant the Rule 144. If this
Note is physically surrendered for conversion and the outstanding Principal of
this Note is greater than the Principal portion of the Conversion Amount being
converted, then the Company shall, upon request of the Holder, as soon as
practicable and in no event later than three (3) business days after receipt of
this Note and at its own expense, issue and deliver to the holder a new Note
representing the outstanding Principal not converted. The person or persons
entitled to receive the shares of Common Stock issuable upon a conversion of
this Note shall be treated for all purposes as the record holder or holders of
such shares of Common Stock upon the transmission of a Conversion Notice.

 

 
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(ii) Company's Failure to Timely Convert. If after three (3) trading days
following the Company's receipt of the facsimile or email copy of a Conversion
Notice the Company shall fail to issue and deliver to Holder the number of
shares of Common Stock to which the Holder is entitled upon such holder's
conversion of any Conversion Amount (a "Conversion Failure"), the Original
Principal Amount of the Note shall increase by $1,000 per day until the Company
issues and delivers a certificate to the Holder or credit the Holder's balance
account with DTC for the number of shares of Common Stock to which the Holder is
entitled upon such holder's conversion of any Conversion Amount (under Holder’s
and Company’s expectation that any damages will tack back to the Issuance Date).
Company will not be subject to any penalties once its transfer agent processes
the shares to the DWAC system. If the Company fails to deliver shares in
accordance with the timeframe stated in this Section, resulting in a Conversion
Failure, the Holder, at any time prior to selling all of those shares, may
rescind any portion, in whole or in part, of that particular conversion
attributable to the unsold shares and have the rescinded conversion amount
returned to the Outstanding Balance with the rescinded conversion shares
returned to the Company (under Holder’s and Company’s expectations that any
returned conversion amounts will tack back to the original date of the Note).

 

In the case that conversion shares are not deliverable by DWAC/FAST electronic
transfer an additional 10% discount to the Conversion Price will apply.

 

(iii) DTC Eligibility & Sub-Penny. If the Company fails to maintain its status
as “DTC Eligible” for any reason, or, if the Conversion Price is less than
$0.01, the Principal Amount of the Note shall increase by ten thousand dollars
($10,000) (under Holder’s and Company’s expectation that any Principal Amount
increase will tack back to the Issuance Date).

 

(iv) Book-Entry. Notwithstanding anything to the contrary set forth herein, upon
conversion of any portion of this Note in accordance with the terms hereof, the
Holder shall not be required to physically surrender this Note to the Company
unless (A) the full Conversion Amount represented by this Note is being
converted or (B) the Holder has provided the Company with prior written notice
(which notice may be included in a Conversion Notice) requesting reissuance of
this Note upon physical surrender of this Note. The Holder and the Company shall
maintain records showing the Principal and interest 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 conversion.

  

(c) Limitations on Conversions or Trading.

 

(i) Beneficial Ownership. The Company shall not effect any conversions of this
Note and the Holder shall not have the right to convert any portion of this Note
or receive shares of Common Stock as payment of interest hereunder to the extent
that after giving effect to such conversion or receipt of such interest payment,
the Holder, together with any affiliate thereof, would beneficially own (as
determined in accordance with Section 13(d) of the Exchange Act and the rules
promulgated thereunder) in excess of 9.99% of the number of shares of Common
Stock outstanding immediately after giving effect to such conversion or receipt
of shares as payment of interest. Since the Holder will not be obligated to
report to the Company the number of shares of Common Stock it may hold at the
time of a conversion hereunder, unless the conversion at issue would result in
the issuance of shares of Common Stock in excess of 9.99% of the then
outstanding shares of Common Stock without regard to any other shares which may
be beneficially owned by the Holder or an affiliate thereof, the Holder shall
have the authority and obligation to determine whether the restriction contained
in this Section will limit any particular conversion hereunder and to the extent
that the Holder determines that the limitation contained in this Section
applies, the determination of which portion of the principal amount of this Note
is convertible shall be the responsibility and obligation of the Holder. If the
Holder has delivered a Conversion Notice for a principal amount of this Note
that, without regard to any other shares that the Holder or its affiliates may
beneficially own, would result in the issuance in excess of the permitted amount
hereunder, the Company shall notify the Holder of this fact and shall honor the
conversion for the maximum principal amount permitted to be converted on such
Conversion Date in accordance with Section 3(a) and, any principal amount
tendered for conversion in excess of the permitted amount hereunder shall remain
outstanding under this Note. The provisions of this Section may be waived at any
time by Holder upon written notification to the Company.

 

 
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(d) Other Provisions.

 

(i) Share Reservation. The Company shall at all times reserve and keep available
out of its authorized Common Stock the full number of shares of Common Stock
issuable upon conversion of all outstanding amounts under this Note; and within
five (5) Business Days following the receipt by the Company of a Holder's notice
that such minimum number of Underlying Shares is not so reserved, the Company
shall promptly reserve a sufficient number of shares of Common Stock to comply
with such requirement. The Company will at all times reserve at least 15,000,000
shares of Common Stock for conversion.

 

(ii) Prepayment. At any time within the 180 day period immediately following the
Issuance Date, the Company shall have the option, upon 10 business days’ notice
to Holder, to pre-pay the entire remaining outstanding principal amount of this
Note in cash, provided that (i) the Company shall pay the Holder 120% of the
Outstanding Balance, (ii) such amount must be paid in cash on the next business
day following such 10 business day notice period, and (iii) the Holder may still
convert this Note pursuant to the terms hereof at all times until such
prepayment amount has been received in full. Except as set forth in this Section
the Company may not prepay this Note in whole or in part.

 

(iii) Terms of Future Financings. So long as this Note is outstanding, upon any
issuance by the Company or any of its subsidiaries of any security with any term
more favorable to the holder of such security or with a term in favor of the
holder of such security that was not similarly provided to the Holder in this
Note, then the Company shall notify the Holder of such additional or more
favorable term and such term, at Holder’s option, shall become a part of the
transaction documents with the Holder. 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, conversion lookback
periods, interest rates, original issue discounts, stock sale price, private
placement price per share, and warrant coverage.

 

(iv) All calculations under this Section 3 shall be rounded up to the nearest
$0.00001 or whole share.

 

(v) Nothing herein shall limit a Holder's right to pursue actual damages or
declare an Event of Default pursuant to Section 2 herein for the Company's
failure to deliver certificates representing shares of Common Stock upon
conversion within the period specified herein and such Holder shall have the
right to pursue all remedies available to it at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief,
in each case without the need to post a bond or provide other security. The
exercise of any such rights shall not prohibit the Holder from seeking to
enforce damages pursuant to any other Section hereof or under applicable law.

 

 
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(4) SECTION 3(A)(9) OR 3(A)(10) TRANSACTION. So long as this Note is
outstanding, the Company 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)(10) of the Securities Act (a “3(a)(10)
Transaction”). In the event that the Company does enter into, or makes any
issuance of Common Stock related to a 3(a)(9) Transaction or a 3(a)(10)
Transaction while this note is outstanding, a liquidated damages charge of 25%
of the outstanding principal balance of this Note, but not less than $10,000,
will be assessed and will become immediately due and payable to the Holder at
its election in the form of cash payment or addition to the balance of this
Note.

 

(5) REISSUANCE OF THIS NOTE.

 

(a) Assignability. The Company may not assign this Note. This Note will be
binding upon the Company and its successors and will inure to the benefit of the
Holder and its successors and assigns and may be assigned by the Holder to
anyone of its choosing without Company’s approval, upon ten (10) trading days
advance written notice to the Company.

 

(b) Lost, 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 representing the
outstanding Principal.

 

(6) NOTICES. Any notices, consents, waivers or other communications required or
permitted to be given under the terms hereof must be in writing and delivered
per the notice provision of the Securities Purchase Agreement between the
parties on the date hereof.

 

(7) APPLICABLE LAW AND VENUE. This Note shall be governed by and construed in
accordance with the laws of the State of Nevada, without giving effect to
conflicts of laws thereof. Any action brought by either party against the other
concerning the transactions contemplated by this Agreement shall be brought only
in the state courts of California or in the federal courts located in the city
and county of San Diego, in the State of California. Both parties and the
individuals signing this Agreement agree to submit to the jurisdiction of such
courts.

 

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

 

[Signature Page Follows]

 

 
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IN WITNESS WHEREOF, the Company has caused this Convertible Note to be duly
executed by a duly authorized officer as of the date set forth above. 

 

  COMPANY:     SearchCore, Inc.         By: /s/ James Pakulis      Name: James
Pakulis     Title: Chief Executive Officer  

 

  HOLDER:           VISTA CAPITAL INVESTMENTS, LLC.           By: /s/ David J.
Clark     Name: David J. Clark     Title: Principal  

 

[Signature Page to Convertible Note No. SRER-1]

 

 
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EXHIBIT A

 

NOTICE OF CONVERSION

 

[Company Contact, Position]

SearchCore, Inc.

 

[Company Address]

[Contact Email Address}

 

The undersigned hereby elects to convert a portion of the $________Convertible
Note _________ issued to Vista Capital Investments, LLC
on                          into Shares of Common Stock
of                         according to the conditions set forth in such Note as
of the date written below.

 

By accepting this notice of conversion, you are acknowledging that the number of
shares to be delivered represents less than 10% (ten percent) of the common
stock outstanding. If the number of shares to be delivered represents more than
9.99% of the common stock outstanding, this conversion notice shall immediately
automatically extinguish and debenture Holder must be immediately notified.

 

 

Date of Conversion:

 

 

 

 

 

Conversion Amount:

 

 

 

 

 

Conversion Price:

 

 

 

 

 

Shares to be Delivered:

 

 

 

Shares delivered in name of:

 

VISTA CAPITAL INVESTMENTS, LLC 

 

Signature:

    By:     Title:     Vista Capital Investments, LLC  

 

 

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