EXCHANGE AGREEMENT

 

            This Exchange Agreement (this “Agreement”) is made and entered into
by and between Blue Calypso, Inc., a Delaware corporation (the “Company”) and
Aztec Systems, Inc., a Texas corporation (“Aztec”) effective as of November 9,
2012. The Company and Aztec are sometimes collectively referenced herein as the
“Parties” or individually as a “Party”. 

 

Recitals

 

            WHEREAS, on January 17, 2012, the Company issued an 8% Promissory
Note to Aztec in the principal amount of $254,992.89 (the “Note”) due September
30, 2012;

 

            WHEREAS, as of the date hereof, the outstanding balance of the Note,
including all interest thereon is $368,059.24;

 

            WHEREAS, as of the date hereof, the Company has an accounts payable
balance with Aztec of $177,898.92(the “Accounts Payable”); 

 

            WHEREAS, upon the terms and subject to the conditions hereof, Aztec
and the Company desire to exchange the Note and the Accounts Payable for that
certain 8% Convertible Note in the original principal amount of $545,958.16 due,
subject to the terms therein, March 31, 2013, in substantially the form of
Exhibit “B”  attached hereto (the “Convertible Note”); 

 

            WHEREAS, the Convertible Note issued and exchanged hereunder is
being issued without registration under the Securities Act in reliance on the
exemption provided by Section 4(2) of the Securities Act;

 

WHEREAS, upon the terms and subject to the conditions hereof, the Company has
agreed to register the shares of common stock issuable upon conversion of the
Convertible Note (the “Convertible Note Shares”) and an aggregate of 3,733,428
shares of common stock currently held by Aztec (the “Aztec Shares” and together
with the Convertible Note Shares, the “Registrable Securities”) on or before
December 31, 2012 as set forth herein; and

 

WHEREAS, the Parties desire to make certain representations, warranties,
covenants and other agreements in connection with the transactions contemplated
hereby:

 

Agreement

 

NOW, THEREFORE in consideration of the covenants, promises and representations
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1         Definitions. In addition to the terms defined elsewhere in
this Agreement: (a) capitalized terms that are not otherwise defined herein have
the meanings given to such terms in the Convertible Note (as defined herein),
and (b) the following terms have the meanings set forth in this Section 1.1:

 

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“Accounts Payable” shall have the meaning ascribed to such term in the Recitals.

 

“Action” shall have the meaning ascribed to such term in Section 5.11.

 

“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 405 under the
Securities Act.

 

“Aztec” shall have the meaning ascribed to such term in the preamble to this
Agreement.

 

“Aztec Party” shall have the meaning ascribed to such term in Section 6.6.

 

“Board of Directors” means the board of directors of the Company.

 

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

 

“Closing Date” means the Trading Day on which all of the Transaction Documents
have been executed and delivered by the applicable parties thereto pursuant to
Section 2.2, and all conditions precedent to (i) Aztec’s obligation to deliver
the Note and Accounts Payable in exchange for the Convertible Note and (ii) the
Company’s obligations to deliver the Securities, in each case, have been
satisfied or waived, but not later than November 9, 2012.

 

“Commission” means the United States Securities and Exchange Commission.

 

“Common Stock” means the common stock of the Company, $0.0001 par value per
share, and any other class of securities into which such securities may
hereafter be reclassified or changed.

 

“Common Stock Equivalents” means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including, without limitation, any debt, preferred stock, right,
option, warrant or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.

 

“Company” shall have the meaning ascribed to such term in the preamble to this
Agreement.

 

“Conversion Price” shall have the meaning ascribed to such term in the
Convertible Note.

 

“Convertible Note” shall have the meaning ascribed to such term in the Recitals.

 

“Convertible Note Shares” shall have the meaning ascribed to such term in the
Recitals.

 

“Debt" of any Person at any date, without duplication, means (a) all
indebtedness of such Person for borrowed money; (b) all obligations of such
Person for the deferred purchase price of property or services, except trade
payables arising in the ordinary course of business; (c) all obligations of such
Person evidenced by notes, bonds, debentures or other similar instruments; (d)
obligations as lessee under capital leases; (e) obligations in respect of any
interest rate swaps, currency exchange agreements, commodity swaps, caps, collar
agreements or similar arrangements entered into by the Company providing for
protection against fluctuations in interest rates, currency exchange rates or
commodity prices or the exchange of nominal interest obligations, either
generally or under specific contingencies; (f) all obligations of such Person to
purchase, redeem, retire, defease or otherwise make any payment in respect of
any equity interests in such Person or any other Person or any warrants, rights
or options to acquire such equity interests, valued, in the case of redeemable
preferred interests, at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends, (g) all obligations of such Person
under acceptance facilities and letters of credit; (h) all guaranties,
endorsements (other than for collection or deposit in the ordinary course of
business), and other contingent obligations of such Person to purchase, to
provide funds for payment, to supply funds to invest in any Person, or otherwise
to assure a creditor against loss, in each case, in respect of indebtedness set
out in clauses (a) through (g) of a Person other than the Company; and (i)
indebtedness set out in clauses (a) through (h) of any Person other than the
Company secured by any lien on any asset of the Company or any of its
Subsidiaries, whether or not such indebtedness has been assumed by the Company
or any of its Subsidiaries.

 

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“Effective Date” shall have the meaning ascribed to such term in Section 3.1.

 

“Effectiveness Period” shall have the meaning ascribed to such term in Section
3.2(a).

 

“Evaluation Date” shall have the meaning ascribed to such term in Section 5.19.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

 

“Filing Date” shall have the meaning ascribed to such term in Section 3.1.

 

“Filings” shall have the meaning ascribed to such term in Section 3.5(a).

 

“GAAP” shall have the meaning ascribed to such term in Section 5.9.

 

“Governmental Authority” means: a federal, state, local or foreign governmental
authority; a state, province, commonwealth, territory or district thereof; a
county or parish; a city, town, township, village or other municipality; a
district, ward or other subdivision of any of the foregoing; any executive,
legislative or other governing body of any of the foregoing; any agency,
authority, board, department, system, service, office, commission, committee,
council or other administrative body of any of the foregoing; any court or other
judicial body; and any officer, official or other representative of any of the
foregoing.

 

“Indebtedness” shall have the meaning ascribed to such term in Section 5.25.

 

“Intellectual Property Rights” shall have the meaning ascribed to such term in
Section 5.16.

 

“Liens” means a lien, charge, pledge, security interest, encumbrance, right of
first refusal, preemptive right or other restriction.

 

“Material Adverse Effect” shall have the meaning assigned to such term in
Section 5.2.

 

“Maximum Rate” shall have the meaning ascribed to such term in Section 7.13.

 

“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

 

“Plan of Distribution” shall have the meaning ascribed to such term in Section
3.2(a).

 

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“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.

 

“Registrable Securities” shall have the meaning ascribed to such term in the
Recitals.

 

“Registration Statement” shall have the meaning ascribed to such term in Section
3.2.

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

 

“SEC Reports” shall have the meaning ascribed to such term in Section 5.9.

 

“Securities” means the Convertible Note and the Registrable Securities.

 

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

 

“Securities Laws” means the securities laws of the United States or any state
thereof.

 

“Subsidiary” means Blue Calypso, LLC, and shall, where applicable, also include
any direct or indirect subsidiary of the Company formed or acquired after the
date hereof.

 

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

 

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

 

“Transaction Documents” means this Agreement and the Convertible Note, all
exhibits and schedules thereto and hereto and all other agreements, documents
and instruments executed and delivered pursuant to the terms of this Agreement
or pursuant to the terms of any other Transaction Document, together with any
and all renewals, extensions, and restatements of, and amendments and
modifications to, any such agreements, documents, and instruments.

 

“Transfer Agent” means Action Stock Transfer Corp., the current transfer agent
of the Company, with a mailing address of 2469 E. Fort Union Blvd., Suite 214,
Salt Lake City, UT, and any successor transfer agent of the Company.

 

“Violation” shall have the meaning ascribe to such term in Section 3.5(a).

 

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Section 1.2       Interpretation. For purposes of this Agreement, (a) the words
“include,” “includes” and “including” shall be deemed to be followed by the
words “without limitation”; (b) the word “or” is not exclusive; and (c) the
words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this
Agreement as a whole. The definitions given for any defined terms in this
Agreement shall apply equally to both the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. Unless the context otherwise
requires, references herein: (i) to Articles, Sections, and Exhibits mean the
Articles and Sections of, and Exhibits attached to, this Agreement; (ii) to an
agreement, instrument or other document means such agreement, instrument or
other document as amended, supplemented and modified from time to time to the
extent permitted by the provisions thereof; and (iii) to a statute means such
statute as amended from time to time and includes any successor legislation
thereto and any regulations promulgated thereunder. This Agreement shall be
construed without regard to any presumption or rule requiring construction or
interpretation against the party drafting an instrument or causing any
instrument to be drafted. The Exhibits referred to herein shall be construed
with, and as an integral part of, this Agreement to the same extent as if they
were set forth verbatim herein.

 

ARTICLE II

EXCHANGE OF NOTE AND CONVERSION OF ACCOUNTS PAYABLE

 

            Section 2.1       Exchange of Note and Accounts Payable. Upon the
terms and subject to the conditions of this Agreement, at the closing, which
shall occur no later than November 9, 2012 (the “Closing Date”), upon the
satisfaction or waiver of all conditions set forth in Section 2.2, (a) Aztec
will (i) convey, assign, transfer and deliver to the Company and the Company
will receive from Aztec, the Note and (ii) record on its books of account that
the Accounts Payable have been paid in full in exchange for the issuance of the
Convertible Note, and (b) the Company will issue and deliver to Aztec the
Convertible Note. Aztec and the Company shall deliver the other items set forth
in Section 2.2 at the Closing Date.

 

Section 2.2       Deliveries. 

 

(a)                On the Closing Date, the Company shall deliver or cause to be
delivered to Aztec the following:

 

(1)               a copy of this Agreement duly executed by the Company;

 

(2)               the Convertible Note duly executed by the Company;

 

(3)               a waiver of LMD Capital, LLC with respect to its rights under
Section 4.13 of that certain Securities Purchase Agreement dated April 19, 2012;

 

(4)               certificates of the appropriate government officials of the
state of incorporation or organization of the Company as to the existence and
good standing of the Company and each of its Subsidiaries, each dated within ten
(10) days prior to the Closing Date; and

 

(5)               Certificate of the Secretary of the Company certifying (i)
resolutions of the Board of Directors of the Company which authorize the
execution, delivery and performance by the Company of this Agreement and the
other Transaction Documents to which the Company is a party and (ii) the names
of the individuals or other Persons authorized to sign this Agreement and the
other Transaction Documents to which the Company is a party together with
specimen signatures of such Persons.

 

(b)               On the Closing Date, Aztec shall deliver or cause to be
delivered to the Company:

 

(1)   A copy of this Agreement duly executed by Aztec;

 

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(2)               the Note;

 

(3)               evidence that the Accounts Payable have been marked “paid in
full” on the accounting books of Aztec in exchange for the Convertible Note;

 

(4)               a waiver letter from The F&M Bank & Trust Company with respect
to the exchange of the Note for the Convertible Note;

 

(5)               certificates of the appropriate government officials of the
state of incorporation or organization of the Company as to the existence and
good standing of the Company and each of its Subsidiaries, each dated within ten
(10) days prior to the Closing Date; and

 

(6)               Certificate of the Secretary of Aztec certifying (i)
resolutions of the Board of Directors of Aztec which authorizes the execution,
delivery and performance by Aztec of this Agreement and (ii) the names of the
individuals or other Persons authorized to sign this Agreement together with
specimen signatures of such Persons.

 

ARTICLE III

REGISTRATION RIGHTS

 

            Section 3.1       Registration Rights.  The Company shall register
with the Commission the Registrable Securities by either (i) “piggybacking” such
Registrable Securities to a Registration Statement filed for the account of the
Company or for the account of one or more stockholders of the Company or (ii)
preparing and filing a Registration Statement solely for the benefit of Aztec
with the Commission, in either case on or before December 31, 2012 (the “Filing
Date”), and shall use its commercially reasonable best efforts to have such
Registration Statement declared effective by the Commission no later than March
31, 2013 (the “Effective Date”). 

 

Section 3.2       Registration. 

 

(a)                On or prior to the Filing Date, the Company shall prepare and
file with the Commission a registration statement covering the Registrable
Securities for an offering to be made on a continuous basis pursuant to Rule
415. The registration statement shall be on Form S-1 or, if the Company is so
eligible, on Form S-3 (except if the Company is not then eligible to register
for resale the Registrable Securities on Form S-1 or Form S-3, as the case may
be, in which case such registration shall be on another appropriate form in
accordance herewith) and shall contain (unless otherwise directed by Aztec)
substantially the “Plan of Distribution” attached hereto as Exhibit A. The
Company shall use its commercially reasonable efforts to cause the Registration
Statement to be declared effective under the Securities Act as soon as possible
and, in any event, by the Effective Date. The Company shall use its commercially
reasonable efforts to keep the Registration Statement continuously effective
under the Securities Act until all Registrable Securities covered by such
Registration Statement have been sold, or may be sold without the requirement to
be in compliance with Rule 144(c)(1) and otherwise without restriction or
limitation pursuant to Rule 144, as determined by counsel to the Company (the
“Effectiveness Period”). The Company shall prepare and file with the Commission
such amendments (including, without limitation, post-effective amendments) and
supplements to each Registration Statement and the prospectus used in connection
with each such Registration Statement, which prospectus is to be filed pursuant
to Rule 424 promulgated under the Securities Act, as may be necessary to keep
each such Registration Statement effective at all times during the Effectiveness
Period for such Registration Statement, and, during such period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company required to be covered by such
Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such Registration
Statement; provided, however, by 8:30 a.m. (New York time) on the Business Day
immediately following the Effective Date, the Company shall file with the SEC in
accordance with Rule 424(b) under the Securities Act the final prospectus to be
used in connection with sales pursuant to the applicable Registration Statement
(whether or not such a prospectus is technically required by such rule). In the
case of amendments and supplements to the Registration Statement which are
required to be filed pursuant to this Agreement (including, without limitation,
pursuant to this Section 3(a)) by reason of the Company filing a report on Form
10-Q or Form 10-K or any analogous report under the Exchange Act, the Company
shall have incorporated such report by reference into such Registration
Statement, if applicable, or shall file such amendments or supplements with the
Commission on the same day on which the Exchange Act report is filed which
created the requirement for the Company to amend or supplement such Registration
Statement.

 

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(b)               The Company shall bear and pay all expenses incurred in
connection with any registration, filing or qualification of the Registrable
Securities with respect to the registrations pursuant to this Section 3.2,
including (without limitation) all registration, filing and qualification fees,
printer’s fees, accounting fees and fees and disbursements of counsel for the
Company, but excluding any brokerage or underwriting fees, discounts and
commissions relating to the Registrable Securities and fees and disbursements of
counsel for Aztec.

 

(c)                Notwithstanding anything in this Agreement to the contrary,
the Company may, by written notice to Aztec, suspend sales under the
Registration Statement after its effectiveness date and/or require that Aztec
immediately cease the sale of Registrable Securities if the financial statements
included in such Registration Statement become ineligible for inclusion therein.
The Company’s rights under this Section 3.2(c)  may be exercised for a period of
no more than 10 trading days in any 12-month period. Immediately after the end
of any suspension period under this Section 3.2(c), the Company shall take all
necessary actions (including filing any required supplemental prospectus) to
restore the effectiveness of the Registration Statement and the ability of Aztec
to publicly resell the Registrable Securities pursuant to such effective
Registration Statement.

 

Section 3.3       Obligations of the Company. In addition to the obligations set
forth in Section 3.2, the Company shall, as expeditiously as reasonably
possible:

 

(a)        Furnish to Aztec such numbers of copies of a prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by it (provided that
the Company would not be required to print such prospectuses if readily
available to Aztec from any electronic service, such as on the EDGAR filing
database maintained at www.sec.gov;

 

(b)        Use its commercially reasonable efforts to register and qualify the
Registrable Securities under the Securities Laws of such jurisdictions as shall
be reasonably requested by Aztec; provided, that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such states
or jurisdictions;

 

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(c)        Promptly notify Aztec at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, within one business day,
(i) of the effectiveness of the Registration Statement, or (ii) of the happening
of any event as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing;

 

(d)        Cause all Registrable Securities to be listed on the Trading Market
on which shares of Common Stock issued by the Company are then listed; and

 

(e)        Provide a transfer agent and registrar for all of the Registrable
Securities and a CUSIP number therefore not later than the Effective Date.

 

3.4       Furnish Information. It shall be a condition precedent to the
Company’s obligations to take any action pursuant to this Article III  with
respect to the Registrable Securities that Aztec shall furnish to the Company
such information regarding Aztec, the Registrable Securities held by Aztec, and
the intended method of disposition of such securities in the form attached to
this Agreement as Exhibit “A”, or as otherwise reasonably required by the
Company to effect the registration of the Registrable Securities.

 

3.5       Indemnification. 

 

(a)        To the extent permitted by law, the Company will indemnify and hold
harmless Aztec, any underwriter (as defined in the Securities Act) retained by
Aztec and each Person, if any, who controls Aztec or underwriter within the
meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages or liabilities (joint or several) to which any of the foregoing Persons
may become subject under the Securities Act, the Exchange Act or other federal
or state securities law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations (collectively, a “Violation”): (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement, as amended from time to time, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto (collectively, the “Filings”), (ii) the omission or
alleged omission to state in the Filings a material fact required to be stated
therein, or necessary to make the statements therein not misleading, or (iii)
any violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any Securities Law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any state securities law; and the Company
will pay any legal or other expenses reasonably incurred by any person to be
indemnified pursuant to this Section 3.5(a)  in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this Section 3.5(a)  shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the Company be liable in
any such case for any such loss, claim, damage, liability or action to the
extent that it arises out of or is based upon a Violation that occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by Aztec, underwriter or controlling
person.

 

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(b)        To the extent permitted by law, Aztec will indemnify and hold
harmless the Company, each of its directors, each of its officers who has signed
the Registration Statement, each Person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act, any underwriter, against
any losses, claims, damages or liabilities (joint or several) to which any of
the foregoing Persons may become subject under the Securities Act, the Exchange
Act or other Securities Law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by Aztec expressly for use in connection with such registration; and
Aztec will pay any legal or other expenses reasonably incurred by any Person to
be indemnified pursuant to this Section 3.5(b)  in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
however, that the indemnity agreement contained in this Section 3.5(b)  shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of Aztec
(which consent shall not be unreasonably withheld); and provided, further, in no
event shall any indemnity under this Section 3.5(b) exceed the net proceeds
received by Aztec upon the sale of the Registrable Securities.

 

(c)        Promptly after receipt by an indemnified party under this
Section 3.5  of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 3.5, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties that may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such Proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if materially prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 3.5, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 3.5. 

 

(d)        If the indemnification provided in Sections 3.5(a)  and 3.5(b)  is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, claim, damage or expense referred to herein,
then the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or expense in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
statements or omissions or alleged statements or omissions that resulted in such
loss, liability, claim or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. In no event shall Aztec be
required to contribute an amount in excess of the net proceeds received by it
upon the sale of the Registrable Securities.

 

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(e)        The obligations of the Company and Aztec under this Section 3.5 
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Article III  and otherwise.

 

 

 

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF AZTEC

 

            As of the date hereof and as of the Closing Date, Aztec represents
and warrants to the Company as follows:

 

            Section 4.1       Ownership of Note.  Aztec is the sole record and
beneficial owner of the Note. The Note is not subject to any encumbrances, other
than the security interest in the assets of Aztec granted to The F&M Bank &
Trust Company pursuant to the terms of a Loan Agreement dated June 14, 2012 by
and between Aztec and F&M (the “Loan Agreement”), and Aztec has not granted any
rights to purchase the Note to any other person or entity. Subject to any
restrictions set forth in the Loan Agreement, Aztec has the sole right to
transfer the Note to the Company.

 

Section 4.2       Validity of Accounts Payable.  All of the Accounts Payable,
other than the charge for pre-billed hosting services for the period November 1
to December 31, 2012, as requested by the Company, have been incurred on or
prior to the date hereof in the ordinary course of the Company’s business and
all of the Accounts Payable represent valid obligations of the Company related
to services provided by Aztec to the Company except for the pre-billed hosting
services.

 

            Section 4.3       No Undisclosed Liabilities.  Except for the Note
and the Accounts Payable, the Company has no financial liabilities or past-due
account payable obligations to Aztec as of the date hereof.

 

Section 4.4       Organization; Authority.  Aztec is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization with full right, corporate power and authority to enter into and to
consummate the transactions contemplated by this each of the Transaction
Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution, delivery and performance by Aztec of the transactions
contemplated by the Transaction Documents have been duly authorized by all
necessary corporate action on the part of Aztec. This Agreement and each of the
other Transaction Documents have been duly executed by Aztec, and when delivered
by Aztec in accordance with the terms hereof, will constitute the valid and
legally binding obligation of Aztec, enforceable against it in accordance with
its terms, except (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.

 

            Section 4.5       Purchaser Status.  At the time Aztec was offered
the Convertible Note, it was, and as of the date hereof it is, and on the date
on which it converts the Convertible Note it will be an “accredited investor” as
defined in Rule 501(a)(3) or (a)(8) of Regulation D promulgated under the
Securities Act.

 

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            Section 4.6       Experience of Aztec.  Aztec, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Convertible Note and
has so evaluated the merits and risks of such investment. Aztec is able to bear
the economic risk of an investment in the Convertible Note and the Registrable
Securities and, at the present time, is able to afford a complete loss of such
investment.

 

            Section 4.7       General Solicitation.  Aztec is not acquiring the
Convertible Note as a result of any advertisement, article, notice or other
communication regarding the Convertible Note published in any newspaper,
magazine or similar media or broadcast over television or radio or presented at
any seminar or any other general solicitation or general advertisement.

 

Section 4.8       Certain Fees.  Aztec has no obligation with respect to any
brokerage or finder’s fees or commissions to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or other Person
with respect to the transactions contemplated by the Transaction Documents.

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

As of the date hereof and as of the Closing Date, the Company represents and
warrants to Aztec as follows:

 

Section 5.1       Subsidiaries.  The Company owns, directly or indirectly, all
of the capital stock or other equity interests of each Subsidiary free and clear
of any Liens, other than Permitted Liens as defined in the Convertible Note, and
all of the issued and outstanding shares of capital stock or other equity
interests of each Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights to subscribe for or
purchase securities.

 

Section 5.2       Organization and Qualification.  The Company and each of the
Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization (as applicable), with the requisite power and
authority to own and use its properties and assets and to carry on its business
as currently conducted. Neither the Company nor any Subsidiary is in violation
or default of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents. The Company
and each of the Subsidiaries is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not have or reasonably be expected to result
in (i) a material adverse effect on the legality, validity or enforceability of
any Transaction Document, (ii) a material adverse effect on the results of
operations, assets, business, prospects or condition (financial or otherwise) of
the Company and its Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company’s ability to perform in any material respect on a timely
basis its obligations under any Transaction Document (any of (i), (ii) or (iii),
a “Material Adverse Effect”) and no Proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such corporate power and authority or qualification.

 

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Section 5.3       Authorization; Enforcement.  The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents to which it is a party and
otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery of each of the Transaction Documents by the Company and the
consummation by each of them of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action on the part of the
Company and no further action is required by the Company, the Board of
Directors, the stockholders or the creditors of the Company or any Subsidiary in
connection therewith. Each Transaction Document has been (or upon delivery will
have been) duly executed by the Company and, when delivered in accordance with
the terms hereof and thereof, will constitute the valid and binding obligation
of the Company enforceable against it in accordance with its terms except (i) as
limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

 

Section 5.4       No Conflicts.  The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
other transactions contemplated hereby and thereby do not and will not: (i)
conflict with or violate any provision of the Company’s articles of
incorporation or bylaws, as amended, or (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, result in the creation of any Lien upon any of the properties or
assets of the Company or any Subsidiary, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected, or
(iii)  conflict with or result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any Governmental
Authority to which the Company or a Subsidiary is subject (including federal and
state securities laws and regulations), or by which any property or asset of the
Company or a Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not have or reasonably be expected to
result in a Material Adverse Effect.

 

Section 5.5       Filings, Consents and Approvals.  The Company is not required
to obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any Governmental Authority or other Person
in connection with the execution, delivery and performance by the Company of the
Transaction Documents, other than: (i) the filing required pursuant to Sections
6.3 and 6.5  of this Agreement, (ii) the filing of the Registration Statement
pursuant to Article III with the Commission, (iii) the filing of a Form D with
the Commission, and (iv) the waiver required to be delivered pursuant to
Sections 2.2(a)(3) and (v) such filings as are required to be made under
applicable state securities laws.

 

Section 5.6       Issuance of the Securities.  The Convertible Note is duly
authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and
non-assessable, free and clear of all Liens imposed by the Company other than
restrictions on transfer provided for in the Transaction Documents. The
Registrable Securities, when issued in accordance with the terms of the
Transaction Documents, will be validly issued, fully paid and non-assessable,
free and clear of all Liens. The Company has reserved from its duly authorized
capital stock a number of shares of Common Stock for issuance of the Registrable
Securities.

 

Section 5.7       Capitalization.  The capitalization of the Company and each
Subsidiary is as set forth on Schedule 5.7, which Schedule 5.7 shall also
include the number of shares of Common Stock owned, to the knowledge of the
Company, beneficially by Affiliates of the Company as of the date hereof. Except
as set forth on Schedule 5.7, as of the date hereof, the Company has not issued
any capital stock since its most recently filed periodic report under the
Exchange Act, other than pursuant to the exercise of employee stock options
under the Company’s stock option plans, the issuance of shares of Common Stock
to employees pursuant to the Company’s employee stock purchase plans and
pursuant to the conversion and/or exercise of Common Stock Equivalents
outstanding as of the date of the most recently filed periodic report under the
Exchange Act. Other than Aztec, no Person has any right of first refusal,
preemptive right, right of participation, or any similar right to participate in
the purchase and sale of the Convertible Note. Except as a result of the
purchase and sale of the Convertible Note and as set forth on Schedule 5.7,
there are no outstanding options, warrants, script rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire, any shares of Common Stock, or
contracts, commitments, understandings or arrangements by which the Company or
any Subsidiary is or may become bound to issue additional shares of Common Stock
or Common Stock Equivalents. Except as set forth on Schedule 5.7, the issuance
and sale of the Securities will not obligate the Company to issue shares of
Common Stock or other securities to any Person (other than Aztec) and will not
result in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under any of such securities. All of the
outstanding shares of capital stock of the Company are duly authorized, validly
issued, fully paid and non-assessable, have been issued in compliance with all
federal and state securities laws, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to subscribe for
or purchase securities. No further approval or authorization of any stockholder,
the Board of Directors of the Company or others is required for the issuance and
sale of the Securities. Except as set forth in Schedule 5.7, there are no
stockholders agreements, voting agreements or other similar agreements with
respect to the Company’s capital stock to which the Company is a party or, to
the knowledge of the Company, between or among any of the Company’s
stockholders.

 

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Section 5.8       Other Debt.  Except as set forth on Schedule 5.8, as of the
Closing Date:  (a) neither the Company nor any Subsidiary is directly,
indirectly or contingently obligated with respect to any Debt; (b) there exists
no default or event of default under the provisions of any Debt or any related
agreement to which the Company or any Subsidiary is a party; (c) neither the
Company nor any Subsidiary has requested the waiver of any provision of any
agreement evidencing Debt; and (d) there has been no demand for payment, oral or
otherwise, with respect to any agreement evidencing Debt to which either the
Company or any Subsidiary is a party.

 

Section 5.9       SEC Reports; Financial Statements.  The Company has filed all
reports, schedules, forms, statements and other documents required to be filed
by the Company under the Securities Act and the Exchange Act, including pursuant
to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof
(or such shorter period as the Company was required by law or regulation to file
such material) (the foregoing materials, including the exhibits thereto and
documents incorporated by reference therein, being collectively referred to
herein as the “SEC Reports”) on a timely basis or has received a valid extension
of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act, as applicable, as in effect at the time of filing and none
of the SEC Reports, when filed, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The Company is not an
issuer subject to Rule 144(i) under the Securities Act. The financial statements
of the Company included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent basis during
the periods involved (“GAAP”), except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP and are subject to
year-end and audit adjustments, and fairly present in all material respects the
financial position of the Company and its consolidated Subsidiaries as of and
for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to year-end
and audit adjustments.

 

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Section 5.10     Material Changes; Undisclosed Events, Liabilities or
Developments. Since the date of the latest audited financial statements included
within the SEC Reports, except as specifically disclosed in a subsequent SEC
Report filed prior to the Closing Date and except as set forth in Schedule 5.10:
(i) there has been no event, occurrence or development that has had or that
could reasonably be expected to result in a Material Adverse Effect, (ii) the
Company has not incurred any liabilities (contingent or otherwise) other than
(A) trade payables, deferred revenue and accrued expenses incurred in the
ordinary course of business consistent with past practice, and (B) liabilities
not required to be reflected in the Company’s financial statements pursuant to
GAAP or disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock and (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing Company stock
option plans. The Company does not have pending before the Commission any
request for confidential treatment of information. Except for the issuance of
the Securities contemplated by this Agreement or as set forth on Schedule 5.10,
no event, liability, fact, circumstance, occurrence or development has occurred
or exists or is reasonably expected to occur or exist with respect to the
Company or any Subsidiary or their respective businesses, properties,
operations, assets or financial condition, that would be required to be
disclosed by the Company under applicable Securities Laws at the time this
representation is made or deemed made that has not been publicly disclosed at
least one (1) Trading Day prior to the date that this representation is made.

 

Section 5.11     Litigation.  Except as set forth on Schedule 5.11, there is no
Proceeding pending or, to the knowledge of the Company, threatened against or
affecting the Company, any Subsidiary or any of their respective assets or
properties before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”) which could, if there were an unfavorable decision,
have or reasonably be expected to result in a Material Adverse Effect. Neither
the Company nor any Subsidiary, nor, to the best of the knowledge of the
Company, any director or officer thereof, is or has been the subject of any
Action involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. There has not been, and
to the knowledge of the Company there is not pending or contemplated, any
investigation by the Commission involving the Company or, to the knowledge of
the Company, any current or former director or officer of the Company. The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or any
Subsidiary under the Exchange Act or the Securities Act.

 

Section 5.12     Labor Relations.  No executive officer, to the knowledge of the
Company, is or is now expected to be in violation of any material term of any
employment contract, confidentiality, disclosure or proprietary information
agreement or non-competition agreement, or any other contract or agreement or
any restrictive covenant, and, to the knowledge of the Company, the continued
employment of each such executive officer does not subject the Company or any
Subsidiary to any liability with respect to any of the foregoing matters. To the
knowledge of the Company, the Company and each Subsidiary is in compliance with
all U.S. federal, state, local and foreign laws and regulations relating to
employment and employment practices, terms and conditions of employment and
wages and hours, except where the failure to be in compliance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

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Section 5.13     Compliance.  Except as set forth on Schedule 5.13, neither the
Company nor any Subsidiary (i) is in default under or in violation of (and no
event has occurred that has not been waived that, with notice or lapse of time
or both, would result in a default by the Company or any Subsidiary under), nor
has the Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its assets or properties is bound (whether or not such
default or violation has been waived), (ii) is in violation of any order of any
court, arbitrator or Governmental Authority binding on the Company or any
Subsidiary or any of their respective assets or properties, or (iii) is or has
been in violation of any statute, rule, ordinance or regulation of any
Governmental Authority, including without limitation all foreign, federal, state
and local laws applicable to its business, except in each case as could not have
or reasonably be expected to result in a Material Adverse Effect.

 

Section 5.14     [Reserved]

 

Section 5.15     Title to Assets.  The Company and each Subsidiary has good and
marketable title in fee simple to all real property owned by them and good and
marketable title in all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and clear of all
Liens, except for the Liens as set forth on Schedule 5.15. Any real property and
facilities held under lease by the Company and each Subsidiary is held by it
under valid, subsisting and enforceable leases with which the Company and each
Subsidiary is in compliance, except where the non-compliance would not
reasonably be expected to result in a Material Adverse Effect.

 

Section 5.16     Intellectual Property.  Except as set forth in Schedule 5.16,
the Company and each Subsidiary has, or has rights to use, all patents, patent
applications, trademarks, trademark applications, service marks, trade names,
trade secrets, inventions, copyrights, licenses and other intellectual property
rights and similar rights necessary or material for use in connection with its
respective business as described in the Registration Statement and the SEC
Reports and which the failure to so have could have a Material Adverse Effect
(collectively, the “Intellectual Property Rights”). None of, and neither the
Company nor any Subsidiary has received a notice (written or otherwise) that any
of, the Intellectual Property Rights has expired, terminated or been abandoned,
or is expected to expire or terminate or be abandoned, within two (2) years from
the date of this Agreement. Neither the Company nor any Subsidiary has received,
since the date of the latest audited financial statements included in the SEC
Reports, a written notice of a claim or otherwise has any knowledge that the
Intellectual Property Rights owned or used by the Company or any Subsidiary
violate or infringe upon the rights of any Person unless such notice has been
resolved without a Material Adverse Effect. To the knowledge of the Company, all
such Intellectual Property Rights owned by the Company and each Subsidiary is
enforceable and there is no existing infringement by another Person of any of
the Intellectual Property Rights. The Company and each Subsidiary has taken
reasonable security measures to protect the secrecy, confidentiality and value
of all of its intellectual properties, except where failure to do so could not,
individually or in the aggregate, reasonably be expecting to have a Material
Adverse Effect.

 

Section 5.17     Insurance.  The Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which the
Company and each Subsidiary is engaged. Neither the Company nor any Subsidiary
has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business
without a significant increase in cost.

 

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Section 5.18     Transactions With Affiliates and Employees.  Except as set
forth in the SEC Reports, none of the officers or directors of the Company or
any Subsidiary and, to the knowledge of the Company, none of the employees of
the Company or any Subsidiary is presently a party to any transaction with the
Company or any Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner, other than (i) for payment of
salary or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company or a Subsidiary and (iii) for other employee
benefits, including stock option or stock grant agreements under any stock plans
of the Company.

 

Section 5.19     Sarbanes-Oxley; Internal Accounting Controls. The Company and
each Subsidiary taken as a whole is in compliance with any and all applicable
requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date
hereof, and any and all applicable rules and regulations promulgated by the
Commission thereunder that are effective as of the date hereof and as of the
applicable Closing Date as of which this representation and warranty is being
made. Except as set forth in the SEC Reports, the Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that: (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management’s general or specific authorization, and
(iv) the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any
differences. Except as set forth in the SEC Reports, the Company and the
Subsidiaries have established disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries
and designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under
the Exchange Act is recorded, processed, summarized and reported, within the
time periods specified in the Commission’s rules and forms. The Company’s
certifying officers have evaluated the effectiveness of the disclosure controls
and procedures of the Company and the Subsidiaries as of the end of the period
covered by the most recently filed periodic report under the Exchange Act (such
date, the “Evaluation Date”). The Company presented in its most recently filed
periodic report under the Exchange Act the conclusions of the certifying
officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Since the Evaluation Date, there
have been no changes in the internal control over financial reporting (as such
term is defined in the Exchange Act) that have materially affected, or is
reasonably likely to materially affect, the internal control over financial
reporting of the Company and its Subsidiaries.

 

Section 5.20     Private Placement.  Assuming the accuracy of the Aztec
representations and warranties set forth in Section 4.4, no registration under
the Securities Act is required for the offer and sale of the Securities by the
Company to Aztec as contemplated hereby.

 

Section 5.21     Registration Rights.  Other than Aztec, LMD Capital, LLC and
Esousa Holdings LLC, no Person has any right to cause the Company to effect the
registration under the Securities Act of any securities of the Company.

 

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Section 5.22     Listing and Maintenance Requirements. The Common Stock is
registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge is likely to
have the effect of, terminating the registration of the Common Stock under the
Exchange Act nor has the Company received any notification that the Commission
is contemplating terminating such registration. The Company has not, in the 12
months preceding the date hereof, received notice from any Trading Market on
which the Common Stock is or has been listed or quoted to the effect that the
Company is not in compliance with the listing or maintenance requirements of
such Trading Market. The Company is, and has no reason to believe that it will
not in the foreseeable future continue to be, in compliance with all such
listing and maintenance requirements.

 

Section 5.23     Disclosure.  All disclosure furnished by or on behalf of the
Company to Aztec regarding the Company, its business and the transactions
contemplated hereby, including the Schedules to this Agreement, is true and
correct and does not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading. The
Company acknowledges and agrees that Aztec has not made any representations or
warranties with respect to the transactions contemplated hereby other than those
specifically set forth in Article IV hereof.

 

Section 5.24     No Integrated Offering.  Assuming the accuracy of Aztec’s
representations and warranties set forth in Section 4.5, neither the Company,
nor any of its Affiliates, nor any Person acting on its or their behalf has,
directly or indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under circumstances that would cause this
offering of the Securities to be integrated with prior offerings by the Company
for purposes of the Securities Act.

 

Section 5.25     [Reserved]

 

Section 5.26     Tax Status.  Except for matters set forth on Schedule 5.26, the
Company and its Subsidiaries each (i) has made or filed all necessary federal,
state and local income and all foreign income and franchise tax returns, reports
and declarations required by any jurisdiction to which it is subject, (ii) has
paid all taxes and other governmental assessments and charges, shown or
determined to be due on such returns, reports and declarations and (iii) has set
aside on its books provision reasonably adequate for the payment of all material
taxes for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Company or of any
Subsidiary know of no reasonable basis for any such claim.

 

Section 5.27     No General Solicitation.  The offer and sale of the Convertible
Note to Aztec in exchange for the Note and the Accounts Payable is a privately
negotiated transaction, and neither the Company nor any Person acting on behalf
of the Company has offered or sold any security of the Company that is
substantially similar to the Convertible Note or any other security that might
be integrated with the issuance of the Convertible Note by any form of general
solicitation or general advertising.

 

Section 5.28     Foreign Corrupt Practices.  Neither the Company nor any
Subsidiary has, nor to the knowledge of the Company or any Subsidiary has any
agent or other Person acting on behalf of the Company or any Subsidiary:
(i) directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company or any Subsidiary (or made by any person acting
on its behalf of which the Company is aware) which is in violation of law or
(iv) violated in any material respect any provision of the Foreign Corrupt
Practices Act of 1977, as amended.

 

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Section 5.29     Seniority.  Except as set forth on Schedule 5.29, as of the
Closing Date, no Indebtedness or other claim against the Company is senior to
the Convertible Note in right of payment, whether with respect to interest or
upon liquidation or dissolution, or otherwise, other than indebtedness secured
by purchase money security interests (which is senior only as to underlying
assets covered thereby) and capital lease obligations (which is senior only as
to the property covered thereby).

 

Section 5.30     No Disagreements with Accountants and Lawyers.  There are no
disagreements of any kind presently existing, or reasonably anticipated by the
Company to arise, between the Company and the accountants and lawyers formerly
or presently employed by the Company and the Company is current with respect to
any fees owed to its accountants and lawyers which would reasonably be expected
to materially adversely affect the Company’s ability to perform any of its
obligations under any of the Transaction Documents.

 

Section 5.31     Regulation M Compliance.  The Company has not, and to its
knowledge no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
any of the Securities or (ii) sold, bid for, purchased, or paid any compensation
for soliciting purchases of, any of the Securities.

 

Section 5.32     Certain Fees.  No brokerage or finder’s fees or commissions are
or will be payable by the Company to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or other Person
with respect to the transactions contemplated by the Transaction Documents.

 

ARTICLE VI

OTHER AGREEMENTS OF THE PARTIES

 

Section 6.1       Transfer Restrictions. 

 

(a)                Aztec agree to the imprinting, so long as is required by any
applicable Securities Law, of a legend on any of the Securities in the following
form:

 

[NEITHER] THIS SECURITY [NOR THE SECURITIES [INTO] [FOR] WHICH THIS SECURITY IS
[EXERCISABLE] [CONVERTIBLE]] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”) AND APPLICABLE STATE SECURITIES LAWS, 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 AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

 

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(b)               Certificates evidencing the Registrable Shares shall not
contain any legend (including the legend set forth in Section 6.1(a) hereof):
(i) while a registration statement covering the resale of such Registrable
Securities is effective under the Securities Act, (ii) following any sale of
such Registerable Securities pursuant to Rule 144, (iii) if such Registrable
Securities are eligible for sale under Rule 144, without the requirement for the
Company to be in compliance with the current public information required under
Rule 144 as to such Registrable Securities and without volume or manner-of-sale
restrictions or (iv) if such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and
pronouncements issued by the staff of the Commission). The Company shall cause
its counsel to issue a legal opinion to the Transfer Agent promptly for any
Security if required by the Transfer Agent to effect the removal of the legend
hereunder. The Company agrees that at such time as such legend is no longer
required under this Section 6.1(b), it will, no later than three (3) Trading
Days following the delivery by Aztec to the Company or the Transfer Agent of a
certificate representing Registrable Securities, as applicable, issued with a
restrictive legend (such third Trading Day, the “Legend Removal Date”), deliver
or cause to be delivered to Aztec a certificate representing such shares that is
free from all restrictive and other legends. The Company may not make any
notation on its records or give instructions to the Transfer Agent that enlarge
the restrictions on transfer set forth in this Section 6.1. Certificates for
Registrable Securities subject to legend removal hereunder shall be transmitted
by the Transfer Agent to Aztec by crediting the account of Aztec’s prime broker
with the Depository Trust Company System through its Deposit or Withdrawal at
Custodian system if the Company is then a participant in such system, and
otherwise by physical delivery to Aztec.

 

Section 6.2       Acknowledgment of Dilution.  The Company acknowledges that the
issuance of the Registrable Securities may result in dilution of the outstanding
shares of Common Stock, which dilution may be substantial under certain market
conditions. The Company further acknowledges that its obligations under the
Transaction Documents, including, without limitation, its obligation to issue
the Registable Securities pursuant to the Transaction Documents, are
unconditional and absolute, but subject to the terms and conditions of the
Transaction Documents, and not subject to any right of set off, counterclaim,
delay or reduction, regardless of the effect of any such dilution or any claim
the Company may have against Aztec and regardless of the dilutive effect that
such issuance may have on the ownership of the other stockholders of the
Company.

 

Section 6.3       Furnishing of Information; Public Information.  Until the
earlier of (i) six months from the date hereof or (ii) such time that Aztec owns
less than 20% of the Registrable Securities, if a Registration Statement is not
available for the resale of all of the Registrable Securities, or (iii) such
time as the Registrable Securities may be sold without restriction or limitation
pursuant to Rule 144 and without the requirement to be in compliance with
Rule 144(c)(1), the Company covenants to (a) timely file (or obtain extensions
in respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act, (b) if the Company is not required to file reports pursuant to the
Exchange Act, prepare and furnish to the Purchasers and make publicly available
in accordance with Rule 144(c) such information as is required for the
Purchasers to sell the Securities under Rule 144, and (c) take such further
action as any holder of Securities may reasonably request, to the extent
required from time to time to enable such Person to sell such Securities without
registration under the Securities Act within the requirements of the exemption
provided by Rule 144.

 

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Section 6.4       Conversion and Exercise Procedures.  The Convertible Note sets
forth the totality of the procedures required of Aztec in order to convert the
Convertible Note into the Registrable Securities. No additional legal opinion,
other information or instructions shall be required of Aztec to convert the
Convertible Note. The Company shall honor conversion of the Convertible Note and
shall deliver registered Registrable Securities in accordance with the terms and
conditions set forth in the Convertible Note.

 

Section 6.5       Securities Laws Disclosure; Publicity.  The Company shall, by
5:30 p.m. (New York City time) on the fourth Trading Day immediately following
the date hereof, file a Current Report on Form 8-K disclosing the material terms
of the transactions contemplated hereby, including the Transaction Documents as
exhibits thereto. The Company and Aztec shall consult with each other in issuing
any other press releases or public statement with respect to the transactions
contemplated hereby, and neither the Company nor Aztec shall issue any such
press release nor otherwise make any such public statement without the prior
consent of the Company, with respect to any press release of Aztec, or without
the prior consent of Aztec, with respect to any press release of the Company,
which consent shall not unreasonably be withheld or delayed, except if such
disclosure is required by law or this Agreement, in which case the disclosing
party shall promptly provide the other party with prior notice of such public
statement or communication.

 

Section 6.6       [Reserved]. 

 

Section 6.7       Reservation and Listing of Securities. 

 

(a)                The Company shall maintain a reserve from its duly authorized
shares of Common Stock for issuance of the Registrable Securities pursuant to
the Transaction Documents in such amount as may then be required to fulfill its
obligations in full under the Transaction Documents.

 

(b)               If, on any date, the number of authorized but unissued shares
of Common Stock of the Company reserved for issuance upon exercise of the
Convertible Note is less than number of Registrable Securities on such date,
then the Board of Directors shall use commercially reasonable efforts to amend
the Company’s certificate or articles of incorporation to increase the number of
authorized but unissued shares of Common Stock to at least the number of
Registrable Securities at such time, as soon as possible and in any event not
later than December 15, 2012.

 

(c)                The Company shall, if applicable: (i) in the time and manner
required by the principal Trading Market, prepare and file with such Trading
Market an additional shares listing application covering a number of shares of
Common Stock at least equal to the Registrable Securities on the date of such
application, (ii) take all steps necessary to cause such Registrable Securities
to be approved for listing or quotation on such Trading Market as soon as
possible thereafter, (iii) provide to Aztec evidence of such listing or
quotation and (iv) maintain the listing or quotation of such Common Stock on any
date at least equal to the number of Registrable Securities on such date on such
Trading Market or another Trading Market.

 

Section 6.8       Form D; Blue Sky Filings. The Company agrees to timely file a
Form D with respect to the Securities as required under Regulation D and
applicable state securities laws, and to provide a copy thereof to Aztec. The
Company shall take such action as the Company shall reasonably determine is
necessary in order to obtain an exemption for, or to qualify the Securities for,
sale to Aztec under applicable securities or “Blue Sky” laws of the states of
the United States, and shall provide evidence of such actions promptly upon
request of Aztec.

 

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ARTICLE VII

GENERAL PROVISIONS

 

Section 7.1       General.  Each of the Parties will use commercially reasonable
efforts to take or cause to be taken all actions and to do or cause to be done,
as soon as possible, all things necessary, proper or advisable (subject to any
applicable laws) to consummate the Closing and the other transactions
contemplated by this Agreement.  In the event that at any time after the Closing
any further action is reasonably necessary to carry out the purposes of this
Agreement, each of the parties will take such further action (including the
execution and delivery of such further instruments and documents) as the other
party may reasonably request, at the sole cost and expense of the requesting
party.

 

Section 7.2       Expenses.  Except as expressly set forth in the Transaction
Documents to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. 

 

Section 7.3       Notices.  Any and all notices, requests, instructions or other
communications to be given hereunder will be in writing and shall be deemed
given and effective on the earliest of: (a) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set
forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York
City time) on a Trading Day, provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party,
(b) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto on a day that is not a Trading Day or later
than 5:30 p.m. (New York City time) on any Trading Day, provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party, (c) the second (2nd) Trading Day following the date of mailing,
if sent by U.S. nationally recognized overnight courier service or (d) upon
actual receipt by the party to whom such notice is required to be given. Such
notices, request, instructions or other communications will be sent to the
Company or Aztec, as the case may be, at the addresses indicated below:

 

            If to the Company:

 

                        Blue Calypso, Inc.

                        19111 North Dallas Parkway, Suite 200

                        Dallas, TX 75287

                        Attention: William Ogle, Chief Executive Officer

 

 

            With a copy to (which will not constitute notice to the Company):

 

                        Fox Rothschild LLP

                        997 Lenox Drive, Building 3

                        Lawrenceville, NJ 08648

                        Attention: Sean F. Reid, Esq.

 

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           If to Aztec:
 

                        Aztec Systems, Inc.

                        c/o glendonTodd Capital LLC

                        2101 Cedar Springs Road, Suite 1540

                        Dallas, Texas 75201

                        Attention: Todd Furniss, Chairman of the Board

 

            With a copy to (which will not constitute notice to Aztec):

 

                        Shackelford, Melton & McKinley, LLP

                        3333 Lee Parkway, 10th Floor

                        Dallas, Texas 75219-5139

                        Attention: W. Phillip Whitcomb

 

Section 7.4       Counterparts.  This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to each other party, it being understood that the
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.

 

Section 7.5       Governing Law.  All questions concerning the construction,
validity, enforcement and interpretation of the Transaction Documents shall be
governed by and construed and enforced in accordance with the internal laws of
the State of Texas, without regard to the principles of conflicts of law
thereof. Each party agrees that all legal -Proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced exclusively in the
state and federal courts sitting in Dallas County, Texas. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in Dallas County, Texas for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such Proceeding is improper or is an
inconvenient venue for such Proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
Proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement 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.  If either party shall commence an
Proceeding to enforce any provisions of the Transaction Documents, then, in
addition to the obligations of the Company under Section 6.7, the prevailing
party in such Proceeding shall be reimbursed by the other party for its
reasonable attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Proceeding.

 

Section 7.6       Waiver of Jury Trial.  IN ANY ACTION, SUIT, OR PROCEEDING IN
ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW,
HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER
TRIAL BY JURY.

 

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Section 7.7       Entire Agreement.  The Transaction Documents, together with
the exhibits and schedules thereto, contain the entire agreement of the Parties
with respect to the subject matter hereof and thereof and supersede all prior
agreements and undertakings, both written and oral, between the Company and
Aztec with respect to the subject matter hereof and thereof.

 

Section 7.8       Amendment and Waiver.  No provision of this Agreement may be
waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and Aztec or, in the case of a
waiver, by the party against whom enforcement of any such waived provision is
sought. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of any such
right.

 

Section 7.9       Assignment.  Neither this Agreement nor any of the rights,
interests or obligations provided by this Agreement will be assigned by either
party (whether by operation of law or otherwise) without the prior written
consent of the other party.  Subject to the preceding sentence, this Agreement
will be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.

 

Section 7.10     Survival. The representations and warranties contained herein
shall survive the Closing and the delivery of the Securities.

 

Section 7.11     Replacement of Securities. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
surrender and cancellation thereof (in the case of mutilation), or in lieu of
and substitution therefor, a new certificate or instrument, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft,
destruction or mutilation, and of the ownership of such Security, and in the
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to the Company. The applicant for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
(including customary indemnity) associated with the issuance of such replacement
certificate.

 

Section 7.12     Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, Aztec and the
Company will be entitled to specific performance under the Transaction
Documents. The Parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
contained in the Transaction Documents and hereby agree to waive and not to
assert in any action for specific performance of any such obligation the defense
that a remedy at law would be adequate.

 

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Section 7.13     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 Proceeding that may be brought by Aztec in order to enforce
any right or remedy under any Transaction Document. Notwithstanding any
provision to the contrary contained in any Transaction Document, it is expressly
agreed and provided that the total liability of the Company under the
Transaction Documents for payments 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 in the
nature of interest that the Company may be obligated to pay under the
Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum
contract rate of interest allowed by law and applicable to the Transaction
Documents is increased or decreased by statute or any official governmental
action subsequent to the date hereof, the new maximum contract rate of interest
allowed by law will be the Maximum Rate applicable to the Transaction Documents
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 Aztec with respect to indebtedness
evidenced by the Transaction Documents, such excess shall be applied by Aztec to
the unpaid principal balance of any such indebtedness or be refunded to the
Company, the manner of handling such excess to be at Aztec’s election.

 

Section 7.14     Construction. The Parties agree that each of them and/or their
respective counsel have reviewed and had an opportunity to revise the
Transaction Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any
amendments thereto. In addition, each and every reference to share prices and
shares of Common Stock in any Transaction Document shall be subject to
adjustment for reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement (but without duplication of any such adjustment
provided in the other Transaction Documents).

 

Section 7.15     Notice of Final Agreement.  THIS AGREEMENT AND THE CONVERTIBLE
NOTE REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the Company and Aztec have caused this Agreement to be
signed, all as of the date first written above.

 

BLUE CALYPSO, INC.

 

                                                                                   
By:       /s/ William Ogle

                                                                                   
            William Ogle,

                                                                                               
Chief Executive Officer

 

                                                                                   
AZTEC SYSTEMS, INC.

                                                                                   
By:       /s/ Todd Furniss

                                                                                               
Todd Furniss,

                                                                                               
Chairman of the Board

 

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EXHIBIT “A”

PLAN OF DISTRIBUTION

 

Each selling stockholder of the common stock and any of their pledgees,
assignees and successors-in-interest may, from time to time, sell any or all of
their shares of common stock on the OTC Bulletin Board or any other stock
exchange, market or trading facility on which the shares are traded or in
private transactions. These sales may be at fixed or negotiated prices. A
selling stockholder may use any one or more of the following methods when
selling shares:

•     ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;

•         block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as principal
to facilitate the transaction;

•     purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;

•     an exchange distribution in accordance with the rules of the applicable
exchange;

•     privately negotiated transactions;

•     settlement of short sales entered into after the effective date of the
registration statement of which this prospectus is a part;

•     broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;

•     through the writing or settlement of options or other hedging
transactions, whether through an options exchange or otherwise;

•     a combination of any such methods of sale; or

•     any other method permitted pursuant to applicable law.

The selling stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, as amended, if available, rather than under this
prospectus.

Broker-dealers engaged by the selling stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated, but, except as set forth in a supplement to this prospectus, in the
case of an agency transaction not in excess of a customary brokerage commission
in compliance with FINRA Rule 2440; and in the case of a principal transaction a
markup or markdown in compliance with FINRA IM-2440.

In connection with the sale of the common stock or interests therein, the
selling stockholders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume. The selling
stockholders may also sell shares of the common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The selling
stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).

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The selling stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act of 1933, as amended, in connection with such sales. In such
event, any commissions received by such broker-dealers or agents and any profit
on the resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act of 1933, as amended. Each
selling stockholder has informed us that it does not have any written or oral
agreement or understanding, directly or indirectly, with any person to
distribute the common stock. In no event shall any broker-dealer receive fees,
commissions and markups which, in the aggregate, would exceed eight percent
(8%).

We are required to pay certain fees and expenses incurred by us incident to the
registration of the shares. We have agreed to indemnify the selling stockholders
against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act of 1933, as amended.

Because selling stockholders may be deemed to be “underwriters” within the
meaning of the Securities Act of 1933, as amended, they will be subject to the
prospectus delivery requirements of the Securities Act of 1933, as amended,
including Rule 172 thereunder. In addition, any securities covered by this
prospectus which qualify for sale pursuant to Rule 144 under the Securities Act
of 1933, as amended, may be sold under Rule 144 rather than under this
prospectus. There is no underwriter or coordinating broker acting in connection
with the proposed sale of the resale shares by the selling stockholders.

We agreed to keep this prospectus effective until the earlier of (i) the date on
which the shares may be resold by the selling stockholders without registration
and without the requirement to be in compliance with Rule 144(c)(1) and
otherwise without restriction or limitation pursuant to Rule 144 or (ii) all of
the shares have been sold pursuant to this prospectus or Rule 144 under the
Securities Act or any other rule of similar effect. The resale shares will be
sold only through registered or licensed brokers or dealers if required under
applicable state securities laws. In addition, in certain states, the resale
shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.

Under applicable rules and regulations under the Securities Exchange Act of
1934, as amended, any person engaged in the distribution of the resale shares
may not simultaneously engage in market making activities with respect to the
common stock for the applicable restricted period, as defined in Regulation M,
prior to the commencement of the distribution. In addition, the selling
stockholders will be subject to applicable provisions of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder, including
Regulation M, which may limit the timing of purchases and sales of shares of the
common stock by the selling stockholders or any other person. We will make
copies of this prospectus available to the selling stockholders and have
informed them of the need to deliver a copy of this prospectus to each purchaser
at or prior to the time of the sale (including by compliance with Rule 172 under
the Securities Act of 1933, as amended).

 

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EXHIBIT “B”

 

FORM OF CONVERTIBLE NOTE

 

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)
AND APPLICABLE STATE SECURITIES LAWS, 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 AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. TO THE EXTENT PERMITTED BY APPLICABLE SECURITIES
LAWS, THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
SECURED BY SUCH SECURITIES.

 

Original Issue Date:                 November 9, 2012

 

Original Conversion Price:                   (See Section 4(b) - subject to
adjustment herein)

 

$545,958.16

 

 

8% CONVERTIBLE NOTE

DUE MARCH 31, 2013

 

FOR VALUE RECEIVED, BLUE CALYPSO, INC., a Delaware corporation (the “Company”),
having its principal place of business at 19111 North Dallas Parkway, Suite 200,
Dallas, Texas 75287, promises to pay to AZTEC SYSTEMS, INC. or its registered
assigns (the “Holder”) the principal sum of $545,958.16 on March 31, 2013 (the
“Maturity Date”) or such earlier date as this Convertible Note is required or
permitted to be repaid as provided hereunder, and to pay interest to the Holder
on the then outstanding principal amount of this Convertible Note in accordance
with the provisions hereof.

 

This 8% Convertible Note due March 31, 2013 (the “Note”) has been entered into
pursuant to the terms of an Exchange Agreement between the Company and the
Holder effective as of November 9, 2012, as amended, modified or supplemented
from time to time in accordance with its terms (the “Exchange Agreement”), and
shall be governed by the terms of such Exchange Agreement. This Note is the
“Convertible Note” referenced in the Exchange Agreement. Unless otherwise
separately defined herein, all capitalized terms used in this Note shall have
the same meaning as set forth in the Exchange Agreement. This Note is subject to
the following additional provisions:

 

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

 

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

 

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

 

“Base Conversion Price” shall have the meaning set forth in Section 5(b).

 

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

 

“Change of Control Transaction” means the occurrence after the date hereof of
any of (a) an acquisition after the date hereof by an individual or legal entity
or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act)
of effective control (whether through legal or beneficial ownership of capital
stock of the Company, by contract or otherwise) of in excess of 40% of the
voting securities of the Company, (b) the Company merges into or consolidates
with any other Person, or any Person merges into or consolidates with the
Company and, after giving effect to such transaction, the stockholders of the
Company immediately prior to such transaction own less than 60% of the aggregate
voting power of the equity securities of the Company or the successor entity of
such transaction, (c) the Company sells or transfers all or substantially all of
its assets to another Person and the stockholders of the Company immediately
prior to such transaction own less than 60% of the aggregate voting power of the
equity securities of the acquiring entity immediately after the transaction,
(d) a replacement at one time or within a three-year period of more than
one-half of the members of the Board of Directors which is not approved by a
majority of those individuals who are members of the Board of Directors on the
Original Issue Date (or by those individuals who are serving as members of the
Board of Directors on any date whose nomination to the Board of Directors was
approved by a majority of the members of the Board of Directors who are members
on the Original Issue Date), or (e) the execution by the Company of an agreement
to which the Company is a party or by which it is bound, providing for any of
the events set forth in clauses (a) through (d) above.

 

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

 

“Conversion Price” shall have the meaning set forth in Section 4(c).

 

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

 

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“Deemed Liquidation Event” shall mean:  (i) a merger or consolidation in which
the Company is a constituent party or a subsidiary of the Company is a
constituent party and the Company issues shares of its capital stock pursuant to
such merger or consolidation, except any such merger or consolidation involving
the Company or a subsidiary in which the shares of capital stock of the Company
outstanding immediately prior to such merger or consolidation continue to
represent, or are converted into or exchanged for shares of capital stock that
represent, immediately following such merger or consolidation, at least a
majority, by voting power, of the capital stock of the surviving or resulting
corporation or if the surviving or resulting corporation is a wholly owned
subsidiary of another corporation immediately following such merger or
consolidation, the parent corporation of such surviving or resulting
corporation; (ii) the sale, lease, transfer, exclusive license or other
disposition, in a single transaction or series of related transactions, by the
Company or any subsidiary of the Company of all or substantially all the assets
of the Company and its subsidiaries taken as a whole; or (iii) the sale or
disposition (whether by merger or otherwise) of one or more subsidiaries of the
Company if substantially all of the assets of the Company and its subsidiaries
taken as a whole are held by such subsidiary or subsidiaries, except where such
sale, lease, transfer, exclusive license or other disposition is to a wholly
owned subsidiary of the Company.

 

“Dilutive Issuance” shall have the meaning set forth in Section 5(b).

 

“Dilutive Issuance Notice” shall have the meaning set forth in Section 5(b).

 

“Event of Default” shall have the meaning set forth in Section 7(a).

 

“Exchange Agreement” shall have the meaning set forth in the second paragraph of
this Agreement.

 

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

 

“Late Fees” shall have the meaning set forth in Section 2(c).

 

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

 

“Note Register” shall have the meaning set forth in Section 2(b).

 

“Original Issue Date” means the date of issuance of this Note, regardless of any
transfer of this Note and regardless of the number of instruments which may be
issued to evidence such Note.

 

“Permitted Indebtedness” means (1) the indebtedness evidenced by the 8% Senior
Secured Convertible Debentures due October 19, 2012, issued to LMD Capital, LLC
pursuant to the terms of that certain Securities Purchase Agreement dated as of
April 19, 2012, (2) any indebtedness issued in connection with a Subsequent
Financing, and (3) any trade payables or payroll liabilities of the Company in
an amount not to exceed $100,000 per month.

 

“Permitted Lien” means the individual and collective reference to the following:
(a) Liens for taxes, assessments and other governmental charges or levies not
yet due or Liens for taxes, assessments and other governmental charges or levies
being contested in good faith and by appropriate proceedings for which adequate
reserves (in the good faith judgment of the management of the Company) have been
established in accordance with GAAP, (b) Liens imposed by law which were
incurred in the ordinary course of the business of the Company or any of its
Subsidiaries, such as suppliers’, vendors’, carriers’, warehousemen’s and
mechanics’ Liens, statutory workmen’s, repairmen’s and landlords’ Liens, and
other similar Liens arising in the ordinary course of the business of the
Company or any Subsidiary, and which (x) do not individually or in the aggregate
materially detract from the value of such property or assets or materially
impair the use thereof in the operation of the business of the Company and its
consolidated Subsidiaries or (y) are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing for the
foreseeable future the forfeiture or sale of the property or asset subject to
such Lien, (c) Liens incurred in connection with Permitted Indebtedness provided
that such Liens are not secured by assets of the Company or any Subsidiary other
than the assets so acquired or leased.

 

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

 

“Significant Subsidiary” shall have the meaning set forth in Rule 1.02(a) of
Regulation S-X promulgated by the Commission, as amended from time to time.

 

“Stockholder’s Agreement” means the Stockholder Agreement dated April 19, 2012
by and among Andrew Levi and the Company.

 

“Subsequent Financing” shall mean any issuance and sale by the Company or any
Subsidiary of common stock or securities convertible, exercisable or
exchangeable into shares of Common Stock, that results in gross proceeds to the
Company of at least $2,000,000, which issuance and sale is consummated on or
before December 31, 2012.

 

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

 

“Texas Courts” shall have the meaning set forth in Section 9(d).

 

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

 

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

 

“VWAP” means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the Trading Market on which the
Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
time)), (b) if the OTC Bulletin Board is not a Trading Market, the volume
weighted average price of the Common Stock for such date (or the nearest
preceding date) on the OTC Bulletin Board, (c) if the Common Stock is not then
listed or quoted for trading on the OTC Bulletin Board and if prices for the
Common Stock are then reported in the “Pink Sheets” published by Pink OTC
Markets, Inc. (or a similar organization or agency succeeding to its functions
of reporting prices), the most recent bid price per share of the Common Stock so
reported, or (d) in all other cases, the fair market value of a share of Common
Stock as determined by an independent appraiser selected in good faith by Aztec
and reasonably acceptable to the Company, the fees and expenses of which shall
be paid by the Company; provided,  however, if Aztec has not selected an
independent appraiser within twenty (20) calendar days after the date required
to do so, such failure will not give rise to a breach of the Company’s
obligations under this Agreement and the Transaction Documents.

 

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Section 2.         Interest. 

 

a)            Payment of Interest in Cash or Kind. The Company shall pay
interest to the Holder on the then outstanding principal amount of this Note at
the rate of 8% per annum, payable on the Maturity Date, in cash or, at the
Holder’s option, in duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock at the Conversion Price.

 

b)           Interest Calculations. Interest shall be calculated on the basis of
a 360-day year, consisting of twelve 30 calendar-day periods, and shall accrue
daily commencing on the Original Issue Date until payment in full of the
outstanding principal, together with all accrued and unpaid interest, liquidated
damages and other amounts which may become due hereunder, has been made.
Interest shall cease to accrue with respect to any principal amount converted,
provided that, the Company actually delivers the Conversion Shares within the
time period required by Section 4(c)(ii) herein. Interest hereunder will be paid
to the Person in whose name this Note is registered on the records of the
Company regarding any transfer of this Note (the “Note Register”). 

 

c)            Late Fee. All overdue accrued and unpaid interest to be paid
hereunder shall entail a late fee at an interest rate equal to the lesser of 12%
per annum or the maximum rate permitted by applicable Law (the “Late Fees”)
which shall accrue daily from the date such interest is due hereunder through
and including the date of actual payment in full.

 

d)           Prepayment. Except as otherwise set forth in this Note, the Company
may, upon ten (10) days written notice to the Holder, prepay any portion of the
principal amount of this Note without premium or penalty.

 

Section 3.         Registration of Transfers and Exchanges. 

 

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

 

b)                  Investment Representations. This Note has been issued
subject to certain investment representations of the Company set forth in the
Exchange Agreement, and this Note and the securities issued or issuable upon
conversion hereof may be transferred or exchanged only in compliance with the
terms of the Exchange Agreement and applicable Securities Laws.

 

c)                  Reliance on Note Register. Prior to due presentment for
transfer to the Company of this Note, the Company and any agent of the Company
may treat the Person in whose name this Note is duly registered on the Note
Register as the owner hereof for the purpose of receiving payment as herein
provided and for all other purposes, whether or not this Note is overdue, and
neither the Company nor any such agent shall be affected by notice to the
contrary. In the event of an assignment or transfer of this Note, the assignee
or transferee shall be deemed a registered holder hereunder and a permitted
assign pursuant to the Exchange Agreement on the date the notice of assignment
and/or transfer is delivered to the Company in accordance with the terms
hereunder and the Exchange Agreement.

 

Section 4.         Conversion. 

 

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a)                  Voluntary Conversion. At any time after the Original Issue
Date until this Note is no longer outstanding, the principal of this Note and
any accrued interest thereon shall be convertible, in whole or in part, into
shares of Common Stock at the option of the Holder at any time and from time to
time. The Holder shall effect conversions by delivering to the Company a Notice
of Conversion, the form of which is attached hereto as Annex A (each, a “Notice
of Conversion”), specifying therein the principal amount of this Note to be
converted and the date on which such conversion shall be effected (such date,
the “Conversion Date”). If no Conversion Date is specified in a Notice of
Conversion, the Conversion Date shall be the date that such Notice of Conversion
is deemed delivered hereunder. To effect conversions hereunder, the Holder shall
not be required to physically surrender this Note to the Company unless the
entire principal amount of this Note has been so converted. Conversions
hereunder shall have the effect of lowering the outstanding principal amount of
this Note in an amount equal to the principal amount converted. The Holder and
the Company shall maintain records showing the principal amount(s) converted and
the date of such conversion(s). The Company may deliver an objection to any
Notice of Conversion within two (2) Business Days of delivery of such Notice of
Conversion.  The Holder, and any assignee by acceptance of this Note,
acknowledges and agrees that, by reason of the provisions of this Section 4(a),
following conversion of a portion of this Note, the unpaid principal amount of
this Note may be less than the amount stated on the face hereof.

 

b)                  Mandatory Conversion. On the Effective Date, the principal
of this Note and all accrued interest thereon shall automatically convert into
shares of Common Stock at the Conversion Price.

 

c)                  Conversion Price. The conversion price shall be equal to the
greater of (i) $0.15 per Conversion Share or (ii) the price per share at which
shares of Common Stock are sold by Company in a Subsequent Financing; provided, 
however, that, in the event that a Subsequent Financing has not occurred prior
to the Filing Date, the conversion price shall be fixed at the price of $0.15
per Conversion Share (the “Conversion Price”), subject to adjustment herein.

 

d)           Mechanics of Conversion. 

 

i.                    Conversion Shares Issuable Upon Conversion. The number of
Conversion Shares issuable upon a conversion hereunder shall be determined by
the quotient obtained by dividing (x) the outstanding principal amount of this
Note to be converted plus accrued interest being converted by (y) the Conversion
Price.

 

ii.                  Delivery of Certificate Upon Conversion. Not later than
five (5) Trading Days after each Conversion Date (the “Share Delivery Date”),
the Company shall deliver, or cause to be delivered, to the Holder (A) a
certificate or certificates representing the Conversion Shares which, on or
after the date on which the Registration Statement covering the Conversion
Shares has been declared effective by the Commission, shall be free of
restrictive legends and trading restrictions representing the number of
Conversion Shares being acquired upon the conversion of this Note and (B) a
check in the amount of accrued and unpaid interest on the principal amount so
converted. Certificates for Conversion Shares shall be transmitted by the
Transfer Agent to the Holder by either (1) crediting the account of the Holder’s
prime broker with The Depository Trust Company through its Deposit or Withdrawal
at Custodian system (“DWAC”) if the Company is then a participant in such system
and either (A) there is an effective registration statement permitting the
issuance of the Conversion Shares to or resale of the Conversion Shares by the
Holder or (B) the shares are eligible for resale by the Holder without volume or
manner-of-sale limitations pursuant to Rule 144, or (2) otherwise by physical
delivery to the address specified by the Holder in the Notice of Conversion.

 

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iii.                Obligation to Deliver Conversion Shares Absolute. Except as
set forth in the next succeeding sentence, to the extent permitted by applicable
law, the Company’s obligations to issue and deliver the Conversion Shares upon
conversion of this Note in accordance with the terms hereof are absolute and
unconditional, irrespective of any action or inaction by the Holder to enforce
the same, any prior waiver or consent with respect to any provision hereof, the
recovery of any judgment against any Person or any action to enforce the same,
or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other Person of any obligation to
the Company or any violation or alleged violation of law by the Holder or any
other Person, and irrespective of any other circumstance which might otherwise
limit such obligation of the Company to the Holder in connection with the
issuance of such Conversion Shares; provided, however, that such delivery shall
not operate as a waiver by the Company of any such action the Company may have
against the Holder

 

iv.                Reservation of Shares Issuable Upon Conversion. The Company
covenants that it will at all times reserve and keep available out of its
authorized and unissued shares of Common Stock for the sole purpose of issuance
upon conversion of this Note, free from preemptive rights or any other actual
contingent purchase rights of Persons other than the Holder, not less than such
aggregate number of shares of the Common Stock as shall (subject to the terms
and conditions set forth in the Exchange Agreement) be issuable (taking into
account the adjustments and restrictions of Section 5) upon the conversion of
the then outstanding principal amount of this Note. The Company covenants that
all shares of Common Stock that shall be so issuable shall, upon issue, be duly
authorized, validly issued, fully paid and nonassessable.

 

v.                  Fractional Shares. No fractional shares or scrip
representing fractional shares shall be issued upon the conversion of this Note.
As to any fraction of a share which the Holder would otherwise be entitled to
purchase upon such conversion, the Company shall at its election, either pay a
cash adjustment in respect of such final fraction in an amount equal to such
fraction multiplied by the Conversion Price or round up to the next whole share.

 

vi.                Transfer Taxes. The issuance of certificates for shares of
the Common Stock on conversion of this Note shall be made without charge to the
Holder hereof for any documentary stamp or similar taxes that may be payable in
respect of the issue or delivery of such certificates, provided that, the
Company shall not be required to pay any tax that may be payable in respect of
any transfer involved in the issuance and delivery of any such certificate upon
conversion in a name other than that of the Holder of this Note so converted and
the Company shall not be required to issue or deliver such certificates unless
or until the Person or Persons requesting the issuance thereof shall have paid
to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.

 

Section 5.         Certain Adjustments. 

 

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a)                  Stock Dividends and Stock Splits. If the Company, at any
time while this Note is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions payable in shares of Common Stock on
shares of Common Stock or any Common Stock Equivalents (which, for avoidance of
doubt, shall not include any shares of Common Stock issued by the Company upon
conversion of this Note), (ii) subdivides outstanding shares of Common Stock
into a larger number of shares, (iii) combines (including by way of a reverse
stock split) outstanding shares of Common Stock into a smaller number of shares
or (iv) issues, in the event of a reclassification of shares of the Common
Stock, any shares of capital stock of the Company, then the Conversion Price
shall be multiplied by a fraction of which the numerator shall be the number of
shares of Common Stock (excluding any treasury shares of the Company)
outstanding immediately before such event, and of which the denominator shall be
the number of shares of Common Stock outstanding immediately after such event.
Any adjustment made pursuant to this Section 5(a) shall become effective
immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution (provided that if the declaration of
such dividend or distribution is rescinded or otherwise cancelled, then such
adjustment shall be reversed upon notice to the Holder of the termination of
such proposed declaration or distribution as to any unconverted principal amount
at the time of such rescission or cancellation) and shall become effective
immediately after the effective date in the case of a subdivision, combination
or re-classification.

 

b)                  Subsequent Equity Sales. If, at any time while this Note is
outstanding, the Company or any Subsidiary, as applicable, sells or grants any
option to purchase or sells or grants any right to reprice, or otherwise
disposes of or issues (or announces any sale, grant or any option to purchase or
other disposition), any Common Stock or Common Stock Equivalents entitling any
Person to acquire shares of Common Stock from the Company or any Subsidiary 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”) (if the holder of the Common Stock or Common Stock
Equivalents 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
to equal the Base Conversion Price. Such adjustment shall be made whenever such
Common Stock or Common Stock Equivalents are issued. If the Company enters into
a Variable Rate Transaction, the Company shall be deemed to have issued Common
Stock or Common Stock Equivalents at the lowest possible conversion price at
which such securities may be converted or exercised. The Company shall notify
the Holder in writing, no later than the Trading Day following the issuance of
any Common Stock or Common Stock Equivalents subject to this Section 5(b),
indicating therein the applicable issuance price, or applicable reset price,
exchange price, conversion price and other pricing terms (such notice, the
“Dilutive Issuance Notice”). For purposes of clarification, whether or not the
Company provides a Dilutive Issuance Notice pursuant to this Section 5(b), upon
the occurrence of any Dilutive Issuance, the Holder is entitled to receive a
number of Conversion Shares based upon the Base Conversion Price on or after the
date of such Dilutive Issuance, regardless of whether the Holder accurately
refers to the Base Conversion Price in the Notice of Conversion.

 

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c)                  Pro Rata Distributions. If the Company, at any time while
this Note is outstanding, distributes to all holders of Common Stock (and not to
the Holder) evidences of its indebtedness or assets (including cash and cash
dividends) or rights or warrants to subscribe for or purchase any security
(other than the Common Stock, which shall be subject to Section 5(b)), then in
each such case the Conversion Price shall be adjusted by multiplying such
Conversion Price in effect immediately prior to the record date fixed for
determination of stockholders entitled to receive such distribution by a
fraction of which the denominator shall be the VWAP determined as of the record
date mentioned above, and of which the numerator shall be such VWAP on such
record date less the then fair market value at such record date of the portion
of such assets or evidence of indebtedness or rights or warrants so distributed
applicable to one outstanding share of the Common Stock as determined by the
Board of Directors of the Company in good faith. In either case the adjustments
shall be described in a statement delivered to the Holder describing the portion
of assets or evidences of indebtedness so distributed or such subscription
rights applicable to one share of Common Stock. Such adjustment shall be made
whenever any such distribution is made and shall become effective immediately
after the record date mentioned above (provided that if such distribution is not
in fact made, then such adjustment shall be reversed upon notice to the Holder
of the termination of such proposed distribution as to any unconverted principal
amount at the time of such cancellation of such distribution).

 

d)                  Fundamental Transaction. If, at any time while this Note is
outstanding, (i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company with or into
another Person, (ii) the Company, directly or indirectly, effects any sale,
lease, license, assignment, transfer, conveyance or other disposition of all or
substantially all of its assets in one or a series of related transactions,
(iii) any, direct or indirect, purchase offer, tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to which
holders of Common Stock are permitted to sell, tender or exchange their shares
for other securities, cash or property and has been accepted by the holders of
50% or more of the outstanding Common Stock, (iv) the Company, directly or
indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively converted into or
exchanged for other securities, cash or property, (v) the Company, directly or
indirectly, in one or more related transactions consummates a stock or share
purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with
another Person whereby such other Person acquires more than 50% of the
outstanding shares of Common Stock (not including any shares of Common Stock
held by the other Person or other Persons making or party to, or associated or
affiliated with the other Persons making or party to, such stock or share
purchase agreement or other business combination) (each a “Fundamental
Transaction”), then, upon any subsequent conversion of this Note, the Holder
shall have the right to receive, for each Conversion Share that would have been
issuable upon such conversion immediately prior to the occurrence of such
Fundamental Transaction (without regard to any limitation in Section 4(d) on the
conversion of this Note), the number of shares of common stock of the successor
or acquiring corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “Alternate Consideration”) receivable as a
result of such Fundamental Transaction for each share of Common Stock held by a
holder. For purposes of any such conversion, the determination of the Conversion
Price shall be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect of one
(1) share of Common Stock in such Fundamental Transaction, and the Company shall
apportion the Conversion Price among the Alternate Consideration in a reasonable
manner reflecting the relative value of any different components of the
Alternate Consideration. If holders of Common Stock are given any choice as to
the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any conversion of this Note following such Fundamental
Transaction. The Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the “Successor Entity”) to
assume in writing all of the obligations of the Company under this Note and the
other Transaction Documents (as defined in the Exchange Agreement) in accordance
with the provisions of this Section 5(d) pursuant to written agreements in form
and substance reasonably satisfactory to the Holder and approved by the Holder
(without unreasonable delay) prior to such Fundamental Transaction and shall, at
the option of the Holder of this Note, deliver to the Holder in exchange for
this Note a security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Note which is convertible
for a corresponding number of shares of capital stock of such Successor Entity
(or its parent entity) equivalent to the shares of Common Stock acquirable and
receivable upon conversion of this Note (without regard to any limitations on
the conversion of this Note) prior to such Fundamental Transaction, and with a
conversion price which applies the Conversion Price to such shares of capital
stock (but taking into account the relative value of the shares of Common Stock
pursuant to such Fundamental Transaction and the value of such shares of capital
stock, such number of shares of capital stock and such conversion price being
for the purpose of protecting the economic value of this Note immediately prior
to the consummation of such Fundamental Transaction), and which is reasonably
satisfactory in form and substance to the Holder. Upon the occurrence of any
such Fundamental Transaction, the Successor Entity shall succeed to, and be
substituted for (so that from and after the date of such Fundamental
Transaction, the provisions of this Note and the other Transaction Documents
referring to the “Company” shall refer instead to the Successor Entity), and may
exercise every right and power of the Company and shall assume all of the
obligations of the Company under this Note and the other Transaction Documents
with the same effect as if such Successor Entity had been named as the Company
herein.

 

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

 

f)                   Notice to the Holder. 

 

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

 

ii.      Notice to Allow Conversion by Holder. If (A) the Company shall declare
a dividend (or any other distribution in whatever form) on the Common Stock,
(B) the Company shall declare a special nonrecurring cash dividend on or a
redemption of the Common Stock, (C) the Company shall authorize the granting to
all holders of the Common Stock of rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights, (D) the
approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which
the Company is a party, any sale or transfer of all or substantially all of the
assets of the Company, or any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property or (E) the Company shall
authorize the voluntary or involuntary dissolution, liquidation or winding up of
the affairs of the Company, then, in each case, the Company shall cause to be
filed at each office or agency maintained for the purpose of conversion of this
Note, and shall cause to be delivered to the Holder at its last address as it
shall appear upon the Note Register, at least ten (10) calendar days prior to
the applicable record or effective date hereinafter specified, a notice stating
(x) the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled to
such dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange, provided that the
failure to deliver such notice or any defect therein or in the delivery thereof
shall not affect the validity of the corporate action required to be specified
in such notice. To the extent that any notice provided hereunder constitutes, or
contains, material, non-public information regarding the Company or any of the
Subsidiaries, the Company shall simultaneously file such notice with the
Commission pursuant to a Current Report on Form 8-K. The Holder shall remain
entitled to convert this Note during the 10-day period commencing on the date of
such notice through the effective date of the event triggering such notice
except as may otherwise be expressly set forth herein.

 

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Section 6.         Negative Covenants. As long as any portion of this Note
remains outstanding, the Company shall not, and shall not permit any Subsidiary
to, directly or indirectly:

 

a)                  other than Permitted Indebtedness, enter into, create,
incur, assume, guarantee or suffer to exist any indebtedness for borrowed money
of any kind, including, but not limited to, a guarantee of indebtedness for
borrowed money;

 

b)                  other than Permitted Liens, enter into, create, incur,
assume or suffer to exist any Liens of any kind, on or with respect to any of
its property or assets now owned or hereafter acquired or any interest therein
or any income or profits therefrom;

 

c)                  amend its charter documents, including, without limitation,
its certificate of incorporation and bylaws, in any manner that materially and
adversely affects any rights of the Holder;

 

d)                  repay, repurchase or offer to repay, repurchase or otherwise
acquire more than a deminimis  number of shares of its Common Stock or Common
Stock Equivalents;

 

e)                  repay, repurchase or offer to repay, repurchase or otherwise
acquire any Indebtedness, other than this Note and the Permitted Indebtedness,
other than regularly scheduled payments, as such terms are in effect as of the
Original Issue Date or, as to Permitted Indebtedness hereafter incurred, as such
terms are in effect at the time of incurrence, provided that such payments shall
not be permitted if, at such time, or after giving effect to such payment, any
Event of Default exists or has occurred;

 

f)                   pay cash dividends or distributions on any equity
securities of the Company;

 

g)                  enter into any transaction with any Affiliate of the Company
which would be required to be disclosed in any public filing with the
Commission, unless such transaction is made on an arm’s-length basis and
expressly approved by a majority of the disinterested directors of the Company
(even if less than a quorum is otherwise required for board approval);

 

h)                  cause the termination of or breach any term of the
Stockholder’s Agreement;

 

i)                    liquidate, dissolve, or wind-up the business and affairs
of the Company or effect any Deemed Liquidation Event; or

 

j)                    enter into any agreement with respect to any of the
foregoing.

 

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Section 7.         Events of Default. 

 

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

 

i.        any default in the payment of (A) the principal amount of this Note or
(B) interest, liquidated damages and other amounts owing to the Holder of this
Note, as and when the same shall become due and payable (whether on a Conversion
Date or the Maturity Date or by acceleration or otherwise) which default, solely
in the case of an interest payment or other default under clause (B) above, is
not cured within three (3) Trading Days;

 

ii.      the Company shall fail to observe or perform any other covenant or
agreement contained in this Note (other than a breach by the Company of its
obligations to deliver shares of Common Stock to the Holder upon conversion,
which breach is addressed in clause (ix) below) which failure is not cured, if
possible to cure, within the earlier to occur of (A) five (5) Trading Days after
notice of such failure sent by the Holder or any other holder to the Company and
(B) ten (10) Trading Days after the Company has become or should have become
aware of such failure;

 

iii.    a default or event of default (subject to any grace or cure period
provided in the applicable agreement, document or instrument) shall occur under
(A) any of the Transaction Documents or (B) any other material agreement, lease,
document or instrument to which the Company or any Subsidiary is obligated (and
not covered by clause (vi) below );

 

iv.    any representation or warranty made in this Note, any other Transaction
Documents, any written statement pursuant hereto or thereto or any other report,
financial statement or certificate made or delivered to the Holder or any other
holder shall be untrue or incorrect in any material respect as of the date when
made or deemed made;

 

v.      the Company or any Significant Subsidiary shall be subject to a
Bankruptcy Event;

 

vi.    the Company or any Significant Subsidiary shall default on any of its
obligations under any mortgage, credit agreement or other facility, indenture
agreement, factoring agreement or other instrument under which there may be
issued, or by which there may be secured or evidenced, any indebtedness for
borrowed money or money due under any long term leasing or factoring arrangement
that (a) involves an obligation greater than $25,000, whether such indebtedness
now exists or shall hereafter be created, and (b) results in such indebtedness
becoming or being declared due and payable prior to the date on which it would
otherwise become due and payable;

 

vii.  the Common Stock shall not be eligible for listing or quotation for
trading on a Trading Market and shall not be eligible to resume listing or
quotation for trading thereon within five (5) Trading Days;

 

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viii.                        the Company shall be a party to a Change of Control
Transaction and the principal amount of this Note, together with all accrued and
unpaid interest, is not satisfied in full;

 

ix.    the Company shall fail for any reason to deliver certificates to the
Holder prior to the fifth (5th) Trading Day after a Conversion Date pursuant to
Section 4(c) or the Company shall provide at any time notice to the Holder,
including by way of public announcement, of the Company’s intention to not honor
requests for conversions of this Note in accordance with the terms hereof;

 

x.      any monetary judgment, writ or similar final process shall be entered or
filed against the Company, any Subsidiary or any of their respective property or
other assets for more than $100,000, and such judgment, writ or similar final
process shall remain unvacated, unbonded or unstayed for a period of forty-five
(45) calendar days; or

 

xi.    the Company does not meet the current public information requirements
under Rule 144 in respect of the Conversion Shares.

 

b)                  Remedies Upon Event of Default.  If any Event of Default
shall occur, Holder may declare the outstanding principal amount of this Note,
plus accrued but unpaid interest, liquidated damages and other amounts owing in
respect thereof through the date of acceleration to be immediately due and
payable and the same shall thereupon become immediately due and payable, without
notice, demand, presentment, notice of dishonor, notice of acceleration, notice
of intent to accelerate, notice of intent to demand, protest, or other
formalities of any kind, all of which are hereby expressly waived by the
Company. Commencing five (5) days after the occurrence of any Event of Default
that results in the eventual acceleration of this Note, the interest rate on
this Note shall accrue at an interest rate equal to the lesser of 16% per annum
or the maximum rate permitted under applicable law. Such acceleration may be
rescinded and annulled by Holder at any time, and the Holder may exercise all
rights and remedies available to it at law or in equity under the Exchange
Agreement, this Note or otherwise. No such rescission or annulment shall affect
any subsequent Event of Default or impair any right consequent thereon.

 

Section 8.         Miscellaneous. 

 

a)      Notices.  Any and all notices or other communications or deliveries to
be provided by the Holder hereunder, including, without limitation, any Notice
of Conversion, shall be in writing and delivered personally, by facsimile,
provided confirmation of transmission is mechanically or electronically
generated and kept on file by the Holder, or email, or sent by a nationally
recognized overnight courier service, addressed to the Company, at the address
set forth in the Exchange Agreement, or such other facsimile number, email
address or address as the Company may specify for such purposes by notice to the
Holder delivered in accordance with this Section 8(a). Any and all notices or
other communications or deliveries to be provided by the Company hereunder shall
be in writing and delivered personally, by facsimile, provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
Company, or email, or sent by a nationally recognized overnight courier service
addressed to the Holder at the facsimile number, email address or address of the
Holder appearing on the books of the Company, or if no such facsimile number,
email address or address appears on the books of the Company, at the principal
place of business of such Holder, as set forth in the Exchange Agreement. Any
notice or other communication or deliveries hereunder shall be deemed given and
effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile or email at the facsimile number or
email address set forth on the signature pages attached hereto prior to
5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the
date of transmission, if such notice or communication is delivered via facsimile
or email at the facsimile number or email address set forth on the signature
pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m.
(New York City time) on any Trading Day, (iii) the second Trading Day following
the date of mailing, if sent by U.S. nationally recognized overnight courier
service or (iv) upon actual receipt by the party to whom such notice is required
to be given.

 

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

 

c)      Lost or Mutilated Note.  If this Note shall be mutilated, lost, stolen
or destroyed, the Company shall execute and deliver, in exchange and
substitution for and upon cancellation of a mutilated Note, or in lieu of or in
substitution for a lost, stolen or destroyed Note, a new Note for the
outstanding principal amount of this Note so mutilated, lost, stolen or
destroyed, but only upon receipt of evidence of such loss, theft or destruction
of such Note, and of the ownership hereof, and, in case of loss, theft or
destruction, of indemnity or security (which shall not include the posting of
any bond), in each case reasonably satisfactory to the Company.

 

d)      Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Note shall be governed by and construed
and enforced in accordance with the internal laws of the State of Texas, without
regard to the principles of conflict of laws thereof. Each party agrees that all
legal proceedings concerning the interpretation, enforcement and defense of the
transactions contemplated by any of the Transaction Documents (whether brought
against a party hereto or its respective Affiliates, directors, officers,
shareholders, employees or agents) shall be commenced in the state and federal
courts sitting in Dallas County, Texas (the “Texas Courts”). Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the Texas Courts for
the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), 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 such Texas Courts, or
such Texas Courts are improper or inconvenient venue for such proceeding. Each
party hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by mailing a copy
thereof via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
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
applicable law. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Note or the transactions
contemplated hereby. If any party shall commence an action or proceeding to
enforce any provisions of this Note, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorneys’ fees and
other costs and expenses incurred in the investigation, preparation and
prosecution of such action or proceeding.

 

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e)      Amendment; Waiver.  No provision of this Note may be waived, modified,
supplemented or amended except in a written instrument signed by the Company and
the Holder. Any waiver by the Company or 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 Company or 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 on any other occasion. Any waiver by
the Company or the Holder must be in writing.

 

f)       Severability.  If any provision of this Note is invalid, illegal or
unenforceable, the balance of this Note shall remain in effect, and if any
provision is inapplicable to any Person or circumstance, it shall nevertheless
remain applicable to all other Persons and circumstances.

 

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

 

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

 

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

 

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

 

 

BLUE CALYPSO, INC.

 

 

 

 

 

By:

/s/ William Ogle

 

 

William Ogle,

 

 

Chief Executive Officer

 

 

 

Facsimile No.: ______________________

 

 

 

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ANNEX A

 

NOTICE OF CONVERSION

 

The undersigned registered holder hereby elects to convert the principal amount
of the 8% Convertible Note due March 31, 2013 (the “Note”) made payable by Blue
Calypso, Inc., a Delaware corporation (the “Company”), to Aztec Systems, Inc., a
Texas corporation, into shares of common stock (the “Common Stock”) of the
Company in accordance with the terms and conditions of the Note, as of the date
written below. If shares of Common Stock are to be issued in the name of a
person other than the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto and is delivering herewith such certificates and
opinions as reasonably requested by the Company in accordance therewith. No fee
will be charged to the undersigned registered holder of the Note for any
conversion, except for such transfer taxes, if any.

 

The undersigned agrees to comply with the prospectus delivery requirements under
the applicable Securities Laws in connection with any transfer of the aforesaid
shares of Common Stock.

 

Conversion calculations:

 

 

 

 

Date to Effect Conversion:

 

 

 

 

 

Principal Amount of Note to be Converted:

 

 

 

 

 

Number of shares of Common Stock to be issued:

 

 

 

 

 

Signature:

 

 

 

 

 

Name:

 

 

 

 

 

Address for Delivery of Common Stock Certificates:

 

 

 

 

 

Or

 

 

 

 

 

DWAC Instructions:

 

 

 

 

 

Broker No:

 

 

 

 

 

Account No:

 

 

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SCHEDULES

 

 

Schedule 5.7                Capitalization

 

Schedule 5.8                Other Debt

 

Schedule 5.10              Material Changes; Undisclosed Events, Liabilities or
Developments

 

Schedule 5.11              Litigation

 

Schedule 5.16              Intellectual Property

 

Schedule 5.13              Compliance

 

Schedule 5.26              Taxes

 

Schedule 5.29              Seniority

 

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