Exhibit 10.2

 

LATTICE INCORPORATED

 

14% SECURED NOTE

 

Thompson, Pennsylvania

 

$580,000.00 November 2, 2015

 

1.     Obligation. For value received and intending to be legally bound, Lattice
Incorporated, a Delaware corporation ("Maker"), hereby promises to pay on or
before the Due Date (as defined below) to the order of Cantone Asset Management,
LLC (including its successors and assigns, collectively, the "Payee"), the
principal sum of up to FIVE HUNDRED EIGHTY Thousand Dollars ($580,000.00),
lawful money of the United States of America together with interest thereon in
the amount of fourteen percent annual simple interest (the “Rate”) on the terms
and conditions stated in this Note, based on the gross amount advanced by the
Payee before deductions. The loan represented by this note is for business
purposes only. The principal sum added to the accrued but unpaid interest
(including Default Interest, defined below) is referred to in this Note as the
"Amount Due." Any term capitalized herein and not defined shall have the same
meaning as in the Loan and Security Agreement between the Maker and the Payee of
even date.

 

The payments under this Note shall be made in funds immediately available to
Payee at its office at Thompson, Pennsylvania, or at such other location as the
Payee shall designate. In the event the due date of any payment under this Note
is a Saturday, Sunday or legal holiday in the Commonwealth of Pennsylvania, such
payment shall be due on the next succeeding date which is not a Saturday, Sunday
or such legal holiday, provided that the principal sum shall continue to accrue
interest until paid.

 

Maker acknowledges that this Note is delivered to the Payee at a 10% original
issue discount. Maker will pay no interest if the $580,000 principal is paid on
or before February 2, 2016; 14% annual interest accrues on the principal sum
beginning February 2, 2016 if the principal remains outstanding, with interest
paid monthly, in arrears, on the twenty-seventh day of the month, at $6,766.67
per month with first interest payment due March 2, 2016, and will continue until
the Amount Due is paid. If any event of default occurs as defined in this Note,
including a failure to pay interest when due, interest will accrue at the rate
of 18% (the “Default Rate”). Interest payable at the Default Rate shall be known
as “Default Interest” under this Note.

 

The Amount Due is due and payable on or before May 2, 2016 (the “Due Date”). If
the Maker fails to pay the Amount Due on the Due Date, Default Interest at the
Default Rate will begin to accrue until the Amount Due is paid in full. If the
Amount Due is not paid in full by the Due Date, in addition to any Default
Interest, late fees or other charges, the Maker will immediately issue to the
Payee a certificate representing 2,500,000 shares of the Maker’s common stock as
a late payment penalty and not as interest and $50,000 will be added to the
principal amount and begin accruing Default Interest.

 

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2.     Prepayment. Maker may prepay all or any portion of the Amount Due at any
time without premium or penalty.

 

3.     Application of Payments. All payments on this Note shall be applied first
to interest at the Rate, then Default Interest, then all other sums due
hereunder, and the balance thereof to principal or in such other order as Payee
may elect.

 

4.     Late Charge. If any payment of interest payable under Section 1, above is
not made by the twenty-ninth day of the month in which it is due, or if the
Amount Due is not paid when due under the terms of this Note and remains unpaid
ten (10) days after the Due Date, then, in either case, there shall also be
immediately due and payable a late charge at the rate of Five Percent (5%) of
such delinquent payment. The amount of any such late charge not paid promptly
following demand therefor shall be deemed outstanding and payable pursuant to
the Note.

 

5.     Collateral. The payment of the Amount Due on the Due Date shall be
secured by a first lien on the revenues and other proceeds of certain contracts
of the Maker, listed on Exhibit A, to be evidenced by a filing on form UCC-1.

 

6.     Default; Acceleration; Remedies.

 

a.     Should there occur and exist any Default (as defined below in Section 6
b), then Payee, at its option and after written notice to Maker, may declare
immediately due and payable the entire unpaid balance of Amount Due and accrued
interest by Maker hereunder, together with interest accrued thereon at the Rate
to the date of Default and thereafter at a rate of interest equal to the Default
Rate, anything herein to the contrary notwithstanding. Payment of the Amount Due
may be enforced and recovered in whole or in part at any time by one or more of
the remedies provided Payee in this Note. If Payee employs counsel to enforce
this Note by suit or otherwise, Maker will reimburse Payee for all reasonable
costs of suit and other expenses in connection therewith, whether or not suit is
actually instituted, together with a reasonable attorney's fee for collection of
Ten Percent (10%) of the total amount then due by Maker to Payee but in no event
less than Five Thousand Dollars ($5,000.00) together, to the extent permitted by
applicable law, with interest on any judgment obtained by Payee at the Default
Rate, including interest at the Default Rate from and after the date of
execution, judicial or foreclosure sale until actual payment is made to Payee of
the full amount due Payee.

 

b.     As used in this Note, "Default" shall mean the occurrence of any of the
following events:

 

(1)     Any default in the payment when due of interest or the Amount Due on the
Due Date, or any other sums due, under this Note, which default is not cured
within ten (10) days after the due date of such payment;

 

(2)     Any default in the performance of any of the provisions of this Note,
which is not cured within ten (10) days;

 

(3)     Any default in any other indebtedness of the Maker, which default is not
cured within ten (10) days of the date of such default;

 

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(4)     The making of any misrepresentation to Payee;

 

(5)     The appointment of a committee of Maker’s creditors;

 

(6)     The making by Maker of a general assignment or offer of settlement for
the benefit of creditors;

 

(7)     The voluntary or involuntary application for, or appointment of, a
receiver, custodian, guardian, trustee, or other personal representative for
Maker or its property;

 

(8)     The filing of a voluntary or involuntary (to the extent not dismissed
within 30 days) petition under any of the provisions of the Federal Bankruptcy
Code or any similar state statute;

 

(9)     The occurrence of any other act of insolvency (however expressed or
indicated);

 

(10)     The issuance of a warrant of attachment or for distraint, or the notice
of tax lien against Maker’s assets;

 

(11)     An entry of judgments against Maker or its assets;

 

(12)     The failure to pay, withhold, collect or remit any taxes or tax
deficiency when assessed or due, unless such taxes are being diligently
contested in good faith by appropriate proceedings;

 

(13)     The general failure of Maker to pay its debts and obligations as the
same become due and payable.

 

7.     Remedies Cumulative, Etc.

 

a.     The remedies of Payee provided in this Note shall be cumulative and
concurrent, may be pursued singly, successively, or together at the sole
discretion of Payee, and may be exercised as often as occasion therefor shall
occur; and the failure to exercise any such right or remedy shall in no event be
construed as a waiver or release thereof.

 

b.     The recovery of any judgment by Payee shall not affect in any manner or
to any extent any rights, remedies or powers of Payee under this Note, but such
rights, remedies and powers of Payee shall continue unimpaired as before. The
exercise by Payee of its rights and remedies and the entry of any judgment by
Payee shall not adversely affect in any way the interest rate payable hereunder
on any amounts due to Payee but interest shall continue to accrue on such
amounts at the rates specified herein.

 

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c.     Maker agrees that any action or proceeding against it to enforce this
Note may be commenced in the Commonwealth of Pennsylvania Court of Common Pleas
in the County of Philadelphia or in such court sitting in any of the five
adjacent counties in the Commonwealth of Pennsylvania, or in the United States
District Court for the Eastern District of Pennsylvania. Maker also consents to
venue in any federal court having subject matter jurisdiction located in the
Commonwealth of Pennsylvania. The provisions of this Section shall not limit or
otherwise affect the right of Payee to institute and conduct action in any other
appropriate manner, jurisdiction or court.

 

8.     Additional Waivers. Maker hereby waives presentment for payment, demand,
demand for payment, notice of demand, notice of nonpayment or dishonor, notice
of acceleration, protest and notice of protest of this Note, and all other
notices in connection with the delivery, acceptance, performance, default or
enforcement of the payment of the Note. Maker agrees that its liability shall be
unconditional without regard to the liability of any other party, and shall not
be affected in any manner by any indulgence, extension of time, renewal, waiver
or modification granted or consented to by Payee. Maker consents to any and all
extensions of time, renewals, waivers or modifications that may be granted by
Payee with respect to payment or other provisions of this Note.

 

9.     Costs and Expenses. Maker shall pay upon demand all reasonable costs and
expenses incurred by Payee in the exercise of any of its rights, remedies or
powers under this Note and any amount thereof not paid promptly following demand
therefor shall be added to the principal sum hereunder and shall bear interest
at the Default Rate from the date of such demand until paid in full.

 

10.     Severability. If any provision of this Note is held to be invalid or
unenforceable by a court of competent jurisdiction, the other provisions of this
Note shall remain in full force and effect and shall be liberally construed in
favor of Payee in order to effectuate the provisions of this Note.

 

11.     Limitation of Interest to Maximum Lawful Rate. In no event shall the
rate of interest payable hereunder exceed the maximum rate of interest permitted
to be charged by applicable law (including choice of law rules) and any interest
paid in excess of the permitted rate shall be refunded to Maker. Such refund
shall be made by application of the excessive amount of interest paid against
any sums outstanding under this Note and shall be applied on such order as Payee
may determine. If the excessive amount of interest paid exceeds the sums
outstanding under this Note, the portion exceeding the sums outstanding under
this Note shall be refunded in cash by Payee. Any such crediting or refund shall
not cure or waive any default by Maker hereunder. Maker agrees, however, that in
determining whether or not any interest payable under this Note exceeds the
highest rate permitted by law, any non-principal payment, including without
limitation prepayment fees and late charges, shall be deemed to the extent
permitted by law to be an expense, fee, premium or penalty rather than interest.
Maker acknowledges that the loan represented by this Note is for business
purposes only.

 

12.     Limitation on Payee's Waivers. Payee shall not be deemed, by any act or
omission or commission, to have waived any of its rights or remedies hereunder
unless such waiver is in writing and signed by Payee, and then only to the
extent specifically set forth in the writing. A waiver as to one event shall not
be construed as continuing or as a bar to or waiver of any right or remedy to a
subsequent event.

 

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13.     No Offset. The obligations of Maker under this Note shall not be subject
to any abatement or offset as a consequence of any claim, event or transaction
otherwise occurring or arising between Maker, Payee and/or any affiliate of any
of them, except as Maker and Payee may otherwise agree.

 

14.     Applicable Law. This instrument shall be governed by and construed
according to the laws of the Commonwealth of Pennsylvania, without regard to its
doctrine regarding conflicts of laws.

 

15.     Captions. The captions or headings of the paragraphs in this Note are
for convenience only and shall not control or affect the meaning or construction
of any of the terms or provisions of the Note.

 

16.     Pronouns. Pronouns used herein shall be deemed to include the masculine,
feminine or neuter, singular or plural, as their contexts may require. The words
"Payee" and "Maker" shall be deemed to include the respective heirs, personal
representatives, successors and assigns of Payee and Maker.

 

17.     Construction. The language in this Agreement shall be construed as a
whole according to its fair meaning, strictly neither for nor against any party,
and without implying a presumption that its terms shall be more strictly
construed against one party by reason of the rule of construction that a
document is to be construed more strictly against the person who drafted it.

 

18.     Computation. The unpaid principal amount of this Note, the unpaid
interest accrued thereon, the interest rate or rates applicable to such unpaid
principal amount, the duration of such applicability, and all other Amounts Due
owing by Maker to Payee pursuant to this Note shall at all times be ascertained
from the records of Payee, which shall be conclusive absent manifest error.

 

19.     Assignment. This Note may not be assigned or otherwise transferred by
Maker without the prior written consent of Payee.

 

20.     Stamp Taxes. Maker shall pay the cost of any revenue, tax or other
stamps now or hereafter required by the laws of the Commonwealth of Pennsylvania
(or any of its political subdivisions) or the United States of America to be
affixed to this note, and if any taxes are imposed under the laws of the
Commonwealth of Pennsylvania (or any of its political subdivisions) or the
United States of America with respect to evidences of indebtedness, Maker shall
pay or reimburse Payee upon demand the amount of such taxes without credit
against any indebtedness evidenced by this Note.

 

21.     Notices. All notices, requests, waivers, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given, made and received when hand delivered against receipt, or on the day
after it is sent by United States certified or registered mail, postage prepaid,
return receipt requested, by nationally recognized overnight courier service, or
by facsimile, to:

 

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If to Maker:

 

Lattice Incorporated

7150 N. Park Drive

Suite 500

Pennsauken, NJ 08109

Telephone (856) 910-1166

Facsimile: (856) 910-1811

 

If to Payee:

 

Cantone Asset Management, LLC

C/o Cantone Research, Inc.

766 Shrewsbury Ave

Suite E 401

Tinton Falls, NJ 07724

Telephone: 732-450-3500

Facsimile: 732-450-3520

Attention: Anthony Cantone

 

Or such other address as shall be specified from time to time (in compliance
with the requirements of this Section 21 for the giving of notice) by the
parties entitled to receive such notices.

 

IN WITNESS WHEREOF, Maker, intending to be legally bound hereby, has caused this
Note to be duly executed the day and year first above written.

 

 

MAKER:

 

 

LATTICE INCORPORATED.

 

 

By: /s/ Paul Burgess

       Paul Burgess, Chief Executive Officer

 

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EXHIBIT A

 

COLLATERAL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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