Exhibit 10.2

 

THIS NOTE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE. THIS NOTE HAS BEEN SOLD IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS.

 

MICRONET ENERTEC TECHNOLOGIES, INC

 

ENERTEC ELECTRONICS LTD

 

Secured Promissory Note

 

No. MICT-4 Original Principal Amount: $600,000 Issuance Date:  June 8, 2017  

 

FOR VALUE RECEIVED, MICRONET ENERTEC TECHNOLOGIES, INC., a corporation organized
and existing under the laws of the State of Nevada (the “Company” or a
“Borrower”), and ENERTEC ELECTRONICS LTD, a corporation organized and existing
under the laws of the State of Israel (“Enertec” or a “Borrower” and
collectively with the Company, the “Borrowers”), hereby promise to pay to the
order of YA II PN, Ltd. or its registered assigns (the “Holder”) (i) the
outstanding portion of the amount set out above as the Original Principal Amount
(as reduced pursuant to the terms hereof pursuant to scheduled payment,
redemption, conversion, or otherwise, the “Principal”) when due, whether upon
the Maturity Date (as defined below), acceleration, redemption or otherwise (in
each case in accordance with the terms hereof) and (ii) to pay interest
(“Interest”) on any outstanding Principal at the applicable Interest Rate (as
defined below) from the date defined in Section 17 hereof as the Issuance Date
until the same is paid, whether upon the Maturity Date or acceleration,
redemption or otherwise (in each case in accordance with the terms hereof)
pursuant to the terms of this Promissory Note (the “Note”).

 

This Note is being issued pursuant to that certain Note Purchase Agreement dated
as of October 28, 2016, as amended and supplemented from time to time (the “Note
Purchase Agreement“) among the Holder and the Borrowers. Certain capitalized
terms used herein but otherwise not defined herein are defined in Section 17 or
in the Note Purchase Agreement.

 

(1)           GENERAL TERMS

 

(a)               Maturity Date. All amounts owed under this Note shall be due
and payable on December 31, 2018 (the “Maturity Date”). On the Maturity Date,
the Borrowers shall pay to the Holder an amount in cash representing all then
outstanding Principal and accrued and unpaid Interest.

 

 

 

 

(b)               Interest. Interest shall accrue on the outstanding Principal
balance hereof at a rate equal to 7% per annum (“Interest Rate”). Interest shall
be calculated on the basis of a 365-day year and the actual number of days
elapsed, to the extent permitted by applicable law.

 

(c)               Payments of Principal and Interest. On (i) September 30, 2018
the Borrowers shall make a payment to the Holder in the amount of $100,000 of
Principal plus all accrued and unpaid Interest outstanding under this Note as of
such payment date, and (ii) December 31, 2018 the Borrowers shall make a payment
to the Holder in the amount of $500,000 of Principal plus all accrued and unpaid
Interest outstanding under this Note as of such payment date (each such date, a
“Payment Due Date”) by wire transfer of immediately available funds to the
account listed on Schedule I hereto (or to any other account specified by the
Holder to the Borrowers in writing) to be received on or before such Payment Due
Date.

 

(2)           NO PREPAYMENT PENALTY. The Borrowers may prepay all or any part of
the balance outstanding hereunder at any time without penalty. The Borrowers
shall use 50% of the net proceeds of any cash raised from financing transactions
completed while this Note is outstanding to make prepayments hereunder.

 

(3)           REPRESENTATIONS AND WARRANTIES. The Borrowers hereby represents
and warrants to the Investor that the following are true and correct as of the
date hereof:

 

(a)               (i) The Borrowers have the requisite corporate power and
authority to enter into and perform its obligations under this Note and any
related agreements, in accordance with the terms hereof and thereof, (ii) the
execution and delivery of this Note and any related agreements by the Borrowers
and the consummation by it of the transactions contemplated hereby and thereby,
have been duly authorized by the each Borrower’s Board of Directors and no
further consent or authorization is required by any Borrower, Board of
Directors, or stockholders, (iii) this Note and any related agreements have been
duly executed and delivered by the Borrowers, (iv) this Note and any related
agreements, constitute the valid and binding obligations of the Borrowers
enforceable against each Borrower in accordance with their terms, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of creditors’ rights and
remedies.

 

(b)               The execution, delivery and performance by the Borrowers of
its obligations under this Note will not (i) result in a violation of any
Borrower’s incorporation documents or any certificate of designation of any
outstanding series of preferred stock or (ii) conflict with or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Borrower or any of its subsidiaries is a party, or result in a violation of
any law, rule, regulation, order, judgment or decree (including federal and
state securities laws and regulations and the rules and regulations of the
Principal Market on which the Common Stock is quoted) applicable to the Borrower
or any of its subsidiaries or by which any material property or asset of the
Borrower is bound or affected and which would cause a Material Adverse Effect.

 

 2 

 

 

(4)           EVENTS OF DEFAULT.

 

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

 

(i) the Borrowers’ failure to pay to the Holder any amount of Principal,
Interest or other amounts when and as due and payable under this Note and such
failure was not cure within 5 days following the Holder’s written notice to such
effect;

 

(ii) any Borrower or any subsidiary of any Borrower shall commence, or there
shall be commenced against any Borrower or any subsidiary of any Borrower under
any applicable bankruptcy or insolvency laws as now or hereafter in effect or
any successor thereto, or any Borrower or any subsidiary of any Borrower
commences, or there shall be commenced against any Borrower or any subsidiary of
any Borrower, any other proceeding under any reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or
similar law of any jurisdiction whether now or hereafter in effect relating to
any Borrower or any subsidiary of any Borrower, in each case which remains
un-dismissed for a period of 61 days; or any Borrower or any subsidiary of any
Borrower is adjudicated insolvent or bankrupt pursuant to a final,
non-appealable order; or any order of relief or other order approving any such
case or proceeding is entered; or any Borrower or any subsidiary of any Borrower
suffers any appointment of any custodian, private or court appointed receiver or
the like for it or any substantial part of its property which continues
un-discharged or un-stayed for a period of 61 days; or any Borrower or any
subsidiary of any Borrower makes a general assignment for the benefit of
creditors; or any Borrower or any subsidiary of any Borrower shall admit in
writing that it is unable to pay its debts generally as they become due; or any
Borrower or any subsidiary of any Borrower shall call a meeting of its creditors
with a view to arranging a composition, adjustment or restructuring of its
debts; or any corporate or other action is taken by any Borrower or any
subsidiary of any Borrower for the purpose of effecting any of the foregoing;

 

(iii) the common stock of the Company shall cease to be authorized for quotation
or trading on the Nasdaq Capital Market, or trading in the common stock of the
Company has been suspended for any reason, for a period of more than ten Trading
Days, or the ordinary shares of Micronet Ltd. shall cease to be authorized for
trading on the Tel-Aviv Stock Exchange, or trading in the ordinary shares of
Micronet Ltd. has been suspended for any reason, for a period of more than ten
Trading Days and in any such case the failure was not cured within 20 days.

 

(iv) the Company is a party to any agreement memorializing (1) the consummation
of any transaction or event (whether by means of a share exchange or tender
offer applicable to the Common Stock, a liquidation, consolidation,
recapitalization, reclassification, combination or merger of the Company or a
sale, lease or other transfer of all or substantially all of the consolidated
assets of the Company) or a series of related transactions or events pursuant to
which all of the outstanding shares of Common Stock are exchanged for, converted
into or constitute solely the right to receive, cash, securities or other
property, (2) a consolidation or merger in which the Company is not the
surviving corporation, or (3) a sale, assignment, transfer, conveyance or other
disposal of all or substantially all of the properties or assets of the Company
to another person or entity (each of (1), (2) and (3) a “Change in Control”)
unless in connection with such Change in Control, all Principal and accrued and
unpaid Interest due under this Note will be paid in full or the Holder consents
to such Change in Control;

 

 3 

 

 

(v) a material event of default or material breach by any Borrower under the
Note Purchase Agreement, any other Transaction Documents, or any other material
obligation, instrument, debenture, note or agreement for borrowed money
occurring after the Issuance Date of this Note and continuing beyond any
applicable notice and/or grace period.

 

(5)           REMEDIES UPON DEFAULT.

 

(a)               During the time that any portion of this Note is outstanding,
if (i) any Event of Default has occurred, the Holder, by notice in writing to
any Borrower, may at any time and from time to time declare the full unpaid
Principal of this Note or any portion thereof, together with Interest accrued
thereon to be due and payable immediately (the “Accelerated Amount”) or (ii) any
Event of Default specified in Section 4(a)(ii) has occurred, the unpaid
Principal of the Note and the Interest accrued thereon shall be immediately and
automatically due and payable without necessity of further action.

 

(6)           REISSUANCE OF THIS NOTE. Upon receipt by any Borrower of evidence
reasonably satisfactory to such Borrower of the loss, theft, destruction or
mutilation of this Note, and, in the case of loss, theft or destruction, of an
indemnification undertaking by the Holder to such Borrower in customary form
and, in the case of mutilation, upon surrender and cancellation of this Note,
the Borrowers shall execute and deliver to the Holder a new Note representing
the outstanding Principal which Note (i) shall be of like tenor with this Note,
(ii) shall represent, as indicated on the face of such new Note, the Principal
remaining outstanding (iii) shall have an issuance date, as indicated on the
face of such new Note, which is the same as the Issuance Date of this Note, (iv)
shall have the same rights and conditions as this Note, and (v) shall represent
accrued and unpaid Interest from the Issuance Date.

 

(7)           NOTICES. Any notices, consents, waivers or other communications
required or permitted to be given under the terms hereof must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one (1) Business Day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses and facsimile numbers for such
communications shall be: 

 

If to the Borrowers, to: Micronet Enertec Technologies, Inc.   28 West Grand
Avenue, Suite 3   Montvale, NJ 07645   Attention:  David Lucatz   Email:
David@micronet-enertec.com     With a copy to:

Zysman, Aharoni, Gayer and Sullivan & Worcester LLP

 

1633 Broadway

New York, NY 10019

Attention: Oded Har-Even, Esq.

Telephone: (212) 660-5002

Email: ohareven@zag-sw.com

 

 4 

 

 

If to the Holder: YA II PN, Ltd.   1012 Springfield Avenue   Mountainside,
NJ  07092   Attention: Mark Angelo   Telephone: (201) 985-830     With a copy
to: David Gonzalez, Esq.   1012 Springfield Avenue   Mountainside, NJ  07092  
Telephone: (201) 985-8300   Email:  dgonzalez@yorkvilleadvisors.com

 

or at such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party three Business Days prior to the effectiveness of such change.
Written confirmation of receipt (i) given by the recipient of such notice,
consent, waiver or other communication, (ii) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or (iii)
provided by a nationally recognized overnight delivery service, shall be
rebuttable evidence of personal service, receipt by facsimile or receipt from a
nationally recognized overnight delivery service in accordance with clause (i),
(ii) or (iii) above, respectively.

 

(8)           No provision of this Note shall alter or impair the obligations of
the Borrowers, which are absolute and unconditional, to pay the Principal of or
Interest (if any) on, this Note at the time, place, and rate, and in the
currency, herein prescribed. This Note is a direct obligation of each Borrower.
As long as this Note is outstanding, the Borrowers shall not and shall cause its
subsidiaries not to, without the consent of the Holder, (i) amend its articles
of incorporation, bylaws or other charter documents so as to adversely affect
any rights of the Holder under this Note; or (ii) enter into any agreement with
respect to any of the foregoing.

 

(9)           This Note shall be governed by and interpreted in accordance with
the laws of the State of New York, without regard to the principles of conflict
of laws. Each of the parties consents to the jurisdiction of the state courts of
the State of New York and the U.S. District Court for the District of New York
sitting in Manhattan, in connection with any dispute arising under this Note and
hereby waives, to the maximum extent permitted by law, any objection, including
any objection based on forum non conveniens to the bringing of any such
proceeding in such jurisdictions.

 

(10)         If an Event of Default has occurred, then the Borrowers shall
reimburse the Holder promptly for all reasonable out-of-pocket fees, costs and
expenses, including, without limitation, reasonable attorneys’ fees and expenses
incurred by the Holder in any action in connection with this Note, including,
without limitation, those incurred: (i) during any workout, attempted workout,
and/or in connection with the rendering of legal advice as to the Holder’s
rights, remedies and obligations, (ii) collecting any sums which become due to
the Holder in accordance with the terms of this Note, (iii) defending or
prosecuting any proceeding or any counterclaim to any proceeding or appeal; or
(iv) the protection, preservation or enforcement of any rights or remedies of
the Holder.

 

 5 

 

 

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

 

(12)         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. If it shall be found that any
Interest or other amount deemed Interest due hereunder shall violate applicable
laws governing usury, the applicable rate of Interest due hereunder shall
automatically be lowered to equal the maximum permitted rate of interest. The
Borrowers covenant (to the extent that it may lawfully do so) that each Borrower
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 Borrowers 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 Borrowers (to the extent they
may lawfully do so) hereby expressly waive 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 had been enacted.

 

(13)         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.

 

(14)          Assignment of this Note by the Borrowers shall be prohibited
without the prior written consent of the Holder. Holder shall be entitled to
assign this Note in whole or in part to any person or entity without the consent
of the Borrowers.

 

(15)         THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES’
ACCEPTANCE OF THE NOTE PURCHASE AGREEMENT AND THIS NOTE.

 

 6 

 

 

(16)         CERTAIN DEFINITIONS For purposes of this Note, the following terms
shall have the following meanings:

 

(a)                “Business Day” means any day except Saturday, Sunday and any
day which shall be a federal legal holiday in the United States or a day on
which banking institutions in the United States are authorized or required by
law or other government action to close.

 

(b)               “Issuance Date” means the date this Note is executed and
delivered by the Borrowers to the Holder as set forth on the first page of this
Note.

 

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

 

(d)               “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, OTCBB, or the OTC
Markets (or any successors to any of the foregoing).

 

(e)                “Transaction Documents” shall have the meaning set forth in
the Note Purchase Agreement.

  

[Signature Page Follows]

 

 7 

 

 

IN WITNESS WHEREOF, each Borrower has caused this Note to be duly executed by a
duly authorized officer as of June 8, 2017.

  

 

BORROWERS:

 

MICRONET ENERTEC TECHNOLOGIES, INC.

      By: /s/ David Lucatz   Name: David Lucatz   Title: Chairman President and
CEO

 

  ENERTEC ELECTRONICS LTD       By: /s/ Tali Dinar   Name: Tali Dinar   Title:
CFO of Enertec Electronics Ltd.

  

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Schedule II

 

(Holder Account Information)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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