**EXHIBIT 4.16**

 

**THISUNSECURED CONVERTIBLE PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIESACT”), OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, PLEDGED OR HYPOTHECATEDIN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIESLAWS OR AN OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLY SATISFACTORY TO BLUENRGY GROUP LIMITED THAT SUCH REGISTRATION IS NOTREQUIRED.**

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UNSECUREDCONVERTIBLE PROMISSORY NOTE

 

 

**FORVALUE RECEIVED**, BlueNRGY Group Limited an Australian Company (the “Payor”), hereby promises to pay, onor prior to the Due Date, to the order of WHI, Inc., for itself and as agent for its affiliates, WHI Retirement Savings Plan Trustand WHIRSP – Columbus LLC, (collectively the “Lender”), at such place as the Lender may designate, inlawful money of the United States, the principal amount of One Million Two Hundred Thousand U.S. Dollars****($1,200,000.00),or such lesser amounts as may be outstanding under this Note as evidenced by the Draw Certificate, together with interest thereoncalculated from the earlier of the date hereof or the date of funding of each Draw (as applicable) plus all other Note Obligations,payable in accordance with the provisions of this Note.

 

1.             Definitions.

 

1.1     “Changeof Control Event” means that a person or group of Persons acting in concert acquires or gains the right to vote 20%or more of the Payor’s ordinary shares or obtains the right to appoint two or more members to Payor’s Board of Directors.

 

1.2     “ConversionDate” shall mean the date on which the Lender delivers the Exercise Notice together with the original Note or the dateon which an automatic conversion is triggered under this Section 4.

 

1.3     “ConversionPrice” means $0.03785, which amount shall be automatically adjusted proportionally for any share split or share consolidationeffected by Payor. 

 

1.4     “DrawAmount” means the initial funding by Lender hereunder or any subsequent funding, each such occurrence a “Draw”.

 

1.5     “DrawCap” means the maximum principal amount that may be funded under this Note. The Draw Cap is not a commitment from Lender.Lender may, in its sole discretion, elect not to fund any Draw request for any reason or no reason. 

 

1.6     “DrawCertificate” means that certain schedule, updated from time to time and signed by Lender and Payor, evidencing the initialamount funded by Lender and the amount funded under each subsequent draw (if any), as well as any repayments of principal or interestthat have occurred subsequent to the initial funding hereunder.

 

 

1.7     “DueDate” means the latest permitted Repayment Date and is the date on which all outstanding Note Obligations become payablein full. 

 

1.8     “ExerciseNotice” means a written notice delivered to Payor in accordance with Section 7 hereof specifying the dollar amount ofNote Obligations that Lender has determined to exchange for Payor’s ordinary shares (“Conversion Amount”)in accordance with Section 3 hereof. 

 

1.9     “Note”means this Note as originally executed or if later amended, modified, supplemented or replaced then, as so amended, modified,supplemented or replaced.

 

1.10   “NoteObligations” means all principal aggregated from all Draws, interest (including interest which accrues after the commencementof any case or proceeding in bankruptcy of the Payor), fees (including the Commitment Fee, if any), charges, expenses and anyother sum chargeable to the Payor pursuant to the terms of this Note.

 

1.11   “Person”means an individual, partnership, corporation, limited liability company, association, joint stock company, trust, joint venture,unincorporated organization or governmental entity or any department, agency or political subdivision thereof.

 

1.12   “RepaymentDate” means the earlier of (a) July 31, 2016 (the “Maturity Date”), (b) the date on which there isan occurrence of a default pursuant to Section 5 hereof or (c) the date on which there is a Change of Control Event. If the Payor’sBoard of Directors determines in good faith within 30 days of the Maturity Date that Payor cannot reasonably repay the Note Obligationswithout jeopardizing the viability of Payor’s business Payor may extend the Maturity Date for up to 6 months (the “ExtensionPeriod), subject to reaching mutual agreement with Lender on a revised interest rate, representative of a market rate, tobe applicable during the Extension Period.

 

2.             Draws;Funding.

 

2.1     Anyauthorized representative of Payor may request a Draw at any time prior to the Maturity Date in such amount as would not causethe Draw Cap to be exceeded. 

 

2.2     Lender,in its sole discretion, shall determine whether and when to fund any Draw request of Payor and may decline to do so for any reasonor no reason.

 

2.3     Lenderis not obligated to provide funding up to the Draw Cap or in any specific amount. 

 

2.4     Fundingmay be made by Lender in any manner convenient, including wire transfer, check or ACH or other means of electronic transfer toany account of Payor or its subsidiaries.

 

2.5     Uponreceipt of funding of any Draw, the Draw amount shall be promptly reflected in an updated Draw Certificate signed by a representativeof Payor. 

 

3.             Payments;Prepayments.

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3.1     Interest.In the absence of an event of default, interest shall accrue at an annual rate of fifteen percent (15%) on the unpaid principalamount of this Note outstanding from time-to-time from the funding date or dates shown on the Draw Certificate until the principaland interest amount of this Note is paid in full. Interest shall accrue on the basis of a 365 day year and shall compound monthly.Upon an event of default, interest on the unpaid balance of any outstanding Note Obligations shall accrue at a default rate thatis 500 basis points per annum higher than the interest rate until paid or the default is cured (if cure is possible).

 

 

3.2     PaymentDate. Unless this Note is converted into ordinary shares (the “Conversion Shares”) in accordance with the termshereof, or is otherwise sooner paid, the principal amount evidenced by this Note together with accrued interest thereon and allOther Note Obligations shall be due and payable on the Repayment Date. All payments hereunder shall be made in lawful money ofthe United States at such address as the Lender shall specify from time to time in writing to the Payor.

 

3.3     Pre-Payments.The principal indebtedness of this Note, or any portion thereof, together with interest and all other Note Obligations relatedthereto, may be prepaid prior to the Repayment Date upon 5 business days written notice by the Payor. Each and all such prepaymentsshall be reflected on an updated Draw Certificate. 

 

3.4	    Null and Void. This Note shall become null and void upon repayment of all Note Obligations (i) in accordance withSection 2.2 hereof; (ii) through conversion in accordance with Section 3 hereof; or (iii) through a combination of repaymentsand conversions. 

 

4.             Conversion.

 

4.1     LenderConversion Option. At the option of the Lender, this Note or any fractional amount thereof is convertible into ordinary sharesof BlueNRGY Group Limited at any time or at multiple times prior to the Repayment Date by delivery of an Exercise Notice to Payor.

 

4.2     Mechanicsof Conversion. Upon delivery of an Exercise Notice, the Payor shall promptly issue to Lender a number of ordinary shares (“ConversionShares”) determined by dividing the Conversion Amount by the Conversion Price (as adjusted). The “ConversionDate” shall be the date on which the Lender is deemed to have delivered the Exercise Notice in accordance with Section7 hereof. As promptly as reasonably practicable on or after the Conversion Date, but in no case longer than 10 business days followingthe Conversion Date, the Company shall issue all Conversion Shares to which Lender is entitled as a result of delivery of anyExercise Notice. For purposes of Payor’s rights under Section 2.3 hereof, any conversion of the Note shall be deemed tohave been effected immediately prior to the close of business on the Conversion Date.

 

4.3     Atsuch time Conversion Shares are actually issued to Lender or Lender’s designee, the Conversion Amount shall be reflectedon an updated Draw Certificate as a reduction in outstanding Note Obligations and the rights of the Lender under the Note shallcease with respect to the applicable Conversion Amount. The failure of the Company to make the deliveries as aforesaid shall notimpair or delay Lender’s right to effect conversion of any Conversion Amount pursuant to this Section 4. 

 

5.             Assignment.

 

5.1     Exceptas otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon theparties hereto and the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intendedto confer upon any party, other than the parties hereto or their respective successors and assigns, any rights, remedies, obligationsor liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

 

5.2     Lendermay unilaterally assign this Note in whole or in part only if the assignee represents and warrants to Lender and Payor that assignee:(i) is an accredited investor within the meaning of the Securities Act; (ii) is aware of and can tolerate the risk of loss applicableto the Note and Conversion Shares; (iii) is acquiring the Note for assignee’s own account for investment purposes only andnot with a view to resale or distribution. 

 

5.3     IfLender elects to make a unilateral assignment of the Note in whole or in part, Payor shall issue a new Note reflecting the NoteObligations payable to Lender and assignee respectively. 

 

6.             Default.

 

6.1.    Payor’sfailure to pay principal or any interest or other Note Obligation on this Note within five (5) days after the Due Date shall bedeemed an event of default.

 

6.2.    Payorshall fail to issue any Conversion Shares required to be issued pursuant to Section 3 hereof within 10 business days followingthe delivery of an Exercise Notice shall be deemed an event of default.

 

6.3.    If:

 

(i)the Payor shall commence any voluntary proceeding under any bankruptcy, reorganization, arrangement, insolvency, readjustmentof debt, receivership, voluntary or involuntary appointment of an administrator, dissolution, or liquidation law or statute ofany jurisdiction, whether now or hereafter in effect; or the Payor shall be adjudicated insolvent or bankrupt by a decree of acourt of competent jurisdiction; or the Payor shall petition or apply for, acquiesce in, or consent to, the appointment of anyreceiver or trustee of the Payor or for all or a substantial part of the property of the Payor; or the Payor shall make an assignmentfor the benefit of creditors; or the Payor shall admit in writing its inability to pay its debts as they mature; or

 

(ii)there shall be commenced against the Payor any proceeding relating to the Payor under any bankruptcy, reorganization, arrangement,insolvency, readjustment of debt receivership, dissolution, or liquidation law or statute of any jurisdiction, whether now orhereafter in effect,****and any such proceeding shall remain undischarged for a period of sixty (60) days or the Payor byany act indicates its consent to, approval of, or acquiescence in, any such proceeding; or a receiver or trustee shall be appointedfor the Payor or for all or a substantial part of the property of the Payor and any such receivership or trusteeship shall remainundischarged for a period of sixty (60) days; or a warrant of attachment, execution, or similar process shall be issued againstany substantial part of the property of the Payor and the same shall not be dismissed or bonded within sixty (60)****daysafter levy;

 

thenin the event of (i) or (ii) above, the Lender may, by written notice to the Payor declare an event of default, and the same shall,unless such default shall be cured within five (5) days after such notice, be deemed an event of default for purposes hereof.	

 

 

7.             LimitedRecourse. No recourse shall be had for payment of any part of the Note Obligations against any present or future officer ordirector of the Payor by virtue of any law, or by enforcement of any assessment, or otherwise, or against any present or futuremanager, agent, officer or director of the Payor, all such liability being, by the acceptance hereof and as a part of the considerationfor the issue hereof, expressly released, it being agreed by the Lender to limit its recourse for collection of the Note Obligationsto the Payor and its assets.

 

8.             Notices.Except as may be otherwise provided herein, all notices and other communications required or permitted hereunder shall be in writingand shall be conclusively deemed to have been duly given (a) when hand delivered to the party; (b) when received whensent by electronic mail or facsimile on a business day at the address and number set forth below, subject to digital or electronicreceipt of acknowledgement from recipient; (c) five (5) business days after deposit in the U.S. or Australian mail withfirst class or certified mail (receipt requested) postage prepaid and addressed to the party as set forth below; or (d) ifdeposit with a national overnight delivery service, delivery charges prepaid, addressed to the party as set forth below with thedelivery guaranteed, on such date as provided that the sending party receives a confirmation of delivery from the delivery serviceprovider.

  

  

   

EachPerson making a communication hereunder by facsimile or e-mail shall promptly confirm by telephone to the Person to whom suchcommunication was addressed each communication made by it by facsimile pursuant hereto, but the absence of such confirmation shallnot affect the validity of any such communication. A party may change or supplement the addresses given above, or designate additionaladdresses, for purposes of this Section 8 by giving the other party written notice of the new address in the manner set forthabove.

 

9.             RegistrationRights. 

 

9.1     UnlessNoteholder is otherwise permitted to sell the Conversion Shares pursuant to Rule 144 or any successor rule or another applicableexemption, Noteholder shall be entitled to the same registration rights for the Conversion Shares as purchasers of Securitiesin the Offering referenced in the Company’s November 12, 2015 filing with the U.S. Securities and Exchange Commission onForm 6-K.

 

 

10.           Miscellaneous.

 

10.1   Lostor Destroyed Note. Upon receipt by the Payor of evidence reasonably satisfactory to the Payor of the loss, theft, destructionor mutilation of this Note, and in the case of any such loss, theft or destruction, upon delivery of an indemnity reasonably satisfactoryto the Payor or, in case of any such mutilation, upon surrender and cancellation of this Note, the Payor will issue a replacementNote of like tenor in lieu of this Note.

 

10.2   Severability.Wherever possible, each provision of this Note shall be interpreted in such manner as to be effective and valid under applicablelaw, but if any provision of this Note shall be prohibited by or invalid under applicable law, such provision shall be ineffectiveto the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisionsof this Note.

 

10.3   Waiver.The Payor hereby waives presentment, demand, protest, notice of dishonor, diligence and all other notices, any release or dischargearising from any extension of time, discharge of a prior party, or other cause of release or discharge other than actual paymentin full hereof.

 

10.4   Rights.Lender shall not be deemed, by any act or omission, to have waived any of its rights or remedies hereunder unless such waiveris in writing and signed by Lender and then only to the extent specifically set forth in such writing. A waiver with referenceto one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. Nodelay or omission of Lender to exercise any right, whether before or after a Default hereunder, shall impair any such right orshall be construed to be a waiver of any right or Default, and the acceptance at any time by Lender of any past-due amount shallnot be deemed to be a waiver of the right to require prompt payment when due of any other amounts then or thereafter due and payable.

 

10.5   Amendment.No amendment of this Note (either generally or in a particular instance and either retroactively or prospectively) may bemade other than by written consent of the Payor and the Lender.

 

10.6   Remedies.The remedies of Lender as provided herein shall be cumulative and concurrent, and may be pursued singularly, successively or togetherat Lender’s sole discretion, and may be exercised as often as occasion therefor shall occur.

 

10.7   Interest.If any provisions of this Note would require the Payor to pay interest hereon at a rate exceeding the highest rate allowed byapplicable law, the Payor shall instead pay interest under this Note at the highest rate permitted by applicable law.

 

10.8   GoverningLaw. This Note shall be governed by and construed in accordance with the laws of Australia, without giving effect to any choiceor conflict of law provision or law that would cause the application of the laws of any jurisdiction other than Australia.

  

*---------Signature Page Follows --------- *

 

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**INWITNESS WHEREOF**, the Payor has caused this Note to be executed on its behalf by its duly authorized signatory.

  

**BLUENRGY GROUP LIMITED**   By: /s/ Richard Pillinger  Richard Pillinger    Its:Chief Financial Officer and authorized Representative    By:/s/ Carlo Botto  Carlo Botto    Its:Director 

  

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