EXHIBIT 4.1


 


For U.S. Investors:


 


THE SECURITIES REPRESENTED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE SECURITIES
MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (C) IN COMPLIANCE WITH RULE 144 OR 144A THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS, (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR (E) IN A TRANSACTION THAT DOES NOT
REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND THE HOLDER HAS, PRIOR TO SUCH SALE,
FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE COMPANY.
HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.


 


For Non-U.S. Investors:


 


THESE SECURITIES WERE ISSUED IN AN OFFSHORE
TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S) PURSUANT TO REGULATION S PROMULGATED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). ACCORDINGLY, NONE OF THE SECURITIES REPRESENTED HEREBY
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED
OR SOLD IN THE UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND
IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES
MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE WITH THE SECURITIES ACT.


 


8% CONVERTIBLE PROMISSORY NOTE


 


RACKWISE, INC.


 


Due ______________ ___, 2013


 


	Original Issue Date: _____________  _____,
    2012	US$______________


 


This Convertible Promissory
Note is one of a series of duly authorized and issued convertible promissory notes of Rackwise, Inc., a Nevada corporation (the
“Company”), designated its 8% Convertible Promissory Notes due on or about ______________ ___, 2013 (the “Note”),
issued to ___________ (together with its permitted successors and assigns, the “Holder”)
in accordance with exemptions from registration under the Securities Act of 1933, as amended (the “Securities Act”),
pursuant to the Securities Purchase Agreement, dated as of ______________ ___, 2012 (the “Purchase Agreement”),
entered into between the Company and the Holder. Capitalized terms not otherwise defined herein shall have the meanings ascribed
to them in the Purchase Agreement.


 


ARTICLE I


 


Section 1.01   Principal
and Interest. (a) For value received, the Company hereby promises to pay to the order of the Holder, in lawful money of the
United States of America and in immediately available funds the principal sum of ______________ ($_____________) on ______________
___, 2013 (the “Maturity Date”)


 



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(b)         The
Company further promises to pay interest on the unpaid principal amount of this Note at a rate per annum equal to eight percent
(8%), commencing to accrue on the date hereof and payable on the Maturity Date. Interest will be computed on the basis of a 360-day
year of twelve 30-day months for the actual number of days elapsed.


 


(c)          Except
as otherwise set forth in this Note, the Company may not prepay any portion of the principal amount of this Note without the prior
written consent of the Holder.


 


Section 1.02      Optional
Conversion. (a) In the event the Company does not consummate the Subsequent Offering (as defined below) on or prior to the
Maturity Date, at the sole discretion of the Holder, the Holder may convert all or any portion of the outstanding principal amount
of, and accrued but unpaid interest on, this Note into shares of the Company’s common stock at a price equal to Sixty Five
Percent (65%) of the Conversion Price (as defined below). No fractional shares of the Company’s common stock will be issued
upon conversion, but the number of shares shall be rounded to the nearest whole number of shares. 


 


(b)      
“Conversion Price” means (i) the average of the daily volume weighted average prices, as quoted on the primary
national or regional stock exchange on which the common stock of the Company is listed, or, if not listed, the OTC Bulletin Board
if quoted thereon, for the twenty (20) consecutive Trading Days immediately preceding the Maturity Date, as proportionately adjusted
to reflect any stock splits, stock dividends, combination of shares or like events, or (ii) if the common stock of the Company
is not publicly traded as set forth above, as reasonably and in good faith determined by the Board of Directors of the Company
on the conversion date;


 


(c)      
“Trading Day” means any day on which the Common Stock is traded (or available for trading) on its principal
trading market.


 


Section 1.03       Mandatory
Conversion. (a) Upon the completion of the Subsequent Offering, all of the outstanding principal amount of, and accrued but
unpaid interest on, this Note shall automatically, without the necessity of any action by the Holder or the Company, convert into
Units of the Company at the conversion price per Unit (the “Conversion Price”) equal to 65% of the Subsequent
Offering Price. No fractional Units will be issued on conversion, but the number of Units shall be rounded to the nearest whole
number of Units. “Subsequent Offering” means the Company’s sale of its equity (or any convertible) securities
first sold after the date hereof and on or prior to the one (1) year anniversary of the Original Issue Date, yielding aggregate
gross proceeds to the Company of greater than $4,000,000. “Subsequent Offering Price” means the price per share
of common stock (or the conversion price of any security convertible into common stock) of the Company comprising or included in
the units (the “Units”) the Company sells in the Subsequent Offering. 


 


(b)          The
date upon which the conversion shall be effective (the “Conversion Date”) shall be deemed to be the date on
which the Subsequent Offering closes. The number of Units issuable upon conversion of this Note shall be determined by the quotient
obtained by dividing (x) the outstanding principal amount of this Note and accrued but unpaid interest hereon on the Conversion
Date by (y) the Conversion Price then in effect. The calculation by the Company of the number of Units to be received by the Holder
upon conversion hereof, and of the applicable Conversion Price, shall be conclusive absent manifest error. 


 


(c)          The
Holder shall be entitled to the same registration rights pari passu as are provided by the Company to the subscribers of the Units
in the Subsequent Offering. The Company shall afford the Holder the opportunity to become a party to all agreements and instruments
executed by the investors in the Subsequent Offering, including, but not limited to, a registration rights agreement (the “Registration
Rights Agreement”). The Registration Rights Agreement shall, among other things and subject to any cut-back comments
from the Securities and Exchange Commission, register the Conversion Shares and the Conversion Warrant Shares under the
Securities Act.


 



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(d)          Maximum
Conversion. Notwithstanding anything to the contrary contained in this Note, this Note shall not be convertible by the Holder
hereof to the extent (but only to the extent) that such conversion would cause the Holder and its affiliates (if they are not,
prior to such conversion, already beneficial owners of greater than 4.99% (the “Maximum Percentage”) of the
Company’s outstanding Common Stock) to beneficially own in excess of the Maximum Percentage of the Company’s outstanding
Common Stock; provided, however, that the Holder may waive the limitation imposed by this subsection, and/or increase the Maximum
Percentage to some other amount, upon at least sixty-one (61) days prior written notice to the Company. For the purposes of this
paragraph, beneficial ownership and all determinations and calculations (including, without limitation, with respect to calculations
of percentage ownership) shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder. The limitations contained in this paragraph shall apply to a successor Holder
of this Note. In the event the mandatory conversion of this Note upon any Subsequent Offering is restricted pursuant to this Section
1.03(d), the Company shall deliver to the Holder prompt notice thereof. At any time following receipt of such notice, the Holder
may elect, in its sole discretion, to demand (a “Cash Settlement Demand”) immediate repayment of principal and
interest on the unconverted portion of the Note. Unless and until the Holder provides the Company with a Cash Settlement Demand,
the unconverted portion of the Note shall remain outstanding, although interest shall cease to accrue thereon, until it can be
converted without violation of this Section 1.03(d).


 


Section 1.04        [Reserved].


 


Section 1.05        Absolute
Obligation/Ranking. 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, and liquidated damages (if any) on, this Note at the
time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company. This
Note ranks pari passu with all other Notes now issued pursuant to the Purchase Agreement.


 


Section 1.06        Paying
Agent and Registrar. Initially, the Company will act as paying agent and registrar. The Company may change any paying agent
or registrar, by giving the Holder not less than five (5) business days’ written notice of its election to do so, specifying
the name, address, telephone number and facsimile number of the paying agent or registrar. Upon an assignment of the Note to the
Company, the Company may act as paying agent and registrar without regard to the notice provision provided above.


 


Section 1.07       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 made for such registration of transfer or exchange.


 


Section 1.08       Investment
Representations. This Note has been issued subject to certain investment representations of the original Holder set forth in
the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal
and state securities laws and regulations.


 


Section 1.09       Reliance
on Note Register. Prior to due presentment to the Company for transfer or conversion 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.


 


Section 1.10       Other
Rights. In addition to the rights and remedies given it by this Note and the Purchase Agreement, the Holder shall have all
those rights and remedies allowed by applicable laws. The rights and remedies of the Holder are cumulative and recourse to one
or more right or remedy shall not constitute a waiver of the others. 


 


ARTICLE II


 


Section 2.01        Amendments
and Waiver of Default. The Note may not be amended without the consent of the Holder.


 


ARTICLE III


 


Section 3.01       Events
of Default. Each of the following events shall constitute a default under this Note (each an “Event of Default”):


 



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(a)      failure
by the Company to pay the principal amount when due hereunder within five (5) business days of receipt of written notice thereof;



 


(b)      failure
by the Company for five (5) business days after notice to it to comply with any of its other agreements in this Note; 


 


(c)      the
Company shall: (1) make a general assignment for the benefit of its creditors; (2) apply for or consent to the appointment
of a receiver, trustee, assignee, custodian, sequestrator, liquidator or similar official for itself or any of its assets and properties;
(3) commence a voluntary case for relief as a debtor under the United States Bankruptcy Code; (4) file with or otherwise
submit to any governmental authority any petition, answer or other document seeking: (A) reorganization, (B) an arrangement
with creditors or (C) to take advantage of any other present or future applicable law respecting bankruptcy, reorganization,
insolvency, readjustment of debts, relief of debtors, dissolution or liquidation; (5) file or otherwise submit any answer
or other document admitting or failing to contest the material allegations of a petition or other document filed or otherwise submitted
against it in any proceeding under any such applicable law, or (6) be adjudicated a bankrupt or insolvent by a court of competent
jurisdiction;


 


(d)      any
case, proceeding or other action shall be commenced against the Company for the purpose of effecting, or an order, judgment or
decree shall be entered by any court of competent jurisdiction approving (in whole or in part) anything specified in Section 3.01(c)
hereof, or any receiver, trustee, assignee, custodian, sequestrator, liquidator or other official shall be appointed with respect
to the Company, or shall be appointed to take or shall otherwise acquire possession or control of all or a substantial part of
the assets and properties of the Company, and any of the foregoing shall continue unstayed and in effect for any period of sixty
(60) days;


 


(e)      default
shall occur with respect to any indebtedness for borrowed money of the Company or under any agreement under which such indebtedness
may be issued by the Company and such default shall continue for more than the period of grace, if any, therein specified, if the
aggregate amount of such indebtedness for which such default shall have occurred exceeds $25,000;


 


(f)      default
shall occur with respect to any contractual obligation of the Company under or pursuant to any contract, lease, or other agreement
to which the Company is a party and such default shall continue for more than the period of grace, if any, therein specified, if
the aggregate amount of the Company’s contractual liability arising out of such default exceeds or is reasonably estimated
to exceed $25,000;


 


(g)      final
judgment for the payment of money in excess of $25,000 shall be rendered against the Company and the same shall remain undischarged
for a period of twenty (20) days during which execution shall not be effectively stayed;


 


(h)      any
event of default of the Company under any agreement, note, mortgage, security agreement or other instrument evidencing or securing
indebtedness that ranks senior in priority to, or pari passu with, the obligations under this Note and the Purchase Agreement;



 


(i)      any
material breach by the Company of any of its representations or warranties under the Purchase Agreement; or


 


(j)      any
material default, whether in whole or in part, shall occur in the due observance or performance of any obligations or other covenants,
terms or provisions to be performed under this Note or the Purchase Agreement which is not cured by the Company within five (5)
business days after receipt of written notice thereof. 


 



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Section 3.02      If
any Event of Default specified in clauses 3.01(d) or (e) occurs, then the full principal amount of this Note, together with any
other amounts owing in respect thereof, to the date of the Event of Default, shall become immediately due and payable without any
action on the part of the Holder, and if any other Event of Default occurs, the full principal amount of this Note, together with
any other amounts owing in respect thereof, to the date of acceleration shall become, at the Holder’s election, immediately
due and payable in cash. Commencing five (5) business days after the occurrence of any Event of Default that results in the
eventual acceleration of this Note, interest on this Note shall begin to accrue at the rate of interest specified in Section 1.01(b)
PLUS five (5%) percent per annum, or such lower maximum amount of interest permitted to be charged under applicable law. All
Notes for which the full amount hereunder shall have been paid in accordance herewith shall promptly be surrendered to or as directed
by the Company. The Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of
any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies
hereunder and all other remedies available to it under applicable law. Such declaration may be rescinded and annulled by the Holder
at any time prior to payment hereunder and the Holder shall have all rights as a Note holder until such time, if any, as the full
payment under this Section shall have been received by it. No such rescission or annulment shall affect any subsequent Event of
Default or impair any right consequent thereon.


 


ARTICLE IV


 


Section 4.01       Negative
Covenants. So long as this Note shall remain in effect and until any outstanding principal and interest and all fees and all
other expenses or amounts payable under this Note and the Purchase Agreement have been paid in full, unless all Holders shall otherwise
consent in writing, the Company shall not:


 


(a)        Senior
or Pari Passu Indebtedness. Incur, create, assume, guaranty or permit to exist any indebtedness that ranks senior in priority
to, or pari passu with, the obligations under this Note and the Purchase Agreement, except for (i) indebtedness existing on the
date hereof and set forth in Schedule A attached hereto and only to the extent that such indebtedness ranks senior in priority
to or pari passu with the obligations under this Note and the Purchase Agreement on the Original Issue Date, (ii) indebtedness
created as a result of a subsequent financing if the gross proceeds to the Company of such financing are equal to or greater than
the aggregate principal amount of the Notes and the Notes are repaid in full upon the closing of such financing and (iii) indebtedness
created as a result of the Subsequent Offering. 


 


(b)       Liens.
Create, incur, assume or permit to exist any lien on any property or assets (including stock or other securities of the Company)
now owned or hereafter acquired by it or on any income or revenues or rights in respect of any thereof, except:


 


(i)       liens
on property or assets of the Company existing on the date hereof and set forth in Schedule B attached hereto, provided that such
liens shall secure only those obligations which they secure on the date hereof;


 


(ii)          any
lien created under this Note or the Purchase Agreement;


 


(iii)
       any lien existing on any property or asset prior to the acquisition thereof by the Company, provided
that


 


1)
      such lien is not created in contemplation of or in connection with such acquisition and


 


2)
      such lien does not apply to any other property or assets of the Company;


 


(iv)         liens
for taxes, assessments and governmental charges;


 


(v)          carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s, landlord’s or other like liens arising in
the ordinary course of business and securing obligations that are not due and payable;


 


(vi)         pledges
and deposits made in the ordinary course of business in compliance, with workmen’s compensation, unemployment insurance and
other social security laws or regulations;


 



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(vii)        deposits
to secure the performance of bids, trade contracts (other than for indebtedness), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;


 


(viii)        zoning
restrictions, easements, licenses, covenants, conditions, rights-of-way, restrictions on use of real property and other similar
encumbrances incurred in the ordinary course of business and minor irregularities of title that, in the aggregate, are not substantial
in amount and do not materially detract from the value of the property subject thereto or interfere with the ordinary conduct of
the business of the Company;


 


(ix)          purchase
money security interests in real property, improvements thereto or equipment hereafter acquired (or, in the case of improvements,
constructed) by the Company, provided that


 


		1)	such security interests secure indebtedness permitted by this Note,



 


		2)	such security interests are incurred, and the indebtedness secured thereby is created, within 90
days after such acquisition (or construction),



 


		3)	the indebtedness secured thereby does not exceed 85% of the lesser of the cost or the fair market
value of such real property, improvements or equipment at the time of such acquisition (or construction) and



 


		4)	such security interests do not apply to any other property or assets of the Company;



 


(x)           liens
arising out of judgments or awards (other than any judgment that constitutes an Event of Default hereunder) in respect of which
the Company shall in good faith be prosecuting an appeal or proceedings for review and in respect of which it shall have secured
a subsisting stay of execution pending such appeal or proceedings for review, provided the Company shall have set aside on its
books adequate reserves with respect to such judgment or award; and


 


(xi)         deposits,
liens or pledges to secure payments of workmen’s compensation and other payments, public liability, unemployment and other
insurance, old-age pensions or other social security obligations, or the performance of bids, tenders, leases, contracts (other
than contracts for the payment of money), public or statutory obligations, surety, stay or appeal bonds, or other similar obligations
arising in the ordinary course of business.


 


(c)           Dividends
and Distributions. In the case of the Company, declare or pay, directly or indirectly, any dividend or make any other distribution
(by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, with respect to any shares
of its capital stock or directly or indirectly redeem, purchase, retire or otherwise acquire for value any shares of any class
of its capital stock or set aside any amount for any such purpose.


 


(d)          Limitation
on Certain Payments and Prepayments.


 


(i)         Pay
in cash any amount in respect of any indebtedness or preferred stock that may at the obligor’s option be paid in kind or
in other securities; or


 


(ii)       Optionally
prepay, repurchase or redeem or otherwise defease or segregate funds with respect to any indebtedness of the Company, other than
for senior indebtedness existing on the date hereof and set forth in Schedule A attached hereto, indebtedness under this Note or
the Purchase Agreement.


 


ARTICLE V


Section 5.01         
[Reserved].


 



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ARTICLE VI


 


Section
6.01     Notice. Notices regarding this Note shall be
sent to the parties at the following addresses, unless a party notifies the other parties, in writing, of a change of address:


 


	If to the Company, to:	Rackwise, Inc.
	 	2365 Iron Point Road, Suite 190
	 	Folsom, CA 95630
	 	Attention:  Guy A. Archbold, Chairman and CEO
	 	Facsimile:  415-358-4665
	 	 
	With a copy to:	Gottbetter & Partners, LLP
	 	488 Madison Avenue, 12th Floor
	 	New York, NY 10022
	 	Attention:  Adam S. Gottbetter, Esq.
	 	Facsimile:  212-400-6901
	 	 
	If to the Holder:	At the address set forth in the Purchase Agreement


 


Section 6.02      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 New York, 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 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 the City of New York,
Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York 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 any such court, or such New York 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 manner
permitted by 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 either
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 attorney’s fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.


 


Section 6.03      Severability.
The invalidity of any of the provisions of this Note shall not invalidate or otherwise affect any of the other provisions of this
Note, which shall remain in full force and effect.


 


Section 6.04      Entire
Agreement and Amendments. This Note, together with the Purchase Agreement, represents the entire agreement between the parties
hereto with respect to the subject matter hereof and there are no representations, warranties or commitments, except as set forth
herein. This Note may be amended only by an instrument in writing executed by the parties hereto.


 


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IN WITNESS WHEREOF,
with the intent to be legally bound hereby, the Company as executed this Note as of the date first written above.


 


	 	RACKWISE, INC.
	 	 
	 	By:	 
	 	 	  Name:  Guy A. Archbold
	 	 	  Title:    Chairman and CEO


 


[SIGNATURE PAGE TO BRIDGE CONVERTIBLE PROMISSORY NOTE]




 



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