SEC Connect





 






THIS
NOTE HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE
TRANSFERRED UNTIL (i) A REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”) SHALL HAVE BECOME
EFFECTIVE WITH RESPECT THERETO OR (ii) RECEIPT BY THE COMPANY OF AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE
EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED IN
CONNECTION WITH SUCH PROPOSED TRANSFER NOR IS IN VIOLATION OF ANY
APPLICABLE STATE SECURITIES LAWS.  THIS LEGEND SHALL BE
ENDORSED UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS NOTE.
NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.

 





	
 Principal
Amount: $100,000


	
 Issue
Date: JANUARY 23, 2017














 


SPENDSMART NETWORKS, INC.


 

9%
CONVERTIBLE PROMISSORY NOTE


 


FOR
VALUE RECEIVED, SpendSmart
Networks, Inc, a corporation organized under the laws of the
State of Delaware (hereinafter called “Borrower” or the
“Company”),
hereby promises to pay to ISAAC BLECH, or its
permitted registered assigns or successors in interest or order
(the “Holder”),
without demand, the sum of One Hundred Thousand
Dollars (US $100,000) (the “Principal Amount”), with simple
interest at the annual rate of nine percent (9%) on the Maturity
Date (as hereinafter defined) if and to the extent not sooner paid
or converted. The “Maturity
Date” of this Note shall be the date that is six (6)
months from the date hereof, subject to conversion and acceleration
as provided in Section
2 or Section
3 hereof. This Note is not
secured and is convertible as provided herein.


 



ARTICLE I


INTEREST


         
    1.1       
Interest Rate.
Interest on this Note shall be simple interest and accrue at the
annual rate of nine percent (9%) per annum payable on the Maturity
Date. All computations of interest payable hereunder shall be on
the basis of a 365-day year and actual days elapsed in the period
for which such interest is payable.


 



ARTICLE
II



CONVERSION RIGHTS


 




         
     2.1       
Voluntary
Conversion. In the event of a
closing by the Borrower of a Qualified Financing (as defined below)
before the Maturity Date, the Holder may convert the principal of
this Note together with any accrued and unpaid interest thereon,
into the Qualified Financing on the terms and conditions of the
Qualified Financing. Borrower will credit Holder with the converted
amount in the Qualified Financing. A “Qualified
Financing” shall mean the
closing of one or more financings to include the issuance or
conversion of securities in which Borrower receives gross proceeds
totaling at least $200,000. In the event that this Note is
converted in accordance with this Section 2.1, then Holder shall
become a party to the offering agreements of the Qualified
Financing, in customary form.

 

       
      2.2   
    Issuance of
Replacement Note. Upon any loss
or destruction of this Note, a replacement Note containing the same
date and provisions of this Note shall be
issued by the Company to the Holder for the outstanding
Principal Amount of this Note and accrued interest which shall not
have been converted or paid.

 

 




 








 










 



ARTICLE III



EVENTS OF DEFAULT


 


3.1       
The occurrence of any of the following
events of default (“Event of
Default”) shall, at the
option of the Holder hereof, make all sums of principal and
interest then remaining unpaid hereon and all other amounts payable
hereunder immediately due and payable, upon demand, without
presentment, or grace period, all of which hereby are expressly
waived, except as set forth below. Any provisions of this Article III
notwithstanding, this Note shall be subordinate to all of
Borrower’s promissory notes in existence at the time of this
issuance.


 


3.2       
Failure to
Pay Principal or Interest. The
Borrower fails to pay any the Principal Amount, interest or other
sum due under this Note when due and such failure continues for a
period of fourteen (14) calendar days after receipt by the Borrower
of written notice of such default.


 


3.3       
Breach of
Covenant. The Borrower breaches
any material covenant or other term or condition of this Note and
such breach, if subject to cure, continues for a period of 10
business days after written notice to the Borrower from the
Holder, provided that if such breach cannot reasonably be
cured within such 10-day period and Borrower shall have commenced
to cure such breach within such 10-day period and thereafter
diligently proceeds to cure the same, such 20-day period shall be
extended for so long as it shall require the Borrower in the
exercise of due diligence to cure such default, not to exceed 45
business days in the aggregate.
Provided that such notice requirement shall only apply if Holder
receives notice from the Company.


 


3.4       
Receiver
or Trustee. The Borrower or any
Subsidiary of Borrower shall make an assignment for the benefit of
creditors, or apply for or consent to the appointment of a receiver
or trustee for them or for a substantial part of their property or
business; or such a receiver or trustee shall otherwise be
appointed and not dismissed within 60 calendar
days.


 


       
      3.5   
     Bankruptcy.
Bankruptcy, insolvency, reorganization, or liquidation proceedings
or other proceedings or relief under any bankruptcy law or any law,
or the issuance of any notice in relation to such event, for the
relief of debtors shall be instituted by or against the Borrower or
any Subsidiary of Borrower and if instituted against them are not
dismissed within 60 calendar days of initiation.


 


3.6        Sale
of Assets. A disposition of all or substantially all of the assets
of the Borrower (excluding any transaction relating to the sale and
lease back of the Borrower’s equipment).


 



ARTICLE IV



MISCELLANEOUS


 


4.1       
Failure or
Indulgence Not Waiver. No
failure or delay on the part of Holder hereof in the exercise of
any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise
thereof or of any other right, power or privilege. All rights and
remedies existing hereunder are cumulative to, and not exclusive
of, any rights or remedies otherwise available.


 


4.2       
Notices.
All notices and other communications required or permitted
hereunder shall be in writing and shall be effective when delivered
personally, provided that a copy is mailed by registered mail,
return receipt requested, or when received by the addressee, if
sent by Express Mail, Federal Express or other express delivery
service (receipt requested) in each case to the appropriate address
set forth below:


 



If to the
Borrower:             



SpendSmart
Networks, Inc.






805
Aerovista Pkwy, Suite 205


San
Luis Obispo, CA 93401


Attn:
Luke Wallace, Chief Executive Officer


 



   



If to the
Holder:
 


              
At the address set forth in the first paragraph
herein.






 


 




 








 






 


4.3       
Amendment
Provision. The term
“Note” and all reference thereto, as used throughout
this instrument, shall mean this instrument as originally executed,
or if later amended or supplemented or reissued, then as so amended
or supplemented or reissued.


 


4.4       
Assignees.
This Note, and the conversion rights described herein, shall not be
assignable by the Holder without the prior written consent of the
Borrower, which shall not be unreasonably withheld. Subject to the
restrictions of the preceding sentence, the rights and obligations
of the Borrower and the Holder shall be binding upon and benefit
the successors, assign, heirs, administrators and transferees of
the parties.


 





4.6       
Governing Law. This
Note shall be governed by and construed in accordance with the laws
of the State of California. Any action brought by either party
against the other concerning the transactions contemplated by this
Agreement shall be brought only in the State Supior Court of the
State of California, County of San Luis Obispo (or any federal
courts having jurisdiction of such area). Both parties agree to
submit to the jurisdiction of such courts. In the event that any provision of this Note is
invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent
that it may conflict therewith and shall be deemed modified to
conform with such statute or rule of law. Any such provision which
may prove invalid or unenforceable under any law shall not affect
the validity or unenforceability of any other provision of this
Note.


 





4.7       
Redemption.
This Note may be prepaid by the Borrower, in whole or in part, at
any time and from time to time, without premium or
penalty.


 



[Signature page follows]


 


 



 







 






 


IN WITNESS
WHEREOF, Borrower has caused
this Note to be signed in its name by an authorized officer as of
the 23rd day of January 2017.


 






SPENDSMART NETWORKS, INC.:


 


 


 


 


By:________________________________


Name:
Luke Wallace


Title:
Chief Executive Officer








 


 


 


 


 



[Signature Page to Convertible Promissory Note of SpendSmart
Networks, Inc.]