Blueprint





 







EXHIBIT 4.1

 



SECURED PROMISSORY NOTE

 


FOR
VALUE RECEIVED, and subject to the terms and conditions set forth
herein, Eclipse Marketing LLC, a Delaware limited liability company
(the “Maker”),
hereby unconditionally promises to pay to the order of SpendSmart
Networks, Inc., a Delaware corporation (the “Noteholder”, and together with the
Maker, the “Parties”), the principal amount of
$750,000 (the “Debt”), together with all accrued
interest thereon, as provided in this Secured Promissory Note (the
“Note”, as the
same may be amended, restated, supplemented or otherwise modified
from time to time in accordance with its terms).

 


1.           Definitions.
Capitalized terms used herein shall have the meanings set forth in
this Section 1.

 


“AAA” has the meaning set forth in
Section 7.3(a).

 


“Applicable Rate” means
3%.

 


“Business Day” means a day other
than a Saturday, Sunday or other day on which commercial banks in
Detroit, Michigan are authorized or required by law to
close.

 


“Company” means SpendSmart
Networks, Inc., a California corporation.

 


“Debt” has the meaning set forth in
the introductory paragraph.

 


“Effective Date” means January 31,
2018.

 


“Governmental Authority” means the
government of any nation or any political subdivision thereof,
whether at the national, state, territorial, provincial, municipal
or any other level, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of, or pertaining to, government
(including any supranational bodies such as the European Union or
the European Central Bank).

 


“Law” as to any Person, means any
law (including common law), statute, ordinance, treaty, rule,
regulation, policy or requirement of any Governmental Authority and
authoritative interpretations thereon, whether now or hereafter in
effect, in each case, applicable to or binding on such Person or
any of its properties or to which such Person or any of its
properties is subject.

 


“Maker” has the meaning set forth
in the introductory paragraph.

 


“Maturity Date” means the date that
is the fifteen-month anniversary of the Effective
Date.

 


“Non-Payment Default” has the
meaning set forth in Section 6.3(a).

 


“Note” has the meaning set forth in
the introductory paragraph.

 


“Noteholder” has the meaning set
forth in the introductory paragraph.

 


“Parties” has the meaning set forth
in the introductory paragraph.

 


“Person” means any individual,
corporation, limited liability company, trust, joint venture,
association, company, limited or general partnership,
unincorporated organization, Governmental Authority or other
entity.

 


“Security Agreement” means the
Security Agreement, dated as of the date hereof, by and between the
Company and Noteholder, as the same may be amended, restated,
supplemented or otherwise modified from time to time in accordance
with its terms.

 


 




 








 






 


“Senior Debt” means the principal
of, premium, if any, interest (including interest accruing
subsequent to the filing of a petition initiating any proceeding
under any state, federal or foreign bankruptcy law, whether or not
a claim for post-petition interest is allowable as a claim in any
such proceeding) and rent payable on or termination payment with
respect to or in connection with, and all fees, costs, expenses,
reimbursement amounts, indemnities and other amounts accrued or due
on or in connection with, senior debt facilities or other working
capital financings owed of the Maker or the Company, whether
outstanding on the date of this Note or thereafter created,
incurred, assumed, guaranteed or in effect guaranteed by the Maker
and/or the Company (including all deferrals, renewals, extensions
or refundings of, or amendments, modifications or supplements to,
the foregoing).

 


2.           Final
Payment Date; Optional Prepayments.

 


2.1           Final
Payment Date. The aggregate unpaid principal amount of the
Debt, all accrued and unpaid interest and all other amounts payable
under this Note shall be due and payable on the Maturity
Date.

 


2.2           Optional
Prepayment. The Maker may prepay the Debt in whole or in
part at any time or from time to time without penalty or premium by
paying the principal amount to be prepaid together with accrued
interest thereon to the date of prepayment.

 


3.           Security
Agreement. The Maker’s performance of its obligations
hereunder is secured by a security interest in the collateral
specified in the Security Agreement.

 


4.           Interest.

 


4.1           Interest
Rate. Except as otherwise provided herein, the outstanding
principal amount of the Debt made hereunder shall bear interest at
the Applicable Rate from the Effective Date until the Debt is paid
in full, whether at maturity, upon acceleration, by prepayment or
otherwise.

 


4.2           Computation
of Interest. All computations of interest shall be made on
the basis of a year of 365 days and the actual number of days
elapsed. Interest shall accrue on the Debt on the Effective Date
and shall not accrue on the Debt on the day on which it is
paid.

 


4.3           Interest
Rate Limitation. If at any time and for any reason
whatsoever, the interest rate payable on the Debt shall exceed the
maximum rate of interest permitted to be charged by the Noteholder
to the Maker under applicable Law, that portion of each sum paid
attributable to that portion of such interest rate that exceeds the
maximum rate of interest permitted by applicable Law shall be
deemed a voluntary prepayment of principal.

 


5.           Payment
Mechanics.

 


5.1           Payment
Dates. The Debt shall be payable in monthly installments of
$20,000 beginning on the last day of the calendar month that
follows the month in which the Effective Date occurs and every
last-day of each calendar month thereafter; provided that all
amounts outstanding under this Note, including all accrued and
unpaid interest, shall be due and payable on the Maturity
Date.

 


5.2           Manner
of Payment. All payments of interest and principal shall be
made in lawful money of the United States of America on the date on
which such payment is due by cashier’s check, certified check
or by wire transfer of immediately available funds to the
Noteholder’s account at a bank specified by the Noteholder in
writing to the Maker from time to time.

 


5.3           Application
of Payments. All payments made hereunder shall be applied
first, to accrued interest and second, to the payment of the
principal amount outstanding under the Note.

 


5.4           Business
Day Convention. Whenever any payment to be made hereunder
shall be due on a day that is not a Business Day, such payment
shall be made on the next succeeding Business Day and such
extension will be taken into account in calculating the amount of
interest payable under this Note.

 


 




 








 






 


6.           Subordination.
Notwithstanding any provision in this Note to the contrary, the
following provisions apply to the Parties and, to the extent
contemplated below, relieve the Maker of its payment obligations
hereunder. For the avoidance of doubt, neither the Maker nor the
Company shall be liable for any amount or damage that arises from
or in connection with compliance with, or acts or omissions made in
accordance with or permitted by, this Article.

 


6.1           Agreement
to Subordinate. The Noteholder agrees that the Debt is and
shall be subordinate, to the extent and in the manner hereinafter
set forth, to the prior payment or satisfaction of all Senior Debt,
including any such Senior Debt incurred, created, assumed or
guaranteed after the date hereof, and that the subordination is for
the benefit of and enforceable by the holders of such Senior
Debt.

 


6.2           Liquidation;
Dissolution; Bankruptcy. The holders of the Senior Debt
shall first be entitled to receive payment in full of all amounts
due on or in respect of such Senior Debt (including interest after
commencement of any bankruptcy proceeding at the rate specified in
the documentation for the applicable Senior Debt) or provision
shall be made for such amount, or other payments satisfactory to
the holders of Senior Debt, before the Noteholder shall be entitled
to receive any payment with respect to the Debt, in the event of
any distribution to creditors of the Maker and/or the Company, as
applicable, in (a) any liquidation or dissolution; (b) any
bankruptcy, reorganization, insolvency, receivership or similar
proceeding: (c) any assignment for the benefit of creditors; or (d)
any marshalling of assets or liabilities.

 


6.3           Default
on Senior Debt.

 


(a)           The
Maker shall not make any payment in respect of the Debt if a
payment default on Senior Debt occurs and is continuing, the
maturity of all or any portion of Senior Debt has been accelerated
due to the occurrence of an event of default in accordance with its
terms, or any other default (a “Non-Payment Default”) occurs and
is continuing on all or any portion of Senior Debt that permits the
holder of such Senior Debt to accelerate its maturity.

 


(b)           Payments
on the Note may and will be resumed: (i) in the case of a payment
default on or acceleration of Senior Debt, on the date on which
such default is cured or waived and any such acceleration is
rescinded or on which such Senior Debt is discharged or paid in
full or other payment satisfactory to the holders of such Senior
Debt; and (ii) in the case of a Non-Payment Default, on the date on
which such default is cured or waived or on which such Senior Debt
is discharged or paid in full or other payment satisfactory to the
holders of such Senior Debt.

 


6.4           When
Distribution Must be Paid Over. If a payment or distribution
is made to the Noteholder that because of this Article should not
have been made, the Noteholder shall hold it in trust for the
holders of Senior Debt, segregated from other funds and property
held by the Noteholder, and pay it over to them (or their proper
representative) as their interests may appear.

 


6.5           Impairment
of Subordination. No right of any holder of Senior Debt to
enforce the subordination of this Note shall be impaired by any act
or failure to act by the Maker, the Company or the Noteholder or by
the failure of the Maker, the Company or the Noteholder to comply
with this Note.

 


6.6           Authorization
to Effect Subordination. The Noteholder, by accepting this
Note, authorizes and directs the Maker on the Noteholder’s
behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article and
appoints the Maker to act as the Noteholder’s
attorney-in-fact for any and all such purposes. Without limiting
the foregoing, the Noteholder will, at any time and from time and
at the Noteholder’s expense, promptly execute and deliver all
further instruments, documents and agreements, and take all further
action, that may be necessary or desirable or that the Maker may
reasonably request in order to protect any right or interest
granted or purported to be granted hereby or to enable the Maker,
the Company or any holder of Senior debt to exercise its rights and
remedies hereunder.

 


 




 

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6.7           Waivers.
The Noteholder hereby waives promptness, diligence, notice of
acceptance and any other notice with respect to the Senior Debt and
this Article and any requirement that any holder of Senior Debt
protect, secure, perfect or insure any security interest or any
property subject thereto or exhaust any right or take any action
against the Maker, the Company, any other Person or any collateral.
The Parties agree that the rights and interests of the holders of
Senior Debt hereunder and the obligations and agreements of the
Noteholder under this Article shall remain in full force and effect
regardless of: (a) any lack of validity or enforceability of the
Senior Debt, or any other agreement or instrument relating thereto;
(b) any change in the time, manner, place or terms of payment, or
in any other term of, all or any part of the Senior Debt, or any
other amendment or waiver of or any consent to modify the Senior
Debt, including, without limitation, any increase in the
obligations under the Senior Debt from additional extensions of
credit or otherwise; (c) any taking, exchange, release or
non-perfection of any collateral, or any taking, release or
amendment or other modification of any guaranty, for the Senior
Debt; (d) any manner of application of collateral, including
proceeds, to the Senior Debt, or any manner of sale or other
disposition of any collateral for the Senior Debt or any other
assets of the Maker or the Company; (e) any modification or
termination of the corporate structure or existence of the Maker or
the Company; or (f) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, the Maker,
the Company or a subordinated creditor.

 


6.8           Reinstatement.
The provisions of this Article shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any
of the Senior Debt is rescinded or must otherwise by returned upon
the insolvency, bankruptcy or reorganization of the Maker, the
Company or otherwise, all as though such payment had not been
made.

 


6.9           No
Waiver; Remedies. No failure or delay by any holder of
Senior Debt to exercise any of its rights and remedies under this
Article shall constitute a waiver thereof, nor shall any partial
exercise of any right or remedy preclude any further exercise of
such right or of any other right. The remedies herein are
cumulative and not exclusive of any remedies provided by
law.

 


6.10           Continuing
Agreement; Assignments. The provisions of this Article
constitute a continuing agreement and shall remain in full force
and effect until payment in full of the Senior Debt, be binding on
the Noteholder and its respective successors and assigns, and inure
to the benefit of, and be enforceable by, the holders of the Senior
Debt and their respective successors and assigns Any holder of
Senior Debt may assign or otherwise transfer all or a part of its
rights and obligations under the Senior Debt to any other Person
and such Person shall thereupon be vested with all the rights
granted in this Article to such holder of Senior Debt in respect
thereof.

 


7.           Miscellaneous.

 


7.1           Notices.
All notices, requests or other communications required or permitted
to be delivered hereunder shall be delivered in writing, to such
address and otherwise in accordance with that certain Stock
Purchase Agreement, dated October 5, 2017, by and between the
Parties (“SPA”).
Notwithstanding any provision in this Note to the contrary, the
Noteholder acknowledges and agrees that, in the event the
Noteholder becomes liable for payments due to the Maker under the
SPA, the Maker may, in its sole discretion, offset the amounts due
from the Maker hereunder by the amount of such
payments.

 


7.2           Governing
Law. This Note, the Security Agreement and any claim,
controversy, dispute or cause of action (whether in contract or
tort or otherwise) based upon, arising out of or relating to this
Note and the Security Agreement and the transactions contemplated
hereby and thereby shall be governed by the laws of the State of
Michigan without giving effect to any choice or conflict of law
provision or rule (whether of the State of Michigan or any other
jurisdiction).

 


 




 

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7.3           Arbitration.

 


(a)           Except
for claims seeking injunctive or other equitable relief, any
controversy or claim arising out of or relating to this Note or the
Security Agreement or a breach of either of the foregoing, shall be
settled by binding arbitration in Detroit, Michigan (or such other
location as may be agreed to by the parties) to be administered by
the American Arbitration Association (“AAA”) in accordance with its
then-prevailing Commercial Rules of Arbitration. The Maker and the
Noteholder shall select an arbitrator from a list provided by the
AAA that is mutually satisfactory to them. If the Maker and the
Noteholder are unable to agree on an arbitrator, then each (i.e.,
the Maker on the one hand and the Noteholder on the other) shall
choose an arbitrator from a list provided by the AAA. The two
arbitrators so selected shall then select a third arbitrator
mutually satisfactory to them from the list provided by the AAA.
The single arbitrator so selected by the aforesaid procedure shall
hear the dispute and decide it. The arbitrator selected shall not
be a present or former officer, employee, consultant or
representative of any of the parties or any of their affiliates.
The arbitrator shall have a background and training in the general
areas of law covered by this Note and the Security Agreement. The
arbitrator shall have the right to award costs, fees and expenses,
including, without limitation, the arbitrator’s fees and
reasonable attorneys’ fees, to the prevailing party. A party
shall be entitled to have a judgment entered on the determination
or decision of the arbitrator in any court of competent
jurisdiction. The award of the arbitrator shall be binding and
final on all parties.

 


(b)           EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS NOTE OR THE SECURITY AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR
RELATING TO THIS NOTE, THE SECURITY AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS NOTE CERTIFIES
AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL
ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS
WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH
PARTY HAS BEEN INDUCED TO ENTER INTO THIS NOTE BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

 


7.4           Counterparts;
Integration; Effectiveness. This Note and any amendments,
waivers, consents or supplements hereto may be executed in
counterparts, each of which shall constitute an original, but all
taken together shall constitute a single contract. This Note and
the Security Agreement constitute the entire contract between the
Parties with respect to the subject matter hereof and supersede all
previous agreements and understandings, oral or written, with
respect thereto. Delivery of an executed counterpart of a signature
page to this Note by facsimile or in electronic (i.e.,
“pdf” or “tif”) format shall be effective
as delivery of a manually executed counterpart of this
Note.

 


7.5           Successors
and Assigns. This Note shall inure to the benefit of and be
binding upon the parties hereto and their permitted
assigns.

 


7.6           Amendments
and Waivers. No term of this Note may be waived, modified or
amended except by an instrument in writing signed by both of the
parties hereto. Any waiver of the terms hereof shall be effective
only in the specific instance and for the specific purpose
given.

 


7.7           Headings.
The headings of the various Sections and subsections herein are for
reference only and shall not define, modify, expand or limit any of
the terms or provisions hereof.

 


7.8           Severability.
If any term or provision of this Note or the Security Agreement is
invalid, illegal or unenforceable in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any
other term or provision of this Note or the Security Agreement or
invalidate or render unenforceable such term or provision in any
other jurisdiction.

 


[SIGNATURE
PAGE FOLLOWS]

 


 




 

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IN
WITNESS WHEREOF, the Maker has executed this Note as of the
Effective Date.

 


Eclipse
Marketing LLC

 


By_____________________

 


Name:
Michael C. Skaff

 


Title:
Authorized Person

 



ACKNOWLEDGED AND AGREED:

 


SpendSmart
Networks, Inc.

 


By____________________

 


Name:
Luke Wallace

 


Title:
Chief Executive Officer


 




 

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