EXHIBIT 10.16


 


 


THE SECURITIES OFFERED
HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER (THE "1933 ACT)


 


 


 US $65,625.00 


 


AGRITEK HOLDINGS, INC.


8% CONVERTIBLE REDEEMABLE NOTE


DUE JANUARY 19, 2017


BACK END NOTE


 


FOR VALUE RECEIVED,
AGRITEK HOLDINGS, Inc. (the “Company”) promises to pay to the order of LG CAPITAL FUNDING, LLC and its authorized
successors and permitted assigns ("Holder"), the aggregate principal face amount of Sixty Five Thousand Six Hundred
Twenty Five Dollars exactly (U.S. $65,625.00) on January 19, 2017 ("Maturity Date") and to pay interest on the
principal amount outstanding hereunder at the rate of 8% per annum commencing on January 19, 2016. The interest will be paid to
the Holder in whose name this Note is registered on the records of the Company regarding registration and transfers of this Note.
The principal of, and interest on, this Note are payable at 1218 Union Street, Suite #2, Brooklyn, NY 11225, initially, and if
changed, last appearing on the records of the Company as designated in writing by the Holder hereof from time to time. The Company
will pay each interest payment and the outstanding principal due upon this Note on the Maturity Date, less any amounts required
by law to be deducted or withheld, to the Holder of this Note by check or wire transfer addressed to such Holder at the last address
appearing on the records of the Company. The forwarding of such check or wire transfer shall constitute a payment of outstanding
principal hereunder and shall satisfy and discharge the liability for principal on this Note to the extent of the sum represented
by such check or wire transfer. Interest shall be payable in Common Stock (as defined below) pursuant to paragraph 4(b) herein.


 


This Note is subject
to the following additional provisions:


 


1.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 or transfer or exchange, except that Holder shall
pay any tax or other governmental charges payable in connection therewith.


 


2.The Company
shall be entitled to withhold from all payments any amounts required to be withheld under applicable laws.


 


3.This Note may
be transferred or exchanged only in compliance with the Securities Act of 1933, as amended ("Act") and applicable
state securities laws. Any attempted transfer to a non-qualifying party shall be treated by the Company as void. Prior to due
presentment for transfer 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 Company's records as the owner hereof for all other purposes, whether or not this Note be overdue, and
neither the Company nor any such agent shall be affected or bound by notice to the contrary. Any Holder of this Note electing
to exercise the right of conversion set forth in Section 4(a) hereof, in addition to the requirements set forth in Section 4(a),
and any prospective transferee of this Note, also is required to give the Company written confirmation that this Note is being
converted ("Notice of Conversion") in the form annexed hereto as Exhibit A. The date of receipt (including
receipt by telecopy) of such Notice of Conversion shall be the Conversion Date.


 


4.(a)The Holder
of this Note is entitled, at its option, after full cash payment for the shares convertible hereunder, to convert all or
any amount of the principal face amount of this Note then outstanding into shares of the Company's common stock (the "Common
Stock"), at a price ("Conversion Price") for each share of Common Stock equal to 58% of the lowest
closing bid price of the Common Stock as reported on the OTCQB maintained by the OTC Markets Group, Inc. upon which the
Company’s shares are traded or any exchange upon which the Common Stock may be traded in the future ("Exchange"),
for the eighteen prior trading days including the day upon which a Notice of Conversion is
received by the Company or its transfer agent (provided such Notice of Conversion is delivered by fax or other electronic method
of communication to the Company or its transfer agent after 4 P.M. Eastern Standard or Daylight Savings Time if the Holder wishes
to include the same day closing price). If the shares have not been delivered within 3 business days, the Notice of Conversion
may be rescinded. Such conversion shall be effectuated by the Company delivering the shares of Common Stock to the Holder within
3 business days of receipt by the Company of the Notice of Conversion. Accrued but unpaid interest shall be subject to conversion.
No fractional shares or scrip representing fractions of shares will be issued on conversion, but the number of shares issuable
shall be rounded to the nearest whole share. To the extent the Conversion Price of the Company’s Common Stock closes
below the par value per share, the Company will take all steps necessary to solicit the consent of the stockholders to reduce
the par value to the lowest value possible under law. The Company agrees to honor all conversions submitted pending this increase.
In the event the Company experiences a DTC “Chill” on its shares, the conversion price shall be decreased to 48%
instead of 58% while that “Chill” is in effect. In no event shall the Holder be allowed to effect a conversion
if such conversion, along with all other shares of Company Common Stock beneficially owned by the Holder and its affiliates would
exceed 9.9% of the outstanding shares of the Common Stock of the Company.


 


(b)Interest on
any unpaid principal balance of this Note shall be paid at the rate of 8% per annum. Interest shall be paid by the Company in
Common Stock ("Interest Shares"). Holder may, at any time, send in a Notice of Conversion to the Company for Interest
Shares based on the formula provided in Section 4(a) above. The dollar amount converted into Interest Shares shall be all or a
portion of the accrued interest calculated on the unpaid principal balance of this Note to the date of such notice.


 


(c)This Note may
not be prepaid, except that if the $76,080.67 Rule 144 convertible redeemable note issued by the Company of even date herewith
is redeemed by the Company within 6 months of the issuance date of such Note, all obligations of the Company under this Note and
all obligations of the Holder under the Holder issued Back End Note will be automatically be deemed satisfied and this Note and
the Holder issued Back End Note will be automatically be deemed cancelled and of no further force or effect.


 


(d) Upon (i) a
transfer of all or substantially all of the assets of the Company to any person in a single transaction or series of related transactions,
(ii) a reclassification, capital reorganization or other change or exchange of outstanding shares of the Common Stock, or (iii)
any consolidation or merger of the Company with or into another person or entity in which the Company is not the surviving entity
(other than a merger which is effected solely to change the jurisdiction of incorporation of the Company and results in a reclassification,
conversion or exchange of outstanding shares of Common Stock solely into shares of Common Stock) (each of items (i), (ii) and
(iii) being referred to as a "Sale Event"), then, in each case, the Company shall, upon request of the Holder, redeem
this Note in cash for 150% of the principal amount, plus accrued but unpaid interest through the date of redemption, or at the
election of the Holder, such Holder may convert the unpaid principal amount of this Note (together with the amount of accrued
but unpaid interest) into shares of Common Stock immediately prior to such Sale Event at the Conversion Price.


 


(e) In case of
any Sale Event in connection with which this Note is not redeemed or converted, the Company shall cause effective provision to
be made so that the Holder of this Note shall have the right thereafter, by converting this Note, to purchase or convert this
Note into the kind and number of shares of stock or other securities or property (including cash) receivable upon such reclassification,
capital reorganization or other change, consolidation or merger by a holder of the number of shares of Common Stock that could
have been purchased upon exercise of the Note and at the same Conversion Price, as defined in this Note, immediately prior to
such Sale Event. The foregoing provisions shall similarly apply to successive Sale Events. If the consideration received by the
holders of Common Stock is other than cash, the value shall be as determined by the Board of Directors of the Company or successor
person or entity acting in good faith.


 


5.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 interest on, this Note at the time, place, and rate, and in the form, herein prescribed.


 


6.The Company
hereby expressly waives demand and presentment for payment, notice of non-payment, protest, notice of protest, notice of dishonor,
notice of acceleration or intent to accelerate, and diligence in taking any action to collect amounts called for hereunder and
shall be directly and primarily liable for the payment of all sums owing and to be owing hereto.


 


7.The Company
agrees to pay all costs and expenses, including reasonable attorneys' fees and expenses, which may be incurred by the Holder in
collecting any amount due under this Note.


 


8.If one or more
of the following described "Events of Default" shall occur:


 


(a)The Company
shall default in the payment of principal or interest on this Note or any other note issued to the Holder by the Company; or


 


(b)Any of the
representations or warranties made by the Company herein or in any certificate or financial or other written statements heretofore
or hereafter furnished by or on behalf of the Company in connection with the execution and delivery of this Note, or the Securities
Purchase Agreement under which this note was issued shall be false or misleading in any material respect; or


 


(c)The Company
shall fail to perform or observe, in any respect, any covenant, term, provision, condition, agreement or obligation of the Company
under this Note or any other note issued to the Holder; or


 


(d)The Company
shall (1) become insolvent; (2) admit in writing its inability to pay its debts generally as they mature; (3) make an assignment
for the benefit of creditors or commence proceedings for its dissolution; (4) apply for or consent to the appointment of a trustee,
liquidator or receiver for its or for a substantial part of its property or business; (5) file a petition for bankruptcy relief,
consent to the filing of such petition or have filed against it an involuntary petition for bankruptcy relief, all under federal
or state laws as applicable; or


 


(e)A trustee,
liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without its consent
and shall not be discharged within thirty (30) days after such appointment; or


 


(f)Any governmental
agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control of the
whole or any substantial portion of the properties or assets of the Company; or


 


(g)One or more
money judgments, writs or warrants of attachment, or similar process, in excess of fifty thousand dollars ($50,000) in the aggregate,
shall be entered or filed against the Company or any of its properties or other assets and shall remain unpaid, unvacated, unbonded
or unstayed for a period of fifteen (15) days or in any event later than five (5) days prior to the date of any proposed sale
thereunder; or


 


(h)defaulted on
or breached any term of any other note of similar debt instrument into which the Company has entered and failed to cure such default
within the appropriate grace period; or


 


(i)The Company
shall have its Common Stock delisted from a trading market (including the OTC BB market) or, if the Common Stock trades on an
exchange, then trading in the Common Stock shall be suspended for more than 10 consecutive days or ceases to file its 1934 act
reports with the SEC;


 


(j)If a majority
of the members of the Board of Directors of the Company on the date hereof are no longer serving as members of the Board;


 


(k)The Company
shall not deliver to the Holder the Common Stock pursuant to paragraph 4 herein without restrictive legend within 3 business days
of its receipt of a Notice of Conversion; or


 


(l) The Company
shall not replenish the reserve set forth in Section 12, within 3 business days of the request of the Holder.


 


(m)The Company’s
Common Stock has a closing bid price of less than $0.0005 per share for at least 5 consecutive trading days; or


 


(n) The aggregate
dollar trading volume of the Company’s Common Stock is less than thirty thousand dollars ($30,000.00) in any 5 consecutive
trading days; or


 


(o) The Company
shall cease to be “current” in its filings with the Securities and Exchange Commission; or


 


(p) The Company shall lose
the “bid” price for its stock in a market (including the OTCBB marketplace or other exchange)


 


Then, or at any time thereafter, unless
cured (except for 8(m) and 8(n) which are incurable defaults, the sole remedy of which is to allow the Holder to cancel
both this Note and the Holder Issued Note, and in each and every such case, unless such Event of Default shall have been waived
in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) at the option of the Holder
and in the Holder's sole discretion, the Holder may consider this Note immediately due and payable, without presentment, demand,
protest or (further) notice of any kind (other than notice of acceleration), all of which are hereby expressly waived, anything
herein or in any note or other instruments contained to the contrary notwithstanding, and the Holder may immediately, and without
expiration of any period of grace, enforce any and all of the Holder's rights and remedies provided herein or any other rights
or remedies afforded by law. Upon an Event of Default, interest shall accrue at a default interest rate of 24% per annum or, if
such rate is usurious or not permitted by current law, then at the highest rate of interest permitted by law. In the event of a
breach of Section 8(k) the penalty shall be $250 per day the shares are not issued beginning on the 4th day after the
conversion notice was delivered to the Company. This penalty shall increase to $500 per day beginning on the 10th day.
The penalty for a breach of Section 8(p) shall be an increase of the outstanding principal amounts by 20%. In case of a breach
of Section 8(i), the outstanding principal due under this Note shall increase by 50%. Further, if a breach of Section 8(o) occurs
or is continuing after the 6 month anniversary of the Note, then the Holder shall be entitled to use the lowest closing bid price
during the delinquency period as a base price for the conversion. For example, if the lowest closing bid price during the delinquency
period is $0.01 per share and the conversion discount is 50% the Holder may elect to convert future conversions at $0.005 per share.
If this Note is not paid at maturity, the outstanding principal due under this Note shall increase by 10%.


 


If the Holder shall commence an action
or proceeding to enforce any provisions of this Note, including, without limitation, engaging an attorney, then if the Holder prevails
in such action, the Holder shall be reimbursed by the Company for its attorneys’ fees and other costs and expenses incurred
in the investigation, preparation and prosecution of such action or proceeding.


 


Make-Whole for Failure
to Deliver Loss. At the Holder’s election, if the Company fails for any reason to deliver to the Holder the conversion shares
by the by the 3rd business day following the delivery of a Notice of Conversion to the Company and if the Holder incurs a Failure
to Deliver Loss, then at any time the Holder may provide the Company written notice indicating the amounts payable to the Holder
in respect of the Failure to Deliver Loss and the Company must make the Holder whole as follows:


 


Failure to Deliver Loss = [(High trade
price at any time on or after the day of exercise) x (Number of conversion shares)]


 


The Company must pay the Failure to Deliver
Loss by cash payment, and any such cash payment must be made by the third business day from the time of the Holder’s written
notice to the Company.


 


9.In case any
provision of this Note is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable,
such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and
the validity and enforceability of the remaining provisions of this Note will not in any way be affected or impaired thereby.


 


10.Neither this
Note nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the Company
and the Holder.


 


11.The Company
represents that it is not a “shell” issuer and has not been a “shell” issuer for the 12 months following
the Company’ having reported Form 10 type information indicating it is no longer a “shell issuer.


 


12.Prior to cash
funding of this Note, The Company will issue irrevocable transfer agent instructions reserving 3x the number of shares of Common
Stock necessary to allow the holder to convert this note based on the discounted conversion price set forth in Section 4(a) herewith.
Upon full conversion of this Note, the reserve representing this Note shall be cancelled. The Company will pay all transfer agent
costs associated with issuing and delivering the shares. If such amounts are to be paid by the Holder, it may deduct such amounts
from the Conversion Price. Conversion Notices may be sent to the Company or its transfer agent via electric mail. The Company
will instruct its transfer agent to provide the outstanding share information to the Holder in connection with its conversions.


 


13.The Company
will give the Holder direct notice of any corporate actions, including but not limited to name changes, stock splits, recapitalizations
etc. This notice shall be given to the Holder as soon as possible under law.


 


14.This Note shall
be governed by and construed in accordance with the laws of New York applicable to contracts made and wholly to be performed within
the State of New York and shall be binding upon the successors and assigns of each party hereto. The Holder and the Company hereby
mutually waive trial by jury and consent to exclusive jurisdiction and venue in the courts of the State of New York. This Agreement
may be executed in counterparts, and the facsimile transmission of an executed counterpart to this Agreement shall be effective
as an original.






    	 	 	 



     


    

 


IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by an officer thereunto duly authorized.


 


 


Dated: January 19, 2016


 


AGRITEK HOLDINGS, INC.


 


By: /s/ B. Michael Friedman


 


Title: Chief Executive Officer







    	 	 	 



     


    



EXHIBIT A


 


 


NOTICE OF CONVERSION


 


(To be Executed by
the Registered Holder in order to Convert the Note)


 


The undersigned hereby
irrevocably elects to convert $___________ of the above Note into _________ Shares of Common Stock of AGRITEK HOLDINGS, Inc. (“Shares”)
according to the conditions set forth in such Note, as of the date written below.


 


If Shares are to be
issued in the name of a person other than the undersigned, the undersigned will pay all transfer and other taxes and charges payable
with respect thereto.


 


Date of Conversion: _________________________________________________________


Applicable Conversion Price: __________________________________________________


Signature: _________________________________________________________________


[Print Name of Holder and Title of Signer]


Address: __________________________________________________________________


__________________________________________________________________________


 


SSN or EIN: _______________________


Shares are to be registered in the following name: _________________________________


 


Name: ____________________________________________________________________


Address: __________________________________________________________________


Tel: _________________________________


Fax: _________________________________


SSN or EIN: __________________________


 


Shares are to be sent or delivered to the following account:


 


Account Name: _____________________________________________________________


Address: __________________________________________________________________