Exhibit 10.15


 


 


 


 


NEITHER THIS NOTE NOR THE SECURITIES
INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE. THESE SECURITIES HAVE BEEN SOLD IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.


 


 


RED
CAT HOLDINGS, INC.


Convertible
Note


	Issuance Date: ______________, 2020	Original Principal Amount:$________
	 	 
	 	 


 


FOR VALUE RECEIVED,
RED CAT HOLDINGS, INC., a Nevada corporation (the "Company"), hereby promises to pay to or his
registered assign (the "Holder"), the amount set out above as the Original Principal Amount when due, whether
upon the Maturity Date (as defined below), acceleration or otherwise (in each case in accordance with the terms hereof) and to
pay interest ("Interest") on the outstanding Principal Amount at the Interest Rate (as defined below) from the
date set out above as the Issuance Date (the "Issuance Date") until the same becomes due and payable, upon the
Maturity Date, acceleration or conversion (in each case in accordance with the terms hereof).


(1)
GENERAL TERMS


(a)
Payment of Principal. The "Maturity Date" shall be two years from the Issuance Date, unless an Event
of Default (as defined below) shall have occurred and be continuing.


(b)
Interest. Interest shall accrue at a rate of 12% (“Interest Rate”) per annum and shall be applied
to the outstanding Original Principal Amount. Interest hereunder shall be paid on the Maturity Date (or sooner as provided herein)
to the Holder or its assignee in whose name this Note is registered on the records of the Company regarding registration and transfers
of Notes in cash, or in shares of common stock of the Company (the “Common Stock”) at the Conversion Price (as
defined below).


(c)
Security. This Note shall not be secured by any collateral or any assets pledged to the Holder.


(i)
Prepayment. Notwithstanding anything contained herein to the contrary, the Company shall have the right to prepay
all or any portion of the outstanding Principal Amount and accrued interest thereon, without penalty or premium, upon no less than
ten business days’ prior notice to the Holder provided that (i) such amount must be paid in cash on the next business
day following such 10 business day notice period, and (ii) the Holder may still convert this Note pursuant to the terms hereof
at all times until such prepayment amount has been received in full.


(2)
TERMS OF FUTURE FINANCINGS. 


(a)
So long as this Note is outstanding, upon any issuance by the Company of any security, or an amendment to a security that
was issued before the date hereof, with any term that the Holder reasonably believes is more favorable to the holder of such security
or with a term in favor of the holder of such security that the Holder reasonably believes was not similarly provided to the Holder,
(I) the Company shall notify the Holder of such additional or more favorable term within one (1) business day of the issuance
and/or amendment (as applicable) of the respective security, and (ii) such term, at Holder’s option, shall become a part
of this Note regardless of whether the Company has complied with the notification provision of this section. The types of terms
contained in another security that may be more favorable to the holder of such security include, but are not limited to, terms
addressing conversion discounts, prepayment rate, conversion lookback periods, interest rates, and original issue discounts. Notwithstanding
the foregoing, the issuance of any security which is an Exempt Issuance (as defined below) shall not entitle to the Holder to such
more favorable term.


(3)
CONVERSION OF NOTE.This Note shall be convertible into shares of the Company's Common Stock, on the terms and
conditions set forth in this Section 3.


(i)
"Conversion Amount" means the portion of the Original Principal Amount and interest to be converted.


(ii)
"Conversion Price" shall be the lower of (a) $1.00, if the conversion herein occurs prior a Qualified Offering,
or (b) a 25% discount of the price per share of Common Stock offered in the Qualified Offering, if the conversion herein occurs
simultaneous with the Qualified Offering.


(iii)
“Exempt Issuance” shall mean the issuance of (a) shares of Common Stock or options to employees, officers
or directors of the Company pursuant to any stock or option plan duly adopted for such purpose, (b) securities upon the exercise
or exchange of or conversion of any Shares issued hereunder and/or other securities exercisable or exchangeable for or convertible
into shares of Common Stock issued and outstanding on the date of this Agreement, unless an amendment thereto effects or changes
the conversion price thereof or provides the holder thereof with a term which is more favorable than the term on effect as of the
date hereof (in which case such amendment would not be considered an Exempt Issuance), and (c) securities issued pursuant to acquisitions
or strategic transactions approved by the Board of Directors of the Company.


(iv)
“Qualified Offering” shall mean an offering of Common Stock (and other securities potentially) resulting
in the listing for trading of the Common Stock on the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).


(v)
“VWAP” means the thirty (30) day volume weighted average of the closing price of a share of Common Stock
as listed or quoted on the market in which the shares of the Company are then traded or listed.


(a) Optional
Conversion. The Holder may, in its sole discretion, determine to convert all or part of the outstanding Principal Amount due
hereunder and any accrued interest thereon into fully paid and nonassessable shares of Common Stock at the Conversion Price. The
number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to this Section 3(a) shall be equal
to the quotient of dividing the Conversion Amount by the Conversion Price. The Company shall not issue any fraction of a share
of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction of a share of Common Stock, the
Company shall round such fraction of a share of Common Stock up to the nearest whole share. The Company shall pay any and all transfer
agent fees, legal fees, costs and any other fees or costs that may be incurred or charged in connection with the issuance of shares
of the Company’s Common Stock to the Holder arising out of or relating to the conversion of this Note; provided, however,
that the Holder shall pay any transfer taxes.


(b)
Mandatory Conversion. Simultaneous with the consummation of a Qualified Offering, the outstanding Principal Amount
due hereunder and all accrued interest hereon shall automatically be converted into fully paid and nonassessable shares of Common
Stock at the Conversion Price. The number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant
to this Section 3(b) shall be equal to the quotient of dividing the Conversion Amount by the Conversion Price. The Company shall
not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction
of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole share. The
Company shall pay any and all transfer agent fees, legal fees, costs and any other fees or costs that may be incurred or charged
in connection with the issuance of shares of the Company’s Common Stock to the Holder arising out of or relating to the conversion
of this Note; provided, however, that the Holder shall pay any transfer taxes.


(c)
Conversion Notice.


(i)
To convert any portion of this Note into shares of Common Stock on any date (a "Conversion Date") pursuant
to Section 3(a), the Holder shall (A) transmit by email, facsimile (or otherwise deliver), for receipt on or prior to 5:30 p.m.,
Pacific Time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit A (the "Conversion
Notice") to the Company. On or before the tenth business day following the date of receipt of a Conversion Notice (the
"Share Delivery Date"), the Company shall (A) if legends are not required to be placed on certificates of Common
Stock pursuant to the then existing provisions of Rule 144 of the Securities Act of 1933 (“Rule 144”) and provided
that the transfer agent for the Company is participating in the Depository Trust Company's ("DTC") Fast Automated
Securities Transfer Program, credit such aggregate number of shares of Common Stock to which the Holder shall be entitled to the
Holder's or its designee's balance account with DTC through its Deposit Withdrawal Agent Commission system or (B) if a restrictive
legend is required to be placed on the certificates of Common Stock, issue and deliver to the address as specified in the Conversion
Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares of Common Stock to which
the Holder shall be entitled, with a restrictive legend imposed thereon.


(ii)
Book-Entry. Notwithstanding anything to the contrary set forth herein, upon conversion of any portion of this Note
in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless (A)
the full Conversion Amount represented by this Note is being converted at the option of the Holder or (B) the Holder has provided
the Company with prior written notice (which notice may be included in a Conversion Notice) requesting reissuance of this Note
upon physical surrender of this Note. The Holder and the Company shall maintain records showing the Principal and Interest converted
and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Company, so as
not to require physical surrender of this Note upon conversion.


(d)
Limitations on Conversions or Trading.


(i)
Beneficial Ownership. The Company shall not effect any conversions of this Note and the Holder shall not have the
right to convert any portion of this Note or receive shares of Common Stock as payment of interest hereunder to the extent that
after giving effect to such conversion or receipt of such interest payment, the Holder, together with any affiliate thereof, would
beneficially own (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules
promulgated thereunder) in excess of 9.99% of the number of shares of Common Stock outstanding immediately after giving effect
to such conversion or receipt of shares as payment of interest. Since the Holder will not be obligated to report to the Company
the number of shares of Common Stock it may hold at the time of a conversion hereunder, unless the conversion at issue would result
in the issuance of shares of Common Stock in excess of 9.99% of the then outstanding shares of Common Stock without regard to any
other shares which may be beneficially owned by the Holder or an affiliate thereof, the Holder shall have the authority and obligation
to determine whether the restriction contained in this Section will limit any particular conversion hereunder and to the extent
that the Holder determines that the limitation contained in this Section applies, the determination of which portion of the principal
amount of this Note is convertible shall be the responsibility and obligation of the Holder. If the Holder has delivered a Conversion
Notice for a principal amount of this Note that, without regard to any other shares that the Holder or its affiliates may beneficially
own, would result in the issuance in excess of the permitted amount hereunder, the Company shall notify the Holder of this fact
and shall honor the conversion for the maximum principal amount permitted to be converted on such Conversion Date in accordance
with Section 3(a) and, any principal amount tendered for conversion in excess of the permitted amount hereunder shall remain outstanding
under this Note. The provisions of this Section may be waived by Holder upon written notification to the Company.


(e)   Dilutive
Issuance. If the Company, at any time while this Note is outstanding, issues, sells or grants (or has issued, sold or
granted as of the issue date, as the case may be) any option to purchase, or sells or grants any right to reprice, or
otherwise disposes of, or issues (or has sold or issued, as the case may be, or announces any sale, grant of any option to
purchase or other disposition), any Common Stock or other securities convertible into, exercisable
for, or that otherwise entitle any person or entity the right to acquire, shares of Common
Stock,
in each or any case at an effective price per share that is lower
than the then Conversion Price (such lower price, the “Base Conversion Price” and such issuances,
collectively, a “Dilutive Issuance”) (it being agreed that if the holder of the Common Stock or other
securities so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating
conversion, or exchange prices or otherwise, due to warrants, options or rights per share which are
issued in connection with such issuance, be entitled to receive shares of Common Stock at an
effective price per share that is lower than the Conversion Price, such issuance shall be deemed to have occurred for less
than the Conversion Price on such date of the Dilutive Issuance), then the Conversion Price shall be reduced, at the option
of the Holder, to a price equal to the Base Conversion Price. If the Company enters into a variable rate transaction the
Company shall be deemed to have issued Common Stock pursuant to this provision at the lowest possible price per
share at which such securities could be issued in connection with such variable rate transaction. Such adjustment shall be
made whenever such Common Stock or other securities are issued. Notwithstanding the foregoing, no adjustment will be made
under this Section 3(e) in respect of an Exempt Issuance. In the event of an issuance of securities involving multiple
tranches or closings, any adjustment pursuant to this Section 3(e) shall be calculated as if all such securities were issued
at the initial closing.


(f)
Other Provisions.


(i)
The Company shall at all times reserve and keep available out of its authorized Common Stock the full number of shares of
Common Stock issuable upon conversion of all outstanding amounts under this Note.


(ii)
All calculations under this Section 3 shall be rounded off to the nearest $0.001.


(iii)
Nothing herein shall limit a Holder's right to pursue actual damages or declare an Event of Default pursuant to Section
2 herein for the Company's failure to deliver certificates representing shares of Common Stock upon conversion within the period
specified herein and such Holder shall have the right to pursue all remedies available to it at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief, in each case without the need to post a bond or provide
other security. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other
Section hereof or under applicable law.


(4)
EVENTS OF DEFAULT. 


(a)
An “Event of Default”, wherever used herein, means any one of the following events (whatever the reason
and whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of
any court, or any order, rule or regulation of any administrative or governmental body):


(i)
The Company's failure to pay to the Holder any amount of the then outstanding Original Principal Amount or Interest when
and as due under this Note;


(ii)
The Company or any subsidiary of the Company shall commence, or there shall be commenced against the Company or any subsidiary
of the Company under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or the
Company or any subsidiary of the Company commences any other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect
relating to the Company or any subsidiary of the Company or there is commenced against the Company or any subsidiary of the Company
any such bankruptcy, insolvency or other proceeding which remains undismissed for a period of 61 business days; or the Company
or any subsidiary of the Company is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or the Company or any subsidiary of the Company suffers any appointment of any custodian, private
or court appointed receiver or the like for it or any substantial part of its property which continues undischarged or unstayed
for a period of 61 business days; or the Company or any subsidiary of the Company makes a general assignment for the benefit of
creditors; or the Company or any subsidiary of the Company shall fail to pay, or shall state that it is unable to pay, or shall
be unable to pay, its debts generally as they become due; or the Company or any subsidiary of the Company shall call a meeting
of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or the Company or any subsidiary
of the Company shall by any act or failure to act expressly indicate its consent to, approval of or acquiescence in any of the
foregoing; or any corporate or other action is taken by the Company or any subsidiary of the Company for the purpose of effecting
any of the foregoing;


(iii)
The Company shall default in any of its obligations under this Note;


(iv)
That upon any event of default (as defined herein) after the Issue Date, the Conversion Price shall equal the lower of (I)
the VWAP, if the conversion herein occurs prior a Qualified Offering, or (ii) sixty percent (65%) multiplied by the lowest closing
price of the Common Stock during the twenty (20) consecutive trading day period immediately preceding the date of the respective
conversion (the “Alternate Conversion Price”);


(v)
The Company (I) fails to issue Conversion Shares to the Holder (or announces or threatens in writing that it will not honor
its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this
Note, (ii) fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate
for the Conversion Shares issuable to the Holder upon conversion of or otherwise pursuant to this Note as and when required by
this Note, (iii) reserve the reserved amount at all times, or (iii) the Company directs its transfer agent not to transfer or delays,
impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate
for the Conversion Shares issuable to the Holder upon conversion of or otherwise pursuant to this Note as and when required by
this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent
from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for
any Conversion Shares issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note
(or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph)
and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations shall
not be rescinded in writing) for two (2) Trading Days after the Holder shall have delivered a Notice of Conversion. It is an obligation
of the Company to remain current in its obligations to its transfer agent. It shall be an Event of Default of this Note, if a conversion
of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of
the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process a conversion, such advanced
funds shall be paid by the Company to the Holder within forty-eight (48) hours of a demand from the Holder;


(vi)
 The Company shall fail to maintain the listing of the Common Stock on at least one of the Over the Counter Bulletin
Board, the OTCQB Market, any level of the OTC Markets, or any level of the Nasdaq Stock Market or the New York Stock Exchange (including
the NYSE American);


(vii)
At any time after the Issue Date, the Borrower shall fail to comply with the reporting requirements of the 1934 Act and/or
the Borrower shall cease to be subject to the reporting requirements of the 1934 Act;


(viii)
The failure by the Company to maintain any material intellectual property rights, personal, real property or other assets
which are necessary to conduct its business (whether now or in the future);


(ix)
The restatement of any financial statements filed by the Borrower with the SEC for any date or period from two years prior
to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement would, by comparison
to the unrestated financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this
Note or the Purchase Agreement;


(x)
In the event that the Company proposes to replace its transfer agent and the Company fails to provide, prior to the effective
date of such replacement, a fully executed irrevocable transfer agent letter (including but not limited to a provision to irrevocably
reserve shares of Common Stock in the reserved amount) signed by the successor transfer agent and the Company;


(xi)
The DTC places a “chill” (i.e. a restriction placed by DTC on one or more of DTC’s services, such as limiting
a DTC participant’s ability to make a deposit or withdrawal of the security at DTC) on any of the Borrower’s securities;


(xii)
In addition to the Event of Default in this section, the Common Stock is otherwise not eligible for trading through the
DTC’s Fast Automated Securities Transfer or Deposit/Withdrawal at Custodian programs; and


(xiii)
If, at any time on or after the date which is six (6) months after the Issue Date, except due to the Holder’s actions
or inactions, the Holder is unable to (I) obtain a standard “144 legal opinion letter” from an attorney reasonably
acceptable to the Holder, the Holder’s brokerage firm (and respective clearing firm), and the Borrower’s transfer agent
in order to facilitate the Holder’s conversion of any portion of the Note into free trading shares of the Borrower’s
Common Stock pursuant to Rule 144, and/or (ii) thereupon deposit such shares into the Holder’s brokerage account.


(b)
Upon notice by Holder and during the continuation of any Event of Default specified in this section, this Note shall become
immediately due and payable and the Company shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount
(the “Default Amount”) equal to the principal amount then outstanding plus accrued interest (including any default
interest) through the date of full repayment multiplied by 130%. Holder may, in its sole discretion, determine to accept payment
part in Common Stock and part in cash. Upon an uncured Event of Default, all amounts payable hereunder shall immediately become
due and payable, all without demand, presentment or notice, all of which hereby are expressly waived by the Company, together with
all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise
all other rights and remedies available at law or in equity, including, without limitation, those set forth herein.


(5)
REISSUANCE OF THIS NOTE.


(a)
Assignability. This Note will be binding upon the Company and its successors and will inure to the benefit of the
Holder and its successors and assigns and may be assigned by the Holder with prior written consent of the Company, which consent
shall not be unreasonably withheld.


(b)
Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification
undertaking by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this
Note, the Company shall execute and deliver to the Holder a new Note representing the outstanding Principal hereunder.


(6)
APPLICABLE LAW AND VENUE. This Note shall be governed by and interpreted in accordance with the laws of the State
of Nevada without regard to the principles of conflict of laws. The parties further agree that any action between them shall be
heard exclusively in federal or state court sitting in the Douglas County, Nevada, and expressly consent to the jurisdiction and
venue of the Supreme Court of Nevada, sitting in Douglas County for the adjudication of any civil action asserted pursuant to this
paragraph. The Company and the Holder waive trial by jury. Each party hereby irrevocably waives personal service of process and
consents to process being served in any suit, action or proceeding in connection with this Note 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 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 other manner permitted by law.


(7)
WAIVER. Any waiver by the Holder of a breach of any provision of this Note shall not operate as or be construed to
be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Holder
to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that
party of the right thereafter to insist upon strict adherence to that term or any other term of this Note. Any waiver must be in
writing.


 





[Remainder of Page Intentionally Omitted;
Signature Page Follows]


 





 



    	 	 	 



     


    




IN WITNESS WHEREOF,
the Company has caused this Convertible Note to be duly executed by a duly authorized officer as of the date set forth above.


 


 


Red Cat Holdings, Inc.    


 


 


By: _______________________________


Jeffrey M. Thompson


President and Chief Executive Officer



    	 	 	 



     


    









EXHIBIT A


 


 


NOTICE OF CONVERSION


 


 


 


Red Cat Holdings, Inc.


1607 Ponce De Leon Avenue


Suite 407


San Juan, Puerto Rico 00909


Attn: Jeffrey M. Thompson, President


 


 


  


 


 


 





The undersigned
hereby elects to convert [all] [a portion] of the $ [  ]Convertible Note issued to ____________ on __________, 2020
into shares of Common Stock of Red Cat Holdings, Inc. according to the conditions set forth in such Note as of the date
written below.


 


 


By accepting this notice of conversion, you are acknowledging that the number of shares to be delivered represents less than 10% (ten percent) of the common stock outstanding.  If the number of shares to be delivered represents more than 9.99% of the common stock outstanding, this conversion notice shall immediately automatically extinguish and the Holder must be immediately notified.


 


 


 


 


 


 





Date of Conversion: _____________________


Conversion Amount: _____________________


Conversion Price: _______________________


Shares to be Delivered: __________________


 


 


EIN:


 





 


By:________________________________


Name:


Title: