Document:

Blueprint

 

 

AMENDMENT NO. 3 TO

 

CONVERTIBLE SECURED SUBORDINATED PROMISSORY NOTES

 

 

 

THIS
AMENDMENT NO. 3 TO CONVERTIBLE SECURED SUBORDINATED PROMISSORY
NOTES (this “Amendment”), effective as
of October 24, 2018, is made and entered into by and among
MobileSmith, Inc., a Delaware corporation (the “Company”), the
undersigned holders (the “Holders”, and each
individually, a “Holder”) of the
Convertible Secured Subordinated Promissory Notes (the
“Notes”) issued by the
Company from time to time pursuant to that certain Convertible
Secured Subordinated Note Purchase Agreement, dated May 25, 2018, (as amended
through the date hereof, the “Note Purchase
Agreement”), among the Company and the Holders.
Capitalized terms used but not defined herein have the meanings
assigned to them in the Note Purchase Agreement.

 

WITNESSETH:

 

WHEREAS, The
Company and the Investors desire to amend the Notes previously
issued pursuant to the Note Purchase Agreement to modify the
provisions concerning payment of interest;

 

WHEREAS, Section 8
of each of the Notes provides that any provision of the Notes may
be amended with the written consent of the Company and Holders
holding at least a Requisite Percentage;

 

WHEREAS, the
Holders identified on the signature page to this Amendment together
constitute the holders of a Requisite Percentage necessary to amend
the provisions of each of the Notes;

 

NOW,
THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as
follows:

 

1.
Amendment to Notes.
Section 2 of each Note is hereby deleted and replaced with the
following Section 2:

 

2.          

Interest. Accrued
interest on this Note shall be due and payable in semi-annual
installments twice a year in January and July, with the final
installment payable on the Maturity Date.

 

A form
of amended Note is attached to this Amendment as Exhibit
A.

 

2.            

Ratification. Except as
specifically amended above, each of the Notes shall continue in
full force and effect in accordance with its terms, and is hereby
in all respects ratified and confirmed.

 

3.            

Counterparts. This Amendment
may be executed in several counterparts and by facsimile or other
electronic transmission, each of which shall be an original and all
of which together shall constitute but one and the
same.

 

 

 

 

 

[Remainder of Page Intentionally Left Blank]

 

 

 

 

 

 

 

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the date first above
written.

 

 

MOBILESMITH,
INC.

 

 

 

By: /s/ Gleb
Mikhailov                                                     

Name:
Gleb Mikhailov

Title:             

Chief Financial
Officer

 

 

UBP,
UNION BANCAIRE PRIVEE

 

 

 

By:
/s/
Jean-Baptiste Erath

Name:
Jean-Baptiste Erath

Title:
Director

 

 

[Signature Third Amendment to Convertible Secured Subordinated
Promissory Note]

 

 

 

EXHIBIT
A

FORM OF AMENDED
NOTE

 

 

THE NOTE AND THE
SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF (THE
“SECURITIES”) HAVE BEEN ISSUED AND SOLD IN RELIANCE
UPON EXEMPTIONS FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “1933 ACT”), AND APPROPRIATE EXEMPTIONS
FROM REGISTRATION UNDER THE SECURITIES LAWS OF OTHER APPLICABLE
JURISDICTIONS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR
TRANSFERRED OTHER THAN PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR AN EXEMPTION THEREFROM UNDER THE 1933 ACT AND THE
APPLICABLE SECURITIES LAWS OF ANY OTHER JURISDICTION. THE ISSUER
SHALL BE ENTITLED TO REQUIRE AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO IT WITH RESPECT TO COMPLIANCE OF THE PROPOSED SALE
OR TRANSFER WITH THE REGISTRATION REQUIREMENTS OF THE 1933 ACT OR
EXEMPTION THEREFROM.

 

 

CONVERTIBLE
SUBORDINATED PROMISSORY NOTE

 

 

$500,000                                                                                                           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
           
        December 11,
2014

 

 

 

 

FOR VALUE RECEIVED,
MobileSmith, Inc., a Delaware corporation (the
“Company”) promises to pay to Union Bancaire
Privée, UBP SA (“Investor”), or its registered
assigns, in lawful money of the United States of America the
principal sum of Five Hundred Thousand Dollars ($500,000), or such
lesser amount as shall equal the outstanding principal amount
hereof, together with interest from the date of this Note on the
unpaid principal balance at a rate equal to 8.00% per annum,
computed on the basis of the actual number of days elapsed and a
year of 360 days. All unpaid principal, together with any then
unpaid and accrued interest and other amounts payable hereunder,
shall be due and payable on the earlier of (i) November 14, 2018,
(ii) a Change of Control or

(iii) when, upon or
after the occurrence of an Event of Default (as defined below),
such amounts are declared due and payable by Investor or made
automatically due and payable in accordance with the terms hereof
(such date upon which all amounts payable hereunder are due is
referred to herein as the “Maturity
Date”).

 

 

 

This Note is one of
a series of “Notes” issued pursuant to the Convertible
Subordinated Note Purchase Agreement, dated December 11, 2014 (as
amended, modified or supplemented, the “Note Purchase
Agreement”), between the Company and the Investors (as
defined in the Note Purchase Agreement). Capitalized terms used
herein and not otherwise defined shall have the meanings assigned
thereto in the Note Purchase Agreement. This Note and the Investor
are subject to certain restrictions, and are entitled to certain
rights and privileges, set forth in the Note Purchase Agreement.
This Note is expressly subject to Section 8, Subordination, of the
Note Purchase Agreement.

 

 

The following is a
statement of the rights of Investor and the conditions to which
this Note is subject, and to which Investor, by the acceptance of
this Note, agrees:

 

 

 

1. Definitions. As
used in this Note, the following capitalized terms have the
following meanings:

 

   
    (a) “Business
Day” means any day other than a Saturday or Sunday or other
day on which the New York Stock Exchange is permitted or required
by law to close.

 

   
    (b) the
“Company” includes the corporation initially executing
this Note and any Person which shall succeed to or assume the
obligations of the Company under this Note.

 

   
    (c) “Conversion Price” means One
Dollar and Forty Three Cents ($1.43).

 

   
    (d) “Change of
Control” means (i) any consolidation or merger or other
transaction or series of transactions to which the Company is a
party following which the “persons” that
“beneficially owned” (as such term is defined in Rule
13d-3 and Rule 13d-5 under the Exchange Act), directly or
indirectly, the voting securities of the Company immediately prior
to such transaction “beneficially own”, directly or
indirectly, less than fifty percent (50%) of the voting securities
of the surviving entity (other than a financing transaction) or
(ii) the sale of all or substantially all of the assets of the
Company.

 

   
    (e) “Event of Default” has the
meaning given in Section 4 hereof.

 

 

 

   
    (f) “Note Purchase Agreement” has
the meaning given in the introductory paragraph
hereof.

    
   

   
    (g) “Obligations”
means and includes all loans, advances, debts, liabilities and
obligations, howsoever arising, owed by the Company to Investor of
every kind and description (whether or not evidenced by any note or
instrument and whether or not for the payment of money), now
existing or hereafter arising under or pursuant to the terms of
this Note, the Note Purchase Agreement and the Security Agreement,
including, all interest, fees, charges, expenses, attorneys’
fees and costs and accountants’ fees and costs chargeable to
and payable by the Company hereunder and thereunder, in each case,
whether direct or indirect, absolute or contingent, due or to
become due, and whether or not arising after the commencement of a
proceeding under Title 11 of the United States Code (11 U. S. C.
Section 101 et seq.), as amended from time to time (including
post-petition interest) and whether or not allowed or allowable as
a claim in any such proceeding.

 

   
    (h) “Person”
means and includes an individual, a partnership, a corporation
(including a business trust), a joint stock company, a limited
liability company, an unincorporated association, a joint venture
or other entity or a governmental authority.

 

   
    (i) “Requisite
Percentage” means at least two-thirds of the aggregate
outstanding principal amount of the Notes issued pursuant to the
Note Purchase Agreement

 

   
    (j) “Transaction
Documents” means this Note, each of the other Notes issued
under the Note Purchase Agreement, and the Note Purchase
Agreement.

 

2. Interest. Accrued
interest on this Note shall be  due and payable in cash in
semi-annual installmentsin January and July with the final
installment payable on the Maturity Date. 

 

3.
    Prepayment. This Note may not be prepaid without
the consent of the holders of a Requisite Percentage.

 

4. Events of Default.
The occurrence of any of the following shall constitute an
“Event of Default” under this Note and the other
Transaction Documents:

 

   
    (a) Failure to Pay. The
Company shall fail to pay (i) when due any principal, or interest
payment or other sum on the due date hereunder or (ii) any other
payment required under the terms of this Note or any other
Transaction Document on the date due and such failure continues for
a period of five (5) business days after the due date;

 

  
    (b) Non-Performance of
Affirmative Covenants. The Company shall default in the due
observance or performance of any material covenant set forth in the
Note, the Note Purchase Agreement or the Security Agreement, which
default shall continue uncured for fifteen (15) days after receipt
of written notice to the Company thereof;

 

  
    (c) Voluntary
Bankruptcy or Insolvency Proceedings. The Company shall (i) apply
for or consent to the appointment of a receiver, trustee,
liquidator or custodian of itself or of all or a substantial part
of its property,

(ii) be unable, or
admit in writing its inability, to pay its debts generally as they
mature, (iii) make a general assignment for the benefit of its or
any of its creditors, (iv) be dissolved or liquidated, (v) become
insolvent (as such term may be defined or interpreted under any
applicable statute), (vi) commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or consent to any such
relief or to the appointment of or taking possession of its
property by any official in an involuntary case or other proceeding
commenced against it, or (vii) take any action for the purpose of
effecting any of the foregoing;

 

   
    (d) Involuntary
Bankruptcy or Insolvency Proceedings. Proceedings for the
appointment of a receiver, trustee, liquidator or custodian of the
Company or of all or a substantial part of the property thereof, or
an involuntary case or other proceedings seeking liquidation,
reorganization or other relief with respect to the Company or the
debts thereof under any bankruptcy, insolvency or other similar law
now or hereafter in effect shall be commenced and an order for
relief entered or such proceeding shall not be dismissed or
discharged within sixty

(60) days of
commencement;

 

   
    (e) Judgments. One or
more judgments, decrees or orders (excluding settlement orders) for
the payment of money shall be entered against the Company or any of
its subsidiaries involving in the aggregate a liability
of

$1,000,000 or more,
and any such judgment, decree or order shall continue without
discharge or stay for a period of sixty (60) days; or

 

 

 

   
    (f) Cross-Defaults. The
Company or any of its subsidiaries shall default in the performance
or observance of any agreement or instrument relating to any
indebtedness, or any other event shall occur or condition exist,
and the effect of such default, event or condition is to cause or
permit the holder or holders of any such indebtedness to cause
indebtedness, in excess of $500,000 individually or in the
aggregate, to become due prior to its stated maturity.

 

5. Rights of Investor
upon Default. Upon the occurrence or existence of any Event of
Default (other than an Event of Default described in Sections 4(c)
or 4(d)) and at any time thereafter during the continuance of such
Event of Default, a default interest rate of fifteen percent (15%)
will accrue on any overdue Obligations. The holders of a Requisite
Percentage may, by written notice to the Company, declare all
outstanding Obligations payable by the Company hereunder to be
immediately due and payable without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly
waived. Upon the occurrence or existence of any Event of Default
described in Sections 4(c) and 4(d), immediately and without
notice, all outstanding Obligations payable by the Company
hereunder shall automatically become immediately due and payable,
without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived. In addition to the
foregoing remedies, upon the occurrence or existence of any Event
of Default and subject to the consent of the Agent, Investor may
exercise any other right power or remedy granted to it by the
Transaction Documents or otherwise permitted to it by law, either
by suit in equity or by action at law, or both.

 

6.
    Conversion.

 

   
    (a) Optional
Conversion. At any time on or prior to the Maturity Date each
Investor will have the option to convert all or a portion of the
entire principal amount of the Notes outstanding into Common Stock
immediately upon the Investor’s request; provided, however,
that if, at the time of any particular conversion, the Company does
not have the number of authorized shares of Common Stock sufficient
to allow for such conversion, the Investors may only convert that
portion of their Notes outstanding for which the Company has a
sufficient number of authorized shares of Common Stock. To the
extent multiple Investors, under the Note Purchase Agreement, the
2007 Note Purchase Agreement (as defined in the Note Purchase
Agreement), or both, request conversion of their Notes on the same
date, any limitations on conversion shall be applied on a pro rata
basis. In such case, the Investors may request, in writing, that
the Company call a special meeting of the stockholders of the
Company specifically for the purpose of increasing the number of
authorized shares of Common Stock to cover the remaining portion of
the Notes outstanding, as well as the maximum issuances
contemplated pursuant to the Company’s 2004 Equity
Compensation Plan, within 90 calendar days after the
Company’s receipt of the Investors’ written request.
Notwithstanding the above, the Company shall use its best efforts
to increase its number of authorized shares so as to allow for the
full conversion of any outstanding Notes on the earlier of: (1)
promptly after the date on which a request for conversion, for
which there are not sufficient shares available to effect such
conversion, is received by the Company, or (2) the time of the next
shareholder meeting. The number of shares of Common Stock that this
Note may be converted into shall be determined by dividing the
principal amount then outstanding by the Conversion Price at the
time of conversion. If the Investor elects to convert this Note on
demand, it shall provide the Company with written notice of its
election at least one (1) day prior to the date selected for
conversion, by submission of the notice of conversion attached as
Exhibit A hereto. Upon conversion, the Investor shall deliver to
the Company the original of this Note (or a notice to the effect
that the original Note has been lost, stolen or destroyed and an
agreement reasonably acceptable to the Company whereby the holder
agrees to indemnify the Company from any loss incurred by it in
connection with this Note). However, upon such conversion of this
Note, this Note shall be deemed converted and of no further force
and effect, whether or not the Note is delivered for cancellation
as set forth in the preceding sentence. If there shall occur a
Change of Control, the Company shall give written notice to the
Investor at least five (5) days prior to any closing thereof and
the Investor’s election to convert this Note shall be
conditional upon the consummation thereof.

 

 
    (b) Mechanics of
Optional Conversion. As soon as practicable following surrender by
the Investor of the original of this Note, the Company shall issue
and deliver to Investor a certificate or certificates for the
shares of Common Stock into which the Note has been converted
(bearing such legends as may be required or advisable in the
opinion of counsel to the Company). Such conversion shall be deemed
to have been made immediately prior to the close of business on the
date selected for the conversion and the Investor shall be treated
for all purposes as the record holder or holders of such Common
Stock on such date.

 

   
(c) Fractional Shares;
Interest; Effect of Conversion. No fractional shares shall be
issued upon conversion of this Note. In lieu of the Company issuing
any fractional shares to Investor upon the conversion of this Note,
the Company shall pay to Investor an amount equal to the product
obtained by multiplying the Conversion Price by the fraction of a
share not issued pursuant to the previous sentence. Upon conversion
of this Note in full and the payment of any
amounts specified in this Section 6(c), the Company shall be
released from all its obligations and liabilities under this
Note.

 

 

 

7. Successors and
Assigns. Subject to the restrictions on transfer described in
Sections 9 and 10 below, the rights and obligations of the Company
and Investor shall be binding upon and benefit the successors,
assigns, heirs, administrators and transferees of the
parties.

 

8. Waiver and
Amendment. Any provision of this Note may be amended, waived or
modified upon the written consent of the Company and the holders of
a Requisite Percentage.

 

9. Transfer of this
Note or Securities Issuable on Conversion Hereof. With respect to
any offer, sale or other disposition of this Note or securities
into which such Note may be converted, Investor will give written
notice to the Company prior thereto, describing briefly the manner
thereof, together with (unless waived by the Company) a written
opinion of Investor’s counsel, or other evidence if
reasonably satisfactory to the Company, to the effect that such
offer, sale or other distribution may be effected without
registration or qualification (under any federal or state law then
in effect). Upon receiving such written notice and reasonably
satisfactory opinion, if so requested, or other evidence, the
Company, as promptly as practicable, shall notify Investor that
Investor may sell or otherwise dispose of this Note or such
securities, all in accordance with the terms of the notice
delivered to the Company. If a determination has been made pursuant
to this Section 9 that the opinion of counsel for Investor, or
other evidence, is not reasonably satisfactory to the Company, the
Company shall so notify Investor promptly after such determination
has been made. Each Note thus transferred and each certificate
representing the securities thus transferred shall bear a legend as
to the applicable restrictions on transferability in order to
ensure compliance with the Securities Act, unless in the opinion of
counsel for the Company such legend is not required in order to
ensure compliance with the Securities Act. The Company may issue
stop transfer instructions to its transfer agent in connection with
such restrictions. Subject to the foregoing, transfers of this Note
shall be registered upon registration books maintained for such
purpose by or on behalf of the Company. Prior to presentation of
this Note for registration of transfer, the Company shall treat the
registered holder hereof as the owner and holder of this Note for
the purpose of receiving all payments of principal and interest
hereon and for all other purposes whatsoever, whether or not this
Note shall be overdue and the Company shall not be affected by
notice to the contrary. Notwithstanding anything in this Section 9
to the contrary, no opinion of counsel shall be required with
respect to any transfer by an Investor to its officers, directors,
partners, members or other affiliates.

 

10. Assignment by the
Company. Neither this Note nor any of the rights, interests or
obligations hereunder may be assigned, by operation of law or
otherwise, in whole or in part, by the Company without the prior
written consent of the holders of a Requisite
Percentage.

 

11.    
Notices. All notices, requests, demands, consents, instructions or
other communications required or

permitted hereunder
shall be in writing and faxed, mailed or delivered to each party at
the respective addresses of the parties as set forth in the Note
Purchase Agreement, or at such other address or facsimile number as
the Company shall have furnished to Investor in writing. All such
notices and communications will be deemed effectively given the
earlier of (i) when received, (ii) when delivered personally, (iii)
one business day after being delivered by facsimile (with receipt
of appropriate confirmation), (iv) one business day after being
deposited with an overnight courier service of recognized standing
or (v) two days after being deposited in the

U.S. mail, first
class with postage prepaid.

 

12. Pari Passu Notes.
Investor acknowledges and agrees that the payment of all or any
portion of the outstanding principal amount of this Note and all
interest hereon shall be pari passu in right of payment and in all
other respects to the other Notes issued pursuant to the Note
Purchase Agreement or pursuant to the terms of such
Notes.

 

13. Usury. In the event
any interest is paid on this Note which is deemed to be in excess
of the then legal maximum rate, then that portion of the interest
payment representing an amount in excess of the then legal maximum
rate shall be deemed a payment of principal and applied against the
principal of this Note.

 

14. Remedies
Cumulative. The remedies of Investor as provided herein and in the
Note Purchase Agreement and in any other documents governing or
securing repayment hereof shall be cumulative and concurrent and
may be pursued singly, successively, or together, at the sole
discretion of Investor to the extent provided herein and in the
Note Purchase Agreement and may be exercised as often as occasion
therefore shall arise. No act or omission of the Investor,
including specifically, but without limitation, any failure to
exercise any right, remedy or recourse, shall be effective as a
waiver of any right of the Investor hereunder, unless set forth in
a written document executed by the Investor, and then only to the
extent specifically recited therein. A waiver or release with
reference to one event shall not be construed as continuing, as a
bar to, or as a waiver or release of any subsequent right,
remedy or recourse as to any subsequent event. All notices,
waivers, releases and/or consents by an Investor shall be directed
to the Company only through the Agent. 

 

 

 

15. No Rights of a
Stockholder. Nothing contained in this Note shall be construed as
conferring upon the Investor or any other Person the right to vote
or consent or to receive notice as an stockholder in respect of
meetings of stockholders for the election of directors of the
Company or any other matters or any rights whatsoever as a
stockholder of the Company prior to the time that this Note is
converted pursuant to Section 6.

 

16. Governing Law. This
Note and all actions arising out of or in connection with this Note
shall be governed by and construed in accordance with the laws of
the State of Delaware, without regard to the conflicts of law
provisions of the State of Delaware, or of any other
state.

 

 

(Signature Page
Follows)

 

 

 

 

 

The Company has
caused this Note to be issued as of the date first written
above.

 

 

MOBILESMITH,
INC.

a Delaware
corporation

 

By:

   
             
Name: Gleb Mikhailov

   
             
Title: Chief Financial Officer

 

 

 

EXHIBIT
A

 

 

FORM OF 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 principal
amount of the above Note No. ___ into shares of Common Stock of
MobileSmith, Inc., (the “Company”) according to the
conditions hereof, as of the date written below.

 

Date of Conversion
___________________________________________________________
                                                                                                        

Applicable
Conversion Price
____________________________________________________

Number of shares of
the Company’s Common Stock beneficially owned or deemed
beneficially owned by the Holder on the Date of Conversion:
_______________________________________________

Signature
___________________________________________________________________
                                                                                                         

[Name]

Address:
___________________________________________________________________Blueprint

 

 

NINTH AMENDMENT TO

 

CONVERTIBLE SECURED SUBORDINATED PROMISSORY NOTES

 

 

 

THIS
NINTH AMENDMENT TO CONVERTIBLE SECURED SUBORDINATED PROMISSORY
NOTES (this “Amendment”), effective as
of October 24, 2018, is made and entered into by and among
MobileSmith, Inc., a Delaware corporation (the “Company”), the
undersigned holders (the “Holders”, and each
individually, a “Holder”) of the
Convertible Secured Subordinated Promissory Notes (the
“Notes”) issued by the
Company from time to time pursuant to that certain Convertible
Secured Subordinated Note Purchase Agreement, dated November 14,
2007 (as amended through the date hereof, the “Note Purchase
Agreement”), among the Company and the Holders.
Capitalized terms used but not defined herein have the meanings
assigned to them in the Note Purchase Agreement.

 

WITNESSETH:

 

WHEREAS, The
Company and the Investors desire to amend the Notes previously
issued pursuant to the Note Purchase Agreement to modify the
provisions concerning payment of interest;

 

WHEREAS, Section 8
of each of the Notes provides that any provision of the Notes may
be amended with the written consent of the Company and Holders
holding at least a Requisite Percentage;

 

WHEREAS, the
Holders identified on the signature page to this Amendment together
constitute the holders of a Requisite Percentage necessary to amend
the provisions of each of the Notes;

 

NOW,
THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as
follows:

 

1.
Amendment to Notes.
Section 2 of each Note is hereby deleted and replaced with the
following Section 2:

 

2.          

Interest. Accrued
interest on this Note shall be due and payable in semi-annual
installments twice a year in January and July, with the final
installment payable on the Maturity Date.

 

A form
of amended Note is attached to this Amendment as Exhibit
A.

 

 

2.            

Ratification. Except as
specifically amended above, each of the Notes shall continue in
full force and effect in accordance with its terms, and is hereby
in all respects ratified and confirmed.

 

3.            

Counterparts. This Amendment
may be executed in several counterparts and by facsimile or other
electronic transmission, each of which shall be an original and all
of which together shall constitute but one and the
same.

 

 

 

 

 

[Remainder of Page Intentionally Left Blank]

 

 

 

 

 

 

 

 

 

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the date first above
written.

 

 

MOBILESMITH, INC.

 

    
            By:
/s/ Gleb
Mikhailov

               
Name:  Gleb Mikhailov

               
Title: Chief Financial Officer

 

       
        GRASFORD INVESTMENTS
LTD .

By: /s/ Avy
Lugassy                                                   

   
             
Name: Avy Lugassy

Title: Principal

 

 

 

 

UBP,
UNION BANCAIRE PRIVEE

 

 

 

By:
/s/
Jean-Baptiste Erath

Name:
Jean-Baptiste Erath

Title:
Director

 

 

 

CRYSTAL
MANAGEMENT LTD.

  

By:

Name:
Doron Roethler

Title:Beneficial
Owner

 

 

WILLIAM FURR

  

 

 

THE BLUELINE FUND

By:
Name: Title:

 

 

[Signature Ninth Amendment to Convertible Secured Subordinated
Promissory Note]

 

 

EXHIBIT A

FORM
OF NOTE

 

THIS
NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR UNDER ANY APPLICABLE STATE SECURITIES
LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
AS TO THE SECURITIES OR AN EXEMPTION THEREFROM UNDER SUCH ACT AND
UNDER ANY APPLICABLE STATE SECURITIES LAWS. THE COMPANY, IN ITS
SOLE DISCRETION, SHALL HAVE THE RIGHT TO REQUIRE AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT
REGISTRATION UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH ANY
PROPOSED TRANSFER NOR IS SUCH TRANSFER IN VIOLATION OF ANY
APPLICABLE STATE SECURITIES LAWS. THIS LEGEND SHALL BE ENDORSED
UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS NOTE.

 

MOBILESMITH,
INC.

 

 

CONVERTIBLE
SECURED SUBORDINATED PROMISSORY NOTE

 

 

	
$                          

	

 

,
              

	
 

	
Raleigh,
NC

 

 

FOR VALUE RECEIVED,
MobileSmith, Inc., a Delaware corporation (the “Company”) promises to pay
to (“Investor”), or its registered
assigns, in lawful money of the United States of America the
principal sum of ($ ), or such lesser amount as shall
equal the outstanding principal amount hereof, together with
interest from the date of this Note on the unpaid principal balance
at a rate equal to 8.00% per annum, computed on the basis of the
actual number of days elapsed and a year of 360 days. All unpaid
principal, together with any then unpaid and accrued interest and
other amounts payable hereunder, shall be due and payable on the
earlier of (i) November 14, 2020, (ii) a Change of Control
or (iii) when, upon or after
the occurrence of an Event of Default (as defined below), such
amounts are declared due and payable by Investor or made
automatically due and payable in accordance with the terms hereof
(such date upon which all amounts payable hereunder are due is
referred to herein as the “Maturity Date”).

 

 

This Note is one of
the “Notes” issued pursuant to the Convertible Secured
Subordinated Note Purchase Agreement, dated November 14, 2007 (as
amended, modified or supplemented, the “Note Purchase Agreement”), between
the Company and the Investors (as defined in the Note Purchase
Agreement). Capitalized terms used herein and not otherwise defined
shall have the meanings assigned thereto in the Note Purchase
Agreement. This Note and the Investor are subject to certain
restrictions, and are entitled to certain rights and privileges,
set forth in the Note Purchase Agreement. This Note is expressly
subject to Section 9(l) of the Note Purchase
Agreement.

 

THE OBLIGATIONS DUE
UNDER THIS NOTE ARE SECURED BY A SECURITY AGREEMENT DATED AS OF
NOVEMBER 14, 2007 (AS AMENDED, RESTATED OR SUPPLEMENTED, THE
“SECURITY
AGREEMENT”) AND EXECUTED BY COMPANY FOR THE BENEFIT OF
THE INVESTORS. ADDITIONAL RIGHTS OF INVESTOR ARE SET FORTH IN THE
SECURITY AGREEMENT.

 

 

 

4

 

 

 

 

 

The following is a
statement of the rights of Investor and the conditions to which
this Note is subject, and to which Investor, by the acceptance of
this Note, agrees:

 

1. Definitions. As used
in this Note, the following capitalized terms have the following
meanings:

 

(a) “Business Day” shall mean any day
other than a Saturday or Sunday or other day on which the New York
Stock Exchange is permitted or required by law to
close.

 

 

(b) the
“Company”
includes the corporation initially executing this Note and any
Person which shall succeed to or assume the obligations of the
Company under this Note.

 

 

                
           
       
(c)     "Price” shall mean the lowest
“Applicable Conversion Price” determined for each Note
issued under the Note Purchase Agreement. The “Applicable Conversion Price” for
each Note issued under the Note Purchase Agreement shall be
calculated by multiplying 110% by the closing price of the
Company’s common stock on    
           
           
           
             
April 14, 2014 (in each
case as adjusted for stock splits, dividends or combinations,
recapitalizations or similar events).

 

(d) “Change of Control” shall mean (i)
any consolidation or merger or other transaction or series of
transactions involving the Company pursuant to which the
Company’s stockholders own less than fifty percent (50%) of
the voting securities of the surviving entity (other than an equity
financing) or (ii) the sale of all or substantially
           
           
           
            all of the
assets of the Company.

 

   
           
           
        (e)    
“Event of
Default” has the meaning given in Section 4
hereof.

 

   
           
           
        (f)    
“Note Purchase
Agreement” has the meaning given in the introductory
paragraph hereof.

 

(g) “Obligations” shall mean and
include all loans, advances, debts, liabilities and obligations,
howsoever arising, owed by the Company to Investor of every kind
and description (whether or not evidenced by any note or instrument
and whether or not for the payment of money), now existing or
hereafter arising under or pursuant to
         
           
           
          the terms of this
Note, the Note Purchase Agreement and the Security Agreement,
including, all interest, fees, charges, expenses, attorneys’
fees and costs and accountants’ fees and costs chargeable to
and payable by the Company hereunder and thereunder, in each case,
whether direct or indirect, absolute or contingent, due or to
           
           
           
            become
due, and whether or not arising after the commencement of a
proceeding under Title 11 of the United States Code (11 U. S. C.
Section 101 et seq.),
as amended from time to time (including post-petition interest) and
whether or not allowed or allowable as a claim in any such
proceeding.

 

(h) “Person” shall mean and include an
individual, a partnership, a corporation (including a business
trust), a joint stock company, a limited liability company, an
unincorporated association, a joint venture or other entity or a
governmental authority.

 

 

 

5

 

 

 

 

 

(i) “Requisite Percentage” shall mean,
at least a majority of the aggregate outstanding principal amount
of the Notes issued pursuant to the Note Purchase
Agreement

 

 

(j)
“Securities Act”
shall mean the Securities Act of 1933, as amended.

 

(k)
“Security
Agreement” has the meaning given in the introductory
paragraphs to this Note.

 

(l) “Transaction Documents” shall mean
this Note, each of the other Notes issued under the Note Purchase
Agreement, the Note Purchase Agreement, the Registration Rights
Agreement, dated November 14, 2007,
as amended, restated and supplemented, and the Security
Agreement.

 

 

 

2. Interest. Accrued
interest on this Note shall be payable in cash in semi-annual
installments in January and July with the final installment payable
on the Maturity Date.

 

 

3. Prepayment. This
Note may not be prepaid without the consent of a Requisite
Percentage. Any prepayment must be made in connection with the
prepayment of all outstanding Notes.

 

 

4. Events of Default.
The occurrence of any of the following shall constitute an
“Event of
Default” under this Note and the other Transaction
Documents:

 

 

(a) Failure to Pay. The Company shall fail
to pay (i) when due any principal or interest payment on the due
date hereunder or (ii) any other payment required under the terms
of this Note or any other Transaction Document on the date due and,
with respect to this subclause (ii) only, such payment shall not
have been made within five        
           
           
            (5) days
of the Company’s receipt of written notice to the Company of
such failure to pay;

 

 

(b) Non-Performance of Affirmative
Covenants. The Company shall default in the due observance
or performance of any material covenant set forth in the Note, the
Note Purchase Agreement or the Security Agreement, which default
shall continue uncured for fifteen (15) days after receipt of
written notice to the Company thereof;

 

 

(c) Voluntary Bankruptcy or Insolvency
Proceedings. The Company shall (i) apply for or consent to
the appointment of a receiver, trustee, liquidator or custodian of
itself or of all or a substantial part of its property, (ii) be
unable, or admit in writing its inability, to pay its debts
generally as they mature, (iii) make a general assignment
           
           
           
            for the
benefit of its or any of its creditors, (iv) be dissolved or
liquidated, (v) become insolvent (as such term may be defined or
interpreted under any applicable statute), (vi) commence a
voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts
under any bankruptcy,        
           
           
           
    insolvency or other similar law now or hereafter
in effect or consent to any such relief or to the appointment of or
taking possession of its property by any official in an involuntary
case or other proceeding commenced against it, or (vii) take any
action for the purpose of effecting any of the
foregoing;

 

 

 

6

 

 

 

 

(d) Involuntary Bankruptcy or Insolvency
Proceedings. Proceedings for the appointment of a receiver,
trustee, liquidator or custodian of the Company or of all or a
substantial part of the property thereof, or an involuntary case or
other proceedings seeking liquidation, reorganization or other
relief with respect to the Company or the    
           
           
           
        debts thereof under any
bankruptcy, insolvency or other similar law now or hereafter in
effect shall be commenced and an order for relief entered or such
proceeding shall not be dismissed or discharged within 30 days of
commencement;

 

 

 

(e) Misrepresentations. Any of the
representations and warranties of the Company in the Note Purchase
Agreement or the Security Agreement proves to have been false or
misleading in any material respect when made or furnished or deemed
made;

 

 

(f) Judgments. One or more judgments,
decrees or orders (excluding settlement orders) for the payment of
money shall be entered against the Company or any of its
subsidiaries involving in the aggregate a liability of $1,000,000
or more, and any such judgment, decree or order shall continue
without discharge or stay for a period of    
           
           
           
        sixty (60) days;
or

 

 

(g) Cross-Defaults. The Company or any of
its subsidiaries shall default in the performance or observance of
any agreement or instrument relating to any indebtedness, or any
other event shall occur or condition exist, and the effect of such
default, event or condition is to cause or permit the holder or
holders of any such indebtedness to    
           
           
           
    cause indebtedness, in excess of $500,000
individually or in the aggregate, to become due prior to its stated
maturity.

 

 

5. Rights of Investor upon
Default. Upon the occurrence or existence of any Event of
Default (other than an Event of Default described
in Sections
4(c) or 4(d)) and at any time thereafter during
the continuance of such Event of Default, Investor may, with the
consent of the Agent, by written notice to the Company, declare all
outstanding         Obligations
payable by the Company hereunder to be immediately due and payable
without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived. Upon the occurrence
or existence of any Event of Default described in Sections 4(c) and 4(d), immediately and without notice,
all outstanding Obligations payable by the Company hereunder shall
automatically become immediately due and payable, without
presentment, demand, protest or any other notice of any kind, all
of which are hereby expressly waived. In addition to the foregoing
remedies, upon the occurrence or existence of any Event of Default
and subject to the consent of the Agent, Investor may exercise any
other right power or remedy granted to it by the Transaction
Documents or otherwise permitted to it by law, either by suit in
equity or by action at law, or both.

 

7

 

 

 

 

 

6.    
Conversion.

 

(a) Optional Conversion. At any time on or
prior to the Maturity Date each Investor will have the option to
convert all or a portion of the entire principal amount of the
Notes outstanding into Common Stock immediately upon the
Investor’s request; provided,however, that if, at the time
of any particular conversion, the Company does not have the number
of authorized shares of Common Stock sufficient to allow for such
particular conversion as well as the issuance of the maximum amount
of Common Stock permitted under the Company’s 2004 Equity
Compensation Plan, the Investors may only convert that portion of
their Notes outstanding for which the Company has a sufficient
number of authorized shares of Common Stock. To the extent multiple
Investors request conversion of their Notes on the same date, any
limitations on conversion shall be applied on a pro rata basis. In
such case, the Investors may request, in writing, that the Company
call a special meeting of the stockholders of the Company
specifically for the purpose of increasing the number of authorized
shares of Common Stock to cover the remaining portion of the Notes
outstanding, as well as the maximum issuances contemplated pursuant
to the Company’s 2004 Equity Compensation Plan, within 90
calendar days after the Company’s receipt of the
Investors’ written request. Notwithstanding the above, the
Company shall use its best efforts to increase its number of
authorized shares of Common Stock to 100,000,000 or such greater
number so as to allow for the full conversion of any outstanding
Notes on the earlier of: (1) promptly after the date on which a
request for conversion, for which there are not sufficient shares
available to effect such conversion, is received by the Company, or
(2) the time of the next shareholder meeting. The number of shares
of Common Stock that this Note may be converted into shall be
determined by dividing the principal amount then outstanding by the
Conversion Price at the time of conversion. If the Investor elects
to convert this Note on demand, it shall provide the Company with
written notice of its election at least one (1) day prior to the
date selected for conversion. Upon conversion, the Investor shall
deliver to the Company the original of this Note (or a notice to
the effect that the original Note has been lost, stolen or
destroyed and an agreement
reasonably acceptable to the
Company whereby the holder agrees to indemnify the Company from any
loss incurred by it in connection with this Note). However, upon
such conversion of this Note, this Note shall be deemed converted
and of no further force and effect, whether or not the Note is
delivered for cancellation as set forth in the preceding sentence.
If there shall occur a Change of Control, the Company shall give
written notice to the Investor at least five (5) days prior to any
closing thereof and the Investor’s election to convert this
Note shall be conditional upon the consummation
thereof.

 

 

 

(b) Mechanics of Optional Conversion. As
soon as practicable following surrender by the Investor of the
original of this Note, the Company shall issue and deliver to
Investor a certificate or certificates for the shares of Common
Stock into which the Note has been converted (bearing such legends
as may be required or advisable in the opinion of counsel to the
Company). Such conversion shall be deemed to have been made
immediately prior to the close of business on the date selected for
the conversion and the Investor shall be treated for all purposes
as the record holder or holders of such Common Stock on such
date.

 

 

(c) Fractional Shares; Interest; Effect of
Conversion. No fractional shares shall be issued upon
conversion of this Note. In lieu of the Company issuing any
fractional shares to Investor upon the conversion of this Note, the
Company shall pay to Investor an amount equal to the product
obtained by multiplying the Conversion Price by the fraction of a
share not issued pursuant to the previous sentence. Upon conversion
of this Note in full and the payment of any amounts specified in
this Section 6(c), the
Company shall be forever released from all its obligations and
liabilities under this Note.

 

 

7.    
Successors and Assigns. Subject to the restrictions on
transfer described in Sections 9 and 10 below,
the rights and obligations of the Company and Investor shall be
binding upon and benefit the successors, assigns, heirs,
administrators and transferees of the parties.

 

 

8. Waiver and
Amendment. Any provision of this Note may be amended, waived
or modified upon the written consent of the Company and the holders
of a Requisite Percentage.

 

8

 

 

 

 

 

9. Transfer of this Note or
Securities Issuable on Conversion Hereof. With respect to
any offer, sale or other disposition of this Note or securities
into which such Note may be converted, Investor will give written
notice to the Company prior thereto, describing briefly the manner
thereof, together with (unless waived by the Company) a written
opinion of Investor’s counsel, or other evidence if
reasonably satisfactory to the Company, to the effect that such
offer, sale or other distribution may be effected without
registration or qualification (under any federal or state law then
in effect). Upon receiving such written notice and reasonably
satisfactory opinion, if so requested, or other evidence, the
Company, as promptly as practicable, shall notify Investor that
Investor may sell or otherwise dispose of this Note or such
securities, all in accordance with the terms of the notice
delivered to the Company. If a determination has been made pursuant
to this Section
9 that the opinion of counsel for Investor, or other
evidence, is not reasonably satisfactory to the Company, the
Company shall so notify Investor promptly after such determination
has been made. Each Note thus transferred and each certificate
representing the securities thus transferred shall bear a legend as
to the applicable restrictions on transferability in order to
ensure compliance with the Securities Act, unless in the opinion of
counsel for the Company such legend is not required in order to
ensure compliance with the Securities Act. The Company may issue
stop transfer instructions to its transfer agent in connection with
such restrictions. Subject to the foregoing, transfers of this Note
shall be registered upon registration books maintained for such
purpose by or on behalf of the Company. Prior to presentation of
this Note for registration of transfer, the Company shall treat the
registered holder hereof as the owner and holder of this Note for
the purpose of receiving all payments of principal and interest
hereon and for all other purposes whatsoever, whether or not this
Note shall be overdue and the Company shall not be affected by
notice to the contrary. Notwithstanding anything in this Section 9
to the contrary, no opinion of counsel shall be required with
respect to any transfer by an Investor to its officers, directors,
partners, members or other affiliates.

 

10. Assignment by the
Company. Neither this Note nor any of the rights, interests
or obligations hereunder may be assigned, by operation of law or
otherwise, in whole or in part, by the Company without the prior
written consent of the holders of a Requisite
Percentage.

 

 

11. Notices. All
notices, requests, demands, consents, instructions or other
communications required or permitted hereunder shall be in writing
and faxed, mailed or delivered to each party at the respective
addresses of the parties as set forth in the Note Purchase
Agreement, or at such other address or facsimile number as the
Company shall have furnished to Investor in writing. All such
notices and communications will be deemed effectively given the
earlier of (i) when received, (ii) when delivered personally, (iii)
one business day after being delivered by facsimile (with receipt
of appropriate confirmation), (iv) one business day after being
deposited with an overnight courier service of recognized standing
or (v) two days after being deposited in the

U.S. mail, first
class with postage prepaid.

 

12. Pari Passu Notes.
Investor acknowledges and agrees that the payment of all or any
portion of the outstanding principal amount of this Note and all
interest hereon shall be pari
passu in right of payment and in all other respects to
the other Notes issued pursuant to the Note Purchase Agreement or
pursuant to the terms of such Notes. In the event Investor receives
payments in excess of its pro rata share of the Company’s
payments to the Investors of all of the Notes, then Investor shall
hold in trust all such excess payments for the benefit of the
holders of the other Notes and shall pay such amounts held in trust
to such other holders upon demand by such holders.

 

 

13. Usury. In the event
any interest is paid on this Note which is deemed to be in excess
of the then legal maximum rate, then that portion of the interest
payment representing an amount in excess of the then legal maximum
rate shall be deemed a payment of principal and applied against the
principal of this Note.

 

 

14. Waivers. The Company
hereby waives notice of default, presentment or demand for payment,
protest or notice of nonpayment or dishonor and all other notices
or demands relative to this instrument.

 

 

9

 

 

 

 

 

15. Remedies Cumulative.
The remedies of Investor as provided herein and in the Note
Purchase Agreement and in any other documents governing or securing
repayment hereof shall be cumulative and concurrent and may be
pursued singly, successively, or together, at the sole discretion
of Investor to the extent provided herein and in the Note Purchase
Agreement and may be exercised as often as occasion therefore shall
arise. No act or omission of the Investor, including specifically,
but without limitation, any failure to exercise any right, remedy
or recourse, shall be effective as a waiver of any right of the
Investor hereunder, unless set forth in a written document executed
by the Investor, and then only to the extent specifically recited
therein. A waiver or release with reference to one event shall not
be construed as continuing, as a bar to, or as a waiver or release
of any subsequent right, remedy or recourse as to any subsequent
event. All notices, waivers, releases and/or consents by an
Investor shall be directed to the Company only through the
Agent.

 

16. No Rights of a
Stockholder. Nothing contained in this Note shall be
construed as conferring upon the Investor or any other Person the
right to vote or consent or to receive notice as an stockholder in
respect of meetings of stockholders for the election of directors
of the Company or any other matters or any rights whatsoever as a
stockholder of the Company prior to the time that this Note is
converted pursuant to Section
6.

 

 

17. Governing Law. This
Note and all actions arising out of or in connection with this Note
shall be governed by and construed in accordance with the laws of
the State of Delaware, without regard to the conflicts of law
provisions of the State of Delaware, or of any other
state.

 

 

 

 

(Signature Page Follows) 10

 

 

 

The Company has
caused this Note to be issued as of the date first written
above.

 

 

MOBILESMITH,
INC.

a Delaware
corporation

 

By:

Name:

Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11

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