Document:

Exhibit 10.2

 

$10,000.00

Aug 9, 2016

Promissory Note

As hereinafter agreed Grote Molen, Inc., jointly and severally, promises to pay to the order of David N. Nemelka  Ten Thousand Dollars ($10,000.00). And it is hereby agreed that the said amount ($10,000.00) shall be payable upon demand. Interest shall accrue at a rate of six percent (6%) per annum and will be charged on the unpaid balance until the whole amount of the principal and interest is paid. There shall be no penalty for early payment of this note.

Should default be made in the payment of the demand note then the whole unpaid amount shall become immediately due and payable; and in the event default is made and said note is placed in the hands of an attorney for collection or suit is brought on the same, then the undersigned agrees to pay all costs and attorney's fees that might be incurred.  If there is a lawsuit, borrower agrees upon lender's request to submit to the jurisdiction of the county of Bannock County, the State of Idaho. This note shall be governed by and construed in accordance with the laws of the State of Idaho.

 

	 	
UNDERSIGNED:

	 	
John B. Hofman

	 	 
	 	 
	 	
 /s/ John B. Hofman

	 	
John B. Hofman, President

	 	
Grote Molen, Inc.Exhibit 10.4

 

Warrant Purchase Agreement

This Warrant Purchase Agreement (the "Agreement") is made and entered into as of September 7, 2016, by and between Grote Molen, Inc., a Nevada corporation (the "Company"), and David N. Nemelka ("Purchas-er").

RECITALS

WHEREAS, on July 15, 2016, the Company issued Purchaser that certain Promissory Note (the "Note") in the principal amount of $50,000, a copy of which is attached hereto as Exhibit A and incorporated herein by reference; and

WHEREAS, the Purchaser desires to convert/cancel the Note in consideration for the issuance by the Company to the Purchaser of a common stock purchase warrant of the Company on the terms and conditions described herein.

AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the Company and Purchaser agree as follows:

1. Conversion/Cancellation of Debt.  Purchaser hereby irrevocably elects to convert the principal amount of the Note and all accrued and unpaid interest thereon, if any, into a common stock purchase warrant (the "Warrant") entitling the holder to acquire up to 5,000,000 shares of the Company's Common Stock at an exercise price of $0.70 per share during the five-year period commencing September 1, 2018.  The Warrant shall be represented by a warrant agreement in substantially the same form as that attached hereto as Exhibit "B."  Upon the execution of this Agreement, the Note shall be deemed to have been paid and satisfied in full and the Purchaser shall be deemed to have acquired the Warrant, all effective as of the date of this Agreement.

2. Representations and Warranties of the Company.  The Company represents and warrants to Purchaser as follows:

(a)  The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated thereby (i) are within the power of the Company and (ii) have been duly authorized by all necessary actions on the part of the Company.

(b)  This Agreement constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors' rights generally and general principles of equity.

(c)  The Warrant, when issued, sold and delivered in accordance with the terms and for the consideration set forth in this Agreement, will be duly authorized, validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under applicable state and federal securities laws and liens or encumbrances created by or imposed by Purchaser.  The Common Stock issuable upon exercise of the Warrant has been duly reserved for issuance, and upon issuance in accordance with the terms of the Warrant, will be duly authorized, validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under applicable federal securities laws and liens or encumbrances created by or imposed by Purchaser.

3. Representations and Warranties of Purchaser.  The Purchaser represents and warrants to the Company as follows:

(a)  Purchaser is acquiring the Warrant for his own account, for investment and with no present intention of distributing, reselling or otherwise disposing of the Warrant.

(b)  Purchaser has been furnished with sufficient information about the Company, the management of the Company and the business operations of the Company to allow him to make an informed investment decision prior to pur-chasing the Warrant and Purchaser has been furnished access to any additional information requested by him.

(c)  Purchaser is an accredited investor within the meaning of Rule 502 of Regulation D promulgated under the Securities Act of 1933, as amended, has experience in business enterprises or investments entailing risks of a type or to a degree substantially similar to those entailed in an invest-ment in the Warrant.  In particular, Purchaser understands that by converting the Note to equity in the Company, he will no longer be a creditor of the Company and, accordingly, his rights in connection with the Warrant will be inferior to the rights he possessed pursuant to the Note.

(d)  Purchaser understands that the Warrant and the share of Common Stock issuable upon exercise thereof (the "Securities") may not be sold, transferred or otherwise disposed of in the absence of either an effective registration statement covering the Shares under the Securities Act of 1933, or an opinion of the Company's counsel that registration is not required.  Except as set forth in the Warrant with regard to "piggy-back" registration rights, the Company shall have no obligation to register the Securities.

(e)  Purchaser is not subject to any of the "bad actor" disqualifications described in Rule 506(d)(1)(i) through (viii) promulgated under the Securities Act.

(f)  Purchaser owns and has good and marketable title to the Note, free and clear of any liens, encumbrances or security interests and of any adverse claims.

(g)  Purchaser has full legal capacity, power and authority to execute and deliver this Agreement and to perform his obligations hereunder.  This Agreement constitutes the valid and binding obligation of Purchaser, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors' rights generally and general principles of equity.

4.  Legend on Agreements/Certificates.  The agreement/certificates evidencing the Securities to be issued in connection with this transaction shall be endorsed with a restricted legend in substantially the following form:

THE SECURITIES REPRESENTED BY THIS AGREEMENT/CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT.  THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR THE AVAILABILITY OF AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.

2

5. Entire Agreement.  This agreement constitutes the entire agreement of parties hereto relating to the subject matter hereof and correctly sets forth the rights, duties, and obligations of each to the other as of its date.  Any prior agreements, promises, negotiations, or representations not expressly set forth in this Agreement shall be void and of no force or effect.

6. Severability.  If any provision of this Agreement is or is deemed invalid, illegal or unenforceable in any jurisdiction, such provision shall be deemed amended to conform to applicable laws so as to be valid and enforceable or, if it cannot be so amended without materially altering the intention of the parties, it shall be stricken and the remainder of this Agreement shall remain in full force and effect.

7. Binding Effect.  This Agreement shall bind and the benefits shall inure to the parties hereto and their respective heirs, legal representatives, successors and assigns.

8. Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.  Facsimile or other electronically transmitted signatures shall be as effective as original signatures.

Dated effective as of the date first written above.

 

	 	
The Company:

	
Grote Molen, Inc.

	 	 	
A Nevada corporation

	 	 	 
	 	 	 
	 	 	
By /s/ John B. Hofman

	 	 	
John B. Hofman

	 	 	
President and CEO

	 	 	 
	 	 	
The Purchaser:

	 	 	 
	 	 	 
	 	 	
 /s/ Davd N. Nemelka

	 	 	
David N. Nemelka

 

3

Exhibit A

Attach hereto a copy of the Note.

 

Exhibit B

Attach hereto a copy of the Warrant Agreement.Exhibit 4.1

NNNNNNNNNNNN .   + Georgeson LLC Toll-Free: (866) 432-2791 E-mail: Overstock@Georgeson.com   NNNNNN CN12N345N678N90 NJ NT MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD   3 ADD 4 ADD 5 ADD 6 12345678901234 Primary Subscription Rights THIS SUBSCRIPTION   RIGHTS OFFERING EXPIRES AT 5:00 P.M., EASTERN TIME, ON DECEMBER 6, 2016   UNLESS THE EXERCISE PERIOD IS EXTENDED (SUCH DATE AND TIME, AS IT MAY BE   EXTENDED, THE “EXPIRATION DATE”). Overstock.com, Inc. (the “Corporation”) is   conducting a rights offering (the “Rights Offering”) in which the Corporation   is distributing non-transferable rights (the “Subscription Rights”) to the   holders of record (the “Record Holders”) of the Corporation’s common stock   (the “Common Stock”) as of 4:00 p.m., Eastern Time, on November 10, 2016 (the   “Record Date”), as described and subject to the limitations set forth in the   accompanying base Prospectus dated December 9, 2015 (the “Base Prospectus”)   and Prospectus Supplement dated November 14, 2016 (the “Prospectus Supplement”   and, together with the Base Prospectus, the “Prospectus”). Each Record Holder   will receive one Subscription Right for each ten (10) shares of Common Stock   held on the Record Date, plus one additional Subscription Right if the number   of shares of Common Stock held by the Record Holder on the Record Date is not   exactly divisible by ten. Subject to proration and other limitations   described in the Prospectus, each Subscription Right entitles the Record   Holder to subscribe (the “Basic Subscription Privilege”) for one share of   either (1) the Corporation’s Blockchain Voting Series A Preferred Stock,   $0.0001 par value per share (the “Series A Preferred”), which will be issued   as digital securities, or (2) the Corporation’s Voting Series B Preferred   Stock, $0.0001 par value per share (the “Series B Preferred”), which will be   issued as non-digital certificated or uncertificated securities, in each case   at a subscription price per share calculated as set forth below under   “SUBSCRIPTION PRICE” (the “Subscription Price”). All Record Holders may   subscribe for shares of Series B Preferred. However, only U.S. residents and   entities meeting the qualifications described below and that open an account   with Keystone Capital Corporation (“Keystone”) may purchase shares of Series   A Preferred. Individual U.S. residents must provide a Form W-9 and must be   either a U.S. citizen with a U.S. address or a U.S. permanent resident alien   who has maintained a residence in the United States for a minimum of one year   and possesses a valid U.S. Social Security number. A corporation, partnership   or limited liability company formed under the laws of the United States or   any state and that has a physical address in the United States and provides a   valid U.S. employer identification number may also purchase shares of Series   A Preferred. Subject to additional requirements that Keystone may impose, a   trust may purchase shares of Series A Preferred as described in the   Prospectus if the trust has a physical address in the United States and all   of the trustees would qualify to purchase Series A Preferred on their own   behalf. As described in the Prospectus, the Series A Preferred may be   acquired and held only by the beneficial owner, and may not be held in   “street name,” except that custodial accounts for minors will be permitted if   the custodian would qualify to purchase shares of Series A Preferred on its   own behalf. Each Record Holder who fully exercises the Basic Subscription   Privilege for shares of one series will be eligible to participate in an over-subscription   privilege (the “Over-Subscription Privilege”). Under the terms of the   Over-Subscription Privilege, subject to the conditions and limitations   described in the Prospectus, a Record Holder may be entitled to subscribe for   additional shares of the same series that such holder subscribed for pursuant   to the Basic Subscription Privilege at the Subscription Price, to the extent   that the shares are unclaimed by other Record Holders exercising their Basic   Subscription Privilege. The Record Holder named on this Rights Certificate is   entitled to the number of Subscription Rights shown on this Rights   Certificate. The method of exercise of Subscription Rights depends on whether   the Record Holder desires to subscribe for shares of Series A Preferred, shares   of Series B Preferred, or both, as described below under “METHOD OF EXERCISE   OF SUBSCRIPTION RIGHTS”. The rights of the holder of this Rights Certificate   are subject to the matters described in the Prospectus, including the   Corporation’s right to amend, modify or cancel the Rights Offering at any   time in its sole discretion. THE SUBSCRIPTION RIGHTS ARE NON-TRANSFERABLE   This Rights Certificate and the related Subscription Rights are   non-transferable. They cannot be sold, transferred or assigned to anyone else.   Only the Record Holder can exercise the Subscription Rights. SUBSCRIPTION   PRICE The Subscription Price, whether for shares of Series A Preferred or   shares of Series B Preferred, and for both the Basic Subscription Privilege   and the Over-Subscription Privilege, will be calculated as the lower of: (A)   $15.68 (the “Maximum Price”), or (B) 95% of the volume-weighted average   trading price of the Common Stock on the Nasdaq Global Market for the five   (5) trading days ending on and including December 6, 2016 (the “End of   Subscription Period Price”). You will be required to fund your subscription   at the Maximum Price. If the End of Subscription Period Price is lower than   the Maximum Price, Computershare Trust Company, N.A. (the “Rights Agent”)   will refund the difference to you promptly after the closing of the Rights   Offering. METHOD OF EXERCISE OF SUBSCRIPTION RIGHTS Series A Preferred – In   order to exercise your Subscription Rights for shares of Series A Preferred,   you must go to the Subscription Portal created by the Rights Agent located at   https://www.mydigitalshares.com and follow the instructions on the   Subscription Portal. Series B Preferred – In order to exercise your   Subscription Rights for shares of Series B Preferred, you must properly   complete and sign this Rights Certificate on the back and return it to the   Rights Agent, Computershare Trust Company, N.A., in the envelope provided,   together with payment in full for an amount equal to the Maximum Price   multiplied by the total number of shares of Series B Preferred that you are   requesting to purchase, before 5:00 p.m., Eastern Time, on December 6, 2016.   The total number of shares of Series A Preferred or Series B Preferred you   may subscribe for under the Basic Subscription Right is limited to the number   of Subscription Rights you hold. Holder ID 123456789 COY XXXX Class   Subscription Rights Rights Qty Issued XXX.XXXXXX Rights Cert # 12345678   Signature of Owner and U.S. Person for Tax Certification Signature of   Co-Owner (if more than one registered holder listed) Date (mm/dd/yyyy) + 1 2   3 4 5 6 7 8 02GXTA C L S X R T 2 C O Y C NNNNNNNNN OVERSTOCK.COM, INC.   SUBSCRIPTION RIGHTS CERTIFICATE 

    

 

. Series A   Preferred – Full payment of the Maximum Price for each share of Series A   Preferred you wish to subscribe for must be made in U.S. dollars and must be   made in accordance with the instructions on the Subscription Portal and the   accompanying Instructions for Exercise of Subscription Rights for Shares of   Blockchain Voting Series A Preferred Stock. Series B Preferred – Full payment   of the Maximum Price for each share of Series B Preferred you wish to   subscribe for must be made in U.S. dollars by (1) a personal check drawn upon   a U.S. bank payable to Computershare or (2) cashier’s check drawn upon a U.S.   bank payable to Computershare, in each case in accordance with the   “Instructions as to Use of Overstock.com, Inc. Subscription Rights   Certificates” that accompanied the mailing or distribution of the Prospectus.   Any personal check used to pay for shares of Series B Preferred must clear   the appropriate financial institutions prior to 5:00 p.m., Eastern Time, on   December 6, 2016, unless the Expiration Date is extended. The clearinghouse   may require five or more business days. Payments by money order will not be   accepted. Payments of the Subscription Price will be held in an escrow   account until five business days following the Expiration Date, unless the   Corporation cancels the Rights Offering. No interest will be paid to you on   the funds you deposit with the Rights Agent under any circumstances. If the   Subscription Price is determined to be the End of Subscription Period Price   instead of the Maximum Price as set forth above under “SUBSCRIPTION PRICE”,   the Rights Agent, promptly after the Expiration Date, will refund all excess   payments made by each Record Holder that has properly exercised Subscription   Rights. Refunds will be sent directly to the beneficial holders and will not   be sent through nominees. I apply for a portion of my entitlement in the form   of shares of Series B Preferred (no. of shares of (per share) (no. of   additional shares) (per share) pursuant to the Over-Subscription Privilege**   (no. of shares) (per share) * You must go to the Subscription Portal at   https://www.mydigitalshares.com and follow the instructions on the   Subscription Portal to complete your subscription for shares of Series A   Preferred. You can only participate in the Over-Subscription Privilege if you   have subscribed for your full entitlement of shares of one series pursuant to   the Basic Subscription Privilege. You may not participate in the   Over-Subscription Privilege if you subscribe for shares of both series   pursuant to your Basic Subscription Privilege.You may exercise your   Over-Subscription Privilege only for shares of the same series that you   subscribe for pursuant to your Basic Subscription Privilege. Please complete   all applicable information and return to: COMPUTERSHARE TRUST COMPANY, N.A.   By First Class Mail: Computershare Trust Company, N.A., Corporate Actions   Voluntary Offer, P.O. Box 43011, Providence, RI 02940-3011 By Express Mail or   Overnight Delivery: Computershare Trust Company, N.A., Corporate Actions   Voluntary Offer, 250 Royall Street, Suite V, Canton, MA 02021 DELIVERY OF   THIS RIGHTS CERTIFICATE TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE DOES NOT   CONSTITUTE A VALID DELIVERY. Any questions regarding this Rights Certificate   and Subscription Rights Offering may be directed to Georgeson LLC toll free   at (866) 432-2791 or by E-mail to Overstock@Georgeson.com ** SERIES B   PREFERRED ONLY --PLEASE PRINT ALL INFORMATION CLEARLY AND LEGIBLY SECTION   1:OFFERING INSTRUCTIONS (check the appropriate boxes) IF YOU WISH TO EXERCISE   ALL YOUR SUBSCRIPTION RIGHTS FOR SHARES OF SERIES B PREFERRED OR A   COMBINATION OF SHARES OF SERES A PREFERED AND SERIES B PREFERRED: I apply for   ALL of my entitlement of shares ofx <$AMOUNT> =$ Series B Preferred   pursuant to the Basic Subscription Privilege(no. of shares)(per share) OR x   <$AMOUNT> =$ and the remainder in shares of Series A Preferred.*Series   B Preferred) (no. of shares of Series A Preferred)* EXAMPLE: If you hold   1,000 Subscription Rights, your Basic Subscription Privilege permits the   purchase of 1,000 shares, in total, of Series A Preferred (via the   Subscription Portal) and Series B Preferred (by completing this Rights   Certificate). In addition, I apply for additional shares of Series B   Preferredx <$AMOUNT> =$ IF YOU WISH TO EXERCISE SOME, BUT LESS THAN   ALL, OF YOUR SUBSCRIPTION RIGHTS FOR SHARES OF SERIES B PREFERRED: I apply   forx <$AMOUNT> =$ Amount of check enclosed (payable to Computershare):$ IF YOU WISH TO SUBSCRIBE FOR SHARES OF SERIES A PREFERRED, GO TO THE   SUBSCRIPTION PORTAL AT HTTPS://WWW.MYDIGITALSHARES.COM SECTION 2:SUBSCRIPTION   AUTHORIZATION: I acknowledge that I have received the Base Prospectus and   Prospectus Supplement with respect to the Rights Offering, and I hereby   subscribe for the number of shares indicated above on the terms and   conditions specified in the Base Prospectus and Prospectus Supplement   relating to the Basic Subscription Privilege and the Over-Subscription   Privilege in the Rights Offering. Signature of Subscriber(s) (and address if   different than that listed on this Rights Certificate) Telephone number   (including area code)

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