Document:

lasvegasexh103.htm

Exhibit 10.3

NOTE EXCHANGE AGREEMENT

 

This Note Exchange Agreement (this "Agreement"), dated as of this 11 day of April, 2014, is made by and between Las Vegas Railway Express, Inc., a Delaware corporation (the "Company"), and Cowen Overseas Investment LP (the "Investor").

BACKGROUND

WHEREAS, the Investor and the Company entered into that certain Purchase Agreement   dated   as  of  November   22,   2013   (the  "Purchase   Agreement")   pursuant  to which,  among  other things, the Company  issued  to  the Investor  on November 22, 2013 a 10% Senior Secured Convertible Promissory  Note  in the  aggregate  principal amount of $1,750,000.00 (the "Old Note"); and

WHEREAS , the Investor and the Company desire to exchange the Old Note (including principal and all accrued interest and any other amounts owing thereunder) for a 10% Senior Secured Convertible Promissory Note of the Company in the aggregate principal amount of $2,000,000.00 substantially in the form attached as Exhibit  A  to this Agreement (the "New Note").

AGREEMENT

NOW , THEREFORE, in consideration of the promises  and  other  good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged , the Investor  and  the Company,  intending to be legally bound , hereby  agree as follows:

1. Cancellation of Old Note. Subject to the delivery of the New Note as contemplated by Section 2 hereof, the Investor hereby agrees to the cancellation and termination of the Old Note and the Investor waives and releases any obligation of the Company, now or at any time in the future, relating to the Old Note. As evidence of the cancellation and termination of the Old Note, simultaneously with the execution and delivery of this Agreement, the Investor is delivering to the Company the Old Note for cancellation and shall execute any and all other documents reasonably requested by the Company to evidence the cancellation of the Old Note.

 

2. Issuance of New Note. In consideration for the cancellation and termination of the Old Note as set forth in Section 1 hereof, the Company hereby delivers to the Investor the New Note. The New Note shall have a maturity date of November 30, 2014, and shall be convertible into shares of the common stock, par value $0.001 per share, of the Company (the "Common Stock"), at an initial conversion price of $0.45, as more fully set forth in the New Note.

 

3. Grant of Security Interest; Release of Collateral. The obligations of the Company under the New Note shall be secured to the same extent as were the obligations of the Company under the Old Note, as more specifically set forth in that certain Security Agreement dated as of November 22, 2013 between the Company and the Investor (as amended from time to time, including, without limitation, by the Security Amendment described below, the "Security Agreement"); provided, however, that the collateral securing the Company's obligations under the New Note shall not include the "Rolling Stock" listed on Schedule I to the Security Agreement. To reflect the grant by the Company of a security interest to secure its obligations under the New Note, and the agreement of the parties to release the "Rolling Stock" listed on Schedule I to the Security Agreement as collateral for such obligations, the Company and the Investor are entering into a First Amendment to Security Agreement and Partial Release of Collateral simultaneously with the execution and delivery of this Agreement (the "Security Amendment").

 

  

1

  

4. Representations   and   Warranties   of  the   Company.    The Company  hereby makes the following representations and warranties to the Investor:

 

(a) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement, the New Note, the Security Agreement and the Security Amendment (collectively, and together with any other documents or agreements executed in connection with the transactions contemplated hereby, the "Transaction Documents"), and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and the other Transaction Documents to which it is a party by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company in connection therewith. Each of this Agreement and the other Transaction Documents to which the Company is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors' rights and remedies or by other equitable principles of general application.

(b) No Conflicts. The execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party by the Company and the consummation by the Company of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company's or any Subsidiary's certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination , amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) result in a violation of any law, rule, regulation , order, judgment , injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations) , or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. Payments of cash on account of principal of or interest under the New Note, upon any event of default under the New Note, as a result of liquidated damages under this Agreement or any of the other Transaction Documents will not require the consent of, any payment to, or the springing of any lien in favor of any lender to or creditor of the Company or any Subsidiary (under a credit facility, loan agreement or otherwise) and will not result in a default under any such credit facilities, loans or other agreements. For purposes of this Section 4(b), (A) "Material Adverse Effect" means any of (i) a material and adverse effect on the legality, validity or enforceability of any Transaction Document , (ii) a material and adverse effect on the results of operations, assets, prospects , business or condition (financial or otherwise) of the Company and its Subsidiaries or (iii) an adverse imparmnent to the Company's ability to timely perform its obligations under any Transaction Document; and (B) "Subsidiary" means each of the subsidiaries of the Company included in the reports, forms and other information required to be filed by the Company with the Commission under the Securities Act of 1933, as amended (the "Securities Act"), and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including pursuant to Section 13(a) or 15(d) of the Exchange Act, during the twelve months preceding the date of this Agreement.

 

  

2

  

(c) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other person in connection with the execution, delivery and performance by the Company of this Agreement or any other Transaction Document , other than (i) filings required by state securities laws, (ii) the filing of a Notice of Sale of Securities on Form D with the Securities and Exchange Commission (the "Commission") under Regulation D of the Securities Act, (iii) the filing of a Current Report on Form 8-K with the Commission disclosing the material terms of this Agreement and the other Transaction Documents (but not including the name of the Investor) and (iv) those that have been made or obtained prior to the date of this Agreement.

 

(d) Issuance of the New Note. The New Note has been duly authorized and, when issued and paid for in accordance with this Agreement, will be duly and validly issued, fully paid and non-assessable , free and clear of all liens. The Company has reserved from its duly authorized capital stock a number of shares of Common Stock equal to 150% of the shares of Common Stock required to comply with its conversion obligations under the New Notes calculated as of the date hereof.

(e) Ratification    and    Confirmation.      Except   as   otherwise   set  forth herein or in the schedules and exhibits hereto, the representations  and warranties of the Company made in  the  Purchase  Agreement  remain  true,  complete  and  correct in all material respects as if made on the date hereof.

5. Representations    and   Warranties   of   the   Investor.   e Investor hereby represents and warrants to the Company as follows:

 

  

3

  

 

(a) Organization; Authority. The Investor is an entity duly organized , validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite corporate or partnership power and authority to enter into and to consummate the transactions contemplated by this Agreement and the other Transaction Documents to which it is a party, and otherwise to carry out its obligations hereunder and thereunder. The execution, delivery and performance by the Investor of the transactions contemplated by this Agreement and the other Transaction Documents to which it is a party have been duly authorized by all necessary corporate or, if the Investor is not a corporation , such partnership , limited liability company or other appl icable like action , on the part of the Investor. This Agreement and the other Transaction Documents to which the Investor is a party has been duly executed by the Investor, and when delivered by the Investor in accordance with terms hereof, will constitute the valid and legally binding obligation of the Investor, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization , moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors ' rights and remedies or by other equitable principles of general application.

(b) Investment Intent. The Investor is acquiring the New Note as principal for its own account for investment purposes only and not with a view to or for distributing or reselling such New Note or any part thereof, without prejudice, however, to the Investor 's right at all times to sell or otherwise dispose of all or any part of such New Note in compliance with applicable federal and state securities laws. Subject to the immediately preceding sentence, nothing contained herein shall be deemed a representation or warranty by the Investor to hold the New Note for any period of time. The Investor is acquiring the New Note hereunder in the ordinary course of its business. The Investor does not have any agreement or understanding, directly or indirectly, with any person to distribute all or any portion of the New Note.

(c) Investor   Status.    At  the  time  the  Investor  was  offered     the  New Note, it was, and at the date hereof it is, an  "accredited  investor" as defined  in Rule 501(a) under the Securities  Act.  The Investor is not a  registered  broker-dealer under Section 15 of the Exchange Act

(d) General   Solicitation.    The  Investor  is  not  acquiring  the New  Note as  a  result  of  any  advertisement,  article,  notice  or  other    communication   regarding the New Note published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

(e) Access to Information. The Investor acknowledges that it has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company  concerning  the  terms  and conditions of the offering of the New Note and the merits  and  risks  of investing  in  the New Note; (ii) access to information about the Company and its Subsidiaries and their respective financial condition, results of  operations, business, properties ,  management and prospects sufficient to enable it to evaluate its investment ; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to  make  an  informed  decision  with respect to the acquisition of the New Note. Neither such inquiries nor any other investigation conducted by or on behalf of the Investor  or its representatives  or  counsel shall modify, amend or affect the Investor's right to rely on the truth, accuracy and completeness of the Company's representations and warranties  contained  in  this Agreement.

 

  

4

  

(f) Independent Investment Decision. The Investor has independently evaluated the merits of its decision to acquire the New Note pursuant to this Agreement , and the Investor confirms that it has not relied on the advice of any other person 's business and/or legal counsel in making such decision .

 

(g) Status of Old Note. The Investor is the sole record and beneficial owner of the Old Note and is acting on its own behalf and for its own account in exchanging the Old Note for the New Note. The Investor has not sold, assigned , participated , endorsed, transferred or deposited under any agreement, or hypothecated or pledged for any loan or otherwise transferred in any manner, the Old Note, and has not signed any power of attorney, endorsement or other assignment or authorization respecting the Old Note which is now outstanding and in force.

The Company acknowledges and agrees that the Investor has made or makes any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Section 5.

6. Affirmative Covenants. The Company hereby acknowledges and agrees that any and all of its covenants, agreements, obligations, commitments and acknowledgements with respect to the Old Note and the "Underlying Shares" as set forth in Sections 4.1 through 4.8 of the Purchase Agreement , including, without limitation , the Company's obligations pursuant to Section 4.1 (c) of the Purchase Agreement , all of which are incorporated herein by reference, shall apply equally and with full force and effect to the New Notes and the shares of Common Stock issuable upon conversion of the New Notes .

7. Negative Covenants. The Company hereby acknowledges and agrees that, from and after the date hereof until the date that the New Note has either been repaid in its entirety and/or converted entirely into Common Stock, the Company shall be bound according to all of the restrictions set forth in Article V of the Purchase Agreement , the terms and provisions of which are incorporated herein by reference, unless and until any such restriction shall have been expressly waived in writing by the Investor.

8. Indemnification. The Company will indemnify and hold the Investor and its directors, officers, shareholders, partners, employees and agents (each, an "Investor Party") harmless from any and all losses, liabilities, obligations, claims, contingencies , damages, costs and expenses, including all judgments , amounts paid in settlements, court costs and reasonable attorneys' fees and costs of investigation that any such Investor Party may suffer or incur as a result of or relating to any misrepresentation , breach or inaccuracy of any representation , warranty, covenant or agreement made by the Company in this Agreement or any other Transaction Document. In addition to the indemnity contained herein, the Company will reimburse the Investor for its reasonable legal and other expenses (including the cost of any investigation , preparation and travel m connection therewith) incurred in connection therewith , as such expenses are incurred.

 

  

5

  

9.  Miscellaneous.

(a) Entire Agreement. This Agreement and the other Transaction Documents, together with the exhibits and schedules thereto, along with the Purchase Agreement and any other documents expressly referenced herein or therein, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements, understandings, discussions and representations , oral or written , with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

(b) Amendments; Waivers; No Additional Consideration. No provision of this Agreement may be waived or amended except in a written instrument signed by the Company and the Investor. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision , condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

(c) Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. This Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.

(d) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investor. The Investor may assign any or all of its rights under this Agreement to any person to whom the Investor assigns or transfers the New Note, provided such transferee agrees in writing to be bound, with respect to the New Note, by the provisions hereof that apply to the "Investor."

(e) No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

(f) Governing Law. All questions concerning the construction , validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York , without regard to the principles of conflicts of law thereof. Each party agrees that all actions concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and the New Note (whether brought against a party hereto or its respective affiliates, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York, Borough of Manhattan (the "New York Courts"). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of this Agreement or any of the other Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action, any claim that it is not personally subject to the jurisdiction of any such New York Court, or that such Action has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Action 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 under the Purchase Agreement 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 manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If either party shall commence an Action to enforce any provisions of this Agreement or the New Note, then the prevailing party in such Action shall be reimbursed by the other party for its reasonable attorneys' fees and other costs and expenses incurred with the investigation , preparation and prosecution of such Action.

 

  

6

  

For purposes of this Section 9(f), "Action" means any action, claim, suit, inquiry, notice of violation , proceeding (including, without limitation , any investigation or partial proceeding such as a deposition) or investigation  pending  or  threatened  in writing against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency, regulatory authority (federal, state, provincial , county, local or foreign),  stock market, stock exchange or trading  facility.

(g) Survival. The representations , warranties , agreements  and covenants contained herein shall survive the execution and delivery of this Agreement.

(h) Execution. This Agreement may be executed in two or more counterparts , all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts  have been  signed by each party and delivered to the other party, it being understood that both parties need  not  sign  the same counterpart. In the event that any signature is delivered by facsimile transmission , such signature shall create a valid and binding obligation of the party  executing  (or on whose behalf such signature is executed) with the same force and  effect  as  if  such facsimile signature page were an original thereof.

  

7

  

 

(i) Severability. If any provision of this Agreement  is  held  to be invalid or unenforceable in any respect , the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be  affected  or  impaired thereby and the parties  will  attempt to agree upon  a valid  and  enforceable provision  that is a reasonable substitute therefor , and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

(j)        Rescission   and   Withdrawal   Right.    Notwithstanding  anything  to the contrary contained in (and without  limiting  any similar provisions  of) this Agreement or  any  of  the  other  Transaction  Documents,  whenever  the  Investor exercises a right, election, demand or option under  this  Agreement  or  any  of  the other Transaction Documents and the Company does not timely perform its related obligations within the periods there in provided , then the Investor may rescind or withdraw, in its sole discretion from time to time upon written  notice  to  the  Company,  any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

(k) Replacement of Securities. If any certificate or instrument evidencing the New Note is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity (which shall not include a surety bond), if requested. The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement New Note. If a replacement certificate or instrument evidencing  the  New  Note  is  requested due   to   a  mutilation   thereof,  the  Company   may  require  delivery  of  such  mutilated certificate or instrument as a condition precedent to any issuance of a replacement.

 

(1) Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Investor will be entitled to specific performance under this Agreement and the other Transaction Documents. The Company agrees that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

 

(m) Payment   Set   Aside.    To  the  extent  that  the  Company    makes  a payment or payments to the Investor pursuant to this Agreement or the other Transaction Documents or the Investor enforces or exercises its rights thereunder, and such payment or payments  or the  proceeds  of such  enforcement  or  exercise  or  any part thereof are subsequently invalidated , declared to be fraudulent or preferential, set aside, recovered from,  disgorged  by  or  are  required  to  be  refunded , repaid  or  otherwise  restored  to  the Company,  a  trustee,  receiver   or  any  other  person    under  any law  (including,  without limitation, any bankruptcy  law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally Intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not   occurred.

 

  

8

  

(n) Limitation   of   Liability.    Notwithstanding   anything  herein   to  the contrary, the Company acknowledges and agrees that the  liability  of the  Investor arising directly or indirectly, under this Agreement or the other Transaction Documents of any and every nature whatsoever shall be satisfied solely out of the assets of the Investor, and that  no  trustee, officer, other  investment  vehicle  or any other  affiliate  of the Investor or any investor, shareholder or holder of shares of beneficial interest of the Investor shall be personally liable for any liabilities of the Investor.

(o) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be provided in the manner set forth in Section 6.3 of the Purchase Agreement.

 

 

[Remainder of page intentionally left blank; signature page follows]

 

  

9

  

 

IN WITNESS WHEREOF, each of the Company and the Investor  has  executed this Note Exchange Agreement  the day and year first written   above.

 

 

	
  

	
 
LAS VEGAS RAILWAY EXPRESS, INC.

 

 

/s/ Michael Barron

	
  

	
Name:  Michael A. Barron

Title: CEO

 

 

 

COWEN OVERSEAS INVESTMENT LP

By: /s/ Kevin Raidy

Name: Kevin Raidy

 

 

 

 

10lasvegasexh104.htm

Exhbit 10.4

­Note: March 24, 2014

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION 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.

THIS NOTE DOES NOT REQUIRE PHYSICAL SURRENDER OF THE NOTE IN THE EVENT OF A PARTIAL REDEMPTION OR CONVERSION.  AS A RESULT, FOLLOWING ANY REDEMPTION OR CONVERSION OF ANY PORTION OF THIS NOTE, THE OUTSTANDING PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE MAY BE LESS THAN THE PRINCIPAL AMOUNT AND ACCRUED INTEREST SET FORTH BELOW.

8% CONVERTIBLE PROMISSORY NOTE

OF

LAS VEGAS RAILWAY EXPRESS, INC.

Issuance Date:  March 24, 2014

Beginning Value of this Note: $150,000

Original Issue Discount: $15,000

Total Face Value of Note: $165,000

This Note (“Note” or “Note”) is a duly authorized Convertible Promissory Note of LAS VEGAS RAILWAY EXPRESS, INC. a corporation duly organized and existing under the laws of the State of Delaware (the “Company”), designated as the Company's eight percent (8%) Convertible Promissory Note Due March 24, 2015 (“Maturity Date”) in the principal amount of One Hundred Sixty Five Thousand Dollars ($165,000) (the “Note”).

 

For Value Received, the Company hereby promises to pay to the order of Iconic Holdings, LLC or its registered assigns or successors-in-interest (“Holder”) the principal sum up to of One Hundred Sixty Five Thousand Dollars ($165,000) and to pay “guaranteed” interest on the principal balance hereof (which principal balance shall be increased by the Holder’s payment of additional consideration as set forth herein and which increase shall also include the prorated amount of the original issue discount in connection with Holders payment of additional consideration) at the rate of eight percent (8%), all of which “guaranteed interest shall be deemed earned as of the date of each such payment of additional consideration by the Holder on the Maturity Date, to the extent such principal amount and “guaranteed” interest have been repaid or converted into the Company's Common Stock, $0.0001 par value per share (the “Common Stock”), in accordance with the terms hereof.

 

  

1

  

 

The initial Purchase Price will be fifty five thousand dollars ($55,000) of consideration upon execution of the Note Purchase Agreement and all supporting documentation.  The sum of fifty thousand dollars ($50,000.00) shall be remitted and delivered to the Company, and five thousand dollars ($5,000) shall be retained by the Purchaser through an original issue discount for due diligence and legal bills related to this transaction. The Holder reserves the right to pay additional consideration at any time and in any amount it desires, at its sole discretion.  The principle sum (including the prorated amount of the original issue discount) owed by the Company shall be prorated to the amount of consideration paid by the Holder and only the consideration received by the Company, plus prorated “guaranteed” interest and other fees and original issue discount, shall be deemed owed by the Company.  The original issue discount is set at ten percent (10%) of any consideration paid. The Company is not responsible to repay any unfunded portion of this Note.

 

In addition to the “guaranteed” interest referenced above, and in the Event of Default pursuant to Section 2(e), additional interest will accrue at the rate equal to the lower of fifteen percent (15%) per annum or the highest rate permitted by law (the “Default Rate”).

 

This Note may not be prepaid in whole or in part except as otherwise provided herein.  Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a Business Day (as defined below), the same shall instead be due on the next succeeding day which is a Business Day.

 

For purposes hereof the following terms shall have the meanings ascribed to them below:

 

 “Business Day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the City of New York are authorized or required by law or executive order to remain closed.

 

 “Conversion Price” shall be equal to the lower of $.50 or sixty percent (60%) of the lowest trading price of the Company’s common stock during the twenty five (25) consecutive trading days prior to the date on which Holder elects to convert all or part of the Note.  If the Company is placed on “chilled” status with the Depository Trust Company (“DTC”), the discount shall be increased by ten percent (10%) until such chill is remedied. If the Company is not Deposits and Withdrawal at Custodian (“DWAC”) eligible through their Transfer Agent and the Depository Trust Company’s (“DTC”) Fast Automated Securities Transfer (“FAST”) system, the discount will be increased by five percent (5%). In the case of both, the discount shall be an additional cumulative fifteen percent (15%).

 

 “Principal Amount” shall refer to the sum of (i) the original principal amount of this Note (including the prorated amount of the original issue discount), (ii) all accrued but unpaid interest hereunder, and (iii) any default payments owing under the Agreements but not previously paid or added to the Principal Amount.

 

“Trading Day” shall mean a day on which there is trading on the Principal Market.

 

  

2

  

 

“Underlying Shares” means the shares of common stock into which the Note is convertible (including interest or principal payments in common stock as set forth herein) in accordance with the terms hereof.

 

The following terms and conditions shall apply to this Note:

 

Section 1.00  Conversion.

 

(a) Conversion Right.  Subject to the terms hereof and restrictions and limitations contained herein, the Holder shall have the right, at the Holder's option, at any time to convert the outstanding Principal Amount and interest under this Note in whole or in part.

 

(b) The date of any Conversion Notice hereunder and any Payment Date shall be referred to herein as the “Conversion Date”.

 

(i) Stock Certificates or DWAC.  The Company will deliver to the Holder, or Holder’s authorized designee, no later than two (2) Trading Days after the Conversion Date, a certificate or certificates (which certificate(s) shall be free of restrictive legends and trading restrictions) representing the number of shares of Common Stock being acquired upon the conversion of this Note.  In lieu of delivering physical certificates representing the shares of Common Stock issuable upon conversion of this Note, provided the Company's transfer agent is participating in the FAST program, upon request of the Holder, the Company shall use commercially reasonable efforts to cause its transfer agent to electronically transmit such shares issuable upon conversion to the Holder (or its designee), by crediting the account of the Holder’s (or such designee’s) prime broker with DTC through its DWAC program (provided that the same time periods herein as for stock certificates shall apply).

 

(ii)   Charges, Expenses.  Issuance of Common Stock to Holder, or any of its assignees, upon the conversion of this Note shall be made without charge to the Holder for any issuance fee, transfer tax, postage/mailing charge or any other expense with respect to the issuance of such Common Stock. Company shall pay all Transfer Agent fees incurred from the issuance of the Company stock to Holder and acknowledges that this is a material obligation of this Note.

 

If the Company fails to deliver to the Holder such certificate or certificates (or shares through DTC) pursuant to this Section (free of any restrictions on transfer or legends) prior to the third Trading Day after the Conversion Date, the Company shall pay to the Holder as liquidated damages, in cash, an amount equal to Two Thousand Dollars ($2,000) per day, until such certificate or certificates are delivered. The Company acknowledges that it would be extremely difficult or impracticable to determine the Holder’s actual damages and costs resulting from a failure to deliver the Common stock and the inclusion herein of any such additional amounts are the agreed upon liquidated damages representing a reasonable estimate of those damages and costs. Such liquidated damages will be added to the principal value of the Note. 

 

(c) Reservation and Issuance of Underlying Securities.  The Company covenants that it will at all times reserve and keep available out of its authorized and unissued Common Stock solely for the purpose of issuance upon conversion of this Note (including repayments in stock), free from preemptive rights or any other actual contingent purchase rights of persons other than the Holder, not less than three times (3x) the number of shares of Common Stock as shall be issuable (taking into account the adjustments under this Section 1 but without regard to any ownership limitations contained herein) upon the conversion of this Note in Common Stock.  These shares shall be reserved in proportion with the Consideration actually received by the Company and the total reserve will be increased with future payments of consideration by Holder.  The Company covenants that all shares of Common Stock that shall be issuable will, upon issue, be duly authorized, validly issued, fully-paid, non-assessable and freely-tradable. The Company agrees that this is a material term of this Note.

 

  

3

  

 

(d) Conversion Limitation.  The holder will not submit a conversion to the Company that would result in the Holder owning more than 9.99% of the total outstanding shares of the Company.

 

Section 2.00                                 Defaults and Remedies.

 

(e) Events of Default. An “Event of Default” is:  (i) a default in payment of any amount due hereunder which default continues for more than five (5) business days after the due date; (ii) a default in the timely issuance of underlying shares upon and in accordance with terms hereof, which default continues for three (3) Business Days after the Company has received notice informing the Company that it has failed to issue shares or deliver stock certificates within the third (3rd) day following the Conversion Date; (iii) failure by the Company for three (3) days after notice has been received by the Company to comply with any material provision of the Purchase Agreement (including without limitation the failure to issue the requisite number of shares of Common Stock upon conversion hereof; (iv) a material breach by the Company of its representations or warranties in the Exchange Agreement; (v) any default after any cure period under, or acceleration prior to maturity of, any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by the Company in excess of $15,000 or for money borrowed the repayment of which is guaranteed by the Company in excess of $15,000, whether such indebtedness or guarantee now exists or shall be created hereafter; (vi) any failure of the Company to satisfy its  “filing” obligations under the rules and guidelines issued by OTC Markets News Service, OTC Markets.com and their affiliates; (vii) Any failure of the Company to provide the Holder with information related to the corporate structure including, but not limited to, the number of authorized and outstanding shares, public float, etc. within one (1) day of request by Holder; (viii) failure to have sufficient number of authorized but unissued shares of the Company’s Common Stock available for any conversion; (ix) failure of Company’s stock to maintain a bid price in its trading market which occurs for at least three (3) consecutive days; (x) any delisting for any reason; (xi) failure by Company to pay any of its Transfer Agent fees or to maintain a Transfer Agent of record; (xii) any trading suspension imposed by the Securities and Exchange Commission under Sections 12(j) or 12(k) of the 1934 Act; (xiii) if the Company is subject to any Bankruptcy Event; or (xiv) failure of the Company to remain compliant with DTC, thus incurring a “chilled” status with DTC.

 

  Remedies.  If an Event of Default occurs and is continuing with respect to the Note, the Holder may declare all of the then outstanding Principal Amount of this Note, including any interest due thereon, to be due and payable immediately without further action or notice. In the event of such acceleration, the amount due and owing to the Holder shall be increased to one hundred and fifty percent (150%) of the outstanding Principal Amount of the Note held by the Holder plus all accrued and unpaid interest, fees, and liquidated damages, if any. Additionally, this Note shall bear interest on any unpaid principal from and after the occurrence and during the continuance of an Event of Default at a rate of twenty percent (20%). Finally, the Note will accrue liquidated damages of one thousand dollars ($1,000) per day from and after the occurrence and during the continuance of an Event of Default. The Company acknowledges that it would be extremely difficult or impracticable to determine the Holder’s actual damages and costs resulting from an Event of Default and any such additional amounts are the agreed upon liquidated damages representing a reasonable estimate of those damages and costs. The remedies under this Note shall be cumulative and added to the principal value of the Note.

  

4

  

 

Section 3.00 General.

 

(f) Payment of Expenses.  The Company agrees to pay all reasonable charges and expenses, including attorneys' fees and expenses, which may be incurred by the Holder in successfully enforcing this Note and/or collecting any amount due under this Note.

 

(g) Assignment, Etc.  The Holder may assign or transfer this Note to any transferee at its sole discretion.  This Note shall be binding upon the Company and its successors and shall inure to the benefit of the Holder and its successors and permitted assigns.

 

(h) Governing Law; Jurisdiction.

 

(i) Governing Law.  This note will be governed by and construed in accordance with the laws of the state of California without regard to any conflicts of laws or provisions thereof that would otherwise require the application of the law of any other jurisdiction.

 

(ii)           Jurisdiction.  Any dispute or claim arising to or in any way related to this Note or the rights and obligations of each of the parties hereto shall be settled by binding arbitration in San Diego, California.  All arbitration shall be conducted in accordance with the rules and regulations of the American Arbitration Association ("AAA").  AAA shall designate an arbitrator from an approved list of arbitrators following both parties' review and deletion of those arbitrators on the approved list having a conflict of interest with either party.  The Company agrees that a final non-appealable judgment in any such suit or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on such judgment or in any other lawful manner.

 

(ii)           No Jury Trial.  The Company hereto knowingly and voluntarily waives any and all rights it may have to a trial by jury with respect to any litigation based on, or arising out of, under, or in connection with, this note.

  

5

  

 

IN WITNESS WHEREOF, the Company has caused this Convertible Promissory Note to be duly executed on the day and in the year first above written.

	  	  	  	  	  	
LAS VEGAS RAILWAY EXPRESS, INC.

	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	
By: /s/ Michael Barron

	  	  	  	  	  	  
	  	  	  	  	  	Name: Michael Barron
	  	  	  	  	  	  
	  	  	  	  	  	Title: CEO
	  	  	  	  	  	  
	  	  	  	  	  	
Date: 3/24/14

This Note is acknowledged as:   Note of March 24, 2014

  

6

  

 

EXHIBIT A

FORM OF CONVERSION NOTICE

(To be executed by the Holder in order to convert that certain $165,000 Convertible Promissory Note identified as the Note)

DATE:                                ____________________________

FROM:                                Iconic Holdings, LLC

	
  

	
Re:

	
$165,000 Convertible Promissory Note (this “Note”) originally issued by LAS VEGAS RAILWAY EXPRESS, INC., a Delaware corporation, to Iconic Holdings, LLC on March 24, 2014.

The undersigned on behalf of Iconic Holdings, LLC, hereby elects to convert $_______________________ of the aggregate outstanding Principal Amount (as defined in the Note) indicated below of this Note into shares of Common Stock, $0.0001 par value per share, of LAS VEGAS RAILWAY EXPRESS, INC. (the “Company”) according to the conditions hereof, as of the date written below.  If shares are to be issued in the name of a person other than undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith.  No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.  The undersigned represents as of the date hereof that, after giving effect to the conversion of this Note pursuant to this Conversion Notice, the undersigned will not exceed the “Restricted Ownership Percentage” contained in this Note.

	
Conversion information:

	  
	  	
Date to Effect Conversion

	  	  
	  	  
	  	
Aggregate Principal Amount of Note Being Converted

	  	  
	  	  
	  	
Aggregate Interest on Amount Being Converted

	  	  
	  	  
	  	
Number of Shares of Common Stock to be Issued

	  	  
	  	  
	  	
Applicable Conversion Price

	  	  
	  	  
	  	
Signature

	  	  
	  	  
	  	
Name

 

 

7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00240-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00240-of-00352.parquet"}]]