Document:

f8k011514ex4i_codesmart.htm

Exhibit 4.1

 

Note: January 10, 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.

 

10% CONVERTIBLE PROMISSORY NOTE

 

OF

 

CODESMART HOLDINGS, INC.

 

Issuance Date: January 10, 2014

Beginning Value of this Note: $100,000

Original Issue Discount $10,000 

Principal Amount of Note: $110,000

 

THIS NOTE (“Note” or “Note”) is a duly authorized Convertible Promissory Note of CODESMART HOLDINGS, INC. a corporation duly organized and existing under the laws of the State of Florida (the “Company”), designated as the Company's 10% Convertible Promissory Note Due January 10, 2015 (“Maturity Date”) in the principal amount of One Hundred Ten Thousand Dollars ($110,000) (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 of One Hundred Ten Thousand Dollars ($110,000) together with all accrued but unpaid interest, if any, on the Maturity Date, to the extent such principal amount and interest has not 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.

 

The initial Purchase Price will be one hundred ten thousand dollars ($110,000) of consideration upon execution of the Note Purchase Agreement and all supporting documentation. The sum of one hundred thousand dollars ($100,000.00) shall be remitted and delivered to the Company, and ten thousand dollars ($10,000) 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 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 interest, 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.

 

$110,000.00 Convertible 

Note CodeSmart Holdings, Inc. 

Iconic Holdings, LLC

 

  

1

  

 

Interest on any outstanding principal balance shall accrue at a rate of 10% per annum. In the Event of Default pursuant to Section 2(f), interest will accrue at the rate equal to the lower of twenty (20%) per annum or the highest rate permitted by law (the “Default Rate”).

 

This note may be prepaid according to the following schedule: Within sixty (60) days of the date of execution, this note may be prepaid for one hundred twenty percent (120%) of face value. Between sixty (60) and one hundred twenty (120) days from the date of execution, this note may be prepaid for one hundred thirty percent (130%) of face value. Between one hundred twenty (120) and one hundred eighty (180) days from the date of execution, this note may be prepaid for one hundred forty percent (140%) of face value. After one hundred eighty (180) days from the date of execution until the Due Date, this note may not be prepaid without written consent from Holder. 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 sixty five percent (65%) of the lowest VWAP of the Company’s common stock during the twenty (20) 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 will be increased by ten percent (10%) until such chill is remedied.

 

“Principal Amount” shall refer to the sum of (i) the original principal amount of this Note, (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.

 

“Principal Market” shall mean the OTC Markets Group, LLC’s OTCQB Marketplace.

 

“Rule 144 Opinion” means an opinion letter prepared by legal counsel of Holder’s choice, which is reasonably acceptable to the Company, stating that the subject securities of the Company may be resold by the Holder without registration in reliance of Rule 144 promulgated under Securities Act of 1933, as amended.

 

$110,000.00 Convertible 

Note CodeSmart Holdings, Inc. 

Iconic Holdings, LLC

 

  

2

  

 

(b)    The date of any Conversion Notice hereunder and any Payment Date shall

 

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

 

“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.

 

“VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities market on which such security is then traded) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “Volume at Price” function or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in “OTC Pink” by Pink OTC Markets Inc. (formerly Pink Sheets LLC), and any successor thereto. If the VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 20. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.

 

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 three (3) Trading Days after the Conversion Date (the “Deadline”), a certificate or certificates (which certificate(s) shall be free of restrictive legends and trading restrictions only if Holder has provided a Rule 144 Opinion or an effective registration statement for the resale of such shares) 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 DTC Fast Automated Securities Transfer (“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 Deposits and Withdrawal at Custodian (DWAC) program (provided that the same time periods herein as for stock certificates shall apply); provided that the Holder shall have provided the Company a Rule 144 Opinion or an effective registration statement for the resale of such conversion shares.

 

$110,000.00 Convertible 

Note CodeSmart Holdings, Inc. 

Iconic Holdings, LLC

 

  

3

  

 

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 One Thousand Dollars ($1,000) 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. Notwithstanding anything to the contrary herein, if the Holder does not provide a Rule 144 Opinion or an effective registration statement for the resale of the conversion shares before the required Deadline therefore causing the Company unable to deliver the conversion shares without restriction, such failure by the Company to deliver conversion shares without restriction by the Deadline shall not be deemed as an event of default and shall not incur the liquidated damages provided in the preceding sentence.

 

(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.

 

(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.

 

$110,000.00 Convertible 

Note CodeSmart Holdings, Inc. 

Iconic Holdings, LLC

 

  

4

  

 

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) Business 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 Purchase 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 $500,000 or for money borrowed the repayment of which is guaranteed by the Company in excess of $500,000, whether such indebtedness or guarantee now exists or shall be created hereafter; (vi) any failure of the Company comply with its reporting obligations under Sections 13 or 15(d) of the Securities Exchange Act of 1934, as amended, when the Holder elects to convert any portion of the Note; (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 two (2) days 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 five (5) consecutive business days; (x) any delisting of the Company’s Common Stock from the Principal Market; (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) failure of the Company to remain compliant with DTC, thus incurring a “chilled” status with DTC; or (xiv) failure by the Company to allow the Holder to execute on the Second and/or Last Closings options in the January 10th, 2014 ITEN Iconic Note Purchase Agreement.

 

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%). 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.

 

$110,000.00 Convertible 

Note CodeSmart Holdings, Inc. 

Iconic Holdings, LLC

  

5

  

 

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.

 

(iii)           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.

 

$110,000.00 Convertible Note 

CodeSmart Holdings, Inc. 

Iconic Holdings, LLC

 

  

6

  

 

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.

 

	 	
CODESMART HOLDINGS, INC.

	 
	 	 	 	 
	 	
By: 

	/s/ Ira Shapiro	 
	 	Name:  	Ira Shapiro	 
	 	Title:	Chief Executive Officer	 
	 	Date:	January 10, 2014	 

  

This Note is acknowledged as: Note of January 10, 2014

 

$110,000.00 Convertible Note 

CodeSmart Holdings, Inc. 

Iconic Holdings, LLC

 

  

7

  

 

EXHIBIT A

 

FORM OF CONVERSION NOTICE

 

(To be executed by the Holder in order to convert that certain $110,000 Convertible Promissory Note identified as the Note)

 

DATE:                  ______________________________________

 

FROM:                    Iconic Holdings, LLC

 

Re:           $110,000 Convertible Promissory Note (this “Note”) originally issued by CODESMART HOLDINGS, INC., a 

                Florida corporation, to Iconic Holdings, LLC on January __, 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 CODESMART HOLDINGS, 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

	 	 
	 	
Address

 

$110,000.00 Convertible Note 

CodeSmart Holdings, Inc.

Iconic Holdings, LLC

 

 

8f8k011514ex10i_codesmart.htm

Exhibit 10.1

 

NOTE PURCHASE AGREEMENT

 

This Note Purchase Agreement (the "Agreement”) is made as of January 10, 2014 (the “Effective Date”) by and between CodeSmart Holdings, Inc. a Florida corporation with principal offices at 275 Seventh Avenue, 7th Floor, New York, NY 10001 (the "Company") and Iconic Holdings, LLC, a Delaware LLC with principal offices at 7200 Wisconsin Ave. Suite 206, Bethesda, MD 20814 (the "Purchaser"). As used herein, the term “Parties” shall be used to refer to the Company and Purchaser jointly.

 

WHEREAS:

 

	
  

	
A.

	
The Parties jointly warrant and represent that they have a pre-existing relationship prior to the date of this Agreement.

 

	
  

	
B.

	
Purchaser warrants and represents that it is sophisticated and experienced in acquiring the debt instruments issued by small early-stage companies that have not achieve profitability, positive cash flow or both.

 

	
  

	
C.

	
Purchaser warrants and represents that it is an “accredited investor,” as that term is defined in Rule 501 of the Securities Act of 1933, as amended (the “1933 Act”).

 

	
  

	
D.

	
Purchaser warrants and represents that prior to entering into this Agreement that it has received and completed its review of the Company’s corporate and financial statements as included in the filings and disclosures as listed for the Company with the Securities and Exchange Commission which has allowed Purchaser to make an informed investment decision with respect to purchase of those certain Convertible Promissory Notes in the amount of one hundred ten thousand dollars ($110,000) each (which consists of one hundred thousand ($100,000) in original value and ten thousand dollars ($10,000) in an original issue discount) up to the aggregate principal amount of Three Hundred Thirty Thousand Dollars ($330,000.00) (each, a “Note” collectively, the “Notes”) in substantially the form of Exhibit A.

 

	
  

	
E.

	
The Purchaser acknowledges and agrees that it is acquiring the Notes for investment purposes only and not with a view to a distribution.

 

	
  

	
F.

	
The Purchaser acknowledges and agrees that: (i) each Note is a “restricted security,” as that term is defined in the 1933 Act and (ii) no registration rights have been granted to Purchaser to register the Notes.

 

  

1

  

 

NOW THEREFORE THE PARTIES AGREE AS FOLLOWS:

 

Section 1.     SALE AND ISSUANCE OF THE NOTE. In consideration of the Company’s receipt of the Purchase Price at each Closing (as defined in Section 2.1), the Company shall sell to the Purchaser, and the Purchaser shall purchase from the Company (the “Issuance”) the Notes upon the terms set forth in this Agreement. In addition, a copy of notarized certificate of corporate secretary (the “Secretary Certificate”) is attached in Exhibit A, attached hereto.

 

Section 2.     THE CLOSINGS.

 

2.1. INITIAL AND SUBSEQUENT CLOSINGS. The purchase price for a Note at each Closing (the “Purchase Price”) shall be One Hundred Thousand U.S. Dollars ($100,000). There may be up to three Closings for this offering, with the initial Closing occur on the Effective Date, the second Closing occur within 120 days after the Effective Date (the “Second Closing Date”) and the last Closing within 180 days after the Effective Date (the “Last Closing Date”). The second and last Closings shall be at the sole discretion of the Purchaser.

 

2.2. PLACE OF CLOSING AND PROCEDURE AT CLOSING. The initial closing of the issuance of the Note to the Purchaser (each, a "Closing") shall take place simultaneously with and upon the satisfaction of the following conditions:

 

(1)           the Company’s execution and delivery to the Purchaser of the following: (a) an executed copy of this Agreement; (b) an executed copy of the Note; (c) a signed copy of the Irrevocable Instructions to the Transfer Agent; and (d) the signed Secretary Certificate.

 

(2)           the Purchaser’s execution of a wire transfer to the Company no later than one (1) business day following the Closing as follows: the sum of one hundred thousand dollars ($100,000.00) in cash shall be remitted and delivered to the Company and ten thousand dollars ($10,000.00) shall be retained by the Purchaser through an original issuance discount for due diligence and legal bills related to this transaction..

 

2.3. SUBSEQUENT CLOSINGS. Any subsequent closings of the issuance of the Notes to the Purchasers pursuant to Section 2.1 hereof shall take place simultaneously with and upon the satisfaction of the following conditions:

 

(1)           the Company’s execution and delivery to the Purchaser of the following: (a) an executed copy of the Note; (b) a signed copy of the Irrevocable Instructions to the Transfer Agent; and (c) the signed Secretary Certificate.

 

(2)           the Purchaser’s execution of a wire transfer to the Company no later than one (1) business day following the Closing as follows: the sum of one hundred thousand dollars ($100,000.00) in cash shall be remitted and delivered to the Company.

 

  

2

  

 

Section 3.      REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby represents and warrants to the Purchaser as follows:

 

3.1. ORGANIZATION. The Company is duly organized, validly existing and in good standing under the laws of the State of Florida and is qualified to conduct its business as a foreign corporation in each jurisdiction where the failure to be so qualified would have a material adverse effect on the Company.

 

3.2. AUTHORIZATION OF AGREEMENT, ETC. The execution, delivery and performance by the Company of this Agreement, the Notes, and each other document or instrument contemplated hereby or thereby (collectively, the "Financing Documents") have been duly authorized by all requisite corporate action by the Company and delivered by the Company. Each of the Financing Documents, when executed and delivered by the Company, constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws affecting creditors' rights and remedies generally, and subject as to enforceability to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

 

Section 4.     REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser hereby represents and warrants to the Company as follows:

 

4.1. AUTHORIZATION OF THE DOCUMENTS. Purchaser has all requisite power and authority (corporate or otherwise) to execute, deliver and perform the Financing Documents to which it is a party and the transactions contemplated thereby, and the execution, delivery and performance by such Purchaser of the Financing Documents to which it is a party have been duly authorized by all requisite action by such Purchaser and each such Financing Document, when executed and delivered by the Purchaser, constitutes a valid and binding obligation of such Purchaser, enforceable against such Purchaser in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws affecting creditors' rights and remedies generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

 

4.2. INVESTMENT REPRESENTATIONS. The Purchaser warrants and represents that:

 

	
  

	
(a)

	
the Purchaser is an accredited investor (as that term is defined in Rule 501(a)(1) of Regulation D of the 1933 Act;

 

	
  

	
(b)

	
the Purchaser is sophisticated and experienced in acquiring the securities of small public companies;

 

	
  

	
(c)

	
the Purchaser has reviewed the Company’s Annual and Quarterly Reports together with the audited financial statements contained therein;

 

	
  

	
(d)

	
the Purchaser has had sufficient opportunity to review and evaluate the risks and uncertainties associated with the purchase of the Company’s securities;

 

	
  

	
(e)

	
the Purchaser is acquiring the Note from the Company for investment purposes only and not with a view to a distribution.

 

  

3

  

 

4.3. RESTRICTED SECURITY. Purchaser understands and acknowledges that the Note has not been, and when issued will not be, registered with the Securities and Exchange Commission. Purchaser warrants and represents that it has fully reviewed the restricted securities legend and the terms thereof with its financial, legal, investment, and business advisors and that it has not relied upon the Company or any other person for any advice in connection with the purchase of the Note, this Agreement, or both of them.

 

4.4. LEGAL COUNSEL. Purchaser has consulted with its own independent legal, tax, investment, and other advisors of its own choosing prior to entering into this Agreement.

 

4.5  ABSENCE OF REGISTRATION RIGHTS. Purchaser understands and agrees that it is not acquiring and has not been granted any registration rights with respect to the Note. The Note is a restricted security and the Purchaser understands that there is no trading market for the Note and no such market will likely ever develop.

 

4.6  TRADING ACTIVITIES. Neither the Purchaser or its affiliates has an open short position in the Company’s Common Stock and the Purchaser agrees that it shall not, and it will cause its affiliates not to, engage in any short sales (as defined in Rule 200 of Regulation SHO under the Securities Exchange Act of 1934) of or hedging transactions with respect to the Company’s Common Stock.

 

Section 5. BROKERS AND FINDERS.

 

The Company shall not be obligated to pay any commission, brokerage fee or finder's fee based on any alleged agreement or understanding between the Purchaser and a third person in respect of the transactions contemplated hereby. The Purchaser hereby agrees to indemnify the Company against any claim by any third person for any commission, brokerage or finder's fee or other payment with respect to this Agreement or the transactions contemplated hereby based on any alleged agreement or understanding between the Purchaser and such third person, whether express or implied from the actions of the Purchaser.

 

Section 6. SUCCESSORS AND ASSIGNS.

 

This Agreement shall bind and inure to the benefit of the Company, the Purchaser and their respective successors and assigns.

 

Section 7. ENTIRE AGREEMENT.

 

This Agreement and the other writings and agreements referred to in this Agreement or delivered pursuant to this Agreement contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings among the parties with respect thereto.

 

  

4

  

 

Section 8. NOTICES.

 

All notices, demands and requests of any kind to be delivered to any party in connection with this Agreement shall be personally served, sent via facsimile or e-mail, or sent in writing via an internationally recognized overnight courier or by registered or certified mail, return receipt requested and postage prepaid to the address of each party listed on the first page of this Agreement or to such other address as the party to whom notice is to be given may have furnished to the other parties to this Agreement in writing in accordance with the provisions of this Section 8. Any such notice or communication shall be deemed to have been received (i) in the case of personal delivery, on the date of such delivery, (ii) in the case of facsimile or e-mail, immediately (iii) in the case of an internationally-recognized overnight courier, on the next business day after the date when sent and (iv) in the case of mailing, on the third business day following that on which the piece of mail containing such communication is posted.

 

Section 9. AMENDMENTS.

 

This Agreement may not be modified or amended, or any of the provisions of this Agreement waived, except by written agreement of the Company and the Purchaser.

 

Section 10. ATTORNEYS’ FEES.

 

In the event of a dispute between the parties concerning the enforcement or interpretation of this Agreement, the prevailing party in such dispute, whether by legal proceedings or otherwise, shall be reimbursed immediately for the reasonably incurred attorneys' fees and other costs and expenses by the other parties to the dispute.

 

Section 11. GOVERNING LAW AND ARBITRATION.

 

(A)         All questions concerning the construction, interpretation and validity of this Agreement shall be governed by and construed and enforced in accordance with the domestic laws of the State of California without giving effect to any choice or conflict of law provision or rule (whether in the State of California or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of California. In furtherance of the foregoing, the internal law of the State of California will control the interpretation and construction of this Agreement, even if under such jurisdiction's choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily or necessarily apply.

 

Section 12. CAPTIONS AND EXHIBIT A.

 

The captions by which the sections and subsections of this Agreement are identified are for convenience only, and shall have no effect whatsoever upon its interpretation. Exhibit A is attached hereto and each of the attachments listed in Exhibit A are each with Exhibit A incorporated by reference herein.

 

  

5

  

 

Section 13. SEVERANCE.

 

If any provision of this Agreement is held to be illegal or invalid by a court of competent jurisdiction, such provision shall be deemed to be severed and deleted; and neither such provision, nor its severance and deletion, shall affect the validity of the remaining provisions.

 

Section 14. COUNTERPARTS.

 

This Agreement may be executed in any number of counterparts, and each such counterpart of this Agreement shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. Facsimile counterpart signatures to this Agreement shall be acceptable and binding.

 

 

[The remainder of this page has been left intentionally blank.]

 

  

6

  

 

IN WITNESS WHEREOF, each of the undersigned has duly executed this Note Purchase Agreement as of the date first written above.

 

FOR THE COMPANY: 

 

CodeSmart Holdings, Inc.

 

By:

Name:

Its:

 

FOR THE PURCHASER: 

 

Iconic Holdings, LLC

 

By:

Name:

Title: Manager

 

[SIGNATURE PAGE TO NOTE PURCHASE AGREEMENT]

 

[The remainder of this page has been left intentionally blank.]

 

  

7

  

 

EXHIBIT A

 

(Copy of Convertible Promissory Note, Board Resolution, and Irrevocable Instructions to Stock Transfer Agent, are each attached hereto.)

 

1.           Copy of Convertible Promissory Note

 

2.           Copy of the Board Resolution of the Borrower

 

3.           Copy of Irrevocable Instructions to Stock Transfer Agent

 

[The remainder of this page has been left intentionally blank.]

 

 

 8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00225-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00225-of-00352.parquet"}]]