Document:

Exhibit 10.9

 

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

 

massroots,
inc.

 

Convertible
Note

 

	Issuance Date:  April 17, 2020	Original Principal Amount:   $[  ]
	 	Consideration Paid at Close:   $[  ]

 

FOR VALUE RECEIVED,
MassRoots, Inc. a Delaware corporation (the “Company”), hereby promises to pay to the order of [  ]
or its registered assigns (the “Holder”) the amount set out above as the Original Principal Amount (as reduced
pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the “Principal”) when due, whether
upon the Maturity Date (as defined below), acceleration, redemption or otherwise (in each case in accordance with the terms hereof)
and to pay interest (“Interest”) on any outstanding Principal at the applicable Interest Rate from the date set
out above as the Issuance Date (the “Issuance Date”) until the same becomes due and payable, upon the Maturity
Date or acceleration, conversion, redemption or otherwise (in each case in accordance with the terms hereof).

 

The Original Principal
Amount is $[  ] ([  ]) plus accrued and unpaid interest and any other fees. The Consideration
is $[  ] ([  ]) payable by wire transfer (there exists a $[  ]original issue
discount (the “OID”)). The Holder shall pay $[  ]of Consideration upon closing of this Note.
For purposes hereof, the term “Outstanding Balance” means the Original Principal Amount, as reduced or increased,
as the case may be, pursuant to the terms hereof for conversion, breach hereof or otherwise, plus any accrued but unpaid interest,
collection and enforcements costs, and any other fees, penalties, damages or charges incurred under this Note.

 

GENERAL TERMS

 

(a) Payment
of Principal. The “Maturity Date” shall be October 17, 2020, as may be extended at the option of the Holder
in the event that, and for so long as, an Event of Default (as defined below) shall not have occurred and be continuing on the
Maturity Date (as may be extended pursuant to this Section 1) or any event shall not have occurred and be continuing on the Maturity
Date (as may be extended pursuant to this Section 1) that with the passage of time and the failure to cure would result in an Event
of Default. 

 

(b) Interest.
Interest shall accrue at a rate of twelve percent annually (12%) (“Interest Rate”) of the Original Principal
Amount beginning on the Issuance Date. Interest hereunder shall be paid on the Maturity Date (or sooner as provided herein) to
the Holder or its assignee in whose name this Note is registered on the records of the Company regarding registration and transfers
of Notes in cash or converted into Common Stock at the Conversion Price. 

 

     

     

    

 

(2) EVENTS
OF DEFAULT.

 

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

 

(i) The
Company’s failure to pay to the Holder any amount of Principal, Interest, or other amounts when and as due under this Note (including,
without limitation, the Company’s failure to pay any redemption payments or amounts hereunder); 

 

(ii) A
Conversion Failure as defined in section 3(b)(ii);

 

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

 

(iv) The
Company or any subsidiary of the Company shall default in any of its obligations under any other Note or any mortgage, credit agreement
or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there
may be secured or evidenced any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement
of the Company or any subsidiary of the Company in an amount exceeding $50,000, whether such indebtedness now exists or shall hereafter
be created, except for notes or instruments considered to be in default prior to the date of this Note; 

 

(v) The
Company’s common stock, par value $0.001 (the “Common Stock”), is suspended or delisted for trading on
the Over the Counter Marketplace (the “OTC”) (the “Primary Market”); 

 

(vi) The
Company loses its ability to deliver shares via “DWAC/FAST” electronic transfer;

 

(vii) The
Company loses its status as “DTC Eligible”;

 

    2

     

    

 

(viii) Except
for any report the Company is required to file pursuant to the Exchange Act (including, but not limited to, the Company’s
Annual Report on Form 10-K) for which the Securities and Exchange Commission has issued an order permitting issuers to take advantage
of extended filing deadlines as a result of COVD-19, the Company shall become late or delinquent in its filing requirements as
a fully-reporting issuer registered with the Securities and Exchange Commission;

 

(ix) The
Company shall fail to reserve and keep available out of its authorized Common Stock a number of shares equal to at least 3 (three)
times the full number of shares of Common Stock issuable upon conversion of all outstanding amounts under this Note; or 

 

(b) Upon
the occurrence of any Event of Default, unless triggered by reasons of impracticability or frustration of purpose due to COVID-19,
the Outstanding Balance shall immediately increase to 130% of the Outstanding Balance immediately prior to the occurrence of the
Event of Default (the “Default Effect”) and a penalty of one hundred dollars ($100) per day shall accrue until
the default is remedied. The Default Effect shall automatically apply upon the occurrence of an Event of Default without the need
for any party to give any notice or take any other action. In addition, all amounts due and payable under the Note shall, at the
election of the Holder, accelerate and become immediately due and payable upon notice from the Holder to the Company.

 

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

 

(a) Conversion
Right. Subject to the provisions of Section 3(c), at any time after the Issuance Date, the Holder shall be entitled to convert
any portion of the Outstanding Balance into fully paid and nonassessable shares of Common Stock in accordance with Section 3(b),
at the Conversion Price (as defined below). The number of shares of Common Stock issuable upon conversion of any portion of the
Outstanding Balance pursuant to this Section 3(a) shall be equal to the quotient of dividing the Outstanding Balance by the Conversion
Price. The Company shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in
the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the
nearest whole share. The Company shall pay any and all transfer agent fees, legal fees, costs and any other fees or costs that
may be incurred or charged in connection with the issuance of shares of the Company’s Common Stock to the Holder arising
out of or relating to the conversion of this Note. “Conversion Price” shall mean $0.01 per share; provided, however,
upon the occurrence of an Event of Default, the Conversion Price shall mean 60% of the average of the three (3) lowest closing
bid prices of the Company’s Common Stock as reported by Bloomberg L.P. twenty (20) days prior to the Conversion Date (as
defined below). Notwithstanding the foregoing, upon the occurrence of an Event of Default the Conversion Price shall not be less
than $0.001.

 

(b) Mechanics
of Conversion.

 

(i) Optional
Conversion. To convert any portion of the Outstanding Balance into shares of Common Stock on any date (a “Conversion
Date”), the Holder shall (A) transmit by email, facsimile (or otherwise deliver), for receipt on or prior to 11:59 p.m.,
New York, NY time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit A (the
“Conversion Notice”) to the Company. On or before the third (3rd) Business Day (as defined below) following
the date of receipt of a Conversion Notice (the “Share Delivery Date”), the Company shall (A) if legends are not
required to be placed on certificates of Common Stock pursuant to the then existing provisions of Rule 144 of the Securities Act
of 1933, as amended, (“Rule 144”) and provided that the Company’s transfer agent is participating in the
Depository Trust Company’s (“DTC”) Fast Automated Securities Transfer Program, credit such aggregate number of
shares of Common Stock to which the Holder shall be entitled to the Holder’s or its designee’s balance account with DTC through
its Deposit Withdrawal Agent Commission system or (B) if the Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program, issue and deliver to the address as specified in the Conversion Notice, a certificate, registered in the name
of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled which certificates
shall not bear any restrictive legends unless required pursuant to federal or state securities laws. If this Note is physically
surrendered for conversion and the outstanding Principal of this Note is greater than the Principal portion of the Outstanding
Balance being converted, then the Company shall, upon request of the Holder, as soon as practicable and in no event later than
three (3) Business Days after receipt of this Note and at its own expense, issue and deliver to the holder a new Note representing
the outstanding Principal not converted. The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion
of this Note shall be treated for all purposes as the record holder or holders of such shares of Common Stock upon the transmission
of a Conversion Notice. “Business Day” means any day except any Saturday, any Sunday, any day which is a federal
legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required
by law or other governmental action to close.

 

    3

     

    

 

(ii) Company’s
Failure to Timely Convert. If within two (2) Trading Days (as defined below) after the Company’s receipt of the facsimile or
email copy of a Conversion Notice the Company shall fail to issue and deliver to Holder via “DWAC/FAST” electronic
transfer the number of shares of Common Stock to which the Holder is entitled upon such holder’s conversion of any Conversion Amount
(a “Conversion Failure”), the Principal of the Note shall increase by $500 per day until the Company issues and
delivers a certificate to the Holder or credit the Holder’s balance account with DTC for the number of shares of Common Stock to
which the Holder is entitled upon such holder’s conversion of any portion of the Outstanding Balance (under Holder’s and
Company’s expectation that any damages will tack back to the Issuance Date). The Company will not be subject to any penalties
once its transfer agent processes the shares to the DWAC system. If the Company fails to deliver shares in accordance with the
timeframe stated in this Section, resulting in a Conversion Failure, the Holder, at any time prior to selling all of those shares,
may rescind any portion, in whole or in part, of that particular conversion attributable to the unsold shares and have the rescinded
conversion amount returned to the Outstanding Balance with the rescinded conversion shares returned to the Company (under Holder’s
and Company’s expectations that any returned conversion amounts will tack back to the Issuance Date of the Note). “Trading
Day” means a day on which the principal Trading Market is open for trading. “Trading Market” means
any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the
NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange,
the Primary Market or any successors to any of the foregoing.

 

(iii) DWAC/FAST
Eligibility. If the Company fails for any reason to deliver to the Holder the Shares by DWAC/FAST electronic transfer
(such as by delivering a physical stock certificate), or if there is a Conversion Failure as defined in Section 3(b)(ii), and if
the Holder incurs a Market Price Loss (as defined below), then at any time subsequent to incurring the loss the Holder may provide
the Company written notice indicating the amounts payable to the Holder in respect of the Market Price Loss and the Company must
make the Holder whole by either of the following options at Holder’s election:

 

Market Price
Loss = [(High trade price for the period between the day of conversion and the day the shares clear in the Holder’s brokerage
account) x (Number of shares receivable from the conversion)] – [(Net proceeds of sale of shares from conversion received
by Holder) x (Number of shares receivable from the conversion)].

 

Option A –
Pay Market Price Loss in Cash. The Company must pay the Market Price Loss by cash payment, and any such cash payment must be made
by the third (3rd) business day from the time of the Holder’s written notice to the Company.

 

Option B –
Add Market Price Loss to Outstanding Balance. The Company must pay the Market Price Loss by adding the Market Price Loss to the
Outstanding Balance (under Holder’s and the Company’s expectation that any Market Price Loss amounts will tack back
to the Issuance Date).

 

    4

     

    

 

In the case that conversion
shares are not deliverable by DWAC/FAST electronic transfer an additional 10% discount to the Conversion Price will apply, unless
the delay was triggered by reasons of impracticability or frustration of purpose due to COVID-19.

 

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

 

(c) Limitations
on Conversions or Trading.

 

(i) Beneficial
Ownership. The Company shall not effect any conversions of this Note and the Holder shall not have the right to convert any
portion of this Note or receive shares of Common Stock as payment of interest hereunder to the extent that after giving effect
to such conversion or receipt of such interest payment, the Holder, together with any affiliate thereof, would beneficially own
(as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934 and the rules promulgated thereunder) in
excess of 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to such conversion or receipt
of shares as payment of interest. Since the Holder will not be obligated to report to the Company the number of shares of Common
Stock it may hold at the time of a conversion hereunder, unless the conversion at issue would result in the issuance of shares
of Common Stock in excess of 4.99% of the then outstanding shares of Common Stock without regard to any other shares which may
be beneficially owned by the Holder or an affiliate thereof, the Holder shall have the authority and obligation to determine whether
the restriction contained in this Section will limit any particular conversion hereunder and to the extent that the Holder determines
that the limitation contained in this Section applies, the determination of which portion of the Outstanding Balance of this Note
is convertible shall be the responsibility and obligation of the Holder. If the Holder has delivered a Conversion Notice for a
portion of the Outstanding Balance of this Note that, without regard to any other shares that the Holder or its affiliates may
beneficially own, would result in the issuance in excess of the permitted amount hereunder, the Company shall notify the Holder
of this fact and shall honor the conversion for the maximum principal amount permitted to be converted on such Conversion Date
in accordance with Section 3(a) and, any principal amount tendered for conversion in excess of the permitted amount hereunder shall
remain outstanding under this Note. In the event that the Market Capitalization (as defined herein) of the Company falls below
$2,500,000, the term “4.99%” above shall be permanently replaced with “9.99%.” “Market Capitalization”
shall be defined as the product of (a) the closing price of the Common Stock of the Common Stock multiplied by (b) the number of
shares of Common Stock outstanding. The provisions of this Section may be waived by Holder upon not less than 61 days prior written
notification to the Company.

 

(ii) Capitalization.
So long as this as this Note is outstanding, upon written request of the Holder, the Company shall furnish to the Holder the then-current
number of Common Stock issued and outstanding, the then-current number of Common Stock authorized, and the then-current number
of shares reserved for issuance for the benefit of third parties.

 

    5

     

    

 

(d) Other
Provisions.

 

(i) Share
Reservation. The Company shall at all times reserve and keep available out of its authorized Common Stock a number of
shares equal to at least three (3) times the total number of shares of Common Stock issuable upon conversion of all outstanding
amounts under this Note; and within three (3) Business Days following the receipt by the Company of a Holder’s notice that such
minimum number of shares of Common Stock is not so reserved, the Company shall promptly reserve a sufficient number of shares of
Common Stock to comply with such requirement. 

 

(ii) Prepayment. During
the first one hundred eighty (180) days this Note is in effect, upon five (5) Business Days’ notice to Holder (“Notice
Period”), the Company may redeem this Note by paying to the Holder an amount as follows (“Redemption Amount”):
(i) if the redemption is within the first ninety (90) days this Note is in effect, then for an amount equal to 120% of the Outstanding
Balance of this Note, and (ii) if the redemption is on or between the 91st and 180th day this Note is in
effect, then for an amount equal to 135% of the Outstanding Balance of this Note. This Note may not be redeemed after one hunred
eighty (180) days without written consent of the Holder. The redemption must be closed and paid for within three (3) Business Days
following the Notice Period or the redemption will be invalid and the Company may not redeem this Note. The Holder may convert
this Note pursuant to the terms hereof at all times, including during the Notice Period, until the Redemption Amount has been received
in full.

 

(iii) Nothing
herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 2 herein for the
Company’s failure to deliver certificates representing shares of Common Stock upon conversion within the period specified herein,
unless the Event of Default was triggered by reasons of impracticability or frustration of purpose due to COVID-19. Except as set
forth herein, Holder shall have the right to pursue all remedies available to it at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief, in each case without the need to post a bond or provide other security.
The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof
or under applicable law. 

 

(4)  Charges
and 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, legal opinion and related charges, postage/mailing charge
or any other expense with respect to the issuance of such Common Stock. The Company shall pay all transfer agent fees,
legal opinion letter fees, as well as brokerage and clearing firm fees incurred by Holder for the issuance and deposit
of the Common Stock to Holder pursuant to any conversion of this Note, as well as any and all other fees and charges required by
the respective parties as a condition to effectuate such issuance or clear such deposit.  Any such fees or charges, as
noted in this Section that are paid by the Holder (whether from the Company’s delays, outright refusal to pay, or otherwise),
will be automatically added to the Principal of the Note and tack back to the Issuance Date for purposes of Rule 144. ​

 

(5) REISSUANCE
OF THIS NOTE.

 

(a) Assignability.
The Company may not assign this Note. This Note will be binding upon the Company and its successors and will inure to the benefit
of the Holder and its successors and assigns and may be assigned by the Holder to anyone of its choosing without Company’s
approval. 

 

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

 

    6

     

    

 

(6) NOTICES. Any
notices, consents, waivers or other communications required or permitted to be given under the terms hereof must be in writing
and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party) (iii)
upon receipt, when sent by email; or (iv) three (3) Trading Days after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications
shall be those set forth in the communications and documents that each party has provided the other immediately preceding the issuance
of this Note or at such other address and/or facsimile number and/or to the attention of such other person as the recipient party
has specified by written notice given to each other party three (3) Business Days prior to the effectiveness of such change. Written
confirmation of receipt (i) given by the recipient of such notice, consent, waiver or other communication, (ii) mechanically or
electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of
the first page of such transmission or (iii) provided by a nationally recognized overnight delivery service, shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

 

The addresses for such communications shall
be:

 

If to the Company, to:

 

MassRoots, Inc.

Attn: Isaac Dietrich

100 W. Broadway

Office 04-109

Long Beach, CA 90802

(805) 214-8024

Isaac@MassRoots.com

 

If to the Holder:

 

[  ]

 

(7) APPLICABLE
LAW AND VENUE. This Note shall be governed by and construed in accordance with the laws of the State of New York, without giving
effect to conflicts of laws thereof. Any action brought by either party against the other concerning the transactions contemplated
by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the city and county
of New York, in the State of New York. Both parties and the individuals signing this Agreement agree to submit to the jurisdiction
of such courts.

 

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

 

(9) AMENDMENT.
Any provision of this Note may be amended, waived or modified (either generally or in a particular instance and either retroactively
or prospectively) only with the written consent of the Company and the Holder.

 

(10) LIQUIDATED
DAMAGES. Holder and Company agree that in the event Company fails to comply with any of the terms or provisions of this Note,
Holder’s damages would be uncertain and difficult (if not impossible) to accurately estimate because of the parties’ inability
to predict future interest rates, future share prices, future trading volumes and other relevant factors. Accordingly, Holder and
Company agree that any fees, balance adjustments, default interest or other charges assessed under this Note are not penalties
but instead are intended by the parties to be, and shall be deemed, liquidated damages (under Holder’s and Company’s expectations
that any such liquidated damages will tack back to the Issuance Date for purposes of determining the holding period under Rule
144).

 

[Signature Page Follows]

 

    7

     

    

 

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

 

	 	COMPANY:
	 	 
	 	MassRoots, Inc.
	 	 	 
	 	By:	 
	 	Name: 	Isaac Dietrich 
	 	Title:	Chief Executive Officer

 

	 	HOLDER:
	 	 
	 	[  ]
	 	 	 
	 	By:	            
	 	Name:	[  ]
	 	Title:	[  ]

 

[Signature Page to Convertible Note]

 

     

     

    

 

EXHIBIT A

CONVERSION NOTICE

 

MassRoots, Inc.

Attn: Isaac Dietrich

100 W. Broadway

Office 04-109

Long Beach, CA 90802

(805) 214-8024

Isaac@MassRoots.com

 

The undersigned hereby elects to convert a portion of the $[  ]Convertible
Note issued to [  ] on April 17, 2020 into Shares of Common Stock of MassRoots, Inc. according to the conditions set
forth in such Note as of the date written below.

 

	Date of Conversion:	 	 
	 	 	 
	Conversion Amount:	 	 
	 	 	 
	Conversion Price:	 	 
	 	 	 
	Shares to be Delivered:	 	 

 

Shares delivered in name of:

[  ]

 

Signature:

 

	 	 
	 	By: [  ]ex_182014.htm

 

Exhibit 10.1

 

	
			

				
			 

			U.S. Small Business Administration

			 

			NOTE

			

 

 

	
			SBA Loan #

				
			6960867108

			 

			
	
			SBA Loan Name

				
			Paycheck Protection Program Loan

			 

			
	
			Date

				
			4/15/2020

			 

			
	
			Loan Amount

				
			8,855,605.00

			 

			
	
			Interest Rate

				
			1.00%

			 

			
	
			Borrower

				
			ASURE SOFTWARE, INC.

			 

			
	
			Operating Company

				
			 

			 

			
	
			Lender

				
			Pinnacle Bank

			 

			

 

 

1.     PROMISE TO PAY:

 

In return for the Loan, Borrower promises to pay to the order of Lender the amount of

Eight Million, Eight Hundred And Fifty-Five Thousand, Six Hundred And Five and 00/100 Dollars                   Dollars,

interest on the unpaid principal balance, and all other amounts required by this Note.

 

2.     DEFINITIONS:

 

"Collateral" means any property taken as security for payment of this Note or any guarantee of this Note.

 

"Guarantor" means each person or entity that signs a guarantee of payment of this Note.

 

"Loan" means the loan evidenced by this Note.

 

"Loan Documents" means the documents related to this loan signed by Borrower, any Guarantor, or anyone who pledges collateral.

 

"SBA" means the Small Business Administration, an Agency of the United States of America.

 

Page 1 of 7

 

 

3.     PAYMENT TERMS:

 

Borrower must make all payments at the place Lender designates. The payment terms for this Note are:

 

	
			Maturity: This Note will mature in 2 years and 0 months from date of Note.

			 

			Repayment terms:

			 

			The interest rate is 1% per year. The interest rate may only be changed in accordance with SOP 50 10.

			 

			Borrower must pay principal and interest payments of $ $498,361.48 every month, beginning seven months from the month this Note is dated; payments must be made on the 15 calendar day in the months they are due.

			 

			Lender will apply each installment first to pay interest accrued to the day Lender receives the payment, then to bring principal current, then to pay any late fees, and will apply any remaining balance to reduce principal.

			 

			Loan Prepayment: 

			 

			Notwithstanding any provision in this Note to the contrary:

			 

			Borrower may prepay this Note. Borrower may prepay 20 percent or less of the unpaid principal balance at any time without notice. If Borrower prepays more than 20 percent and the Loan has been sold on the secondary market, Borrower must:

			 

			a. Give Lender written notice;

			 

			b. Pay all accrued interest; and

			 

			c. If this prepayment is received less than 21 days from the date Lender receives the notice, pay an amount equal to 21 days' interest from the date lender receives the notice, less any interest accrued during the 21 days and paid under subparagraph b., above.

			 

			If Borrower does not prepay within 30 days from the date Lender receives the notice, Borrower must give Lender a new notice.

			 

			All remaining principal and accrued interest is due and payable 2 years and 0 months from date of Note.

			 

			Late Charge: If payment on this Note is more than 15 days late, Lender may charge Borrower a late fee of up to

			5.0 % of the unpaid portion of the regularly scheduled payment.

			 

			

 

Page 2 of 7

 

 

4.     DEFAULT:

 

Borrower is in default under this Note if Borrower does not make a payment when due under this Note, or if Borrower or Operating Company:

 

	
			A.

				
			Fails to do anything required by this Note and other Loan Documents;

			

 

	
			B.

				
			Defaults on any other loan with Lender;

			

 

	
			C.

				
			Does not preserve, or account to Lender's satisfaction for, any of the Collateral or its proceeds;

			

 

	
			D.

				
			Does not disclose, or anyone acting on their behalf does not disclose, any material fact to Lender or SBA;

			

 

	
			E.

				
			Makes, or anyone acting on their behalf makes, a materially false or misleading representation to Lender or SBA;

			

 

	
			F.

				
			Defaults on any loan or agreement with another creditor, if Lender believes the default may materially affect Borrower's ability to pay this Note;

			

 

	
			G.

				
			Fails to pay any taxes when due;

			

 

	
			H.

				
			Becomes the subject of a proceeding under any bankruptcy or insolvency law;

			

 

	
			I.

				
			Has a receiver or liquidator appointed for any part of their business or property;

			

 

	
			J.

				
			Makes an assignment for the benefit of creditors;

			

 

	
			K.

				
			Has any adverse change in financial condition or business operation that Lender believes may materially affect Borrower's ability to pay this Note;

			

 

	
			L.

				
			Reorganizes, merges, consolidates, or otherwise changes ownership or business structure without Lender's prior written consent; or

			

 

	
			M.

				
			Becomes the subject of a civil or criminal action that Lender believes may materially affect Borrower's ability to pay this Note.

			

 

5.     LENDER'S RIGHTS IF THERE IS A DEFAULT:

 

Without notice or demand and without giving up any of its rights, Lender may:

 

	
			A.

				
			Require immediate payment of all amounts owing under this Note;

			

 

	
			B.

				
			Collect all amounts owing from any Borrower or Guarantor;

			

 

	
			C.

				
			File suit and obtain judgment;

			

 

	
			D.

				
			Take possession of any Collateral; or

			

 

	
			E.

				
			Sell, lease, or otherwise dispose of, any Collateral at public or private sale, with or without advertisement.

			

 

6.     LENDER'S GENERAL POWERS:

 

Without notice and without Borrower's consent, Lender may:

 

	
			A.

				
			Bid on or buy the Collateral at its sale or the sale of another lienholder, at any price it chooses;

			

 

	
			B.

				
			Incur expenses to collect amounts due under this Note, enforce the terms of this Note or any other Loan Document, and preserve or dispose of the Collateral. Among other things, the expenses may include payments for property taxes, prior liens, insurance, appraisals, environmental remediation costs, and reasonable attorney's fees and costs. If Lender incurs such expenses, it may demand immediate repayment from Borrower or add the expenses to the principal balance;

			

 

	
			C.

				
			Release anyone obligated to pay this Note;

			

 

	
			D.

				
			Compromise, release, renew, extend or substitute any of the Collateral; and

			

 

	
			E.

				
			Take any action necessary to protect the Collateral or collect amounts owing on this Note.

			

 

Page 3 of 7

 

 

7.     WHEN FEDERAL LAW APPLIES:

 

When SBA is the holder, this Note will be interpreted and enforced under federal law, including SBA regulations. Lender or SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and other purposes. By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability. As to this Note, Borrower may not claim or assert against SBA any local or state law to deny any obligation, defeat any claim of SBA, or preempt federal law.

 

8.    SUCCESSORS AND ASSIGNS:

 

Under this Note, Borrower and Operating Company include the successors of each, and Lender includes its successors and assigns.

 

9.     GENERAL PROVISIONS:

 

	
			A.

				
			All individuals and entities signing this Note are jointly and severally liable.

			

 

	
			B.

				
			Borrower waives all suretyship defenses.

			

 

	
			C.

				
			Borrower must sign all documents necessary at any time to comply with the Loan Documents and to enable Lender to acquire, perfect, or maintain Lender's liens on Collateral.

			

 

	
			D.

				
			Lender may exercise any of its rights separately or together, as many times and in any order it chooses. Lender may delay or forgo enforcing any of its rights without giving up any of them.

			

 

	
			E.

				
			Borrower may not use an oral statement of Lender or SBA to contradict or alter the written terms of this Note.

			

 

	
			F.

				
			If any part of this Note is unenforceable, all other parts remain in effect.

			

 

	
			G.

				
			To the extent allowed by law, Borrower waives all demands and notices in connection with this Note, including presentment, demand, protest, and notice of dishonor. Borrower also waives any defenses based upon any claim that Lender did not obtain any guarantee; did not obtain, perfect, or maintain a lien upon Collateral; impaired Collateral; or did not obtain the fair market value of Collateral at a sale.

			

 

Page 4 of 7

 

 

10.     STATE-SPECIFIC PROVISIONS:

 

	
			 

			The following provision applies when a borrower is a resident of WISCONSIN:

			Each Borrower who is married represents that this obligation is incurred in the interest of his or her marriage or family. 

			 

			The following Confession of Judgment provision applies when a borrower is a resident of DELAWARE: WARRANT OF ATTORNEY/CONFESSION OF JUDGMENT. In addition to any other remedies Lender may possess, Borrower knowingly, voluntarily and intentionally authorizes any attorney to appear on behalf of Borrower, from time to time, in any court of record possessing jurisdiction over this Note and to waive issuance and service of process and to confess judgment in favor of Lender against Borrower, for the unpaid principal, accrued interest, accrued charges, reasonable attorney fees and court costs and such other amount due under this Note. 

			 

			The following Confession of Judgment provision applies when a borrower is a resident of MARYLAND:

			WARRANT OF ATTORNEY/CONFESSION OF JUDGMENT. Borrower authorizes an attorney to appear in a court of record and confess judgment, without process, against Borrower in favor of Lender for all indebtedness owed in connection with the loan, including but not limited to service charges, other charges and reasonable attorney's fees. 

			 

			The following Confession of Judgment provision applies when a borrower is a resident of OHIO:

			WARRANT OF ATTORNEY/CONFESSION OF JUDGMENT. In addition to any other remedies Lender may possess, Borrower knowingly, voluntarily and intentionally authorizes any attorney to appear on behalf of Borrower, from time to time, in any court of record possessing jurisdiction over this Note and to waive issuance and service of process and to confess judgment in favor of Lender against Borrower, for the unpaid principal, accrued interest, accrued charges, reasonable attorney fees and court costs and such other amount due under this Note. 

			 

			WARNING: BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME, A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF THE COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT OR ANY OTHER CAUSE. 

			 

			The following Confession of Judgment provision applies when a borrower is a resident of PENNSYLVANIA:

			WARRANT OF ATTORNEY/CONFESSION OF JUDGMENT. Borrower irrevocably authorizes and empowers the prothonotary, any attorney or any clerk of any court of record, upon default, to appear for and confess judgment against Borrower for such sums as are due and/or may become due under this Note including costs of suit, without stay of execution, and for attorney's fees and costs as set forth in this Note and knowingly, voluntarily and intentionally waives any and all rights Borrower may have to notice and hearing under the state and federal laws prior to entry of a judgment. To the extent permitted by law, Borrower releases all errors in such proceedings. If a copy of this Note, verified by or on behalf of the holder shall have been filed in such action, it shall not be necessary to file the original Note as a warrant of attorney. The authority and power to appear for and confess judgment against Borrower shall not be exhausted by the initial exercise thereof and may be exercised as often as the holder shall find it necessary and desirable and this Note shall be a sufficient warrant for such authority and power. 

			 

			The following Confession of Judgment provision applies when a borrower is a resident of VIRGINIA:

			IMPORTANT NOTICE: THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR AND ALLOWS THE CREDITOR TO OBTAIN A JUDGMENT AGAINST YOU WITHOUT ANY FURTHER NOTICE. WARRANT OF ATTORNEY/CONFESSION OF JUDGMENT. In addition to any other remedies Lender may possess, Borrower knowingly, voluntarily and intentionally authorizes to appear on behalf of Borrower, from time to time, in the District Court of Alexandria, Virginia and to waive issuance and service of process and to confess judgment in favor of Lender against Borrower, for the unpaid principal, accrued interest, accrued charges, reasonable attorney fees and court costs and such other amount due under this Note. 

			 

			The following Oral Agreements Disclaimer provision applies when the borrower is a resident of MISSOURI:

			Oral or unexecuted agreements or commitments to loan money, extend credit or to forbear from enforcing repayment of a debt including promises to extend or renew such debt are not enforceable, regardless of the legal theory upon which it is based that is in any way related to the credit agreement. To protect you (Borrowers(s)) and us (Creditor) from misunderstanding or disappointment, any agreements we reach covering such matters are contained in this writing, which is the complete and exclusive statement of the agreement between us, except as we may later agree in writing to modify it.

			 

			

 

 

Page 5 of 7

 

 

10.     STATE-SPECIFIC PROVISIONS (CONTINUED):

 

	
			 

			The following Oral Agreements Disclaimer provision applies when the borrower is a resident of OREGON:

			UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY [BENEFICIARY]/ US CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY GRANTOR'S/BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY [AN AUTHORIZED REPRESENTATIVE OF BENEFICIARY]/US TO BE ENFORCEABLE. 

			 

			The following Oral Agreements Disclaimer provision applies when the borrower is a resident of WASHINGTON:

			Oral agreements or oral commitments to loan money, extend credit, or to forbear from enforcing repayment of a debt are not enforceable under Washington law. 

			 

			The following provision applies when the borrower is a resident of ALASKA:

			The Mortgagor or Trustor (Borrower) is personally obligated and fully liable for the amount due under the Note. The Mortgagee or Beneficiary (Lender) has the right to sue on the Note and obtain a personal judgment against the Mortgagor or Trustor for the satisfaction of the amount due under the Note either before or after a judicial foreclosure of the Mortgage or Deed of Trust as under AS 09.45.170-09.45.220. 

			 

			The following Oral Agreements Disclaimer provision applies when the borrower is a resident of IOWA:

			IMPORTANT: READ BEFORE SIGNING. The terms of this agreement should be read carefully because only those terms in writing are enforceable. No other terms or oral promises not contained in this written contract may be legally enforced. You may change the terms of this agreement only by another written agreement. 

			 

			The following Oral Agreements Disclaimer provision applies when the borrower is a resident of UTAH:

			This is a final expression of the agreement between the creditor and debtor and the written agreement may not be contradicted by evidence of any alleged oral agreement.

			 

			

 

 

Page 6 of 7

 

 

11.     BORROWER'S NAME(S) AND SIGNATURE(S):

 

 

By signing below, each individual or entity becomes obligated under this Note as Borrower.

 

 

	
			DocuSigned by:

				 	 	 
	 	 	 	 
	
			

				 	
			4/15/2020

				 
	
			Signature of Authorized Representative of Borrower/Borrower

				 	
			Date

				 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
			KELYN BRANNON

				 	
			CFO

				 
	
			Name of Authorized Representative of Borrower

				 	
			Title

				 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

 

 

Page 7 of 7

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