Document:

Blueprint

 

Exhibit 10.1

 

CONVERTIBLE PROMISSORY NOTE AMENDMENT

 

THIS CONVERTIBLE PROMISSORY
NOTE AMENDMENT (this “Amendment”)
is entered into as of May 21, 2017, by and between root9B Holdings,
Inc., a Delaware corporation (formerly known as Premier Alliance
Group, Inc.) (the “Company”
or “Borrower”)
and the various noteholders that participated in the
Company’s prior
convertible note offering (the “Noteholders”).

 

WHEREAS, the Noteholders
currently hold various convertible promissory notes (the
“Convertible
Notes”) which were
issued by the Company between October 2014 and November 2014,
representing a remaining aggregate principal amount of One Million
Six Hundred Thousand Dollars ($1,600,000); and

 

WHEREAS, the Company and
the Noteholders previously entered into Note Extension Agreements,
dated as of October 28, 2015, in order to extend the Maturity Date
(as defined in the Convertible Notes) of the Outstanding Principal
of the Convertible Notes to May 21, 2016; and

 

WHEREAS, the Company and
the Noteholders previously entered into Note Extension Agreements,
dated as of April 18, 2016, in order to extend the Maturity Date of
the Outstanding Principal of the Convertible Notes to May 21, 2017;
and

 

WHEREAS, the Company and
the Noteholders desire to enter into this Amendment in order to
extend the Maturity Date of the Outstanding Principal of the
Convertible Notes and reduce the Conversion Price (as defined in
the Convertible Notes), upon the terms and conditions as set forth
herein; and

 

WHEREAS, the Company and
the Noteholder intend for, and explicitly agree that, this
Amendment shall be deemed an “exchange offer” within
the meaning of Section 3(a)(9) of the Securities Act of 1933, as
amended and recapitalization under Rule 144(d)(3).

 

NOW, THEREFORE, in consideration of the mutual promises and
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, each of the parties agree with
the others as follows:

 

1. Maturity
Date. The Maturity Date of the Convertible Notes is hereby
extended to May 21, 2018.

 

2.
Interest Rate.
Section 1.1 of the Convertible Notes is hereby amended, restated
and replaced in its entirety with the following:

 

1.1            

Interest Rate. Interest on this
Note shall be simple interest and accrue (i) from the Issue Date
through May 21, 2017, at the annual rate of ten percent (10%) per
annum, and (ii) from May 22, 2017 until the Maturity Date, at the
annual rate of fifteen percent (15%) per annum. All computations of
interest payable hereunder shall be on the basis of a 365-day year
and actual days elapsed in the period for which such interest is
payable. Interest will be payable in cash according to the
following schedule:

 

	May 24,
2017:	$ [●]
(representing accrued interest through May 21, 2017)
	May 30,
2017:
	$ [●]
(representing a non-refundable prepayment of interest through
November 20, 2017)
	November 21,
2017	$ [●]
(representing a non-refundable prepayment of interest through May
21, 2018)

 

3. Conversion
Price. Section 2.1(a) of the Convertible Notes is hereby
amended, restated and replaced in its entirety with the
following:

 

(a)            

For so long as this
Convertible Note remains outstanding and not fully paid, the Holder
shall have the right, but not the obligation, to convert all or any
portion of the then aggregate outstanding Principal Amount of this
Convertible Note, together with any accrued and unpaid interest
thereon, into shares of Common Stock of the Borrower or its
successor in interest (the “Conversion Shares”),
subject to the terms and conditions set forth in this Article II,
at the rate of $8.00 per share of Company’s common stock par
value $0.001 (the “Common Stock”) (as may be adjusted
as provided herein, the “Conversion Price”). The Holder
may exercise such right by delivery to the Borrower of a written
Notice of Conversion pursuant to Section 2.2.

 

 

 

 

4.
Notices. Section
4.2 of the Convertible Notes is hereby amended, restated and
replaced in its entirety with the following:

 

4.2            

Notices. All notices, demands,
requests, consents, approvals, and other communications required or
permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in
the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service
with charges prepaid, or (iv) transmitted by hand delivery,
electronic mail or facsimile, addressed as set forth below or to
such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon
hand delivery, electronic mail or delivery by facsimile, with
accurate confirmation generated by the transmitting facsimile
machine, if sent by electronic mail with confirmed receipt, at the
address or number designated below (if delivered on a business day
during normal business hours where such notice is to be received),
or the first business day following such delivery (if delivered
other than on a business day during normal business hours where
such notice is to be received) or (b) on the second business day
following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such
mailing, whichever shall first occur.

 

If to
the Borrower:

 

root9B
Holdings, Inc.

102 N.
Cascade Avenue, Suite 220

Colorado Springs,
CO 80919

Attention: Chief
Operating Officer

 

With a
copy to:

 

DLA
Piper LLP (US)

2525
East Camelback Road, Suite 1000

Phoenix, Arizona
85016

Attention: Steven
D. Pidgeon, Esq.

 

If to
the Noteholder:

 

At the
address set forth on the Noteholder’s Signature to the
Purchase Agreement

 

5.
Mandatory
Redemption. The
Convertible Notes shall be repaid by the Borrower in the event that
the Borrower, after May 21, 2017, raises at least an aggregate of
$16,000,000 in capital through the issuance of debt, equity, or a
combination thereof, without premium or penalty and upon 30
days’ prior written notice to the Holder.

 

6. Further
Assurances. Each Party hereto, without additional
consideration, shall cooperate, shall take such further action and
shall execute and deliver such further documents as may be
reasonably requested by the other Party hereto in order to carry
out the provisions and purposes of this Amendment.

 

7. Counterparts.
This Amendment may be signed in counterparts with the same effect
as if the signature on each counterpart were upon the same
instrument. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, 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 or “.pdf” signature page were an original
thereof.

 

8. Headings.
The headings of articles and sections in this Amendment are
provided for convenience only and will not affect its construction
or interpretation.

 

9. Waiver.
Neither any failure nor any delay by any party in exercising any
right, power or privilege under this Amendment or any of the
documents referred to in this Amendment will operate as a waiver of
such right, power or privilege, and no single or partial exercise
of any such right, power or privilege will preclude any other or
further exercise of such right, power or privilege.

 

 

2

 

 

10. Severability.
The invalidity or unenforceability of any provisions of this
Amendment pursuant to any applicable law shall not affect the
validity of the remaining provisions hereof, but this Amendment
shall be construed as if not containing the provision held invalid
or unenforceable in the jurisdiction in which so held, and the
remaining provisions of this Amendment shall remain in full force
and effect. If the Amendment may not be effectively construed as if
not containing the provision held invalid or unenforceable, then
the provision contained herein that is held invalid or
unenforceable shall be reformed so that it meets such requirements
as to make it valid or enforceable.

 

11. Governing
Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York, without giving
effect to the choice of law principles thereof.

 

12. Effect
of this Extension Agreement. Except as expressly
modified or amended hereby, the terms and rights contained in the
Convertibles Notes shall remain unchanged, are not waived and shall
remain in full force and effect.

 

[SIGNATURE
PAGE FOLLOWS]

 

 

 

 

 

 

 

 

3

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Convertible
Promissory Note Amendment to be duly executed by their respective
authorized signatories as of the date first indicated
above.

 

	

ROOT9B
HOLDINGS, INC.

 

 

By:
______________________

Name:
William Hoke

Title:
Chief Financial Officer

 

 

	

Address
for Notice:

 

root9B
Holdings, Inc.

102 N.
Cascade Avenue, Suite 220

Colorado
Springs, CO 80919

Attention:
Chief Operating Officer

 

	
 

	
 

 

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

 

4

 

 

[NOTEHOLDER
SIGNATURE PAGES TO

CONVERTIBLE
PROMISSORY NOTE EXTENSION AGREEMENT]

 

IN
WITNESS WHEREOF, the undersigned has caused this Convertible
Promissory Note Amendment to be duly executed by it authorized
signatory as of the date first indicated above.

 

	

NOTEHOLDER

 

 

By:

Name:

Title:

 

 

	

Address
for Notice

 

 

Principal
Amount of

Convertible
Promissory Notes: _____________

 

 

 

 

 

5Blueprint

 

Exhibit 10.2

 

AMENDMENT NO. 1 TO

COMMON STOCK PURCHASE WARRANT

 

 

This Amendment No.
1 (the “Amendment”) to that
certain Common Stock Purchase Warrant (the “Warrant”) issued to the
undersigned (the “Registered Holder”)
pursuant to that certain Securities Purchase Agreement (as amended,
the “Agreement’) first dated
as of October 23, 2014, by and among root9B Holdings, Inc.
(formerly known as Premier Alliance Group, Inc.), a Delaware
corporation (the “Company”) and the
Purchasers (as defined therein), is entered into effective as of
May 22, 2017 (the “Effective Date”).
Capitalized terms used in this Amendment that are not otherwise
defined herein shall have the respective meanings assigned to them
in the Warrant.

 

RECITALS

 

Whereas, the
Company has agreed to amend the Warrant in order to reduce the
exercise price from $16.80 (as previously adjusted to reflect the
Company’s one-for-fifteen reverse stock split on December 1,
2016) to $8.00, in connection a recapitalization of certain of its
securities;

 

Whereas,
pursuant to Section 14 of the Warrant, the Warrant may be amended
only with the written consent of the Company and the Registered
Holder; and

 

Whereas, the
Registered Holder and the Company desire to amend the Warrant as
set forth herein.

 

AGREEMENT

 

Now, Therefore, in consideration of the foregoing and of the
mutual promises and conditions hereinafter set forth, the parties
hereto agree as follows:

 

 

A.

Amendment of Exercise Price.
The Recital of the Warrant is hereby amended to reduce the
“Exercise Price” from $16.80 per share (as previously
adjusted to reflect the Company’s one-for-fifteen reverse
stock split on December 1, 2016) to $8.00 per share.

 

B.

Amendment of Notice Provisions.
Section 10 of the Warrant is hereby amended, restated and replaced
in its entirety with the following:

 

10.
Notices. All
notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally
served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable
air courier service with charges prepaid, or (iv) transmitted by
hand delivery, electronic mail or facsimile, addressed as set forth
below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication
required or permitted to be given hereunder shall be deemed
effective (a) upon hand delivery, electronic mail or delivery by
facsimile, with accurate confirmation generated by the transmitting
facsimile machine, if sent by electronic mail with confirmed
receipt, at the address or number designated below (if delivered on
a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours
where such notice is to be received) or (b) on the second business
day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such
mailing, whichever shall first occur.

 

 

 

 

If to
the Borrower:

 

root9B
Holdings, Inc.

102 N.
Cascade Avenue, Suite 220

Colorado Springs,
CO 80919

Attention: Chief
Operating Officer

 

With a
copy to:

 

DLA
Piper LLP (US)

2525
East Camelback Road, Suite 1000

Phoenix, Arizona
85016

Attention: Steven
D. Pidgeon, Esq.

 

If to
the Holder:

 

At the
address provided by the Holder

 

C.

Representations of the Company.
The Company represents and warrants as follows:

 

a.

Organization. The Company is a
corporation duly organized and validly existing under the laws of
the jurisdiction of its incorporation and has all requisite
corporate power and legal authority to own and use its properties
and assets and carry on its business as now conducted and to own
its properties. The Company is not in violation of any of the
provisions of its Certificate of Incorporation or
Bylaws.

 

b.

Authorization; Enforcement. The
Company has all corporate right, power and authority to enter into
this Amendment and to consummate the transactions contemplated
hereby and thereby. All corporate action on the part of the
Company, its directors and stockholders necessary for the
authorization, execution, delivery and performance of this
Amendment by the Company, the authorization, sale, issuance and
delivery of the Securities contemplated herein and the performance
of the Company’s obligations hereunder and thereunder has
been taken, other than obtaining the requisite filings necessary to
authorize and effect the issuance of Warrant Shares upon exercise
of the Warrants. This Amendment has been duly executed and
delivered by the Company and constitutes the legal, valid and
binding obligation of the Company, enforceable against the Company
in accordance with its terms, except: (i) as limited by general
equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

 

 

 

2

 

 

D.

Representations of Registered
Holder. Registered Holder hereby represents and warrants as
follows:

 

a.

Organization; Authority.
Registered Holder is either an individual or an entity duly
incorporated or formed, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or formation with
full right, corporate, partnership, limited liability company or
similar power and authority to enter into and to consummate the
transactions contemplated by this Amendment and otherwise to carry
out its obligations hereunder. The execution and delivery of this
Amendment and performance by Registered Holder of the transactions
contemplated by this Amendment have been duly authorized by all
necessary corporate, partnership, limited liability company or
similar action, as applicable, on the part of Registered Holder.
This Amendment has been duly executed by Registered Holder, and
when delivered by Registered Holder in accordance with the terms
hereof, shall constitute the valid and legally binding obligation
of Registered Holder, enforceable against it in accordance with its
terms, except: (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of
creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or
other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable
law.

 

b.

Registered Holder Status. As of
the date hereof, Registered Holder is an “accredited
investor” as defined in Rule 501 under the Securities Act.
Registered Holder is not a broker-dealer registered under Section
15 of the Exchange Act. Registered Holder is acting alone in its
determination as to whether to invest in the Warrant. Such
Registered Holder is not a party to any voting agreements or
similar arrangements with respect to the Warrant or Warrant Stock.
Except as expressly disclosed in a Schedule 13D or Schedule 13G (or
amendments thereto) filed by Registered Holder with the Securities
and Exchange Commission with respect to the beneficial ownership of
the Company’s Common Stock, Registered Holder is not a member
of a partnership, limited partnership, syndicate, or other group
for the purpose of acquiring, holding, voting or disposing of the
Warrant or Warrant Stock. Each Registered Holder represents and
warrants that it (i) is not and shall not become a party to (A) any
agreement, arrangement or understanding with, and has not given any
commitment or assurance to, any Person as to how such Person, if
serving as a director or if elected as a director of the Company,
shall act or vote on any issue or question (a “Voting
Commitment”) or (B) any Voting Commitment that could limit or
interfere with such Person’s ability to comply, if serving as
or elected as a director of the Company, with such Person’s
fiduciary duties under applicable law; (ii) is not and shall not
become a party to any agreement, arrangement or understanding with
any Person other than the corporation with respect to any direct or
indirect compensation, reimbursement or indemnification in
connection with service or action as a director of the
Company.

 

 

3

 

 

c.

Compliance with Laws.
Registered Holder has complied, or will comply, with the reporting
requirements of the Securities Exchange Act of 1934, as amended,
including, but not limited to, Section 13 and 16 thereunder,
arising from, or in connection with, the transactions contemplated
by this Amendment, the Agreement and the Warrant.

 

E.

Full Force and Effect. It is
expressly intended and agreed that this Agreement constitutes an
“exchange offer” within the meaning of Section 3(a)(9)
of the Securities Act of 1933, as amended and
“recapitalization” under Rule 144(d)(3). All of the
provisions of the Warrant are ratified and confirmed and no
provision is waived, except as modified by this
Amendment.

 

F.

Counterpart. This Amendment may
be executed in counterparts, each of which shall be deemed an
original but all of which together shall be deemed one original.
PDF or facsimile copies of manually executed signature pages to
this Amendment are fully binding and enforceable without the need
for delivery of the original manually executed signature
page.

 

G.

Governing Law. This Amendment
shall be governed by the laws of the state of Delaware, without
giving effect to conflict of law principles.

 

H.

Independent Counsel. The
Registered Holder represents that it has had the opportunity to
consult with its own counsel concerning entry into this Amendment,
including, but not limited to, any potential reporting requirements
and trading restrictions under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), arising
from or in connection with the transactions contemplated by this
Amendment and the Agreement (including Sections 10, 13 and 16 of
the Exchange Act).

 

I.

Cooperation. Each party hereto
agrees to execute and deliver such additional documents and
instruments and to perform such additional acts as any party may
reasonably request or as may be reasonably necessary or appropriate
to effectuate, consummate and perform any other terms, provisions,
or conditions of this Amendment.

 

[Remainder of page intentionally left blank. Signature page
follows.]

 

 

 

4

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective authorized signatories as of
the Effective Date.

 

	

 

	
ROOT9B
HOLDINGS, INC.

	

 

	

 

	

 

	

 

	

 

	
Date

	
By:  

	
/s/ 

	

 

	

 

	

Name:  

	
 

	

 

	

 

	

Title:

	

 

	

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

[SIGNATURE
PAGE FOR REGISTERED HOLDER FOLLOWS]

 

 

 

5

 

 

Agreed
to and accepted:

 

 

REGISTERED
HOLDER:
[●]

 

By:

 

 

By:
    ______________________________________

Name:

Its:

 

 

6

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