Document:

PROMISSORY NOTE

	
$500,000

	
March 17, 2011

	  	
Weston, Florida

For value received, and on the terms and subject to the conditions set forth herein, Next 1 Interactive, Inc., a Nevada corporation (the “Company”), HEREBY PROMISES TO PAY to the order of William James Whyte, or his registered assigns (collectively, the “Noteholder”), on the Maturity Date (as defined below), the principal sum of up to five hundred thousand dollars ($500,000) (the “Loan”), plus any unpaid interest accrued thereon, or such lesser amount as shall be equal to the unpaid principal amount of the Loan plus such interest.  The Company hereby promises to make
principal repayments and to pay interest on the dates and at the rate or rates provided for herein.

SECTION 1.  Certain Terms Defined.  The following terms for all purposes of this Note shall have the respective meanings specified below.

“Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized by law to close.

“Commission” has the meaning set forth in Section 10(d).

“Common Stock” has the meaning set forth in Section 7.

“Company” has the meaning set forth in the introductory paragraphs.

“Conversion Date” has the meaning set forth in Section 7.

“Conversion Delivery Date” has the meaning set forth in Section 7.

“Conversion Price” has the meaning set forth in Section 7.

“Event of Default” has the meaning set forth in Section 8.

“Exchange Act” has the meaning set forth in Section 10(d).

“Fundamental Transaction” has the meaning set forth in Section 7.

“GAAP” has the meaning set forth in Section 10(b).

“Loan” has the meaning set forth in the introductory paragraphs.

“Material Adverse Effect” has the meaning set forth in Section 9(c).

 

  

  

  

 

“Maturity Date” means the earlier of (i) April 6, 2012, or (ii) the date on which the amounts due under this Note have been accelerated and are immediately due and payable pursuant to the terms hereof; provided that if such date is not a Business Day, then such date shall be the next succeeding Business Day.

“Note” shall mean this Promissory Note as amended, from time to time, in accordance with the terms hereof.

“Noteholder” has the meaning set forth in the introductory paragraphs.

“Notice” has the meaning set forth in Section 2.

“Notice of Conversion” has the meaning set forth in Section 7.

“Period” means from the date hereof to the earlier of (i) the Maturity Date, or (ii) the date of occurrence of an Event of Default.

“Person” means any natural person, corporation, limited liability company, partnership, joint venture, association, trust or unincorporated organization, governmental authority or any other legal entity, whether acting in an individual, fiduciary or other capacity.

“Securities Act” has the meaning set forth in Section 9(e).

“Segregated Account” means a segregated account maintained by the Company for the sole purpose of holding Resort & Residence TV, Inc. receivable collections as collateral for the Loan.

“Shares” has the meaning set forth in Section 7.

“Subsidiary” means any corporation or other entity of which at least a majority of the securities or other ownership interest having ordinary voting power (absolutely or contingently) for the election of directors or other persons performing similar functions are at the time owned directly or indirectly by the Company and/or any of its other Subsidiaries.

SECTION 2.  Loan Drawdown.

The Noteholder shall make one or more loans available to the Company during the Period in an aggregate amount not to exceed the Loan.  As a condition to the Noteholder making any loan hereunder, the Company shall provide to the Noteholder at least three (3) Business Days’ prior written notice of a drawdown request in the minimum amount of at least two hundred and fifty thousand dollars ($250,000) (each collectively, a “Notice”).  Upon the reasonable satisfaction of the Noteholder of the Notice, the Noteholder shall lend, and the Company shall borrow, such amounts on the drawdown date as set forth in such Notice.

 

  

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SECTION 3.  Maturity Date.

The Loan shall mature, and the principal amount thereof shall become immediately due and payable (together with unpaid interest accrued thereon) on the Maturity Date.

SECTION 4.  Interest Payments.

Interest shall accrue from the date hereof at a rate equal to six percent (6%) per annum, plus any increase in the Prime Rate, as reported by the Wall Street Journal.

Interest shall be payable quarterly in arrears to the Noteholder out of the Segregated Account on the last day of the Company’s fiscal quarter (or if any such day is not a Business Day, then on the next succeeding Business Day).  Interest shall be computed on the basis of a year of three hundred and sixty (360) days and paid for the actual number of days elapsed.

SECTION 5.  Optional Prepayments.

The Company may prepay the Loan in whole or in part at any time or from time to time without penalty or premium by paying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment.  Any such prepayments made under this Section 5 shall be in minimum increments of two hundred and fifty thousand dollars ($250,000).

SECTION 6.  General Provisions as to Payments.

All payments of principal and interest on the Loan by the Company hereunder shall be made not later than 12:00 p.m. (Eastern Standard Time) on the date when due either by cashier’s check, certified check or by wire transfer of immediately available funds to the Noteholder’s account at a bank specified by the Noteholder in writing to the Company, without reduction by reason of any set-off or counterclaim.

SECTION 7.  Conversion

Noteholder shall have the right to convert the principal and any interest due under this Note into shares (the “Shares”) of the Company’s common stock, $0.001 par value per share (“Common Stock”), as set forth below.

(a)           Noteholder shall have the right at any time until this Note is fully paid, to convert any outstanding and unpaid principal portion of this Note, and accrued interest thereon, at the election of Noteholder, by delivering to the Company a Notice of Conversion (as defined herein) (the date of giving of the Notice of Conversion being a “Conversion Date”), into fully paid and nonassessable Shares of Common Stock as such stock exists on the date of issuance of this Note, or any shares of capital stock of the Company into which such Common Stock shall hereafter be changed or reclassified, at the Conversion Price (as defined herein), determined as provided
herein.  Upon delivery to Company of a completed Notice of Conversion, a form of which is annexed hereto as Exhibit A (the “Notice of Conversion”), the Company shall issue and deliver to Noteholder within four (4) business days after the Conversion Date (such fourth day being the “Conversion Delivery Date”) that number of Shares of Common Stock for the portion of this Note converted in accordance with the foregoing. Upon partial conversion of this Note, a replacement Note containing the same date and provisions of this Note shall, at the request of Noteholder and upon surrender of the Note to the Company for cancellation, be issued by the Company to Noteholder for the principal balance of this Note and interest which shall not have been converted or paid.  If a new Note is not requested by Noteholder, Noteholder
will not be required to surrender the Note to Company until the Note has been fully converted or satisfied. At the election of Noteholder, the Company will deliver accrued but unpaid interest on this Note, if any, through the Conversion Date directly to Noteholder on the Conversion Date.  The number of Shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing that portion of the outstanding principal amount of this Note and accrued but unpaid interest thereon to be converted, by the Conversion Price.

 

  

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(b)           Subject to adjustment as provided herein, the conversion price (“Conversion Price”) per share shall be equal to twenty cents ($0.20).

(c)           The Conversion Price and number and kind of shares or other securities to be issued upon conversion shall be subject to adjustment from time to time upon the happening of any of the Fundamental Transactions described below while this conversion right remains.  A Fundamental Transaction is defined as the occurrence of any of the following (each, a “Fundamental Transaction”):  (a) Company effects any merger or consolidation of Company with or into another entity where the other entity acquires more than 50% in one or a series of related transactions; (b) Company effects any sale or transfer of 40% in the aggregate, in one or a series of related
transactions, of the properties and assets of Company to another Person(s) in any rolling twelve (12) month period; (c) any purchase, exchange or tender offer (whether by Company or another entity) is completed pursuant to which holders of an aggregate of 50% or more of the outstanding Shares of Common Stock of Company are permitted to tender or exchange their Shares for other securities (whether of Company or another Person), cash or property; (d) Company consummates a stock purchase or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Persons whereby such other Persons acquire more than the 50% of the outstanding Shares of Common Stock (not including any Shares of Common Stock held by such other Persons making or party to, or associated or affiliated with, the other Persons making or party to, such stock purchase or other business combination); (e) any “person” or
“group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, in one or a series of related transactions, of 50% or more of the aggregate Common Stock of Company; or (f) Company effects any reclassification of the Common Stock or any share exchange pursuant to which the Common Stock of Company is effectively converted into or exchanged for other securities (whether of Company or another Person), cash or property.  The foregoing provision shall similarly apply to successive Fundamental Transactions of a similar nature by any such successor or purchaser.  Without limiting the generality of the foregoing, the anti-dilution provisions of this Section shall apply to such securities of such successor or purchaser after any such Fundamental Transaction.

(d)           If Company at any time shall change the Common Stock into the same or a different number of securities of any class or classes that may be issued or outstanding, this Note, as to the unpaid principal portion thereof and accrued interest thereon, shall thereafter be deemed to evidence the right to purchase an adjusted number of such securities and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately prior to such reclassification or other change.

 

  

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(e)           If the Shares of Common Stock are subdivided or combined into a smaller or greater, respectively, number of Shares of Common Stock, or if a dividend is paid on the Common Stock in Shares of Common Stock, the Conversion Price shall be proportionately reduced in the case of subdivision of Shares or payment of dividends in Shares, or proportionately increased in the case of combination of Shares, as applicable, in each such case by the ratio which the total number of Shares of Common Stock outstanding immediately after such event bears to the total number of Shares of Common Stock outstanding immediately prior to such event.

(f)           Company represents and warrants to Noteholder that upon issuance, such Shares will be duly and validly issued, fully paid and non-assessable. Company agrees that its issuance of this Note shall constitute the granting of full authority to Company’s officers, agents and transfer agents who are charged with the duty of executing and issuing stock certificates, to execute and issue the necessary certificates for Shares of Common Stock upon the conversion of this Note.

(g)           Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer), this Note, as to the unpaid principal portion thereof and accrued interest thereon, shall thereafter be deemed to evidence the right to convert into such number and kind of shares or other securities and property as would have been issuable or distributable on account of such Fundamental Transaction, upon or with respect to the securities subject to the conversion right immediately prior to such Fundamental Transaction.

(h)           Company may prepay and redeem this Note without penalty at any time prior to the Maturity Date, provided at least ten (10) business days’ prior written notice is delivered to Noteholder. Upon such notice being made to Noteholder, Noteholder agrees that it shall not elect to convert the Note into Common Stock, until such notice has expired.

(i)            Notwithstanding any provision contained herein to the contrary, in the event that the Company offers to assign, transfer, place and/or sell the Note, and all outstanding obligations owed hereunder, to a qualified third party, and the Noteholder refuses such assignment, transfer, placement and/or sale, the Company may, upon ten (10) days written notice to Noteholder, convert the unpaid principal portion of the Note and any accrued interest thereon into Shares of Common Stock of the Company pursuant to the terms and conditions herein contained.

SECTION 8.  Events of Default.

Each of the following events shall constitute an “Event of Default”:

(a)           the principal of the Loan shall not be paid when due;

 

  

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(b)           any interest on the Loan shall not be paid within five (5) Business Days of when it was due;

(c)           the Company breaches any covenant hereunder and such breach is not cured within forty five (45) days after notice from the Noteholder;

(d)           any representation or warranty of the Company made in this Note shall be incorrect when made in any material respect;

(e)           a court shall enter a decree or order for relief in respect of the Company or any Subsidiary in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Company or any Subsidiary or for any substantial part of the property of the Company or any Subsidiary or ordering the winding up or liquidation of the affairs of the Company or any Subsidiary, and such decree or order shall remain unstayed and in effect for a period of sixty (60) consecutive days; or

(f)            the Company or any Subsidiary shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Company or any Subsidiary or for any substantial part of the property of the Company or any Subsidiary, or the Company or any Subsidiary shall make any general assignment for the benefit of creditors.

If an Event of Default described in (e) or (f) above shall occur, the principal of and accrued interest on the Loan shall become immediately due and payable without any declaration or other act on the part of the Noteholder.  Immediately upon the occurrence of any Event of Default described in (e) or (f) above, or upon failure to pay this Note on demand, the Noteholder, without any notice to the Company, which notice is expressly waived by the Company, may proceed to protect, enforce, exercise and pursue any and all rights and remedies available to the Noteholder under this Note, or at law or in equity.

If any Event of Default in (a) – (d) above shall occur for any reason, whether voluntary or involuntary, and be continuing, the Noteholder may by notice to the Company declare all or any portion of the outstanding principal amount of the Loan to be due and payable, whereupon the full unpaid amount of the Loan which shall be so declared due and payable shall be and become immediately due and payable without further notice, demand or presentment.

SECTION 9.  Representations.

The Company hereby represents and warrants to the Noteholder, as follows:

(a)           The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the state of Nevada and has the requisite corporate power to own, lease and operate its properties and assets and to conduct its business as it is now being conducted.  Each Subsidiary is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of organization and has the requisite corporate power to own, lease and operate its properties and assets and to conduct its business as it is now being conducted

 

  

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(b)           The Company has the requisite legal and corporate power and authority to enter into, issue and perform this Note in accordance with the terms hereof and thereof.  The execution, delivery and performance of this Note by the Company and the consummation by it of the transactions contemplated hereby or thereby have been duly and validly authorized by all necessary corporate action, and no further consent or authorization of the Company, its board of directors or stockholders is required.  When executed and delivered by the Company, this Note shall constitute valid and binding obligations of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable
bankruptcy, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditor's rights and remedies or by other equitable principles of general application.

(c)           The execution, delivery and performance of this Note and the consummation by the Company of the transactions contemplated hereby or thereby, do not and will not (i) violate or conflict with any provision of the Company's certificate of incorporation or bylaws, each as amended to date, or any Subsidiary's comparable charter documents, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries' respective properties or assets are bound, or (iii) result in a violation of any federal, state, local or foreign statute, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries are bound or affected, except, in the case of clauses (ii) and (iii) above, for any such default or violation that would not, individually or in the aggregate, have a material adverse effect on the business, properties, management, financial position, results of operations or prospects of the Company and its Subsidiaries taken as a whole (a “Material Adverse Effect”).  Neither the Company nor any of its Subsidiaries is required under federal, state, foreign or local law, rule or regulation to obtain any consent,
authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Note.

(d)           The Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency or any regulatory or self-regulatory agency or any other person in order for it to execute, deliver or perform any of its obligations under or contemplated by this Note, except where the failure to obtain any such consent, authorization or order, or the failure to make any such filing or registration, could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior
to the date hereof.

 

  

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(e)           The Shares when issued and delivered will be duly and validly issued and will be free of all liens and restrictions on transfer other than any restrictions on transfer under the Securities Act of 1933, as amended (the “Securities Act”).

(f)           The Shares have been duly reserved for issuance by the Company in sufficient number to cover the conversion of this Note.  The issuance of the Shares upon exercise of this Note has been duly authorized by the Company and the Shares when delivered in accordance with this Note, will be validly issued, fully paid and non-assessable, and free of all liens and restrictions on transfer other than any restrictions on transfer under the Securities Act.

(g)           The offer, issuance, sale and delivery of the Shares will not under current laws and regulations require compliance with the prospectus delivery or registration requirements of the Securities Act.

SECTION 10.  Covenants.

(a)           The Company and each Subsidiary shall maintain its existence and authority to conduct its business as presently contemplated to be conducted;

(b)           The Company shall keep and cause each Subsidiary to keep adequate records and books of account, in which complete entries will be made in accordance with United States generally accepted accounting principles (“GAAP”) consistently applied, reflecting all financial transactions of the Company and its Subsidiaries, and in which, for each fiscal year, all proper reserves for depreciation, depletion, obsolescence, amortization, taxes, bad debts and other purposes in connection with its business shall be made;

(c)           The Company shall not enter into any agreement in which the terms of such agreement would restrict or impair the right or ability to perform of the Company or any Subsidiary under this Note;

(d)           The Company shall timely file all reports required to be filed with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities and Exchange Act of 1934, as amended, (the “Exchange Act”), and the Company shall not terminate its status as an issuer required to file reports under the Exchange Act even if the Exchange Act or the rules and regulations thereunder would permit such termination.

(e)           The Company agrees that it will not, without the consent of the Noteholder enter into any new agreement or make any amendment to any existing agreement, which by its terms would restrict the Company’s performance of its obligations to the Noteholder pursuant to this Note.

 

  

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SECTION 11.  Transfers.

The Company may not transfer or assign this Note nor any right or obligation hereunder to any person or entity without the prior written consent of the Noteholder.  The Noteholder may not transfer or assign this Note nor any right or obligation hereunder to any person or entity without the prior written consent of the Company.

SECTION 12.  Powers and Remedies Cumulative; Delay or Omission Not Waiver of Event of Default.

No right or remedy herein conferred upon or reserved to the Noteholder is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

No delay or omission of the Noteholder to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power or shall be construed to be a waiver of any Event of Default or an acquiescence therein; and every power and remedy given by this Note or by law may be exercised from time to time, and as often as shall be deemed expedient, by the Noteholder.

SECTION 13.  Modification.

This Note may be modified in writing only with the written consent of both the Company and the Noteholder.

SECTION 14.  Attorneys Fees/Enforcement Costs.

(a)           The Company will reimburse the Noteholder for reasonable legal fees and expenses in connection with the transactions contemplated hereby, including without limitation the negotiation, documentation and execution of this Note and any amendments to any of the documents contemplated hereby, and

(b)           In the event that amounts owed pursuant to this Note are collected by law or through attorneys at law, or under advice therefrom, the Company agrees to pay all costs of collection, including reasonable attorneys’ fees, whether or not suit is brought, and whether incurred in connection with collection, trial, appeal, bankruptcy or other creditors’ proceedings or otherwise.

SECTION 15.  Indemnification

The Company agrees to indemnify and hold harmless the Noteholder (and, if applicable, its respective directors, officers, managers, partners, members, shareholders, affiliates, agents, successors and assigns) (each an “Indemnified Party”) from and against any and all losses, liabilities, deficiencies, costs, damages and expenses (including, without limitation, reasonable attorneys’ fees, charges and disbursements) incurred by such Indemnified Party as a result of any inaccuracy in or breach of the representations, warranties or covenants made by the Company herein.

 

  

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SECTION 16.  Miscellaneous.

(a)           The parties hereto hereby waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of or any default under this Note, except as specifically provided herein.

(b)           Any provision of this Note which is illegal, invalid, prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity, prohibition or unenforceability without invalidating or impairing the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

(c)           This Note shall bind the Company and its successors and permitted assigns.  The rights under and benefits of this Note shall inure to the Noteholder and their successors and assigns.

(d)           The Section headings herein are for convenience only and shall not affect the construction hereof.

(e)           All notices, requests, demands, consents, instructions or other communications required or permitted hereunder shall be made in writing and faxed, mailed or delivered to each party at the respective addresses of the parties, or at such other address or facsimile number as the Company shall have furnished to the Noteholder in writing.  All such notices and communications will be deemed effectively given the earlier of (i) when received, (ii) when delivered personally, (iii) one (1) business day after being delivered by facsimile (with receipt of appropriate confirmation), (iv) one (1) business day after being deposited with an overnight courier service of recognized standing or (v) on receipt of confirmation of delivery.

(f)           In the event any interest is paid on this Note, which is deemed to be in excess of the then legal maximum rate, then that portion of the interest payment representing an amount in excess of the then legal maximum rate shall be deemed a payment of principal and applied against the principal of this Note.

THIS NOTE HAS BEEN DELIVERED IN WESTON, FLORIDA AND SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF FLORIDA, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.

 

  

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THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF FLORIDA AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF FLORIDA FOR THE PURPOSE OF ANY LITIGATION ARISING HEREUNDER.  THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF FLORIDA.  THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

BY ITS ACCEPTANCE OF THIS NOTE THE NOTEHOLDER AND THE COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE NOTEHOLDER OR THE COMPANY.  THE COMPANY ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE NOTEHOLDER MAKING THE LOAN EVIDENCED HEREBY.

[ - signature page follows - ]

  

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IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed on the date indicated above.

	  	
NEXT 1 INTERACTIVE, INC.

	  	  
	  	
By:

	  
	  	
Name: William Kerby

	  	
Title:    Chief Executive Officer

 

  

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EXHIBIT A

NOTICE OF CONVERSION

Next 1 Interactive, Inc.:

The undersigned hereby elects to surrender and convert a portion of that certain Promissory Note in the principal amount of $500,000.00, dated March 17, 2011 (the “Note”), issued by Next 1 Interactive, Inc. (the “Company”) in favor of William James Whyte (the “Noteholder”), into shares of common stock of the Company (the “Shares”) according to the terms and conditions contained in the Note, as of the date written below. Upon the request of the Noteholder, the Company agrees to issue a new promissory note for
the balance of the principal amount that was not converted into shares of common stock.

 

Conversion Calculations:

 

Date of Conversion: [●]

Amount of Conversion: $[●]

Number of Shares to be issued:  [●]

 

The stock certificate(s) representing the Shares should be issued in the name of [●] and delivered as follows:

Delivery via DWAC:

Clearing Firm: [●]

DTC # [●]

Account Name: [●]

Account Number: [●]

	  	  	  
	  	
James Whyte

	  

 

  

13TERMINATION AGREEMENT

THIS TERMINATION AGREEMENT (this “Agreement”), dated as of the 11th day of March, 2011, is made by and between NEXT 1 INTERACTIVE, INC., a corporation incorporated under the laws of State of Nevada (the “Company”), and JAMES WHYTE (the “Holder”).

WITNESSETH:

WHEREAS, the Company and the Holder are each parties to (i) that certain convertible promissory note dated January 25, 2010 given by the Company in favor of the Holder in the principal amount of $3,500,000 (the “Original Note”); and (ii) those certain common stock purchase warrant agreements (agreement nos. 00025, 00034 and 00050) dated April 6, 2010, July 12, 2010 and July 23, 2010 respectively, pursuant to which the Company granted the Holder the right to purchase an aggregate amount of 1,050,000 shares of the Company’s common stock at the Warrant Price (as defined in each) (together, collectively, the “Original
Warrants”, and together with the Original Note, collectively, the “Original Transaction Documents”);

WHEREAS, the Company has requested and the Holder has agreed to cancel the Original Transaction Documents as of the date hereof pursuant to the terms and conditions herein contained;

WHEREAS, in consideration of permitting the Company to cancel the Original Transaction Documents, the Company shall execute and deliver to the Holder (i) a convertible promissory note in favor of the Holder in the principal amount of $500,000, in the form attached as Exhibit A hereto (the “Note”); (ii) a common stock purchase warrant pursuant to which the Company shall grant the Holder the right to purchase an aggregate amount of 3,600,000 shares of the Company’s common stock at the purchase price of $0.25 per share, in the form attached as Exhibit B
hereto (the “Warrant” and, together with the Note, collectively, the “Transaction Documents”); and (iii) 3,300,000 shares of common stock of the Company (consisting of (a) 2,250,000 shares of common stock of the Company relating to the conversion of $450,000 of principal owed under the Original Note and (b) 1,050,000 shares of common stock of the Company relating to the exercise of the Original Warrants).

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants and agreements herein contained, the Company and the Holder do hereby agree as follows:

1.           Notwithstanding any provision contained in the Original Transaction Documents to the contrary, the Holder hereby (i) converts $450,000 of principal owed under the Original Note into 2,250,000 shares of common stock of the Company; and (ii) exercises the Original Warrants in an amount equal to 1,050,000 shares of common stock of the Company.

  

  

 

 

2.           Subject to the satisfaction of the conditions precedent and pursuant to the terms and conditions contained herein, the Original Transaction Documents shall be immediately cancelled.

3.           The Company shall pay and the Holder shall accept, upon the receipt by the Company of additional funds pursuant to a private placement to hereinafter occur (and not before such time), $25,000 in full satisfaction of any and all interest, fees and expenses owed under the Original Note as of the date hereof.

	
  

	
4.

	
As a condition precedent to the effectiveness of this Agreement:

	
  

	
(i)

	
the Holder shall have delivered to the Company each of the Original Transaction Documents marked “CANCELLED”;

	
  

	
(ii)

	
the Company shall have executed and delivered to the Holder each of the Transaction Documents in the forms attached as Exhibit A and Exhibit B hereto;

	
  

	
(iii)

	
the Company shall have delivered to the Holder 3,300,000 shares of common stock of the Company (consisting of (a) 2,250,000 shares of common stock of the Company relating to the conversion of $450,000 of principal owed under the Original Note and (b) 1,050,000 shares of common stock of the Company relating to the exercise of the Original Warrants); and

	
  

	
(iv)

	
the Holder shall have received such evidence as may be reasonably required as to the authority of the officers or attorneys-in-fact executing this Agreement and the Transaction Documents including copies, certified as true and complete by an officer of the Company of the resolutions of the Company’s board of directors evidencing approval of this Agreement and the Transaction Documents and authorizing an appropriate officer or officers or attorney-in-fact or attorneys-in-fact to execute the same on its behalf.

5.           This Agreement contains the entire understanding between and among the parties and supersedes any prior understandings and agreements among them respecting the subject matter of this Agreement.

6.           This Agreement is only effective in the specific instances set forth herein.  Each of the Company and the Holder expressly reserves the right, now and at all times hereafter, to require strict compliance with the terms of the Transaction Documents in all other respects and expressly covenants that, subject to the conversion and exercise provided in Section 1 herein, the Original Transaction Documents shall be ineffective.

  

  

 

 

7.           This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to choice of law principles.

8.           This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one and the same instrument.

9.           The parties hereby consent and agree that if this Agreement, the Transaction Documents or any other document executed in connection herewith or therewith shall at any time be deemed by the parties for any reason insufficient, in whole or in part, to carry out the true intent and spirit hereof or thereof, the parties will execute or cause to be executed such other and further assurances and documents as in the reasonable opinion of the parties may be reasonably required in order more effectively to accomplish the purposes of this Agreement, the Transaction Documents or any other document executed in connection herewith or therewith.

10.           In case any provision of this Agreement shall be held to be invalid, illegal or unenforceable, such provision shall be severable from the rest of this Agreement, and the validity legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

[ signature page follows ]

 

  

  

 

 

IN WITNESS WHEREOF, this Agreement has been executed as of this 11th day of March, 2011.

	  	
NEXT 1 INTERACTIVE, INC.

	 
	  	  	  	 
	  	
By:

	
  

	 
	  	
Name: 

	
William Kerby

	 
	  	
Title:

	
Chief Executive Officer

	 
	  	  	  	 
	  	
  

	 
	  	
James Whyte

	 

 

  

  

 

 

EXHIBIT A

[INSERT FORM OF NOTE]

 

  

  

 

 

EXHIBIT B

[INSERT FORM OF WARRANT]

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