Document:

Exhibit 10.2

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND STATE SECURITIES LAWS.

 

	
$[Principal Note Amount]

	
[insert Closing Date]

 

SECURED PROMISSORY NOTE

 

FOR VALUE RECEIVED, nDivision, Inc. a Texas corporation ("Maker"), hereby promises to pay to the order of Gamwell Technologies Inc., a Texas corporation ("Holder") in lawful money of the United States of America the principal sum of ____________________ and _/100 Dollars ($[Principal Note Amount]) plus interest thereon according to the terms set forth below.

 

1.       Background.  Reference is hereby made to that certain Asset Purchase Agreement (the "Purchase Agreement"), by and among the Maker and Holder and Timothy and Cecilia Gamwell.  Capitalized terms used herein that are not otherwise defined herein shall have the meanings ascribed to them in the Purchase Agreement.  This Secured Promissory Note (this "Note") shall be effective upon the Closing Date (as defined in the Purchase Agreement).

 

2.       Payments.  This Note will be paid in one annual payment (the "Initial Payment") and twenty-three equal monthly payments of principal, plus accrued but unpaid interest thereon, commencing after the Initial Payment which is to be made on the date that is thirteen (13) months after the Closing Date of the Purchase Agreement.   The monthly payments shall begin on the next month following the Initial Payment and continuing thereafter until the third-year anniversary of the Closing Date, at which time this Note shall mature and all unpaid principal and interest hereunder shall be due and payable in full (the "Maturity Date").  The Initial Payment shall be equal to one-third of the Principal Note Amount (as defined in the Purchase Agreement).

 

3.       Security Interest. In order to secure the indebtedness memorialized in this Note, Maker hereby grants to Holder a first lien security interest (the "Security Interest") in the Collateral (as defined and set forth in the Security Agreement by and between the parties of even date herewith) and Holder shall have all rights of a secured party in connection therewith.  Maker agrees to execute further documentation as may be necessary to perfect the foregoing security interest.  Provided, however, Holder agrees to subordinate its security interest in the Purchase Contracts to any security interest required by any indebtedness of the Maker obtained to pay the Purchase Price (as defined in the Purchase Agreement) or indebtedness obtained after Closing (as defined in the Purchase Agreement) by Maker to reimburse Maker the Purchase Price paid and to be paid to Holder.  However, in no event, shall such lien be subordinate to an amount greater than the Purchase Price.  Upon the filing of a correct financing statement with the Secretary of State in Maker's state of formation, the Security Interest will be perfected to the extent such security interest can be perfected by the filing of a financing statement under the Uniform Commercial Code applicable to Maker.

 

 

Exhibit 10.2 -- Page 1

3.       Accrual of Interest.  Interest on the outstanding principal balance of this Note shall accrue at a fixed rate equal to the lesser of (a) the then current short-term applicable federal rate in existence on the Closing Date of the Purchase Agreement, or (b) the Maximum Legal Rate (as defined below).  On the Maturity Date, all accrued, unpaid interest shall be paid in full.

4.       Prepayment.  Maker may voluntarily prepay this Note in whole or in part at any time and from time to time without penalty, together with interest accrued on the amount prepaid through the date of prepayment.

 

5.       Event of Default.  Each of the following shall constitute an event of default ("Event of Default") under this Note:

 

(i)       Failure by Maker to make any payment of principal or interest under this Note within thirty (30) days following the due date;

 

(ii)       The Maker pursuant to or within the meaning of any Bankruptcy Law:

 

(a)       commences a voluntary case;

 

(b)       consents to the entry of an order for relief against it in an involuntary case;

 

(c)       consents to the appointment of a Custodian (as defined below) of it or for all or substantially all of its property;

 

(d)       makes a general assignment for the benefit of its creditors; or

 

(iii)       A court of competent jurisdiction enters an order or decree under any Bankruptcy Law (as defined below) that:

 

(a)       is for relief against the Maker in an involuntary case which order or decree is not stayed or dismissed within thirty (30) days of the entry thereof;

 

(b)       appoints a Custodian of the Maker or for all or substantially all of its property; or

 

(c)       orders the liquidation of the Maker and the order or decree remains unstayed and in effect for forty-five (45) days.

 

The term "Bankruptcy Law" means title 11, United States Code, or any similar federal or state law for the relief of debtors.  The term "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

 

 

 

Exhibit 10.2 -- Page 2

6.       Remedies Upon an Event of Default.  If an Event of Default (other than an Event of Default specified in clauses (ii) and (iii) of Section 5 hereof) occurs and is continuing, the Holder of this Note by written notice to the Maker may declare this Note to be due and payable if the Event of Default has not been remedied thirty (30) days following written notice to the Maker of the Holder's election to accelerate repayment of this Note.  Upon such declaration, this Note shall be due and payable in cash in full immediately.  If an Event of Default specified in clause (ii) and (iii) of this Section 5 hereof occurs, such amount shall become and be immediately due and payable without any declaration or other act on the part of the Holder of this Note.

 

7.       Waivers.  Except as provided herein, Maker hereby waives presentment, demand, protest or notice of any kind in connection with this Note.  No failure on the part of Holder in exercising any right or remedy hereunder, and no single, partial or delayed exercise by Holder of any right or remedy shall preclude the full and timely exercise by Holder at any time of any right or remedy of Holder hereunder without notice.  No course of dealing or other conduct, no oral agreement or representation made by Holder or usage of trade shall operate as a waiver of any right or remedy of Holder.  In the event that any court of competent jurisdiction shall determine that any provision, or portion thereof, contained in this Note shall be unenforceable in any respect, then such provision shall be deemed limited to the extent that such court deems it enforceable, and the remaining provisions of this Note shall nevertheless remain in full force and effect.

 

8.       Maximum Legal Rate.  It is the intent of Holder and of Maker that in no event shall interest be payable at a rate in excess of the maximum rate permitted by applicable law (the "Maximum Legal Rate").  Solely to the extent necessary to prevent interest under this Note from exceeding the Maximum Legal Rate, any amount that would be treated as excessive under a final judicial interpretation of applicable law shall be deemed to have been a mistake and automatically cancelled and, if received by Holder, shall be applied to the principal balance of this Note or, if no principal balance remains outstanding, then such amount shall be refunded to Maker.

 

9.       Successors and Assigns.  This Note shall be binding upon and enforceable against Maker and Maker's successors and assigns and shall inure to the benefit of Holder and Holder's successors, endorsees and assigns.

 

10.       Governing Law.  This Note shall be governed by, and construed and enforced in accordance with the laws of the State of Texas, without regard to its principles of conflicts of laws.

 

11.       Adjustment and Offset.  This Note is not subject to offset (except to the extent provided in the Purchase Agreement), recoupment or counterclaim.  The principal amount of this Note is subject to adjustment pursuant to the Purchase Agreement.

 

12.       Counterparts. Copies of signatures sent by facsimile transmission or in PDF format shall be deemed to constitute originals.

 

 

[Signature Page to Follow]

 

 

Exhibit 10.2 -- Page 3

 

 

IN WITNESS WHEREOF, Maker has caused this Note to be executed as an instrument under seal as of the date first above written.

	 	
NDIVISION, INC.,

	 	
a Texas corporation

	 	 	 
	 	 	 
	 	
By:

	 
	 	
Name:   Alan Hixon

	 	
Title:     Chief Executive Officer

	 	 	 
	 	 	 
	 	 	 
	 	
GAMWELL TECHNOLOGIES, INC.,

	 	
a Texas corporation

	 	 	 
	 	 	 
	 	
By:

	 
	 	
Name:   Timothy Gamwell

	 	
Title:      President

 

 

 

 

 

 

 

Exhibit 10.2 -- Page 4Exhibit 10.3

NEITHER THIS WARRANT NOR THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY OTHER APPLICABLE SECURITIES LAWS IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS.  NEITHER THIS WARRANT NOR THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF MAY BE SOLD, PLEDGED, TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER THE PROVISIONS OF THE SECURITIES ACT AND SUCH SECURITIES LAWS.

No. [000]

COMMON STOCK PURCHASE WARRANT

To Purchase Common Stock in Go2Green Landscaping, Inc.,

a Nevada corporation (the "Company")

This Warrant is issued pursuant to that certain Asset Purchase Agreement by and between Gamwell Technologies Inc., a Texas corporation (the "Holder"), the Company, and Timothy and Cecilia Gamwell of even date herewith (the "APA").  This Warrant shall be effective on the Closing Date (as defined in the APA). This certifies that, for value received, Holder, is entitled, upon the terms and subject to the conditions hereinafter set forth, at any time on or after the first anniversary of the Closing Date (as defined in the APA) and until the close of business on the tenth (10th) anniversary of the Closing Date, subject to earlier termination as provided herein (the "Termination Date"), but not thereafter, to subscribe for and purchase from the Company common shares ("Common Stock") constituting up to one-fourth percent (0.25%) (the "Warrant Percentage") of the Company's total outstanding common shares on a fully issued and diluted basis as of the first (1st) anniversary of the Closing Date (the "Warrant Shares"). The exercise price per share of the Warrant Shares (the "Exercise Price") under this Warrant shall be $0.40.  The Warrant Percentage, Exercise Price and the number of Warrant Shares for which this Warrant is exercisable shall be subject to further adjustment as provided in Section 9 herein. All terms not defined herein shall have the definitions given in the APA.

1.       Authorization and Reservation of Warrant Shares.  The Company covenants that all Warrant Shares that may be issued upon the exercise of this Warrant will, upon exercise of this Warrant, be duly authorized, validly issued, fully paid and non-assessable.  The Company covenants that, during the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized and reserved, for the purpose of issue upon exercise of the rights evidenced by this Warrant, a sufficient number of authorized but unissued shares of Common Stock, or other securities and property, when and as required to provide for the exercise of the rights represented by this Warrant.

 

 

Exhibit 10.3 -- Page 1

2.       Vesting of Warrant.  The Warrant shall vest and become exercisable as follows:

(a)       one-third (1/3) of the Warrant Shares shall vest and become exercisable after any adjustment of the Warrant Percentage pursuant to Section 9(c);

(b)       one-third (1/3) of the Warrant Shares shall vest and become exercisable effective on the second (2nd) anniversary of the Closing Date; and

(c)       one-third (1/3) of the Warrant Shares shall vest and become exercisable effective on the third (3rd) anniversary of the Closing Date.

3.       Exercise of Warrant.

(a)       Method of Exercise.  Exercise of the purchase rights represented by this Warrant may be made in whole (or in part) after and in accordance with the vesting dates as set forth in Section 2 and before the close of business on the Termination Date, by (i) the surrender of this Warrant and delivery of a duly executed Notice of Exercise Form, in the form annexed hereto as Exhibit A, in each case, at the office of the Company (or such other office or agency of the Company as the Company may designate by notice in writing to the registered Holder hereof at the address of such Holder appearing on the books of the Company) and (ii) payment of the Exercise Price of the Warrant Shares thereby purchased by wire transfer of immediately available funds to an account designated by the Company or delivery of a check drawn on a United States bank delivered at the office of the Company (or such other office or agency of the Company as the Company may designate by notice in writing to the registered Holder hereof at the address of such Holder appearing on the books of the Company).  The Company may, in its sole discretion, condition the Holder's exercise of this Warrant and the issuance of the Warrant Shares upon the Holder's execution and delivery to the Company of all agreements that have been executed by some or all of the Company's equity investors, including, without limitation, any and all voting agreements, investors' rights agreements, co-sale and right of first refusal agreements, and other shareholders agreements.  Upon an exercise of this Warrant, delivery of the executed agreements referred to above if so required by the Company, and payment in accordance with the foregoing, the Holder shall be entitled to receive either a certificate representing the number of Warrant Shares purchased, or other evidence of ownership.  If this Warrant shall have been duly exercised only in part, the Company shall deliver to the Holder a new Warrant evidencing the rights to purchase the remaining Warrant Shares, which new Warrant shall in all other respects be identical with this Warrant.

(b)       Time of Exercise.  The Company agrees that this Warrant shall be deemed to have been exercised immediately prior to the close of business on the date on which this Warrant shall have been surrendered, a duly executed Notice of Exercise Form has been delivered and payment made for the Warrant Shares, all as aforesaid, and the person entitled to receive the Warrant Shares issuable upon such exercise shall be treated for all purposes as the holder of record of such Warrant Shares as of the close of business on such date.

 

 

 

 

Exhibit 10.3 -- Page 2

(c)       Early Termination on Liquidity Event.  If a Liquidity Event (as defined below) is proposed to be effected, then the Company shall give the Holder at least ten (10) days' advance notice of the consummation of the proposed Liquidity Event and, if this Warrant has not been exercised by the effective date of the Liquidity Event, this Warrant shall terminate.  The Holder may condition its exercise of this Warrant upon the consummation of the Liquidity Event.  For purposes hereof, "Liquidity Event" shall mean the consolidation or merger of the Company with or into any other corporation or business entity (other than with or into a wholly-owned domestic subsidiary of the Company), the sale or other transfer in a single transaction or a series of related transactions of all or substantially all of the assets of the Company, or the liquidation, dissolution, winding-up or reorganization of the Company.

(d)       Legend on Warrant Shares.  If the shares of Common Stock of the Company are certificated, the Warrant Shares shall be imprinted with a legend in substantially the following form:

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.

4.       No Fractional Shares.  No fractional Warrant Shares shall be issued upon the exercise of this Warrant.  As to any fraction of a Warrant Share that a Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay a cash adjustment in respect of such final fraction in an amount determined on the basis of the Exercise Price.

5.       Transfer.

(a)       The Holder, by acceptance of this Warrant, covenants and agrees that it is acquiring this Warrant and, upon exercise hereof, the Warrant Shares for its own account as an investment and not with a view to distribution hereof or thereof.  Neither this Warrant nor the Warrant Shares have been registered under the Securities Act or any state securities laws, and no transfer of this Warrant or any Warrant Shares shall be permitted unless the Company has received notice of such transfer, at the address of its principal office, in the form of an assignment reasonably satisfactory to the Company, accompanied by an opinion of counsel reasonably satisfactory to the Company that an exemption from registration of this Warrant or Warrant Shares, as applicable, under the Securities Act is available for such transfer.

 

 

 

Exhibit 10.3 -- Page 3

(b)       The  agrees to maintain books for the registration and the transfer of this Warrant.

6.Rights as a Shareholder until Exercise.  This Warrant does not entitle the Holder hereof to any voting rights or other rights as a shareholder of the Company prior to the exercise hereof.

7.       Loss, Theft, Destruction or Mutilation of Warrant.  The Company covenants that, upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and upon surrender and cancellation of such Warrant, if mutilated, the Company will make and deliver a new Warrant of like tenor and dated as of such cancellation, in lieu of such Warrant.

8.       Saturdays, Sundays, Holidays, Etc.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall be a Saturday, Sunday or a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day not a Saturday, Sunday or legal holiday.

9.       Adjustments.  The Exercise Price and the number of Warrant Shares purchasable hereunder are subject to adjustment from time to time as follows:

(a)       Reclassification, Etc.  If the Company, at any time while this Warrant, or any portion hereof, remains outstanding and exercisable, by reclassification of securities or otherwise, shall change any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities that were subject to the purchase rights under this Warrant immediately prior to such reclassification or other change, and the Exercise Price shall be appropriately adjusted, all subject to further adjustment as provided in this Section 9.

(b)       Split, Subdivision or Combination of Warrant Shares.  If the Company, at any time while this Warrant, or any portion hereof, remains outstanding and exercisable, shall split (including, without limitation, a common share split effected by means of a stock dividend), subdivide or combine the securities as to which purchase rights under this Warrant exist, into a different number of securities of the same class, then (i) in the case of a split or subdivision, the Exercise Price for such securities shall be proportionately decreased and the securities issuable upon exercise of this Warrant shall be proportionately increased, and (ii) in the case of a combination, the Exercise Price for such securities shall be proportionately increased and the securities issuable upon exercise of this Warrant shall be proportionately decreased.

 

 

 

Exhibit 10.3 -- Page 4

(c)       MRR Percentage Decrease.  On the first (1st) anniversary of the Closing Date, the Warrant Percentage shall be decreased by the MRR Percentage Decrease, if any, resulting in the adjustment of the number of Warrant Shares purchasable hereunder, pursuant to Section 4.2 of the APA.

10.       Notice of Adjustment.  Upon the occurrence of each adjustment or readjustment pursuant to Section 9, the Company, at its expense, shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to the Holder of this Warrant a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based.  The Company shall, upon the written request, at any time, of such Holder, furnish or cause to be furnished to such Holder a like certificate setting forth: (a) such adjustments and readjustments; (b) the Exercise Price at the time in effect; and (c) the number of Warrant Shares and the amount, if any, of other property that at the time would be received upon the exercise of this Warrant.

11.       Notice of Company Action.  If at any time there shall be any capital reorganization of the Company, or any reclassification or recapitalization of the capital of the Company then, in any one or more of such cases, the Company shall give to the Holder at least ten (10) days' prior written notice of the record date for such reorganization, reclassification, or recapitalization.  Such notice in accordance with the foregoing clause also shall specify (a) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, the date on which the holders of Common Stock shall be entitled to any such dividend, distribution or right, and the amount and character thereof, and (b) the estimated date on which any such reorganization, reclassification, or recapitalization is to take place.

12.       Miscellaneous.  Section 12.1 through Section 12.3 and 12.6 through 12.14 of the APA shall apply to this Warrant and are incorporated as if set forth herein, mutatis matandis.

 

  

 [Signature page follows.]

 

 

Exhibit 10.3 -- Page 5

 

 

 

IN WITNESS WHEREOF, this Warrant has been duly executed and delivered on the Closing Date.

	 	
COMPANY:

	 	 
	 	
Go2Green Landscaping, Inc.,

	 	
a Nevada corporation

	 	 
	 	 
	 	
By: _____________________________________

	 	
Name:___________________________________

	 	
Title: _____________________________________

	 	 
	 	 
	 	 
	 	
HOLDER:

	 	 
	 	
GAMWELL TECHNOLOGIES, INC.,

	 	
a Texas corporation

	 	 
	 	 
	 	
By: _______________

	 	
Name: Timothy Gamwell

	 	
Title: President

 

Exhibit 10.3 -- Page 6

 

 

 

EXHIBIT A

NOTICE OF EXERCISE

To: Go2Green Landscaping, Inc.

The undersigned hereby elects to exercise its right to acquire _______________ shares of Common Stock of Go2Green Landscaping, Inc., a Nevada corporation pursuant to the terms of the attached Common Stock Purchase Warrant and tenders herewith payment by wire transfer of the exercise price of such Common Stock in full.

Date:____________________, 20___.

	 	
GAMWELL TECHNOLOGIES, INC.,

a Texas corporation

	 
	 	 	 
	 	 	 
	 	
By:

	
__________________________________

	 	
Name:

	
__________________________________

	 	
Title:

	
__________________________________

	 	 	 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.3 -- Page 7

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