Document:

Jammin Java Corp. 10-Q 

Exhibit 10.47

 

 

SECURITIES
PURCHASE AGREEMENT

 

This
SECURITIES PURCHASE AGREEMENT (the “Agreement”),
dated as of November 15, 2016,
by and between JAMMIN JAVA CORP., a Nevada
corporation, with headquarters located at
730 Tejon St., Denver, Colorado 80211 (the “Company”),
and VIS VIRES GROUP, INC.,
a New York corporation, with its
address at 111 Great Neck Road –
Suite 216, Great Neck, NY
11021 (the “Buyer”).

 

WHEREAS:

 

A.                
The Company
and the Buyer
are executing and delivering this Agreement
in reliance upon the exemption
from securities registration afforded by the rules
and regulations as promulgated
by the United States Securities and Exchange
Commission (the “SEC”) under the Securities
Act of 1933, as amended (the “1933 Act”);

 

B.                
Buyer desires
to purchase
and the
Company desires to issue
and sell, upon the terms
and conditions set forth in this Agreement
an 8% convertible note of the
Company, in the form
attached hereto as Exhibit A, in the aggregate
principal amount of $14,000.00
(together with any
note(s) issued in replacement thereof
or as a dividend thereon or otherwise
with respect thereto in accordance
with the terms thereof, the “Note”),
convertible into shares of common
stock, $0.001 par value per
share, of the Company (the “Common
Stock”), upon the terms and subject
to the limitations and conditions
set forth in such Note; and

 

C.                
The Buyer
wishes to purchase,
upon the terms
and conditions stated in this Agreement, such principal amount of Note as
is set forth immediately below
its name on the signature
pages hereto.

 

NOW
THEREFORE, the Company
and the Buyer severally (and not
jointly) hereby agree
as follows:

 

1.                 
Purchase and Sale of
Note.

 

a.                  
Purchase of Note.
On the Closing Date (as defined below),
the Company shall issue and sell
to the Buyer and
the Buyer agrees to purchase
from the Company such principal
amount of Note as is set forth
immediately below the Buyer’s
name on the signature pages hereto.

 

    	 	1	 

    	 

    

 

b.                  
Form of Payment.
On the Closing Date (as
defined below), (i) the Buyer shall
pay the purchase price for the Note to be
issued and sold to it at
the Closing (as defined below)
(the “Purchase Price”) by wire transfer
of immediately available funds
to the Company, in accordance with the
Company’s written wiring instructions,
against delivery of the Note in the principal
amount equal to the Purchase Price
as is set forth immediately
below the Buyer’s name on
the signature pages hereto, and (ii) the
Company shall deliver such duly executed
Note on behalf of the Company, to the Buyer,
against delivery of such
Purchase Price.

 

c.                  
Closing Date. Subject to the satisfaction
(or written waiver) of the conditions
thereto set forth in Section 6 and
Section 7 below, the date and
time of the issuance and sale
of the Note pursuant to this
Agreement (the “Closing Date”)
shall be 12:00 noon, Eastern Standard
Time on or about November 18, 2016,
or such other mutually agreed upon
time. The closing
of the transactions contemplated
by this Agreement (the “Closing”) shall occur on the Closing
Date at such location as may
be agreed to by the parties.

 

2.                 
 Buyer’s
Representations and Warranties.The
Buyer represents and
warrants to the Company
that:

 

a.                  
Investment
Purpose.
As of
the date hereof, the Buyer is purchasing
the Note and the shares
of Common Stock issuable upon
conversion of or otherwise pursuant to
the Note (including, without limitation, such
additional shares of Common
Stock, if any, as are issuable
(i) on account of interest
on the Note or (ii) as a result
of the events described in Section
1.4(g) of the Note, such
shares of Common Stock being
collectively referred to herein as
the “Conversion Shares” and, collectively
with the Note, the “Securities”)
for its own account and
not with a present view
towards the public sale or distribution
thereof, except pursuant to sales registered
or exempted from registration under
the 1933 Act; provided, however,
that by making the representations
herein, the Buyer does not agree
to hold any of the Securities for
any minimum or other specific term and
reserves the right to dispose
of the Securities at any
time in accordance with or pursuant
to a registration statement or an
exemption under the 1933 Act.

 

b.                  
Accredited Investor Status. The
Buyer is
an “accredited investor” as that term
is defined in Rule
501(a) of Regulation D (an “Accredited
Investor”).

 

c.                  
Reliance on
Exemptions.
The Buyer
understands that the Securities are
being offered and
sold to it in reliance upon specific
exemptions from the registration requirements
of United States federal and state
securities laws and
that the Company is relying upon
the truth and accuracy of, and the Buyer’s
compliance with, the representations,
warranties, agreements, acknowledgments
and understandings of the Buyer
set forth herein in order
to determine the availability of such
exemptions and the eligibility
of the Buyer to acquire the Securities.

    	 	2	 

    	 

    

 

d.                  
Information. The
Buyer and its
advisors, if
any, have been,
and for
so long as the Note
remains outstanding will continue
to be, furnished
with all materials relating to
the business, finances and
operations of the Company and materials
relating to the offer
and sale of the
Securities which have been
requested by the Buyer or its advisors.
The Buyer and its advisors, if
any, have been,
and for so long as
the Note remains outstanding will
continue to be,
afforded the opportunity to ask
questions of the Company. Notwithstanding
the foregoing, the Company has
not disclosed to the Buyer
any material nonpublic information and
will not disclose such information unless
such information is disclosed to the public prior to or promptly
following such disclosure to the Buyer.
Neither such inquiries nor any other
due diligence investigation conducted
by Buyer or any
of its advisors or representatives shall
modify, amend or affect
Buyer’s right to rely
on the Company’s representations and
warranties contained in Section
3 below. The Buyer understands
that its investment in the Securities
involves a significant degree
of risk. The Buyer is not aware of any
facts that may constitute a breach
of any of the Company's
representations and warranties
made herein.

 

e.                  
Governmental Review. The
Buyer understands that no United
States federal or state agency
or any other government or governmental
agency has passed
upon or made any recommendation
or endorsement of the Securities.

 

f.                   
Transfer or Re-sale.
The Buyer understands that (i) the sale or re- sale of the Securities has not been and is not being registered under the 1933
Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities are sold pursuant
to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company, at the cost of the
Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in comparable transactions
to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration,
which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an “affiliate” (as defined
in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees to sell or
otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities
are sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule)
(“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel
that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall be
accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance with the
terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances in which the
seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act)
may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii)
neither the Company nor any other person is under any obligation to register such Securities under the 1933 Act or any state securities
laws or to comply with the terms and conditions of any exemption thereunder (in each case). Notwithstanding the foregoing or anything
else contained herein to the contrary, the Securities may be pledged as collateral in connection with a bona fide margin
account or other lending arrangement.

 

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g.                  
Legends.
The Buyer
understands that
the Note and, until such
time as the Conversion Shares have
been registered under the 1933 Act may
be sold pursuant to Rule 144 or
Regulation S without any
restriction as to the
number of securities as of a particular
date that can then be immediately
sold, the Conversion Shares may bear
a restrictive legend in substantially
the following form (and a stop-transfer
order may be placed against transfer
of the certificates for
such Securities):

 

“NEITHER
THE ISSUANCE AND
SALE OF
THE SECURITIES REPRESENTED
BY THIS CERTIFICATE
NOR THE SECURITIES
INTO WHICH THESE
SECURITIES
ARE EXERCISABLE HAVE
BEEN REGISTERED
UNDER
THE SECURITIES ACT OF
1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED

(I)
IN THE
ABSENCE OF (A) AN
EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH
COUNSEL SHALL BE SELECTED
BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION
IS NOT REQUIRED UNDER SAID ACT OR (II)
UNLESS SOLD PURSUANT TO RULE 144
OR RULE 144A
UNDER SAID ACT. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY
BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT OR OTHER LOAN
OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.”

 

The
legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security
upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for
sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation
S without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such
holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act,
which opinion shall be accepted by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities,
including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus
delivery requirements, if any. In the event that the Company does not accept the opinion of counsel provided by the Buyer with
respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, at the Deadline,
it will be considered an Event of Default pursuant to Section 3.2 of the Note.

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h.                  
Authorization; Enforcement.
This Agreement
has been duly
and validly
authorized. This Agreement has
been duly executed and delivered on behalf
of the Buyer, and this Agreement
constitutes a valid and binding agreement
of the Buyer enforceable in accordance
with its terms.

i.                   
Residency.
The Buyer
is a resident of the jurisdiction set
forth immediately below the Buyer’s name
on the signature pages hereto.

 

3.                 
Representations and Warranties
of the Company.The Company
represents and warrants
to the Buyer that:

 

a.                  
Organization and
Qualification. The Company
and each of its
Subsidiaries (as defined below), if
any, is a corporation
duly organized, validly existing and
in good standing under the laws
of the jurisdiction in which
it is incorporated, with full power
and authority (corporate and other)
to own, lease, use and operate its
properties and to carry
on its business as and
where now owned, leased, used, operated
and conducted. Schedule 3(a) sets
forth a list of all
of the Subsidiaries of the Company and
the jurisdiction in which each is
incorporated. The Company and each of its Subsidiaries
is duly qualified as a foreign corporation
to do business and is
in good standing in every jurisdiction
in which its ownership
or use of property or
the nature of the business conducted
by it makes such qualification
necessary except where the failure
to be so qualified
or in good standing
would not have a Material Adverse Effect.
“Material Adverse Effect”
means any material adverse effect on
the business, operations, assets, financial
condition or prospects
of the Company or its
Subsidiaries, if any, taken as
a whole, or on the transactions contemplated
hereby or by the agreements or
instruments to be entered
into in connection herewith. “Subsidiaries”
means any corporation or
other organization, whether incorporated
or unincorporated, in
which the Company owns, directly
or indirectly, any equity or
other ownership interest.

 

b.                  
Authorization;
Enforcement.
(i) The
Company has all
requisite corporate power and
authority to enter into and
perform this Agreement,
the Note and to consummate the
transactions contemplated hereby
and thereby and to issue the Securities,
in accordance with the
terms hereof and thereof, (ii)
the execution and delivery of
this Agreement, the Note by the Company
and the consummation by it of the transactions
contemplated hereby and thereby (including without limitation, the issuance
of the Note and the issuance
and reservation for
issuance of the Conversion Shares
issuable upon conversion or exercise
thereof) have been duly
authorized by the Company’s
Board of Directors and
no further consent
or authorization of the Company,
its Board of Directors, or its
shareholders is required, (iii) this
Agreement has been duly executed
and delivered by the Company
by its authorized
representative, and such authorized representative
is the true and official representative
with

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authority
to sign
this Agreement
and the
other documents executed in connection
herewith and bind the Company accordingly,
and (iv) this Agreement constitutes,
and upon execution and
delivery by the Company
of the Note, each of such
instruments will constitute, a legal,
valid and binding obligation of the Company
enforceable against the Company in accordance
with its terms.

 

c.                   Capitalization. As of
the date hereof, the authorized capital stock
of the Company consists of: (i) 5,112,861,525 authorized shares
of Common Stock, $0.001 par value per share,
of which 230,567,965 shares are issued and outstanding; and
(ii) there are no authorized shares of Preferred
Stock, (iii) 52,211,321 shares are
reserved for issuance
pursuant to the Company’s stock option plans,
(iv) no shares are reserved for issuance
pursuant to securities (other than
the Note and a Note dated March
11, 2016 for which 23,300,000
are reserved for Vis Vires Group, Inc.)
and due to the diminution of the Bid
Price, the total amount of shares
exercisable for, or convertible into or exchangeable for
shares of Common Stock, except as otherwise disclosed in
the SEC Documents, and 500,000,000 shares
are reserved for issuance upon conversion
of the Note as well as the March
11, 2016 Note. All
of such outstanding shares of capital stock
are, or upon issuance will be, duly authorized,
validly issued, fully paid and non- assessable. No shares of capital stock
of the Company are subject to preemptive
rights or any other similar rights of the
shareholders of the Company or any liens
or encumbrances imposed through the actions
or failure to act of the Company. As
of the effective date of this Agreement, (i)   there
are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights
of first refusal, agreements, understandings, claims or other
commitments or rights of any
character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares
of capital stock of the Company or any of its Subsidiaries, or arrangements
by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares of
capital stock of the Company or any of its Subsidiaries (except as otherwise disclosed in the SEC Documents),
(ii)   there are no agreements or arrangements
under which the Company or any of
its Subsidiaries is obligated to register
the sale of any of
its or their securities under the 1933 Act and
(iii) there are no anti-dilution or price adjustment
provisions contained in any security
issued by the Company (or in any agreement
providing rights to security
holders) that will be triggered by the issuance of
the Note or the Conversion Shares. The
Company has furnished to the Buyer
true and correct copies of the
Company’s Certificate of Incorporation
as in effect on
the date hereof (“Certificate
of Incorporation”), the Company’s
By-laws, as in effect on the date hereof
(the “By-laws”), and the terms of all
securities convertible into or exercisable for Common Stock
of the Company and the
material rights of the holders
thereof in respect thereto. The Company shall provide the Buyer with a written
update of this representation
signed by the Company’s Chief Executive on
behalf of the Company as of the
Closing Date.

 

d.                  
Issuance of Shares.
The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note in accordance with its respective
terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect
to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and
will not impose personal liability upon the holder thereof.

 

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e.                  
Acknowledgment
of Dilution.
The Company understands
and acknowledges the potentially
dilutive effect to the Common
Stock upon the issuance of the
Conversion Shares upon conversion
of the Note. The Company further
acknowledges that its obligation
to issue Conversion
Shares upon conversion of the
Note in accordance with this
Agreement, the Note is absolute
and unconditional regardless of the dilutive
effect that such issuance may have on
the ownership interests of other
shareholders of the Company.

 

f.                   
No Conflicts.
The execution,
delivery and performance of this Agreement,
the Note by the Company and the consummation
by the Company of the transactions contemplated
hereby and thereby (including, without limitation, the issuance
and reservation for issuance
of the Conversion Shares) will not (i)
conflict with or result
in a violation of any
provision of the Certificate
of Incorporation or By-laws, or (ii)
violate or conflict with,
or result in a breach of any
provision of, or constitute a
default (or an event
which with notice or lapse of
time or both could
become a default) under, or give
to others any
rights of termination, amendment, acceleration
or cancellation of, any agreement,
indenture, patent, patent license or instrument
to which the Company or any
of its Subsidiaries is a party,
or (iii) result in a violation
of any law, rule,
regulation, order, judgment or decree
(including federal and state securities
laws and regulations and
regulations of any self-regulatory organizations to which
the Company or
its securities are subject) applicable
to the Company or any of its
Subsidiaries or by which any
property or asset of
the Company or any of its Subsidiaries
is bound or affected (except
for such conflicts, defaults,
terminations, amendments, accelerations,
cancellations and violations
as would not, individually or in the aggregate,
have a Material Adverse
Effect). Neither the Company nor any
of its Subsidiaries is in violation
of its Certificate of Incorporation,
By-laws or other organizational documents and neither the Company nor any
of its Subsidiaries
is in default (and no event has
occurred which with notice or lapse of time or both could
put the Company or any of its Subsidiaries
in default) under, and neither the Company nor any of its Subsidiaries
has taken any
action or failed to
take any action that would give to
others any rights
of termination, amendment, acceleration or cancellation
of, any agreement, indenture or instrument
to which the Company or
any of its Subsidiaries
is a party or by which any property
or assets of the Company
or any of its Subsidiaries
is bound or affected, except for
possible defaults as would not, individually
or in the aggregate,
have a Material Adverse Effect.
The businesses of the Company and its
Subsidiaries, if any, are not
being conducted, and shall
not be conducted so long as
the Buyer owns any of the Securities,
in violation of any law, ordinance
or regulation of any governmental entity.
Except as specifically contemplated by this Agreement
and as required under the 1933
Act and any
applicable state securities laws,
the Company is not required to
obtain any consent, authorization or order
of, or make any filing or
registration with, any court, governmental agency, regulatory agency,
self-regulatory organization or stock market or any
third party in order for it to
execute, deliver or perform
any of its obligations under this
Agreement, the Note in accordance with
the terms hereof or thereof or to issue
and sell the Note

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in
accordance with
the terms hereof
and to issue the
Conversion Shares upon conversion
of the Note. 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. If the Company
is listed on the OTCQB,
the Company is not in violation
of the listing requirements of
the OTCQB and does not reasonably
anticipate that the Common Stock will
be delisted by the OTCQB in the foreseeable
future. The Company and its Subsidiaries
are unaware of any facts or circumstances
which might give rise to any
of the foregoing.

 

g.                                             
SEC Documents;
Financial Statements. The Company
has filed all reports, schedules,
forms, statements and
other documents required to
be filed by
it with the SEC pursuant to the
reporting requirements of the Securities
Exchange Act of 1934, as amended
(the “1934 Act”) (all of the foregoing
filed prior to the date hereof and all exhibits included therein and
financial statements and schedules
thereto and documents
(other than exhibits to such
documents) incorporated by reference therein,
being hereinafter referred to
herein as the “SEC
Documents”), except for the Company’s quarterly report
on Form 10-Q for the period ended
July 31, 2016. Upon written
request the Company will deliver
to the Buyer true and complete
copies of the SEC Documents, except
for such exhibits and incorporated
documents. As of their respective dates,
the SEC Documents complied in all
material respects with the requirements of
the 1934 Act and the rules and
regulations of the SEC promulgated thereunder
applicable to the SEC Documents,
and none of the SEC Documents,
at the time they
were filed with the SEC, contained any
untrue statement of a material fact
or omitted to state a material
fact required to be
stated therein or necessary in
order to make the statements therein, in light
of the circumstances under which they were
made, not misleading. None of the
statements made in
any such SEC Documents
is, or has been, required
to be amended
or updated under applicable law
(except for such statements
as have been amended or updated
in subsequent filings prior the date
hereof). As of their respective dates, the financial
statements of the Company included in
the SEC Documents complied as to
form in all
material respects with applicable
accounting requirements and the published
rules and regulations of the SEC with respect
thereto. Such financial statements have
been prepared in accordance with United States generally
accepted accounting principles, consistently applied, during the periods
involved and fairly present in all material
respects the consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods
then ended (subject, in the case
of unaudited statements, to normal
year-end audit adjustments). Except as set forth
in the financial statements of
the Company included in the SEC Documents,
the Company has no liabilities, contingent
or otherwise, other than (i) liabilities
incurred in the ordinary course of business
subsequent to April 30, 2016,
and (ii) obligations under
contracts and commitments incurred in
the ordinary course of business
and not required under generally
accepted accounting principles to be
reflected in such financial statements,
which, individually or
in the aggregate, are
not material to the financial
condition or operating results
of the Company. The Company is subject
to the reporting requirements
of the 1934 Act.

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h.                  
Absence of Certain
Changes.
Since April 30, 2016, there
has been no material
adverse change and no material adverse
development in the assets, liabilities,
business, properties, operations, financial
condition, results of operations,
prospects or 1934 Act
reporting status of the Company or any
of its Subsidiaries.

 

i.                   
Absence of Litigation.
There is no action, suit, claim,
proceeding, inquiry or investigation
before or by any court, public
board, government agency, self-regulatory
organization or body pending
or, to the knowledge of the Company
or any of its Subsidiaries,
threatened against or affecting the Company
or any of
its Subsidiaries, or their officers
or directors in their capacity as such,
that could have a Material
Adverse Effect, except
as set forth
in the SEC Documents..
Schedule 3(i) contains a complete
list and summary description of
any pending or, to
the knowledge of the Company, threatened
proceeding (which would require disclosure on the
Company’s SEC Documents) against
or affecting the Company or
any of its Subsidiaries, without
regard to whether it would
have a Material Adverse Effect.
The Company and
its Subsidiaries are unaware of any facts
or circumstances which might give
rise to any of the foregoing.

 

j.                   
Patents, Copyrights,
etc.
The Company
and each of its Subsidiaries
owns or possesses the requisite
licenses or rights to use all
patents, patent applications, patent rights, inventions, know-how, trade
secrets, trademarks, trademark applications, service marks, service names, trade names and
copyrights (“Intellectual
Property”) necessary to enable it to conduct
its business as now operated (and,
as presently contemplated to be
operated in the future); there is
no claim or action by any person
pertaining to, or proceeding pending, or to the Company’s
knowledge threatened, which challenges
the right of the Company or of
a Subsidiary with respect to any
Intellectual Property necessary to enable it to conduct its
business as now operated (and, as presently
contemplated to be operated in
the future); to the best of the Company’s
knowledge, the Company’s
or its Subsidiaries’ current and
intended products, services and processes
do not infringe on any Intellectual Property or other rights
held by any person; and the Company is unaware
of any facts or circumstances
which might give rise to any
of the foregoing. The Company and each
of its Subsidiaries have taken reasonable
security measures to protect the
secrecy, confidentiality and value
of their Intellectual Property.

 

k.                  
No Materially
Adverse Contracts,
Etc.
Neither the
Company nor any
of its Subsidiaries is
subject to any charter, corporate or
other legal restriction, or any judgment,
decree, order, rule or regulation which in the judgment
of the Company’s officers has
or is expected in the future
to have a Material Adverse Effect. Neither
the Company nor any of
its Subsidiaries is a party
to any contract or
agreement which in
the judgment of the Company’s
officers has or is expected to
have a Material Adverse Effect.

 

l.                   
Tax
Status.
The Company and each of its
Subsidiaries has made or
filed all federal, state and foreign
income and all other tax returns, reports and
declarations required by any jurisdiction
to which it is subject (unless
and only to the extent that the
Company

    	 	9	 

    	 

    

 

and
each of
its Subsidiaries has set
aside on its books provisions reasonably
adequate for the payment of all
unpaid and unreported taxes) and
has paid all taxes and other governmental
assessments and charges that are material
in amount, shown or determined
to be due on such returns, reports
and declarations, except those being
contested in good faith
and has set
aside on its books provisions reasonably
adequate for the payment of all
taxes for periods subsequent
to the periods to which such
returns, reports or declarations apply.
There are no unpaid taxes in
any material amount claimed to be due
by the taxing authority of any jurisdiction,
and the officers of the Company
know of no basis for any
such claim. The Company has
not executed a waiver with
respect to the statute of limitations
relating to the assessment or
collection of any foreign, federal,
state or local tax. None of the Company’s
tax returns is presently being audited
by any taxing authority.

 

m.               
Certain Transactions.
Except for
arm’s length transactions pursuant
to which the Company or
any of its
Subsidiaries makes payments in the ordinary course of business
upon terms no less favorable
than the Company or
any of its Subsidiaries
could obtain from third
parties and other than the grant
of stock options disclosed on Schedule
3(c), none of the officers,
directors, or employees of the
Company is presently a party
to any transaction with the Company
or any of its
Subsidiaries (other than for services
as employees, officers and directors),
including any contract, agreement or other arrangement providing
for the furnishing of services
to or by, providing
for rental of real or
personal property to
or from, or otherwise requiring payments
to or from any officer,
director or such employee or, to
the knowledge of the Company, any corporation,
partnership, trust or other entity in which
any officer, director, or any
such employee has a substantial
interest or is an officer, director,
trustee or partner.

 

n.                  
Disclosure.
All information
relating to or concerning
the Company or any of its
Subsidiaries set forth in this Agreement
and provided to the Buyer
pursuant to Section 2(d) hereof
and otherwise in connection with
the transactions contemplated hereby is
true and correct in all material respects
and the Company has not omitted
to state any material fact necessary
in order to make the statements
made herein or therein, in light
of the circumstances under which they
were made, not misleading. No
event or circumstance has occurred or exists
with respect to the Company or
any of its Subsidiaries or its
or their business, properties, prospects, operations
or financial conditions, which, under
applicable law, rule or regulation,
requires public disclosure or announcement
by the Company but which has not been
so publicly announced or disclosed
(assuming for this purpose
that the Company’s reports filed
under the 1934 Act are being
incorporated into an effective
registration statement filed by the Company
under the 1933 Act).

 

o.                  
Acknowledgment
Regarding Bu
yer’ Purchase
of
Securities.
The Company
acknowledges and agrees that the Buyer is
acting solely in the capacity
of arm’s length purchasers with
respect to this Agreement
and the transactions contemplated hereby.
The Company further acknowledges that the Buyer
is not acting as
a financial advisor or fiduciary
of

    	 	10	 

    	 

    

 

the
Company (or in any similar
capacity) with respect to
this Agreement and
the transactions contemplated hereby
and any statement made by the Buyer
or any of its
respective representatives or agents
in connection with this Agreement and
the transactions contemplated hereby is not advice
or a recommendation and is merely
incidental to the Buyer’
purchase of the Securities.
The Company further represents to
the Buyer that the Company’s
decision to enter into this Agreement
has been based solely
on the independent evaluation
of the Company and its representatives.

 

p.                  
No Integrated
Offering.
Neither the
Company, nor any of its affiliates,
nor any person acting on its
or their behalf, has directly
or indirectly made
any offers or sales in any security or
solicited any offers to buy any security
under circumstances that would require
registration under the 1933 Act
of the issuance of the Securities
to the Buyer. The issuance
of the Securities to the Buyer will
not be integrated with
any other issuance of the Company’s
securities (past, current or
future) for purposes of any shareholder
approval provisions applicable to the Company or
its securities.

 

q.                  
No Brokers.
The Company has
taken no
action which would give rise
to any claim
by any person for brokerage
commissions, transaction fees or
similar payments relating to this Agreement
or the transactions contemplated
hereby.

 

r.                   
Permits;
Compliance.
The Company and each
of its Subsidiaries
is in possession of all franchises,
grants, authorizations, licenses, permits,
easements, variances, exemptions, consents,
certificates, approvals and orders necessary
to own, lease and operate
its properties and
to carry on its business
as it is now being conducted
(collectively, the “Company
Permits”), and there
is no action pending or, to the knowledge
of the Company, threatened regarding
suspension or cancellation of
any of the Company Permits. Neither
the Company nor any of its
Subsidiaries is in
conflict with, or in default or violation
of, any of the Company Permits, except
for any such conflicts, defaults or violations
which, individually or in
the aggregate, would not reasonably
be expected to have
a Material Adverse Effect.
Since April 30, 2016, neither
the Company nor any of its Subsidiaries has
received any notification with
respect to possible conflicts, defaults
or violations of applicable laws,
except for notices relating
to possible conflicts, defaults or violations,
which conflicts, defaults or
violations would not have
a Material Adverse Effect.

 

		s.	Environmental
                                         Matters.

 

(i)                      
There are,
to the
Company’s knowledge, with
respect to the Company or
any of its Subsidiaries
or any predecessor of the Company,
no past or present
violations of Environmental Laws
(as defined below), releases of any material
into the environment, actions, activities,
circumstances, conditions, events, incidents, or contractual
obligations which may give rise
to any common law environmental liability
or any liability under
the Comprehensive Environmental Response, Compensation and Liability Act of
1980 or similar

    	 	11	 

    	 

    

 

federal,
state, local
or foreign
laws and neither
the Company nor any of its Subsidiaries
has received any notice with
respect to any of the foregoing,
nor is any action pending or,
to the Company’s knowledge, threatened
in connection with any of the foregoing.
The term “Environmental
Laws” means all federal, state,
local or foreign laws relating to pollution
or protection of human health
or the environment (including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface
strata), including, without limitation,
laws relating to emissions, discharges,
releases or threatened releases
of chemicals, pollutants contaminants, or toxic or hazardous
substances or wastes (collectively,
“Hazardous Materials”) into the
environment, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials,
as well as
all authorizations, codes, decrees, demands
or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders,
permits, plans or regulations issued, entered, promulgated or
approved thereunder.

 

(ii)                    
Other than
those that are or were
stored, used or disposed of in
compliance with applicable law, no Hazardous
Materials are contained on or about
any real property currently owned, leased
or used by the Company
or any of its
Subsidiaries, and no Hazardous
Materials were released on or
about any real property previously
owned, leased or used by the Company
or any of its Subsidiaries
during the period the property
was owned, leased or used
by the Company or any of its
Subsidiaries, except in
the normal course of the Company’s
or any of its Subsidiaries’
business.

 

(iii)                  
There are no
underground storage tanks on or under
any real property owned, leased
or used by the Company or
any of its
Subsidiaries that are not in compliance with applicable
law.

 

t.                   
Title to
Property.
The Company and
its Subsidiaries
have good and
marketable title in fee simple
to all real property and good and
marketable title to all personal property
owned by them which is material
to the business of the Company
and its Subsidiaries, in each case free
and clear of all liens, encumbrances and
defects except such as are described
in Schedule 3(t) or such as would
not have a Material
Adverse Effect. Any real property and
facilities held under
lease by the Company
and its Subsidiaries are held
by them under valid, subsisting
and enforceable leases with such
exceptions as would not have a
Material Adverse Effect.

 

u.                  
Insurance.
The Company
and each of its Subsidiaries are
insured by insurers of recognized
financial responsibility against
such losses and risks and in such amounts
as management of the Company believes
to be prudent and
customary in the businesses in which
the Company and its Subsidiaries are
engaged. Neither the Company
nor any such Subsidiary has
any reason to believe that it
will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers
as may be necessary
to continue its business
at a cost that would not have
a Material Adverse

    	 	12	 

    	 

    

 

Effect.
Upon written
request the Company
will provide to the Buyer true and
correct copies of
all policies relating to directors’
and officers’ liability coverage,
errors and omissions coverage,
and commercial general liability coverage.

 

v.                  
Internal Accounting
Controls.
Except as set forth
in the SEC
Documents, the
Company and each of its Subsidiaries
maintain a system of internal accounting
controls sufficient, in the judgment of the Company’s
board of directors, to provide
reasonable assurance that (i) transactions
are executed in accordance with management’s
general or specific authorizations,
(ii) transactions are recorded as necessary to
permit preparation of financial
statements in conformity with generally
accepted accounting principles and to maintain
asset accountability, (iii) access
to assets is
permitted only in accordance with
management’s general or specific
authorization and (iv) the recorded
accountability for assets is compared
with the existing assets at reasonable
intervals and appropriate action is taken
with respect to any differences.

 

w.                
Foreign Corrupt Practices.
Neither the Company, nor any
of its Subsidiaries, nor any director,
officer, agent, employee or other person
acting on behalf of the Company
or any Subsidiary has, in the course
of his actions for, or on behalf
of, the Company, used any corporate funds
for any unlawful contribution, gift, entertainment
or other unlawful expenses relating
to political activity; made any direct
or indirect unlawful payment
to any foreign or domestic
government official or employee from
corporate funds; violated or is
in violation of any provision
of the U.S. Foreign Corrupt Practices Act of 1977, as
amended, or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful
payment to any foreign or domestic government official
or employee.

 

		x.	[INTENTIONALLY
                                         DELETED].

 

y.                  
No Investment
Company.
The Company is not, and
upon the issuance and sale
of the Securities as contemplated
by this Agreement will not be
an “investment company”
required to be
registered under the Investment
Company Act of 1940 (an “Investment
Company”). The Company is
not controlled by an Investment
Company.

 

z.                  
Breach of Representations
and Warranties by the Company.
If the Company
breaches any of the representations or warranties
set forth in this Section 3, and
in addition to any
other remedies available to the
Buyer pursuant to this Agreement,
it will be considered an
Event of default under Section
3.4 of the Note.

 

		4.	COVENANTS.

 

a.                  
Best Efforts.The
parties shall
use their
best efforts to satisfy timely each
of the conditions described in
Section 6 and 7 of this Agreement.

    	 	13	 

    	 

    

 

b.                  
Form D;
Blue Sky
Laws.
The Company agrees to file
a Form D with respect to the
Securities as required
under Regulation D and to
provide a copy thereof to
the Buyer promptly after such filing,
if deemed required. The Company
shall, on or before the Closing
Date, take such action as the
Company shall reasonably determine
is necessary to qualify
the Securities for sale to the
Buyer at the applicable
closing pursuant to this
Agreement under applicable securities
or “blue sky” laws
of the states of the United
States (or to obtain an exemption
from such qualification), and
shall provide evidence of any
such action so taken to the Buyer
on or prior to the Closing Date.

 

c.                  
Use
of Proceeds.
The Company shall use
the proceeds for general
working capital purposes.

 

		d.	[INTENTIONALLY
                                         DELETED]

 

e.                  
Expenses.
The Company’s
sole expense with respect to
this transaction is to reimburse Buyer’
expenses shall be $0.00.

 

f.                   
Financial Information.
Upon written request
the Company
agrees to send or make available
the following reports to the Buyer until
the Buyer transfers, assigns, or sells
all of the Securities: (i)
within ten (10) days after the filing
with the SEC, a copy of its Annual
Report on Form 10-K its Quarterly Reports on Form
10-Q and any Current Reports on
Form 8-K; (ii) within one (1) day after
release, copies of all press releases
issued by the Company or
any of its Subsidiaries;
and (iii) contemporaneously with the making
available or giving to the
shareholders of the Company, copies of any notices
or other information the Company makes
available or gives to such
shareholders.

 

		g.	[INTENTIONALLY
                                         DELETED]

 

h.                  
Listing. The Company shall promptly secure
the listing of the Conversion
Shares upon each national
securities exchange or automated quotation
system, if any, upon which
shares of Common Stock are then listed
(subject to official notice of issuance)
and, so long as the Buyer owns any of the Securities,
shall maintain, so long as
any other shares of Common
Stock shall be so listed, such
listing of all Conversion Shares
from time to time issuable upon conversion
of the Note. The Company will obtain
and, so long as the Buyer owns
any of the Securities, maintain the listing
and trading of its Common Stock on the OTCQB or
any equivalent replacement exchange
or electronic quotation system (including but not limited to
the Pink Sheets electronic quotation system)
and will comply in all respects with the Company’s
reporting, filing and other obligations
under the bylaws or rules of the Financial
Industry Regulatory Authority (“FINRA”) and such exchanges, as applicable. The Company shall promptly
provide to the Buyer copies of any notices
it receives from the OTCQB and
any other exchanges or electronic quotation
systems on which the Common Stock
is then quoted regarding

    	 	14	 

    	 

    

 

the
continued eligibility of the Common
Stock for listing on such exchanges and
quotation systems.

 

i.                   
Corporate Existence.
So long
as the Buyer beneficially
owns any Note, the Company
shall maintain its corporate
existence and shall not sell all
or substantially all of the
Company’s assets, except in
the event of a merger
or consolidation or sale of all
or substantially all
of the Company’s assets, where the
surviving or successor entity in
such transaction (i) assumes the
Company’s obligations hereunder
and under the agreements
and instruments entered into in connection herewith and
(ii) is a publicly traded corporation
whose Common Stock is listed
for trading on the Pink Sheets, OTCQX,
OTCQB, Nasdaq, Nasdaq SmallCap, NYSE
or AMEX.

 

j.                   
No Integration.
The Company shall
not make any offers or sales of
any security (other than the Securities) under
circumstances that would require registration
of the Securities being offered
or sold hereunder under the 1933 Act
or cause the offering of the Securities
to be integrated with any other offering
of securities by the Company for the purpose of any stockholder approval provision
applicable to the Company or its securities.

 

k.                  
Breach of Covenants.
If the Company breaches any of
the covenants set forth in
this Section 4, and in addition
to any other remedies
available to the Buyer pursuant
to this Agreement, it will be
considered an event of default
under Section 3.4 of the Note.

 

l.                    
Failure to
Comply with
the 1934 Act.
So long as the Buyer
beneficially owns the Note, the
Company shall comply with the reporting
requirements of the 1934 Act;
and the Company shall continue
to be subject to the reporting
requirements of the 1934 Act,
provided that the Company’s
failure to timely file the
Company’s quarterly report
on Form 10-Q for the period
ended July 31, 2016 as
long as it is filed by December
14, 2016, shall not be deemed
an Event of Default.

 

m.               
Trading Activities.
Neither the
Buyer nor its affiliates
has an open short position
in the common stock of the
Company and the Buyer agree that it
shall not, and that it
will cause its affiliates
not to, engage in any short sales
of or hedging transactions with
respect to the common stock of the
Company.

 

5.                  
Transfer Agent Instructions.
The Company
shall issue
irrevocable instructions to its transfer
agent to issue certificates, registered
in the name of the Buyer or
its nominee, for the Conversion
Shares in such amounts as specified from
time to time by the Buyer
to the Company upon conversion
of the Note in
accordance with the terms thereof (the “Irrevocable
Transfer Agent Instructions”). In the event that the Borrower
proposes to replace its transfer
agent, the Borrower shall provide,
prior to the effective date of such
replacement, a fully executed Irrevocable
Transfer Agent Instructions in a form
as initially delivered pursuant to the Purchase
Agreement (including but not limited to the provision to
irrevocably reserve shares of
Common Stock in the Reserved
Amount) signed by the successor transfer
agent to Borrower

    	 	15	 

    	 

    

 

and
the Borrower. Prior to
registration of the Conversion Shares under the 1933 Act
or the date on which the Conversion
Shares may be sold pursuant to Rule 144 without
any restriction as to
the number of Securities as of
a particular date that can then
be immediately sold, all such
certificates shall bear
the restrictive legend specified in Section
2(g) of this Agreement. The Company warrants
that: (i) no instruction other
than the Irrevocable Transfer
Agent Instructions referred to in
this Section 5, and stop transfer
instructions to give effect
to Section 2(f) hereof (in the case
of the Conversion Shares, prior
to registration of the Conversion Shares under
the 1933 Act or the date on which
the Conversion Shares may be
sold pursuant to Rule 144 without
any restriction as to the number of
Securities as of a particular date that
can then be immediately sold),
will be given by the Company
to its transfer agent and
that the Securities shall otherwise
be freely transferable on the books
and records of the Company
as and to the extent provided
in this Agreement and
the Note; (ii) it will not direct
its transfer agent not to transfer
or delay, impair, and/or hinder its transfer
agent in transferring (or issuing)(electronically or in
certificated form) any certificate for Conversion Shares
to be issued to the
Buyer upon conversion of or otherwise
pursuant to the Note as and when
required by the Note and this Agreement;
and (iii) it will not fail
to remove (or directs its
transfer agent not
to remove or impairs, delays,
and/or hinders its transfer
agent from removing) any restrictive
legend (or to withdraw any stop transfer
instructions in respect thereof) on any certificate
for any Conversion Shares issued
to the Buyer upon conversion of
or otherwise pursuant to the Note as and when
required by the Note and this Agreement.
Nothing in this Section
shall affect in any way the Buyer’s
obligations and agreement set forth in
Section 2(g) hereof to comply with
all applicable prospectus delivery requirements,
if any, upon re-sale
of the Securities. If the Buyer
provides the Company, at
the cost of the Buyer, with (i)
an opinion of counsel in form, substance
and scope customary for opinions in
comparable transactions, to the effect
that a public sale or transfer of
such Securities may be made
without registration under the 1933 Act
and such sale or transfer
is effected or (ii) the Buyer provides
reasonable assurances that the Securities can be
sold pursuant to Rule 144 (along
with an opinion of counsel),
the Company shall permit the transfer,
and, in the case of the Conversion
Shares, promptly instruct its
transfer agent to issue one or
more certificates, free from
restrictive legend, in such name
and in such denominations as
specified by the Buyer. The Company
acknowledges that a breach by it of its
obligations hereunder will cause
irreparable harm to the Buyer,
by vitiating the intent and purpose
of the transactions contemplated
hereby. Accordingly, the Company
acknowledges that the remedy at law
for a breach of its obligations
under this Section 5 may be inadequate
and agrees, in the event
of a breach or threatened breach
by the Company of the provisions
of this Section, that the Buyer shall
be entitled, in addition to all
other available remedies, to an
injunction restraining any breach
and requiring immediate transfer, without the necessity of showing
economic loss and without any bond
or other security being required.

    	 	16	 

    	 

    

 

6.                  
Conditions
to the
Compan y’s Obligation
to Sell.
The obligation of the Company hereunder
to issue and sell
the Note to the Buyer at the Closing
is subject to the satisfaction, at
or before the Closing Date of each
of the following conditions
thereto, provided that these conditions
are for the Company’s sole
benefit and may
be waived by the Company at any
time in its sole discretion:

 

a.                  
The Buyer shall have executed
this Agreement and
delivered the same to the Company. 

 

b.                  
The Buyer shall
have delivered
the Purchase Price in accordance
with Section
1(b) above.

 

c.                  
The representations
and warranties of the Buyer
shall be true and correct in all material
respects as of the date when
made and as of the Closing Date as though
made at that time (except
for representations and warranties that speak
as of a specific date), and the
Buyer shall have performed, satisfied and complied
in all material respects with the covenants, agreements and
conditions required by this
Agreement to be performed,
satisfied or complied with by the
Buyer at or prior to the Closing
Date.

 

d.                  
No litigation, statute, rule,
regulation, executive order, decree, ruling or injunction
shall have been enacted, entered,
promulgated or endorsed by or in
any court or governmental authority
of competent jurisdiction or any self-regulatory
organization having authority over the matters
contemplated hereby which prohibits the
consummation of any of the transactions
contemplated by this Agreement.

 

7.                  
Conditions
to The
Bu
yer ’s
Obligation to Purchase.
The obligation of the Buyer hereunder
to purchase the Note at the Closing
is subject to the satisfaction, at
or before the Closing Date of each
of the following conditions, provided
that these conditions are
for the Buyer’s sole benefit
and may be waived
by the Buyer at any
time in its sole discretion:

 

 

a.                  
The Company
shall have executed
this Agreement
and delivered
the same
to the Buyer.

 

b.                  
The Company
shall have delivered to
the Buyer
the duly executed Note (in
such denominations as the Buyer
shall request) in accordance with
Section 1(b) above.

 

c.                  
The Irrevocable
Transfer Agent
Instructions,
in form
and substance satisfactory
to a majority-in-interest
of the Buyer, shall have
been delivered to and acknowledged
in writing by the Company’s Transfer
Agent.

 

d.                  
The representations
and warranties
of the Company
shall be true and
correct in all material respects
as of the date when
made and as of the Closing
Date as

    	 	17	 

    	 

    

 

though
made at
such time
(except for representations
and warranties that speak
as of a specific date) and
the Company shall have performed, satisfied and
complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be
performed, satisfied or complied
with by the Company at or prior to the
Closing Date. The Buyer shall
have received a certificate or certificates,
executed by the chief executive officer of the Company,
dated as of the Closing Date,
to the foregoing effect and as
to such other matters as may
be reasonably requested by the Buyer
including, but not limited to
certificates with respect to the Company’s
Certificate of Incorporation, By-laws and Board of Directors’
resolutions relating to the transactions contemplated
hereby.

 

e.                  
No litigation, statute, rule,
regulation, executive order, decree, ruling or injunction
shall have been
enacted, entered, promulgated
or endorsed by or in any court
or governmental authority of competent
jurisdiction or any self-regulatory
organization having authority over
the matters contemplated hereby which
prohibits the consummation of any
of the transactions contemplated
by this Agreement.

 

f.                   
No event shall
have occurred
which could
reasonably be expected
to have
a Material Adverse Effect on the Company
including but not limited to a change
in the 1934 Act reporting
status of the Company or the failure
of the Company to be timely in
its 1934 Act reporting
obligations.

 

		g.	[Removed]

 

h.                  
The Buyer shall
have received
an officer’s
certificate described
in Section 3(c)
above, dated as of the Closing Date.

 

 

		8.	Governing
                                         Law;
                                         Miscellaneous.

 

a.                  
Governing Law.
This Agreement
shall be governed by and
construed in accordance with the laws
of the State of New
York without regard to principles
of conflicts of laws. 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 state and county of Nassau.
The parties to
this Agreement hereby irrevocably waive any objection
to jurisdiction and venue
of any action instituted hereunder
and shall not assert any defense based
on lack of jurisdiction
or venue or based upon forum
non conveniens. The
Company and Buyer
waive trial by jury. The
prevailing party shall be entitled to
recover from the other party its
reasonable attorney's fees
and costs. In the event that any provision
of this Agreement or any other agreement
delivered in connection herewith is invalid or unenforceable
under any applicable statute or rule
of law, then such

    	 	18	 

    	 

    

 

provision
shall be deemed
inoperative to the extent that it
may conflict therewith and shall be deemed
modified to conform with such
statute or rule of law. Any such provision which
may prove invalid or unenforceable under any
law shall not affect the
validity or enforceability
of any other provision of any
agreement. Each party hereby irrevocably
waives personal service of process and consents
to process being served in
any suit, action or proceeding in connection
with this Agreement or any other
Transaction Document by mailing a copy
thereof via registered
or certified mail or overnight delivery
(with evidence of delivery) to
such party at the address in effect
for notices to it under this
Agreement and agrees that such
service shall constitute good and sufficient
service of process and notice
thereof. Nothing contained herein shall
be deemed to limit in any
way any right to serve
process in any other manner
permitted by law.

 

b.                  
Counterparts.
This Agreement
may be
executed in one or more counterparts,
each of which shall
be deemed an original but all
of which shall constitute one and the
same agreement and shall become effective when counterparts have been signed by each
party and delivered
to the other party.

 

c.                  
Headings.
The headings
of this
Agreement are for convenience of
reference only and
shall not form part
of, or affect the interpretation of, this
Agreement.

 

d.                  
Severability.
In the event that any
provision of this Agreement is
invalid or unenforceable under any applicable
statute or rule of law, then such provision shall
be deemed inoperative to the
extent that it may conflict therewith
and shall be deemed modified to
conform with such statute or
rule of law. Any provision hereof which
may prove invalid or unenforceable
under any law shall not affect the validity
or enforceability of any other provision hereof.

 

e.                  
Entire Agreement;
Amendments.
This Agreement
and the instruments referenced
herein contain the entire understanding
of the parties with respect
to the matters covered herein and
therein and, except as specifically set forth
herein or therein, neither the
Company nor the Buyer makes any representation,
warranty, covenant or undertaking with respect
to such matters. No provision
of this Agreement may be waived or amended
other than by an instrument in writing
signed by the majority in interest
of the Buyer.

 

f.                   
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, telegram, 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 or delivery
by facsimile, with accurate
confirmation

    	 	19	 

    	 

    

 

generated
by the transmitting facsimile
machine, 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. The addresses for such
communications shall be:

 

If
to the Company, to: 

JAMMIN
JAVA CORP.

730
Tejon St.

Denver,
Colorado 80211

Attn:
ANH TRAN, President

facsimile:
[enter fax number]

 

With
a copy
by fax only to (which
copy shall not constitute notice):

Attn:
David M. Loev, Esq. 

6300
West Loop South,
Suite 280 

Bellaire,
Texas 77401 

Phone:
(713) 524-4110 

Fax:
(713) 524-4122 

Email:
dloev@loevlaw.com

 

 

If
to the Buyer:

VIS
VIRES GROUP,
INC.

111
Great Neck Road
– Suite 216, Great Neck,
NY 11021

Attn:
Curt Kramer, President

e-mail:
info@visviresgroup.com

 

With
a copy
by fax only to (which
copy shall not constitute notice):

Naidich
Wurman LLP

111
Great Neck Road – Suite 214

Great
Neck, NY
11021

facsimile: 516-466-3555

 

Each
party shall
provide notice to the other party of
any change in address.

    	 	20	 

    	 

    

 

g.                  
Successors and Assigns.
This Agreement
shall be binding
upon and inure to
the benefit of the parties
and their successors and assigns. Neither
the Company nor the Buyer shall
assign this Agreement or any rights
or obligations hereunder without the
prior written consent of the
other. Notwithstanding the foregoing, subject
to Section 2(f), the Buyer may assign
its rights hereunder to any
person that purchases Securities in
a private transaction from the
Buyer or to any
of its “affiliates,” as
that term is defined under the 1934
Act, without the consent
of the Company.

 

h.                  
Third Party Beneficiaries.
This Agreement
is intended for the benefit
of the parties hereto and their
respective permitted successors and assigns,
and is not for the benefit of,
nor may any provision hereof be enforced
by, any other person.

 

i.                   
Survival.
The representations
and warranties of the Company
and the agreements and
covenants set forth in
this Agreement shall
survive the closing hereunder notwithstanding
any due diligence investigation
conducted by or on behalf
of the Buyer. The Company
agrees to indemnify and hold
harmless the Buyer and
all their officers, directors,
employees and agents for loss
or damage arising as a result
of or related to any breach or alleged
breach by the Company of any
of its representations,
warranties and covenants set forth
in this Agreement
or any of its covenants
and obligations under this Agreement, including advancement of expenses as
they are incurred.

 

j.                   
Publicity.
The Company, and
the Buyer shall have the right
to review a reasonable
period of time before issuance
of any press releases, SEC, OTCQB or FINRA
filings, or any
other public statements with respect
to the transactions contemplated hereby;
provided, however,
that the Company shall be entitled,
without the prior approval of the Buyer,
to make any press release
or SEC, OTCQB (or other applicable trading
market) or FINRA filings with
respect to such transactions
as is required by applicable law
and regulations (although the
Buyer shall be consulted
by the Company in connection with any such press release
prior to its release and
shall be provided with a copy thereof
and be given an opportunity to
comment thereon).

 

k.                  
Further Assurances.
Each party shall
do and perform, or cause to be
done and performed, all such further acts
and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents,
as the other party may reasonably request
in order to carry out the intent
and accomplish the purposes
of this Agreement and the consummation
of the transactions contemplated hereby.

 

l.                   
No Strict
Construction.
The language
used in this Agreement
will be
deemed to be
the language chosen by the parties
to express their mutual intent, and
no rules of strict construction
will be applied against any
party.

    	 	21	 

    	 

    

 

m.               
Remedies.
The Company acknowledges
that a breach by it of its obligations
hereunder will cause irreparable harm to the
Buyer by vitiating the intent
and purpose of the transaction
contemplated hereby. Accordingly,
the Company acknowledges that the remedy at
law for a breach of its obligations
under this Agreement
will be inadequate
and agrees, in the event
of a breach or threatened breach
by the Company of the provisions
of this Agreement, that the Buyer shall
be entitled, in addition to all
other available remedies at law
or in equity, and in addition to the penalties
assessable herein, to an injunction
or injunctions restraining, preventing or curing
any breach of this Agreement
and to enforce specifically the terms
and provisions hereof, without the
necessity of showing economic loss
and without any bond or other security
being required.

 

IN
WITNESS WHEREOF,
the undersigned
Buyer and the Company have
caused this Agreement
to be duly executed as of the
date first above written.

 

JAMMIN
JAVA CORP.

	

         

	 

	By:	ANH
                                         TRAN
	 	President

11/18/2016

 

	VIS
        VIRES GROUP, INC.

         

        By:
_______________________________________        
	 
	Name:
        Curt Kramer
        Title: President

        111
        Great Neck Road
        – Suite 216,

	Great
    Neck, NY
    11021
	AGGREGATE
        SUBSCRIPTION AMOUNT:

        Aggregate
        Principal Amount
        of Note:
	 

        $14,000.00

	Aggregate
    Purchase Price:	$14,000.00

Tranche
#3VVG-1273
(JAMNI)

November
15, 2016

anh@jamminjavacoffee.com;
anh@marleycoffee.com; dloev@loevlaw.com

 

 

 

 

 

 

22Jammin Java Corp. 10-Q

 

 Exhibit
10.48

 

 

 

 

NEITHER
THE ISSUANCE AND
SALE OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE NOR THE SECURITIES INTO
WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES
MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN
THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (B) AN OPINION OF COUNSEL
(WHICH COUNSEL SHALL BE SELECTED
BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II)
UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT ACCOMPANIED BY A LEGAL OPINION. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN
OR FINANCING ARRANGEMENT SECURED BY
THE SECURITIES.

 

 

	Principal
                           Amount: $14,000.00

	Issue Date:
    November 15, 2016
	Purchase
    Price: $14,000.00	 

 

 

 

CONVERTIBLE
PROMISSORY NOTE

 

FOR
VALUE
RECEIVED,
JAMMIN JAVA
CORP., a Nevada corporation
(hereinafter called the “Borrower”), hereby promises
to pay to
the order VIS VIRES
GROUP, INC.,
a New York corporation, or registered
assigns (the “Holder”) the
sum of $14,000.00 together with any interest
as set forth herein, on August
15, 2017 (the “Maturity Date”), and
to pay interest on the
unpaid principal balance hereof
at the rate of eight percent (8%) (the
“Interest Rate”) per annum
from the date hereof
(the “Issue Date”) until
the same becomes due and payable,
whether at maturity or upon acceleration
or by prepayment or otherwise.
This Note may not be
prepaid in whole
or in part except as otherwise
explicitly set forth herein. Any amount of
principal or interest on this
Note which is not paid when
due shall bear interest at
the rate of twenty two percent
(22%) per annum from the due date
thereof until the same is paid
(“Default Interest”). Interest shall
commence accruing on the date that the Note is
fully paid and shall
be computed on the basis of a
365-day year and
the actual number of days elapsed. All payments
due hereunder (to the extent not converted into common
stock, $0.001 par value per share
(the “Common Stock”) in
accordance with the terms hereof)
shall be made in lawful money of
the United States of America. All
payments shall be made at such
address as the Holder shall hereafter
give to the Borrower by
written notice made in accordance
with the provisions of this Note. Whenever
any amount expressed to be
due by the
terms of this Note is due on
any day which is not a business day,
the same shall instead be due on the next
succeeding day which is
a business day and, in the
case of any interest payment date which
is not the date on

    	1 

    	 

    

 

 

which
this Note
is paid
in full, the
extension of
the due date thereof shall
not be taken into account for
purposes of determining the amount of
interest due on such date. As used
in this Note, the term “business day”
shall mean any day other than a
Saturday, Sunday or a day
on which commercial banks in the
city of New York, New
York are authorized or required
by law or executive
order to remain closed.
Each capitalized term used herein, and
not otherwise defined, shall have
the meaning ascribed thereto in that
certain Securities Purchase Agreement dated the
date hereof, pursuant to which
this Note was originally issued
(the “Purchase Agreement”).

 

This
Note is
free from all
taxes, liens, claims and encumbrances with respect to
the issue thereof and
shall not be subject to
preemptive rights or other similar
rights of shareholders of the Borrower
and will not impose
personal liability upon the holder
thereof.

 

The
following terms shall
apply to this
Note:

 

ARTICLE
I. CONVERSION
RIGHTS

 

1.1 
 Conversion Right.
The Holder
shall have the right from
time to time, and at
any time during the period beginning
on the date which
is one hundred eighty (180) days
following the date of this Note
and ending on the
later of: (i) the Maturity Date
and (ii) the date of
payment of the Default Amount (as defined in
Article III) pursuant to
Section 1.6(a) or Article
III, each in respect of the remaining
outstanding principal (and accrued interest) amount of
this Note to convert all or
any part of the outstanding
and unpaid principal amount of
this Note into fully paid
and non- assessable shares of Common
Stock, as such Common
Stock exists on the Issue
Date, or any shares
of capital stock or other securities of the
Borrower into which such Common
Stock shall hereafter be
changed or reclassified at the
conversion price (the “Conversion
Price”) determined as provided
herein (a “Conversion”); provided, however, that
in no event shall the Holder be
entitled to convert any
portion of this Note in
excess of that portion of this
Note upon conversion
of which the sum of (1) the number of
shares of Common Stock beneficially
owned by the Holder and
its affiliates (other than shares of Common
Stock which may be deemed
beneficially owned through the ownership of the
unconverted portion of the Notes
or the unexercised or unconverted
portion of any other security of the
Borrower subject to a limitation
on conversion or
exercise analogous to the
limitations contained herein) and
(2) the number of shares of Common Stock
issuable upon the conversion of
the portion of this Note with
respect to which the
determination of this proviso is being
made, would result in
beneficial ownership by the
Holder and its affiliates of more than
9.99% of the outstanding shares of Common
Stock. For purposes
of the proviso to the immediately
preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d)
of the Securities Exchange Act of
1934, as amended (the “Exchange
Act”), and Regulations 13D-G thereunder, except as otherwise
provided in clause (1) of such proviso,
provided, further, however,
that the limitations on conversion
may be waived by
the Holder upon, at the election
of the Holder, not less than 61
days’ prior notice to
the Borrower, and the
provisions of the conversion limitation shall continue

    	2 

    	 

    

 

 

to
apply until
such 61st day (or such
later date, as determined by the
Holder, as may be specified in
such notice of waiver). The number
of shares of Common Stock to be issued
upon each conversion of this
Note shall be
determined by dividing the Conversion
Amount (as defined below) by
the applicable Conversion Price then in
effect on the date specified in
the notice of conversion, in
the form attached hereto as
Exhibit A (the “Notice of Conversion”), delivered
to the Borrower by
the Holder in accordance
with Section 1.4 below; provided
that the Notice of Conversion
is submitted by facsimile
or e-mail (or
by other means resulting in,
or reasonably expected to
result in, notice)
to the Borrower before 6:00 p.m.,
New York, New York time on
such conversion date (the
“Conversion Date”). The term “Conversion
Amount” means, with respect to any
conversion of this Note,
the sum of
(1) the principal amount of this
Note to be converted in
such conversion plus (2) at
the Holder’s option, accrued and unpaid
interest, if any, on such
principal amount at the
interest rates provided in this
Note to the Conversion Date,
plus

(3)
at the Holder’s option, Default
Interest, if any, on the amounts referred
to in the immediately preceding
clauses (1) and/or (2) plus (4) at
the Holder’s option, any
amounts owed to the Holder pursuant
to Section 1.4(g) hereof.

 

		1.2	Conversion
                                         Price.

 

(a)  
Calculation of Conversion
Price. The conversion
price (the “Conversion Price”) shall
equal the greater of (a)
$0.00009 per share; and (b) the
Variable Conversion Price (as defined herein) (subject to equitable
adjustments for stock splits, stock dividends
or rights offerings by
the Borrower relating to
the Borrower’s securities or the
securities of any subsidiary of the Borrower, combinations,
recapitalization, reclassifications, extraordinary distributions and similar
events). The "Variable Conversion
Price" shall mean 65% multiplied
by the Market Price (as defined
herein) (representing a discount rate of
35%). “Market Price” means the average
of the lowest five (5) Trading
Prices (as defined below) for
the Common Stock during the ten
(10) Trading Day period ending on the
latest complete Trading Day prior to
the Conversion Date. “Trading Price”
means, for any security as of any
date, the closing bid
price on the OTCQB market, Pink
Sheets electronic quotation system or
applicable trading market (the “OTC”) as reported by a reliable reporting
service (“Reporting Service”) designated by the Holder
(i.e. Bloomberg) or, if the OTC is
not the principal trading market for such security,
the closing bid price of such
security on the principal securities exchange or trading
market where such security is listed
or traded or, if no closing
bid price of such
security is available in any
of the foregoing manners, the
average of the closing bid prices of any
market makers for such security
that are listed in the “pink
sheets”. If the Trading Price cannot
be calculated for such security on such
date in the manner provided above, the
Trading Price shall be the fair
market value as mutually determined
by the Borrower and the
holders of a majority in interest of
the Notes being converted for
which the calculation of the
Trading Price is required in order to
determine the Conversion Price
of such Notes. “Trading Day” shall
mean any day on which
the Common Stock is tradable for any
period on the OTC, or on the
principal securities exchange or other securities
market on which the Common Stock
is then being traded.

    	3 

    	 

    

 

 

(b)  
Conversion Price During Major
Announcements. Notwithstanding anything
contained in Section 1.2(a) to
the contrary, in the
event the Borrower (i) makes
a public announcement that it intends to
consolidate or merge
with any other corporation
(other than a merger in
which the Borrower is the
surviving or continuing corporation and its
capital stock is unchanged) or
sell or transfer
all or substantially all of
the assets of the Borrower or
(ii) any person, group or
entity (including the Borrower)
publicly announces a tender offer to purchase
50% or more of the
Borrower’s Common Stock (or any
other takeover scheme) (the date of the announcement referred
to in clause
(i) or (ii) is
hereinafter referred to as the “Announcement
Date”), then the Conversion
Price shall, effective upon the Announcement
Date and continuing through the Adjusted
Conversion Price Termination Date (as
defined below), be equal to
the lower of (x) the Conversion
Price which would have been
applicable for a Conversion occurring on the Announcement Date and
(y) the Conversion Price that would
otherwise be in effect. From and
after the Adjusted Conversion Price
Termination Date, the Conversion Price shall be
determined as set forth in this
Section 1.2(a). For purposes hereof,
“Adjusted Conversion Price
Termination Date” shall mean, with respect to
any proposed transaction or
tender offer (or takeover scheme)
for which a public announcement as
contemplated by this Section 1.2(b) has
been made, the date upon
which the Borrower (in the
case of clause (i) above) or
the person, group or entity
(in the case of clause (ii)
above) consummates or publicly announces
the termination or
abandonment of the proposed transaction
or tender offer (or
takeover scheme) which caused this
Section 1.2(b) to become operative.

 

1.3 
 Authorized Shares.
The Borrower
covenants that during the
period the conversion right exists,
the Borrower will reserve from its
authorized and unissued Common Stock a sufficient
number of shares, free from preemptive
rights, to provide for
the issuance of Common Stock upon
the full conversion
of this Note issued pursuant to
the Purchase Agreement. The Borrower
is required at all
times to have
authorized and reserved eight times the number of shares
that is actually issuable upon
full conversion of the Note (based
on the Conversion Price of
the Notes in effect from time
to time)(the “Reserved Amount”).
The Reserved Amount shall
be increased from
time to time in
accordance with the Borrower’s
obligations hereunder. The Borrower represents
that upon issuance, such shares
will be duly
and validly issued, fully paid
and non-assessable. In addition,
if the Borrower shall issue any securities
or make any
change to its capital
structure which would change the
number of shares of Common Stock into
which the Notes shall
be convertible at the
then current Conversion Price, the
Borrower shall at the
same time make proper provision
so that thereafter there shall be a sufficient number
of shares of Common Stock authorized
and reserved, free from preemptive
rights, for conversion of the outstanding
Notes. The Borrower (i) acknowledges
that it has irrevocably
instructed its transfer agent
to issue certificates for the Common
Stock issuable upon conversion of this
Note, and

(ii) 
agrees that
its issuance of this
Note shall constitute full
authority to its
officers and agents who are charged
with the duty of executing stock
certificates to execute
and issue the necessary certificates
for shares of Common Stock in accordance with the terms and conditions of
this Note.

    	4 

    	 

    

 

 

If,
at any
time the
Borrower does not maintain the
Reserved Amount it will be
considered an Event of
Default under Section 3.2 of the Note. , provided
that the Borrower shall have 10
Business Days to
begin to cure
the default (during which time,
if an authorized share increase
is required, the Borrower will
at the minimum
file the necessary
paperwork with the
SEC to start
the process to
increase its authorized
shares, and which if
timely completed, will not
constitute an Event
of Default), provided that such
default does not occur
after the one hundred
eighty day from the date
of the note, whereupon there
would be no cure
allowed.

 

		1.4	Method
                                         of Conversion.

 

(a)  
Mechanics of Conversion.
Subject to Section 1.1, this
Note may be converted by
the Holder in whole
or in part at
any time from
time to time after the Issue
Date, by

(A)  
submitting to
the Borrower
a Notice of Conversion (by facsimile,
e-mail or other reasonable means
of communication dispatched on the Conversion Date prior
to 6:00 p.m., New York, New York
time) and (B) subject to
Section 1.4(b), surrendering this
Note at the principal office of
the Borrower.

 

(b)  
Surrender of Note
Upon Conversion. Notwithstanding
anything to the contrary set forth
herein, upon conversion of this Note in
accordance with the terms hereof,
the Holder shall not be
required to physically
surrender this Note to the
Borrower unless the entire unpaid
principal amount of this Note is
so converted. The Holder and the Borrower
shall maintain records showing the
principal amount so converted and the
dates of such conversions or shall
use such other method, reasonably satisfactory
to the Holder and the Borrower,
so as not to require physical surrender
of this Note upon each such
conversion. In the event of any
dispute or discrepancy, such records
of the Borrower shall, prima
facie, be controlling and determinative
in the absence of manifest error. Notwithstanding
the foregoing, if any portion of
this Note is converted as aforesaid,
the Holder may not transfer this
Note unless the Holder first physically
surrenders this Note to the
Borrower, whereupon the Borrower will
forthwith issue and deliver upon the
order of the Holder a new
Note of like
tenor, registered as the Holder (upon payment
by the Holder of any applicable
transfer taxes) may request, representing
in the aggregate the
remaining unpaid principal amount of this Note. The
Holder and any assignee, by
acceptance of this Note,
acknowledge and agree that, by
reason of the provisions of this paragraph,
following conversion of a portion of
this Note, the unpaid and unconverted
principal amount of this Note represented
by this Note
may be less than
the amount stated on the face
hereof.

 

(c)  
Payment of Taxes
and Fees. The Borrower shall
not be required to
pay any tax
which may be payable in
respect of any transfer involved
in the issue and delivery of shares
of Common Stock or other securities
or property on
conversion of this Note in
a name other than that of
the Holder (or in street name),
and the Borrower shall not be
required to issue or deliver any
such shares or other securities
or property unless and
until the person or persons (other
than the Holder or the
custodian in whose street name such shares
are to be held for the Holder’s

    	5 

    	 

    

 

 

account)
requesting the issuance thereof shall
have paid to the
Borrower the amount of any such
tax or shall have
established to the satisfaction of
the Borrower that such tax
has been paid. The Holder shall however
pay all costs charged by the Borrower’s Transfer Agent in connection with the conversion of this Note or the issuance of
Common Stock in connection herewith.

 

(d)  
Delivery of Common
Stock Upon Conversion.
Upon receipt by the
Borrower from the Holder of
a facsimile transmission or e-mail
(or other reasonable means of
communication) of a Notice of Conversion
meeting the requirements for conversion as provided in
this Section 1.4, the Borrower
shall issue and deliver or
cause to be
issued and delivered to or upon the
order of the Holder certificates for
the Common Stock issuable upon such conversion within
three (3) business days after such
receipt (the “Deadline”) (and, solely in the
case of conversion of the
entire unpaid principal amount hereof, surrender of this Note) in
accordance with the terms hereof
and the Purchase Agreement.

 

(e)  
Obligation of Borrower to
Deliver Common Stock.
Upon receipt by the Borrower of
a Notice of Conversion, the Holder shall
be deemed to be
the holder of record of the Common
Stock issuable upon such conversion,
the outstanding principal amount and
the amount of accrued and unpaid interest
on this Note shall
be reduced to reflect
such conversion, and, unless
the Borrower defaults on its
obligations under this Article
I, all rights with respect to the
portion of this Note being
so converted shall forthwith terminate except the
right to receive the Common Stock
or other securities, cash or
other assets, as herein provided,
on such conversion. If the
Holder shall have given
a Notice of Conversion as provided herein,
the Borrower’s obligation
to issue and
deliver the certificates for Common
Stock shall be absolute and
unconditional, irrespective of the absence of any
action by the Holder to
enforce the same, any waiver or
consent with respect to
any provision thereof, the recovery
of any judgment against any person or
any action to
enforce the same, any failure or
delay in the enforcement of any
other obligation of the Borrower
to the holder of record, or any
setoff, counterclaim, recoupment, limitation or
termination, or any breach
or alleged breach
by the Holder of
any obligation to
the Borrower, and irrespective
of any other circumstance which might otherwise
limit such obligation of the Borrower to the
Holder in connection with such
conversion. The Conversion Date specified
in the Notice of Conversion
shall be the Conversion Date so
long as the
Notice of Conversion is
received by the Borrower before
6:00 p.m., New York, New York time,
on such date.

 

(f)   
Delivery of Common Stock
by Electronic Transfer.
In lieu of delivering
physical certificates representing the Common
Stock issuable upon conversion, provided
the Borrower is participating in
the Depository Trust Company (“DTC”)
Fast Automated Securities Transfer (“FAST”)
program, upon request of the Holder and its
compliance with the provisions contained
in Section 1.1 and
in this Section 1.4, the
Borrower shall use its best
efforts to cause its
transfer agent to electronically
transmit the Common Stock issuable
upon conversion to the Holder
by crediting the account of
Holder’s Prime Broker with DTC through its
Deposit Withdrawal Agent Commission (“DWAC”)
system.

    	6 

    	 

    

 

 

(g)  
Failure to Deliver
Common Stock Prior
to Deadline.
Without in any way
limiting the Holder’s right to pursue
other remedies, including actual damages and/or equitable
relief, the parties agree that if delivery of
the Common Stock issuable upon
conversion of this Note is
not delivered by the Deadline, unless
such failure is the result of the actions or inactions of the Holder, the Borrower shall
pay to the Holder $2,000 per day
in cash, for each
day beyond the Deadline that the
Borrower fails to deliver
such Common Stock. Such cash amount
shall be paid to
Holder by the fifth
day of the month following the month
in which it has
accrued or, at the option of the
Holder (by written notice to
the Borrower by the
first day of the month
following the month in which
it has accrued), shall
be added to the
principal amount of this Note,
in which event interest
shall accrue thereon in
accordance with the terms of this
Note and such additional principal
amount shall be convertible into Common
Stock in accordance with
the terms of this Note. The
Borrower agrees that the right
to convert is a valuable right to
the Holder. The damages
resulting from a failure, attempt to
frustrate, interference with such
conversion right are difficult if not impossible to
qualify. Accordingly the parties
acknowledge that the liquidated damages provision contained in
this Section 1.4(g) are justified.

 

1.5 
 Concerning the
Shares.
The shares of Common
Stock issuable
upon conversion of this Note
may not be sold
or transferred unless (i) such
shares are sold pursuant to an
effective registration statement under the Act
or (ii) the
Borrower or its transfer agent shall
have been furnished
with an opinion of counsel (which
opinion shall be in form,
substance and scope customary for opinions
of counsel in comparable transactions)
to the effect that the
shares to be sold or
transferred may be
sold or transferred pursuant to
an exemption from such registration
or (iii) such
shares are sold or transferred
pursuant to Rule 144 under
the Act (or a successor rule) (“Rule 144”) or
(iv) such shares are transferred
to an “affiliate”
(as defined in Rule 144) of the
Borrower who agrees to sell
or otherwise transfer the
shares only in accordance with
this Section 1.5 and who is
an Accredited Investor (as
defined in the Purchase Agreement).
Except as otherwise provided in the
Purchase Agreement (and subject
to the removal
provisions set forth below), until
such time as the shares of Common
Stock issuable upon conversion of this
Note have been registered under
the Act or otherwise may
be sold pursuant to
Rule 144 without any restriction
as to the
number of securities as of a particular date that can then
be immediately sold, each certificate
for shares of
Common Stock issuable upon conversion
of this Note that has not been
so included in an
effective registration statement or that has
not been sold pursuant to
an effective registration statement
or an exemption that permits removal
of the legend, shall bear
a legend substantially in
the following form, as appropriate:

 

“NEITHER
THE ISSUANCE AND
SALE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES
INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE
OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE

    	7 

    	 

    

 

 

SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR (B) AN OPINION OF
COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY
THE HOLDER), IN A GENERALLY ACCEPTABLE
FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
OR (II) UNLESS SOLD PURSUANT TO
RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY
BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED
BY THE SECURITIES.”

 

The
legend set forth
above shall be
removed and
the Borrower shall issue to
the Holder a new
certificate therefore free of any
transfer legend if (i) the
Borrower or its transfer agent
shall have received an opinion
of counsel, in form, substance and scope
customary for opinions of counsel in
comparable transactions, to the effect
that a public sale or transfer
of such Common Stock may be made
without registration under the Act, which
opinion shall be accepted by
the Borrower so that the sale or
transfer is effected or (ii) in the
case of the Common Stock issuable
upon conversion of this Note, such security
is registered for sale by the
Holder under an effective registration statement filed
under the Act or otherwise may
be sold pursuant to Rule
144 without any restriction as to
the number of securities as of a particular
date that can then be immediately
sold. In the event that the Borrower does not accept the
opinion of counsel provided by
the Holder with respect to
the transfer of Securities pursuant
to an exemption from registration, such
as Rule 144 or Regulation S, at
the Deadline, it will
be considered an Event of Default
pursuant to Section 3.2 of the Note.

 

		1.6	Effect
                                         of
                                         Certain
                                         Events.

 

(a)  
Effect of Merger, Consolidation,
Etc. At
the option of the Holder, the sale,
conveyance or disposition of
all or substantially all of the
assets of the Borrower, the effectuation by
the Borrower of a transaction
or series of related transactions
in which more than 50% of
the voting power of the Borrower is
disposed of, or the
consolidation, merger or other business
combination of the Borrower with or
into any other Person (as defined below)
or Persons when the Borrower is
not the survivor shall either: (i) be
deemed to be an
Event of Default (as defined in
Article III) pursuant to
which the Borrower shall be required
to pay to
the Holder upon the
consummation of and as a condition to such transaction
an amount equal to
the Default Amount (as defined
in Article III) or (ii)
be treated pursuant to
Section 1.6(b) hereof. “Person”
shall mean any
individual, corporation, limited liability
company, partnership, association, trust or other entity
or organization.

 

(b)  
Adjustment Due to Merger, Consolidation,
Etc. If, at
any time when this
Note is issued and
outstanding and prior to conversion
of all of the Notes, there shall be
any merger, consolidation, exchange
of shares, recapitalization, reorganization,
or other similar event, as
a result of which shares
of Common Stock of the Borrower shall be
changed into the same or
a different number of shares
of another class or classes
of stock or securities of the

    	8 

    	 

    

 

 

Borrower
or another entity, or
in case of any sale or conveyance
of all or substantially
all of the assets of the
Borrower other than in connection
with a plan of complete liquidation of the
Borrower, then the Holder of this
Note shall thereafter have
the right to receive
upon conversion of this Note, upon the
basis and upon the terms and conditions
specified herein and in
lieu of the
shares of Common Stock immediately
theretofore issuable upon conversion, such stock, securities
or assets which the Holder would
have been entitled to receive
in such transaction had
this Note been
converted in full immediately
prior to such transaction
(without regard to any limitations on conversion
set forth herein), and in any
such case appropriate provisions shall
be made with respect to the
rights and interests of the Holder
of this Note to the
end that the provisions hereof (including, without limitation,
provisions for adjustment of the Conversion Price and
of the number of shares issuable upon
conversion of the Note) shall
thereafter be applicable, as nearly as
may be practicable
in relation to any
securities or assets thereafter deliverable
upon the conversion hereof. The
Borrower shall not affect any
transaction described in this Section
1.6(b) unless (a) it first gives,
to the extent practicable, thirty (30)
days prior written notice (but in
any event at least
fifteen (15) days
prior written notice) of the
record date of the special
meeting of shareholders to approve,
or if there is no such
record date, the consummation
of, such merger, consolidation, exchange of shares, recapitalization, reorganization
or other similar event or sale
of assets (during which time the
Holder shall be entitled
to convert this Note) and
(b) the resulting successor or
acquiring entity (if not the
Borrower) assumes by written instrument
the obligations of this Section 1.6(b).
The above provisions shall similarly apply
to successive consolidations,
mergers, sales, transfers or share exchanges.

 

(c)  
Adjustment Due to Distribution.
If the Borrower shall declare
or make any
distribution of its assets (or
rights to acquire
its assets) to holders
of Common Stock as a dividend,
stock repurchase, by way
of return of capital or
otherwise (including any dividend
or distribution to the
Borrower’s shareholders in cash or
shares (or rights to acquire
shares) of capital stock of a
subsidiary (i.e., a spin-off)) (a “Distribution”),
then the Holder of this Note shall
be entitled, upon any conversion of this
Note after the date of record for
determining shareholders entitled to such
Distribution, to receive
the amount of such assets which
would have been payable
to the Holder with
respect to the shares of Common
Stock issuable upon such conversion
had such Holder been
the holder of such shares of Common
Stock on the record date for
the determination of shareholders entitled to such
Distribution.

 

(d)  
Adjustment Due to Dilutive
Issuance. If, at
any time when any
Notes are issued and
outstanding, the Borrower issues
or sells, or
in accordance with this
Section 1.6(d) hereof is deemed
to have issued
or sold, any shares
of Common Stock for no consideration
or for a consideration
per share (before deduction of reasonable
expenses or commissions or
underwriting discounts or allowances
in connection therewith) or
for consideration per share
which is less than the Conversion Price in
effect on the date of such issuance
(or deemed issuance) of such shares of
Common Stock (a “Dilutive
Issuance”), then immediately
upon the Dilutive Issuance, the
Conversion Price will be reduced
to the amount of
the consideration per

    	9 

    	 

    

 

 

share
received by the
Borrower in
such Dilutive Issuance. Provided that no adjustment
shall be required
or made in connection
with the issuance
of shares of
Common Stock or securities (a)
upon conversion and/or exercise of
the Borrower’s currently outstanding
convertible promissory notes,
convertible securities, warrants and
options; (b) to officers,
employees, directors or consultants
in connection with issuances pursuant
to a stock plan
approved by the
Board of Directors of the Borrower; or (c) to
persons or entities
with whom the Borrower is
in discussions regarding an investment
in the Borrower as of the date
of the Borrower’s
entry into this Note (or
in connection with
the issuance or
grant of any securities of
the Borrower to such entities), regardless
in each case of
the conversion price or deemed
issuance price of such shares
and securities.

 

The
Borrower shall
be deemed to have
issued or sold
shares of Common Stock if the Borrower
in any manner issues
or grants any
warrants, rights or options (not
including employee stock option plans),
whether or not immediately
exercisable, to subscribe for
or to purchase Common Stock or
other securities convertible into or
exchangeable for Common Stock (“Convertible
Securities”) (such warrants, rights
and options to
purchase Common Stock
or Convertible Securities are hereinafter referred
to as “Options”)
and the price per share for which Common
Stock is issuable upon the
exercise of such Options is less
than the Conversion Price then
in effect, then the
Conversion Price shall be equal
to such price
per share. For purposes of the preceding
sentence, the “price per share
for which Common Stock is
issuable upon the exercise of such Options”
is determined by dividing (i)
the total amount, if any, received
or receivable by
the Borrower as consideration for the
issuance or granting
of all such Options, plus the minimum
aggregate amount of additional consideration, if any, payable
to the Borrower upon the
exercise of all such Options, plus,
in the case of
Convertible Securities issuable upon the
exercise of such Options, the
minimum aggregate amount of additional
consideration payable upon the conversion
or exchange thereof at
the time such Convertible Securities
first become convertible or exchangeable,
by (ii) the maximum total number
of shares of Common Stock issuable upon the exercise of all
such Options (assuming full conversion
of Convertible Securities, if
applicable). No further adjustment to
the Conversion Price will be made
upon the actual issuance
of such Common Stock upon the exercise
of such Options or upon the conversion or
exchange of Convertible Securities
issuable upon exercise
of such Options.

 

Additionally,
the Borrower shall
be deemed to have
issued or sold
shares of Common Stock if the
Borrower in any manner issues
or sells any
Convertible Securities, whether or
not immediately convertible (other than
where the same are issuable upon the
exercise of Options), and the
price per share for which Common Stock is
issuable upon such conversion or
exchange is less than
the Conversion Price then in effect,
then the Conversion Price
shall be equal to such price per
share. For the purposes of the preceding
sentence, the “price per share for
which Common Stock is issuable upon such
conversion or exchange” is determined
by dividing (i) the total amount,
if any, received or
receivable by the
Borrower as consideration for the
issuance or sale
of all such Convertible Securities, plus the
minimum aggregate amount of additional consideration, if
any, payable to the
Borrower upon the

    	10 

    	 

    

 

 

conversion
or exchange
thereof at the
time such Convertible Securities first become
convertible or
exchangeable, by (ii)
the maximum total number of shares of Common
Stock issuable upon the
conversion or exchange of all such
Convertible Securities. No further
adjustment to the Conversion Price will
be made upon the actual issuance of such Common
Stock upon conversion or exchange of such Convertible Securities.

 

(e)  
Purchase Rights. If, at any
time when any Notes are issued
and outstanding, the Borrower issues
any convertible securities or
rights to purchase
stock, warrants, securities or
other property (the “Purchase Rights”)
pro rata to the
record holders of any class of
Common Stock, then
the Holder of this Note will be
entitled to acquire, upon the terms
applicable to such Purchase
Rights, the aggregate Purchase Rights
which such Holder could have acquired
if such Holder had held the number
of shares of Common
Stock acquirable upon complete
conversion of this Note (without
regard to any limitations on conversion
contained herein) immediately before the date on which
a record is taken for the grant, issuance or
sale of such Purchase Rights
or, if no such
record is taken, the date
as of which the record holders
of Common Stock are to
be determined for the grant, issue
or sale of such Purchase
Rights.

 

(f)   
Notice of Adjustments.
Upon the occurrence of each adjustment
or readjustment of the Conversion
Price as a result of the events described
in this Section 1.6, the
Borrower, at its expense, shall
promptly compute such adjustment or
readjustment and prepare and
furnish to the Holder a certificate
setting forth such adjustment or readjustment
and showing in detail
the facts upon which such adjustment or readjustment
is based. The Borrower shall,
upon the written request at any
time of the Holder, furnish
to such Holder a like certificate setting
forth (i) such adjustment or readjustment, (ii) the
Conversion Price at the
time in effect and
(iii) the number of shares of
Common Stock and the amount, if
any, of other securities or property
which at the time would
be received upon conversion of the
Note.

 

1.7 
Trading
Market Limitations.
Unless permitted by the
applicable rules and regulations
of the principal securities market on which the
Common Stock is then listed or
traded, in no event shall the Borrower
issue upon conversion of or otherwise
pursuant to this Note and the other
Notes issued pursuant to the
Purchase Agreement more than the
maximum number of shares of Common Stock that the
Borrower can issue pursuant to
any rule of the principal
United States securities market on which
the Common Stock is then traded
(the “Maximum Share Amount”),
which shall be 9.99%
of the total shares outstanding on the Closing Date (as
defined in the Purchase Agreement),
subject to equitable adjustment from time
to time for stock splits,
stock dividends, combinations, capital
reorganizations and similar events relating to the Common Stock occurring
after the date hereof. Once
the Maximum Share Amount has
been issued, if the Borrower fails
to eliminate any prohibitions under
applicable law or the
rules or regulations of any stock
exchange, interdealer quotation system or
other self-regulatory organization with
jurisdiction over the Borrower or any
of its securities on the
Borrower’s ability to issue shares
of Common Stock in excess of the Maximum Share Amount, in lieu
of any

    	11 

    	 

    

 

 

further
right to convert
this Note, this
will be considered an
Event of Default under Section
3.3 of the Note.

 

1.8 
Status as
Shareholder. Upon submission
of a Notice of Conversion by a Holder,
(i) the shares covered thereby (other than the
shares, if any, which cannot be
issued because their issuance would
exceed such Holder’s allocated portion
of the Reserved Amount or Maximum
Share Amount) shall be deemed converted
into shares of Common Stock and
(ii) the Holder’s rights
as a Holder of such converted portion
of this Note shall cease and terminate,
excepting only the
right to receive certificates for
such shares of Common Stock and
to any remedies
provided herein or otherwise
available at law or in equity to
such Holder because of a failure by
the Borrower to comply
with the terms of this Note.
Notwithstanding the foregoing, if
a Holder has not received certificates
for all shares
of Common Stock prior to the
tenth (10th) business day after
the expiration of the Deadline with
respect to a conversion of any
portion of this Note for
any reason, then (unless the Holder
otherwise elects to retain
its status as a holder of Common
Stock by so notifying the Borrower) the
Holder shall regain the rights
of a Holder of this Note with respect
to such unconverted portions of this
Note and the Borrower shall,
as soon as practicable, return
such unconverted Note to the
Holder or, if the Note has not
been surrendered, adjust its
records to reflect that such portion
of this Note has not been converted.
In all cases, the Holder shall
retain all of its rights and remedies
for the Borrower’s failure
to convert this Note.

 

1.9             
Prepayment. Notwithstanding
anything to
the contrary contained in this
Note, at any time during the
periods set forth on the table immediately following this paragraph
(the “Prepayment Periods”), the Borrower shall have
the right, exercisable on not less
than three

(3)
Trading Days prior written notice
to the Holder of the Note to prepay
the outstanding Note (principal and
accrued interest), in full, in
accordance with this Section 1.9. Any
notice of prepayment hereunder
(an “Optional Prepayment Notice”)
shall be delivered to the Holder of the Note at
its registered addresses and shall
state: (1) that the Borrower is
exercising its right to prepay
the Note, and (2) the
date of prepayment which shall
be not more than
three (3) Trading Days from the date
of the Optional Prepayment Notice.
On the date fixed for prepayment (the
“Optional Prepayment Date”), the
Borrower shall make payment of
the Optional Prepayment Amount (as
defined below) to Holder, or
upon the order of the Holder as
specified by the Holder in
writing to the Borrower, at least
one (1) business day prior to
the Optional Prepayment Date. If
the Borrower exercises its right to
prepay the Note, the
Borrower shall make payment to
the Holder of an
amount in cash (the “Optional
Prepayment Amount”) equal to the
percentage (“Prepayment Percentage”) as
set forth in the table
immediately following this paragraph opposite
the applicable Prepayment Period, multiplied by the sum
of: (w) the then outstanding principal
amount of this Note plus (x)
accrued and unpaid
interest on the unpaid principal amount of
this Note to the
Optional Prepayment Date plus
(y) Default Interest, if any, on the
amounts referred to in clauses (w) and
(x) plus (z) any amounts owed
to the Holder pursuant to Section
1.4(g) hereof. If the Borrower
delivers an Optional Prepayment Notice
and fails to pay the
Optional Prepayment Amount due
to the Holder of
the Note within two (2) business
days

    	12 

    	 

    

 

 

following
the Optional Prepayment Date, the
Borrower shall forever forfeit
its right to prepay the
Note pursuant to this
Section 1.9.

 

 

 

 

 

	Prepayment
    Period	Prepayment
    Percentage
	1.The
    period beginning
    on the
    Issue Date and ending on the
    date which is thirty
    (30) days following the Issue
    Date.	108%
	2.The
    period beginning  on
    the date which is thirty- one
    (31) days following the Issue
    Date and ending
    on the date which is sixty (60) days
    following the Issue
    Date	113%
	3.       The
        period beginning on
        the date which is
        sixty-one

        (61)
        days following
        the Issue Date
        and ending on the date
        which is ninety (90) days
        following the Issue Date
	118%
	4.       The
        period beginning on the date
        that is ninety-one

        (91)
        day from
        the Issue Date
        and ending one hundred
        twenty (120) days
        following
        the Issue
        Date
	123%
	5.
    The period beginning
    on the date that is one
    hundred twenty-one (121) day from
    the Issue Date and
    ending one hundred fifty (150)
    days following the
    Issue Date	128%
	6.The
    period beginning on
    the date that is one hundred fifty-one
    (151) day from the Issue
    Date and ending
    one hundred eighty (180) days
    following the Issue Date	133%

 

After
the expiration of one hundred eighty (180) days
following the Issue Date, the Borrower shall
have no right of prepayment. 

 

 

ARTICLE
II. CERTAIN COVENANTS

 

2.1 
Distributions
on Capital
Stock. So long
as the Borrower shall have
any obligation under this Note,
the Borrower shall not without the
Holder’s written consent (a) pay,
declare or set apart for such
payment, any dividend or other
distribution (whether in cash, property
or other securities) on shares
of capital stock other than dividends
on shares of Common

    	13 

    	 

    

 

 

Stock
solely in the form
of additional shares of Common Stock or
(b) directly or
indirectly or through any
subsidiary make any
other payment or distribution
in respect of its capital
stock except for distributions pursuant to any
shareholders’ rights plan which
is approved by a majority of the Borrower’s
disinterested directors.

 

2.2 
Restriction
on Stock
Repurchases.
So long
as the
Borrower shall have any
obligation under this Note,
the Borrower shall not without
the Holder’s written consent redeem, repurchase
or otherwise acquire (whether for
cash or in exchange for property
or other securities or otherwise) in
any one transaction or series
of related transactions any
shares of capital stock of the
Borrower or any warrants, rights
or options to purchase
or acquire any such
shares.

 

2.3 
Borrowings.
So long
as the Borrower
shall have any
obligation under this Note, the
Borrower shall not, without the Holder’s
written consent, (a) create, incur, assume guarantee, endorse, contingently
agree to purchase
or otherwise become
liable upon the obligation of
any other person, firm, partnership, joint
venture or corporation, except by
the endorsement of negotiable instruments for
deposit or collection, or (b)
suffer to exist
any liability for borrowed money,
except in each
case for any borrowings that does not render
the Borrower a "Shell" company
as defined in Rule 12b-2
under the Securities Exchange Act of 1934.

 

2.4 
Sale of Assets.
So long
as the Borrower shall have
any obligation under this Note, the
Borrower shall not, without the Holder’s
written consent, sell, lease or
otherwise dispose of any significant portion
of its assets outside the ordinary
course of business. Any consent to the
disposition of any assets may be
conditioned on a specified use of the
proceeds of disposition.

 

2.5 
Advances and Loans.
So long
as the Borrower shall have any
obligation under this Note, the Borrower
shall not, without the
Holder’s written consent, lend
money, give credit or make advances
to any person, firm,
joint venture or corporation, including,
without limitation, officers, directors, employees,
subsidiaries and affiliates of the Borrower, except loans, credits
or advances (a) in
existence or committed on the
date hereof and which the Borrower
has informed Holder in writing
prior to the date hereof,
(b) made in the ordinary course
of business or (c) not in excess
of $100,000.

 

 

ARTICLE
III. EVENTS OF
DEFAULT

 

If
any of the
following events of default (each, an “Event of
Default”) shall occur:

    	14 

    	 

    

 

 

3.1 
Failure
to Pay
Principal
or Interest.
The Borrower fails
to pay the
principal hereof or interest
thereon when due on this Note,
whether at maturity,
upon acceleration or otherwise.

 

3.2 
Conversion and the
Shares. The
Borrower fails
to issue shares
of Common Stock to the Holder (or
announces or threatens
in writing that it
will not honor its obligation
to do so) upon
exercise by the
Holder of the conversion rights of the
Holder in accordance with the terms
of this Note, fails to transfer
or cause its
transfer agent to transfer
(issue) (electronically or in certificated form)
any certificate for shares of
Common Stock issued to the
Holder upon conversion of or
otherwise pursuant to this
Note as and when required by this
Note, through willful hindrances on the part of the Borrower, the
Borrower directs its transfer
agent not to transfer or delays,
impairs, and/or hinders its transfer
agent in transferring (or issuing) (electronically
or in certificated form) any
certificate for shares of Common
Stock to be issued to the
Holder upon conversion of or otherwise
pursuant to this Note
as and when required by this Note,
or fails to remove (or
directs its transfer agent
not to remove or
impairs, delays, and/or hinders
its transfer agent from
removing) any restrictive
legend (or to withdraw any stop
transfer instructions in respect thereof)
on any certificate for any shares
of Common Stock issued to the
Holder upon conversion of or otherwise
pursuant to this Note as
and when required by this Note
(or makes any written announcement, statement
or threat that it does not intend
to honor the obligations described in this
paragraph) and any such failure shall
continue uncured (or any written
announcement, statement or threat not to
honor its obligations shall not
be rescinded in writing)
for three (3) business days after the
Holder shall have delivered a Notice
of Conversion. It is an obligation of
the Borrower to remain current in
its obligations to its
transfer agent. It shall be
an event of default of
this Note, if a conversion of this
Note is delayed, hindered or
frustrated due to a balance
owed by the Borrower to its
transfer agent. If at
the option of the Holder, the
Holder advances any funds to the Borrower’s
transfer agent in order to process
a conversion; such advanced funds shall be
paid by the Borrower to the
Holder within forty eight (48) hours
of a demand from the Holder.

 

3.3 
Breach
of Covenants.
The Borrower
breaches any material
covenant or other material term or
condition contained in this
Note and any
collateral documents including but not
limited to the
Purchase Agreement and such breach
continues for a period of ten (10) days
after written notice thereof to
the Borrower from the Holder.

 

3.4 
Breach
of Representations
and Warranties.
Any representation or
warranty of the
Borrower made herein or
in any agreement, statement
or certificate given in
writing pursuant hereto or in
connection herewith (including, without limitation,
the Purchase Agreement), shall be false or
misleading in any material respect
when made and the breach of which
has (or with
the passage of
time will have) a material
adverse effect on the rights of the Holder with
respect to this Note or
the Purchase Agreement.

    	15 

    	 

    

 

 

3.5 
Receiver
or Trustee.
The Borrower
or any subsidiary of the Borrower shall
make an assignment for the benefit of
creditors, or apply for or consent
to the appointment of a receiver
or trustee for it or
for a substantial part of its
property or business, or
such a receiver or trustee shall
otherwise be appointed.

 

3.6 
Judgments.
Any money
judgment, writ
or similar process shall
be entered or filed against the
Borrower or any subsidiary of the Borrower
or any of
its property or other assets
for more than $100,000, and
shall remain unvacated, unbonded
or unstayed for a period
of twenty (20) days unless otherwise
consented to by the Holder, which consent
will not be unreasonably withheld.

 

3.7 
Bankruptcy.
Bankruptcy, insolvency,
reorganization or liquidation proceedings
or other proceedings, voluntary or
involuntary, for relief under any
bankruptcy law or any law
for the relief of debtors shall
be instituted by or against the
Borrower or any subsidiary
of the Borrower.

 

3.8 
Delisting
of Common
Stock. The Borrower
shall fail to
maintain the listing of the
Common Stock on at least one of the
OTC (which specifically includes the Pink
Sheets electronic quotation system)
or an equivalent replacement
exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the
New York Stock Exchange, or the
NYSE MKT.

 

3.9  
Failure
to Comply
with the
Exchange Act.
The Borrower shall fail to
comply with the reporting requirements
of the Exchange Act; and/or the
Borrower shall cease to
be subject to the reporting requirements
of the Exchange Act, provided that the Company’s failure to timely file the
Company’s quarterly report on Form 10-Q for the period ended July 31, 2016 as long as it is filed by December 14, 2016,
shall not be deemed an Event of Default hereunder. 

 

3.10         
Liquidation. Any
dissolution, liquidation,
or winding up of Borrower or
any substantial portion of its
business.

 

3.11         
Cessation
of Operations.
Any cessation of operations by
Borrower or Borrower admits it is otherwise generally
unable to pay its
debts as such debts become due,
provided, however, that any disclosure of the
Borrower’s ability to continue
as a “going concern” shall
not be an admission that the
Borrower cannot pay its debts
as they become due.

 

3.12         
Maintenance
of Assets.The
failure by
Borrower to
maintain any material
intellectual property rights, personal,
real property or other assets
which are necessary to
conduct its business (whether now
or in the future).

 

3.13         
Financial Statement
Restatement.
The restatement of any financial statements
filed by the Borrower with
the SEC for any
date or period from two years
prior to the Issue
Date of this Note and until this
Note is no longer
outstanding, if the result of such
restatement would, by comparison
to the unrestated financial
statement, have constituted a

    	16 

    	 

    

 

 

material
adverse effect
on the rights of the Holder with respect
to this Note
or the Purchase Agreement.

 

3.14         
Reverse
Splits.The
Borrower effectuates
a reverse split of its
Common Stock without twenty (20) days
prior written notice to the Holder.

 

 

3.15         
Replacement of
Transfer Agent.
In the event that the Borrower
proposes to replace its
transfer agent, the Borrower fails
to provide, prior to the
effective date of such replacement,
a fully executed Irrevocable Transfer Agent
Instructions in a form as initially
delivered pursuant to the
Purchase Agreement (including but not limited to the
provision to irrevocably reserve shares of Common
Stock in the Reserved Amount)
signed by the successor transfer agent
to Borrower and the
Borrower.

 

 

3.16         
Cross-Default.
Notwithstanding anything to
the contrary contained in this
Note or the other related or
companion documents, a breach or default
by the Borrower of any
covenant or other term or condition
contained in any of the Other Agreements,
after the passage of all applicable notice
and cure or grace periods, shall,
at the option of the Holder, be
considered a default under this
Note and the
Other Agreements, in which event the Holder shall
be entitled (but in no event required)
to apply all rights and remedies
of the Holder under the terms of this
Note and the Other Agreements
by reason of a default under said
Other Agreement or hereunder. “Other
Agreements” means, collectively, all agreements and instruments between, among
or by: (1) the
Borrower, and, or for the benefit
of, (2) the Holder and any affiliate
of the Holder, including, without limitation,
promissory notes; provided, however, the term “Other Agreements”
shall not include the
related or companion documents to this
Note. Each of the loan transactions
will be cross-defaulted with each other loan transaction and with all other
existing and future debt of Borrower
to the Holder. For the
avoidance of doubt it is only
considered a Cross Default and
therefore an Event of Default in
the event that the Borrower is In default
of the Note or any other agreements
with the Holder and does not refer to agreements
the Borrower has with third
parties.

 

 

 

Upon
the occurrence of any
Event of Default specified in
Section 3.1 (solely with respect to failure
to pay the principal hereof or
interest thereon when due at
the Maturity Date), the Holder
shall have the right, with written (e-mail is acceptable) notice to Borrower, to declare
the Note shall become immediately due
and payable and the Borrower upon
receipt of such notice, the Borrower
shall pay to
the Holder, in full satisfaction
of its obligations hereunder, an amount
equal to the
Default Sum (as defined herein). UPON THE OCCURRENCE
OF ANY EVENT OF DEFAULT
SPECIFIED IN SECTION 3.2, WITH NOTICE FROM
BORROWER,THE NOTE SHALL BECOME IMMEDIATELY
DUE AND PAYABLE AND

    	17 

    	 

    

 

 

THE
BORROWER SHALL PAY TO THE HOLDER, IN
FULL SATISFACTION OF ITS OBLIGATIONS
HEREUNDER, AN AMOUNT EQUAL
TO: (Y) THE DEFAULT SUM (AS DEFINED
HEREIN); MULTIPLIED BY (Z) TWO (2). Upon
the occurrence of any Event of
Default, other than Section
3.2, exercisable through the delivery
of written notice to the Borrower by such
Holders (the “Default Notice”), the
Note shall become immediately due and payable
and the Borrower shall pay to
the Holder, in full satisfaction of
its obligations hereunder, an
amount equal to the greater of
(i) 150% times the sum of (w) the
then outstanding principal amount of this
Note plus (x) accrued and
unpaid interest on the unpaid principal
amount of this Note to the date of
payment (the “Mandatory Prepayment Date”) plus
(y) Default Interest, if any,
on the amounts referred to in clauses
(w) and/or (x) plus (z) any amounts
owed to the Holder pursuant to Section
1.4(g) hereof (the then outstanding
principal amount of this Note to
the date of payment plus the
amounts referred to in clauses (x), (y)
and (z) shall collectively be
known as the
“Default Sum”) or (ii) the
“parity value” of the Default
Sum to be prepaid,
where parity value means (a) the
highest number of shares of Common Stock
issuable upon conversion of or
otherwise pursuant to such Default
Sum in accordance with Article
I, treating the Trading Day immediately
preceding the Mandatory Prepayment Date as
the “Conversion Date” for purposes of
determining the lowest applicable Conversion Price,
unless the Default Event arises
as a result of a breach in
respect of a specific Conversion
Date in which case such Conversion Date shall
be the Conversion Date), multiplied
by (b) the highest Closing
Price for the Common Stock during
the period beginning on the date of
first occurrence of the Event
of Default and ending one
day prior to the Mandatory Prepayment Date (the
“Default Amount”) and all other amounts
payable hereunder shall immediately become due and payable, all without demand,
presentment or notice, all of which
hereby are expressly waived, together with all costs, including,
without limitation, legal fees
and expenses, of collection, and
the Holder shall be entitled
to exercise all other rights
and remedies available at law or in equity.

 

If
the Borrower
fails to pay
the Default Amount within five
(5) business days of written notice
that such amount is due
and payable, then the Holder shall
have the right at any
time, so long
and to the extent that there are
sufficient authorized shares, to require the
Borrower, upon written notice, to
convert the Default Amount into shares
of Common Stock of the Borrower
pursuant to Section 1.1 hereof.

 

 

ARTICLE
IV. MISCELLANEOUS

 

4.1 
Failure
or Indulgence
Not Waiver.
No failure or delay
on the part of the Holder in
the exercise of any power, right
or privilege hereunder shall operate
as a waiver thereof, nor shall
any single or
partial exercise of any
such power, right or privilege
preclude other or further exercise
thereof or of any other
right, power or privileges. All
rights and remedies existing hereunder
are cumulative to, and
not exclusive of, any rights or
remedies otherwise available.

    	18 

    	 

    

 

 

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, telegram, 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 or delivery by facsimile,
with accurate confirmation generated
by the transmitting facsimile machine,
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. The addresses
for such communications shall
be:

 

If
to the
Borrower, to:

  JAMMIN
JAVA CORP.

  730
Tejon St.

  Denver,
Colorado 80211 

  Attn:
ANH TRAN, President

  facsimile:

 

With
a copy
by fax only to
(which copy shall
not constitute notice):

The
Loev Law Firm, PC

Attn:
David M. Loev, Esq. 6300 West Loop South

Suite
280

Bellaire,
Texas 77401

Facsimile
(713) 524-4122

    If
to the Holder:

VIS
VIRES GROUP, INC.

111
Great Neck Road – Suite 216, Great
Neck, NY 11021

Attn:
Curt Kramer, President

e-mail:
info@visviresgroup.com 

 

With
a copy
by fax only to
(which copy shall
not constitute notice): Naidich
Wurman LLP

    	19 

    	 

    

 

 

111
Great Neck Road – Suite 214

Great
Neck, NY 11021

facsimile:
516-466-3555

 

4.3 
Amendments.
This Note
and any provision hereof
may only be amended by an
instrument in writing signed by
the Borrower and the
Holder. The term “Note” and
all reference thereto, as
used throughout this instrument, shall
mean this instrument (and the
other Notes issued pursuant to
the Purchase Agreement) as originally
executed, or if later amended
or supplemented, then as so amended
or supplemented.

 

4.4 
Assignability.
This Note
shall be binding upon the
Borrower and its successors and
assigns, and shall inure to be
the benefit of the Holder and its
successors and assigns.
Each transferee of this Note must
be an “accredited investor” (as
defined in Rule 501(a)
of the 1933 Act). Notwithstanding
anything in this Note to the
contrary, this Note may be
pledged as collateral in connection
with a bona fide margin
account or other lending arrangement.

 

4.5 
Cost of
Collection.
If default
is made in the
payment of this Note, the Borrower
shall pay the Holder hereof
costs of collection, including reasonable attorneys’ fees.

 

4.6 
Governing
Law.
This Note
shall be
governed by and
construed in
accordance with the laws
of the State of New York without
regard to principles
of conflicts of laws. Any action brought by
either party against the other concerning the transactions contemplated by
this Note shall be brought only
in the state courts of New York or
in the federal courts located
in the state and county
of Nassau. The parties
to this Note
hereby irrevocably waive any objection
to jurisdiction and venue of any action
instituted hereunder and shall
not assert any defense based on lack
of jurisdiction or venue
or based upon forum non conveniens.
The Borrower and Holder waive trial
by jury. The
prevailing party shall be
entitled to recover from the
other party its reasonable
attorney's fees and costs. In
the event that any provision of
this Note or any
other agreement delivered in
connection herewith is invalid
or unenforceable under any
applicable statute or rule of law, then
such provision shall be deemed inoperative to
the extent that it may conflict
therewith and shall be
deemed modified to conform with such
statute or rule of law. Any
such provision which may
prove invalid or unenforceable
under any law shall
not affect the validity
or enforceability of any
other provision of any agreement.
Each party hereby irrevocably
waives personal service of process and consents
to process being
served in any
suit, action or
proceeding in connection
with this Agreement or any
other Transaction Document by mailing
a copy thereof via
registered or certified mail
or overnight delivery (with evidence
of delivery) to such
party at the address in
effect for notices to
it under this Agreement and agrees
that such service shall constitute
good and sufficient service of process
and notice thereof. Nothing contained herein
shall be deemed to limit in
any way any right to serve
process in any other manner
permitted by law.

    	20 

    	 

    

 

 

4.7 
Certain Amounts.
Whenever pursuant to
this Note the Borrower is
required to pay
an amount in excess
of the outstanding principal amount (or the
portion thereof required to be paid
at that time) plus accrued
and unpaid interest plus Default
Interest on such interest, the Borrower and
the Holder agree that the actual damages
to the Holder from
the receipt of cash payment
on this Note may be difficult
to determine and the amount to
be so paid by
the Borrower represents stipulated
damages and not a penalty
and is intended to
compensate the Holder in part for
loss of the opportunity to
convert this Note and
to earn a return from
the sale of shares of Common
Stock acquired upon conversion
of this Note at a price
in excess of the
price paid for such shares
pursuant to this Note. The
Borrower and the Holder hereby
agree that such amount of
stipulated damages is not plainly
disproportionate to the possible loss
to the Holder from
the receipt of a cash payment
without the opportunity to convert this
Note into shares of Common Stock.

 

4.8 
Purchase Agreement.
By its
acceptance of this
Note, each
party agrees to be
bound by the
applicable terms of the Purchase
Agreement.

 

4.9 
Notice
of Corporate Events.
Except as otherwise provided below, the Holder of
this Note shall
have no rights as a Holder
of Common Stock unless and only
to the extent that it
converts this Note into
Common Stock. The Borrower shall
provide the Holder with
prior notification of any meeting of
the Borrower’s shareholders (and copies
of proxy materials and other information
sent to shareholders). In the event of
any taking by the
Borrower of a record of its
shareholders for the purpose of determining
shareholders who are entitled to receive
payment of any dividend or other distribution,
any right to subscribe for, purchase
or otherwise acquire (including
by way of merger, consolidation,
reclassification or recapitalization)
any share of any
class or any
other securities or property,
or to receive any other right,
or for the purpose of determining shareholders
who are entitled to vote
in connection with any proposed
sale, lease or
conveyance of all or substantially
all of the assets of the Borrower
or any proposed liquidation, dissolution
or winding up of
the Borrower, the Borrower shall
mail a notice to
the Holder, at least twenty (20)
days prior to the
record date specified therein
(or thirty (30) days
prior to the consummation of the
transaction or event,
whichever is earlier), of the
date on which any such
record is to be
taken for the purpose of such dividend, distribution, right or other event,
and a brief statement regarding
the amount and character of such
dividend, distribution, right or other event
to the extent known at
such time. The
Borrower shall make
a public announcement of any
event requiring notification to
the Holder hereunder substantially simultaneously
with the notification to
the Holder in accordance
with the terms of this Section 4.9.

 

4.10         
Remedies. The
Borrower acknowledges
that a breach by it
of its obligations hereunder will cause irreparable
harm to the Holder, by vitiating
the intent and purpose of the
transaction contemplated hereby. Accordingly,
the Borrower acknowledges that
the remedy at law for
a breach of its obligations
under this Note will be
inadequate and agrees, in the
event of a breach or threatened
breach by the Borrower of
the provisions of this Note, that the Holder shall be entitled, in
addition to all other available
remedies at law or in
equity, and in

    	21 

    	 

    

 

 

addition
to the
penalties assessable herein,
to an injunction
or injunctions restraining, preventing
or curing any breach of this Note
and to enforce specifically the
terms and provisions thereof, without the necessity
of showing economic loss and
without any bond or other security
being required.

 

 

 

IN
WITNESS WHEREOF, Borrower has caused
this Note to be
signed in its
name by its duly
authorized officer this November 15, 2016.

 

JAMMIN
JAVA CORP.

 

	By:
/s/   Anh Tran	
	              ANH
TRAN	 

President

    	22 

    	 

    

 

 

EXHIBIT
A -- NOTICE OF CONVERSION

 

The
undersigned hereby
elects to
convert $principal
amount of the
Note (defined below) into that number
of shares of Common Stock to be issued pursuant to the
conversion of the Note (“Common
Stock”) as set forth
below, of JAMMIN JAVA
CORP., a Nevada corporation (the “Borrower”) according to the
conditions of the convertible note of
the Borrower dated as of November
15, 2016 (the “Note”), as of
the date written below. No
fee will be charged to the Holder for
any conversion, except
for transfer taxes, if any.

 

Box
Checked as
to applicable instructions:

 

[
] The Borrower shall electronically
transmit the Common Stock issuable pursuant to
this Notice of Conversion to the
account of the undersigned or its nominee
with DTC through its Deposit Withdrawal Agent
Commission system (“DWAC
Transfer”).

 

Name
of DTC
Prime Broker: Account Number:

 

[
] The undersigned hereby requests that
the Borrower issue a certificate
or certificates for the number
of shares of
Common Stock set forth below (which
numbers are based on the Holder’s
calculation attached hereto) in the name(s)
specified immediately below or,
if additional space is
necessary, on an attachment hereto:

 

VIS
VIRES GROUP, INC.

111
Great Neck Road – Suite 216,

Great
Neck, NY 11021
Attention: Certificate Delivery

e-mail:
info@visviresgroup.com

 

Date
of Conversion:

 

Applicable
Conversion Price:$

Number
of Shares
of Common
Stock to be Issued

Pursuant
to Conversion of the
Notes:

Amount
of Principal Balance
Due remaining

Under
the Note after this conversion:

 

VIS
VIRES GROUP, INC.

 

By:
__________________

Name:Curt
Kramer

Title:President

 

23

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