Document:

mine_ex108.htm

Exhibit 10.8

 

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. 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.

 

CONVERTIBLE PROMISSORY NOTE

 

U.S. $150,000 Dated: April 23, 2014

 

FOR MONIES RECEIVED, Minerco Resources Inc., a Nevada corporation (the “Maker”), hereby promises to pay to LOMA Management Partners LLC. , or its successors and assigns (the “Payee”), at its address at 405 Lexington Avenue, Chrysler Building, 25th Floor, New York City, NY 10174 or to such other address as Payee shall provide in writing to the Maker for such purpose, a principal sum of One Hundred Fifty Thousand Dollars (U.S. $150,000).  The aggregate principal amount outstanding under this Note will be conclusively evidenced by the schedule annexed as Exhibit B hereto (the “Loan Schedule”), up to a maximum principal amount of U.S $150,000.  The entire principal amount hereunder shall be due and payable on November 23, 2014 (the “Maturity Date”), or on such earlier date as such principal amount may earlier become due and payable pursuant to the terms hereof.

 

1. Interest Rate.  Interest shall accrue on the unpaid principal amount of this Convertible Promissory Note (the “Note”) at the rate of eight percent (8%) per annum from the date of the first making of the loan for such principal amount until such unpaid principal amount is paid in full or earlier converted into shares (the “Shares”) of the Maker’s common stock (the “Common Stock”) in accordance with the terms hereof.  Interest hereunder shall be paid on such date as the principal amount under this Note becomes due and payable or is converted in accordance with the terms hereof and shall be computed on the basis of a 360-day year for the actual number of days elapsed.

 

2. Conversion of Principal and Interest.  Subject to the terms and conditions hereof, the Payee, at its sole option, may deliver to the Maker a notice in the form attached hereto as Exhibit A (a “Conversion Notice”) and an updated Loan Schedule, at any time and from time to time after the date hereof and prior to the payment of the principal amount and all accrued interest thereon (the date of the delivery of a Conversion Notice shall be referred to herein as a “Conversion Date”), to convert all or any portion of the outstanding principal amount of this Note plus accrued and unpaid interest thereon, for a number of Shares equal to the quotient obtained by dividing the dollar amount of such outstanding principal amount of this Note plus the accrued and unpaid interest thereon being converted by the Conversion Price (as defined in Section 15).  Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note plus all accrued and unpaid interest thereunder in an amount equal to the applicable conversion, which shall be evidenced by entries set forth in the Conversion Notice and the Loan Schedule.

 

3. Certain Conversion Limitations.  The Payee may not convert an outstanding principal amount of this Note or accrued and unpaid interest thereon to the extent such conversion would result in the Payee, together with any affiliate thereof, beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act (as defined in Section 15) and the rules promulgated thereunder) in excess of 9.999% of the then issued and outstanding shares of Common Stock.  Since the Payee will not be obligated to report to the Maker the number of shares of Common Stock it may hold at the time of a conversion hereunder, unless the conversion at issue would result in the beneficial ownership in excess of 9.999% of the then outstanding shares of Common Stock (inclusive of any other shares which may be beneficially owned by the Payee or an affiliate thereof), the Payee shall have the authority and obligation to determine whether and the extent to which the restriction contained in this Section will limit any particular conversion hereunder.  The Payee may waive the provisions of this Section upon not less than 75 days prior notice to the Maker.

 

4. Deliveries.   Not later than five (5) Trading Days (as defined in Section 15) after any Conversion Date, the Maker will deliver to the Payee (i) a certificate or certificates representing the number of Shares being acquired upon the conversion of the principal amount of this Note and any interest accrued thereunder being converted pursuant to the Conversion Notice (subject to the limitations set forth in Section 3 hereof), and (ii) an endorsement by the Maker of the Loan Schedule acknowledging the remaining outstanding principal amount of this Note plus all accrued and unpaid interest thereon not converted (an “Endorsement”).  The Maker’s delivery to the Payee of stocks certificates in accordance clause (i) above shall be Maker’s conclusive endorsement of the remaining outstanding principal amount of this Note plus all accrued and unpaid interest thereon not converted as set forth in the Loan Schedule.

 

5. Prepayment Right. The Maker shall have the right to prepay all or a portion of the outstanding principal amount of this Note plus all accrued and unpaid interest thereon.

 

  

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6. No Adjustments.  If the Maker, at any time while any portion of the principal amount due under this Note is outstanding, (a) shall pay a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock, (b) subdivide outstanding shares of Common Stock into a larger number of shares, (c) combine (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (d) issue by reclassification of shares of the Common Stock any shares of capital stock of the Maker, then the Conversion Price (as defined in Section 15) shall not be adjusted.

 

7. No Waiver of Payee’s Rights, etc.  All payments of principal and interest shall be made without setoff, deduction or counterclaim.  No delay or failure on the part of the Payee in exercising any of its options, powers or rights, nor any partial or single exercise of its options, powers or rights shall constitute a waiver thereof or of any other option, power or right, and no waiver on the part of the Payee of any of its options, powers or rights shall constitute a waiver of any other option, power or right.  The Maker hereby waives presentment of payment, protest, and notices or demands in connection with the delivery, acceptance, performance, default or endorsement of this Note.  Acceptance by the Payee of less than the full amount due and payable hereunder shall in no way limit the right of the Payee to require full payment of all sums due and payable hereunder in accordance with the terms hereof.

 

8. Modifications.  No term or provision contained herein may be modified, amended or waived except by written agreement or consent signed by the party to be bound thereby.

 

9. Cumulative Rights and Remedies; Usury.  The rights and remedies of the Payee expressed herein are cumulative and not exclusive of any rights and remedies otherwise available. If it shall be found that any interest outstanding hereunder shall violate applicable laws governing usury, the applicable rate of interest outstanding hereunder shall be reduced to the maximum permitted rate of interest under such law.

 

10. Collection Expenses. If this obligation is placed in the hands of an attorney for collection after default, and provided the Payee prevails on the merits in respect to its claim of default, the Maker shall pay (and shall indemnify and hold harmless the Payee from and against), all reasonable attorneys’ fees and expenses incurred by the Payee in pursuing collection of this Note.

 

11. Successors and Assigns. This Note shall be binding upon the Maker and its successors and shall inure to the benefit of the Payee and its successors and assigns.  The term “Payee” as used herein, shall also include any endorsee, assignee or other holder of this Note.

 

12. Lost or Stolen Promissory Note.  If this Note is lost, stolen, mutilated or otherwise destroyed, the Maker shall execute and deliver to the Payee a new promissory note containing the same terms, and in the same form, as this Note.  In such event, the Maker may require the Payee to deliver to the Maker an affidavit of lost instrument and customary indemnity in respect thereof as a condition to the delivery of any such new promissory note.

 

13. Due Authorization.  This Note has been duly authorized, executed and delivered by the Maker and is the legal obligation of the Maker, enforceable against the Maker in accordance with its terms.

 

14. Governing Law.  This Note shall be governed by and construed and enforced in accordance with the internal laws of the State of Texas without regard to the principles of conflicts of law thereof.

 

15. Definitions.  For the purposes hereof, the following terms shall have the following meanings:

 

“Business Day” means any day except Saturday, Sunday and any day that is a legal holiday or a day on which banking institutions in the State of New York or State of Texas are authorized or required by law or other government action to close.

“Conversion Price” shall be or 50% of the lowest Per Share Market Value of the fifteen (15) Trading Days immediately preceding a Conversion Date, whichever is lowest.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Trading Day” means (a) a day on which the shares of Common Stock are traded on such Subsequent Market on which the shares of Common Stock are then listed or quoted, or (b) if the shares of Common Stock are not listed on a Subsequent Market, a day on which the shares of Common Stock are traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (c) if the shares of Common Stock are not quoted on the OTC Bulletin Board, a day on which the shares of Common Stock are quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding its functions of reporting prices); provided, however, that in the event that the shares of Common Stock are not listed or quoted as set forth in (a), (b) and (c) hereof, then Trading Day shall mean any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of Texas or State of New York are authorized or required by law or other government action to close.

  

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IN WITNESS WHEREOF, the Maker has caused this Convertible Promissory Note to be duly executed and delivered as of the date first set forth above.

 

	 	

MINERCO RESOURCES, INC.

	 
	 	 	 	 
	
 

	
By: 

	/s/ John F. Powers	 
	 	 	

Name: John F. Powers

	 
	 	 	

Title: Chief Executive Officer

	 
	 	 	 	 
	 	

LOMA MANAGEMENT PARTNERS LLC.

	 
	 	 	 	 
	 	 	/s/ John Loud	 
	 	 	Name: John Loud	 
	 	 	Title: Managing Partner	 

 

(Signature Page of Convertible Promissory Note)

 

  

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EXHIBIT A

 

NOTICE OF CONVERSION

 

Dated:

 

The undersigned hereby elects to convert the principal amount and interest indicated below of the attached Convertible Promissory Note into shares of common stock (the “Common Stock”), of Minerco Resources Inc., according to the conditions hereof, as of the date written below.  No fee will be charged to the holder for any conversion.

 

Exchange calculations: _________________________________________

Date to Effect Conversion: ______________________________________

 

Principal Amount and Interest of

Secured Convertible Note to be Converted: _________________________

Number of shares of Common Stock to be Issued: ____________________

 

Applicable Conversion Price:

 

Signature: ______________________________________

 

Name: _________________________________________

 

Address: _______________________________________

 

 

  

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EXHIBIT B

LOAN SCHEDULE

Convertible Promissory Note Issued by Minerco Resources Inc.

Dated:

SCHEDULE

OF

CONVERSIONS AND PAYMENTS OF PRINCIPAL

 

	
Date of Conversion

	 	
Amount of Conversion

	 	
Total Amount Due Subsequent To Conversion

	  	 	  	 	  
	  	 	  	 	  
	  	 	  	 	  
	  	 	  	 	  
	  	 	  	 	  
	  	 	  	 	  
	  	 	  	 	  
	  	 	  	 	  
	  	 	  	 	  
	  	 	  	 	  
	  	 	  	 	  
	  	 	  	 	  
	  	 	  	 	  

B-1ecig_ex41.htm

Exhibit 4.1

 

THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND SUCH STATE SECURITIES LAWS.

 

FIRST AMENDMENT

TO

VICTORY ELECTRONIC CIGARETTES CORPORATION

6% SENIOR CONVERTIBLE NOTE

THIS FIRST AMENDMENT TO THE VICTORY ELECTRONIC CIGARETTES CORPORATION 6% SENIOR CONVERTIBLE NOTE (the “First Amendment to the Senior Convertible Note”) is entered into as of June 3, 2014, by and between Victory Electronic Cigarettes Corporation, a Nevada corporation (the “Company”) and [_______________] (“[___]” or “Holder”).

RECITALS

A.  On April 22, 2014, the Company executed and delivered to Holder a certain 6% Senior Convertible Note (the “Original Senior Convertible Note”) in the original principal amount of $24,175,824 (“Original Principal Amount”) and the Company and [___] executed and delivered a certain Securities Purchase Agreement (the “Original Securities Purchase Agreement”);

B.           The Company and [___] have entered into that certain First Amendment to the Securities Purchase Agreement of even date herewith (the “First Amendment” and together with the Original Securities Purchase Agreement, the “Securities Purchase Agreement”);

C.           In connection with the foregoing, the parties hereto therefore agree in accordance with Section 12 of the Original Senior Convertible Note as follows:

NOW, THEREFORE, in consideration of the recitals, the mutual promises, and agreements herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:

1.1  Defined Terms. Capitalized Terms used herein but not otherwise defined herein shall have the respective meaning given such terms in the Securities Purchase Agreement.  The Original Senior Convertible Note as amended hereby is referred to herein as the “Note.”

1.2  Acknowledgment. After giving effect to the payments made pursuant to Original Senor Convertible Note by the Company, including, without limitation, those payments made pursuant to Section 7 thereof up to June 3, 2014 (but without giving effect to the First Incremental Loan Closing Date or any Holder Redemption Amounts for June 2014), the parties acknowledge and agree that the outstanding Principal amount of the Note is $11,375,824.18 and the accrued and unpaid Interest thereon is $31,892.58.   After giving effect to the First Incremental Loan Closing on the date hereof, the outstanding Principal amount of the Note shall be $15,771,428.57.

1.3 Amendments to the Original Senior Convertible Note.

(a) On the top of page 1 of the Original Senior  Convertible Note the following phrases are hereby deleted:

“Issuance Date: April 22, 2014

Original Principal Amount: $24,175,824

No.: 0001”

 

  

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and replaced by the following:

“Original Issuance Date: April 22, 2014

Original Principal Amount: $31,868,132

No.: 0001”

(b)           The first paragraph of the Original Convertible Senior Note is hereby amended and restated in its entirety as follows:

“FOR VALUE RECEIVED, Victory Electronic Cigarettes Corporation, a Nevada corporation (the “Company”), hereby promises to pay to the order of [_____________] or its registered assigns (“Holder”) the amount set out above as the Original Principal Amount or so much thereof as shall be become outstanding pursuant to and in accordance with the terms of the Securities Purchase Agreement (as defined below) (as reduced pursuant to any redemption, conversion or otherwise, in any case, in accordance with the terms hereof, the “Principal”) when due, whether upon (as reduced pursuant the Maturity Date (as defined below)), acceleration, conversion, redemption or otherwise (in each case in accordance with the terms hereof) and to pay interest (“Interest”) on any outstanding Principal at the applicable Interest Rate (as defined below) from the date set out above as the Original Issuance Date (the “Issuance Date”), or, in the case of the First Tranche or the Second Tranche (if any), from the First Tranche Incremental Loan Closing Date or the Second Tranche Incremental Loan Closing Date (each as defined in the Securities Purchase Agreement), as applicable, until the same becomes due and payable, whether upon the Maturity Date or any acceleration, conversion, redemption or otherwise (in each case in accordance with the terms hereof).  This Convertible Note (including all Convertible Notes issued in exchange, transfer or replacement hereof, this “Note”) is one of an issue of Convertible Notes issued pursuant to the Securities Purchase Agreement (collectively, the “Notes” and such other Convertible Notes, the “Other Notes”).  Certain capitalized terms used herein are defined in Section 24.”

(c)           Section 1 of the Original Convertible Senior Note is hereby amended by adding the following as (c) thereof:

“(c)   On the last Trading Day of each calendar Month (the “Fixed Payment Amount Payment Date”), commencing on June 30, 2014, the Company shall pay to the Holder, as additional interest, an amount in cash by wire transfer of immediately available funds equal to the Fixed Payment Amount (as defined herein).  For purposes hereof, the “Fixed Payment Amount” means, for each Fixed Payment Amount Payment Date after the First Tranche Incremental Loan Closing Date, $68,750, and with respect to each Fixed Payment Amount Payment Date after the Second Tranche Incremental Loan Closing Date (if any), $75,000.”

(d)           Paragraphs (a) and (b) of Section 2 of the Original Convertible Senior Note are hereby amended and restated in their entirety as follows:

“(a) Conversion Right.  Subject to the provisions of Section 2(d), at any time or times on or after the Issuance Date, the Holder shall be entitled to convert all or any portion of the outstanding and unpaid Principal, Interest and other amounts due under this Note into validly issued, fully paid and non-assessable shares of Common Stock in accordance with Section 2(c), at the Conversion Rate.  The Company shall not issue any fraction of a share of Common Stock upon any conversion.  If the issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole share.  The Company shall pay any and all transfer, stamp, issuance and similar taxes that may be payable with respect to the issuance and delivery of Common Stock upon conversion of any Conversion Amount (as defined below).

 

(b) Conversion Prices; Conversion Rates.  The number of shares of Common Stock issuable upon conversion of any Conversion Amount (such number of shares, the “Conversion Shares”) pursuant to Section 2(a) shall be determined by dividing (x) such Conversion Amount by (y) the Conversion Price (the "Conversion Rate").

 

(i)           “Conversion Amount” means the sum of (A) the portion of the Principal of the specific Tranche of this Note identified by the Holder on the Conversion Notice (as defined below) to be converted or otherwise with respect to which this determination is being made, (B) accrued and unpaid Interest with respect to such Principal, and (C) accrued and unpaid Late Charges with respect to such Principal and Interest.

 

(ii)           “Conversion Price” means, as of any Conversion Date (as defined below), with respect to:

 

(A) the Original Tranche, the lower of (1) $7.48 and (2) the Reset Price (as defined below);

 

(B) the First Tranche, the lower of (1) 115% of the VWAP on the Trading Day immediately preceding the First Incremental Loan Closing Date and (2) the Reset Price; and

 

(C) the Second Tranche, if any, the lower of (1) 115% of VWAP on the Trading Day immediately preceding the Second Incremental Loan Closing Date and (2) the Reset Price.

 

  

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In each case of clauses (A), (B) and (C) above, the applicable Conversion Price shall be subject to adjustment as provided in this Note from and after the Closing Date, the First Tranche Incremental Loan Closing Date or Second Tranche Incremental Loan Closing Date, as applicable, except that if the Conversion Price is the Reset Price, from and after the date of the Public Offering.

 

 (iii)           “Reset Price” means the price that is equal to 115% of the VWAP of the Common Stock on the Trading Day immediately following the pricing of the first public offering of the Company’s Common Stock pursuant to effective Registration Statement on Form S-1 after the date hereof for gross proceeds of at least $25,000,000 (the “Public Offering”).”

(e)           The first sentence of Section 6(a) of the Original Senior Convertible Note is hereby amended and restated in its entirety as follows:

“So long as all or any portion of the Note remains outstanding, if and whenever on or after the Issuance Date the Company, except for any Exempt Issuance, issues or sells, or in accordance with this Section 6(a) is deemed to have issued or sold, any shares of Common Stock for a consideration per share less than a price equal to the applicable Conversion Price for any Tranche (such lower price the “Base Conversion Price”) in effect immediately prior to such issue or sale or deemed issuance or sale (such Conversion Price then in effect is referred to herein as the “Applicable Price”) (the foregoing a “Dilutive Issuance”), then immediately after such Dilutive Issuance, the Applicable Price shall be reduced to an amount equal to 115% of the Base Conversion Price.  Notwithstanding the foregoing, no adjustments shall be made under this Section 6 with respect to any Exempt Issuance.”

(f)           Section 7(a)(i) of the Original Senior Convertible Note is hereby amended and restated in its entirety as follows:

“(i)           Subject to Section 7(b), commencing on May 1, 2014 for the month of May 2014, Holder shall have the right, at its option, to require the Company to redeem up to $800,000 of Principal (plus accrued and unpaid interest thereon) and commencing effective June 1, 2014, to require the Company to redeem up to $1,000,000 of Principal (plus accrued and unpaid interest thereon) (the “Monthly Allowance”) per calendar month (the “Holder Redemption Right”).  The Holder may exercise its Holder Redemption Right for a calendar month, at any time and from time to time, during such calendar month, by sending one or more written notices to the Company (each a “Holder Redemption Notice”) by not later than 11:59:59 P.M. (local time in New York City, New York) on the last Trading Day of such calendar month, which Holder Redemption Notices shall specify (A) the Principal amount to be redeemed and the amount of accrued and unpaid interest thereon (together, the “Holder Redemption Amount”) and (B) the Tranche or Tranches to which such Holder Redemption Amount shall be applied as repayment. For the avoidance of doubt, the Holder Redemption Amount set forth in each Holder Redemption Notice delivered during a given calendar month may be applied to one or more Tranches, as the Holder may designate, in its sole discretion, in each applicable Holder Redemption Notice. The Company shall promptly, but in any event no more than three (3) Trading Days after the date that the Holder delivers a Holder Redemption Notice to the Company (the “Holder Redemption Payment Date”), pay the applicable Holder Redemption Amount (1) in cash by wire transfer of immediately available funds to the extent that this Note is Stock Off (as defined below) on the date that the Holder delivers the Holder Redemption Notice to the Company or (2) shares of Common Stock to the extent that this Note is Stock On (as defined below) on the date that the Company delivers the Holder Redemption Notice in accordance with Section 7(e) below.  For the avoidance of doubt, payment in cash or Common Stock shall be determined according to the status of the Note as Stock On or Stock Off on the date that the Holder delivers the Holder Redemption Notice to Company and not the Holder Redemption Payment Date.  For the further avoidance of doubt, the Holder and the Company agree that the Holder may deliver more than one Holder Redemption Notice during a calendar month, provided that the sum of the Holder Redemption Amounts set forth in all of the Holder Redemption Notices delivered during such calendar month does not exceed the Monthly Allowance. Notwithstanding anything contained herein to the contrary, commencing on November 1, 2014, the Holder may, at its election by delivering written notice to the Company (which may be e-mail) at any time prior to the applicable Holder Redemption Payment Date, require the Company to pay any Holder Redemption Amount that is payable in shares of Common Stock pursuant to the provisions of this Section 7 in cash by wire transfer of immediately available funds on the Holder Redemption Payment Date. For further avoidance of doubt, the conversion of any Principal or Interest pursuant to Section 2 during any calendar month shall not, and does not, reduce the Monthly Allowance for such calendar month, except in no event shall the Monthly Allowance exceed the sum of all outstanding Principal, Interest and other amounts due hereunder.”

(g)           Section 7(b)(i) of the Original Senior Convertible Note is hereby amended and restated in its entirety:

“Notwithstanding Section 7(a)(i) hereof, following October 1, 2014 and prior to the 170th day after April 22, 2014, the Company shall, upon two Trading Days’ prior written notice from the Company to the Holder, redeem an aggregate of $1,000,000 of Principal (plus accrued and unpaid interest thereon) (the “Scheduled Mandatory Redemption Amount”).  On the date the Company consummates such redemption (the “Mandatory Cash Redemption Date”), the Company shall pay to the Holder the Scheduled Mandatory Redemption Amount in cash by wire transfer of immediately available funds. For the avoidance of doubt, the Company’s obligation to the Scheduled Mandatory Redemption Amount is not contingent or conditional on the delivery of the written notice described in the first sentence of this paragraph.”

(h)           Section 24(w) of the Original Convertible Senior Note is hereby amended and restated in its entirety:

“Securities Purchase Agreement” means that certain securities purchase agreement, dated April 22, 2014, by and among the Company and the initial holders of Notes pursuant to which the Company issued Notes, as may be amended from time to time, as amended by that certain First Amendment to the Securities Purchase Agreement, dated June 3, 2014, by and between [_______________] and the Company.”

  

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(i)           Section 24(o) of the Original Convertible Senior Note is hereby amended and restated in its entirety:

“Maturity Date” shall mean the later of (i) September 3, 2015, and (ii) solely to the extent that the Second Tranche has been advanced to the Company by the Holder pursuant to Section 1.3 of the Securities Purchase Agreement, December 2, 2015.”

(j)           Section 24 of the Original Convertible Senior Note is hereby amended by inserting a new subsection for each of the following definitions in alphabetical order and re-lettering the subsections of Section 24 sequentially:

“First Tranche” shall have the meaning set forth in the Securities Purchase Agreement.

“Original Tranche” means the Principal amount outstanding plus all accrued but unpaid Interest thereon and such other amounts outstanding under this Note immediately prior to the First Incremental Closing Date.

“Second Tranche” shall have the meaning set forth in the Securities Purchase Agreement.

“Tranches” means the Original Tranche, the First Tranche and the Second Tranche, as applicable (each a “Tranche”).

 

(k)           Section 3(a)(v) of the Original Convertible Senior Note is hereby by amended by deleting the phrase “(including, without limitation, the Company’s failure to pay any redemption payments or any other amounts hereunder)” therefrom.

Section 1.4                      Deemed Amendment of Original Senior Convertible Note.

The Original Senior Convertible Note is hereby deemed amended and supplemented to the extent necessary to give effect to the provisions of this First Amendment.

Section 1.5                      Original Senior Convertible Note in Full Force and Effect.

Except as specifically amended herein, the Original Senior Convertible Note shall remain unmodified and in full force and effect.

[Signature Page Follows]

  

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

VICTORY ELECTRONIC CIGARETTES CORPORATION

By:                                                                

Name:                                                                           

Title:                                                                

 

[_______________________]

By:                                                                

Name:                                                                           

Title:                                                                

 

5

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