Document:

Exhibit 10.2

NEITHER THESE SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

BLUE CALYPSO, INC.

COMMON STOCK PURCHASE WARRANT

 

	
Warrant No. [___]

	
Dated:  September [__], 2015

Blue Calypso, Inc., a Delaware corporation (the “Company”), hereby certifies that, for value received, [______] or its registered assigns (the “Holder”), is entitled to purchase from the Company up to a total of [_________] (____) shares of common stock, $0.0001 par value per share (the “Common Stock”), of the Company at an exercise price equal to $4.75 per share (as adjusted from time to time as provided in Section 9, the “Exercise Price”), at any time and on or after the date hereof (the “Initial Exercise Date”) and through and including the Expiration Date (as defined below), and subject to the following terms and conditions.  This Warrant (this “Warrant”) is one of a  series of similar warrants issued pursuant to that certain Securities Purchase Agreement, dated as of September [__], 2015, by and among the Company and the Purchasers identified therein (the “Purchase Agreement”). All such warrants are referred to herein, collectively, as the “Warrants.”  Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Purchase Agreement.

1.           Certain Definitions.  In additional to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:

 

(a)           “Expiration Date” shall be the fifth (5th) anniversary of the Initial Exercise Date of this Warrant.

(b)           “Merger” means (A) the closing of the sale, transfer or other disposition of all or substantially all of the Company’s assets, (B) the consummation of the merger or consolidation of the Company with or into another entity (except a merger or consolidation in which the holders of capital stock of the Company immediately prior to such merger or consolidation continue to hold at least 50% of the voting power of the capital stock of the Company or the surviving or acquiring entity), or (C) the closing of the transfer (whether by merger, consolidation or otherwise), in one transaction or a series of related transactions, to a person or group of affiliated persons (other than an underwriter of the Company’s securities), of the Company’s securities if, after such closing, such person or group of affiliated persons would hold 50% or more of the outstanding voting stock of the Company; provided, however, that a transaction shall not constitute a Merger if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately prior to such transaction.

 

(c)           “Warrant Share” is a share of the Company’s capital stock for which the Holder is entitled to subscribe for and purchase by exercising this Warrant.

2.           Registration of Warrant.  The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time.  The Company may deem and treat the registered Holder of record of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

3.           Registration of Transfers.  The Company shall register the transfer of any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Company at its address specified herein.  Upon any such registration of transfer, a new warrant to purchase Common Stock, in substantially the form of this Warrant (any such new warrant, a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder.  The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a holder of a Warrant.

4.           Exercise and Duration of Warrant.

(a)              This Warrant shall be exercisable by the registered Holder at any time and from time to time on or after the Initial Exercise Date and including the Expiration Date.  At 5:30 P.M., New York City time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value.

(b)           A Holder may exercise this Warrant by delivering to the Company (i) an exercise notice, in the form attached hereto (the “Exercise Notice”), appropriately completed and duly signed, and (ii) payment of the Exercise Price for the number of Warrant Shares as to which this Warrant is being exercised, and the date such items are delivered to the Company (as determined in accordance with the notice provisions hereof) is an “Exercise Date.”  The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder.  Execution and delivery of the Exercise Notice shall have the same effect as cancellation of the original Warrant and issuance of a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.

5.           Delivery of Warrant Shares.

(a)           Upon exercise of this Warrant, the Company shall promptly (but in no event later than five Trading Days after the Exercise Date) issue or cause to be issued and cause to be delivered to or upon the written order of the Holder and in such name or names as the Holder may designate, a certificate for the Warrant Shares issuable upon such exercise or, if the Company is then a participant in the Deposit or Withdrawal at Custodian system at The Depository Trust Company and either (A) there is an effective registration statement permitting the resale of the Warrant Shares by the Holder (and the Holder provides the Company or the Company’s counsel with any reasonable requested certifications with respect to future sales of such Warrant Shares) or (B) the shares are eligible for resale by the Holder without the requirement for the Company to be in compliance with the current public information requirements pursuant to Rule 144, and otherwise without volume or manner-of-sale restriction or limitation pursuant to Rule 144, by crediting the account of the Holder’s prime broker.  The Holder, or any Person so designated by the Holder to receive Warrant Shares, shall be deemed to have become the holder of record of such Warrant Shares as of the Exercise Date.

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(b)           This Warrant is exercisable, either in its entirety or, from time to time, for a portion of the number of Warrant Shares.  Upon request by the Holder following one or more partial exercises, the Company shall issue or cause to be issued, at its expense, a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.

6.           Charges, Taxes and Expenses.  Issuance and delivery of certificates for shares of Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder.  The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

7.           Replacement of Warrant.  If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable bond or indemnity, if requested.  Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe.

8.           Reservation of Warrant Shares.  The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of persons other than the Holder (after giving effect to the adjustments of Section 9, if any). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable.  The Company will take all such action as may be necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of any securities exchange or automated quotation system upon which the Common Stock may be listed.

9.           Certain Adjustments.  The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 9.

(a)           Stock Dividends and Splits.  If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, or (iii) combines outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event.

(b)           Number of Warrant Shares.  Simultaneously with any adjustment to the Exercise Price pursuant to paragraph (a) of this Section, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be adjusted proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the increased or decreased number of Warrant Shares, as the case may be, shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment.

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(c)           Calculations.  All calculations under this Section 9 shall be made to the nearest cent or the nearest 1/100th of a share, as applicable.

(d)           Notice of Corporate Events.  In the event (i) the Company shall take a record of the holders of the securities at the time receivable upon the exercise of this Warrant for the purpose of entitling them to receive any dividend or other distribution, or any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, (ii) of any capital reorganization of the Company, (iii) of any reclassification of the capital stock of the Company, (iv) of any Merger or (v) of any voluntary dissolution, liquidation or winding-up of the Company, then, and in each such case, the Company will mail or cause to be mailed to the Holder a notice specifying, as the case may be, (A) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (B) the date on which such reorganization, reclassification, Merger, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the holders of the securities at the time receivable upon the exercise of this Warrant shall be entitled to exchange such securities for the securities or other property deliverable upon such reorganization, reclassification, Merger, dissolution, liquidation or winding-up.  Such notice shall be mailed at least ten (10) days prior to the date therein specified.

10.           Payment of Exercise Price.  The Holder shall pay the Exercise Price in immediately available funds.

11.           Fractional Shares.  The Company shall not be required to issue or cause to be issued fractional Warrant Shares on the exercise of this Warrant.  If any fraction of a Warrant Share would, except for the provisions of this Section, be issuable upon exercise of this Warrant, the number of Warrant Shares to be issued will be rounded up to the nearest whole share.

12.           Notices.  Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.

13.           Warrant Agent.  The Company shall serve as warrant agent under this Warrant.  Upon 30 days’ notice to the Holder, the Company may appoint a new warrant agent.  Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or stockholder services business shall be a successor warrant agent under this Warrant without any further act.  Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.

14.           Miscellaneous.

(a)           The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws.

(b)           Subject to the restrictions on transfer set forth on the first page hereof, this Warrant may be assigned by the Holder. This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in writing signed by the Company and the Holder and their successors and assigns.

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(c)           All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.

(d)           The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.

(e)           In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,

SIGNATURE PAGE FOLLOWS

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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.

	 	 
	 	
BLUE CALYPSO, INC.

 

 

	 	
By:

	 	
Name:

	 	
Title:

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FORM OF EXERCISE NOTICE

(To be executed by the Holder to exercise the right to purchase shares of Common Stock under the foregoing Warrant)

To Blue Calypso, Inc.:

The undersigned is the Holder of Warrant No. ____________ (the “Warrant”) issued by Blue Calypso, Inc., a Delaware corporation (the “Company”).  Capitalized terms used herein and not otherwise defined have the respective meanings set forth in the Warrant.

	1.	The Warrant is currently exercisable to purchase a total of ____________Warrant Shares.

	2.	The undersigned Holder hereby exercises its right to purchase ____________Warrant Shares pursuant to the Warrant.

	3.	The holder shall pay the sum of $____________ to the Company in accordance with the terms of the Warrant.

	4.	Pursuant to this exercise, the Company shall deliver to the holder ____________ Warrant Shares in accordance with the terms of the Warrant.

	5.	Following this exercise, the Warrant shall be exercisable to purchase a total of  ____________ Warrant Shares.

	 	 	 
	
Dated: _______________, _____

	 	
Name of Holder:

	 	 	 
	 	 	
(Print) ______________________

	 	 	 
	 	 	
By:   ________________________

	 	 	
Name:   ______________________

	 	 	
Title: ________________________

	 	 	 
	 	 	
(Signature must conform in all respects to name of holder as specified on the face of the Warrant)

	
ACKNOWLEDGED AND AGREED

 TO this ___ day of ___________, 20__

 

BLUE CALYPSO, INC.

 

By:

 

Name: __________________

Title:   __________________

	 	 

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FORM OF ASSIGNMENT

 

[To be completed and signed only upon transfer of Warrant]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ________________________________ the right represented by the within Warrant to purchase  ____________ shares of Common Stock of Blue Calypso, Inc. to which the within Warrant relates and appoints ________________ attorney to transfer said right on the books of Blue Calypso, Inc. with full power of substitution in the premises.

	 	 
	 	 
	
Dated:                                                           ,           

	 
	 	 
	 	 	 
	 	
(Signature must conform in all respects to name of holder as specified on the face of the Warrant)

	 	 
	 	 	 
	 	
Address of Transferee

	 	 
	 	 	 
	 	 
	 	 	 
	 	 
	 	 
	
In the presence of:ex10-1.htm

Exhibit 10.1

 

LOAN AGREEMENT

THIS LOAN AGREEMENT (the “Loan Agreement”), dated September 14, 2015 is entered into between TRACK GROUP, INC., a Utah corporation, having its principal place of business at 405 S. Main Street, Ste. 700, Salt Lake City, Utah 84111 (the “Borrower”) and SAPINDA ASIA LIMITED a British Virgin Islands corporation with its offices at 37th Floor, Two International Finance Centre, 8 Finance Street, Central, Hong Kong(the “Lender”).

WHEREAS, Borrower desires to borrow from Lender an amount of up to $5,000,000 U.S. Dollars and Lender is willing to lend said amount to Borrower;

NOW, THEREFORE, the parties, in consideration of the mutual agreements contained herein, agree as follows:

SECTION 1:                                THE LOAN

1.1           Subject to the terms and conditions set forth herein, Lender shall lend to Borrower up to the aggregate principal amount of Five Million U.S. Dollars ($5,000,000) with interest at the rate of: (i) three percent (3%) per annum for undrawn funds and (ii) eight percent (8%) per annum for drawn down funds, all payable at the Maturity Date (as hereinafter defined).  Interest shall be calculated on a 360 day year.  Upon Borrower signing an applicable note(s) (the “Note(s)”) in substantially the form attached hereto as Schedule “I” the Loan shall be funded by the Lender as follows: Borrower shall deliver to Lender a Notice of borrowing and Promissory Note fifteen (15) business days prior to the date funds are needed and Lender shall deliver the funds requested on the date requested in the Notice of borrowing, up to the total amount hereunder (collectively the “Loan”).

1.2           Borrower shall have the right to prepay, without penalty or fees, the Note(s), in whole or in part at any time before the Maturity Date by paying to Lender the principal amount together with all accrued and unpaid interest under the Note(s), as of the date of such prepayment.

1.3           The term of the Loan shall begin on the date hereof and run through midnight Mountain Time on September 30, 2017 (the “Maturity Date”).

SECTION 2:                                METHOD OF PAYMENT

All sums, including all principal, interest and fees, payable to the Lender shall be paid in U.S. Dollars to the Lenders designated account.  Lender shall provide appropriate account information to Borrower, in writing.  All amounts advanced to Borrower under the Loan shall be in U.S. Dollars and wired to Borrower’s account at JP Morgan Chase Bank, in Salt Lake City, Utah.  Borrower shall provide appropriate account information to Lender in writing.

SECTION 3:                                REPRESENTATIONS AND WARRANTIES

Borrower represents, warrants and agrees that on the date hereof and on the date of each borrowing as set forth in Section 1.1 above:

3.1           It is a corporation duly organized, legally existing and in good standing under the laws of the State of Utah.

3.2           The execution, delivery and performance of this Loan Agreement, the Note(s) and all certificates, and other documents required to be delivered or executed in connection herewith (collectively the “Loan Documents”) have been duly authorized by all necessary corporate action of Borrower, the individual or individuals executing the Loan Documents were duly authorized to do so.  The Loan Documents constitute legal, valid and binding obligations of the Borrower, enforceable in accordance with their respective terms, subject to applicable bankruptcy or other similar laws generally affecting the enforcement of the rights of creditors.

3.3           The Loan Documents do not and will not violate any provisions of its articles of incorporation, bylaws or any contract, agreement, law, regulation, order, injunction, judgment, decree or writ to which the Borrower is subject.

  

  

  

3.4           The execution, deliver and performance of the Loan Documents do not require the consent or approval of any other person or entity including, without limitation, any regulatory authority or governmental body of the United States or any state thereof or any political subdivision of the United States of any state thereof.

3.5           Except as previously disclosed to Lender, as of the date hereof no fact or condition exists that would (or could with the passage of time, the giving of notice, or both) constitute and Event of Default under the Loan Documents and no event which has or had or could reasonably be expected to have a Material Adverse Effect has occurred and is continuing.  For purposed of this Loan Agreement, “Material Adverse Effect” means a material adverse effect upon the business, operations, properties, assets or financial condition of Borrower.

SECTION 4.                                DEFAULT

The occurrence of any one or more of the following events (herein called “Events of Default”) shall constitute a default hereunder and under the Note(s):

4.1           Borrower defaults in any payments of principal or interest payable under the Loan Agreement or Note(s), and such default continues for more than thirty (30) calendar days after the due date thereof;

4.2           Borrower defaults in payment or performance of any other covenants or obligations of the Borrower hereunder or under the Note(s) or the Loan Documents for more than thirty (30) calendar days after the Lender has given notice of such default to Borrower;

4.3           Any representations or warranties made herein by the Borrower shall prove to have been false or misleading in any material respect;

4.4           The making of an assignment by Borrower for the benefit of its creditors or the admission by Borrower in writing of its inability to pay its debts as they come due, or the insolvency of Borrower, or the filing by Borrower of a voluntary petition in bankruptcy, or the adjudication of Borrower bankrupt, or the filing by Borrower of any petition or answer seeking for itself any reorganization arrangement, composition ,readjustment, liquidation, dissolution, or similar relief under any present or future statute, law or regulation, or the filing of any answer by Borrower admitting, or the failure by Borrower to deny, the material allegations of a petition filed against it for any such relief, or the seeking or consenting by Borrower to, acquiescence by Borrower in, the appointment of any trustee, receiver or liquidator of Borrower or of all or any substantial part of the properties of Borrower, or the inability of Borrower to pay its debts when due, or the commission by Borrower of any act of bankruptcy as defined in the Federal Bankruptcy Act, as amended.

4.5           The failure by Borrower, within ninety (90) days after the commencement of any proceeding against Borrower seeking reorganization, liquidation, dissolution or similar relief under any proceeding or, within ninety (90) days after the appointment, without the written consent or acquiescence of Lender, to any trustee, receiver or liquidator of Borrower or of all or any substantial part of the properties of Borrower, to vacate such appointment;

4.6           Any Loan Document shall (except in accordance with its terms and other than as a result of acts or omissions of the Lender), in whole or in part, terminate, cease to be effective or cease to be the legally valid, binding and enforceable obligation of the Borrower; the Borrower shall, directly or indirectly, contest in any manner such effectiveness, validity, binding nature or enforceability.

SECTION 5.                                REMEDIES

Upon the occurrence hereof of any one or more Events of Default, Lender shall provide written notice of such Event of Default to Borrower who shall have thirty (30) days to cure such Event(s) of Default.  If Borrower fails to cure such Event of Default, Lender at its option:

	
  

	
(a)

	
may declare the Loan to be accelerated and immediately due and payable, whereupon the unpaid principal, accrued interest and fees under the Note(s) shall become immediately due and payable;

 

  

  

  

	
  

	
(b)

	
extend any portion of the Loan for a period not to exceed six (6) months from the date of the Event of Default; or

	
  

	
(c)

	
refuse to make additional advances under the Loan.

The rights, powers and remedies of Lender hereunder shall be cumulative and shall be in addition to (and not in lieu of) all rights, powers and remedies given by statute or rule of law.  The exercise of any one or more of the rights, powers and remedies provided herein shall not be construed as a waiver of or election or remedies with respect to any other rights, powers and remedies of Lender.

The Borrower must pay immediately on demand to the Lender all costs and expenses incurred by the Lender, attorney, manager, delegate, agent or other person appointed by the Lender for the purposes enforcing its rights under this Loan Agreement, the Note(s) and other Loan Documents.  Borrower hereby agrees to indemnify and hold harmless the Lender and each of its affiliates and their officers, directors, employees, agents, advisors and representatives (each, an “Indemnified Party”) from and against any and all claims, damages, losses, liabilities and expenses (including without limitation, attorney’s fees and expenses), joint and several, that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of, or in connection with the preparation for a defense of, any investigation, litigation or proceeding arising out of, related to or in connection with the transactions contemplated by the Loan Documents or any use made or proposed to be made with the proceeds of the Loan, except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s negligence or willful misconduct.  Borrower further agrees that no Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Borrower or its shareholders or creditors for or in connection with transactions contemplated by the Loan Documents.

SECTION 6.                                FAILURE OF LENDER TO FUND

6.1           If Lender fails to timely fund to Borrower after Borrower has complied with paragraph 1.1 above and has complied with all other provisions established therein the Lender failing to provide funds or failing to timely provide funds shall be a Lender default of this Loan Agreement.

6.2           If Lender is in default pursuant to this Section 6, Lender shall have three (3) calendar days from the date specified for funding in the Notice of Borrowing to cure its default.

6.3           Default by Lender which remains uncured after the three (3) calendar day period mentioned above, shall result in penalties of $1,000 per day (or partial day) which shall accrue until such Lender default is cured.

SECTION 7.                                MISCELLANEOUS

7.1           (a) This Loan Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to the provisions of conflicts of law that may result in the application of the substantive laws of another jurisdiction.  Borrower and Lender hereby submit to the nonexclusive jurisdiction of the state or federal courts located in the State of New York, for the purposes of all legal proceedings arising out of or relating to the Loan Documents or the transactions contemplated therein.  Borrower and Lender hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection which either party may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.  Nothing herein shall affect the right to serve process in any other manner permitted by applicable law or any right to bring legal action or proceedings in any other competent jurisdiction.

(b)           THE BORROWER AND LENDER HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE LOAN OR THE ACTIONS OF LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

 

  

  

  

7.2           Whenever possible, each provision of this Loan Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Loan Agreement shall be prohibited or invalid under such law, such provision shall be ineffective only to the extent and duration of such prohibition or invalidity, without invalidating the remainder of such provision or remaining provisions this Loan Agreement.

7.3           Any notice, request and other communication to any party required or given hereunder shall be in writing (including facsimile and electronic mail (e-mail) so long as a receipt of such email is requested and received), delivered to the address set forth in the first paragraph of this Loan Agreement or such other address as such party may hereafter specify for notice to the other parties hereto and shall be deemed properly given upon the earlier of: (i) the first business day after transmission by facsimile or e-mail or upon hand delivery or deposit with an overnight express service or overnight mail delivery service; (ii) or three (3) days after mailed, postage prepaid, in each case, addressed to the designated recipient at its address set forth herein or such other address as such party may advise the other party by notice in accordance with this paragraph.

7.4           Lender and Borrower acknowledge that there are no agreements or understandings, written or oral between Lender and Borrower with respect to the Loan, other than as set forth in the Loan Documents and that the Loan Documents contain the entire agreement between the Lender and Borrower with respect thereto.  None of the terms of the Loan Documents may be amended except by an instrument executed by each of the parties hereto.

7.5           No omission, or delay, by Lender at any time to enforce any right or remedy reserved to it, or to require performance of any of the terms, or provisions hereof by Borrower at any time designated, shall be a waiver of any such right or remedy to which Lender is entitled, nor shall it in any way affect the right of Lender to enforce such provisions thereafter nor shall any single or partial exercise of any right under any Loan Document preclude any other or further exercise thereof or the exercise of any other right.  The remedies provided in the Loan Documents are cumulative and not exclusive of any remedies provided by law.

7.6           All agreements, representations and warranties contained in the Loan Documents delivered hereto or in connection herewith shall be for the benefit of the Lender and shall survive execution and delivery of the Loan Documents and the expiration or other termination of the Loan Agreement.

7.7           This Loan Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.  Each party hereto agrees to accept facsimile or other electronic signatures as an original and fully enforceable.

7.8           Borrower shall not assign its obligations under this Loan Agreement or any of the Loan Documents without Lender’s written consent, which consent shall not be unreasonably withheld.  Any such attempted assignment without Lender’s consent shall be deemed void and of no effect.

7.9           Lender hereby notifies Borrower that pursuant to the requirements of the USA Patriot Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of Borrower and other information that will allow the Lender to identify the Borrower in accordance with the USA Patriot Act.  Borrower agrees that it will provide Lender with such information as it may request in order for Lender to satisfy the requirements of the USA Patriot Act.

7.10           This Loan Agreement shall be effective on the date each of the parties hereto has executed this instrument and returned such signature to Borrower.  The parties hereto shall be fully bound and legally obligated to perform as of that date.  Notwithstanding the foregoing, the parties hereto agree to execute this Loan Agreement no later than 5:00 PM Mountain Time on September 17, 2015.

 

  

  

  

IN WITNESS WHEREOF, this Loan Agreement has been duly executed and delivered as of the date indicated below.

 

 

	
BORROWER  

 

Track Group, Inc.      

 

 

By: /s/ John R. Merrill

John Merrill, Chief Financial Officer

 

 

Date: September 17, 2015

	
LENDER

 

Sapinda Asia Limited

 

 

By:/s/ Lars Winhorst

Lars Winhorst, Director

 

 

Date: September 25, 2015  

 

 

By: Theresa Tsang

Theresa Tsang, Director

 

 

Date: September 25, 2015                                           

 

By: VS Cho

YS Cho, Director

 

Date: September 25, 2015   

 

                                                                                                                                                        

  

  

  

 

EXHIBIT “A”

NOTICE OF BORROWING

(FORM)

To:                          Sapinda Asia Limited

From:                      Track Group, Inc.

Date:                      ______________, 201_

Dear Sirs:

	
  

	
1.

	
We refer to the Loan Agreement dated _______________, 2015, as may be amended from time to time (the “Loan Agreement”) and made between Track Group, Inc. as Borrower and Sapinda Asia Limited as Lender.

	
  

	
2.

	
Pursuant to the Loan Agreement, Borrower hereby gives you notice that it requests to drawdown from the Loan __________________ (date of drawdown) the amount of $_______________ upon the terms and subject to the conditions set out in the Loan Agreement.

	
  

	
3.

	
Borrower confirms and attests, as of the date hereof, that the representations and conditions set out in the Loan Agreement have been satisfied, and shall continue to be as of the date of the drawdown.

Sincerely yours,

Track Group, Inc.

By:______________________________________

Name:____________________________________

Title:_____________________________________

  

  

  

SCHEDULE “1”

FORM OF PROMISSORY NOTE

 

	
$_______________  

_________________________

	
Date: ________________________

Maturity Date: September 30, 2017

                                                                                  

 

 

FOR VALUE RECEIVED, Track Group, Inc., a Utah corporation (the “Borrower”) hereby promises to pay to the order of Sapinda Asia Limited (the “Lender”) at ______________________________________

_______________________________________________________________________________________, or such other place as the holder of this Note may specify from time to time in writing, in lawful money of the United States of America, the principal amount of _________________________ Dollars ($___________), together with interest at the rate of eight (8%) percent per annum from the date of this Note until paid in full.

All unpaid principal, accrued and unpaid interest shall be due and payable to Lender on the Maturity Date referenced above.

This Note is the Note referenced in, and is executed and delivered in connection with, that certain Loan Agreement dated as of ________________, 2015 by and between the Borrower and Lender (as the same may be amended, restated, amended and restated, refinanced, modified or supplemented in accordance with it terms, the “Loan Agreement), and Lender is entitled to the benefit and terms of the Loan Agreement and any other Loan Documents, to which reference is made for a statement of the terms and conditions thereof.  All terms defined in the Loan Agreement shall have the same definitions when used herein, unless otherwise defined herein.

Borrower waives presentment and demand for payment, notice of dishonor, protest and notice of protest and any other notice as permitted under applicable law.

This Note shall be governed by and construed and enforced in accordance with the laws of the State of New York, excluding any conflicts of law rules or principles that would cause the application of the laws of any other jurisdiction.

BORROWER

Track Group, Inc.

By: ____________________________________

Name:__________________________________

Title: ___________________________________

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