UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
Date of Report (Date of earliest event reported): December 9, 2015
 
ATRINSIC, INC.
(Exact name of Registrant as specified in its charter)
  
Delaware
 
000-51353
 
06-1390025
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)
     
  
65 Atlantic Avenue, Boston, Massachusetts 02110
 
07932
(Address Of Principal Executive Office)
 
(Zip Code)
 
 
Registrant's telephone number, including area code (617) 823-2300
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 

 
 

 

 
 
 
Item 1.01
Entry into a Material Definitive Agreement
 
 
See disclosure in response to Item 2.03 below with respect to the Letter Agreements.
 
 
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
 
On December 9, 2015, Atrinsic, Inc., a Delaware corporation (the “Company”), issued secured convertible promissory notes (the “Secured Convertible Notes”) in the principal amount of $25,000 to each of Iroquois Master Fund Ltd (“Iroquois”) and Hudson Bay Master Fund Ltd. (“Hudson”) (for an aggregate of $50,000), each an existing secured lender to the Company. The Secured Convertible Notes have a maturity date of August 31, 2016 and bear interest at the rate of 5.0% per annum, payable at maturity. The outstanding principal and accrued interest of each Secured Convertible Note is convertible, subject to a 4.99% Beneficial Ownership Cap (as defined in the Secured Convertible Notes), into shares of the Company’s common stock (“Common Stock”) at an initial conversion price of $5.00 per share (subject to adjustment), at the option of the respective holders.
 
The obligations of the Company under the Secured Convertible Notes are secured by a first priority security interest in all of the property of the Company pursuant to letter agreements, dated December 9, 2015, with each of Iroquois and Hudson, respectively (the “Letter Agreements”). The Letter Agreements further amend the First Amended and Restated Security Agreement among the Company, Iroquois and Hudson dated as of December 18, 2014, as amended on May 15, 2015, on September 3, 2015 and on October 30, 2015, to include the Company’s obligations under the Secured Convertible Notes. The proceeds of the Secured Convertible Notes will be utilized by the Company to fund its working capital needs.
 
The foregoing description of the Secured Convertible Notes and the Letter Agreements are qualified in their entirety by the full text of the Secured Convertible Notes and the Letter Agreements, which are filed as Exhibits 4.1, 4.2, 10.1 and 10.2, respectively, hereto and incorporated by reference herein.
 
Item 8.01 
Other Events
 
Series B Preferred Stock

Pursuant to our Certificate of Incorporation, as amended, we are authorized to issue up to 5,000,000,000 shares of preferred stock. On February 2, 2016, our Board of Directors approved the creation of a class of up to 18,000,000 shares of preferred stock, par value $0.000001, called Series B Preferred Stock, and on February 3, 2016, we filed a Certificate of Designations, Powers, Preferences and Other Rights of Preferred Stock and Qualifications, Limitations and Restrictions (the “Certificate of Designations”) for this class of stock with the Delaware Secretary of State.


 
1

 
 
 
Pursuant to the Certificate of Designations, each share of Series B Preferred Stock will immediately and automatically convert, subject to a beneficial ownership limit of 9.99% for holders who elect to be subject to this limit,  into one share of Common Stock at such time that we file an amendment to our certificate of incorporation to effect a reverse stock split of our Common Stock in which every 15,463.7183 shares of our Common Stock outstanding at the time that this Certificate of Designations was filed with the Secretary of State of Delaware is exchanged for one share of our Common Stock (the “Reverse Stock Split”).
 
Prior to the Reverse Stock Split, the Series B Preferred Stock votes together with our Common Stock as a single class, with each share of Series B Preferred Stock having a number of votes equal to that of 15,463.7183 shares of Common Stock.  After the Reverse Stock Split, any Series B Preferred Stock which remains outstanding as a result of the beneficial ownership limit will vote together with the Common Stock as a single class, with each share of Series B Preferred Stock having a number of votes equal to one share of Common Stock on a post-Reverse Stock Split basis.
 
In the event of any liquidation, dissolution or winding up of our Company, the assets available for distribution to our stockholders will be distributed among the holders of our Series B Preferred Stock and the holders of our Common Stock, pro rata, on an as-converted-to- Common Stock post-Reverse Stock Split basis. The holders of our Series B Preferred Stock are entitled to dividends in the event that we pay cash or other dividends in property to holders of outstanding shares of our Common Stock, which dividends would be made pro rata, on an as-converted-to-Common Stock post-Reverse Stock Split basis.
 
We have included a copy of the Certificate of Designations as an exhibit to this Current Report, and you may review the Certificate of Designations for a more complete understanding of the terms of the Series B Preferred Stock.

New York Workers’ Compensation Claim
 
We have been informed by the New York State Workers’ Compensation Board that a judgment in the amount of $62,000 has been filed against us for a violation of Section 52.2 of the New York State Workers’ Compensation Law for failure to carry workers’ compensation insurance for the period from July 6, 2011 to May 10, 2012. 
IRS Claim

We have been informed by the Internal Revenue Service that we owe approximately $31,000 in penalties and interest for failure to file Form 5471 for our tax years ended December 31, 2011, December 31, 2012 and June 30, 2014.  Form 5471 is an information return that U.S. companies with foreign operations or subsidiaries must file with their annual tax return to report the results (among other things) of those foreign operations or subsidiaries.  

 
2

 


 
Item 9.01 Financial Statements and Exhibits
 
 
(d)
Exhibits.
 
Exhibit 
Number
 
Description of Exhibits
3.1
 
Certificate of Designations, Powers, Preferences and Other Rights of Preferred Stock and Qualifications, Limitations and Restrictions of the Series B Preferred Stock.
 
4.1
 
Secured Convertible Note, dated December 9, 2015, in the principal amount of $25,000, bearing interest at the rate of 5.0% per annum issued by the Company to Iroquois.
     
4.2
 
Secured Convertible Note, dated October 30, 2015, in the principal amount of $25,000, bearing interest at the rate of 5.0% per annum issued by the Company to Hudson.
     
10.1
 
Letter agreement, dated December 9, 2015, between the Company and Iroquois amending the First Amended and Restated Security Agreement among the Company Iroquois and Hudson dated as of December 18, 2014, as amended on May 15, 2015, on September 30, 2015 and on October 30, 2015.
     
10.2
 
Letter agreement, dated October 30, 2015, between the Company and Hudson amending the First Amended and Restated Security Agreement among the Company Iroquois and Hudson dated as of December 18, 2014, as amended on May 15, 2015, on September 30, 2015 and on October 30, 2015.
  
 
 
 
 
 
 
 

 
3

 


 
 
SIGNATURES
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned, hereunto duly authorized.
  
 
Atrinsic, Inc.
     
     
Dated:   February 4, 2016
By:
/s/ Edward Gildea
   
Edward Gildea,
   
Chief Executive Officer
 
 


 
 
4




 
 


EXHIBIT 3.1

CERTIFICATE OF DESIGNATIONS, POWERS, PREFERENCES
AND OTHER RIGHTS OF PREFERRED STOCK AND QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS THEREOF
of
SERIES B CONVERTIBLE PREFERRED STOCK
of
ATRINSIC, INC.
(Pursuant to Section 151 of the
General Corporation Law of the State of Delaware)
 
ATRINSIC, INC., a Delaware corporation (the “Corporation”), pursuant to the provisions of Section 151 of the General Corporation Law of the State of Delaware, does hereby make this Certificate of Designations, Powers, Preferences and Other Rights of Preferred Stock and Qualifications, Limitations and Restrictions (the “Certificate of Designations”) and does hereby state and certify that pursuant to the authority expressly vested in the Board of Directors of the Corporation (the “Board”) by the Amended and Restated Certificate of Incorporation of the Corporation (the “Certificate”), which authorizes the issuance of 5,000,000,000 shares of preferred stock, $0.000001 par value per share, in one or more series, the Board duly adopted the following resolutions, which resolutions remain in full force and effect as of the date hereof:
 
RESOLVED, that, pursuant to Article IV of the Certificate, the Board hereby authorizes the issuance of, and fixes the designation and preferences and relative, participating, optional and other special rights, and qualifications, limitations and restrictions, of a series of preferred stock of the Corporation consisting of eighteen million (18,000,000) shares, $0.000001 par value per share, to be designated “Series B Convertible Preferred Stock” (hereinafter, the “Series B Preferred Stock”); and be it
 
RESOLVED, that each share of Series B Preferred Stock shall rank equally in all respects and shall be subject to the following terms and provisions:
 
1.          Dividends. The holders of the Series B Preferred Stock shall be entitled to receive, when, if and as declared by the Board, out of funds legally available therefor, any dividends or other distributions from the Corporation that are declared on the common stock, $0.000001 par value per share, of the Corporation (the “Common Stock”), in which case holders of Series B Preferred Stock shall each be entitled to receive, on an As-Converted Basis (as defined below, but without regard to the Beneficial Ownership Cap limitations set forth in Section 5(d) hereof), any dividends or distributions (other than dividends payable solely in additional Common Stock) declared by the Board and paid to the holders of Common Stock, out of any assets legally available therefor, pari passu with the amount of such dividends to be distributed to the holders of Common Stock immediately prior to the declaration of such dividend or distribution. “As-Converted Basis” means, as of the time of determination, that, solely for the purpose of determining the applicable right (and without limitation to any rights of the Series B Preferred Stock), the Series B Preferred Stock shall be treated:

 
(a)
if the Reverse Stock Split (as defined herein) has not occurred, as if each share of such Series B Preferred Stock had been converted into 15,463.7183 (as such number may be adjusted pursuant to Section 5) shares of Common Stock (even if such Series B Preferred Stock is not eligible at the time of such determination to be converted into Common Stock); and
 
 
 
(b)
if the Reverse Stock Split has occurred, as if each share of such Series B Preferred Stock had been converted into one (as such number may be adjusted pursuant to Section 5) share of Common Stock on a post Reverse Stock Split-basis (even if such Series B Preferred Stock is not eligible at the time of such determination to be converted into Common Stock).
 

 
EXHIBIT 3.1, 1

 


 
2.          Voting Rights.  Except as otherwise provided herein or as provided by law, the holders of the Series B Preferred Stock shall have full voting rights and powers, subject to the Beneficial Ownership Cap as defined in Section 5(d), if applicable, equal to the voting rights and powers of holders of Common Stock and shall be entitled to notice of any stockholders meeting in accordance with the Bylaws of the Corporation, and shall be entitled to vote, with respect to any question upon which holders of Common Stock are entitled to vote, including, without limitation, the right to vote for the election of directors, voting together with the holders of Common Stock as one class. Each holder of shares of Series B Preferred Stock shall be entitled to vote on an As-Converted Basis, determined on the record date for the taking of a vote, subject to the applicable Beneficial Ownership Cap limitations set forth in Section 5(d), or, if no record date is established, at the day prior to the date such vote is taken or any written consent of stockholders is first executed. Fractional votes shall not, however, be permitted and any fractional voting rights resulting from the above formula (after aggregating all shares into which shares of Series B Preferred Stock held by each holder could be converted) shall be rounded up to the nearest whole number.
 
3.          Rights on Liquidation.
 
(a)          Prior to the Reverse Stock Split, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation (any such event being hereinafter referred to as a “Liquidation”), the holders of record of the shares of the Series B Preferred Stock shall be entitled to receive, immediately after any distributions required by the Corporation’s Certificate and any certificate(s) of designation, powers, preferences and rights in respect of any securities of the Corporation having priority over the Series B Preferred Stock with respect to the distribution of the assets of the Corporation upon Liquidation, or in terms of redemption rights or dividend rights (“Senior Securities”), and before and in preference to any distribution or payment of assets of the Corporation or the proceeds thereof may be made or set apart with respect to any other securities of the Corporation over which the Series B Preferred Stock has priority with respect to the distribution of the assets of the Corporation upon Liquidation (“Junior Securities”), an amount in cash with respect to each share of Series B Preferred Stock held by such holders, equal to such amount that would be due on an As-Converted Basis immediately prior to such Liquidation (the amount payable pursuant to this sentence is hereinafter referred to as the “Liquidation Preference”). If, upon such Liquidation, the assets of the Corporation available for distribution to the holders of Series B Preferred Stock and any securities of the Corporation having equal priority with the Series B Preferred Stock with respect to the distribution of the assets of the Corporation upon Liquidation, or in terms of redemption rights or dividend rights (“Parity Securities”) shall be insufficient to permit payment in full to the holders of the Series B Preferred Stock and Parity Securities, then the entire assets and funds of the Corporation legally available for distribution to such holders of the Series B Preferred Stock and Parity Securities then outstanding shall be distributed ratably among such holders based upon the proportion the total amount distributable on each share upon liquidation bears to the aggregate amount available for distribution on all shares of the Series B Preferred Stock and of such Parity Securities, if any.
 
(b)          A change of control of the Corporation (including any change in the ownership of more than fifty percent (50%) of the voting capital of the Corporation) shall not be deemed a Liquidation.
 
(c)          In the event of a Liquidation, after the payment of all preferential amounts required to be paid to the holders of shares of Series B Preferred Stock and any Parity Securities, the remaining assets of the Corporation available for distribution to its stockholders shall be distributed among the holders of shares of Common Stock, pro rata based on the number of shares held by each such holder.
 

 
EXHIBIT 3.1, 2

 


 
4.          Actions Requiring the Consent of Holders of Series B Preferred Stock.

(a)           Prior to the Reverse Stock Split, the consent of the holders of at least two-thirds of the shares of Series B Preferred Stock at the time outstanding, given in accordance with the Certificate and Bylaws of the Corporation, as amended, shall be necessary for effecting or validating any of the following transactions or acts, whether by merger, consolidation or otherwise:
 
 
(i)          Other than with respect to the Reverse Stock Split, a change of the Corporation’s name, an increase in the par value of the Corporation’s common stock and a decrease in the number of authorized shares of common stock to 100,000,000, any amendment, alteration or repeal (whether by merger, consolidation or otherwise) of (i) the Certificate or (ii) the Bylaws of the Corporation that will adversely affect the rights or privileges of the holders of the Series B Preferred Stock;
 
(ii)          The authorization or creation by the Corporation of, or the increase in the number of authorized shares of, any Senior Securities or Parity Securities, or any security convertible into Senior Securities or Parity Securities, or the authorization or creation of any new Senior Securities or Parity Securities (or any action which would result in another series of Senior Securities or Parity Securities), in each case, ranking in terms of liquidation preference, redemption rights or dividend rights, pari passu with or senior to, the Series B Preferred Stock in any manner; and
 
(iii)          Any act or thing not authorized or contemplated by this Certificate of Designations which would result in taxation of the holders of shares of the Series B Preferred Stock under Section 305 of the Internal Revenue Code of 1986, as amended (or any comparable provision of the Internal Revenue Code as hereafter from time to time amended).
 
(b)           Prior to the Reverse Stock Split, the consent of (i) the holders of at least a majority of the shares of Series B Preferred Stock at the time outstanding and (ii) Iroquois Capital Management LLC, given in accordance with the Certificate and Bylaws of the Corporation, as amended, shall be necessary for any amendment, alteration or repeal (whether by merger, consolidation or otherwise) of any of the provisions of this Certificate of Designations, including any increase in the number of authorized shares of Series B Preferred Stock;

(c)           If the Reverse Stock Split has not occurred by July 14, 2014, the consent of (i) the holders of at least a majority of the shares of Series B Preferred Stock at the time outstanding and (ii) Iroquois Capital Management LLC, which consent will not be unreasonably withheld, given in accordance with the Certificate and Bylaws of the Corporation, as amended, shall be necessary for the issuance of any securities of the Corporation, excluding warrants and options to purchase shares of authorized but unissued shares of Series B Preferred Stock or common stock.

5.          Conversion.
 
(a)           Automatic Conversion. Subject to the limitations set out in Section 5(d), upon the occurrence of  a reverse stock split of the Corporation’s common stock in which every 15,463.7183 shares of the Corporation’s Common Stock outstanding at the time that this Certificate of Designations was filed with the Secretary of State of  Delaware is exchanged for one share of the Corporation’s Common Stock (the “Reverse Stock Split”), each share of Series B Convertible Preferred Stock shall automatically convert without any further action from the Corporation or the holder into one (1) share of the Corporation’s Common Stock (on a post Reverse Stock Split-basis); provided that any shares of Series B Preferred Stock that do not convert as a result of Section 5(d), shall automatically convert (without any further action from the Corporation or the holder) into one (1) share of the Corporation’s Common Stock (on a post Reverse Stock Split-basis) at any time, and to the extent that, such conversion would not violate the provisions of Section 5(d).
 
 

 
EXHIBIT 3.1, 3

 


 
(b)           No Fractional Shares. No fractional shares of Common Stock or scrip shall be issued upon conversion of shares of Series B Convertible Preferred Stock. In lieu of any fractional share to which the Holder would otherwise be entitled, the Corporation shall issue a number of shares to such Holder rounded up to the nearest whole number of shares of Common Stock. No cash shall be paid to any Holder of Series B Convertible Preferred Stock by the Corporation upon conversion of Series B Preferred Convertible Stock by such Holder.
 
 
(c)           Stock Dividends, Splits, Combinations and Reclassifications. If the Corporation shall (i) declare a dividend or other distribution payable in securities, (ii) split its outstanding shares of Common Stock into a larger number, (iii) combine its outstanding shares of Common Stock into a smaller number (other than the Reverse Stock Split), or (iv) increase or decrease the number of shares of its capital stock in a reclassification of the Common Stock including any such reclassification in connection with a merger, consolidation or other business combination in which the Corporation is the continuing entity (any such corporate event, an “Event”), then in each instance the conversion rate that would otherwise be applicable shall be adjusted such that the number of shares issued upon conversion of one share of Series B Convertible Preferred Stock will equal the number of shares of Common Stock that would otherwise be issued but for such Event.
  
(d)          Limitation on Beneficial Ownership.
 
(i)          Except as provided otherwise in this Section 5(d)(i), the number of shares of Common Stock that may be acquired by an Electing Holder (as defined herein) upon conversion of such Electing Holder’s Series B Preferred Stock, and the number of shares of Series B Preferred Stock with respect to which an Electing Holder shall be entitled to voting rights under Section 2 hereof, shall be limited to the extent necessary to ensure that, after giving effect to such conversion (or deemed conversion for voting purposes), the number of shares of Common Stock then beneficially owned by such Electing Holder and its Affiliates and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Electing Holder’s for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (including shares held by any “group” of which the Electing Holder is a member, but, for avoidance of doubt, excluding shares of Common Stock issuable upon conversion or exercise of securities or rights to acquire securities that have limitations on the right to convert, exercise or purchase similar to the limitation set forth herein) does not exceed 9.99% of the total number of shares of Common Stock of the Corporation issued and outstanding immediately after giving effect to such conversion (or deemed conversion for voting purposes) (the “Beneficial Ownership Cap”). For purposes hereof, “group” has the meaning set forth in Section 13(d) of the Exchange Act and applicable regulations of the Securities and Exchange Commission, and the percentage held by the Electing Holder shall be determined in a manner consistent with the provisions of Section 13(d) of the Exchange Act. As used herein, the term “Affiliate” means any person or entity that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a person or entity, as such terms are used in and construed under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”). With respect to an Electing Holder of Series B Preferred Stock, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Electing Holder will be deemed to be an Affiliate of such Electing Holder. This paragraph shall be construed and administered in such manner as shall be consistent with the intent of the first sentence of this paragraph. Any provision hereof which would require a result that is not consistent with such intent shall be deemed severed herefrom and of no force or effect with respect to the conversion contemplated by this Certificate of Designations.
 

 
EXHIBIT 3.1, 4

 


 
(ii)         In the event the Corporation is prohibited from issuing shares of Common Stock as a result of any restrictions or prohibitions under applicable law or the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization, the Corporation shall as soon as possible seek the approval of its stockholders and take such other action to authorize the issuance of the full number of shares of Common Stock issuable upon the full conversion of the then outstanding shares of Series B Preferred Stock.
 
(iii)        For purposes of the foregoing, the number of shares of Common Stock beneficially owned by an Electing Holder and its affiliates shall include the number of shares of Common Stock issuable upon conversion of the shares of Series B Preferred Stock with respect to which the determination of such beneficial ownership is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) conversion of the remaining, nonconverted shares of Series B Preferred Stock beneficially owned by such Electing Holder or any of its affiliates and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any notes or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained in this Section beneficially owned by such Electing Holder or any of its affiliates. Except as set forth in the preceding sentence, for purposes of this Section 5(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended. For purposes of this Section 5(d), in determining the number of outstanding shares of Common Stock, a Electing Holder of Series B Preferred Stock may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company’s most recent Form 10-K, Form 10-Q, or Form 8-K, as the case may be, (2) a more recent public announcement by the Company, or (3) any other notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. For any reason at any time, upon the written request of any such Electing Holder, the Company shall within one (1) Business Day following the receipt of such notice, confirm orally and in writing to any such Electing Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including the Series B Preferred Stock (or deemed conversion thereof, as applicable), by such Electing Holder and its affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 5(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation.

(iv)           The provisions of this Section 5(d) shall only apply to those holders of shares of Series B Preferred Stock that have notified the Corporation in writing that they wish to have Section 5(d) apply to such holder (an “Electing Holder”).  If an Electing Holder notifies the Corporation in writing that it no longer wishes to have Section 5(d) apply to such holder, then this Section shall no longer apply to such holder sixty-one (61) days after the Corporation receives such written notice.
 
(e)          Common Stock Reserved. At all times after the Reverse Stock Split, the Corporation shall reserve and keep available out of its authorized but unissued Common Stock, solely for issuance upon the conversion of shares of Series B Preferred Stock as herein provided, such number of shares of Common Stock as shall from time to time be issuable upon the conversion of all the shares of Series B Preferred Stock at the time outstanding (without regard to any ownership limitations provided in Section 5(d)).
 

 
EXHIBIT 3.1, 5

 


 
6.          Other Action Affecting Common Stock. In case at any time or from time to time the Corporation shall take any action in respect of its Common Stock, other than the payment of dividends permitted by Section 5 or any other action described in Section 5, then, unless such action will not have a materially adverse effect upon the rights of the holder of Series B Preferred Stock, the number of shares of Common Stock or other stock into which the Series B Preferred Stock is convertible and/or the purchase price thereof shall be adjusted in such manner as may be equitable in the circumstances.
 
7.         Covenants of the Corporation. The Corporation covenants and agrees that, prior to the Reverse Stock Split, it will perform the obligations set forth in this Section 7:
 
(a)          Taxes and Levies. The Corporation will promptly pay and discharge all taxes, assessments, and governmental charges or levies imposed upon the Corporation or upon its income and profits, or upon any of its property, before the same shall become delinquent, as well as all claims for labor, materials and supplies which, if unpaid, might become a lien or charge upon such properties or any part thereof; provided, however, that the Corporation shall not be required to pay and discharge any such tax, assessment, charge, levy or claim so long as the validity thereof shall be contested in good faith by appropriate proceedings and the Corporation shall set aside on its books adequate reserves in accordance with generally accepted accounting principles (“GAAP”) with respect to any such tax, assessment, charge, levy or claim so contested;
 
(b)          Maintenance of Existence. The Corporation will do or cause to be done all things reasonably necessary to preserve and keep in full force and effect its corporate existence, rights and franchises and comply with all laws applicable to the Corporation, except where the failure to comply would not have a material adverse effect on the Corporation;
 
(c)          Maintenance of Property. The Corporation will at all times maintain, preserve, protect and keep its property used or useful in the conduct of its business in good repair, working order and condition, and from time to time make all needful and proper repairs, renewals, replacements and improvements thereto as shall be reasonably required in the conduct of its business;
 
(d)          Insurance. The Corporation will, to the extent necessary for the operation of its business, keep adequately insured by financially sound reputable insurers, all property of a character usually insured by similar corporations and carry such other insurance as is usually carried by similar corporations;
 
(e)          Books and Records. The Corporation will at all times keep true and correct books, records and accounts reflecting all of its business affairs and transactions materially in accordance with GAAP; and
 
(f)          Notice of Certain Events. The Corporation will give prompt written notice (with a description in reasonable detail) to the holders of Series B Preferred Stock in the event the Corporation shall:
 
(i)          become insolvent or generally fail or be unable to pay, or admit in writing its inability to pay, its debts as they become due;
 
(ii)         apply for, consent to, or acquiesce in, the appointment of a trustee, receiver, sequestrator or other custodian for the Corporation or any of its property, or make a general assignment for the benefit of creditors;
 

 
EXHIBIT 3.1, 6

 


 
(iii)        in the absence of such application, consent or acquiesce in, permit or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian for the Corporation or for any part of its property;
 
(iv)        permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law, or any dissolution, winding up or liquidation proceeding, in respect of the Corporation, and, if such case or proceeding is not commenced by the Corporation or converted to a voluntary case, such case or proceeding shall be consented to or acquiesced in by the Corporation or shall result in the entry of an order for relief;
 
(v)         enter into any agreement to merge or consolidate with any other person or sell, transfer or lease all or substantially all of its assets to any other person; or
 
(vi)        declare any split of its outstanding shares of capital stock, declare or make any dividend or distribution, or subdivide, reclassify or combine any of its outstanding shares of capital stock.
 
(g)          Other Notices. The Corporation shall distribute to the holders of the Series B Preferred Stock all communications sent by the Corporation to the holders of the Common Stock.
 
8.         Notices of Record Date. Prior to the Reverse Stock Split, in the event of any fixing by the Corporation of a record date for the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend or a dividend set forth in Section 1 hereof) or other distribution, any shares of Common Stock or other securities, or any right to subscribe for, purchase or otherwise acquire, or any option for the purchase of, any shares of stock of any class or any other securities or property, or to receive any other right, the Corporation shall mail to each holder of Series B Preferred Stock at least twenty (20) days prior to the date specified therein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend, distribution or rights, and the amount and character of such dividend, distribution or right.
 
9.         No Redemption. The Corporation may not redeem the outstanding shares of Series B Preferred Stock and the holders shall not have any right, at any time or under any circumstances, to require the Corporation to redeem any of the Series B Preferred Stock.
 
10.         Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 5:00 p.m. (New York, NY time) on a business day, (b) the next business day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a business day or later than 5:00 p.m. (New York, NY time) on any business day, or (c) the business day following the date of mailing, if sent by U.S. nationally recognized overnight courier service such as Federal Express with next day delivery specified. The address for such notices and communications shall be as follows: (i) if to the Corporation, to: such address as is set forth on the Corporation’s most recent filing with the Securities and Exchange Commission, to the attention of the Corporation’s president, or (ii) if to a holder of Series B Preferred Stock, to the address or facsimile number appearing on the Corporation’s stockholder records or, in either case, to such other address or facsimile number as the Corporation or a holder of Series B Preferred Stock may provide to the other in accordance with this Section.
 

 
EXHIBIT 3.1, 7

 


 
11.         Stock Transfer Taxes. The issue of stock certificates upon conversion of the Series B Preferred Stock shall be made without charge to the converting holder for any tax in respect of such issue; provided, however, that the Corporation shall be entitled to withhold any applicable withholding taxes with respect to such issue, if any. The Corporation shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares in any name other than that of the holder of any of the Series B Preferred Stock converted, and the Corporation shall not be required to issue or deliver any such stock certificate unless and until the person or persons requesting the issue thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid.

12.           Termination of Series B Preferred Stock.  Upon the occurrence of the Reverse Stock Split, the Corporation is prohibited from issuing any additional shares of Series B Preferred Stock.  On that date that all shares of Series B Preferred Stock have converted to Common Stock pursuant to the terms of this Certificate of Designations and no shares of Series B Preferred Stock are issued and outstanding, the Series B Preferred Stock shall cease to be an authorized class of preferred stock of the Corporation.
 
[signature page follows]
 

 
EXHIBIT 3.1, 8

 


 
 
 
 
IN WITNESS WHEREOF, the undersigned being a duly authorized officer of the Corporation, does file this Certificate of Designations, hereby declaring and certifying that the facts stated herein are true and accordingly has hereunto set his hand this February 2, 2016.
 
 
ATRINSIC, INC.
   
 
By:
                  /s/ Edward Gildea     
   
Name:           Edward Gildea
   
   
Title:           President
   
 


 

 
 
 
EXHIBIT 3.1, 9




 
 


EXHIBIT 4.1
 
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), NOR UNDER ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, PLEDGED, OFFERED FOR SALE, ASSIGNED OR TRANSFERRED UNLESS (a) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT, AND ANY APPLICABLE STATE SECURITIES LAW REQUIREMENTS HAVE BEEN MET OR (B) EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS ARE AVAILABLE.


SECURED CONVERTIBLE PROMISSORY NOTE

$25,000                                                                                                                           December 9, 2015
New York, New York


FOR VALUE RECEIVED, Atrinsic, Inc., a Delaware corporation (the “Company”), promises to pay to the order of Iroquois Master Fund Ltd (“Holder”), at the offices of Fisher Broyles LLP 445 Park Avenue, New York, New York 10022, the principal sum of Twenty Five Thousand U.S. Dollars (U.S. $25,000) with interest thereon at the rate of five percent (5%) per annum.  Any amounts that remain unpaid when due shall thereafter bear interest at the rate of twelve percent (12%) per annum.  Interest as aforesaid shall be calculated on the basis of actual number of days elapsed over a year of 360 days.

The principal amount and all accrued interest of this Note are due on August 31, 2016 (the “Maturity Date”).

This Note is subject to the following additional provisions:

Section 1.                      Definitions. For the purposes hereof the following terms shall have the following meanings:

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

Common Stock” means the common stock, par value $0.000001 per share, of the Company and stock of any other class into which such shares may hereafter have been reclassified or changed.

Conversion Date” shall have the meaning set forth in Section 5(a) hereof.

Conversion Price” shall have the meaning set forth in Section 5(b).

Conversion Shares” means the shares of Common Stock issuable upon conversion of this Note or as payment of interest, all in accordance with the terms hereof.

Event of Default” shall have the meaning set forth in Section 7.

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


 
EXHIBIT 4.1, 1

 

Fundamental Transaction” shall have the meaning set forth in Section 3.

Original Issue Date” means the date of the first issuance of this Note regardless of the number of transfers of any Note and regardless of the number of instruments which may be issued to evidence such Note.

Person” means a corporation, an association, a partnership, organization, a business, an individual, a government or political subdivision thereof or a governmental agency.

Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Security Agreement” means the First Amended and Restated Security Agreement dated as of December 18, 2014 by and among the Company, the Holder and Iroquois Master Fund Ltd (“Iroquois”), as amended by the Letter Agreements dated May 15, 2015, September 3, 2015 and an even date hereof.

 “Subsidiary” means any Person in which the Company owns more than 50% of the outstanding equity.

Transaction Documents” means the Security Agreement and this Note.

Section 2.                      Registration of Transfers and Exchanges.

a)            Different Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations as requested by the Holder surrendering the same, No service charge will be made for such registration of transfer or exchange.

b)            Investment Representations.  This Note has been issued subject to certain investment representations of the original Holder set forth herein and may be transferred or exchanged only in compliance with applicable federal and state securities laws and regulations.

c)            Reliance on Note Register. Prior to due presentment to the Company for transfer of this Note, the Company and any agent of the Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

Section 3.                      Acceleration of Maturity Date.

If, at any time while this Note is outstanding the Company or any of its Subsidiaries, (A) effects any merger or consolidation of the Company with or into another Person or (B) acquires assets of a business from any Person (in any such case, a “Fundamental Transaction”), then, immediately prior to the occurrence of such Fundamental Transaction the principal and accrued but unpaid interest payable hereunder shall automatically become, at the Holder’s election, immediately due and payable in cash.


 
EXHIBIT 4.1, 2

 

Section 4.                      Use of Proceeds.

The Company will use the proceeds of the loan represented by this Note only to pay expenses necessary to consummate a business combination transaction (including related public company expenses).

Section 5.                      Conversion.

a)            Voluntary Conversion. At all times after the Original Issue Date until this Note is no longer outstanding, the principal and accrued interest due and payable under this Note shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, so long and only to the extent that after taking into consideration all issued and outstanding common stock shares and the maximum number of shares issuable under all issued and outstanding convertible securities at the time of conversion, there remain enough authorized but unissued shares under the Company’s Certificate of Incorporation that are not previously reserved for issuance under such convertible securities to effect conversion of this Note. The Holder shall effect conversions by delivering to the Company the form of Notice of Conversion attached hereto as Annex A (a “Notice of Conversion”), specifying therein the principal amount of Note to be converted and the date on which such conversion is to be effected (a “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is provided hereunder. To effect conversions hereunder, the Holder shall not be required to physically surrender the Note to the Company unless the entire principal amount of this Note plus all accrued and unpaid interest thereon has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. The Company shall deliver any objection to any Notice of Conversion within 3 Business Days of receipt of such notice. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. 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 may be less than the amount stated on the face hereof. However, at the Company’s request, the Holder shall surrender the Note to the Company within five (5) trading days following such request so that a new Note reflecting the correct principal amount may be issued to Holder.

b)            Conversion Price. The conversion price in effect on any Conversion Date (subject to adjustment herein) shall initially be equal to $5.00 per share.

c)            Mechanics of Conversion

i.           Conversion Shares Issuable Upon Conversion of Principal Amount. The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the amount of this Note (whether principal or accrued but unpaid interest) to be converted by (y) the Conversion Price.


 
EXHIBIT 4.1, 3

 

ii.           Delivery of Certificate Upon Conversion. Not later than five (5) trading days after any Conversion Date, the Company will deliver to the Holder at an address in the United States (A) a certificate or certificates representing the Conversion Shares representing the number of shares of Common Stock being acquired upon the conversion of Notes (including, if so timely elected by the Company, shares of Common Stock representing the payment of accrued interest) and (B) a bank check or wire transfer in the amount of accrued and unpaid interest (if the Company is required to pay accrued interest in cash).

iii.           Reservation of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock solely for the purpose of issuance upon conversion of this Note (after taking into account all existing issued and outstanding shares of Common Stock and all shares reserved for issuance under the Company’s issued and outstanding convertible securities), free from preemptive rights or any other actual contingent purchase rights of persons other than the Holder, not less than such number of shares of the Common Stock as shall be issuable (taking into account the adjustments and restrictions of Section 6) upon the conversion of the outstanding principal amount and accrued interest under this Note. The Company covenants that all shares of Common Stock that are issuable upon conversion of this Note shall, upon issuance, be duly and validly authorized, issued and fully paid and nonassessable.

iv.           Fractional Shares. Upon a conversion hereunder the Company shall not be required to issue stock certificates representing fractions of shares of the Common Stock, but may if otherwise permitted, make a cash payment in respect of any final fraction of a share based on the fair market value of a share at such time. If the Company elects not, or is unable, to make such a cash payment, the Holder shall be entitled to receive, in lieu of the final fraction of a share, one whole share of Common Stock.

v.           Transfer Taxes. The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificate.

d)            Holder’s Representations.

i.           Own Account.  Holder understands that the Conversion Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and upon Conversion will acquire the Conversion Shares as principal for its own account and not with a view to or for distributing or reselling the Conversion Shares or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing the Conversion Shares in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of the Conversion Shares in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting Holder’s right to sell the Conversion Shares otherwise in compliance with applicable federal and state securities laws).

ii.           Holder Status.  On the date hereof and on each date on which Holder elects to convert all or a portion of this Note, it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.
 
 

 
EXHIBIT 4.1, 4

 

iii.           Experience of Holder.  Holder, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in this Note and the Conversion Shares, and has so evaluated the merits and risks of such investment.  Such Purchaser is able to bear the economic risk of an investment in this Note and the Conversion Shares and, at the present time, is able to afford a complete loss of such investment.
 
Section 6.                      Certain Adjustments.

 
a)
Adjustment Triggers.

i.           Stock Dividends and Stock Splits. If the Company, at any time after the Original Issue Date while the 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 to all stockholders of the Company (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company pursuant to this Note, including as interest thereon), (B) subdivide outstanding shares of Common Stock into a larger number of shares, or (C) combine (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding before such event and of which the denominator shall be the number of shares of Common Stock outstanding after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

ii.           Voluntary Adjustment By Company. The Company may at any time reduce the then current Conversion Price to any amount and for any period of time deemed appropriate and approved by the Board in accordance with Delaware law, provided that the same voluntary adjustment shall be made to the then current Conversion Price of all outstanding Notes (as defined in the Security Agreement).

b)            Calculations. All calculations under this Section 6 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. The number of shares of Common Stock outstanding at any given time shall not includes shares of Common Stock owned or held by or for the account of the Company, and the description of any such shares of Common Stock shall be considered on issue or sale of Common Stock. For purposes of this Section 6, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

c)            Notice to Holder.

i.           Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any of this Section 6, the Company shall promptly mail to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.


 
EXHIBIT 4.1, 5

 

ii.           Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution) on the Common Stock; (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company; then, in each case, the Company shall cause to mailed to the Holder at its last address as it shall appear upon the stock books of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided, that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder shall be entitled to convert this Note during the 20-day period commencing the date of such notice to the effective date of the event triggering such notice.

d)           Limitation on Beneficial Ownership.

(i)           Except as provided otherwise in this Section 6(d)(i), the number of Conversion Shares that may be acquired by the Holder shall be limited to the extent necessary to insure that, after giving effect to such conversion (or deemed conversion for voting purposes), the number of shares of Common Stock then beneficially owned by the Holder and its affiliates and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act (including shares held by any “group” of which the Holder is a member, but, for avoidance of doubt, excluding shares of Common Stock issuable upon conversion or exercise of securities or rights to acquire securities that have limitations on the right to convert, exercise or purchase similar to the limitation set forth herein) does not exceed 4.99% (the “Maximum Percentage”) of the total number of shares of Common Stock of the Company issued and outstanding immediately after giving effect to such conversion (or deemed conversion for voting purposes) (the “Beneficial Ownership Cap”). Upon delivery of a written notice to the Company, the Holder may from time to time increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after such notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and its Affiliates and not to any other holder of contemporaneously issued Notes that is not an Affiliate. For purposes hereof, “group” has the meaning set forth in Section 13(d) of the Exchange Act and applicable regulations of the Securities and Exchange Commission, and the percentage held by the Holder shall be determined in a manner consistent with the provisions of Section 13(d) of the Exchange Act.  As used herein, the term “Affiliate” means any person or entity that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a person or entity, as such terms are used in and construed under Rule 144 under the Securities Act.  With respect to the Holder, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as the Holder will be deemed to be an affiliate of the Holder.  In the event the Company is prohibited from issuing shares of Common Stock as a result of any restrictions or prohibitions under applicable law or the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization, the Company shall as soon as possible seek the approval of its stockholders and take such other action to authorize the issuance of the full number of shares of Common Stock issuable upon the full conversion of this Note.
 

 
EXHIBIT 4.1, 6

 

(ii)           For purposes of the foregoing, the number of shares of Common Stock beneficially owned by the Holder and its affiliates shall include the number of shares of Common Stock issuable upon conversion of this Note with respect to which the determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) conversion of the remaining, nonconverted shares under this Note beneficially owned by such Person or any of its affiliates and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any other notes or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained in this Section beneficially owned by Holder or any of its affiliates.  Except as set forth in the preceding sentence, for purposes of this Section 6(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act.  For purposes of this Section 6(d), in determining the number of outstanding shares of Common Stock, Holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company’s most recent Form 10-K, Form 10-Q, or Form 8-K, as the case may be, (2) a more recent public announcement by the Company, or (3) any other notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  For any reason at any time, upon the written request of Holder, the Company shall within one (1) Business Day following the receipt of such notice, confirm orally and in writing to any such Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including conversions under this Note (or deemed conversion, as applicable), by Holder and its affiliates since the date as of which such number of outstanding shares of Common Stock was reported.  In the event that the Company cannot issue any shares of Common Stock to a Holder solely by reason of this Section 6(d) (such shares, the “Limited Shares”), notwithstanding anything to the contrary contained herein, the Company shall hold any such Limited Shares in abeyance for such Holder until such time, if ever, that the delivery of such Limited Shares shall not cause the Holder to exceed the Beneficial Ownership Cap, at which time such Holder shall be delivered such Limited Shares to the extent as if there had been no such limitation.  The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 6(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation.
 
Section 7.                      Events of Default.

a)            Event of Default.  Wherever used herein, means any one of the following events (whatever the reason and whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

i.           any default in the payment of (A) the principal, or (B) interest on this Note or any other note of the Company held by the Holder when the same shall become due and payable (whether on the Maturity Date or by acceleration or otherwise) which default is not cured within ten (10) Business Days after written notice from the Holder

ii.           a breach of any of the covenants or agreements made by the Company herein; or


 
EXHIBIT 4.1, 7

 

iii.           (A) there is commenced against the Company or any Subsidiary thereof a case under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Company or any Subsidiary thereof which remains undismissed for a period of 60 days; or (B) the Company or any Subsidiary thereof is adjudicated by a court of competent jurisdiction insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or (C) the Company or any Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property which continues undischarged or unstayed for a period of 60 days.

b)            Remedies Upon Event of Default. If any Event of Default occurs, the full principal amount of this Note, together with interest and any other amounts owing in respect hereof, to the date of acceleration shall become, at the Holder’s election, immediately due and payable in cash. The Holder need not provide and the Company hereby waives any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such declaration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a Note holder until such time, if any, as the full payment under this Section shall have been received by it. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

Section 8.                      Miscellaneous.

a)           Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder shall be in writing and delivered personally, by facsimile to Fax No: (212) 208-6809, or sent by a nationally recognized overnight courier service, addressed to the Company at 65 Atlantic Avenue, Boston, Massachusetts 02110, attention:  Chief Executive Officer, or such other address or facsimile number as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service addressed to the Holder at the facsimile, telephone number or address of such Holder appearing on the books of the Company, or if no such facsimile telephone number or address appears, at the principal place of business of the Holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section prior to 5:30 p.m. (New York City time), (ii) the date after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section later than 5:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City time) on such date, (iii) the second Business Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

b)            Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, interest and other amounts provided for herein (if any) on, this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company.


 
EXHIBIT 4.1, 8

 

c)            Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof; and indemnity, if requested, all reasonably satisfactory to the Company.

d)            Security Interest. This Note is a direct debt obligation of the Company and, pursuant to the Security Agreement all of the Company’s obligations hereunder are secured by a security interest in all of the assets of the Company for the benefit of the Holder.  The Holder understands, acknowledges and agrees that Iroquois has made a loan to the Company in a principal amount equal to the principal amount of this Note, and that the Company has granted Iroquois a security interest in all of the assets of the Company and that the Iroquois security interest is pari passu with that of the Holder.

e)            Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Note, and any claim, controversy or dispute arising under or related to this Note, the relationship of the parties, and/or the interpretation and enforcement of the rights and duties of the parties hereunder shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state or federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding 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 Note 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 manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

f)            Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note. Any waiver must be in writing.


 
EXHIBIT 4.1, 9

 

g)            Severability. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this indenture, and due Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, binder, delay or impeded the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.

h)            Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

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

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

ATRINSIC, INC.
 


By:__/s/ Edward Gildea________________________
       Edward Gildea, Chief Executive Officer

Agreed to and Accepted:

IROQUOIS MASTER FUND LTD.


By:____/s/ Joshua Silverman________________________________
Name:  Joshua Silverman
Title:  Authorized Signatory

[SIGNATURE PAGE TO DECEMBER 4, 2015 CONVERTIBLE NOTE]
:

 
EXHIBIT 4.1, 10

 



ANNEX A

NOTICE OF CONVERSION


The undersigned hereby elects to convert principal under the Convertible Note of Atrinsic, Inc., a Delaware corporation (the “Company”), due on ___________, 20__, into shares of common stock, par value $0.000001 per share (the “Common Stock”), of the Company according to the conditions hereof, as of the date written below. If shares are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by due Company in accordance therewith. No fee will be charged to the Holder for any conversion, except for such transfer taxes, if any.

The undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid shares of Common Stock.

Conversion calculations:
Date to Effect Conversion:

Principal Amount of Note to be Converted:

Payment of Interest in Common Stock_ yes _  no
If yes, $______ of Interest Accrued on Account of
Conversion at Issue.

Number of shares of Common Stock to be issued:


Signature:

Name:

Address:



 
EXHIBIT 4.1, 10




 
 


EXHIBIT 4.2

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), NOR UNDER ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, PLEDGED, OFFERED FOR SALE, ASSIGNED OR TRANSFERRED UNLESS (a) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT, AND ANY APPLICABLE STATE SECURITIES LAW REQUIREMENTS HAVE BEEN MET OR (B) EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS ARE AVAILABLE.


SECURED CONVERTIBLE PROMISSORY NOTE

$25,000                                                                                                                           December 9, 2015
New York, New York


FOR VALUE RECEIVED, Atrinsic, Inc., a Delaware corporation (the “Company”), promises to pay to the order of Hudson Bay Master Fund Ltd (“Holder”), at the offices of Fisher Broyles LLP 445 Park Avenue, New York, New York 10022, the principal sum of Twenty Five Thousand U.S. Dollars (U.S. $25,000) with interest thereon at the rate of five percent (5%) per annum.  Any amounts that remain unpaid when due shall thereafter bear interest at the rate of twelve percent (12%) per annum.  Interest as aforesaid shall be calculated on the basis of actual number of days elapsed over a year of 360 days.

The principal amount and all accrued interest of this Note are due on August 31, 2016 (the “Maturity Date”).

This Note is subject to the following additional provisions:

Section 1.                      Definitions. For the purposes hereof the following terms shall have the following meanings:

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

Common Stock” means the common stock, par value $0.000001 per share, of the Company and stock of any other class into which such shares may hereafter have been reclassified or changed.

Conversion Date” shall have the meaning set forth in Section 5(a) hereof.

Conversion Price” shall have the meaning set forth in Section 5(b).

Conversion Shares” means the shares of Common Stock issuable upon conversion of this Note or as payment of interest, all in accordance with the terms hereof.

Event of Default” shall have the meaning set forth in Section 7.

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


 
EXHIBIT 4.2, 1

 

Fundamental Transaction” shall have the meaning set forth in Section 3.

Original Issue Date” means the date of the first issuance of this Note regardless of the number of transfers of any Note and regardless of the number of instruments which may be issued to evidence such Note.

Person” means a corporation, an association, a partnership, organization, a business, an individual, a government or political subdivision thereof or a governmental agency.

Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Security Agreement” means the First Amended and Restated Security Agreement dated as of December 18, 2014 by and among the Company, the Holder and Hudson Bay Master Fund Ltd (“Hudson”), as amended by the Letter Agreements dated May 15, 2015, September 3, 2015 and an even date hereof.

 “Subsidiary” means any Person in which the Company owns more than 50% of the outstanding equity.

Transaction Documents” means the Security Agreement and this Note.

Section 2.                      Registration of Transfers and Exchanges.

a)            Different Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations as requested by the Holder surrendering the same, No service charge will be made for such registration of transfer or exchange.

b)            Investment Representations.  This Note has been issued subject to certain investment representations of the original Holder set forth herein and may be transferred or exchanged only in compliance with applicable federal and state securities laws and regulations.

c)            Reliance on Note Register. Prior to due presentment to the Company for transfer of this Note, the Company and any agent of the Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

Section 3.                      Acceleration of Maturity Date.

If, at any time while this Note is outstanding the Company or any of its Subsidiaries, (A) effects any merger or consolidation of the Company with or into another Person or (B) acquires assets of a business from any Person (in any such case, a “Fundamental Transaction”), then, immediately prior to the occurrence of such Fundamental Transaction the principal and accrued but unpaid interest payable hereunder shall automatically become, at the Holder’s election, immediately due and payable in cash.


 
EXHIBIT 4.2, 2

 

Section 4.                      Use of Proceeds.

The Company will use the proceeds of the loan represented by this Note only to pay expenses necessary to consummate a business combination transaction (including related public company expenses).

Section 5.                      Conversion.

a)            Voluntary Conversion. At all times after the Original Issue Date until this Note is no longer outstanding, the principal and accrued interest due and payable under this Note shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, so long and only to the extent that after taking into consideration all issued and outstanding common stock shares and the maximum number of shares issuable under all issued and outstanding convertible securities at the time of conversion, there remain enough authorized but unissued shares under the Company’s Certificate of Incorporation that are not previously reserved for issuance under such convertible securities to effect conversion of this Note. The Holder shall effect conversions by delivering to the Company the form of Notice of Conversion attached hereto as Annex A (a “Notice of Conversion”), specifying therein the principal amount of Note to be converted and the date on which such conversion is to be effected (a “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is provided hereunder. To effect conversions hereunder, the Holder shall not be required to physically surrender the Note to the Company unless the entire principal amount of this Note plus all accrued and unpaid interest thereon has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion. The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. The Company shall deliver any objection to any Notice of Conversion within 3 Business Days of receipt of such notice. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. 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 may be less than the amount stated on the face hereof. However, at the Company’s request, the Holder shall surrender the Note to the Company within five (5) trading days following such request so that a new Note reflecting the correct principal amount may be issued to Holder.

b)            Conversion Price. The conversion price in effect on any Conversion Date (subject to adjustment herein) shall initially be equal to $5.00 per share.

c)            Mechanics of Conversion

i.           Conversion Shares Issuable Upon Conversion of Principal Amount. The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the amount of this Note (whether principal or accrued but unpaid interest) to be converted by (y) the Conversion Price.


 
EXHIBIT 4.2, 3

 

ii.           Delivery of Certificate Upon Conversion. Not later than five (5) trading days after any Conversion Date, the Company will deliver to the Holder at an address in the United States (A) a certificate or certificates representing the Conversion Shares representing the number of shares of Common Stock being acquired upon the conversion of Notes (including, if so timely elected by the Company, shares of Common Stock representing the payment of accrued interest) and (B) a bank check or wire transfer in the amount of accrued and unpaid interest (if the Company is required to pay accrued interest in cash).

iii.           Reservation of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock solely for the purpose of issuance upon conversion of this Note (after taking into account all existing issued and outstanding shares of Common Stock and all shares reserved for issuance under the Company’s issued and outstanding convertible securities), free from preemptive rights or any other actual contingent purchase rights of persons other than the Holder, not less than such number of shares of the Common Stock as shall be issuable (taking into account the adjustments and restrictions of Section 6) upon the conversion of the outstanding principal amount and accrued interest under this Note. The Company covenants that all shares of Common Stock that are issuable upon conversion of this Note shall, upon issuance, be duly and validly authorized, issued and fully paid and nonassessable.

iv.           Fractional Shares. Upon a conversion hereunder the Company shall not be required to issue stock certificates representing fractions of shares of the Common Stock, but may if otherwise permitted, make a cash payment in respect of any final fraction of a share based on the fair market value of a share at such time. If the Company elects not, or is unable, to make such a cash payment, the Holder shall be entitled to receive, in lieu of the final fraction of a share, one whole share of Common Stock.

v.           Transfer Taxes. The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificate.

d)            Holder’s Representations.

i.           Own Account.  Holder understands that the Conversion Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and upon Conversion will acquire the Conversion Shares as principal for its own account and not with a view to or for distributing or reselling the Conversion Shares or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing the Conversion Shares in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of the Conversion Shares in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting Holder’s right to sell the Conversion Shares otherwise in compliance with applicable federal and state securities laws).

ii.           Holder Status.  On the date hereof and on each date on which Holder elects to convert all or a portion of this Note, it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.
 
 

 
EXHIBIT 4.2, 4

 

iii.           Experience of Holder.  Holder, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in this Note and the Conversion Shares, and has so evaluated the merits and risks of such investment.  Such Purchaser is able to bear the economic risk of an investment in this Note and the Conversion Shares and, at the present time, is able to afford a complete loss of such investment.
 
Section 6.                      Certain Adjustments.

 
a)
Adjustment Triggers.

i.           Stock Dividends and Stock Splits. If the Company, at any time after the Original Issue Date while the 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 to all stockholders of the Company (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company pursuant to this Note, including as interest thereon), (B) subdivide outstanding shares of Common Stock into a larger number of shares, or (C) combine (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding before such event and of which the denominator shall be the number of shares of Common Stock outstanding after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

ii.           Voluntary Adjustment By Company. The Company may at any time reduce the then current Conversion Price to any amount and for any period of time deemed appropriate and approved by the Board in accordance with Delaware law, provided that the same voluntary adjustment shall be made to the then current Conversion Price of all outstanding Notes (as defined in the Security Agreement).

b)            Calculations. All calculations under this Section 6 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. The number of shares of Common Stock outstanding at any given time shall not includes shares of Common Stock owned or held by or for the account of the Company, and the description of any such shares of Common Stock shall be considered on issue or sale of Common Stock. For purposes of this Section 6, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

c)            Notice to Holder.

i.           Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any of this Section 6, the Company shall promptly mail to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.


 
EXHIBIT 4.2, 5

 

ii.           Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution) on the Common Stock; (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company; then, in each case, the Company shall cause to mailed to the Holder at its last address as it shall appear upon the stock books of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided, that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder shall be entitled to convert this Note during the 20-day period commencing the date of such notice to the effective date of the event triggering such notice.

d)           Limitation on Beneficial Ownership.

(i)           Except as provided otherwise in this Section 6(d)(i), the number of Conversion Shares that may be acquired by the Holder shall be limited to the extent necessary to insure that, after giving effect to such conversion (or deemed conversion for voting purposes), the number of shares of Common Stock then beneficially owned by the Holder and its affiliates and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act (including shares held by any “group” of which the Holder is a member, but, for avoidance of doubt, excluding shares of Common Stock issuable upon conversion or exercise of securities or rights to acquire securities that have limitations on the right to convert, exercise or purchase similar to the limitation set forth herein) does not exceed 4.99% (the “Maximum Percentage”) of the total number of shares of Common Stock of the Company issued and outstanding immediately after giving effect to such conversion (or deemed conversion for voting purposes) (the “Beneficial Ownership Cap”). Upon delivery of a written notice to the Company, the Holder may from time to time increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after such notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and its Affiliates and not to any other holder of contemporaneously issued Notes that is not an Affiliate. For purposes hereof, “group” has the meaning set forth in Section 13(d) of the Exchange Act and applicable regulations of the Securities and Exchange Commission, and the percentage held by the Holder shall be determined in a manner consistent with the provisions of Section 13(d) of the Exchange Act.  As used herein, the term “Affiliate” means any person or entity that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a person or entity, as such terms are used in and construed under Rule 144 under the Securities Act.  With respect to the Holder, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as the Holder will be deemed to be an affiliate of the Holder.  In the event the Company is prohibited from issuing shares of Common Stock as a result of any restrictions or prohibitions under applicable law or the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization, the Company shall as soon as possible seek the approval of its stockholders and take such other action to authorize the issuance of the full number of shares of Common Stock issuable upon the full conversion of this Note.
 

 
EXHIBIT 4.2, 6

 

(ii)           For purposes of the foregoing, the number of shares of Common Stock beneficially owned by the Holder and its affiliates shall include the number of shares of Common Stock issuable upon conversion of this Note with respect to which the determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) conversion of the remaining, nonconverted shares under this Note beneficially owned by such Person or any of its affiliates and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any other notes or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained in this Section beneficially owned by Holder or any of its affiliates.  Except as set forth in the preceding sentence, for purposes of this Section 6(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act.  For purposes of this Section 6(d), in determining the number of outstanding shares of Common Stock, Holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company’s most recent Form 10-K, Form 10-Q, or Form 8-K, as the case may be, (2) a more recent public announcement by the Company, or (3) any other notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  For any reason at any time, upon the written request of Holder, the Company shall within one (1) Business Day following the receipt of such notice, confirm orally and in writing to any such Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including conversions under this Note (or deemed conversion, as applicable), by Holder and its affiliates since the date as of which such number of outstanding shares of Common Stock was reported.  In the event that the Company cannot issue any shares of Common Stock to a Holder solely by reason of this Section 6(d) (such shares, the “Limited Shares”), notwithstanding anything to the contrary contained herein, the Company shall hold any such Limited Shares in abeyance for such Holder until such time, if ever, that the delivery of such Limited Shares shall not cause the Holder to exceed the Beneficial Ownership Cap, at which time such Holder shall be delivered such Limited Shares to the extent as if there had been no such limitation.  The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 6(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation.
 
Section 7.                      Events of Default.

a)            Event of Default.  Wherever used herein, means any one of the following events (whatever the reason and whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

i.           any default in the payment of (A) the principal, or (B) interest on this Note or any other note of the Company held by the Holder when the same shall become due and payable (whether on the Maturity Date or by acceleration or otherwise) which default is not cured within ten (10) Business Days after written notice from the Holder

ii.           a breach of any of the covenants or agreements made by the Company herein; or


 
EXHIBIT 4.2, 7

 

iii.           (A) there is commenced against the Company or any Subsidiary thereof a case under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Company or any Subsidiary thereof which remains undismissed for a period of 60 days; or (B) the Company or any Subsidiary thereof is adjudicated by a court of competent jurisdiction insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or (C) the Company or any Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property which continues undischarged or unstayed for a period of 60 days.

b)            Remedies Upon Event of Default. If any Event of Default occurs, the full principal amount of this Note, together with interest and any other amounts owing in respect hereof, to the date of acceleration shall become, at the Holder’s election, immediately due and payable in cash. The Holder need not provide and the Company hereby waives any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such declaration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a Note holder until such time, if any, as the full payment under this Section shall have been received by it. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

Section 8.                      Miscellaneous.

a)           Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder shall be in writing and delivered personally, by facsimile to Fax No: (212) 208-6809, or sent by a nationally recognized overnight courier service, addressed to the Company at 65 Atlantic Avenue, Boston, Massachusetts 02110, attention:  Chief Executive Officer, or such other address or facsimile number as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service addressed to the Holder at the facsimile, telephone number or address of such Holder appearing on the books of the Company, or if no such facsimile telephone number or address appears, at the principal place of business of the Holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section prior to 5:30 p.m. (New York City time), (ii) the date after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section later than 5:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City time) on such date, (iii) the second Business Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

b)            Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, interest and other amounts provided for herein (if any) on, this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company.


 
EXHIBIT 4.2, 8

 

c)            Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof; and indemnity, if requested, all reasonably satisfactory to the Company.

d)            Security Interest. This Note is a direct debt obligation of the Company and, pursuant to the Security Agreement all of the Company’s obligations hereunder are secured by a security interest in all of the assets of the Company for the benefit of the Holder.  The Holder understands, acknowledges and agrees that Hudson has made a loan to the Company in a principal amount equal to the principal amount of this Note, and that the Company has granted Hudson a security interest in all of the assets of the Company and that the Hudson security interest is pari passu with that of the Holder.

e)            Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Note, and any claim, controversy or dispute arising under or related to this Note, the relationship of the parties, and/or the interpretation and enforcement of the rights and duties of the parties hereunder shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state or federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding 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 Note 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 manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

f)            Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note. Any waiver must be in writing.


 
EXHIBIT 4.2, 9

 

g)            Severability. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this indenture, and due Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, binder, delay or impeded the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.

h)            Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

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

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

ATRINSIC, INC.
 


By:___/s/ Edward Gildea_________________________________
       Edward Gildea, Chief Executive Officer

Agreed to and Accepted:

Hudson Bay Master Fund Ltd.

By:____/s/Yoau Roth________________________________
Name: Yoau Roth
Title:  Authorized Signatory

[SIGNATURE PAGE TO DECEMBER 4, 2015 CONVERTIBLE NOTE]
:

 
EXHIBIT 4.2, 10

 



ANNEX A

NOTICE OF CONVERSION


The undersigned hereby elects to convert principal under the Convertible Note of Atrinsic, Inc., a Delaware corporation (the “Company”), due on ___________, 20__, into shares of common stock, par value $0.000001 per share (the “Common Stock”), of the Company according to the conditions hereof, as of the date written below. If shares are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by due Company in accordance therewith. No fee will be charged to the Holder for any conversion, except for such transfer taxes, if any.

The undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid shares of Common Stock.

Conversion calculations:
Date to Effect Conversion:

Principal Amount of Note to be Converted:

Payment of Interest in Common Stock_ yes _  no
If yes, $______ of Interest Accrued on Account of
Conversion at Issue.

Number of shares of Common Stock to be issued:


Signature:

Name:

Address:


 
EXHIBIT 4.2, 11




 
 


EXHIBIT 10.1

ATRINSIC, INC.
 
65 Atlantic Avenue
Boston, Massachusetts 02110


December ___, 2015
Iroquois Capital Management LLC
205 East 42nd St- 20th Fl.
New York NY
Attn.: Joshua Silverman

Re: 3rd Amendment to First Amended and Restated Security Agreement

Dear Mr. Silverman:

Reference is made to the incremental $25,000.00 loan from Iroquois Master Fund Ltd. to Atrinsic, Inc. being funded today which will be evidenced by a Convertible Promissory Note of even date herewith.  We hereby confirm that “Notes” as defined in the First Amended and Restated Security Agreement dated December 18, 2014, as amended, shall be further amended to include all of the notes described on Exhibit A hereto.

Except as modified hereby, the First Amended and Restated Security Agreement dated December 18, 2014 shall remain in full force and effect.

Sincerely,


/s/ Edward Gildea_______________________
Edward Gildea,
President

Agreed to and Accepted:

Iroquois Master Fund Ltd.

By:_/s/ Joshua Silverman___________________
Joshua Silverman, Authorized Signatory


 
 
EXHIBIT 10.1, 1

 


 
Exhibit A

Notes Covered by First Amended and Restated Security Agreement
by and among
Atrinsic, Inc., Iroquois Master Fund LTD and Hudson Bay Master Fund LTD


Note Date
 
Holder
 
Note Amount
         
2/11/2014
 
Hudson Bay Master Fund LTD
 
$87,500.00
2/11/2014
 
Iroquois Master Fund LTD
 
$87,500.00
8/15/2014
 
Hudson Bay Master Fund LTD
 
$45,000.00
8/15/2014
 
Iroquois Master Fund LTD
 
$45,000.00
12/18/2014
 
Hudson Bay Master Fund LTD
 
$75,000.00
12/18/2014
 
Iroquois Master Fund LTD
 
$75,000.00
5/15/2015
 
Hudson Bay Master Fund LTD
 
$50,000.00
5/15/2015
 
Iroquois Master Fund LTD
 
$50,000.00
9/3/2015
 
Hudson Bay Master Fund LTD
 
$25,000.00
9/3/2015
 
Iroquois Master Fund LTD
 
$25,000.00
10/__/2015
 
Hudson Bay Master Fund LTD
 
$25,000.00
10/__/2015
 
Iroquois Master Fund LTD
 
$25,000.00
12/_/2015
 
Hudson Bay Master Fund
LTD
 
$25,000.00
12/_/2015
 
Iroquois Master Fund
LTD
 
$25,000.00
 
 


 
 
EXHIBIT 10.1, 2




 
 


EXHIBIT 10.2
ATRINSIC, INC.
 
65 Atlantic Avenue
Boston, Massachusetts 02110


December 9, 2015
Hudson Bay Master Fund Ltd.
777 Third Avenue, 30th Floor
New York, NY 10017
Attn.: Mr. Yoav Roth

Re: 3rd Amendment to First Amended and Restated Security Agreement

Dear Mr. Roth:

Reference is made to the incremental $25,000.00 loan from Hudson Bay Master Fund Ltd. to Atrinsic, Inc. being funded today which will be evidenced by a Convertible Promissory Note of even date herewith.  We hereby confirm that “Notes” as defined in the First Amended and Restated Security Agreement dated December 18, 2014, as amended, shall be further amended to include all of the notes described on Exhibit A hereto.

Except as modified hereby, the First Amended and Restated Security Agreement dated December 18, 2014 shall remain in full force and effect.

Sincerely,


/s/ Edward Gildea_______________________
Edward Gildea,
President

Agreed to and Accepted:

Hudson Bay Master Fund Ltd.

By:/s/ Yoau Roth____________________
Yoau Roth, Authorized Signatory


 
 
EXHIBIT 10.2, 1

 


 
Exhibit A

Notes Covered by First Amended and Restated Security Agreement
by and among
Atrinsic, Inc., Iroquois Master Fund LTD and Hudson Bay Master Fund LTD


Note Date
 
Holder
 
Note Amount
         
2/11/2014
 
Hudson Bay Master Fund LTD
 
$87,500.00
2/11/2014
 
Iroquois Master Fund LTD
 
$87,500.00
8/15/2014
 
Hudson Bay Master Fund LTD
 
$45,000.00
8/15/2014
 
Iroquois Master Fund LTD
 
$45,000.00
12/18/2014
 
Hudson Bay Master Fund LTD
 
$75,000.00
12/18/2014
 
Iroquois Master Fund LTD
 
$75,000.00
5/15/2015
 
Hudson Bay Master Fund LTD
 
$50,000.00
5/15/2015
 
Iroquois Master Fund LTD
 
$50,000.00
9/3/2015
 
Hudson Bay Master Fund LTD
 
$25,000.00
9/3/2015
 
Iroquois Master Fund LTD
 
$25,000.00
10/__/2015
 
Hudson Bay Master Fund LTD
 
$25,000.00
10/__/2015
 
Iroquois Master Fund LTD
 
$25,000.00
12/_/2015
 
Hudson Bay Master Fund
LTD
 
$25,000.00
12/_/2015
 
Iroquois Master Fund
LTD
 
 
$25,000.00
 
 


 
 
EXHIBIT 10.2, 2