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): February 10, 2016
NOTIS GLOBAL, INC.
(Exact name of registrant as specified in its charter)
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Nevada |
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000-54928 |
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45-3992444 |
(State or other jurisdiction
of incorporation) |
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(Commission
File Number) |
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(I.R.S. Employer
Identification Number) |
600 Wilshire Blvd. Ste. 1500
Los Angeles, CA 90017
(Address of principal executive offices) (zip code)
(800)-762-1452
(Registrants telephone number, including area code)
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 (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement.
Entry into Note Purchase Agreement
On February 10,
2016, Notis Global, Inc. (the Company) entered into a Note Purchase Agreement (the Purchase Agreement) with an accredited investor (the Investor), pursuant to which the Company agreed to sell, and the Investor
agreed to purchase, a promissory note (the Note) in the aggregate principal amount of $275,000. The closing will occur on February 11, 2016.
The Investor will deduct a commitment fee in the amount of $25,000 at the closing. The Note bears interest at the rate of 10% per year and matures on October
31, 2016. The Company may prepay all or any part of the outstanding balance of the Note at any time without penalty. In the event that the Company or any of its subsidiaries becomes subject to bankruptcy, insolvency, liquidation, or similar
proceedings or takes certain related corporate actions, all outstanding principal and accrued interest under the Note will immediately and automatically become due and payable. In addition, the Note identifies certain other events of default, the
occurrence of which would entitle the Investor to declare the outstanding principal and accrued interest immediately due and payable or to convert the Note, in whole or in part, into shares of the Companys common stock at a conversion price
that is the lower of (a) $0.75, or (b) a 51% discount to the lowest daily volume weighted average price of the Companys common stock during the 20 trading days prior to the conversion date.
In connection with the foregoing, the Company relied on the exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as
amended, for transactions not involving a public offering and Rule 506 of Regulation D promulgated thereunder. The Investor represented to the Company that it was an accredited investor as such term is defined under Regulation D and that
the offer and sale of the Note did not involve any form of general solicitation or general advertising.
The foregoing description of the Purchase
Agreement and the Note do not purport to be complete and are qualified in their entirety by reference to the full text of the documents, which are filed as exhibits to this Current Report on Form 8-K and are incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information provided under Item 1.01 of this report is incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d)
Exhibits
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Exhibit Number |
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Description |
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10.1 |
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Note Purchase Agreement, dated February 10, 2016, between the Company and the Investor |
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10.2 |
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Form of Promissory Note |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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NOTIS GLOBAL, INC. |
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Dated: February 11, 2016 |
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By: |
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/s/ C. Douglas Mitchell |
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Name: |
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C. Douglas Mitchell |
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Title: |
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Chief Financial Officer |
EXHIBIT INDEX
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Exhibit No. |
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Description |
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10.1 |
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Note Purchase Agreement, dated February 10, 2016, between the Company and the Investor |
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10.2 |
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Form of Promissory Note |
Exhibit 10.1
NOTE PURCHASE AGREEMENT
THIS NOTE PURCHASE AGREEMENT (this Agreement) is dated as of February 10, 2016 (the Agreement
Date), by and between NOTIS GLOBAL, INC. (P/K/A MEDBOX, INC.), a corporation organized and existing under the laws of the State of Nevada (the Company), and YA GLOBAL MASTER SPV, LTD., a Cayman Islands
exempt limited partnership (the Investor).
WITNESSETH
WHEREAS, the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to
the Investor, and the Investor shall purchase from the Company, a promissory note, substantially in the form attached hereto as Exhibit A (the Note), in an aggregate principal amount of up to $275,000;
NOW, THEREFORE, in consideration of the mutual covenants and other agreements contained in this Agreement the Company and the Investor
hereby agree as follows:
1. PURCHASE AND SALE OF NOTE;
(a) Purchase of Note. The Investor shall purchase, and the Company shall sell, the Note in the aggregate principal amount of $275,000,
which shall be purchased for 100% of the face amount of the Note. The purchase and sale of the Note will occur within 2 business days of the date hereof (the Closing and the date of the Closing shall be referred to as the
Closing Date), subject to the satisfaction of all the conditions precedent set forth below.
(b) Form of
Payment. Subject to the satisfaction of the terms and conditions of this Agreement, on the Closing Date, (i) the Investor shall deliver to the Company the principal amount of the Note, and (ii) the Company shall deliver to the Investor, the Note
duly executed on behalf of the Company in the principal amount so purchased. The parties agree that that at the Closing the Investor shall deduct a commitment fee in the amount of $25,000 from the proceeds of the Note (to be payable to YA Global II
SPV LLC as designee of the Investor) and any other deductions of payments to be made on behalf of the Company as agreed upon between the parties and set out on a signed closing statement (the Closing Statement).
(c) Conditions Precedent to the Closing. The obligation of the Investor hereunder to purchase the Note at the Closing is subject to
the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Investors sole benefit and may be waived by the Investor at any time in its sole discretion:
(i) There shall not have been any condition, circumstance, or situation that has resulted in or would reasonably be expected to result in a
Material Adverse Effect, where Material Adverse Effect shall mean any condition, circumstance, or situation that may result in, or reasonably be expected to result in (1) a material adverse effect on the legality, validity or
enforceability of this Agreement or the transactions contemplated herein, (2) a material adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Company, taken as a whole, or (3) a material adverse
effect on the Companys ability to perform in any material respect on a timely basis its obligations under this Agreement, the Note, all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with
the transactions contemplated hereunder (collectively, the Transaction Documents).
(ii) The Companys common stock (Common Stock) shall be authorized for
quotation or trading on the OTCQB of the OTC Markets Group (the Principal Market) and trading in the Common Stock shall not have been suspended for any reason;
(iii) The Company is not in material default nor aware of any potential material default with any of its lenders (including any holders of
its convertible debentures), except as has been disclosed in the Companys filings with the United States Securities and Exchange Commission (the SEC);
(iv) The Company has received all necessary authorizations required to issue and sell the Note to the Investor;
(v) The parties have signed a Closing Statement with respect to the Closing in an agreed upon form; and
(vi) The Company shall have obtained the agreement of Redwood Management LLC, RDW Capital LLC, Redwood Fund II, LLC and Redwood Fund III,
Ltd. (collectively the Redwood Parties) to transfer 20,000,000 shares of common stock which were reserved for the Redwood Parties to the Investor or Hudson Street, LLC, or an affiliate of either such entities (the YA
Parties), and its transfer agent shall have executed its acknowledgement and agreement to follow such instructions.
2.
INVESTORS REPRESENTATIONS AND WARRANTIES.
Investor hereby represents and warrants to the Company that the following are true and correct as
of the date hereof, and as of the Closing Date:
(a) Organization and Authorization. The Investor is duly organized, validly
existing and in good standing under the laws of the Cayman Islands and has all requisite power and authority to purchase and hold the Note. The decision to invest and the execution and delivery of this Agreement by such Investor, the
performance by such Investor of its obligations hereunder and the consummation by such Investor of the transactions contemplated hereby have been duly authorized and requires no other proceedings on the part of the Investor. The undersigned has
the right, power and authority to execute and deliver this Agreement and all other instruments on behalf of the Investor. This Agreement has been duly executed and delivered by the Investor and, assuming the execution and delivery hereof and
acceptance thereof by the Company, will constitute the legal, valid and binding obligations of the Investor, enforceable against the Investor in accordance with its terms.
(b) Evaluation of Risks. The Investor has such knowledge and experience in financial, tax and business matters as to be capable
of evaluating the merits and risks of, and bearing the economic risks entailed by, an investment in the Company and of protecting its interests in connection with this transaction. It recognizes that its investment in the Company involves a
high degree of risk.
(c) Investment Purpose. The Note is purchased by the Investor for its own account, and for investment
purposes. The Investor agrees not to assign or in any way
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transfer the Investors rights to the Note or any interest therein and acknowledges that the Company will not recognize any purported assignment or transfer of the Note except in accordance
with applicable Federal and state securities laws. No other person has or will have a direct or indirect beneficial interest in the Note. The Investor agrees not to sell, hypothecate or otherwise transfer the Note unless the Note is registered under
Federal and applicable state securities laws or unless, in the opinion of counsel satisfactory to the Company, an exemption from such laws is available.
(d) Accredited Investor. The Investor is an Accredited Investor as that term is defined in Rule 501(a)(3) of
Regulation D of the Securities Act of 1933 (the Securities Act).
(e) Information. The Investor and its
advisors (and its counsel), if any, have been furnished with all materials relating to the business, finances and operations of the Company and information it deemed material to making an informed investment decision. The Investor and its advisors,
if any, have been afforded the opportunity to ask questions of the Company and its management. Neither such inquiries nor any other due diligence investigations conducted by such Investor or its advisors, if any, or its representatives shall modify,
amend or affect the Investors right to rely on the Companys representations and warranties contained in this Agreement. The Investor understands that its investment involves a high degree of risk. The Investor has sought such accounting,
legal and tax advice, as it has considered necessary to make an informed investment decision with respect to this transaction.
(f) No
General Solicitation. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the
Securities Act) in connection with the offer or sale of the Note offered hereby.
(g) Not an Affiliate. The Investor is not an
officer, director or a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with the Company or any Affiliate of the Company (as that term is defined in
Rule 405 of the Securities Act).
3. COMPANYS REPRESENTATIONS AND WARRANTIES. Except as stated below or in the SEC Documents,
the Company hereby represents and warrants to, the Investor that the following are true and correct as of the date hereof, and as of the Closing Date:
(a) Organization and Qualification. The Company is duly incorporated, validly existing and in good standing under the laws of the
State of Nevada and has all requisite corporate power to own its properties and to carry on its business as now being conducted. Each of the Company and its subsidiaries is duly qualified as a foreign corporation to do business and is in good
standing in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect on the
Company and its subsidiaries taken as a whole. The Company has furnished or made available to the Investor true and correct copies of the Companys Articles of Incorporation and amendments as in effect on the date hereof (the Articles
of Incorporation), and the Companys By-laws, as in effect on the date hereof (the By-laws).
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(b) Authorization, Enforcement, Compliance with Other Instruments. (i) The Company
has the requisite corporate power and authority to enter into and perform this Agreement and any other Transaction Document, and to issue the Note in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement and
any other Transaction Document by the Company and the consummation by it of the transactions contemplated hereby and thereby, have been duly authorized by the Companys Board of Directors and no further consent or authorization is required by
the Company, its Board of Directors or its stockholders, (iii) this Agreement, the Note (when issued) and any related agreements have been duly executed and delivered by the Company, (iv) this Agreement, the Note (when issued), and any other
Transaction Document, constitute the valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors rights and remedies.
(c) No Conflict. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of
the transactions contemplated hereby will not (i) result in a violation of the Articles of Incorporation, any certificate of designations of any outstanding series of preferred stock of the Company or By-laws or (ii) conflict with or constitute a
default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or
any of its subsidiaries is a party, or result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and the rules and regulations of the Principal Market on which the
Common Stock is quoted) applicable to the Company or any of its subsidiaries or by which any material property or asset of the Company or any of its subsidiaries is bound or affected and which would cause a Material Adverse Effect. Except as
disclosed in the SEC Documents, neither the Company nor its subsidiaries is in violation of any term of or in default under its Articles of Incorporation or By-laws or their organizational charter or by-laws, respectively, or any material contract,
agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or order or any statute, rule or regulation applicable to the Company or its subsidiaries. The business of the Company and its subsidiaries is not being conducted in
violation of any material law, ordinance, regulation of any governmental entity. Except as specifically contemplated by this Agreement and as required under the Securities Act and any applicable state securities laws, the Company is not
required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under or contemplated by this Agreement in
accordance with the terms hereof or thereof except as such consent, authorization or order has been obtained prior to the date hereof. The Company and its subsidiaries are unaware of any fact or circumstance which might give rise to any of the
foregoing.
(d) SEC Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934 (the Exchange Act) during the two years preceding the date hereof (or such shorter period as the Company was
required by law or regulation to file such material) (all of the foregoing filed within the two years preceding
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the date hereof as amended after the date hereof and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein, being
hereinafter referred to as the SEC Documents) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Document prior to the expiration of any such extension. The Company has delivered
to the Investor or its representatives, or made available through the SECs website at http://www.sec.gov, true and complete copies of the SEC Documents. As of their respective dates, the SEC Documents complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates, the
financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial
statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the
case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of
its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). No other information provided by or on behalf of the Company to the Investor which is not included in
the SEC Documents contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstance under which they are or were made, not misleading.
(e) No Default. Except as disclosed in the SEC Documents, the Company is not in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any indenture, debenture, mortgage, deed of trust or other material instrument or agreement to which it is a party or by which it or its property is bound and neither the execution,
nor the delivery by the Company, nor the performance by the Company of its obligations under this Agreement or any of the exhibits or attachments hereto will conflict with or result in the breach or violation of any of the terms or provisions of, or
constitute a default or result in the creation or imposition of any lien or charge on any assets or properties of the Company under its Articles of Incorporation, By-Laws, any material indenture, mortgage, deed of trust or other material agreement
applicable to the Company or instrument to which the Company is a party or by which it is bound, or any statute, or any decree, judgment, order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or
its properties, in each case which default, lien or charge is likely to cause a Material Adverse Effect.
(f) Internal Accounting
Controls. The Company and each of its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with managements general or specific
authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset
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accountability, (iii) access to assets is permitted only in accordance with managements general or specific authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(g) Absence of
Litigation. Except as set forth in the SEC Documents, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending against or affecting the
Company, the Common Stock or any of the Companys subsidiaries, wherein an unfavorable decision, ruling or finding would have a Material Adverse Effect.
(h) Subsidiaries. Except as disclosed in the SEC Documents, the Company does not presently own or control, directly or
indirectly, any interest in any other corporation, partnership, association or other material business entity.
(i) Tax
Status. Except as disclosed in the SEC Documents, the Company and each of its subsidiaries has made or filed all federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is
subject and (unless and only to the extent that the Company and each of its subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) has paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and has set aside on its books provision reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim.
(j) Certain Transactions. Except as set forth in the SEC Documents none of the
officers, directors, or employees of the Company is presently a party to any transaction with the Company (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust
or other entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.
(k) Foreign Corrupt Practices. Neither the Company nor any subsidiary, nor to the knowledge of the Company or any subsidiary, any
agent or other person acting on behalf of the Company or any subsidiary, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity,
(ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any
subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended. Neither the
Company nor any subsidiary nor, to the Companys knowledge, any director, officer, agent, employee or affiliate of the Company or any subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of
the U.S. Treasury Department.
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(l) Except with respect to the material terms and conditions of the transactions contemplated by
this Agreement, all of which shall be publicly disclosed by the Company as soon as possible after the date hereof, the Company covenants and agrees that neither it, nor any other person acting on its behalf, will provide the Investor or its agents
or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto the Investor shall have entered into a written agreement with the Company regarding the confidentiality and use of such
information. The Company understands and confirms that the Investor shall be relying on the foregoing covenant in effecting transactions in securities of the Company.
4. INDEMNIFICATION. The Company will indemnify and hold the Investor and its directors, officers, shareholders, members, partners,
employees and agents (and any other persons with a functionally equivalent role of a person holding such titles notwithstanding a lack of such title or any other title), each person who controls the Investor, and the directors, officers,
shareholders, agents, members, partners or employees (and any other persons with a functionally equivalent role of a person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a
Purchaser Party) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys fees
and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement, the Note, or any
other Transaction Document or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect to
any of the transactions contemplated by herein (unless such action is based upon a breach of such Purchaser Partys representations, warranties or covenants under this Agreement or any agreements or understandings such Purchaser Party may have
with any such stockholder or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action shall be
brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with
counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and
to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall be
responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Companys
prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Partys breach of any of the representations,
warranties, covenants
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or agreements made by such Purchaser Party in this Agreement or any other Transaction Document. The indemnification required by this Section 4 shall be made by periodic payments of the
amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party
against the Company or others and any liabilities the Company may be subject to pursuant to law.
5. GOVERNING LAW. This Agreement
shall be governed by and interpreted in accordance with the laws of the State of New York without regard to the principles of conflict of laws. Each of the parties consents to the jurisdiction of the state courts of the State of New York and
the U.S. District Court for the District of New York sitting in Manhattan, for the adjudication of any civil action asserted pursuant to this paragraph.
6. NOTICES. Any notices, consents, waivers or other communications required or permitted to be given under the terms hereof must
be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by electronic mail (provided that the electronic mail transmission is not returned in error or the sender is not
otherwise notified of any error in transmission); or (iii) one (1) Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile
numbers for such communications shall be:
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If to the Company, to: |
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Notis Global, Inc. |
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600 Wilshire Blvd., Ste. 1500 Los Angeles, CA
90017 |
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Attention: C. Douglas Mitchell |
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Telephone: 323-848-7278 |
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E-Mail: dmitchell@notisglobal.com |
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With a copy to: |
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Blase P. Dillingham, Esq. Scott A. Schwartz,
Esq. Manatt, Phelps & Phillips, LLP 11355 West Olympic
Boulevard Los Angeles, CA 90064 Telephone: (310)
312-4000 |
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E-Mail: bdillingham@manatt.com |
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sschwartz@manatt.com |
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If to the Holder: |
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YA Global Master SPV, Ltd. |
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1012 Springfield Avenue |
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Mountainside, NJ 07092 |
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Attention: Mark Angelo |
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Telephone: (201) 985-8300 |
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E-Mail: legal@yorkvilleadvisors.com |
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With a copy to: |
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David Gonzalez, Esq. |
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1012 Springfield Avenue |
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Mountainside, NJ 07092 |
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Telephone: (201) 985-8300 |
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Email: dgonzalez@yorkvilleadvisors.com |
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or at such other address and/or electronic mail address and/or to the attention of such other person as the
recipient party has specified by written notice given to each other party three Business Days prior to the effectiveness of such change. Written confirmation of receipt (i) given by the recipient of such notice, consent, waiver or other
communication, or (ii) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence of personal service, or receipt from a nationally recognized overnight delivery service in accordance with clause (i), or (iii)
above, respectively.
7. MISCELLANEOUS.
(a) Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and
the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.
(b)
This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the
Purchaser (other than by merger). The Purchaser may assign any or all of its rights under this Agreement to any person to whom such Purchaser assigns or transfers the Note, or a portion thereof, provided that such transferee agrees in writing to be
bound, with respect to the Note, by the provisions of the this Agreement that apply to the Investor.
(c) Usury. To the extent it
may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time
hereafter in force, in connection with any claim, action or proceeding that may be brought by the Investor in order to enforce any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any
Transaction Document, it is expressly agreed and provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the
Maximum Rate), and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest that the Company may be obligated to
pay under the Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental
action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from the effective date thereof forward, unless such application is precluded by
applicable law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to the Investor with respect to indebtedness evidenced by the Transaction Documents, such excess shall be applied by the Investor to
the unpaid principal balance of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at the Investors election.
9
(d) Entire Agreement; Amendments. This Agreement supersedes all other prior oral or
written agreements between the Investor and the Company with respect to the matters discussed herein, and this Agreement, and the instruments referenced herein, contain the entire understanding of the parties with respect to the matters covered
herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Investor makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be
waived or amended other than by an instrument in writing signed by the party to be charged with enforcement.
[signature page
follows]
10
IN WITNESS WHEREOF, each of the Investor and the Company have caused their
respective signature page to this Note Purchase Agreement to be duly executed as of the date first written above.
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COMPANY: |
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NOTIS GLOBAL, INC. |
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By: |
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/s/ C. Douglas Mitchell |
Name: |
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/s/ C. Douglas Mitchell |
Title: |
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Chief Financial Officer |
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INVESTOR: |
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YA GLOBAL MASTER SPV LTD. |
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By: |
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Yorkville Advisors Global LP |
Its: |
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Investment Manager |
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By: |
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Yorkville Advisors Global LLC |
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Its: |
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General Partner |
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By: |
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/s/ Ed Schinik |
Name: |
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/s/ Ed Schinik |
Title: |
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Chief Financial Officer |
11
Exhibit A
Form of Note
Exhibit 10.2
THIS NOTE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THIS NOTE HAS BEEN SOLD IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
NOTIS GLOBAL, INC.
PROMISSORY NOTE
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No. NTIS-1 |
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Original Principal Amount: $275,000 |
FOR VALUE RECEIVED, Notis Global, Inc., (p/k/a Medbox, Inc.) a corporation organized and existing under
the laws of the State of Nevada (the Company), hereby promises to pay to the order of YA Global Master SPV, Ltd. or its registered assigns (the Holder) (i) the outstanding portion of the amount set out
above as the Original Principal Amount (as reduced pursuant to the terms hereof pursuant to scheduled payment, redemption, conversion, or otherwise, the Principal) when due, whether upon the Maturity Date (as defined below),
acceleration, redemption or otherwise (in each case in accordance with the terms hereof) and (ii) to pay interest (Interest) on any outstanding Principal at the applicable Interest Rate (as defined below) from the date defined in
Section 17 hereof as the Issuance Date (the Issuance Date) until the same is paid, whether upon the Maturity Date or acceleration, redemption or otherwise (in each case in accordance with the terms hereof) pursuant to the terms of
this Promissory Note (the Note).
This Note is being issued pursuant to that certain Note Purchase Agreement dated as
of February 10, 2016 (the Note Purchase Agreement) between the Company and the Holder. Certain capitalized terms used herein but otherwise not defined herein are defined in Section 17 or in the Note Purchase Agreement.
(1) GENERAL TERMS
(a)
Maturity Date. All amounts owed under this Note shall be due and payable on October 31, 2016 (the Maturity Date). On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all then outstanding
Principal and accrued and unpaid Interest.
(b) Interest. Interest shall accrue on the outstanding Principal balance hereof at a
rate equal to 10% per annum (Interest Rate). Interest shall be calculated on the basis of a 365-day year and the actual number of days elapsed, to the extent permitted by applicable law.
(2) NO PREPAYMENT PENALTY. The Company may prepay all or any part of the balance
outstanding hereunder at any time without penalty.
(3) REPRESENTATIONS AND WARRANTIES. The Company hereby represents and warrants
to the Investor that the following are true and correct as of the date hereof:
(a) (i) The Company has the requisite corporate power and
authority to enter into and perform its obligations under this Note and any related agreements, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Note and any related agreements by the Company and the
consummation by it of the transactions contemplated hereby and thereby, have been duly authorized by the Companys Board of Directors and no further consent or authorization is required by the Company, its Board of Directors or its
stockholders, (iii) this Note and any related agreements have been duly executed and delivered by the Company, (iv) this Note and any related agreements, constitute the valid and binding obligations of the Company enforceable against the
Company in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally,
the enforcement of creditors rights and remedies.
(b) The execution, delivery and performance by the Company of its obligations
under this Note will not (i) result in a violation of the Companys Articles of Incorporation or By-laws or any certificate of designation of any outstanding series of preferred stock of the Company or (ii) conflict with or constitute a default
(or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its
subsidiaries is a party, or result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and the rules and regulations of the Principal Market on which the Common Stock is
quoted) applicable to the Company or any of its subsidiaries or by which any material property or asset of the Company is bound or affected and which would cause a Material Adverse Effect.
(4) EVENTS OF DEFAULT.
(a) An 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) shall have occurred and be continuing:
(i) the Companys failure to pay to the Holder any amount of Principal, Interest or other amounts when and as due and payable under this
Note;
(ii) the Company or any subsidiary of the Company shall commence, or there shall be commenced against the Company or any
subsidiary of the Company under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any
2
successor thereto, or the Company or any subsidiary of the Company commences, or there shall be commenced against the Company or any subsidiary of the Company, 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 of the Company, in each case
which remains un-dismissed for a period of 61 days; or the Company or any subsidiary of the Company is adjudicated insolvent or bankrupt pursuant to a final, non-appealable order; or any order of relief or other order approving any such case or
proceeding is entered; or the Company or any subsidiary of the Company suffers any appointment of any custodian, private or court appointed receiver or the like for it or any substantial part of its property which continues un-discharged or
un-stayed for a period of 61 days; or the Company or any subsidiary of the Company makes a general assignment for the benefit of creditors; or the Company or any subsidiary of the Company shall admit in writing that it is unable to pay its debts
generally as they become due; or the Company or any subsidiary of the Company shall call a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or any corporate or other action is taken by the
Company or any subsidiary of the Company for the purpose of effecting any of the foregoing;
(iii) the Company is a party to any
agreement memorializing (1) the consummation of any transaction or event (whether by means of a share exchange or tender offer applicable to the Common Stock, a liquidation, consolidation, recapitalization, reclassification, combination or merger of
the Company or a sale, lease or other transfer of all or substantially all of the consolidated assets of the Company) or a series of related transactions or events pursuant to which all of the outstanding shares of Common Stock are exchanged for,
converted into or constitute solely the right to receive, cash, securities or other property, (2) a consolidation or merger in which the Company is not the surviving corporation, or (3) a sale, assignment, transfer, conveyance or other disposal of
all or substantially all of the properties or assets of the Company to another person or entity (each of (1), (2) and (3) a Change in Control) unless in connection with such Change in Control, all Principal and accrued and unpaid
Interest due under this Note will be paid in full or the Holder consents to such Change in Control;
(iv) an event of default by the
Company under any other material obligation, instrument, debenture, note or agreement for borrowed money occurring after the Issuance Date of this Note and continuing beyond any applicable notice and/or grace period (including any event which
constitutes an event of default by the Company under any outstanding convertible debentures held by the Holder, Hudson Street, LLC, Redwood Management, LLC, Redwood Fund II LLC, and Redwood Fund III Ltd. occurring and continuing beyond any
applicable notice and/or grace period).
(5) REMEDIES UPON DEFAULT.
(a) During the time that any portion of this Note is outstanding, if (i) any Event of Default has occurred, the Holder, by notice in writing
to the Company, may at any time and from time to time declare the full unpaid Principal of this Note or any portion thereof, together with Interest accrued thereon to be due and payable immediately (the Accelerated Amount) or (ii)
any Event of Default specified in Section 4(a)(ii) has occurred, the unpaid Principal of the Note and the Interest accrued thereon shall be immediately and automatically due and payable without necessity of further action.
3
(b) Default Conversion. At any time after the occurrence of an Event of Default and while
such Event of Default remains uncured, this Note shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder (subject to the conversion limitations set forth in Section 5(c) hereof). The Holder shall
effect conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (each, a Notice of Conversion), specifying therein (i) that an Event of Default has occurred and remains
uncured, (ii) the principal amount of this Note to be converted, (iii) the accrued and unpaid interest outstanding under this Note to be converted, and (iv) the date on which such conversion shall be effected (such date, the 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 deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any
medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. To effect conversions hereunder, the Holder shall not be required to physically surrender this Note to the Company unless the entire
principal amount of this Note, plus all accrued and unpaid interest thereon, has been repaid. Conversions hereunder shall have the effect of lowering the outstanding principal amount and accrued and unpaid interest of this Note in an amount equal to
the applicable conversion. The Holder and the Company shall maintain a Conversion Schedule showing the amounts converted and the date of such conversions. The Company may deliver an objection to any Notice of Conversion within one (1) Business Day
of delivery of such Notice of Conversion. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.
(c) Conversion Price. The conversion price in effect on any Conversion Date shall be equal to the lower of (a) $0.75, subject to
adjustment herein (the Fixed Conversion Price), or (b) 51% of the lowest VWAP for the 20 consecutive Trading Days ending on the Trading Day that is immediately prior to the applicable Conversion Date (the resulting pricing being
referred to herein as the Conversion Price). All such determinations will be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately decreases or
increases the Common Stock during such measuring period. Nothing herein shall limit a Holders right to pursue actual damages or declare an Event of Default pursuant to Section 5 hereof and the Holder shall have the right to pursue all remedies
available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce and rights, remedies, or
damages pursuant to any other Section hereof or under applicable law.
(d) Mechanics of Conversion.
(i) Conversion Shares Issuable Upon Conversion of Principal Amount and Interest. The number of shares of Common Stock issuable upon
conversions of this Note (Conversion Shares) shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted and any accrued and unpaid interest to be converted by (y) the
Conversion Price.
4
(ii) Delivery of Certificate Upon Conversion. Not later than two (2) Trading Days after
each Conversion Date (the Share Delivery Date), the Company shall deliver, or cause to be delivered, to the Holder a certificate or certificates representing the Conversion Shares which, on or after the date on which such
Conversion Shares are eligible to be sold under Rule 144 without the need for current public information and the Company has received an opinion of counsel to such effect reasonably acceptable to the Company (which opinion the Company will be
responsible for obtaining) shall be free of restrictive legends and trading restrictions representing the number of Conversion Shares being acquired upon the conversion of this Note. All certificate or certificates required to be delivered by the
Company under this Section 5(d) shall be delivered electronically through the Depository Trust Company or another established clearing corporation performing similar functions. If the Conversion Date is prior to the date on which such Conversion
Shares are eligible to be sold under Rule 144 without the need for current public information the Conversion Shares shall bear a restrictive legend in the following form, as appropriate:
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
Notwithstanding the foregoing, commencing on such date that the Conversion Shares are eligible for sale under Rule 144 subject to current public information
requirements, the Company, upon request of the Holder, shall obtain a legal opinion to allow for such sales under Rule 144.
(iii)
Failure to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates are not delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect
by written notice to the Company at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in which event the Company shall promptly return to the Holder any original Note delivered to the Company and the
Holder shall promptly return to the Company the Common Stock certificates issued to such Holder pursuant to the rescinded Conversion Notice.
5
(e) Holders Conversion Limitations. The Company shall not effect any
conversion of principal and/or interest of this Note, and a Holder shall not have the right to convert any principal and/or interest of this Note, to the extent that after giving effect to the conversion set forth on the applicable Notice of
Conversion, the Holder (together with the Holders Affiliates, and any Persons acting as a group together with the Holder or any of the Holders Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation (as
defined below). For purposes of the foregoing sentence, 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 such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (i) conversion of the remaining, unconverted principal amount or accrued and unpaid interest amount of this Note
beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation
contained herein (including, without limitation, any debentures or the warrants) beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section, beneficial ownership shall
be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To ensure compliance with this restriction, the Holder will be deemed to represent to the Company each time it delivers a Notice
of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group
status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section, in determining the number of outstanding shares of Common
Stock, the Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Companys most recent periodic or annual report filed with the Commission, as the case may be, (ii) a more
recent public announcement by the Company, or (iii) a more recent written notice by the Company or the Companys transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder,
the Company shall within two Trading Days confirm orally and in writing to the 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 this Note, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The Beneficial Ownership
Limitation shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Note held by the Holder. The Holder, upon not less
than 61 days prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section, provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the
Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Note held by the Holder and the Beneficial Ownership Limitation provisions of this Section shall continue to apply. Any such
increase or decrease will not be effective until the 61st day after such notice is delivered to the Company. The Beneficial
6
Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section to correct this paragraph (or
any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations
contained in this paragraph shall apply to a successor holder of this Note.
(6) REISSUANCE OF THIS NOTE. Upon receipt by the
Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of an indemnification undertaking by the Holder to the Company in customary form
and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute and deliver to the Holder a new Note representing the outstanding Principal which Note (i) shall be of like tenor with this Note, (ii) shall
represent, as indicated on the face of such new Note, the Principal remaining outstanding (iii) shall have an issuance date, as indicated on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same
rights and conditions as this Note, and (v) shall represent accrued and unpaid Interest from the Issuance Date.
(7) NOTICES. Any
notices, consents, waivers or other communications required or permitted to be given under the terms hereof must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent
by electronic mail (provided that the electronic mail transmission is not returned in error or the sender is not otherwise notified of any error in transmission); or (iii) one (1) Business Day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:
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If to the Company, to: |
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Notis Global, Inc. |
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600 Wilshire Blvd., Ste. 1500 Los
Angeles, CA 90017 |
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Attention: Doug Mitchell |
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Telephone: 323-848-7278 |
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E-Mail: dmitchell@notisglobal.com |
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With a copy to: |
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Blase P. Dillingham, Esq. Scott A.
Schwartz, Esq. Manatt, Phelps & Phillips, LLP 11355 West
Olympic Boulevard Los Angeles, CA 90064 Telephone: (310)
312-4000 E-mail: bdillingham@manatt.com
sschwartz@manatt.com |
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If to the Holder: |
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YA Global Master SPV, Ltd. |
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1012 Springfield Avenue |
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Mountainside, NJ 07092 |
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Attention: |
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Mark Angelo |
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Telephone: E-Mail: |
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(201) 985-8300
legal@yorkvilleadvisors.com |
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With a copy to: |
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David Gonzalez, Esq. |
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1012 Springfield Avenue |
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Mountainside, NJ 07092 |
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Telephone: |
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(201) 985-8300 |
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Email: dgonzalez@yorkvilleadvisors.com |
or at such other address and/or electronic mail address and/or to the attention of such other person as the recipient party
has specified by written notice given to each other party three Business Days prior to the effectiveness of such change. Written confirmation of receipt (i) given by the recipient of such notice, consent, waiver or other communication, or (ii)
provided by a nationally recognized overnight delivery service, shall be rebuttable evidence of personal service or receipt from a nationally recognized overnight delivery service in accordance with clause (i), or (iii) above, respectively.
(8) No provision of this Note shall alter or impair the obligations of the Company, which are absolute and unconditional, to pay the Principal
of or Interest (if any) on, this Note at the time, place, and rate, and in the currency, herein prescribed. This Note is a direct obligation of the Company. As long as this Note is outstanding, the Company shall not and shall cause its subsidiaries
not to, without the consent of the Holder, (i) amend its articles of incorporation, bylaws or other charter documents so as to adversely affect any rights of the Holder under this Note; or (ii) enter into any agreement with respect to any of the
foregoing.
(9) This Note shall not entitle the Holder to any of the rights of a stockholder of the Company, including without limitation,
the right to vote, to receive dividends and other distributions, or to receive any notice of, or to attend, meetings of stockholders or any other proceedings of the Company.
(10) This Note shall be governed by and interpreted in accordance with the laws of the State of New York, without regard to the principles of
conflict of laws. Each of the parties consents to the jurisdiction of the state courts of the State of New York and the U.S. District Court for the District of New York sitting in Manhattan, in connection with any dispute arising under this
Note and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non conveniens to the bringing of any such proceeding in such jurisdictions.
(11) If an Event of Default has occurred, then the Company shall reimburse the Holder promptly for all out-of-pocket fees, costs and expenses,
including, without limitation, reasonable attorneys fees and expenses incurred by the Holder in any action in connection with this Note, including, without limitation, those incurred: (i) during any workout, attempted workout, and/or in
connection with the rendering of legal advice as to the Holders rights, remedies and obligations, (ii) collecting any sums which become due to the Holder in accordance with the terms of this Note, (iii) defending or prosecuting any proceeding
or any counterclaim to any proceeding or appeal; or (iv) the protection, preservation or enforcement of any rights or remedies of the Holder.
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(12) Any waiver by 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 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.
(13) 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 shall violate 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 Note, and the 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, hinder, delay or impede 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 had
been enacted.
(14) 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.
(15) Assignment of this Note by the Company shall be prohibited without the prior written
consent of the Holder. Holder shall be entitled to assign this Note in whole or in part to any person or entity without the consent of the Company.
(16) THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
PARTIES ACCEPTANCE OF THE NOTE PURCHASE AGREEMENT AND THIS NOTE.
(17) CERTAIN DEFINITIONS For purposes of this Note,
the following terms shall have the following meanings:
(a) 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 United States are authorized or required by law or other government action to close.
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(b) Issuance Date means the Closing Date (as that term is defined in the Note
Purchase Agreement).
(c) Trading Day means a day on which the principal Trading Market is open for trading.
(d) Trading Market means any of the following markets or exchanges on which the Common Stock is listed or quoted for
trading on the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, OTCBB, or the OTC Markets (or any successors to any of the foregoing).
(e) VWAP means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common
Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by
Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is not then listed or quoted for trading on a Trading Market, the fair market value of a share of Common Stock as
determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
[Signature Page Follows]
10
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly
authorized officer as of February 10, 2016.
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COMPANY: |
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NOTIS GLOBAL, INC. |
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By: |
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Name: |
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C. Douglas Mitchell |
Its: |
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Chief Financial Officer |
ANNEX A
NOTICE OF CONVERSION
The
undersigned hereby elects to convert principal and interest under the Promissory Note issued on February 10, 2016 by Notis Global, Inc. (p/k/a Medbox, Inc.), a Nevada corporation (the Company), into shares of common stock (the
Common Stock), of the Company according to the conditions hereof, as of the date written below. If shares of Common Stock 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 the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if
any.
By the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common
Stock does not exceed the amounts specified under Section 5 of this Note, as determined in accordance with Section 13(d) of the Exchange Act.
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.
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Conversion calculations: |
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Date to Effect Conversion: |
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Principal Amount of Note to be Converted: |
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Accrued and unpaid Interest to be Converted |
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Number of shares of Common Stock to be issued: |
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Signature: |
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Name: |
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Delivery Instructions: |
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