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 29, 2015
LIBERTY STAR URANIUM & METALS CORP.
(Exact name of registrant as specified in its charter)
Nevada |
000-50071 |
90-0175540 |
(State or other jurisdiction |
(Commission |
(IRS Employer |
of incorporation) |
File Number) |
Identification No.) |
5610 E. Sutler Lane
Tucson, Arizona 85712
(Address of principal executive offices and Zip Code)
(520) 731-8786
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:
[ ] 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))
[ ] 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
On December 29, 2015 (the Issuance Date), Liberty Star
Uranium & Metals Corp. (the Company) issued a 12% Convertible Promissory
Note (the JSJ Note) to JSJ Investments, Inc. (JSJ) in the principal amount
of $50,000 (the Principal Amount). The JSJ Note bears interest at the rate of
12% per annum (the Interest) and is due September 29, 2016 (the Maturity
Date). The JSJ Note may be repaid in full, together with any accrued and unpaid
interest, plus any applicable prepayment premium at any time on or prior to the
date which occurs 180 days after the Issuance Date in accordance with the terms
and conditions of the JSJ Note (the Prepayment Date). At any time after the
Prepayment Date, including prior to, upon, or after the Maturity Date, JSJ shall
be entitled to convert all of the outstanding and unpaid Principal Amount of the
JSJ Note into fully paid and non-assessable shares of common stock of the
Company at a conversion price which is the lower of (i) a 45% discount to the
second lowest trading price during the previous ten trading days to the date of
the conversion notice or (ii) a 45% discount to the second lowest trading price
during the previous ten days before the Issuance Date.
Under the terms of the JSJ Note, an Event of Default (as defined in the JSJ Note) shall
occur upon the following, including but not limited to (i) the Companys default
in the payment of the outstanding Principal, Interest or Default Interest (as
defined in the JSJ Note) when due, whether at the Maturity Date, acceleration or
otherwise, (ii) the occurrence of a Default of Conversion (as defined in the JSJ
Note), (iii) the failure by the Company for ten (10) days after notice to comply with
any material provision of the JSJ Note, or (iv) the Companys Purposeful (as defined in the JSJ Note) breach of any covenant, representations, or warranties made by the Company in the JSJ Note.
The description above of the JSJ Note does not purport to be
complete and is qualified in its entirety by reference to the full text of the
JSJ Note, a copy of which is filed as exhibit 10.1 hereto.
Item 2.03. Creation of a Direct Financial Obligation or an
Obligation Under an Off-Balance Sheet Arrangement of a Registrant
The information provided in Item 1.01 of this Current Report on
Form 8-K regarding the JSJ Note is incorporated herein by reference.
Item 3.02. Unregistered Sales of Equity Securities
Item 1.01 is hereby incorporated by reference.
The JSJ Note was not registered under the Securities Act of 1933,
as amended (the Securities Act), but qualified for exemption under Section
4(a)(2) of the Securities Act. The JSJ Note was exempt from registration under
Section 4(a)(2) of the Securities Act because the issuance by the
Company did not involve a public offering, as defined in Section 4(a)(2) of
the Securities Act, due to the insubstantial number of persons involved in the
transaction, size of the offering, and manner of the offering and number of
securities offered. The Company did not undertake an offering in which it sold a
high number of securities to a high number of investors. In addition, the
Investor had the necessary investment intent as required by Section 4(a)(2) of
the Securities Act since they agreed to, and received, the
securities bearing a legend stating that such securities are restricted pursuant
to Rule 144 of the Securities Act. This restriction ensures that these
securities would not be immediately redistributed into the market and therefore
not be part of a public offering. Based on an analysis of the above factors,
the Company has met the requirements to qualify for exemption under Section
4(a)(2) of the Securities Act.
Item 9.01. Financials Statements and Exhibits
*Filed herewith
2
SIGNATURE
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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LIBERTY STAR URANIUM & METALS
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CORP. |
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By: |
/s/ James Briscoe |
Date: January 7, 2016 |
Name: |
James Briscoe |
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Title: |
Chief Executive Officer
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NEITHER THIS NOTE NOR THE SECURITIES THAT MAY BE ISSUED BY THE
COMPANY UPON CONVERSION HEREOF (COLLECTIVELY, THE SECURITIES) HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE 1933 ACT), OR THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THE SECURITIES NOR
ANY INTEREST OR PARTICIPATION THEREIN MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED: (I) IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE 1933 ACT, OR APPLICABLE STATE SECURITIES LAWS; OR (II) IN
THE ABSENCE OF AN OPINION OF COUNSEL, IN A FORM ACCEPTABLE TO THE ISSUER, THAT
REGISTRATION IS NOT REQUIRED UNDER THE 1933 ACT OR; (III) UNLESS SOLD,
TRANSFERRED OR ASSIGNED PURSUANT TO RULE 144 UNDER THE 1933 ACT.
12% CONVERTIBLE PROMISSORY NOTE
MATURITY DATE OF SEPTEMBER 29, 2016 *THE MATURITY DATE
$50,000 DECEMBER 29, 2015 *THE ISSUANCE DATE
FOR VALUE RECEIVED, Liberty Star Uranium & Metals Corp., a
Nevada Corporation (the Company) doing business in Tucson, AZ, hereby promises
to pay to the order of JSJ Investments Inc., an accredited investor and Texas
Corporation, or its assigns (the Holder), the principal amount of Fifty
Thousand Dollars ($50,000) (Note), on demand of the Holder at any time on or
after September 29, 2016 (the Maturity Date), and to pay interest on the
unpaid principal balance hereof at the rate of Twelve Percent (12%) per
annum (the Interest Rate) commencing on the date hereof (the Issuance
Date).
1. |
Payments of Principal and Interest. |
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a. |
Pre-Payment of Principal. The Company may pay this Note
in full, together with any and all accrued and unpaid interest, plus any
applicable pre-payment premium set forth herein and subject to the terms
of this Section 1.a, at any time on or prior to the date which occurs 180
days after the Issuance Date hereof (the Prepayment Date). In the event
the Note is not prepaid in full on or before the Prepayment Date, it shall
be deemed a Pre-Payment Default hereunder. Until the Ninetieth (90th)
day after the Issuance Date the Company may pay the principal at a cash
redemption premium of 135%, in addition to outstanding interest, without
the Holders consent; from the 91st day to the One Hundred and Twentieth
(120th) day after the Issuance Date, the Company may pay the principal at
a cash redemption premium of 140%, in addition to outstanding interest,
without the Holders consent; from the 121st day to the Prepayment Date,
the Company may pay the principal at a cash redemption premium of 145%, in
addition to outstanding interest, without the Holders consent. After the
Prepayment Date up to the Maturity Date this Note shall have a cash
redemption premium of 150% of the then outstanding principal amount of the
Note, plus accrued interest and Default Interest, if any, which may only
be paid by the Company upon Holders prior written consent. |
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b. |
Demand of Repayment. The principal and interest balance
of this Note shall be paid to the Holder hereof on demand by the Holder at
any time on or after the Maturity Date. The Default Amount (defined
herein), if applicable, shall be paid to Holder hereof on demand by the
Holder at any time such Default Amount becomes due and payable to
Holder. |
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c. |
Interest. This Note shall bear interest (Interest) at
the rate of Twelve Percent (12%) per annum from the Issuance Date until
the same is paid, or otherwise converted in accordance with Section 2
below, in full and the Holder, at the Holders sole discretion, may
include any accrued but unpaid Interest in the Conversion Amount. Interest
shall commence accruing on the Issuance Date, shall be computed on the
basis of a 365-day year and the actual number of days elapsed and shall
accrue daily. Upon an Event of Default, as defined in Section 10 below,
the Interest Rate shall increase to Fifteen Percent (15%) per annum for so
long as the Event of Default is continuing (Default Interest). |
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d. |
General Payment Provisions. This Note shall be paid in
lawful money of the United States of America by check or wire transfer to
such account as the Holder may from time to time designate by written
notice to the Company in accordance with the provisions of this Note.
Whenever any amount expressed to be due by the terms of this Note is due
on any day which is not a Business Day (as defined below), the same shall
instead be due on the next succeeding day which is a Business Day and, in
the case of any interest payment date which is not the date on which this
Note is paid in full, the extension of the due date thereof shall not be
taken into account for purposes of determining the amount of interest due
on such date. For purposes of this Note, Business Day shall mean any day
other than a Saturday, Sunday or a day on which commercial banks in the
State of Texas are authorized or required by law or executive order to
remain closed. |
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2. |
Conversion of Note. At any time after the Prepayment
Date, which is also the Rule 144 restriction date of 180 days from date of
execution of this note, including prior to, upon, or after the Maturity
Date, the Conversion Amount (see Paragraph 2(a)(i)) of this Note shall be
convertible into shares of the Companys common stock (the Common Stock)
according to the terms and conditions set forth in this Paragraph
2. |
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a. |
Certain Defined Terms. For purposes of this Note, the
following terms shall have the following meanings: |
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i. |
Conversion Amount means the sum of (a) the principal
amount of this Note to be converted with respect to which this
determination is being made, (b) Interest; and (c) Default Interest, if
any, if so included at the Holders sole discretion. |
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ii. |
Conversion Price means the lower of: (i) a 45% discount
to the second (2nd) lowest trading price during the previous
ten (10) trading days to the date of a Conversion Notice; or (ii) a 45%
discount to the second (2nd) lowest trading price during the
previous ten (10) trading days before the date that this note was
executed. By way of example if the company's common stock trades at $.0028
on nine separate occasions and at $.0029 one time during the pricing
period, then the 2nd lowest trade would be $.0029 per share. |
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iii. |
Person means an individual, a limited liability
company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or agency
thereof. |
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iv. |
Shares means the Shares of the Common Stock of the
Company into which any balance on this Note may be converted upon
submission of a Conversion Notice to the Company substantially in the
form attached hereto as Exhibit 1. |
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b. |
Holders Conversion Rights. At any time after the
Prepayment Date, including prior to, upon, or after the Maturity Date, the
Holder shall be entitled to convert all of the outstanding and unpaid
principal amount of this Note into fully paid and non-assessable shares of
Common Stock in accordance with the stated Conversion Price. The Holder
shall not be entitled to convert on a Conversion Date that amount of the
Note in connection with that number of shares of Common Stock which would
be in excess of the sum of the number of shares of Common Stock issuable
upon the conversion of the Note with respect to which the determination of
this provision is being made on a Conversion Date, which would result in
beneficial ownership by the Holder and its affiliates of more than 4.99%
of the outstanding shares of Common Stock of the Company on such
Conversion Date. For the purposes of the provision to the immediately
preceding sentence, beneficial ownership shall be determined in accordance
with Section 13(d) of the Securities Exchange Act of 1934, as amended, and
Regulation 13d-3 thereunder. Subject to the foregoing, the Holder shall
not be limited to aggregate conversions of 4.99% (Conversion Limitation
1). The Holder shall have the authority to determine whether the
restriction contained in this Section 2(b) will limit any
conversion hereunder. The Holder may waive the conversion limitation
described in this Section 2(b), in whole or in part, upon and
effective after 61 days prior written notice to the Company to increase
such percentage to up to 9.99% or any other amount as determined by Holder
in its sole discretion (Conversion Limitation 2). |
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c. |
Fractional Shares. The Company shall not issue any
fraction of a share of Common Stock upon any conversion; if such issuance
would result in the issuance of a fraction of a share of Common Stock, the
Company shall round such fraction of a share of Common Stock up to the
nearest whole share except in the event that rounding up would violate the
conversion limitation set forth in section 2(b) above. |
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d. |
Conversion Amount. The Conversion Amount shall be
converted pursuant to Rule 144(b)(1)(ii) and Rule 144(d)(1)(ii) as
promulgated by the Securities and Exchange Commission under the Securities
Act of 1933, as amended, into unrestricted shares at the Conversion Price
180 days after the date of this note. |
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e. |
Mechanics of Conversion. The conversion of this Note
shall be conducted in the following manner: |
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i. |
Holders Conversion Requirements. To convert this Note
into shares of Common Stock on any date set forth in the Conversion Notice
by the Holder (the Conversion Date), the Holder shall transmit by email,
facsimile or otherwise deliver, for receipt on or prior to 11:59 p.m.,
Eastern Time, on such date or on the next business day, a copy of a fully
executed notice of conversion in the form attached hereto as Exhibit 1 to
the Company. |
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ii. |
Companys Response. Upon receipt by the Company of a copy
of a Conversion Notice, the Company shall as soon as practicable, but in
no event later than one (1) Business Day after receipt of such Conversion
Notice, send, via email, facsimile or overnight courier, a confirmation of
receipt of such Conversion Notice to such Holder indicating that the
Company will process such Conversion Notice in accordance with the terms
herein. Within two (2) Business Days after the date the Conversion Notice
is delivered, the Company shall have issued and electronically transferred
the shares to the Broker indicated in the Conversion Notice; should the
Company be unable to transfer the shares electronically, it shall, within
two (2) Business Days after the date the Conversion Notice was delivered,
have surrendered to an overnight courier for delivery the next day to the
address as specified in the Conversion Notice, a certificate, registered
in the name of the Holder, for the number of shares of Common Stock to
which the Holder shall be entitled. |
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iii. |
Record Holder. The person or persons entitled to receive
the shares of Common Stock issuable upon a conversion of this Note shall
be treated for all purposes as the record holder or holders of such shares
of Common Stock on the Conversion Date. |
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iv. |
Timely Response by Company. Upon receipt by Company of a
Conversion Notice, Company shall respond within 2 business day to Holder
confirming the details of the Conversion, and provide within two business
days the Shares requested in the Conversion Notice. |
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v. |
Liquidated Damages for Delinquent Response. If the
Company fails to deliver for whatever reason (including any neglect or
failure by, e.g., the Company, its counsel or the transfer agent)
to Holder the Shares as requested in a Conversion Notice within five (5)
business days of the Conversion Date, the Company shall be deemed in
Default of Conversion. Beginning on the sixth 6th) business day after
the date of the Conversion Notice, after the Company is deemed in
Default of Conversion, there shall accrue liquidated damages (the
Conversion Damages) of Additional Shares due to Holder equal to
Twenty-Five percent (25%) of the number stated in the Conversion Notice
and for every five (5) Trading Days while a Default of Conversion is in
effect and continuing the Company shall continue to incur a Conversion
Penalty in the amount of Twenty-Five percent (25%) of the number of shares
stated in the Conversion Notice issuable to Holder (the Additional
Shares), which may be applied to the Conversion at the Holders election
except in the case of the failure of the Transfer Agent, or acts of God or
war. The Additional Shares shall be issued and the amount of the Note
retired will not be reduced beyond that stated in the Conversion Notice.
If the Additional Shares owed the Holder cause the Shares requested by the
Conversion Notice to exceed Conversion Limitation 1 or Conversion
Limitation 2, as applicable, the Holder may opt instead to have the
Conversion Amount reduced by the value, as calculated using the Conversion
Price, of the Additional Shares owing to Holder pursuant to this Section
2(e)(v). At any time after a Default of Conversion the Holder may, at
their sole discretion, rescind the Conversion. The Parties agree that, at
the time of drafting of this Note, the Holders damages as to the
delinquent response are incapable or difficult to estimate and that the
liquidated damages called for is a reasonable forecast of just
compensation. |
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vi. |
Liquidated Damages for Inability to Issue Shares. If the
Company fails to deliver Shares requested by a Conversion Notice due to an
exhaustion of authorized and issuable common stock such that the Company
must increase the number of shares of authorized Common Stock before the
Shares requested may be issued to the Holder, the discount set forth in
the Conversion Price will be increased by 5% for the Conversion Notice in
question and all future Conversion Notices until the outstanding principal
and interest of the Note is converted or paid in full. These liquidated
damages shall not render the penalties prescribed by Paragraph 2(e)(v)
void, and shall be applied in conjunction with Paragraph 2(e)(v) unless
otherwise agreed to in writing by the Holder. The Parties agree that, at
the time of drafting of this Note, the Holders damages as to the
inability to issue shares are incapable or difficult to estimate and that
the liquidated damages called for is a reasonable forecast of just
compensation. |
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vii. |
Rescindment of Conversion Notice. If: (i) the Company
fails to respond to Holder within 2 business days from the date of
delivery of a Conversion Notice confirming the details of the Conversion,
(ii) the Company fails to provide the Shares requested in the Conversion
Notice within three business days from the date of the delivery of the
Conversion Notice, (iii) the Holder is unable to procure a legal opinion
required to have the Shares issued unrestricted and/or deposited to sell
for any reason related to the Company's standing with the SEC or FINRA, or
any action or inaction by the Company, (iv) the Holder is unable to
deposit the Shares requested in the Conversion Notice for any reason
related to the Company's standing with the SEC or FINRA, or any action or
inaction by the Company, (v) if the Holder is informed that the Company
does not have the authorized and issuable Shares available to satisfy the
Conversion, or (vi) if OTC Markets changes the Company's designation to
'Limited Information' (Yield), 'No Information' (Stop Sign), 'Caveat
Emptor' (Skull and Crossbones), or 'OTC', 'Other OTC' or 'Grey Market'
(Exclamation Mark Sign) on the day of or any day after the date of the
Conversion Notice, the Holder maintains the option and sole discretion to
rescind the Conversion Notice ("Rescindment") by delivering a notice of
rescindment to the Company in the same manner that a Conversion Notice is
required to be delivered to the Company pursuant to the terms of this
Note. |
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viii. |
Transfer Agent Fees and Legal Fees. The issuance of the
certificates shall be without charge or expense to the Holder. The Company
shall pay any and all Transfer Agent fees, legal fees, and advisory fees
required for execution of this Note and processing of any Notice of
Conversion, including but not limited to the cost of obtaining a legal
opinion with regard to the Conversion. The Holder will deduct $1,000 from
the principal payment of the Note solely to cover the cost of obtaining
any and all legal opinions required to obtain the Shares requested in any
given Conversion Notice. These fees do not make provision for or suffice
to defray any legal fees incurred in collection or enforcement of the Note
as described in Paragraph 13. |
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ix. |
Conversion Right Unconditional. If the Holder shall
provide a Notice of Conversion as provided herein, the Companys
obligations to deliver Common Stock shall be absolute and unconditional,
irrespective of any claim of setoff, counterclaim, recoupment, or alleged
breach by the Holder of any obligation to the
Company. |
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Other Rights of Holder: Reorganization, Reclassification,
Consolidation, Merger or Sale. Any recapitalization, reorganization,
reclassification, consolidation, merger, sale of all or substantially all
of the Companys assets to another Person or other transaction which is
effected in such a way that holders of Common Stock are entitled to
receive (either directly or upon subsequent liquidation) stock, securities
or assets with respect to or in exchange for Common Stock is referred to
herein as Organic Change. Prior to the consummation of any (i) Organic
Change or (ii) other Organic Change following which the Company is not a
surviving entity, the Company will secure from the Person purchasing such
assets or the successor resulting from such Organic Change (in each case,
the Acquiring Entity) a written agreement (in form and substance
reasonably satisfactory to the Holder) to deliver to Holder in exchange
for this Note, a security of the Acquiring Entity evidenced by a written
instrument substantially similar in form and substance to this Note, and
reasonably satisfactory to the Holder. Prior to the consummation of any
other Organic Change, the Company shall make appropriate provision (in
form and substance reasonably satisfactory to the Holder) to ensure that
the Holder will thereafter have the right to acquire and receive in lieu
of or in addition to (as the case may be) the shares of Common Stock
immediately theretofore acquirable and receivable upon the conversion of
the Note, such shares of stock, securities or assets that would have been
issued or payable in such Organic Change with respect to or in exchange
for the number of shares of Common Stock which would have been acquirable
and receivable upon the conversion of the Note as of the date of such
Organic Change (without taking into account any limitations or
restrictions on the convertibility of the Note set forth in Section 2(b)
or otherwise). All provisions of this Note must be included to the
satisfaction of Holder in any new Note created pursuant to this
section. |
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Representations and Warranties of the Company. In
connection with the transactions provided for herein, the Company hereby
represents and warrants to the Holder the following: |
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Organization, Good Standing and Qualification. The
Company is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation and has all
requisite corporate power and authority to carry on its business as now
conducted. The Company is duly qualified to transact business and is in
good standing in each jurisdiction in which the failure to so qualify
would have a material adverse effect on its business or
properties. |
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b. |
Authorization. All corporate action has been taken on the
part of the Company, its officers, directors and stockholders necessary
for the authorization, execution and delivery of this Agreement. The
Company has taken all corporate action required to make all of the
obligations of the Company reflected in the provisions of this Agreement,
valid and enforceable obligations. The shares of capital stock issuable
upon conversion of the Note have been authorized or will be authorized
prior to the issuance of such shares. |
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c. |
Fiduciary Obligations. The Company hereby represents that
it intends to use the proceeds of the Note primarily for the operations of
its business and not for any personal, family, or household purpose. The
Company hereby represents that its board of directors, in the exercise of
its fiduciary duty, has approved the execution of this Agreement based
upon a reasonable belief that the proceeds of the Note provided for herein
is appropriate for the Company after reasonable inquiry concerning its
financial objectives and financial situation. |
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d. |
Data Request Form. The Company hereby represents and
warrants to Holder that all of the information furnished to Holder
pursuant to the data request form (DRF) dated December 21, 2015 is true
and correct in all material respects as of the date hereof. |
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5. |
Covenants of the Company. |
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a. |
So long as the Company shall have any obligations under
this Note, the Company shall not without the Holders prior written
consent redeem, repurchase, or otherwise acquire (whether for cash or in
exchange for property or other securities) in any one transaction or
series of transactions any shares of capital stock of the Company, acquire
any such shares. |
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Trading Activities. Neither the Holder nor its affiliates
has an open short position in the common stock of the Company and the
Holder agrees that it shall not, and that it will cause its affiliates not
to, engage in any short sales of or hedging transactions with respect to
the common stock of the Company. |
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7. |
Reservation of Shares. The Company shall at all times, so
long as any principal amount of the Note is outstanding, reserve and keep
available out of its authorized and unissued shares of Common Stock,
solely for the purpose of effecting the conversion of the Note, such
number of shares of Common Stock as shall at all times be sufficient to
effect the conversion of all of the principal amount, plus Interest and
Default Interest, if any, of the Note then outstanding (Share Reserve).
The initial number of shares of Common Stock reserved for conversions of
the Note shall be calculated as four times the number of shares necessary
to convert the entire value of the Note on the day it was executed, unless
the Holder stipulates otherwise in the Irrevocable Letter of Instructions
to the Transfer Agent. So long as this Note is outstanding, upon written
request of the Holder or via telephonic communication, the Companys
Transfer Agent shall furnish to the Holder the then-current number of
common shares issued and outstanding, the then-current number of common
shares authorized, the then-current number of unrestricted shares, and the
then-current number of shares reserved for third parties. |
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Voting Rights. The Holder of this Note shall have no
voting rights as a note holder, except as required by law, however, upon
the conversion of any portion of this Note into Common Stock, Holder shall
have the same voting rights as all other Common Stock holders with respect
to such shares of Common Stock then owned by Holder. |
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Reissuance of Note. In the event of a conversion or
redemption pursuant to this Note of less than all of the Conversion Amount
represented by this Note, the Company shall promptly cause to be issued
and delivered to the Holder, upon tender by the Holder of the Note
converted or redeemed, a new note of like tenor representing the remaining
principal amount of this Note which has not been so converted or redeemed
and which is in substantially the same form as this Note, as set forth
above. |
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10. |
Default and Remedies. |
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a. |
Event of Default. For purposes of this Note, an Event of
Default shall occur upon: |
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the Companys default in the payment of the outstanding
principal, Interest or Default Interest of this Note when due, whether at
Maturity, acceleration or otherwise; |
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ii. |
the occurrence of a Default of Conversion as set forth in
Section 2(e)(v); |
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the failure by the Company for ten (10) days after notice
to it to comply with any material provision of this Note not included in
this Section 10(a); |
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iv. |
the Companys Purposeful breach of any covenants,
warranties, or representations made by the Company herein; |
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any of the information in the DRF is false or misleading
in any material respect; |
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vi. |
the default by the Company in any Other Agreement entered
into by and between the Company and Holder, for purposes hereof Other
Agreement shall mean, collectively, all agreements and instruments
between, among or by: (1) the Company, and, or for the benefit of, (2) the
Holder and any affiliate of the Holder, including without limitation,
promissory notes; |
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vii. |
the cessation of operations of the Company or a material
subsidiary; |
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viii. |
the Company pursuant to or within the meaning of any
Bankruptcy Law; (a) commences a voluntary case; (b) consents to the entry
of an order for relief against it in an involuntary case; (c) consents to
the appointment of a Custodian of it or for all or substantially all of
its property; (d) makes a general assignment for the benefit of its
creditors; or (e) admits in writing that it is generally unable to pay its
debts as the same become due; |
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ix. |
court of competent jurisdiction entering an order or
decree under any Bankruptcy Law that: (a) is for relief against the
Company in an involuntary case; (b) appoints a Custodian of the Company or
for all or substantially all of its property; or (c) orders the
liquidation of the Company or any subsidiary, and the order or decree
remains unstayed and in effect for thirty (30) days; |
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x. |
the Company files a Form 15 with the SEC; |
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xi. |
the Companys failure to timely file all reports required
to be filed by it with the Securities and Exchange Commission; |
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xii. |
the Companys failure to timely file all reports required
to be filed by it with OTC Markets to remain a Current Information
designated company; |
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xiii. |
the Companys Common Stock is reported as No Inside by
OTC Markets at any time while any principal, Interest or Default Interest
under the Note remains outstanding; |
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xiv. |
the Companys failure to maintain the required Share
Reserve pursuant to the terms of the Irrevocable Letter of Instructions to
the Transfer Agent; |
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xv. |
the Company directs its transfer agent not to transfer,
or delays, impairs, or hinders its transfer agent in transferring or
issuing (electronically or in certificated form) any certificate for
Shares of Common Stock to be issued to the Holder upon conversion of or
otherwise pursuant to this Note as and when required by this Note, or
fails to remove (or directs its transfer agent not to remove or impairs,
delays and/or hinders its transfer agent from removing) any restrictive
legend (or to withdraw and stop transfer instructions) on any certificate
for any Shares of Common Stock issued to the Holder upon conversion of or
otherwise pursuant to this Note as and when required by this Note (or
makes any written announcement, statement or threat that it does not
intend to honor its obligations pursuant to a Conversion Notice submitted
by the Holder) and any such failure shall continue uncured for three (3)
Business Days after the Conversion Notice has been delivered to the
Company by Holder; |
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xvi. |
the Companys failure to remain current in its billing
obligations with its transfer agent and such delinquency causes the
transfer agent to refuse to issue Shares to Holder pursuant to a
Conversion Notice; |
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xvii. |
the Company effectuates a reverse split of its Common
Stock and fails to provide twenty (20) days prior written notice to Holder
of its intention to do so; or |
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xviii. |
OTC Markets changes the Company's designation to 'No
Information' (Stop Sign), 'Caveat Emptor' (Skull and Crossbones), or
'OTC', 'Other OTC' or 'Grey Market' (Exclamation Mark
Sign). |
The Term Bankruptcy Law means Title
11, U.S. Code, or any similar Federal or State Law for the relief of debtors.
The term Custodian means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
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b. |
Remedies. If an Event of Default occurs, the Holder may
in its sole discretion determine to request immediate repayment of all or
any portion of the Note that remains outstanding; at such time the Company
will be required to pay the Company the Default Amount (defined herein) in
cash. For purposes hereof, the Default Amount shall mean: the product of
(A) the then outstanding principal amount of the Note, plus accrued
Interest and Default Interest, divided by (B) the Conversion Price as
determined on the Issuance Date, multiplied by (C) the highest price at
which the Common Stock traded at any time between the Issuance Date and
the date of the Event of Default. If the Company fails to pay the Default
Amount within five (5) Business Days of written notice that such amount is
due and payable, then Holder shall have the right at any time, so long as
the Company remains in default (and so long and to the extent there are a
sufficient number of authorized but unissued shares), to require the
Company, upon written notice, to immediately issue, in lieu of the Default
Amount, the number of shares of Common Stock of the Company equal to the
Default Amount divided by the Conversion Price then in
effect. |
11. |
Vote to Change the Terms of this Note. This Note and any
provision hereof may only be amended by an instrument in writing signed by
the Company and the Holder. |
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12. |
Lost or Stolen Note. Upon receipt by the Company of
evidence 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 a form
reasonably acceptable to the Company and, in the case of mutilation, upon
surrender and cancellation of the Note, the Company shall execute and
deliver a new Note of like tenor and date and in substantially the same
form as this Note;. provided, however, the Company shall not be obligated
to re-issue a Note if the Holder contemporaneously requests the Company to
convert such remaining principal amount, plus accrued Interest and Default
Interest, if any, into Common Stock. |
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13. |
Payment of Collection, Enforcement and Other Costs. If:
(i) this Note is placed in the hands of an attorney for collection or
enforcement or is collected or enforced through any legal proceeding; or
(ii) an attorney is retained to represent the Holder of this Note in any
bankruptcy, reorganization, receivership or other proceedings affecting
creditors rights and involving a claim under this Note, then the Company
shall pay to the Holder all reasonable attorneys fees, costs and expenses
incurred in connection therewith, in addition to all other amounts due
hereunder. |
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14. |
Cancellation. After all principal, accrued Interest and
Default Interest, if any, at any time owed on this Note has been paid in
full or otherwise converted in full, this Note shall automatically be
deemed canceled, shall be surrendered to the Company for cancellation and
shall not be reissued. |
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15. |
Waiver of Notice. To the extent permitted by law, the
Company hereby waives demand, notice, protest and all other demands and
notices in connection with the delivery, acceptance, performance, default
or enforcement of this Note. |
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16. |
Governing Law. This Note shall be construed and enforced
in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Note shall be governed
by, the laws of the State of Texas, without giving effect to provisions
thereof regarding conflict of laws. Each party hereby irrevocably submits
to the non-exclusive jurisdiction of the state and federal courts sitting
in Texas for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein,
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, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit,
action or proceeding by sending, through certified mail or overnight
courier, a copy thereof to such party at the address for such notices to
it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in
any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING
OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. |
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17. |
Remedies, Characterizations, Other Obligations, Breaches
and Injunctive Relief. The remedies provided in this Note shall be
cumulative and in addition to all other remedies available under this
Note, at law or in equity (including a decree of specific performance
and/or other injunctive relief), and no remedy contained herein shall be
deemed a waiver of compliance with the provisions giving rise to such
remedy and nothing herein shall limit the Holders right to pursue actual
damages for any failure by the Company to comply with the terms of this
Note. The Company covenants to the Holder that there shall be no
characterization concerning this instrument other than as expressly
provided herein. Amounts set forth or provided for herein with respect to
payments, conversion and the like (and the computation thereof) shall be
the amounts to be received by the Holder thereof and shall not, except as
expressly provided herein, be subject to any other obligation of the
Company (or the performance thereof). |
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18. |
Specific Shall Not Limit General; Construction. No
specific provision contained in this Note shall limit or modify any more
general provision contained herein. This Note shall be deemed to be
jointly drafted by the Company and the Holder and shall not be construed
against any person as the drafter hereof. |
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19. |
Failure or Indulgence Not Waiver. No failure or delay on
the part of the Holder in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or privilege preclude further
exercise thereof or of any other right, power or privilege. |
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20. |
Partial Payment. In the event of partial payment by the
Holder, the principal sum due to the Holder shall be prorated based on the
consideration actually paid by the Holder such that the Company is only
required to repay the amount funded and the Company is not required to
repay any unfunded portion of this Note, with the exception of any OID
contemplated herein. |
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21. |
Entire Agreement. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to the
subjects herein. None of the terms of this Agreement can be waived or
modified, except by an express agreement signed by all Parties
hereto. |
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22. |
Additional Representations and Warranties. The Company
expressly acknowledges that the Holder, including but not limited to its
officer, directors, employees, agents, and affiliates, have not made any
representation or warranty to it outside the terms of this Agreement. The
Company further acknowledges that there have been no representations or
warranties about future financing or subsequent transactions between the
parties. |
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23. |
Notices. All notices and other communications given or
made to the Company pursuant hereto shall be in writing (including
facsimile or similar electronic transmissions) and shall be deemed
effectively given: (i) upon personal delivery, (ii) when sent by
electronic mail or facsimile, as deemed received by the close of business
on the date sent, (iii) five (5) days after having been sent by registered
or certified mail, return receipt requested, postage prepaid or (iv) one
(1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery. All communications shall be sent either by
email, or fax, or to the email address or facsimile number set forth on
the signature page hereto. The physical address, email address, and phone
number provided on the signature page hereto shall be considered valid
pursuant to the above stipulations; should the Companys contact
information change from that listed on the signature page, it is incumbent
on the Company to inform the Holder. |
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24. |
Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the rest of the Agreement shall be
enforceable in accordance with its terms. |
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25. |
Usury. If it shall be found that any interest or other
amount deemed interest due hereunder violates the applicable law governing
usury, the applicable rate of interest due hereunder shall automatically
be lowered to equal the maximum rate of interest permitted under
applicable law. The Company covenants (to the extent that it may lawfully
do so) that it will not seek to claim or take advantage of any law that
would prohibit or forgive the Company from paying all or a portion of the
principal, Interest or Default Interest on this Note. |
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26. |
Successors and Assigns. This Agreement shall be binding
upon all successors and assigns hereto. |
6
SIGNATURE PAGE
TO FOLLOW
7
IN WITNESS WHEREOF, the Company has caused this Note to be
signed by its CEO, on and as of the Issuance Date.
COMPANY
Signature:
By: |
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Title: |
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Address: |
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Email: |
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Phone: |
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Facsimile: |
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JSJ Investments Inc.
Signature:
Sameer Hirji, President
JSJ Investments Inc.
6060 North
Central Expressway, Suite 500
Dallas TX 75206
888-503-2599
8
Exhibit 1
Conversion Notice
Reference is made to the 12% Convertible Note issued by Liberty
Star Uranium & Metals Corp. (the "Note"), dated December 29, 2015 in the
principal amount of $50,000 with 12% interest. This note currently holds a
principal balance of $50,000. The features of conversion stipulate a Conversion
Price equal to the lower of (i) a 45% discount to the second (2nd)
lowest trading price during the previous ten (10) trading days to the date of a
Conversion Notice; or (ii) a 45% discount to the second (2nd) lowest
trading price during the previous ten (10) trading days before the date that
this note was executed, pursuant to the provisions of Section 2(a)(ii) in the
Note.
In accordance with and pursuant to the Note, the undersigned
hereby elects to convert $______of the principal/interest balance of the
Note, indicated below into shares of Common Stock (the "Common Stock"), of the
Company, by tendering the Note specified as of the date specified below.
Date of Conversion: __________
Please confirm the following information: Conversion Amount: $
____________________
Conversion Price: $ ____________________( ____ % discount from
$ ____________________)
Number of Common Stock to be issued:
_____________________________________________________________________
Current
Issued/Outstanding:
_______________________________________________________________________________
If the Issuer is DWAC eligible, please issue the Common Stock
into which the Note is being converted in the name of the Holder of the Note and
transfer the shares electronically to:
[BROKER INFORMATION]
Holder Authorization:
JSJ Investments Inc.
6060 North Central Expressway, Suite
500 *Do not send certificates to this address
Dallas, TX 75206
888-503-2599
Sameer Hirji, President
[DATE]
[CONTINUED ON NEXT PAGE]
9
PLEASE BE ADVISED, pursuant to Section 2(e)(ii) of the Note,
Upon receipt by the Company of a copy of the Conversion Notice, the Company
shall as soon as practicable, but in no event later than one (1) Business
Day after receipt of such Conversion Notice, SEND, VIA EMAIL, FACSIMILE OR
OVERNIGHT COURIER, A CONFIRMATION OF RECEIPT OF SUCH CONVERSION NOTICE TO SUCH
HOLDER INDICATING THAT THE COMPANY WILL PROCESS SUCH CONVERSION NOTICE in
accordance with the terms herein. Within two (2) Business Days after the date of
the Conversion Confirmation, the Company shall have issued and electronically
transferred the shares to the Broker indicated in the Conversion Notice; should
the Company be unable to transfer the shares electronically, they shall, within
two (2) Business Days after the date of the Conversion Confirmation, have
surrendered to FedEx for delivery the next day to the address as specified in
the Conversion Notice, a certificate, registered in the name of the Holder, for
the number of shares of Common Stock to which the Holder shall be entitled.
Signature:
___________________________
James Briscoe
CEO
Liberty Star Uranium & Metals Corp.
10
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