Form of convertible promissory note

$[ ● ]

September 26, 2019

Purchase Agreement; Definitions.

This Convertible Promissory Note (as amended, modified or supplemented from time to time, the “Note”) is issued by the Company on the date hereof pursuant to the Note Purchase Agreement (as amended, modified or supplemented from time to time, the “Note Purchase Agreement”) dated as of September 26, 2019, by and among the Company, the Holder and the other lenders from time to time party thereto. This Note is one of a series of Convertible Promissory Notes (together with all notes issued pursuant to Section 13(d) or Section 14 hereof and thereof, the “Notes”) issued in connection with and pursuant to the Note Purchase Agreement.  The Holder is entitled to the benefits of this Note and the Note Purchase Agreement, and may, enforce the agreements of the Company contained herein and therein and exercise the remedies provided for hereby and thereby or otherwise available in respect hereto and thereto, to the extent provided herein or therein.  Capitalized terms used herein without definition are used herein with the meanings ascribed to such terms in the Note Purchase Agreement.

In addition to the definitions set forth above, the following terms shall have the meanings set forth below and, unless the context of this Note provides otherwise, all capitalized terms not otherwise defined herein shall have the meanings given to them in the Note Purchase Agreement:

The Lenders collectively shall cease to beneficially own and control, directly or indirectly, at least a majority of the outstanding voting rights of the Company, or

(w) any merger or consolidation of the Company into or with another entity (except one in which the holders of capital stock of the Company immediately prior to such merger or consolidation continue to hold at least a majority of the voting power of the capital stock of the surviving entity), (x) any sale, license, lease or transfer of all or a material portion of the assets of the Company (other than sales of receivables consistent with past practices in the ordinary course of business and securitization transactions), in whatever form, (y) any sale, license, lease or transfer of all or a material portion of the assets of the subsidiaries of the Company, taken as a whole (other than sales of receivables consistent with past practices in the ordinary course of business and securitization transactions), in whatever form, or (z) any other transaction pursuant to or as a result of which a single person (or group of affiliated persons) acquires or holds capital stock of the Company representing a majority of the Company’s outstanding voting power.

Interest.

The Company promises to pay interest on the Principal Amount (as hereinafter defined) of this Note at the Interest Rate (as defined herein).  Any accrued and unpaid interest shall be due on the Maturity Date. If this Note is converted into fully paid and non- assessable Conversion Shares, the accrued but unpaid interest will also be converted into fully paid and non-assessable Conversion Shares as provided in Section 4.  Interest on this Note shall accrue from the date of issuance until repayment of the Principal Amount and payment of all accrued interest in full.  Interest shall accrue and be computed on the basis of the actual number of days in the related period over 360 days.

“Principal Amount” shall mean the outstanding principal amount of this Note at any time; and

“Interest Rate” shall mean twelve percent (12%) per annum.

Notwithstanding the foregoing provisions of this Section 2, but subject to applicable law, upon and during the occurrence of an Event of Default (as hereinafter defined), the Principal Amount of this Note shall bear interest, from the date of the occurrence of such Event of Default until such Event of Default is cured or waived, payable on demand in immediately available funds, at a rate equal to fifteen percent (15%) per annum. In addition, any overdue interest on this Note shall bear interest, payable on demand in immediately available funds, at a rate equal to fifteen percent (15%) per annum.  In the event that any interest rate provided for herein shall be determined to be unlawful, such interest rate shall be computed at the highest rate permitted by applicable law.  Any payment by the Company of any interest amount in excess of that permitted by law shall be considered a mistake, with the excess being applied to the principal of this Note without prepayment premium or penalty.

Principal.

Optional Conversion.

Voluntary Prepayment.

The Notes are subject to prepayment at the option of the Company, in whole or in part. The Company shall give written notice of voluntary prepayment of this Note or any portion thereof to the Holder not less than five (5) Business Days prior to the date fixed for such prepayment.  Such notice of voluntary prepayment shall be given in the manner specified in Section 7.4 of the Note Purchase Agreement.  Upon notice of prepayment being given by the Company to the Holder, the Company covenants and agrees that the Company shall prepay, on the date fixed for prepayment in the notice therefor, this Note or the portion hereof so called for prepayment, at the Principal Amount thereof or the portion thereof so called for prepayment, together with interest accrued and unpaid thereon to the date fixed for such prepayment, together with costs and expenses including, without limitation, reasonable fees, charges and disbursements of counsel to the Holder.  Notwithstanding the above, at any time prior to such prepayment by the Company, the Holder may elect to convert all or any portion of the outstanding Principal Amount and accrued and unpaid interest due under this Note into Conversion Shares on the terms set forth in Section 4.

All prepayments under this Section 5 shall include payment of accrued interest on the Principal Amount so prepaid and shall be applied first to payment of default interest, if any, then to payment of accrued interest, then to all costs, expenses and indemnities payable under the Note Purchase Agreement, if any, and thereafter to principal, provided, however, each voluntary prepayment of less than the full outstanding principal balance of the Note shall be in an aggregate Principal Amount of $100,000 or a whole multiple thereof.

If more than one Note is outstanding, the amounts payable under this Section 5 upon an election by the Company to prepay shall be applied to the Notes pro rata based on the relative amounts outstanding under each of the Notes (subject to the right of the Holder or any holder of the other Notes to convert some or all of such Note(s) as provided in Section 5(a) above).

Mandatory Prepayment.

Upon the occurrence of a Liquidity Event, all Principal Amount and interest on this Note shall become immediately due and payable at the option of the Holder. The Holder may, upon receiving notice of any Liquidity Event pursuant to Section 6(b) hereof, exercise its right to demand payment in full of this Note, by giving the Company notice of such election within ten (10) Business Days of receiving such notice. The Company shall, within five (5) Business Days following the consummation of an Asset Disposition, apply the Net Proceeds thereof to the prepayment of the outstanding balance of this Note.

The Company shall give written notice to the Holder of any Liquidity Event at least ten (10) Business Days and not more than sixty (60) Business Days prior to the consummation of such event.  Such notice shall be given in the manner specified in Section 7.4 of the Note Purchase Agreement.  Nothing contained in this Section 6 shall be deemed a consent by the Holder or any affiliate or board representative thereof to the consummation of any Liquidity Event and the Company covenants and agrees that, notwithstanding any other provisions of any Transaction Document, it shall not consummate an Asset Disposition of all or substantially all of the assets of such Company without the consent in writing of all Holders of the Notes unless the Company pays the Notes in full at or prior to consummation thereof. In addition, in the event that such a notice of prepayment is delivered by the Company in connection with a Change of Control or Asset Disposition transaction and such transaction is not consummated within sixty (60) days of the notice of prepayment, the Company shall be under no obligation to make the payments as set forth above (but must once again comply with the notice provisions above in connection with any subsequent closing of such a transaction).

All prepayments under this Section 6 shall include payment of accrued interest on the Principal Amount so prepaid and shall be applied first to payment of default interest, if any, then to payment of accrued interest, then to all costs, expenses and indemnities payable under the Note Purchase Agreement, if any, and thereafter to the Principal Amount.

If more than one Note is outstanding, the Net Proceeds payable under this Section 6 shall be applied to the Notes pro rata, in accordance with the Principal Amount outstanding under each such Note.

Termination of Rights.

Amendment.

Defaults and Remedies.

Events of Default.

Non-Payment.  The Company shall (A) fail to pay when due any principal of this Note, (B) fail to pay within three (3) days after the same becomes due, any interest or fees payable under the terms of this Note or the Note Purchase Agreement or (C) fail to pay within three (3) days after receipt of notice of the failure to pay when due, any other obligations payable under the terms of this Note, the Note Purchase Agreement or any of the other Transaction Documents; or

Other Defaults. The Company shall fail to observe or perform any other covenant, obligation, condition or agreement contained in this Note, the Note Purchase Agreement or any other Transaction Document and such failure shall continue for thirty (30) days after the earlier of (A) the date of notice by any Lender to the Company of such failure or (B) the date the Company has knowledge of such failure; or

Representations and Warranties.  Any material representation, warranty or certificate made or furnished by or on behalf of the Company to any Lender in or in connection with this Note, the Note Purchase Agreement or any other Transaction Document, or as an inducement to any Lender to enter into this Note, the Note Purchase Agreement or any other Transaction Document, shall be false, incorrect, incomplete or misleading in any material respect when made or furnished; or

Intentionally Omitted.

Insolvency; Voluntary Proceedings. The Company shall (A) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (B) be unable, or admit in writing its inability, to pay its debts generally as they mature, (C) make a general assignment for the benefit of its or any of its creditors, (D) be dissolved or liquidated in full or in part, (E) become insolvent (as such term may be defined or interpreted under any applicable statute), or (F) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it; or

Involuntary Proceedings.  Proceedings for the appointment of a receiver, trustee, liquidator or custodian of the Company or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to the Company or the debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be dismissed or discharged within ninety (90) days of commencement; or

Judgments.  (A) One or more judgments, orders, decrees or arbitration awards requiring the Company to pay an aggregate amount of $250,000 or more (exclusive of amounts covered by insurance issued by an insurer not an Affiliate of the Company) shall be rendered against the Company in connection with any single or related series of transactions, incidents or circumstances and the same shall not be satisfied, vacated, stayed or bonded for a period of ten (10) consecutive days; (B) one or more judgments, orders, decrees or arbitration awards requiring the Company to pay an aggregate amount of $250,000 (exclusive of amounts covered by insurance issued by an insurer not an Affiliate of the Company) shall be rendered against the Company in connection with any related or unrelated transactions, incidents or circumstances and the same shall not be satisfied, vacated, stayed or bonded for a period of ten (10) consecutive days; (C) any judgment, writ, assessment, warrant of attachment, tax lien or execution or similar process not covered by a customer of the Company’s indemnity or similar duty shall be issued or levied against a part of the property of the Company with an aggregate value in excess of $250,000 and the same shall not be released, stayed, vacated, bonded or otherwise dismissed within thirty (30) days after issue or levy; or (D) any other non-monetary judgments, orders, decrees, arbitration awards, writs or similar processes which, alone or in the aggregate, could reasonably be expected to have a Material Adverse Effect are rendered, issued or levied; or

Involuntary Dissolution or Split Up.  Any order, judgment or decree shall be entered against the Company decreeing its involuntary dissolution or split up and such order shall remain undischarged and unstayed for a period in excess of sixty (60) days.

Acceleration.

Suits for Enforcement.

Upon the occurrence and during the continuation of any one or more Events of Default, the Holder of this Note may proceed to protect and enforce its rights hereunder by suit in equity, action at law or by other appropriate proceeding, whether for the specific performance of any covenant or agreement contained in the Note Purchase Agreement or this Note or in aid of the exercise of any power granted in the Note Purchase Agreement or this Note, or may proceed to enforce the payment of this Note, or to enforce any other legal or equitable right of the Holders of this Note, provided, however, that no Holder will take any actions to protect or enforce its rights hereunder without the consent of a Required Interest.

In case of an Event of Default, the Company will pay to the Holder such amounts as shall be sufficient to cover the reasonable costs and expenses of such Holder due to such Event of Default, including without limitation the reasonable fees and disbursements of counsel to such Holder.

Remedies Cumulative.

Remedies Not Waived.

Transfer; Registration.

The term “Holder” as used herein shall also include any registered transferee of this Note.  Each transferee of this Note acknowledges that this Note has not been registered under the Securities Act, and each Holder agrees that, prior to any proposed transfer of this Note, if such transfer is not made pursuant to either an effective registration statement under the Securities Act, or an opinion of counsel, reasonably satisfactory in form and substance to the Company, that this Note may be sold without registration under the Securities Act, the Holder will, if requested by the Company, deliver to the Company:

an investment covenant reasonably satisfactory to the Company signed by the proposed transferee;

an agreement by such transferee to the impression of the restrictive investment legend set forth on this Note; and

an agreement by such transferee to be bound by the provisions of this Section 13 relating to the transfer of such Note.

This Note is a registered instrument. The Company shall maintain a register (the “Note Register”) in its principal offices for the purpose of registering the Note and any transfer thereof, which register shall reflect and identify, at all times, the ownership of any interest in the Note.  Upon the issuance of this Note, the Company shall record the name of the initial purchaser of this Note in the Note Register as the first Holder.  Upon surrender for registration of transfer or exchange of this Note at the principal offices of the Company, the Company shall, at the Company’s expense, execute and deliver a new Note of like tenor and of a like aggregate Principal Amount, registered in the name of the Holder or a transferee or transferees.  Every Note surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by written instrument of transfer duly executed by the Holder of such Note or such holder’s attorney duly authorized in writing.  The Company shall not have any obligation hereunder to any Person other than the registered Holder of this Note.

This Note may be transferred or assigned by the Holder at any time, subject to Sections 13(a), 13(b) and 15 hereof.

In the event that the Holder intends to transfer the Note to more than one transferee, the Company shall, in good faith, cooperate with the Holder to effectuate such a transfer and to issue replacement Notes in the appropriate denominations.

The Holder shall bear the costs if any of any transfer or assignment of the Note.

Replacement of Note.

Successors and Assigns; Assignment.

GOVERNING LAW.

WAIVER OF JURY TRIAL.

Headings.

Severability.