Exhibit
4.4
NEITHER
THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS.
SUPER
LEAGUE GAMING, INC.
9%
SECURED CONVERTIBLE PROMISSORY NOTE
$
__________________
Issuance Date: ________________________
This 9%
Secured Convertible Promissory Note (the "Note")
is issued by SUPER LEAGUE GAMING,
INC., a Delaware corporation (the "Company"),
in favor of ________________________________ (the
"Holder")
pursuant to the terms set forth herein, and in the Note Purchase
Agreement attached herewith between the Company, the Holder and the
other parties named as “Purchasers” therein (the
“Note
Purchase Agreement”).
FOR VALUE RECEIVED, the Company hereby
promises to pay to the Holder the principal amount set forth
hereinabove (the “Loan”),
together with accrued but unpaid interest, on the Maturity Date in
accordance with the provisions hereof, expressly subject to the
conversion provisions set forth in Section
hereinbelow.
In
addition to the terms defined elsewhere in this Note, the following
terms shall have the meanings ascribed below:
(a)
“Automatic
Conversion Rate” means all outstanding principal and
accrued interest under the Notes shall be automatically converted
into shares of common stock at the lesser of (i) $3.60 per share or
(ii) a fifteen percent (15.0%) discount to the initial public
offering price per share (”IPO”)
of the Company
(b)
"Bankruptcy
Event" means any of the following events: (i) the Company
commences a case or other proceeding under any bankruptcy,
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any
jurisdiction relating to the Company; (ii) there is commenced
against the Company any such case or proceeding that is not
dismissed within 60 calendar days after commencement; (iii) the
Company is adjudicated insolvent or bankrupt or any order of relief
or other order approving any such case or proceeding is entered;
(iv) the Company suffers any appointment of any custodian or the
like for it or any substantial part of its property that is
not
discharged or
stayed within 60 calendar days; (v) the Company makes a general
assignment for the benefit of creditors.
(c)
"Business
Day" means any day except Saturday, Sunday, and any day
which shall be a federal legal holiday or a day on which banking
institutions in the State of Delaware are authorized or required by
law or other governmental action to close.
(d)
"Event
of Default" has the meaning ascribed thereto in Section
4(a).
(e)
“IPO”
shall mean the initial public offering of the Company’s
common stock on a national securities exchange.
(f)
"Maturity
Date" means the earlier of (i) the closing of the IPO or
(ii) April 30, 2019.
(g)
"Person"
means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.
2.
Principal and Interest; Security
Interest.
(a)
Principal. Unless
converted pursuant to Section 3 hereinbelow, all outstanding
principal shall be due and payable on the Maturity Date in United
States Dollars.
(b)
Interest. The Notes
shall bear simple interest at the rate of nine percent (9.0%) per
annum ("Interest")
and shall accrue until the earlier of (i) the closing of the IPO,
(ii) or (ii) the Maturity Date. All accrued interest on the Notes
shall be converted at the Conversion Rate into common stock issued
in the IPO. The default interest rate shall be fifteen percent
(15.0%) per annum.
(c)
Application of
Payments. Except as otherwise expressly provided herein, each
payment under this Note shall be applied (i) first to the repayment
of any reasonable sums incurred by the Holder for the payment of
any expenses incurred in enforcing the terms of this Note, (ii)
then to the payment of all accrued but unpaid Interest, and (iii)
then to the reduction of the principal amount.
(d)
Security Interest.
This Note is secured by a security interest in all of the assets,
tangible and intangible (collectively, the “Assets”),
of the Company, as specifically detailed in Exhibit 1 hereto and in the
Security Agreement (defined below). The security interest is being
granted to the Holder pursuant to the terms of the security
agreement (“Security
Agreement”) between the Holder, the Company and other
purchasers of Notes. As of the closing of this offering. there
shall be no liens or encumbrances of any kind on the Assets.
Lender’s security interest in the Assets shall also be
evidenced by a financing statement on Form UCC-1 to filed with the
California secretary of state office. In addition, Holder, and
other purchasers of the Notes, shall enter into an intercreditor
and collateral agent agreement (“Intercreditor
Agreement”) which shall define the rights
and
remedies of Holder
and other parties to the Intercreditor Agreement should the Company
default hereunder. The Holder and the other parties to the
Intercreditor Agreement shall have a pari passu interest in the
Assets.
(a)
Automatic
Conversion. At the closing of the IPO, all of the outstanding
principal and accrued but unpaid Interest hereunder shall be
automatically converted into the common stock sold in the IPO at
the Automatic Conversion Rate (the “Automatic
Conversion”).
(a)
An "Event of
Default" shall mean any one of the following events:
(i)
any default in the
payment of the principal of, Interest on or other charges in
respect of this Note, as and when the same shall become due and
payable (whether on the Maturity Date or by acceleration or
otherwise);
(ii)
the occurrence of a
Bankruptcy Event; or
(iii)
the Company shall
commit any material breach or default of any material provision of
this Note, which is not cured within twenty (20) Business Days
following written notice to the Company from the Holder specifying
in reasonable detail such breach or default.
(b)
Upon and during the
continuance of an Event of Default, the default interest rate of
fifteen percent (15.0%) per annum shall apply.
4.
Acceleration Upon Event of Default or
Certain Other Events.
(a)
Upon the occurrence
of (i) an Event of Default as specified in Section 3 above,
or (ii) a Change in
Control (as defined below), all outstanding principal and accrued
interest on the Note shall, at the option of Holder, evidenced by a
written notice to Company, become immediately due and payable,
without further presentment, notice or demand for payment. For
purposes of this Note, a “Change in Control” shall mean
the occurrence of any of the following events: (A) a sale of all or
substantially all of the assets of the Company; (B) a liquidation
or dissolution of the Company; (C) a merger or consolidation in
which the Company is not the surviving corporation, unless the
stockholders of the Company immediately prior to such
consolidation, merger or reorganization, own more than 50% of the
Company’s voting power immediately after such merger or
consolidation; or (D) any consolidation or merger of the Company,
or any other corporate reorganization, in which the stockholders of
the Company immediately prior to such consolidation, merger or
reorganization, own less than 50% of the Company’s voting
power immediately after such consolidation, merger or
reorganization.
(a)
Security Interests.
Without the prior written consent of Holder, under no circumstance
shall the Company grant a security interest in any of the Company's
assets (other than capital leases and purchase money security
interests incurred in the ordinary course of business), including,
without limitation, all personal or other property, intellectual
property, patents, or any other property owned by the Company,
unless and until this Note has been repaid in full or converted
pursuant to Section 3 hereinabove; provided, however, it is
expressly understood and agreed by Holder that a pari passu
security interest is being granted to other investors in the Notes
relating to the Assets.
(b)
Distributions. The
Company shall not, without the prior written consent of the Holder,
make any distributions to its stockholders while amounts remain
payable to Holder pursuant to this Note.
Any
notice, demand or request which may be permitted, required or
desired to be given in connection with herewith shall be given in
writing and directed to the parties hereto as follows:
|
If to
the Company:
If to
the Holder:
|
Super
League Gaming, Inc.
2906
Colorado Ave.
Santa
Monica, CA 90404
Attention: General
Counsel
To
Holder’s address listed in Exhibit A to the Note Purchase
Agreement
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Notices
shall be deemed properly delivered and received when delivered to
the primary notice party (without regard to the copied parties) (i)
if personally delivered, upon receipt or refusal to accept
delivery, (ii) if sent via facsimile, upon mechanical confirmation
of successful transmission thereof generated by the sending
telecopy machine, (iii) if sent by a commercial overnight courier
for delivery on the next business day, on the first business day
after deposit with such courier service (or the third business day
if sent to an address not in the United States), or (iv) if sent by
registered or certified mail, five (5) Business Days after deposit
thereof in the U.S. mail. Any party may change its address for
delivery of notices by properly notifying the others pursuant to
this Section 6.
(a)
Amendments;
Waivers. No provision of this Note may be waived or amended except
in a written instrument signed, in the case of an amendment, by the
Company and the Holder or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought. No waiver of
any default with respect to any provision, condition or requirement
of this Note shall be deemed to be a
continuing waiver
in the future or a waiver of any subsequent default or a waiver of
any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder
in any manner impair the exercise of any such right.
(b)
Construction. The
headings herein are for convenience only, do not constitute a part
of this Agreement and shall not be deemed to limit or affect any of
the provisions hereof. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their
mutual intent, and no rules of strict construction will be applied
against any party.
(c)
Successors and
Assigns. This Note shall be binding upon and inure to the benefit
of the parties and their successors and permitted assigns. Neither
the Company nor the Holder may assign this Note or any rights or
obligations hereunder without the prior written consent of the
other party; provided, that notwithstanding the foregoing, the
Holder may assign this Note, and the related securities, to the
following permitted transferees: if Holder is a partnership,
limited liability company, corporation or other entity to (i) a
partner or former partner of such partnership, a member or former
member of such limited liability company or a shareholder of such
corporation, (ii) the estate of any such partner, member or
shareholder, or (iii) any other Affiliate (as defined below) of
such Holder. As used herein, “Affiliate” means any
person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a person as such terms are used in and construed under
Rule 144 under the Securities Act; and with respect to a Holder,
any investment fund or managed account that is managed on a
discretionary basis by the same investment manager as such Holder
will be deemed to be an Affiliate of such Holder. Any instrument
purporting to make an assignment in violation of this Section 8(c)
shall be void.
(d)
Severability. If
any provision of this Note is held to be invalid or unenforceable
in any respect, the validity and enforceability of the remaining
terms and provisions of this Note shall not in any way be affected
or impaired thereby and the parties will attempt to agree upon a
valid and enforceable provision that is a reasonable substitute
therefor, and upon so agreeing, shall incorporate such substitute
provision in this Note.
(e)
Replacement of the
Note. If any certificate or instrument evidencing this Note is
mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a
new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or
destruction and customary and reasonable indemnity, if requested.
The applicants for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Note.
(f)
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 Holder in order to enforce any right or remedy under this
Note. Notwithstanding any provision to the contrary contained in
this Note, it is expressly agreed and provided that the total
liability of the Company under this Note 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 this Note exceed such Maximum Rate. It is agreed that if
the maximum contract rate of interest allowed by law and applicable
to this Note 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
of interest applicable to this Note from the effective date
forward, unless such application is precluded by applicable
law.
(g)
Governing Law. All
questions concerning the construction, validity, enforcement and
interpretation of this Note shall be governed by and construed and
enforced in accordance with the internal laws of the State of
Delaware, without regard to the principles of conflicts of law
thereof.
IN
WITNESS WHEREOF, the Company has caused this Note to be executed by
a duly authorized officer as of the date set forth
above.
SUPER LEAGUE GAMING, INC.
By:____________________________
Ann
Hand
Chief
Executive Officer & President
EXHIBIT 1
LIST
OF COLLATERAL
All
cash and cash equivalents, bank and Deposit accounts (including any
control account, disbursement account and any other bank accounts),
commercial tort claims, insurance claims, rights and policies,
letter of credit rights, investment property, Accounts, Goods,
Fixtures, Securities, Documents of Title, Inventory, General
Intangibles, Equipment and Records now owned or acquired at any
time hereafter by Debtor, wherever located or situated, and the
products and proceeds (including condemnation proceeds) of the
foregoing.
The
capitalized terms used hereinabove shall have the meanings set
forth below. All other terms used herein are used as defined in the
UCC.
"Accounts" means
any and all rights to payment for goods, including Inventory, sold
or leased or to be sold or leased or for services rendered or to be
rendered, whether or not evidenced by an instrument or chattel
paper, and no matter how evidenced, including such rights in the
form of accounts (as that term is defined in the UCC), accounts
receivable, exchange Receivables, contract rights, Instruments,
Documents, Chattel Paper, purchase orders, notes drafts,
acceptances and all other forms of obligations and receivables,
including all right, title and interest of the Debtor in the
Inventory which gave rise to any of the foregoing, including the
right of stoppage in transit and all returned, rejected, rerouted
or repossessed Inventory.
"Chattel paper"
means "chattel paper" as that term is defined in the
UCC.
"Deposit Account"
means a demand, time, savings, passbook or like account maintained
with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a certificate of
deposit.
"Documents" means
"documents" as that term is defined in the UCC, "Documents of
Title" means "documents of title" as defined in the
UCC.
"Equipment" means
"equipment" as defined in the UCC, and also all motor vehicles,
rolling stock,
machinery, office
equipment, plant equipment, tools, dies, molds, store fixtures,
furniture, and other goods, property, and assets which are used
and/or were purchased for use in the operation of furtherance of
the Debtor's business, and any and all accessions, additions
thereto, and substitutions therefore.
"Fixtures" means
"fixtures" as that term is defined in the UCC.
"General
Intangibles" means "general intangibles" as defined in the UCC and
also all books and records; customer lists; goodwill; causes of
action; judgments; literary rights; rights to performance;
licenses, permits, certificates of convenience and necessity, and
similar rights granted by any governmental authority; copyrights,
trademarks, patents, patent applications, proprietary processes,
blueprints, drawings, designs, diagrams, plans, reports, charts,
catalogs, manuals, literature, technical data, proposals, cost
estimates, source codes, object codes, computer
programs, computer
program flow diagrams, and tangible property embodying or
incorporating any of the foregoing, and all other reproductions on
paper, or otherwise, of any and all the design, development,
manufacture, sale, marketing, lease or use of any or all goods
produced or sold or leased or credit extended, or service performed
by the Debtor, whether intended for an individual customer or the
general business of Debtor.
"Goods"
means "goods" as that term is defined in the UCC. "Instruments"
means "instruments" as that term is defined in the
UCC.
"Inventory" means
any and all raw materials, supplies, work in process, finished
goods, goods returned by customers, and inventory (as that term is
defined in the UCC), including goods in transit, wherever located,
which are-held for sale (but excluding goods subject to leases and
goods not manufactured by the Debtor or an affiliate and which were
purchased for resale directly or indirectly by the Debtor from a
non-affiliate pursuant to a then existing agreement or arrangement
with a non-affiliate customer), including the right of stoppage in
transit, or goods which are or might be used in connection with the
manufacturing or packing of such goods, and all such goods, the
sale or disposition of which has given rise to an Account, which
are returned to and/or repossessed and/or stopped in transit by the
Debtor or by the Secured Party, or at any time hereafter in the
possession or under the control of the Debtor or the Secured Party
or any agent or bailee of the Debtor or the Secured Party, and any
documents of title representing any of the above.
"Records" means all
books, records, customer lists, ledger cards, computer programs,
computer tapes, disks, printouts and records and other property and
general intangibles at any time evidencing or relating to any of
the types (or items) of property covered by this financing
statement, whether now in existence or hereafter
created.
"Securities" means
"securities" as that term is defined in the UCC.
"UCC"
means the Uniform Commercial Code as in effect in the State of
California.