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

 

September 16, 2016

Date of Report (Date of earliest event reported)

 

KSIX MEDIA HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

Nevada   000-52522   98-0550352

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

10624 S. Eastern Ave., Suite A-910

Henderson, NV

  89052
(Address of principal executive offices)   (Zip Code)

 

(702) 701-8030

Registrant’s telephone number, including area code

 

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K 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))

 

 

 

     
 

 

SECTION 1 – REGISTRANT’S BUSINESS AND OPERATIONS

 

Item 1.01 Entry into a Material Definitive Agreement

 

On or about February 24, 2016, the Company entered into a Senior Secured Credit Facility with TCA Global Credit Master Fund, LP (the “TCA Agreement”). Pursuant to §2.5(f) of the TCA Agreement, the Company was obligated to pay an advisory fee of $300,000 USD. In lieu of the cash payment, TCA Global Credit Master Fund, LP (“TCA”) agreed to take 1,782,000 shares of Common Stock restricted in accordance with Rule 144 (the “Advisory Fee Stock”). The issuance of the Advisory Fee Shares was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933. Under this Agreement, once the Advisory Fee Shares satisfies the requirements of Rule 144, TCA may sell these Advisory Fee Shares until such time as they have received $300,000 in gross proceeds. At that time, TCA is obligated to return any remaining shares of Advisory Fee Stock back to the Company for cancellation into treasury. TCA is an accredited investor as defined under Regulation D, Rule 501, familiar with our corporate operations, and there was no general solicitation. The transaction approved by written consent of the Board of Directors through authority set forth in our Articles of Incorporation, corporate bylaws, and §78.315 of the Nevada Revised Statutes. The Advisory Fee Shares was issued on or about March 4, 2016, and was fully paid and non-assessable upon execution of the TCA Agreement.

 

On or about September 15, 2016 the Company entered into a First Amended Credit Agreement which amended the agreements underlying the Senior Secured Credit Facility with TCA Global Credit Master Fund, LP (the “TCA Agreement”) described above utilizing a third party, Salksanna, LLC (“Salksanna”), a Delaware limited liability company, to negotiate an amended credit facility whereby Salksanna will purchase, with each monthly payment due to TCA, portions of the debt underlying the TCA Agreement pursuant to a Debt Purchase Agreement executed with Salksana on same said date. The Company will then utilize the proceeds paid to it by Salksanna to debt service TCA and in the process, issuing Salksanna a series of replacement promissory notes convertible into shares of the Company upon maturity of the underlying note. TCA will remain in custody of its ‘Advisory Fee Shares’ as defined in the TCA Agreement, but is restricted from selling such shares but for an event of default, and only then after notice and failure to cure by the Company of such default. The first of such notes issued to Salksanna is in the amount of $53,452.53 with a maturity date of March 13, 2018. On September 16, 2016, Salksana executed an “Assignment of Note” and made the first payment of $53,452.53 to TCA. Pursuant to such assignment and payment of $53,452.53 to TCA by Salksana, the Company executed the “Convertible Replacement Convertible Note A to the holder Salksana (hereinafter referred to as the “Replacement Note”). The maturity date of the Replacement Note is March 13, 2018 and carries an interest rate of 18% per annum. The Replacement Note is convertible by Salksana (the “Holder”) into the common stock of the Company as follows: The holder may convert all or any portion of the outstanding principal, accrued and unpaid interest, premium, if applicable, and any other sums due and payable under the Replacement Note (the “Conversion Amount”) into common stock of the Company at a conversion price equal to (i) the Conversion Amount (the numerator); divided by (ii) eighty-five (85%) of the lowest of the daily volume weighted average of the price of the Company’s common stock during five business days immediately prior to the conversion date (the denominator). Pursuant to the terms of the Replacement Note, the Holder my not convert an amount of common stock that will result in a beneficial ownership of greater than 4.99% of the issued and outstanding common stock on the day of conversion.

 

SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS

 

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

 

(a) Financial Statements of Business Acquired.

 

Not Applicable

 

(b) Pro forma Financial Information .

 

Not applicable.

 

(c) Shell Company Transaction.

 

Not applicable.

 

(d) Exhibits.

 

10.1 – First Amendment to Credit Agreement between TCA Global Credit Master Fund, LP and KSIX Media Holdings, Inc.

10.2 – Debt Purchase Agreement between TCA Global Credit Master Fund, LP; Salksana, LLC; KSIX Media Holdings, Inc.

10.3 – First Replacement Convertible Promissory Note A for TCA Global Credit Master Fund, LP

10.4 – First Replacement Convertible Promissory Note B for TCA Global Credit Master Fund, LP

10.5 – Assignment of Note between TCA Global Credit Master Fund, LP and Salksana, LLC

 

     
 

 

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.

 

  NORTH AMERICAN ENERGY RESOURCES, INC.
     
DATE: September 19, 2016 By: /s/ Carter Matzinger
  Name: Carter Matzinger
  Title: President and Chief Executive Officer

 

     
 

 

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

This FIRST AMENDMENT TO CREDIT AGREEMENT (the Amendment ) is dated effective as of the 29 th day of August, 2016, by and between KSIX MEDIA HOLDINGS, INC., a Nevada corporation (the Borrower ”), KSIX MEDIA, INC., a Nevada corporation, BLVD MEDIA GROUP, LLC., a Nevada limited liability company, KSIX LLC, a Nevada limited liability company, DIGITIZEIQ LLC, an Illinois limited liability company (collectively, the Corporate Guarantors ”), CARTER MATZINGER, an individual (the Validity Guarantor ,” and together with the Borrower and the Corporate Guarantors, collectively, the Credit Parties ), and TCA GLOBAL CREDIT MASTER FUND, LP, a Cayman Islands limited partnership (the Lender ).

 

RECITALS

 

WHEREAS, the Borrower, the Corporate Guarantors, and the Lender executed that certain Senior secured Credit Facility Agreement dated as of November 30, 2015 but made effective as of February 24, 2016 (as amended, supplemented, renewed or modified from time to time, the Credit Agreement ); and

 

WHEREAS, pursuant to the Credit Agreement, the Borrower executed and delivered to Lender that certain Convertible Promissory Note dated as of November 30, 2015, but made effective as of February 24, 2016, evidencing an aggregate amount of Loans under the Credit Agreement in the original face amount of $750,000.00 (such Convertible Note, together with any other amendments, renewals, substitutions, replacements or modifications from time to time, collectively referred to as the Original Convertible Note ); and

 

WHEREAS, in connection with the Credit Agreement and the Original Convertible Note, the Credit Parties executed and delivered to the Lender various ancillary documents referred to in the Credit Agreement as the Loan Documents ; and

 

WHEREAS, the Borrower’s obligations under the Credit Agreement and the Original Convertible Note are secured by the following, all of which are included within the Loan Documents: (i) the Security Agreements; (ii) the Guarantee Agreements; (iii) the Pledge Agreement; (iv) the Validity Certificate; and (v) UCC-1 Financing Statements naming the Borrower and the Corporate Guarantors, as debtors, and Lender, as secured party (the UCC-l’s ), among other Loan Documents; and

 

WHEREAS, the Credit Parties desire to enter into certain agreements with respect to the Credit Agreement, the Original Convertible Note, and the other Loan Documents, all as more specifically set forth in this Amendment;

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants of the parties hereinafter expressed and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, each intending to be legally bound, agree as follows:

 

1. Recitals . The recitations set forth in the preamble of this Amendment are true and correct and incorporated herein by this reference.

 

2. Capitalized Terms . All capitalized terms used in this Amendment shall have the same meaning ascribed to them in the Credit Agreement, except as otherwise specifically set forth herein. In addition, the other definitional and interpretation provisions of Sections 1.2, 1.3 and 1.4 of the Credit Agreement shall be deemed to apply to all terms and provisions of this Amendment, unless the express context otherwise requires.

 

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3. Conflicts . In the event of any conflict or ambiguity by and between the terms and provisions of this Amendment and the terms and provisions of the Credit Agreement, the terms and provisions of this Amendment shall control, but only to the extent of any such conflict or ambiguity.

 

4. Outstanding Balance . The Borrower acknowledges and agrees that the aggregate amount of all Obligations due and owing under the Credit Agreement and other Loan Documents, as of August 29, 2016, is $632,073.12 . The Outstanding Balance is comprised of: (i) principal, accrued and unpaid interest, and other fees (other than Advisory Fees) due under the Credit Agreement and other Loan Documents as of August 29, 2016 in the amount of $332,073.12 (the Principal Obligations ); and (ii) amounts outstanding, due and owing in connection with Advisory Fees due under the Credit Agreement in the aggregate amount of $300,000 as of August 29, 2016 (the Advisory Fee Obligations ). The Borrower and the Lender agree that the Principal Obligations shall be evidenced by the “First Replacement Notes” (as hereinafter defined), and such Principal Obligations shall continue to accrue interest as set forth in the Credit Agreement and Loan Documents, including the First Replacement Notes. The Borrower and Lender agree that interest on the Advisory Fee Obligations shall accrue from and after August 29, 2016 at the rate of fifteen percent (15%) per annum. If Borrower prepays the Advisory Fee Obligations in full, such prepayment shall only include interest accrued through the day such prepayment is received by Lender. The Principal Obligations and the Advisory Fee Obligations shall be paid in accordance with Section 7 below.

 

5. Modification of Note . From and after the date hereof, the Original Convertible Note shall be and is hereby severed, split, divided and apportioned into two (2) separate and distinct replacement notes, as follows:

 

(a) First Replacement Convertible Note A evidencing a principal indebtedness of Fifty Three Thousand Four Hundred Fifty-Two and 33/100 Dollars ($53,542.33), which is being executed and delivered by Borrower to Lender simultaneously herewith (the First Replacement Note A ). First Replacement Note A shall be and remain secured by the Security Agreements, the Guarantee Agreements, the Pledge Agreement, the Validity Certificate, the UCC-1 ’s, and all other applicable Loan Documents.

 

(b) First Replacement Convertible Note B evidencing a principal indebtedness of Two Hundred Seventy-Eight Thousand Five Hundred Thirty and 79/100 Dollars ($278,530.79)(as of August 29, 2016), which is being executed and delivered by Borrower to Lender simultaneously herewith (the First Replacement Note B ”, and together with First Replacement Note A, collectively, the First Replacement Notes ). First Replacement Note B shall be and remain secured by the Security Agreements, the Guarantee Agreements, the Pledge Agreement, the Validity Certificate, the UCC-l’s, and all other applicable Loan Documents.

 

(c) The First Replacement Notes are being executed and delivered simultaneously herewith in substitution for and to supersede the Original Convertible Note in its entirety. It is the intention of the Borrower and Lender that while the First Replacement Notes replace and supersede the Original Convertible, in its entirety, they are not in payment or satisfaction of the Original Convertible Note, but rather are the substitute of one evidence of debt for another without any intent to extinguish the old. Nothing contained in this Amendment or in the First Replacement Notes shall be deemed to extinguish the indebtedness and obligations evidenced by the Original Convertible Note or constitute a novation of the indebtedness evidenced by the Original Convertible Note.

 

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(d) Notwithstanding the splitting of the Original Convertible Note into the First Replacement Notes in the principal amounts as contemplated by this Amendment, Borrower understands and acknowledges that all sums received by Lender in payment of the First Replacement Notes, or either one of them, shall be applied by Lender in accordance with the terms of the Credit Agreement, first to outstanding fees, charges and other costs due and payable under the Credit Agreement and other Loan Documents, second to accrued and unpaid interest, and last to outstanding principal. By way of example, and not in limitation, if First Replacement Note A is sold as contemplated under the Debt Purchase Agreement, as hereinafter defined, upon Lender’s receipt of the purchase price therefor, such amounts received by Lender shall be applied to the aggregate amount of all Obligations in the order described above. Specifically, the Credit Parties acknowledge that sums received by Lender (or Lender’s counsel) in payment of the First Replacement Notes, or either one of them, may be first applied by Lender towards legal fees incurred by Lender in connection with this Amendment and the Debt Purchase Agreement, before applying any remaining sums in accordance with the terms of the Credit Agreement.

 

(e) Borrower understands and acknowledges that in connection with the Debt Purchase Agreement, it may be necessary or desirable, in Lender’s sole and absolute discretion, to have the Borrower further sever, split, divide and apportion the First Replacement Notes further to accomplish the sale of the Outstanding Claims to Purchaser, as more specifically set forth in the Debt Purchase Agreement. In that regard, within no later than three (3) Business Days after request therefor is made by Lender to Borrower from time to time, the Borrower agrees to further sever, split, divide and apportion the First Replacement Notes, or any of them (or any replacement notes issued in replacement thereof from time to time), and to execute and deliver such replacement notes to Lender within such time frames as required or requested by Lender from time to time.

 

6. Sale of Replacement Notes .

 

(a) The parties acknowledge that Lender is entering into this Amendment, in part, in connection with the contemplated sale of the indebtedness represented by the First Replacement Notes, or portion thereof, to Salksanna, LLC, or any other Person who may from time to time seek to purchase any of such indebtedness (any such Person hereinafter referred to as a Purchaser ) under the terms of a Debt Purchase Agreement (the Debt Purchase Agreement ) to be entered into between a Purchaser, Lender, and Borrower. In that regard, the Credit Parties hereby represent and warrant to Lender as follows, which representations and warranties shall be true and correct as of the date hereof, and which representations and warranties shall be deemed re-made and be true and correct as of each sale of the First Replacement Notes, or any one of them (or any replacement notes issued in replacement thereof from time to time) to any Purchaser from time to time:

 

(i) All amounts of any nature or kind due and owing by the Borrower to Lender under the Credit Agreement and the other Loan Documents, and represented by the First Replacement Notes or any other Loan Documents (collectively, the Outstanding Claims ) are bona fide Outstanding Claims against the Borrower and are enforceable obligations of the Borrower arising in the ordinary course of business, for services and financial accommodations rendered to the Borrower by Lender in good faith. The Outstanding Claims are currently due and owing and are payable in full.

 

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(ii) The amount of the First Replacement Notes, respectively and as applicable, represent the amount due to Lender with respect thereto as of the date thereof, and neither the Borrower, nor the Corporate Guarantors, are entitled to any discounts, allowances or other deductions with respect thereto. The aggregate amount of the indebtedness evidenced by the First Replacement Notes was funded by Lender to Borrower at least [X] six months preceding the date hereof, or [  ] one year preceding the date hereof.

 

(iii) The Outstanding Claims are not subject to dispute by the Credit Parties, and the Borrower is unconditionally obligated to pay the full amount of all Outstanding Claims without defense, counterclaim or offset.

 

(iv) Except for the Credit Agreement and other Loan Documents, including this Amendment, there has been no modification, compromise, forbearance, or waiver (written or oral) entered into or given by Lender to Credit Parties with respect to the Outstanding Claims.

 

(v) Lender has not filed or commended any action against Credit Parties based on the Outstanding Claims, and no such action will be pending in any court or other legal venue, and no judgments based upon the Outstanding Claims have been previously entered in favor of Lender in any legal proceeding.

 

(vi) That the Credit Agreement and each of the Loan Documents executed by the Credit Parties, respectively and as applicable, and all obligations due and owing thereunder, are valid and binding obligations of the Credit Parties, respectively and as applicable, enforceable against the Credit Parties in accordance with their respective terms.

 

(b) The Credit Parties acknowledge that the Outstanding Claims, or a portion thereof, are being or may be sold by Lender to a Purchaser in accordance with the Debt Purchase Agreement, and that payment of the purchase price by any such Purchaser to Lender for such Outstanding Claims may be conditioned upon the Borrower’s strict compliance with the terms of certain agreements to be entered into between the Borrower and any such Purchaser (the Exchange Agreements ). If applicable, Borrower hereby covenants and agrees to strictly comply with each and every term and provision of the Exchange Agreements, including, without limitation, timely issuance and delivery of Common Stock to any such Purchaser upon conversion by such Purchaser of any convertible notes then in such Purchaser’s possession.

 

(c) The Credit Parties understand and acknowledge that Lender is relying on the representations, warranties and covenants of the Borrower and Corporate Guarantors set forth in this Amendment in order to enter into the Debt Purchase Agreement (or any future Debt Purchase Agreement), and the foregoing representations, warranties and acknowledgements by the Credit Parties are a material inducement for Lender to agree to a sale of the Outstanding Claims, or portion thereof, to any Purchaser, and without this acknowledgement, Lender would not have sold the Outstanding Claims, or portion thereof, to any such Purchaser.

 

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7. Payment of Obligations . The Credit Parties hereby agree that all outstanding Obligations due and owing under the Credit Agreement and other Loan Documents, including the Principal Obligations and the Advisory Fee Obligations, shall be paid as follows:

 

(a) Payments . As a material inducement for Lender to enter into this Amendment, the Borrower agrees to make payment for all Obligations due under the Credit Agreement and the other Loan Documents in accordance with this Section 7(a) . The Borrower shall make payments to Lender in the amounts and on the respective due dates as set forth in the payment schedule attached hereto as Exhibit “A” , until the “Extended Maturity Date” (as hereinafter defined) (each length of time between payment due dates referred to as a Payment Period ). Any payments due and owing as set forth in this Section 7(a), or a portion thereof, may be satisfied through the sale of the Outstanding Claims, or portions thereof, from time to time to a Purchaser under a Debt Purchase Agreement (any such payments referred to as the Debt Sale Payments ), such that if Lender receives any sums during any Payment Period from Debt Sale Payments, then the Dollar amount of the sums so received by Lender from the Debt Sale Payments during such Payment Period shall be credited towards the payment due from the Borrower on the subsequent payment due date as follows: (A) if the Dollar amount of the sums received by Lender from the Debt Sale Payments during any Payment Period is equal to or greater than the payment due on the subsequent payment due date, then no further payment shall be due from Borrower on such subsequent payment due date; and (B) if the Dollar amount of the sums received by Lender from Debt Sale Payments during any Payment Period is less than the payment due on the subsequent payment due date, then Borrower shall be liable for and obligated to pay to Lender, on such subsequent payment due date, the difference between the amount of that payment and the Dollar amount of the sums received by Lender from any of the Debt Sale Payments during such Payment Period, if any, by wire transfer of Dollars to an account designated by Lender.

 

(b) Maturity Date . The Credit Agreement is hereby amended such that the Maturity Date shall be extended to the earlier to occur of: (i) September 28, 2017; or (ii) the occurrence of any Event of Default and acceleration of all Obligations pursuant to the Credit Agreement and other Loan Documents (the Extended Maturity Date ). Notwithstanding anything contained in this Amendment, the Credit Agreement, or any other Loan Documents to the contrary, all Obligations owing by the Borrower and all other Credit Parties under the Credit Agreement and all other Loan Documents shall be paid in full by the Extended Maturity Date.

 

8. Ratification . The Credit Parties each hereby acknowledge, represent, warrant and confirm to Lender that: (i) each of the Loan Documents executed by the Credit Parties are valid and binding obligations of the Credit Parties, respectively and as applicable, enforceable against the Credit Parties in accordance with their respective terms; (ii) all Obligations of the Credit Parties under the Credit Agreement, all other Loan Documents and this Amendment, shall be and continue to be and remain (after execution of this Amendment and the Debt Purchase Agreement) secured by and under the Loan Documents, including the Security Agreements, the Guarantee Agreements, the Pledge Agreement, the Validity Certificate, and the UCC-l’s; and (iii) no oral representations, statements, or inducements have been made by Lender, or any agent or representative of Lender, with respect to the Credit Agreement, this Amendment, or any other Loan Documents, or the Debt Purchase Agreement.

 

9. Additional Confirmations . The Credit Parties hereby represent, warrant and covenant as follows: (i) that the Lender’s Liens and security interests in all of the “Collateral” (as such term is defined in the Credit Agreement and each of the Security Agreements) are and remain valid, perfected, first-priority security interests in such Collateral, subject only to Permitted Liens, and none of the Credit Parties have granted any other Liens or security interests of any nature or kind in favor of any other Person affecting any of such Collateral.

 

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10. Lender’s Conduct . As of the date of this Amendment, the Credit Parties hereby acknowledge and admit that: (i) the Lender has acted in good faith and has fulfilled and fully performed all of its obligations under or in connection with the Credit Agreement or any other Loan Documents; and (ii) that there are no other promises, obligations, understandings or agreements with respect to the Credit Agreement or the Loan Documents, except as expressly set forth herein, or in the Credit Agreement and other Loan Documents.

 

11. Redefined Terms . The term “Loan Documents,” as defined in the Credit Agreement and as used in this Amendment, shall be deemed to refer to and include this Amendment, the First Replacement Notes, and all other documents or instruments executed in connection with this Amendment.

 

12. Affirmation of Guaranty Agreement and Validity Certificate . The Corporate Guarantors and the Validity Guarantor do hereby acknowledge and agree as follows: (i) Corporate Guarantors and Validity Guarantor acknowledge having reviewed the terms of this Amendment, and agree to the terms thereof; (ii) that the Guarantee Agreements and the Validity Certificate, and all representations, warranties, covenants, agreements and guaranties made by Corporate Guarantors and Validity Guarantor thereunder, and any other Loan Documents by which the Corporate Guarantors and Validity Guarantor may be bound, respectively and as applicable, shall and do hereby remain, are effective and continue to apply to the Loan Documents, and with respect to all Obligations of the Borrower under the Loan Documents, as amended by this Amendment; (iii) that this Amendment shall not in any way adversely affect or impair the obligations of the Corporate Guarantors or the Validity Guarantor to Lender under any of the Loan Documents; and (iv) the Guarantee Agreements and the Validity Certificate are hereby ratified, confirmed and continued, all as of the date of this Amendment.

 

13. Representations and Warranties of the Borrower and Corporate Guarantors . The Borrower and Corporate Guarantors hereby make the following representations and warranties to the Lender:

 

(a) Authority and Approval of Agreement; Binding Effcct . The execution and delivery by the Borrower and Corporate Guarantors of this Amendment, the First Replacement Notes, and all other documents executed and delivered in connection herewith and therewith, and the performance by Borrower and Corporate Guarantors of all of their respective Obligations hereunder and thereunder, have been duly and validly authorized and approved by the Borrower and the Corporate Guarantors and then- respective board of directors pursuant to all applicable laws and no other corporate action or consent on the part of the Borrower, the Corporate Guarantors, their board of directors, stockholders or any other Person is necessary or required by the Borrower and Corporate Guarantors to execute this Amendment, the First Replacement Notes, and the documents executed and delivered in connection herewith and therewith, to consummate the transactions contemplated herein or therein, or perform all of the Borrower’s and Corporate Guarantors’ Obligations hereunder or thereunder. This Amendment, the First Replacement Notes, and each of the documents executed and delivered in connection herewith and therewith have been duly and validly executed by the Borrower and the Corporate Guarantors (and the officer executing this Amendment and all such other documents for each Borrower and Corporate Guarantors is duly authorized to act and execute same on behalf of each Borrower and Corporate Guarantors) and constitute the valid and legally binding agreements of the Borrower and Corporate Guarantors, enforceable against the Borrower and Corporate Guarantors in accordance with their respective terms.

 

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14. Indemnification . Each of the Credit Parties, jointly and severally, hereby indemnifies and holds the Lender Indemnitees, their successors and assigns, and each of them, harmless from and against any and all charges, complaints, claims, counter-claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, cross-actions, threats, setoffs, equities, judgments, accounts, suits, liens, rights, demands, benefits, costs, losses, debts, expenses, and other distributions, of every kind and nature whatsoever, payable by any of the Lender Indemnitees to any Person, including reasonable attorneys’ and paralegals’ fees and expenses, court costs, settlement amounts, costs of investigation and interest thereon from the time such amounts are due at the highest non-usurious rate of interest permitted by applicable law (collectively, the Claims ), through all negotiations, mediations, arbitrations, trial and appellate levels, as a result of, or arising out of, or relating to any matters relating to this Amendment, the Credit Agreement, or any other Loan Documents. The foregoing indemnification obligations shall survive the termination of the Credit Agreement or any of the Loan Documents, and repayment of the Obligations.

 

15. Waiver and Release . Each of the Credit Parties hereby represents and warrants to Lender that none of them have any defenses, setoffs, claims, counterclaims, cross-actions, equities, or any other Claims in favor of the Credit Parties, to or against the enforcement of any of the Loan Documents, and to the extent any of the Credit Parties have any such defenses, setoffs, claims, counterclaims, cross-actions, equities, or other Claims against Lender and/or against the enforceability of any of the Loan Documents, the Credit Parties each acknowledge and agree that same are hereby fully and unconditionally waived by the Credit Parties. In addition to the foregoing full and unconditional waiver, each of the Credit Parties does hereby release, waive, discharge, covenant not to sue, acquit, satisfy and forever discharges each of the Lender Indemnitees and their respective successors and assigns, from any and all Claims whatsoever, in law or in equity, whether known or unknown, whether suspected or unsuspected, whether fixed or contingent, which the Credit Parties ever had, now have, or which any successor or assign of the Credit Parties hereafter can, shall, or may have against any of the Lender Indemnitees or their successors and assigns, for, upon or by reason of any matter, cause or thing whatsoever, from the beginning of the world through and including the date hereof, including, without limitation, any matter, cause, or thing related to the Credit Agreement, this Amendment, the Original Convertible Note, the First Replacement Notes, or any other Loan Documents (collectively, the Released Claims ). Without in any manner limiting the generality of the foregoing waiver and release, Credit Parties hereby agree and acknowledge that the Released Claims specifically include: (i) any and all Claims regarding or relating to the enforceability of the Loan Documents as against any of the Credit Parties; (ii) any and all Claims regarding, relating to, or otherwise challenging the governing law provisions of the Loan Documents; (iii) any and all Claims regarding or relating to the amount of principal, interest, fees or other Obligations due from any of the Credit Parties to the Lender under any of the Loan Documents; (iv) any and all Claims regarding or relating to Lender’s conduct or Lender’s failure to perform any of Lender’s covenants or obligations under any of the Loan Documents; (v) any and all Claims regarding or relating to any delivery or failure to deliver any notices by Lender to Credit Parties; (vi) any and all Claims regarding or relating to any failure by Lender to fund any advances or other amounts under any of the Loan Documents; (vii) any and all Claims regarding or relating to any advisory services (or the lack thereof) provided by Lender to any of the Credit Parties for which any advisory fees may be due and owing and included within the Obligations; and (viii) any and all Claims based on grounds of public policy, unconscionability, or implied covenants of fair dealing and good faith. The Credit Parties further expressly agree that the foregoing release and waiver agreement is intended to be as broad and inclusive as permitted by the laws governing the Loan Documents, and the Released Claims include all Claims that the Credit Parties do not know or suspect to exist, whether through ignorance, oversight, error, negligence, or otherwise, and which, if known, would materially affect their decision to enter into this Amendment. The foregoing waiver and release agreements by the Credit Parties are a material inducement for Lender to enter into this Amendment, and Lender’s agreement to enter into this Amendment is separate and material consideration to the Credit Parties for the waiver and release agreements contained herein, the receipt and sufficiency of such consideration hereby acknowledged by Credit Parties. In addition, each of the Credit Parties agrees and acknowledges that it has had an opportunity to negotiate the terms and provisions of this Amendment, including the foregoing waiver and release agreements, with and through their own competent counsel, and that each of the Credit Parties have sufficient leverage and economic bargaining power, and have used such leverage and economic bargaining power, to fairly and fully negotiate this Amendment, including the waiver and release agreements herein, in a manner that is acceptable to the Credit Parties. The foregoing waiver and release agreements shall survive the termination of the Credit Agreement or any of the Loan Documents, and repayment of the Obligations.

 

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16. Effect on Agreement and Loan Documents . Except as expressly amended by this Amendment, all of the terms and provisions of the Credit Agreement and the Loan Documents shall remain and continue in fall force and effect after the execution of this Amendment, are hereby ratified and confirmed, and incorporated herein by this reference.

 

17. Default . In addition to the Events of Default under the Credit Agreement, any breach or default by Credit Parties under this Amendment, which breach or default is not cured within ten (10) calendar days after notice of such breach or default is given to the Credit Parties, shall be deemed an immediate “Event of Default” under the Credit Agreement, and such Events of Default hereunder include, without limitation, the following: (i) failure by Borrower to consummate any and all of the Purchase Tranche Closings, as such term is defined in the Debt Purchase Agreement, because of any of the conditions described in Section 3(b) of the Debt Purchase Agreement; (ii) failure by the Purchaser to pay for any portion of the Applicable Purchase Price, as such term is defined in the Debt Purchase Agreement, for any and all of the Purchase Tranche Closings when due in accordance with the terms and provisions of the Debt Purchase Agreement and other applicable documents, if such failure to pay was caused by any action, inaction, or omission of any of the Credit Parties, or any of their agents, representatives and employees; (iii) failure by the Borrower to pay when due any other amounts due to Lender under this Amendment, including, without limitation, the amounts due under under Section 19(a) below; and (v) and other failure of the Credit Parties to comply with, satisfy or perform any term, provision, covenant or agreement of the Credit Parties under this Amendment or any of the Exchange Agreements.

 

18. Restriction on Sale of Advisory Fee Shares . So long as no Event of Default under the Credit Agreement or other Loan Documents occurs, and so long as no event has occurred that, with the passage of time, the giving of notice, or both, would constitute an Event of Default under the Credit Agreement or other Loan Documents, then Lender agrees that it will not sell any Advisory Fee Shares in the Principal Trading Market; provided, however, upon the occurrence of an Event of Default under the Credit Agreement or other Loan Documents, or the occurrence of any event that, with the passage of time, the giving of notice, or both, would constitute an Event of Default under the Credit Agreement or other Loan Documents, the restriction imposed by this Section 18 shall automatically terminate without further notice to any of the Credit Parties.

 

19. Execution . This Amendment may be executed in one or more counterparts, all of which taken together shall be deemed and considered one and the same Amendment. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf’ format file or other similar format file, such signature shall be deemed an original for all purposes and shall create a valid and binding obligation of the party executing same with the same force and effect as if such facsimile or “.pdf” signature page was an original thereof.

 

20. Fees and Expenses .

 

(a) Document Review and Legal Fees; Due Diligence . The Borrower hereby agrees to pay to the Lender or its counsel a legal fee equal to Three Thousand Five Hundred and No/100 Dollars ($3,500.00) for the preparation, negotiation and execution of this Amendment aid all other documents in connection herewith, which legal fee and costs, to the extent not previously paid, shall be paid simultaneously with the execution of this Amendment.

 

[Signatures on the following page]

 

8
 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the day and year first above written.

 

CREDIT PARTIES :    
     
KSIX MEDIA HOLDINGS, INC.,   KSIX MEDIA, INC., a Nevada corporation
a Nevada corporation    
         
By: /s/ Carter Matzinger   By: /s/ Carter Matzinger
Name: CARTER MARTZINGER   Name: CARTER MARTZINGER
Title: CEO   Title: CEO

 

BLVD MEDIA GROUP, LLC, a Nevada limited liability company   KSIX LLC, a Nevada limited liability company
         
By: /s/ Carter Matzinger   By: /s/ Carter Matzinger
Name: CARTER MARTZINGER   Name: CARTER MARTZINGER
Title: PRESIDENT   Title: PRESIDENT

 

DIGITIZEIQ LLC, an Illinois limited liability company    
       
By: /s/ Carter Matzinger    
Name: CARTER MARTZINGER    
Title: PRESIDENT    

 

CARTER MATZINGER,    
an Individual    
       
By: /s/ Carter Matzinger    
Name: CARTER MARTZINGER    

 

LENDER :    
     
TCA GLOBAL CREDIT MASTER FUND, LP    
       
By: TCA Global Credit Fund GP, Ltd.    
Its: General Partner    
       
By: /s/ Robert Press      
  Robert Press, Director    

 

9
 

 

EXHIBIT “A”

 

PAYMENT SCHEDULE

 

10
 

 

        Principle     Interest     Principal     Total     IB fee     Total Monthly  
Period     Balance     Payment     Payment     Interest     payment     Payment  
  8/29/2016                                                      
  9/29/2016   1       332,073.12       4,981.10       23,324.93       4,981.10       25,146.3       53,452.33  
  10/29/2016   2       308,748.19       4,631.22       23,674.81       9,612.32       25,146.3       53,452.33  
  11/29/2016   3       285,073.38       4,276.10       24,029.93       13,888.42       25,146.3       53,452.33  
  12/29/2016   4       261,043.45       3,915.65       24,390.38       17,804.07       25,146.3       53,452.33  
  1/29/2017   5       236,553.07       3,549.80       24,756.24       21,353.87       25,146.3       53,452.33  
  2/28/2017   6       211,896.83       3,178.45       25,127.58       24,532.32       25,146 3       53,452.33  
  3/28/2017   7       186,769.25     2,801.54       25,504.49       27,333.86       25,146.3       53,452.33  
  4/28/2017   8       161,264.76       2,418.97       25,887.06       29,752.83       25,146.3       53,452.33  
  5/28/2017   9       135,377.70       2,030.67       26,275.37       31,783.50       25,146.3       53,452.33  
  6/28/2017   10       109,102.33       1,636.53       26,669.50       33,420.03       25,146.3       53,452.33  
  7/28/2017   11       82,432.84       1,236.49       27,069.54       34,656.52       25,146.3       53,452.33  
  8/28/2017   12       55,363.30       830.45       27,475.58       35,486.97       25,146.3       53,452.33  
  9/28/2017   13       27,887.72       418.32       27,887.72       35,905.29       25,146.3       53,452.33  

 

11
 

 

 

DEBT PURCHASE AGREEMENT

 

THIS DEBT PURCHASE AGREEMENT (this “ Agreement ”), is made and entered into as of the day of the 15 th day of Sept. , 2016 (the “ Effective Pate ”), by and among TCA GLOBAL CREDIT MASTER FUND, LP, a Cayman Islands limited partnership, with an address of 3960 Howard Hughes Parkway, Suite 500, Las Vegas, NV 89169 (“ Assignor ” or “ Lender ”), SALKSANNA, LLC (“ Assignee ”), and KSIX MEDIA HOLDINGS, INC., a Nevada corporation (the “ Borrower ”).

 

WITNESSETH

 

WHEREAS, the Borrower, Lender and others entered into, or are otherwise parties to and bound by, the terms of a Senior secured Credit Facility Agreement dated as of November 30, 2015 but made effective as of February 24, 2016 (such agreement, together with any amendments, renewals, substitutions, replacements or modifications from time to time, collectively referred to as the Credit Agreement ”); and

 

WHEREAS, pursuant to the Credit Agreement, the Borrower executed and delivered to Lender that certain Convertible Promissory Note dated as of November 30, 2015, but made effective as of February 24, 2016, evidencing an aggregate amount of Loans under the Credit Agreement in the original face amount of $750,000.00 (the Convertible Note ); and

 

WHEREAS, Assignee desires to purchase from Lender, and Lender is amenable to selling and assigning to Assignee, Assignor’s right, title and interest in and to a portion of the monetary obligations evidenced by the Convertible Note (or any replacement notes issued in replacement thereof as hereby contemplated, as applicable), such portion being equal to the lesser of: (i) Seven Hundred Thousand Dollars ($700,000.00); or (ii) the amount of the obligations due and owing under the Credit Agreement, (the Assigned Debt ”), which Assigned Debt shall be purchased by Assignee in multiple tranches as more specifically hereinafter set forth; and

 

WHEREAS, on or prior to each “Purchase Tranche Closing” (as hereinafter defined), as directed by Lender, the Borrower agrees to sever, split, divide and apportion the Convertible Note (or any replacement notes issued in replacement thereof as hereby contemplated, as applicable) into two separate and distinct replacement notes, each in substantially the form as set forth on Exhibit “A” attached hereto (the “ Note Form ”), one for the amount of the portion of the Assigned Debt being sold and assigned at such Purchase Tranche Closing (the portion of the Assigned Debt being sold and assigned at each separate Purchase Tranche Closing, as applicable, being referred to as the Applicable Assigned Debt ”), and one for the remaining amount of the overall debt evidenced by the Convertible Note (or any replacement notes issued in replacement thereof as hereby contemplated, as applicable);

 

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and agreed, Assignor, Assignee, and Borrower hereby covenant and agree as follows:

 

1. Recitals . The recitations set forth in the preamble of this Agreement are true and correct and incorporated herein by this reference.

 

2. Agreement to Assign Assigned Debt .

 

1
 

 

(a) Purchase Tranche Closings . Provided there is no default or breach under this Agreement, and that no event has occurred that, with the passage of time, the giving of notice, or both, would constitute a default or breach under this Agreement, and subject to all the terms and provisions of this Agreement, the Assignor hereby agrees to sell and assign to Assignee, and Assignee hereby agrees to purchase from Assignor, the Assigned Debt, which Assigned Debt shall be sold in multiple separate tranches (each of such tranches hereinafter referred to as a Purchase Tranche ), each of such separate Purchase Tranches to be sold and assigned on the respective dates and for the respective amounts set forth in the schedule attached hereto as Exhibit “B” (each closing of a Purchase Tranche referred to as a Purchase Tranche Closing and the purchase price to be paid for each Applicable Assigned Debt at each Purchase Tranche Closing, as shown on such attached schedule, referred to as the Applicable Purchase Price” ): provided, however, nothing herein shall prevent Assignee from electing to purchase a greater portion of the Assigned Debt than that set forth in the attached schedule for any given Purchase Tranche Closing, up to the aggregate amount of the Assigned Debt, by written notice to Assignor delivered prior to the applicable Purchase Tranche Closing.

 

(b) Deliveries at Each Purchase Tranche Closing . Subject to the terms of this Agreement, at each Purchase Tranche Closing: (i) Lender shall execute and deliver to Assignee, an assignment of the Applicable Assigned Debt being sold and assigned at such Purchase Tranche Closing, substantially in the form attached hereto as Exhibit “C” (each, an Assignment” ); (ii) Lender shall deliver to Assignee the original replacement note for the Applicable Assigned Debt being sold and assigned at such Purchase Tranche Closing (subject to receipt of same by Lender from Borrower as provided in Section 2(c) below); and (iii) Assignee shall pay to Lender the Applicable Purchase Price for the Applicable Assigned Debt being sold and assigned at such Purchase Tranche Closing, by wire transfer of good and cleared U.S. currency to an account designated by Lender.

 

(c) Borrower’s Obligation to Sever Notes. On or prior to each Purchase Tranche Closing, and within no later than two (2) business days after request therefor is made by Lender to Borrower, the Borrower agrees to sever, split, divide and apportion the Convertible Note (or any replacement notes issued in replacement thereof as hereby contemplated, as applicable) into two separate and distinct and newly issued replacement notes, each substantially in the Note Form. One of such replacement notes shall be for a principal amount equal to the Applicable Purchase Price corresponding to the Applicable Assigned Debt for the applicable Purchase Tranche Closing, and the other replacement note shall be for a principal amount equal to the remaining amount of the overall debt then existing and evidenced by the Convertible Note (or any replacement notes issued in replacement thereof as hereby contemplated, as applicable). In order to clarify the foregoing, as an example, on or prior to the first Purchase Tranche Closing contemplated hereby, upon request by Lender, the Borrower shall provide to Lender two replacement notes in replacement of the Convertible Note, one for $53,452.33, which is the Applicable Purchase Price for the Applicable Assigned Debt being sold and assigned at the first Purchase Tranche Closing, and fee second for $278,530.79 (as of August 29, 2016), which is the amount of the overall debt evidenced by the Convertible Note, less the Applicable Purchase Price for the replacement note being sold and. assigned at the first Purchase Tranche Closing. This second replacement note shall then be severed in the same manner for the second Purchase Tranche Closing, and this foregoing process of severing and issuing replacement notes shall be repeated for each Purchase Tranche Closing, until the Assigned Debt is sold and assigned in full, or this Agreement is otherwise earlier terminated in accordance with its terms. Assignee acknowledges and understands that Lender’s obligation to sell, assign and deliver each original replacement note representing the Applicable Assigned Debt at each Purchase Tranche Closing is subject to and conditioned upon Borrower executing and delivering such replacement notes to Lender in accordance with this Agreement.

 

(d) Remaining Debt . Assignee and Borrower acknowledge that at each Purchase Tranche Closing, and subject to Lender’s receipt of the Applicable Purchase Price, only the Applicable Assigned Debt represented by the specific replacement note representing the applicable Purchase Tranche shall be deemed sold and assigned hereunder, it being acknowledged by Assignee and by Borrower that the remaining portion of the debt evidenced by the Convertible Note (or any replacement notes issued in replacement thereof as hereby contemplated, as applicable) for which the Applicable Purchase Price has not been paid and received by Lender (the Remaining Debt ) shall not be sold or assigned thereby unless and until additional replacement notes for additional Purchase Tranches are thereafter sold in accordance with this Agreement and the Applicable Purchase Price therefor is received by Lender. Moreover, any portion of the debt evidenced by the Convertible Note other than the Assigned Debt shall also be part of the Remaining Debt hereunder, shall not be part of this Agreement and shall not be subject to sale or assignment hereunder.

 

2
 

 

(e) No Security Rights. Assignee and Borrower each hereby agree and acknowledge that the sale, transfer and assignment of the Assigned Debt, or any portion thereof, shall be a sale, transfer and assignment of the monetary obligations evidenced by such Assigned Debt (or portion thereof) only, and shall not include, and such sale, transfer and assignment expressly excludes, the Remaining Debt, as well as excluding any and all security rights, rights to any collateral, or any other security interests or rights of Assignor of any nature or kind related to, arising under, or pursuant to, the Credit Agreement, any other “Loan Documents” (as defined in the Credit Agreement) related thereto, or any other security agreements, UCC financing statements, or any other documents or instruments relating to the obligations of the Borrower or any “Guarantors” (as defined in the Credit Agreement) to Assignor (collectively, the Security Right ), it being agreed and acknowledged that all Security Rights shall remain with Assignor, as security for any portion of die Assigned Debt not assigned at any Purchase Tranche Closing, the Remaining Debt, or any other obligations of Borrower or any Guarantors to Assignor.

 

3. Conditions to Additional Purchases .

 

(a) Initial Purchase . The initial Purchase Tranche contemplated hereunder shall be closed and funded simultaneous with the execution of this Agreement by Lender, Assignee and Borrower.

 

(b) Subsequent Purchases . If the first Purchase Tranche Closing is consummated hereunder, and the Applicable Purchase Price therefor is paid and received by Lender as contemplated under this Agreement, then Assignee’s obligation to purchase any additional Purchase Tranches as hereby contemplated is a binding and continuing obligation of Assignee; provided, however, Assignee shall have the right to terminate such obligation at any time during the term of this Agreement upon the occurrence of any of the following events (each a Trigger Event ): (i) the Borrower fails to stay current in its filing obligations with the SEC; (ii) trading of the Borrower’s Common Stock on the “Principal Trading Market” (as defined in the Credit Agreement) is stopped or halted for any reason; (iii) any suspension of electronic trading or settlement services by the Depository Trust Company ( DTC ) with respect to the Common Stock occurs and is continuing, or any receipt by the Borrower of any notice from DTC to the effect that a suspension of electronic trading or settlement services by DTC with respect to the Common Stock is being imposed or is contemplated (unless, prior to such suspension, DTC shall have notified the Borrower in writing that DTC has determined not to impose any such suspension); (iv) the Borrower’s transfer agent (the Transfer Agent ) fails to issue to Assignee any shares of the Borrower’s Common Stock which may be due to Assignee in connection with any conversion rights exercised by Assignee under any promissory notes purchased by Assignee hereunder, or notes issued in replacement thereof; (v) the Borrower fails to maintain its active status with its State of organization; (vi) Borrower shall default (beyond any applicable notice and cure periods) in any of their obligations to Assignee under the promissory notes purchased by Assignee hereunder, or notes issued in replacement thereof, or any other obligations of Borrower to Assignee; or (vii) the Borrower fails to maintain any share reserve required by Assignee. Upon the occurrence of a Trigger Event, in the event Assignee desires to terminate its obligation to purchase Purchase Tranches as hereby contemplated, Assignee shall deliver to Lender written notice of such termination delivered within five (5) days of the date the Assignee becomes aware of the occurrence of the Trigger Event (which notice shall include a statement of the Trigger Event that has occurred and reasonable evidence of the occurrence thereof), whereupon Assignee’s obligation to purchase any additional Purchase Tranches thereafter shall immediately terminate and be of no further force or effect.

 

3
 

 

 

4. Representations and Warranties of Assignor . Assignor makes the following representations and warranties to Assignee, each of which shall be deemed made as of the Effective Date, and re-made as of each Purchase Tranche Closing:

 

(a) Assignor is the legal and equitable owner of Assignor’s right, title and interest in and to She Assigned Debt, except for any portion of the Assigned Debt previously sold and assigned to Assignee pursuant to this Agreement; and

 

(b) Assignor has not sold, transferred, assigned, pledged, hypothecated, or otherwise encumbered the Assigned Debt, or any portion thereof, except for any portion of the Assigned Debt previously sold and assigned to Assignee pursuant to this Agreement; and

 

(c) The Assignor is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full right, corporate, partnership or other applicable power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder, and the execution, delivery and performance by the Assignor of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate, partnership, or similar action on the part of the Assignor; and

 

(d) Except for the foregoing representations and warranties, this Agreement and the Assignment is made by Assignor without recourse, representation or warranty of any nature or kind, express or implied, and Assignor specifically disclaims any warranty, guaranty or representation, oral or written, past, present or future with respect to fee Assigned Debt, any portion thereof, or any instruments evidencing same, including, without limitation; (i) the validity, effectiveness or enforceability of the Assigned Debt, any portion thereof, or any instruments evidencing same; (ii) the validity, existence, or priority of any lien or security interest securing the obligations of Borrower or any other Credit Parties evidenced by the Assigned Debt, any portion thereof, or any instruments evidencing same; (iii) She existence of, or basis for, any claim, counterclaim, defense or offset relating to the Assigned Debt, any portion thereof, or any instruments evidencing same; (iv) the financial condition of the Borrower, or any other Credit Parties or guarantor or obligor liable under the Assigned Debt, any portion thereof, or any instruments evidencing same, or the ability of any such parties to pay or perform their respective obligations under the Assigned Debt, any portion thereof, or any instruments evidencing same; (v) the compliance of the Assigned Debt, any portion thereof, or any instruments evidencing same with any laws, ordinances or regulations of any governmental agency or other body; (vi) the value or condition of any collateral securing the obligations under the Assigned Debt, any portion thereof, or any instruments evidencing same; and (vii) the future performance of the Borrower or any other Credit Parties or guarantor or obligor liable under the Assigned Debt, any portion thereof or any instruments evidencing same. Assignee acknowledges and represents to Assignor that Assignee has been given the opportunity to undertake its own investigations of the Borrower, the Assigned Debt, any portion thereof, or any instruments evidencing same, and having undertaken and performed all such investigations as Assignee deemed necessary or desirable, Assignee represents, warrants and agrees that it is relying solely on its own investigation of the Borrower, the Assigned Debt, any portion thereof, or any instruments evidencing same, and not any information whatsoever provided or to be provided by Assignor, or any representation or warranty of Assignor. This Agreement, and each Assignment of the Assigned Debt, or portion thereof, as provided for herein is made on an AS IS ,” “ WHERE IS basis, with all faults, and Assignee, by acceptance of this Agreement and each Assignment, shall be deemed to have agreed and acknowledged that Assignor has fully performed, discharged and complied with all of Assignor’s obligations, representations, warranties, covenants and agreements hereunder, that Assignor is discharged therefrom, and that Assignor shall have no further liability with respect thereto, except only for those express warranties contained in this Agreement, and Assignee, by such acceptance, expressly acknowledges that ASSIGNOR MAKES NO WARRANTY OR REPRESENTATIONS, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW, RELATING TO THE ASSIGNED DEBT, ANY PORTION THEREOF, OR ANY INSTRUMENTS EVIDENCING SAME, EXCEPT AS SPECIFICALLY SET FORTH HEREIN.

 

4
 

 

5. Representations and Warranties of Assignee. Assignee makes the following representations and warranties to Assignor, each of which shall be deemed made as of the Effective Date, and re-made as of each Purchase Tranche Closing:

 

(a) The Assignee is a legally recognized entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full right, corporate, partnership or other applicable power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder, and the execution, delivery and performance by the Assignee of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or similar action on the part of the Assignee.

 

(b) This Agreement, when executed and delivered by the Assignee, will constitute a valid and legally binding obligation of the Assignee, enforceable against the Assignee in accordance with its terms, except: (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally; or (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

 

(c) The Assignee: (i) either alone or together with its representatives, has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of this investment and make an informed decision to so invest, and has so evaluated the risks and merits of such investment; (ii) has the ability to bear the economic risks of this investment and can afford a complete loss of such investment; (iii) understands the terms of and risks associated with the acquisition of the Assigned Debt, or any portion thereof, or any instruments evidencing same, including, without limitation, a lack of liquidity, price transparency or pricing availability and risks associated with the industry in which the Borrower operates; (iv) has had the opportunity to review the Borrower, its business, its financial condition, its prospects, the Credit Agreement, the Assigned Debt, any portion thereof, or any instruments evidencing same, all as the Assignee has determined to be necessary in connection with this Agreement and the assignments contemplated hereby.

 

(d) The Assignee understands that: (i) the Assigned Debt, any portion thereof or any instruments evidencing same, have not been registered under the Securities Act of 1933 (the Securities Act ) or the securities laws of any state; (ii) the Assigned Debt, any portion thereof, or any instruments evidencing same, and any securities issuable upon conversion of the Assigned Debt, or any portion thereof, is and will be “restricted securities” as said term is defined in Rule 144 of the Rules and Regulations promulgated under the Securities Act ( “Rule 144” ); (iii) the Assigned Debt, any portion thereof, or any instruments evidencing same, may not be sold, pledged or otherwise transferred unless a registration statement for such transaction is effective under the Securities Act and any applicable state securities laws, or unless an exemption from such registration is available with respect to such transaction; and (iv) the Assigned Debt, any portion thereof, or any instruments evidencing same, will contain restrictive legends as to the foregoing in customary form.

 

5
 

 

(e) The Assignee is not accepting this Agreement or any Assignment as a result of any advertisement, article, notice or other communication regarding the Assigned Debt, any portion thereof, or any instruments evidencing same published in any newspaper, magazine, internet or social media, broadcast over television or radio, presented at any seminary, or under any other media generally circulated or available to the public or any other general solicitation or general advertisement.

 

(f) To the knowledge of its officers, members and managers, neither the execution and delivery of this Agreement, or any Assignment, nor the consummation of the transactions contemplated hereby, does or will violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge or other restriction of any government, governmental agency, or court to which the Assignee is subject or any provision of its organizational documents or other similar governing instruments, or conflict with, violate or constitute a default under any agreement, credit facility, debt or other instrument or understanding to which the Assignee is a party. The Assignee has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with this Agreement and the assignment of the Assigned Debt, any portion thereof, or any instruments evidencing same as contemplated hereby.

 

(g) To the knowledge of its officers, members and managers, there is no action, suit, proceeding, judgment, claim or investigation pending, or to the knowledge of the Assignee, threatened against the Assignee which could reasonably be expected in any manner to challenge or seek to prevent, enjoin, alter or materially delay any of the transactions contemplated hereby.

 

(h) To the knowledge of its officers, members and managers, no authorization, consent, approval or other order of, or declaration to or filing with, any governmental agency or body or other Person is required for the valid authorization, execution, delivery and performance by the Assignee of this Agreement and the consummation of the transactions contemplated hereby.

 

(i) The Assignee hereby acknowledges that the Assigned Debt, any portion thereof, or any instruments evidencing same may only be disposed of in compliance with state and federal securities laws. The Assignee further acknowledges that in connection with any transfer of the Assigned Debt, any portion thereof, or any instruments evidencing same subsequent to the date hereof and other than pursuant to an effective registration statement, or an applicable exemption to such registration requirements, the Borrower and/or the Borrower’s transfer agent may require an opinion of counsel, the form and substance of which opinion shall be reasonably satisfactory to the Borrower’s transfer agent.

 

6. Borrower Acknowledgments . Borrower hereby consents to the sale and purchase of the Assigned Debt pursuant to the terms of this Agreement Borrower further represents and warrants that the obligations evidenced by the Convertible Note, including, without limitation, all obligations for the Assigned Debt and the Remaining Debt, are valid and enforceable obligations of the Borrower subject to no defenses, setoffs, counterclaims, cross-actions or equities in favor of the Borrower, and to the extent the Borrower has any defenses, setoffs, counterclaims, cross-actions or equities against Assignor and/or against the enforceability of any such obligations, the Borrower acknowledges and agrees that same are hereby fully and unconditionally waived by the Borrower. The Borrower further acknowledges its obligations under Section 2(c) above, and agrees to timely and promptly deliver replacement notes to Lender as required by this Agreement. The Borrower further acknowledges that the Assigned Debt may only represent a portion of the obligations due or owing under the Convertible Note, and that the Assigned Debt is only being assigned hereunder in Purchase Tranches as contemplated above. In that regard, the Borrower further acknowledges that the Remaining Debt, and any portion of the Assigned Debt for which the Applicable Purchase Price therefor has not been received by Lender, are and remain valid and enforceable obligations of the Borrower. Borrower agrees and acknowledges that it is and shall remain liable to pay the Remaining Debt, and any portion, of the Assigned Debt for which the Applicable Purchase Price therefor has not been received by Leader, as same becomes due in accordance with the terms of the Credit Agreement and the Convertible Note, or any replacement notes issued in replacement thereof as hereby contemplated, and nothing contained herein shall be deemed or construed any waiver or to otherwise excuse performance by Borrower under its obligations to Lender.

 

6
 

 

7. RELEASE . AS A MATERIAL INDUCEMENT FOR LENDER TO AGREE TO ENTER INTO THIS AGREEMENT, BORROWER AND ASSIGNEE HEREBY RELEASE LENDER, TOGETHER WITH ALL OF ITS PARTNERS AND AFFILIATES, AND THE OFFICERS, MEMBERS, DIRECTORS, PARTNERS, EMPLOYEES, AGENTS AND ATTORNEYS OF EACH OF THE FOREGOING, FROM ALL CLAIMS, CAUSES OF ACTION AND LIABILITIES OF ANY NATURE OR KIND IN ANY WAY RELATING, DIRECTLY OR INDIRECTLY, TO THE ASSIGNED DEBT, ANY COLLATERAL SECURING ANY OBLIGATIONS THEREUNDER, THIS AGREEMENT, OR ANY OTHER DEBTS OR OBLIGATIONS IN ANY WAY RELATING TO THE CREDIT AGREEMENT, TO THE EXTENT ARISING ON OR PRIOR TO THE DATE HEREOF, INCLUDING, WITHOUT LIMITATION, ANY AND ALL CLAIMS ARISING FROM OR RELATING TO NEGOTIATIONS, DEMANDS, REQUESTS OR EXERCISE OF REMEDIES IN CONNECTION WITH THE ASSIGNED DEBT, THIS AGREEMENT, ANY OTHER DEBTS OR OBLIGATIONS IN ANY WAY RELATING TO THE CREDIT AGREEMENT, AND ANY AND ALL FEES OR CHARGES COLLECTED IN CONNECTION WITH THE ASSIGNED DEBT, THIS AGREEMENT, OR ANY OTHER DEBTS OR OBLIGATIONS IN ANY WAY RELATING TO THE CREDIT AGREEMENT. MOREOVER UPON DELIVERY OF EACH ASSIGNMENT HEREUNDER, THE FOREGOING RELEASE SHALL BE DEEMED AUTOMATICALLY RE-MADE AND EFFECTIVE FOR ALL CLAIMS, CAUSES OF ACTION AND LIABILITIES OF ANY NATURE OR KIND COVERED HEREBY TO THE EXTENT ARISING ON OR PRIOR TO THE DATE OF SUCH ASSIGNMENT.

 

8. Default and Termination .

 

(a) Breach By Assignor . In the event Assignor shall breach any of its covenants or agreements hereunder, and such breach is not cured within twenty (20) days after Assignor’s receipt of written notice of such breach from Assignee, which notice shall specify the breach with specificity, then Assignee’s sole and exclusive remedy hereunder shall be to terminate this Agreement upon written notice to Assignor, whereupon this Agreement shall terminate and Assignor and Assignee shall have no further obligation, each to the other, under this Agreement Assignor and Assignee agree that the foregoing exclusive remedy will be adequate and each of them agrees that Assignee shall not have any other remedies, at law or in equity, for any breach by Assignor not cured within any applicable notice and cure period, other than termination of this Agreement as hereby provided.

 

(b) Breach By Assignee . In the event Assignee shall breach any of its covenants or agreements hereunder, and such breach is not cured within twenty (20) days after Assignee’s receipt of written notice of such breach from Assignor, which notice shall specify the breach with specificity, then Assignor’s sole and exclusive remedy hereunder shall be to terminate this Agreement upon written notice to Assignee, whereupon this Agreement shall terminate and Assignor and Assignee shall have no further obligation, each to the other, under this Agreement. Assignor and Assignee agree that die foregoing exclusive remedy will be adequate and each of them agrees that Assignor shall not have any other remedies, at law or in equity, for any breach by Assignee not cured within any applicable notice and cure period, other than termination of this Agreement as hereby provided. Notwithstanding the foregoing to the contrary, the foregoing notice and cure period shall not be applicable with respect to Assignee’s failure to pay the Purchase Price at the Purchase Tranche Closing, and any such failure shall be deemed an immediate breach hereunder, entitling Assignor to avail itself of the exclusive termination remedy hereby provided immediately upon such failure to pay the Purchase Price at the Purchase Tranche Closing.

 

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(c) Breach by Borrower . Any breach by Borrower under this Agreement shall be deemed an event of default by Borrower under the Credit Agreement, and any such breach may be enforced by Assignor through any remedies available to Assignor, at law or in equity, or under the Credit Agreement. Borrower shall have no rights to enforce this Agreement as against Assignor or Assignee, nor shall any breach or default by Assignor or Assignee hereunder in any way abrogate, limit, or otherwise affect Borrower’s obligations under the Credit Agreement and related Loan Documents.

 

9. No Waiver . The parties recognize and acknowledge that by entering into this Agreement, the Lender is not waiving any rights or remedies it may have under any of the Loan Documents, any defaults or Events of Default arising thereunder, or any judgments previously obtained by Lender in connection therewith. In addition, notwithstanding anything contained in this Agreement to the contrary, the Lender shall have the right, at any time, to: (i) accept payments (whether in full or partial payments) of the then outstanding Remaining Debt, or any portion of the Assigned Debt not assigned at any Purchase Tranche Closing, whether such payments are made by the Borrower, or any other Person (whether in connection with such other Person’s purchase of all or any portion of the then outstanding Remaining Debt, or any portion of the Assigned Debt not assigned at any Purchase Tranche Closing, or otherwise); or (ii) enter into agreements with Borrower or any other Person for payments to be made to Lender by Borrower or any other Person at such later dates and under such terms and conditions as Lender may elect in its sole and absolute discretion, and in any of such events, or for any other reason whatsoever, in Lender’s sole and absolute discretion, Lender shall have the absolute right to terminate this Agreement upon written notice to Assignee, without liability to Assignee or any other Person, with respect to any portion of the Assigned Debt not yet sold and assigned to Assignee as of such date.

 

10. Governing Law. This Agreement shall be governed by and construed in accordance with the laws governing the Credit Agreement

 

11. Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

 

12. Headings. The headings of the paragraphs of this Agreement have been included only for convenience, and shall not be deemed in any manner to modify or limit any of the provisions of this Agreement or used in any manner in the interpretation of this Agreement

 

13. Interpretation . Whenever the context so requires in this Agreement, all words used in the singular shall be construed to have been used in the plural (and vice versa), each gender shall be construed to include any other genders, and the word Person shall be construed to include a natural person, a corporation, a firm, a partnership, a joint venture, a trust, an estate or any other entity.

 

14. Partial Invalidity. Each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. If any provision of this Agreement or the application of such provision to any person or circumstances shall, to any extent, be invalid or unenforceable, then the remainder of this Agreement, or the application of such provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected by such invalidity or unenforceability.

 

15. Execution . This Agreement may be executed in one or more counterparts, all of which taken together shall be deemed and considered one and the same Agreement. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “pdf” format file or other similar format file, such signature shall be deemed an original for all purposes and shall create a valid and binding obligation of lie party executing same with the same force and effect as if such facsimile or “.pdf’ signature page was an original thereof.

 

16. Effective Date. For purposes of this Agreement, the Effective Pate shall mean the date when this. Agreement ‘becomes fully executed by all parties hereto.

 

[Signatures on the following page]

 

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IN WITNESS WHEREOF, Assignor, Assignee, and Borrower have executed this Agreement as of the date above first written.

 

  Assignor :
   
  TCA GLOBAL CREDIT MASTER FUND, LP
     
  By: TCA Global Credit Fund GP, Ltd.
  Its: General Partner
     
  By: /s/ Robert Press  
    Robert Press, Director
     
  Date:  
     
  Assignee:
   
  SALKSANNA, LLC
   
  By: /s/ Mark Savage  
  Name: Mark Savage 
  Title: P resident 
     
  Date: 9.15.16 

 

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IN WITNESS WHEREOF, Assignor, Assignee, and Borrower have executed this Agreement of the date above first written.

 

Borrower :  

 

KSIX MEDIA. HOLDINGS, INC., a Nevada corporation

 

By: /s/ Carter Matzinger  
Name: Carter Matzinger  
Title: CEO  
Date: 9/13/2016  

 

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EXHIBIT “A”

 

FORM NOTE

 

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BY ACCEPTING THIS OBLIGATION, THE HOLDER REPRESENTS AND WARRANTS THAT IT IS NOT A UNITED STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SEC 6049(BX4) OF THE INTERNAL REVENUE CODE AND REGULATIONS THEREUNDER) AND THAT IT IS NOT ACTING FOR OR ON BEHALF OF A UNITED STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SEC. 6049(B)(4) OF THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER).

 

FIRST REPLACEMENT CONVERTIBLE PROMISSORY NOTE A

 

Issuance and Effective Date: as of August 29,2016

 

$53,542.33

 

FOR VALUE RECEIVED, KSIX MEDIA HOLDINGS, INC., a Nevada corporation ( Borrower ),whose address is 10624 S. Eastern Ave., Ste. A-910, Henderson, NV 89052, hereby promises to pay to the order of TCA Global Credit Master Fund, LP, a Cayman Islands limited partnership, with an office Located at 3960 Howard Hughes Parkway, Suite 500, Las Vegas, Nevada 89169, and its successors or assigns (collectively, the “ Holder ”), on or before the Extended Maturity Date (as defined in the Credit Agreement): (i) the principal amount of Fifty-Three Thousand Five Hundred Forty-Two and 33/100 Dollars ($53,542.33); together with (ii) interest on the unpaid principal balance hereof at the rate of eighteen percent (18%) per annum commencing as of the effective date hereof; together with (iii) all other Obligations due, owing and payable under the terms of the Credit Agreement and all other Loan Documents, all in accordance with the terms hereof and the terms and provisions of that certain Credit Agreement between the Borrower and the Holder dated as of November 30,2015, but made effective as of February 24,2016 (the “ Original Credit Agreement ”) (the Original Credit Agreement, together with all other renewals, extensions, future advances, amendments, modifications, substitutions, or replacements thereof, sometimes collectively referred to as the Credit Agreement ). This First Replacement Convertible Promissory Note A (this note, and all modifications, extensions, future advances, supplements, and renewals thereof, and any substitutions therefor, hereinafter referred to as the Note - ) shall be payable in accordance with the terms of the Credit Agreement and the specific terms set forth below. Capitalized words and phrases not otherwise defined herein shall have the meanings assigned thereto in the Credit Agreement.

 

This Note, along with First Replacement Convertible Promissory Note B ( Note B ) being executed and delivered simultaneously herewith, are being both executed in substitution for and to supersede the Convertible Promissory Note dated as of November 30, 2015, but made effective as of February 24, 2016 (the Original Note ), in its entirety. It is the intention of the Borrower and Lender that while this Note and Note B replace and supersede the Original Note, in its entirety, it is not in payment or satisfaction of the Original Note, but rather is the substitute of one evidence of debt for another without any intent to extinguish the old. Nothing contained in this Note or Note B shall be deemed to extinguish the indebtedness and obligations evidenced by the Original Note or constitute a novation of the indebtedness evidenced by the Original Note.

 

Principal, interest and other fees and charges shall be paid to Lender as set forth in the Credit Agreement, or at such other place as the holder of this Note shall designate in writing to Borrower. Each Loan made by Lender, and all payments on account of the principal and interest thereof shall be recorded on the books and records of Lender and the principal balance as shown on such books and records, or any copy thereof certified by an officer of Lender, shall be rebuttably presumptive evidence of the principal amount owing hereunder.

 

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Except for such notices as may be required under the terms of the Credit Agreement, each Borrower waives presentment, demand, notice, protest, and all other demands, or notices, in connection with the delivery, acceptance, performance, default, or enforcement of this Note, and assents to any extension or postponement of the time of payment or any other indulgence.

 

Borrower shall be solely responsible for the payment of any and all documentary stamps and other taxes applicable to the foil face amount of this Note.

 

This Note shall be governed and construed in accordance with the laws of the State of Nevada, and shall be binding upon Borrower and their legal representatives, successors, and assigns. Wherever possible, each provision of the Credit Agreement and this Note shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Credit Agreement or this Note shall be prohibited by or be invalid under such law, such provision shall be severable, and be ineffective to the extent of such prohibition or invalidity, without invalidating the remaining provisions of the Credit Agreement or this Note.

 

Nothing herein contained, nor in any instrument or transaction relating hereto, shall be construed or so operate as to require any Borrower, or any person liable for the payment of this Note, to pay interest in an amount or at a rate greater titan the highest rate permissible under applicable law. By acceptance hereof, Lender hereby warrants and represents to Borrower that Lender has no intention of charging a usurious rate of interest Should any interest or other charges paid by Borrower, or any parties liable for the payments made pursuant to this Note, result in the computation or earning of interest in excess of the highest rate permissible under applicable law, any and all such excess shall be and the same is hereby waived by the holder hereof. Lender shall make adjustments in the Note or Credit Agreement, as applicable, as necessary to ensure that Borrower will not be required to pay further interest in excess of the amount permitted by applicable law. All such excess shall be automatically credited against and in reduction of the outstanding principal balance. Any portion of such excess which exceeds the outstanding principal balance shall be paid by the holder hereof to the Lender and any parties liable for the payment of this Note, it being the intent of the parties hereto that under no circumstances shall Borrower, or any party liable for the payments hereunder, be required to pay interest in excess of the highest rate permissible under applicable law.

 

THE HOLDER IS A NON-U.S. PERSON AS THAT TERM IS DEFINED IN THE UNITED STATES INTERNAL REVENUE CODE. IT IS HEREBY AGREED AND UNDERSTOOD THAT THE OBLIGATIONS HEREUNDER MAY BE SOLD OR RESOLD ONLY TO NON-U.S. PERSONS. THE INTEREST PAYABLE HEREUNDER IS PAYABLE ONLY OUTSIDE THE UNITED STATES. ANY U.S. PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAW

 

1. Conversion of Note . At any time and from time to time while this Note is outstanding, but only upon: (i) the occurrence of an Event of Default under any of the Loan Documents; or (ii) mutual agreement between (he Borrower and the Holder, this Note may be, at the sole option of the Holder, convertible into shares of the common stock, which has a par value of $0,001 per share (the Common Stock ) of the Borrower, in accordance with the terms and conditions set forth below.

 

(a) Voluntary Conversion. At any time while this Note is outstanding, but only upon: (i) the occurrence of an Event of Default under any of the Loan Documents; or (ii) mutual agreement between the Borrower and the Holder, the Holder may convert all or any portion of the outstanding principal, accrued and unpaid interest, Premium, if applicable, and any other sums due and payable hereunder or under any other Loan Documents (such total amount, the Conversion Amount ) into shares of Common Stock of the Borrower (the Conversion Shares ) at a price equal to: (i) the Conversion Amount (the numerator); divided by (ii) eighty-five percent (85%) of the lowest of the daily volume weighted average price of the Borrower’s Common Stock during the five (5) Business Days immediately prior to the Conversion Date, which price shall be indicated in the conversion notice (in the form attached hereto as Exhibit “B” . die Conversion Notice ) (fee denominator) (the Conversion Price ). The Holder shall submit a Conversion Notice indicating the Conversion Amount, the number of Conversion Shares issuable upon such conversion, and where the Conversion Shares should be delivered.

 

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(b) The Holder’s Conversion Limitations. The Borrower shall not effect any conversion of this Note, and the Holder shall not have the right to convert any portion of this Note, to the extent that after giving effect to the conversion set forth on the Conversion Notice submitted by the Holder, the Holder (together with the Holder’s Affiliates and any Persons acting as a group together with the Holder or any of the Holder’s Affiliates) would beneficially own shares of Common Stock in excess of the Beneficial Ownership Limitation (as defined herein). To ensure compliance with this restriction, prior to delivery of any Conversion Notice, the Holder shall have the right to request that the Borrower provide to the Holder a written statement of the percentage ownership of the Borrower’s Common Stock that would be beneficially owned by the Holder and its Affiliates in the Borrower if the Holder converted such portion of this Note then intended to be converted by Holder. The Borrower shall, within two (2) Business Days of such request, provide Holder with the requested information in a written statement, and the Holder shall be entitled to rely on such written statement from the Borrower in issuing its Conversion Notice and ensuring that its ownership of the Borrower’s Common Stock is not in excess of the Beneficial Ownership Limitation. The restriction described in this Section may be waived by Holder, in whole or in part, upon notice not less than sixty-one (61) days prior written notice from the Holder to the Borrower to increase such percentage.

 

For purposes of this Note, the Beneficial Ownership limitation shall be 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Note. The limitations contained in this Section shall apply to a successor holder of this Note.

 

(c) Mechanics of Conversion . The conversion of this Note shall be conducted in the following manner:

 

(i) 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 facsimile or electronic mail (or otherwise deliver) a copy of the fully executed Conversion Notice to the Borrower (or, under certain circumstances as set forth below, by delivery of the Conversion Notice to the Borrower’s transfer agent).

 

(ii) Borrower’s Response . Upon receipt by the Borrower of a copy of a Conversion Notice, the Borrower shall as soon as practicable, but in no event later than two (2) Business Days after receipt of such Conversion Notice, send, via facsimile or electronic mail (or otherwise deliver) a confirmation of receipt of such Conversion Notice (the Conversion Confirmation ) to the Holder indicating that the Borrower will process such Conversion Notice in accordance with the terms herein. In the event the Borrower fails to issue its Conversion Confirmation within said two (2) Business Day time period, the Holder shall have the absolute and irrevocable right and authority to deliver the folly executed Conversion Notice to the Borrower’s transfer agent, and pursuant to the terms of the Loan Documents, the Borrower’s transfer agent shall issue the applicable Conversion Shares to Holder as hereby provided. Within five (5) Business Days after the date of the Conversion Confirmation, (or the date of the Conversion Notice, if the Borrower fails to issue the Conversion Confirmation), provided that the Borrower’s transfer agent is participating in the Depository Trust Borrower ( DTC ) Fast Automated Securities Transfer ( FAST ) program, the Borrower shall cause the transfer agent to (or, if for any reason the Borrower fails to instruct or cause its transfer agent to so act, then pursuant to the Loan Documents, the Holder may request and require the Borrower’s transfer agent to) electronically transmit the applicable Conversion Shares to which the Holder shall be entitled by crediting the account of the Holder’s prime broker with DTC through its Deposit Withdrawal Agent Commission (“ DWAC ’’) system, and provide proof satisfactory to the Holder of such delivery. In the event that the Borrower’s transfer agent is not participating in the DTC FAST program and is not otherwise DWAC eligible, within five (5) Business Days after the date of the Conversion Confirmation (or the date of the Conversion Notice, if the Borrower fails to issue the Conversion Confirmation), the Borrower shall instruct and cause its transfer agent to (or, if for any reason the Borrower fails to instruct or cause its transfer agent to so act, then pursuant to the Loan Documents, fee Holder may request and require the Borrower’s transfer agent to) issue and surrender to a nationally recognized overnight courier for delivery to the address specified in the Conversion Notice, a certificate, registered in the name of the Holder, or its designees, for the number of Conversion Shares to which the Holder shall be entitled. To effect conversions hereunder, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire principal amount of this Note, plus all accrued and unpaid interest, Premium, if applicable, and other sums due hereunder, has been so converted. Subject to die make-whole rights below, conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion. The Holder and the Borrower shall maintain records showing fee principal amounts) converted and the date of such conversion(S). The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof.

 

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(iii) Record Holder . The Person(s) entitled to receive the shares of Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the record holders) of such shares of Common Stock as of the Conversion Date.

 

(iv) Failure to Deliver Certificates . If in the case of any Conversion Notice, the certificate or certificates are not delivered to or as directed by the Holder by the date required hereby, the Holder shall be entitled to elect by written notice to the Borrower at any time on or before its receipt of such certificate or certificates, to rescind such Conversion Notice, in which event the Borrower shall promptly return to the Holder any original Note delivered to the Borrower and the Holder shall promptly return to the Borrower the Common Stock certificates representing the principal amount of this Note unsuccessfully tendered for conversion to the Borrower.

 

(v) Obligation Absolute: Partial Liquidated Damages . The Borrower’s obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any person or entity or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Borrower or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with the issuance of such Conversion Shares; provided, however , that such delivery shall not operate as a waiver by the Borrower of any such action the Borrower may have against the Holder. In die event the Holder of this Note shall elect to convert any or all of the outstanding principal amount hereof and accrued but unpaid interest and Premium, if applicable, thereon in accordance with the terms of this Note, the Borrower may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Note shall have been sought and obtained, and the Borrower posts a surety bond for the benefit of the Holder in the amount of 150% of the outstanding principal amount of this Note, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the absence of such injunction, the Borrower shall issue Conversion Shares upon a properly noticed conversion. If the Borrower foils for any reason to deliver to the Holder such certificate or certificates representing Conversion Shares pursuant to timing and delivery requirements of this Note, the Borrower shall pay to such Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of principal amount being converted, $1.00 per day for each day after the date by which such certificates should have been delivered until such certificates are delivered. Nothing herein shall l im it a Holder’s right to pursue actual damages or declare an Event of Default pursuant to this Note, the other Loan Documents, or any agreement securing the indebtedness under this Note for the Borrower’s failure to deliver Conversion Shares within the period specified herein and such 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 damages pursuant to any other Section hereof or under applicable law. Nothing herein shall prevent the Holder from having the Conversion Shares issued directly by the Borrower’s transfer agent in accordance with the Loan Documents, in the event for any reason the Borrower fails to issue or deliver, or cause its transfer agent to issue and deliver, the Conversion Shares to the Holder upon exercise of Holder’s conversion rights hereunder.

 

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(vi) Transfer Taxes . The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Holder hereof for any documentary stamp or similar taxes, or any other issuance or transfer fees of any nature or kind that may be payable in respect of the issue or delivery of such certificates, any such taxes or fees, if payable, to be paid by the Borrower.

 

(d) Make-Whole Rights . Upon liquidation by the Holder of Conversion Shares issued pursuant to a Conversion Notice, provided   that the Holder realizes a net amount from such liquidation equal to less than the Conversion Amount specified in the relevant Conversion Notice (such net realized amount, the Realized Amount” ), the Borrower shall issue to the Holder additional shares of the Borrower’s Common Stock equal to: (i) the Conversion Amount specified in the relevant Conversion Notice; minus (ii) the Realized Amount, as evidenced by a reconciliation statement from the Holder (a “ Sale Reconciliation ) showing the Realized Amount from the sale of the Conversion Shares; divided by (iii) the average volume weighted average price of the Borrower’s Common Stock during the five (5) Business Days immediately prior to the date upon which the Holder delivers notice (the Make-Whole Notice” ) to the Borrower that such additional shares are requested by the Holder (the “Make-Whole Stock Price” ) (such number of additional shares to be issued, the “Make-Whole Shares” ). Upon receiving the Make-Whole Notice and Sale Reconciliation evidencing the number of Make-Whole Shares requested, the Borrower shall instruct its transfer agent to issue certificates representing the Make-Whole Shares, which Make Whole Shares shall be issued and delivered in the same manner and within the same time frames as set forth in Subsection (c)(ii) above. Subsections (c)(iii), (c)(iv), (c)(v) and (c)(vi) above shall be applicable to the issuance of the Make-Whole Shares. The Make-Whole Shares, when issued, shall be deemed to be validly issued, fully paid, and non-assessable shares of the Borrower’s Common Stock. Following the sale of the Make-Whole Shares by the Holder: (i) in the event that the Holder receives net proceeds from such sale which, when added to the Realized Amount from the prior relevant Conversion Notice, is less than the Conversion Amount specified in the relevant Conversion Notice, the Holder shall deliver an additional Make-Whole Notice to the Borrower following the procedures provided previously in this paragraph, and such procedures and the delivery of Make-Whole Notices shall continue until the Conversion Amount has been fully satisfied; (ii) in the event that the Holder received net proceeds from the sale of Make-Whole Stores in excess of the Conversion Amount specified in the relevant Conversion Notice, such excess amount shall be applied to satisfy any and all amounts owed hereunder in excess of the Conversion Amount specified in the relevant Conversion Notice.

 

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(e) Adjustments to Conversion Price. The adjustments set forth in Sections (e)(i) and (e)(ii) below shall be applicable only to the extent the Conversion Price of the Common Stock does not already reflect an adjustment for any of such events.

 

(i) Stock Dividends and Stock Splits. If the Borrower, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on outstanding shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of Common Stock, any shares of capital stock of the Borrower, then the Conversion Price shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock (excluding any treasury shares of the Borrower) outstanding immediately before such event, and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination, or re-classification.

 

(ii) Fundamental Transaction . If, at any time while this Note is outstanding: (i) the Borrower effects any merger or consolidation of the Borrower with or into another Person, (ii) the Borrower effects any sale of all or substantially all of its assets in one transaction or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Borrower or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv) the Borrower effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a Fundamental Transaction ) then upon any subsequent conversion of this Note, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to lie occurrence of such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one (1) share of Common Stock (the Alternate Consideration ) For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Borrower shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to die Alternate Consideration it receives upon any conversion of this Note following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Borrower or surviving entity in such Fundamental Transaction shall issue to the Holder a new note consistent with the foregoing provisions and evidencing the Holder’s right to convert such note into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section, and insuring that this Note (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

 

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(iii) Adjustment to Conversion Price . Whenever the Conversion Price is adjusted pursuant to any provision of this Note, the Borrower shall promptly deliver to Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment

 

(iv) Notice to Allow Conversion by Holder . If: (A) the Borrower shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Borrower shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Borrower shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Borrower shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Borrower is a party, any sale or transfer of all or substantially all of the assets of the Borrower, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Borrower shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Borrower, then, in each case, the Borrower shall cause to be filed at each office or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder at its last address as it shall appear upon the Borrower’s records, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating: (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined, or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder is entitled to convert this Note during the 10-day period commencing on the date of such notice through the effective date of the event triggering such notice.

 

[Signature page follows]

 

7
 

 

IN WITNESS WHEREOF, the Borrower has caused this Note to be executed as of the Effective Date set forth above.

 

BORROWER :

 

KSIX MEDIA HOLDINGS, INC., a Nevada corporation  
     
By: /s/ Carter Matzinger  
Name: Carter Matzinger  
Title: CEO  

 

STATE OF Nevada )  
    ss.  
COUNTY OF Clark   )  

 

The foregoing instrument was acknowledged before me this 13 th day of September , 2016 by Carter Matzinger , who is the CEO of Ksix Media Holdings, Inc., a Nevada corporation, on behalf of said corporation. He/She is personally known to me or has produced state issued driver’s license as identification.

 

My Commission Expires:

 

  DESCRIPTION: C:/USERS/IGS/DESKTOP/COMPARE/IMAGE_002.JPG /s/ Shawn Person
Notary Public
 
Shawn Person
Name of Notary Typed or printed

 

[Signature page to Promissory Note]

 

8
 

 

EXHIBIT “A”

 

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert principal, interest, Premium, if applicable, and/or other sums due under the Convertible Promissory Note (the Note ) of KSIX MEDIA HOLDINGS, INC., a Nevada corporation (the Company ), into shares of common stock, which has a par value of $0,001 per share (the Common Shares ), of the Company in accordance with the conditions of the Note, as of the date written below.

 

Based solely on information provided by the Company to Holder, the undersigned represents and warrants to the Company that its ownership of the Common Shares does not exceed the Beneficial Ownership Limitation determined in accordance with Section 13(d) of the Exchange Act of 1934, as amended, as specified under the Note.

 

Conversion calculations

 

Effective Date of Conversion:    
     
Principal Amount, Interest, Premium, if applicable, and other Sums to be Converted:    
     
Number of Common Shares to be Issued:    

 

[HOLDER]

 

By:    
     
Name:    
     
Title:    
     
Address:    
     
     
     
     

 

9
 

 

EXHIBIT “B”

 

PURCHASE TRANCHES  

 

P urchase Tranches

  Application Purchase Price     Date for Purchase Tranche Closing
           
1   $ 53,452.33     Simultaneously with execution of ‘this Agreement
All additional Purchase Tranches until Assignee has purchased the entire amount of the Assigned Debt     $ 153,452.33     Thirty (30) Days after prior Purchase Tranche Closing

 

10
 

 

ASSIGNMENT OF NOTE

 

THIS ASSIGNMENT OF NOTE (this Assignment ), is made and entered into as of the 16 th day Of Sept. , 2016, by TCA GLOBAL CREDIT MASTER FUND, LP, a Cayman Islands limited partnership, with an address of 3960 Howard Hughes Parkway, Suite 500, Las Vegas, NV 89169 ( Assignor or “Lender” ), in favor of SALKSANNA, LLC ( Assignee ).

 

WITNESSETH

 

WHEREAS, Assignor is the present legal and equitable owner and holder of that certain First Replacement Note A dated effective as of Aug 29 , 2016, executed by Borrower, and made payable to the order of Assignor, in the original principal amount of $53,452.33 (the Note ”); and

 

WHEREAS, the parties hereto have entered into a Debt Purchase Agreement dated as of Sep 15 , 2016 (the DPA ”), pursuant to which Assignor has agreed to assign to Assignee, its successors and assigns, Assignor’s right, title and interest in and to the monetary obligations evidenced by the Note (the Assigned Debt” ), all subject to the terms and conditions set forth in the DPA and hereinafter set forth;

 

NOW, THEREFORE, in consideration of the sum of $53,452.33, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and agreed, Assignor, Assignee, and Borrower hereby covenant and agree as follows:

 

1. Recitals , The recitations set forth in the preamble of this Assignment are true and correct and incorporated herein by this reference. All capitalized terms used herein and not otherwise defined in this Assignment shall have the same meaning ascribed to them in the DPA.

 

2. Assignment , Assignor does hereby transfer, assign, grant, and convey to Assignee, its successors and assigns, all of the right, title and interest of Assignor in and to the Assigned Debt only, it being acknowledged by Assignee that the Remaining Debt is not being assigned hereby.

 

3. No Security Rights . Assignee hereby agrees and acknowledges that the sale, transfer and assignment of the Assigned Debt shall be a sale, transfer and assignment of the monetary obligations evidenced by such Assigned Debt only, and shall not include, and such sale, transfer and assignment expressly excludes, the Remaining Debt, and any and all Security Rights.

 

4. Reference to DPA . The assignment contemplated hereby shall be subject to the representations, warranties, limitations, exclusions, releases, acknowledgments, and all other terms and provisions of the DPA.

 

5. Governing Law . This Assignment shall be governed by and construed in accordance with the laws governing the Note.

 

6. Successors and Assigns . This Assignment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

 

7. Headings . The headings of the paragraphs of this Assignment have been included only for convenience, and shall not be deemed in any manner to modify or limit any of the provisions of this Agreement or used in any manner in the interpretation of this Assignment.

 

1
 

 

8. Interpretation . Whenever the context so requires in this Assignment, all words used in the singular shall be construed to have been used in the plural (and vice versa), each gender shall be construed to include any other genders, and the word “Person shall be construed to include a natural person, a corporation, a firm, a partnership, a joint venture, a trust, an estate or any other entity.

 

9. Partial Invalidity . Each provision of this Assignment shall be valid and enforceable to the fullest extent permitted by law. If any provision of this Assignment or the application of such provision to any Person or circumstances shall, to any extent, be invalid or unenforceable, then the remainder of this Assignment, or the application of such provision to Persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected by such invalidity or unenforceability.

 

10. Execution . In the event that any signature is delivered by facsimile transmission or by email delivery of a “.pdf” format file or other similar format file, such signature shall be deemed an original for all purposes and shall create a valid and binding obligation of the party executing same with the same force and effect as if such facsimile or “.pdf” signature page was an original thereof.

 

[Signatures on the following page]

 

2
 

 

IN WITNESS WHEREOF, Assignor has executed this Assignment as of the date above first written.

 

  Assignor :
   
  TCA GLOBAL CREDIT MASTER FUND, LP
   
  By: TCA Global Credit Fund GP, Ltd.
  Its: General Partner
     
  By: /s/ Robert Press
    Robert Press, Director

 

3
 

 

 

BY ACCEPTING THIS OBLIGATION, THE HOLDER REPRESENTS AND WARRANTS THAT IT IS NOT A UNITED STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SEC 6049(B)(4) OF THE INTERNAL REVENUE CODE AND REGULATIONS THEREUNDER) AND THAT IT IS NOT ACTING FOR OR ON BEHALF OF A UNITED STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SEC. 6049(B)(4) OF THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER).

 

FIRST REPLACEMENT CONVERTIBLE PROMISSORY NOTE A

 

Issuance and Effective Date: as of August 29,2016

 

$53,542.33

 

FOR VALUE RECEIVED, KSIX MEDIA HOLDINGS, INC., a Nevada corporation ( Borrower ), w hose address is 10624 S. Eastern Ave., Ste. A-910, Henderson, NV 89052, hereby promises to pay to the order of TCA Global Credit Master Fund, LP, a Cayman Islands limited partnership, with an office located at 3960 Howard Hughes Parkway, Suite 500, Las Vegas, Nevada 89169, and its successors or assigns (collectively, the Holder ), on or before the Extended Maturity Date (as defined in the Credit Agreement): (i) the principal amount of Fifty-Three Thousand Five Hundred Forty-Two and 33/100 Dollars ($53,542.33); together with (ii) interest on the unpaid principal balance hereof at the rate of eighteen percent (18%) per annum commencing as of the effective date hereof; together with (iii) all other Obligations due, owing and payable under the terms of the Credit Agreement and all other Loan Documents, all in accordance with the terms hereof and the terms and provisions of that certain Credit Agreement between the Borrower and the Holder dated as of November 30, 2015, but made effective as of February 24, 2016 (the Original Credit Agreement ) (the Original Credit Agreement, together with all other renewals, extensions, future advances, amendments, modifications, substitutions, or replacements thereof, sometimes collectively referred to as the Credit Agreement ). This First Replacement Convertible Promissory Note A (this note, and all modifications, extensions, future advances, supplements, and renewals thereof, and any substitutions therefor, hereinafter referred to as the “ Note ”) shall be payable in accordance with the terms of the Credit Agreement and the specific terms set forth below. Capitalized words and phrases not otherwise defined herein shall have the meanings assigned thereto in the Credit Agreement.

 

This Note, along with First Replacement Convertible Promissory Note B (“ Note B ”) being executed and delivered simultaneously herewith, are being both executed in substitution for and to supersede the Convertible Promissory Note dated as of November 30, 2015, but made effective as of February 24, 2016 (the Original Note ), in its entirety. It is the intention of the Borrower and Lender that while this Note and Note B replace and supersede the Original Note, in its entirety, it is not in payment or satisfaction of the Original Note, but rather is the substitute of one evidence of debt for another without any intent to extinguish the old. Nothing contained in this Note or Note B shall be deemed to extinguish the indebtedness and obligations evidenced by the Original Note or constitute a novation of the indebtedness evidenced by the Original Note.

 

Principal, interest and other fees and charges shall be paid to Lender as set forth in the Credit Agreement, or at such other place as the holder of this Note shall designate in writing to Borrower. Each Loan made by Lender, and all payments on account of the principal and interest thereof shall be recorded on the books and records of Lender and the principal balance as shown on such books and records, or any copy thereof certified by an officer of Lender, shall be rebuttably presumptive evidence of the principal amount owing hereunder.

 

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Except for such notices as may be required under the terms of the Credit Agreement, each Borrower waives presentment, demand, notice, protest, and all other demands, or notices, in connection with the delivery, acceptance, performance, default, or enforcement of this Note, and assents to any extension or postponement of the time of payment or any other indulgence.

 

Borrower shall be solely responsible for the payment of any and all documentary stamps and other taxes applicable to the full face amount of this Note.

 

This Note shall be governed and construed in accordance with the laws of the State of Nevada, and shall be binding upon Borrower and their legal representatives, successors, and assigns. Wherever possible, each provision of the Credit Agreement and this Note shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Credit Agreement or this Note shall be prohibited by or be invalid under such law, such provision shall be severable, and be ineffective to the extent of such prohibition or invalidity, without invalidating the remaining provisions of the Credit Agreement or this Note.

 

Nothing herein contained, nor in any instrument or transaction relating hereto, shall be construed or so operate as to require any Borrower, or any person liable for the payment of this Note, to pay interest in an amount or at a rate greater than the highest rate permissible under applicable law. By acceptance hereof, Lender hereby warrants and represents to Borrower that Lender has no intention of charging a usurious rate of interest. Should any interest or other charges paid by Borrower, or any parties liable for the payments made pursuant to this Note, result in the computation or earning of interest in excess of the highest rate permissible under applicable law, any and all such excess shall be and the same is hereby waived by the holder hereof. Lender shall make adjustments in the Note or Credit Agreement, as applicable, as necessary to ensure that Borrower will not be required to pay further interest in excess of the amount permitted by applicable law. All such excess shall be automatically credited against and in reduction of the outstanding principal balance. Any portion of such excess which exceeds the outstanding principal balance shall be paid by the holder hereof to the Lender and any parties liable for the payment of this Note, it being the intent of the parties hereto that under no circumstances shall Borrower, or any party liable for the payments hereunder, be required to pay interest in excess of the highest rate permissible under applicable law.

 

THE HOLDER IS A NON-U.S. PERSON AS THAT TERM IS DEFINED IN THE UNITED STATES INTERNAL REVENUE CODE. IT IS HEREBY AGREED AND UNDERSTOOD THAT THE OBLIGATIONS HEREUNDER MAY BE SOLD OR RESOLD ONLY TO NON-U.S. PERSONS. THE INTEREST PAYABLE HEREUNDER IS PAYABLE ONLY OUTSIDE THE UNITED STATES. ANY U.S. PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBIECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAW

 

1. Conversion of Note . At any time and from time to time while this Note is outstanding, but only upon: (i) the occurrence of an Event of Default under any of the Loan Documents; or (ii) mutual agreement between the Borrower and the Holder, this Note may be, at the sole option of the Holder, convertible into shares of the common stock, which has a par value of $0,001 per share (the Common Stock ) of the Borrower, in accordance with the terms and conditions set forth below.

 

(a) Voluntary Conversion . At any time while this Note is outstanding, but only upon: (i) the occurrence of an Event of Default under any of the Loan Documents; or (ii) mutual agreement between the Borrower and the Holder, the Holder may convert all or any portion of the outstanding principal, accrued and unpaid interest, Premium, if applicable, and any other sums due and payable hereunder or under any other Loan Documents (such total amount, the Conversion Amount ”) into shares of Common Stock of the Borrower (the Conversion Shares ”) at a price equal to: (i) the Conversion Amount (the numerator); divided by (ii) eighty-five percent (85%) of the lowest of the daily volume weighted average price of the Borrower’s Common Stock during the five (5) Business Days immediately prior to the Conversion Date, which price shall be indicated in the conversion notice (in the form attached hereto as Exhibit “B”, the Conversion Notice ) (the denominator) (the Conversion Price” ) . The Holder shall submit a Conversion Notice indicating the Conversion Amount, the number of Conversion Shares issuable upon such conversion, and where the Conversion Shares should be delivered.

 

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(b) The Holder’s Conversion Limitations . The Borrower shall not effect any conversion of this Note, and the Holder shall not have the right to convert any portion of this Note, to the extent that after giving cffect to the conversion set forth on the Conversion Notice submitted by the Holder, the Holder (together with the Holder’s Affiliates and any Persons acting as a group together with the Holder or any of the Holder’s Affiliates) would beneficially own shares of Common Stock in excess of the Beneficial Ownership Limitation (as defined herein). To ensure compliance with this restriction, prior to delivery of any Conversion Notice, the Holder shall have the right to request that the Borrower provide to the Holder a written statement of the percentage ownership of the Borrower’s Common Stock that would be beneficially owned by the Holder and its Affiliates in the Borrower if the Holder converted such portion of this Note then intended to be converted by Holder. The Borrower shall, within two (2) Business Days of such request, provide Holder with the requested information in a written statement, and the Holder shall be entitled to rely on such written statement from the Borrower in issuing its Conversion Notice and ensuring that its ownership of the Borrower’s Common Stock is not in excess of the Beneficial Ownership Limitation. The restriction described in this Section may be waived by Holder, in whole or in part, upon notice not less than sixty-one (61) days prior written notice from the Holder to the Borrower to increase such percentage.

 

For purposes of this Note, the Beneficial Ownership Limitation shall be 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Note. The limitations contained in this Section shall apply to a successor holder of this Note.

 

(c) Mechanics of Conversion . The conversion of this Note shall be conducted in the following manner:

 

(i) 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 facsimile or electronic mail (or otherwise deliver) a copy of the fully executed Conversion Notice to the Borrower (or, under certain circumstances as set forth below, by delivery of the Conversion Notice to the Borrower’s transfer agent).

 

(ii) Borrower’s Response . Upon receipt by the Borrower of a copy of a Conversion Notice, the Borrower shall as soon as practicable, but in no event later than two (2) Business Days after receipt of such Conversion Notice, send, via facsimile or electronic mail (or otherwise deliver) a confirmation of receipt of such Conversion Notice (the Conversion Confirmation ”) to the Holder indicating that the Borrower will process such Conversion Notice in accordance with the terms herein. In the event the Borrower fails to issue its Conversion Confirmation within said two (2) Business Day time period, the Holder shall have the absolute and irrevocable right and authority to deliver the fully executed Conversion Notice to the Borrower’s transfer agent, and pursuant to the terms of the Loan Documents, the Borrower’s transfer agent shall issue the applicable Conversion Shares to Holder as hereby provided. Within five (5) Business Days after the date of the Conversion Confirmation (or the date of the Conversion Notice, if the Borrower fails to issue the Conversion Confirmation), provided that the Borrower’s transfer agent is participating in the Depository Trust Borrower (“ DTC ”) Fast Automated Securities Transfer (“ FAST ”) program, the Borrower shall cause the transfer agent to (or, if for any reason the Borrower fails to instruct or cause its transfer agent to so act, then pursuant to the Loan Documents, the Holder may request and require the Borrower’s transfer agent to) electronically transmit the applicable Conversion Shares to which the Holder shall be entitled by crediting the account of the Holder’s prime broker with DTC through its Deposit Withdrawal Agent Commission (“ DWAC ”) system, and provide proof satisfactory to the Holder of such delivery. In the event that the Borrower’s transfer agent is not participating in the DTC FAST program and is not otherwise DWAC eligible, within five (5) Business Days after the date of the Conversion Confirmation (or the date of the Conversion Notice, if the Borrower fails to issue the Conversion Confirmation), the Borrower shall instruct and cause its transfer agent to (or, if for any reason the Borrower fails to instruct or cause its transfer agent to so act, then pursuant to the Loan Documents, the Holder may request and require the Borrower’s transfer agent to) issue and surrender to a nationally recognized overnight courier for delivery to the address specified in the Conversion Notice, a certificate, registered in the name of the Holder, or its designees, for the number of Conversion Shares to which the Holder shall be entitled. To effect conversions hereunder, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire principal amount of this Note, plus all accrued and unpaid interest, Premium, if applicable, and other sums due hereunder, has been so converted. Subject to the make-whole rights below, conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion. The Holder and the Borrower shall maintain records showing the principal amount(s) converted and the date of such conversion(s). The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof.

 

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(iii) Record Holder . The Person(s) 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(s) of such shares of Common Stock as of the Conversion Date.

 

(iv) Failure to Deliver Certificates . If in the case of any Conversion Notice, the certificate or certificates are not delivered to or as directed by the Holder by the date required hereby, the Holder shall be entitled to elect by written notice to the Borrower at any time on or before its receipt of such certificate or certificates, to rescind such Conversion Notice, in which event the Borrower shall promptly return to the Holder any original Note delivered to the Borrower and the Holder shall promptly return to the Borrower the Common Stock certificates representing the principal amount of this Note unsuccessfully tendered for conversion to the Borrower.

 

(v) Obligation Absolute: Partial Liquidated Damages . The Borrower’s obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any person or entity or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Borrower or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with the issuance of such Conversion Shares; provided , however , that such delivery shall not operate as a waiver by the Borrower of any such action the Borrower may have against the Holder. In the event the Holder of this Note shall elect to convert any or all of the outstanding principal amount hereof and accrued but unpaid interest and Premium, if applicable, thereon in accordance with the terms of this Note, the Borrower may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Note shall have been sought and obtained, and the Borrower posts a surety bond for the benefit of the Holder in the amount of 150% of the outstanding principal amount of this Note, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the absence of such injunction, the Borrower shall issue Conversion Shares upon a properly noticed conversion. If the Borrower fails for any reason to deliver to the Holder such certificate or certificates representing Conversion Shares pursuant to timing and delivery requirements of this Note, the Borrower shall pay to such Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of principal amount being converted, $1.00 per day for each day after the date by which such certificates should have been delivered until such certificates are delivered. Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to this Note, the other Loan Documents, or any agreement securing the indebtedness under this Note for the Borrower’s failure to deliver Conversion Shares within the period specified herein and such 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 damages pursuant to any other Section hereof or under applicable law. Nothing herein shall prevent the Holder from having the Conversion Shares issued directly by the Borrower’s transfer agent in accordance with the Loan Documents, in the event for any reason the Borrower fails to issue or deliver, or cause its transfer agent to issue and deliver, the Conversion Shares to the Holder upon exercise of Holder’s conversion rights hereunder.

 

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(vi) Transfer Taxes . The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Holder hereof for any documentary stamp or similar taxes, or any other issuance or transfer fees of any nature or kind that may be payable in respect of the issue or delivery of such certificates, any such taxes or fees, if payable, to be paid by the Borrower.

 

(d) Make-Whole Rights . Upon liquidation by the Holder of Conversion Shares issued pursuant to a Conversion Notice, provided that the Holder realizes a net amount from such liquidation equal to less than the Conversion Amount specified in the relevant Conversion Notice (such net realized amount, the Realized Amount ), the Borrower shall issue to the Holder additional shares of the Borrower’s Common Stock equal to: (i) the Conversion Amount specified in the relevant Conversion Notice; minus (ii) the Realized Amount, as evidenced by a reconciliation statement from the Holder (a Sale Reconciliation ) showing the Realized Amount from the sale of the Conversion Shares; divided by (iii) the average volume weighted average price of the Borrower’s Common Stock during the five (5) Business Days immediately prior to the date upon which the Holder delivers notice (the Make-Whole Notice ) to the Borrower that such additional shares are requested by the Holder (the Make-Whole Stock Price ) (such number of additional shares to be issued, the Make-Whole Shares ). Upon receiving the Make-Whole Notice and Sale Reconciliation evidencing the number of Make-Whole Shares requested, the Borrower shall instruct its transfer agent to issue certificates representing the Make-Whole Shares, which Make Whole Shares shall be issued and delivered in the same manner and within the same time frames as set forth in Subsection (c)(ii) above. Subsections (c)(iii), (c)(iv), (c)(v) and (c)(vi) above shall be applicable to the issuance of the Make-Whole Shares. The Make-Whole Shares, when issued, shall be deemed to be validly issued, fully paid, and non-assessable shares of the Borrower’s Common Stock. Following the sale of the Make-Whole Shares by the Holder: (i) in the event that the Holder receives net proceeds from such sale which, when added to the Realized Amount from the prior relevant Conversion Notice, is less than the Conversion Amount specified in the relevant Conversion Notice, the Holder shall deliver an additional Make-Whole Notice to the Borrower following the procedures provided previously in this paragraph, and such procedures and the delivery of Make-Whole Notices shall continue until the Conversion Amount has been fully satisfied; (ii) in the event that the Holder received net proceeds from the sale of Make-Whole Shares in excess of the Conversion Amount specified in the relevant Conversion Notice, such excess amount shall be applied to satisfy any and all amounts owed hereunder in excess of the Conversion Amount specified in the relevant Conversion Notice.

 

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(e) Adjustments to Conversion Price . The adjustments set forth in Sections (e)(i) and (e)(ii) below shall be applicable only to the extent the Conversion Price of the Common Stock does not already reflect an adjustment for any of such events.

 

(i) Stock Dividends and Stock Splits . If the Borrower, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on outstanding shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of Common Stock, any shares of capital stock of the Borrower, then the Conversion Price shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock (excluding any treasury shares of the Borrower) outstanding immediately before such event, and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination, or re-classification.

 

(ii) Fundamental Transaction . If, at any time while this Note is outstanding: (i) the Borrower effects any merger or consolidation of the Borrower with or into another Person, (ii) the Borrower effects any sale of all or substantially all of its assets in one transaction or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Borrower or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv) the Borrower effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a Fundamental Transaction ), then upon any subsequent conversion of this Note, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one (1) share of Common Stock (the Alternate Consideration ). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Borrower shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Note following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Borrower or surviving entity in such Fundamental Transaction shall issue to the Holder a new note consistent with the foregoing provisions and evidencing the Holder’s right to convert such note into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section and insuring that this Note (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

 

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(iii) Adjustment to Conversion Price . Whenever the Conversion Price is adjusted pursuant to any provision of this Note, the Borrower shall promptly deliver to Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

 

(iv) Notice to Allow Conversion by Holder . If: (A) the Borrower shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Borrower shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Borrower shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Borrower shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Borrower is a party, any sale or transfer of all or substantially all of the assets of the Borrower, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Borrower shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Borrower, then, in each case, the Borrower shall cause to be filed at each office or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder at its last address as it shall appear upon the Borrower’s records, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating: (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined, or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder is entitled to convert this Note during the 10-day period commencing on the date of such notice through the effective date of the event triggering such notice.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the Borrower has caused this Note to be executed as of the Effective Date set forth above.

 

BORROWER:  
     
KSIX MEDIA HOLDINGS, INC., a  
Nevada corporation  
     
By: /s/ Carter Matzinger  
Name: Carter Matzinger  
Title: CEO  

 

STATE OF Nevada )
    SS.
COUNTY OF Clark )

 

The foregoing instrument was acknowledged before me this 13 th day of September, 2016 by Carter Matzinger , who is the CEO of Ksix Media Holdings, Inc., a Nevada corporation, on behalf of said corporation. He/She is personally known to me or has produced state issued drivers license as identification.

 

My Commission Expires:

 

 

  /s/ Shawn Pearson
  Notary Public
   
  Shawn Pearson
  Name of Notary typed or printed

 

[Signature page to Promissory Note]

 

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EXHIBIT “A”

 

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert principal, interest, Premium, if applicable, and/or other sums due under the Convertible Promissory Note (the Note ”) of KSIX MEDIA HOLDINGS, INC., a Nevada corporation (the Company ), into shares of common stock, which has a par value of $0,001 per share (the Common Shares ), of the Company in accordance with the conditions of the Note, as of the date written below.

 

Based solely on information provided by the Company to Holder, the undersigned represents and warrants to the Company that its ownership of the Common Shares does not exceed the Beneficial Ownership Limitation determined in accordance with Section 13(d) of the Exchange Act of 1934, as amended, as specified under the Note.

 

Conversion calculations

 

Effective Date of Conversion:  
Principal Amount, Interest, Premium, if applicable, and other Sums to be Converted:  
Number of Common Shares to be Issued:  

 

[HOLDER]  
     
By:    
     
Name:    
     
Title:    
     
Address:    
     
     
     
     

 

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NEITHER THIS NOTE NOR THE SECURITIES THAT ARE ISSUABLE TO THE HOLDER 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 (H) IN THE ABSENCE OF AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE ISSUER, THAT REGISTRATION IS NOT REQUIRED UNDER THE 1933 ACT OR; (IH) UNLESS SOLD, TRANSFERRED OR ASSIGNED PURSUANT TO RULE 144 UNDER THE 1933 ACT.

 

BY ACCEPTING THIS OBLIGATION, THE HOLDER REPRESENTS AND WARRANTS THAT IT IS NOT A UNITED STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SEC 6049(B)(4) OF THE INTERNAL REVENUE CODE AND REGULATIONS THEREUNDER) AND THAT IT IS NOT ACTING FOR OR ON BEHALF OF A UNITED STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SEC. 6049(B)(4) OF THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER).

 

FIRST REPLACEMENT CONVERTIBLE PROMISSORY NOTE B

 

Issuance and Effective Date: as of August 29, 2016

 

$278,530.79

 

FOR VALUE RECEIVED, KSIX MEDIA HOLDINGS, INC., a Nevada corporation ( “Borrower ”), whose address is 10624 S. Eastern Ave., Ste. A-910, Henderson, NV 89052, hereby promises to pay to the order of TCA Global Credit Master Fund, LP, a Cayman Islands limited partnership, with an office located at 3960 Howard Hughes Parkway, Suite 500, Las Vegas, Nevada 89169, and its successors or assigns (collectively, the Holder” ), on or before the Extended Maturity Date (as defined in the Credit Agreement): (i) the principal amount of Two Hundred Seventy-Eight Thousand Five Hundred Thirty and 79/100 Dollars ($278,530.79); together with (ii) interest on the unpaid principal balance hereof at the rate of eighteen percent (18%) per annum commencing as of the effective date hereof; together with (iii) all other Obligations due, owing and payable under the terms of the Credit Agreement and all other Loan Documents, all in accordance with the terms hereof and the terms and provisions of that certain Credit Agreement between the Borrower and the Holder dated as of November 30, 2015, but made effective as of February 24, 2016 (the Original Credit Agreement ) (the Original Credit Agreement, together with all other renewals, extensions, future advances, amendments, modifications, substitutions, or replacements thereof, sometimes collectively referred to as the Credit Agreement ). This First Replacement Convertible Promissory Note B (this note, and all modifications, extensions, future advances, supplements, and renewals thereof, and any substitutions therefor, hereinafter referred to as the Note ”) shall be payable in accordance with the terms of the Credit Agreement and the specific terms set forth below. Capitalized words and phrases not otherwise defined herein shall have the meanings assigned thereto in the Credit Agreement.

 

This Note, along with First Replacement Convertible Promissory Note A (“ Note A ) being executed and delivered simultaneously herewith, are being both executed in substitution for and to supersede the Convertible Promissory Note dated as of November 30, 2015, but made effective as of February 24, 2016 (the Original Note ), in its entirety, it is the intention of the Borrower and Lender that while this Note and Note A replace and supersede the Original Note, in its entirety, it is not in payment or satisfaction of the Original Note, but rather is the substitute of one evidence of debt for another without any intent to extinguish the old. Nothing contained in this Note or Note A shall be deemed to extinguish the indebtedness and obligations evidenced by the Original Note or constitute a novation of the indebtedness evidenced by the Original Note.

 

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1. Payments.

 

(a) Monthly Payments . The Borrower shall make monthly payments of principal, interest, and other sums, as applicable, to the Holder, on the dates and in the amounts, based on the payment and amortization schedule attached hereto as Exhibit “A” . In the event the due date under such payment schedule is not a Business Day, then said payment shall be due on the first Business Day thereafter occurring.

 

(b) Prepayment Prior to Maturity . The Borrower, at its option, shall have the right to prepay this Note in full and for cash, at any time prior to the Maturity Date, with three (3) Business Days advance written notice (the “ Prepayment Notice ”) to the Holder. The amount required to prepay this Note in full pursuant to this Section 1(c) shall be equal to: (i) the aggregate principal amount then outstanding under this Note; plus (ii) all accrued and unpaid interest due under this Note as of the prepayment date; plus (iii) all other costs, fees, charges, and all other Obligations due and payable hereunder or under any other “Loan Documents” (as hereinafter defined) (collectively, the “ Prepayment Amount ”). The Borrower shall deliver the Prepayment Amount to the Holder on the third (3 rd ) Business Day after the date of the Prepayment Notice.

 

(c) Payment at Maturity . The principal amount of this Note, together with all accrued and unpaid interest, and all other sums due and payable hereunder and/or under any other Loan Documents, are and shall be due and payable in full to the Holder by no later than 2:00 P.M., EST, on the Maturity Date.

 

(d) Payment of Default Interest . Any amount of principal, interest, or other sums due on this Note or any other Loan Documents which are not paid when due shall bear interest from the date due until such past due amount is paid in full at the Default Rate.

 

(e) Late Fee . If all or any portion of the payments of principal, interest, or other charges due hereunder are not received by the Holder within five (5) days of the date such payment is due, then the Borrower shall pay to the Holder a late charge (in addition to any other remedies that Holder may have) equal to five percent (5%) of each such unpaid payment or sum. Any payments returned to Holder for any reason must be covered by wire transfer of immediately available funds to an account designated by Holder, plus a $100.00 administrative fee charge. Holder shall have no responsibility or liability for payments purportedly made hereunder but not actually received by Holder, and the Borrower shall not be discharged from the obligation to make such payments due to loss of same in the mails or due to any other excuse or justification ultimately involving facts where such payments were not actually received by Holder.

 

(f) General Payment Provisions . Interest shall be calculated on the basis of a 360- day year, and shall accrue daily on the outstanding principal amount outstanding from time to time for the actual number of days elapsed, commencing as of the effective date hereof until payment in full of the outstanding principal, together with all accrued and unpaid interest, and other amounts which may become due hereunder or under any Loan Documents, has been received and cleared to the Holder. All payments received and actually collected by Holder hereunder shall be applied first to any costs, fees and expenses due or incurred hereunder or under any other Loan Documents, second to accrued and unpaid interest hereunder, and last to reduce the outstanding principal balance of this Note. All payments on this Note shall be made in lawful money of the United States of America in the manner required by the Credit Agreement.

 

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2. Secured Nature of Note . This Note is being issued in connection with the Credit Agreement. The indebtedness evidenced by this Note is also secured by all of the Collateral of the Borrower and various other instruments and documents referred to in the Credit Agreement as the Loan Documents (which term shall have the same meaning in this Note as such term is given in the Credit Agreement). All of the agreements, conditions, covenants, provisions, representations, warranties and stipulations contained in any of the Loan Documents which are to be kept and performed by the Borrower are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein, and the Borrower covenants and agrees to keep and perform them, or cause them to be kept or performed, strictly in accordance with their terms.

 

3. Defaults and Remedies .

 

(a) Events of Default . The occurrence of any of the following events shall constitute an Event of Default hereunder: (i) the Borrower shall fail to pay any installment of interest, principal, or other sums due under this Note or any other Loan Documents when any such payment shall be due and payable; (ii) the Borrower or any of its Subsidiaries makes an assignment for the benefit of creditors; (iii) any order or decree is rendered by a court which appoints or requires the appointment of a receiver, liquidator or trustee for the Borrower or any of its Subsidiaries, and the order or decree is not vacated within thirty (30) days from the date of entry thereof; (iv) any order or decree is rendered by a court adjudicating the Borrower or any of its Subsidiaries, insolvent, and the order or decree is not vacated within thirty (30) days from the date of entry thereof; (v) the Borrower of any of its Subsidiaries files a petition in bankruptcy under the provisions of any bankruptcy law or any insolvency act; (vi) the Borrower or any of its Subsidiaries admits, in writing, its inability to pay its debts as they become due; (vii) a proceeding or petition in bankruptcy is filed against the Borrower or any of its Subsidiaries, and such proceeding or petition is not dismissed within thirty (30) days from the date it is filed; (viii) the Borrower or any of its Subsidiaries files a petition or answer seeking reorganization or arrangement under the bankruptcy laws or any law or statute of the United States or any other foreign country or state; (ix) the occurrence of any breach, default or “Event of Default” (as such term may be defined in any of the other Loan Documents) under the Credit Agreement or any other Loan Documents; or (x) the Borrower shall fail to perform, comply with or abide by any of the material stipulations, agreements, conditions and/or covenants contained in this Note or any other Loan Documents on the part of the Borrower to be performed, complied with, or abided by, and such failure is not cured within ten (10) days after written notice of such failure is delivered by Holder to the Borrower (provided that if the failure to perform or default in performance is not capable of being cured, in Holder’s sole discretion, then the cure period set forth herein shall not be applicable and the failure or default shall be an immediate Event of Default hereunder).

 

(b) Remedies . Upon the occurrence of an Event of Default, the interest on this Note shall immediately accrue at the Default Rate, and, in addition to all other rights or remedies the Holder may have, at law or in equity, the Holder may, in its sole discretion, accelerate full repayment of all principal amounts outstanding hereunder, together with accrued interest thereon, together with all other fees, charges and amounts due under any Loan Documents, together with all attorneys’ fees, paralegals’ fees and costs and expenses incurred by the Holder in collecting or enforcing payment hereof (whether such fees, costs or expenses are incurred in negotiations, all trial and appellate levels, administrative proceedings, bankruptcy proceedings or otherwise), and together with all other Obligations due by the Borrower hereunder and under the Loan Documents, and all such amounts shall thereafter accrue interest at the Default Rate, all without any relief whatsoever from any valuation or appraisement laws, and payment thereof may be enforced and recovered in whole or in part at any time by one or more of the remedies provided to the Holder at law, in equity, or under this Note or any of the other Loan Documents. In connection with the Holder’s rights hereunder upon an Event of Default, the Holder need not provide, and the Borrower hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately enforce any and all of its rights and remedies hereunder and all other remedies available to it in equity or under applicable law.

 

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(c) Exercise of Remedies . The remedies of the Holder as provided herein and in any of the other Loan Documents shall be cumulative and concurrent and may be pursued singly, successively or together, at the sole discretion of the Holder, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof.

 

4. Lost or Stolen Note . Upon notice to the Borrower 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 Borrower in a form reasonably acceptable to the Borrower and customary for similar circumstances in commercial lender/borrower circumstances, and, in the case of mutilation, upon surrender and cancellation of the mutilated Note, the Borrower shall promptly execute and deliver a new Note of like tenor and date and in substantially the same form as this Note.

 

5. Cancellation . After all principal, accrued interest, and all other Obligations at any time owed on this Note or any other Loan Documents have been indefeasibly paid in full, and there are no existing or outstanding commitments for Holder to make any loans or other advances of credit to Borrower under the Credit Agreement or otherwise, this Note shall be canceled by Holder.

 

6. Waivers . Borrower hereby waives and releases all benefit that might accrue to the Borrower by virtue of any present or future laws exempting any property that may serve as security for this Note, or any other property or Collateral, real or personal, or any part of the proceeds arising from any sale of any such property or Collateral, from attachment, levy, or sale under execution, exemption from civil process, or extension of time for payment, including, without limitation, any and all homestead exemption rights of the Borrower; and the Borrower agrees that any property that may be levied upon pursuant to a judgment obtained by virtue hereof, on any writ of execution issued thereon, may be sold upon any such writ in whole or in part in any order or manner desired by Holder. In addition, the Borrower and all others who are, or may become liable for the payment hereof: (i) severally waive presentment for payment, demand, notice of nonpayment or dishonor, protest and notice of protest of this Note or the other Loan Documents, and all other notices in connection with the delivery, acceptance, performance, default, or enforcement of the payment of this Note or the other Loan Documents; (ii) expressly consent to all extensions of time, renewals or postponements of time of payment of this Note or the other Loan Documents from time to time prior to or after the maturity of this Note without notice, consent or further consideration to any of the foregoing; (iii) expressly agree that the Holder shall not be required first to institute any suit, or to exhaust its remedies against the Borrower, or any other Person or party to become liable hereunder or against any Collateral that may secure this Note in order to enforce the payment of this Note; and (iv) expressly agree that, notwithstanding the occurrence of any of the foregoing (except the express written release by the Holder of any such Person), the undersigned shall be and remain, directly and primarily liable for all sums due under this Note.

 

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7. Gove r ning Law; Venue . The Borrower irrevocably agrees that any dispute arising under, relating to, or in connection with, directly or indirectly, this Note or related to any matter which is the subject of or incidental to this Note (whether or not such claim is based upon breach of contract or tort) shall be subject to the exclusive jurisdiction and venue of the state and/or federal courts located in Broward County, Florida. This provision is intended to be a “mandatory” forum selection clause and governed by and interpreted consistent with Florida law. Borrower hereby consents to the exclusive jurisdiction and venue of any state or federal court having its situs in said county (or to any other jurisdiction or venue, if Holder so elects), and waives any objection based on forum non conveniens. Borrower hereby waives personal service of any and all process and consents that all such service of process may be made by certified mail, return receipt requested, directed to Borrower, as applicable, as set forth herein or in the manner provided by applicable statute, law, rule of court or otherwise. Except for the foregoing mandatory forum selection clause, all terms and provisions hereof and the rights and obligations of the Borrower and Holder hereunder shall be governed, construed and interpreted in accordance with the laws of the State of Nevada, without reference to conflict of laws principles.

 

8. Expenses . The Borrower agrees to pay and reimburse the Holder upon demand for all costs and expenses (including, without limitation, attorneys’ fees and expenses) that the Holder may incur in connection with (i) the exorcise or enforcement of any rights or remedies (including, but not limited to, collection) granted hereunder or otherwise available to it (whether at law, in equity or otherwise); or (ii) the failure by the Borrower to perform or observe any of the provisions hereof. The provisions of this Section 8 shall survive the execution and delivery of this Note, the repayment of any or all of the Obligations, and the termination of this Note.

 

9. Waiver of Jury Trail . THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION BASED ON THIS NOTE, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS NOTE OR ANY OTHER LOAN DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF OR BETWEEN ANY PARTY HERETO, AND THE BORROWER AGREES AND CONSENTS TO THE GRANTING TO HOLDER OF RELIEF FROM ANY STAY ORDER WHICH MIGHT BE ENTERED BY ANY COURT AGAINST HOLDER AND TO ASSIST HOLDER IN OBTAINING SUCH RELIEF. THIS PROVISION IS A MATERIAL INDUCEMENT FOR HOLDER ACCEPTING THIS NOTE FROM THE BORROWER. THE BORROWER’S REASONABLE RELIANCE UPON SUCH INDUCEMENT IS HEREBY ACKNOWLEDGED.

 

10. Sp ecific 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 Borrower and the Holder and shall not be construed against any person as the drafter hereof.

 

11. Failure or Indulgen c e Not Waiver . Holder shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder or under any Loan Documents, unless such waiver is in writing and signed by Holder, and then only to the extent specifically set forth in the writing. A waiver on one event shall not be construed as continuing or as a bar to or waiver of any right or remedy to a subsequent event.

 

12. Notice . Notice shall be given to each party at the address for such party set forth in the Credit Agreement, and such notice shall be deemed properly given in accordance with the notice provisions set forth in the Credit Agreement.

 

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13. Usury Savings Clause . Notwithstanding any provision in this Note or the other Loan Documents, the total liability for payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions, or other sums which may at any time be deemed to be interest, shall not exceed the limit imposed by the usury laws of the jurisdiction governing this Note or any other applicable law. In the event the total liability of payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions or other sums which may at any time be deemed to be interest, shall, for any reason whatsoever, result in an effective rate of interest, which for any month or other interest payment period exceeds the limit imposed by the usury laws of the jurisdiction governing this Note, all sums in excess of those lawfully collectible as interest for the period in question shall, without further agreement or notice by, between, or to any party hereto, be applied to the reduction of the outstanding principal balance of this Note immediately upon receipt of such sums by die Holder hereof, with the same force and effect as though the Borrower had specifically designated such excess sums to be so applied to the reduction of such outstanding principal balance and the Holder hereof had agreed to accept such sums as a penalty-free payment of principal; provided, however, that the Holder of this Note may, at any time and from time to time, elect, by notice in writing to the Borrower, to waive, reduce, or limit the collection of any sums in excess of those lawfully collectible as interest rather than accept such sums as a prepayment of the outstanding principal balance. It is the intention of the parties that the Borrower do not intend or expect to pay nor does the Holder intend or expect to charge or collect any interest under this Note greater than the highest non-usurious rate of interest which may be charged under applicable law.

 

14. Binding Effect . This Note shall be binding upon the Borrower and the successors and assigns of the Borrower and shall inure to the benefit of Holder and the successors and assigns of Holder.

 

15. Severability . In the event any one or more of the provisions of this Note shall for any reason be held to be invalid, illegal, or unenforceable, in whole or in part, in any respect, or in the event that any one or more of the provisions of this Note operates or would prospectively operate to invalidate this Note, then and in any of those events, only such provision or provisions shall be deemed null and void and shall not affect any other provision of this Note. The remaining provisions of this Note shall remain operative and in full force and effect and shall in no way be affected, prejudiced, or disturbed thereby.

 

16. Participations . Holder may from time to time sell or assign, in whole or in part, or grant participations in this Note and/or the obligations evidenced hereby, without any requirement to obtain the Borrower’s written consent or approval. The holder of any such sale, assignment or participation, if the applicable agreement between Holder and such holder so provides, shall be: (a) entitled to all of the rights, obligations and benefits of Holder (to the extent of such holder’s interest or participation); and (b) deemed to hold and may exercise the rights of setoff or banker’s lien with respect to any and all obligations of such holder to the Borrower (to the extent of such holder’s interest or participation), in each case as fully as though the Borrower was directly indebted to such holder. Holder may in its discretion give notice to the Borrower of such sale, assignment or participation; however, the failure to give such notice shall not affect any of Holder’s or such holder’s rights hereunder.

 

17. Amendments . The provisions of this Note may be changed only by a written agreement executed by the Borrower and Holder.

 

18. Conversion of Note . At any time and from time to time while this Note is outstanding, but only upon: (i) the occurrence of an Event of Default under any of the Loan Documents; or (ii) mutual agreement between the Borrower and the Holder, this Note may be, at the sole option of the Holder, convertible into shares of the common stock, which has a par value of $0,001 per share (the Common Stock ) of the Borrower, in accordance with the terms and conditions set forth below.

 

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(d) Voluntary Conversion . At any time while this Note is outstanding, but only upon: (i) the occurrence of an Event of Default under any of the Loan Documents; or (ii) mutual agreement between the Borrower and the Holder, die Holder may convert all or any portion of the outstanding principal, accrued and unpaid interest, Premium, if applicable, and any other sums due and payable hereunder or under any other Loan Documents (such total amount, the Conversion Amount ) into shares of Common Stock of the Borrower (the Conversion Shares ) at a price equal to: (i) the Conversion Amount (the numerator); divided by (ii) eighty-five percent (85%) of the lowest of the daily volume weighted average price of the Borrower’s Common Stock during the five (5) Business Days immediately prior to the Conversion Date, which price shall be indicated in the conversion notice (in the form attached hereto as Exhibit “B” , the Conversion Notice ”) (the denominator) (the Conversion Price ). The Holder shall submit a Conversion Notice indicating the Conversion Amount, the number of Conversion Shares issuable upon such conversion, and where the Conversion Shares should be delivered.

 

(e) The Holder’s Conversion Limitations . The Borrower shall not effect any conversion of this Note, and the Holder shall not have the right to convert any portion of this Note, to the extent that after giving effect to the conversion set forth on the Conversion Notice submitted by the Holder, the Holder (together with the Holder’s Affiliates and any Persons acting as a group together with the Holder or any of the Holder’s Affiliates) would beneficially own shares of Common Stock in excess of the Beneficial Ownership Limitation (as defined herein). To ensure compliance with this restriction, prior to delivery of any Conversion Notice, the Holder shall have the right to request that the Borrower provide to the Holder a written statement of the percentage ownership of the Borrower’s Common Stock that would be beneficially owned by die Holder and its Affiliates in the Borrower if the Holder converted such portion of this Note then intended to be converted by Holder, The Borrower shall, within two (2) Business Days of such request, provide Holder with the requested information in a written statement, and the Holder shall be entitled to rely on such written statement from the Borrower in issuing its Conversion Notice and ensuring that its ownership of the Borrower’s Common Stock is not in excess of the Beneficial Ownership Limitation. The restriction described in this Section may be waived by Holder, in whole or in part, upon notice not less than sixty-one (61) days prior written notice from the Holder to the Borrower to increase such percentage.

 

For purposes of this Note, the Beneficial Ownership Limitation shall be 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Note. The limitations contained in this Section shall apply to a successor holder of this Note.

 

(f) Mechanics of Conversion . The conversion of this Note shall be conducted in the following manner:

 

(i) 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 facsimile or electronic mail (or otherwise deliver) a copy of the fully executed Conversion Notice to the Borrower (or, under certain circumstances as set forth below, by delivery of the Conversion Notice to the Borrower’s transfer agent).

 

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(ii) Borrower’s Response . Upon receipt by the Borrower of a copy of a Conversion Notice, the Borrower shall as soon as practicable, but in no event later than two (2) Business Days after receipt of such Conversion Notice, send, via facsimile or electronic mail (or otherwise deliver) a confirmation of receipt of such Conversion Notice (the “ Conversion Confirmation ”) to the Holder indicating that the Borrower will process such Conversion Notice in accordance with the terms herein. In the event the Borrower fails to issue its Conversion Confirmation within said two (2) Business Day time period, the Holder shall have the absolute and irrevocable right and authority to deliver the fully executed Conversion Notice to the Borrower’s transfer agent, and pursuant to the terms of the Loan Documents, the Borrower’s transfer agent shall issue the applicable Conversion Shares to Holder as hereby provided. Within five (5) Business Days after the date of the Conversion Confirmation (or the date of the Conversion Notice, if the Borrower fails to issue the Conversion Confirmation), provided that the Borrower’s transfer agent is participating in the Depository Trust Borrower (“ DTC ”) Fast Automated Securities Transfer (“ FAST ”) program, the Borrower shall cause the transfer agent to (or, if for any reason the Borrower fails to instruct or cause its transfer agent to so act, then pursuant to the Loan Documents, the Holder may request and require the Borrower’s transfer agent to) electronically transmit the applicable Conversion Shares to which the Holder shall be entitled by crediting the account of the Holder’s prime broker with DTC through its Deposit Withdrawal Agent Commission (“ DWAC ”) system, and provide proof satisfactory to the Holder of such delivery. In the event that the Borrower’s transfer agent is not participating in the DTC FAST program and is not otherwise DWAC eligible, within five (5) Business Days after the date of the Conversion Confirmation (or the date of the Conversion Notice, if the Borrower fails to issue the Conversion Confirmation), the Borrower shall instruct and cause its transfer agent to (or, if for any reason the Borrower fails to instruct or cause its transfer agent to so act, then pursuant to the Loan Documents, the Holder may request and require the Borrower’s transfer agent to) issue and surrender to a nationally recognized overnight courier for delivery to the address specified in the Conversion Notice, a certificate, registered in the name of the Holder, or its designees, for the number of Conversion Shares to which the Holder shall be entitled. To effect conversions hereunder, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire principal amount of this Note, plus all accrued and unpaid interest, Premium, if applicable, and other sums due hereunder, has been so converted. Subject to the make-whole rights below, conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion. The Holder and the Borrower shall maintain records showing the principal amount(s) converted and the date of such conversion(s). The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof.

 

(iii) Record Holder . The Person(s) 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(s) of such shares of Common Stock as of the Conversion Date.

 

(iv) Failure to Deliver Certificates . If in the case of any Conversion Notice, the certificate or certificates are not delivered to or as directed by the Holder by the date required hereby, the Holder shall be entitled to elect by written notice to the Borrower at any time on or before its receipt of such certificate or certificates, to rescind such Conversion Notice, in which event the Borrower shall promptly return to the Holder any original Note delivered to the Borrower and the Holder shall promptly return to the Borrower the Common Stock certificates representing the principal amount of this Note unsuccessfully tendered for conversion to the Borrower.

 

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(v) Obligation Absolute; Partial Liquidated Damages . The Borrower’s obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any person or entity or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Borrower or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with the issuance of such Conversion Shares; provided , however , that such delivery shall not operate as a waiver by the Borrower of any such action the Borrower may have against the Holder. In the event the Holder of this Note shall elect to convert any or all of the outstanding principal amount hereof and accrued but unpaid interest and Premium, if applicable, thereon in accordance with the terms of this Note, the Borrower may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Note shall have been sought and obtained, and the Borrower posts a surety bond for the benefit of the Holder in the amount of 150% of the outstanding principal amount of this Note, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the absence of such injunction, the Borrower shall issue Conversion Shares upon a properly noticed conversion. If the Borrower fails for any reason to deliver to “the Holder such certificate or certificates representing Conversion Shares pursuant to timing and delivery requirements of this Note, the Borrower shall pay to such Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of principal amount being converted, $ 1.00 per day for each day after the date by which such certificates should have been delivered until such certificates are delivered. Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to this Note, the other Loan Documents, or any agreement securing the indebtedness under this Note for the Borrower’s failure to deliver Conversion Shares within the period specified herein and such 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 damages pursuant to any other Section hereof or under applicable law. Nothing herein shall prevent the Holder from having the Conversion Shares issued directly by the Borrower’s transfer agent in accordance with the Loan Documents, in the event for any reason the Borrower fails to issue or deliver, or cause its transfer agent to issue and deliver, the Conversion Shares to the Holder upon exercise of Holder’s conversion rights hereunder.

 

(vi) Transfer Taxes . The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Holder hereof for any documentary stamp or similar taxes, or any other issuance or transfer fees of any nature or kind that may be payable in respect of the issue or delivery of such certificates, any such taxes or fees, if payable, to be paid by the Borrower.

 

(g) Make-Whole Rights . Upon liquidation by the Holder of Conversion Shares issued pursuant to a Conversion Notice, provided that the Holder realizes a net amount from such liquidation equal to less than the Conversion Amount specified in the relevant Conversion Notice (such net realized amount, the Realized Amount ”), the Borrower shall issue to the Holder additional shares of the Borrower’s Common Stock equal to: (i) the Conversion Amount specified in the relevant Conversion Notice; minus (ii) the Realized Amount, as evidenced by a reconciliation statement from the Holder (a Sale Reconciliation ”) showing the Realized Amount from the sale of the Conversion Shares; divided by (iii) the average volume weighted average price of the Borrower’s Common Stock during the five (5) Business Days immediately prior to the date upon which the Holder delivers notice (the Make-Whol e N otice ”) to the Borrower that such additional shares are requested by the Holder (the Make-Whole Stock Price ”) (such number of additional shares to be issued, the Make-Whole Shares - ). Upon receiving the Make-Whole Notice and Sale Reconciliation evidencing the number of Make-Whole Shares requested, the Borrower shall instruct its transfer agent to issue certificates representing the Make-Whole Shares, which Make Whole Shares shall be issued and delivered in the same manner and within the same time frames as set forth in Subsection (c)(ii) above. Subsections (c)(iii), (c)(iv), (c)(v) and (c)(vi) above shall be applicable to the issuance of the Make-Whole Shares. The Make-Whole Shares, when issued, shall be deemed to be validly issued, fully paid, and non-assessable shares of the Borrower’s Common Stock. Following the sale of the Make-Whole Shares by the Holder: (i) in the event that the Holder receives net proceeds from such sale which, when added to the Realized Amount from the prior relevant Conversion Notice, is less than the Conversion Amount specified in the relevant Conversion Notice, the Holder shall deliver an additional Make-Whole Notice to the Borrower following the procedures provided previously in this paragraph, and such procedures and the delivery of Make-Whole Notices shall continue until the Conversion Amount has been fully satisfied; (ii) in the event that the Holder received net proceeds from the sale of Make-Whole Shares in excess of the Conversion Amount specified in the relevant Conversion Notice, such excess amount shall be applied to satisfy any and all amounts owed hereunder in excess of the Conversion Amount specified in the relevant Conversion Notice.

 

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(h) Adjustments to Conversion Price . The adjustments set forth in Sections (e)(i) and (e)(ii) below shall be applicable only to the extent the Conversion Price of the Common Stock does not already reflect an adjustment for any of such events.

 

(i) Stock Dividends and Stock Splits . If the Borrower, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on outstanding shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of Common Stock, any shares of capital stock of the Borrower, then the Conversion Price shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock (excluding any treasury shares of the Borrower) outstanding immediately before such event, and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination, or re-classification.

 

(ii) Fundamental Transaction . If, at any time while this Note is outstanding: (i) the Borrower effects any merger or consolidation of the Borrower with or into another Person, (ii) the Borrower effects any sale of all or substantially all of its assets in one transaction or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Borrower or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv) the Borrower effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a Fundamental Transaction ”), then upon any subsequent conversion of this Note, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one (1) share of Common Stock (the Alternate Consideration ”). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Borrower shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of an)’ different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Note following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Borrower or surviving entity in such Fundamental Transaction shall issue to the Holder a new note consistent with the foregoing provisions and evidencing the Holder’s right to convert such note into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section and insuring that this Note (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

 

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(iii) Adjustment to Conversion Price . Whenever the Conversion Price is adjusted pursuant to any provision of this Note, the Borrower shall promptly deliver to Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

 

(iv) Notice to Allow Conversion by Holder . If: (A) the Borrower shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Borrower shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Borrower shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Borrower shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Borrower is a party, any sale or transfer of all or substantially all of the assets of the Borrower, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Borrower shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Borrower, then, in each case, the Borrower shall cause to be filed at each office or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder at its last address as it shall appear upon the Borrower’s records, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating: (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined, or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder is entitled to convert this Note during the 10-day period commencing on the date of such notice through the effective date of the event triggering such notice.

 

19. Non-U.S. Statu s. THE HOLDER IS A NON-U.S. PERSON AS THAT TERM IS DEFINED IN THE UNITED STATES INTERNAL REVENUE CODE. IT IS HEREBY AGREED AND UNDERSTOOD THAT THE OBLIGATIONS HEREUNDER MAY BE SOLD OR RESOLD ONLY TO NON-U.S. PERSONS. THE INTEREST PAYABLE HEREUNDER IS PAYABLE ONLY OUTSIDE THE UNITED STATES. ANY U.S. PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAW. BY ACCEPTING THIS OBLIGATION, THE HOLDER REPRESENTS AND WARRANTS THAT IT IS NOT A UNITED STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SEC 6049(B)(4) OF THE INTERNAL REVENUE CODE AND REGULATIONS THEREUNDER) AND THAT IT IS NOT ACTING FOR OR ON BEHALF OF A UNITED STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SEC. 6049(B)(4) OF THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER).

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the Borrower has caused this Note to be executed as of the Effective Date set forth above.

 

BORROWER:  
     
KSIX MEDIA HOLDINGS, INC., a  
Nevada corporation  
     
By: /s/ Carter Matzinger  
Name: Carter Matzinger  
Title: CEO  

 

STATE OF Nevada )
    SS.
COUNTY OF Clark )

 

The foregoing instrument was acknowledged before me this 13 th day of. September , 2016 by Carter Matzinger, who is the CEO of Ksix Media Holdings, Inc., a Nevada corporation, on behalf of said corporation. He/She is personally known to me or has produced State Issued Drivers License as identification.

 

My Commission Expires:

 

  /s/ Shawn Pearson
  Notary Public
   
  Shawn Pearson
  Name of Notary typed or printed

  

[Signature page to Promissory Note]

 

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EXHIBIT “A”

 

PAYMENT SCHEDULE

 

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      Principle     Interest     Principal     Total      IB fee     Total Monthly  
Period   Balance     Payment     Payment     Interest     Payment     payment  
8/29/2016                                                
9/29/2016 1     332,073,12       4,981,10       23,324.93       4,981.10       25,146.3       53,452.33  
10/29/2016 2     308,748.19       4,631.22       23,674.81       9,612.32       25,146.3       53,452.33  
11/29/2016 3     285,073.38       4,276.10       24,029.93       13,888.42       25,146.3       53,452.33  
12/29/2016 4     261,043.45       3,915.65       24,390.38       17,804.07       25,146.3       53,452.33  
1/29/2017 5     236,653.07       3,549.80       24,756.24       21,353.87       25,146.3       53,452.33  
2/28/2017 6     211,896.83       3,178.45       25,127.58       24,532.32       25,146.3       53,452.33  
3/28/2017 7     186,769.25       2,801.54       25,504.49       27,333.86       25,146.3       53,452.33  
4/28/2017 8     161,264.76       2,418.97       25,887.06       29,752.83       25,146.3       53,452.33  
5/28/2017 9     135,377.70       2,030.67       26,275.37       31,783.50       25,146.3       53,452.33  
6/28/2017 10     109,102.33       1,636.53       26,669.50       33,420.03       25,146.3       53,452.33  
7/28/2017 11     82,432.84       1,236.49       27,069.54       34,656.52       25,146.3       53,452.33  
8/28/2017 12     55,363.30       830.45       27,475.58       35,486.97       25,146.3       53,452.33  
9/28/2017 13     27,887.72       418.32       27,887.72       35,905.29       25,146.3       53,452.33  

 

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EXHIBIT “B”

 

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert principal, interest, Premium, if applicable, and/or other sums clue under the Convertible Promissory Note (the Note ) of KSIX MEDIA HOLDINGS, INC., a Nevada corporation (the Company ), into shares of common stock, which has a par value of $0.001 per share (the Common Shares ), of the Company in accordance with the conditions of the Note, as of the date written below.

 

Based solely on information provided by the Company to Holder, the undersigned represents arid warrants to the Company that its ownership of the Common Shares does not exceed the Beneficial Ownership Limitation determined in accordance with Section 13(d) of the Exchange Act of 1934, its amended, as specified under the Note.

 

Conversion calculations

 

Effective Date of Conversion:  
Principal Amount, Interest, Premium, if applicable, and other Sums to be Converted:  
Number of Common Shares to be Issued:  

 

[HOLDER]  
     
By:    
     
Name:    
     
Title:    
     
Address:    
     
     
     
     

 

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ASSIGNMENT OF NOTE

 

THIS ASSIGNMENT OF NOTE (this Assignment ), is made and entered into as of the 16 th day of Sept , 2016, by TCA GLOBAL CREDIT MASTER FUND, LP, a Cayman Islands limited partnership, with an address of 3960 Howard Hughes Parkway, Suite 500, Las Vegas, NV 89169 (“ Assignor or Lender ”), in favor of SALKSANNA, LLC (“ Assignee ”).

 

W I T N E S S E T H

 

WHEREAS, Assignor is the present legal and equitable owner and holder of that certain First Replacement Note A dated effective as of Aug 29, 2016, executed by Borrower, and made payable to the order of Assignor, in the original principal amount of $53,452.33 (the Note ”); and

 

WHEREAS, the parties hereto have entered into a Debt Purchase Agreement dated as of Sep 15 , 2016 (the “DPA”), pursuant to which Assignor has agreed to assign to Assignee, its successors and assigns, Assignor’s right, title and interest in and to the monetary obligations evidenced by the Note (the Assigned Debt ”), all subject to the terms and conditions set forth in the DPA and hereinafter set forth;

 

NOW, THEREFORE, in consideration of the sum of $53,452.33, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and agreed, Assignor, Assignee, and Borrower hereby covenant and agree as follows:

 

1. Recitals . The recitations set forth in the preamble of this Assignment are true and correct and incorporated herein by this reference. All capitalized terms used herein and not otherwise defined in this Assignment shall have the same meaning ascribed to them in the DPA.

 

2. Assignment . Assignor does hereby transfer, assign, grant, and convey to Assignee, its successors and assigns, all of the right, title and interest of Assignor in and to the Assigned Debt only, it being acknowledged by Assignee that the Remaining Debt is not being assigned hereby.

 

3. No Security Rights . Assignee hereby agrees and acknowledges that the sale, transfer and assignment of the Assigned Debt shall be a sale, transfer and assignment of the monetary obligations evidenced by such Assigned Debt only, and shall not include, and such sale, transfer and assignment expressly excludes, the Remaining Debt, and any and all Security Rights.

 

4. Reference to DPA . The assignment contemplated hereby shall be subject to the representations, warranties, limitations, exclusions, releases, acknowledgments, and all other terms and provisions of the DPA.

 

5. Governing Law . This Assignment shall be governed by and construed in accordance with the laws governing the Note.

 

6. Successors and Assigns . This Assignment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

 

7. Headings . The headings of the paragraphs of this Assignment have been included only for convenience, and shall not be deemed in any manner to modify or limit any of the provisions of this Agreement or used in any manner in the interpretation of this Assignment.

 

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8. Interpretation . Whenever the context so requires in this Assignment, all words used in the singular shall be construed to have been used in the plural (and vice versa), each gender shall be construed to include any other genders, and the word Person shall be construed to include a natural person, a corporation, a firm, a partnership, a joint venture, a trust, an estate or any other entity.

 

9. Partial Invalidity . Each provision of this Assignment shall be valid and enforceable to the fullest extent permitted by law. If any provision of this Assignment or the application of such provision to any Person or circumstances shall, to any extent, be invalid or unenforceable, then the remainder of this Assignment, or the application of such provision to Persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected by such invalidity or unenforceability.

 

10. Execution . In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format file or other similar format file, such signature shall be deemed an original for all purposes and shall create a valid and binding obligation of the party executing same with the same force and effect as if such facsimile or “.pdf” signature page was an original thereof.

 

[Signatures on the following page]

 

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IN WITNESS WHEREOF, Assignor has executed this Assignment as of the date above first written

 

  Assignor :
     
  TCA GLOBAL CREDIT MASTER FUND, LP
     
  By: TCA Global Credit Fund GP, Ltd.
  Its: General Partner
     
  By: /s/ Robert Press
    Robert Press, Director

 

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