On March 9, 2012 Net Savings Link, Inc., (“NSL”) executed a Secured Convertible Promissory note in the amount of $75,000.00 payable to Southridge Partners II, LP, a Delaware Limited Partnership (“Southridge”) and related Equity Purchase Agreement (collectively the foregoing are referred to as the “Note”). David Saltrelli, President & CEO pledged 2,500,000 of his shares as collateral to guarantee the Note. Under the terms of the Note, Net Savings Link, Inc. is obligated to repay $75,000.00 with interest thereon at the rate of 8% per annum on June 23, 2012. In addition, NSL will issue a stock warrant for 1,500,000 shares of its common stock with an initial exercise price of $0.05 per share, however, Southridge may elect a cashless exercise as described in the Note. If the Note is not paid on June 23, 2012, we will pay an amount 130% times the sum then due.
The Note may, at the election of Southridge, be converted into restricted shares of NSL’s common stock on the basis of 60% of the market price of our common stock, which represents a discount of 40% from the market price. For example, if the price of one share of common stock is a dollar, Southridge may convert $0.60 of debt into one share of common stock. In the event Net Savings Link, Inc. elects to prepay the Note, we are obligated to pay the following: Between 1 and 90 days from the date of the Note - 120% of the unpaid balance due on the Note; between 91 and 180 days from the date of the Note - 125% of the unpaid balance due on the Note; and, after 180 days of the date of the Note - 130% of the unpaid balance due on the Note. In addition, NSL has provided certain registration rights as disclosed in a companion Registration Rights Agreement.
On March 9, 2012 NSL entered into an Equity Purchase Agreement with Southridge Partners II, LP, a Delaware Limited Partnership (“Southridge”) whereas, the parties desire that, based upon the terms and subject to the conditions contained, to which the Parties have agreed, the Company shall issue and sell to Southridge, from time to time as provided herein, and Southridge shall purchase up to Twenty Million Dollars ($20,000,000) of its Common Stock at a purchase price of 91% (that represent a discount of 9%) of the Market Price on such date on which the Purchase Price is calculated in accordance with the terms and conditions of the agreement. Net Savings Link is not obligated to take down the entire $20,000,000 and it may put stock to Southridge at any time according to the terms and conditions of the agreement through March 8, 2014. Southridge is a sophisticated investor (as described in Rule 506(b)(2)(ii) of Regulation D) and an accredited investor (as defined in Rule 501 of Regulation D), and Southridge has such experience in business and financial matters that it is capable of evaluating the merits and risks of an investment in the Registered Securities. Southridge acknowledged that an investment in the Registered Securities is speculative and involves a high degree of risk. Southridge is not an officer, director or “affiliate” (as that term is defined in Rule 405 of the Securities Act) of the Company.