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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported) March 5, 2024 (February 29, 2024)
Commission
File Number 001-37916
SRAX,
Inc.
(Exact
name of registrant as specified in its charter)
Delaware |
|
45-2925231 |
(State
or other jurisdiction
of incorporation or organization) |
|
(I.R.S.
Employer
Identification No.) |
|
|
|
1014
S. Westlake Blvd., Suite
14-299
Westlake
Village, CA |
|
91361 |
(Address
of principal executive offices) |
|
(Zip
Code) |
Registrant’s
telephone number, including area code (323) 205-6109
Securities
registered pursuant to Section 12(b) of the Act:
Class
A Common Stock, $0.001 par value |
|
SRAX |
|
N/A |
(Title
of each class) |
|
(Trading
Symbol) |
|
(Name
of each exchange on which registered) |
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any
of the following provisions (see General Instruction A.2. below):
☐ |
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)) |
Indicate
by check mark whether the registrant is an emerging growth company as defined in in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01 Entry into a Material Definitive Agreement.
On
March 5, 2024 SRAX, Inc. (the “Company”) entered into definitive securities purchase agreements (the “Securities Purchase
Agreement”) with a certain accredited and institutional investor (the “Purchasers”) for the purchase and sale of an
aggregate of: (i) $90,000 in principal amount of Original Issue Discount Convertible Debenture (the “Debentures”) for $75,000
(representing a 20% original issue discount) (“Purchase Price”) and (i) in a private placement (the “Offering”)
exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on the exemption
provided by Rule 506(b) of Regulation D and Section 4(a)(2) of the Securities Act.
The
Debentures, which mature on February 28, 2026, pay 0%, no interest per annum commencing on February 29, 2024. In the event a Purchaser
converts a portion of its Debenture into Common Stock, such amount will be deducted from the principle balance.
The
Debentures are convertible at the option of the holder into shares of our Class A common stock (“Common Stock”) at an initial
conversion price of $0.25 per share, subject to adjustment in the event of (i) stock splits and dividends, (ii) subsequent rights offerings,
(iii) pro-rata distributions, and (iv) certain fundamental transactions, including but not limited to the sale of the Company, business
combinations, and reorganizations (v) subsequent equity sales. Company has agreed to amend and restate the Certificate of Designation
of Preferences of Rights and Limitations to the Series B Non- Voting Convertible preferred to include the language in section 5b of this
agreement to section 7 (a) of said agreement within 7 days of execution of this agreement, modify the ownership limitations
and eliminate the need for a shareholder vote which was required by NASDAQ.
Subject
to our compliance with certain equity conditions, (as more fully set forth in the Debentures), upon five (5) trading days’ notice
to the Purchasers, the Company has the right to prepay the Debentures in cash at 120% of their outstanding principal, plus accrued interest
for the first 90 days of the note and 135% thereafter.
The
Debentures also contain certain customary events of default provisions, including, but not limited to, default in payment of principal,
changes in control of the Company. Upon the occurrence of any such event of default, the outstanding principal amount of the Debenture
plus liquidated damages, interest and other amounts owing in respect thereof through the date of acceleration, shall become, at the Purchaser’s
election, immediately due and payable in cash.
The
Offering closed on March 5, 2024.
The
securities offered have not been registered under the Securities Act, and may not be offered or sold in the United States absent registration
or an applicable exemption from registration requirements. This current report shall not constitute an offer to sell or the solicitation
of an offer to buy, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful
prior to the registration or qualification under the securities laws of any such state.
The
foregoing summaries of each of the Securities Purchase Agreement, and Debentures, are qualified in their entirety by reference to the
full text of each such document, a copy of the form of each is attached hereto as Exhibits 10.01, 10.02, , respectively, and each of
which is incorporated herein in its entirety by reference.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The
information set forth above in Item 1.01 of this current report on Form 8-K is incorporated herein by reference in its entirety.
Item
2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
The
information set forth above in Item 1.01 of this current report on Form 8-K is incorporated herein by reference in its entirety.
Item
3.02 Unregistered Sale of Equity Securities.
The
information set forth above in Item 1.01 of this current report on Form 8-K is incorporated herein by reference in its entirety.
Item
9.01 Financial Statements and Exhibits.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
Date:
March 6, 2024 |
|
SRAX, Inc. |
|
|
|
|
|
/s/
Christopher Miglino |
|
By: |
Christopher
Miglino |
|
|
Chief
Executive Officer |
Exhibit
4.01
NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
Original
Issue Date: February 29, 2024
Purchase
Price: $75,000
Principal
Amount which includes original issue discount: $90,000
CONVERTIBLE
PROMISSORY NOTE
DUE
February 29, 2024
THIS
CONVERTIBLE PROMISSORY NOTE is one of a series of duly authorized and validly issued Convertible Promissory Notes of Debenture of SRAX,
INC. designated as its Convertible Promissory Note due February 29, 2024 (this Note, the “Note” and, collectively
with the other Notes of such series, the “Notes”).
FOR
VALUE RECEIVED, the Company promises to pay to its registered assigns (the “Holder”), or shall have
paid pursuant to the terms hereunder, the principal sum of $75,000 , without interest, on February 28, 2026 (the “Maturity Date”)
or such earlier date as this Note is required or permitted to be repaid as provided hereunder. This Note is subject to the following
additional provisions:
Section
1. Definitions. For the purposes hereof, the following terms shall have the following meanings:
“Alternate
Consideration” shall have the meaning set forth in Section 5(e).
“Bankruptcy
Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w)
of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Significant
Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof any such case or proceeding that
is not dismissed within 60 days after commencement, (c) the Company or any Significant Subsidiary thereof is adjudicated insolvent or
bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the Company or any Significant Subsidiary
thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or
stayed within 60 calendar days after such appointment, (e) the Company or any Significant Subsidiary thereof makes a general assignment
for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging
a composition, adjustment or restructuring of its debts or (g) the Company or any Significant Subsidiary thereof, by any act or failure
to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action
for the purpose of effecting any of the foregoing.
“Base
Conversion Price” shall have the meaning set forth in Section 5(b).
“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 4(d).
“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day
on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.
“Buy-In”
shall have the meaning set forth in Section 4(c)(v).
“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an
individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective
control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 50%
of the voting securities of the Company (other than by means of conversion or exercise of the Notes and the Securities issued together
with the Notes), (b) the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with the
Company and, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own less
than 50% of the aggregate voting power of the Company or the successor entity of such transaction, (c) the Company sells or transfers
all or substantially all of its assets to another Person and the stockholders of the Company immediately prior to such transaction own
less than 50% of the aggregate voting power of the acquiring entity immediately after the transaction, (d) a replacement at one time
or within a three year period of more than one-half of the members of the Board of Directors which is not approved by a majority of those
individuals who are members of the Board of Directors on the Original Issue Date (or by those individuals who are serving as members
of the Board of Directors on any date whose nomination to the Board of Directors was approved by a majority of the members of the Board
of Directors who are members on the date hereof), or (e) the execution by the Company of an agreement to which the Company is a party
or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.
“Conversion”
shall have the meaning ascribed to such term in Section 4.
“Conversion
Date” shall have the meaning set forth in Section 4(a).
“Conversion
Price” shall have the meaning set forth in Section 4(b).
“Conversion
Schedule” means the Conversion Schedule in the form of Schedule 1 attached hereto.
“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the terms
hereof.
“Dilutive
Issuance” shall have the meaning set forth in Section 5(b).
“Dilutive
Issuance Notice” shall have the meaning set forth in Section 5(b).
“DTC”
means the Depository Trust Company.
“DTC/FAST
Program” means the DTC’s Fast Automated Securities Transfer Program.
“DWAC”
means Deposit Withdrawal at Custodian as defined by the DTC.
“DWAC
Eligible” means that (a) the Common Stock is eligible at DTC for full services pursuant to DTC’s Operational Arrangements,
including without limitation transfer through DTC’s DWAC system, (b) the Company has been approved (without revocation) by the
DTC’s underwriting department, (c) the Transfer Agent is approved as an agent in the DTC/FAST Program, (d) the Conversion Shares
are otherwise eligible for delivery via DWAC, and (e) the Transfer Agent does not have a policy prohibiting or limiting delivery of the
Conversion Shares via DWAC.
“Event
of Default” shall have the meaning set forth in Section 6(a).
“Fundamental
Transaction” shall have the meaning set forth in Section 5(e).
“Mandatory
Default Amount” means the payment of 130% of the outstanding principal amount of this Note, in addition to the payment of all
other amounts, costs, expenses and liquidated damages due in respect of this Note.
“New
York Courts” shall have the meaning set forth in Section 7(d).
“Note
Register” means the records of the Company regarding registration and transfers of this Note.
“Notice
of Conversion” shall have the meaning set forth in Section 4(a).
“Original
Issue Date” means the date of the first issuance of the Notes, regardless of any transfers of any Note and regardless of the
number of instruments which may be issued to evidence such Notes.
“Permitted
Indebtedness” means the indebtedness evidenced by the Notes.
“Permitted
Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental
charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good faith
and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company) have been established
in accordance with GAAP, (b) Liens imposed by law which were incurred in the ordinary course of the Company’s business, such as
carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in
the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate materially detract from the
value of such property or assets or materially impair the use thereof in the operation of the business of the Company and its consolidated
Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing for
the foreseeable future the forfeiture or sale of the property or asset subject to such Lien and (c) Liens incurred in connection with
Permitted Indebtedness.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Share
Delivery Date” shall have the meaning set forth in Section 4(c)(ii).
“Successor
Entity” shall have the meaning set forth in Section 5(e).
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange
or the OTC Bulletin Board (or any successors to any of the foregoing).
“VWAP”
means, for or as of any date, the dollar volume-weighted average price for such security on the Trading Market (or, if the Trading Market
is not the principal trading market for such security, then on the principal securities exchange or securities market on which such security
is then traded) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by
Bloomberg through its “HP” function (set to weighted average) or, if the foregoing does not apply, the dollar volume-weighted
average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning
at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted
average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest
closing ask price of any of the market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc.
(formerly Pink Sheets LLC). If the VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of
such security on such date shall be the fair market value as mutually determined by the Company and the Holder. All such determinations
shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction
during such period.
Section
2. Prepayment. At any time upon five (5) days’ notice written notice to the Holder, (a “Prepayment Notice”),
the Company may prepay any portion of the principal amount of this Note. If the Company exercises its right to prepay the Note, the Company
shall within three (3) days after such five-day period (the “Prepayment Period”), make payment to the Holder of an
amount in cash equal to the sum of the then outstanding principal amount of this Note that it desires to prepay, multiplied by (a) 1.2,
during the first ninety (90) days after the execution of this Note, or (b) 1.35, at any point thereafter ( (a) and (b) of this Section
2, together, the “Prepayment Multiplier”). If the Company does not make such payment within the relevant Prepayment
Period, it shall be required to deliver a new Prepayment Notice, and repeat the procedures set forth in this Section 2, prior to pre-paying
any portion of this Note. The Holder may continue to convert the Note from the date of its receipt of any Prepayment Notice until the
beginning of the Prepayment Period. If the Company participates in any Subsequent Financing (as defined in the Exchange Agreement), or
sells any of its assets other than in the ordinary course, while any portion of this Note remains outstanding, any proceeds of such Subsequent
Financing or asset sale must be applied toward repayment of this Note, subject to the Prepayment Multiplier, within three (3) days of
the closing of such Subsequent Financing or asset sale.
Section
3. Registration of Transfers and Exchanges.
a)
Different Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations,
as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.
b)
Investment Representations. This Note has been issued subject to certain investment representations of the original Holder set
forth in the Exchange Agreement and may be transferred or exchanged only in compliance with the Exchange Agreement and applicable federal
and state securities laws and regulations.
c)
Reliance on Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the
Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent
shall be affected by notice to the contrary.
Section
4. Conversion.
a)
Voluntary Conversion. At any time after the Original Issue Date until this Note is no longer outstanding, this Note shall be convertible,
in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from time to time (subject to the conversion
limitations set forth in Section 4(d) hereof). The Holder shall effect conversions by delivering to the Company a Notice of Conversion,
the form of which is attached hereto as Annex A (each, a “Notice of Conversion”), specifying therein the principal
amount of this Note to be converted and the date on which such conversion shall be effected (such date, the “Conversion Date”).
If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is
deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type
of guarantee or notarization) of any Notice of Conversion form be required. To effect conversions hereunder, the Holder shall not be
required to physically surrender this Note to the Company unless the entire principal amount of this Note, plus all accrued and unpaid
interest thereon, has been so converted. 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 Company shall maintain records showing the principal amount(s)
converted and the date of such conversion(s). The Company may deliver an objection to any Notice of Conversion within one (1) Business
Day of delivery of such Notice of Conversion. In the event of any dispute or discrepancy, the records of the Holder shall be controlling
and determinative in the absence of manifest error. 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.
b)
Conversion Price. The conversion price in effect on any Conversion Date shall be equal to : (a) $0.25, subject to adjustment herein
(the “Conversion Price”). All such determinations to be appropriately adjusted for any stock dividend, stock split,
stock combination, reclassification or similar transaction that proportionately decreases or increases the Common Stock during such measuring
period. Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section
6 hereof and the 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.
c)
Mechanics of Conversion.
i.
Conversion Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion hereunder
shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted by (y) the
Conversion Price.
ii.
Delivery of Certificate Upon Conversion. Not later than three (3) Trading Days after each Conversion Date (the “Share
Delivery Date”), the Company shall deliver, or cause to be delivered, to the Holder a certificate or certificates representing
the Conversion Shares which, on or after the earlier of (i) the six month anniversary of the Original Issue Date or the date on which
the restrictive legend can be removed from the shares per rule 144 (ii) the Effective Date, shall be free of restrictive legends and
trading restrictions (other than those which may then be required by the Exchange Agreement) representing the number of Conversion Shares
being acquired upon the conversion of this Note. All certificate or certificates required to be delivered by the Company under this Section
4(c) shall be delivered electronically through the Depository Trust Company or another established clearing corporation performing similar
functions. If the Conversion Date is prior to the earlier of (i) the six month anniversary of the Original Issue Date or (ii) the Effective
Date, then the Conversion Shares shall bear a restrictive legend in the following form, as appropriate:
“NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.”
iii.
Failure to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates are not delivered
to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the
Company at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in which event the Company
shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly return to the Company the
Common Stock certificates issued to such Holder pursuant to the rescinded Conversion Notice.
iv.
Obligation Absolute; Partial Liquidated Damages. The Company’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 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 Company 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 Company 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 Company of any such action the Company 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, the Company 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 Company 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 the Holder to the extent it obtains judgment. In the absence
of such injunction, the Company shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If the Company
fails for any reason to deliver to the Holder such certificate or certificates pursuant to Section 4(c)(ii) by the Share Delivery Date,
the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of principal amount being converted,
$10 per Trading Day (increasing to $20 per Trading Day on the fifth (5th) Trading Day after such liquidated damages begin
to accrue) for each Trading Day after such Share Delivery Date until such certificates are delivered or Holder rescinds such conversion.
Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 6 hereof
for the Company’s failure to deliver Conversion Shares within the period specified herein and the 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.
v.
Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to
the Holder, if the Company fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery Date
pursuant to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase (in an open
market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction
of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion relating to such Share
Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in addition to any other remedies
available to or elected by the Holder) the amount, if any, by which (x) the Holder’s total purchase price (including any brokerage
commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that the
Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise
to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of the Holder, either reissue (if
surrendered) this Note in a principal amount equal to the principal amount of the attempted conversion (in which case such conversion
shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued if the Company had
timely complied with its delivery requirements under Section 4(c)(ii). For example, if the Holder purchases Common Stock having a total
purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of this Note with respect to which the actual sale
price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under
clause (A) of the immediately preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall provide the
Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence
of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock upon conversion of this Note as required pursuant to the terms
hereof.
vi.
Reservation of Shares Issuable Upon Conversion. The Company covenants that it will, within 72 hours after the Closing, at all
times reserve and keep available out of its authorized and unissued shares of Common Stock a number of shares of Common Stock at least
equal to the greater of (i) 200% of the Required Minimum, or (ii) 19.9% of the current shares outstanding in the Company, in the name
of the Holders, for the sole purpose of issuance upon conversion of this Note, free from preemptive rights or any other actual contingent
purchase rights of Persons other than the Holder (and the other holders of the Notes), not less than such aggregate number of shares
of the Common Stock as shall (subject to the terms and conditions set forth in the Exchange Agreement) be issuable (taking into account
the adjustments and restrictions of Section 5) upon the conversion of the then outstanding principal amount of this Note. The Company
covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid
and non-assessable (subject to such Holder’s compliance with its obligations under the Section 4.17 of the Exchange Agreement).
vii.
Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note.
As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company shall at its
election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion
Price or round up to the next whole share.
viii.
Transfer Taxes and Expenses. 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 that may be payable in respect of the issue or delivery
of such certificates, provided that, the Company shall not be required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Note so
converted and the Company shall not be required to issue or deliver such certificates unless or until the Person or Persons requesting
the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion.
Section
5. Certain Adjustments; Issuance Prohibitions.
a)
Stock Dividends and Stock Splits. If the Company, 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 shares of Common Stock or any Common Stock Equivalents (which,
for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion of, the Notes), (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 the Common Stock,
any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall
be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event, and
of which the denominator 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.
b)
Subsequent Equity Sales. If, at any time while this Note is outstanding, the Company or any Subsidiary, as applicable, sells or
grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces any sale, grant
or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling any Person to acquire shares
of Common Stock at an effective price per share that is lower than the then Conversion Price (such lower price, the “Base Conversion
Price” and such issuances, collectively, a “Dilutive Issuance”) (if the holder of the Common Stock or Common
Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion,
exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance,
be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price, such issuance
shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance), then the Conversion Price
shall be reduced to equal the Base Conversion Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents
are issued. Notwithstanding the foregoing, no adjustment will be made under this Section 5(b) in respect of an Exempt Issuance. Exempt
Issuances shall include shares issued to consultants, employees and shares issued for payment of accounts payable. The Company shall
notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common Stock Equivalents subject
to this Section 5(b), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and
other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification, whether or not the
Company provides a Dilutive Issuance Notice pursuant to this Section 5(b), upon the occurrence of any Dilutive Issuance, the Holder is
entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the date of such Dilutive Issuance,
regardless of whether the Holder accurately refers to the Base Conversion Price in the Notice of Conversion. Company agrees to amend
and restate the Certificate of Designation of Preferences of Rights and Limitations to the Series B Non- Voting Convertible preferred
to include the language in section 5b of this agreement to section 7 a of said agreement within 7 days of execution of this agreement.
c)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above, if at any time the Company grants,
issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire,
upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had
held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations on exercise
hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for
the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the
Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation,
then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of
Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for
the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
d)
Pro Rata Distributions. During such time as this Note is outstanding, if the Company shall declare or make any dividend or other
distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise
(including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Note, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Note (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in
the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation).
e)
Fundamental Transaction. If, at any time while this Note is outstanding, (i) the Company, directly or indirectly, in one or more
related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in
one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares
for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the
Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization
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, (v) the Company, directly or indirectly, in one or more related transactions consummates a stock
or share Exchange Agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off
or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock
(not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with
the other Persons making or party to, such stock or share Exchange Agreement or other business combination) (each 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 (without
regard to any limitation in Section 4(d) on the conversion of this Note), the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Note is convertible
immediately prior to such Fundamental Transaction (without regard to any limitation in Section 4(d) on the conversion of this Note).
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 Company 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. The Company shall cause
any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”)
to assume in writing all of the obligations of the Company under this Note and the other Transaction Documents (as defined in the Exchange
Agreement) in accordance with the provisions of this Section 5(e) pursuant to written agreements in form and substance reasonably satisfactory
to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option
of the holder of this Note, deliver to the Holder in exchange for this Note a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to this Note which is convertible for a corresponding number of shares of capital
stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion
of this Note (without regard to any limitations on the conversion of this Note) prior to such Fundamental Transaction, and with a conversion
price which applies the conversion price hereunder to such shares of capital stock (but taking into account the relative value of the
shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares
of capital stock and such conversion price being for the purpose of protecting the economic value of this Note immediately prior to the
consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence
of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of
such Fundamental Transaction, the provisions of this Note and the other Transaction Documents referring to the “Company”
shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations
of the Company under this Note and the other Transaction Documents with the same effect as if such Successor Entity had been named as
the Company herein.
f)
Calculations. All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the
case may be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date
shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.
g)
Notice to the Holder.
i.
Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, the Company
shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement
of the facts requiring such adjustment.
ii.
Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)
on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company 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 Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company 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 Note Register, 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. To the extent that any notice provided
hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall
simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to convert
this Note during the 20-day period commencing on the date of such notice through the effective date of the event triggering such notice
except as may otherwise be expressly set forth herein.
Section
6. Events of Default.
a)
“Event of Default” means, wherever used herein, any of the following events (whatever the reason for such event and
whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of
any court, or any order, rule or regulation of any administrative or governmental body):
i.
any default in the payment of the principal amount of this Note and other amounts owing to the Holder of this Note, as and when the same
shall become due and payable (whether on a Conversion Date or the Maturity Date or by acceleration or otherwise);
ii.
the Company shall fail to observe or perform any other material covenant or material agreement contained in the Notes (other than a breach
by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause
(ix) below) which failure is not cured, if possible to cure, within the earlier to occur of (A) 5 Trading Days after notice of such failure
sent by the Holder or by any other Holder to the Company and (B) 10 Trading Days after the Company has become or should have become aware
of such failure;
iii.
a material default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument)
shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which the
Company or any Subsidiary is obligated (and not covered by clause (vi) below);
iv.
any material representation or warranty made in this Note, any other Transaction Documents, any written statement pursuant hereto or
thereto or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or
incorrect in any material respect as of the date when made or deemed made;
v.
the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy
Event;
vi.
the Company shall be a party to any Change of Control Transaction or Fundamental Transaction or shall agree to sell or dispose of all
or substantially all of its assets in one transaction or a series of related transactions (whether or not such sale would constitute
a Change of Control Transaction);
vii.
the Company shall fail for any reason to deliver certificates via DWAC to a Holder prior to the third Trading Day after a Conversion
Date pursuant to Section 4(c) or the Company shall provide at any time notice to the Holder, including by way of public announcement,
of the Company’s intention to not honor requests for conversions of any Notes in accordance with the terms hereof;
viii.
if the Borrower or any Significant Subsidiary shall: (i) apply for or consent to the appointment of a receiver, trustee, custodian or
liquidator of it or any of its properties, (ii) admit in writing its inability to pay its debts as they mature, (iii) make a general
assignment for the benefit of creditors, (iv) be adjudicated a bankrupt or insolvent or be the subject of an order for relief under Title
11 of the United States Code or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute
of any other jurisdiction or foreign country, or (v) file a voluntary petition in bankruptcy, or a petition or an answer seeking reorganization
or an arrangement with creditors or to take advantage or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution
or liquidation law or statute, or an answer admitting the material allegations of a petition filed against it in any proceeding under
any such law, or (vi) take or permit to be taken any action in furtherance of or for the purpose of effecting any of the foregoing;
ix.
if any order, judgment or decree shall be entered, without the application, approval or consent of the Borrower or any Significant Subsidiary,
by any court of competent jurisdiction, approving a petition seeking liquidation or reorganization of the Borrower or any Subsidiary,
or appointing a receiver, trustee, custodian or liquidator of the Borrower or any Subsidiary, or of all or any substantial part of its
assets, and such order, judgment or decree shall continue unstayed and in effect for any period of sixty (60) days;
x.
the Company shall fail to maintain sufficient reserved shares pursuant to Section 4(c)(vi) of this Note;
xi.
the Company shall issue a secured obligation in violation of Section 5(c) of this Note; or
xii.
any monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their respective
property or other assets for more than $50,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or
unstayed for a period of 45 calendar days.
b)
Remedies Upon Event of Default. If any Event of Default occurs, then the outstanding principal amount of this Note, liquidated
damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder’s election, immediately
due and payable in cash at the Mandatory Default Amount. After the occurrence of any Event of Default that results in the eventual acceleration
of this Note, the Note shall accrue interest at an interest rate equal to the lesser of 2% per month (24% per annum) or the maximum rate
permitted under applicable law. Upon the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Note
to or as directed by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company
hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of
any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law.
Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights
as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 6(b). No such rescission
or annulment shall affect any subsequent Event of Default or impair any right consequent thereon; and in addition to any other remedies
herein and notwithstanding any other provision in this Note, in addition to any other rights and remedies available to the Holder in
an Event of Default, the Conversion Price in effect on any Conversion Date shall be equal to the Alternate Conversion Price, subject
to adjustment herein, without any notice or any action taken by the Holder.
Section
7. Miscellaneous.
a)
Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without
limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized
overnight courier service, addressed to the Company, at the address set forth above, or such other facsimile number or address as the
Company may specify for such purposes by notice to the Holder delivered in accordance with this Section 7(a). Any and all notices or
other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile,
or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of the Holder
appearing on the books of the Company, or if no such facsimile number or address appears on the books of the Company, at the principal
place of business of such Holder, as set forth in the Exchange Agreement. Any notice or other communication or deliveries hereunder shall
be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on any date, (ii) the
next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set
forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading
Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv)
upon actual receipt by the party to whom such notice is required to be given.
b)
Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, and liquidated damages, as applicable, on this Note at the time,
place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company. This Note ranks
pari passu with all other Notes now or hereafter issued under the Exchange Agreement.
c)
Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in
exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed
Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of
such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.
d)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict
of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions
contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers,
shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan
(the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York
Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not
to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts,
or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service
of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees
that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of
or relating to this Note or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any
provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys
fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.
e)
Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed
to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company
or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive
that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note on any other occasion.
Any waiver by the Company or the Holder must be in writing.
f)
Severability. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect,
and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and
circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing
usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under
applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit
or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein, wherever enacted,
now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and the Company (to the extent
it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to
any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution
of every such as though no such law has been enacted.
g)
Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative
and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity (including
a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue actual
and consequential damages for any failure by the Company to comply with the terms of this Note. The Company covenants to the Holder that
there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided
for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the
Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof).
The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy
at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach,
the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any such breach or any such threatened
breach, without the necessity of showing economic loss and without any bond or other security being required. The Company shall provide
all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance
with the terms and conditions of this Note.
h)
Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day.
i)
Headings. The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed
to limit or affect any of the provisions hereof.
*********************
(Signature
Pages Follow)
IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.
|
SRAX,
INC. |
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By: |
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Name: |
Christopher
Miglino |
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Title: |
CEO |
ANNEX
A
NOTICE
OF CONVERSION
The
undersigned hereby elects to convert principal under the Convertible Promissory Note due February 29, 2024 of SRAX, Inc., Inc., a Delaware
corporation (the “Company”), into shares of common stock (the “Common Stock”), of the Company according
to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a person other than
the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates
and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the holder for any conversion,
except for such transfer taxes, if any.
By
the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock
does not exceed the amounts specified under Section 4 of this Note, as determined in accordance with Section 13(d) of the Exchange Act.
The
undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer
of the aforesaid shares of Common Stock.
Conversion
calculations:
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Date
to Effect Conversion: |
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Principal
Amount of Note to be Converted: |
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|
Number
of shares of Common Stock to be issued: |
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Signature: |
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Name: |
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DWAC
Instructions: |
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Broker
No:___________________________ |
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Account
No:_________________________ |
Schedule
1
CONVERSION
SCHEDULE
This
Convertible Promissory Note due on February 29, 2024 in the original principal amount of $150,000 is issued by SRAX, Inc. a Delaware
corporation. This Conversion Schedule reflects conversions made under Section 4 of the above referenced Note.
Dated:
Date
of Conversion
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Exhibit
10.01
PURCHASE
AGREEMENT
This
PURCHASE AGREEMENT (the “Agreement”), dated as of February 29, 2024 is by and among SRAX, Inc., a Delaware
corporation (the “Company”), and, (the “Buyer”).
RECITALS
A.
The Company and the Buyer is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506(b) of Regulation D (“Regulation
D”) as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the 1933 Act.
B.
The Company has authorized a new series of convertible notes of the Company substantially in the form attached hereto as Exhibit
A (the “Note”), which Note shall be convertible into shares of Common Stock (as defined below) (the shares
of Common Stock issuable pursuant to the terms of the Note, including, without limitation, upon conversion or otherwise, collectively,
the “Conversion Shares”), in accordance with the terms of the Note.
C.
The Buyer wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, (i) a Note in the
aggregate original principal amount set forth on such Buyer’s signature page hereto.
D.
The Notes, the Conversion Shares, referred to herein as the “Securities.”
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and each Buyer hereby agree as follows:
1.
PURCHASE AND SALE OF NOTES
(a)
Purchase of Notes. The Company shall issue and sell to the Buyer, and the Buyer agrees to purchase from the Company on the Closing
Date (as defined below) a Note (with a 20% original issue discount) the Note is convertible into using a conversion price of $0.25).
(b)
Purchase Price. The aggregate purchase price for the Notes to be purchased by each Buyer (the “Purchase Price”)
shall be the amount set forth on the Buyer’s signature page
(c)
Form of Payment. On the Closing Date, (i) the Buyer shall pay its Purchase Price to the Company for the Notes and the s to be
issued and sold to the Buyer at the Closing, by wire transfer of immediately available funds and (ii) the Company shall deliver to the
Buyer (A) a Note
2.
BUYER’S REPRESENTATIONS AND IES.
The
Buyer to the Company with respect to only itself that, as of the date hereof and as of the Closing Date:
(a)
Accredited Investor Status. Such Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation
D.
(b)
Reliance on Exemptions. Such Buyer understands that the Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the
truth and accuracy of, and such Buyer’s compliance with, the representations, ies, agreements, acknowledgments and understandings
of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of such Buyer to acquire
the Securities.
(c)
Information. The Buyer has been furnished with all materials relating to the business, finances and operations of the Company
and materials relating to the offer and sale of the Securities that have been requested by the Buyer. The Buyer has been afforded the
opportunity to ask questions of the Company. Neither such inquiries nor any other due diligence investigations conducted by the Buyer
shall modify, amend or affect the Buyer’s right to rely on the Company’s representations and ies contained herein. The Buyer
understands that its investment in the Securities involves a high degree of risk. The Buyer has sought such accounting, legal and tax
advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Securities.
(d)
Validity; Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Buyer and
shall constitute the legal, valid and binding obligations of the Buyer enforceable against the Buyer in accordance with their respective
terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights
and remedies.
3.
REPRESENTATIONS AND IES OF THE COMPANY.
The
Company represents and s to the Buyer that, as of the date hereof and as of the Closing Date:
(a)
Organization and Qualification. Each of the Company and each of its Subsidiaries are entities duly organized and validly existing
and in good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authority to own their
properties and to carry on their business as now being conducted and as presently proposed to be conducted. Each of the Company and each
of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership
of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to
be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect (as defined below). As used
in this Agreement, “Material Adverse Effect” means any material adverse effect on (i) the business, properties, assets,
liabilities, operations (including results thereof), condition (financial or otherwise) or prospects of the Company and the Subsidiaries
taken as a whole, (ii) the transactions contemplated hereby or in any of the other Transaction Documents or any other agreements or instruments
to be entered into in connection herewith or therewith or (iii) the authority or ability of the Company or any of its Subsidiaries to
perform any of their respective obligations under any of the Transaction Documents (as defined below). Other than the Persons (as defined
below) set forth on Schedule 3(a), the Company has no Subsidiaries. “Subsidiaries” means any Person in which the Company,
directly or indirectly, (I) owns any of the outstanding capital stock or holds any equity or similar interest of such Person or (II)
controls or operates all or any part of the business, operations or administration of such Person, and each of the foregoing, is individually
referred to herein as a “Subsidiary.”
(b)
Authorization; Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations
under this Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof.
Each Subsidiary has the requisite power and authority to enter into and perform its obligations under the Transaction Documents to which
it is a party. The execution and delivery of this Agreement and the other Transaction Documents by the Company and its Subsidiaries,
and the consummation by the Company and its Subsidiaries of the transactions contemplated hereby and thereby (including, without limitation,
the issuance of the Notes and the reservation for issuance and issuance of the Conversion Shares issuable upon conversion of the Notes
and the issuance of the s and the reservation for issuance and issuance of the Shares issuable upon exercise of the s) have been duly
authorized by the Company’s board of directors and each of its Subsidiaries’ board of directors or other governing body,
as applicable, and (other than (i) the obtaining of the Stockholder Approval (as defined below), (ii) the filing with the SEC of (A)
the 8-K Filing (as defined below), (B) one or more Registration Statements in accordance with the requirements of the Registration Rights
Agreement, and (C) a Form D and any other filings as may be required by any state securities agencies)(collectively, the “Required
Approvals”) no further filing, consent or authorization is required by the Company, its Subsidiaries, their respective boards
of directors or their stockholders or other governing body. This Agreement has been, and the other Transaction Documents to which it
is a party will be prior to the Closing, duly executed and delivered by the Company, and each constitutes the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with its respective terms, except as such enforceability may
be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and except as rights to indemnification
and to contribution may be limited by federal or state securities law. Prior to the Closing, the Transaction Documents to which each
Subsidiary is a party will be duly executed and delivered by each such Subsidiary, and shall constitute the legal, valid and binding
obligations of each such Subsidiary, enforceable against each such Subsidiary in accordance with their respective terms, except as such
enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and except as
rights to indemnification and to contribution may be limited by federal or state securities law. “Transaction Documents”
means, collectively, this Agreement, the Notes, the s, the and each of the other agreements and instruments entered into or delivered
by any of the parties hereto in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.
(c)
Issuance of Securities. The issuance of the Notes are duly authorized and upon issuance in accordance with the terms of the Transaction
Documents shall be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, mortgages, defects,
claims, liens, filings, inchoate liens, violations, delinquent assessments, pledges, charges, taxes, rights of first refusal, encumbrances,
security interests and other encumbrances (collectively “Liens”) with respect to the issuance thereof. As of the Closing,
the Company shall have reserved from its duly authorized capital stock for issuance pursuant to the Notes, not less than the sum of (i)
100% of the maximum number of Conversion Shares issuable upon conversion of the Notes and (ii) 100% of the maximum number of Shares initially
issuable upon exercise of the Upon issuance or conversion in accordance with the Notes (as the case may be), the Conversion Shares and
the Shares, respectively, when issued, will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights
or Liens with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. Subject
to the accuracy of the representations and warranties of the Buyers in this Agreement, the offer and issuance by the Company of the Securities
is exempt from registration under the 1933 Act.
(d)
No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and its Subsidiaries and the
consummation by the Company and its Subsidiaries of the transactions contemplated hereby and thereby (including, without limitation,
the issuance of the Notes, the s, the Conversion Shares and the Shares and the reservation for issuance of the Conversion Shares and
the Shares) will not (i) result in a violation of the Certificate of Incorporation (as defined below) (including, without limitation,
any certificate of designation contained therein), Bylaws (as defined below), certificate of formation, memorandum of association, articles
of association, bylaws or other organizational documents of the Company or any of its Subsidiaries, or any capital stock or other securities
of the Company or any of its Subsidiaries, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time
or both would become a default) in any respect under, or give to others any rights of termination, amendment, acceleration or cancellation
of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation
of any law, rule, regulation, order, judgment or decree (including, without limitation, foreign, federal and state securities laws and
including all applicable foreign, federal and state laws, rules and regulations) applicable to the Company or any of its Subsidiaries
or by which any property or asset of the Company or any of its Subsidiaries is bound or affected.
(e)
Consents. Neither the Company nor any Subsidiary is required to obtain any consent from, authorization or order of, or make any
filing or registration with (other than the Required Approvals), any Governmental Entity (as defined below) or any regulatory or self-regulatory
agency or any other Person in order for it to execute, deliver or perform any of its respective obligations under or contemplated by
the Transaction Documents, in each case, in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings
and registrations which the Company or any Subsidiary is required to obtain pursuant to the preceding sentence have been or will be obtained
or effected on or prior to the Closing Date, and neither the Company nor any of its Subsidiaries are aware of any facts or circumstances
which might prevent the Company or any of its Subsidiaries from obtaining or effecting any of the registration, application or filings
contemplated by the Transaction Documents. Except as set forth on Schedule 3(e), the Company is not in violation of the requirements
of the Principal Market and has no knowledge of any facts or circumstances which could reasonably lead to delisting or suspension of
the Common Stock in the foreseeable future. “Governmental Entity” means any nation, state, county, city, town, village,
district, or other political jurisdiction of any nature, federal, state, local, municipal, foreign, or other government, governmental
or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court
or other tribunal), multi-national organization or body; or body exercising, or entitled to exercise, any administrative, executive,
judicial, legislative, police, regulatory, or taxing authority or power of any nature or instrumentality of any of the foregoing, including
any entity or enterprise owned or controlled by a government or a public international organization or any of the foregoing.
(f)
Acknowledgment Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely
in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby
and thereby and that no Buyer is (i) an officer or director of the Company or any of its Subsidiaries, (ii) an “affiliate”
(as defined in Rule 144) of the Company or any of its Subsidiaries or (iii) to its knowledge, a “beneficial owner” of more
than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the
“1934 Act”)). The Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary of the
Company or any of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated
hereby and thereby. The Company further represents to each Buyer that the Company’s and each Subsidiary’s decision to enter
into the Transaction Documents to which it is a party has been based solely on the independent evaluation by the Company, each Subsidiary
and their respective representatives.
(g)
Dilutive Effect. The Company understands and acknowledges that the number of Conversion Shares and Shares will increase in certain
circumstances. The Company further acknowledges that its obligation to issue the Conversion Shares pursuant to the terms of the Notes
in accordance with this Agreement and the Notes and the Shares upon exercise of the s in accordance with this Agreement, the Notes is,
in each case, absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of
other stockholders of the Company.
(h)
Conduct of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term of or in
default under its Certificate of Incorporation, any certificate of designation, preferences or rights of any other outstanding series
of preferred stock of the Company or any of its Subsidiaries or Bylaws or their organizational charter, certificate of formation, memorandum
of association, articles of association, Certificate of Incorporation or certificate of incorporation or bylaws, respectively. Neither
the Company nor any of its Subsidiaries is in violation of any judgment, decree or order or any statute, ordinance, rule or regulation
applicable to the Company or any of its Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct its business in
violation of any of the foregoing, except in all cases for possible violations which could not, individually or in the aggregate, have
a Material Adverse Effect. Without limiting the generality of the foregoing, the Company is not in violation of any of the rules, regulations
or requirements of the Principal Market and has no knowledge of any facts or circumstances that could reasonably lead to delisting or
suspension of the Common Stock by the Principal Market in the foreseeable future. During the two years prior to the date hereof, (i)
the Common Stock has been listed or designated for quotation on the Principal Market, (ii) trading in the Common Stock has not been suspended
by the SEC or the Principal Market and (iii) the Company has received no communication, written or oral, from the SEC or the Principal
Market regarding the suspension or delisting of the Common Stock from the Principal Market. The Company and each of its Subsidiaries
possess all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary to conduct their respective
businesses, except where the failure to possess such certificates, authorizations or permits would not have, individually or in the aggregate,
a Material Adverse Effect, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation
or modification of any such certificate, authorization or permit. There is no agreement, commitment, judgment, injunction, order or decree
binding upon the Company or any of its Subsidiaries or to which the Company or any of its Subsidiaries is a party which has or would
reasonably be expected to have the effect of prohibiting or materially impairing any business practice of the Company or any of its Subsidiaries,
any acquisition of property by the Company or any of its Subsidiaries or the conduct of business by the Company or any of its Subsidiaries
as currently conducted other than such effects, individually or in the aggregate, which have not had and would not reasonably be expected
to have a Material Adverse Effect on the Company or any of its Subsidiaries.
(i)
Disclosure. The Company confirms that neither it nor any other Person acting on its behalf has provided the Buyer with any information
that constitutes or could reasonably be expected to constitute material, non-public information concerning the Company or any of its
Subsidiaries, other than the existence of the transactions contemplated by this Agreement and the other Transaction Documents. The Company
understands and confirms that the Buyer will rely on the foregoing representations in effecting transactions in securities of the Company.
All disclosure provided to the Buyer regarding the Company and its Subsidiaries, their businesses and the transactions contemplated hereby,
furnished by or on behalf of the Company or any of its Subsidiaries is true and correct and does not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. All of the written information furnished after the date hereof by or on behalf of the Company
or any of its Subsidiaries to the Buyer pursuant to or in connection with this Agreement and the other Transaction Documents, taken as
a whole, will be true and correct in all material respects as of the date on which such information is so provided and will not contain
any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading.
(j)
4.
COVENANTS.
(a)
Listing. The Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Registrable
Securities upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is then listed
or designated for quotation (as the case may be) (subject to official notice of issuance) and shall maintain such listing or designation
for quotation (as the case may be) of all Registrable Securities from time to time issuable under the terms of the Transaction Documents
on such national securities exchange or automated quotation system. The Company shall maintain the Common Stock’s listing or authorization
for quotation (as the case may be) on the Principal Market, The New York Stock Exchange, the NYSE American, the Nasdaq Global Market
or the Nasdaq Global Select Market (each, an “Eligible Market”).
(b)
Reservation of Shares. So long as any of the Notes remain outstanding, the Company shall take all action necessary to at all times
have authorized, and reserved for the purpose of issuance, no less than the sum of (i) 200% of the maximum number of shares of Common
Stock issuable upon conversion of all the Notes then outstanding, and (ii) 200% of the maximum number of Shares issuable upon exercise
of all the s then outstanding, as subject to adjustments as outlined in the s (without regard to any limitations on the exercise of the
s set forth therein) (collectively, the “Required Reserve Amount”); provided that at no time shall the number of shares
of Common Stock reserved pursuant to this Section 4(b) be reduced other than proportionally in connection with any conversion, exercise
and/or redemption, as applicable of Notes and s. If at any time the number of shares of Common Stock authorized and reserved for issuance
is not sufficient to meet the Required Reserve Amount, the Company will promptly take all corporate action necessary to authorize and
reserve a sufficient number of shares, including, without limitation, calling a special meeting of stockholders to authorize additional
shares to meet the Company’s obligations pursuant to the Transaction Documents, in the case of an insufficient number of authorized
shares, obtain stockholder approval of an increase in such authorized number of shares, and voting the management shares of the Company
in favor of an increase in the authorized shares of the Company to ensure that the number of authorized shares is sufficient to meet
the Required Reserve Amount.
(c)
Conduct of Business. The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance
or regulation of any Governmental Entity, except where such violations would not reasonably be expected to result, either individually
or in the aggregate, in a Material Adverse Effect.
(d)
Restriction on Redemption and Cash Dividends. So long as any Notes are outstanding, the Company shall not, directly or indirectly,
redeem, or declare or pay any cash dividend or distribution on, any securities of the Company without the prior express written consent
of the Buyers.
(e)
Corporate Existence. So long as the Buyer beneficially owns any Notes or s, the Company shall not be party to any Fundamental
Transaction (as defined in the Notes) unless the Company is in compliance with the applicable provisions governing Fundamental Transactions
set forth in the Notes and the s.
(f)
Stock Splits. Until the Notes and all notes issued pursuant to the terms thereof are no longer outstanding, the Company shall
not effect any stock combination, reverse stock split or other similar transaction (or make any public announcement or disclosure with
respect to any of the foregoing) without the prior written consent of the Buyer.
(g)
Conversion and Exercise Procedures. Each of the form of Exercise Notice (as defined in the s) included in the s and the form of
Conversion Notice (as defined in the Notes) included in the Notes set forth the totality of the procedures required of the Buyers in
order to exercise the s or convert the Notes. The Company shall honor exercises of the conversions of the Notes and shall deliver the
Conversion Shares in accordance with the terms, conditions and time periods set forth in the Notes.
(h)
General Solicitation. None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act) or any person
acting on behalf of the Company or such affiliate will solicit any offer to buy or offer or sell the Securities by means of any form
of general solicitation or general advertising within the meaning of Regulation D, including: (i) any advertisement, article, notice
or other communication published in any newspaper, magazine or similar medium or broadcast over television or radio; and (ii) any seminar
or meeting whose attendees have been invited by any general solicitation or general advertising.
(i)
Integration. None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act), or any person acting
on behalf of the Company or such affiliate will sell, offer for sale, or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the 1933 Act) which will be integrated with the sale of the Securities in a manner which would require the registration
of the Securities under the 1933 Act or require stockholder approval under the rules and regulations of the Principal Market and the
Company will take all action that is appropriate or necessary to assure that its offerings of other securities will not be integrated
for purposes of the 1933 Act or the rules and regulations of the Principal Market, with the issuance of Securities contemplated hereby.
5.
REGISTER; TRANSFER AGENT INSTRUCTIONS; LEGEND.
(a)
Register. The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may
designate by notice to each holder of Securities), a register for the Notes and the s in which the Company shall record the name and
address of the Person in whose name the Notes and the s have been issued (including the name and address of each transferee), the principal
amount of the Notes held by such Person, the number of Conversion Shares issuable pursuant to the terms of the Notes and the number of
Shares issuable upon exercise of the s held by such Person. The Company shall keep the register open and available at all times during
business hours for inspection of any Buyer or its legal representatives.
(b)
Transfer Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent and any subsequent transfer
agent (as applicable, the “Transfer Agent”) in a form acceptable to the Buyer (the “Irrevocable Transfer
Agent Instructions”) to issue certificates or credit shares to the applicable balance accounts at The Depository Trust Company
(“DTC”), registered in the name of the Buyer or its nominee(s), for the Conversion Shares and the Shares in such amounts
as specified from time to time by each Buyer to the Company upon conversion of the Notes or the exercise of the s (as the case may be).
The Company represents and s that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5(b),
and stop transfer instructions to give effect to Section 2(g) hereof, will be given by the Company to its transfer agent with respect
to the Securities, and that the Securities shall otherwise be freely transferable on the books and records of the Company, as applicable,
to the extent provided in this Agreement and the other Transaction Documents. If the Buyer effects a sale, assignment or transfer of
the Securities in accordance with Section 2(g), the Company shall permit the transfer and shall promptly instruct its transfer agent
to issue one or more certificates or credit shares to the applicable balance accounts at DTC in such name and in such denominations as
specified by such Buyer to effect such sale, transfer or assignment. In the event that such sale, assignment or transfer involves Conversion
Shares or Shares sold, assigned or transferred pursuant to an effective registration statement or in compliance with Rule 144, the transfer
agent shall issue such shares to such Buyer, assignee or transferee (as the case may be) without any restrictive legend in accordance
with Section 5(d) below. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the
Buyer. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5(b) will be inadequate
and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section 5(b), that the Buyer shall
be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate
issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required. Any fees
(with respect to the transfer agent, counsel to the Company or otherwise) associated with the issuance of such opinion or the removal
of any legends on any of the Securities shall be borne by the Company.
(c)
Legends. The Buyer understands that the Securities have been issued (or will be issued in the case of the Conversion Shares and
the Shares) pursuant to an exemption from registration or qualification under the 1933 Act and applicable state securities laws, and
except as set forth below, the Securities shall bear any legend as required by the “blue sky” laws of any state and a restrictive
legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):
NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE]
[EXERCISABLE] HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE
OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL
TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING,
THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
(d)
Removal of Legends. Certificates evidencing Securities shall not be required to contain the legend set forth in Section 5(c) above
or any other legend (i) while a registration statement covering the resale of such Securities is effective under the 1933 Act, (ii) following
any sale of such Securities pursuant to Rule 144 (assuming the transferor is not an affiliate of the Company), (iii) if such Securities
are eligible to be sold, assigned or transferred under Rule 144 (provided that the Buyer provides the Company with reasonable assurances
that such Securities are eligible for sale, assignment or transfer under Rule 144 which shall not include an opinion of Buyer’s
counsel), (iv) in connection with a sale, assignment or other transfer (other than under Rule 144), provided that the Buyer provides
the Company with an opinion of counsel to such Buyer, in a generally acceptable form, to the effect that such sale, assignment or transfer
of the Securities may be made without registration under the applicable requirements of the 1933 Act or (v) if such legend is not required
under applicable requirements of the 1933 Act (including, without limitation, controlling judicial interpretations and pronouncements
issued by the SEC). If a legend is not required pursuant to the foregoing, the Company shall no later than two (2) Trading Days (or such
earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade initiated
on the date such Buyer delivers such legended certificate representing such Securities to the Company) following the delivery by a Buyer
to the Company or the transfer agent (with notice to the Company) of a legended certificate representing such Securities (endorsed or
with stock powers attached, and otherwise in form necessary to affect the reissuance and/or transfer, if applicable), together with any
other deliveries from such Buyer as may be required above in this Section 5(d), as directed by such Buyer, either: (A) provided that
the Company’s transfer agent is participating in the DTC Fast Automated Securities Transfer Program (“FAST”)
and such Securities are Conversion Shares or Shares, credit the aggregate number of shares of Common Stock to which such Buyer shall
be entitled to such Buyer’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system
or (B) if the Company’s transfer agent is not participating in FAST, issue and deliver (via reputable overnight courier) to such
Buyer, a certificate representing such Securities that is free from all restrictive and other legends, registered in the name of such
Buyer or its designee (the date by which such credit is so required to be made to the balance account of such Buyer’s or such Buyer’s
designee with DTC or such certificate is required to be delivered to such Buyer pursuant to the foregoing is referred to herein as the
“Required Delivery Date”, and the date such shares of Common Stock are actually delivered without restrictive legend
to such Buyer or such Buyer’s designee with DTC, as applicable, the “Share Delivery Date”). The Company shall
be responsible for any transfer agent fees or DTC fees with respect to any issuance of Securities or the removal of any legends with
respect to any Securities in accordance herewith. In addition to such Buyer’s other available remedies, the Company shall pay to
a Buyer, in cash, (i) as partial liquidated damages and not as a penalty, for each $1,000 of Conversion Shares or Shares (based on the
VWAP of the Common Stock on the date such Securities are submitted to the Transfer Agent) delivered for removal of the restrictive legend,
$5 per Trading Day for each Trading Day after the Required Delivery Date until such certificate is delivered without a legend. The Company
shall cause its counsel to issue a legal opinion to the Transfer Agent or the Buyers promptly after such time as such legend is no longer
required under this Section, and in any event within such time as to enable the Transfer Agent to remove the legend hereunder by the
Required Delivery Date, if required by the Transfer Agent to effect the removal of the legend hereunder, or if requested by a Buyer,
respectively.
(e)
Failure to Timely Deliver; Buy-In. If the Company fails, for any reason or for no reason, to issue and deliver (or cause to be
delivered) to a Buyer (or its designee) by the Required Delivery Date, either (I) if the Transfer Agent is not participating in FAST,
a certificate for the number of Conversion Shares or Shares (as the case may be) to which such Buyer is entitled and register such Conversion
Shares or Shares (as the case may be) on the Company’s share register or, if the Transfer Agent is participating in FAST, to credit
the balance account of such Buyer or such Buyer’s designee with DTC for such number of Conversion Shares or Shares (as the case
may be) submitted for legend removal by such Buyer pursuant to Section 5(d) above or (II) if the Registration Statement covering the
resale of the Conversion Shares or Shares (as the case may be) submitted for legend removal by such Buyer pursuant to Section 5(d) above
(the “Unavailable Shares”) is not available for the resale of such Unavailable Shares and the Company fails to promptly,
but in no event later than as required pursuant to the Registration Rights Agreement (x) so notify such Buyer and (y) deliver the Conversion
Shares or Shares, as applicable, electronically without any restrictive legend by crediting such aggregate number of Conversion Shares
or Shares (as the case may be) submitted for legend removal by such Buyer pursuant to Section 5(d) above to such Buyer’s or its
designee’s balance account with DTC through its Deposit/Withdrawal At Custodian system (the event described in the immediately
foregoing clause (II) is hereinafter referred as a “Notice Failure” and together with the event described in clause
(I) above, a “Delivery Failure”), then, and if on or after such Trading Day such Buyer purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Buyer of shares of Common Stock submitted
for legend removal by such Buyer pursuant to Section 5(d) above that such Buyer is entitled to receive from the Company (a “Buy-In”),
then the Company shall, within two (2) Trading Days after such Buyer’s request and in such Buyer’s discretion, either (i)
pay cash to such Buyer in an amount equal to such Buyer’s total purchase price (including brokerage commissions and other out-of-pocket
expenses, if any, for the shares of Common Stock so purchased) (the “Buy-In Price”), at which point the Company’s
obligation to so deliver such certificate or credit such Buyer’s balance account shall terminate and such shares shall be cancelled,
or (ii) promptly honor its obligation to so deliver to such Buyer a certificate or certificates or credit the balance account of such
Buyer or such Buyer’s designee with DTC representing such number of shares of Common Stock that would have been so delivered if
the Company timely complied with its obligations hereunder and pay cash to such Buyer in an amount equal to the excess (if any) of the
Buy-In Price over the product of (A) such number of shares of Conversion Shares or Shares (as the case may be) that the Company was required
to deliver to such Buyer by the Required Delivery Date multiplied by (B) the lowest Closing Sale Price (as defined in the s) of the Common
Stock on any Trading Day during the period commencing on the date of the delivery by such Buyer to the Company of the applicable Conversion
Shares or Shares (as the case may be) and ending on the date of such delivery and payment under this clause (ii). Nothing shall limit
such Buyer’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation,
a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates
representing shares of Common Stock (or to electronically deliver such shares of Common Stock) as required pursuant to the terms hereof.
Notwithstanding anything herein to the contrary, with respect to any given Notice Failure and/or Delivery Failure, this Section 5(e)
shall not apply to the applicable Buyer the extent the Company has already paid such amounts in full to such Buyer with respect to such
Notice Failure and/or Delivery Failure, as applicable, pursuant to the analogous sections of the Note or , as applicable, held by such
Buyer.
(f)
FAST Compliance. While any s remain outstanding, the Company shall maintain a transfer agent that participates in FAST.
6.
CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.
(a)
The obligation of the Company hereunder to issue and sell the Notes and the related s to each Buyer at the Closing is subject to the
satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s
sole benefit and may be waived by the Company at any time in its sole discretion by providing each Buyer with prior written notice thereof:
(i)
Such Buyer shall have executed each of the other Transaction Documents to which it is a party and delivered the same to the Company.
(ii)
Such Buyer and each other Buyer shall have delivered to the Company the Purchase Price (less, in the case of any Buyer, the amounts withheld
pursuant to Section 4(g)) for the Note and the related s being purchased by such Buyer at the Closing by wire transfer of immediately
available funds in accordance with the Flow of Funds Letter.
(iii)
The representations and ies of such Buyer shall be true and correct in all material respects as of the date when made and as of the Closing
Date as though originally made at that time (except for representations and ies that speak as of a specific date, which shall be true
and correct as of such specific date), and such Buyer shall have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such Buyer at or prior
to the Closing Date.
7.
TERMINATION.
In
the event that the Closing shall not have occurred with respect to the Buyer within five (5) business days of the date hereof, then such
Buyer shall have the right to terminate its obligations under this Agreement with respect to itself at any time on or after the close
of business on such date without liability of such Buyer to any other party; provided, however, (i) the right to terminate this Agreement
under this Section 8 shall not be available to such Buyer if the failure of the transactions contemplated by this Agreement to have been
consummated by such date is the result of such Buyer’s breach of this Agreement and (ii) the abandonment of the sale and purchase
of the Notes and the s shall be applicable only to such Buyer providing such written notice, provided further that no such termination
shall affect any obligation of the Company under this Agreement to reimburse such Buyer for the expenses described in Section 4(g) above.
Nothing contained in this Section 7 shall be deemed to release any party from any liability for any breach by such party of the terms
and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance
by any other party of its obligations under this Agreement or the other Transaction Documents.
8.
MISCELLANEOUS.
(a)
Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of
this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of
any jurisdictions other than the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state
and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or under any of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding
is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude
any Buyer from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s
obligations to such Buyer or to enforce a judgment or other court ruling in favor of such Buyer. EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION
DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY
OR THEREBY.
(b)
Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the
same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event
that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an
executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such signature page were an original thereof.
(c)
Headings; Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation
of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine,
neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words
of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision in
which they are found.
(d)
Severability; Maximum Payment Amounts. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid
or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall
be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues
to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature,
invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal
obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties
will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s). Notwithstanding anything
to the contrary contained in this Agreement or any other Transaction Document (and without implication that the following is required
or applicable), it is the intention of the parties that in no event shall amounts and value paid by the Company and/or any of its Subsidiaries
(as the case may be), or payable to or received by any of the Buyers, under the Transaction Documents (including without limitation,
any amounts that would be characterized as “interest” under applicable law) exceed amounts permitted under any applicable
law. Accordingly, if any obligation to pay, payment made to any Buyer, or collection by any Buyer pursuant the Transaction Documents
is finally judicially determined to be contrary to any such applicable law, such obligation to pay, payment or collection shall be deemed
to have been made by mutual mistake of such Buyer, the Company and its Subsidiaries and such amount shall be deemed to have been adjusted
with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by the applicable
law. Such adjustment shall be effected, to the extent necessary, by reducing or refunding, at the option of such Buyer, the amount of
interest or any other amounts which would constitute unlawful amounts required to be paid or actually paid to such Buyer under the Transaction
Documents. For greater certainty, to the extent that any interest, charges, fees, expenses or other amounts required to be paid to or
received by such Buyer under any of the Transaction Documents or related thereto are held to be within the meaning of “interest”
or another applicable term to otherwise be violative of applicable law, such amounts shall be pro-rated over the period of time to which
they relate.
(e)
Entire Agreement; Amendments. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto and
thereto and the instruments referenced herein and therein supersede all other prior oral or written agreements between the Buyer, the
Company, its Subsidiaries, their affiliates and Persons acting on their behalf, including, without limitation, any transactions by any
Buyer with respect to Common Stock or the Securities, and the other matters contained herein and therein, and this Agreement, the other
Transaction Documents, and the instruments referenced herein and therein contain the entire understanding of the parties solely with
respect to the matters covered herein and therein; provided, however, nothing contained in this Agreement or any other Transaction Document
shall (or shall be deemed to) (i) have any effect on any agreements any Buyer has entered into with, or any instruments any Buyer has
received from, the Company or any of its Subsidiaries prior to the date hereof with respect to any prior investment made by such Buyer
in the Company or (ii) waive, alter, modify or amend in any respect any obligations of the Company or any of its Subsidiaries, or any
rights of or benefits to the Buyer or any other Person, in any agreement entered into prior to the date hereof between or among the Company
and/or any of its Subsidiaries and the Buyer, or any instruments the Buyer received from the Company and/or any of its Subsidiaries prior
to the date hereof, and all such agreements and instruments shall continue in full force and effect. Except as specifically set forth
herein or therein, neither the Company nor the Buyer makes any representation, y, covenant or undertaking with respect to such matters.
For clarification purposes, the Recitals are part of this Agreement. No provision of this Agreement may be amended other than by an instrument
in writing signed by the Company and the Buyer Notices. Any notices, consents, waivers or other communications required or permitted
to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon delivery, when sent by electronic mail (provided that such sent email is kept on file (whether electronically or
otherwise) by the sending party and the sending party does not receive an automatically generated message from the recipient’s
email server that such e-mail could not be delivered to such recipient); or (iii) one (1) Business Day after deposit with an overnight
courier service with next day delivery specified, in each case, properly addressed to the party to receive the same. The mailing addresses
and e-mail addresses for such communications shall be:
If
to the Company:
SRAX,
Inc.
Telephone:
(323) 394-8362
Attention:
Chris Miglino, Chief Executive Officer
E-Mail:
Chris@srax.com
If
to the Buyer, to its mailing address and e-mail address set forth on the signature page. Written confirmation of receipt (A) given by
the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s
e-mail containing the time, date and recipient’s e-mail or (C) provided by an overnight courier service shall be rebuttable evidence
of personal service, receipt by e-mail or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above,
respectively.
(f)
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors
and assigns, including any purchasers of any of the Notes and s. The Company shall not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Buyer, including, without limitation, by way of a Fundamental Transaction (as defined
in the s) (unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the s)
or a Fundamental Transaction (as defined in the Notes) (unless the Company is in compliance with the applicable provisions governing
Fundamental Transactions set forth in the Notes). The Buyer may assign some or all of its rights hereunder in connection with any transfer
of any of its Securities without the consent of the Company, in which event such assignee shall be deemed to be a Buyer hereunder with
respect to such assigned rights.
(g)
No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than the
Indemnitees referred to in Section 9(k).
(h)
Survival. The representations, ies, agreements and covenants shall survive the Closing. Each Buyer shall be responsible only for
its own representations, ies, agreements and covenants hereunder.
(i)
Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and
shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.
(j)
Indemnification. In consideration of the Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities
thereunder and in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend,
protect, indemnify and hold harmless the Buyer and each holder of any Securities and all of their stockholders, partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing Persons’ agents or other representatives (including,
without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses
in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred
by any Indemnitee as a result of, or arising out of, or relating to (i) any misrepresentation or breach of any representation or y made
by the Company or any Subsidiary in any of the Transaction Documents, (ii) any breach of any covenant, agreement or obligation of the
Company or any Subsidiary contained in any of the Transaction Documents or (iii) any cause of action, suit, proceeding or claim brought
or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company or
any Subsidiary) or which otherwise involves such Indemnitee that arises out of or results from (A) the execution, delivery, performance
or enforcement of any of the Transaction Documents, (B) any transaction financed or to be financed in whole or in part, directly or indirectly,
with the proceeds of the issuance of the Securities, (C) any disclosure properly made by such Buyer pursuant to Section 4(i), or (D)
the status of such Buyer or holder of the Securities either as an investor in the Company pursuant to the transactions contemplated by
the Transaction Documents or as a party to this Agreement (including, without limitation, as a party in interest or otherwise in any
action or proceeding for injunctive or other equitable relief). To the extent that the foregoing undertaking by the Company may be unenforceable
for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities
which is permissible under applicable law. Except as otherwise set forth herein, the mechanics and procedures with respect to the rights
and obligations under this Section 9(k) shall be the same as those set forth in Section 6 of the Registration Rights Agreement.
(k)
Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party. No specific representation or y shall limit the generality
or applicability of a more general representation or y. Each and every reference to share prices, shares of Common Stock and any other
numbers in this Agreement that relate to the Common Stock shall be automatically adjusted for any stock splits, stock dividends, stock
combinations, recapitalizations or other similar transactions that occur with respect to the Common Stock after the date of this Agreement.
Notwithstanding anything in this Agreement to the contrary, for the avoidance of doubt, nothing contained herein shall constitute a representation
or y against, or a prohibition of, any actions with respect to the borrowing of, arrangement to borrow, identification of the availability
of, and/or securing of, securities of the Company in order for such Buyer (or its broker or other financial representative) to effect
short sales or similar transactions in the future.
(l)
Remedies. The Buyer and in the event of assignment by Buyer of its rights and obligations hereunder, each holder of Securities,
shall have all rights and remedies set forth in the Transaction Documents and all rights and remedies which such holders have been granted
at any time under any other agreement or contract and all of the rights which such holders have under any law. Any Person having any
rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security),
to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. Furthermore,
the Company recognizes that in the event that it or any Subsidiary fails to perform, observe, or discharge any or all of its or such
Subsidiary’s (as the case may be) obligations under the Transaction Documents, any remedy at law would inadequate relief to the
Buyers. The Company therefore agrees that the Buyer shall be entitled to specific performance and/or temporary, preliminary and permanent
injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual
damages and without posting a bond or other security. The remedies provided in this Agreement and the other Transaction Documents shall
be cumulative and in addition to all other remedies available under this Agreement and the other Transaction Documents, at law or in
equity (including a decree of specific performance and/or other injunctive relief).
(m)
Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and the Company or any Subsidiary
does not timely perform its related obligations within the periods therein provided, then such Buyer may rescind or withdraw, in its
sole discretion from time to time upon written notice to the Company or such Subsidiary (as the case may be), any relevant notice, demand
or election in whole or in part without prejudice to its future actions and rights.
(n)
Payment Set Aside; Currency. To the extent that the Company makes a payment or payments to any Buyer hereunder or pursuant to
any of the other Transaction Documents or any of the Buyers enforce or exercise their rights hereunder or thereunder, and such payment
or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal law,
common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended
to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff
had not occurred. Unless otherwise expressly indicated, all dollar amounts referred to in this Agreement and the other Transaction Documents
are in United States Dollars (“U.S. Dollars”), and all amounts owing under this Agreement and all other Transaction
Documents shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be converted into the U.S. Dollar
equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate” means, in relation
to any amount of currency to be converted into U.S. Dollars pursuant to this Agreement, the U.S. Dollar exchange rate as published in
the Wall Street Journal on the relevant date of calculation.
[signature
pages follow]
IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as
of the date first written above.
|
COMPANY: |
|
|
|
|
SRAX,
INC. |
|
|
|
|
By: |
|
|
Name: |
Christopher
Miglino |
|
Title: |
CEO |
IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as
of the date first written above.
|
BUYER: |
|
|
|
|
|
|
|
Name: |
|
|
|
Principal
Amount of Note (including the original issue discount): $90,000 |
v3.24.0.1
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|
Mar. 05, 2024 |
Cover [Abstract] |
|
Document Type |
8-K
|
Amendment Flag |
false
|
Document Period End Date |
Mar. 05, 2024
|
Entity File Number |
001-37916
|
Entity Registrant Name |
SRAX,
Inc.
|
Entity Central Index Key |
0001538217
|
Entity Tax Identification Number |
45-2925231
|
Entity Incorporation, State or Country Code |
DE
|
Entity Address, Address Line One |
1014
S. Westlake Blvd
|
Entity Address, Address Line Three |
Suite
14-299
|
Entity Address, City or Town |
Westlake
Village
|
Entity Address, State or Province |
CA
|
Entity Address, Postal Zip Code |
91361
|
City Area Code |
(323)
|
Local Phone Number |
205-6109
|
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|
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|
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SRAX
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Entity Emerging Growth Company |
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