Exhibit 10.1

 

AMENDMENT NO. 2 TO SECURITIES PURCHASE AGREEMENT, DEBENTURES AND
REGISTRATION RIGHTS AGREEMENT

 

This Amendment No. 2 to Securities Purchase Agreement, Debentures and
Registration Rights Agreement (this “Agreement”) is made and entered into as of
October 14, 2019 (the “Effective Date”) by and between LGBTQ Loyalty Holdings,
Inc. (the “Company”) and Pride Partners LLC (“Pride” and together with the
Company, the “Parties”) for the purpose of (i) amending that certain Securities
Purchase Agreement, dated as of June 4, 2019, by and between the Parties (as
amended, the “Purchase Agreement”), (ii) amending that certain 10% Original
Issue Discount Senior Convertible Debenture due September 4, 2020 (as amended,
the “Debentures”) and (iii) amending that certain Registration Rights Agreement,
dated as of June 4, 2019, by and between the Parties (as amended, the “RRA”).
Reference is made to that certain Amendment No. 1 to Securities Purchase
Agreement, Debentures and Registration Rights Agreement, dated August 26, 2019
(“Amendment No. 1”). Capitalized terms used herein and not otherwise defined
shall have the respective meanings ascribed to such terms in the Purchase
Agreement.

 

WHEREAS, the Parties previously entered into Amendment No. 1 to provide the
Company with an additional $200,000 of funding to continue its business
operations;

 

WHEREAS, the Company requires $300,000 of additional funding to continue its
business operations and Pride desires to provide such funding; and

 

WHEREAS, to affect such additional funding the Parties desire to amend the
Purchase Agreement and Debenture to, among other things, increase the face
amount of the Debentures by $330,000 in consideration for a cash payment of
$300,000.

 

NOW, THEREFORE, in consideration of the foregoing recitals, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, the Parties agree as follows:

 

1.                Purchase and Sale. Concurrent with the execution and delivery
of this Agreement by the Parties, the Company agrees to sell, and Pride agrees
to purchase, an aggregate of $330,000 in principal amount of the Debentures.
Pride shall deliver to the Company, via wire transfer or a certified check,
immediately available funds equal to $300,000 in three tranches as follows:
$100,000 shall be due concurrently with the execution of this Agreement (the
“Initial Tranche”), $100,000 shall be due on or prior to November 14, 2019 (the
“Second Tranche”) and $100,000 shall be due on or prior to December 14, 2019
(the “Final Tranche”); provided, that upon receipt of the Initial Tranche, the
amendment contemplated by Section 2 of this Agreement shall be deemed effective.

 

2.                Amendment to Face Value of Debentures. In accordance with
Section 1 above, upon receipt of payment by the Company of the Initial Tranche
payment from Pride, the face value of the Debentures (which is currently
$770,000) shall immediately, and without any further action by either of the
Parties, be amended to $1,100,000; provided, however, that if Pride shall fail
to make payment of the Second Tranche or Final Tranche on or before November 14,
2019 or December 14, 2019, respectively, the face value of the Debentures shall
immediately, and without further action by either of the Parties, be amended by
$110,000 for each missed payment.

 

3.                Waiver of Warrant Exercise at Company Demand. Upon receipt of
the Initial Tranche, Second Tranche and Final Tranche, the Company hereby
irrevocably waives its right pursuant to Section 2(f) of the Warrants to make
any Company Demand (as such term is defined in the Warrants).

 

 

 

 

4.                Second Additional Principal Amount Definition. Section 1 of
the Purchase Agreement is hereby amended to add the defined term “Second
Additional Principal Amount” which such term shall be included in the Purchase
Agreement as follows:

 

““Second Additional Principal Amount” means the $300,000 investment made by the
Purchasers on or about October 14, 2019.”

 

5.                Amendment to Registration Rights Agreement. The defined term
“Registrable Securities” in the RRA is hereby amended and restated in its
entirety as follows:

 

““Registrable Securities” means, as of any date of determination, (a) all shares
of Common Stock issued and issuable on the Debentures (other than the shares due
and payable upon conversion of the Additional Principal Amount and Second
Additional Principal Amount) assuming all permissible interest and principal
payments are made in shares of Common Stock and the Debentures are held until
maturity, (b) all Warrant Shares then issued and issuable upon exercise of the
Warrants (assuming on such date the Warrants are exercised in full without
regard to any exercise limitations therein), (c) any additional shares of Common
Stock issued and issuable in connection with any anti-dilution provisions in the
Debentures (other than as it relates to the shares due and payable upon
conversion of the Additional Principal Amount and Second Additional Principal
Amount) or the Warrants (in each case, without giving effect to any limitations
on conversion set forth in the Debentures or limitations on exercise set forth
in the Warrants), and (d) any securities issued or then issuable upon any stock
split, dividend or other distribution, recapitalization or similar event with
respect to the foregoing (other than as it relates to the shares due and payable
upon conversion of the Additional Principal Amount and Second Additional
Principal Amount); provided, however, that any such Registrable Securities shall
cease to be Registrable Securities (and the Company shall not be required to
maintain the effectiveness of any, or file another, Registration Statement
hereunder with respect thereto) for so long as (a) a Registration Statement with
respect to the sale of such Registrable Securities is declared effective by the
Commission under the Securities Act and such Registrable Securities have been
disposed of by the Holder in accordance with such effective Registration
Statement, (b) such Registrable Securities have been previously sold in
accordance with Rule 144, or (c) such securities become eligible for resale
without volume or manner-of-sale restrictions and without current public
information pursuant to Rule 144 as set forth in a written opinion letter to
such effect, addressed, delivered and acceptable to the Transfer Agent and the
affected Holders (assuming that such securities and any securities issuable upon
exercise, conversion or exchange of which, or as a dividend upon which, such
securities were issued or are issuable, were at no time held by any Affiliate of
the Company), as reasonably determined by the Company, upon the advice of
counsel to the Company.”

 

6.                Demand Registration Rights.

 

a.                If, at any time following the three (3) month anniversary of
the date of Amendment No. 1, Pride shall not have any remaining Underlying
Shares available for resale pursuant to the Registration Statement and shall not
be permitted to otherwise sell the Conversion Shares underlying the Second
Additional Principal Amount (such Conversion Shares, the “Second Additional
Conversion Shares”) pursuant to Rule 144 without volume limitation, then the
Company, upon written demand of Pride, agrees to use its commercially best
efforts to register under the Securities Act all or any portion of the Second
Additional Conversion Shares as requested by Pride. Upon receipt of such demand,
the Company will use its commercially best efforts to file a registration
statement covering the Second Additional Conversion Shares within thirty
calendar days after receipt of a demand notice and use its commercially best
efforts to have such registration statement declared effective as soon as
possible thereafter. The demand notice shall specify the number of Second
Additional Conversion Shares proposed to be sold by Pride and the intended
method(s) of distribution thereof.

 

 

 

 

b.                Pride acknowledges and agrees that the Company shall be
permitted to include on any demand registration statement filed pursuant to this
Section for resale by Brian Neal such number of shares equal to one-third (1/3)
of the Second Additional Conversion Shares that were included in Pride’s written
demand for registration pursuant to this Section.

 

c.                The Company shall not be obligated to effect more than two (2)
demand registrations per calendar year, with no demand registrations required to
be effected within three (3) months of a previously effected demand
registration, under this Section.

 

7.                No Other Amendment. Except as expressly modified by this
Agreement, all terms, conditions and covenants contained in the Purchase
Agreement, Debentures and RRA shall remain in full force and effect.

 

8.                Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law. However, if any provision of this Agreement shall be
prohibited by or invalid under such law, it shall be deemed modified to conform
to the minimum requirements of such law and the parties will attempt to modify
this agreement by insertion, deletion or revision so as to accomplish the
original intent in a fashion that is not so prohibited or invalid.

 

9.                Successors. This Agreement shall inure to the benefit of and
bind (i) any and all heirs, successors in interest, assigns, officers, members
or employees of the Parties, as applicable and (ii) any persons or entities that
acquire assignee or all or substantially all of the assets or a portion of the
assets of assignee, whether by asset sale, equity transfer, merger, combination
or otherwise.

 

10.             Venue. The Parties irrevocably submit exclusively to the
jurisdiction of the State of New York and the venue of New York County in any
action brought by the Parties concerning this Agreement or the performance
thereof.

 

11.             Choice of Law. This Agreement shall be governed by, construed
and entered in accordance with the laws of the State of New York applicable to
contracts deemed to be made within such state, without regard to choice of law
or conflict of law provisions thereof.

 

12.             Interpretation. No provision of this Agreement shall be
interpreted or construed against any Party because that Party or its legal
representative drafted it.

 

13.             Counterparts. This Agreement may be executed in two or more
counterparts, each of which when so executed and delivered to the other party
shall be deemed an original. The executed page(s) from each original may be
joined together and attached to one such original and shall thereupon constitute
one and the same instrument. Such counterparts may be delivered by facsimile or
other electronic transmission, which shall not impair the validity thereof.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the date first written above.

 

LGBTQ LOYALTY HOLDINGS, INC.   PRIDE PARTNERS LLC               By:     By:    
Name:     Name:     Title:     Title: