Exhibit 10.1

 

TERM LOAN AND SECURITY AGREEMENT

 

BETWEEN

 

SRAX, INC., as Borrower

 

AND

 

BRF FINANCE CO., LLC, as Lender

 

 

 

 

TABLE OF CONTENTS

 

    Page       1. RECITALS 1       2. DEFINITIONS 1         2.1 Defined Terms 1
  2.2 Singular and Plural Terms 4   2.3 Accounting Principles 4   2.4 References
and Other Terms 4         3. THE LOAN 4         3.1 Commitment and Loan
Advances; Borrowing; Prepayments 4   3.2 Term Loan Advances Evidenced by the
Note 5   3.3 Calculation of Interest 5   3.4 Payments of Principal and Interest
6   3.5 Default Rate 6   3.6 Late Charge 6   3.7 Fees 6   3.8 Warrants 6        
4. CLOSING DOCUMENTS AND CONDITIONS PRECEDENT 7         4.1 Term Loan Documents
7   4.2 FastPay Payoff Letter 7   4.3 Searches 7   4.4 Opinion of Counsel 7  
4.5 Financial Conditions 7   4.6 Organizational Documents 7   4.7 Conditions
Precedent in General 8   4.8 Borrower Account 8   4.9 Power of Attorney 8   4.10
Additional Documents 8   4.11 Consultancy 8         5. SECURITY INTEREST AND THE
COLLATERAL 9         5.1 Security Interest 9   5.2 Rights and Remedies of a
Secured Party 9   5.3 Further Actions 9   5.4 Actions With Respect to Accounts
10   5.5 Preservation of Rights Against Third Parties; Preservation of
Collateral in Lender's Possession 11   5.6 Assignment of Deposit Accounts 11    
    6. REPRESENTATIONS AND WARRANTIES 12           6.1 Formation, Qualification
and Compliance 12   6.2 Execution and Performance of Term Loan Documents 12

 

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  6.3 Title 12   6.4 Validity and Enforceability of Documents 13   6.5 Solvency
13   6.6 Financial Statements 13   6.7 No Material Adverse Change 13   6.8
Litigation 13   6.9 Name and Principal Place of Business 13   6.10 Financing
Statements 13   6.11 Ineligible Securities 14   6.12 Use of Loan Proceeds 14    
    7. BORROWER’S COVENANTS 14         7.1 Acceptable ATM 14   7.2 Incurrence of
Additional Debt 14   7.3 Liens 14   7.4 Release by Lender 14   7.5 Transactions
with Affiliates 15   7.6 Financial Statements; Reports 15   7.7 Affirmation of
Representations and Warranties 15   7.8 Title 15   7.9 Performance of
Obligations; Notice of Default 15   7.10 OFAC 15   7.11 Loan Expenses 15   7.12
Notice of Certain Matters 15   7.13 Additional Reports and Information 16   7.14
Further Assurances 16   7.15 Amendment of Organizational Documents 16   7.16
Limitations on Additional Indebtedness; Other Prohibited Transactions 16        
8. EVENTS OF DEFAULT 16         9. REMEDIES 18           9.1 Remedies 18   9.2
Cumulative Remedies, No Waiver 18         10. MISCELLANEOUS 18           10.1
Additional Indebtedness 18   10.2 Additional Acts 19   10.3 Term Loan Agreement
Governs 19   10.4 Additional Advances 19   10.5 Amendment; Waiver; Approval 19  
10.6 Notice 19   10.7 Benefit; Assignment 20   10.8 Governing Law 20   10.9
Indemnity 20   10.10 Headings 20   10.11 No Partnership or Joint Venture 20  
10.12 Time is of the Essence 21

 

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  10.13 Invalid Provisions 21   10.14 Acts by Lender 21   10.15 Binding
Provisions 21   10.16 Counterparts 21   10.17 No Third Party Beneficiary 21  
10.18 Publicity 21   10.19 Joint and Several Obligations 21   10.20 JURISDICTION
AND VENUE 22   10.21 JURY WAIVER 22

 

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TERM LOAN AND SECURITY AGREEMENT

 

This TERM Loan AND SECURITY Agreement (“Agreement”) is dated as of February 28,
2020, by and between SRAX, Inc., a Delaware corporation and all of its
affiliated entities, including the entities set forth in Schedule A attached
hereto (“Borrower”), and BRF Finance Co., LLC and its successors and assigns
(“Lender”).

 

1. RECITALS.

 

1.1 Borrower has requested that Lender make a Term Loan to Borrower in the
maximum principal amount of FIVE MILLION DOLLARS ($5,000,000.00), the proceeds
of which shall be used by Borrower for general corporate purposes and working
capital for Borrower. Lender has agreed to provide the Term Loan to Borrower
subject to the terms and conditions set forth herein.

 

1.2 In consideration of the mutual agreements set forth herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower and Lender agree as follows:

 

2. DEFINITIONS.

 

2.1 Defined Terms. All capitalized terms used in this Agreement and not
otherwise defined in this Agreement or in the Note shall have the following
meanings:

 

“Acceptable ATM” shall have the meaning set forth in Section 7.1 hereof.

 

“Affiliate” shall mean, with respect to any Person, (a) any other Person which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, (i) such Person or (ii) any
general partner, manager or managing member of such Person; (b) any other Person
50% or more of the equity interest of which is held beneficially or of record by
(i) such Person or (ii) any general partner, manager or managing member of such
Person, and (c) any general partner, limited partner or member of (i) such
Person or (ii) any general partner or managing member of such Person. As used in
the previous sentence, “control” means the possession, directly or indirectly,
of the power to cause the direction of the management of a Person, whether
through voting securities, by contract, family relationship or otherwise.

 

“Amortization Period” means the period beginning on August 1, 2020 and ending on
the Maturity Date.

 

“Applicable Laws” shall mean all laws, statutes, ordinances, codes, rules,
regulations, judgments, decrees or orders of any state, federal or local
government or agency which are applicable to Borrower and/or the Property.

 

“ATM” shall have the meaning set forth in Section 7.1 hereof.

 

“ATM Agreement” shall have the meaning set forth in Section 7.1 hereof.

 

“Business Day” shall mean each day excluding Saturdays, Sundays and any other
day on which Lender is closed for business.

 

“Closing Date” shall have the meaning set forth in Article 4 hereof.

 

 

 

 

“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

“Collateral” shall mean, collectively, all assets of Borrower, but excluding the
Excluded Assets, including, without limitation, the money, cash, cash
equivalents, Accounts, Deposit Accounts, Documents, Equipment, Electronic
Chattel Paper, Fixtures, General Intangibles, Goods, Instruments, Inventory,
Investment Property, Letter-of-Credit Rights, books and records, and the
products, profits, rents of, dividends or distributions on, accessions to, and
all Proceeds (including insurance claims and insurance proceeds) of any of the
foregoing and Supporting Obligations of Borrower, whether now owned or acquired
in the future. The capitalized foregoing terms shall have the meanings given
them in the UCC. Collateral includes the Securities Accounts and all securities
and amounts contained therein.

 

“Common Stock” means Borrower’s Class A common stock, par value $0.001 per
share.

 

“Debt” shall mean with respect to any Person, (a) all indebtedness of such
Person for borrowed money, (b) all indebtedness evidenced by bonds, debentures,
notes or similar instruments, (c) all obligations of such Person as lessee under
any capital lease of real or personal property, (d) all obligations of such
Person to pay the deferred purchase price of property or services (excluding
trade accounts payable in the ordinary course of business or consistent with
past practice), (e) all indebtedness secured by a Lien on the property of such
Person, and (f) all obligations, contingent or otherwise, with respect to the
face amount of all letters of credit (whether or not drawn), bankers’
acceptances and similar obligations issued for the account of such Person.

 

“Default Rate” shall mean the Term Loan Rate plus five percent (5%) per annum.

 

“Deposit Account Control Agreement” shall mean the Deposit Account Control
Agreement to be executed on or before the Closing Date among Borrower, Lender
and Wells Fargo Bank, National Association.

 

“Event of Default” shall have the meaning set forth in Section 8 hereof.

 

“Excluded Assets” shall mean 718,548 shares of Common Stock held as treasury and
pledged to secure the repayment of $959,753 of secured promissory notes.

 

“Governmental Agency” shall mean any governmental or quasi-governmental agency,
board, bureau, commission, department, court, administrative tribunal or other
instrumentality or authority, and any public utility.

 

“Indebtedness” shall mean any and all obligations, contingent or otherwise,
whether now existing or hereafter arising, of Borrower to Lender or to any of
its Affiliates or successors, arising under or in connection with the Term Loan,
this Agreement or any other Loan Document.

 

“IP Security Agreement” shall mean the Intellectual Property Security Agreement
between Borrower and Lender of even date herewith.

 

“Irrevocable Placement Notice” shall have the meaning set forth in Section 7.1
hereof.

 

“Liens” shall mean with respect to any Person, any interest granted by such
Person in any real or personal property, asset or other right owned or being
purchased or acquired by such Person (including an interest in respect of a
capital lease) which secures payment or performance of any obligation and shall
include any mortgage, lien, encumbrance, title retention lien, charge or other
security interest of any kind, whether arising by contract, as a matter of law,
by judicial process or otherwise.

 

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“Maturity Date” shall mean March 1, 2022.

 

“Notice of Borrowing” shall have the meaning set forth in Section 3.1 hereof.

 

“Permitted Liens” shall mean (a) Liens for taxes or other governmental charges
not at the time delinquent or thereafter payable without penalty or being
diligently contested in good faith by appropriate proceedings, (b) Liens arising
in the ordinary course of business, Liens described on Schedules 6.3 and 6.10 as
of the Term Loan Closing Date and Liens arising under the Term Loan Closing
Documents, and (c) Liens on 718,548 pledged shares of Common Stock securing the
repayment of secured promissory notes.

 

“Person” shall mean any individual, firm, corporation, business enterprise,
trust, association, joint venture, partnership, governmental body or other
entity, whether acting in an individual, fiduciary or other capacity.

 

“PIK Payment” shall have the meaning set forth in Section 3.4(b).

 

“Power of Attorney” shall have the meaning set forth in Section 4.9 hereof.

 

“Second Term Loan Advance” shall have the meaning set forth in Section 3.1
hereof.

 

“Term Loan” shall mean the term loan from Lender to Borrower in an amount not to
exceed FIVE MILLION and No/100 Dollars ($5,000,000.00) on the terms set forth in
this Agreement and the Term Loan Note.

 

“Term Loan Advance” shall mean a disbursement of all or any portion of the Term
Loan.

 

“Term Loan Closing Date” shall mean the date on which all of the conditions set
forth in Article 4 hereof have been satisfied in the sole discretion of Lender.

 

“Term Loan Documents” shall mean this Agreement, the Term Loan Note, the Deposit
Account Control Agreement, the IP Security Agreement, the Power of Attorney, and
every other document now or hereafter evidencing, securing or otherwise executed
in conjunction with the Loan, together with all amendments, restatements,
supplements and modifications thereof.

 

“Term Loan Expenses” shall mean, collectively, the expenses, charges, costs
(including both hard costs and soft costs) and fees relating to the making,
administration, negotiation, documentation, extension or any other aspect of the
Term Loan, including, without limitation, Lender’s reasonable attorneys’ fees
and costs in connection with the negotiation and documentation of the Loan (not
exceeding $35,000), all recording fees and charges, title insurance charges and
premiums, escrow fees, fees of insurance consultants, binders, policies and the
like, and all other costs, expenses, charges and fees referred to in or
necessitated by the terms of this Agreement or any of the other Term Loan
Documents.

 

“Term Loan Note” shall mean the Term Loan Note evidencing the Term Loan dated as
of even date herewith by Borrower payable to the order of Lender in the original
principal amount of FIVE MILLION and No/100 Dollars ($5,000,000.00), as the same
may be amended, restated, modified or supplemented and in effect from time to
time

 

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“Term Loan Rate” shall mean $10.00% per annum, payable quarterly in arrears.

 

“UCC” shall mean the Uniform Commercial Code as in effect in the State of New
York on the date of this Agreement and as amended from time to time.

 

“Unmatured Default” shall mean an event or circumstance that with the giving of
notice, the passage of time, or both, would constitute an Event of Default.

 

“Warrant(s)” shall have the meaning set forth in Section 3.8 hereof.

 

2.2 Singular and Plural Terms. The meaning of defined terms are equally
applicable to the singular and plural forms of the defined terms.

 

2.3 Accounting Principles. Any accounting term used and not specifically defined
in any Loan Document shall be construed in conformity with, and all financial
data required to be submitted under any Loan Document shall be prepared in
conformity with, tax accounting principles applied on a consistent basis or in
accordance with such other principles or methods as are reasonably acceptable to
Lender.

 

2.4 References and Other Terms. Any reference to any Loan Document or other
document shall include such document both as originally executed and as it may
from time to time be modified. References herein to Articles, Sections and
Exhibits shall be construed as references to this Agreement unless a different
document is named. References to subparagraphs shall be construed as references
to the same Section in which the reference appears. The term “document” is used
in its broadest sense and encompasses agreements, certificates, opinions,
consents, instruments and other written material of every kind. The terms
“including” and “include” mean “including (include) without limitation.”

 

3. THE LOAN.

 

3.1 Commitment and Loan Advances; Borrowing; Prepayments.

 

(a) Commitment. Subject to the terms and conditions of this Agreement, Lender
agrees to lend to Borrower, and Borrower may borrow from Lender from time to
time prior to the Maturity Date the maximum aggregate principal amount of FIVE
MILLION and No/100 Dollars ($5,000,000.00); provided that subject to the
conditions of funding the Term Loan Advances, Borrower shall initially borrow
TWO MILLION FIVE HUNDRED THOUSAND AND No/100 Dollars ($2,5000,000.00) on the
Closing Date and then borrow the remaining committed amount of TWO MILLION FIVE
HUNDRED THOUSAND AND No/100 Dollars ($2,500,000) not later than thirty (30) days
after the filing by Borrower of an Acceptable ATM and the issuance of an
Irrevocable Placement Notice (as defined below)(such borrowing referred to
herein as the “Second Term Loan Advance”).

 

(b) Term Loan Advances. Borrower shall give written notice (each such written
notice, a “Notice of Borrowing”) substantially in the form of Exhibit A or
telephonic notice (followed immediately by a Notice of Borrowing) to Lender of
each Term Loan Advance not later than two (2) Business Days prior to the
proposed Term Loan Advance date. Each such notice shall be effective upon
receipt by Lender, shall be irrevocable, and shall specify the date and the
amount thereof. Each borrowing shall be on a Business Day. Amounts borrowed and
repaid may not be re-borrowed.

 

(c) Voluntary Prepayments. Borrower may from time to time prepay the Term Loan
in advance in whole or in part; provided that Borrower shall give Lender notice
thereof, not later than 11:00am New York time, on the date of such prepayment,
specifying the date and amount of such prepayment.

 

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(d) Optional PIK Payment. Borrower may make a one (1) time PIK Payment as
provided in Section 3.4(b).

 

(e) Mandatory Prepayments. Unless sooner paid in full, the outstanding principal
balance of the Term Loan shall be paid in full on the Maturity Date.
Notwithstanding the foregoing, Borrower shall be required to prepay the
outstanding principal balance, together with any accrued interest and fees, of
the Term Loan upon the occurrence of the following events and in the following
amounts (each a “Mandatory Prepayment”):

 

(i) Upon the closing of any sale of any of the assets of Borrower or Collateral
(excluding Excluded Assets) provided to Lender hereunder, Borrower shall make a
Mandatory Prepayment in the amount of such sale;

 

(ii) Upon the closing of any sale of debt or equity securities of Borrower,
Borrower shall make a Mandatory Prepayment in an amount equal to the net
proceeds of such sale; and

 

(iii) Upon sales under the Acceptable ATM, Borrower shall make Mandatory
Prepayments with the net proceeds from such sales.

 

Prior to the Maturity Date, all Mandatory Prepayments under clauses (i) and (ii)
shall be applied first to any unpaid fees and expenses due and owing under this
Agreement and second to scheduled payments in the inverse order of maturity.

 

Prior to July 1, 2020, all Mandatory Prepayments under clause (iii) shall be
applied first to any unpaid fees and expenses due and owing under this Agreement
and second to scheduled payments in the inverse order of maturity.

 

Beginning on and continuing after July 1, 2020, Mandatory Prepayments under
clause (ii) shall be applied first to any unpaid fees and expenses due and owing
under this Agreement and second to the next regularly scheduled payment during
the Amortization Period and if that next scheduled payment is prepaid in full
prior to the scheduled payment date then third to scheduled payments in the
inverse order of maturity.

 

3.2 Term Loan Advances Evidenced by the Note. All Term Loan Advances hereunder
shall be evidenced by the Term Loan Note, substantially in the form of Exhibit
B, which shall be executed and delivered by Borrower simultaneously with the
execution of this Agreement and amended in accordance with any additional Term
Loan Advances made hereunder.

 

3.3 Calculation of Interest. Borrower promises to pay interest on the unpaid
principal amount of the Term Loan for the period commencing on the date of the
Term Loan until such Term Loan is paid in full at the Term Loan Rate; provided,
if at any time an uncured Event of Default exists, the interest rate applicable
to the Term Loan shall be increased to the Default Rate. In no event shall
interest payable by Borrower to Lender hereunder exceed the maximum rate
permitted under Applicable Law, and if any such provision of this Agreement is
in contravention of any such law, such provision shall be deemed modified to
limit such interest to the maximum rate permitted under such law.

 

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3.4 Payments of Principal and Interest.

 

(a) Unless sooner paid in full, the outstanding principal balance of the Term
Loan shall be paid in full on the Maturity Date. Beginning on August 1, 2020,
and continuing on the first day of each month during the Amortization Period or,
if sooner, until all amounts under the Term Loan are paid in full. Borrower
shall make monthly principal and interest payment on a straight line
amortization schedule. The amortization schedule shall be calculated by Lender
on an 18-month straight line basis based on the principal outstanding on July
31, 2020.

 

(b) Notwithstanding the foregoing, at any time prior to the Maturity Date,
Borrower may choose to convert all or any part of one (and only one) regularly
scheduled monthly payment of principal and interest into a payment-in-kind
payment (a “PIK Payment”). Borrower shall provide Lender with written notice at
least two (2) Business Days prior to the regularly scheduled payment date of its
decision to convert such payment into a PIK Payment. Upon receipt of such
notice, Lender shall apply the amount of the PIK Payment to the existing
outstanding principal balance of the Term Loan and shall recalculate the
remainder of the straight line amortization repayment schedule for the Term Loan
through the Maturity Date. Borrower shall resume regularly scheduled payments of
principal and interest of the Term Loan on the basis of the revised repayment
schedule in the following month.

 

3.5 Default Rate. Upon the occurrence of an uncured Event of Default under this
Agreement or any of the other Term Loan Documents, after the Maturity Date or
following the acceleration of the maturity of the Term Loan, Lender may, if
permitted under Applicable Law, do one or both of the following: (a) increase
the rate of interest on the outstanding principal balance of the Term Loan and
any other amounts then owing by Borrower to Lender to the Default Rate until
paid in full and (b) add any unpaid accrued interest to principal and such sum
shall bear interest therefrom until paid in full at the Default Rate. Neither
the Term Loan Rate nor the Default Rate shall exceed the maximum rate permitted
by Applicable Law under any circumstance.

 

3.6 Late Charge. If any payment under this Agreement or any other Loan Document
is not made when such payment is due, then, in addition to the payment of the
amount so due, Borrower shall pay to Lender a “late charge” equal to three
percent (3.0%) of the amount of that payment. This late charge may be assessed
without notice, shall be immediately due and payable and shall be in addition to
all other rights and remedies available to Lender. Borrower agrees that the
damages to be sustained by Lender for the detriment caused by any late payment
are extremely difficult and impractical to ascertain, and that the amount of
three (3) cents for each one dollar due is a reasonable estimate of such
damages, does not constitute interest, and is not a penalty.

 

3.7 Fees. Borrower shall pay to Lender, for Lender’s sole account in immediately
available funds: (a) on the date of the first Term Loan Advance, an origination
fee of Three Hundred Thousand dollars ($300,000.00); and (b) on the Term Loan
Closing Date, any Term Loan Expenses then due and owing.

 

3.8 Warrants. On the date of the first Term Loan Advance, Borrower shall deliver
to Lender 500,000 warrants exercisable into shares of Common Stock on the terms
and conditions describer therein (each a “Warrant” and collectively, the
“Warrants”). On the date of the Second Term Loan Advance, Borrower shall also
deliver to Lender 500,000 Warrants. The Warrants shall be substantially in the
form attached hereto as Exhibit C. The Warrants will be fully transferrable,
have an exercise period terminating on October 31, 2022 and will be exercisable
by the holder at a price equal to a 25% premium to the closing price of the
Common Stock on the date that the respective Warrants are issued to Lender.
Notwithstanding the foregoing, the exercise price of the Warrants shall not be
less than $2.50 per share, subject to adjustment as further contained in the
Warrants. The Warrants shall have demand and piggyback registration rights.
Borrower shall use its best efforts to include the Warrants on a registration
statement that Borrower files with Securities Exchange Commission within six (6)
months of the date hereof. The Warrants shall permit a cashless exercise if they
are not registered for resale at any time subsequent to six (6) months of the
date of this Agreement.

 

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4. CLOSING DOCUMENTS AND CONDITIONS PRECEDENT. Prior to the making of any Term
Loan Advance, Borrower shall execute and/or deliver to Lender those of the
following documents and other items reasonably required to be executed and/or
delivered by Borrower, and shall cause to be executed and/or delivered to Lender
those of the following documents and other items reasonably required to be
executed and/or delivered by others, all of which documents and other items
shall contain such provisions as shall be reasonably required to conform to this
Agreement and otherwise shall be satisfactory in form and substance to Lender
(the first date on which all such documents and other items being accepted by
Lender being the “Closing Date”) :

 

4.1 Term Loan Documents. The Term Loan Documents.

 

4.2 FastPay Payoff Letter. A letter from Fastpay Partners LLC, evidencing the
payoff amount required by Fastpay Partners LLC to satisfy and release all of
Borrower’s obligations and collateral under that certain Financing and Security
Agreement dated September 14, 2016 among Borrower and FastPay Partners LLC with
such payoff amount to be included in the flow of funds memorandum with
instructions by Borrower that funds in such amount be disbursed to FastPay
Partners LLC at Closing.

 

4.3 Searches. Current Uniform Commercial Code, federal and state tax lien and
judgment searches, pending suit and litigation searches and bankruptcy court
filings searches covering Borrower and disclosing no matters objectionable to
Lender. Borrower agrees that Lender shall file, on the Closing Date, UCC-1
financing statements suitable for the perfection of the security interests
granted by Borrower in the Collateral hereunder.

 

4.4 Opinion of Counsel. Opinion letter from legal counsel for Borrower (which
counsel must be approved by Lender with respect to the issuance of such opinion)
opining to the authority of said parties to execute, deliver and perform their
respective obligations under the Term Loan Documents, to the validity and
binding effect and enforceability of the Term Loan Documents, to the perfection
of the security interests provided to Lender in the Collateral, and to such
other matters as Lender and its counsel shall reasonably require.

 

4.5 Financial Conditions. Evidence that, as of the date of the Term Loan
Advance, there has been no material adverse change in the business prospects or
financial condition of Borrower since the date of the most recent financial
statements or projections delivered to Lender.

 

4.6 Organizational Documents. A certified copy (certified, where applicable, by
the state office in which such documents were filed, and in all other cases by
an appropriate representative of the entity) of:

 

(a) The Certificate of Incorporation of Borrower;

 

(b) The Bylaws of Borrower;

 

(c) A Good Standing Certificate for Borrower from the Secretary of State of
Delaware, reflecting that Borrower is in good standing in the State of Delaware;

 

(d) Resolutions of Borrower authorizing the execution and delivery of the
documents evidencing and securing the Term Loan, certified by an appropriate
representative of Borrower;

 

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(e) An incumbency certificate, including specimen signatures for all individuals
executing any of the Term Loan Documents of Borrower, certified by the manager
or other appropriate representative of Borrower;

 

(f) All other instruments and documents concerning the formation and existence
of Borrower and each of its Affiliates, and the execution and delivery of the
Term Loan Documents by Borrower and each of its Affiliates, as required by
Lender.

 

4.7 Conditions Precedent in General. In addition to the other conditions set
forth herein, the obligation of Lender to make any Term Loan Advance shall be
conditioned upon and subject to the payment to Lender of all loan fees then
owing from Borrower to Lender, including without limitation the Term Loan
Expenses, and to satisfaction of all of the following conditions:

 

(a) All representations and warranties contained in this Agreement and in the
other Term Loan Documents shall be true in all material respects on and as of
the date of such disbursement.

 

(b) Borrower shall have performed, or Lender shall have waived, all of its
obligations under all Term Loan Documents which are required to be performed on
or prior to the date of such disbursement.

 

(c) There shall be no material adverse change in the business prospects or
financial condition of Borrower as reasonably determined by Lender.

 

(d) No Event of Default shall have occurred that has not been waived in writing
by Lender, and no Unmatured Default shall then exist.

 

(e) No litigation or proceedings are pending (including proceedings under Title
11 of the United States Code) against Borrower, which litigation or proceedings,
in the reasonable judgment of Lender, would adversely affect Borrower’s ability
to perform its respective obligations under the Term Loan Documents.

 

4.8 Borrower Account. Borrower shall, at all times while any amounts remain
outstanding hereunder, maintain an account with Lender.

 

4.9 Power of Attorney. Borrower shall execute and deliver to Lender a Power of
Attorney (the “Power of Attorney”), substantially in the form attached hereto as
Exhibit D.

 

4.10 Additional Documents. Such other papers and documents regarding Borrower as
Lender may reasonably require.

 

4.11 Consultancy. Borrower shall enter into an advisory agreement with Lender or
its Affiliate, in such form as acceptable to Lender in its sole discretion,
pursuant to which Lender shall act as Borrower’s exclusive financial advisor in
connection with the sale of the Units.

 

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5. SECURITY INTEREST AND THE COLLATERAL.

 

5.1 Security Interest. As security for the full and timely payment of the
Indebtedness in accordance with the terms of this Term Loan Agreement, the Term
Loan Note and the other Term Loan Documents and the full and timely payment and
performance of all of the obligations of Borrower under this Agreement, the Term
Loan Note and the other Term Loan Documents (the “Obligations”), Borrower hereby
grants to Lender a continued enforceable perfected security interest under the
UCC in and to such of the Collateral as is now owned or acquired after the date
of this Agreement by Borrower, but excluding the Excluded Assets, including
without limitation all money, cash, cash equivalents, Accounts, Chattel Paper,
Commercial Tort Claims, Deposit Accounts, Documents, Equipment, Electronic
Chattel Paper, Fixtures, General Intangibles, Goods, Instruments, Inventory,
Investment Property, Letter-of-Credit Rights, books and records, and the
products, profits, rents of, dividends or distributions on, accessions to, and
all Proceeds (including insurance claims and insurance proceeds) of any of the
foregoing and Supporting Obligations of Borrower, and agrees that, upon filing
of all applicable UCC-1 financing statements with the appropriate offices,
Lender shall have a perfected security interest in and to such Collateral. The
Collateral is intended to be all assets of Borrower, but excluding the Excluded
Assets, whether or not within the scope of the Code. Borrower hereby ratifies
any and all financing statements and amendments to financing statements
evidencing Lender’s security interest in the Collateral filed prior to the date
hereof.

 

5.2 Rights and Remedies of a Secured Party. In addition to all rights and
remedies given to Lender pursuant to this Agreement, the Term Loan Note, and the
other Term Loan Documents, Lender shall have all of the rights and remedies of a
secured party under the UCC. Borrower and Lender agree that this Agreement shall
constitute a Security Agreement within the meaning of the UCC, Borrower being
the debtor and Lender being the secured party. Promptly upon request of Lender
from time to time after the occurrence of an Event of Default, Borrower shall
deliver to Lender, without limitation, (1) all invoices and customer statements
rendered to account debtors, Documents, contracts, Chattel Paper, Electronic
Chattel Paper, Instruments and other writings and/or records pertaining to
Borrower’s contracts or the performance of Borrower’s contracts, and (2)
evidence of Borrower’s Accounts and statements showing the aging,
identification, reconciliation and collection thereof, all of the foregoing to
be certified by an authorized officer or other employee of Borrower. Lender
shall have the right at any time after the occurrence of an Event of Default, in
its sole discretion, to give notice of Lender’s security interest to account
debtors obligated to Borrower, to take over and direct collection of the
Accounts, the Chattel Paper and the Electronic Chattel Paper, to notify such
account debtors to make payment directly to Lender and to enforce payment of the
Accounts, the Chattel Paper and the Electronic Chattel Paper and to enforce
Borrower’s contract rights. Further, upon the occurrence of any Event of
Default, and promptly following demand by Lender, Borrower shall assemble the
Collateral and make it available to Lender at a place or places to be designated
by Lender. The right of Lender under this paragraph to have the Collateral
assembled and made available to it may, at Lender’s election, be enforced by an
action in equity for injunctive relief or specific performance. It is understood
and agreed by Borrower that Lender shall have no liability whatsoever under this
Agreement except for its own gross negligence or willful misconduct.

 

5.3 Further Actions. Borrower shall at any time and from time to time, take such
steps as Lender may request (i) to cause any bailee having possession of any of
the Collateral to provide to Lender a written acknowledgement of Lender’s
security interest in such Collateral, in form and substance satisfactory to
Lender, (ii) to cause Lender to obtain “control” of any Investment Property,
Deposit Accounts, Letter-of-Credit Rights or Electronic Chattel Paper, and (iii)
otherwise to ensure the continued perfection and priority of Lender’s security
interest in any of the Collateral and of the preservation of its rights therein.
Further, Borrower will immediately notify Lender in writing in the event that
Borrower becomes a party to or obtains any rights with respect to any Commercial
Tort Claim. Such notification shall include information sufficient to describe
such Commercial Tort Claim, including, but not limited to, the parties to the
claim, the court in which the claim was commenced, the docket number assigned to
such claim, if any, and a detailed explanation of the events that gave rise to
the claim. Borrower shall execute and deliver to Lender all documents and/or
agreements necessary to grant Lender a security interest in such Commercial Tort
Claim to secure the Obligations. Borrower authorizes Lender to file (without
Borrowers signature) initial financing statements or amendments, as Lender deems
necessary to perfect its security interest in the Commercial Tort Claim.
Additionally, Borrower shall provide Lender with written notice of any Letters
of Credit for which Borrower is the beneficiary. Borrower shall execute and
deliver (or cause to be executed or delivered) to Lender, all documents and
agreements as Lender may require in order to obtain and perfect its security
interest in such Letter of Credit Rights.

 

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5.4 Actions With Respect to Accounts. Borrower irrevocably makes, constitutes
and appoints Lender (and any of Lender’s designated officers, employees or
agents) as its true and lawful attorney-in-fact with power to sign its name and
to take any of the following actions, in its name or in the name of Lender, as
Lender may determine, at any time after the occurrence of an Event of Default
and for so long as such Event of Default continues (except as expressly limited
in this Article 5) without notice to Borrower and at Borrower’s expense:

 

(a) Verify the validity and amount of, or any other matter relating to, the
Collateral by mail, telephone, telegraph or otherwise;

 

(b) Notify all account debtors that the Accounts have been assigned to Lender
and that Lender has a security interest in the Accounts;

 

(c) Direct all account debtors to make payment of all Accounts;

 

(d) Take control in any manner of any cash or non-cash items of payment or
proceeds of Accounts;

 

(e) In any case and for any reason, notify the United States Postal Service to
change the address for delivery of mail addressed to Borrower to such address as
Lender may designate;

 

(f) In any case and for any reason, receive, open and dispose of all mail
addressed to Borrower;

 

(g) Take control in any manner of any rejected, returned, stopped-in-transit or
repossessed goods relating to Accounts;

 

(h) Enforce payment of and collect any Accounts by legal proceedings or
otherwise, and for such purpose Lender may:

 

(i) Demand payment of any Accounts or direct any account debtors to make payment
of Accounts directly to Lender;

 

(ii) Receive and collect all monies due or to become due to Borrower;

 

(iii) Exercise all of Borrower’s rights and remedies with respect to the
collection of Accounts;

 

(iv) Settle, adjust, compromise, extend, renew, discharge or release Accounts;

 

(v) Sell or assign Accounts on such terms, for such amounts and at such times as
Lender deems advisable;

 

(vi) Prepare, file and sign Borrower’s name on any proof of claim or similar
documents in any proceeding filed under federal or state bankruptcy, insolvency,
reorganization or other similar law as to any account debtor;

 

(vii) Prepare, file and sign Borrower’s name on any notice of lien, claim of
mechanic’s lien, assignment or satisfaction of lien or mechanic’s lien, or
similar document in connection with the Collateral;

 

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(viii) Endorse the name of Borrower upon any chattel papers, documents,
instruments, invoices, freight bills, bills of lading, or similar documents or
agreements relating to Accounts or goods pertaining to Accounts or upon any
checks or other medium of payment or evidence of security interest that may come
into Lender’s possession;

 

(ix) Sign the name of Borrower to verifications of Accounts and notices of
Accounts sent by account debtors to Borrower; or

 

(x) Take all other actions necessary or desirable to protect Borrower’s and
Lender’s interest(s) in the Accounts.

 

Borrower ratifies and approves all acts of said attorneys and agrees that said
attorneys shall not be liable for any acts of commission or omission, nor for
any error of judgment or mistake of fact or law. This power, being coupled with
an interest, is irrevocable until the Indebtedness is paid in full and Borrower
shall have performed all of its obligations under this Agreement. Borrower
further agrees to use its best efforts to assist Lender in the collection and
enforcement of the Accounts and will not hinder, delay or impede Lender in any
manner in its collection and enforcement of the Accounts. NEITHER LENDER, NOR
ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL BE
RESPONSIBLE TO BORROWER FOR ANY ACT OR FAILURE TO ACT PURSUANT TO THE POWERS
GRANTED UNDER THE POWER OF ATTORNEY HEREIN OR OTHERWISE, EXCEPT FOR ITS OR THEIR
OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, NOR FOR ANY PUNITIVE, EXEMPLARY,
INDIRECT OR CONSEQUENTIAL DAMAGES.

 

5.5 Preservation of Rights Against Third Parties; Preservation of Collateral in
Lender’s Possession. Until such time as Lender exercises its right to effect
direct collection of the Accounts, the Chattel Paper and the Electronic Chattel
Paper and to effect the enforcement of Borrower’s contract rights, Borrower
assumes full responsibility for taking any and all steps to preserve rights in
respect of the Accounts, the Chattel Paper and the Electronic Chattel Paper and
its contracts against third parties. Lender’s duty of care with respect to
Collateral in its possession (as imposed by law) will be deemed fulfilled if it
exercises reasonable care in physically keeping such Collateral, or in the case
of Collateral in the custody or possession of a bailee or other third person,
exercises reasonable care in the selection of the bailee or third person, and
Lender need not otherwise preserve, protect, insure or care for such Collateral.
Lender shall not be obligated to preserve rights that Borrower may have against
prior parties, to liquidate the Collateral at all or in any particular manner or
order or apply the Proceeds of the Collateral in any particular order of
application. Lender has no obligation to clean up or prepare Collateral for
sale. If notice to Borrower of any intended disposition of Collateral or any
other intended action is required by applicable law in a particular situation,
such notice will be deemed commercially reasonable if given in the manner
specified in this Agreement at least ten (10) calendar days before the date of
intended disposition or other action.

 

5.6 Assignment of Deposit Accounts. As permitted by the terms of any previously
existing liens on Borrower’s deposit accounts, prior to or concurrently with the
execution of this Agreement, Borrower shall perfect the security interest of
Lender in such Borrower’s deposit accounts including, without limitation, a
Deposit Account Control Agreement for each such deposit account.

 

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6. REPRESENTATIONS AND WARRANTIES. In order to induce Lender to execute this
Agreement and to make the Term Loan, Borrower represents and warrants to Lender
as follows:

 

6.1 Formation, Qualification and Compliance. Borrower is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and is qualified to conduct business in each of the jurisdictions in
which it conducts business except to the extent that failure to do so would not
result in a material adverse effect to the Company’s business. Borrower has full
power and authority to conduct its business as presently conducted, to enter
into this Agreement, the other Term Loan Documents to which it is a party and to
perform all of its duties and obligations under this Agreement and such other
Term Loan Documents. Such execution and performance have been duly authorized
pursuant to the Certificate of Incorporation and Bylaws of Borrower.

 

6.2 Execution and Performance of Term Loan Documents.

 

(a) Borrower has all requisite authority to execute, deliver, and perform its
obligations under the Term Loan Documents.

 

(b) The execution and delivery by Borrower and the performance by Borrower of
its obligations under each Term Loan Document have been authorized by all
necessary action and do not and will not:

 

(i) require any consent or approval not heretofore obtained of any Person;

 

(ii) violate any provision of, or require any consent or approval not heretofore
obtained under, any governing document applicable to Borrower;

 

(iii) result in or require the creation of any lien, claim, charge or other
right of others of any kind (other than under or as provided for in the Term
Loan Documents) on or with respect to any property now or hereafter owned or
leased by Borrower or any of its Affiliates;

 

(iv) violate any provision of any Applicable Law presently in effect; or

 

(v) constitute a breach or default under, or permit the acceleration of
obligations owed under, any contract, loan agreement, lease or other agreement
or document to which Borrower is a party or by which Borrower or any of its
property is bound.

 

(c) Borrower is not in default, in any respect, that is adverse to Lender’s
interests in or under the Term Loan Documents or that would have any material
adverse effect on the financial condition of Borrower or the conduct of their
respective businesses, under any Applicable Law, contract, lease or other
agreement or document described in subparagraphs (ii) or (v) of the previous
Subsection.

 

(d) No approval, license, exemption or other authorization from, or filing,
registration or qualification with, any Governmental Agency is required in
connection with:

 

(i) the execution by Borrower of, and the performance by Borrower of its
obligations under, the Term Loan Documents; and

 

(ii) the creation of the liens described in the Term Loan Documents other than
the recording of recordable documents and filing the financing statements.

 

6.3 Title. Borrower owns good and marketable fee simple title to the Collateral.
The Collateral is owned free and clear of all liens, claims and encumbrances,
except as set forth on Schedule 6.3.

 

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6.4 Validity and Enforceability of Documents. Upon the execution and delivery of
the Term Loan Documents, the Term Loan Documents shall be valid and binding upon
the parties that have executed the same in accordance with the respective
provisions thereof, and shall be enforceable in accordance with the respective
provisions thereof, subject only to applicable bankruptcy, reorganization,
insolvency, moratorium and other similar laws affecting the enforcement of
creditor’s rights.

 

6.5 Solvency. Borrower is solvent and able to pay its debts as such debts become
due, and has capital sufficient to carry on Borrower’s present business
transactions. The value of Borrower’s property, at a fair valuation, is greater
than the sum of its debts. Borrower is not bankrupt or insolvent, nor has
Borrower made an assignment for the benefit of its creditors, nor has there been
a trustee or receiver appointed for the benefit of Borrower’s creditors, nor has
there been any bankruptcy, reorganization or insolvency proceedings instituted
by or against Borrower, nor will Borrower be rendered insolvent by Borrower’s
execution, delivery or performance of the Term Loan Documents or by the
transactions contemplated thereunder.

 

6.6 Financial Statements. All financial statements submitted to Lender relating
to Borrower, are materially true, complete and correct, and have been prepared
in accordance with tax accounting principles and fairly present the financial
condition of Borrower and the other information therein described and do not
contain any untrue statement of a material fact or omit to state a fact material
to the financial statement submitted or this Agreement.

 

6.7 No Material Adverse Change 1. There has been no material adverse change in
the condition, financial or otherwise, or the properties or businesses of
Borrower since the dates of the latest financial statements furnished to Lender.
Since those dates, Borrower has not entered into any material transaction which
would have a material adverse effect on Borrower whether or not disclosed in
such financial statements or otherwise disclosed to Lender in writing, and there
do not exist any circumstances or conditions that with the passage of time or
giving of notice or both would result in an Event of Default under any of the
Term Loan Documents.

 

6.8 Litigation. Except as set forth in Schedule 6.9, there is not any condition,
event or circumstance existing, or any litigation, arbitration, governmental or
administrative proceeding, action, investigation, claims or demand pending or,
to the best of Borrower’s knowledge, after due inquiry, threatened, affecting
Borrower or the Collateral, or involving the validity or enforceability of the
Term Loan Documents or involving any risk of a judgment or liability which, if
satisfied, would have an adverse effect on the financial condition, business or
properties of Borrower, or which would prevent Borrower from complying with or
performing its obligations under this Agreement, the Term Note or any of the
other Term Loan Documents within the time limits set forth therein for such
compliance or performance and no basis for any such matter exists

 

6.9 Name and Principal Place of Business. Borrower presently uses no trade name
other than its actual name. Borrower’s principal place of business is 456 Seaton
Street, Los Angeles, CA 90013.

 

6.10 Financing Statements. Except to the extent set forth in Schedule 6.10,
there are no UCC financing statements in effect with respect to the Collateral
other than those to be filed and/or recorded by Lender which name Borrower as
debtor. The security interests in the Collateral granted to Lender herein (i)
constitute and will continue to constitute perfected security interests under
the UCC (or other applicable law) entitled to all the rights, benefits and
priorities provided by the UCC (or other applicable law) and (ii) are and will
continue to be superior and prior to the rights of all third parties, to the
full extent provided by law. All filing fees and other expenses in connection
with filing of financing statements or continuations thereof shall be paid by
Borrower, and Lender shall be reimbursed by Borrower for any such fees and
expenses incurred by Lender.

 

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6.11 Ineligible Securities. No portion of any Term Loan Advance shall be used
directly or indirectly to purchase ineligible securities, as defined by
applicable regulations of the Federal Reserve Board, underwritten by any
Affiliate of Lender during the underwriting period and for thirty (30) days
thereafter.

 

6.12 Use of Loan Proceeds. The proceeds of the Term Loan disbursed to Borrower
shall be used by Borrower solely for the purposes set forth in Section 1.1
hereof.

 

7. BORROWER’S COVENANTS.

 

7.1 Acceptable ATM . To the extent permitted by Applicable Law, Borrower
covenants and agrees

 

(a) To enter into with Lender, or its designee, no later than May 1, 2020, an At
Market Issuance Sales Agreement (the “ATM Agreement”) pursuant to which Borrower
shall conduct an at the market offering of its common stock (an “ATM”) for the
maximum amount of capacity then available to it under General Instruction I.B.6
of Form S-3 of the Securities and Exchange Commission. To the extent that
General Instruction I.B.6 would permit an ATM of at least $1 million dollars
prior to May 1, 2020, Borrower shall file the ATM Agreement as soon as
reasonably practical. Notwithstanding the foregoing, each time that General
Instruction I.B.6 would permit an additional amount of offering capacity of at
least $1 million dollars, Borrower shall re-file the ATM for such incremental
amount of additional offering capacity. In addition to the foregoing, the ATM
shall contain terms and conditions (including availability) acceptable to Lender
in its sole discretion relating to conditions to making sales, representations
and warranties, covenants, underwriter fees, expense reimbursement, and
indemnification (an “Acceptable ATM”). Notwithstanding any of the foregoing to
the contrary, to meet the second Bridge Loan Advance requirement set forth in
Section 3.4 hereof of an Acceptable ATM, the cumulative amount of capacity
available, to be sold under the ATM must be no less than such amount as mutually
agreed to in writing between the parties.

 

(b) Immediately upon the filing of an Acceptable ATM, Borrower shall deliver to
Lender an irrevocable placement notice (the “Irrevocable Placement Notice”)
containing such parameters as may be acceptable to Lender in its sole discretion
in Lender’s capacity as underwriter under the ATM, together with such other
documents, instruments and certificates reasonably required by Lender in such
capacity. For the avoidance of doubt, the issuance and delivery to Lender of an
Irrevocable Placement Notice under the ATM Agreement shall also be considered a
requirement for the Second Term Loan Advance.

 

7.2 Incurrence of Additional Debt. Borrower shall not create, incur, assume or
suffer to exist any additional Debt, direct or indirect, without the prior
written consent of Lender.

 

7.3 Liens. Borrower shall not create or permit to exist any Lien on any of its
real or personal properties (whether now owned or hereafter acquired), including
without limitation, any of the Collateral, except the Permitted Liens.

 

7.4 Release by Lender. With respect to the matters set forth in Section 7.3
above, if Borrower shall fail promptly to discharge any asserted liens or
claims, then Lender may, but shall not be required to, procure the release and
discharge of any such claim and any judgment or decree thereon and, further,
may, in its sole discretion, effect any settlement or compromise of the same,
and any amounts so expended by Lender, including premiums paid, shall be deemed
to constitute disbursements of the proceeds of the Term Loan hereunder and shall
bear interest from the date so disbursed until paid at the Default Rate. In
discharging any claims for lien, Lender shall not be required to inquire into
the validity or amount of any such claim.

 

14

 

 

7.5 Transactions with Affiliates. If any Affiliate constitutes a material
portion of the Collateral provided to Lender as security for the repayment of
the Term Loan, Borrower shall not permit the merger or consolidation of such
Affiliate into another business entity if such merger or consolidation would
negatively impact the perfection of Lender’s security interest in the
Collateral, without Lender’s prior written consent.

 

7.6 Financial Statements; Reports. Borrower will from time to time furnish to
Lender such information and reports, financial and otherwise, concerning
Borrower, as Lender reasonably requires.

 

7.7 Affirmation of Representations and Warranties. Borrower agrees that all
representations and warranties of Borrower contained in Article 6 hereof shall
remain true in all material respects at all times until the Term Loan is repaid
in full.

 

7.8 Title. Except for the Permitted Liens and lien of general real estate taxes
payment of which is not yet due, Borrower shall keep its fee simple title to the
Collateral, free and clear of all liens, claims and encumbrances. Borrower shall
faithfully preserve and protect Lender’s security interest in the Collateral and
shall, at its own cost and expense, cause or assist Lender to cause that
security interest to be perfected and continue perfected so long as the
Indebtedness or any portion of the Indebtedness is outstanding, unpaid or
executory. For purposes of the perfection of Lender’s security interest in the
Collateral in accordance with the requirements of this Agreement, Borrower
authorizes Lender, at any time and from time to time, to file financing
statements, continuation statements and amendments thereto that describe the
Collateral as all assets of Borrower or words of similar effect and which
contain any other information required by the UCC for the sufficiency or filing
office acceptance of any financing statement, continuation statement or
amendment.

 

7.9 Performance of Obligations; Notice of Default. Borrower shall promptly and
fully perform and comply in all respects with the obligations, terms,
agreements, provisions and requirements of this Agreement and the other Term
Loan Documents and all other documents and instruments relating thereto and will
not permit to occur any default or breach hereunder or thereunder. Borrower
shall promptly give to Lender notice of the occurrence of any Unmatured Default
or of any event that could have a material adverse effect on any security for
the Term Loan or on Borrower’s ability to perform its obligations under this
Agreement or any of the other Term Loan Documents.

 

7.10 OFAC. Borrower shall (a) ensure that no Person that controls Borrower is or
shall be listed on the Specially Designated Nationals and Blocked Person List or
other similar lists maintained by the Office of Foreign Assets Control (“OFAC”),
the Department of the Treasury or included in any Executive Orders, (b) not use
or permit the use of any proceeds of the Loan to violate any of the foreign
asset control regulations of OFAC or any enabling statute or Executive Order
relating thereto, and (c) comply with all applicable Bank Secrecy Act laws and
regulations, as amended.

 

7.11 Loan Expenses. Borrower agrees to pay all of the Loan Expenses. Any Loan
Expenses paid by Lender shall bear interest commencing on the date demand for
repayment thereof is made by Lender until repaid to Lender at the Default Rate
and shall be paid by Borrower upon demand, or may be paid by Lender at any time
by disbursement of proceeds of the Loan. Any Loan Expenses paid by Lender shall
be reimbursed to Lender by Borrower regardless of whether there shall be any
disbursements of the Loan.

 

7.12 Notice of Certain Matters. Borrower shall give notice to Lender, within
fifteen (15) days after Borrower obtains actual knowledge thereof, of each of
the following:

 

(a) any litigation or claim affecting or relating to Borrower, including any of
its Affiliates, and involving an amount in excess of Twenty-Five Thousand and
No/100 Dollars ($25,000.00); and any litigation or claim that might subject
Borrower or any of its Affiliates to liability in excess of Fifty Thousand and
00/100 Dollars ($50,000.00), whether covered by insurance or not;

 

15

 

 

(b) any dispute between Borrower or any of its Affiliates and any Governmental
Agency the adverse determination of which might materially affect Borrower;

 

(c) any trade name hereafter used by Borrower or any of its Affiliates and any
change in Borrower’s principal place of business;

 

(d) any Unmatured Default or Event of Default; and/or

 

(e) any material adverse change in the financial condition of Borrower or in the
Collateral.

 

7.13 Additional Reports and Information. Borrower shall deliver to Lender,
concurrently with delivery to the third parties noted hereafter, copies of all
reports which are available for public inspection or which Borrower is required
to file with any Governmental Agency.

 

7.14 Further Assurances. Borrower shall execute and acknowledge (or cause to be
executed and acknowledged) and deliver to Lender all documents, and take all
actions, reasonably required by Lender from time to time to confirm the rights
created or now or hereafter intended to be created under the Term Loan
Documents, to protect and further the validity, priority and enforceability of
the Term Loan Documents, to subject to the Term Loan Documents any property
intended by the terms of any Term Loan Document to be covered by the Term Loan
Documents, including the Collateral, or otherwise to carry out the purposes of
the Term Loan Documents and the transactions contemplated thereunder.

 

7.15 Amendment of Organizational Documents. Neither the Certificate of
Incorporation nor the Bylaws of Borrower shall be amended, supplemented or
restated, in whole or in part, without the prior, written consent of Lender
(which consent shall not be unreasonably withheld, conditioned or delayed).
Borrower shall deliver to Lender a copy of any such amendment, supplementation
or restatement to the Certificate of Incorporation or the Bylaws within ten (10)
calendar days after the execution of any such amendment.

 

7.16 Limitations on Additional Indebtedness; Other Prohibited Transactions.

 

(a) Except as expressly permitted herein, Borrower shall not, without the prior
written consent of Lender granted in its sole discretion, incur any indebtedness
of any kind.

 

(b) Borrower shall not, without the prior written consent of Lender, engage
directly or indirectly in any off balance sheet, hedge or derivative
transactions, including without limitation, interest rate swaps and interest
rate caps except with Lender and its affiliates and subsidiaries. In addition to
the foregoing, Borrower shall not cause or allow the proceeds of the Term Loan
to be invested.

 

8. EVENTS OF DEFAULT. The occurrence of any one or more of the following, shall
constitute an “Event of Default”:

 

(a) Failure by Borrower to make: (i) any payment of principal or interest under
the Term Loan Note when due, or (ii) any other payment under the Term Loan
Documents when due or, if no date is stated, five (5) days after demand (or such
shorter period as may be expressly provided for herein or therein).

 

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(b) Failure by Borrower to perform or cause to be performed any other obligation
or observe any other condition, covenant, term, agreement or provision required
to be performed or observed by Borrower contained in this Agreement and not
specifically referred to elsewhere in this Section 8; provided, however, that if
such failure by its nature can be cured, then so long as the priority, validity
and enforceability of the liens created by this Agreement, or any of the other
Term Loan Documents is not impaired, threatened or jeopardized, then Borrower
shall have a period (“Cure Period”) of thirty (30) days after Borrower obtains
actual knowledge of such failure or receives written notice of such failure to
cure the same and an Event of Default shall not be deemed to exist during the
Cure Period (provided, however, such period shall be limited to ten (10) days if
such failure can be cured by the payment of money), provided further that if
Borrower commences to cure such failure during the Cure Period and is diligently
and in good faith attempting to effect such cure, the Cure Period shall be
extended for thirty (30) additional days, but in no event shall the Cure Period
be longer than sixty (60) days in the aggregate.

 

(c) The existence of any material inaccuracy or untruth in any representation or
warranty contained in this Agreement or any other Term Loan Documents, or of any
statement or certification as to facts delivered to Lender by or on behalf of
Borrower.

 

(d) Borrower or any of its successors or permitted assigns, shall:

 

(i) file a voluntary petition in bankruptcy or an arrangement or reorganization
under any federal or state bankruptcy, insolvency or debtor relief law or
statute (hereinafter referred to as a “Bankruptcy Proceeding”);

 

(ii) file any answer in any Bankruptcy Proceeding or any other action or
proceeding admitting insolvency or inability to pay his, her or its debts;

 

(iii) fail to oppose, or fail to obtain a vacation or stay of, any involuntary
Bankruptcy Proceeding within sixty (60) days after the filing thereof;

 

(iv) solicit or cause to be solicited petitioning creditors for any involuntary
Bankruptcy Proceeding against Borrower;

 

(v) be granted a decree or order for relief, or be adjudicated a bankrupt or
declared insolvent in any Bankruptcy Proceeding, whether voluntary or
involuntary;

 

(vi) have a trustee or receiver appointed for or have any court take
jurisdiction of its property, or the major part thereof, in any voluntary or
involuntary proceeding for the purpose of reorganization, arrangement,
dissolution or liquidation, and, with respect to an involuntary proceeding only,
such trustee or receiver is not discharged or such jurisdiction is not
relinquished, vacated or stayed on appeal or otherwise, within sixty (60) days
after the commencement thereof;

 

(vii) make an assignment for the benefit of creditors;

 

(viii) consent to any appointment of a receiver or trustee or liquidator of all
of its property, or the major part thereof; or

 

17

 

 

(ix) have an attachment or execution levied with respect to, or other judicial
seizure be effected for, all or substantially all of its assets.

 

(e) The assignment or attempted assignment of this Agreement by Borrower without
Lender’s prior written consent.

 

(f) The occurrence of a material adverse change in the financial condition of
Borrower.

 

(g) The occurrence of an Event of Default under any of the other Term Loan
Documents.

 

(h) The existence of any fraud, dishonesty or bad faith by or with the
acquiescence of Borrower which in any way relates to or affects the Term Loan.

 

(i) The occurrence of a default under any other loan in excess $250,000 under
which Borrower is obligated.

 

9. REMEDIES.

 

9.1 Remedies. Upon the occurrence of any Event of Default (subject to all
required cure periods hereunder), Lender, in addition to availing itself of any
remedies conferred upon it at law or in equity and by the terms of the Term Loan
Note or the other Term Loan Documents, may declare the outstanding principal
balance of the Term Loan, together with all accrued interest thereon and other
amounts owing in connection therewith, to be immediately due and payable in
full, regardless of any other specified due date, and in the event of the
occurrence of an Event of Default under Section 8(d) such principal and interest
shall become immediately due automatically.

 

9.2 Cumulative Remedies, No Waiver. Lender’s rights and remedies under the Term
Loan Documents are cumulative and in addition to all rights and remedies
provided by Applicable Law from time to time. The exercise or direction to
exercise by Lender of any right or remedy shall not constitute a cure or waiver
of any default, nor invalidate any notice of default or any act done pursuant to
any such notice, nor prejudice Lender in the exercise of any other right or
remedy. No waiver of any default shall be implied from any omission by Lender to
take action on account of such default if such default persists or is repeated.
No waiver of any default shall affect any default other than the default
expressly waived, and any such waiver shall be operative only for the time and
to the extent stated. No waiver of any provision of any Term Loan Document shall
be construed as a waiver of any subsequent breach of the same provision. The
consent by Lender to any act by Borrower requiring further consent or approval
shall not be deemed to waive or render unnecessary Lender’s consent to or
approval of any subsequent act. Lender’s acceptance of the late performance of
any obligation shall not constitute a waiver by Lender of the right to require
prompt performance of all further obligations; Lender’s acceptance of any
performance following the sending or filing of any notice of default shall not
constitute a waiver of Lender’s right to proceed with the exercise of remedies
for any unfulfilled obligations; and Lender’s acceptance of any partial
performance shall not constitute a waiver by Lender of any rights relating to
the unfulfilled portion of the applicable obligation.

 

10. MISCELLANEOUS.

 

10.1 Additional Indebtedness. If any advances or payments made by Lender
pursuant to this Agreement or any other Term Loan Document, together with
disbursements of the Term Loan, shall exceed the aggregate face amount of the
Term Loan Note, all such advances and payments shall constitute additional
Indebtedness secured by the security for the Term Loan, and shall bear interest
at the Default Rate from the date advanced until paid. Notwithstanding the
foregoing, any excess which results from the conversion of a PIK Payment shall
bear interest at the Term Loan Rate.

 

18

 

 

10.2 Additional Acts. Borrower shall, upon request, execute and deliver such
further instruments and documents and do such further acts and things as may be
reasonably required to provide to Lender the evidence of and security for the
Term Loan contemplated by this Agreement.

 

10.3 Term Loan Agreement Governs. In the event of any inconsistency between any
provision of this Agreement and any provision of any other Term Loan Document,
the provision of this Agreement shall govern; provided, however, that the
provisions of all of the Term Loan Documents shall be construed as an integrated
set of provisions governing the Term Loan and, accordingly, shall be interpreted
and construed liberally to give the maximum validity, enforceability and effect
to all of such provisions.

 

10.4 Additional Advances. If an Event of Default shall occur, Lender may, but
shall not be obligated to, take any and all actions to cure such default, and
all amounts expended in so doing, all Term Loan Expenses and all other amounts
paid or advanced by Lender pursuant to the Term Loan Documents, and all other
amounts advanced by Lender in connection with preserving any security for the
Term Loan, shall constitute additional advances of the Term Loan, shall be
secured by the security for the Term Loan, and shall bear interest at the
Default Rate from the date advanced until paid.

 

10.5 Amendment; Waiver; Approval. This Agreement shall not be amended, modified
or supplemented without the written agreement of Borrower and Lender at the time
of such amendment, modification or supplement. No waiver of any provision of
this Agreement or any of the other Term Loan Documents shall be effective unless
set forth in writing signed by the party making such waiver, and any such waiver
shall be effective only to the extent therein set forth. Failure by Lender to
insist upon full and prompt performance of any provisions of this Agreement or
any of the other Term Loan Documents, or to take action in the event of any
breach of any such provision or upon the occurrence of any Event of Default,
shall not constitute a waiver of any rights of Lender, and Lender may at any
time thereafter exercise all available rights and remedies with respect to such
breach or Event of Default. Receipt by Lender of any instrument or document
shall not constitute or be deemed to be an approval thereof. Any approvals
required under any of the other Term Loan Documents must be in writing, signed
by Lender and directed to Borrower.

 

10.6 Notice. All notices or other written communications hereunder shall be
deemed to have been properly given (a) upon delivery, if delivered in person,
(b) one (1) Business Day after having been deposited for overnight delivery with
any reputable overnight courier service, or (c) immediately upon transmission of
electronic mail (e-mail). Either party by notice to the other in the manner
provided herein may designate additional or different addresses for subsequent
notices or communications:

 

  To Lender: BRF Finance Co., LLC       21255 Burbank Blvd.       Suite 400    
  Woodland Hills, CA 91367       Attn: General Counsel       Telephone: (212)
457-9947             With copy to: Duane Morris LLP       1540 Broadway      
New York, NY 10036       Attn: Dean M. Colucci       Telephone: 973-424-2020    
  Email: dmcolucci@duanemorris.com  

 

19

 

 

  To Borrower: SRAX, Inc.       456 Seaton Street       Los Angeles, CA 90013  
    Attn: Christopher Miglino       Telephone:       Email: Chris@srax.com      
      With copy to: Silvestre Law Group, P.C.       31200 Via Colinas., Suite
200       Westlake Village, CA 91362       Attn: Raul Silverstre, Esq.      
Telephone: (818) 597-7552       Email: rsilvestre@silvestrelaw.com  

 

10.7 Benefit; Assignment. The rights, powers and remedies of Lender under this
Agreement shall inure to the benefit of Lender and its successors and assigns.
The rights and obligations of Borrower under this Agreement may not be assigned
and any purported assignment by Borrower shall be null and void. Lender shall
have the right to sell, assign or transfer portions of its right, title and/or
interest in and to this Agreement and the other Term Loan Documents (including
the sale of participation interests therein), without the consent or approval of
Borrower, and Borrower agrees to cooperate in all respects with Lender in
connection therewith, including, without limitation, the execution of all
documents and instruments reasonably requested by Lender or such transferee
provided that such documents and instruments do not materially adversely affect
any of Borrower’s duties or obligations under the Term Loan Documents.

 

10.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

 

10.9 Indemnity. Borrower agrees to indemnify, defend and hold Lender harmless
from and against any and all liabilities, obligations, losses, damages, claims,
costs and expenses (including court costs and reasonable attorneys’ fees) of
whatever kind or nature which may be imposed on, incurred by or asserted against
Lender at any time which relate to or arise from the offer for sale or sale of
any limited partnership interest, shareholder interest or membership interest in
Borrower, the acquisition or sale or offer for sale of all or any portion of the
Collateral, including, without limitation, any brokerage commissions or finder’s
fees asserted against Lender with respect to the making of the Term Loan or
other matters; provided, however, that the foregoing indemnity shall not extend
to any liabilities, obligations, claims, losses, costs, damages or expenses
resulting from the gross negligence or willful misconduct of Lender.

 

10.10 Headings. The titles and headings of the articles, sections and paragraphs
of this Agreement have been inserted as a matter of convenience of reference
only and shall not control or affect the meaning or construction of any of the
terms or provisions of this Agreement.

 

10.11 No Partnership or Joint Venture. Lender, by executing and performing this
Agreement shall not become a partner or joint venturer with Borrower or any of
their respective associates or affiliates.

 

20

 

 

10.12 Time is of the Essence. Time is of the essence of the payment of all
amounts due Lender under the Term Loan Documents and performance and observance
by Borrower of each covenant, agreement, provision and term of this Agreement
and the other Loan Documents.

 

10.13 Invalid Provisions. In the event that any provision of this Agreement is
deemed to be invalid by reason of the operation of law, or by reason of the
interpretation placed thereon by any administrative agency or any court,
Borrower and Lender shall negotiate an equitable adjustment in the provisions of
the same in order to effect, to the maximum extent permitted by law, the purpose
of this Agreement and the validity and enforceability of the remaining
provisions, or portions or applications thereof, shall not be affected thereby
and shall remain in full force and effect.

 

10.14 Acts by Lender. Notwithstanding anything herein contained to the contrary,
Lender will not be required to make any disbursement or perform any other act
under this Agreement if, as a result thereof, Lender will violate any law,
statute, ordinance, rule, regulation or judicial decision applicable thereto.

 

10.15 Binding Provisions. The covenants, warranties, agreements, obligations,
liabilities and responsibilities of Borrower under this Agreement shall be
binding upon and enforceable against Borrower and its legal representatives,
administrators, successors and permitted assigns.

 

10.16 Counterparts. This Agreement may be executed in counterparts, and all said
counterparts when taken together shall constitute one and the same Agreement.
This Agreement may be signed and delivered by tele facsimile or other electronic
signatures and such signatures shall bind the parties hereto. Delivery of an
executed counterpart of this Agreement by tele facsimile or other electronic
method of transmission shall have the same force and effect as the delivery of
an original executed counterpart of this Agreement. Any party delivering an
executed counterpart of this Agreement by tele facsimile or any other electronic
method of transmission shall also deliver an original executed counterpart, but
the failure to do so shall not affect the validity, enforceability or binding
effect of this Agreement.

 

10.17 No Third Party Beneficiary. This Agreement is only for the benefit of the
parties hereto and their permitted successors and assigns. No other Person or
entity shall be entitled to rely on any matter set forth herein without the
prior written consent of such parties.

 

10.18 Publicity. Subject to compliance with Applicable Laws, Lender reserves the
right to publicize the making of the Loan in any manner it deems appropriate.

 

10.19 Joint and Several Obligations. The obligations and liabilities of Borrower
under this Agreement shall be joint and several and shall be binding upon and
enforceable against Borrower and its successors and assigns.

 

21

 

 

10.20 JURISDICTION AND VENUE. BORROWER HEREBY AGREES THAT ALL ACTIONS OR
PROCEEDINGS INITIATED BY BORROWER AND ARISING DIRECTLY OR INDIRECTLY OUT OF THIS
AGREEMENT SHALL BE LITIGATED IN THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK
COUNTY, NEW YORK OR, IF LENDER INITIATES SUCH ACTION, ANY COURT IN WHICH LENDER
SHALL INITIATE SUCH ACTION AND WHICH HAS JURISDICTION. BORROWER HEREBY EXPRESSLY
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING
COMMENCED BY LENDER IN ANY OF SUCH COURTS, AND HEREBY WAIVES PERSONAL SERVICE OF
THE SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN, AND AGREES
THAT SERVICE OF SUCH SUMMONS AND COMPLAINT OR OTHER PROCESS OR PAPERS MAY BE
MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO BORROWER AT THE ADDRESS TO
WHICH NOTICES ARE TO BE SENT PURSUANT TO THIS AGREEMENT. BORROWER WAIVES ANY
CLAIM THAT NEW YORK COUNTY, NEW YORK OR THE SOUTHERN DISTRICT OF NEW YORK IS AN
INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON LACK OF VENUE. SHOULD BORROWER,
AFTER BEING SO SERVED, FAIL TO APPEAR OR ANSWER TO ANY SUMMONS, COMPLAINT,
PROCESS OR PAPERS SO SERVED WITHIN THE NUMBER OF DAYS PRESCRIBED BY APPLICABLE
LAW AFTER THE MAILING THEREOF, BORROWER SHALL BE DEEMED IN DEFAULT AND AN ORDER
AND/OR JUDGMENT MAY BE ENTERED BY LENDER AGAINST BORROWER AS DEMANDED OR PRAYED
FOR IN SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS. THE EXCLUSIVE CHOICE OF FORUM
FOR BORROWER SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE
ENFORCEMENT BY LENDER OF ANY JUDGMENT OBTAINED IN ANY OTHER FORUM OR THE TAKING
BY LENDER OF ANY ACTION TO ENFORCE THE SAME IN ANY OTHER APPROPRIATE
JURISDICTION, AND BORROWER HEREBY WAIVES THE RIGHT, IF ANY, TO COLLATERALLY
ATTACK ANY SUCH JUDGMENT OR ACTION.

 

10.21 JURY WAIVER. BORROWER AND LENDER HEREBY VOLUNTARILY, KNOWINGLY,
IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN
OR AMONG BORROWER AND LENDER ARISING OUT OF OR IN ANY WAY RELATED TO THIS
AGREEMENT, ANY OTHER TERM LOAN DOCUMENT, OR ANY RELATIONSHIP BETWEEN BORROWER
AND LENDER. THIS PROVISION IS A MATERIAL INDUCEMENT TO LENDER TO PROVIDE THE
TERM LOAN DESCRIBED HEREIN AND IN THE OTHER TERM LOAN DOCUMENTS.

 

[Signature page follows]

 

22

 

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.

 

BORROWER:   LENDER:       SRAX, INC.   BRF FINANCE CO., LLC           By:    
By:        Name: Michael Malone   Name:   Title: Chief Financial Officer  
Title:  

 

Loan and Security Agreement Signature Page 

 

 

 

 

SCHEDULES

 

 

 

 

ExhibitS

 

Exhibit A – Form of Notice of Borrowing

 

Exhibit B – Form of Term Loan Note

 

Exhibit C - Warrant

 

Exhibit D – Power of Attorney

 

(Exhibit to Loan and Security Agreement)

 

 

 

 

EXHIBIT A

 

FORM OF NOTICE OF BORROWING

 

To: BRF Finance Co., LLC, as Lender

 

Please refer to the Term Loan and Security Agreement dated as of February 28,
2020 (as amended, restated, supplemented or otherwise modified from time to
time, the “Term Loan and Security Agreement”) between SRAX, Inc. (“Borrower”)
and BRF Finance Co., LLC (the “Lender”). Terms used but not otherwise defined
herein are used herein as defined in the Term Loan and Security Agreement.

 

The undersigned hereby gives irrevocable notice, pursuant to Section 3.1 of the
Term Loan and Security Agreement, of a request hereby for a borrowing as
follows:

 

(i) The requested borrowing date for the proposed borrowing (which is a Business
Day) is ______________, ____.

 

(ii) The aggregate amount of the proposed borrowing is $______________.

 

(iii) The undersigned hereby certifies that on the date hereof and on the date
of borrowing set forth above, and immediately after giving effect to the
borrowing requested hereby: (i) there exists and there shall exist no Unmatured
Default or Event of Default under the Term Loan and Security Agreement; and (ii)
each of the representations and warranties contained in the Term Loan and
Security Agreement and the other Term Loan Documents is true and correct as of
the date hereof, except to the extent that such representation or warranty
expressly relates to another date and except for changes therein expressly
permitted or expressly contemplated by the Term Loan and Security Agreement.

 

(Signature page follows.)

 

(Exhibit to Loan and Security Agreement)

 

 

 

 

Borrower has caused this Certificate to be executed and delivered by its officer
thereunto duly authorized on ___________, ______.

 

  SRAX, INC.          By:           Title:              

 

(Exhibit to Loan and Security Agreement)

 

 

 

 

EXHIBIT B

 

FORM OF TERM LOAN NOTE

 

TERM LOAN NOTE

 

______________________

[PLACE]

$______________  

 

The undersigned, for value received, jointly and severally, promise to pay to
the order of BRF Finance Co., LLC (“Lender”) at its principal office in Woodland
Hills, California, the aggregate unpaid amount of the Term Loan (“Loan”) made to
the undersigned by Lender pursuant to the Term Loan and Security Agreement
referred to below (as shown on the schedule attached hereto (and any
continuation thereof) or in the records of Lender), such principal amount to be
payable on the dates set forth in the Term Loan and Security Agreement.

 

The undersigned further promises to pay on the unpaid principal amount of the
Term Loan from the date of the Term Loan until such Term Loan is paid in full,
payable at the rate(s) and at the time(s) set forth in the Term Loan and
Security Agreement. Payments of both principal and interest are to be made in
lawful money of the United States of America.

 

This Term Loan Note (“Note”) evidences indebtedness incurred under, and is
subject to the terms and provisions of, the Term Loan and Security Agreement,
dated as of the date hereof (as amended, restated, supplemented or otherwise
modified from time to time, the “Term Loan and Security Agreement”; terms not
otherwise defined herein are used herein as defined in the Loan and Security
Agreement), among the undersigned and Lender, to which Term Loan and Security
Agreement reference is hereby made for a statement of the terms and provisions
under which this Note may or must be paid prior to its due date or its due date
accelerated.

 

This Note is made under and governed by the laws of the State of New York
applicable to contracts made and to be performed entirely within such State
without reference to conflicts of law provisions.

 

(Signature page follows.)

 

(Exhibit to Loan and Security Agreement)

 

 

 

 

  SRAX, INC.            By:           Title:  

 

 

 

 

EXHIBIT C

 

FORM OF WARRANT

 

 

 

 

EXHIBIT C

 

POWER OF ATTORNEY

 

This Power of Attorney is executed and delivered as of May [*], 2020, by SRAX,
Inc. (the “Borrower”), a corporation organized and existing under the laws of
the State of Delaware pursuant to the Term Loan Agreement, dated as of the date
hereof (the “Loan Agreement”), by and among Borrower and Lender named therein.
Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in the Loan Agreement.

 

Upon the occurrence and during the continuance of an Event of Default (unless
waived in writing by Lender), Borrower hereby irrevocably constitutes and
appoints BRF Finance Co., LLC or its designee (the “Agent”), Borrower’s true and
lawful attorney-in-fact to take any action and execute any instruments which the
Agent may deem necessary or advisable (without notice to or assent by Borrower,
except to the extent required by the Loan Agreement or applicable Law) to
enforce its rights and remedies under the Loan Agreement, the Irrevocable
Placement Notice and other related documents, including, without limitation to:

 

(a) Sell common stock of Borrower pursuant to, and in accordance with, the ATM
Agreement and the Irrevocable Placement Notice, and execute, in connection with
such sale or action, any transfer agent instructions, brokerage agreements,
endorsements, assignments or other instruments of conveyance or transfer in
connection therewith, and use the net proceeds thereof, after commissions, to
repay any and all amounts outstanding under the Loan Agreement;

 

(b) Execute the ATM Agreement or any successor or replacement to the ATM
Agreement on behalf of Borrower upon any termination or attempted termination
thereof by Borrower or any person purporting to act through or on behalf of
Borrower;

 

(c) To execute and deliver to the Agent on behalf of Borrower the Irrevocable
Placement Notice or any replacement thereof;

 

(d) Upon the failure of Borrower to do so upon the request of the Agent, file
any prospectuses, or supplements thereto, necessary or desirable in order to
effectuate the purposes of the Irrevocable Placement Notice;

 

(e) Do and perform any and every act required, necessary or proper to be done in
the exercise of any of the rights and powers herein granted, as fully to all
intents and purposes as Borrower might or could do if personally present, with
full power of substitution or revocation, hereby ratifying and confirming all
that such attorney-in-fact, or such attorney-in-fact’s substitute or
substitutes, shall lawfully do or cause to be done by virtue of this Power of
Attorney and the rights and powers herein granted.

 

This Power of Attorney is irrevocable and coupled with an interest, until the
payment in full of the Note.

 

The authority to grant this Power of Attorney was approved by the board of
directors of Borrower, at a meeting duly held on [DATE] / pursuant to a
resolution dated [DATE].

 

Borrower, through its board of directors, ratifies and confirms everything that
the attorneys-in-fact or any of them, may lawfully do or cause to be done by
virtue of this instrument.

 

[Signature page follows]

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as of
the date first above written.

 

  SRAX, INC.         By     Name: Michael Malone   Title: Chief Financial
Officer

 

IN PRESENCE OF:

 

STATE OF CALIFORNIA

COUNTY OF

)

)SS.

)

 

On the __ day of May 2020, before me personally came Michael Malone, to me
known, who, being by me duly sworn, did depose and say that he resides at
_____________________________________________; that he is the Chief Financial
Officer of SRAX, Inc., the corporation described and which executed the
foregoing instrument; that s/he signed his name thereto by order of the board of
directors of said corporation.

 

My Commission Expires:

___________________

Notary Public

Printed Name: