Blueprint





 










 Exhibit
10.7

 






WARRANT

 



NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE
OF THESE SECURITIES HAVE BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) AND APPLICABLE
STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR (II) AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS OR BLUE SKY LAWS. THESE SECURITIES AND THE SECURITIES ISSUABLE
UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
SECURITIES.

 



EXACTUS, INC.

 



WARRANT TO PURCHASE COMMON STOCK

 


	


Warrant No. A1

	


Original Issue Date: November 27, 2019







 



Exactus Inc., a Nevada corporation (the “Company”),
hereby certifies that, for value received, Alliance Global
Partners, or its permitted registered assigns (the
“Holder”),
is entitled to purchase from the Company shares of common stock,
$0.0001 par value (the “Common
Stock”), of the Company
(each such share, a “Warrant
Share” and all such
shares, the “Warrant
Shares”) as determined in
accordance with the terms herein, at the Exercise Price (as defined
below) at any time and from time to time from on or after the date
hereof (the “Trigger
Date”) and through and
including 5:00 P.M., prevailing Eastern time, on November __, 2023
(the “Expiration
Date”), and subject to
the following terms and conditions:

 


This Warrant (this “Warrant”)
is issued pursuant to that certain Engagement Agreement dated
October 25, 2019 between the Company and the Holder (the
“Engagement
Agreement”).

 

1. Definitions

 



.. In addition to the terms defined elsewhere in this Warrant,
capitalized terms that are not otherwise defined herein have the
meanings given to such terms in as set forth in that certain
Securities Purchase Agreement (as may be amended from time to time,
the “Purchase
Agreement”), dated
November 27, 2019, among the Company and the purchasers signatory
thereto.

 

2. Exercise
Price

 



.. For purposes of this Warrant, the “Exercise
Price” shall be equal to
110% of the of the then Closing Sale Price of the Company’s
Common Stock as of the Initial Closing Date (as adjusted from time
to time as provided in Section 11 herein).

 

3. Number
of Warrant Shares

 



.. The aggregate number of Warrant Shares shall be equal to 8% of
the aggregate number of shares of Common Stock issued by the
Company upon conversion of of Eight Hundred and
Thirty Three Thousand Three Hundred Thirty Three and 33/100 Dollars
($833,333.33) in Principal Amount of Notes (the
“Initial
Notes”).

 

4. Registration
of Warrants

 



.. The Company shall register this Warrant, upon records to be
maintained by the Company for that purpose (the
“Warrant
Register”), in the name
of the record Holder (which shall include the initial Holder or, as
the case may be, any registered assignee to which this Warrant is
permissibly assigned hereunder) from time to time. The Company may
deem and treat the registered Holder of this Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent
actual notice to the contrary.

 


 




 

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5. Transfers;
Lock-Up Period



..


(a) The
Company shall register the transfer of all or any portion of this
Warrant in the Warrant Register, upon (i) surrender of this
Warrant, with the Form of Assignment attached as
Schedule
2 hereto duly completed and
signed, to the Company’s transfer agent or to the Company at
its address specified herein (ii) delivery, at the request of the
Company, of an opinion of counsel reasonably satisfactory to the
Company to the effect that the transfer of such portion of this
Warrant may be made pursuant to an available exemption from the
registration requirements of the Securities Act of 1933
(“Securities
Act”) and all applicable
state securities or blue sky laws and (iii) delivery by the
transferee of a written statement to the Company certifying that
the transferee is an “accredited investor” as defined
in Rule 501(a) under the Securities Act and making the
representations and certifications as the Company may reasonably
request to procure an exemption from Section 5 of the Securities
Act. Upon any such registration or transfer, a new warrant to
purchase Common Stock in substantially the form of this Warrant
(any such new warrant, a “New
Warrant”) evidencing the
portion of this Warrant so transferred shall be issued to the
transferee, and a New Warrant evidencing the remaining portion of
this Warrant not so transferred, if any, shall be issued to the
transferring Holder. The acceptance of the New Warrant by the
transferee thereof shall be deemed the acceptance by such
transferee of all of the rights and obligations of a Holder of a
Warrant.

 


(b) The
Holder agrees that in the event of a public offering of the
Company’s securities, pursuant to the Lock-Up Period (as
defined below) contained in Rule 5110(g)(1) of the Financial
Industry Regulatory Authority, Inc. (“FINRA”),
it will not (a) sell, transfer, assign, pledge, hypothecate or
otherwise transfer the Warrant (including any Warrant Shares issued
or issuable hereunder) other than to a bona fide officer, partner
or other associated person of the Holder or any selected dealer (or
any officer, partner or other associated person thereof) in
connection with the initial public offering, in each case in
accordance with FINRA Conduct Rule 5110(g)(1), or (b) cause the
Warrant or any Warrant Shares issued or issuable hereunder to be
the subject of any hedging, short sale, derivative, put or call
transaction that would result in the effective economic disposition
of the Warrant or any Warrant Shares issued or issuable hereunder,
except as provided for in FINRA Rule 5110(g)(2). As used herein,
the term “Lock-Up
Period” means the period
beginning on the date that a registration statement of the Company
under the Securities Act is declared effective by the Securities
and Exchange Commission (the “Effective
Date”) and ending on the
one hundred eighty day anniversary of the Effective
Date.

 


6. Exercise
and Duration of Warrants.

 


(a) All
or any part of this Warrant shall be exercisable by the registered
Holder at any time and from time to time on or after the Trigger
Date and through and including 5:00 P.M. prevailing Pacific
time on the Expiration Date. At 5:00 P.M., prevailing Pacific time,
on the Expiration Date, the portion of this Warrant not exercised
prior thereto shall be and become void and of no value and this
Warrant shall be terminated and no longer outstanding.

 


(b) The
Holder may exercise this Warrant by delivering to the Company
(i) an exercise notice, in the form attached as Schedule 1
hereto (the “Exercise
Notice”), appropriately
completed and duly signed, (ii) payment of the Exercise Price for
the number of Warrant Shares as to which this Warrant is being
exercised (which may take the form of a “cashless
exercise” if so indicated in the Exercise Notice and if a
“cashless exercise” may occur at such time pursuant
to Section 12
below), and the date such items are
delivered to the Company (as determined in accordance with the
notice provisions hereof) is an “Exercise
Date.” The Holder shall
not be required to deliver the original Warrant in order to effect
an exercise hereunder, but shall do so reasonably shortly
thereafter. Execution and delivery of the Exercise Notice shall
have the same effect as cancellation of the original Warrant and
issuance of a New Warrant evidencing the right to purchase the
remaining number of Warrant Shares.

 


 




 

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(c) The
Holder may not exercise this Warrant at any time that Holder is
unable to establish to the Company’s reasonable satisfaction
that the exercise complies with an exemption from the registration
provisions of Section 5 of the Securities Act.

 


7. Delivery
of Warrant Shares

 



.. Upon exercise of this Warrant, the Company shall promptly issue
or cause to be issued and cause to be delivered to or upon the
written order of the Holder and in such name or names as the Holder
may designate a certificate for the Warrant Shares issuable upon
such exercise, with an appropriate restrictive legend. The Holder,
or any Person permissibly so designated by the Holder to receive
Warrant Shares, shall be deemed to have become the holder of record
of such Warrant Shares as of the Exercise Date.

 


8. Charges,
Taxes and Expenses

 



.. Issuance and delivery of certificates for shares of Common Stock
upon exercise of this Warrant shall be made without charge to the
Holder for any issue or transfer tax, transfer agent fee or other
incidental tax or expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the
Company; provided, however, that the Company shall not be required to pay
any tax which may be payable in respect of any transfer involved in
the registration of any certificates for Warrant Shares or Warrants
in a name other than that of the Holder or an Affiliate thereof.
The Holder shall be responsible for all other tax liability that
may arise as a result of holding or transferring this Warrant or
receiving Warrant Shares upon exercise hereof.

 


9. Replacement
of Warrant

 



.. If this Warrant is mutilated, lost, stolen or destroyed, the
Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and
substitution for this Warrant, a New Warrant, but only upon receipt
of evidence reasonably satisfactory to the Company of such loss,
theft or destruction (in such case) and, in each case, a customary
and reasonable indemnity (which shall not include a surety bond),
if requested. Applicants for a New Warrant under such circumstances
shall also comply with such other reasonable regulations and
procedures and pay such other reasonable third-party costs as the
Company may prescribe. If a New Warrant is requested as a result of
a mutilation of this Warrant, then the Holder shall deliver such
mutilated Warrant to the Company as a condition precedent to the
Company’s obligation to issue the New Warrant.

 


10. Reservation
of Warrant Shares

 



.. The Company covenants that it will at all times reserve and keep
available out of the aggregate of its authorized but unissued and
otherwise unreserved Common Stock, solely for the purpose of
enabling it to issue Warrant Shares upon exercise of this Warrant
as herein provided, the number of Warrant Shares which are then
issuable and deliverable upon the exercise of this entire Warrant,
free from preemptive rights or any other contingent purchase rights
of persons other than the Holder (taking into account the
adjustments and restrictions of Section
11). The Company covenants that
all Warrant Shares so issuable and deliverable shall, upon issuance
and the payment of the applicable Exercise Price in accordance with
the terms hereof, be duly and validly authorized, issued and fully
paid and nonassessable. The Company will take all such action as
may be necessary to assure that such shares of Common Stock may be
issued as provided herein without violation of any applicable law
or regulation, or of any requirements of any securities exchange or
automated quotation system upon which the Common Shares may be
listed.

 


11. Certain
Adjustments

 



.. The Exercise Price and number of Warrant Shares issuable upon
exercise of this Warrant are subject to adjustment from time to
time as set forth in this Section 11.

 


 




 

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(a) Stock
Dividends and Splits. If the
Company, at any time while this Warrant is outstanding, (i) pays a
stock dividend on its Common Stock or otherwise makes a
distribution on any class of capital stock that is payable in
shares of Common Stock, (ii) subdivides its outstanding shares
of Common Stock into a larger number of shares, or
(iii) combines its outstanding shares of Common Stock into a
smaller number of shares, then in each such case the Exercise Price
shall be multiplied by a fraction, the numerator of which shall be
the number of shares of Common Stock outstanding immediately before
such event and the denominator of which shall be the number of
shares of Common Stock outstanding immediately after such event.
Any adjustment made pursuant to clause (i) of this paragraph shall
become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or
distribution, and any adjustment pursuant to clause (ii) or (iii)
of this paragraph shall become effective immediately after the
effective date of such subdivision or
combination.

 


(b) Fundamental
Transactions. If, at any time
while this Warrant is outstanding (i) the Company effects any
merger or consolidation of the Company with or into another Person,
in which the Company is not the survivor, (ii) the Company effects
any sale of all or substantially all of its assets or a majority of
its Common Stock is acquired by a third party, in each case, in one
or a series of related transactions, (iii) any tender offer or
exchange offer (whether by the Company or another Person) is
completed pursuant to which all or substantially all of the holders
of Common Stock are permitted to tender or exchange their shares
for other securities, cash or property, or (iv) the Company effects
any reclassification of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property
(other than as a result of a subdivision or combination of shares
of Common Stock covered by Section 11(a)
above) (in any such case, a
“Fundamental
Transaction”), then the
Holder shall have the right thereafter to receive, upon exercise of
this Warrant (including payment of the Exercise Price), the same
amount and kind of securities, cash or property as it would have
been entitled to receive upon the occurrence of such Fundamental
Transaction if it had been, immediately prior to such Fundamental
Transaction, the holder of the number of Warrant Shares then
issuable upon exercise in full of this Warrant without regard to
any limitations on exercise contained herein (the
“Alternate
Consideration”). The
Company shall not effect any such Fundamental Transaction unless
prior to or simultaneously with the consummation thereof, any
successor to the Company, surviving entity or the corporation
purchasing or otherwise acquiring such assets or other appropriate
corporation or entity shall assume the obligation to deliver to the
Holder, such Alternate Consideration as, in accordance with the
foregoing provisions, the Holder may be entitled to purchase and/or
receive (as the case may be), and the other obligations under this
Warrant. The provisions of this paragraph (c) shall similarly apply
to subsequent transactions analogous to a Fundamental
Transaction.

 


(c) Number
of Warrant Shares.
Simultaneously with any adjustment to the Exercise Price pursuant
to paragraph (a) of this Section, the number of Warrant Shares that
may be purchased upon exercise of this Warrant shall be increased
or decreased proportionately, so that after such adjustment the
aggregate Exercise Price payable hereunder for the increased or
decreased number of Warrant Shares shall be the same as the
aggregate Exercise Price in effect immediately prior to such
adjustment.

 


(d) Calculations.
All calculations under this Section 11
shall be made to the nearest cent or
the nearest 1/100th of a share, as applicable. The number of shares
of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Company, and the
sale or issuance of any such shares shall be considered an issue or
sale of Common Stock.

 


(e) Notice
of Adjustments. Upon the
occurrence of each adjustment pursuant to this Section
11, the Company at its expense
will, at the written request of the Holder, promptly compute such
adjustment, in good faith, in accordance with the terms of this
Warrant and prepare a certificate setting forth such adjustment,
including a statement of the adjusted Exercise Price and adjusted
number or type of Warrant Shares or other securities issuable upon
exercise of this Warrant (as applicable), describing the
transactions giving rise to such adjustments and showing in detail
the facts upon which such adjustment is based. Upon written
request, the Company will promptly deliver a copy of each such
certificate to the Holder and to the Company’s transfer
agent.

 


 




 

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(f) Notice
of Corporate Events. If, while
this Warrant is outstanding, the Company (i) declares a dividend or
any other distribution of cash, securities or other property in
respect of its Common Stock, including, without limitation, any
granting of rights or warrants to subscribe for or purchase any
capital stock of the Company, (ii) authorizes or approves, enters
into any agreement contemplating or solicits stockholder approval
for any Fundamental Transaction or (iii) authorizes the voluntary
dissolution, liquidation or winding up of the affairs of the
Company, then, except if such notice and the contents thereof shall
be deemed to constitute material non-public information, the
Company shall deliver to the Holder a notice describing the
material terms and conditions of such transaction at least ten (10)
Trading Days prior to the applicable record or effective date on
which a Person would need to hold Common Stock in order to
participate in or vote with respect to such transaction, and the
Company will take all steps reasonably necessary in order to insure
that the Holder is given the practical opportunity to exercise this
Warrant prior to such time so as to participate in or vote with
respect to such transaction; provided, however, that the failure to deliver such notice or any
defect therein shall not affect the validity of the corporate
action required to be described in such notice.

 


12. Payment
of Exercise Price

 



.. The Holder shall pay the Exercise Price in immediately available
funds; provided, however, the Holder may, in its sole discretion,
commencing on the date that is 18 months from the date of this
Warrant, satisfy its obligation to pay the Exercise Price through a
“cashless exercise”, in which event the Company shall
issue to the Holder the number of Warrant Shares determined as
follows:

 


X =
Y [(A-B)/A]

 


where:

 


X =
the number of Warrant Shares to be issued to the
Holder.

 


Y =
the total number of Warrant Shares with respect to which this
Warrant is being exercised.

 


A =
the average of the Closing Sale Prices of the shares of Common
Stock (as reported by Bloomberg Financial Markets) for the five
Trading Days ending on the date immediately preceding the Exercise
Date.

 


B =
the Exercise Price then in effect for the applicable Warrant Shares
at the time of such exercise.

 



For purposes of this Warrant, “Closing
Sale Price” means, for
any security as of any date, the last trade price for such security
on the principal securities exchange or trading market for such
security, as reported by Bloomberg Financial Markets, or, if such
exchange or trading market begins to operate on an extended hours
basis and does not designate the last trade price, then the last
trade price of such security prior to 4:00:00 p.m., New York Time,
as reported by Bloomberg Financial Markets, or if the foregoing do
not apply, the last trade price of such security in the
over-the-counter market on the electronic bulletin board for such
security as reported by Bloomberg Financial Markets, or, if no last
trade price is reported for such security by Bloomberg Financial
Markets, the average of the bid prices, or the ask prices,
respectively, of any market makers for such security as reported in
the “pink sheets” by Pink Sheets LLC. If the Closing Sale
Price cannot be calculated for a security on a particular date on
any of the foregoing bases, the Closing Sale Price of such security
on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are
unable to agree upon the fair market value of such security, then
the Company shall, within two business days submit via facsimile
(a) the disputed determination of the Warrant Exercise Price to an
independent, reputable investment bank selected by the Company and
approved by the Holder or (b) the disputed arithmetic
calculation of the Warrant Shares to the Company’s
independent, outside accountant. The Company shall cause at its
expense the investment bank or the accountant, as the case may be,
to perform the determinations or calculations and notify the
Company and the Holder of the results no later than ten business
days from the time it receives the disputed determinations or
calculations. Such investment bank’s or accountant’s
determination or calculation, as the case may be, shall be binding
upon all parties absent demonstrable error. All such determinations
to be appropriately adjusted for any stock dividend, stock split,
stock combination or other similar transaction during the
applicable calculation period.

 


 




 

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For purposes of Rule 144 promulgated under the Securities Act, it
is intended, understood and acknowledged that the Warrant Shares
issued in a cashless exercise transaction shall be deemed to have
been acquired by the Holder, and the holding period for the Warrant
Shares shall be deemed to have commenced, on the date this Warrant
was originally issued pursuant to the Consulting Agreement
(provided that the Commission continues to take the position that
such treatment is proper at the time of such
exercise).

 


13. Limitation on Exercises. The
Company shall not effect the exercise of this Warrant, and the
Holder shall not have the right to exercise this Warrant, to the
extent that after giving effect to such exercise, the Holder
(together with such Holder’s affiliates) would beneficially
own in excess of 4.99% (“Maximum
Percentage”) of the shares of Common Stock outstanding
immediately after giving effect to such exercise. For purposes of
the foregoing sentence, the aggregate number of shares of Common
Stock beneficially owned by such Holder and its affiliates shall
include the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which the determination of such
sentence is being made, but shall exclude shares of Common Stock
which would be issuable upon (A) exercise of the remaining,
unexercised portion of this Warrant beneficially owned by such
Holder and its affiliates and (B) exercise or conversion of
the unexercised or unconverted portion of any other securities of
the Company beneficially owned by such Person and its affiliates
(including, without limitation, any convertible notes or
convertible preferred stock or warrants) subject to a limitation on
conversion or exercise analogous to the limitation contained
herein. Except as set forth in the preceding sentence, for purposes
of this paragraph, beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended. To the extent that the limitation contained in
this Section 13 applies, the
determination of whether this Warrant is exercisable (in relation
to other securities owned by the Holder together with any
affiliate) and of which portion of this Warrant is exercisable
shall be in the sole discretion of the Holder, and the submission
of a Notice of Exercise shall be deemed to be the Holder’s
determination of whether this Warrant is exercisable (in relation
to other securities owned by the Holder together with any
affiliate) and of which portion of this Warrant is exercisable, in
each case subject to such aggregate percentage limitation, and the
Company shall have no obligation to verify or confirm the accuracy
of the determination. For purposes of this Warrant, in determining
the number of outstanding shares of Common Stock, the Holder may
rely on the number of outstanding shares of Common Stock as
reflected in (1) the Company’s most recent Form 10-K, Form
10-Q, Current Report on Form 8-K or other public filing with the
Securities and Exchange Commission, as the case may be, (2) a
more recent public announcement by the Company or (3) any other
notice by the Company setting forth the number of shares of Common
Stock outstanding. For any reason at any time, upon the written or
oral request of the Holder, the Company shall within one (1)
business day confirm orally and in writing to the Holder the number
of shares of Common Stock then outstanding. In any case, the number
of outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the
Company, including this Warrant, by the Holder and its affiliates
since the date as of which such number of outstanding shares of
Common Stock was reported. By written notice to the Company, any
Holder may decrease the Maximum Percentage to any other percentage
specified in such notice; provided that such decrease will apply
only to the Holder sending such notice and not to any other holder
of Warrants. In addition, by written notice to the Company, any
Holder may remove the limitations on exercises provided in this
Section 13
entirely; provided that (i) any such removal will not be
effective until the 61st day after such notice is delivered to the
Company, and (ii) any such removal will apply only to the Holder
sending such notice and not to any other holder of Warrants. The
provisions of this paragraph shall be construed and implemented in
a manner otherwise than in strict conformity with the terms of this
Section 13 to
correct this paragraph (or any portion hereof) which may be
defective or inconsistent with the intended beneficial ownership
limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such
limitation.

 


14. No
Fractional Shares

 



.. No fractional Warrant Shares will be issued in connection with
any exercise of this Warrant. In lieu of any fractional shares
which would otherwise be issuable, the number of Warrant Shares to
be issued shall be rounded up to the next whole
number.

 


 




 

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15. Notices

 



.. Any and all notices or other communications or deliveries
hereunder (including, without limitation, any Exercise Notice)
shall be in writing and shall be deemed given and effective on the
earliest of (i) the date of transmission, if such notice or
communication is delivered via email at the email address specified
in the Engagement Agreement prior to 5:00 p.m. (prevailing Pacific
time) on a Trading Day, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via
email at the email address specified in the Engagement Agreement t
on a day that is not a Trading Day or later than 5:00 p.m.
(prevailing Pacific time) on any Trading Day, (iii) the Trading Day
following the date of mailing, if sent by nationally recognized
overnight courier service specifying next business day delivery, or
(iv) upon actual receipt by the party to whom such notice is
required to be given, if by hand delivery. The address and
facsimile number of a party for such notices or communications
shall be as set forth in the Engagement Agreement unless changed by
such party by two Trading Days’ prior notice to the other
party in accordance with this Section
15.

 


16. Warrant
Agent

 



.. The Company shall serve as warrant agent under this Warrant. Upon
thirty (30) days’ notice to the Holder, the Company may
appoint a new warrant agent. Any corporation into which the Company
or any new warrant agent may be merged or any corporation resulting
from any consolidation to which the Company or any new warrant
agent shall be a party or any corporation to which the Company or
any new warrant agent transfers substantially all of its corporate
trust or shareholders’ services business shall be a successor
warrant agent under this Warrant without any further act. Any such
successor warrant agent shall promptly cause notice of its
succession as warrant agent to be mailed (by first class mail,
postage prepaid) to the Holder at the Holder’s last address
as shown on the Warrant Register.

 


17. Registration
Rights

 


(a) Demand
Registration. Reference is made
to the Registration Rights Agreement, as referred to in the
Purchase Agreement. The Company agrees to include the Warrant
Shares of the Holder in the Registration Statement (as defined in
the Registration Rights Agreement), which shall be filed and
maintained effective as and to the extent provided in the
Registration Rights Agreement, all at no cost or expense to the
Holder (other than any costs or commissions which would be borne by
the Holder under the terms of the Registration Rights Agreement
were the Warrant Shares deemed to be Registrable Securities under
that agreement).

 


(b) Piggyback
Registration. In addition to
the registration rights referred to in the preceding provisions of
Section 17(a), effective after the expiration of the effectiveness
of the Registration Statement as contemplated by the Registration
Rights Agreement, the Holder shall have piggy-back registration
rights with respect to the Warrant Shares then held by the Holder
or then subject to issuance upon exercise of this Warrant
(collectively, the “Remaining Warrant Shares”), subject
to the conditions set forth below. If, at any time after the
Registration Statement has ceased to be effective, the Company
participates (whether voluntarily or by reason of an obligation to
a third party) in the registration of any shares of the
Company’s stock (other than a registration on Form S-8 or on
Form S-4), the Company shall give written notice thereof to the
Holder and the Holder shall have the right, exercisable within ten
(10) Trading Days after receipt of such notice, to demand inclusion
of all or a portion of the Holder’s Remaining Warrant Shares
in such registration statement. If the Holder exercises such
election, the Remaining Warrant Shares so designated shall be
included in the registration statement at no cost or expense to the
Holder (other than any costs or commissions which would be borne by
the Holder under the terms of the Registration Rights Agreement).
The Holder’s rights under this Section 17 shall expire at
such time as the Holder can sell all of the Remaining Warrant
Shares under Rule 144 without volume or other restrictions or
limit.

 


 




 

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18. Miscellaneous

 


(a) The
Holder, solely in such Person’s capacity as a holder of this
Warrant, shall not be entitled to vote or receive dividends or be
deemed the holder of share capital of the Company for any purpose,
nor shall anything contained in this Warrant be construed to confer
upon the Holder, solely in such Person’s capacity as the
Holder of this Warrant, any of the rights of a stockholder of the
Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization, issue of stock,
reclassification of stock, consolidation, merger, amalgamation,
conveyance or otherwise), receive notice of meetings, receive
dividends or subscription rights, or otherwise, prior to the
issuance to the Holder of the Warrant Shares which such Person is
then entitled to receive upon the due exercise of this Warrant. In
addition, nothing contained in this Warrant shall be construed as
imposing any liabilities on the Holder to purchase any securities
(upon exercise of this Warrant or otherwise) or as a stockholder of
the Company, whether such liabilities are asserted by the Company
or by creditors of the Company. Notwithstanding this
Section
18(a), the Company shall
provide the Holder with copies of the same notices and other
information given to the shareholders of the Company,
contemporaneously with the giving thereof to the
shareholders.

 


(b) Subject
to the restrictions on transfer set forth on the first page hereof,
and compliance with applicable securities laws, this Warrant may be
assigned by the Holder. This Warrant may not be assigned by the
Company except to a successor in the event of a Fundamental
Transaction. This Warrant shall be binding on and inure to the
benefit of the parties hereto and their respective successors and
assigns. Subject to the preceding sentence, nothing in this Warrant
shall be construed to give to any Person other than the Company and
the Holder any legal or equitable right, remedy or cause of action
under this Warrant. This Warrant may be amended only in writing
signed by the Company and the Holder, or their successors and
assigns.

 


(c) GOVERNING
LAW; VENUE; WAIVER OF JURY TRIAL. ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS
WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH PARTY HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND
FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF
MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR
DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY
OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND
AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM
THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH
COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY
HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS
TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY
MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR
OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE
ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES
THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF
PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE
DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER
PERMITTED BY LAW. THE COMPANY HEREBY WAIVES ALL RIGHTS TO A TRIAL
BY JURY.

 


(d) The
headings herein are for convenience only, do not constitute a part
of this Warrant and shall not be deemed to limit or affect any of
the provisions hereof.

 


(e) In
case any one or more of the provisions of this Warrant shall be
invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this
Warrant shall not in any way be affected or impaired thereby, and
the parties will attempt in good faith to agree upon a valid and
enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Warrant.

 


(f) Except
as otherwise set forth herein, prior to exercise of this Warrant,
the Holder hereof shall not, by reason of by being a Holder, be
entitled to any rights of a stockholder with respect to the Warrant
Shares.

 


 




 

-8-








 






 



IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated
above.

 


	
 

	


COMPANY


 



Exactus, Inc.


 



By: /s/ Kenneth
Puzder




Name: 
Kenneth Puzder



Title: CFO



 


 


 


 


 


 







 




 

-9-








 










 



SCHEDULE 1

 



FORM OF EXERCISE NOTICE

 



(To be executed by the Holder to exercise the right to purchase
shares of

 



Common Stock under the foregoing Warrant)

 



Ladies and Gentlemen:

 


(1)           The
undersigned is the Holder of Warrant No. _______ (the
“Warrant”) issued by Exactus, Inc. (the
“Company”). Capitalized terms used herein and not
otherwise defined herein have the respective meanings set forth in
the Warrant.

 


(2)           The
undersigned hereby exercises its right to purchase _______ Warrant
Shares pursuant to the Warrant.

 


(3)           The
Holder intends that payment of the Exercise Price shall be made as
(check one):

 


   Cash Exercise

 


   “Cashless Exercise” under
Section
12

 


(4)           If
the Holder has elected a Cash Exercise, the Holder shall pay the
sum of $_______ in immediately available funds to the Company in
accordance with the terms of the Warrant.

 


(5)           Pursuant
to this Exercise Notice, the Company shall deliver to the Holder
_______ Warrant Shares in accordance with the terms of the
Warrant.

 


	


Dated:                                            ,            



[Company]


 



By:

	
 







 



(Signature must conform in all respects to name of Holder as
specified on the face of the Warrant)

 




 

-10-








 










 



SCHEDULE 2

 



FORM OF ASSIGNMENT

 



[To be completed and signed only upon transfer of
Warrant]

 



FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _______ (the “Transferee”
the right represented by the within Warrant to purchase _______
shares of Common Stock of Exactus, Inc. (the
“Company”)
to which the within Warrant relates and appoints _______ attorney
to transfer said right on the books of the Company with full power
of substitution in the premises. In connection therewith, the
undersigned represents, warrants, covenants and agrees to and with
the Company that:

 



(a) 

the offer and sale of the Warrant contemplated
hereby is being made in compliance with Section 4(a)(1) of the
United States Securities Act of 1933, as amended (the
“Securities
Act”) or another valid
exemption from the registration requirements of Section 5 of the
Securities Act and in compliance with all applicable securities
laws of the states of the United States;





 



(b) 

the
undersigned has not offered to sell the Warrant by any form of
general solicitation or general advertising, including, but not
limited to, any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media
or broadcast over television or radio, and any seminar or meeting
whose attendees have been invited by any general solicitation or
general advertising;





 



(c) 

the
undersigned has read the Transferee’s investment letter
included herewith, and to its actual knowledge, the statements made
therein are true and correct; and





 



(d) 

the
undersigned understands that the Company may condition the transfer
of the Warrant contemplated hereby upon the delivery to the Company
by the undersigned or the Transferee, as the case may be, of a
written opinion of counsel (which opinion shall be in form,
substance and scope customary for opinions of counsel in comparable
transactions) to the effect that such transfer may be made without
registration under the Securities Act and under applicable
securities laws of the states of the United States.





 



(Continued on Next Page)

 


	


Dated:                                 ,            



[Company]



By:                                                                 



(Signature must conform in all respects to name of Holder as
specified on the face of the Warrant)


 

	


Address of Transferee


	


In the presence of:


 

	
 







 


 


 


 




 


 



 

-11-