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Exhibit 10.2 

THE SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION
OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

SECURED CONVERTIBLE PROMISSORY NOTE

$__________  _________, 2016

  New York , New York

 

For value received, root9B Technologies, Inc., a Delaware corporation (the “Company”), promises to pay to ____________ (the “Holder”), or its registered assigns, in lawful money of the United States of America the principal amount
of [●] Dollars ($[●]). Interest shall accrue from the date of this Secured Convertible Promissory Note (this “Note”) on the unpaid principal amount at a rate equal to 10.00% per annum simple interest. Interest on this Note shall accrue and, unless otherwise converted in accordance with Section 2 below, shall be payable upon the Maturity Date (as defined below). This Note is one of a series of Notes issued pursuant to that certain Securities
Purchase Agreement, dated as of ________, 2016 (the “Purchase Agreement”), by and among the Company and the investors (the “Holders”) referred to therein, as amended from time to time. Capitalized terms used but not defined herein shall have the meaning set forth in the Purchase Agreement. This Note is subject to the following terms and conditions:

1. Payments.

(a) Repayment. If this Note is not earlier converted pursuant to Section 2, the entire then-outstanding and unpaid
principal amount of this Note, together with any accrued but unpaid interest thereon (the “Outstanding Amount”), shall be due and payable upon the earlier to occur of (i) _________, 2019 (the “Maturity Date”), and (ii) following the occurrence of an Event of Default (as defined below), when such amounts are declared due and payable by the Holder in accordance with the terms hereof. All
payments shall be made, at the Holder’s option, in either (i) lawful money of the United States of America at such place as the Holder hereof may from time to time designate in writing to the Company or (ii) shares of the Company’s common stock, par value $0.001 (the “Common Stock”) pursuant to Section 2(b) below. Subject to Section 2 below, interest
shall accrue on this Note but shall not be due and payable until the Maturity Date.

(b) Interest Payment. The Interest Payment shall be paid by the Company on each Payment Date. The Interest Payment shall be payable in, at the option of the Holder,
either (i) lawful money of the United States of America at such place as the Holder hereof may from time to time designate in writing to the Company or (ii) such number of shares of Common Stock (the “Interest Shares”) equal to the quotient obtained by dividing (i) the Interest Payment by (ii) Interest Conversion Rate (the “Interest Payment Type”). Notwithstanding the foregoing, Holder may not
request the Interest Payment to be paid in Interest Shares if such issuance shall result in a Share Reserve Failure. Holder shall notify the Company in writing no fewer than three (3) business days prior to the applicable Payment Date the Interest Payment Type such Holder’s Interest Payment shall be payable in on the applicable Payment Date.

 

 

 

(c) Prepayment. The Company shall have the right at any time prior to the twelve month anniversary (the “Anniversary
Date”) of the date of issuance of this Note, with the prior written consent of the Holder, to prepay all or some of the outstanding Principal Amount of this Note together with accrued interest then due (the "Prepayment Amount") by paying to the Holder an amount equal to (1) the unpaid principal to be repaid plus (2) any accrued but unpaid interest plus (3) an amount equal
to the interest which has not accrued as of the Optional Prepayment Date but would accrue on the principal to be repaid during the period beginning on the Optional Prepayment Date and ending on the Anniversary Date (the “Early Prepayment Price”). Following the Anniversary Date, the Company shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note, to prepay all or some of the outstanding
Principal Amount of this Note together with accrued interest then due by paying to the Holder an amount equal to (1) the unpaid principal to be repaid plus (2) any accrued but unpaid interest plus (3) an amount equal to one-half of the interest which has not accrued as of the Optional Prepayment Date (as defined below) but would accrue on the principal to be repaid during the period beginning on the Optional Prepayment Date and ending
on the Maturity Date (the “Subsequent Prepayment Price” and, together with the Early Prepayment Price, the "Prepayment Price"). Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder at its registered address and shall state: (1) that the Company is exercising its right to prepay the Note, (2) the
Prepayment Amount, (3) the applicable Prepayment Price and (4) the date of prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”), the Company shall make payment of the applicable Prepayment Price to or upon the order of the Holder as specified by the Holder in writing to the Company at least one (1) business day prior to the Optional
Prepayment Date. The Company covenants and agrees that it will honor all Notices of Conversion (as defined below) tendered from the time of delivery of the Optional Prepayment Notice through the date all amounts owing thereon are due and paid in full..

(d) Security. The payment obligations arising under this Note are secured pursuant to the terms of that certain Security Agreement made effective as of the date
of the Purchase Agreement by and between the Company and the Holder (as amended from time to time, the “Security Agreement”). Reference hereby is made to the Security Agreement for a description of the nature and extent of the collateral serving as security for this Note and the rights of the Holder with respect to such security.

 

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(e) Ranking. The Note shall rank senior in all respect to all indebtedness, liabilities or obligations of the Company to other parties outstanding as of the date
of the Purchase Agreement.

(f) Definitions.

(i) “Interest Conversion Rate” means a per share price equal to 85% of the quotient of the sum of the VWAP of the Common Stock as of each Trading Day during the five
(5) consecutive Trading Day period ending and including the Trading Day ended immediately prior to the Additional Closing Date, divided by five (5), but in no event less than $0.80 per share.

(ii)  “Interest Payment” means an amount equal to any accrued but unpaid interest under this Note as of each Payment Date.

(iii) “Payment Date” means each March 31, June 30, September 30 and December 31, commencing December 31, 2016 or, in each case, if such day is not a business day, the
first business day immediately thereafter until the earlier of (i) the Outstanding Amount is repaid pursuant to Section 1(a) or (ii) the Outstanding Amount is converted pursuant to Section 2.

(iv) “Trading Day” means a day on which the principal Trading Market is open for trading.

(v) “Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE MKT,
the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the OTC Bulletin Board or the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices) (or any successors to any of the foregoing).

(vi) “VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading
Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the OTC Bulletin Board is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board, (c) if the
Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders
of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

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2. Conversion.

(a) 

Conversion. Subject to the limitations set forth in Section 2(d) and Section 3 below, at any time on or after February ___, 2017, unless the Outstanding Amount has previously been repaid or converted as provided herein, the Holder may elect to convert, in whole or in part, the Outstanding Amount into fully
paid and non-assessable shares of Common Stock. The number of shares of Common Stock to be issued upon conversion of this Note pursuant to this Section 2(a) shall be equal to the quotient obtained by dividing (i) the Outstanding Amount elected by the Holder to be converted, by (ii) $0.80 (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or similar recapitalization affecting such shares) (the "Conversion
Price"), rounded down to the nearest whole share.

(b) Rights, Preferences and Privileges of Common Stock. Upon conversion of this Note pursuant to this Section 2,
the Company shall issue shares of Common Stock (the “Conversion Shares”) which shall have the rights, preferences and privileges set forth in the Company’s Certificate of Incorporation, as amended from time to time and then in effect.

(c) Mechanics and Effect of Conversion. This Note may be converted by the Holder in whole or in part pursuant to Section
2(a), on any Trading Day, by submitting to the Company a notice (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 4:00 p.m., New York, New York time) specifying the Outstanding Amount to be so converted (the “Notice of Conversion”). Any Notice of Conversion submitted after 4:00 p.m., New York, New York time, shall be deemed to have been delivered and received on the next Trading Day.No
fractional shares of the Common Stock will be issued upon conversion of this Note. In lieu of any fractional share to which the Holder would otherwise be entitled, the Company will pay to the Holder in cash the amount of the unconverted outstanding and unpaid principal amount of this Note that would otherwise be converted into such fractional share. Upon conversion of this Note pursuant to this Section 2, the Holder shall surrender this Note, duly endorsed,
at the principal offices of the Company or any transfer agent of the Company. At its expense, the Company will, as soon as practicable thereafter, issue and deliver to such Holder, at such principal office, a certificate or certificates for the number of shares to which such Holder is entitled upon such conversion, together with any other securities and property to which the Holder is entitled upon such conversion under the terms of this Note, including a check payable to the Holder for any cash amounts payable
as described herein. Upon conversion of this Note, the Company will be forever released from all of its obligations and liabilities under this Note with regard to that portion of the principal amount being converted including without limitation the obligation to pay such portion of the principal amount.

 

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(d) Limitations on Exercise. This Note shall not be converted by the Holder to the extent (but only to the extent) that, following such conversion, the Holder or
any of its affiliates would beneficially own in excess of 9.99% (the “Maximum Percentage”) of the Outstanding Shares of Common Stock (as defined below). No prior limitation on the number of shares of Common Stock subject to this Note or the inability to convert this Note pursuant to this Section 2 shall have any effect on the applicability of the provisions of this Section
2 with respect to any subsequent determinations of the number of shares subject to the Note or the conversion hereof. For the purpose of this Section 2(e), beneficial ownership and all determinations and calculations (including, without limitation, with respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d) of the Exchange Act. For clarification, the foregoing calculation of beneficial ownership shall take into
account all securities which give rise to beneficial ownership by the Holder or its Affiliates of such Common Stock under such rules and regulations and not solely this Note. The provisions of this Section 2(e) shall be implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) in order to correct this Section 2(e) or any portion hereof
which may be defective or inconsistent with the intended Maximum Percentage beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such Maximum Percentage limitation. The limitations contained in this Section 2(e) shall apply to a successor holder of this Note. “Affiliate” means, with respect to any Person, any other Person that,
directly or indirectly through one or more intermediaries, Controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act. With respect to the Holder, any investment fund or managed account that is managed on a discretionary basis by the same investment manager Holder will be deemed to be an Affiliate of Holder. “Person” means any individual, firm, corporation, partnership,
limited liability company, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof, or other entity of any kind and includes any successor (by merger or otherwise) of such entity. “Outstanding Shares of Common Stock” means, as of any particular measurement time, the sum of (i) the total number of outstanding shares of Common Stock of the Company as of such time,
and (ii) the total number of shares of Common Stock which Holder has the right to acquire beneficial ownership of within sixty days of such measurement time (to the extent not included in (i)), including but not limited to any right to acquire shares of Common Stock through the exercise of any option, warrant or right or through the conversion of another security (including this Note). “Exchange Act” means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Securities and Exchange Commission thereunder.

(e) No Rights as Stockholder. This Note does not by itself entitle the Holder to any voting rights or other rights as a stockholder of the Company. In the absence
of conversion of this Note, no provisions of this Note, and no enumeration herein of the rights or privileges of the Holder shall cause the Holder to be a stockholder of the Company for any purpose.

3. Share Reserve.

(a) Notwithstanding anything herein to the contrary, the Holder acknowledges and agrees that this Note may not be converted nor any shares issued in payment of accrued interest pursuant to Section
1(b), if, at the time of such conversion or share payment, as applicable, the Company does not have a sufficient number of authorized shares of Common Stock pursuant to the Company’s Certificate of Incorporation (the “Certificate of Incorporation”), as in effect as of such date, to cover such issuance. Notwithstanding anything herein to the contrary, the Company shall hold a Special Meeting of Stockholders prior to December 31, 2016 (the
“Meeting”), in order to seek stockholder approval (the “Approval”) to amend its Certificate of Incorporation (the “Amendment”) in order to, among other thing, to provide for a number of authorized shares of Common Stock such that, following the effectiveness of the Amendment, sufficient shares of Common Stock will be available to provide
for the conversion of the Notes in full without regard to any limitation on conversion set forth in the Notes, as well as any possible payment of interest on the Notes in shares of Common Stock as provided in Section 1(b), and the exercise in full of the Warrants without regard to any limitation on exercise set forth in the Warrants.

 

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(b) If the Company does not receive the Approval on or prior to December 31, 2016, then the Holder shall have the right at any time through January 31, 2017, at its option, to require the Company to repurchase all or any portion
of its Notes, or any portion of the Outstanding Amount thereunder at a price equal to the Outstanding Amount elected by the Holder to be redeemed hereunder.

4. Events of Default. Promptly following the Company becoming aware of an occurrence of any Event of Default, the Company shall furnish to the Holder written notice
of the occurrence thereof. The occurrence of any of the following shall constitute an “Event of Default” under this Note:

(a) Failure to Pay. The Company shall fail to pay (i) when due any outstanding and unpaid principal amount on any due date hereunder or (ii) any other
payment required under the terms of this Note on the date due, and in either such case of (i) and (ii), such payment shall not have been made within five (5) business days following the Company’s receipt of Holder’s written notice to the Company of such failure to pay; or

(b) Voluntary Bankruptcy or Insolvency Proceedings. The Company shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian
of itself or of all or a substantial part of its property, (ii) make a general assignment for the benefit of its or any of its creditors, or (iii) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding
commenced against it; or

(c) Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the appointment of a receiver, trustee, liquidator
or custodian of the Company or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to the Company or the debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be challenged, dismissed or discharged within sixty (60) days of commencement;

 

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(d) Dissolution. The dissolution or winding up of the Company;

   (e) Cessation or Suspension of Trading. The Common Stock is (i) no longer listed for trading or authorized for quotation (as the case may be) on a
Trading Market or (ii) suspended from trading on a Trading Market for a period of five (5) consecutive Trading Days or for more than an aggregate of ten (10) Trading Days in any 365-day period;

   (f) Failure to Deliver Shares. The Company shall fail to timely deliver any shares of Common Stock when so required pursuant to the terms of this Note;

(g) Cross-Default. There shall have occurred an “Event of Default” (or other comparable event) under any currently or future existing indebtedness
of the Company and such “Event of Default” (or other comparable event) shall be continuing and not subject to forbearance; or

(h) Breach of Representations, Warranties or Covenants. Any representation or warranty of the Company in the Purchase Agreement, this Note or any other document
or agreement delivered by the Company to the Holder shall not be true and complete, or the Company shall fail to observe or perform any other covenant, obligation, condition or agreement contained in this Note or any other Purchase Agreement or any other document or agreement delivered by the Company to the Holder, and such failure, to the extent curable, shall continue for five (5) Trading Days.

5. Rights of Holder upon Default. Upon the occurrence or existence of any Event of Default (other than an Event of Default referred to in Sections 4(b) or 4(c))
and at any time thereafter during the continuance of such Event of Default, following the applicable cure or grace period, the Holder, may, by written notice to the Company, declare all Outstanding Amounts hereunder to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding. Upon the occurrence or existence of any Event of Default described in Sections 4(b) or 4(c),
immediately and without notice, all Outstanding Amounts payable by the Company hereunder shall automatically become immediately due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding. In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default, and following the applicable cure or grace period, Holder may exercise any other right power or remedy
granted to it by this Note or otherwise permitted to it by law, either by suit in equity or by action at law, or both.

 

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6. Rights Upon a Fundamental Transaction. As a condition of the consummation of any Fundamental Transaction occurring at any time prior to the repayment or conversion
in full of the Outstanding Amount, the Company shall cause any Successor Entity in a Fundamental Transaction to assume in writing all of the obligations of the Company under this Note in accordance with the provisions of this Section 6 pursuant to written agreements in form and substance reasonably satisfactory to the Holder, including agreements to deliver to the Holder in exchange for this Note a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance
to this Note, including, without limitation, which is, at the time of consummation of the Fundamental Transaction, convertible into a corresponding number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon conversion of this Note (without regard to any limitations on the conversion of this Note) prior to such Fundamental Transaction, and with a conversion price equal to the Conversion Price (but taking into account the relative value of the shares of Common Stock
pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Note immediately prior to the consummation of such Fundamental Transaction). Upon the consummation of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of the applicable Fundamental Transaction, the provisions
of this Note referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Note with the same effect as if such Successor Entity had been named as the Company herein. Notwithstanding anything to the contrary, the Company or any Successor Entity shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the
Fundamental Transaction, purchase all or any portion of the Outstanding Amount under this Note from the Holder by paying to the Holder an amount of cash equal to the applicable Prepayment Amount set forth is Section 1(c) above. The foregoing provisions of this Section 6 shall similarly apply to successive Fundamental Transactions.

(a) Definitions.

(i) “Fundamental Transaction" means that the Company shall, directly or indirectly, in one or more related transactions, (i) consolidate or merge with or into (whether or not
the Company is the surviving corporation) another Person or Persons, if the holders of the Voting Stock (not including any shares of Voting Stock held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such consolidation or merger) immediately prior to such consolidation or merger shall hold or have the right to direct the voting of less than 50% of the Voting Stock or such voting securities of such other surviving Person immediately following such transaction,
or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company (other than the sale of IPSA International, Inc., the Company’s wholly-owned subsidiary (“IPSA”), or any assets related to IPSA) to another Person, or (iii) allow another Person to make a purchase, tender or exchange offer that is accepted by the holders of more than the 50% of the outstanding shares of Voting Stock
of the Company (not including any shares of Voting Stock held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer) (other than the acquisition of the Voting Stock of IPSA), or (iv) consummate a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than
the 50% of the outstanding shares of Voting Stock of the Company (not including any shares of Voting Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock purchase agreement or other business combination) (other than a sale of the Voting Stock of IPSA), (v) reorganize, recapitalize or reclassify its Common Stock (other than pursuant to the Amendment, if approved) or (vi) any "person" or "group" (as these terms are
used for purposes of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) is or shall become the "beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock.

 

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(ii) “Successor Entity” means the Person formed by, resulting from or surviving any Fundamental Transaction or the Person with which such Fundamental Transaction shall
have been entered into.

(iii) “Voting Stock" of a Person means capital stock of such Person of the class or classes pursuant to which the holders thereof have the general voting power to elect, or
the general power to appoint, at least a majority of the board of directors, managers or trustees of such Person (irrespective of whether or not at the time capital stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).

7. Negative Covenants. Until the Note has been converted, redeemed or otherwise satisfied in accordance with their terms, the Company shall not and, the Company
shall not permit any of its subsidiaries, without the prior written consent of the Holder to, directly or indirectly

(a) incur or guarantee, assume or suffer to exist any indebtedness senior or pari passu to the Note;

(b) allow or suffer to exist any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by the Company or any of its subsidiaries
(collectively, "Liens") other than (i) the Liens contemplated by the Security Agreement (as defined in the Purchase Agreement), (ii) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with United States generally accepted accounting principles, consistently applied during the periods involved, (iii) any statutory Lien arising in the ordinary course
of business by operation of law with respect to a liability that is not yet due or delinquent, (iv) any Liens created by that certain Factoring and Security Agreement by and between IPSA and Advance Payroll Funding Ltd., as amended, and any similar agreements and (v) any Lien created by operation of law, such as materialmen's liens, mechanics' liens and other similar liens, arising in the ordinary course of business with respect to a liability that is not yet due or delinquent or that are being contested in good
faith by appropriate proceedings, (v) Liens (A) upon or in any equipment acquired or held by the Company or any of its subsidiaries to secure the purchase price of such equipment or indebtedness incurred solely for the purpose of financing the acquisition or lease of such equipment, or (B) existing on such equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon, and the proceeds of such equipment, (vi) Liens incurred in connection
with the extension, renewal or refinancing of the indebtedness secured by Liens of the type described in clause (v) above, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the Indebtedness being extended, renewed or refinanced does not increase, (vii) leases or subleases and licenses and sublicenses granted to others in the ordinary course of the Company's business, not interfering in any material respect with
the business of the Company and its subsidiaries taken as a whole, (viii) Liens in favor of customs and revenue authorities arising as a matter of law to secure payments of custom duties in connection with the importation of goods, and (ix) Liens arising from judgments, decrees or attachments in circumstances;

 

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(c) redeem, defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or in part, whether by way of open market purchases, tender offers, private transactions or otherwise),
all or any portion of (i) any indebtedness of the Company which is junior in priority to the Note or (ii) any indebtedness if at the time such payment is due or is otherwise made or, after giving effect to such payment, an event constituting, or that with the passage of time and without being cured would constitute, an Event of Default has occurred and is continuing, in each case, whether by way of payment in respect of principal of (or premium, if any) or interest on, such indebtedness;

(d) redeem or repurchase for cash the Common Stock;

(e) declare or pay any cash dividend on the Common Stock; or

(f) enter into any agreement that conflicts with any provision set forth in the Purchase Agreement or this Note and/or restricts or prohibits the Company's compliance with any provision of the Purchase Agreement or this Note.

8. Transfer; Successors and Assigns. The terms and conditions of this Note shall inure to the benefit of and be binding upon
the respective successors and permitted assigns of the parties. Notwithstanding the foregoing, neither the Company nor the Holder may assign or transfer any of its obligations or rights under this Note without the prior written approval of the other party hereto. Subject to the preceding sentence, this Note may be transferred only upon surrender of the original Note for registration of transfer, duly endorsed, or accompanied by a duly executed written instrument of transfer in form satisfactory to the Company.
Thereupon, a new note for the same principal amount and interest will be issued to, and registered in the name of, the transferee. Interest and principal are payable only to the Holder of this Note. The Company shall maintain at its offices a register for the recordation of the names and addresses of each Holder and assignee or transferee of such Holder, and the principal amounts (and stated interest) under the Note owing to, the Holder or any such assignee or transferee pursuant to the terms hereof from time
to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Company, the Holder and any such assignee or transferee shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Holder for all purposes hereunder.

 

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9. Governing Law. This Note and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto
shall be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law.

10. Notices. All notices and other communications given or made pursuant to this Note shall be in writing and shall be deemed
effectively given upon the earlier of actual receipt or: (i) personal delivery to the party to be notified, (ii) when sent, if sent by electronic mail or facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, provided that in either case it is followed promptly by a confirming copy of the notice given via another authorized means for that recipient, (iii) two (2) business days after deposit with a nationally recognized
overnight courier, freight prepaid for delivery, specifying next business day delivery, with written verification of receipt, addressed to the party to be notified at such party’s address as set forth on the signature page hereto, or as subsequently modified by written notice, and if to the Company, with a copy to DLA Piper LLP (US), 4365 Executive Drive, Suite 1100, San Diego, CA, 92121, Attention: Randy Socol.

11. Amendments and Waivers. Any term of this Note may be amended only with the written consent of the Company and the Holder.
Any amendment or waiver effected in accordance with this Section 11 shall be binding upon the Company, the Holder and each transferee of the Note. No consideration shall be offered or paid to the Holder or any holder of any Secured Convertible Promissory Note (other than this Note) issued by the Company pursuant to the Purchase Agreement (the "Other Notes") to amend or consent to a waiver or modification of any provision
of this Note and/or the Other Notes unless the same consideration is also offered to the Holder and all holders of Other Notes.

12. Counterparts; Electronic Delivery. This Note may be executed in two (2) counterparts, each of which shall be deemed an
original, but both of which together shall constitute one and the same instrument. Counterparts may be executed electronically and delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

13. Stockholders, Officers and Directors Not Liable. In no event shall any stockholder, officer or director of the Company
be liable for any amounts due or payable pursuant to this Note.

 

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The Company has caused this Note to be issued as of the date first written above.

 

COMPANY:

 

ROOT9B TECHNOLOGIES, INC.

 

 

By:        

Name:

Title:

 

Address:

 

 

 

AGREED TO AND ACCEPTED:

 

 

By:                                                       

Name:

Title:

 

Address:

 

 

 

 

 -12-Blueprint

 

 

 Exhibit 10.3

 

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS WARRANT NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE REGISTERED HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.

 

Warrant No.: 2016-_____  Number of Shares: ________

Date of Issuance: __________, 2016  (subject to adjustment)

______________________________________________________________________________________

 

ROOT9B TECHNOLOGIES, INC.

A Delaware Corporation

______________________________________________________________________________________

 

Warrant

 

root9B Technologies, Inc., a Delaware corporation (the “Company”), for value received, hereby certifies that _____________ (the “Initial Holder”), or its
registered assigns (the Initial Holder or such registered assigns shall be referred to as the “Registered Holder”), is entitled, subject to the terms set forth below, to purchase from the Company at any time on or after the Exercise Date (as hereinafter defined) and on or before the Expiration Date (as hereinafter defined), in whole or in part, ________ shares (as adjusted from time to time pursuant
to the provisions of this Warrant) of the Company’s common stock, $0.001 par value per share (“Common Stock”), at an Exercise Price equal to $0.80 per share (the “Exercise Price”). The shares purchasable upon exercise of this Warrant are sometimes hereinafter referred to as the “Warrant
Stock”. “Exercise Date” means any date on or after February ___, 2017 (the “Initial Exercise Date”) and prior to the Expiration Date on which the Registered Holder elects by written notice to the Company to exercise this Warrant. This Warrant is one of a series of Warrants issued pursuant to that certain Securities Purchase Agreement, dated
as of ________, 2016 (the “Purchase Agreement”), by and among the Company and the investors (the “Holders”) referred to therein, as amended from time to time. Capitalized terms used but not defined herein shall have the meaning set forth in the Purchase Agreement.

1. Exercise.

(a) Manner of Exercise. This Warrant may be exercised by the Registered Holder, in whole or in part with the purchase/exercise form
appended hereto as Exhibit A (the “Notice of Exercise”) duly executed by such Registered Holder or by such Registered Holder’s duly authorized attorney, at the principal office of the Company, or at such other office or agency as the Company may designate in writing, accompanied by payment in full of the Exercise Price payable in respect of the number of shares of Warrant Stock
purchased upon such exercise. The Exercise Price may be paid by cash, check, or wire transfer in immediately available funds.

(b) Effective Time of Exercise. Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of
business as of the date the Warrant has been exercised pursuant to a Notice of Exercise, with payment to the Company of the Exercise Price and all transfer taxes required to be paid by the Holder, if any, prior to the issuance of such shares, having been paid. At such time, the person or persons in whose name or names any certificates for Warrant Stock shall be issuable upon such exercise as provided in Section 1(c) below shall be deemed to have become the holder or holders of record of the Warrant Stock represented
by such certificates.

 

 

 

(c) Delivery to Holder. As soon as practicable after the exercise of this Warrant, in whole or in part, and in any event within ten
(10) calendar days thereafter, the Company at its expense will cause to be issued in the name of, and delivered to, the Registered Holder, or as such Registered Holder (upon payment by such Registered Holder of any applicable transfer taxes) may direct, certificates for Warrant Stock purchased hereunder which shall be transmitted by the Company’s transfer agent to the Registered Holder by (i) crediting the account of the Registered Holder’s broker with the Depository Trust Company through its Deposit
Withdrawal Agent Commission (“DWAC”) system if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the resale of the Warrant Stock by the Registered Holder or (B) the Warrant Stock is eligible for resale without volume or manner-of-sale limitations pursuant to Rule 144 of the Act, as amended from time to time, or any similar rule or regulation hereafter adopted by
the SEC having substantially the same effect as such Rule (“Rule 144”), or (ii) if the conditions specified in (i)(A) or (i)(B) are not satisfied, by physical delivery to the address specified by the Registered Holder in the Notice of Exercise.

(d) Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of the Registered Holder, at the time of delivery
of the certificate or certificates representing the Warrant Stock, deliver to the Registered Holder a new Warrant evidencing the rights of Registered Holder to purchase the unpurchased Warrant Stock called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant. The Registered Holder shall not be required to deliver the original of this Warrant in order to effect an exercise hereunder.

(e) Limitations on Exercise. This Warrant shall not be exercisable by the Registered Holder to the extent (but only to the extent) that, following exercise, the Registered Holder
or any of its Affiliates would beneficially own in excess of 9.99% (the “Maximum Percentage”) of the Outstanding Shares of Common Stock. No prior limitation on the number of shares of Common Stock subject to this Warrant or the inability to exercise this Warrant pursuant to this Section 1(e) shall have any effect on the applicability of the provisions of this Section 1(e) with respect to any subsequent determinations of the number
of shares subject to a Warrant or the exercisability hereof. For the purpose of this Section 1(e), beneficial ownership and all determinations and calculations (including, without limitation, with respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d) of the Exchange Act. For clarification, the foregoing calculation of beneficial ownership shall take into account all securities which give rise to beneficial ownership by the Registered Holder or its Affiliates of
such Common Stock under such rules and regulations and not solely this Warrant. The provisions of this Section 1(e) shall be implemented in a manner otherwise than in strict conformity with the terms of this Section 1(e) in order to correct this Section 1(e) or any portion hereof which may be defective or inconsistent with the intended Maximum Percentage beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such Maximum Percentage
limitation. The limitations contained in this Section 1(e) shall apply to a successor holder of this Warrant. “Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act. With respect to the Registered Holder, any
investment fund or managed account that is managed on a discretionary basis by the same investment manager Registered Holder will be deemed to be an Affiliate of Registered Holder. “Person” means any individual, firm, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof, or other entity of
any kind and includes any successor (by merger or otherwise) of such entity. “Outstanding Shares of Common Stock” means, as of any particular measurement time, the sum of (i) the total number of outstanding shares of Common Stock of the Company as of such time, and (ii) the total number of shares of Common Stock which Registered Holder has the right to acquire beneficial ownership of within sixty days of such measurement time (to the
extent not included in (i)), including but not limited to any right to acquire shares of Common Stock through the exercise of any option, warrant or right (including this Warrant) or through the conversion of another security. “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission thereunder.

2. Adjustments.

(a) Stock Splits and Dividends. If outstanding shares of the Company’s Common Stock shall be subdivided into a greater number
of shares or a dividend in Common Stock shall be paid in respect of Common Stock, then the Exercise Price in effect immediately prior to such subdivision or at the record date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced. If outstanding shares of Common Stock shall be combined into a smaller number of shares, then the Exercise Price in effect immediately prior to such combination shall, simultaneously
with the effectiveness of such combination, be proportionately increased. When any adjustment is required to be made in the Exercise Price, the number of shares of Warrant Stock purchasable upon the exercise of this Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of this Warrant immediately prior to such adjustment, multiplied by the Exercise Price in effect immediately prior to such adjustment, by (ii) the Exercise
Price in effect immediately after such adjustment.

 

2

 

 

(b) Reclassification, Etc. As a condition of the consummation of any Fundamental Transaction occurring at any time while any portion
of this Warrant remains outstanding, the Company shall cause any Successor Entity in such Fundamental Transaction to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 2(b) pursuant to written agreements in form and substance reasonably satisfactory to the Holder, including agreements to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and
substance to this Warrant, including, without limitation, which is, at the time of consummation of the Fundamental Transaction, exercisable into a corresponding number of shares of capital stock of the Successor Entity equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price equal to the Exercise Price (but taking into account the relative
value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction). Upon the consummation of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of the applicable
Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein. Notwithstanding anything to the contrary, the Company or any Successor Entity shall, at the Holder’s option, exercisable at any time concurrently with,
or within 30 days after, the consummation of the Fundamental Transaction, (a) purchase all or any portion of this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value of the remaining unexercised portion of such Warrant on the date of such Fundamental Transaction or (b) deliver, in exchange for surrender of this Warrant, the same amount and kind of securities, cash or property as such Holder would have been entitled to receive upon the occurrence of such Fundamental
Transaction if it had been, immediately prior to such Fundament Transaction, the holder of the number of shares of Warrant Stock then issuable upon exercise in full of the Warrant (without regard to any limitations on the exercise of this Warrant).

"Fundamental Transaction" means that the Company shall, directly or indirectly, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Person or Persons, if the holders of the Voting Stock (not including
any shares of Voting Stock held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such consolidation or merger) immediately prior to such consolidation or merger shall hold or have the right to direct the voting of less than 50% of the Voting Stock or such voting securities of such other surviving Person immediately following such transaction, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or
assets of the Company (other than the sale of IPSA International, Inc., the Company’s wholly-owned subsidiary (“IPSA”), or any assets related to IPSA) to another Person, or (iii) allow another Person to make a purchase, tender or exchange offer that is accepted by the holders of more than the 50% of the outstanding shares of Voting Stock of the Company (not including any shares of Voting Stock held by the Person or Persons making
or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer) (other than the acquisition of the Voting Stock of IPSA), or (iv) consummate a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than the 50% of the outstanding shares of Voting Stock of the Company (not including any shares of
Voting Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock purchase agreement or other business combination) (other than a sale of the Voting Stock of IPSA), (v) reorganize, recapitalize or reclassify its Common Stock (other than pursuant to the Amendment, if approved) or (vi) any "person" or "group" (as these terms are used for purposes of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended)
is or shall become the "beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock.

 

3

 

 

“Successor Entity” means the Person formed by, resulting from or surviving any Fundamental Transaction or the Person with which such Fundamental Transaction shall have been entered into.

"Voting Stock" of a Person means capital stock of such Person of the class or classes pursuant to which the holders thereof have the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers or trustees of such Person (irrespective
of whether or not at the time capital stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).

(c) Adjustment Certificate. When any adjustment is required to be made in the Warrant Stock or the Exercise Price pursuant to this Section 2, the Company shall promptly mail to the
Registered Holder a certificate setting forth (i) a brief statement of the facts requiring such adjustment, (ii) the Exercise Price after such adjustment and (iii) the kind and amount of stock or other securities or property into which this Warrant shall be exercisable after such adjustment.

3. Transfers.

(a) Unregistered Security.
Each Registered Holder acknowledges that this Warrant and the Warrant Stock have not been registered under the Securities Act of 1933, as amended (the “Act”), and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of this Warrant or any Warrant Stock issued upon its exercise in the absence of (i) an effective registration statement under the Act as to this Warrant or such Warrant Stock and registration
or qualification of this Warrant or such Warrant Stock under any applicable U.S. federal or state securities law then in effect or (ii) an opinion of counsel, reasonably satisfactory to the Company, that such registration or qualification is not required. Each certificate or other instrument for Warrant Stock issued upon the exercise of this Warrant shall bear a legend substantially to the foregoing effect.

(b) Transferability. Subject to the provisions of Section 3(a) hereof, this Warrant
and all rights hereunder are transferable, in whole or in part, upon surrender of the Warrant with a properly executed assignment (in the form of Exhibit B hereto) at the principal office of the Company. The Company shall, upon receipt of a transfer notice and appropriate documentation, register any transfer on the Company’s warrant register; provided, however, that the Company may require, as a condition to such transfer, an opinion reasonably
satisfactory to the Company that said transfer does not require registration pursuant to one or more exemptions provided under the Act.

(c) Warrant Register. The Company will maintain a register containing the names and addresses of the Registered Holders of this Warrant.
Until any transfer of this Warrant is made in the warrant register, the Company may treat the Registered Holder of this Warrant as the absolute owner hereof for all purposes; provided, however, that if this Warrant is properly assigned in blank, the Company may (but shall not be required to) treat the bearer hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary. Any Registered
Holder may change such Registered Holder’s address as shown on the warrant register by written notice to the Company requesting such change.

4. No Impairment. The Company will not, by amendment of its charter or through reorganization, consolidation, merger, dissolution, sale of assets or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holder of this Warrant against impairment. Notwithstanding any other provision of this Agreement to the contrary (including by way of implication), the Company (a) will not increase the par value of any shares of Common Stock receivable on
the exercise of any Warrant above the amount payable therefor on such exercise and (b) will take all such action as may be necessary or appropriate so that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on the exercise of any Warrant. The Company covenants and agrees that it shall not, without the prior written consent of the Registered Holder, enter into or agree to become subject to any term, condition, provision or agreement that would restrict in any material
way the performance of the Company’s obligations under this Agreement. The Company represents to each Holder that the Company is not subject to or bound by any such term, condition, provision or agreement as of the date hereof. The Company further covenants and agrees that it shall not, without the prior written consent of the Registered Holder, which shall not be unreasonably withheld, conditioned or delayed, take any action or agree to take any action that would cause or result in or could reasonably
be expected to cause or result in any Qualified Purchaser (as defined in that certain Amended and Restated Securities Purchase Agreement of even date herewith, pursuant to which this Warrant was issued) beneficially owning more than the Maximum Percentage of the Outstanding Shares of Common Stock.).

 

4

 

 

5. Termination. This Warrant (and the right to purchase securities upon exercise hereof) shall terminate five (5) years from the date of issuance of this Warrant (the “Expiration
Date”).

6. Notices of Certain Transactions. In case:

(a) the Company shall take a record of the holders of its Common Stock (or other stock or securities at the time deliverable upon the exercise of this Warrant) for the purpose of entitling or enabling them to receive any dividend
or other distribution, or to receive any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, or

(b) of any reclassification of the capital stock of the Company, or

(c) of the voluntary or involuntary dissolution, liquidation or winding-up of the Company ((a), (b) and (c) of this Section 6 being referred to herein as a “Liquidation
Event”), then, and in each such case, the Company will mail or cause to be mailed to the Registered Holder of this Warrant a notice specifying, as the case may be, (i) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reclassification, dissolution, liquidation or winding-up is to take place, and the time, if any is to be
fixed, as of which the holders of record of Common Stock (or such other stock or securities at the time deliverable upon such reclassification, dissolution, liquidation or winding-up) are to be determined. Such notice shall be mailed at least ten (10) days prior to the record date or effective date for the event specified in such notice. Failure to so notify a Registered Holder shall not invalidate any such action.

7. Reservation of Stock.

(a) Notwithstanding anything herein to the contrary, the Registered Holder acknowledges and agrees that this Warrant may not be exercised if, at the time of such exercise, the Company does not have a sufficient number of authorized
shares of Common Stock pursuant to the Company’s Certificate of Incorporation (the “Certificate of Incorporation”), as in effect as of such date, to cover such issuance. Notwithstanding anything herein to the contrary, the Company shall hold a Special Meeting of Stockholders prior to December 31, 2016 (the “Meeting”), in order to seek stockholder approval
(the “Approval”) to amend its Certificate of Incorporation (the “Amendment”) in order to, among other thing, to provide for a number of authorized shares of Common Stock such that, following the effectiveness of the Amendment, sufficient shares of Common Stock will be available to provide for the exercise in full of the Warrants without regard to any limitation
on exercise set forth in the Warrants. Following, and subject to, the effectiveness of the Amendment, the Company will at all times reserve and keep available out of its authorized but unissued stock, solely for the issuance and delivery upon the exercise of this Warrant and other similar Warrants, and free of preemptive rights, such number of its duly authorized shares of Common Stock as from time to time shall be issuable upon the exercise in full of this Warrant and other similar Warrants without regard to
any limitation on exercise set forth herein or therein. All of the shares of Common Stock issuable upon exercise of this Warrant and other similar Warrants, when issued and delivered in accordance with the terms hereof and thereof, will be duly authorized, validly issued, fully paid and non-assessable, subject to no lien or other encumbrance other than restrictions on transfer arising under applicable securities laws and restrictions imposed by Section 3 hereof.

(b) If the Company does not receive the Approval on or prior to December 31, 2016, then the Holder shall have the right at any time through January 31, 2017, at its option, to require the Company to purchase all or any portion
of this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value of the remaining unexercised portion of such Warrant on December 31, 2016. 

 

5

 

 

8. Exchange of Warrants. Upon the surrender by the Registered Holder of any Warrant or Warrants, properly endorsed, to the Company at the principal office of the Company, the Company
will, subject to the provisions of Section 3 hereof, issue and deliver to or upon the order of such Registered Holder, at the Company’s expense, a new Warrant or Warrants of like tenor, in the name of such Registered Holder or as such Registered Holder (upon payment by such Registered Holder of any applicable transfer taxes) may direct, calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face or faces of the Warrant or Warrants so surrendered.

9. Replacement of Warrants. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and (in the case of loss,
theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor.

10. Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, electronic mail or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder
shall be deemed effective (a) upon hand delivery, electronic mail or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, if sent by electronic mail with confirmed receipt, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.

If to the Company:              root9B Technologies, Inc.

4521 Sharon Road #300

Charlotte, NC 28211-3627

Attn: Joseph J. Grano, Jr., Chief Executive Officer

 

If to the Registered Holder: 

At the address provided by the Registered Holder.

11. No Rights as Stockholder. Until the exercise of this Warrant, the Registered Holder of this Warrant shall not have or exercise any rights by virtue hereof as a stockholder of
the Company, and this Warrant shall not impose on the Registered Holder any obligation to purchase any securities or impose any liability on such Registered Holder as a stockholder whether such obligation or liabilities are asserted by the Company or creditors of the Company.

12. Representations of Registered Holder. The Registered Holder hereby represents and acknowledges to the Company that:

(a) It understands that this Warrant and the Warrant Stock will be “restricted securities” as such term is used in the rules and regulations under the Act and that such
securities have not been and will not be registered under the Act or any state securities law, and that such securities must be held indefinitely unless registration is effected or transfer can be made pursuant to appropriate exemptions;

 

6

 

 

(b) the Registered Holder has read, and fully understands, the terms of this Warrant set forth on its face and the attachments hereto, including the restrictions on transfer contained herein;

(c) the Registered Holder is purchasing for investment for its own account and not with a view to or for sale in connection with any distribution of this Warrant and the Warrant Stock and it has no intention of selling such securities
in a public distribution in violation of the federal securities laws or any applicable state securities laws; provided that nothing contained herein will prevent the Registered Holder from transferring such securities in compliance with the terms of this Warrant and the applicable federal and state securities laws; and

(d) the Company may affix the following legend (in addition to any other legend(s), if any, required by applicable state corporate and/or securities laws) to certificates for shares issued upon exercise of this Warrant:

“These securities have not been registered under the Securities Act of 1933, as amended. They may not be sold, offered for sale, pledged or hypothecated in the absence of a registration statement in effect with respect to the securities under such Act or an opinion of counsel satisfactory to the Company that such registration is not required
or unless sold pursuant to Rule 144 of such Act.”

13. No Fractional Shares. No fractional shares will be issued in connection with any exercise hereunder. In lieu of any fractional shares which would otherwise be issuable, the Company
shall pay cash equal to the product of such fraction multiplied by the fair market value of one such share on the date of exercise, as determined in good faith by the Company’s Board of Directors.

14. Securities Law Reporting Requirements. The Company covenants and agrees that it will comply with the reporting requirements of Sections 13 and 15(d) of the Exchange Act and will
comply with all other public information reporting requirements of the Securities and Exchange Commission (including Rule 144 promulgated under the Securities Act) from time to time in effect and applicable to the Company and relating to the availability of an exemption from the Securities Act for the sale of restricted securities.

15. Amendment or Waiver. Any term of this Warrant may be amended or waived upon written consent of the Company and the Registered Holder. No consideration shall be offered or paid
to the Registered Holder or to the initial holder or registered assigns of any warrant to purchase Common Stock (other than this Warrant) issued by the Company pursuant to the Purchase Agreement (the "Other Warrants") to amend or consent to a waiver or modification of any provision of this Warrant and/or the Other Warrants unless the same consideration is also offered to the Registered Holder and all initial holders or registered assigns of the Other Warrants.

16. Headings. The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.

17. Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws
of the State of Delaware, without regard to the principles of conflicts of law thereof. Each party agrees that all proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement shall be commenced exclusively in courts of the State of Delaware (the “Delaware Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the Delaware Courts for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any proceeding, any claim that it is not personally subject to the jurisdiction of any such Delaware Court, or that such proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such 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. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

[Remainder of Page Intentionally Left Blank]

 

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

ROOT9B TECHNOLOGIES, INC. , a Delaware corporation

Signed:                                                          

By:                 

Title:

 

 

Company Address:              root9B Technologies, Inc.

4521 Sharon Road #300

Charlotte, NC 28211-3627

Attn: Joseph J. Grano, Jr., Chief Executive Officer

 

 

 

 

 

 

[SIGNATURE PAGE TO ROOT9B TECHNOLOGIES COMMON STOCK WARRANT]

 

 

EXHIBIT A

PURCHASE/EXERCISE FORM

To:            ROOT9B TECHNOLOGIES, INC.                                                                                                                                                                                                                                                                                       
Dated:_________________

The undersigned holder, pursuant to the provisions set forth in the attached Warrant No. ___, hereby exercises the right to purchase _________________ shares of Common Stock covered by such Warrant. Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

1.           Form of Exercise Price. The undersigned holder intends that payment of the Exercise Price shall be made as:

____________ a “Cash Exercise” with respect to _________________ shares of Warrant Stock; and

2.           Payment of Exercise Price. The Registered Holder shall pay the aggregate Exercise Price in the sum of $___________________ to the Company in accordance with the terms of the Warrant.

The undersigned acknowledges that it has reviewed the representations and warranties contained in Section 13 of the Warrant and by its signature below hereby makes such representations and warranties to the Company.

Signature:                                                                                       

Name (print):                                                                     
            

Title (if applic.)                                                                     
         

Company (if applic.):                                                                      

 

 

 

 

EXHIBIT B

ASSIGNMENT FORM

FOR VALUE RECEIVED, _________________________________________ hereby sells, assigns and transfers all of the rights of the undersigned under the attached Warrant No. ___ with respect to the number of shares of Common Stock covered thereby set forth below, to:

	
  
Name of Assignee

  
	
  
Address/Fax Number

  
	
  
No. of Shares

  

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

 

 

	
  
	
  
	
  
	
  

	
Dated:                                                  

	

	
Signature:                                                                  

	
  

	
  
	
  
	
                                                                                   

	
  

	
  
	
  
	
                                                                    

	
  

 

 

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