Document:

EXHIBIT 4.05

 

NEITHER
THE ISSUANCE AND SALE OF
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
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
IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT. NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY THE SECURITIES.

 

 

	Principal
Amount: $63,000.00	 Issue
Date: July 25, 2017
	Purchase Price: $63,000.00	 

 

 

CONVERTIBLE
PROMISSORY NOTE

 

FOR
VALUE RECEIVED, MOUNTAIN HIGH ACQUISITIONS CORP., a Colorado
corporation (hereinafter called the “Borrower”), hereby promises to pay to
the order of POWER UP LENDING GROUP LTD., a Virginia
corporation, or registered assigns (the “Holder”) the sum of $63,000.00
together with any interest as set
forth herein, on April 30, 2018 (the
“Maturity Date”), and to pay interest on the
unpaid principal balance hereof at the rate of twelve
percent (12%)(the “Interest Rate”) per annum
from the date hereof (the “Issue Date”) until the same becomes due and
payable, whether at
maturity or upon acceleration or by
prepayment or otherwise. This Note may not be
prepaid in whole or in part except as otherwise
explicitly set forth herein. Any amount of principal or interest
on this Note which is not
paid when due shall bear interest at the rate of twenty two percent (22%) per
annum from the due date thereof until the same is paid (“Default Interest”).
Interest shall be computed on the basis of a 365
day year and the actual number of days elapsed. Interest shall commence
accruing on the Issue Date but
shall not be payable until the Note becomes payable (whether at Maturity
Date or upon acceleration or by
prepayment). All payments due hereunder (to the extent not
converted into common stock, $0.01 par value per share (the “Common Stock”) in accordance with the terms
hereof) shall be made in lawful
money of the United States of America.
All payments shall be made at such
address as the Holder shall hereafter give to the Borrower by written notice made
in accordance with the provisions
of this Note. Each capitalized term used herein, and not otherwise
defined, shall have the meaning
ascribed thereto in that certain Securities Purchase Agreement dated the date hereof, pursuant to which this Note was
originally issued (the “Purchase Agreement”).

 

This
Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive
rights or other similar rights of shareholders
of the Borrower and will not impose personal
liability upon the holder thereof.

 

The following
terms shall apply to this Note:

 

ARTICLE
I. CONVERSION RIGHTS

 

1.1                Conversion
Right. The Holder shall have the
right from time to time, and at any
time during the period beginning on the
date which is one hundred eighty (180) days following the date
of this Note and ending on the
later of: (i) the Maturity Date and (ii) the date of payment
of the Default Amount (as defined in
Article III), each in respect of the remaining outstanding principal
amount of this Note to convert
all or any part of the outstanding
and unpaid principal amount of this Note into fully paid and
non-assessable shares of Common Stock, as such Common Stock exists on the
Issue Date, or any shares of capital
stock or other securities of the
Borrower into which such Common Stock shall hereafter be changed or reclassified at the
conversion price (the
“Conversion Price”) determined as provided herein (a “Conversion”); provided, however,
that in no event shall the Holder be entitled to convert any portion of this
Note in excess of that portion
of this Note upon
conversion of which the sum
of (1) the number of shares of Common Stock beneficially
owned by the Holder and its
affiliates (other than shares of Common Stock which may be
deemed beneficially owned through the ownership of the
unconverted portion of the Notes or the
unexercised or unconverted portion of any
other security of the Borrower subject
to a limitation on conversion
or exercise analogous to the limitations contained herein) and (2) the number of
shares of Common Stock issuable upon
the conversion of the portion of this Note with
respect to which the determination of this proviso is being made, would result
in beneficial ownership by the Holder and its
affiliates of more than 4.99% of the
outstanding shares of Common Stock. For purposes of the
proviso to the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended
(the “Exchange Act”), and Regulations 13D-G thereunder, except as
otherwise provided in clause (1) of such proviso. The beneficial
ownership limitations on conversion as
set forth in the section may NOT be
waived by the Holder.
The number of shares of Common Stock to be issued upon each conversion
of this Note shall be determined
by dividing the Conversion Amount (as defined below) by the applicable Conversion
Price then in effect on the date
specified in the notice of conversion, in the form attached hereto as
Exhibit A (the “Notice of Conversion”),
delivered to the Borrower by the Holder in accordance with Section 1.4 below;
provided that the Notice of Conversion
is submitted by facsimile or e-mail (or by other
means resulting in, or reasonably expected to result
in, notice) to the Borrower before
6:00 p.m., New York, New York time on such
conversion date (the “Conversion Date”); however, if the Notice of Conversion
is sent after 6:00pm, New York, New York time the Conversion Date shall be the
next business day. The term “Conversion Amount” means, with respect to any conversion
of this Note, the sum
of (1) the principal amount of this
Note to be converted in such conversion plus (2) at the Holder’s
option, accrued and unpaid
interest, if any, on such
principal amount at the interest rates provided
in this Note to the Conversion Date, plus (3) at the Holder’s
option, Default Interest, if any, on the amounts referred to in
the immediately preceding clauses
(1) and/or (2) plus (4) at the
Holder’s option, any amounts owed to the Holder pursuant to Sections 1.4 hereof.

 

1.2               Conversion
Price. The conversion price (the
“Conversion Price”) shall equal the Variable Conversion Price (as defined
herein) (subject to equitable adjustments by the
Borrower relating to the Borrower’s securities or the securities
of any subsidiary of the Borrower, combinations, recapitalization,
reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean 61%
multiplied by the Market Price (as defined herein) (representing a discount
rate of 39%). “Market Price” means the average
of the lowest one (1) Trading Price (as
defined below) for the Common Stock during the fifteen (15) Trading
Day period ending on the latest
complete Trading Day prior to the Conversion Date. “Trading Price” means, for any security as of any
date, the closing bid price on the OTCQB, OTCQX, Pink Sheets electronic
quotation system or applicable
trading market (the “OTC”) as reported by a reliable reporting
service (“Reporting Service”) designated by the Holder
(i.e. Bloomberg) or, if the OTC is
not the principal trading
market for such security, the closing bid price of such
security on the principal securities
exchange or trading market where such security is listed or traded
or, if no closing bid price of such
security is available in any
of the foregoing manners, the
average of the closing bid prices of any market
makers for such security that are listed
in the “pink sheets”. If
the Trading Price cannot be calculated for such security on such date in the
manner provided above, the Trading
Price shall be the fair market value
as reasonably determined by the
Borrower. “Trading Day” shall
mean any day on which the Common
Stock is tradable for any
period on the OTC, or on the
principal securities exchange or other
securities market on which the
Common Stock is then being
traded.

 

1.3              
Authorized Shares.The Borrower covenants that
during the period the conversion
right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient
number of shares, free from preemptive
rights, to provide for the issuance of Common
Stock upon the full conversion of this Note issued pursuant to the
Purchase Agreement. The Borrower is required
at all times to have authorized and reserved six times the number
of shares that would be issuable upon full conversion of the
Note (assuming that the 4.99% limitation set forth
in Section 1.1 is not in effect)(based on the
respective Conversion Price of the Note
(as defined in Section 1.2) in effect
from time to time, initially 6,135,367)(the “Reserved Amount”). The Reserved Amount
shall be increased (or decreased with the written consent of the
Holder) from time to time in accordance with
the Borrower’s obligations hereunder. The Borrower
represents that upon issuance, such shares will be duly
and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any
securities or make any change to its capital
structure which would change the number
of shares of Common Stock into which
the Notes shall be convertible at
the then current Conversion Price, the Borrower shall at the same time make proper provision
so that thereafter there shall be a sufficient
number of shares of Common Stock authorized
and reserved, free from preemptive rights, for conversion of the
outstanding Note. The Borrower (i) acknowledges
that it has irrevocably instructed its transfer agent to
issue certificates for the Common Stock issuable upon conversion of this Note, and
(ii) agrees that its issuance of this Note
shall constitute full authority to its officers and agents who are
charged with the duty of executing stock certificates
to execute and issue the necessary certificates for shares of Common
Stock in accordance with the terms and conditions of this Note.

 

If,
at any time the
Borrower does not maintain the Reserved Amount
it will be considered an Event of Default under Section 3.2 of the Note.

 

		1.4	Method of Conversion.

 

(a)               
Mechanics of Conversion.
As set forth in Section 1.1 hereof, from time to time,
and at any time during the period beginning on the date which is one hundred
eighty (180) days following the date of this
Note and ending on the later of: (i)
the Maturity Date and (ii) the date
of payment of the Default Amount, this
Note may be converted by the Holder in whole or in
part at any time from time to time after the
Issue Date, by (A) submitting to the Borrower a Notice
of Conversion (by facsimile, e-mail or other
reasonable means of communication dispatched on the
Conversion Date prior to 6:00 p.m., New York, New York time) and (B)
subject to Section 1.4(b), surrendering this Note at the principal office of the
Borrower (upon payment in full
of any amounts owed hereunder).

 

(b)               
Surrender of Note Upon Conversion.
Notwithstanding anything to the contrary
set forth herein, upon conversion of this Note in accordance with the terms hereof,
the Holder shall not be required to physically surrender this Note to the
Borrower unless the entire unpaid principal amount of this
Note is so converted. The Holder
and the Borrower shall maintain records showing
the principal amount so converted and the
dates of such conversions or shall
use such other method, reasonably satisfactory to the Holder and the Borrower, so as
not to require physical surrender of this
Note upon each such conversion.

 

(c)                 Delivery
of Common Stock Upon Conversion.Upon
receipt by the Borrower from the
Holder of a facsimile transmission or e-mail
(or other reasonable means of communication) of a Notice of Conversion
meeting the requirements for conversion as provided in this Section 1.4, the
Borrower shall issue and deliver or
cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such
conversion within three (3) business days after such receipt (the “Deadline”) (and, solely in the case
of conversion of the entire unpaid
principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement. Upon
receipt by the Borrower of a Notice
of Conversion, the Holder shall be deemed to be the
holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount
and the amount of accrued and unpaid interest
on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations hereunder, all
rights with respect to the portion
of this Note being so converted shall forthwith
terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such
conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s
obligation to issue and deliver the certificates for Common
Stock shall be absolute and unconditional, irrespective of the absence of any action
by the Holder to enforce the same, any waiver or consent with respect to any provision
thereof, the recovery of any
judgment against any person or
any action to enforce the same, any failure or delay in
the enforcement of any other obligation of the Borrower to the holder
of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach
or alleged breach by the Holder of any obligation
to the Borrower, and irrespective of any other
circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such
conversion.

 

(d)               
Delivery of Common Stock by
Electronic Transfer. In lieu of delivering
physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is participating in the Depository
Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request of the
Holder and its compliance with the provisions set forth herein, the Borrower shall
use its best efforts to cause its transfer agent to electronically transmit the Common
Stock issuable upon conversion to the Holder by
crediting the account of Holder’s Prime Broker with DTC through its Deposit
Withdrawal Agent Commission (“DWAC”) system.

 

(e)                Failure
to Deliver Common Stock Prior to
Deadline. Without in any way
limiting the Holder’s right to pursue other remedies, including actual
damages and/or equitable relief, the parties agree that if delivery of the
Common Stock issuable upon
conversion of this Note is not
delivered by the Deadline due to action and/or inaction of the Borrower, the Borrower
shall pay to the Holder $2,000 per
day in cash, for each day beyond the Deadline
that the Borrower fails to deliver
such Common Stock (the “Fail
to Deliver Fee”); provided; however that the Fail
to Deliver Fee shall not be due if the failure
is a result of a third party (i.e., transfer agent; and not
the result of any failure to pay such
transfer agent) despite the best efforts of the Borrower
to effect delivery of such Common Stock. Such cash amount shall be paid to Holder by the fifth day of
the month following the month in which it has accrued or, at the option
of the Holder (by written notice to the Borrower
by the first day of the month
following the month in which it has
accrued), shall be added to the principal amount of this Note,
in which event interest shall accrue thereon in accordance with the terms of this Note and
such additional principal amount shall be convertible into Common Stock in accordance with the terms
of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a
failure, attempt to frustrate, interference with such conversion right are difficult if not impossible
to qualify. Accordingly, the parties acknowledge that the liquidated damages provision contained in this Section
1.4(e) are justified.

 

1.5                Concerning
the Shares. The shares of Common Stock issuable upon conversion of this
Note may not be sold or transferred unless: (i) such shares are sold
pursuant to an effective registration statement under
the Act or (ii) the Borrower or its
transfer agent shall have been
furnished with an opinion of counsel (which opinion shall be in form,
substance and scope customary for opinions of counsel in comparable transactions) to the effect that
the shares to be sold or transferred may be sold
or transferred pursuant to an exemption from such registration (such as Rule 144 or a successor rule) (“Rule
144”); or (iii) such shares are transferred to an “affiliate” (as defined in Rule 144)
of the Borrower who agrees to sell
or otherwise transfer the shares
only in accordance with this Section 1.5 and who is an Accredited
Investor (as defined in the Purchase Agreement).

 

Any
restrictive legend on certificates representing shares of Common
Stock issuable upon conversion of this
Note shall be removed and the Borrower shall issue to the Holder a new certificate
therefore free of any transfer legend if the Borrower or its
transfer agent shall have received an
opinion of counsel from Holder’s counsel, in form,
substance and scope customary for opinions of counsel
in comparable transactions, to the effect that (i) a public sale or transfer
of such Common Stock may be made without registration under the Act, which opinion shall
be accepted by the Company so that the
sale or transfer is effected; or (ii)
in the case of the Common Stock issuable upon conversion of this
Note, such security is registered for
sale by the Holder under an effective
registration statement filed under the Act; or otherwise may be
sold pursuant to an exemption from registration.
In the event that the Company does
not reasonably accept the opinion of counsel
provided by the Holder with respect to the transfer of Securities
pursuant to an exemption from registration (such as Rule 144), at the Deadline, it will be considered an Event of Default
pursuant to Section 3.2 of the Note.

 

		1.6	Effect of Certain Events.

 

(a)               
Effect of Merger, Consolidation,
Etc. At the option
of the Holder, the sale, conveyance
or disposition of all or substantially all of the
assets of the Borrower, the effectuation by the
Borrower of a transaction or series
of related transactions in which more than 50% of the
voting power of the Borrower is disposed of, or the
consolidation, merger or other business combination
of the Borrower with or into any
other Person (as defined below) or Persons when
the Borrower is not the survivor shall be deemed
to be an Event of Default (as defined in Article
III) pursuant to which the Borrower shall be required to pay
to the Holder upon the consummation of and as
a condition to such transaction an amount equal
to the Default Amount (as defined in Article III). “Person” shall mean
any individual, corporation, limited liability company, partnership, association, trust
or other entity or organization.

 

(b)                Adjustment
Due to Merger, Consolidation,
Etc. If, at any time
when this Note is issued and outstanding and prior to conversion
of all of the Note,
there shall be any merger, consolidation, exchange of shares, recapitalization,
reorganization, or other similar event, as a result
of which shares of Common Stock
of the Borrower shall be changed into the same or a different
number of shares of another
class or classes of stock or securities
of the Borrower or another
entity, or in case of any sale or conveyance
of all or substantially all of the
assets of the Borrower other than in
connection with a plan of complete
liquidation of the Borrower, then the Holder
of this Note shall thereafter have the right to receive
upon conversion of this Note, upon the basis and upon the terms and conditions
specified herein and in lieu of the shares of Common
Stock immediately theretofore issuable upon conversion, such stock, securities or assets
which the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately
prior to such transaction (without regard to any limitations
on conversion set forth herein), and
in any such case appropriate
provisions shall be made with respect to the rights and interests of the
Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment
of the Conversion Price and of the
number of shares issuable upon conversion of the
Note) shall thereafter be applicable, as nearly as may be practicable in
relation to any securities or assets
thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this
Section 1.6(b) unless (a) it first gives, to the extent practicable, ten (10)
days prior written notice (but in any event at least five (5) days prior written notice) of the record date of the special
meeting of shareholders to approve, or if there is no such
record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other
similar event or sale of assets (during which time the Holder
shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Borrower) assumes by
written instrument the obligations of this Note. The above provisions shall similarly apply to successive consolidations,
mergers, sales, transfers or share exchanges.

 

(c)                
Adjustment Due to Distribution. If the Borrower shall declare or make
any distribution of its assets (or rights to acquire its assets) to holders
of Common Stock as a dividend, stock repurchase,
by way of return
of capital or otherwise (including any dividend
or distribution to the Borrower’s
shareholders in cash or shares (or rights to acquire shares) of capital
stock of a subsidiary (i.e., a spin-off))
(a “Distribution”), then the Holder
of this Note shall be
entitled, upon any conversion of this
Note after the date of record for determining
shareholders entitled to such Distribution, to receive the
amount of such assets which would have been
payable to the Holder with respect to the shares of Common Stock
issuable upon such conversion had such Holder been the holder of such
shares of Common Stock on the record
date for the determination of shareholders entitled to such Distribution.

 

1.7              
Prepayment. Notwithstanding anything to the
contrary contained in this Note, at any time during the periods set forth on the
table immediately following this paragraph (the “Prepayment Periods”),
the Borrower shall have the right, exercisable
on not more than three (3) Trading Days prior written notice
to the Holder of the Note to prepay the outstanding
Note (principal and accrued interest),
in full, in accordance with this Section 1.7. Any notice of prepayment
hereunder (an “Optional Prepayment Notice”) shall be delivered to the
Holder of the Note at its registered addresses and shall state: (1) that
the Borrower is exercising its right to prepay the Note, and (2) 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 Borrower shall make payment of the Optional Prepayment Amount (as
defined below) to Holder, or upon the direction of the
Holder as specified by the
Holder in a writing to the
Borrower (which direction shall to be sent to Borrower by the Holder at least
one (1) business day prior to the Optional
Prepayment Date). If the Borrower exercises its right to prepay
the Note, the Borrower shall make payment to
the Holder of an
amount in cash equal to the percentage (“Prepayment Percentage”) as set
forth in the table immediately following this paragraph opposite the applicable Prepayment Period, multiplied by the sum of: (w)
the then outstanding principal amount of this Note plus (x) accrued and unpaid
interest on the unpaid principal amount of this
Note to the Optional Prepayment Date plus (y) Default
Interest, if any, on the amounts referred
to in clauses (w) and (x) plus (z) any amounts owed to the
Holder pursuant to Section 1.4 hereof (the “Optional
Prepayment Amount”). If the Borrower delivers an Optional Prepayment Notice
and fails to pay
the Optional Prepayment Amount due to the Holder of the Note within two (2) business
days following the Optional Prepayment
Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 1.7.

 

	Prepayment Period	Prepayment Percentage
	1.The period beginning on the Issue Date and ending on the date which is thirty (30) days following the Issue Date.	110%
	
        2.       The
        period beginning on the date which is thirty-one

        (31) days
        following the Issue Date and ending on the date
        which is sixty (60) days following the
        Issue Date.
	115%

 

	
        3.       The
        period beginning on the date which is sixty-one

        (61) days
        following the Issue Date and ending on the date
        which is ninety (90) days
        following the Issue Date.
	120%
	
        4.       The
        period beginning on the date
        that is ninety-one

        (91) day from
        the Issue Date and ending one hundred twenty (120) days following the Issue Date.
	125%
	5. The period beginning on the date that is one hundred twenty-one (121) day from the Issue Date and ending one hundred fifty (150) days following the Issue Date.	130%
	6. The period beginning on the date that is one hundred fifty-one (151) day from the Issue Date and ending one hundred eighty (180) days following the Issue Date.	135%

 

After
the expiration of one hundred eighty (180) days following the
Issue Date, the Borrower shall have no right
of prepayment.

 

ARTICLE
II. CERTAIN COVENANTS

 

2.1       Sale
of Assets. So
long as the
Borrower shall have any obligation under this Note, the Borrower shall not, without
the Holder’s written consent, sell, lease or otherwise dispose of any
significant portion of its assets outside the ordinary course
of business. Any consent to the disposition
of any assets may be conditioned on a specified
use of the proceeds of disposition.

 

ARTICLE
III. EVENTS OF DEFAULT

 

If any of
the following events of default (each, an “Event
of Default”) shall occur:

 

3.1              
Failure to Pay Principal
and Interest. The Borrower fails to pay
the principal hereof or interest
thereon when due on this Note, whether at
maturity or upon acceleration and such breach
continues for a period of five (5) days
after written notice from the Holder.

 

3.2               Conversion
and the Shares. The Borrower fails to issue shares of Common Stock
to the Holder (or announces or threatens
in writing that it will not honor its obligation to do so)
upon exercise by the Holder of the conversion rights of the
Holder in accordance with the terms of this Note, fails to transfer or cause
its transfer agent to transfer (issue) (electronically or in certificated
form) any certificate for shares of Common Stock issued to the Holder
upon conversion of or otherwise pursuant to this
Note as and when required by this Note, the Borrower directs its transfer agent not to transfer or delays,
impairs, and/or hinders its transfer agent in transferring (or issuing)
(electronically or in certificated
form) any certificate for shares of Common Stock
to be issued to the Holder upon conversion of or otherwise
pursuant to this Note as and when required by this Note, or fails to remove
(or directs its transfer agent not to remove or impairs, delays, and/or hinders
its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect
thereof) on any certificate for any
shares of Common Stock issued
to the Holder upon conversion of
or otherwise pursuant to this Note as
and when required by this Note (or
makes any written announcement, statement or threat that it does not intend to honor
the obligations described in this paragraph) and any such failure shall continue uncured
(or any written announcement,
statement or threat not to honor
its obligations shall not be rescinded in writing) for three (3) business days
after the Holder shall have delivered a Notice of Conversion.
It is an obligation of the Borrower to remain current
in its obligations to its transfer agent. It shall
be an event of default of this Note,
if a conversion of this Note is
delayed, hindered or frustrated due
to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to
the Borrower’s transfer agent in
order to process a conversion, such advanced funds shall be paid by the Borrower to the Holder within forty-eight (48) hours
of a demand from the Holder.

 

3.3              
Breach of Covenants.
The Borrower breaches any material covenant or other material term
or condition contained in this Note and any collateral documents including but not
limited to the Purchase
Agreement and such breach continues for a period of twenty
(20) days after written notice thereof
to the Borrower from the Holder.

 

3.4              
Breach of Representations and
Warranties. Any representation or warranty
of the Borrower made herein or in any agreement,
statement or certificate given in writing pursuant hereto
or in connection herewith (including, without limitation, the Purchase Agreement), shall
be false or misleading in any material
respect when made and the breach
of which has (or with the passage of
time will have) a material
adverse effect on the rights of the
Holder with respect to this Note
or the Purchase Agreement.

 

3.5              
Receiver or Trustee.
The Borrower or any subsidiary
of the Borrower shall make an assignment for the
benefit of creditors, or apply
for or consent to the appointment of a receiver
or trustee for it or for a substantial part
of its property or business, or such
a receiver or trustee shall otherwise
be appointed.

 

3.6              
Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings, voluntary or involuntary,
for relief under any bankruptcy law or any
law for the relief of debtors shall be instituted by or against
the Borrower or any subsidiary of
the Borrower.

 

3.7              
Delisting of Common
Stock. The
Borrower shall fail to maintain the listing of the
Common Stock on at least one of
the OTC (which specifically includes the quotation platforms maintained by the OTC
Markets Group) or an
equivalent replacement exchange, the Nasdaq National
Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock
Exchange.

 

3.8              
Failure to Comply with
the Exchange Act. The Borrower shall fail to comply with the reporting requirements
of the Exchange Act; and/or the Borrower shall
cease to be subject to the reporting requirements
of the Exchange Act.

 

3.9              
Liquidation. Any dissolution, liquidation, or winding
up of Borrower or any substantial
portion of its business.

 

3.10          
Cessation of Operations.Any
cessation of operations by Borrower or Borrower
admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure
of the Borrower’s ability to continue as a “going
concern” shall not be an admission
that the Borrower cannot pay its debts as they become due.

 

3.11          
Financial Statement Restatement.Therestatementofanyfinancial
statements filed by the Borrower with
the SEC at any time after 180 days after the Issuance
Date for any date or period
until this Note is no longer
outstanding, if the result of such restatement would, by comparison to the
un-restated financial statement, have constituted a material
adverse effect on the rights of the Holder
with respect to this Note or the Purchase Agreement.

 

3.12          
 Replacement of Transfer Agent.
In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date
of such replacement, a fully executed Irrevocable
Transfer Agent Instructions in a form as initially delivered pursuant to the
Purchase Agreement (including but not limited to the provision
to irrevocably reserve shares of Common Stock in
the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

 

3.13          
Cross-Default. Notwithstanding anything to the
contrary contained in this Note or the other related
or companion documents, a breach or default
by the Borrower of any
covenant or other term or condition
contained in any of the Other
Agreements, after the passage of all
applicable notice and cure or grace periods,
shall, at the option of the Holder, be
considered a default under this Note and
the Other Agreements, in which event the Holder
shall be entitled (but in no event required)
to apply all rights and remedies of the Holder under the terms of this
Note and the Other Agreements by reason
of a default under said Other
Agreement or hereunder. “Other Agreements” means, collectively, all agreements
and instruments between, among or by: (1)
the Borrower, and, or for the benefit of, (2) the
Holder and any affiliate of the
Holder, including, without limitation,
promissory notes; provided, however, the term “Other
Agreements” shall not include the related
or companion documents to this Note.
Each of the loan transactions will be cross-defaulted with each other loan
transaction and with all other existing
and future debt of Borrower to the Holder.

 

Upon
the occurrence and during the continuation of any Event of Default
specified in Section 3.1 (solely with respect to failure to pay the
principal hereof or interest thereon
when due at the Maturity Date), the Note shall become immediately due and
payable and the Borrower shall pay to the Holder,
in full satisfaction of its obligations hereunder, an amount equal to the
Default Sum (as defined herein). UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY
EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY
DUE AND PAYABLE AND THE
BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS
OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL
TO: (Y) THE DEFAULT SUM (AS
DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2).
Upon the occurrence and during the continuation of any
Event of Default specified in
Sections 3.1 (solely with respect to failure to pay the
principal hereof or interest thereon
when due on this Note
or upon acceleration), 3.3, 3.4, 3.7, 3.8, 3.10, 3.11, 3.12, 3.13, and/or 3.14
exercisable through the delivery of written
notice to the Borrower by such
Holders (the “Default Notice”), and upon the occurrence of an Event
of Default specified the remaining sections of Articles
III (other than failure to pay the
principal hereof or interest thereon
at the Maturity Date specified in Section 3,1 hereof),
the Note shall become immediately due and
payable and the Borrower shall pay to the
Holder, in full satisfaction of its obligations hereunder, an amount equal to the
greater of (i) 150% times
the sum of (w) the then
outstanding principal amount of this
Note plus (x) accrued and
unpaid interest on the unpaid
principal amount of this Note
to the date of payment
(the “Mandatory Prepayment Date”) plus (y) Default
Interest, if any, on the amounts
referred to in clauses (w) and/or (x) plus
(z) any amounts owed to the Holder pursuant
to Section 1.4(e) hereof (the then outstanding principal amount of this
Note to the date of payment plus
the amounts referred to in
clauses (x), (y) and (z) shall
collectively be known as the “Default Amount”) and all other amounts
payable hereunder shall immediately become due and payable, all
without demand, presentment or notice,
all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and
expenses, of collection, and the
Holder shall be entitled to exercise all other rights and
remedies available at law or in
equity.

 

If
the Borrower fails to pay the
Default Amount within five (5) business days of written notice that such amount
is due and payable, then the Holder shall have the right
at any time, so long as the Borrower remains in default (and so long
and to the extent that there are sufficient authorized shares), to require the
Borrower, upon written notice, to immediately issue, in lieu of the
Default Amount, the number of shares
of Common Stock of the Borrower equal to the Default
Amount divided by the Conversion Price then in effect.

 

ARTICLE
IV. MISCELLANEOUS

 

4.1              
Failure or Indulgence Not Waiver.
No failure or delay on the part
of the Holder in
the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any
such power, right or privilege preclude other or further
exercise thereof or of any other right,
power or privileges. All rights and
remedies existing hereunder are
cumulative to, and not exclusive of, any
rights or remedies otherwise available.

 

4.2              
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, telegram, 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 or delivery by facsimile,
with accurate confirmation generated by the transmitting facsimile machine, 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. The addresses for such
communications shall be:

 

If to the
Borrower, to:

 

MOUNTAIN HIGH ACQUISITIONS
CORP.

6501 E. Greenway
Parkway #103-412

Scottsdale, Arizona
85254

Attn:
Richard G. Stifel, Chief Financial Officer Fax:

Email:
Alan.Smith@avidcap.com If to the Holder:

POWER
UP LENDING GROUP LTD.

111 Great
Neck Road, Suite 214 Great Neck, NY 11021

Attn: Curt
Kramer, Chief Executive Officer e-mail: info@poweruplending.com

 

With
a copy by fax only
to (which copy shall not constitute notice):

Naidich Wurman LLP

111 Great
Neck Road, Suite 216 Great Neck, NY 11021

Attn: Allison Naidich

facsimile:
516-466-3555

e-mail:
allison@nwlaw.com

 

4.3              
Amendments. This Note and
any provision hereof may only be amended by
an instrument in writing signed by the Borrower and the Holder. The term “Note”
and all reference thereto, as used throughout
this instrument, shall mean this instrument (and the
other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later
amended or supplemented, then as so
amended or supplemented.

 

4.4              
Assignability. This Note shall
be binding upon the Borrower and its successors and assigns, and shall inure to be
the benefit of the Holder and
its successors and assigns. Each transferee of this Note must be an “accredited
investor” (as defined in Rule 501(a) of the Securities and Exchange Commission).
Notwithstanding anything in this Note to the contrary, this Note may be pledged
as collateral in connection with a bona fide margin account or other
lending arrangement; and may be assigned by the
Holder without the consent of the Borrower.

 

4.5              
Cost of Collection. If
default is made in the payment of this
Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable
attorneys’ fees.

 

4.6              
Governing Law. This Note shall
be governed by and
construed in accordance with the laws of the State of Virginia
without regard to principles of conflicts of laws.
Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only
in the state courts of New York or in
the federal courts located in the state and county
of Nassau. The parties to this Note hereby irrevocably waive any objection to jurisdiction
and venue of any
action instituted hereunder and shall not assert
any defense based on lack of jurisdiction
or venue or based upon forum non conveniens.
The Borrower and Holder waive trial by
jury. The prevailing party
shall be entitled to recover from
the other party its reasonable attorney's fees
and costs. In the event that any provision of this
Note or any other agreement delivered
in connection herewith is invalid or unenforceable under any applicable statute
or rule of law, then such provision shall be
deemed inoperative to the extent that
it may conflict therewith and shall
be deemed modified to conform with such statute or rule of law.
Any such provision which may prove invalid or unenforceable under any law shall
not affect the validity or enforceability
of any other provision of any
agreement. Each party hereby irrevocably waives personal service of process and consents
to process being served in any suit, action
or proceeding in connection with this Note, any agreement or any
other document delivered in connection with this Note by
mailing a copy thereof via registered
or certified mail or overnight delivery (with
evidence of delivery) to such party at
the address in effect for notices
to it under this Note and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any
right to serve process in any other manner permitted by law.

 

4.7              
Purchase Agreement. By its acceptance of this
Note, each party agrees to be bound by the applicable terms of the Purchase
Agreement.

 

4.8              
Remedies. The Borrower
acknowledges that a breach by it
of its obligations hereunder will cause irreparable
harm to the Holder, by vitiating the intent
and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges
that the remedy at law for a breach
of its obligations under this Note will be inadequate
and agrees, in the event of a breach
or threatened breach by the Borrower
of the provisions of this Note, that the Holder
shall be entitled, in addition to all other available remedies
at law or in
equity, and in addition to the penalties assessable herein, to an injunction or injunctions
restraining, preventing or curing any breach of this
Note and to enforce

specifically
the terms and provisions thereof, without the necessity of showing economic loss and
without any bond or other security being required.

 

IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly
authorized officer this on July 25, 2017

 

MOUNTAIN HIGH
ACQUISITIONS CORP.

 

 

 

 

By: _________________________________________

Richard
G. Stifel

Chief
Financial Officer

    	 	 	 

     

    

EXHIBIT
A -- NOTICE OF CONVERSION

 

 

The
undersigned hereby elects to convert $__________________ principal amount of the Note (defined
below) into that number of shares of Common Stock
to be issued pursuant to the conversion of the Note (“Common Stock”)
as set forth below, of MOUNTAIN
HIGH ACQUISITIONS CORP., a Colorado corporation (the “Borrower”)
according to the conditions of the convertible
note of the Borrower dated as of July
25, 2017 (the “Note”), as of the date
written below. No fee will be charged to the Holder for any
conversion, except for transfer taxes, if any.

 

Box Checked as
to applicable instructions:

 

[ ]         The
Borrower shall electronically transmit the Common Stock issuable pursuant to this
Notice of Conversion to the account of the
undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission
system (“DWAC Transfer”).

 

Name
of DTC Prime Broker: Account Number:

 

[ ]           The
undersigned hereby requests that the Borrower
issue a certificate or certificates for
the number of shares of Common Stock
set forth below (which numbers are based on the Holder’s
calculation attached hereto) in the name(s)
specified immediately below or, if additional
space is necessary, on an attachment hereto:

 

POWER
UP LENDING GROUP LTD.

111 Great
Neck Road, Suite 214 Great Neck, NY 11021
Attention: Certificate Delivery

e-mail:
info@poweruplendinggroup.com

 

	Date of conversion:	 
	Applicable Conversion Price:	$
	Number of shares of common stock to be issued	 
	pursuant to conversion of the Notes:	 
	Amount of Principal Balance due remaining	 
	under the Note after this conversion:	 

 

POWER
UP LENDING GROUP LTD.

 

By: _______________________________

Name: Curt Kramer

Title: Chief
Executive Officer

Date: _____________________ex_100278.htm

Exhibit 4.32

 

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

SERIES DDD COMMON STOCK PURCHASE WARRANT

celsion corporation

 

Warrant Shares: [ ]

Issue Date: [ ], 2017 

Initial Exercise Date [ ], 2018

THIS SERIES DDD COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, [                 ] or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after [ ], 2018 (the “Initial Exercise Date”) and on or prior to the close of business on [ ], 2019 (the “Termination Date”, provided, however, that if such date is not a Trading Day, the Termination Date shall be the immediately following Trading Day) but not thereafter, to subscribe for and purchase from Celsion Corporation, a Delaware corporation (the “Company”), up to [ ] shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase Agreement”), dated [ ], 2017, among the Company and the purchasers signatory thereto.

Section 2. Exercise.

a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company or the Transfer Agent (or such other office or agency that the Company may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company), as applicable, of a duly executed facsimile copy or PDF copy submitted by electronic (or e-mail attachment) of the Notice of Exercise in the form annexed hereto. Within the earlier of (i) three (3) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

b) Exercise Price. The exercise price per share of the Common Stock under this Warrant shall be $6.20, subject to adjustment hereunder (the “Exercise Price”).

c) Cashless Exercise. If at any time after the twelve-month anniversary of the Issue Date, there is no effective registration statement registering, or no current prospectus available for, the resale of the Warrant Shares by the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

 

 

 

(A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;

(B) = the Exercise Price of this Warrant, as adjusted hereunder; and

(X) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).

“Bid Price” 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 bid price of the Common Stock for the time in question (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 OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, 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 Purchasers 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.

“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 OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, 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 Purchasers 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.

 

 

 

 

	 	
			d)

				
			Mechanics of Exercise.

			

i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earlier of (i) one (1) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) three Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.

ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

iv. Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

 

 

 

 

vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.

vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) 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 Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days 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 or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be [4.99%/9.99%] of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) 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. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

 

 

 

 

Section 3. Certain Adjustments.

a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged, subject to the limitation on fractional shares in Section 2(d)(v). Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

b) Voluntary Adjustment By Company. The Company may at any time during the term of this Warrant reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.

c) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

d) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (other than dividends or distributions subject to Section 3(a) herein) (a "Distribution"), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

 

 

 

e) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, 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 which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon 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 which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein. 

f) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

g) Notice to Holder.

i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

 

 

 

ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

Section 4. Transfer of Warrant.

a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to the provisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Issue Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

c) Warrant Register. 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 hereof 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.

d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions of Section 5.7 of the Purchase Agreement.

e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.

 

 

 

 

Section 5. Miscellaneous.

a) No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3(c) and Section 3(d).

b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

d) Authorized Shares.

The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities 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 actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.

f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered and the Holder does not utilize cashless exercise following the twelve month anniversary of the Issue Date, will have restrictions upon resale imposed by state and federal securities laws.

g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that all rights hereunder terminate on the Termination Date. If the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

h) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.

 

 

 

 

i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

********************

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

	 	
			CELSION CORPORATION

				 
	 	 	 	 
	 	 	 	 
	 	
			By:

				 	 
	 	 	
			Name:

				 
	 	 	
			Title:

				 

 

 

 

 

EXHIBIT A

NOTICE OF EXERCISE

To: celsion corporation

(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

(2) Payment shall take the form of (check applicable box):

[ ] in lawful money of the United States; or

[ ] if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

____________________________________

The Warrant Shares shall be delivered to the following DWAC Account Number:

____________________________________

____________________________________

____________________________________

(4) Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

[SIGNATURE OF HOLDER]

	
			Name of Investing Entity:

				 

 

	
			Signature of Authorized Signatory of Investing Entity:

				 

 

	
			Name of Authorized Signatory:

				 

 

	
			Title of Authorized Signatory:

				 

 

	
			Date:

				 

 

 

 

 

EXHIBIT B

ASSIGNMENT FORM

(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

	
			Name:

				
			______________________________________

			
	 	
			(Please Print)

			
	
			Address:

				
			______________________________________

			
	
			Phone Number:

			Email Address:

				
			(Please Print)

			______________________________________

			______________________________________

			
	 	 
	
			Dated: _______________ __, ______

				 
	 	 
	
			Holder’s Signature:______________________________________

				 
	 	 
	
			Holder’s Address:______________________________________

				 

15

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