Document:

Execution Version

 

AMENDED AND
RESTATED CONSULTING AGREEMENT

THIS AMENDED AND RESTATED CONSULTING
AGREEMENT (this “Agreement”) dated as of May 13, 2016, is made by and between Horry County State Bank, a South
Carolina state-chartered commercial bank (the “Bank”), which is a wholly owned subsidiary of the HCSB Financial Corporation
(the “Company”), and James R. Clarkson, an individual resident of South Carolina.

WHEREAS, Mr. Clarkson has served as President
and Chief Executive Officer of the Company and the Bank for the past 29 years;

WHEREAS, on April 11, 2016, the Company
completed a private offering of its common stock in which it raised approximately $45 million in new capital (the “Offering”),
and upon the closing of the Offering, Mr. Clarkson retired as the President and Chief Executive Officer of the Company and the
Bank;

WHEREAS, Mr. Clarkson remains an employee
of the Company and the Bank and will continue to serve as an advisor to the Chief Executive Officer of the Company and the Bank
through June 30, 2016;

WHEREAS, Mr. Clarkson has significant
and valuable institutional knowledge of the Company, the Bank, and the Bank’s customers and employees and his continued assistance
and support will be very important to the success of the Bank, and therefore, effective as of July 1, 2016, the Bank desires to
retain Mr. Clarkson to provide consulting services to it pursuant to the terms and conditions set forth herein; and

WHEREAS, Mr. Clarkson desires to accept
such engagement on the terms and conditions provided herein.

NOW, THEREFORE, in consideration of the
mutual covenants and promises contained herein, the parties hereto agree as follows:

1.           
Engagement; Consultant Relationship; Duties.  Effective as of July 1, 2016,
the Bank hereby engages Mr. Clarkson to provide, and he hereby agrees to render, at the request of the Bank, those consulting services
to the Bank as set forth on Appendix A hereto and subject to the terms, conditions, work schedules, and performance objectives
described therein. 

2.           
Term and Termination.  The term of this Agreement (the “Term”) shall
commence on July 1, 2016 and shall continue until the earliest of: (i) the close of business on the last business day immediately
preceding the first anniversary of the effective date of this Agreement; (ii) Mr. Clarkson’s death; (iii) upon the Disability
(as defined below) of Mr. Clarkson for a period of 90 consecutive days; (iv) Mr. Clarkson’s termination of this Agreement
by providing two weeks’ prior written notice; or (v) the Bank’s termination of this Agreement at any time upon Mr.
Clarkson’s material breach of this Agreement by failing to adequately provide the services set forth on Appendix A,
which failure has not been cured within 30 days of notice from the Bank and provided that the Mr. Clarkson has not previously given
the Bank notice that he has terminated this Agreement pursuant to this Section 2. Notwithstanding anything in this Agreement to
the contrary, the Bank’s obligations to make payments to Mr. Clarkson hereunder shall also terminate effective immediately
upon Mr. Clarkson’s indictment for a crime involving dishonesty, moral turpitude or fraud or any felony, or the Bank’s
receipt of formal written notice that any regulatory agency having jurisdiction over the Company or the Bank intends to institute
any form of formal regulatory action against Mr. Clarkson. Certain rights and obligations of the parties shall continue following
the termination of this Agreement as stated in Section 19 hereof. 

    	 

     

    

3.           
Compensation. During the Term of this Agreement, as compensation for all services
rendered by Mr. Clarkson under this Agreement, the Bank shall pay him the sum of $3,648.60 per month, or for the first and last
months of the Term, a pro rata portion for any partial month. Payments will be made approximately every two weeks in arrears at
the same time as the Bank processes its periodic payroll disbursements. All such compensation shall be payable without deduction
for federal income, social security, or state income taxes or any other amounts. Mr. Clarkson acknowledges and agrees that he shall
be solely responsible for making all such filings and payments and shall indemnify and hold harmless the Bank for any liability,
claim, expense, or other cost incurred by the Bank arising out of or related to his obligations pursuant to this Section. 

4.           
Expenses.  During the Term of this
Agreement, Mr. Clarkson shall be reimbursed by the Bank for all reasonable business expenses incurred
in connection with the performance of his duties hereunder, and all such reimbursements shall be paid in accordance with the reimbursement
policies of the Bank in effect from time to time. 

5.           
Independent Contractor. Mr. Clarkson is an independent contractor providing services
to the Bank. The Bank will report all payments to be made hereunder on IRS Forms 1099 as payments to Mr. Clarkson for independent
contracting services. 

6.           
Ownership of Work Product. The Bank shall own all Work Product arising during the period
Mr. Clarkson is providing services to the Bank. For purposes hereof, “Work Product” shall mean all intellectual property
rights, including all Trade Secrets, U.S. and international copyrights, patentable inventions, and other intellectual property
rights in any programming, documentation, technology or other work product that relates to the Bank or any Affiliates (as defined
below), their business, or customers and that Mr. Clarkson conceives, develops, or delivers to the Bank at any time during the
period he is providing services to the Bank, during or outside normal working hours, in or away from the facilities of the Bank,
and whether or not requested by the Bank. 

7.           
Protection of Trade Secrets. Mr. Clarkson agrees to maintain in strict confidence and,
except as necessary to perform his duties for the Bank, he agrees not to use or disclose any Trade Secrets of the Bank or any Affiliates
during or after the period he is providing services to the Bank. “Trade Secret” means information, including a formula,
pattern, compilation, program, device, method, technique, process, drawing, cost data, or customer list, that (i) derives economic
value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by other persons
who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are reasonable under the circumstances
to maintain its secrecy.

    	 	2	 

     

    

8.           
Protection of Other Confidential Business Information. In addition, Mr. Clarkson agrees
to maintain in strict confidence and, except as necessary to perform his duties for the Bank, not to use or disclose any Confidential
Business Information of the Bank during Mr. Clarkson’s engagement pursuant to this Agreement and for a period of 24 months
thereafter. “Confidential Business Information” shall mean any internal, non-public information (other than Trade Secrets
already addressed above) concerning the Bank’s financial position and results of operations (including revenues, assets,
net income, etc.); annual and long-range business plans, product or service plans; marketing plans and methods; training, education
and administrative manuals; customer and supplier information and purchase histories; and employee lists. The provisions of Sections
7 and 8 shall also apply to protect Trade Secrets and Confidential Business Information of third parties provided to the Bank under
an obligation of secrecy.

9.           
Return of Materials. Mr. Clarkson shall surrender to the Bank, promptly upon its request
and in any event upon cessation of his services to the Bank, all media, documents, notebooks, computer programs, handbooks, data
files, models, samples, price lists, drawings, customer lists, prospect data, or other material of any nature whatsoever (in tangible
or electronic form) in his possession or control, including all copies thereof, relating to the Bank, its business, or customers.
Upon the request of the Bank, Mr. Clarkson shall certify in writing compliance with the foregoing requirement. Mr. Clarkson may
retain a copy of this Agreement after the expiration of the Term or any earlier termination of this Agreement. 

10.           
Notice. For the purposes of this
Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, addressed to the
respective addresses last given by each party to the other; provided however that all notices to the Bank shall be directed to
the attention of the Chief Executive Officer of the Bank. All notices and communications shall be deemed to have been received
on the date of delivery thereof.

 

11.           
Governing Law. This Agreement
and all rights hereunder shall be governed by the laws of the State of South Carolina, except to the extent governed by the laws
of the United States of America in which case federal laws shall govern. The parties agree that any appropriate state court located
in South Carolina or federal court for the District of South Carolina shall have exclusive jurisdiction of any case or controversy
arising under or in connection with this Agreement shall be a proper forum in which to adjudicate such case or controversy. The
parties consent and waive any objection to the jurisdiction or venue of such courts.

 

    	 	3	 

     

    

12.           
Non-Waiver. Failure of the Bank
to enforce any of the provisions of this Agreement or any rights with respect thereto shall in no way be considered to be a waiver
of such provisions or rights, or in any way affect the validity of this Agreement.

 

13.           
Saving Clause. The provisions
of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity
or enforceability of the other provisions hereof. If any provision or clause of this Agreement, or portion thereof, shall be held
by any court or other tribunal of competent jurisdiction to be illegal, void, or unenforceable in such jurisdiction, the remainder
of such provision shall not be thereby affected and shall be given full effect, without regard to the invalid portion. It is the
intention of the parties that, if any court construes any provision or clause of this Agreement, or any portion thereof, to be
illegal, void, or unenforceable because of the duration of such provision or the area or matter covered thereby, such court shall
reduce the duration, area, or matter of such provision, and, in its reduced form, such provision shall then be enforceable and
shall be enforced.

 

14.           
Successors; Binding Agreement.
The rights and obligations of this Agreement shall bind and inure to the benefit of the surviving entity in any merger or consolidation
in which the Bank is a party, or any assignee of all or substantially all of the Bank’s business and properties. Mr. Clarkson’s
rights and obligations under this Agreement may not be assigned by him, except that his right to receive accrued but unpaid compensation,
unreimbursed expenses, and other rights, if any, provided under this Agreement, which survive termination of this Agreement shall
pass after death to the personal representatives of his estate.

 

15.           
Compliance with Regulatory Restrictions.
Notwithstanding anything to the contrary herein, and in addition to any restrictions stated above, this Agreement shall be modified,
or any compensation or other benefits to be paid to Mr. Clarkson hereunder shall be limited, to the extent required by any federal
or state regulatory agency having authority over the Company or the Bank. Mr. Clarkson agrees that compliance by the Company or
the Bank with such modifications or limitations, even to the extent that compensation or other benefits paid to him are limited,
shall not be a breach of this Agreement by the Bank. The Bank and Mr. Clarkson agree, however, that if this Agreement is modified
or any of the compensation or other benefits to be paid to Mr. Clarkson hereunder are prohibited by any federal or state regulatory
agency having authority over the Company or the Bank, Mr. Clarkson shall have the right to terminate this Agreement effective immediately.

 

16.           
Compliance with
Internal Revenue Code Section 409A. All payments that may be made and benefits that may be provided pursuant to this Agreement
are intended to qualify for an exclusion from Section 409A of the Code and any related regulations or other pronouncements thereunder
and, to the extent not excluded, to meet the requirements of Section 409A of the Code. Any payments made under Section 3 of this
Agreement which are paid on or before the last day of the applicable period for the short-term deferral exclusion under Treasury
Regulation § 1.409A-1(b)(4) are intended to be excluded under such short-term deferral exclusion. Each payment made under
Section 3 shall be treated as a “separate payment”, as defined in Treasury Regulation § 1.409A-2(b)(2), for purposes
of Code Section 409A. None of the payments under this Agreement are intended to result in the inclusion in Mr. Clarkson’s
federal gross income on account of a failure under Section 409A(a)(1) of the Code. The parties intend to administer and interpret
this Agreement to carry out such intentions. However, the Bank does not represent, warrant, or guarantee that any payments that
may be made pursuant to this Agreement will not result in inclusion in Mr. Clarkson’s gross income, or any penalty, pursuant
to Section 409A(a)(1) of the Code or any similar state statute or regulation. In addition, the Bank shall pay all reimbursements
hereunder as soon as administratively practicable, but in no event shall any such reimbursements be paid after the last day of
the taxable year following the year in which the expense was incurred.

 

    	 	4	 

     

    

17.           
Certain Definitions.

 

(a)           
“Affiliate” shall mean
any business entity controlled by, controlling or under common control with the Bank, including, but not limited to, the Company.

 

(b)           
“Code” shall mean the
Internal Revenue Code of 1986.

 

(c)           
“Disability” or “Disabled”
shall mean as defined by Treasury Regulation § 1.409A-3(i)(4).

 

18.           
Entire Agreement. This Agreement
constitutes the entire agreement between the parties hereto and supersedes all prior agreements, if any understandings and arrangements,
oral or written, between the parties hereto with respect to the subject matter hereof.

 

19.           
Survival. The obligations of the
parties pursuant to Sections 6 through 9 and 11, as applicable, shall survive the termination of this Agreement hereunder for the
period designated under each of those respective sections.

 

20.            
Counterparts. This Agreement
may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute
one and the same instrument.

 

[Signature Page Follows]

    	 	5	 

     

    

IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed and its seal to be affixed hereunto by an officer thereunto
duly authorized and Mr. Clarkson has signed and sealed this Agreement, effective as of the date described above.

 

 

	 	 	 	HORRY COUNTY STATE BANK  
	 	 	 	 	 	 
	ATTEST:	 	 	 	 
	By:	 	 	By: 	/s/ Michael S. Addy	 
	Name:  	 	 	Name:  	Michael S. Addy	 
	 	 	 	Title: 	Chairman	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	/s/ James R. Clarkson	 
	 	 	 	James R. Clarkson	 

 

    	 	6	 

     

    

APPENDIX A

 

In his role as a consultant, Mr. Clarkson shall
devote appropriate time, efforts, and abilities to the performance of the following activities, the advancement of the interests
of the Bank, and the achievement of the goals and objectives of the Bank, including, without limitation:

 

		·	assisting with unresolved issues from the Bank’s
past operations, such as resolving, strengthening and/or collecting non-performing assets and collecting previously charged off
loans;

 

		·	advising Bank management as to matters of Bank institutional
knowledge such as prior Bank philosophy, the competitive factors of the Bank’s market, current personnel qualifications and
utilization as well as historical effectiveness of Bank product and services offerings; 

 

		·	advising Bank management and the Board on matters
relating to the Bank’s market area learned while serving as a community banker over the past 42 years in the Bank’s
market area.

 

		·	providing such other consulting services as may be
requested by the Chief Executive Officer of the Bank from time to time. 

 

In performing these services, Mr. Clarkson shall
comply with all of the Bank’s policies and procedures and report to the Chief Executive Officer of the Bank on an every other
week basis and at such other times as may be required to address material matters. Upon no less than 72 hours’ notice, Mr.
Clarkson shall provide written or oral report(s) to the Board of Directors of the Bank regarding his activities as may be requested
by the Chief Executive Officer from the Bank. The parties agree that Mr. Clarkson shall, on average, dedicate eight hours per week,
for 48 work weeks during the Term, to performing these services. Mr. Clarkson’s performance of the above-listed activities
shall be assessed by the Board of Directors in accordance with the following performance objectives: response time between information
being requested by the Bank and provided by Mr. Clarkson, utility of the information provided by Mr. Clarkson regarding the Bank
and its market area, effectiveness of Mr. Clarkson in assisting Bank management with addressing unresolved issues in the Bank’s
past operations.

 

    	 	7Warrant

 

Exhibit 4.6

FORM OF COMPENSATION WARRANT

NEITHER THE SECURITIES REPRESENTED BY THIS WARRANT NOR THE SECURITIES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) AN EXEMPTION FROM SUCH REGISTRATION EXISTS AND PURADYN FILTER TECHNOLOGIES INCORPORATED AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR APPLICABLE STATE SECURITIES LAWS.

Warrant to Purchase Common Stock

		
	Date of Issuance: March 7, 2016

	Warrant No.: RR-1

	 
	Warrant to Purchase an Aggregate of 

	 
	350,000 Shares of Common Stock

FOR VALUE RECEIVED, PURADYN FILTER TECHNOLOGIES INCORPORATED, a Delaware corporation (the “Company”), promises to issue in the name of, and sell and deliver to Rainerio Reyes (the "Holder") a certificate or certificates for an aggregate of 350,000 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), upon payment by the Holder of Five Cents ($0.05) per share (the “Exercise Price”), with the Exercise Price being subject to adjustment in the circumstances set forth below.  This Warrant is being issued to the Holder in accordance with the terms of that certain Advisory Agreement of even date herewith by and between the Company and the Holder (the "Advisory Agreement").

1. 

Exercise of Warrant

(A) 

Exercise Period.  The Holder may exercise this Warrant, in whole or in part (but not as to fractional shares), at any time and time to time commencing on the date hereof and ending at 5:00 p.m., Eastern Time, on March 7, 2021 (the “Exercise Period”). 

(B) 

Exercise Procedure.  

(i) 

This Warrant will be deemed to have been exercised at such time as the Company has received all of the following items (the “Exercise Date”):

(a)

a completed Exercise Agreement, in the form attached hereto as Exhibit 1, executed by the Holder (the “Purchaser”); and

(b)

a certified check or other immediately available funds payable to the Company in an amount equal to the sum of the product of the Exercise Price multiplied by the number of shares of Common Stock being purchased upon such exercise. 

Page 1 of 7

 

(ii) 

Certificates for the shares of Common Stock purchased upon exercise of this Warrant will be delivered by the Company to the Purchaser within ten (10) business days after the Exercise Date.  Unless this Warrant has expired or all of the purchase rights represented hereby have been exercised, the Company will prepare a new Warrant representing the rights formerly represented by this Warrant that have not expired or been exercised.  The Company will, within such ten (10) day period, deliver such new Warrant to the Holder at the address set forth in this Warrant.

(iii) 

The shares of Common Stock issuable upon the exercise of this Warrant will be deemed to have been transferred to the Purchaser on the Exercise Date, and the Purchaser will be deemed for all purposes to have become the record holder of such Common Stock on the Exercise Date.

(iv)

The issuance of certificates for shares of Common Stock upon the exercise of this Warrant will be made without charge to the Purchaser for any issuance tax in respect thereof or any other cost incurred by the Company in connection with such exercise and related transfer of the shares; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any certificate or instrument in a name other than that of the Holder of this Warrant, and that the Company shall not be required to issue or deliver any such certificate or instrument unless and until the person or persons requiring the issue thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.

(v)

The Company has no obligation to register the resale of the shares of Common Stock underlying this Warrant under the 1933 Act.  Unless the Company shall have so registered the shares of Common Stock underlying this Warrant, the shares of Common Stock issuable upon the exercise of this Warrant will be “restricted securities” as that term is defined in the 1933 Act. The Company may insert the following or similar legend on the face of the certificates evidencing shares of Common Stock if required in compliance with state securities laws:

"These securities have not been registered under any state securities laws and may not be sold or otherwise transferred or disposed of except pursuant to an effective registration statement under any applicable state securities laws, or an opinion of counsel satisfactory to counsel to Puradyn Filter Technologies Incorporated that an exemption from registration under any applicable state securities laws is available."

 

(C)

Fractional Shares.  The Company shall not be required to issue fractions of shares of Common Stock on the exercise of this Warrant.  The Company shall not be obligated to issue any fractional share interests or fractional warrant interests upon the exercise of this Warrant, nor shall it be obligated to issue scrip or pay cash in lieu of fractional interests, provided, however, that if a holder exercises all the Warrants held of record by such holder, the Company shall at its option (i) eliminate the fractional interests by rounding any fraction up to the nearest whole number of shares or (ii) within 30 days after the Exercise Date, deliver to the Purchaser a check payable to the Purchaser, in lieu of such fractional share, in an amount equal to the value of such fractional share as determined by the closing price of the Company’s Common Stock as reported on the principal market on which the Company’s Common Stock is then listed or quoted, as of the close of business on the Exercise Date.

Page 2 of 7

 

2. 

Effect of Reorganization, Reclassification, Consolidation, Merger or Sale

(A) 

Recapitalization or Reclassification of Common Stock.  In case the Company shall at any time prior to exercise of this Warrant or the expiration of the Exercise Period, whichever first occurs, effect a recapitalization or reclassification of such character that its Common Stock shall be changed into or become exchangeable for a larger or smaller number of shares, then, upon the effective date thereof, the number of shares of Common Stock that the Holder of this Warrant shall be entitled to purchase upon exercise hereof shall be increased or decreased, as the case may be, in direct proportion to the increase or decrease in such number of shares of Common Stock by reason of such recapitalization or reclassification, and the Exercise Price of such recapitalized or reclassified Common Stock shall, in the case of an increase in the number of shares, be proportionately decreased and, in the case of a decrease in the number of shares, be proportionately increased.

(B) 

Consolidation, Merger or Sale. .  In case the Company shall at any time prior to the exercise of this Warrant or the expiration of the Exercise Period, whichever first occurs, consolidate or merge with any other corporation (unless the Company shall be the surviving entity) or transfer all or substantially all of its assets to any other corporation preparatory to a dissolution (collectively, the "Fundamental Transaction"), then the Company shall, as a condition precedent to such transaction, provide notice to the Holder of not less than ten (10) of days prior to the closing and/or effective date of such Fundamental Transaction during which time the Holder shall have the right to exercise this Warrant pursuant to its terms.  To the extent not exercised, this Warrant and any right to acquire shares of the Company's Common Stock will automatically expire on the closing date and/or effective date of such Fundamental Transaction.

(C) 

Notice of Adjustment.  Whenever the number of shares of Common Stock purchasable upon exercise of this Warrant shall be adjusted as provided herein, the Company shall file with its corporate records a certificate of its chief financial officer setting forth the computation and the adjusted number of shares of Common Stock purchasable hereunder resulting from such adjustments, and a copy of such certificate shall be mailed to the Holder.  Any such certificate or letter shall be conclusive evidence as to the correctness of the adjustment or adjustments referred to therein and shall be available for inspection by the holders of the Warrants on any day during normal business hours.

3. 

Reservation of Common Stock.  The Company will at all time reserve and keep available such number of shares of Common Stock as will be sufficient to permit the exercise in full of this Warrant.  Upon exercise of this Warrant pursuant to its terms, the Holder will acquire fully paid and non-assessable ownership rights of the Common Stock, free and clear of any liens, claims or encumbrances except as otherwise provided herein.

4. 

No Stockholder Rights or Obligations.  This Warrant will not entitle the Holder hereof to any voting rights or other rights as a stockholder of the Company.  Until the shares of Common Stock issuable upon the exercise of this Warrant are recorded as issued on the books and records of the Company’s transfer agent, the Holder shall not be entitled to any voting rights or other rights as a stockholder; provided, however, the Company uses its best efforts to ensure that, upon receipt of the Exercise Agreement and payment of the Exercise Price, the appropriate documentation necessary to effectuate the exercise of the Warrant and the issuance of the Common Stock is accomplished as expeditiously as possible.  No provision of this Warrant, in the absence of affirmative action by the Holder to purchase Common Stock, and no enumeration in this Warrant of the rights or privileges of the Holder, will give rise to any obligation of such Holder for the Exercise Price or as a stockholder of the Company.

Page 3 of 7

 

5. 

Transferability.  Subject to the terms hereof, this Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant with a properly executed Assignment in the form of Exhibit 2 hereto at the principal offices of the Company.  This Warrant and the underlying shares of Common Stock may not be offered, sold or transferred except in compliance with the Securities 1933 Act, and any applicable state securities laws, and then only against receipt of an agreement of the person to whom such offer or sale or transfer is made to comply with the provisions of this Warrant with respect to any resale or other disposition of such securities; provided, however, that no such agreement shall be required from any person purchasing this Warrant or the underlying shares of Common Stock pursuant to a registration statement effective under the 1933 Act.  The Holder of this Warrant agrees that, prior to the disposition of any security purchased on the exercise hereof other than pursuant to a registration statement then effective under the 1933 Act, or any similar statute then in effect, the Holder shall give written notice to the Company, expressing his intention as to such disposition.  Upon receiving such notice, the Company shall present a copy thereof to its securities counsel.  If, in the sole opinion of such counsel, which such opinion shall not be unreasonably withheld, the proposed disposition does not require registration of such security under the 1933 Act, or any similar statute then in effect, the Company shall, as promptly as practicable, notify the Holder of such opinion, whereupon the Holder shall be entitled to dispose of such security in accordance with the terms of the notice delivered by the Holder to the Company. 

6. 

Miscellaneous

(A) 

Notices.  Any notices, requests or consents hereunder shall be deemed given, and any instruments delivered, two days after they have been mailed by first class mail, postage prepaid, or upon receipt if delivered personally or by facsimile transmission, as follows:

If to the Company:

Puradyn Filter Technologies Incorporated

2017 High Ridge Road

Boynton Beach, FL  33426

Attention:  President

If to the Holder:

To the addresses forth in the Advisory Agreement or such other address as the Holder shall provide pursuant to the terms of this Warrant.

except that any of the foregoing may from time to time by written notice to the other designate another address which shall thereupon become its effective address for the purposes of this paragraph.

(B) 

Entire Agreement.  This Warrant, including the exhibits and documents referred to herein which are a part hereof, contain the entire understanding of the parties hereto with respect to the subject matter and may be amended only by a written instrument executed by the parties hereto or their successors or assigns.  Any paragraph headings contained in this Warrant are for reference purposes only and shall not affect in any way the meaning or interpretation of this Warrant.

(C) 

Governing Law. This Warrants shall be construed in accordance with the laws of the State of Delaware, without and application of the principles of conflicts of laws.  If it becomes necessary for any party to institute legal action to enforce the terms and conditions of this Agreement, and such legal action results in a final judgment in favor of such party ("Prevailing Party"), then the party or parties against whom said final judgment is obtained shall reimburse the Prevailing Party for all direct, indirect or incidental expenses incurred, including, but not limited to, all attorney's fees, court costs and other expenses incurred throughout all negotiations, trials or appeals undertaken in order to enforce the Prevailing Party's rights hereunder.  Any suit, action or proceeding with respect to this Warrant shall be 

Page 4 of 7

 

brought in the state or federal courts located in Palm Beach County, Florida.  The parties hereto hereby accept the exclusive jurisdiction and venue of those courts for the purpose of any such suit, action or proceeding.  The parties hereto hereby irrevocably waive, to the fullest extent permitted by law, any objection that any of them may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any judgment entered by any court in respect thereof brought in Palm Beach County, Florida, and hereby further irrevocably waive any claim that any suit, action or proceeding brought in Palm Beach County, Florida, has been brought in an inconvenient forum.

IN WITNESS WHEREOF, this Warrant has been duly executed and the corporate seal affixed hereto, all as of the day and year first above written.

PURADYN FILTER TECHNOLOGIES INCORPORATED

		
	By:

	/s/ Alan J. Sandler

	 
	Alan J. Sandler,

	 
	Principal Financial Officer,

	 
	Vice President

Page 5 of 7

 

EXHIBIT 1

EXERCISE AGREEMENT

To:

____________________

Dated:

____________________

The undersigned record Holder, pursuant to the provisions set forth in the within Warrant, hereby subscribed for and purchases _________________ shares of Common Stock covered by such Warrant and hereby makes full cash payment of $_________________ for such shares at the Exercise Price provided by such Warrant.

________________________________

(Signature)

________________________________

(Print or type name)

________________________________

(Address)

________________________________

________________________________

NOTICE: The signature of this Exercise Agreement must correspond with the name as written upon the face of the within Warrant, or upon the Assignment thereof, if applicable, in every particular, without alteration, enlargement or any change whatsoever.

Page 6 of 7

 

EXHIBIT 2

ASSIGNMENT

FOR VALUE RECEIVED, _________________, the undersigned Holder hereby sells, assigns, and transfers all of the rights of the undersigned under the within Warrant with respect to the number of shares of Common Stock issuable upon the exercise of such Warrant set forth below, unto the Assignee identified below, and does hereby irrevocable constitute and appoint _________________ to effect such transfer of rights on the books of the Company, with full power of substitution:

Number of Shares

Name of Assignee

Address of Assignee

of Common Stock

Dated: _________________

_____________________________

(Signature of Holder)

_____________________________

(Print or type name)

NOTICE: The signature of this Exercise Agreement must correspond with the name as written upon the face of the within Warrant, or upon the Assignment thereof, if applicable, in every particular, without alteration, enlargement or any change whatsoever.

CONSENT OF ASSIGNEE

I HEREBY CONSENT to abide by the terms and conditions of the within Warrant.

Dated: _________________

______________________________

(Signature of Assignee)

______________________________

(Print or type name)

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