Document:

REGISTRATION
RIGHTS AGREEMENT

 

This
Registration Rights Agreement (“Agreement”) is entered into as of August 13, 2019 by and between AgeX
Therapeutics, Inc., a California corporation (the “Company”) and the Juvenescence Limited, a company incorporated
in the British Virgin Islands (“Holder”).

 

NOW,
THEREFORE, the parties agree as follows:

 

1.
Certain Definitions. As used in this Agreement the following terms shall have the following respective meanings:

 

(a)
“Act” shall mean the Securities Act of 1933, as amended, or any similar federal statute and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the time.

 

(b)
“Commission” shall mean the Securities and Exchange Commission or any other federal agency at the time administering
the Act.

 

(c)
“Holder” shall mean Juvenescence Limited, a company incorporated in the British Virgin Islands, and its transferees
as permitted by Section 6.

 

(d)
The terms “register,” “registered” and “registration” refer to a registration
effected by preparing and filing a registration statement in compliance with the Act, and the declaration or ordering of the effectiveness
of such registration statement.

 

(e)
“Loan Agreement” means the Loan Facility Agreement between the Company and Holder, dated August 13,
2019, pursuant to which the Company agreed to issue the Shares and the Warrants.

 

(f)
“Registrable Securities” means the Shares, Warrants, and Warrant Shares. Any securities that are (i) distributed
as a dividend or otherwise with respect to Registrable Securities, (ii) issuable upon the exercise or conversion of Registrable
Securities, or (iii) issued or issuable in exchange for or through conversion of Registrable Securities pursuant to a recapitalization,
reorganization, merger, consolidation or other transaction shall also constitute Registrable Securities.

 

(g)
“Shares” means 19,000 shares of common stock, par value $0.0001 per share, of the Company issued by the Company
upon the Company’s first draw down from the credit line under the Loan Agreement.

 

(h)
“Warrants” means up to 150,000 common stock purchase warrants governed by that certain Warrant Agreement, dated
August 13, 2019.

 

(i)
“Warrant Shares” means shares of common stock, par value $0.0001 per share, of the Company issuable by the
Company pursuant to the exercise of Warrants.

 

    
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AgeX Therapeutics, Inc.
Registration Rights Agreement

    	 

    

 

2.
Registration Rights.

 

(a)
Filing of Registration Statement with Respect to Shares and Warrant Shares. The Company agrees, at its expense, to file
a registration statement with the Commission to register Registrable Securities under the Act, and to take such other actions
as may be necessary to allow the Registrable Securities to be freely tradable, without restrictions under the Act, provided that
the Company is eligible to register such Registrable Securities on Form S-3. Such registration statement shall be filed following
a written request for registration from the Holder. The Company will use commercially reasonable efforts to cause the registration
statement to become effective as promptly as practicable after filing. The Company will make all filings required under applicable
state securities or “blue sky” laws so that the Registrable Securities being registered shall be registered or qualified
for sale under the securities or blue sky laws of New York, California and such jurisdictions as shall be reasonably appropriate
for distribution of the Shares and Warrant Shares covered by the registration statement. The registration statement shall be a
“shelf” registration pursuant to Rule 415 (or similar rule that may be adopted by the Commission) and shall provide
that the Holder’s plan of distribution is to offer and sell Shares or Warrant Shares from time to time at market prices
or prices related to market prices; provided, that a registration statement may be amended to provide for an underwritten public
offering of Registrable Securities included in the registration statement (excluding Warrants except as provided in Section 2(e))
if the Holder submits to the Company a written notice to such effect with a copy of the applicable underwriting documents and
such other relevant information concerning the offering as the Company may request. The Company shall use commercially reasonable
efforts to keep each such registration statement effective until the earlier of (i) completion of the distribution or distributions
being made pursuant thereto, and (ii) such time as the Holder is eligible to sell its Shares and Warrant Shares under Rule 144
under the Act without application of the manner of sale and volume limitations under Rule 144. The Company will furnish to the
Holder such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the
Act and such other related documents as the Holder may reasonably request in order to effect the sale of its Registrable Securities.

 

(b)
“Piggy-Back Registration” of Shares. If, at any time the Company proposes to register any of its securities
under the Act (otherwise than pursuant to (i) this Agreement, (ii) a registration statement pertaining to subscription rights
distributed to Company shareholders, and (iii) a registration on a Form S-8 or any other form if such form cannot be used for
registration of the Registrable Securities pursuant to its terms), and the Shares and Warrant Shares shall not then be eligible
for sale by the Holder under Rule 144 under the Act, the Company shall, as promptly as practicable, give written notice to the
Holder. The Company shall include in such registration statement the Registrable Securities proposed to be sold by the Holder,
subject to the provisions of Section 2(e) if the offering is made through underwriters. If the registration by the Company pertains
to an offering by the Company without underwriters, Holder shall not be entitled to participate as a party to any stock sale or
purchase agreement entered into by the Company for the sale of securities for its own account or to otherwise sell Registrable
Securities to any prospective purchaser to whom the Company offers registered securities for the Company’s account other
than in “at-the-market” transactions as defined in Rule 415 promulgated under the Act.

 

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AgeX Therapeutics, Inc.
Registration Rights Agreement

    	 

    

 

(c)
Costs of Registration. The Company shall pay the cost of the registration statements filed pursuant to this Agreement,
including without limitation all registration and filing fees, fees and expenses of compliance with securities or blue sky laws
(including counsel’s fees and expenses in connection therewith), printing expenses, messenger and delivery expenses, internal
expenses of the Company, listing fees and expenses, and fees and expenses of the Company’s counsel, independent accountants
and other persons retained or employed by the Company. Holder shall pay any underwriters discounts applicable to the Registrable
Securities.

 

(d)
Other Securities. Any registration statement filed pursuant to this Agreement may include other securities of the Company
which are held by other persons who, by virtue of agreements with the Company or permission given, are entitled to include their
securities in such registration.

 

(e)
Underwriting. If Holder wishes to include Shares, Warrant Shares, or other Registrable Securities (but not Warrants) in
a registration under Section 2(b), or if Holder intends to distribute Shares by means of an underwriting to be registered under
Section 2(a), Holder shall so advise the Company prior to the effective date of the registration statement filed by the Company.
Holder shall not have the right to include Warrants in an underwriting unless either (i) the inclusion of such Warrants in the
registration is for the purpose of permitting the underwriters to exercise the Warrants and sell the Registrable Securities issued
upon such exercise, or (ii) the Company expressly consents in writing to such inclusion in its sole discretion.

 

The
Company shall enter into an underwriting agreement in customary form with the managing underwriter selected for such underwriting
the Holder, in the case of a registration under Section 2(a), or selected by the Company in its sole discretion in the case of
a registration under Section 2(b). Notwithstanding any other provision of this Agreement, if the managing underwriter advises
the Holder and the Company in writing that marketing factors require a limitation of the number of shares to be underwritten,
then, the number of Registrable Securities that may be included in the registration and underwriting shall be allocated first
to the Company in a registration under Section 2(b), and then, in a registration under Section 2(a) or Section 2(b), among Holder
and any other holders of securities having rights to include their securities in the registration, at the time of filing the registration
statement. No Registrable Securities excluded from the underwriting by reason of the managing underwriter’s marketing limitation
shall be included in such registration.

 

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AgeX Therapeutics, Inc.
Registration Rights Agreement

    	 

    

 

If
Holder or any other holder of securities eligible for inclusion in the registration disapproves of the terms of the underwriting,
such person may elect to withdraw from the underwriting and registration by written notice to the Company and the managing underwriter.
The Registrable Securities and/or other securities so withdrawn shall also be withdrawn from the registration; provided, however,
that, if by the withdrawal of such Registrable Securities or other securities a greater number of Registrable Securities held
by other securities held by persons having rights to participate in such registration may be included in such registration (up
to the maximum of any limitation imposed by the underwriters), then the Company shall offer to Holder and other persons who have
included Registrable Securities or other securities in the registration the right to include additional Registrable Securities
(excluding Warrants except as permitted in Section 2(e)) or other securities in the same proportion used in determining the underwriter
limitation.

 

(f)
Waiver. Notwithstanding any other provision of this Agreement, the rights of the Holder under Section 2(b) may be waived
by the Holder.

 

(g)
Limitation on Company Liability. The Company shall have no obligation to make any cash settlement or payment to Holder,
or to issue any additional Registrable Securities or other securities to Holder, in the event that the Company is unable to effect
or maintain in effect the registration of any Registrable Securities under the Act or any state securities law despite the Company’s
commercially reasonable efforts so to do.

 

3.
Indemnification.

 

(a)
The Company will indemnify, defend and hold harmless Holder, each of its officers, directors and partners, and each person who
controls Holder within the meaning of the Act, and each underwriter, if any, and each person who controls any underwriter within
the meaning of the Act from and against all expenses, claims, losses, damages and liabilities (or actions commenced or threatened
in respect thereof), including any of the foregoing incurred in settlement of any litigation commenced or threatened (other than
a settlement effected without the consent of the Company, which consent will not unreasonably be withheld), to the extent such
expenses, claims, losses, damages and liabilities (or actions commenced or threatened in respect thereof) arise out of or are
based on (i) any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement or
prospectus, or any amendment or supplement thereto, offering Registrable Securities, or any omission to state therein a material
fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were
made, not misleading, or (ii) any violation, by the Company, of any rule or regulation promulgated under the Act and applicable
to the Company and relating to any registration of Registrable Securities by the Company under the Act. The Company will reimburse
Holder, each of its officers, directors and partners, and each person controlling Holder, each such underwriter and each such
person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability or action; provided that the Company will not be liable in any such case
to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission
based upon written information furnished to the Company by Holder or underwriter or controlling person specifically for use in
connection with the registration or offering of Registrable Securities.

 

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AgeX Therapeutics, Inc.
Registration Rights Agreement

    	 

    

 

(b)
Holder will, if Registrable Securities held by Holder are included in a registration under the Act or under any state securities
law, indemnify, defend and hold harmless the Company, each of its directors and officers, and each independent accountant of the
Company, each underwriter, if any, of the Company’s securities covered by such a registration statement, each person who
controls the Company or such underwriter within the meaning of the Act, from and against all claims, losses, damages and liabilities
(or actions commenced or threatened in respect thereof) arising out of or based on (i) any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement or prospectus, or any amendment or supplement offering
Registrable Securities, or any omission (or alleged omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, or (ii) any violation,
by Holder, of any rule or regulation promulgated under the Act applicable to Holder and relating to action or inaction required
of Holder in connection with any registration of Registrable Securities. Holder will reimburse the Company and its directors,
officers, partners, persons, accounting firms, underwriters, or control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss, damage, liability, or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement or prospectus in reliance upon and in conformity with written information furnished to the
Company or any underwriter by Holder specifically for use therein; provided, however, that the obligations of Holder under this
Section 3(b) shall be limited to an amount equal to the net proceeds to Holder from the sale of Registrable Securities pursuant
to such registration.

 

(c)
Each party entitled to indemnification under this Section 3 (the “Indemnified Party”) shall give notice to
the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense
of any such claim or any litigation resulting therefrom; provided that counsel for the Indemnifying Party, who shall conduct the
defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall
not unreasonably be withheld). The Indemnified Party may participate in such defense at the Indemnified Party’s own expense.
The failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 3 except to the extent such failure is prejudicial to the ability of the Indemnifying Party to defend such
action, but such failure shall not relieve the Indemnifying Party of any liability that the Indemnifying Party may have to any
Indemnified Party otherwise than under this Section 3. No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release
from all liability in respect to such claim or litigation.

 

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AgeX Therapeutics, Inc.
Registration Rights Agreement

    	 

    

 

4.
Information by Holder. Holder shall furnish to the Company and to each underwriter, upon the Company’s request, such
information regarding Holder and the distribution proposed by Holder as shall be required in connection with any registration
of Registrable Securities.

 

5.
Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the Commission which
may permit the sale of the Registrable Securities to the public without registration, the Company agrees to:

 

(a)
Use commercially reasonable efforts to file with the Commission in a timely manner all reports and other documents required of
the Company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) at such times as the
Company is subject to the reporting requirements under Section 13 of the Exchange Act; and,

 

(b)
So long as Holder owns any Registrable Securities, furnish to Holder forthwith upon written request a written statement by the
Company as to its compliance with the reporting requirements of the Exchange Act, a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents so filed by the Company under the Exchange Act as Holder may reasonably
request in availing itself of any rule or regulation of the Commission allowing Holder to sell any such securities without registration.

 

6.
Transfer of Registration Rights. The rights to cause the Company to register securities under this Agreement may be assigned:
(a) to an “affiliate” (defined as an entity that controls, is controlled by, or under common control with the transferor);
(b) to one or more of its general partners, limited partners, or members if the transferor is a partnership or limited liability
company; or (c) to any other transferee or assignee of an aggregate of twenty-five percent (25%) or more of the transferor’s
Registrable Securities; provided, that as a condition to any transfer of such rights the transferor must give the Company written
notice at the time or within a reasonable time after said transfer, stating its desire to transfer such rights, the name and address
of the transferee or assignee, and identifying the securities with respect to which such registration rights are being assigned;
provided, further, that nothing in this Section shall be construed in any way to limit any restriction or condition on transfer
of any Registrable Securities imposed by any other agreement between Holder and the Company, the Act, any rule or regulation promulgated
under the Act, or any state securities or blue sky law or any rule or regulation thereunder. In the event of any such transfer,
the transferee shall have the rights and obligations of Holder, provided that the rights under Section 2(a) may be exercised only
by holders of not less than 50% of the Registrable Securities.

 

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AgeX Therapeutics, Inc.
Registration Rights Agreement

    	 

    

 

7.
Computation of Certain Percentages. Where any provision of this Agreement provides for the exercise, waiver, or amendment
of any rights upon the action of a holder of a specified percentage of Registrable Securities, such percentage shall be determined
based upon the aggregate number of Registrable Securities issued and outstanding, and any holders of Warrants shall be deemed
to own the Registrable Securities issuable upon the exercise of such Warrants.

 

8.
Miscellaneous.

 

(a)
Governing Law. This Agreement shall be governed in all respects by the laws of the State of California, as applied to contracts
entered into in California between California residents and to be performed entirely within California.

 

(b)
Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit
of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.

 

(c)
Entire Agreement; Amendment. This Agreement constitutes the full and entire understanding and agreement between the parties
with regard to the subject matter hereof. Neither this Agreement nor any term hereof may be amended, waived, discharged or terminated
orally, but only by a written instrument signed by the Company and Holder.

 

(d)
Notices, etc. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed
by first-class mail, postage prepaid, or otherwise delivered by hand, by messenger or next business day air freight services,
addressed (i) if to Holder at Holder’s address set forth on the signature page hereto, or at such other address as Holder
shall have furnished to the Company in writing, or (ii) if to the Company, at 1010 Atlantic Avenue, Suite 102, Alameda, California
94501; attention: Chief Financial Officer, or at such other address as the Company shall have furnished to Holder in writing.

 

(e)
Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party, upon any breach
or default of any other party under this Agreement, shall impair any such right, power or remedy, nor shall it be construed to
be a waiver of or acquiescence in any such breach or default or any similar breach or default thereafter occurring. A waiver of
any single breach or default shall not be deemed a waiver of any other breach or default theretofore or thereafter occurring.
Any waiver, permit, consent or approval of any kind or character of any breach or default under this Agreement, or any waiver
of any provisions or conditions of this Agreement, must be made in writing and shall be effective only to the extent specifically
set forth in such writing. All remedies, either under this Agreement, or by law or otherwise afforded to any party, shall be cumulative
and not alternative.

 

(f)
Severability. In case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

(g)
Titles and Subtitles. The titles of the sections and subparagraphs of this Agreement are for convenience of reference only
and are not to be considered in construing this Agreement.

 

(h)
Counterparts. This Agreement may be executed in any number of counterparts (including by separate counterpart signature
pages), each of which shall be an original, but all of which together shall constitute one instrument. Any counterpart of this
Agreement may be signed by electronic or facsimile, and such electronic or facsimile signature shall be deemed an original signature.

 

[Signature
page follows.]

 

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AgeX Therapeutics, Inc.
Registration Rights Agreement

    	 

    

 

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

 

COMPANY:

 

	AGEX
    THERAPEUTICS, INC.	 
	 	 
	By:	/s/
    Russell L. Skibsted	 
	 	Russell
    L. Skibsted,	 
	 	Chief
    Financial Officer	 
	 	 	 
	By:	/s/ Judith Segall 	 
	 	Judith
    Segall, Secretary	 

 

HOLDER:

 

	JUVENESCENCE LIMITED	 
	 	 
	By:  	/s/
    Gregory Bailey	 
	 	 	 
	Name:	Gregory
    Bailey	 
	 	 	 
	Title:	Authorized Signatory	 

 

	Address
    for Notice:	4th
Floor Viking House	 
	 	 	 
	 	Nelson Street	 
	 	 	 
	 	Isle of Man IMI2AH	 

 

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AgeX Therapeutics, Inc.
Registration Rights AgreementForm of Series A Warrant

 

EXHIBIT 4.01

COMMON STOCK PURCHASE WARRANT

 SOCIAL REALITY, INC.

		
	Warrant Shares: _______

	Initial Exercise Date: August ____, 2019

THIS 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 (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on __________1 (the “Termination Date”) but not thereafter, to subscribe for and purchase from Social Reality, Inc., 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 August 12, 2019, 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 of a duly executed facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”).  Within the earlier of (i) two (2) 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 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 

——————

1 Insert the date that is the 90 days following the Initial Exercise Date, provided that, if such date is not a Trading Day, insert the immediately following Trading Day.

1

 

the date on which 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 Common Stock under this Warrant shall be $3.60, subject to adjustment hereunder (the “Exercise Price”).

c)

Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of the Warrant Shares to 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 (including until two (2) hours after the close of “regular trading hours” on a Trading Day) 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 

2

 

(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 registered characteristics of the Warrants being exercised.  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 Open Market 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 Open Market 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 

3

 

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 Holder or (B) this Warrant is being exercised via cashless exercise, 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 earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) 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) two (2) 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.

4

 

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 

5

 

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 

6

 

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 one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder 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 

7

 

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.  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)

[RESERVED]

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, that, 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) (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 

8

 

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, that, 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, merger 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 

9

 

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. 

10

 

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.  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, 

11

 

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 on which 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 initial issuance date of this Warrant 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.

Section 5.

Miscellaneous.

a)

No Rights as Stockholder Until Exercise; No Settlement in Cash.  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.  Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.

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 

12

 

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 or articles 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.

13

 

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, 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.  Without limiting any other provision of this Warrant or the Purchase Agreement, 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 

14

 

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.

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

(Signature Page Follows)

15

 

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.

 

	
	SOCIAL REALITY, INC.

	By:__________________________________________

     Name:

     Title:

16

NOTICE OF EXERCISE

TO:

SOCIAL REALITY, INC.

(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:

_______________________________

_______________________________

_______________________________

[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: _____________________

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