Document:

LOAN
AGREEMENT

 

This
LOAN AGREEMENT (this “Agreement”), dated February 13, 2018 (the “Effective Date”), is entered into by
and between Immune Therapeutics, Inc., a Florida corporation (“Borrower”), and Rogoff Family Trust (“Lender”).

 

RECITALS

 

WHEREAS,
Borrower has requested that Lender provide Borrower with a term loan bearing interest at a fixed rate as more particularly described
in this Agreement; and

 

WHEREAS,
Lender has agreed to make such a loan, subject to the terms and conditions set forth herein and in the other Loan Documents (as
defined below).

 

NOW,
THEREFORE, in consideration of the foregoing, the mutual covenants and agreements herein contained and other good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

 

	1.	AMOUNT
                                         AND TERMS OF THE LOAN

 

1.
The Loan. The “Loan” hereunder shall mean the loan by Lender to Borrower in the total principal amount of Fifty
Thousand Dollars ($50,000).

 

1.2
The Note The Loan shall be evidenced by a Promissory Note in substantially the form attached hereto as Exhibit A (the “Note”),
which Note shall be executed by Borrower as of the Effective Date.

 

	1.3	Payment
                                         of Principal and Interest.

 

(a) The
outstanding principal balance of the Loan shall bear interest at the rate of two percent (2%) per annum. Interest on the Loan
shall be calculated on the basis of a 360-day year and the actual number of days elapsed.

 

(b) The
principal balance of the Loan and all accrued interest shall become due and payable one hundred and twenty days (120) from the
Effective Date (the “Term”); provided however, that the principal balance of the Loan and all accrued interest
shall be paid earlier as follows:

 

(i) If
Borrower receives investment capital in an amount equal to or greater than one million five hundred thousand dollars ($1,500,000)
during the Term, principal and accrued interest under the Loan shall become immediately due and payable;

 

(ii) Upon
the receipt of gross revenues by borrower equaling or greater than one million five hundred thousand dollars ($1,500,000) during
the Term, Borrower shall pay Lender in monthly installments five percent (5%) of gross revenues received on the outstanding principal
and accrued interest on the last day of each month beginning the first month after the Borrower has received total gross revenues
of $1,500,000 or more.

 

(c) Nothing
contained herein shall be deemed to require the payment of interest at a rate in excess of the maximum rate permitted by applicable
law. In the event that the amount required to be paid hereunder for any calendar month exceeds the maximum rate permitted by law,
such amounts shall be automatically reduced for such month to the maximum rate permitted by applicable law.

 

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1.5
Prepayment. Upon three (3) business days’ prior written notice to Lender, Borrower may prepay all or any part of
the Loan, including interest, without penalty or premium at any time and from time to time.

 

1.6
Acceleration. Immediately upon the occurrence of any Event of Default (as defined in Section 6.1) and during any continuance
thereof, Lender may declare the Loan, all interest thereon and all other amounts and obligations payable to be forthwith due and
payable to Lender or may take any other action as provided in Section 6.2 herein.

 

1.7
Payment Procedures. All payments made by Borrower under this Agreement shall be made to Lender by wire transfer in U.S.
dollars in immediately available funds to such bank account as shall be designated by Lender in writing from time to time.

 

	2.	EFFECTIVENESS

 

2.1
Effectiveness. This Agreement and the Note and (collectively: the “Loan Documents”) shall not become effective
until (a) all parties hereto have executed and delivered a counterpart hereof (including by way of facsimile transmission or by
electronic transmission in PDF format), and (b) the conditions precedent set forth in Section 4 hereof shall have been satisfied.

 

	3.	REPRESENTATIONS
                                         AND WARRANTIES OF BORROWER

 

Borrower
represents and warrants to Lender the following:

 

3.1
Authority. Borrower has the requisite legal capacity to borrow money, to execute, deliver and perform each of the Loan
Documents to which it is a party and all other documents, certificates and instruments delivered in connection therewith, and
to effect and carry out the transactions contemplated herein and therein. Each Loan Document has been duly authorized and, when
executed and delivered, will be a valid and legally binding instrument enforceable against Borrower in accordance with its terms.
The execution and delivery of the Loan Documents and the consummation of the transactions contemplated thereby will not (immediately
or with the passage of time, or the giving of notice) violate (a) any law, order, rule or regulation or deten11ination of an arbitrator,
a court, or other governmental agency, applicable or binding upon Borrower or any of Borrower’s property or as to which
Borrower or any of Borrower s property is subject (collectively, “Requirement of Law”), or (b) any provision of any
agreement, instrument, or undertaking to which Borrower is a party. No consents, approvals or other authorizations or notices,
other than those which have been obtained and are in full force and effect, are required by any state or federal regulatory authority
or other person or entity (“Person”) in connection with the execution and delivery of the Loan Documents and the performance
of any obligations contemplated thereby.

 

3.2
Litigation. There are no actions, suits, proceedings or governmental investigations or inquiries pending, or to the best
knowledge of Borrower threatened, against Borrower or Lender, that could, if adversely determined, have a material adverse effect
on the performance of any obligation contemplated in or arising under the Loan Documents (“Material Adverse Effect”).

 

3.3
Full Disclosure. No written statement prepared or furnished to Lender in connection with the transactions contemplated
hereby (including, without limitation, financial statements) by or on behalf of Borrower:- when all such statements are taken
as a whole, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements
contained therein not misleading. All facts known to Borrower which are material to an understanding of the financial condition,
business, properties or prospects of Borrower have been disclosed to Lender.

 

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	4.	CONDITIONS
                                         PRECEDENT

 

The
effectiveness of this Agreement is subject to the satisfaction of the following conditions precedent:

 

4.1
Documents. Lender shall have received the following, validly executed to the satisfaction of the Lender: (a) this Agreement;
and (b) the Note.

 

4.2
Compliance with Covenants. Borrower shall have complied with and performed all of Borrower’s covenants and obligations
under the Loan Documents.

 

4.3
Related Information. Borrower shall have provided to Lender in form satisfactory to Lender such other financial information
relating to Borrower as requested by Lender.

 

	5.	COVENANTS
                                         OF BORROWER

 

5.1
Certain Affirmative Covenants. Borrower covenants and agrees that until full and complete performance by Borrower of all
obligations arising under the Loan and the Loan Documents, Borrower shall:

 

(a) Cooperate
with Lender and execute such further instruments and documents as Lender shall reasonably request to can-y out to its satisfaction
of the transactions contemplated by the Loan Documents;

 

(b) As
soon as possible and in any event within two (2) business days after acquiring knowledge thereof notify Lender in writing of the
occurrence of any Event of Default; and

 

(c)
Promptly provide Lender with such other information respecting condition or operations, financial or othe1wise, of Borrower as
Lender may from time to time reasonably request.

 

5.2
Compliance with Laws. Borrower shall comply in all material respects with all Requirements of Law, contractual obligations,
commitments, instruments, licenses, and permits.

 

5.3
Reporting Requirements. Borrower shall furnish to Lender, promptly after the commencement thereof notice of all actions,
suits and proceedings before any domestic or foreign governmental authority or arbitrator, affecting Borrower, except those which
in the aggregate, if adversely determined, would have no Material Adverse Effect;

 

	6.	EVENTS
                                         OF DEFAULT; ACCELERATION

 

6.1
Events of Default. Each of the following shall constitute an “Event of Default”

 

(a)
Borrower shall fail to make any payment of principal or interest on the Loan or other amounts due under the Loan Documents within
fifteen (15) days of the date, which such payment is due;

 

(b) Borrower
shall fail to preform any terms, covenant or agreement contained herein or in any Loan Document and such failure shall continue
for thirty (30) days after the earlier of the date on which (x) Borrower becomes aware of such failure, or (y) written notice
of such failure has been given to Borrower by Lender;

 

(c) Any
representation or warranty of Borrower in any Loan Document shall prove to have been false in any material respect upon the date
when made;

 

(d) Borrower
shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator,
(ii) make a general assignment for the benefit of Borrower creditors, (iii) commence a voluntary case under the United States
Bankruptcy Code (as now or hereafter in effect), (iv) file a petition seeking to take advantage of any other law of any jurisdiction
relating to bankruptcy, insolvency, or composition or readjustment of debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against Borrower in an involuntary case under the United States Bankruptcy
Code, or (vi) take any action for the purpose of effecting any of the foregoing; or

 

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(e) A
proceeding or case shall be commenced, without the application or consent of Borrower, in any court of competent jurisdiction,
seeking (i) the liquidation of Borrower’s assets, or the composition or readjustment of Borrower’s debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of any substantial part of Borrower’s assets, or (iii)
similar relief in respect of Borrower under any law of any jurisdiction relating to bankruptcy, insolvency, or the composition
or readjustment of debts, and such proceedings or case shall continue undismissed, or an order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue unstayed and in effect for a period of sixty (60) days; or an order
for relief against the Borrower shall be entered in an involuntary case under any bankruptcy, insolvency, composition, readjustment
of debt, liquidation of assets or similar law of any jurisdiction.

 

6.2
Remedies Upon Default. Immediately upon the occurrence of any Event of Default and during the continuance thereof, Lender
may declare the Loan, all interest thereon and all other amounts and obligations payable under any Loan Document to be due and
payable, without presentment, demand, protest or further notice of any kind, all of which are expressly waived by Borrower.

 

	7.	ARBITRATION

 

		7.1	AGREEMENT
                                         TO BINDING ARBITRATION. THE PARTIES AGREE THAT ANY

 

CONTROVERSY
OR CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE BREACH THEREOF SHALL AT EITHER PARTIES
ELECTION, BE SUBMITTED TO ARBITRATION BEFORE THE AMERICAN ARBITRATION ASSOCIATION IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION
RULES OF THE AMERICAN ARBITRATION ASSOCIATION, AND JUDGMENT ON THE AWARD RENDERED BY THE ARBITRATOR MAY BE ENTERED IN ANY COURT
HAVING JURISDICTION THEREOF. EITHER PARTY MAY OBTAIN PROVISIONAL OR ANCILLARY REMEDIES SUCH AS INJUNCTIVE RELIEF OR THE APPOINTMENT
OF A RECEIVER, OR EXERCISE SELF-HELP, AT ANY TIME WITHOUT WAIVING ITS RIGHT TO ARBITRATION.

 

	8.	MISCELLANEOUS

 

8.1
Governing Law; Submission to Jurisdiction. This Agreement and the Note are contracts under the laws of the State of Florida
and shall for all purposes be governed by and construed in accordance with the laws of the State of Florida, without regard to
its principals of conflicts of laws. Borrower and Lender hereby submit to the nonexclusive jurisdiction of any Florida state or
federal court sitting in Orlando for the purposes of all legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. Borrower and Lender irrevocably waive, to the fullest extent pern1itted by applicable law, any
objection that Borrower or Lender may now or hereafter have to laying of the venue of any such proceedings brought in such a court
and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.

 

8.2
Waiver of Jury Trial. BORROWER AND LENDER HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

 

8.3
Further Assurances. Borrower shall, at any time, and from time to time, upon the written request of Lender, execute and
deliver such further documents and do such further acts and things as Lender may reasonably request to effect the purposes of
this Agreement.

 

8.4
Waivers. No course of dealing between Borrower and Lender, nor any failure to exercise, nor any delay in exercising, any
right, power or privilege of Lender hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any
right, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power
or privilege.

 

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8.5
Rights Cumulative. The rights and remedies provided herein, and under the Note, and in all other agreements, instruments,
and documents delivered pursuant to or in connection with this Agreement, and by applicable law are cumulative and are in addition
to and not exclusive of any other rights or remedies provided by law.

 

8.6
Severability. The provisions of this Agreement are severable. If any clause or provision hereof shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect only such clause
or provision or pa1t thereof in such jurisdiction and shall not in any manner affect such clause or provision in any other jurisdiction
or any other clause or provision in this Agreement in any jurisdiction.

 

8.7
Notices. All notices and other communications made or required to be given pursuant to the Loan Documents shall be in writing
and shall be deemed given if delivered personally, by facsimile transmission or by electronic transmission in PDF format, or delivered
by overnight courier service, or mailed by registered or ce11ified mail {return receipt requested), postage prepaid, to the parties
at the following addresses (or at such other address for a party as shall be specified by like notice; provided that notices of
a change of address shall be effective only upon receipt thereat):

 

If
to Borrower:

 

Immune
Therapeutics, Inc.

37 North Orange Ave., Suite 607

Orlando, Florida 32801

Fax
number: (407) 894-5567

Phone:
(407) 902-7904

 

If
to Lender:

 

Lofton
Family Trust

 

8.8
Successors and Assign. This Agreement shall inure to the benefit of and shall be binding upon the successors and assigns
of the parties hereto; provided, however, that Borrower may not assign any rights or obligations hereunder without the written
consent of Lender.

 

8.9
Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of
which shall constitute one document.

 

8.10
Termination. This Agreement shall terminate upon iI1·evocable payment in cash in full of all obligations hereby.

 

8.11
Entire Agreement. This Agreement and the other Loan Documents executed and delivered contemporaneously herewith, together
with the exhibits and schedules attached hereto and thereto, constitute the entire understanding of the parties with respect to
the subject matter hereof, and any other prior or contemporaneous agreements, whether written or oral, with respect thereto are
expressly superseded hereby. In the event that the provisions of this Agreement shall conflict with provisions of any of the other
Loan Documents, the provisions of this Agreement shall control.

 

Signatures
Appear on the Following Page

 

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IN
WITNESS WHEREOF, the parties hereby have caused this Agreement to be duly executed and delivered as of the day and year first
above written.

 

	Borrower:
    Immune Therapeutics, Inc.	 	Lender:
    Rogoff Family Trust
	 	 	 	 
	By:	 	 	 
	 	Noreen
Griffin	 	 
	 	 	 	 
	Its:	CEO	 	 

 

[Signature
Page to Loan Agreement]

 

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Exhibit
A

 

PROMISSORY
NOTE

 

	$50,000	February
    13, 2018

 

 

FOR
VALUE RECEIVED, the undersigned, Immune Therapeutics, Inc., a Florida corporation (“Borrower”), promises to pay to
the order of Rogoff Family Trust (“Lender”), the principal sum of Fifty Thousand dollars ($50,000), together with
interest upon the unpaid principal balance (the “Loan”), at the rate hereinafter specified, said principal and interest
being payable as follows:

 

The
outstanding principal balance of the Loan shall bear interest at the rate of two percent (2%) per annum. Interest on the Loan
shall be calculated on the basis of a 360-day year and the actual number of days elapsed.

 

The
principal balance of the Loan and all accrued interest shall become due and payable 120 days from the Effective Date; provided,
however, that the principal balance of the Loan and all accrued interest shall be paid earlier as follows:

 

(i) If
Borrower receives investment capital in an amount equal to or greater than one million five hundred thousand dollars ($1,500,000)
during the Term, principal and accrued interest under the Loan shall become immediately due and payable;

 

(ii) If
Borrower uplists its common stock to a global or national exchange for buying and selling its common stock during the Term, principal
and accrued interest under the Loan shall become immediately due and payable; or

 

(iii) Upon
the receipt of gross revenues by Borrower equaling or greater than one million five hundred thousand dollars ($ 1,500,000) during
the Term, Borrower shall pay Lender in monthly installments five percent (5%) of gross revenues received on the outstanding principal
and accrued interest on the last day of each month beginning the first month after the Borrower has received total gross revenues
of $1,500,000 or more.

 

This
Promissory Note (the “Note’’) is being issued pursuant to that certain Loan Agreement, dated of even date herewith,
between Borrower and Lender (the “Loan Agreement”). Capitalized terms not otherwise defined herein shall have the
meaning ascribed to such terms in the Loan Agreement.

 

For
any payment which is not made within ten (10) days of the due date for such payment, Borrower shall pay a late fee. The late fee
shall equal five percent (5%) of the unpaid portion of the past-due payment.

 

All
interest and the principal hereof shall be paid to Lender by wire transfer in U.S. dollars in immediately available funds to such
bank account as shall be designated by Lender in writing from time to time.

 

If
Borrower shall fail to make payment of any installment of principal and interest, within fifteen (15) days of its due date, or
upon the occurrence of any other Event of Default under the Loan Agreement or this Note, then and in any such event, the entire
unpaid principal balance of the indebtedness evidenced hereby, together with all interest then accrued, shall, at the absolute
option of Lender, at once become due and payable, without demand or notice, the same being expressly waived and Lender may exercise
any right, power or remedy permitted by law or equity, or as set forth herein or in the Loan Agreement or any other Loan Document.

 

Lender
and Borrower hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Borrower
against the other. Borrower waives protest, demand, presentment, and notice of dishonor, and agrees that this Note may be extended,
in whole or in part, without limit as to the number of such extensions or the period or periods thereof, without notice to it
and without affecting its liability thereon. The liability of Borrower shall be absolute and unconditional and without regard
to the liability of any other party hereto.

 

    	Promissory Note Page 1 of 3	 	_________ / ________

    	 

    

 

It
is the intention of Lender and Borrower to comply strictly with applicable usury laws; and, accordingly, in no event and upon
no contingency shall Lender ever be entitled to receive, collect, or apply as interest any interest, fees, charges or other payments
equivalent to interest, in excess of the maximum effective contract rate which Lender may lawfully charge under applicable statutes
and laws from time to time in effect; and in the event that Lender ever receives, collects, or applies as interest any such excess,
such amount which, but for this provision, would be excessive interest, shall be applied to the reduction of the principal amount
of the indebtedness hereby evidenced; and if the principal amount of the indebtedness evidenced hereby, all lawful interest thereon
and all lawful fees and charges in connection therewith, are paid in full, any remaining excess shall forthwith be paid to Borrower,
or other party lawfully entitled thereto. All interest paid or agreed to be paid by Borrower shall, to the maximum extent permitted
under applicable law, be amortized, prorated, allocated and spread throughout the full period until payment in full of the principal
so that the interest hereon for such full period shall not exceed the maximum amount permitted by applicable law. The provisions
of this paragraph shall be given precedence over any other provision contained herein or in any other agreement between Lender
and Borrower that is in conflict with the provisions of this paragraph.

 

This
Note shall be governed and construed according to the statutes and laws of the State of Florida from time to time in effect.

 

Upon
three (3) business days’ prior written notice to Lender, Borrower shall have the right to prepay the indebtedness evidenced
hereby in whole or in part by paying the principal amount being prepaid plus accrued interest.

 

The
invalidity or unenforceability of any one or more provisions of this Note shall not render any other provision invalid or unenforceable.
The parties hereto shall negotiate in good faith to replace such invalid or unenforceable provision with a valid and enforceable
provision to effect the original intent of the parties in a mutually acceptable manner; provided, however, that if the parties
cannot agree on such provision after negotiating in good faith within a reasonable period of time under the circumstances, in
lieu of any invalid or unenforceable provision, there shall be added automatically a valid and enforceable provision as similar
in terms to such invalid or unenforceable provision as may be possible.

 

The
covenants, conditions, waivers, releases and agreements contained in this Note shall bind, and the benefits thereof shall inure
to, the parties hereto and their respective heirs, executors, administrators, successors and assigns; provided, however, that
this Note cannot be assigned by Borrower without the prior written consent of Lender, and any such assignment or attempted assignment
by Borrower without consent shall be void and of no effect with respect to Lender.

 

Subject
to the Loan Agreement, Lender may from time to time assign, in whole or in part, this Note and/or the obligations evidenced hereby.
The holder of any such assignment, if the applicable agreement between Lender and such holder so provides, shall be entitled to
all of the rights, obligations and benefits of Lender as fully as though Borrower were directly indebted to such holder.

 

Borrower
irrevocably appoints each and every officer of Borrower as its attorneys upon whom may be served, by certified mail at the address
set forth in the Loan Agreement, or such other address as may be directed by Borrower, in writing, any notice, process or pleading
in any action or proceeding against it arising out of or in connection with this Note or any other Loan Document; and Borrower
hereby consents that any action or proceeding against it be commenced and maintained in any state or federal court sitting in
Orlando, Orange County, Florida, by service of process on any such officer; and Borrower agrees that such courts of the State
shall have jurisdiction with respect to the subject matter hereof and the person of Borrower. Borrower agrees not to assert any
defense to any action or proceeding initiated by Lender in any such court based upon improper venue or inconvenient forum.

 

[signature
page to follow]

 

    	Promissory Note Page 2 of 3	 	_________ / ________

    	 

    

 

	Borrower:	 
	 	 	 
	Immune Therapeutics, Inc.	 
	 	                	 
	By:	 	 
	Noreen Griffin, Chief Executive	 

 

    	Promissory Note Page 3 of 3	 	_________ / ________cbbt_ex1040.htm

EXHIBIT 10.40

 

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

 

AMENDED AND RESTATED

COMMON STOCK PURCHASE WARRANT

 

CEREBAIN BIOTECH CORP 

	
Warrant Shares: 275,000 Issue 
	
 
	
Date: February 15, 2018 

	
 
	
 
	
 

  

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, EMA Financial, LLC, a Delaware limited liability company (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 Issue Date (as defined above) and on or prior to the close of business on the fifth (5th) anniversary of the Issue Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from CEREBAIN BIOTECH CORP., a Nevada corporation (the “Company”), up to 275,500 shares (the “Warrant Shares”) (whereby such number may be adjusted from time to time pursuant to the terms and conditions of this Warrant) 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), subject to adjustment herein. This Warrant is issued by the Company as of the date hereof in connection with that certain securities purchase agreement dated February 15, 2018, by and among the Company and the Holder.

 

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 on or about the date hereof, among the Company and the Holder, among others, pursuant to which this Warrant is being issued.

 

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 and from time to time on or after the Issue Date and on or before the Termination Date by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto (“Notice of Exercise”) (which delivery may be made in any manner set forth in the Purchase Agreement, including without limitation by email); and, within three (3) Trading Days of the date said Notice of Exercise is delivered to the Company, the Company shall have received payment of the aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank, unless payment is being made by cashless exercise as provided in Section 2(c) below. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The 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.

 

	 
	1
	

 
	 

  

	
 
	b)	Exercise Price. The exercise price per share of the Common Stock under this Warrant shall be $0.20, subject to adjustment hereunder (the “Exercise Price”).
	
 
	
 
	
 

	
 
	c)	Cashless Exercise. In the event that the shares underlying this Warrant are not registered for resale with the Securities and Exchange Commission under an effective registration statement with a current prospectus, then this Warrant may also be exercised by means of a “cashless exercise” in which the Holder shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (B), where:

  

(A) = the Market Price (as defined below);

 

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

 

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

 

“Market Price” shall mean the closing sale price per share of Common Stock on the principal market where the Common Stock is traded on the Trading Day immediately preceding delivery of the Notice of Exercise or the Closing Date, whichever is greater. Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c).

 

	
 
	d)	Holder’s Restrictions. 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 person or entity acting as a group together with the Holder or any of the Holder’s Affiliates), 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 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 (A) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates and (B) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any rights or securities convertible into or exercisable for Common Stock (“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. Except as set forth in the preceding sentence, for purposes of this Section 2(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section 2(d) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) 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 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(d), 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 (x) the Company’s most recent periodic or annual report, as the case may be, (y) a more recent public announcement by the Company or (z) any other notice by the Company or the Company’s Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.9% 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. By written notice to the Company, the Holder may at any time and from time to time increase or decrease the Beneficial Ownership Limitation to any other percentage specified in such notice (or specify that the Beneficial Ownership Limitation shall no longer be applicable), provided, however, that (A) any such increase (or inapplicability) shall not be effective until the sixty-first (61st) day after such notice is delivered to the Company, and (B) any such increase or decrease shall apply only to the Holder and not to any other holder of Warrants. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(d) 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.

 

	 
	2
	

 
	 

  

	
 
	e)	Mechanics of Exercise.

  

	i.	Delivery of Certificates Upon Exercise. Certificates for shares purchased hereunder shall be transmitted by the transfer agent of the Company to the Holder by crediting the account of the Holder’s prime broker with the Depository Trust Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if the Company is a participant in such system and either (x) there is an effective registration statement permitting the resale of the Warrant Shares by the Holder, or (y) such shares may be sold pursuant to Rule 144, and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise, within 3 Trading Days from the delivery to the Company of the Notice of Exercise Form, surrender of this Warrant (if required) and payment of the aggregate Exercise Price as set forth above (“Warrant Share Delivery Date”). This Warrant shall be deemed to have been exercised on the date the Exercise Price is received by the Company. The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised by payment to the Company of the Exercise Price (or by cashless exercise) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(e)(vi) prior to the issuance of such shares, have been paid. If the Company fails for any reason to deliver to the Holder the Warrant Shares or certificates evidencing 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, $1,000.00 per Trading Day (increasing to $2,000.00 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 shares or certificates are delivered.
	
 
	
 

	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 certificate or certificates representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
	
 
	
 

	iii.	Rescission Rights. If the Company fails to cause its transfer agent to transmit to the Holder a certificate or certificates representing the Warrant Shares (or otherwise transmit such shares via DWAC to the Holders DTC account) pursuant to this Section 2(e) 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 Certificates Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause its transfer agent to transmit to the Holder a certificate or certificates representing the Warrant Shares (or otherwise transmit such shares via DWAC to the Holders DTC account) 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 (1) pay in cash to the Holder the amount 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 (A) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (B) the price at which the sell order giving rise to such purchase obligation was executed, and (2) 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 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 $11,000.00 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 $10,000.00, under clause (1) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000.00. 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 the Warrant Shares or certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

 

 

	 
	3
	

 
	 

 

	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 Holder would otherwise be entitled to purchase upon such exercise, the Company shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.
	
 
	
 

	vi.	Charges, Taxes and Expenses. Issuance of certificates for 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 certificate, all of which taxes and expenses shall be paid by the Company, and such certificates 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 certificates for 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.

 

Section 3. Certain Adjustments.

 

	
 
	a)	Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (A) pays a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (B) subdivides outstanding shares of Common Stock into a larger number of shares, (C) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (D) 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 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)	Subsequent Equity Sales. If the Company or any Subsidiary thereof, as applicable, at any time while this Warrant is outstanding, shall sell or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Stock or securities entitling any Person to acquire shares of Common Stock (upon conversion, exercise or otherwise), at an effective price per share less than the then Exercise Price (such lower price, the “Base Share Price” and such issuances collectively, a “Dilutive Issuance”) (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share which is less than the Exercise Price, such issuance shall be deemed to have occurred for less than the Exercise Price on such date of the Dilutive Issuance), then the Exercise Price shall be reduced and only reduced to equal the Base Share Price, and the number of Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise Price payable hereunder, after taking into account the decrease in the Exercise Price, shall be equal to the aggregate Exercise Price prior to such adjustment. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. The Company shall notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common Stock Equivalents subject to this Section 3(b), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice the “Dilutive Issuance Notice”). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 3(b), upon the occurrence of any Dilutive Issuance, after the date of such Dilutive Issuance the Holder is entitled to receive a number of Warrant Shares based upon the Base Share Price regardless of whether the Holder accurately refers to the Base Share Price in the Notice of Exercise.

 

	 
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	c)	Subsequent Rights Offerings. If the Company, at any time while the Warrant is outstanding, shall issue rights, options or warrants to all holders of Common Stock (and not to Holders) entitling them to subscribe for or purchase shares of Common Stock at a price per share less than the closing price at the record date mentioned below, then the Exercise Price shall be multiplied by a fraction, of which the denominator shall be the number of shares of the Common Stock outstanding on the date of issuance of such rights or warrants plus the number of additional shares of Common Stock offered for subscription or purchase, and of which the numerator shall be the number of shares of the Common Stock outstanding on the date of issuance of such rights or warrants plus the number of shares which the aggregate offering price of the total number of shares issued (assuming receipt by the Company in full of all consideration payable upon exercise of such rights, options or warrants) would purchase at such closing price. Such adjustment shall be made whenever such rights or warrants are issued, and shall become effective immediately after the record date for the determination of stockholders entitled to receive such rights, options or warrants.
	
 
	
 
	
 

	
 
	d)	Pro Rata Distributions. If the Company, at any time while this Warrant is outstanding, shall distribute to all holders of Common Stock (and not to Holders of the Warrants) evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants to subscribe for or purchase any security other than the Common Stock (which shall be subject to Section 3(b)), then in each such case the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator shall be the closing price determined as of the record date mentioned above, and of which the numerator shall be such closing price on such record date less the then per share fair market value at such record date of the portion of such assets or evidence of indebtedness so distributed applicable to one outstanding share of the Common Stock as determined by the Board of Directors in good faith. In either case the adjustments shall be described in a statement provided to the Holder of the portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to one share of Common Stock. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date mentioned above.
	
 
	
 
	
 

	
 
	e)	Fundamental Transaction. If, at any time while this Warrant is outstanding, (A) the Company effects any merger or consolidation of the Company with or into another Person, (B) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (C) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (D) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (each “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, 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 merger, consolidation or disposition of assets by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event. For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant consistent with the foregoing provisions and evidencing the Holder’s right to exercise such warrant into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 3(e) and insuring that this Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction that is (1) an all cash transaction, (2) a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the Securities Exchange Act of 1934, as amended, or (3) a Fundamental Transaction involving a person or entity not traded on a national securities exchange, the Nasdaq Global Select Market, the Nasdaq Global Market, or the Nasdaq Capital Market, the Company or any successor entity shall pay at the Holder’s option, exercisable at any time concurrently with or within 30 days after the consummation of the Fundamental Transaction, an amount of cash equal to the value of this Warrant as determined in accordance with the Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg L.P. using (i) a price per share of Common Stock equal to the closing price of the Common Stock for the Trading Day immediately preceding the date of consummation of the applicable Fundamental Transaction, (ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as of the date of consummation of the applicable Fundamental Transaction and (iii) an expected volatility equal to the 100 day volatility obtained from the “HVT” function on Bloomberg L.P. determined as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction.

 

	 
	5
	

 
	 

  

	
 
	f)	Calculations. All calculations under this Section 3 shall be made to the nearest two decimal places 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 mail to the Holder a notice setting forth the Exercise Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.
	
 
	
 
	
 

	
 
	ii.	Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock; (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; (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 mailed to the Holder at its last address as it shall appear upon the Warrant Register of the Company, at least 7 business 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 mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder is 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.

 

	 
	6
	

 
	 

 

 

Section 4. Transfer of Warrant.

 

	
 
	a)	Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to the provisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees 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. A Warrant, if properly assigned, 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 original Issue Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
	
 
	
 
	
 

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

	
 
	d)	Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws or eligible for resale under Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions of Section 5.7 of the Purchase Agreement.

  

Section 5. Miscellaneous.

 

	
 
	a)	No Rights as Shareholder Until Exercise. This Warrant does not entitle the Holder to any voting rights or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2(e)(i).
	
 
	
 
	
 

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

 

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

	
 
	d)	Authorized Shares.

 

	 
	7
	

 
	 

 

The Company covenants that during the from the Issue Date herein it will reserve from its authorized and unissued Common Stock, the number of shares of Common Stock equal to 300% of the total shares of Common Stock issuable upon the full exercise of this Warrant (without regard to the beneficial ownership limitations contained herein). The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the 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, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (a) 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, (b) 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 (c) 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.

 

	
 
	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, 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 Holder’s rights, powers or remedies, notwithstanding the fact that all rights hereunder terminate on the Termination Date. If the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to 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 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.

	 
	8
	

 
	 

 

	
 
	i)	Limitation of Liability. No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of 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. 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 of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of all Holders 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.
	
 
	
 
	
 

	
 
	o)	Signatures. Any signature transmitted by facsimile, e-mail, or other electronic means shall be deemed to be an original signature.

  
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.

 

	
 
	
CEREBAIN BIOTECH CORP 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
/s/ Eric Clemons
	
 

	
 
	
Name: 
	
Eric Clemons
	
 

	
 
	
Title: 
	
President & CEO
	
 

 

	 
	9
	

 
	 

  

NOTICE OF EXERCISE

 

	To: 	CEREBAIN BIOTECH CORP 
	
 
	
 

	
RE:
	
Warrant originally issued on or about February 15, 2018 to EMA Financial, LLC for 275,000 Warrant Shares.

 

(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

[ ] 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 a certificate or certificates representing 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 or by physical delivery of a certificate to:

 

_______________________________

 

_______________________________

 

_______________________________

 

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

 

[SIGNATURE OF HOLDER]

 

Name of Warrant Holder: ________________________________________________________________________

Signature of Authorized Signatory of Warrant Holder: _________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: ________________________________________________________________________________________

 

	 
	10
	

 
	 

  

ASSIGNMENT FORM

 
(To assign the foregoing warrant, execute
this form and supply required information. 
Do not use this form to exercise the warrant.)
 

FOR VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

_______________________________________________ whose address is

 

_______________________________________________________________.

 

_______________________________________________________________

 

Dated: ______________, _______

 

 

Holder’s Signature: _____________________________

 

Holder’s Address: _____________________________

 

_____________________________

 

Signature Guaranteed: ___________________________________________

 

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

 

 

	
11

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