Document:

ex_168431.htm

Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (the “Agreement”) is dated as of December ___, 2019 by and among BioSig Technologies, Inc., a Delaware corporation (the “Company”), and each of the purchasers identified on the signature pages hereto and such purchasers’ respective successors and assigns (individually, a “Purchaser” and collectively, the “Purchasers”).

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:

 

DEFINITIONS

 

In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings set forth in this section:

 

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 405 under the Securities Act.

 

“Board of Directors” means the board of directors of the Company.

 

“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 

“Closing” means the closing of the purchase and sale of the Shares pursuant to Section 1.02.

 

“Closing Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Shares, in each case, have been satisfied or waived, but in no event later than the second (2nd) Trading Day following the date hereof.

 

“Commission” means the United States Securities and Exchange Commission.

 

“Common Stock” means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

 

“Disclosure Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.

 

“Disclosure Time” means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time) and before midnight (New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the date hereof, unless otherwise instructed as to an earlier time by the Company, and (ii) if this Agreement is signed between midnight (New York City time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof, unless otherwise instructed as to an earlier time by the Company. 

 

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“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“FDA” shall have the meaning ascribed to such term in Section 2.01(h).

 

“FDCA” shall have the meaning ascribed to such term in Section 2.01(h).

 

“GAAP” shall have the meaning ascribed to such term in Section 2.01(f).

 

“Liens” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

“Material Adverse Effect” shall have the meaning assigned to such term in Section 2.01(a).

 

“Per Share Purchase Price” equals $6.00, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

 

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Prospectus” means the final prospectus filed for the Registration Statement.

 

“Prospectus Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with the Commission and delivered by the Company to each Purchaser at the Closing.

 

“Registration Statement” means the effective registration statement with Commission file No. 333-230448 which registers the sale of the Shares.

 

“Required Approvals” shall have the meaning ascribed to such term in Section 2.01(e).

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

 

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

 

“SEC Reports” shall have the meaning ascribed to such term in Section 2.01(f).

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Shares” means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement.

 

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating and/or borrowing shares of Common Stock). 

 

“Subscription Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares purchased hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in immediately available funds.

 

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

 

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).

 

“Transaction Documents” means this Agreement, all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.

 

“Transfer Agent” means Action Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address of 2469 E. Fort Union Blvd, Suite 214, Salt Lake City, Utah 84121 and a facsimile number of (801) 274-1099, and any successor transfer agent of the Company.

 

Article I. 

Purchase and Sale of COMMON Stock 

 

Section 1.01 Purchase and Sale of Stock. Upon the following terms and conditions, the Company shall issue and sell at the Closing, and the Purchasers, severally and not jointly, agree to purchase at the Closing, an aggregate of $10,000,000 of the Company’s Common Stock (collectively, the “Shares”), with an aggregate number of shares of Common Stock for each Purchaser equal to such Purchaser’s Subscription Amount divided by the Per Share Purchase Price.

 

Section 1.02 Closing.

 

(a) On the closing date (the “Closing Date”), upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell at the closing (the “Closing”), and the Purchasers, severally and not jointly, agree to purchase at the Closing, an aggregate of $10,000,000 of Common Stock, calculated based upon the Per Share Purchase Price, for each Purchaser equal to such Purchaser’s Subscription Amount. Each Purchaser purchasing shares of Common Stock on the Closing Date shall deliver to the Company such Purchaser’s Subscription Amount by wire transfer of immediately available funds in accordance with the Company’s written wire instructions, and the Company shall deliver to each Purchaser its respective shares of Common Stock, as determined pursuant to Section 1.03(a), and the Company and each Purchaser shall deliver the other items set forth in Section 1.03 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 1.03 and 1.04, the Closing shall occur at the offices of Haynes and Boone, LLP, 30 Rockefeller Plaza, 26th Floor, New York, New York 10112 or such other location as the parties shall mutually agree. Notwithstanding anything herein to the contrary, the Closing Date shall occur on or before December 31, 2019; provided, however, that such date may be extended by the Company, without notice, for up to three additional 30-day periods (the “Termination Date”).

 

(b) If the Closing is not held on or before the Termination Date, the Company shall cause all subscription documents and funds to be returned, without interest or deduction, to each prospective Purchaser. The Company shall also cause any subscription documents or funds received following the Closing to be returned, without interest or deduction, to each applicable prospective Purchaser. Notwithstanding the foregoing, the Company in its sole discretion may elect not to sell to any Person any or all of the shares of Common Stock requested to be purchased hereunder, provided that the Company causes all corresponding subscription documents and funds received from such Person to be promptly returned.

 

Section 1.03 Deliveries.

 

(a) On or prior to the Closing, the Company shall deliver or cause to be delivered to each Purchaser purchasing the shares of Common Stock on the Closing Date each of the following:

 

(i) this Agreement duly executed by the Company;

 

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(ii) the Company’s wire instructions, on Company letterhead and executed by the Chief Executive Officer or Chief Financial Officer; and

 

(iii) Instructions to the Company’s Transfer Agent instructing the Transfer Agent to deliver the Shares purchased by such Purchaser. Within five (5) days following the Closing, the Company will deliver, unless otherwise requested by any Purchaser, one (1) certificate registered in such Purchaser’s name representing the shares of Common Stock purchased by such Purchaser at the Closing.

 

(b) On or prior to the Closing Date, each Purchaser purchasing Common Stock on the Closing Date shall deliver or cause to be delivered to the Company the following:

 

(i) this Agreement duly executed by such Purchaser; and

 

(ii) such Purchaser’s Subscription Amount by wire transfer to the Company’s account specified in the Company’s wire instructions.

 

Section 1.04 Closing Conditions.

 

(a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

 

(i) the accuracy in all material respects on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific date therein in which case they shall be accurate in all material respects as of such date);

 

(ii) all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed; and

 

(iii) the delivery by each Purchaser of the items set forth in Section 1.03(b) of this Agreement.

 

(b) The respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met:

 

(i) the accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of a specific date therein in which case they shall be accurate in all material respects as of such date);

 

(ii) all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;

 

(iii) the delivery by the Company of the items set forth in Section 1.03(a) of this Agreement; and

 

(iv) there shall have been no Material Adverse Effect with respect to the Company since the date hereof.

 

Article II. 

Representations and Warranties 

 

Section 2.01 Representations and Warranties of the Company. The Company hereby represents and warrants to the Purchasers, as of the date hereof, as follows:

 

(a) Organization, Good Standing and Power. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has the requisite corporate power to own, lease and operate its properties and assets and to conduct its business as it is now being conducted. The Company is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary except for any

 

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jurisdiction(s) (alone or in the aggregate) in which the failure to be so qualified will not have material adverse effect on the business, operations, assets, properties, prospects or financial condition of the Company, and/or any condition, circumstance, or situation that would prohibit or otherwise interfere with the ability of the Company to perform any of its obligations under this Agreement in any material respect (each, a “Material Adverse Effect”).

 

(b) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and perform this Agreement and each of the other Transaction Documents and to issue and sell the Shares in accordance with the terms hereof and otherwise carry out its obligations hereunder and thereunder. The execution, delivery and performance of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate action, and no further action is required of the Company or its Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed and delivered by the Company. This Agreement and each of the other Transaction Documents, when delivered in accordance with the terms hereof and thereof, will constitute a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditor’s rights and remedies or by other equitable principles of general application.

 

(c) Issuance of of the Shares; Registration. The Shares are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement. The Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities Act, which became effective on March 29, 2019 (the “Effective Date”), including the Prospectus, and such amendments and supplements thereto as may have been required to the date of this Agreement. The Registration Statement is effective under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus has been issued by the Commission and no proceedings for that purpose have been instituted or, to the knowledge of the Company, are threatened by the Commission. The Company, if required by the rules and regulations of the Commission, shall file the Prospectus with the Commission pursuant to Rule 424(b). At the time the Registration Statement and any amendments thereto became effective, at the date of this Agreement and at the Closing Date, the Registration Statement and any amendments thereto conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus and any amendments or supplements thereto, at the time the Prospectus or any amendment or supplement thereto was issued and at the Closing Date, conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company was at the time of the filing of the Registration Statement eligible to use Form S-3.

 

(d) No Conflicts. The execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party by the Company and the consummation by the Company of the transactions contemplated herein and therein do not and will not (i) conflict with or violate any provision of the Company’s Certificate of Incorporation or Bylaws, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which the Company is a party or by which it or its properties or assets are bound, (iii) create or impose a lien, mortgage, security interest, charge or encumbrance of any nature on any property of the Company under any agreement or any commitment to which the Company is a party or by which the Company is bound or by which any of its properties or assets are bound or (iv) subject to Required Approvals, result in a violation of any federal, state, local or foreign statute, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or by which any property or asset of the Company are bound or affected, except, in all cases other than violations pursuant to clauses (i) and (iii) above, for

 

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such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect.

 

(e) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 3.03 of this Agreement, (ii) the filing with the Commission of the Prospectus Supplement, (iii) application(s) to each applicable Trading Market for the listing of the Shares for trading thereon in the time and manner required thereby and (iv) such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).

 

(f) Shell Company Status; SEC Reports, Financial Statements. The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

(g) Material Changes; Undisclosed Events; Liabilities or Developments. Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof: (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any material liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, and (v) the Company has not issued any equity securities to any officer, director or affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of the Shares contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its businesses, properties, operations, assets or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least one (1) Trading Day prior to the date that this representation is made.

 

(h) FDA. As to each of the Company’s product candidates subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the Company (each such product candidate, a “Regulated Product”), such Regulated Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed by the Company in compliance with all applicable

 

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requirements under FDCA and other federal or state laws, rules and regulations relating to registration, investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices, good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the failure to be in compliance would not reasonably be expected to have a Material Adverse Effect. There is no pending, completed or, to the Company’s knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against the Company, and of the Company has not received any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the premarket clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any Regulated Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any Regulated Product, (iii) imposes a clinical hold on any clinical investigation by the Company, (iv) enjoins production at any facility of the Company, (v) enters or proposes to enter into a consent decree of permanent injunction with the Company, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company, and which, either individually or in the aggregate, would have or reasonably be expected to have a Material Adverse Effect. The properties, business and operations of the Company have been and are being conducted in all material respects in accordance with all applicable laws, rules and regulations of the FDA. The Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed, produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product being developed or proposed to be developed by the Company.

 

Section 2.02 Representations and Warranties of the Purchasers. Each of the Purchasers hereby makes the following representations and warranties to the Company with respect solely to itself and not with respect to any other Purchaser:

 

(a) Organization and Standing of the Purchasers. If the Purchaser is an entity, such Purchaser is a corporation, limited liability company or partnership duly incorporated or organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization.

 

(b) Authorization and Power. Each Purchaser has the requisite power and authority to enter into and perform this Agreement and to purchase the Shares being sold to such Purchaser hereunder. The execution and delivery of the Transaction Documents and performance by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against such Purchaser in accordance with the terms thereof, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditor’s rights and remedies or by other equitable principles of general application.

 

(c) Purchase for Own Account. Each Purchaser is acquiring the Shares solely for its own account and not with a view to or for sale in connection with distribution. Each Purchaser does not have a present intention to sell the Shares, nor a present arrangement (whether or not legally binding) or intention to effect any distribution of the Shares to or through any person or entity. Each Purchaser, either alone or together with its representatives, acknowledges that it is able to bear the financial risks associated with an investment in the Shares and that it has been given full access to such records of the Company and to the officers of the Company and received such information as it has deemed necessary or appropriate to conduct its due diligence investigation and has sufficient knowledge and experience in investing in companies similar to the Company in terms of the Company’s stage of development so as to be able to evaluate the risks and merits of its investment in the Company.

 

(d) Status of Purchasers. Such Purchaser is an “accredited investor” as defined in Regulation D promulgated under the Securities Act.

 

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(e) Opportunities for Additional Information. Each Purchaser acknowledges that such Purchaser has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto) and the SEC Reports and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Neither such inquiries nor any other investigation conducted by or on behalf of such Purchaser or its representatives or counsel shall modify, amend or affect such Purchaser’s right to rely on the truth, accuracy and completeness of the Company’s representations and warranties contained in this Agreement.

   

(f) Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Shares covered by this Agreement. Other than to other Persons party to this Agreement or to such Purchaser’s representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.

 

(i) Independent Investment. Except as may be disclosed in any filings with the Commission by the Purchasers under Section 13 and/or Section 16 of the Exchange Act, no Purchaser has agreed to act with any other Purchaser for the purpose of acquiring, holding, voting or disposing of the Shares purchased hereunder for purposes of Section 13(d) under the Exchange Act, and each Purchaser is acting independently with respect to its investment in the Shares.

 

Article III. 

OTHER AGREEMENTS OF THE PARTIES 

 

Section 3.01. Furnishing of Information. Until the time that no Purchaser owns Shares, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.

 

Section 3.02. Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Shares for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.

 

Section 3.03. Securities Laws Disclosure; Publicity. The Company shall (a) by the Disclosure Time, issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission within the time required by the Exchange Act. From and after the issuance of such press release, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its subsidiaries, or any of their respective officers, directors, employees or

 

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agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall terminate. No Purchaser shall issue any press release nor otherwise make any such public statement regarding this Agreement or the transactions contemplated hereby without the prior consent of the Company. The Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (a) as required by federal securities law in connection with the filing of final Transaction Documents with the Commission and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b).

 

Section 3.04. Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 3.03.  Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 3.03, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information provided in connection with this transaction.  Notwithstanding the foregoing, and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 3.03, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 3.03 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the Company to the Company or its Subsidiaries after the issuance of the initial press release as described in Section 3.03.  Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Shares covered by this Agreement.

 

Article IV. 

Miscellaneous 

 

Section 4.01 Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated on or before the Termination Date.

 

Section 4.02 Fees and Expenses. Except as otherwise set forth in the Transaction Documents, each party shall pay the fees and expenses of its advisors, counsel, accountants and other experts, if any, and all other expenses, incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees and stamp or other similar taxes and duties levied in connection with issuance of the Shares pursuant hereto.

 

Section 4.03 Specific Enforcement, Consent to Jurisdiction.

 

(a) The Company and the Purchasers acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to seek an injunction or

 

9

 

 

injunctions to prevent or cure breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which any of them may be entitled by law or equity.

 

(b) Each of the Company and the Purchasers (i) hereby irrevocably submits to the jurisdiction of the United States District Court sitting in the Southern District of New York and the courts of the State of New York located in New York County for the purposes of any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby and (ii) hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper. Each of the Company and the Purchasers consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this Section 4.03 shall affect or limit any right to serve process in any other manner permitted by law.

 

Section 4.04 Entire Agreement; Amendment. The Transaction Documents, together with the exhibits and schedules thereto, the Prospectus and the Prospectus Supplement, contain the entire understanding and agreement of the parties with respect to the matters covered hereby and thereby and, except as specifically set forth herein, neither the Company nor any of the Purchasers makes any representations, warranty, covenant or undertaking with respect to such matters and they supersede all prior understandings and agreements with respect to said subject matter, all of which are merged into such documents, exhibits and schedules. No provision of this Agreement may be waived or amended other than by a written instrument signed by the Company and the Purchasers holding a majority of the Shares then outstanding and held by Purchasers. No such amendment shall be effective to the extent that it applies to less than all of the holders of the Shares then outstanding.

 

Section 4.05 Notices. Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be effective (a) upon hand delivery by telex (with correct answer back received), telecopy, e-mail or facsimile at the address or number designated below (if delivered on a Business Day during normal business hours where such notice is to be received), or the first Business Day following such delivery (if delivered other than on a Business Day during normal business hours where such notice is to be received) or (b) on the second Business Day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

 

(a) If to the Company:

 

BioSig Technologies, Inc.

54 Wilton Road, 2nd Floor

Westport, Connecticut 06880

Attention: Kenneth Londoner

Email: klondoner@biosigtech.com

 

with copies to:

 

Haynes and Boone, LLP

30 Rockefeller Plaza, 26th Floor

New York, New York 10112

Attention: Rick A. Werner, Esq.

Email: rick.werner@haynesboone.com

Fax No.: (212) 884-8234

 

(b) If to any Purchaser at the address of such Purchaser set forth on the signature pages hereto.

 

Any party hereto may from time to time change its address for notices by giving at least ten (10) days written notice of such changed address to the other party hereto. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any

 

10

 

 

Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.

 

Section 4.06 Waivers. No waiver by either party of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any other provisions, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter.

 

Section 4.07 Headings. The article, section and subsection headings in this Agreement are for convenience only and shall not constitute a part of this Agreement for any other purpose and shall not be deemed to limit or affect any of the provisions hereof.

 

Section 4.08 Successors and Assigns; Restrictions on Transfer. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Purchasers. Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Shares, provided that such transferee agrees in writing to be bound, with respect to the transferred Shares, by the provisions of the Transaction Documents that apply to the “Purchasers.”

 

Section 4.09 No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

Section 4.10 Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York, without giving effect to any of the conflicts of law principles which would result in the application of the substantive law of another jurisdiction. This Agreement shall not be interpreted or construed with any presumption against the party causing this Agreement to be drafted. Each party hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all rights to a trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

 

Section 4.11 Survival. The representations and warranties of the Company and the Purchasers shall survive the execution and delivery of the Shares hereof and the Closing hereunder for the applicable statute of limitations period.

 

Section 4.12 Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement and shall become effective when counterparts have been signed by each party and delivered to the other parties hereto, it being understood that all parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

 

Section 4.13 Severability. The provisions of this Agreement are severable and, in the event that any court of competent jurisdiction shall determine that any one or more of the provisions or part of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Agreement and such provision shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part of such provision, had never been contained herein, so that such provisions would be valid, legal and enforceable to the maximum extent possible.

 

Section 4.14 Further Assurances. From and after the date of this Agreement, upon the request of any Purchaser or the Company, each of the Company and the Purchasers shall execute and deliver such instrument, documents and other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement.

 

11

 

 

Section 4.15 Like Treatment of Purchasers. No consideration shall be offered or paid to any Purchaser to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration is also offered to all of the Purchasers then holding Shares. Further, the Company shall not make any payments or issue any securities to the Purchasers in amounts which are disproportionate to the respective numbers of outstanding Shares held by any Purchasers at any applicable time. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of the Shares or otherwise.

 

[SIGNATURE PAGES FOLLOWS]

 

 

 

 

12

 

 

 

 

Company Signature Page

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an authorized signatory as of the date first above written.

 

	
			 

				
			BIOSIG TECHNOLOGIES, INC.

			 

			 

			By: _____________________

			Name: Kenneth L. Londoner

			Title: Chairman & Chief Executive Officer

			

 

 

 

 

13

 

 

Purchaser Signature Page

 

By its execution and delivery of this signature page, the undersigned Purchaser hereby joins in and agrees to be bound by the terms and conditions of the Securities Purchase Agreement dated as of December ____, 2019 (the “Purchase Agreement”) by and among BioSig Technologies, Inc. and the Purchasers (as defined therein), as to the number of shares of Common Stock set forth below, and authorizes this signature page to be attached to the Purchase Agreement or counterparts thereof.

 

 

 

Name of Purchaser:                                                                                       

 

Signature:                                                                                                  

 

If Entity:    Name                                                                                      

 

Title                                                                                        

 

Address for Notice to Purchaser:                                                                  

 

                                                                                                    

 

Telephone No.:                                                                                              

 

Email Address:                                                                                         

 

      SSN/EIN:                                                                   

 

Subscription Amount: $__________________________

Number of Shares: $___________________________

 

 

Delivery Instructions (if different than above):

 

c/o: ______________________________________________________

 

Address: __________________________________________________

 

__________________________________________________________

 

Telephone No.: _____________________________________________

 

 

If Electronic delivery:

 

DTC (Brokerage Name)      _________________________________________

 

DTC (Broker Number) ______________________________________________

 

Account holder name (should be same as above) _____________________________

 

     Account number:        ________________________________________     

 

14Blueprint

  EXHIBIT 4.2

 

FRIENDABLE, INC.

 

CERTIFICATE
OF DESIGNATIONS, PREFERENCES,

RIGHTS
AND LIMITATIONS

OF

SERIES
C CONVERTIBLE PREFERRED STOCK

 

 

The
undersigned, Robert Rositano Jr., hereby certifies that:

 

1.   
I am the Chief Executive Officer of FRIENDABLE, INC., a Nevada corporation (the
“Company”).

 

2.   
The Company is authorized to issue 50,000,000 shares of preferred
stock, par value $0.001 per share
(the “Preferred Stock”) of which 21,267 shares are
currently issued and outstanding;

 

3.   
The following resolutions were duly adopted by the Board of
Directors:

 

WHEREAS, the Board
of Directors of the Company is authorized to fix the dividend
rights, dividend rate, voting rights, conversion rights, rights and
terms of redemption and liquidation preferences of any wholly
unissued series of Preferred
Stock and the number of shares constituting any Series and
the designation thereof, of any of them;

 

WHEREAS, it is the
desire of the Board of Directors of the Company, pursuant to its
authority as aforesaid in accordance with the corporation law of
the State of Nevada, and as set forth in this Certificate of
Designations, Preferences, Rights and Limitations of Series C
Convertible Preferred Stock, to designate the rights, preferences,
restrictions and other matters relating to the Series C Convertible
Preferred Stock, which will
consist of 1,000,000 shares of Series C Convertible Preferred Stock, par value $0.0001 per
share (“Series C Preferred Stock”), which the Company
has the authority to issue, as follows:

 

NOW,
THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby
provide for the issuance of a series of Preferred Stock for cash or exchange of
other securities, rights or property and does hereby fix and
determine the rights, preferences, restrictions and other matters
relating to such series of Preferred
Stock as follows:

 

RESOLVED, FURTHER,
that the chairman, chief executive
officer, chief financial officer, president or any
vice-president, and the secretary or any assistant secretary, of
the Company be and they hereby are authorized and directed to
prepare and file a Certificate of Designations, Preferences, Rights
and Limitations of Series C Preferred Stock in accordance with the
foregoing resolution and the provisions of Nevada law.

 

ARTICLE
I

Series
C Preferred Stock

 

Section
1.    Designation and
Amount. The number of shares so
designated as Series C Preferred Stock is 1,000,000 which will not
be subject to increase without the consent of the holders (each a
“Holder” and collectively, the “Holders”)
of a majority of the outstanding shares of Series C Preferred
Stock. The designations, powers, preferences, rights and
restrictions granted or imposed upon the Series C Preferred Stock
are as set forth in this Certificate of Designation (this
“Certificate of Designations”). Each share of Series C
Preferred Stock shall have, subject to Section 8(b), a stated value
of $1.00 (the “Stated Value”).

 

 

1

 

 

Section
2.     Ranking and Voting.
Ranking. The Series C Preferred
Stock will, with respect to dividend rights and rights upon
liquidation, winding-up or dissolution, rank: (a) senior with
respect to dividends with the Company’s common stock, par
value 0.0001 per share (“Common Stock”)(the Series C
Preferred Stock will convert into common stock immediately upon
liquidation and be pari passu with the common stock in the event of
litigation), and (b) junior with respect to dividends and right of
liquidation to all existing and future indebtedness of the
Company.

 

Voting. Except as set forth herein, Series C Preferred Stock shall
have no right to vote on any matters requiring shareholder approval
or any matters on which the shareholders are permitted to vote.
With respect to any voting rights of the Series C Preferred Stock
set forth herein, the Series C Preferred Stock shall vote as a
class, each share of Series C Preferred Stock shall have one vote
on any such matter, and any such approval may be given via a
written consent in lieu of a meeting of the Series C Holders. Any
reference herein to a determination, decision or election being
made by the “Majority Holders” shall mean the
determination, decision or election as made by Holders holding a
majority of the issued and outstanding shares of Series C Preferred
Stock at such time.

 

Section
3.      Dividends. Each share of Series C Preferred Stock will carry
an annual dividend in the amount of eight percent (8%) of the
Stated Value (the “Divided Rate”), which shall be
cumulative and compounded daily, payable solely upon redemption,
liquidation or conversion. Upon the occurrence of an Event of
Default (as defined herein), the Dividend Rate shall automatically
increase to twenty two percent (22%).

 

Section
4.      Protective
Provision.

 

A.           So
long as any shares of Series C Preferred Stock are outstanding, the
Company will not, without the affirmative approval of the Majority
Holders (i) alter or change adversely the powers, preferences or
rights given to the Series C Preferred Stock or alter or amend this
Certificate of Designations, (ii) authorize or create any class of
stock ranking as to distribution of dividends or a liquidation
preference senior to the Series C Preferred Stock, (iii) amend its
Articles of Incorporation, as amended, or other charter documents
in breach of any of the provisions hereof, (iv) increase the
authorized number of shares of Series C Preferred Stock, (v)
liquidate, dissolve or wind-up the business and affairs of the
Company, or effect any Deemed Liquidation Event (as defined below),
(vi) breach any of the provisions set forth herein; or (vii) enter
into any binding agreement with respect to any of the
foregoing.

 

B.           A
“Deemed Liquidation Event” means: (a) a merger or
consolidation in which the Company is a constituent party or a
subsidiary of the Company is a constituent party and the Company
issues shares of its capital stock pursuant to such merger or
consolidation, except any such merger or consolidation involving
the Company or a subsidiary in which the shares of capital stock of
the Company outstanding immediately prior to such merger or
consolidation continue to represent, or are converted into or
exchanged for shares of capital stock that represent, immediately
following such merger or consolidation, at least a majority, by
voting power, of the capital stock of the surviving or resulting
corporation or, if the surviving or resulting corporation is a
wholly owned subsidiary of another corporation immediately
following such merger or consolidation, the parent corporation of
such surviving or resulting corporation; or (b) the sale, lease,
transfer, exclusive license or other disposition, in a single
transaction or series of related transactions, by the Company or
any subsidiary of the Company of all or substantially all the
assets of the Company and its subsidiaries taken as a whole, or the
sale or disposition (whether by merger or otherwise) of one or more
subsidiaries of the Company if substantially all of the assets of
the Company and its subsidiaries taken as a whole are held by such
subsidiary or subsidiaries, except where such sale, lease,
transfer, exclusive license or other disposition is to a wholly
owned subsidiary of the Company.

 

 

2

 

 

C.           The
Company shall not have the power to effect a Deemed Liquidation
Event unless the agreement or plan of merger or consolidation for
such transaction provides that the consideration payable to the
stockholders of the Company will be allocated among the holders of
capital stock of the Company in accordance
hereof.

 

Section
5.      Liquidation.

 

A.           Upon
any liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary, or upon any Deemed Liquidation Event,
after payment or provision for payment of debts and other
liabilities of the Company, and after payment or provision for any
liquidation preference payable to the holders of any Preferred
Stock ranking senior upon liquidation to the Series C Preferred
Stock, if any, but prior to any distribution or payment made to the
holders of Common Stock or the holders of any Preferred Stock
ranking junior upon liquidation to the Series C Preferred Stock by
reason of their ownership thereof, the Holders will be entitled to
be paid out of the assets of the Company available for distribution
to its stockholders an amount with respect to each share of Series
C Preferred Stock equal to (i) the Stated Value plus (ii) any
accrued but unpaid dividends, the Default Adjustment (as defined
herein), if applicable, Failure to Deliver Fees (as defined
herein), if any, and any other fees as set forth herein (the
amounts in this clause (ii) collectively, the “Adjustment
Amount”).

 

B.           If,
upon any liquidation, dissolution or winding up of the Company or
any Deemed Liquidation Event, the assets of the Company will be
insufficient to make payment in full to all Holders of the
liquidation preferences hereunder, then such assets will be
distributed among the Holders at the time outstanding, ratably in
proportion to the full amounts to which they would otherwise be
respectively entitled.

 

Section
6.      Redemption.

 

A.           Company’s
Redemption Option.
Notwithstanding anything to the contrary contained herein, at any
time during the periods set forth on the table immediately
following this paragraph (the “Redemption Periods”)
provided that an Event of Default has not occurred, the Company
will have the right, at the Company’s option, to redeem all
or any portion of the shares of Series C Preferred Stock,
exercisable on not more than three (3) Trading Days (as defined
herein) prior written notice to the Holders, in full, in accordance
with this Section 6. Any notice of redemption hereunder (an
“Optional Redemption Notice”) shall be delivered to
each Holder at its registered addresses and shall state: (1) that
the Company is exercising its right to redeem the Series C
Preferred Stock, and (2) the date of redemption which shall be not
more than three (3) Trading Days (as defined herein) from the date
of the Optional Redemption Notice. On the date fixed for redemption
(the “Optional Redemption Date”), the Company shall
make payment of the Optional Redemption Amount (as defined herein)
to the applicable Holder. If the Company exercises its right to
redeem the Series C Preferred Stock, the Company shall make payment
to the applicable Holder(s) of an amount in cash equal to the
percentage (“Redemption Percentage”) as set forth in
the table immediately following this paragraph opposite the
applicable Redemption Period, multiplied by the sum of an amount
equal to (i) the total number of Series C Preferred Stock held by
the applicable Holder multiplied by (ii) the Stated Value plus the
Adjustment Amount, (the “Optional Redemption Amount”).
If the Company delivers an Optional Redemption Notice and fails to
pay the Optional Redemption Amount due to the applicable Holder
within two (2) business days following the Optional Redemption
Date, the Company shall forever forfeit its right to redeem the
Series C Preferred Stock pursuant to this Section
6.

 

 

3

 

 

	

Redemption Period

	

Redemption Percentage

	

1.
The period beginning on the date of the issuance of shares of
Series C Preferred Stock (the “Issuance Date”) and
ending on the date which is thirty (30) days following the Issuance
Date.

	

110%

	

2.
The period beginning on the date that is thirty-one (31) days from
the Issuance Date and ending sixty (60) days following the Issuance
Date.

	

115%

	

3.
The period beginning on the date that is sixty-one (61) days from
the Issuance Date and ending ninety (90) days following the
Issuance Date.

	

120%

	

4.
The period beginning on the date that is ninety-one (91) days from
the Issuance Date and ending one hundred twenty (120) days
following the Issuance Date.

	

125%

	

5.
The period beginning on the date that is one hundred twenty-one
(121) days from the Issuance Date and ending one hundred fifty
(150) days following the Issuance Date.

	

130%

	

 6.
The period beginning on the date that is one hundred fifty-one
(151) days from the Issuance Date and ending one hundred eighty
(180) days following the Issuance Date.

	

135%

 

 

After the expiration of one hundred eighty (180) days following the
Issuance Date of the applicable shares of Series C Preferred Stock,
the Company shall have no right of redemption, provided that, for
the avoidance of doubt, the provisions of Section 6(B) may continue
to apply. For the avoidance of doubt, any reference hereto to the
“Issuance Date” shall mean the date of the issuance of
the applicable share(s) of Series C Preferred Stock, and any
calculations or determinations hereunder shall apply to the
share(s) of Series C Preferred Stock based on the Issuance Date of
such share(s) of Series C Preferred Stock.

 

B.           Company’s
Mandatory Redemption. On the
earlier to occur of (i) the date which is twenty-four (24) months
following the Issuance Date and (ii) the occurrence of an Event of
Default (the “Mandatory Redemption Date”), the Company
shall redeem all of the shares of Series C Preferred Stock of the
Holders (which have not been previously redeemed or converted).
With five (5) days of the Mandatory Redemption Date, the Company
shall make payment to each Holder of an amount in cash equal to (i)
the total number of Series C Preferred Stock held by such Holder
multiplied by (ii) the Stated Value plus the Adjustment Amount (the
“Mandatory Redemption Amount”).

 

Section
7.      
Conversion.

 

 

4

 

 

A.           Conversion
Right. The Holder shall have the right from time to time, and at
any time during the period beginning on the date which is six (6)
months following the Issuance Date, to convert all or any part of
the outstanding Series C Preferred Stock into fully paid and
non-assessable shares of Common Stock, as such Common Stock exists
on the Issuance Date, or any shares of capital stock or other
securities of the Company into which such Common Stock shall
hereafter be changed or reclassified at the conversion price
determined as provided herein (a “Conversion”);
provided, however, that in no event shall any Holder be entitled to
convert any portion of the Series C Preferred Stock in excess of
that number of Series C Preferred Stock that upon conversion of
which the sum of (1) the number of shares of Common Stock
beneficially owned by such Holder and its affiliates (other than
shares of Common Stock which may be deemed beneficially owned
through the ownership of the unconverted portion of the Series C
Preferred Stock or the unexercised or unconverted portion of any
other security of the Company subject to a limitation on conversion
or exercise analogous to the limitations contained herein) and (2)
the number of shares of Common Stock issuable upon the conversion
of the portion of the Series C Preferred Stock with respect to
which the determination of this proviso is being made, would result
in beneficial ownership by the Holder and its affiliates of more
than 4.99% of the outstanding shares of Common Stock. For purposes
of the proviso to the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of
the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and Regulations 13D-G thereunder,
except as otherwise provided in clause (1) of such proviso. The
beneficial ownership limitations on conversion as set forth in the
section may NOT be waived by the Holder. The number of shares of
Common Stock to be issued upon each conversion of Series C
Preferred Stock shall be determined by dividing the Conversion
Amount (as defined herein) by the applicable Conversion Price (as
defined herein) then in effect on the date specified in the notice
of conversion (the “Notice of Conversion”), attached
hereto as Exhibit
A, delivered to the Company by
a Holder in accordance with the terms hereof; provided that the
Notice of Conversion is submitted by facsimile or e-mail (or by
other means resulting in, or reasonably expected to result in,
notice) to the Company before 6:00 p.m., New York, New York time on
such conversion date (the “Conversion Date”); however,
if the Notice of Conversion is sent after 6:00 p.m., New York, New
York time the Conversion Date shall be the next business day. The
term “Conversion Amount” means, with respect to any
conversion of shares of the Series C Preferred Stock, the sum of
the Stated Value plus the Adjustment Amount with respect to the
shares of Series C Preferred Stock being converted in such
conversion.

 

B.           Conversion
Price. The conversion price (the “Conversion Price”)
shall equal the Variable Conversion Price (as defined herein)
(subject to equitable adjustments by the Company relating to the
Company’s securities or the securities of any subsidiary of
the Company, combinations, recapitalization, reclassifications,
extraordinary distributions and similar events). The "Variable
Conversion Price" shall mean 71% multiplied by the Market Price (as
defined herein) (representing a discount rate of 29%).
“Market Price” means the average of the two (2) lowest
Trading Prices (as defined here) for the Common Stock during the
twenty (20) Trading Day period ending on the latest complete
Trading Day prior to the Conversion Date. “Trading
Price” means, for any security as of any date, the closing
bid price on the OTCQB, OTCQX, Pink Sheets electronic quotation
system or applicable trading market (the “OTC”) as
reported by a reliable reporting service (“Reporting
Service”) designated by the Holder (i.e. Bloomberg).
“Trading Day” shall mean any day on which the Common
Stock is tradable for any period on the OTC, or on the principal
securities exchange or other securities market on which the Common
Stock is then being traded. Notwithstanding any reference above or
elsewhere herein to any certificates representing the Series C
Preferred Stock, the Company expects that the Series C Preferred
Stock shall be recorded solely in book entry form, and in such case
any references hereto to certificates representing the Series C
Preferred Stock being required to be delivered or provided in
certain instances shall be deemed automatically waived, and such
book entry records shall take the place
thereof.

 

 

5

 

 

C.           Authorized
Shares. The Company covenants that during the period the conversion
right exists, the Company will reserve from its authorized and
unissued Common Stock a sufficient number of shares, free from
preemptive rights, to provide for the issuance of Common Stock upon
the full conversion of this Series C Preferred Stock issued. The
Company is required at all times to have authorized and reserved
eight times the number of shares that would be issuable upon full
conversion of the Series C Preferred Stock (assuming that the 4.99%
limitation set forth in herein is not in effect) (based on the
respective Conversion Price of the Series C Preferred Stock in
effect from time to time) (the “Reserved Amount”). The
Reserved Amount shall be increased (or decreased unilaterally by
the Holder) from time to time in accordance with the
Company’s obligations hereunder. The Company represents that
upon issuance, such shares will be duly and validly issued, fully
paid and non-assessable. In addition, if the Company shall issue
any securities or make any change to its capital structure which
would change the number of shares of Common Stock into which the
Series C Preferred Stock shall be convertible at the then current
Conversion Price, the Company shall at the same time make proper
provision so that thereafter there shall be a sufficient number of
shares of Common Stock authorized and reserved, free from
preemptive rights, for conversion of the outstanding Series C
Preferred Stock. The Company (i) acknowledges that it has
irrevocably instructed its transfer agent to issue certificates for
the Common Stock issuable upon conversion of this Series C
Preferred Stock, and (ii) agrees that its issuance of the Series C
Preferred Stock shall constitute full authority to its officers and
agents who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for
shares of Common Stock in accordance with the terms and conditions
of the Purchase Agreement and the Series C Preferred Stock. If, at
any time the Company does not maintain the required Reserved
Amount, the Company shall be put on notice by the Holder, and shall
have five (5) days to cure its deficiency, after which time, such
failure will be deemed an Event of Default
hereunder.

 

D.           Method
of Conversion.

 

i.           Mechanics
of Conversion. As set forth in
hereof, the shares of Series C Preferred Stock may be converted by
the Holder thereof, either as to all of such Holder’s shares
of Series C Preferred Stock or as to a portion of such
Holder’s shares of Series C Preferred Stock, at any time from
time to time after six (6) months following the Issuance Date, by
submitting to the Company a Notice of Conversion (by facsimile,
e-mail or other reasonable means of communication dispatched on the
Conversion Date prior to 6:00 p.m., New York, New York time) and
within five (5) days following such conversion surrendering the
converted Series C Preferred Stock to the Company’s transfer
agent.

 

ii.           Surrender
of Series C Preferred Stock Upon Conversion. Notwithstanding anything to the contrary set
forth herein, upon conversion of the Series C Preferred Stock in
accordance with the terms hereof, the converting Holder shall be
required to physically surrender the any certificate representing
the Series C Preferred Stock being converted to the Company (or its
transfer agent) and, in the event that less than all of the Series
C Stock represented by such certificate is being converted, the
Company shall return to the applicable Holder a new certificate
representing the unconverted shares of Series C Preferred
Stock.

 

 

6

 

 

iii.           Delivery
of Common Stock Upon Conversion. Upon receipt by the Company from a Holder of a
facsimile transmission or e-mail (or other reasonable means of
communication) of a Notice of Conversion meeting the requirements
for conversion as set forth herein, and the certificate
representing the Series C Preferred Stock as required herein, the
Company shall issue and deliver or cause to be issued and delivered
to or upon the order of the applicable Holder certificates for the
Common Stock issuable upon such conversion, and any replacement
certificate representing the unconverted shares of Series C
Preferred Stock, if applicable, within two (2) business days after
such receipt (the “Deadline”). Upon receipt by the
Company of a Notice of Conversion, the applicable Holder shall be
deemed to be the holder of record of the Common Stock issuable upon
such conversion, the outstanding Series C Preferred Stock held by
such applicable Holder shall be reduced to reflect such conversion,
and, unless the Company defaults on its obligations hereunder, all
rights with respect to the shares of Series C Preferred Stock being
so converted shall forthwith terminate except the right to receive
the Common Stock or other securities, cash or other assets, as
herein provided, on such conversion. If the applicable Holder shall
have given a Notice of Conversion as provided herein and comply
with the other requirements herein, the Company’s obligation
to issue and deliver the certificates for Common Stock shall be
absolute and unconditional, irrespective of the absence of any
action by the applicable Holder to enforce the same, any waiver or
consent with respect to any provision thereof, the recovery of any
judgment against any person or any action to enforce the same, any
failure or delay in the enforcement of any other obligation of the
Company to the holder of record, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged
breach by the applicable Holder of any obligation to the Company,
and irrespective of any other circumstance which might otherwise
limit such obligation of the Company to the applicable Holder in
connection with such conversion.

 

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

 

v.           Failure
to Deliver Common Stock Prior to Deadline. Without in any way limiting a Holder’s
right to pursue other remedies, including actual damages and/or
equitable relief, the parties agree that if delivery of the Common
Stock issuable upon conversion of the Series C Preferred Stock is
not delivered by the Deadline due to action and/or inaction of the
Company, the Company shall pay to the applicable Holder $2,000 per
day in cash, for each day beyond the Deadline that the Company
fails to deliver such Common Stock (the “Fail to Deliver
Fee”); provided, however, that the Fail to Deliver Fee shall
not be due if the failure is a result of a third party (i.e.
transfer agent; and not the result of any failure to pay such
transfer agent) despite the commercially reasonable efforts of the
Company to effect delivery of such Common Stock. Such cash amount
shall be paid to applicable Holder by the fifth
(5th)
day of the month following the month in which it has accrued. The
Company agrees that the right to convert is a valuable right to the
applicable Holder. The damages resulting from a failure, attempt to
frustrate, interference with such conversion right are difficult if
not impossible to qualify. Accordingly, the parties acknowledge
that the damages provision contained in this section are justified
and reasonable.

 

 

7

 

 

vi.           Concerning
the Shares. The shares of
Common Stock issuable upon conversion of the Series C Preferred
Stock may not be sold or transferred unless: (i) such shares are
sold pursuant to an effective registration statement under the
Securities Act of 1933, as amended (together with the rules and
regulations thereunder, the “Securities Act”) or (ii)
the Company or its transfer agent shall have been furnished with an
opinion of counsel (which opinion shall be in form, substance and
scope customary for opinions of counsel in comparable transactions)
to the effect that the shares to be sold or transferred may be sold
or transferred pursuant to an exemption from such registration
(such as Rule 144 or a successor rule) (“Rule 144”); or
(iii) such shares are transferred to an “affiliate” (as
defined in Rule 144) of the applicable Holder who agrees to sell or
otherwise transfer the shares only in accordance with this section
and who is an accredited investor (as defined in Rule 501 under
Regulation D promulgated pursuant to the Securities Act). Any
restrictive legend on certificates representing shares of Common
Stock issuable upon conversion of the Series C Preferred Stock
shall be removed and the Company shall issue to the applicable
Holder a new certificate therefore free of any transfer legend if
the Company or its transfer agent shall have received an opinion of
counsel from applicable Holder’s counsel, in form, substance
and scope customary for opinions of counsel in comparable
transactions, to the effect that (i) a public sale or transfer of
such Common Stock may be made without registration under the
Securities Act, which opinion shall be accepted by the Company so
that the sale or transfer is effected; or (ii) in the case of the
Common Stock issuable upon conversion of the Series C Preferred
Stock such security is registered for sale by the applicable Holder
under an effective registration statement filed under the
Securities Act; or otherwise may be sold pursuant to an exemption
from registration. In the event that the Company does not
reasonably accept the opinion of counsel provided by the applicable
Holder with respect to the transfer of Securities pursuant to an
exemption from registration (such as Rule 144), at the Deadline, it
will be considered an Event of Default
hereunder.

 

E.           Effect
of Certain Events.

 

i.           Effect
of Merger, Consolidation, Etc. At the option of the Majority Holders, the sale,
conveyance or disposition of all or substantially all of the assets
of the Company, the effectuation by the Company of a transaction or
series of related transactions in which more than 50% of the voting
power of the Company is disposed of, or the consolidation, merger
or other business combination of the Company with or into any other
Person (as defined herein) or Persons when the Company is not the
survivor shall be deemed to be an Event of Default hereunder.
“Person” shall mean any individual, corporation,
limited liability company, partnership, association, trust or other
entity or organization.

 

ii.           Adjustment
Due to Merger, Consolidation, Etc. If, at any time when the Series C Preferred Stock
are outstanding and prior to conversion of all of the Series C
Preferred Stock, there shall be any merger, consolidation, exchange
of shares, recapitalization, reorganization, or other similar
event, as a result of which shares of Common Stock of the Company
shall be changed into the same or a different number of shares of
another class or classes of stock or securities of the Company or
another entity, or in case of any sale or conveyance of all or
substantially all of the assets of the Company other than in
connection with a plan of complete liquidation of the Company, then
each Holder shall thereafter have the right to receive upon
conversion of the Series C Preferred Stock, upon the basis and upon
the terms and conditions specified herein and in lieu of the shares
of Common Stock immediately theretofore issuable upon conversion,
such stock, securities or assets which such Holder would have been
entitled to receive in such transaction had the Series C Preferred
Stock been converted in full immediately prior to such transaction
(without regard to any limitations on conversion set forth herein),
and in any such case appropriate provisions shall be made with
respect to the rights and interests of the Holders to the end that
the provisions hereof (including, without limitation, provisions
for adjustment of the Conversion Price and of the number of shares
issuable upon conversion of the Series C Preferred Stock) shall
thereafter be applicable, as nearly as may be practicable in
relation to any securities or assets thereafter deliverable upon
the conversion hereof. The Company shall not affect any transaction
described in this section unless (a) it first gives, to the extent
practicable, ten (10) days’ prior written notice (but in any
event at least five (5) days prior written notice) of the record
date of the special meeting of shareholders to approve, or if there
is no such record date, the consummation of, such merger,
consolidation, exchange of shares, recapitalization, reorganization
or other similar event or sale of assets (during which time a
Holder shall be entitled to convert the Series C Preferred Stock,
notwithstanding the 6 month limitation set forth in Section 7(A))
and (b) the resulting successor or acquiring entity (if not the
Company) assumes by written instrument the rights, preferences
afforded to the Holders hereunder and obligations set forth herein.
The above provisions shall similarly apply to successive
consolidations, mergers, sales, transfers or share
exchanges.

 

 

8

 

 

iii.           Adjustment
Due to Distributions. If the
Company shall declare or make any distribution of its assets (or
rights to acquire its assets) to holders of Common Stock as a
dividend, stock repurchase, by way of return of capital or
otherwise (including any dividend or distribution to the
Company’s shareholders in cash or shares (or rights to
acquire shares) of capital stock of a subsidiary (i.e., a
spin-off)) (a “Distribution”), then each Holder shall
be entitled to receive the applicable portion of such Distribution
on an as-converted-to-Common-Stock basis, assuming that the Series
C Preferred Stock were converted to Common Stock on the day
immediately prior to the record date for holders of the Common
Stock entitled to receive such Distribution, but, for the avoidance
of doubt, without any conversion to Common Stock actually being
required.

 

F.           Stock
Register. The Company will keep
at the offices of the transfer agent, a register of the Series C
Preferred Stock, which shall be prima facie indicia of ownership of
all outstanding shares of Series C Preferred Stock, and amounts so
converted and the dates of such conversions. Upon the surrender of
any certificate representing Series C Preferred Stock at such
place, the Company, at the request of the record Holder of such
certificate, will execute and deliver (at the Company’s
expense) a new certificate or certificates in exchange therefor
representing in the aggregate the number of shares represented by
the surrendered certificate. Each such new certificate will be
registered in such name and will represent such number of shares as
is requested by the Holder of the surrendered certificate and will
be substantially identical in form to the surrendered
certificate.

 

G.           Taxes.
The Company shall pay any and all documentary, stamp, transfer (but
only in respect of the registered Holder thereof), issuance and
other similar taxes that may be payable with respect to the
issuance and delivery of shares of Common Stock upon the conversion
of Preferred Shares.

 

Section
8.      Events of
Default.

 

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

 

i.           Failure
to Redeem. The Company fails to
pay the Mandatory Redemption Amount when due as set forth herein
and such breach continues for a period of three (3) days after
written notice from the Majority Holders.

 

 

9

 

 

ii.           Conversion
and the Shares. The Company
fails to issue shares of Common Stock to a Holder (or announces or
threatens in writing that it will not honor its obligation to do
so) upon exercise by a Holder of the conversion rights of a Holder
in accordance with the terms hereof, fails to transfer or cause its
transfer agent to transfer (issue) (electronically or in
certificated form) any certificate for shares of Common Stock
issued to a Holder upon conversion of or otherwise pursuant to the
terms hereof as and when required hereby, the Company directs its
transfer agent not to transfer or delays, impairs, and/or hinders
its transfer agent in transferring (or issuing) (electronically or
in certificated form) any certificate for shares of Common Stock to
be issued to a Holder upon conversion of the Series C Preferred
Stock or otherwise pursuant to the terms hereof, as and when
required by the terms hereof, or fails to remove (or directs its
transfer agent not to remove or impairs, delays, and/or hinders its
transfer agent from removing) any restrictive legend (or to
withdraw any stop transfer instructions in respect thereof) on any
certificate for any shares of Common Stock issued to the applicable
Holder upon conversion of or otherwise pursuant to the terms hereof
as and when required by the terms hereof (or makes any written
announcement, statement or threat that it does not intend to honor
the obligations described in this section) and any such failure
shall continue uncured (or any written announcement, statement or
threat not to honor its obligations shall not be rescinded in
writing) for two (2) business days after a Holder shall have
delivered a Notice of Conversion. It is an obligation of the
Company to remain current in its obligations to its transfer agent.
It shall be an event of default hereunder, if a conversion of the
Series C Preferred Stock is delayed, hindered or frustrated due to
a balance owed by the Company to its transfer agent. If at the
option of a Holder, such Holder advances any funds to the
Company’s transfer agent in order to process a conversion,
such advanced funds shall be paid by the Company to the applicable
Holder within two (2) business days of a demand from the applicable
Holder.

 

iii.           Breach
of Covenants. The Company
breaches any material covenant or other material terms or
conditions contained in this Certificate of Designations or in any
purchase agreement, subscription agreement or other agreement
pursuant to which any Holder has acquired any shares of Series C
Preferred Stock, and such breach continues for a period of ten (10)
days after written notice thereof to the Company from the Majority
Holders.

 

iv.           Breach
of Representations and Warranties. Any representation or warranty of the Company
made herein or in any agreement, statement or certificate given in
writing pursuant hereto or in connection herewith, or in any
purchase agreement, subscription agreement or other agreement
pursuant to which any Holder has acquired any shares of Series C
Preferred Stock, shall be false or misleading in any material
respect when made and the breach of which has (or with the passage
of time will have) a material adverse effect on the rights of the
Holders with respect to the Series C Preferred
Stock.

 

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

 

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

 

vii.           Delisting
of Common Stock. The Company
shall fail to maintain the listing of the Common Stock on at least
one of the OTC electronic quotations systems (which specifically
includes the quotation platforms maintained by the OTC Markets
Group) or an equivalent replacement exchange.

 

 

10

 

 

viii.           Failure
to Comply with the Exchange Act. The Company shall fail to comply with the
reporting requirements of the Exchange Act; and/or the Company
shall cease to be subject to the reporting requirements of the
Exchange Act (the filing of a Form 15 shall be an immediate Event
of Default).

 

ix.           Liquidation.
Any dissolution, liquidation, or winding up of Company or any
substantial portion of its business occurs.

 

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

 

xi.           Financial
Statement Restatement. The
restatement of any financial statements filed by the Company with
the Securities and Exchange Commission (“SEC”) at any
time after 180 days after the Issuance Date for any date or period
until the Series C Preferred Stock is no longer outstanding, if the
result of such restatement would, by comparison to the un-restated
financial statement, have constituted a material adverse effect on
the rights of the Holders with respect to the terms hereof
(including the conversion rights hereof).

 

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

 

B. Default
Adjustment. Upon the occurrence and during the continuation
of any Event of Default (other than as set forth in Section
8(A)(ii), the Stated Value shall immediately be increased to $1.50
per share of Series B Preferred Stock. Upon the occurrence and during the continuation of
any Event of Default specified in Section
8(A)(ii), the Stated Value shall
immediately be increased to $2.00 per share of Series B Preferred
Stock (the amounts referred to herein shall be referred to
collectively as the “Default Adjustment”). In the event
of a Default Adjustment, the Company shall immediately, upon the
demand of the Majority Holders, redeem the issued and outstanding
Series C Preferred Stock and pay to the Holders the amount which is
equal to (i) the number of shares of Series C Preferred Stock held
by such Holders multiplied by (ii) the Stated Value plus any
Adjustment Amount.

 

Section
9.        
Miscellaneous.

 

A.           Lost
or Mutilated Preferred Stock Certificate. Upon receipt of evidence reasonably satisfactory
to the Company (an affidavit of the registered Holder will be
satisfactory) of the ownership and the loss, theft, destruction or
mutilation of any certificate evidencing shares of Series C
Preferred Stock, and in the case of any such loss, theft or
destruction upon receipt of indemnity reasonably satisfactory to
the Company (provided that if the Holder is a financial institution
or other institutional investor its own agreement will be
satisfactory) or in the case of any such mutilation upon surrender
of such certificate, the Company will, at its expense, execute and
deliver in lieu of such certificate a new certificate of like kind
representing the number of shares of such class represented by such
lost, stolen, destroyed or mutilated certificate and dated the date
of such lost, stolen, destroyed or mutilated
certificate.

 

 

11

 

 

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

 

C.           Notices.
All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally
served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable
air courier service with charges prepaid, or (iv) transmitted by
hand delivery, telegram, email, or facsimile, and, if sent to the
Company, addressed to the Company at its principal office address
or, if sent to a Holder, to the address of the Holder as set forth
in the books and records of the Company. Any notice or other
communication required or permitted to be given hereunder shall be
deemed effective: (a) upon hand delivery or delivery by facsimile
or email, with accurate confirmation (if delivered on a business
day during normal business hours where such notice is to be
received), or the first (1st) business day
following such delivery (if delivered other than on a business day
during normal business hours where such notice is to be received)
or (b) on the second (2nd) business day
following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such
mailing, whichever shall first occur.

 

D.           Jurisdiction.
Any action brought by any party against any other concerning this
Certificate of Designations shall be brought only in the state
courts of New York or in the federal courts located in the Eastern
District of New York. The Company and each Holder hereby
irrevocably waives any objection to jurisdiction and venue of any
action instituted hereunder and shall not assert any defense based
on lack of jurisdiction or venue or based upon forum non conveniens. The Company and
each Holder waives trial by jury. The prevailing party shall be
entitled to recover from the other party its reasonable attorney's
fees and costs. In the event that any provision of this Certificate
of Designations is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall
be deemed modified to conform with such statute or rule of law. Any
such provision which may prove invalid or unenforceable under any
law shall not affect the validity or enforceability of any other
provision of this Certificate of Designations. Each party hereby
irrevocably waives personal service of process and consents to
process being served in any suit, action or proceeding in
connection with the Series C Preferred Stock by mailing a copy
thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect
for notices to it and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to
serve process in any other manner permitted by law.

 

E.           Remedies.
The Company and each Holder acknowledge that a breach by it of its
obligations hereunder will cause irreparable harm to the Company or
the Holder, as applicable, by vitiating the intent and purpose of
the transaction contemplated hereby. Accordingly, the Company and
each Holder acknowledges that the remedy at law for a breach of its
obligations under this Certificate of Designations will be
inadequate and agrees, in the event of a breach or threatened
breach of the provisions of this Certificate of Designations, that
the Company or the Holders, as applicable, shall be entitled, in
addition to all other available remedies at law or in equity, (the
parties will not be entitled of any punitive damages or penalties,
but, only real and actual damages), to an injunction or injunctions
restraining, preventing or curing any breach of this Certificate of
Designations and to enforce specifically the terms and provisions
thereof, without the necessity of showing economic loss and without
any bond or other security being required.

 

 

 

12

 

 

F.           Headings.
The headings contained herein are for convenience only and will not
be deemed to limit or affect any of the provisions
hereof.

 

IN
WITNESS WHEREOF, the undersigned have executed this Certificate this
November 7, 2019.

 

 

	

 

	
FRIENDABLE,
INC.

	

 

	

 

	

 

	

 

	

 

	

	
By:  

	

/s/Robert Rositano Jr.

	

 

	

 

	

 

	

Name:
  Robert
Rositano Jr.  

	

	

 

	

 

	

Title:    
Chief
Executive Officer

	

 

 

 

 

 

 

 

 

 

 

 

 

 

13

 

 

EXHIBIT A

 

FRIENDABLE, INC.

 

CONVERSION NOTICE

 

Reference is made
to the Certificate of Designations, Preferences, Rights and
Limitations of the Series C Convertible Preferred Stock of
FRIENDABLE, INC. (the “Certificate of Designations”).
In accordance with and pursuant to the Certificate of Designations,
the undersigned hereby elects to convert the number of shares of
Series C Convertible Preferred Stock, $0.0001 par value per share
(the “Preferred Shares”), of FRIENDABLE, INC., a Nevada
corporation (the “Company”), indicated below into
shares of common stock, $0.0001 par value per share (the
“Common Stock”), of the Company, as of the date
specified below.

 

Date of
Conversion:                                                                                                                               

 

Number
of Preferred Shares to be converted:                                                                                                                               

 

Share
certificate no(s). of Preferred Shares to be
converted:                                                                                                                               

 

Tax ID
Number (If applicable):                                                                                                                               

 

Conversion
Price:_________________________________________________________

 

Number
of shares of Common Stock to be
issued:                                                                                                                                

 

Please
issue the shares of Common Stock into which the Preferred Shares
are being converted in the following name and to the following
address:

 

Issue
to: ___________________________________________

 

                                                                                                 

 

Address:
_________________________________________

 

Telephone Number:
________________________________

 

Facsimile
Number:                                                                                    

 

Holder:                                                                                    

 

By:                                                       

 

Title:                                                       

 

Dated:_____________________________

 

Account
Number (if electronic book entry transfer):                                                                                                                               

 

Transaction Code
Number (if electronic book entry transfer):                                                                                                                               

 

 

 

14

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