Document:

ex108-phunwareinc2020rra

                                                           EXECUTION COPY                       REGISTRATION RIGHTS AGREEMENT         This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of July  __, 2020, is by and among Phunware, Inc., a Delaware corporation with offices located at 7800  Shoal  Creek  Blvd,  Suite  230-S,  Austin,  Texas  78757 (the  “Company”),  and  the  undersigned  buyers (each, a “Buyer,” and collectively, the “Buyers”).                                    RECITALS         A.    In connection with the Securities Purchase Agreement by and among the parties  hereto,  dated  as  of July 14,  2020 (the  “Securities  Purchase  Agreement”),  the  Company  has  agreed, upon the terms and subject to the conditions of the Securities Purchase Agreement, to  issue  and  sell  to each Buyer  (i)  the  Notes  (as  defined  in  the  Securities  Purchase  Agreement)  which  will  be  convertible  into  Conversion  Shares  (as  defined  in  the  Securities  Purchase  Agreement) in accordance with the terms of the Notes and (ii) the Warrants (as defined in the  Securities  Purchase  Agreement)  which  will  be  exercisable  to  purchase  Warrant  Shares  (as  defined in the Securities Purchase Agreement) in accordance with the terms of the Warrants.         B.    To  induce  the  Buyers  to  consummate  the  transactions  contemplated  by  the  Securities  Purchase  Agreement,  the  Company  has  agreed  to  provide  certain  registration  rights  under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any  similar successor statute (collectively, the “1933 Act”), and applicable state securities laws.                                   AGREEMENT         NOW,  THEREFORE,    in  consideration  of  the  premises  and  the  mutual  covenants  contained herein and for other good and valuable consideration, the receipt and sufficiency of  which are hereby acknowledged, the Company and each of the Buyers hereby agree as follows:   1.    Definitions.         Capitalized terms used herein and not otherwise defined herein shall have the respective  meanings  set  forth  in  the  Securities  Purchase  Agreement.   As  used  in  this  Agreement,  the  following terms shall have the following meanings:         (a)   “Business  Day” means  any  day  other  than  Saturday,  Sunday  or  other  day  on  which commercial banks in The City of New York, New York are authorized or required by law  to remain closed; provided, however, for clarification, commercial banks shall not be deemed to  be  authorized  or  required  by  law  to  remain  closed  due  to  “stay  at  home”, “shelter-in-place”,  “non-essential  employee”  or  any  other  similar  orders  or  restrictions  or  the  closure  of  any  physical branch locations at the direction of any governmental authority so long as the electronic  funds transfer systems (including for wire transfers) of commercial banks in The City of New  York, New York generally are open for use by customers on such day.         (b)   “Closing  Date”  shall  have  the  meaning  set  forth  in  the  Securities  Purchase  Agreement.    Error! Unknown document property name. 

 

         (c)   “Effective  Date” means the date that the  applicable Registration Statement  has  been declared effective by the SEC.         (d)   “Effectiveness  Deadline”  means  (i)  with  respect  to  the  initial  Registration  Statement required to be filed pursuant to Section 2(a), the earlier of the (A) 90th calendar day  after the Closing Date and (B) 2nd Business Day after the date the Company is notified (orally or  in  writing,  whichever  is  earlier)  by  the  SEC  that  such  Registration  Statement  will  not  be  reviewed  or  will  not  be  subject  to  further  review  and  (ii)  with  respect  to  any  additional  Registration  Statements  that  may  be  required  to  be  filed  by  the  Company  pursuant  to  this  Agreement, the earlier of the (A) 90th calendar day following the date on which the Company  was required to file such additional Registration Statement and (B) 2nd Business Day after the  date the Company is notified (orally or in writing, whichever is earlier) by the SEC that such  Registration Statement will not be reviewed or will not be subject to further review.         (e)   “Filing  Deadline”  means  (i)  with  respect  to  the  initial  Registration  Statement  required to  be filed pursuant  to  Section 2(a), the 60th calendar day  after  the Closing Date and  (ii) with respect to any additional Registration Statements that may be required to be filed by the  Company pursuant to this Agreement, the date on which the Company was required to file such  additional Registration Statement pursuant to the terms of this Agreement.         (f)   “Investor”  means  a  Buyer  or  any  transferee  or  assignee  of  any  Registrable  Securities,  Notes  or  Warrants,  as  applicable,  to  whom  a  Buyer  assigns  its  rights  under  this  Agreement and who agrees to become bound by the provisions of this Agreement in accordance  with Section 9 and any transferee or assignee thereof to whom a transferee or assignee of any  Registrable Securities, Notes or Warrants, as applicable, assigns its rights under this Agreement  and  who  agrees  to  become  bound  by  the  provisions  of  this  Agreement  in  accordance  with  Section 9.         (g)   “Person” means an individual, a limited liability company, a partnership, a joint  venture,  a  corporation,  a  trust,  an  unincorporated  organization  or  a  government  or  any  department or agency thereof.         (h)   “register,”  “registered,”  and  “registration”  refer  to  a  registration  effected  by  preparing and filing one or more Registration Statements in compliance with the 1933 Act and  pursuant to Rule 415 and the declaration of effectiveness of such Registration Statement(s) by  the SEC.         (i)   “Registrable  Securities”  means  (i)  the  Conversion  Shares,  (ii)  the  Warrant  Shares  and  (iii)  any  capital  stock  of  the  Company  issued  or  issuable  with  respect  to  the  Conversion Shares, the Warrant Shares, the Notes or the Warrants, including, without limitation,  (1) as a result of any stock split, stock dividend, recapitalization, exchange or similar event or  otherwise  and  (2)  shares  of  capital  stock  of  the  Company  into  which  the  shares  of  Common  Stock  (as  defined  in  the  Notes) are  converted  or  exchanged  and  shares  of  capital  stock  of  a  Successor  Entity  (as  defined  in  the  Warrants)  into  which  the  shares  of  Common  Stock  are  converted  or  exchanged,  in  each  case,  without  regard  to  any  limitations  on  conversion  of  the  Notes or exercise of the Warrants.                                         2  Error! Unknown document property name. 

 

         (j)   “Registration  Statement”  means  a  registration  statement  or  registration  statements of the Company filed under the 1933 Act covering Registrable Securities.         (k)   “Required  Holders” shall  have  the  meaning  as  set  forth  in  the  Securities  Purchase Agreement.         (l)   “Required Registration Amount” means 300% of the sum of (i) the maximum  number  of  Conversion  Shares  issuable  upon  conversion  of  the  Notes  (assuming  for  purposes  hereof  that  (x)  the  Notes  are  convertible  at  the Alternate Conversion Price  (as  defined  in  the  Notes) assuming an Alternate Conversion Date (as defined in the Notes) as of the applicable date  of determination hereunder, (y) interest on the Notes shall accrue through December 31, 2021  and will be converted in shares of Common Stock at an interest conversion price equal to at the  Alternate Conversion Price assuming an Alternate Conversion Date as of the applicable date of  determination and  (z)  any  such  conversion  shall  not  take  into  account  any  limitations  on  the  conversion of the Notes set forth in the Notes) and (ii) the maximum number of Warrant Shares  issuable  upon  exercise  of  the  Warrants  (without  taking  into  account  any  limitations  on  the  exercise of the Warrants set forth therein), all subject to adjustment as provided in Section 2(d)  and/or Section 2(f).         (m)   “Rule 144” means Rule 144 promulgated by the SEC under the 1933 Act, as such  rule may be amended from time to time, or any other similar or successor rule or regulation of  the SEC that may at any time permit the Investors to sell securities of the Company to the public  without registration.         (n)   “Rule 415” means Rule 415 promulgated by the SEC under the 1933 Act, as such  rule may be amended from time to time, or any other similar or successor rule or regulation of  the SEC providing for offering securities on a continuous or delayed basis.         (o)   “SEC”  means  the  United  States  Securities  and  Exchange  Commission  or  any  successor thereto.   2.    Registration.         (a)   Mandatory Registration.  The Company shall prepare and, as soon as practicable,  but in no event later than the Filing Deadline, file with the SEC an initial Registration Statement  on Form S-3 covering the resale of all of the Registrable Securities, provided that such initial  Registration Statement shall register for resale at least the number of shares of Common Stock  equal to the Required Registration Amount as of the date such Registration Statement is initially  filed with the SEC; provided further that if Form S-3 is unavailable for such a registration, the  Company  shall  use  such  other  form  as  is  required  by  Section 2(c).   Such  initial  Registration  Statement, and each other Registration Statement required to be filed pursuant to the terms of  this Agreement, shall contain (except if otherwise directed by the Required Holders) the “Selling  Stockholders”  and  “Plan  of  Distribution”  sections  in  substantially  the  form  attached  hereto  as  Exhibit B.  The Company shall use its best efforts to have such initial Registration Statement,  and  each  other  Registration  Statement  required  to  be  filed  pursuant  to  the  terms  of  this  Agreement, declared effective by the SEC as soon as practicable, but in no event later than the  applicable Effectiveness Deadline for such Registration Statement.                                         3  Error! Unknown document property name. 

 

         (b)   Legal Counsel.  Subject to Section 5 hereof, Kelley Drye & Warren LLP, counsel  solely to the lead investor (“Legal Counsel”) shall review and oversee any registration, solely on  behalf of the lead investor, pursuant to this Section 2.         (c)   Ineligibility to Use Form S-3.  In the event that Form S-3 is not available for the  registration of the resale of Registrable Securities hereunder, the Company shall (i) register the  resale  of  the  Registrable  Securities  on Form  S-1  or another  appropriate  form  reasonably  acceptable  to  the  Required  Holders  and  (ii)  undertake  to  register  the  resale  of  the  Registrable  Securities  on  Form S-3  as  soon  as  such  form  is  available,  provided  that  the  Company  shall  maintain  the  effectiveness  of  all  Registration  Statements  then  in  effect  until  such  time  as  a  Registration Statement on Form S-3 covering the resale of all the Registrable Securities has been  declared effective by the SEC and the prospectus contained therein is available for use.         (d)   Sufficient  Number  of  Shares  Registered.   In  the  event  the  number  of  shares  available  under  any  Registration  Statement  is  insufficient  to  cover  all  of  the  Registrable  Securities  required  to  be  covered  by  such  Registration  Statement  or  an  Investor’s  allocated  portion  of  the  Registrable  Securities  pursuant  to  Section 2(h),  the  Company  shall  amend  such  Registration Statement (if permissible), or file with the SEC a new Registration Statement (on  the  short  form  available  therefor,  if  applicable),  or  both,  so  as  to  cover  at  least  the  Required  Registration Amount as of the Trading Day immediately preceding the date of the filing of such  amendment or new Registration Statement, in each case, as soon as practicable, but in any event  not later than fifteen (15) days after the necessity therefor arises (but taking account of any Staff  position  with  respect  to  the  date  on  which  the  Staff  will  permit  such  amendment  to  the  Registration Statement and/or such new Registration Statement (as the case may be) to be filed  with  the  SEC).   The  Company  shall  use  its  best  efforts  to  cause  such  amendment  to  such  Registration Statement and/or such new Registration Statement (as the case may be) to become  effective as soon as practicable following the filing thereof with the SEC, but in no event later  than the applicable Effectiveness Deadline for such Registration Statement.  For purposes of the  foregoing  provision,  the  number  of  shares  available  under  a  Registration  Statement  shall  be  deemed  “insufficient  to  cover  all of  the  Registrable  Securities”  if  at  any  time  the  number  of  shares of Common Stock available for resale under the applicable Registration Statement is less  than the product determined by multiplying (i) the Required Registration Amount as of such time  by (ii) 0.90.  The calculation set forth in the foregoing sentence shall be made without regard to  any limitations on conversion and/or redemption of the Notes or exercise of the Warrants (and  such  calculation  shall  assume  (A)  that  the  Notes  are  then convertible  in  full  into  shares  of  Common Stock at the then prevailing Alternate Conversion Price (as defined in the Notes), (B)  the initial outstanding principal amount of the Notes remains outstanding through the scheduled  Maturity  Date  (as  defined  in  the  Notes)  and  no  redemptions  of  the  Notes  occur  prior  to  the  scheduled  Maturity  Date  and  (C)  the  Warrants  are  then  exercisable  in  full  into  shares  of  Common Stock at the then prevailing Exercise Price (as defined in the Warrants)).         (e)   Effect  of  Failure  to  File and  Obtain  and  Maintain  Effectiveness  of  any  Registration  Statement.   If  (i)  a  Registration  Statement  covering  the  resale  of  all  of  the  Registrable  Securities  required  to  be  covered  thereby (after  giving  effect  to any  reduction  pursuant to Section 2(f)) and required to be filed by the Company pursuant to this Agreement is  (A) not filed with the SEC on or before the Filing Deadline for such Registration Statement (a  “Filing Failure”) (it being understood that if the Company files a Registration Statement without                                        4  Error! Unknown document property name. 

 

   affording each Investor and Legal Counsel the opportunity to review and comment on the same  as  required  by  Section 3(c) hereof,  the  Company  shall  be  deemed  to  not  have  satisfied  this  clause (i)(A) and such event shall be deemed to be a Filing Failure) or (B) not declared effective  by  the  SEC  on  or  before  the  Effectiveness  Deadline  for  such  Registration  Statement  (an  “Effectiveness Failure”) (it being understood that if on the Business Day immediately following  the Effective Date for such Registration Statement the Company shall not have filed a “final”  prospectus for such Registration Statement with the SEC under Rule 424(b) in accordance with  Section 3(b) (whether  or  not  such  a  prospectus  is  technically  required  by  such  rule),  the  Company shall be deemed to not have satisfied this clause (i)(B) and such event shall be deemed  to  be  an  Effectiveness  Failure), (ii)  other  than  during  an  Allowable  Grace  Period  (as  defined  below),  on  any  day  after  the  Effective  Date  of  a  Registration  Statement  sales  of  all  of  the  Registrable Securities required to be included on such Registration Statement (after giving effect  to any  reduction  pursuant  to  Section 2(f)) cannot  be  made  pursuant  to  such  Registration  Statement (including, without limitation, because of a failure to keep such Registration Statement  effective, a failure to disclose such information as is necessary for sales to be made pursuant to  such Registration Statement, a suspension or delisting of (or a failure to timely list) the shares of  Common Stock on the Principal Market (as defined in the Securities Purchase Agreement) or any  other limitations imposed by the Principal Market, or a failure to register a sufficient number of  shares of Common Stock or by reason of a stop order) or the prospectus contained therein is not  available for use for any reason (a “Maintenance Failure”), or (iii) if a Registration Statement is  not effective for any reason or the prospectus contained therein is not available for use for any  reason,  and  either  (x)  the  Company  fails  for  any  reason  to  satisfy  the  requirements  of  Rule  144(c)(1),  including,  without  limitation,  the  failure  to  satisfy  the  current  public  information  requirement under Rule 144(c) or (y) the Company has ever been an issuer described in Rule  144(i)(1)(i) or becomes such an issuer in the future, and the Company shall fail to satisfy any  condition set forth in Rule 144(i)(2) (a “Current Public Information Failure”) as a result of  which  any  of  the  Investors  are  unable  to  sell  Registrable  Securities  without  restriction  under  Rule 144  (including,  without  limitation,  volume  restrictions),  then,  as  partial  relief  for  the  damages  to  any  holder  by  reason of  any  such  delay  in,  or  reduction  of,  its  ability  to  sell  the  underlying shares of Common Stock (which remedy shall not be exclusive of any other remedies  available at law or in equity, including, without limitation, specific performance), the Company  shall  pay  to  each  holder  of  Registrable  Securities  relating  to  such  Registration  Statement  an  amount in cash equal to one percent (1%) of such Investor’s original principal amount stated in  such Investor’s Note on the Closing Date (1) on the date of such Filing Failure, Effectiveness  Failure,  Maintenance  Failure  or  Current  Public  Information  Failure,  as  applicable,  and  (2)  on  every thirty (30) day anniversary of (I) a Filing Failure until such Filing Failure is cured; (II) an  Effectiveness Failure until such Effectiveness Failure is cured; (III) a Maintenance Failure until  such Maintenance Failure is cured; and (IV) a Current Public Information Failure until the earlier  of (i) the date such Current Public Information Failure is cured and (ii) such time that such public  information  is  no  longer  required  pursuant  to  Rule 144  (in  each  case,  pro  rated  for  periods  totaling less than thirty (30) days).  The payments to which a holder of Registrable Securities  shall  be  entitled  pursuant  to  this  Section 2(e) are referred  to  herein  as  “Registration  Delay  Payments”;  provided,  however,  that  no  Registration  Delay  Payments  shall  be  payable  to  an  Investor  with  respect  to  a  Filing  Failure  or  an  Effectiveness  Failure  to  the  extent  (x)  such  Registration Delay Payments relate to Registrable Securities such Investor elects not to include  in  such  Registration  Statement,  or  (y)  such  Investor  fails  to  timely  deliver  the  Company  the                                         5  Error! Unknown document property name. 

 

   information required to be delivered to the Company pursuant to Section 4(a); provided, further,  that,  in  the  event  of  any  reduction  in  Registrable  Securities  required  to  be  included  in  such  Registration Statement pursuant to Sections 2(f) or 3(t), the Company shall not be obligated to  make  any  Registration  Delay  Payments  with  respect  to  such  reduced  number  of  Registrable  Securities as a result thereof.  Following the initial Registration Delay Payment for any particular  event  or failure (which shall be paid  on the date of such event  or failure, as  set  forth  above),  without  limiting  the  foregoing,  if  an  event  or  failure  giving  rise  to  the  Registration  Delay  Payments  is  cured prior to  any thirty (30) day anniversary of such event or failure, then such  Registration Delay Payment shall be made on the third (3rd) Business Day after such cure.  In the  event the Company fails to make Registration Delay Payments in a timely manner in accordance  with  the  foregoing,  such  Registration  Delay  Payments  shall  bear  interest  at  the  rate of one  percent  (1%)  per  month  (prorated  for  partial  months)  until  paid  in  full.  Notwithstanding  the  foregoing,  no  Registration  Delay  Payments  shall  be  owed  to  an  Investor (x) other  than  with  respect to a Maintenance Failure resulting from a suspension or delisting of (or a failure to timely  list)  the  shares  of  Common  Stock  on  the  Principal  Market)  with  respect  to  any  period  during  which  all  of  such  Investor’s  Registrable  Securities  may  be  sold  by  such  Investor  without  restriction under Rule 144 (including, without limitation, volume restrictions) and, solely with  respect to a Current Public Information Failure, without the need for current public information  required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable), and (y) on the Restricted Principal  (as defined in the Series B Notes (as defined in the Securities Purchase Agreement)) or Restriced  OID (as defined in the Series B Notes).         (f)   Offering.  Notwithstanding anything to the contrary contained in this Agreement,  in  the  event  the  staff  of  the  SEC  (the “Staff”)  or  the  SEC  seeks  to  characterize  any offering  pursuant to a Registration Statement filed pursuant to this Agreement as constituting an offering  of securities by, or on behalf of, the Company, or in any other manner, such that the Staff or the  SEC do  not permit  such  Registration  Statement  to  become  effective  and  used  for  resales  in  a  manner that does  not  constitute such an offering and that permits the continuous  resale at  the  market  by the Investors  participating therein (or as  otherwise may be reasonably acceptable to  each Investor) without being named therein as an “underwriter,” then the Company shall reduce  the  number  of Registrable  Securities to  be  included  in  such  Registration  Statement  by  all  Investors until such time as the Staff and the SEC shall so permit such Registration Statement to  become effective as aforesaid.  In making such reduction, the Company shall reduce the number  of  shares to  be  included  by  all  Investors  on  a  pro  rata  basis  (based  upon  the  number  of  Registrable Securities otherwise required to be included for each Investor) unless the inclusion of  shares  by a particular  Investor or  a particular set of  Investors  are  resulting in  the Staff or the  SEC’s “by or on behalf of the Company” offering position, in which event the shares held by  such Investor or set of Investors shall be the only shares subject to reduction (and if by a set of  Investors  on  a  pro  rata  basis  by  such  Investors  or  on  such  other  basis  as  would  result  in  the  exclusion of the least number of shares by all such Investors); provided, that, with respect to such  pro rata portion allocated to any Investor, such Investor may elect the allocation of such pro rata  portion among the Registrable Securities of such Investor.  In addition, in the event that the Staff  or the SEC requires any Investor seeking to sell securities under a Registration Statement filed  pursuant to this Agreement to be specifically identified as  an “underwriter” in order to permit  such Registration Statement to become effective, and such Investor does not consent to being so  named  as  an  underwriter  in  such  Registration  Statement, then,  in  each  such  case,  the  Company shall  reduce  the  total  number  of Registrable  Securities  to  be  registered  on  behalf                                        6  Error! Unknown document property name. 

 

   of such Investor, until such time as the Staff or the SEC does not require such identification or  until such Investor accepts such identification and the manner thereof.  Any reduction pursuant  to this paragraph will first reduce all Registrable Securities other than those issued pursuant to  the  Securities  Purchase  Agreement. In  the  event  of  any reduction  in  Registrable  Securities  pursuant to this paragraph, an affected Investor shall have the right to require, upon delivery of a  written  request  to  the  Company  signed  by  such  Investor,  the  Company  to  file  a  registration  statement within thirty (30) days of such request (subject to any restrictions imposed by Rule 415  or such other applicable rule adopted by the SEC or required by the Staff or the SEC) for resale  by such Investor of its Registrable Securities in a manner reasonably acceptable to such Investor,  and the Company shall following such request cause to be and keep effective such registration  statement in  the  same  manner  as  otherwise  contemplated in  this  Agreement  for registration  statements hereunder, in each case until such time as: (i) all Registrable Securities held by such  Investor have  been  registered  and  sold  pursuant  to  an  effective  Registration Statement  in  a  manner  acceptable  to  such  Investor or  (ii)  all  Registrable  Securities  may  be  resold  by  such  Investor without restriction (including, without limitation, volume limitations) pursuant to Rule  144 (taking account of any Staff position with respect to “affiliate” status) or (iii) such Investor  agrees to be named as an underwriter in any such Registration Statement in a manner acceptable  to  such  Investor  as  to  all  Registrable  Securities  held  by  such  Investor  and  that  have  not  theretofore been included in a Registration Statement under this Agreement (it being understood  that the special demand right under this sentence may be exercised by an Investor multiple times  and with respect to limited amounts of Registrable Securities in order to permit the resale thereof  by such Investor as contemplated above).         (g)   Piggyback  Registrations.   Without  limiting  any  obligation  of  the  Company  hereunder or under the Securities Purchase Agreement, if there is not an effective Registration  Statement  covering  all  of  the Registrable  Securities  or  the  prospectus  contained  therein  is  not  available for use and the Company shall determine to prepare and file with the SEC a registration  statement or  offering  statement relating  to  an  offering  for  its  own  account  or  the  account of  others under the 1933 Act of any of its equity securities (other than on Form S-4 or Form S-8  (each as promulgated under the 1933 Act) or their then equivalents relating to equity securities to  be issued solely in connection with any acquisition of any entity or business or equity securities  issuable in connection with the Company’s stock option or other employee benefit plans), then  the Company shall promptly (but, in any event, no less than fifteen (15) calendar days (or such  lesser number of calendar days as the Company and the Required Holders shall mutually agree in  writing with respect to such offering) prior to the time of pricing of such offering) deliver to each  Investor  a  written  notice  of  such  determination (including,  without  limitation,  the  anticipated  minimum number (each, a “Minimum Number”) of shares of Common Stock to be sold by the  Company in such offering as calculated and determined based upon an estimate, made in good  faith,  by  the lead underwriter or  placement  agent,  as  applicable, of the  Company  in  such  offering) (each,  a  “Piggyback  Notice”) and,  if  within  fifteen (15)  days  after  the  date  of  the  delivery of such notice, any such Investor shall so request in writing, the Company shall include  in such registration statement or offering statement all or any part of such Registrable Securities  such Investor requests to be registered; provided, however, the Company shall not be required to  register  any  Registrable  Securities  pursuant  to  this  Section 2(g) that  are  eligible  for  resale  pursuant to Rule 144 without restriction (including, without limitation, volume restrictions) and  without the need for current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if  applicable) or that are the subject of a then-effective Registration Statement and provided further                                        7  Error! Unknown document property name. 

 

   that, solely to the extent the Company shall have timely delivered a Piggyback Notice to such  Investor properly specifying a Minimum Number as required pursuant to this Section 2(g), the  Company shall not be required to include in such offering such aggregate number of Registrable  Securities  which  the  lead  underwriter  or  placement  agent,  as  applicable, shall,  in  good  faith,  advise  the  Company  will result  in  the  Company  unable  to  sell  in  such  offering  at  least the  Minimum Number of shares of Common Stock as specified in such applicable Piggyback Notice.   The  Company  may  postpone  or  withdraw  the  filing  or  the  effectiveness  of  a  piggyback  registration at any time in its sole discretion.         (h)   Allocation of Registrable Securities.  The initial number of Registrable Securities  included in any Registration Statement and any increase in the number of Registrable Securities  included  therein  shall  be  allocated  pro  rata  among  the  Investors  based  on  the  number  of  Registrable  Securities  held  by  each  Investor  at  the  time  such  Registration  Statement  covering  such initial number of Registrable Securities or increase thereof is declared effective by the SEC.   In  the  event  that  an  Investor  sells  or  otherwise  transfers  any  of  such  Investor’s  Registrable  Securities, each transferee or assignee (as  the case may be) that becomes  an Investor shall be  allocated a pro rata portion of the then-remaining number of Registrable Securities included in  such Registration Statement for such transferor or assignee (as the case may be).  Any shares of  Common Stock included in a Registration Statement and which remain allocated to any Person  which ceases to hold any Registrable Securities covered by such Registration Statement shall be  allocated to the remaining Investors, pro rata based on the number of Registrable Securities then  held by such Investors which are covered by such Registration Statement.         (i)   No  Inclusion  of  Other  Securities.   The  Company  shall  in  no  event  include  any  securities  other  than  Registrable  Securities  on  any  Registration  Statement  filed  in  accordance  herewith without the prior written consent of the Required Holders.  Until the Applicable Date  (as  defined  in  the  Securities  Purchase  Agreement),  the  Company  shall  not  enter  into  any  agreement  providing  any registration rights  to  any of its  security  holders,  except as  otherwise  permitted under the Securities Purchase Agreement.   3.    Related Obligations.         The  Company  shall  use  its  best  efforts  to  effect  the  registration  of  the  Registrable  Securities in accordance with the intended method of disposition thereof, and, pursuant thereto,  the Company shall have the following obligations:         (a)   The  Company  shall  promptly  prepare  and  file  with  the  SEC  a  Registration  Statement with respect to all the Registrable Securities (but in no event later than the applicable  Filing Deadline) and use its best efforts to cause such Registration Statement to become effective  as soon as practicable after such filing (but in no event later than the Effectiveness Deadline).   Subject  to  Allowable  Grace  Periods,  the  Company  shall  keep  each  Registration  Statement  effective (and the prospectus contained therein available for use) pursuant to Rule 415 for resales  by the Investors on a delayed or continuous basis at then-prevailing market prices (and not fixed  prices) at all times until the earlier of (i) the date as of which all of the Investors may sell all of  the  Registrable  Securities  required  to  be  covered  by  such  Registration  Statement (after  giving  effect  to any  reduction  pursuant  to  Section 2(f)) without  restriction  pursuant  to  Rule  144  (including,  without  limitation,  volume  restrictions) and  without  the  need  for  current  public                                        8  Error! Unknown document property name. 

 

   information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) or (ii) the date on which  the  Investors  shall  have  sold  all  of  the  Registrable  Securities  covered  by  such  Registration  Statement (the “Registration Period”).  Notwithstanding anything to the contrary contained in  this Agreement, the Company shall ensure that, when filed and at all times while effective, each  Registration Statement (including, without limitation, all amendments and supplements thereto)  and the prospectus (including, without limitation, all amendments and supplements thereto) used  in connection with such Registration Statement (1) shall not contain any untrue statement of a  material fact or omit to state a material fact required to be stated therein, or necessary to make  the statements therein (in the case of prospectuses, in the light of the circumstances in which they  were made) not misleading and (2) will disclose (whether directly or through incorporation by  reference  to  other  SEC  filings  to  the  extent  permitted)  all  material  information  regarding  the  Company  and  its  securities.   The  Company  shall  submit  to  the  SEC,  within two (2)  Business  Days after  the  later  of  the  date  that  (i)  the  Company  learns  that  no  review  of  a  particular  Registration Statement will be made by the Staff or that the Staff has no further comments on a  particular Registration Statement (as the case may be) and (ii) the consent of Legal Counsel is  obtained  pursuant  to  Section 3(c) (which  consent  shall  be  immediately  sought),  a  request  for  acceleration  of  effectiveness  of  such  Registration  Statement  to  a  time  and  date  not  later  than  forty-eight  (48) hours  after  the  submission  of  such  request.  The  Company  shall  respond  in  writing  to  comments  made by  the  SEC  in  respect  of  a  Registration  Statement  as  soon  as  practicable, but in no event later than fifteen (15) days after the receipt of comments by or notice  from the SEC that an amendment is required in order for a Registration Statement to be declared  effective.         (b)   Subject  to  Section 3(r) of  this  Agreement, the  Company  shall  prepare  and  file  with the SEC such amendments (including, without limitation, post-effective amendments) and  supplements  to  each  Registration  Statement  and  the  prospectus  used  in  connection  with  each  such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated  under the 1933 Act, as may be necessary to keep each such Registration Statement effective at  all times during the Registration Period for such Registration Statement, and, during such period,  comply  with  the  provisions  of  the  1933  Act  with  respect  to  the  disposition  of  all  Registrable  Securities of the Company required to be covered by such Registration Statement until such time  as all of such Registrable Securities shall have been disposed of in accordance with the intended  methods of disposition by the seller or sellers thereof as set forth in such Registration Statement;  provided, however, by 8:30 a.m. (New York time) on the Business Day immediately following  each Effective Date, the Company shall file with the SEC in accordance with Rule 424(b) under  the 1933 Act the final prospectus to be used in connection with sales pursuant to the applicable  Registration Statement (whether or not such a prospectus is technically required by such rule).   In the case of amendments and supplements to any Registration Statement which are required to  be filed pursuant to this Agreement (including, without limitation, pursuant to this Section 3(b))  by  reason  of  the  Company  filing  a  report  on Form  8-K, Form  10-Q  or  Form  10-K  or  any  analogous report under the Securities Exchange Act of 1934, as amended (the “1934 Act”), the  Company  shall,  if  permitted  under  the  applicable  rules  and  regulations  of  the  SEC,  have  incorporated such report by reference into such Registration Statement, if applicable, or shall file  such amendments or supplements with the SEC on the same day on which the 1934 Act report is  filed which created the requirement for the Company to amend or supplement such Registration  Statement.                                         9  Error! Unknown document property name. 

 

         (c)   The  Company  shall  (A)  permit  Legal  Counsel  and  legal  counsel  for  each  other  Investor to review and comment upon (i) each Registration Statement at least five (5) Business  Days  prior  to  its  filing  with  the  SEC  and  (ii)  all  amendments  and  supplements  to  each  Registration Statement (including, without limitation, the prospectus contained therein) (except  for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form  8-K, and any similar or successor reports) within a reasonable number of days prior to their filing  with the SEC, and (B) not file any Registration Statement or amendment or supplement thereto  in a form to which Legal Counsel or any legal counsel for any other Investor reasonably objects.  The Company shall not submit a request for acceleration of the effectiveness of a Registration  Statement  or  any  amendment  or  supplement  thereto  or  to  any  prospectus  contained  therein  without the prior consent of Legal Counsel, which consent shall not be unreasonably withheld.  The Company shall promptly furnish to Legal Counsel and legal counsel for each other Investor,  without charge, (i) copies of any correspondence from the SEC or the Staff to the Company or its  representatives relating to each Registration Statement, provided that such correspondence shall  not  contain  any  material,  non-public  information  regarding  the  Company  or  any  of  its  Subsidiaries  (as  defined  in  the  Securities  Purchase  Agreement),  (ii) after  the  same  is  prepared  and filed with the SEC, one (1) copy of each Registration Statement and any amendment(s) and  supplement(s)  thereto,  including,  without  limitation,  financial  statements  and  schedules,  all  documents  incorporated  therein  by reference, if requested by an  Investor, and all exhibits  and  (iii) upon  the  effectiveness  of  each  Registration Statement,  one  (1)  copy  of  the  prospectus  included  in  such  Registration  Statement  and  all  amendments  and  supplements  thereto. The  Company  shall  reasonably  cooperate  with  Legal  Counsel  and  legal  counsel  for  each  other  Investor in performing the Company’s obligations pursuant to this Section 3.         (d)   The  Company  shall  promptly  furnish  to  each  Investor  whose  Registrable  Securities  are  included  in  any  Registration  Statement,  without  charge, if  requested  by  such  Investor, (i)  after  the  same  is  prepared  and  filed  with  the  SEC,  at  least  one  (1)  copy  of  each  Registration  Statement  and  any  amendment(s)  and  supplement(s)  thereto,  including,  without  limitation, financial statements and schedules, all documents incorporated therein by reference, if  requested by an Investor, all exhibits and each preliminary prospectus, (ii) upon the effectiveness  of  each  Registration  Statement, up  to ten (10)  copies  of  the  prospectus  included  in  such  Registration Statement and all amendments and supplements thereto (or such other number of  copies  as  such  Investor  may  reasonably  request  from  time  to  time)  and  (iii)  such  other  documents, including, without limitation, copies of any preliminary or final prospectus, as such  Investor may reasonably request  from  time to time in  order to  facilitate the disposition  of the  Registrable  Securities  owned  by  such  Investor, in  each  case  unless  publicly  available  on  EDGAR.         (e)   The  Company  shall  use  its  best  efforts  to  (i)  register  and  qualify,  unless  an  exemption from registration and qualification applies, the resale by Investors of the Registrable  Securities covered by a Registration Statement under such other securities or “blue sky” laws of  all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions, such  amendments (including, without limitation, post-effective amendments) and supplements to such  registrations and qualifications as may be necessary to maintain the effectiveness thereof during  the  Registration  Period,  (iii)  take  such  other  actions  as  may  be  necessary  to  maintain  such  registrations and qualifications in effect at all times during the Registration Period, and (iv) take  all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale                                        10  Error! Unknown document property name. 

 

   in  such  jurisdictions;  provided,  however,  the  Company  shall  not  be  required  in  connection  therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would  not otherwise be required to qualify but for this Section 3(e), (y) subject itself to general taxation  in  any  such  jurisdiction,  or  (z)  file  a  general  consent  to  service  of  process  in any  such  jurisdiction.  The Company shall promptly notify Legal  Counsel,  legal  counsel  for each other  Investor and each Investor who holds Registrable Securities of the receipt by the Company of  any notification with respect to the suspension of the registration or qualification of any of the  Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction in the  United States or its receipt of actual notice of the initiation or threatening of any proceeding for  such purpose.         (f)   The Company shall notify Legal  Counsel,  legal  counsel  for each other  Investor  and  each  Investor  in  writing  of  the  happening  of  any  event,  as  promptly  as  practicable  after  becoming aware of such event,  as  a result of which the prospectus  included in  a Registration  Statement, as then in effect, may include an untrue statement of a material fact or omission to  state a material fact required to be stated therein or necessary to make the statements therein, in  the light of the circumstances under which they were made, not misleading (provided that in no  event shall such notice contain any material, non-public information regarding the Company or  any  of  its  Subsidiaries),  and,  subject  to  Section 3(r),  promptly  prepare  a  supplement  or  amendment to such Registration Statement and such prospectus contained therein to correct such  untrue statement or omission and deliver ten (10) copies of such supplement or amendment to  Legal Counsel, legal counsel for each other Investor and each Investor (or such other number of  copies as Legal Counsel, legal counsel for each other Investor or such Investor may reasonably  request). The Company shall also promptly notify Legal Counsel, legal counsel for each other  Investor  and  each  Investor  in  writing  (i)  when  a  prospectus  or  any  prospectus  supplement  or  post-effective  amendment  has  been  filed,  when  a  Registration  Statement  or  any  post-effective  amendment has become effective (notification of such effectiveness shall be delivered to Legal  Counsel, legal counsel for each other Investor and each Investor by facsimile or e-mail on the  same day of such effectiveness and by overnight mail), and when the Company receives written  notice  from  the  SEC  that  a Registration  Statement  or  any  post-effective  amendment  will  be  reviewed  by  the  SEC,  (ii)  of  any  request  by  the  SEC  for  amendments  or  supplements  to  a  Registration  Statement  or  related  prospectus  or  related  information,  (iii)  of  the  Company’s  reasonable determination that a post-effective amendment to a Registration Statement would be  appropriate;  and  (iv) of  the  receipt  of  any  request  by  the  SEC  or  any  other  federal  or  state  governmental authority for any additional information relating to the Registration Statement or  any amendment or supplement thereto or any related prospectus.  The Company shall respond as  promptly  as  practicable  to  any  comments  received  from  the  SEC  with  respect  to  each  Registration  Statement  or  any  amendment  thereto  (it  being  understood  and  agreed  that  the  Company’s  response  to  any  such  comments  shall  be  delivered  to  the  SEC  no  later  than  fifteen (15) Business Days after the receipt thereof).         (g)   The Company shall (i) use its best efforts to prevent the issuance of any stop order  or other suspension of effectiveness of each Registration Statement or the use of any prospectus  contained  therein,  or  the  suspension  of  the  qualification,  or  the  loss  of  an  exemption  from  qualification, of any of the Registrable Securities for sale in any jurisdiction and, if such an order  or  suspension  is  issued,  to  obtain  the  withdrawal  of  such  order  or  suspension  at  the  earliest  possible moment and (ii) notify Legal Counsel, legal counsel for each other Investor and each                                        11  Error! Unknown document property name. 

 

   Investor who holds Registrable Securities of the issuance of such order and the resolution thereof  or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.         (h)   If any Investor may be required under applicable securities law to be described in  any Registration Statement as an underwriter and such Investor consents to so being named an  underwriter, at the request of any Investor, the Company shall furnish to such Investor, on the  date of the effectiveness of such Registration Statement and thereafter from time to time on such  dates as an Investor may reasonably request (i) a letter, dated such date, from the Company’s  independent  certified  public  accountants  in  form  and  substance  as  is  customarily  given  by  independent  certified  public  accountants  to  underwriters  in an  underwritten  public  offering,  addressed to the Investors, and (ii) an opinion, dated as of such date, of counsel representing the  Company  for  purposes  of  such  Registration  Statement,  in  form,  scope  and  substance  as  is  customarily given in an underwritten public offering, addressed to the Investors.         (i)   If any Investor may be required under applicable securities law to be described in  any Registration Statement as an underwriter and such Investor consents to so being named an  underwriter,  upon  the  written  request  of  such  Investor,  the  Company  shall  make  available  for  inspection  by  (i)  such  Investor,  (ii)  legal  counsel  for  such  Investor  and  (iii)  one  (1)  firm  of  accountants  or  other  agents  retained  by  such  Investor  (collectively,  the  “Inspectors”),  all  pertinent  financial  and  other  records,  and  pertinent  corporate  documents  and  properties  of  the  Company  (collectively,  the  “Records”),  as  shall  be  reasonably  deemed  necessary  by  each  Inspector, and cause the Company’s officers, directors and employees to supply all information  which any Inspector may reasonably request; provided, however, each Inspector shall agree in  writing to hold in strict confidence and not to make any disclosure (except to such Investor) or  use of any Record or other information which the Company’s board of directors determines in  good faith to be confidential, and of which determination the Inspectors are so notified, unless  (1) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in  any Registration Statement or is otherwise required under the 1933 Act, (2) the release of such  Records  is  ordered  pursuant  to  a  final,  non-appealable  subpoena  or  order  from  a  court  or  government  body  of  competent  jurisdiction,  or  (3)  the  information  in  such  Records  has  been  made generally available to the public other than by disclosure in violation of this Agreement or  any  other  Transaction  Document  (as  defined  in  the  Securities  Purchase  Agreement).  Such  Investor agrees that it shall, upon learning that disclosure of such Records is sought in or by a  court  or  governmental  body  of  competent  jurisdiction  or  through  other  means,  give  prompt  notice to the Company and allow the Company, at its expense, to undertake appropriate action to  prevent  disclosure  of,  or  to  obtain  a  protective  order  for,  the  Records  deemed  confidential.   Nothing  herein  (or  in  any  other  confidentiality  agreement  between  the  Company  and  such  Investor, if any) shall be deemed to limit any Investor’s ability to sell Registrable Securities in a  manner which is otherwise consistent with applicable laws and regulations.         (j)   The  Company  shall  hold  in  confidence  and  not  make  any  disclosure  of  information  concerning  an  Investor  provided  to  the  Company  unless  (i)  disclosure  of  such  information  is  necessary  to  comply  with  federal  or  state  securities  laws,  (ii)  the  disclosure  of  such information is necessary to avoid or correct a misstatement or omission in any Registration  Statement or is otherwise required to be disclosed in such Registration Statement pursuant to the  1933 Act, (iii) the release of such information is ordered pursuant to a subpoena or other final,  non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such                                        12  Error! Unknown document property name. 

 

   information has been made generally available to the public other than by disclosure in violation  of this Agreement or any other Transaction Document.  The Company agrees that it shall, upon  learning that disclosure of such information concerning an Investor is sought in or by a court or  governmental body of competent jurisdiction or through other means, give prompt written notice  to such Investor and allow such Investor, at such Investor’s expense, to undertake appropriate  action to prevent disclosure of, or to obtain a protective order for, such information.         (k)   Without  limiting  any  obligation  of  the  Company  under  the  Securities  Purchase  Agreement,  the  Company  shall  use  its  best  efforts  either  to  (i)  cause  all  of  the  Registrable  Securities covered by each Registration Statement to  be listed on each securities exchange on  which securities of the same class or series issued by the Company are then listed, if any, if the  listing  of  such  Registrable  Securities  is  then  permitted  under  the  rules  of  such  exchange,  (ii) secure  designation  and  quotation  of  all  of  the  Registrable  Securities  covered  by  each  Registration Statement on an Eligible Market (as defined in the Securities Purchase Agreement),  or  (iii)  if,  despite  the  Company’s  best  efforts  to  satisfy  the  preceding  clauses (i)  or  (ii)  the  Company  is  unsuccessful  in  satisfying  the  preceding  clauses  (i)  or  (ii),  without  limiting  the  generality of the foregoing, to use its best efforts to arrange for at least two market makers to  register  with  the  Financial  Industry  Regulatory  Authority  (“FINRA”)  as  such  with  respect  to  such Registrable Securities.  In addition, the Company shall cooperate with each Investor and  any broker or dealer through which any such Investor proposes to sell its Registrable Securities  in effecting a filing with FINRA pursuant to FINRA Rule 5110 as requested by such Investor.   The Company shall pay all fees and expenses in connection with satisfying its obligations under  this Section 3(k).         (l)   The Company shall cooperate with the Investors who hold Registrable Securities  being  offered  and,  to  the  extent  applicable,  facilitate  the  timely  preparation  and  delivery  of  certificates  (not  bearing  any  restrictive  legend)  representing  the  Registrable  Securities  to  be  offered  pursuant  to a  Registration  Statement  and  enable  such  certificates  to  be  in  such  denominations or amounts (as the case may be) as the Investors may reasonably request from  time to time and registered in such names as the Investors may request.         (m)   If requested by an Investor, the Company shall as soon as practicable after receipt  of notice from such Investor and subject to Section 3(r) hereof, (i) incorporate in a prospectus  supplement or post-effective amendment such information as an Investor reasonably requests to  be  included  therein  relating  to  the  sale  and  distribution  of  Registrable  Securities,  including,  without  limitation,  information  with  respect  to  the  number  of  Registrable Securities  being  offered or sold, the purchase price being paid therefor and any other terms of the offering of the  Registrable Securities to be sold in such offering; (ii) make all required filings of such prospectus  supplement or post-effective amendment after being notified of the matters to be incorporated in  such  prospectus  supplement  or  post-effective  amendment;  and  (iii)  supplement  or  make  amendments  to  any  Registration  Statement  or  prospectus  contained  therein  if  reasonably  requested by an Investor holding any Registrable Securities.         (n)   The Company shall use its best efforts to cause the Registrable Securities covered  by  a  Registration  Statement  to  be  registered  with  or  approved  by  such  other  governmental  agencies or authorities as may be necessary to consummate the disposition of such Registrable  Securities.                                        13  Error! Unknown document property name. 

 

         (o)   The  Company  shall  make  generally  available  to  its  security  holders  as  soon  as  practical,  but  not  later  than  ninety  (90)  days  after  the  close  of  the  period  covered  thereby,  an  earnings statement (in form complying with, and in the manner provided by, the provisions of  Rule 158 under the 1933 Act) covering a twelve-month period beginning not later than the first  day  of  the  Company’s  fiscal  quarter  next  following  the  applicable  Effective  Date  of  each  Registration Statement.         (p)   The Company shall otherwise use its  best  efforts to  comply with all applicable  rules and regulations of the SEC in connection with any registration hereunder.         (q)   Within  one  (1)  Business  Day  after  a  Registration  Statement  which  covers  Registrable  Securities  is  declared  effective  by  the  SEC,  the  Company  shall  deliver,  and  shall  cause  legal  counsel  for  the  Company  to  deliver,  to  the  transfer  agent  for  such  Registrable  Securities  (with  copies  to  the  Investors  whose  Registrable  Securities  are included  in  such  Registration  Statement)  confirmation  that  such  Registration  Statement  has  been  declared  effective by the SEC in the form attached hereto as Exhibit A.         (r)   Notwithstanding anything to the contrary herein (but subject to the last sentence  of this Section 3(r)), at any time after the Effective Date of a particular Registration Statement,  the  Company  may  delay  the  disclosure  of  material,  non-public  information  concerning  the  Company or any of its Subsidiaries the disclosure of which at the time is not, in the good faith  opinion of the board of directors of the Company, in the best interest of the Company and, in the  opinion of counsel to the Company, otherwise required (a “Grace Period”), provided that the  Company  shall  promptly  notify  the  Investors  in  writing  of  the  (i)  existence  of  material,  non- public information giving rise to a Grace Period (provided that in each such notice the Company  shall not disclose the content of such material, non-public information to any of the Investors)  and the date on which such Grace Period will begin and (ii) date on which such Grace Period  ends, provided further that (I) no Grace Period shall exceed ten (10) consecutive days and during  any  three  hundred  sixty  five  (365)  day  period  all  such  Grace  Periods  shall  not  exceed  an  aggregate  of  thirty  (30)  days,  (II)  the  first  day  of  any  Grace  Period  must  be  at  least  five (5)  Trading Days after the last day of any prior Grace Period and (III) no Grace Period may exist  during  the  sixty  (60)  Trading  Day  period  immediately  following  the  Effective  Date  of  such  Registration Statement (provided that such sixty (60) Trading Day period shall be extended by  the number of Trading Days during such period and any extension thereof contemplated by this  proviso during which such Registration Statement is  not  effective or the prospectus  contained  therein  is  not  available  for  use)  (each,  an  “Allowable  Grace  Period”).  For  purposes  of  determining the length of a Grace Period above, such Grace Period shall begin on and include  the  date  the  Investors  receive  the  notice  referred  to  in  clause  (i)  above  and  shall  end  on  and  include the later of the date the Investors receive the notice referred to in clause (ii) above and  the date referred to in such notice.  The provisions of Section 3(g) hereof shall not be applicable  during the period of any Allowable Grace Period.  Upon expiration of each Grace Period, the  Company  shall  again  be  bound  by  the  first  sentence  of  Section 3(f) with  respect  to  the  information  giving  rise  thereto unless  such  material,  non-public  information  is  no  longer  applicable.   Notwithstanding  anything  to  the  contrary  contained  in  this  Section 3(r),  the  Company  shall cause  its  transfer  agent  to  deliver  unlegended  shares  of  Common  Stock  to  a  transferee of an Investor in accordance with the terms of the Securities Purchase Agreement in  connection  with  any  sale  of  Registrable  Securities  with  respect  to  which  such  Investor has                                        14  Error! Unknown document property name. 

 

   entered into a contract for sale, and delivered a copy of the prospectus included as part of the  particular Registration Statement to the extent applicable, prior to such Investor’s receipt of the  notice of a Grace Period and for which the Investor has not yet settled.         (s)   The  Company  shall  take  all  other  reasonable  actions  necessary  to  expedite  and  facilitate disposition by each Investors of its Registrable Securities pursuant to each Registration  Statement.         (t)   Neither  the  Company  nor  any  Subsidiary  or  affiliate  thereof  shall  identify  any  Investor as an underwriter in any public disclosure or filing with the SEC, the Principal Market  or any Eligible Market and any Buyer being deemed an underwriter by the SEC shall not relieve  the Company of any obligations it has under this Agreement or any other Transaction Document  (as defined in the Securities Purchase Agreement); provided, however, that the foregoing shall  not  prohibit  the  Company from  including  the  disclosure  found  in  the  "Plan  of  Distribution"  section  attached  hereto  as  Exhibit  B  in  the  Registration  Statement;  provided,  further  that  if  a  reduction of the number of Registrable Securities to be included in the Registration Statement for  resale by such Investor in accordance with Section 2(f) would not cause the Investor to cease to  be deemed an “underwriter” by the SEC and such Investor does not consent to be named as an  “underwriter” in such Registration Statement, the Company’s shall have no obligation hereunder  to  include  such  Investor’s  Registrable Securities  in  such  Registration  Statement  (nor  shall  the  Company incur any Registration Delay Payments with respect thereto).           (u)   Neither the Company nor any of its Subsidiaries has entered, as of the date hereof,  nor shall the Company or any of its Subsidiaries, on or after the date of this Agreement, enter  into  any  agreement  with  respect  to  its  securities,  that  would  have  the  effect  of  impairing  the  rights granted to the Buyers in this Agreement or otherwise conflicts with the provisions hereof.     4.    Obligations of the Investors.         (a)   At  least  five  (5)  Business  Days  prior  to  the  first  anticipated  filing  date of  each  Registration Statement, the Company shall notify each Investor in writing of the information the  Company requires from each such Investor with respect to such Registration Statement.  It shall  be a condition precedent to the obligations of the Company to complete the registration pursuant  to  this  Agreement  with  respect  to  the  Registrable  Securities  of  a  particular  Investor  that  such  Investor  shall  furnish  to  the  Company  such  information  regarding  itself,  the  Registrable  Securities held by it and the intended method of disposition of the Registrable Securities held by  it, as shall be reasonably required to effect and maintain the effectiveness of the registration of  such  Registrable  Securities  and  shall  execute  such  documents  in  connection  with  such  registration as the Company may reasonably request.         (b)   Each Investor, by such Investor’s acceptance of the Registrable Securities, agrees  to cooperate with the Company as reasonably requested by the Company in connection with the  preparation  and  filing  of  each  Registration  Statement  hereunder,  unless  such  Investor  has  notified  the  Company  in  writing  of  such  Investor’s  election  to  exclude  all  of  such  Investor’s  Registrable Securities from such Registration Statement.                                          15  Error! Unknown document property name. 

 

         (c)   Each Investor agrees that, upon receipt of any notice from the Company of the  happening of any event of the kind described in Section 3(g) or the first sentence of 3(f), such  Investor  will  immediately  discontinue  disposition  of  Registrable  Securities  pursuant  to  any  Registration Statement(s) covering such Registrable Securities until such Investor’s receipt of the  copies  of  the  supplemented  or  amended prospectus  contemplated  by  Section 3(g) or  the  first  sentence  of  Section 3(f) or  receipt  of  notice  that  no  supplement  or  amendment  is  required.   Notwithstanding  anything  to  the  contrary  in  this  Section 4(c),  the  Company  shall  cause  its  transfer agent to deliver unlegended shares of Common Stock to a transferee of an Investor in  accordance with the terms of the Securities Purchase Agreement in connection with any sale of  Registrable Securities with respect  to  which such Investor has entered into  a contract  for sale  prior to the Investor’s receipt of a notice from the Company of the happening of any event of the  kind described in Section 3(g) or the first sentence of Section 3(f) and for which such Investor  has not yet settled.   5.    Expenses of Registration.         All reasonable expenses, other than underwriting discounts and commissions, incurred in  connection with  registrations,  filings  or qualifications  pursuant  to  Sections 2 and 3, including,  without limitation, all registration, listing and qualifications fees, printers and accounting fees,  FINRA filing fees (if any) and fees and disbursements of counsel for the Company (but not any  Investor except as expressly provided for below) shall be paid by the Company.  The Company  shall  reimburse  Legal  Counsel  for  its reasonable fees  and  disbursements  in  connection  with  registration, filing or qualification pursuant to Sections 2 and 3 of this Agreement which amount  shall be limited to $5,000 for each such registration, filing or qualification.   6.    Indemnification.         (a)   To  the  fullest  extent  permitted  by  law,  the  Company  will,  and hereby  does,  indemnify,  hold  harmless  and  defend  each  Investor  and each  of  its  directors,  officers,  shareholders,  members,  partners,  employees,  agents,  advisors,  representatives  (and  any  other  Persons with a functionally equivalent role of a Person holding such titles notwithstanding the  lack of such title or any other title) and each Person, if any, who controls such Investor within the  meaning  of  the  1933  Act  or  the  1934  Act  and  each  of  the  directors,  officers,  shareholders,  members, partners, employees, agents, advisors, representatives (and any other Persons with a  functionally equivalent role of a Person holding such titles notwithstanding the lack of such title  or  any  other  title)  of  such  controlling  Persons (each,  an  “Indemnified  Person”),  against  any  losses,  obligations,  claims,  damages,  liabilities,  contingencies,  judgments,  fines,  penalties,  charges, costs (including, without limitation, court costs, reasonable attorneys’ fees and costs of  defense and investigation), amounts paid in settlement or expenses, joint or several, (collectively,  “Claims”)  incurred  in  investigating,  preparing  or  defending  any  action,  claim,  suit,  inquiry,  proceeding,  investigation  or  appeal  taken  from  the  foregoing  by  or  before  any  court  or  governmental, administrative or other regulatory agency, body or the SEC, whether pending or  threatened, whether or not  an Indemnified Person is  or may be a party thereto  (“Indemnified  Damages”),  to  which  any  of  them  may  become  subject  insofar  as  such  Claims  (or  actions  or  proceedings,  whether  commenced  or  threatened,  in  respect  thereof)  arise  out  of  or  are  based  upon:  (i) any untrue statement or alleged untrue statement of a material fact in a Registration  Statement or any post-effective amendment thereto or in any filing made in connection with the                                        16  Error! Unknown document property name. 

 

   qualification of the offering under the securities or other “blue sky” laws of any jurisdiction in  which  Registrable  Securities  are  offered  (“Blue  Sky  Filing”),  or  the  omission  or  alleged  omission to state a material fact required to be stated therein or necessary to make the statements  therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact  contained in any preliminary prospectus if used prior to the effective date of such Registration  Statement, or contained in the final prospectus (as amended or supplemented, if the Company  files  any  amendment  thereof  or  supplement  thereto  with  the  SEC)  or  the  omission  or  alleged  omission  to  state  therein  any  material  fact  necessary  to  make  the  statements  made  therein, in  light of the circumstances under which the statements therein were made, not misleading or (iii)  any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law,  including,  without  limitation,  any  state  securities  law,  or any  rule  or  regulation  thereunder  relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement or  (iv) any violation of this Agreement (the matters in the foregoing clauses (i) through (iv) being,  collectively,  “Violations”).  Subject  to  Section 6(c),  the  Company  shall  reimburse  the  Indemnified Persons, promptly as such expenses are incurred and are due and payable, for any  legal fees  or  other  expenses reasonably incurred  by  them  in  connection  with  investigating  or  defending  any  such  Claim.  Notwithstanding  anything  to  the  contrary  contained  herein,  the  indemnification agreement contained in this Section 6(a):  (i) shall not apply to a Claim by an  Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in  conformity with information furnished in writing to the Company by such Indemnified Person  for  such  Indemnified  Person  expressly  for  use  in  connection  with  the  preparation  of  such  Registration Statement or any such amendment thereof or supplement thereto, if such prospectus  was timely made available by the Company pursuant to Section 3(d); and (ii) shall not apply to  amounts paid in settlement of any Claim if such settlement is effected without the prior written  consent of the Company, which consent shall not be unreasonably withheld or delayed.  Such  indemnity  shall  remain  in  full  force  and  effect  regardless  of  any  investigation  made  by  or  on  behalf  of  the  Indemnified  Person  and  shall  survive  the  transfer  of  any  of  the  Registrable  Securities by any of the Investors pursuant to Section 9.         (b)   In  connection  with  any  Registration  Statement  in  which  an  Investor  is  participating,  such  Investor  agrees  to  severally  and  not  jointly  indemnify,  hold  harmless  and  defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company,  each of its directors, each of its officers who signs the Registration Statement and each Person, if  any, who controls the Company within the meaning of the 1933 Act or the 1934 Act (each, an  “Indemnified Party”), against any Claim or Indemnified Damages to which any of them may  become  subject,  under  the  1933  Act,  the  1934  Act  or  otherwise,  insofar  as  such  Claim  or  Indemnified Damages arise out of or are based upon any Violation, in each case, to the extent,  and only to the extent, that such Violation occurs in reliance upon and in conformity with written  information  furnished  to  the  Company  by  such  Investor  expressly  for  use  in  connection  with  such  Registration  Statement;  and,  subject  to  Section 6(c) and  the  below  provisos  in  this  Section 6(b),  such  Investor  will  reimburse  an  Indemnified  Party  any  legal  or  other  expenses  reasonably incurred by such Indemnified Party in connection with investigating or defending any  such Claim; provided, however, the indemnity agreement contained in this Section 6(b) and the  agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in  settlement of any Claim if such settlement is effected without the prior written consent of such  Investor, which  consent  shall  not  be  unreasonably  withheld  or  delayed,  provided  further  that  such  Investor  shall  be  liable  under  this  Section 6(b) for  only  that  amount  of  a Claim  or                                        17  Error! Unknown document property name. 

 

   Indemnified  Damages  as  does  not  exceed  the  net  proceeds  to  such  Investor  as  a  result  of  the  applicable  sale  of  Registrable  Securities  pursuant  to  such  Registration  Statement.  Such  indemnity  shall  remain  in  full  force  and  effect  regardless  of  any investigation  made  by  or  on  behalf  of  such  Indemnified  Party  and  shall  survive  the  transfer  of  any  of  the  Registrable  Securities by any of the Investors pursuant to Section 9.         (c)   Promptly after receipt by an Indemnified Person or Indemnified Party (as the case  may  be)  under  this  Section 6 of  notice  of  the  commencement  of  any  action  or  proceeding  (including, without limitation, any governmental action or proceeding) involving a Claim, such  Indemnified Person or Indemnified Party (as the case may be) shall, if a Claim in respect thereof  is to be made against any indemnifying party under this Section 6, deliver to the indemnifying  party a written notice of the commencement thereof, and the indemnifying party shall have the  right to participate in, and, to the extent the indemnifying party so desires, jointly with any other  indemnifying  party  similarly  noticed,  to  assume  control  of  the  defense  thereof  with  counsel  mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified  Party (as the case may be); provided, however, an Indemnified Person or Indemnified Party (as  the case may be) shall have the right to retain its own counsel with the fees and expenses of such  counsel to be paid by the indemnifying party if:  (i) the indemnifying party has agreed in writing  to pay such fees and expenses; (ii) the indemnifying party shall have failed promptly to assume  the defense of such Claim  and to  employ counsel  reasonably  satisfactory to  such Indemnified  Person or Indemnified Party (as the case may be) in any such Claim; or (iii) the named parties to  any  such  Claim  (including,  without  limitation, any  impleaded  parties)  include  both  such  Indemnified Person or Indemnified Party (as the case may be) and the indemnifying party, and  such Indemnified Person or such Indemnified Party (as the case may be) shall have been advised  by counsel that a conflict of interest is likely to exist if the same counsel were to represent such  Indemnified Person or such Indemnified Party and the indemnifying party (in which case, if such  Indemnified  Person  or  such  Indemnified  Party  (as  the  case  may  be)  notifies  the  indemnifying  party  in  writing  that  it  elects  to  employ  separate  counsel  at  the  expense  of  the  indemnifying  party, then the indemnifying party shall not have the right to assume the defense thereof and such  counsel shall be at the expense of the indemnifying party, provided further that in the case of  clause  (iii)  above  the  indemnifying  party  shall  not  be  responsible  for  the  reasonable  fees and  expenses of more than one (1) separate legal counsel for such Indemnified Person or Indemnified  Party (as the case may be).  The Indemnified Party or Indemnified Person (as the case may be)  shall  reasonably  cooperate  with  the  indemnifying  party  in  connection  with  any  negotiation  or  defense  of  any  such  action  or  Claim  by  the  indemnifying  party  and  shall  furnish  to  the  indemnifying party all information reasonably available to the Indemnified Party or Indemnified  Person (as the case may be) which relates to such action or Claim.  The indemnifying party shall  keep the Indemnified Party or Indemnified Person (as the case may be) reasonably apprised at all  times  as  to  the  status  of  the  defense  or  any  settlement  negotiations  with  respect  thereto.  No  indemnifying party shall be liable for any settlement of any action, claim or proceeding effected  without  its  prior  written  consent;  provided,  however,  the  indemnifying  party  shall  not  unreasonably withhold, delay or condition its consent.  No indemnifying party shall, without the  prior  written  consent  of  the  Indemnified  Party  or  Indemnified  Person  (as  the  case  may  be),  consent to entry of any judgment or enter into any settlement or other compromise which does  not  include  as  an  unconditional  term  thereof  the  giving  by  the  claimant  or  plaintiff  to  such  Indemnified Party or Indemnified Person (as the case may be) of a release from all liability in  respect  to  such  Claim  or  litigation,  and  such  settlement  shall  not  include  any  admission  as  to                                        18  Error! Unknown document property name. 

 

   fault on the part of the Indemnified Party.  Following indemnification as provided for hereunder,  the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified  Person (as the case may be) with respect to all third parties, firms or corporations relating to the  matter  for  which  indemnification  has  been  made.  The  failure  to  deliver  written  notice  to  the  indemnifying party within a reasonable time of the commencement of any such action shall not  relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party  (as  the  case  may  be)  under  this  Section 6,  except  to  the  extent  that  the  indemnifying  party  is  materially and adversely prejudiced in its ability to defend such action.         (d)   The  indemnification  required  by  this  Section 6 shall  be  made  by  periodic  payments of the amount thereof during the course of the investigation or defense, as and when  bills are received or Indemnified Damages are incurred.         (e)   The indemnity and contribution agreements contained herein shall be in addition  to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person against  the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to  pursuant to the law.   7.    Contribution.         To the extent any indemnification by an indemnifying party is prohibited or limited by  law,  the  indemnifying  party  agrees  to  make  the  maximum  contribution  with  respect  to  any  amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by  law; provided, however:  (i) no contribution shall be made under circumstances where the maker  would not have been liable for indemnification under the fault standards set forth in Section 6 of  this  Agreement,  (ii)  no  Person  involved  in  the  sale  of  Registrable  Securities  which  Person  is  guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in  connection with such sale shall be entitled to contribution from any Person involved in such sale  of  Registrable  Securities  who  was  not  guilty  of  fraudulent  misrepresentation;  and  (iii) contribution by any seller of Registrable Securities shall be limited in amount to the amount  of net proceeds received by such seller from the applicable sale of such Registrable Securities  pursuant to such Registration Statement.  Notwithstanding the provisions of this Section 7, no  Investor shall be required to contribute, in the aggregate, any amount in excess of the amount by  which  the  net  proceeds  actually  received  by  such  Investor  from  the  applicable  sale  of  the  Registrable  Securities  subject  to  the  Claim  exceeds  the  amount  of  any  damages  that  such  Investor  has  otherwise  been  required  to  pay,  or  would  otherwise  be  required  to  pay  under  Section 6(b),  by  reason  of  such  untrue  or  alleged  untrue  statement  or  omission  or  alleged  omission.   8.    Reports Under the 1934 Act.         With a view to making available to the Investors the benefits of Rule 144, the Company  agrees to:         (a)   make and keep public information  available, as those terms  are understood and  defined in Rule 144;                                         19  Error! Unknown document property name. 

 

         (b)   use  reasonable  efferots  to file  with  the  SEC  in  a  timely manner  all  reports  and  other documents required of the Company under the 1933 Act and the 1934 Act so long as the  Company  remains  subject  to  such  requirements  (it  being  understood  and  agreed  that  nothing  herein shall limit any obligations of the Company under the Securities Purchase Agreement) and  the filing of such reports and other documents is required for the applicable provisions of Rule  144; and         (c)   furnish  to  each  Investor  so  long  as  such  Investor  owns  Registrable  Securities,  promptly upon request, (i) a written statement by the Company, if true, that it has complied with  the reporting, submission and posting requirements of Rule 144, the 1933 Act and the 1934 Act,  (ii) a copy of the most recent annual or quarterly report of the Company and such other reports  and documents so filed by the Company with the SEC if such reports are not publicly available  via  EDGAR,  and  (iii) such  other  information  as  may  be  reasonably  requested  to  permit  the  Investors to sell such securities pursuant to Rule 144 without registration.   9.    Assignment of Registration Rights.         All or any portion of the rights under this Agreement shall be automatically assignable by  each Investor to any transferee or assignee (as the case may be) of all or any portion of such  Investor’s Registrable Securities, Notes or Warrants if:  (i) such Investor agrees in writing with  such transferee or assignee (as the case may be) to assign all or any portion of such rights, and a  copy of such agreement is furnished to the Company within a reasonable time after such transfer  or  assignment  (as  the  case  may  be);  (ii)  the  Company  is,  within  a  reasonable  time  after  such  transfer or assignment (as the case may be), furnished with written notice of (a) the name and  address of such transferee or assignee (as the case may be), and (b) the securities with respect to  which  such  registration  rights  are  being  transferred  or  assigned  (as  the  case  may  be);  (iii) immediately  following  such  transfer  or  assignment  (as  the  case  may  be)  the  further  disposition  of such securities by such transferee or assignee (as  the  case may be) is  restricted  under the 1933 Act or applicable state securities laws if so required; (iv) at or before the time the  Company receives the written notice contemplated by clause (ii) of this sentence such transferee  or assignee (as the case may be) agrees in writing with the Company to be bound by all of the  provisions contained herein; (v) such transfer or assignment (as the case may be) shall have been  made in accordance with the applicable requirements of the Securities Purchase Agreement, the  Notes and the Warrants (as the case may be); and (vi) such transfer or assignment (as the case  may be) shall have been conducted in accordance with all applicable federal and state securities  laws.   10.   Amendment of Registration Rights.         Provisions  of  this  Agreement  may  be  amended  and  the  observance  thereof may  be  waived (either generally or in a particular instance and either retroactively or prospectively), only  with  the  written  consent  of  the  Company  and  the  Required  Holders;  provided  that  any  such  amendment or waiver that complies with the foregoing, but that disproportionately, materially  and adversely affects the rights and obligations of any Investor relative to the comparable rights  and obligations of the other Investors shall require the prior written consent of such adversely  affected Investor. Any amendment or waiver effected in accordance with this Section 10 shall be  binding  upon  each  Investor  and  the  Company,  provided  that  no  such  amendment  shall  be                                        20  Error! Unknown document property name. 

 

   effective to the extent that it (1) applies to less than all of the holders of Registrable Securities or  (2)  imposes  any  obligation  or  liability  on  any  Investor  without  such  Investor’s  prior  written  consent (which may be granted or withheld in such Investor’s sole discretion).  No waiver shall  be  effective  unless  it  is  in  writing  and  signed  by  an  authorized  representative  of  the  waiving  party.  No consideration shall be offered or paid to any Person to amend or consent to a waiver or  modification of any provision of this Agreement unless the same consideration (other than the  reimbursement of legal fees) also is offered to all of the parties to this Agreement.   11.   Miscellaneous.         (a)   Solely  for  purposes  of  this  Agreement,  a  Person  is  deemed  to  be  a  holder  of  Registrable  Securities  whenever  such  Person  owns,  or  is  deemed  to  own,  of  record  such  Registrable  Securities.  If  the  Company  receives  conflicting  instructions,  notices  or  elections  from two or more Persons with respect to the same Registrable Securities, the Company shall act  upon  the  basis  of  instructions,  notice  or  election  received  from  such  record  owner  of  such  Registrable Securities.         (b)   Any notices, consents, waivers or other communications required or permitted to  be given under the terms of this Agreement must be in writing and will be deemed to have been  delivered:  (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile  (provided confirmation of transmission is mechanically or electronically generated and kept on  file  by  the  sending  party) or  electronic  mail (provided  that  such  sent  email  is  kept  on  file  (whether electronically or otherwise) by the sending party and the sending party does not receive  an automatically generated message from the recipient's email server that such e-mail could not  be  delivered  to  such  recipient); or  (iii) one  (1)  Business  Day  after  deposit  with  a  nationally  recognized  overnight  delivery  service  with  next  day  delivery  specified,  in  each  case,  properly  addressed  to  the  party  to  receive  the  same.  The  addresses, facsimile  numbers and  email  addresses for such communications shall be:                     If to the Company:                           Phunware, Inc.                          7800 Shoal Creek Blvd, Suite 230-S                          Austin, Texas 78757                           Telephone:  (___) ___-____                          Facsimile:  (___) ___-____                          Attention:  Chief Executive Officer                          Email:                                           21  Error! Unknown document property name. 

 

                     with a copy (for informational purposes only) to:                           Winstead PC                          401 Congress Avenue Suite 2100                          Austin, Texas 78701                          Telephone:  (512) 370-2804                          Facsimile:  (512) 370-2850                          Attention:  Alex R. Allemann, Esq.                          E-mail:  aallemann@winstead.com                      If to the Transfer Agent:                           Continental Stock Transfer & Trust Company                          1 State Street, Floor 30                          New York, New York 110004_                          Telephone:  (212) 845-329                          Facsimile:  (___) ___-____                          Attention:  Michael Mullings and George Dalton                          E-Mail:  mmullings@continentalstock.com and                          gdalton@continentalstock.com                      If to Legal Counsel:                           Kelley Drye & Warren LLP                           101 Park Avenue                          New York, NY 10178                          Telephone: (212) 808-7540                          Facsimile: (212) 808-7897                          Attention:  Michael A. Adelstein, Esq.                          Email:  madelstein@kelleydrye.com   If to a Buyer, to its address, facsimile number and/or email address set forth on the Schedule of  Buyers  attached  to  the  Securities  Purchase  Agreement,  with  copies  to  such  Buyer’s  representatives  as  set  forth  on  the  Schedule  of  Buyers,  or  to  such  other  address, facsimile  number, and/or email address and/or to the attention of such other Person as the recipient party  has specified by written notice given to each other party five (5) days prior to the effectiveness of  such change, provided that Kelley Drye & Warren LLP shall only be provided notices sent to the  lead investor.  Written confirmation of receipt (A) given by the recipient of such notice, consent,  waiver  or  other  communication,  (B) mechanically  or  electronically  generated  by  the  sender’s  facsimile  machine  or email containing  the  time,  date,  recipient  facsimile  number  or  email  address  and  an  image  of  the  first  page  of  such  transmission  or  (C)  provided  by  a  courier  or  overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or  receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii)  or (iii) above, respectively.         (c)   Failure  of  any  party  to  exercise  any  right  or  remedy  under  this  Agreement  or  otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver                                         22  Error! Unknown document property name. 

 

   thereof.  The Company and each Investor 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 each party  hereto  shall  be  entitled  to  an  injunction  or  injunctions  to  prevent  or  cure  breaches  of  the  provisions of this Agreement by any other party hereto and to enforce specifically the terms and  provisions hereof (without the necessity of showing economic loss and without any bond or other  security being required), this being in addition to any other remedy to which any party may be  entitled by law or equity.         (d)   All  questions  concerning  the  construction,  validity,  enforcement  and  interpretation of this Agreement shall be governed by the internal laws of the State of New York,  without giving effect to any choice of law or conflict of law provision or rule (whether of the  State of New York or any other jurisdictions) that would cause the application of the laws of any  jurisdictions other than the State of New York.  Each party hereby irrevocably submits to the  exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of  Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any  transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees  not to assert in any suit, action or proceeding, any claim that it is not personally subject to the  jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient  forum  or  that  the  venue  of  such  suit,  action  or  proceeding  is  improper.  Each party  hereby  irrevocably waives personal service of process and consents to process being served in any such  suit, action or proceeding by mailing a copy thereof to such party at the address for such notices  to  it  under  this  Agreement  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  manner  permitted  by  law.  EACH  PARTY  HEREBY  IRREVOCABLY  WAIVES  ANY  RIGHT  IT    MAY  HAVE  TO,  AND  AGREES  NOT  TO  REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER  OR  IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY  TRANSACTION CONTEMPLATED HEREBY.         (e)   If any provision of this Agreement is prohibited by law or otherwise determined  to  be  invalid  or  unenforceable  by  a  court  of  competent  jurisdiction,  the  provision  that  would  otherwise  be  prohibited,  invalid  or  unenforceable  shall  be  deemed  amended  to  apply  to  the  broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of  such provision shall not affect the validity of the remaining provisions of this Agreement so long  as  this  Agreement  as  so  modified  continues  to  express,  without  material  change,  the  original  intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or  unenforceability  of  the  provision(s)  in  question  does  not  substantially  impair  the  respective  expectations or reciprocal obligations of the parties or the practical realization of the benefits that  would  otherwise  be  conferred  upon  the  parties.   The  parties  will  endeavor  in  good  faith  negotiations  to  replace  the  prohibited,  invalid  or  unenforceable  provision(s)  with  a  valid  provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or  unenforceable provision(s).         (f)   This  Agreement,  the  other  Transaction  Documents,  the  schedules  and  exhibits  attached hereto and thereto and the instruments referenced herein and therein constitute the entire  agreement among the parties hereto and thereto solely with respect to the subject matter hereof                                        23  Error! Unknown document property name. 

 

   and thereof.  There are no restrictions, promises, warranties or undertakings, other than those set  forth or referred to herein and therein.  This Agreement, the other Transaction Documents, the  schedules  and  exhibits  attached  hereto  and  thereto  and  the  instruments  referenced  herein  and  therein supersede all prior agreements and understandings among the parties hereto solely with  respect  to  the  subject  matter  hereof and  thereof;  provided,  however,  nothing  contained  in  this  Agreement or any other Transaction Document shall (or shall be deemed to) (i) have any effect  on any agreements  any Investor has entered into with the Company or any of its Subsidiaries  prior  to  the date  hereof  with  respect  to  any  prior  investment  made  by  such  Investor  in  the  Company, (ii) waive, alter, modify or amend in any respect any obligations of the Company or  any of its Subsidiaries or any rights of or benefits to any Investor or any other Person in any  agreement entered into prior to the date hereof between or among the Company and/or any of its  Subsidiaries and any Investor and all such agreements shall continue in full force and effect or  (iii) limit any obligations of the Company under any of the other Transaction Documents.         (g)   Subject to compliance with Section 9 (if applicable), this Agreement shall inure to  the benefit of and be binding upon the permitted successors and assigns of each of the parties  hereto.  This Agreement is not for the benefit of, nor may any provision hereof be enforced by,  any Person, other than the parties hereto, their respective permitted successors and assigns and  the Persons referred to in Sections 6 and 7 hereof.         (h)   The headings in this Agreement are for convenience of reference only and shall  not limit or otherwise affect the meaning hereof.  Unless the context clearly indicates otherwise,  each pronoun herein  shall be deemed to  include  the masculine, feminine, neuter, singular and  plural  forms  thereof.  The  terms  “including,”  “includes,”  “include”  and  words  of  like  import  shall be construed broadly as if followed by the words “without limitation.”  The terms “herein,”  “hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the  provision in which they are found.         (i)   This Agreement may be executed in two or more identical counterparts, each of  which  shall  be  deemed an  original,  but all  of  which  shall  be  considered  one  and  the  same  agreement  and  shall  become  effective  when  counterparts  have  been  signed  by  each  party  and  delivered  to  the  other  party.  In  the  event  that  any  signature  is  delivered  by  facsimile  transmission or by an email which contains a portable document format (.pdf) file of an executed  signature  page,  such  signature  page  shall  create  a  valid  and  binding  obligation  of  the  party  executing (or on whose behalf such signature is executed) with the same force and effect as if  such signature page were an original thereof.         (j)   Each  party  shall  do  and  perform,  or  cause  to  be  done  and  performed,  all  such  further  acts  and  things,  and  shall  execute  and  deliver  all  such  other  agreements,  certificates,  instruments and documents as any other party may reasonably request in order to carry out the  intent and accomplish the purposes of this Agreement and the consummation of the transactions  contemplated hereby.         (k)   The language used in this Agreement will be deemed to be the language chosen  by the parties to express their mutual intent and no rules of strict construction will be applied  against any party.  Notwithstanding anything to the contrary set forth in Section 10, terms used in  this Agreement but defined in the other Transaction Documents shall have the meanings ascribed                                        24  Error! Unknown document property name. 

 

   to  such  terms  on  the  Closing  Date  in  such  other  Transaction  Documents  unless  otherwise  consented to in writing by each Investor.         (l)   All  consents  and  other  determinations  required  to  be  made  by  the  Investors  pursuant to this Agreement shall be made, unless otherwise specified in this Agreement, by the  Required Holders, determined as if all of the outstanding Notes then held by the Investors have  been  converted  for  Registrable  Securities  without  regard  to  any  limitations  on  redemption,  amortization and/or conversion of the Notes and the outstanding Warrants then held by Investors  have been exercised for Registrable Securities without regard to any limitations on exercise of  the Warrants.         (m)   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.         (n)   The obligations of each Investor under this Agreement and the other Transaction  Documents are several and not joint with the obligations of any other Investor, and no Investor  shall  be  responsible  in  any  way  for  the  performance  of  the  obligations  of  any  other  Investor  under this Agreement or any other Transaction Document.  Nothing contained herein or in any  other  Transaction  Document,  and  no  action  taken  by  any  Investor  pursuant  hereto  or  thereto,  shall be deemed to constitute the Investors as, and the Company acknowledges that the Investors  do not so constitute, a partnership, an association, a joint venture or any other kind of group or  entity, or create a presumption that the Investors are in any way acting in concert or as a group or  entity  with  respect  to  such  obligations  or  the  transactions  contemplated  by  the  Transaction  Documents or any matters, and the Company acknowledges that the Investors are not acting in  concert or as  a group, and the Company shall not  assert  any such claim, with  respect  to  such  obligations  or  the  transactions  contemplated  by  this  Agreement  or  any  of  the  other  the  Transaction Documents.  Each Investor shall be entitled to independently protect and enforce its  rights, including, without limitation, the rights arising out of this Agreement or out of any other  Transaction Documents, and it shall not be necessary for any other Investor to be joined as an  additional party in any proceeding for such purpose.  The use of a single agreement with respect  to the obligations of the Company contained herein was solely in the control of the Company,  not  the  action  or  decision  of  any  Investor,  and  was  done  solely  for  the  convenience  of  the  Company and not because it was required or requested to do so by any Investor.  It is expressly  understood  and  agreed  that  each  provision  contained  in  this  Agreement  and  in  each  other  Transaction  Document  is  between  the  Company  and  an  Investor,  solely,  and  not  between  the  Company and the Investors collectively and not between and among Investors.                                 [signature page follows]                                          25  Error! Unknown document property name. 

 

          IN WITNESS WHEREOF, each Buyer and the Company have caused their respective  signature page to this Registration Rights Agreement to be duly executed as of the date first  written above.                                         COMPANY:                                       PHUNWARE, INC.                                                                                                                                                        By:                                                                        Name:                                          Title:    Error! Unknown document property name. 

 

          IN WITNESS WHEREOF, each Buyer and the Company have caused their respective  signature page to this Registration Rights Agreement to be duly executed as of the date first  written above.                                         BUYERS:                                       ALTO OPPORTUNITY MASTER FUND, SPC -                                      SEGREGATED MASTER PORTFOLIO B                                                                                                                  By:                                                                        Name:                                          Title:        Error! Unknown document property name. 

 

                                                                       EXHIBIT A                      FORM OF NOTICE OF EFFECTIVENESS                         OF REGISTRATION STATEMENT    ______________________  ______________________  ______________________  Attention:  _____________               Re:   Phunware, Inc.   Ladies and Gentlemen:               [We  are][I  am]  counsel  to Phunware,  Inc.,  a  Delaware corporation  (the  “Company”),  and  have  represented  the  Company  in  connection  with  that  certain  Securities  Purchase  Agreement  (the  “Securities  Purchase  Agreement”)  entered  into  by  and  among  the  Company  and  the  buyers  named  therein  (collectively,  the  “Holders”)  pursuant  to  which  the  Company issued to the Holders Series A Senior Convertible Notes and Series B Senior Secured  Convertible Notes  (collectively, the “Notes”) convertible into the Company’s shares of common  stock, $0.0001 par value per share (the “Common Stock”), and warrants exercisable for shares  of  Common  Stock  (the  “Warrants”).  Pursuant  to  the  Securities  Purchase  Agreement,  the  Company  also  has  entered  into  a  Registration  Rights  Agreement  with  the  Holders  (the  “Registration Rights Agreement”) pursuant to which the Company agreed, among other things,  to register the Registrable Securities (as defined in the Registration Rights Agreement), including  the shares of Common Stock issuable upon conversion of the Notes and exercise of the Warrants,  under  the  Securities  Act  of  1933,  as  amended  (the  “1933  Act”).  In  connection  with  the  Company’s obligations under the Registration Rights Agreement, on ____________ ___, 2020,  the Company filed a Registration Statement on Form [S-1][S-3] (File No. 333-_____________)  (the “Registration  Statement”)  with  the  Securities  and  Exchange  Commission  (the  “SEC”)  relating to the Registrable Securities which names each of the Holders as a selling stockholder  thereunder.               In connection with the foregoing, [we][I] advise you that [a member of the SEC’s  staff  has  advised  [us][me]  by  telephone  that  [the  SEC  has  entered  an  order  declaring  the  Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS]  on  [ENTER  DATE  OF  EFFECTIVENESS]]  [an  order  declaring  the  Registration  Statement  effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF  EFFECTIVENESS]] has been posted on the web site of the SEC at www.sec.gov] and [we][I]  have  no  knowledge,  after  a  review  of  information  posted  on  the  website  of the  SEC  at  http://www.sec.gov/litigation/stoporders.shtml,  that  any  stop  order  suspending  its  effectiveness  has been issued or that any proceedings for that purpose are pending before, or threatened by, the  SEC and the Registrable Securities are available for resale under the 1933 Act pursuant to the  Registration Statement.    Error! Unknown document property name. 

 

                This  letter  shall  serve  as  our  opinion  to  you  that  the  shares  of  Common  Stock  underlying  the  Notes  and  Warrants,  upon  their  issuance  in  accordance  with  the  terms  of  the  Notes and Warrants, will be freely transferable by the Holders as provided in the Registration  Statement.  You need not require further letters from us to effect any future legend-free issuance  or reissuance of such shares of Common Stock to the Holders as contemplated by the Company’s  Irrevocable Transfer Agent Instructions dated _________ __, 2020.                                             Very truly yours,                                             [ISSUER’S COUNSEL]                                             By:_____________________     CC:   Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B        [OTHER BUYERS]       Error! Unknown document property name. 

 

                                                                       EXHIBIT B                            SELLING STOCKHOLDERS         The shares of common stock being offered by the selling stockholders are those issuable  to  the  selling  stockholders  upon  conversion  of  the  notes  and  exercise  of  the  warrants.  For  additional  information  regarding  the  issuance  of  the  notes  and  the  warrants,  see  “Private  Placement of Notes  and Warrants” above.  We  are registering the shares  of common stock in  order to permit the selling stockholders to offer the shares for resale from time to time.  Except  for  the  ownership  of  the  notes  and  the  warrants  issued  pursuant  to  the  Securities  Purchase  Agreement, the selling stockholders have not had any material relationship with us within the  past three years.         The  table  below  lists  the  selling  stockholders  and  other  information  regarding  the  beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934,  as amended, and the rules and regulations thereunder) of the shares of common stock held by  each of the selling stockholders.  The second column lists the number of shares of common stock  beneficially owned by the selling stockholders, based on their respective ownership of shares of  common stock, notes and warrants, as of ________, 2020, assuming conversion of the notes and  exercise of the warrants held by each such selling stockholder on that date but taking account of  any limitations on conversion and exercise set forth therein.         The third column lists the shares of common stock being offered by this prospectus by  the  selling  stockholders  and  does  not  take  in  account any  limitations  on  (i)  conversion  of  the  notes set forth therein or (ii) exercise of the warrants set forth therein.         In accordance with the terms of a registration rights agreement with the holders of the  notes and the warrants, this prospectus generally covers the resale of 300% of the sum of (i) the  maximum number of shares of common stock issued or issuable pursuant to the Notes, including  payment of interest on the notes through December 31, 2021, and (ii) the maximum number of  shares  of  common  stock issued  or issuable  upon  exercise  of  the warrants,  in  each  case,  determined  as  if  the  outstanding notes (including interest  on  the notes through December  31,  2021) and warrants were converted or exercised (as the case may be) in full (without regard to  any  limitations  on  conversion  or  exercise  contained  therein  solely  for  the  purpose  of  such  calculation) at  a  conversion  price  or  exercise  price  (as  the  case  may  be) calculated as  of  the  trading day immediately preceding the date this registration statement was initially filed with the  SEC.  Because the conversion price  of the notes and the exercise price of the warrants may be  adjusted, the number of shares that will actually be issued may be more or less than the number  of  shares  being  offered  by  this  prospectus.   The  fourth  column  assumes  the  sale  of  all  of  the  shares offered by the selling stockholders pursuant to this prospectus.          Under the terms of the notes and the warrants, a selling stockholder may not convert the  notes or exercise the warrants to the extent (but only to the extent) such selling stockholder or  any  of  its  affiliates  would  beneficially  own  a  number  of  shares  of  our  common  stock  which  would exceed 4.99% of the outstanding shares of the Company.  The number of shares in the  second column reflects these limitations.  The selling stockholders may sell all, some or none of  their shares in this offering.  See “Plan of Distribution.”    Error! Unknown document property name. 

 

                                                   Number of Shares of    Maximum Number of Shares    Number of Shares of                                           Common Stock Owned      of Common Stock to be Sold    Common Stock of  Name of Selling Stockholder                Prior to Offering     Pursuant to this Prospectus Owned After Offering     Alto Opportunity Master Fund, SPC -                                                                     Segregated Master Portfolio B (1)                                                                                                          [OTHER BUYERS]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             (1)     [                  ]                Error! Unknown document property name. 

 

                               PLAN OF DISTRIBUTION         We are registering the shares of common stock issuable upon conversion of the notes and  exercise of the warrants to permit the resale of these shares of common stock by the holders of  the notes and warrants from time to time after the date of this prospectus.  We will not receive  any of the proceeds  from  the sale by the selling stockholders of the shares  of common stock,  although  we  will  receive  the  exercise  price  of  any  Warrants  not  exercised  by  the  selling  stockholders on a cashless  exercise basis.  We  will bear all fees  and expenses  incident  to  our  obligation to register the shares of common stock.         The selling stockholders may sell all or a portion of the shares of common stock held by  them and offered hereby from time to time directly or through one or more underwriters, broker- dealers or agents.  If the shares of common stock are sold through underwriters or broker-dealers,  the selling stockholders will be responsible for underwriting discounts or commissions or agent’s  commissions.  The shares  of common stock may be sold  in  one or more transactions at  fixed  prices, at prevailing market prices at the time of the sale, at varying prices determined at the time  of sale or at negotiated prices.  These sales may be effected in transactions, which may involve  crosses or block transactions, pursuant to one or more of the following methods:         •  on any national securities exchange or quotation service on which the securities may           be listed or quoted at the time of sale;         •  in the over-the-counter market;         •  in  transactions  otherwise  than  on  these  exchanges  or  systems  or in  the  over-the-          counter market;         •  through the writing  or settlement  of options,  whether such options  are listed on an           options exchange or otherwise;         •  ordinary brokerage transactions  and transactions  in  which the broker-dealer solicits           purchasers;         •  block trades in  which the broker-dealer  will attempt to  sell the shares  as agent  but           may position and resell a portion of the block as principal to facilitate the transaction;         •  purchases  by  a  broker-dealer  as  principal  and  resale  by  the  broker-dealer  for  its           account;         •  an exchange distribution in accordance with the rules of the applicable exchange;         •  privately negotiated transactions;         •  short sales made after the date the Registration Statement is declared effective by the           SEC;    Error! Unknown document property name. 

 

         •  broker-dealers may agree with a selling security holder to sell a specified number of           such shares at a stipulated price per share;         •  a combination of any such methods of sale; and         •  any other method permitted pursuant to applicable law.         The  selling  stockholders  may  also  sell  shares  of  common  stock  under  Rule 144  promulgated under the Securities Act of 1933, as amended, if available, rather than under this  prospectus.  In addition, the selling stockholders may transfer the shares of common stock by  other means not described in this prospectus.  If the selling stockholders effect such transactions  by  selling  shares  of  common  stock  to  or  through  underwriters,  broker-dealers  or  agents,  such  underwriters,  broker-dealers  or  agents  may  receive  commissions  in  the  form  of  discounts,  concessions  or commissions  from  the selling  stockholders or commissions  from  purchasers of  the  shares  of  common  stock  for  whom  they  may  act  as  agent  or  to  whom  they  may  sell  as  principal  (which  discounts,  concessions  or  commissions  as  to  particular  underwriters,  broker- dealers or agents may be in excess of those customary in the types of transactions involved).  In  connection with sales of the shares of common stock or otherwise, the selling stockholders may  enter into hedging transactions with broker-dealers, which may in turn engage in short sales of  the  shares  of  common  stock  in  the  course  of  hedging  in  positions  they  assume.   The  selling  stockholders may also sell shares of common stock short and deliver shares of common stock  covered  by  this  prospectus  to  close  out  short  positions  and to  return  borrowed  shares  in  connection with  such short sales.  The selling  stockholders  may also  loan or pledge shares  of  common stock to broker-dealers that in turn may sell such shares.         The  selling  stockholders  may  pledge  or  grant  a  security  interest  in some  or  all  of  the  notes,  warrants  or  shares  of  common  stock  owned  by  them  and,  if  they  default  in  the  performance of their secured obligations, the pledgees or secured parties may offer and sell the  shares of common stock from time to time pursuant to this prospectus or any amendment to this  prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending, if  necessary, the list of selling stockholders to include the pledgee, transferee or other successors in  interest as selling stockholders under this prospectus.  The selling stockholders also may transfer  and  donate  the  shares  of  common  stock  in  other  circumstances  in  which  case  the  transferees,  donees, pledgees or other successors in interest will be the selling beneficial owners for purposes  of this prospectus.         To the extent required by the Securities Act and the rules and regulations thereunder, the  selling  stockholders  and  any  broker-dealer  participating  in  the  distribution  of  the  shares  of  common stock may be deemed to be “underwriters” within the meaning of the Securities Act,  and any commission paid, or any discounts or concessions allowed to, any such broker-dealer  may be deemed to be underwriting commissions or discounts under the Securities Act.  At the  time a particular offering of the shares of common stock is made, a prospectus supplement, if  required,  will  be  distributed,  which  will  set  forth  the  aggregate  amount  of  shares  of  common  stock being offered and the terms of the offering, including the name or names of any broker- dealers or agents, any discounts, commissions and other terms constituting compensation from  the selling stockholders and any discounts, commissions or concessions allowed or re-allowed or  paid to broker-dealers.   Error! Unknown document property name. 

 

         Under the securities laws of some states, the shares of common stock may be sold in such  states  only  through  registered  or  licensed  brokers  or  dealers.   In  addition,  in  some  states  the  shares of common stock may not be sold unless such shares have been registered or qualified for  sale in such state or an exemption from registration or qualification is available and is complied  with.         There can be no assurance that any selling stockholder will sell any or all of the shares of  common stock registered pursuant to the registration statement, of which this prospectus forms a  part.         The selling stockholders and any other person participating in such distribution will be  subject  to  applicable provisions  of the Securities Exchange Act  of 1934, as  amended, and the  rules  and  regulations  thereunder,  including,  without  limitation,  to  the  extent  applicable,  Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of  the shares of common stock by the selling stockholders and any other participating person.  To  the extent applicable, Regulation M may also restrict the ability of any person engaged in the  distribution of the shares of common stock to engage in market-making activities with respect to  the shares of common stock.  All of the foregoing may affect the marketability of the shares of  common stock and the ability of any person or entity to engage in market-making activities with  respect to the shares of common stock.         We will pay all expenses of the registration of the shares of common stock pursuant to  the registration rights  agreement, estimated to  be $[     ] in  total,  including, without limitation,  Securities  and  Exchange  Commission  filing  fees  and  expenses  of  compliance  with  state  securities or “blue sky” laws; provided, however, a selling stockholder will pay all underwriting  discounts and selling commissions, if any.  We will indemnify the selling stockholders against  liabilities, including some liabilities under the Securities Act in accordance with the registration  rights  agreements  or  the  selling  stockholders  will  be  entitled  to  contribution.   We  may  be  indemnified  by  the  selling  stockholders  against  civil  liabilities,  including  liabilities  under  the  Securities  Act  that  may  arise  from  any  written  information  furnished  to  us  by  the  selling  stockholder  specifically for  use  in  this  prospectus,  in  accordance  with  the  related  registration  rights agreements or we may be entitled to contribution.         Once  sold  under  the  registration  statement,  of  which  this  prospectus  forms  a  part,  the  shares of common stock will be freely tradable in the hands of persons other than our affiliates.    Error! Unknown document property name.Exhibit 4.1

  

NEITHER THIS DEBENTURE NOR THE SECURITIES
INTO WHICH THIS DEBENTURE IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE. THESE SECURITIES HAVE BEEN SOLD IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

 

KONA
GOLD SOLUTIONS, INC.

 

Secured
Convertible Debenture

 

	Issuance Date:  ___________	Original Principal Amount:	$____
	No. KGKG – _____	Original Issue Discount:	4%

 

FOR VALUE RECEIVED,
KONA GOLD SOLUTIONS, INC., a Delaware corporation (the “Company”), hereby promises to pay to the order of YAII
PN, LTD. or registered assigns (the “Holder”) the amount set out above as the Original Principal Amount (as
reduced pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the “Principal”) when
due, on the Maturity Date (as defined below), acceleration, redemption or otherwise (in each case in accordance with the terms
hereof) and to pay interest (“Interest”) on any outstanding Principal at the applicable Interest Rate from the
date set out above as the Issuance Date (the “Issuance Date”) until the same becomes due and payable, whether
upon the Maturity Date, acceleration, conversion, redemption or otherwise (in each case in accordance with the terms hereof). This
Convertible Debenture (including all Convertible Debentures issued in exchange, transfer or replacement hereof, this “Debenture”)
is issued pursuant to the Securities Purchase Agreement. Certain capitalized terms used herein are defined in Section 17.

 

(1)          GENERAL
TERMS

 

(a)          Payment
of Principal. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal
and accrued and unpaid Interest. The “Maturity Date” shall be __________, as may be extended at the option
of the Holder (i) in the event that, and for so long as, an Event of Default (as defined below) shall have occurred and be continuing
on the Maturity Date (as may be extended pursuant to this Section 1) or any event shall have occurred and be continuing on the
Maturity Date (as may be extended pursuant to this Section 1) that with the passage of time and the failure to cure would result
in an Event of Default. Other than as specifically permitted by this Debenture, the Company may not prepay or redeem any portion
of the outstanding Principal without the prior written consent of the Holder.

 

     

     

    

 

(b)          Interest.
Interest shall accrue on the outstanding principal balance hereof at an annual rate equal to 8% (“Interest Rate”).
Interest shall be calculated on the basis of a 365-day year and the actual number of days elapsed, to the extent permitted by applicable
law. Interest hereunder shall be paid on the Maturity Date (or sooner if upon conversion or acceleration by the Holder as provided
herein) to the Holder or its assignee in whose name this Debenture is registered on the records of the Company regarding registration
and transfers of Debentures at the option of the Company in cash, or, provided that the Equity Conditions are then satisfied converted
into Common Stock at the Market Conversion Price on the Trading Day immediately prior to the date paid.

 

(c)          Original
Issue Discount.         The Original Principal Amount of this Debenture shall
have an original issue discount (the “OID”) which the Holder shall be entitled to deduct from the gross proceeds
of the Original Principal Amount when this Debenture was issued.

 

(d)          Security
and Guaranty. This Debenture is secured by (i) a security interest in all of the assets of the Company and of each of the Company’s
subsidiaries pursuant to the Security Agreement by and among the Company, its wholly owned subsidiaries and the Investor dated
the date hereof (all such security agreements shall be referred to as the “Security Agreement”) and (ii) subject
to a global guarantee pursuant to the Global Guaranty by and among each of the Company’s wholly owned subsidiaries and the
Investor dated the date hereof (the “Guaranty” and collectively with the Security Agreement, the “Security
Documents”).

 

(2)         EVENTS
OF DEFAULT. 

 

(a)          An
“Event of Default”, wherever used herein, means any one of the following events (whatever the reason and whether
it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court,
or any order, rule or regulation of any administrative or governmental body):

 

(i)          the
Company’s failure to pay to the Holder any amount of Principal, Interest, or other amounts when and as due under this Debenture
(including, without limitation, the Company’s failure to pay any redemption payments or amounts hereunder) or any other Transaction
Document;

 

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(ii)         The
Company or any subsidiary of the Company shall commence, or there shall be commenced against the Company or any subsidiary of the
Company under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or the Company
or any subsidiary of the Company commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief
of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating
to the Company or any subsidiary of the Company or there is commenced against the Company or any subsidiary of the Company any
such bankruptcy, insolvency or other proceeding which remains undismissed for a period of 61 days; or the Company or any subsidiary
of the Company is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding
is entered; or the Company or any subsidiary of the Company suffers any appointment of any custodian, private or court appointed
receiver or the like for it or any substantial part of its property which continues undischarged or unstayed for a period of 61
days; or the Company or any subsidiary of the Company makes a general assignment for the benefit of creditors; or the Company or
any subsidiary of the Company shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay, its debts
generally as they become due; or the Company or any subsidiary of the Company shall call a meeting of its creditors with a view
to arranging a composition, adjustment or restructuring of its debts; or the Company or any subsidiary of the Company shall by
any act or failure to act expressly indicate its consent to, approval of or acquiescence in any of the foregoing; or any corporate
or other action is taken by the Company or any subsidiary of the Company for the purpose of effecting any of the foregoing;

 

(iii)        The
Company or any subsidiary of the Company shall default in any of its obligations under any other debenture or any mortgage, credit
agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by
which there may be secured or evidenced any indebtedness for borrowed money or money due under any long term leasing or factoring
arrangement of the Company or any subsidiary of the Company in an amount exceeding $100,000, whether such indebtedness now exists
or shall hereafter be created and such default shall result in such indebtedness becoming or being declared due and payable prior
to the date on which it would otherwise become due and payable;

 

(iv)        If
the Common Stock is quoted or listed for trading on the following and it ceases to be so quoted or listed for trading and shall
not again be quoted or listed for trading on the OTC Markets’ OTCQB® Venture Market (the “Primary
Market”) within 5 Trading Days of such delisting;

 

(v)         The
Company or any subsidiary of the Company shall be a party to any Change of Control Transaction (as defined in Section 17) unless
in connection with such Change of Control Transaction this Debenture is retired;

 

(vi)        the
Company’s (A) failure to cure a Conversion Failure by delivery of the required number of shares of Common Stock within 3
Business Days after the applicable Conversion Failure or (B) notice, written or oral, to any holder of the Debenture, including
by way of public announcement, at any time, of its intention not to comply with a request for conversion of the Debenture into
shares of Common Stock that is tendered in accordance with the provisions of the Debentures, other than pursuant to Section 4(e);

 

(vii)       The
Company shall fail for any reason to deliver the payment in cash pursuant to a Buy-In (as defined herein) within 3 Business Days
after such payment is due;

 

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(viii)      The
Company shall fail to observe or perform any other covenant, agreement or warranty contained in, or otherwise commit any breach
or default of any provision of this Debenture (except as may be covered by Section 2(a)(i) through 2(a)(vii) hereof) or any Transaction
Documents (as defined in Section 17) which is not cured within the time prescribed.

 

(ix)         any
Event of Default occurs with respect to any Transaction Document.

 

(b)          During
the time that any portion of this Debenture is outstanding, if any Event of Default has occurred, the full unpaid Principal amount
of this Debenture, together with interest and other amounts owing in respect thereof, to the date of acceleration shall become
at the Holder’s election, immediately due and payable in cash; provided, however, the Holder may request (but
shall have no obligation to request) payment of such amounts in Common Stock of the Company. If an Event of Default occurs and
for so long as such Event of Default remains uncured, the Interest Rate on this Debenture shall immediately become 15% per annum
and shall remain at such increased interest rate until the applicable Event of Default is cured. Furthermore, in addition to any
other remedies, the Holder shall have the right (but not the obligation) to convert this Debenture at any time after (x) an Event
of Default at the Market Conversion Price or (y) the Maturity Date at the Market Conversion Price. The Holder need not provide
and the Company hereby waives any presentment, demand, protest or other notice of any kind, (other than required notice of conversion)
and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder
and all other remedies available to it under applicable law. Such declaration may be rescinded and annulled by Holder at any time
prior to payment hereunder. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent
thereon.

 

(3)         COMPANY
REDEMPTION.

 

(a)          Company’s
Cash Redemption. The Company at its option shall have the right to redeem (a “Redemption”), in part or in
whole, outstanding Principal and Interest under this Debenture prior to the Maturity Date provided that as of the date of the Holder’s
receipt of a Redemption Notice (as defined herein) (i) the VWAP of the Company’s Common Stock is less than the Fixed Conversion
Price and (ii) there is no Equity Conditions Failure. The Company shall pay an amount equal to the principal amount being redeemed
plus a redemption premium (“Redemption Premium”) equal to 15% of the outstanding Principal Amount being redeemed
plus outstanding and accrued Interest thereon. In order to make a Redemption pursuant to this Section, the Company shall first
provide 15 business days advanced written notice to the Holder of its intention to make a redemption (the “Redemption
Notice”) setting forth the amount of Principal and Interest it desires to redeem plus the applicable Redemption Premium
(the “Redemption Amount”). After receipt of the Redemption Notice the Holder shall have 15 Business Days to
elect to convert all or any portion of this Debenture, subject to the limitations set forth in Section 4(e). On the 16th
Business Day after the Redemption Notice, the Company shall deliver to the Holder via wire transfer of immediately available funds
the Redemption Amount with respect to the Principal Amount and Interest redeemed after giving effect to conversions by the Holder
effected during the 15 Business Day period.

 

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(4)         CONVERSION
OF DEBENTURE.         This Debenture shall be convertible into shares of the
Company’s Common Stock, on the terms and conditions set forth in this Section 4.

 

(a)          Conversion
Right. Subject to the provisions of Section 4(f), at any time or times on or after the Issuance Date and not withstanding any
pending Company Redemption, the Holder shall be entitled to convert at its option any portion of the outstanding and unpaid Conversion
Amount (as defined below) into fully paid and nonassessable shares of Common Stock in accordance with Section 4(e), at the lower
of the Fixed Conversion Price then in effect or the Market Conversion Price except as provided for in Section 2(b). The number
of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to this Section 4(a) shall be determined by
dividing (x) such Conversion Amount by (y) the Fixed Conversion Price or (z) the Market Conversion Price, as applicable (the “Conversion
Rate”). The Company shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would
result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock
up to the nearest whole share. The Company shall pay any and all transfer, stamp and similar taxes that may be payable with respect
to the issuance and delivery of Common Stock upon conversion of any Conversion Amount.

 

(b)          
“Conversion Amount” means the portion of the Principal and accrued Interest to be converted, redeemed or otherwise
with respect to which this determination is being made.

 

(c)          “Fixed
Conversion Price” means, as of any Conversion Date (as defined below) or other date of determination, $0.05, subject
to adjustment as provided herein. All such determinations to be appropriately adjusted for any stock split, stock dividend, stock
combination or other similar transaction.

 

(d)          “Market
Conversion Price” means, as of any Conversion Date (as defined below) or other date of determination, 80% of the lowest
daily VWAP of the Company’s Common Stock during the 15 Trading Days immediately preceding the Conversion Date. All such determinations
to be appropriately adjusted for any stock split, stock dividend, stock combination or other similar transaction.

 

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(e)          Mechanics
of Conversion.

 

(i)          Optional
Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion Date”),
the Holder shall (A) transmit by electronic mail (or otherwise deliver), for receipt on or prior to 11:59 p.m., New York Time,
on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit I (the “Conversion
Notice”) to the Company and (B) if required by Section 4(e)(iii), surrender this Debenture to a nationally recognized
overnight delivery service for delivery to the Company (or an indemnification undertaking reasonably satisfactory to the Company
with respect to this Debenture in the case of its loss, theft or destruction). On or before the 3rd Business Day following the
date of receipt of a Conversion Notice (the “Share Delivery Date”), the Company shall (X) if legends are not
required to be placed on certificates of Common Stock pursuant to the Securities Purchase Agreement and provided that the Transfer
Agent is participating in the Depository Trust Company’s (“DTC”) Fast Automated Securities Transfer Program,
credit such aggregate number of shares of Common Stock to which the Holder shall be entitled to the Holder’s or its designee’s
balance account with DTC through its Deposit and Withdrawal at Custodian service or (Y) if the Transfer Agent is not participating
in the DTC Fast Automated Securities Transfer Program, issue and deliver to the address as specified in the Conversion Notice,
a certificate, registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder
shall be entitled which certificates shall not bear any restrictive legends unless required pursuant to Section 3(g) of the Securities
Purchase Agreement. If this Debenture is physically surrendered for conversion and the outstanding Principal of this Debenture
is greater than the Principal portion of the Conversion Amount being converted, then the Company shall as soon as practicable and
in no event later than 3 Business Days after receipt of this Debenture and at its own expense, issue and deliver to the holder
a new Debenture representing the outstanding Principal not converted. The Person or Persons entitled to receive the shares of Common
Stock issuable upon a conversion of this Debenture shall be treated for all purposes as the record holder or holders of such shares
of Common Stock upon the transmission of a Conversion Notice.

 

(ii)         Company’s
Failure to Timely Convert. If within 3 Trading Days after the Company's receipt by electronic mail a copy of a Conversion Notice
the Company shall fail to issue and deliver a certificate to the Holder or credit the Holder’s balance account with DTC for
the number of shares of Common Stock to which the Holder is entitled upon such conversion of any Conversion Amount (a “Conversion
Failure”), and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) Common
Stock to deliver in satisfaction of a sale by the Holder of Common Stock issuable upon such conversion that the Holder anticipated
receiving from the Company (a “Buy-In”), then the Company shall, within 3 Business Days after the Holder’s
request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total
purchase price (including brokerage commissions and other out of pocket expenses, if any) for the shares of Common Stock so purchased
(the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and to issue
such Common Stock) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates
representing such Common Stock and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the
product of (A) such number of shares of Common Stock, times (B) the Closing Bid Price on the Conversion Date.

 

(iii)        Book-Entry.
Notwithstanding anything to the contrary set forth herein, upon conversion of any portion of this Debenture in accordance with
the terms hereof, the Holder shall not be required to physically surrender this Debenture to the Company unless (A) the full Conversion
Amount represented by this Debenture is being converted or (B) the Holder has provided the Company with prior written notice (which
notice may be included in a Conversion Notice) requesting reissuance of this Debenture upon physical surrender of this Debenture.
The Holder and the Company shall maintain records showing the Principal and Interest converted and the dates of such conversions
or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender
of this Debenture upon conversion.

 

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(f)          Limitations
on Conversions.

 

(i)          Beneficial
Ownership. The Company shall not effect any conversions of this Debenture and the Holder shall not have the right to convert
any portion of this Debenture or receive shares of Common Stock as payment of interest hereunder to the extent that after giving
effect to such conversion or receipt of such interest payment, the Holder, together with any affiliate thereof, would beneficially
own (as determined in accordance with Section 13(d) of the Exchange Act and the rules promulgated thereunder) in excess of 4.99%
of the number of shares of Common Stock outstanding immediately after giving effect to such conversion or receipt of shares as
payment of interest. Since the Holder will not be obligated to report to the Company the number of shares of Common Stock it may
hold at the time of a conversion hereunder, unless the conversion at issue would result in the issuance of shares of Common Stock
in excess of 4.99% of the then-outstanding shares of Common Stock without regard to any other shares which may be beneficially
owned by the Holder or an affiliate thereof, the Holder shall have the authority and obligation to determine whether the restriction
contained in this Section will limit any particular conversion hereunder and to the extent that the Holder determines that the
limitation contained in this Section applies, the determination of which portion of the principal amount of this Debenture is convertible
shall be the responsibility and obligation of the Holder. If the Holder has delivered a Conversion Notice for a principal amount
of this Debenture that, without regard to any other shares that the Holder or its affiliates may beneficially own, would result
in the issuance in excess of the permitted amount hereunder, the Company shall notify the Holder of this fact and shall honor the
conversion for the maximum principal amount permitted to be converted on such Conversion Date in accordance with Section 4(a) without
liability to the Holder and, any principal amount tendered for conversion in excess of the permitted amount hereunder shall remain
outstanding under this Debenture. The provisions of this Section may be waived by a Holder (but only as to itself and not to any
other Holder) upon not less than 65 days prior notice to the Company. Other Holders shall be unaffected by any such waiver.

 

(g)          Other
Provisions.

 

(i)          The
Company shall at all times reserve and keep available out of its authorized Common Stock the full number of shares of Common Stock
issuable upon conversion of all outstanding amounts under this Debenture; and within 3 Business Days following the receipt by the
Company of a Holder’s notice that such minimum number of Underlying Shares is not so reserved, the Company shall promptly
reserve a sufficient number of shares of Common Stock to comply with such requirement.

 

(ii)         All
calculations under this Section 4 shall be rounded to the nearest $0.0001 or whole share.

 

(iii)        The
Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock
solely for the purpose of issuance upon conversion of this Debenture and payment of interest on this Debenture, each as herein
provided, free from preemptive rights or any other actual contingent purchase rights of persons other than the Holder, not less
than such number of shares of the Common Stock as shall (subject to any additional requirements of the Company as to reservation
of such shares set forth in this Debenture or in the Transaction Documents) be issuable (taking into account the adjustments and
restrictions set forth herein) upon the conversion of the outstanding principal amount of this Debenture and payment of interest
hereunder. The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly and validly
authorized, issued and fully paid, nonassessable and, if the Underlying Shares Registration Statement has been declared effective
under the Securities Act, registered for public sale in accordance with such Underlying Shares Registration Statement.

 

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(iv)        Nothing
herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 2 herein
for the Company’s failure to deliver certificates representing shares of Common Stock upon conversion within the period specified
herein and such Holder shall have the right to pursue all remedies available to it at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief, in each case without the need to post a bond or provide other security.
The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof
or under applicable law.

 

(5)         Adjustments
to the Fixed Conversion Price.

 

(a)          Adjustment
of Fixed Conversion Price upon Issuance of Common Stock. If the Company, at any time while this Debenture is outstanding, issues
or sells, or in accordance with this Section 5(a) is deemed to have issued or sold, any shares of Common Stock, excluding shares
of Common Stock deemed to have been issued or sold by the Company in connection with an issuance of Excluded Securities, for a
consideration per share (the “New Issuance Price”) less than a price equal to the Fixed Conversion Price in
effect immediately prior to such issue or sale (such price the “Applicable Price”) (the foregoing, a “Dilutive
Issuance”), then immediately after such Dilutive Issuance the Fixed Conversion Price then in effect shall be reduced
(and in no event increased) to a Fixed Conversion Price equal to the quotient obtained by dividing:

 

		(X)	the sum of (A) the product obtained by multiplying the number of shares of Common Stock
issued and outstanding immediately prior to such issuance or sale (or deemed issuance or sale) by the Fixed Conversion Price then
in effect plus (B) the aggregate consideration, if any, received by the Company upon such issuance or sale (or deemed
issuance or sale); by

 

		(Y)	the sum of (A) the number of shares of Common Stock outstanding
immediately prior to such issuance or sale (or deemed issuance or sale) plus (B) the aggregate number of shares of Common
Stock issued or sold (or deemed issued or sold) by the Company in such issuance or sale (or deemed issuance or sale).

 

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For purposes of determining
the adjusted Fixed Conversion Price under this Section 5(a), the following shall be applicable:

 

(i)          Issuance
of Options. If the Company in any manner grants or sells any Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Option or upon conversion or exchange or exercise of any Convertible Securities
issuable upon exercise of such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to be
outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price per
share. For purposes of this Section, the “lowest price per share for which one share of Common Stock is issuable upon the
exercise of any such Option or upon conversion or exchange or exercise of any Convertible Securities issuable upon exercise of
such Option” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company
with respect to any one share of Common Stock upon granting or sale of the Option, upon exercise of the Option and upon conversion
or exchange or exercise of any Convertible Securities issuable upon exercise of such Option. No further adjustment of the Conversion
Price shall be made upon the actual issuance of such share of Common Stock or of such Convertible Securities upon the exercise
of such Options or upon the actual issuance of such Common Stock upon conversion or exchange or exercise of such Convertible Securities.

 

(ii)         Issuance
of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest price per
share for which one share of Common Stock is issuable upon such conversion or exchange or exercise thereof is less than the Applicable
Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the
time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section, the “lowest
price per share for which one share of Common Stock is issuable upon such conversion or exchange or exercise” shall be equal
to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share
of Common Stock upon the issuance or sale of the Convertible Security and upon the conversion or exchange or exercise of such Convertible
Security. No further adjustment of the Fixed Conversion Price shall be made upon the actual issuance of such share of Common Stock
upon conversion or exchange or exercise of such Convertible Securities, and if any such issue or sale of such Convertible Securities
is made upon exercise of any Options for which adjustment of the Fixed Conversion Price had been or are to be made pursuant to
other provisions of this Section, no further adjustment of the Fixed Conversion Price shall be made by reason of such issue or
sale.

 

(iii)        Change
in Option Price or Rate of Conversion. If the purchase price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion, exchange or exercise of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exchangeable or exercisable for Common Stock changes at any time, the Fixed Conversion Price
in effect at the time of such change shall be adjusted to the Conversion Price which would have been in effect at such time had
such Options or Convertible Securities provided for such changed purchase price, additional consideration or changed conversion
rate, as the case may be, at the time initially granted, issued or sold. For purposes of this Section, if the terms of any Option
or Convertible Security that was outstanding as of the Issuance Date are changed in the manner described in the immediately preceding
sentence, then such Option or Convertible Security and the Common Stock deemed issuable upon exercise, conversion or exchange thereof
shall be deemed to have been issued as of the date of such change. No adjustment shall be made if such adjustment would result
in an increase of the Conversion Price then in effect.

 

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(iv)        Calculation
of Consideration Received. If any Common Stock, Options or convertible securities are issued or sold or deemed to have been
issued or sold for cash, the consideration received therefor will be deemed to be the gross amount received by the Company therefor,
less placement agent fees, brokerage commissions, finder’s fees or the like. If any Common Stock, Options or Convertible
Securities are issued or sold for a consideration other than cash, the amount of the consideration other than cash received by
the Company will be the fair value of such consideration, except where such consideration consists of securities, in which case
the amount of consideration received by the Company will be the Closing Bid Price of such securities on the date of receipt thereof.
If any Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with
any merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value
of such portion of the net assets and business of the non-surviving entity as is attributable to such Common Stock, Options or
Convertible Securities, as the case may be. The fair value of any consideration other than cash or securities will be determined
jointly by the Company and the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence
of an event requiring valuation (the “Valuation Event”), the fair value of such consideration will be determined
within five (5) Business Days after the 10th day following the Valuation Event by an independent, reputable appraiser
jointly selected by the Company and the Holder. The determination of such appraiser shall be deemed binding upon all parties absent
manifest error and the fees and expenses of such appraiser shall be borne jointly by the Company and the Holder.

 

(v)         Integrated
Transactions. In case any Option is issued in connection with the issue or sale of other securities of the Company, together
comprising one integrated transaction in which any specific consideration or no specific consideration is allocated to such Options
by the parties thereto, (1) the per-share value of the shares of Common Stock included in such integrated transaction shall be
the sole determinate as to whether the Fixed Conversion Price is to be adjusted in accordance with the provisions of Section 5(a),
above, (2) if no shares of Common Stock are included in such integrated transaction, but shares of the Company’s preferred
stock are included in such integrated transaction, then the per-share conversion price of shares of that preferred stock shall
be the sole determinate as to whether the Fixed Conversion Price is to be adjusted in accordance with the provisions of Section
5(a), above, and (3) if no shares of Common Stock and no shares of the Company’s preferred stock are included in such integrated
transaction, but debt convertible into shares of Common Stock (whether directly or through an intermediate step, e.g.,
an initial conversion of that debt into shares of the Company’s preferred stock that, thereafter, could be converted into
shares of Common Stock), then the per-share conversion price of shares of such debt shall be the sole determinate as to whether
the Fixed Conversion Price is to be adjusted in accordance with the provisions of Section 5(a), above; provided, however,
that, if the exercise price of the Option is less than the Fixed Conversion Price (after having taken into account any adjustments
thereto in accordance with the provisions of (1), (2), or (3), immediately above), then the Option exercise price shall be utilized
in connection with the Fixed Conversion Price adjustment provisions of Section 5(a), above.

 

(vi)        Treasury
Shares. The number of shares of Common Stock outstanding at any given time does not include shares owned or held by or for
the account of the Company, and the disposition of any shares so owned or held will be considered an issue or sale of Common Stock.

 

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(vii)       Record
Date. If the Company takes a record of the holders of Common Stock for the purpose of entitling them (A) to receive a dividend
or other distribution payable in Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase Common
Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issue or sale of the Common
Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the
date of the granting of such right of subscription or purchase, as the case may be.

 

(b)          Adjustment
of the Fixed Conversion Price upon Subdivision or Combination of Common Stock. If the Company, at any time while this Debenture
is outstanding, shall (a) pay a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock
or any other equity or equity equivalent securities payable in shares of Common Stock, (b) subdivide outstanding shares of Common
Stock into a larger number of shares, (c) combine (including by way of reverse stock split) outstanding shares of Common Stock
into a smaller number of shares, or (d) issue by reclassification of shares of the Common Stock any shares of capital stock of
the Company, then the Fixed Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares
of Common Stock (excluding treasury shares, if any) outstanding before such event and of which the denominator shall be the number
of shares of Common Stock outstanding after such event. Any adjustment made pursuant to this Section shall become effective immediately
after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

(c)          Purchase
Rights. If at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”),
then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which
the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion
of this Debenture (without taking into account any limitations or restrictions on the convertibility of this Debenture) immediately
before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken,
the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

 

(d)          Other
Events. If any event occurs of the type contemplated by the provisions of this Section 5 but not expressly provided for by
such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights
with equity features), then the Company’s Board of Directors will make an appropriate adjustment in the Conversion Price
so as to protect the rights of the Holder under this Debenture; provided that no such adjustment will increase the Conversion Price
as otherwise determined pursuant to this Section 5.

 

     11

     

    

  

(e)          Other
Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental
Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect
to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision
to ensure that the Holder will thereafter have the right to receive upon a conversion of this Debenture, at the Holder’s
option, (i) in addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to which
the Holder would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by the
Holder upon the consummation of such Corporate Event (without taking into account any limitations or restrictions on the convertibility
of this Debenture) or (ii) in lieu of the shares of Common Stock otherwise receivable upon such conversion, such securities or
other assets received by the holders of shares of Common Stock in connection with the consummation of such Corporate Event in such
amounts as the Holder would have been entitled to receive had this Debenture initially been issued with conversion rights for the
form of such consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration commensurate with
the Conversion Rate. Provision made pursuant to the preceding sentence shall be in a form and substance satisfactory to the Required
Holders. The provisions of this Section shall apply similarly and equally to successive Corporate Events and shall be applied without
regard to any limitations on the conversion or redemption of this Debenture.

 

(f)          Whenever
the Fixed Conversion Price is adjusted pursuant to Section 5 hereof, the Company shall promptly mail to the Holder a notice setting
forth the Fixed Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

 

(g)          In
case of any (1) merger or consolidation of the Company or any subsidiary of the Company with or into another Person, or (2) sale
by the Company or any subsidiary of the Company of more than one-half of the assets of the Company in one or a series of related
transactions, a Holder shall have the right to (A) exercise any rights under Section 2(b), (B) convert the aggregate amount of
this Debenture then outstanding into the shares of stock and other securities, cash and property receivable upon or deemed to be
held by holders of Common Stock following such merger, consolidation or sale, and such Holder shall be entitled upon such event
or series of related events to receive such amount of securities, cash and property as the shares of Common Stock into which such
aggregate principal amount of this Debenture could have been converted immediately prior to such merger, consolidation or sales
would have been entitled, or (C) in the case of a merger or consolidation, require the surviving entity to issue to the Holder
a convertible Debenture with a principal amount equal to the aggregate principal amount of this Debenture then held by such Holder,
plus all accrued and unpaid interest and other amounts owing thereon, which such newly issued convertible Debenture shall have
terms identical (including with respect to conversion) to the terms of this Debenture, and shall be entitled to all of the rights
and privileges of the Holder of this Debenture set forth herein and the agreements pursuant to which this Debentures were issued.
In the case of clause (C), the conversion price applicable for the newly issued shares of convertible preferred stock or convertible
Debentures shall be based upon the amount of securities, cash and property that each share of Common Stock would receive in such
transaction and the Fixed Conversion Price in effect immediately prior to the effectiveness or closing date for such transaction.
The terms of any such merger, sale or consolidation shall include such terms so as to continue to give the Holder the right to
receive the securities, cash and property set forth in this Section upon any conversion or redemption following such event. This
provision shall similarly apply to successive such events.

 

     12

     

    

  

(6)         REISSUANCE
OF THIS DEBENTURE.

 

(a)          Transfer.
If this Debenture is to be transferred, the Holder shall surrender this Debenture to the Company, whereupon the Company will, subject
to the satisfaction of the transfer provisions of the Securities Purchase Agreement, forthwith issue and deliver upon the order
of the Holder a new Debenture (in accordance with Section 6(d)), registered in the name of the registered transferee or assignee,
representing the outstanding Principal being transferred by the Holder and, if less than the entire outstanding Principal is being
transferred, a new Debenture (in accordance with Section 6(d)) to the Holder representing the outstanding Principal not being transferred.
The Holder and any assignee, by acceptance of this Debenture, acknowledge and agree that, by reason of the provisions of Section
4(e)(iii) following conversion or redemption of any portion of this Debenture, the outstanding Principal represented by this Debenture
may be less than the Principal stated on the face of this Debenture.

 

(b)          Lost,
Stolen or Mutilated Debenture. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Debenture, and, in the case of loss, theft or destruction, of any indemnification undertaking
by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Debenture,
the Company shall execute and deliver to the Holder a new Debenture (in accordance with Section 6(d)) representing the outstanding
Principal.

 

(c)          Debenture
Exchangeable for Different Denominations. This Debenture is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Debenture or Debentures (in accordance with Section 6(d)) representing in the aggregate the outstanding
Principal of this Debenture, and each such new Debenture will represent such portion of such outstanding Principal as is designated
by the Holder at the time of such surrender.

 

(d)          Issuance
of New Debentures. Whenever the Company is required to issue a new Debenture pursuant to the terms of this Debenture, such
new Debenture (i) shall be of like tenor with this Debenture, (ii) shall represent, as indicated on the face of such new Debenture,
the Principal remaining outstanding (or in the case of a new Debenture being issued pursuant to Section 6(a) or Section 6(c), the
Principal designated by the Holder which, when added to the principal represented by the other new Debentures issued in connection
with such issuance, does not exceed the Principal remaining outstanding under this Debenture immediately prior to such issuance
of new Debentures), (iii) shall have an issuance date, as indicated on the face of such new Debenture, which is the same as the
Issuance Date of this Debenture, (iv) shall have the same rights and conditions as this Debenture, and (v) shall represent accrued
and unpaid Interest from the Issuance Date.

 

     13

     

    

  

(7)         NOTICES.         Any
notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be
in writing and will be deemed to have been delivered upon: (i) receipt, when delivered personally, (ii) 1 Business Day after deposit
with an overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive the
same, or (iii) receipt, when sent by electronic mail (provided that the electronic mail transmission is not returned in error
or the sender is not otherwise notified of any error in transmission. The addresses and e-mail addresses for such communications
shall be:

 

	If to the Company, to:	Kona Gold Solutions, Inc.
	 	746 North Drive STE A
	 	Melbourne, FL 32934
	 	
        Attention: Robert Clark

        Telephone: 844-714-2224

	 	Email:      robert@konagoldhemp.com
	 	 
	
        With a copy to:

        (which shall not constitute

        Notice)
	
        Baker & Hostetler LLP

        600 Anton Blvd., Suite 900

        Costa Mesa, CA 92626

	 	Attention:  Randolf Katz
	 	Telephone: 714-966-8807
	 	Email: rwkatz@bakerlaw.com

 

	If to the Holder:	
        YAII PN, Ltd.

        c/o Yorkville Advisors Global, LP

	 	1012 Springfield Avenue
	 	Mountainside, NJ 07092
	 	
        Attention: Mark Angelo

        Telephone: (201)536-5114

	 	Email: mangelo@yorkvilleadvisors.com
	 	 
	With a copy to:	David Gonzalez, Esq.
	(which shall not constitute	1012 Springfield Avenue
	notice)	Mountainside, NJ 07092
	 	Telephone:      (201) 536-5109
	 	Email: dgonzalez@yorkvilleadvisors.com 

 

or at such other address and/or electronic
email address and/or to the attention of such other person as the recipient party has specified by written notice given to each
other party 3 Business Days prior to the effectiveness of such change. Written confirmation of receipt (i) given by the recipient
of such notice, consent, waiver or other communication, (ii) mechanically or electronically generated by the sender’s computer
containing the time, date, recipient’s electronic mail address and the text of such electronic mail or (iii) provided by
a nationally recognized overnight delivery service, shall be rebuttable evidence of personal service, receipt by electronic mail
or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.

 

     14

     

    

  

(8)         Except
as expressly provided herein, no provision of this Debenture shall alter or impair the obligations of the Company, which are absolute
and unconditional, to pay the principal of, interest and other charges (if any) on, this Debenture at the time, place, and rate,
and in the coin or currency, herein prescribed. This Debenture is a direct obligation of the Company. As long as this Debenture
is outstanding, the Company shall not and shall cause their subsidiaries not to, without the consent of the Holder, (i) amend its
certificate of incorporation, bylaws or other charter documents so as to adversely affect any rights of the Holder (which shall
include combining (by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares); (ii) repay,
repurchase or offer to repay, repurchase or otherwise acquire shares of its Common Stock or other equity securities other than
as to the Underlying Shares to the extent permitted or required under the Transaction Documents; or (iii) enter into any agreement
with respect to any of the foregoing.

 

(9)         This
Debenture shall not entitle the Holder to any of the rights of a stockholder of the Company, including without limitation, the
right to vote, to receive dividends and other distributions, or to receive any notice of, or to attend, meetings of stockholders
or any other proceedings of the Company, unless and to the extent converted into shares of Common Stock in accordance with the
terms hereof.

 

(10)        No
indebtedness of the Company is senior to this Debenture in right of payment, whether with respect to interest, damages or upon
liquidation or dissolution or otherwise. Without the Holder’s consent, the Company will not and will not permit any of their
subsidiaries to, directly or indirectly, enter into, create, incur, assume or suffer to exist any indebtedness of any kind, on
or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits
there from that is senior in any respect to the obligations of the Company under this Debenture.

 

(11)        This
Debenture shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to conflicts
of laws thereof. Each of the parties consents to the jurisdiction of the Supreme Court of the State of New York sitting in the
Borough of Manhattan, New York and the U.S. District Court for the Southern District of New York sitting in the Borough of
Manhattan, New York in connection with any dispute arising under this Debenture and hereby waives, to the maximum extent permitted
by law, any objection, including any objection based on forum non conveniens to the bringing of any such proceeding in such jurisdictions.

 

(12)        If
the Company fails to strictly comply with the terms of this Debenture, then the Company shall reimburse the Holder promptly for
all fees, costs and expenses, including, without limitation, attorneys’ fees and expenses incurred by the Holder in any action
in connection with this Debenture, including, without limitation, those incurred: (i) during any workout, attempted workout, and/or
in connection with the rendering of legal advice as to the Holder’s rights, remedies and obligations, (ii) collecting any
sums which become due to the Holder, (iii) defending or prosecuting any proceeding or any counterclaim to any proceeding or appeal;
or (iv) the protection, preservation or enforcement of any rights or remedies of the Holder.

 

(13)        Any
waiver by the Holder of a breach of any provision of this Debenture shall not operate as or be construed to be a waiver of any
other breach of such provision or of any breach of any other provision of this Debenture. The failure of the Holder to insist upon
strict adherence to any term of this Debenture on one or more occasions shall not be considered a waiver or deprive that party
of the right thereafter to insist upon strict adherence to that term or any other term of this Debenture. Any waiver must be in
writing.

 

     15

     

    

  

(14)        If
any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain in effect, and
if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and
circumstances. If it shall be found that any interest or other amount deemed interest due hereunder shall violate applicable laws
governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate
of interest. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would
prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Debenture as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this indenture,
and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants
that it will not, by resort to any such law, hinder, delay or impeded the execution of any power herein granted to the Holder,
but will suffer and permit the execution of every such as though no such law has been enacted.

 

(15)        Whenever
any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day.

 

(16)        THE
PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION DOCUMENT OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR THE PARTIES’ ACCEPTANCE OF THIS AGREEMENT.

 

(17)        CERTAIN
DEFINITIONS   For purposes of this Debenture, the following terms shall have the following meanings:

 

(a)          “Approved
Stock Plan” means a stock option plan that has been approved by the Board of Directors of the Company, pursuant to which
the Company’s securities may be issued only to any employee, officer, or director or third party service providers in the
normal course of business, for services provided to the Company.

 

(b)          “Bloomberg”
means Bloomberg Financial Markets.

 

(c)          “Business
Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday in the United States or
a day on which banking institutions are authorized or required by law or other government action to close.

 

     16

     

    

  

(d)          
“Change of Control Transaction” means the occurrence of (a) an acquisition after the date hereof by an individual
or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control
(whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 50% of
the voting securities of the Company (except that the acquisition of voting securities by the Holder or any other current holder
of convertible securities of the Company shall not constitute a Change of Control Transaction for purposes hereof), (b) a replacement
at one time or over time of more than one-half of the members of the board of directors of the Company which is not approved by
a majority of those individuals who are members of the board of directors on the date hereof (or by those individuals who are serving
as members of the board of directors on any date whose nomination to the board of directors was approved by a majority of the members
of the board of directors who are members on the date hereof), (c) the merger, consolidation or sale of 50% or more of the assets
of the Company or any subsidiary of the Company in one or a series of related transactions with or into another entity, or (d)
the execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the
events set forth above in (a), (b) or (c).

 

(e)          “Closing
Bid Price” means the price per share in the last reported trade of the Common Stock on a Primary Market or on the exchange
which the Common Stock is then listed as quoted by Bloomberg.

 

(f)          “Convertible
Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable
or exchangeable for Common Stock.

 

(g)          “Commission”
means the Securities and Exchange Commission.

 

(h)          “Common
Stock” means the common stock, par value $0.00001, of the Company and stock of any other class into which such shares
may hereafter be changed or reclassified.

 

(i)          “Equity
Conditions” means that each of the following conditions is satisfied: (i) on each day during the period beginning 2 weeks
prior to the applicable date of determination and ending on and including the applicable date of determination (the “Equity
Conditions Measuring Period”), all applicable shares of Common Stock to be issued in connection with the event requiring
determination shall be eligible for sale without restriction and without the need for registration under any applicable federal
or state securities laws; (ii) on each day during the Equity Conditions Measuring Period, the Common Stock is designated for quotation
on the Principal Market and shall not have been suspended from trading on such exchange or market nor shall delisting or suspension
by such exchange or market been threatened or pending either (A) in writing by such exchange or market or (B) by falling below
the then effective minimum listing maintenance requirements of such exchange or market; (iii) during the Equity Conditions Measuring
Period, the Company shall have delivered Conversion Shares upon conversion of the Debentures to the Holder on a timely basis as
set forth in Section 4(e)(i) hereof; (iv) any applicable shares of Common Stock to be issued in connection with the event requiring
determination may be issued in full without violating Section 4(f) hereof and the rules or regulations of the Primary Market; (v)
during the Equity Conditions Measuring Period, there shall not have occurred either (A) an Event of Default or (B) an event that
with the passage of time or giving of notice would constitute an Event of Default; and (vii) the Company shall have no knowledge
of any fact that would cause any applicable shares of Common Stock to be issued in connection with the event requiring determination
not to be eligible for sale without restriction and without the need for registration under any applicable federal or state securities
laws.

 

     17

     

    

  

(j)          “Equity
Conditions Failure” means that on any applicable date the Equity Conditions have not been satisfied (or waived in writing
by the Holder).

 

(k)          “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

(l)          “Excluded
Securities” means, (a) shares issued or deemed to have been issued by the Company pursuant to an Approved Stock Plan
and (b) the shares of Common Stock issued or deemed to be issued by the Company upon conversion of this Debenture.

 

(m)          “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

 

(n)          “Original
Issue Date” means the date of the first issuance of this Debenture regardless of the number of transfers and regardless
of the number of instruments, which may be issued to evidence such Debenture.

 

(o)          “Person”
means a corporation, an association, a partnership, organization, a business, an individual, a government or political subdivision
thereof or a governmental agency.

 

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

 

(q)          “Securities
Purchase Agreement” means the Securities Purchase Agreement dated the date hereof by and among the Company and the Holder.

 

(r)          “Trading
Day” means a day on which the shares of Common Stock are quoted on the Primary Market on which the shares of Common Stock
are then quoted or listed; provided, that in the event that the shares of Common Stock are not listed or quoted, then Trading Day
shall mean a Business Day.

 

(s)          “Transaction
Documents” means the Securities Purchase Agreement or any other agreement delivered in connection with the Securities
Purchase Agreement, including, without limitation, the Security Documents, the Registration Rights Agreement, the Irrevocable Transfer
Agent Instructions and the Warrant.

 

(t)          “Underlying
Shares” means the shares of Common Stock issuable upon conversion of this Debenture or as payment of interest in accordance
with the terms hereof.

 

(u)          “VWAP”
means, for any security as of any date, the daily dollar volume-weighted average price for such security as reported by Bloomberg,
LP through its “Historical Price Table Screen (HP)” with Market: Weighted Avg function selected, or, if no dollar volume-weighted
average price is reported for such security by Bloomberg, the average of the highest closing bid price and the lowest closing ask
price of any of the market makers for such security as reported in the "pink sheets" by Pink Sheets LLC.

 

[Signature Page Follows]

 

     18

     

    

 

IN WITNESS WHEREOF,
the Company has caused this Secured Convertible Debenture to be duly executed by a duly authorized officer as of the date set
forth above. 

 

	 	COMPANY:
	 	KONA GOLD SOLUTIONS, INC.
	 	 
	 	By:	             
	 	Name: Robert Clark
	 	Title:  CEO

 

     

     

    

 

EXHIBIT I

CONVERSION NOTICE

 

(To be executed by the Holder in order
to Convert the Debenture)

 

	TO: 

 

The undersigned hereby
irrevocably elects to convert $__________________________ of the principal amount of Debenture No. KGKG-1-3 into Shares of Common
Stock of KONA GOLD SOLUTIONS, INC., according to the conditions stated therein, as of the Conversion Date written below.

 

	Conversion Date:	 
	 	 
	Conversion Amount to be converted:	$
	 	 
	Conversion Price:	$
	 	 
	Number of shares of Common Stock to be issued:	 
	 	 
	Amount of Debenture Unconverted:	$

 

Please issue the shares of Common Stock in the following name
and to the following address: 

 

Issue to:

 

	Authorized Signature:	 
	Name:	 
	Title:	 
	Broker DTC Participant Code:	 
	Account Number:

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