Document:

Blueprint

 

Exhibit 10.3

 

NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY
A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.

 

COMMON STOCK PURCHASE WARRANT

 

EXACTUS, INC.

 

 

Warrant Shares:
275,612

            

Issuance Date:
November 27, 2019

 

 

This
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that,
for value received, 3i, LP or its assigns (the “Holder”) is entitled,
upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after November
27, 2019 (the “Issuance Date”) and on or
prior to the close of business on the second (2nd) year anniversary
of the Issuance Date (the “Termination Date”) but
not thereafter, to subscribe for and purchase from Exactus, Inc., a
Nevada corporation (the “Company”), up to 275,612
shares (as subject to adjustment hereunder, the “Warrant Shares”) of
common stock, par value $0.0001 per share, of the Company (the
“Common
Stock”). The purchase price of one share of Common
Stock under this Warrant shall be equal to the Exercise Price, as
defined in Section 2(b).

 

Section
1.                      Definitions.
In addition to the terms defined elsewhere in this Warrant, the
following terms have the meanings set forth in this Section
1:

 

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

 

b) “Business Day” means any
day other than a Saturday or Sunday or any other day on which the
Federal Reserve Bank of New York is not open for
business.

 

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

 

d) “Common Stock Equivalents”
means any
securities of the Company or any Subsidiary which would entitle the
holder thereof to acquire at any time Common Stock, including,
without limitation, any debt, preferred stock, right, option,
warrant, unit or other instrument that is at any time convertible
into or exercisable or exchangeable for, or otherwise entitles the
holder thereof to receive, Common Stock.

 

e) “Conversion Shares” means,
collectively, the shares of Common Stock issuable upon Conversion
of the Notes in accordance with the terms of this
Notes.

 

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

 

 

 

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g) “Exempt
Issuance” means
the issuance of (i) Common Stock by the Company pursuant to the
terms and conditions of the Purchase Agreement, (ii) the issuance
of (a) Conversion Shares upon conversion of the Notes or any other
Notes issued under the Purchase Agreement in accordance with the
terms of such Notes, which for the avoidance of doubt, includes any
adjustment to the conversion price prior to conversion hereof or
thereof, and (b) Warrant Shares upon exercise of the Warrants in
accordance with the terms of the Warrants, which for the avoidance
of doubt, includes any adjustment to the Exercise Price prior to
exercise thereof, (iii) the issue of shares of Common Stock or
options to employees, officers, directors, consultants, advisors or
contractors of the Company pursuant to any stock or option plan
duly adopted for any such purpose, by a majority of the
non-employee members of the Board of Directors of the Company or a
majority of the members of a committee of non-employee directors
established for such purpose, provided, in no event shall the
aggregate amount of such issuances to employees, officers,
directors, consultants, advisors or contractors of the Company
during the period commencing on the date of the Purchase Agreement
and ending on the date no Warrants are outstanding exceed fifteen
percent (15%) of the outstanding shares of Common Stock (as
adjusted for stock splits, stock dividends, stock combinations,
recapitalizations or other similar transactions following the
Issuance Date), (iv) securities issued as part of the purchase
price for strategic acquisitions, which in no event shall include
any issuances of securities that directly and/or indirectly will be
used to raise capital of all such strategic acquisitions, which
must have been approved by a majority of the disinterested
directors of the Company, and (v) the issuance of Common Stock upon
the exercise or exchange of or conversion of any Common Stock
Equivalents issued and outstanding on the date of the Purchase
Agreement pursuant to terms and conditions applicable to such
Common Stock Equivalents in effect as of the date of the Purchase
Agreement and disclosed in filings of the Company with the
Commission prior to the date of the Purchase Agreement,
provided that such
Common Stock Equivalents have not been amended since the date of
the Purchase Agreement to increase the number of such Common Stock
Equivalents or shares of Common Stock issuable upon the exercise or
exchange of or conversion of such Common Stock Equivalents, or to
decrease the Exercise Price, exchange price or conversion price of
such Common Stock Equivalents (other than Common Stock Equivalents
issued and outstanding on the date of the Purchase Agreement,
subject to exchange prices or conversion prices adjustable pursuant
to anti-dilution protection or in connection with stock splits or
combinations) or to extend the term of such Common Stock
Equivalents.

 

h) “Notes” means the 8%
Senior Secured Convertible Promissory Notes of the Company offered
by the Company pursuant to the Purchase Agreement.

 

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

 

j) “Purchase Agreement” means
that certain Securities Purchase Agreement, dated November 27,
2019, between the Company and the Holder.

 

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

 

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

 

m) “Transfer
Agent” means V Stock
Transfer, the current transfer agent of the Company, with a mailing
address of 18 Lafayette Place, Woodmere, New York 11598 and a phone
number of (212) 828-8436, attention: Yoel Goldfeder, and any
successor transfer agent of the Company.

 

 

 

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Section
2.                      Exercise.

 

a) Exercise
of Warrant. Exercise of the purchase rights represented by
this Warrant may be made, in whole or in part, at any time or times
on or after the Issuance Date and on or before the Termination Date
by delivery to the Company (or such other office or agency of the
Company as it may designate by notice in writing to the registered
Holder at the address of the Holder appearing on the books of the
Company) of a duly executed facsimile copy of the Notice of
Exercise form annexed hereto and within two (2) Business Days of
the date said Notice of Exercise is delivered to the Company, the
Company shall have received payment of the aggregate Exercise Price
of the shares of Common Stock thereby purchased by wire transfer or
cashier’s check drawn on a United States bank . No ink-original Notice of Exercise
shall be required, nor shall any medallion guarantee (or other type
of guarantee or notarization) of any Notice of Exercise form be
required. Notwithstanding anything herein to the contrary, the
Holder shall not be required to physically surrender this Warrant
to the Company. Partial exercises of this Warrant resulting in
purchases of a portion of the total number of Warrant Shares
available hereunder shall have the effect of lowering the
outstanding number of Warrant Shares purchasable hereunder in an
amount equal to the applicable number of Warrant Shares purchased.
The Holder and the Company shall maintain records showing the
number of Warrant Shares purchased and the date of such purchases.
The Company shall deliver any objection to any Notice of Exercise
Form within one (1) Business Day of receipt of such notice.
The Holder and any assignee, by
acceptance of this Warrant, acknowledge and agree that, by reason
of the provisions of this paragraph, following the purchase of a
portion of the Warrant Shares hereunder, the number of Warrant
Shares available for purchase hereunder at any given time may be
less than the amount stated on the face hereof.

 

b) Exercise Price. The exercise
price per share of the Common Stock under this Warrant shall be
$0.756, subject to adjustment hereunder (the “Exercise
Price”).

 

c) Cashless
Exercise. Notwithstanding
anything contained herein to the contrary, if at any point after
the 180 day anniversary of the issuance of this Warrant a
Registration Statement on Form S-1 (or other applicable
registration statement under the 1933 Act (the
“Registration
Statement”) covering the
resale of the Warrant Shares is not available for the issuance of
such Warrant Shares, the Holder may, in its sole discretion,
exercise this Warrant in whole or in part and, in lieu of making
the cash payment otherwise contemplated to be made to the Company
upon such exercise in payment of the Exercise Price, elect instead
to exercise this Warrant by means of a cashless exercise (a
“Cashless
Exercise”) in which the
Holder shall be entitled to receive a number of Warrant Shares
equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where:

 

(A) as
applicable: (i) the VWAP on the Trading Day immediately preceding
the date of the applicable Notice of Exercise if such Notice of
Exercise is (1) both executed and delivered pursuant to Section
1(a) hereof on a day that is not a Trading Day or (2) both executed
and delivered pursuant to Section 1(a) hereof on a Trading Day
prior to the opening of “regular trading hours” (as
defined in Rule 600(b)(64) of Regulation NMS promulgated under the
federal securities laws) on such Trading Day, (ii) the Bid Price of
the Common Shares on the principal Trading Market as reported by
Bloomberg L.P. as of the time of the Holder’s execution of
the applicable Notice of Exercise if such Notice of Exercise is
executed during “regular trading hours” on a Trading
Day and is delivered within two (2) hours thereafter pursuant to
Section 1(a) hereof or (iii) the VWAP on the date of the applicable
Notice of Exercise if the date of such Notice of Exercise is a
Trading Day and such Notice of Exercise is both executed and
delivered pursuant to Section 1(a) hereof after the close of
“regular trading hours” on such Trading
Day;

 

(B) =

the
Exercise Price of this Warrant, as adjusted hereunder;
and 

 

(X) 

= 

the
number of Warrant Shares that would be issuable upon exercise of
this Warrant in accordance with the terms of this Warrant if such
exercise were by means of a cash exercise rather than a cashless
exercise.

 

 

 

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d) Mechanics
of Exercise.

 

i. Delivery of Warrant Shares Upon
Exercise. Warrant Shares purchased hereunder shall be
transmitted by the Transfer Agent to the Holder by crediting the
account of the Holder’s prime broker with The Depository
Trust Company through its Deposit or Withdrawal at Custodian system
(“DWAC”) if the Company is
then a participant in such system and either (A) there is an
effective registration statement permitting the issuance of the
Warrant Shares to or resale of the Warrant Shares by the Holder or
(B) the shares are eligible for resale by the Holder without volume
or manner-of-sale limitations pursuant to Rule 144, and otherwise
Warrant Shares purchased hereunder shall be transmitted by physical
delivery to the address specified by the Holder in the Notice of
Exercise by the date that is two (2) Business Days after the latest
of (A) the delivery to the Company of the Notice of Exercise and
(B) surrender of this Warrant (if required) (such date, the
“Warrant Share
Delivery Date”). The Warrant Shares shall be deemed to
have been issued, and Holder or any other person so designated to
be named therein shall be deemed to have become a holder of record
of such shares for all purposes, as of the date the Warrant has
been exercised, with payment to the Company of the Exercise Price,
which Exercise Price shall be paid in either lawful U.S. currency
or by contributing Notes that have been duly and validly issued by
the Company, and all taxes required to be paid by the Holder, if
any, pursuant to Section 2(d)(vi) prior to the issuance of such
shares, having been paid. The Warrant Shares shall bear a
restrictive legend in the following form, as
appropriate:

 

“THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL
SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY
BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.”

 

ii. Delivery of New Warrants Upon
Exercise. If this Warrant shall have been exercised in part,
the Company shall, at the request of a Holder and upon surrender of
this Warrant certificate, at the time of delivery of the Warrant
Shares, deliver to the Holder a new Warrant evidencing the rights
of the Holder to purchase the unpurchased Warrant Shares called for
by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.

 

iii. Rescission
Rights. If the Company fails to cause the Transfer Agent to
transmit to the Holder the Warrant Shares pursuant to Section
2(d)(i) by the Warrant Share Delivery Date, then the Holder will
have the right to rescind such exercise.

 

 

 

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iv. Compensation for Buy-In on Failure to
Timely Deliver Warrant Shares Upon Exercise. In addition to
any other rights available to the Holder, if the Company fails to
cause the Transfer Agent to transmit to the Holder the Warrant
Shares pursuant to an exercise on or before the Warrant Share
Delivery Date, and if after such date the Holder is required by its
broker to purchase (in an open market transaction or otherwise) or
the Holder’s brokerage firm otherwise purchases, shares of
Common Stock to deliver in satisfaction of a sale by the Holder of
the Warrant Shares which the Holder anticipated receiving upon such
exercise (a “Buy-In”), then the
Company shall (A) pay in cash to the Holder the amount, if any, by
which (x) the Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the amount obtained by multiplying (1) the
number of Warrant Shares that the Company was required to deliver
to the Holder in connection with the exercise at issue times (2)
the price at which the sell order giving rise to such purchase
obligation was executed, and (B) at the option of the Holder,
either reinstate the portion of the Warrant and equivalent number
of Warrant Shares for which such exercise was not honored (in which
case such exercise shall be deemed rescinded) or deliver to the
Holder the number of shares of Common Stock that would have been
issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted exercise of shares of
Common Stock with an aggregate sale price giving rise to such
purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder
$1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the
Buy-In and, upon request of the Company, evidence of the amount of
such loss. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the
Company’s failure to timely deliver shares of Common Stock
upon exercise of the Warrant as required pursuant to the terms
hereof.

 

v. No Fractional Shares or Scrip.
No fractional shares or scrip representing fractional shares shall
be issued upon the exercise of this Warrant. As to any fraction of
a share which the Holder would otherwise be entitled to purchase
upon such exercise, the Company shall, at its election, either pay
a cash adjustment in respect of such final fraction in an amount
equal to such fraction multiplied by the Exercise Price or round up
to the next whole share.

 

vi. Charges, Taxes and Expenses.
Issuance of Warrant Shares shall be made without charge to the
Holder for any issue or transfer tax or other incidental expense in
respect of the issuance of Warrant Shares, all of which taxes and
expenses shall be paid by the Company, and such Warrant Shares
shall be issued in the name of the Holder or in such name or names
as may be directed by the Holder; provided, however, that in the event that
Warrant Shares are to be issued in a name other than the name of
the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by
the Holder and the Company may require, as a condition thereto, the
payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto.

 

vii. Closing
of Books. The Company will not close its stockholder books
or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.

 

 

 

 

 

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e)           Holder’s
Exercise Limitations. The
Company shall not effect any exercise of this Warrant, and a Holder
shall not have the right to exercise any portion of this Warrant,
pursuant to Section 2 or otherwise, to the extent that after giving
effect to such issuance after exercise as set forth on the
applicable Notice of Exercise, the Holder (together with the
Holder’s Affiliates, and any other Persons acting as a group
together with the Holder or any of the Holder’s Affiliates
(such Persons, “Attribution
Parties”)), would
beneficially own in excess of the Beneficial Ownership Limitation
(as defined below).  For purposes of the foregoing sentence,
the number of shares of Common Stock beneficially owned by the
Holder and its Affiliates and Attribution Parties shall include the
number of shares of Common Stock issuable upon exercise of this
Warrant with respect to which such determination is being made, but
shall exclude the number of shares of Common Stock which would be
issuable upon (i) exercise of the remaining, nonexercised portion
of this Warrant beneficially owned by the Holder or any of its
Affiliates or Attribution Parties and (ii) exercise or conversion
of the unexercised or nonconverted portion of any other securities
of the Company (including, without limitation, any other Common
Stock Equivalents) subject to a limitation on conversion or
exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its Affiliates or Attribution
Parties.  Except as set forth in the preceding sentence, for
purposes of this Section 2(e), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to
the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for
any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2(e) applies,
the determination of whether this Warrant is exercisable (in
relation to other securities owned by the Holder together with any
Affiliates and Attribution Parties) and of which portion of this
Warrant is exercisable shall be in the sole discretion of the
Holder, and the submission of a Notice of Exercise shall be deemed
to be the Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder
together with any Affiliates and Attribution Parties) and of which
portion of this Warrant is exercisable, in each case subject to the
Beneficial Ownership Limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated
above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 2(e), in determining the number of
outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as reflected in (A) the
Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public
announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of
shares of Common Stock outstanding.  Upon the written or oral
request of a Holder, the Company shall within two Trading Days
confirm orally and in writing to the Holder the number of shares of
Common Stock then outstanding.  In any case, the number of
outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its Affiliates or
Attribution Parties since the date as of which such number of
outstanding shares of Common Stock was reported. The
“Beneficial Ownership
Limitation” shall be
4.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common
Stock issuable upon exercise of this Warrant. The Holder, upon
notice to the Company, may increase or decrease the Beneficial
Ownership Limitation provisions of this Section 2(e), provided that
the Beneficial Ownership Limitation in no event exceeds 9.99% of
the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock upon
exercise of this Warrant held by the Holder and the provisions of
this Section 2(e) shall continue to apply. Any increase in the
Beneficial Ownership Limitation will not be effective until the
61st
day after such notice is delivered to
the Company. The provisions of this paragraph shall be construed
and implemented in a manner otherwise than in strict conformity
with the terms of this Section 2(e) to correct this paragraph (or
any portion hereof) which may be defective or inconsistent with the
intended Beneficial Ownership Limitation herein contained or to
make changes or supplements necessary or desirable to properly give
effect to such limitation. The limitations contained in this
paragraph shall apply to a successor holder of this
Warrant.

 

 

 

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Section
3.                      Certain
Adjustments.

 

a) Stock Dividends and Splits. If
the Company, at any time while this Warrant is outstanding: (i)
pays a stock dividend or otherwise makes a distribution or
distributions on shares of its Common Stock or any other equity or
equity equivalent securities payable in shares of Common Stock
(which, for avoidance of doubt, shall not include any shares of
Common Stock issued by the Company upon exercise of this Warrant),
(ii) subdivides outstanding shares of Common Stock into a larger
number of shares, (iii) combines (including by way of reverse stock
split) outstanding shares of Common Stock into a smaller number of
shares or (iv) issues by reclassification of shares of the Common
Stock any shares of capital stock of the Company, then in each case
the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of
Common Stock outstanding immediately after such event, and the
number of shares issuable upon exercise of this Warrant shall be
proportionately adjusted such that the aggregate Exercise Price of
this Warrant shall remain unchanged. Any adjustment made pursuant
to this Section 3(a) shall become effective immediately after the
record date for the determination of stockholders entitled to
receive such dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision,
combination or re-classification.

 

b) Intentionally
Omitted

 

c) Pro Rata Distributions. During
such time as this Warrant is outstanding, if the Company shall
declare or make any dividend or other distribution of its assets
(or rights to acquire its assets) to holders of shares of Common
Stock, by way of return of capital or otherwise (including, without
limitation, any distribution of cash, stock or other securities,
property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or
other similar transaction) (a “Distribution”), at any
time after the issuance of this Warrant, then, in each such case,
the Holder shall be entitled to participate in such Distribution to
the same extent that the Holder would have participated therein if
the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any
limitations on exercise hereof, including without limitation, the
Beneficial Ownership Limitation) immediately before the date of
which a record is taken for such Distribution, or, if no such
record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the participation in such
Distribution (provided, however, to the extent that the
Holder's right to participate in any such Distribution would result
in the Holder exceeding the Beneficial Ownership Limitation, then
the Holder shall not be entitled to participate in such
Distribution to such extent (or in the beneficial ownership of any
shares of Common Stock as a result of such Distribution to such
extent) and the portion of such Distribution shall be held in
abeyance for the benefit of the Holder until such time, if ever, as
its right thereto would not result in the Holder exceeding the
Beneficial Ownership Limitation;
provided, further, that to the extent that this Warrant has not
been partially or completely exercised at the time of such
Distribution, such portion of the Distribution shall be held in
abeyance for the benefit of the Holder until the Holder has
exercised this Warrant).

 

 

 

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d) Fundamental Transaction. If, at
any time while this Warrant is outstanding, (i) the Company,
directly or indirectly, in one or more related transactions effects
any merger or consolidation of the Company with or into another
Person, (ii) the Company, directly or indirectly, effects any sale,
lease, license, assignment, transfer, conveyance or other
disposition of all or substantially all of its assets in one or a
series of related transactions, (iii) any, direct or indirect,
purchase offer, tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders
of Common Stock are permitted to sell, tender or exchange their
shares for other securities, cash or property and has been accepted
by the holders of fifty percent (50%) or more of the outstanding
Common Stock, (iv) the Company, directly or indirectly, in one or
more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash
or property, or (v) the Company, directly or indirectly, in one or
more related transactions consummates a stock or share purchase
agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme
of arrangement) with another Person or group of Persons whereby
such other Person or group acquires more than 50% of the
outstanding shares of Common Stock (not including any shares of
Common Stock held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons making
or party to, such stock or share purchase agreement or other
business combination) (each a “Fundamental
Transaction”), then, upon any subsequent exercise of
this Warrant, the Holder shall have the right to receive, for each
Warrant Share that would have been issuable upon such exercise
immediately prior to the occurrence of such Fundamental
Transaction, at the option of the Holder, the number of shares of
Common Stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and any additional
consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder
of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction. For
purposes of any such exercise, the determination of the Exercise
Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such
Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable
manner reflecting the relative value of any different components of
the Alternate Consideration. If holders of Common Stock are given
any choice as to the securities, cash or property to be received in
a Fundamental Transaction, then the Holder shall be given the same
choice as to the Alternate Consideration it receives upon any
exercise of this Warrant following such Fundamental Transaction.
The Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the
“Successor
Entity”) to assume in writing all of the obligations
of the Company under this Warrant and the other Transaction
Documents (as defined in the Purchase Agreement) in accordance with
the provisions of this Section 3(e) pursuant to written agreements
in form and substance reasonably satisfactory to the Holder and
approved by the Holder (without unreasonable delay) prior to such
Fundamental Transaction and shall, at the option of the Holder,
deliver to the Holder in exchange for this Warrant a security of
the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant which
is exercisable for a corresponding number of shares of capital
stock of such Successor Entity (or its parent entity) equivalent to
the shares of Common Stock acquirable and receivable upon exercise
of this Warrant (without regard to any limitations on the exercise
of this Warrant) prior to such Fundamental Transaction, and with an
exercise price which applies the exercise price hereunder to such
shares of capital stock (but taking into account the relative value
of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such
number of shares of capital stock and such exercise price being for
the purpose of protecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and
substance to the Holder. Upon the occurrence of any such
Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of this Warrant and the
other Transaction Documents (as defined in the Purchase Agreement)
referring to the “Company” shall refer instead to the
Successor Entity), and may exercise every right and power of the
Company and shall assume all of the obligations of the Company
under this Warrant and the other Transaction Documents (as defined
in the Purchase Agreement) with the same effect as if such
Successor Entity had been named as the Company herein.

 

 

 

-8-

 

 

 

e) Calculations. All calculations
under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the
case may be. For purposes of this Section 3, the number of shares
of Common Stock deemed to be issued and outstanding as of a given
date shall be the sum of the number of shares of Common Stock
(excluding treasury shares, if any) issued and
outstanding.

 

f) Notice to Holder.

 

i. Adjustment to Exercise Price.
Whenever the Exercise Price is adjusted pursuant to any provision
of this Section 3, the Company shall promptly mail to the Holder a
notice setting forth the Exercise Price after such adjustment and
any resulting adjustment to the number of Warrant Shares and
setting forth a brief statement of the facts requiring such
adjustment.

 

ii. Notice to Allow Exercise by
Holder. If (A) the Company shall declare a dividend (or any
other distribution in whatever form) on the Common Stock, (B) the
Company shall declare a special nonrecurring cash dividend on or a
redemption of the Common Stock, (C) the Company shall authorize the
granting to all holders of the Common Stock rights or warrants to
subscribe for or purchase any shares of capital stock of any class
or of any rights, (D) the Company
grants, issues or sells any Common Stock Equivalents or rights to
purchase stock, warrants, securities or other property pro rata to
the record holders of any class of shares of Common Stock or
(E) the Company shall declare or make any dividend or other
distribution of its assets (or rights to acquire its assets) to
holders of shares of Common Stock, by way of return of capital or
otherwise (including, without limitation, any distribution of cash,
stock or other securities, property or options by way of a
dividend, spin off, reclassification, corporate rearrangement,
scheme of arrangement or other similar transaction), then, in each
case, the Company shall cause to be mailed to the Holder at its
last address as it shall appear upon the Warrant Register of the
Company, at least ten (10) Business Days prior to the applicable
record or effective date hereinafter specified, a notice stating
the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a
record is not to be taken, the date as of which the holders of the
Common Stock of record to be entitled to such dividend,
distributions, redemption, rights or warrants are to be determined;
provided that the failure to mail such notice or any defect therein
or in the mailing thereof shall not affect the validity of the
corporate action required to be specified in such notice. The
Holder shall remain entitled to exercise this Warrant during the
period commencing on the date of such notice to the effective date
of the event triggering such notice except as may otherwise be
expressly set forth herein.

 

Section
4.                      Transfer
of Warrant.

 

a) Transferability. Subject to
compliance with any applicable securities laws and the conditions
set forth in Section 4(d) hereof, this Warrant and all rights
hereunder are transferable, in whole or in part, upon surrender of
this Warrant at the principal office of the Company or its
designated agent, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by
the Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such
surrender and, if required, such payment, the Company shall execute
and deliver a new Warrant or Warrants in the name of the assignee
or assignees, as applicable, and in the denomination or
denominations specified in such instrument of assignment, and shall
issue to the assignor a new Warrant evidencing the portion of this
Warrant not so assigned, and this Warrant shall promptly be
cancelled. Notwithstanding anything
herein to the contrary, the Holder shall not be required to
physically surrender this Warrant to the Company unless the Holder
has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Business
Days of the date the Holder delivers an assignment form to the
Company assigning this Warrant full. The Warrant, if properly
assigned in accordance herewith, may be exercised by a new
holder for the purchase of Warrant Shares without having a new
Warrant issued.

 

 

 

-9-

 

 

 

b) New Warrants. This Warrant may
be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written
notice specifying the names and denominations in which new Warrants
are to be issued, signed by the Holder or its agent or attorney.
Subject to compliance with Section 4(a), as to any transfer which
may be involved in such division or combination, the Company shall
execute and deliver a new Warrant or Warrants in exchange for the
Warrant or Warrants to be divided or combined in accordance with
such notice. All Warrants issued on transfers or exchanges shall be
dated the Issuance Date and shall be identical with this Warrant
except as to the number of Warrant Shares issuable pursuant
thereto.

 

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

 

d) Transfer Restrictions. If, at
the time of the surrender of this Warrant in connection with any
transfer of this Warrant, the transfer of this Warrant shall not be
either (i) registered pursuant to an effective registration statement under the
Securities Act and under applicable state securities or blue sky
laws or (ii) eligible for resale without volume or manner-of-sale
restrictions or current public information requirements pursuant to
Rule 144, the Company may require, as a condition of allowing such
transfer, that the Holder or transferee of this Warrant, as the
case may be, comply with the provisions of Section
5(k).

 

a) Representation by the Holder.
The Holder, by the acceptance hereof, represents and warrants as of
the date hereof, and through the Termination Date, as
follows:

 

i. Organization;
Authority. The Holder is either
an individual or an entity duly incorporated or formed, validly
existing and in good standing under the laws of the jurisdiction of
its incorporation or formation with full right, corporate,
partnership, limited liability company or similar power and
authority to enter into and to consummate the transactions
contemplated by this Warrant.

 

ii. Own
Account. The Holder
understands that the securities are “restricted
securities” and is acquiring such securities for its own
account and not with a view to or for distributing or reselling
such securities or any part thereof in violation of the Securities
Act or any applicable state securities law, has no present
intention of distributing any of such securities in violation of
the Securities Act or any applicable state securities law and has
no direct or indirect arrangement or understandings with any other
persons to distribute or regarding the distribution of such
securities in violation of the Securities Act or any applicable
state securities law (this representation and warranty not limiting
the Holder’s right to sell the securities in compliance with
applicable federal and state securities laws). Holder understands
that any transfer of the securities will be made only in compliance
with the Securities Act and applicable state securities laws. The
Holder is acquiring the securities hereunder in the ordinary course
of its business.

 

iii. Holder
Status. At the time the
Holder was offered the Warrants, it was, and as of the date hereof
it is, and on each date on which it exercises the Warrants it will
be, an “accredited investor” as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities
Act.

 

iv. Experience
of the Holder. The Holder, either
alone or together with its representatives, has such knowledge,
sophistication and experience in business and financial matters so
as to be capable of evaluating the merits and risks of the
prospective investment in the securities described herein, and has
so evaluated the merits and risks of such investment. The
Holder acknowledges that it must bear the economic risk of an
investment in the securities for an indefinite period of time
because, among other things, the securities have not been
registered under the Securities Act, and, therefore, cannot be
sold, transferred, pledged, or otherwise disposed of unless they
are subsequently registered under the Securities Act and the
applicable state securities laws or the Holder delivers an opinion
of counsel to the Company (in reasonably acceptable form and
substance to the Company) that an exemption from such registration
is available.

 

 

 

-10-

 

 

 

v. General
Solicitation. The Holder is not
purchasing the securities as a result of any advertisement,
article, notice or other communication regarding the securities
published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or any other
general solicitation or general advertisement.

 

vi. Access
to Information. In order to
adequately evaluate the merits and risks of an investment in the
Company, the Holder has had an opportunity to (i) ask questions and
receive answers from the Company and its representatives concerning
the Company and the Holder’s investment therein, and (ii)
obtain any additional information which the Holder has requested
with respect to the Company and the Holder’s investment
therein.

 

vii. No
Government Approval. The Holder
understands that no federal or state governmental agency has passed
upon or will pass upon the securities or has made or will make any
finding or determination as to the fairness of investment in the
securities.

 

viii. Agreement.
The Holder has been furnished and has read, understands and is
fully familiar with, this Warrant and the Transaction Documents (as
defined in the Purchase Agreement), which will govern the
securities.

 

Section
5.                      Miscellaneous.

 

a) No Rights as Stockholder Until
Exercise. This Warrant does not entitle the Holder to any
voting rights, dividends or other rights as a stockholder of the
Company prior to the exercise hereof as set forth in Section
2(d)(i), except as expressly set forth in Section 3.

 

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

 

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

 

d) Authorized Shares. The Company
covenants that, during the period the Warrant is outstanding, it
will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of the
Warrant Shares upon the exercise of any purchase rights under this
Warrant. The Company further covenants that its issuance of this
Warrant shall constitute full authority to its officers who are
charged with the duty of issuing the necessary Warrant Shares upon
the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure
that such Warrant Shares may be issued as provided herein without
violation of any applicable law or regulation, or of any
requirements of any trading market upon which the Common Stock may
be listed. The Company covenants that all Warrant Shares which may
be issued upon the exercise of the purchase rights represented by
this Warrant will, upon exercise of the purchase rights represented
by this Warrant and payment for such Warrant Shares in accordance
herewith, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges created by
the Company in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such
issue).

 

 

 

-11-

 

 

 

Except
and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of
all such actions as may be necessary or appropriate to protect the
rights of Holder as set forth in this Warrant against impairment.
Without limiting the generality of the foregoing, the Company will
(i) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to
such increase in par value, (ii) take all such action as may be
necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares upon the
exercise of this Warrant and (iii) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof, as may
be, necessary to enable the Company to perform its obligations
under this Warrant.

 

Before
taking any action, which would result in an adjustment in the
number of Warrant Shares for which this Warrant is exercisable, the
Company shall obtain all such authorizations or exemptions thereof,
or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.

 

e) Jurisdiction. All questions
concerning the construction, validity, enforcement and
interpretation of this Warrant shall be determined in accordance
with the provisions of the Purchase Agreement.

 

f) Restrictions. The Holder
acknowledges that the Warrant Shares acquired upon the exercise of
this Warrant, if not registered, will have restrictions upon resale
imposed by state and federal securities laws.

 

g) Nonwaiver and Expenses. No
course of dealing or any delay or failure to exercise any right
hereunder on the part of Holder shall operate as a waiver of such
right or otherwise prejudice the Holder’s rights, powers or
remedies, notwithstanding the fact that all rights hereunder
terminate on the Termination Date. If the Company willfully and
knowingly fails to comply with any provision of this Warrant, which
results in any material damages to the Holder, the Company shall
pay to the Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable
attorneys’ fees, including those of appellate proceedings,
incurred by the Holder in collecting any amounts due pursuant
hereto or in otherwise enforcing any of its rights, powers or
remedies hereunder.

 

h) Notices. Any notice, request or
other document required or permitted to be given or delivered to
the Holder by the Company shall be delivered in accordance with the
notice provisions of the Purchase Agreement.

 

i) Limitation of Liability. No
provision hereof, in the absence of any affirmative action by the
Holder to exercise this Warrant to purchase Warrant Shares, and no
enumeration herein of the rights or privileges of the Holder, shall
give rise to any liability of the Holder for the purchase price of
any Common Stock or as a stockholder of the Company, whether such
liability is asserted by the Company or by creditors of the
Company.

 

j) Remedies. The Holder, in
addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees
that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this
Warrant and hereby agrees to waive and not to assert the defense in
any action for specific performance that a remedy at law would be
adequate.

 

k) Successors and Assigns. Subject
to applicable securities laws, this Warrant and the rights and
obligations evidenced hereby shall inure to the benefit of and be
binding upon the successors and permitted assigns of the Company
and the successors and permitted assigns of Holder. The provisions
of this Warrant are intended to be for the benefit of any Holder
from time to time of this Warrant and shall be enforceable by such
Holder.

 

 

 

-12-

 

 

 

l) Amendment. No provision of this
Warrant may be waived, modified, supplemented or amended except in
a written instrument signed, in the case of an amendment, by the
Company and the holders of warrants issued under the Purchase
Agreement holding at least 51% in interest of such warrants then
outstanding or, in the case of a waiver, by the party against whom
enforcement of any such waived provision is sought; provided,
however, that no such waiver,
modification, supplement or amendment, as applied to any provision
of this Warrant held by any particular holder of the Warrants,
shall, without the written consent of that particular holder (i)
reduce the number of Warrant Shares issuable upon exercise
of this Warrant, (ii) increase
in the Exercise Price under this Warrant, or (iii) disproportionally and adversely affect
any rights under this Warrant of any holder of the Warrants.
No waiver of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of any party to exercise any right
hereunder in any manner impair the exercise of any such
right.

 

m) Severability. Wherever
possible, each provision of this Warrant shall be interpreted in
such manner as to be effective and valid under applicable law, but
if any provision of this Warrant shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provisions or the remaining provisions of this
Warrant.

 

n) Headings. The headings used in
this Warrant are for the convenience of reference only and shall
not, for any purpose, be deemed a part of this
Warrant.

 

 

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

 

(Signature Page Follows)

 

 

 

-13-

 

 

 

IN WITNESS WHEREOF, the Company has
caused this Warrant to be executed by its officer thereunto duly
authorized as of the date first above indicated.

 

 

 

	

EXACTUS, INC.

 

 

	

By:
/s/ Emiliano
Aloi           

       Name:
Emiliano Aloi

       Title:
President & CEO

 

 

 

 

-14-

 

 

NOTICE OF EXERCISE

 

TO:            

EXACTUS,
INC.

 

(1) The undersigned
hereby elects to purchase ________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in
full), and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any.

 

(2) Payment
shall take the form of (check applicable box):

 

[ ]
in lawful money of the United States; or

 

[ ]
if permitted the cancellation of such number of Warrant Shares as
is necessary, in accordance with the formula set forth in
subsection 2(c), to exercise this Warrant with respect to the
maximum number of Warrant Shares purchasable pursuant to the
cashless exercise procedure set forth in subsection
2(c).

 

(3) Please issue said
Warrant Shares in the name of the undersigned or in such other name
as is specified below:

 

_______________________________

 

 

The
Warrant Shares shall be delivered to the following DWAC account
number:

 

_______________________________

 

_______________________________

 

_______________________________

 

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

 

[SIGNATURE
OF HOLDER]

 

Name of
Investing Entity:
_________________________________________________________________

 

Signature of Authorized Signatory of Investing Entity:
___________________________________________

 

Name of
Authorized Signatory:
_____________________________________________________________

 

Title
of Authorized Signatory:
______________________________________________________________

 

Date:
_________________________________________________________________________________

 

 

 

 

 

-15-

 

 

 

ASSIGNMENT
FORM

 

 (To assign the foregoing Warrant, execute this form and
supply required information. Do not use this form to purchase
shares.)

 

FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to

 

 

 

 

 

	

Name:

	
 

	
 

	

(Please
Print)

 

	

Address:

	
 

	
 

	

(Please
Print)

 

	

Dated:
_______________ __, ______

 

	
 

	

Holder’s
Signature:                                                                 

 

	
 

	

Holder’s
Address:                                                                 

 

	
 

 

 

 

 

 

 

 

 

 

 

-16-Blueprint

 

Exhibit 10.4

 

SUBSIDIARY GUARANTEE

 

SUBSIDIARY
GUARANTEE, dated as of November 27, 2019 (this “Guarantee”), made by each
of the signatories hereto (together with any other entity that may
become a party hereto as provided herein, the “Guarantors”), in favor of
the purchasers signatory (together with their permitted assigns,
the “Purchasers”) to that
certain Securities Purchase Agreement, dated as of the date hereof
(the “Purchase
Agreement”), between Exactus, Inc., a Nevada
corporation (the “Company”) and the
Purchasers.

 

W I T N E S S E T H:

 

WHEREAS, pursuant
to the Purchase Agreement, the Company has agreed to sell and issue
to the Purchasers, and the Purchasers have agreed to purchase from
the Company the Senior Secured Convertible Note and Warrants,
subject to the terms and conditions set forth therein;

 

WHEREAS, each
Guarantor will directly benefit from the extension of credit to the
Company represented by the issuance of the Senior Secured
Convertible Note and Warrants; and

 

NOW,
THEREFORE, in consideration of the premises and to induce the
Purchasers to enter into the Purchase Agreement and to carry out
the transactions contemplated thereby, each Guarantor hereby agrees
with the Purchasers as follows:

 

1.       Definitions.
Unless otherwise defined herein, terms defined in the Purchase
Agreement and used herein shall have the meanings given to them in
the Purchase Agreement. The words “hereof,”
“herein,” “hereto” and
“hereunder” and words of similar import when used in
this Guarantee shall refer to this Guarantee as a whole and not to
any particular provision of this Guarantee, and Section and
Schedule references are to this Guarantee unless otherwise
specified. The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such
terms. The following terms shall have the following
meanings:

 

“Guarantee” means this
Subsidiary Guarantee, as the same may be amended, supplemented or
otherwise modified from time to time.

 

“Obligations” means, in
addition to all other costs and expenses of collection incurred by
Purchasers in enforcing any of such Obligations and/or this
Guarantee, all of the liabilities and obligations (primary,
secondary, direct, contingent, sole, joint or several) due or to
become due, or that are now or may be hereafter contracted or
acquired, or owing to, of the Company or any Guarantor to the
Purchasers, including, without limitation, all obligations under
this Guarantee, the Senior Secured Convertible Note and any other
instruments, agreements or other documents executed and/or
delivered in connection herewith or therewith, in each case,
whether now or hereafter existing, voluntary or involuntary, direct
or indirect, absolute or contingent, liquidated or unliquidated,
whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created
or incurred, and all or any portion of such obligations or
liabilities that are paid, to the extent all or any part of such
payment is avoided or recovered directly or indirectly from any of
the Purchasers as a preference, fraudulent transfer or otherwise as
such obligations may be amended, supplemented, converted, extended
or modified from time to time. Without limiting the generality of
the foregoing, the term “Obligations” shall include,
without limitation: (i) principal of, and interest on the Senior
Secured Convertible Note and the loans extended pursuant thereto;
(ii) any and all other fees, indemnities, costs, obligations and
liabilities of the Company or any Guarantor from time to time under
or in connection with this Guarantee, the Senior Secured
Convertible Note and any other instruments, agreements or other
documents executed and/or delivered in connection herewith or
therewith; and (iii) all amounts (including but not limited to
post-petition interest) in respect of the foregoing that would be
payable but for the fact that the obligations to pay such amounts
are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the
Company or any Guarantor.

 

 

 

-1-

 

 

2.       Guarantee.

 

(a)       Guarantee.

 

(i)       The
Guarantors hereby, jointly and severally, unconditionally and
irrevocably, guarantee to the Purchasers and their respective
successors, endorsees, transferees and assigns, the prompt and
complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the
Obligations.

 

(ii)       Anything
herein or in any other Transaction Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder
and under the other Transaction Documents shall in no event exceed
the amount which can be guaranteed by such Guarantor under
applicable federal and state laws, including laws relating to the
insolvency of debtors, fraudulent conveyance or transfer or laws
affecting the rights of creditors generally (after giving effect to
the right of contribution established in Section
2(b)).

 

(iii)       Each
Guarantor agrees that the Obligations may at any time and from time
to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section
2 or affecting the rights and remedies of the Purchasers
hereunder.

 

(iv)       The
guarantee contained in this Section 2 shall remain in full force
and effect until all the Obligations and the obligations of each
Guarantor under the guarantee contained in this Section 2 shall
have been satisfied by indefeasible payment in full.

 

(v)       No
payment made by the Company, any of the Guarantors, any other
guarantor or any other Person or received or collected by the
Purchasers from the Company, any of the Guarantors, any other
guarantor or any other Person by virtue of any action or proceeding
or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Obligations shall
be deemed to modify, reduce, release or otherwise affect the
liability of any Guarantor hereunder which shall, notwithstanding
any such payment (other than any payment made by such Guarantor in
respect of the Obligations or any payment received or collected
from such Guarantor in respect of the Obligations), remain liable
for the Obligations up to the maximum liability of such Guarantor
hereunder until the Obligations are indefeasibly paid in
full.

 

(vi)       Notwithstanding
anything to the contrary in this Guarantee, with respect to any
defaulted non-monetary Obligations the specific performance of
which by the Guarantors is not reasonably possible (e.g. the
issuance of the Company’s Common Stock), the Guarantors shall
only be liable for making the Purchasers whole on a monetary basis
for the Company’s failure to perform such Obligations in
accordance with the Transaction Documents.

 

(b)       Right
of Contribution. Subject to Section 2(c), each Guarantor
hereby agrees that to the extent that a Guarantor shall have paid
more than its proportionate share of any payment made hereunder,
such Guarantor shall be entitled to seek and receive contribution
from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. Each Guarantor’s
right of contribution shall be subject to the terms and conditions
of Section 2(c). The provisions of this Section 2(b) shall in no
respect limit the obligations and liabilities of any Guarantor to
the Purchasers and each Guarantor shall remain liable to the
Purchasers for the full amount guaranteed by such Guarantor
hereunder.

 

 

 

-2-

 

 

 

(c)       No
Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any
Guarantor by the Purchasers, no Guarantor shall be entitled to be
subrogated to any of the rights of the Purchasers against the
Company or any other Guarantor or any collateral security or
guarantee or right of offset held by the Purchasers for the payment
of the Obligations, nor shall any Guarantor seek or be entitled to
seek any contribution or reimbursement from the Company or any
other Guarantor in respect of payments made by such Guarantor
hereunder, until all amounts owing to the Purchasers by the Company
on account of the Obligations are indefeasibly paid in full. If any
amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Obligations shall
not have been paid in full, such amount shall be held by such
Guarantor in trust for the Purchasers, segregated from other funds
of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Purchasers in the exact form
received by such Guarantor (duly indorsed by such Guarantor to the
Purchasers, if required), to be applied against the Obligations,
whether matured or unmatured, in such order as the Purchasers may
determine.

 

(d)       Amendments,
Etc. With Respect to the Obligations. Each Guarantor shall
remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to
or further assent by any Guarantor, any demand for payment of any
of the Obligations made by the Purchasers may be rescinded by the
Purchasers and any of the Obligations continued, and the
Obligations, or the liability of any other Person upon or for any
part thereof, or any collateral security or guarantee therefor or
right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the
Purchasers, and the Purchase Agreement and the other Transaction
Documents and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Purchasers may deem
advisable from time to time, and any collateral security, guarantee
or right of offset at any time held by the Purchasers for the
payment of the Obligations may be sold, exchanged, waived,
surrendered or released. The Purchasers shall have no obligation to
protect, secure, perfect or insure any Lien at any time held by
them as security for the Obligations or for the guarantee contained
in this Section 2 or any property subject thereto.

 

(e)       Guarantee
Absolute and Unconditional. Each Guarantor waives any and
all notice of the creation, renewal, extension or accrual of any of
the Obligations and notice of or proof of reliance by the
Purchasers upon the guarantee contained in this Section 2 or
acceptance of the guarantee contained in this Section 2; the
Obligations, and any of them, shall conclusively be deemed to have
been created, contracted or incurred, or renewed, extended, amended
or waived, in reliance upon the guarantee contained in this Section
2; and all dealings between the Company and any of the Guarantors,
on the one hand, and the Purchasers, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Section 2. Each
Guarantor waives to the extent permitted by law diligence,
presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Company or any of the Guarantors with
respect to the Obligations. Each Guarantor understands and agrees
that the guarantee contained in this Section 2 shall be construed
as a continuing, absolute and unconditional guarantee of payment
and performance without regard to (a) the validity or
enforceability of the Purchase Agreement or any other Transaction
Document, any of the Obligations or any other collateral security
therefor or guarantee or right of offset with respect thereto at
any time or from time to time held by the Purchasers, (b) any
defense, set-off or counterclaim (other than a defense of payment
or performance or fraud by Purchasers) which may at any time be
available to or be asserted by the Company or any other Person
against the Purchasers, or (c) any other circumstance whatsoever
(with or without notice to or knowledge of the Company or such
Guarantor) which constitutes, or might be construed to constitute,
an equitable or legal discharge of the Company for the Obligations,
or of such Guarantor under the guarantee contained in this Section
2, in bankruptcy or in any other instance. When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder
against any Guarantor, the Purchasers may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such
rights and remedies as they may have against the Company, any other
Guarantor or any other Person or against any collateral security or
guarantee for the Obligations or any right of offset with respect
thereto, and any failure by the Purchasers to make any such demand,
to pursue such other rights or remedies or to collect any payments
from the Company, any other Guarantor or any other Person or to
realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of the Company,
any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability hereunder, and shall not
impair or affect the rights and remedies, whether express, implied
or available as a matter of law, of the Purchasers against any
Guarantor. For the purposes hereof, “demand” shall
include the commencement and continuance of any legal
proceedings.

 

 

 

-3-

 

 

 

(f)       Reinstatement.
The guarantee contained in this Section 2 shall continue to be
effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Obligations is
rescinded or must otherwise be restored or returned by the
Purchasers upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Company or any Guarantor, or
upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, the Company or
any Guarantor or any substantial part of its property, or
otherwise, all as though such payments had not been
made.

 

(g)       Payments.
Each Guarantor hereby guarantees that payments hereunder will be
paid to the Purchasers without set-off or counterclaim in U.S.
dollars at the address set forth or referred to in the Signature
Pages to the Purchase Agreement.

 

3.       Representations
and Warranties. Each Guarantor hereby makes the following
representations and warranties to Purchasers as of the date
hereof:

 

(a)       Organization
and Qualification. The Guarantor is a corporation or a
limited liability company, duly incorporated or formed, validly
existing and in good standing under the laws of the applicable
jurisdiction set forth on Schedule 1, with the requisite corporate
or limited liability company power and authority to own and use its
properties and assets and to carry on its business as currently
conducted. The Guarantor has no subsidiaries other than those
identified as such on the Disclosure Schedules to the Purchase
Agreement. The Guarantor is duly qualified to do business and is in
good standing as a foreign corporation or limited liability company
in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the
case may be, could not, individually or in the aggregate, (x)
adversely affect the legality, validity or enforceability of any of
this Guaranty in any material respect, (y) have a material adverse
effect on the results of operations, assets, prospects, or
financial condition of the Guarantor or (z) adversely impair in any
material respect the Guarantor’s ability to perform fully on
a timely basis its obligations under this Guaranty (a
“Material Adverse
Effect”).

 

(b)       Authorization;
Enforcement. The Guarantor has the requisite corporate or
limited liability company power and authority to enter into and to
consummate the transactions contemplated by this Guaranty, and
otherwise to carry out its obligations hereunder. The execution and
delivery of this Guaranty by the Guarantor and the consummation by
it of the transactions contemplated hereby have been duly
authorized by all requisite corporate or limited liability company
action on the part of the Guarantor. This Guaranty has been duly
executed and delivered by the Guarantor and constitutes the valid
and binding obligation of the Guarantor enforceable against the
Guarantor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating
to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general
application.

 

(c)       No
Conflicts. The execution, delivery and performance of this
Guaranty by the Guarantor and the consummation by the Guarantor of
the transactions contemplated thereby do not and will not (i)
conflict with or violate any provision of its Certificate of
Incorporation or organizational document or By-laws or (ii)
conflict with, constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which
the Guarantor is a party, or (iii) result in a violation of any
law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the
Guarantor is subject (including Federal and State securities laws
and regulations), or by which any material property or asset of the
Guarantor is bound or affected, except in the case of each of
clauses (ii) and (iii), such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as could
not, individually or in the aggregate, have or result in a Material
Adverse Effect. The business of the Guarantor is not being
conducted in violation of any law, ordinance or regulation of any
governmental authority, except for violations which, individually
or in the aggregate, do not have a Material Adverse
Effect.

 

 

 

-4-

 

 

 

(d)       Consents
and Approvals. The Guarantor is not required to obtain any
consent, waiver, authorization or order of, or make any filing or
registration with, any court or other federal, state, local,
foreign or other governmental authority or other person in
connection with the execution, delivery and performance by the
Guarantor of this Guaranty.

 

(e)       Purchase
Agreement. The representations and warranties of the Company
set forth in the Purchase Agreement as they relate to such
Guarantor, each of which is hereby incorporated herein by
reference, are true and correct as of each time such
representations are deemed to be made pursuant to such Purchase
Agreement, and the Purchasers shall be entitled to rely on each of
them as if they were fully set forth herein, provided that each
reference in each such representation and warranty to the
Company’s knowledge shall, for the purposes of this Section
3, be deemed to be a reference to such Guarantor’s
knowledge.

 

(f)       Foreign
Law. Each Guarantor has consulted with appropriate foreign
legal counsel with respect to any of the above representations for
which non-U.S. law is applicable. Such foreign counsel have advised
each applicable Guarantor that such counsel knows of no reason why
any of the above representations would not be true and accurate.
Such foreign counsel were provided with copies of this Subsidiary
Guarantee and the Transaction Documents prior to rendering their
advice.

 

4.       Covenants.

 

 

(a)       Each
Guarantor covenants and agrees with the Purchasers that, from and
after the date of this Guarantee until the Obligations shall have
been indefeasibly paid in full, such Guarantor shall take, and/or
shall refrain from taking, as the case may be, each commercially
reasonable action that is necessary to be taken or not taken, as
the case may be, so that no Event of Default (as defined in the
Senior Secured Convertible Note) is caused by the failure to take
such action or to refrain from taking such action by such
Guarantor.

 

(b)       So
long as any of the Obligations are outstanding, unless Purchasers
holding at least 51% of the aggregate principal amount of the then
outstanding Senior Secured Convertible Note shall otherwise consent
in writing, each Guarantor will not directly or indirectly on or
after the date of this Guarantee:

 

(i)       enter
into, create, incur, assume or suffer to exist any indebtedness for
borrowed money of any kind, including but not limited to, a
guarantee, 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 therefrom;

 

(ii)       enter
into, create, incur, assume or suffer to exist any liens 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 therefrom;

 

(iii)           amend
its certificate of incorporation, bylaws or other charter documents
so as to adversely affect any rights of any Purchaser;

 

(iv)       repay,
repurchase or offer to repay, repurchase or otherwise acquire more
than a de minimis number of shares of its securities or debt
obligations;

 

(v)       pay
cash dividends on any equity securities of the
Company;

 

(vi)       enter
into any transaction with any Affiliate of the Guarantor which
would be required to be disclosed in any public filing of the
Company with the Commission, unless such transaction is made on an
arm’s-length basis and expressly approved by a majority of
the disinterested directors of the Company (even if less than a
quorum otherwise required for board approval); or

 

(vii)
enter into any agreement with respect to any of the
foregoing.

 

 

 

 

-5-

 

 

 

5.       Miscellaneous.

 

(a)       Amendments
in Writing. None of the terms or provisions of this
Guarantee may be waived, amended, supplemented or otherwise
modified except in writing by the Purchasers.

 

(b)       Notices.
All notices, requests and demands to or upon the Purchasers or any
Guarantor hereunder shall be effected in the manner provided for in
the Purchase Agreement, provided that any such notice, request or
demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 5(b).

 

(c)       No
Waiver By Course Of Conduct; Cumulative Remedies. The
Purchasers shall not by any act (except by a written instrument
pursuant to Section 5(a)), delay, indulgence, omission or otherwise
be deemed to have waived any right or remedy hereunder or to have
acquiesced in any default under the Transaction Documents or Event
of Default. No failure to exercise, nor any delay in exercising, on
the part of the Purchasers, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power
or privilege. A waiver by the Purchasers of any right or remedy
hereunder on any one occasion shall not be construed as a bar to
any right or remedy which the Purchasers would otherwise have on
any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by
law.

 

(d)       Enforcement
Expenses; Indemnification.

 

(i)       Each
Guarantor agrees to pay, or reimburse the Purchasers for, all its
costs and expenses incurred in collecting against such Guarantor
under the guarantee contained in Section 2 or otherwise enforcing
or preserving any rights under this Guarantee and the other
Transaction Documents to which such Guarantor is a party,
including, without limitation, the reasonable fees and
disbursements of counsel to the Purchasers.

 

(ii)       Each
Guarantor agrees to pay, and to save the Purchasers harmless from,
any and all liabilities with respect to, or resulting from any
delay in paying, any and all stamp, excise, sales or other taxes
which may be payable or determined to be payable in connection with
any of the transactions contemplated by this
Guarantee.

 

(iii)       Each
Guarantor agrees to pay, and to save the Purchasers harmless from,
any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Guarantee to
the extent the Company would be required to do so pursuant to the
Purchase Agreement.

 

(iv)       The
agreements in this Section shall survive repayment of the
Obligations and all other amounts payable under the Purchase
Agreement and the other Transaction Documents.

 

(e)       Successor
and Assigns. This Guarantee shall be binding upon the
successors and assigns of each Guarantor and shall inure to the
benefit of the Purchasers and their respective successors and
assigns; provided that no Guarantor may assign, transfer or
delegate any of its rights or obligations under this Guarantee
without the prior written consent of the Purchasers.

 

(f)       Set-Off.
Each Guarantor hereby irrevocably authorizes the Purchasers at any
time and from time to time while an Event of Default under any of
the Transaction Documents shall have occurred and be continuing,
without notice to such Guarantor or any other Guarantor, any such
notice being expressly waived by each Guarantor, to set-off and
appropriate and apply any and all deposits, credits, indebtedness
or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time
held or owing by the Purchasers to or for the credit or the account
of such Guarantor, or any part thereof in such amounts as the
Purchasers may elect, against and on account of the obligations and
liabilities of such Guarantor to the Purchasers hereunder and
claims of every nature and description of the Purchasers against
such Guarantor, in any currency, whether arising hereunder, under
the Purchase Agreement, any other Transaction Document or
otherwise, as the Purchasers may elect, whether or not the
Purchasers have made any demand for payment and although such
obligations, liabilities and claims may be contingent or unmatured.
The Purchasers shall notify such Guarantor promptly of any such
set-off and the application made by the Purchasers of the proceeds
thereof, provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of
the Purchasers under this Section are in addition to other rights
and remedies (including, without limitation, other rights of
set-off) which the Purchasers may have.

 

 

 

-6-

 

 

 

(g)       Counterparts.
This Guarantee may be executed by one or more of the parties to
this Guarantee on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

 

(h)       Severability.
Any provision of this Guarantee which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.

 

(i)       Section
Headings. The Section headings used in this Guarantee are
for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the
interpretation hereof.

 

(j)       Integration.
This Guarantee and the other Transaction Documents represent the
agreement of the Guarantors and the Purchasers with respect to the
subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Purchasers
relative to subject matter hereof and thereof not expressly set
forth or referred to herein or in the other Transaction
Documents.

 

(k)       Governing
Laws. All questions concerning the construction, validity,
enforcement and interpretation of this Guarantee shall be governed
by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of
conflicts of law thereof. Each of the Company and the Guarantors
agree that all proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this
Guarantee (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, partners, members,
employees or agents) shall be commenced exclusively in the state
and federal courts sitting in the City of New York, Borough of
Manhattan. Each of the Company and the Guarantors 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 proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such proceeding
is improper. Each party hereto hereby irrevocably waives personal
service of process and consents to process being served in any such
proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such
party at the address in effect for notices to it under this
Guarantee 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 hereto hereby
irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Guarantee or the transactions
contemplated hereby.

 

(l)       Acknowledgements.
Each Guarantor hereby acknowledges that:

 

(i)       it
has been advised by counsel in the negotiation, execution and
delivery of this Guarantee and the other Transaction Documents to
which it is a party;

 

(ii)       the
Purchasers have no fiduciary relationship with or duty to any
Guarantor arising out of or in connection with this Guarantee or
any of the other Transaction Documents, and the relationship
between the Guarantors, on the one hand, and the Purchasers, on the
other hand, in connection herewith or therewith is solely that of
debtor and creditor; and

 

(iii)       no
joint venture is created hereby or by the other Transaction
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Guarantors and the
Purchasers.

 

 

 

-7-

 

 

 

(m)       Additional
Guarantors. The Company shall cause each of its subsidiaries
formed or acquired on or subsequent to the date hereof to become a
Guarantor for all purposes of this Guarantee by executing and
delivering an Assumption Agreement in the form of Annex 1
hereto.

 

(n)       Release
of Guarantors. Each Guarantor will be released from all
liability hereunder concurrently with the indefeasible repayment in
full of all amounts owed under the Purchase Agreement, the Senior
Secured Convertible Note and the other Transaction
Documents.

 

(o)       Seniority.
The Obligations of each of the Guarantors hereunder rank senior in
priority to any other Indebtedness (as defined in the Purchase
Agreement) of such Guarantor.

 

(p)       WAIVER
OF JURY TRIAL.
EACH GUARANTOR AND, BY ACCEPTANCE
OF THE BENEFITS HEREOF, THE PURCHASERS, HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM
THEREIN.

 

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

 

 (Signature Pages Follow)

 

 

 

-8-

 

 

 

IN
WITNESS WHEREOF, each of the undersigned has caused this Guarantee
to be duly executed and delivered as of the date first above
written.

 

 

	
 

	

EXACTUS ONE WORLD, LLC

 

	
 

	
 

	
 

	
 

	

By:

	

 /s/ Emiliano
Aloi

	
 

	

Name:

	

 Emiliano
Aloi

	
 

	

Title:

	

 President
& CEO – Exactus, Inc.

 

	
 

	

PARADISE MEDLIFE, LLC

 

 

	
 

	
 

	
 

	
 

	

By:

	

  /s/
Emiliano Aloi

	
 

	

Name:

	

 Emiliano
Aloi

	
 

	

Title:

	

 President
& CEO – Exactus, Inc.

 

 

 

 

 

-9-

 

 

 

SCHEDULE 1

 

GUARANTORS

 

The
following are the names, notice addresses and jurisdiction of
organization of each Guarantor.

 

	
 

	
 

	
 

	
 

	

COMPANY

	
 

	
 

	

JURISDICTION
OF

	
 

	

OWNED
BY

	
 

	
 

	

INCORPORATION

	
 

	

PERCENTAGE

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

Exactus
One World, LLC

	
 

	

Oregon

	
 

	

100%

	
 

	
 

	
 

	
 

	
 

	

Paradise
Medlife, LLC

	
 

	

Florida

	
 

	

100%

 

 

 

-10-

 

 

 

Annex 1
to

 

SUBSIDIARY GUARANTEE

 

ASSUMPTION
AGREEMENT, dated as of November 27, 2019 made by Exactus, Inc., a
Nevada corporation (the “Additional Guarantor”),
in favor of the Purchasers pursuant to the Purchase Agreement
referred to below. All capitalized terms not defined herein shall
have the meaning ascribed to them in such Purchase
Agreement.

 

W I T N E S S E T H:

 

WHEREAS, Exactus,
Inc., a Nevada corporation (the “Company”) and the
Purchasers have entered into a Securities Purchase Agreement, dated
as of November 27, 2019 (as amended, supplemented or otherwise
modified from time to time, the “Purchase
Agreement”);

 

WHEREAS, in
connection with the Purchase Agreement, the Subsidiaries of the
Company (other than the Additional Guarantor) have entered into the
Subsidiary Guarantee, dated as of November 27, 2019 (as amended,
supplemented or otherwise modified from time to time, the
“Guarantee”) in favor of
the Purchasers;

 

WHEREAS, the
Purchase Agreement requires the Additional Guarantor to become a
party to the Guarantee; and

 

WHEREAS, the
Additional Guarantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the
Guarantee;

 

NOW, THEREFORE, IT IS AGREED:

 

1.       Guarantee.
By executing and delivering this Assumption Agreement, the
Additional Guarantor, as provided in Section 5(m) of the Guarantee,
hereby becomes a party to the Guarantee as a Guarantor thereunder
with the same force and effect as if originally named therein as a
Guarantor and, without limiting the generality of the foregoing,
hereby expressly assumes all obligations and liabilities of a
Guarantor thereunder. The information set forth in Annex 1 hereto
is hereby added to the information set forth in Schedule 1 to the
Guarantee. The Additional Guarantor hereby represents and warrants
that each of the representations and warranties contained in
Section 3 of the Guarantee is true and correct on and as the date
hereof as to such Additional Guarantor (after giving effect to this
Assumption Agreement) as if made on and as of such
date.

 

2.       Governing
Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE
OF NEW YORK.

 

IN
WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first
above written.

 

	
 

	

[ADDITIONAL GUARANTOR]

	
 

	
 

	
 

	
 

	

By:

	

                                                      

	
 

	

Name:

	
 

	
 

	

Title:

	
 

 

 

-11-

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