Document:

Exhibit
10.3

 

SOFTWARE
LICENSE AGREEMENT

  

This Software License Agreement (the “Agreement”),
effective as of January 01, 2017 (the “Effective Date”), is entered into by and between Social Life Network,
Inc., located at 8100 East Union Ave. STE 1809, Denver, Colorado 80237 (the “Licensor”) and Sports Social Network,
Inc., located at 3465 South Gaylord Ct. STE. A401, Englewood, Colorado 80113 (the “Licensee,” together with Licensor,
the “Parties,” and each a “Party”).

 

WHEREAS
Licensor is the legal and beneficial owner of the Licensed Software and desires to license the Licensed Software to Licensee;
and

 

WHEREAS
Licensee desires to obtain a license to use the Licensed Software subject to the terms and conditions of this Agreement;

 

NOW,
THEREFORE, in consideration of the mutual covenants, terms, and conditions set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

		1.	DEFINITIONS.
                                         For purposes of this Agreement,

 

		a.	“Agreement”
                                         has the meaning set forth in the preamble.

 

		b.	“Confidential
                                         Information” means any non-public information in any form and however transmitted,
                                         whether orally, visually, in writing, or by electronic communication, that both Parties
                                         reasonably and in good faith deem to be confidential or proprietary. Confidential Information
                                         includes, but is not limited to, technological disclosures, trade secrets, ideas, concepts,
                                         know-how, business operations, plans, strategies, customer information, pricing information,
                                         and any other information that the disclosing Party is contractually or otherwise bound
                                         to keep confidential. Confidential Information may, but is not obligated to be designated,
                                         marked, or otherwise identified as “confidential.” See exclusions in the
                                         section titled “CONFIDENTIALITY” below.

 

		c.	“Documentation”
                                         means any and all manuals, instructions, and other end user materials that Licensor
                                         provides to Licensee describing the software’s functionality, components, technical
                                         specifications, capabilities, requirements, or limitations. Documentation may include,
                                         but is not limited to, aspects of the software that are of practical importance to Licensee,
                                         such as instructions on installation, configuration, integration, operation, use, support,
                                         or maintenance.

  

     

    

    

 

		d.	“Effective
                                         Date” has the meaning set forth in the preamble. It is the start date for this
                                         Agreement where all rights and obligations herein become operational and enforceable.

 

		e.	“Intellectual
                                         Property Rights” means any and all registered and unregistered rights to plans,
                                         ideas, designs, or other intangible assets. Such rights are granted, applied for, or
                                         otherwise now or hereafter in existence under or related to any patent, copyright, trademark,
                                         trade secret, database protection, right of publicity, other intellectual property rights
                                         laws, and all similar or equivalent rights or forms of protection, in any part of the
                                         world.

 

		f.	“Law”
                                         means any statute, code, ordinance, rule, regulation, constitution, order, treaty,
                                         precedent, judgment, or other legal requirements of any authority of competent jurisdiction,
                                         including, but not limited to, federal, state, local, or foreign governments, political
                                         agencies or subdivisions thereof, or any appropriate courts or tribunals.

 

		g.	“Licensed
                                         Software” means software version 4.0 of SLN - Social Networking and eCommerce
                                         Platform, any ancillary data files, modules, libraries, tutorials, or demonstration programs,
                                         and any Maintenance Releases provided to Licensee according to this Agreement.

 

		h.	“Licensee”
                                         has the meaning set forth in the preamble.

 

		i.	“Licensor”
                                         has the meaning set forth in the preamble.

 

		j.	“Maintenance
                                         Release” means any update, upgrade, release, or other adaptation or modification
                                         of the Licensed Software or Documentation that Licensor may optionally and periodically
                                         provide to Licensee during the Term. Such release may include, but is not limited to,
                                         error corrections, enhancements, improvements, or other changes to the Licensed Software’s
                                         functionality, compatibility, capabilities, performance, efficiency, user interface,
                                         or quality. Such release is separate and distinct from any New Version Licensor may choose
                                         to release during the Term.

 

		k.	“New
                                         Version” means any new variant of the Licensed Software that Licensor may introduce
                                         and market from time to time as a distinct licensed product. A New Version may be indicated
                                         by Licensor’s designation of a new version or release number. Licensor may make
                                         a New Version available to Licensee at an additional cost under a separate agreement
                                         or by written amendment.

 

		l.	“Parties”
                                         mean the Licensor and Licensee collectively.

 

		m.	“Party”
                                         means the Licensor or Licensee individually.

  

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		n.	“Permitted
                                         Use” means use of the Licensed Software by an authorized user for specific
                                         purposes agreed upon herein. Licensee can use the Social Networking and eCommerce Platform
                                         for real estate website and mobile applications in all countries, without exception,
                                         and under any brand name that authorized by Social Life Network, Inc. CEO or CTO, in
                                         advance of the deployment of the technology platform. Any unauthorized deployment or
                                         resale of the technology platform is strictly prohibited.

 

		o.	“Open-Source
                                         Components” means any software component that is subject to an open-source
                                         copyright license agreement. Qualifying open-source copyright license agreements include,
                                         but are not limited to, Apache License 2.0, BSD 3-Clause “New” or “Revised”
                                         license, BSD 20-Clause “Simplified” or “FreeBSD” license, GNU
                                         General Public License, GNU Library or “Lesser” General Public License, MIT
                                         License, Mozilla Public License 2.0, Common Development and Distribution License, Eclipse
                                         Public License, and any other obligations, restrictions, or license agreements that substantially
                                         conform to the “Open Source Definition” as prescribed by the Open Source
                                         Initiative or otherwise may require third-party disclosure or licensing if any source
                                         code of such software components is used or compiled.

 

		p.	“Term”
                                         has the meaning set forth in the Term section.

 

		2.	LICENSE
                                         GRANT. Subject to the terms and conditions of this Agreement and the Parties’
                                         compliance therewith, Licensor hereby grants to Licensee, solely for defined Permitted
                                         Use, a non-exclusive, non-sublicensable, and non-transferable license to use the Licensed
                                         Software and Documentation during the Agreement Term.

 

		a.	Scope
                                         of Licensed Access and Use. Licensee can install, use, and run an unlimited number
                                         of copies of the Licensed Software on any device or network.

 

		b.	Additional
                                         Copy. Licensee is permitted to duplicate a copy of the Licensed Software exclusively
                                         for testing, disaster recovery, or archival purposes. Any copy of the Licensed Software
                                         made by Licensee, for any authorized or unauthorized purposes, continues to be Licensor’s
                                         exclusive property, is subject to the terms and conditions of this Agreement, and must
                                         include all Intellectual Property Rights notices contained in the original Licensed Software
                                         and Documentation.

 

		c.	Open-Source
                                         Licenses. Should the Licensed Software include any Open-Source Components, Licensee’s
                                         use of the Open-Source Components will be governed by, and subject to, the terms and
                                         conditions of the related open-source and public licenses. Licensor will provide Licensee
                                         with the license name, author information, license source, access information, and other
                                         relevant information for Open-Source Components.

  

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		3.	LICENSE
                                         RESTRICTIONS. Except as expressly permitted in this Agreement, and subject to the
                                         Open-Source Components if applicable, Licensee will not, and will not permit any third
                                         party to,

 

		a.	reproduce
                                         any portion of the Licensed Software for any purpose except as otherwise authorized in
                                         this Agreement;

 

		b.	decode,
                                         disassemble, reverse engineer, or otherwise attempt to derive or gain access to any portion
                                         the Licensed Software’s source code;

 

		c.	adopt,
                                         build upon, correct, modify, translate, or otherwise improve or create derivative works
                                         of the Licensed Software;

 

		d.	lend,
                                         publish, rent, lease, sell, sublicense, assign, transfer, or otherwise make available
                                         to any third party not authorized within this Agreement the Licensed Software in any
                                         manner, including, but not limited to, access to the Licensed Software on the internet
                                         or any timesharing, service bureau, software as a service, cloud, or similar technology
                                         or service;

 

		e.	breach
                                         or circumvent any disclosed or undisclosed security device or intended protection used
                                         for or contained in the Licensed Software or Documentation;

 

		f.	efface,
                                         alter, obscure, translate, combine, or otherwise change any trademarks, disclaimers,
                                         warranties, Documentation terms, Intellectual Property Rights, proprietary rights, or
                                         any symbols, notices, marks, serial numbers, or identification on or relating to any
                                         copy of the Licensed Software or Documentation;

 

		g.	use
                                         the Licensed Software in any manner or for any purpose that infringes, misappropriates,
                                         or otherwise violates any Intellectual Property Rights or any applicable Law;

 

		h.	use
                                         the Licensed Software for the purposes of (i) comparative or competitive analysis of
                                         the Licensed Software; (ii) developing, using, or providing a competing software product
                                         or service; or (iii) any other purpose that is to Licensor’s detriment or commercial
                                         disadvantage;

 

		i.	use
                                         the Licensed Software, alone or in part, in connection with any hazardous environments,
                                         systems, or applications; any safety response systems; any safety-critical applications;
                                         or any applications where the failure of the Licensed Software may reasonably and foreseeably
                                         lead to personal injury, severe physical damage, or severe property damage; or

  

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		j.	use
                                         the Licensed Software, Documentation, or any Open-Source Components for any purpose not
                                         expressly permitted under Permitted Use or in any manner not expressly permitted by this
                                         Agreement or the controlling Open-Source License.

 

		4.	TERM.
                                         The term of this Agreement commences as of the Effective Date and will continue in
                                         effect indefinitely until termination, pursuant to the Termination section under this
                                         Agreement.

 

		5.	DELIVERY.
                                         Licensor will deliver one copy of the Licensed Software electronically to Licensee
                                         on January 01, 2017.

 

		6.	INSTALLATION.
                                         Licensor will install the Licensed Software on Licensee’s computers, electronic
                                         devices, or systems in a commercially reasonable manner at Licensor’s discretion.

 

		7.	FEES
                                         AND TAXES. In consideration of the rights granted to Licensee under this Agreement,
                                         Licensee agrees to pay to Licensor the following fees in accordance to the payment terms
                                         set forth in this Agreement:

 

		a.	Social
                                         Life Network, Inc. will receive $125,000 USD annually for the first two years of this
                                         agreement, and thereafter will receive 20% of the net profits from all monthly subscriptions
                                         and online ad sales from licensee, paid annually, on the 31st day of January for the
                                         preceding year. Early payment or installment payments on a monthly or quarterly basis
                                         are allowed.

 

		b.	Taxes.
                                         All fees are exclusive of taxes, duties, and other similar assessments. Licensee
                                         is responsible for all sales, service, use, exercise, and all other similar taxes, duties,
                                         and charges of any kind imposed by any governmental, federal, state, local, or regulatory
                                         authority on any amounts payable by Licensee hereunder. Notwithstanding the forgoing,
                                         Licensor is solely responsible for its own income tax.

 

		8.	PAYMENT

 

		a.	Payment
                                         Terms. Installments -or- Annual Lump Sum. Licensee will make all payments in U.S.
                                         currency by check to the Notice address or by wire transfer to any account as Licensor
                                         may specify in writing from time to time.

 

		b.	Late
                                         Payment. If any payment to Licensor is delinquent, then in addition to all other
                                         remedies available to Licensor,

 

		i.	Licensor
                                         may charge interest on the past due amount at a rate no higher than the highest rate
                                         permitted under applicable Law;

  

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		ii.	Licensee
                                         must reimburse Licensor for all reasonable costs incurred to collect any and all late
                                         payment and associated interest amounts, including, but not limited to, any attorneys’
                                         fee, court costs, and collection agency fees; and

 

		iii.	if
                                         payment delinquency continues for five business days following written notice or demand
                                         for payment, Licensor may exercise any or all of the following remedies: (1) technologically
                                         disable Licensee’s use of the Licensed Software; (2) withhold, suspend, or revoke
                                         this license grant; and (3) terminate this Agreement pursuant to the Termination section.

 

		9.	TESTING
                                         AND ACCEPTANCE

 

		a.	Acceptance
                                         Parameters and Testing. Acceptance testing will be conducted by Licensor to establish
                                         whether the Licensed Software operates properly and in accordance with Documentation.
                                         Licensee will supply to Licensor suitable test data and the associated results Licensee
                                         reasonably expects to be achieved by using the Licensed Software. Licensor will carry
                                         out testing, in the presence of Licensee or its authorized representative, upon a mutually
                                         acceptable date and time after delivery and installation of Licensed Software.

 

		b.	Testing
                                         Failure. If the initial acceptance testing does not yield expected results, Licensor
                                         will, at its own cost, correct the errors and repeat the acceptance testing again under
                                         the same testing conditions as the initial test in the presence of Licensee or its authorized
                                         representatives. If the subsequent acceptance testing also fails to yield expected results
                                         and such failure is reasonably determined to be caused solely by the Licensed Software,
                                         Licensee may terminate this Agreement upon written notice to Licensor. On termination,
                                         Licensor will refund any and all license fees already paid by Licensee to Licensor under
                                         this Agreement. This is Licensee’s sole and exclusive remedy for any unresolved
                                         acceptance testing failures.

 

		c.	Acceptance.
                                         Notwithstanding any acceptance testing rights, requirements, and obligations herein,
                                         Licensee is deemed to have accepted the Licensed Software if

 

		i.	the
                                         acceptance testing conducted by Licensor and witnessed by Licensee or its authorized
                                         representative is successful;

 

		ii.	Licensee
                                         fails to provide the acceptance test parameters or voluntarily forgoes the acceptance
                                         testing process; or

 

		iii.	Licensee
                                         commences intended use of Licensed Software irrespective of acceptance testing parameters,
                                         process, or result.

  

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		10.	MAINTENANCE
                                         RELEASE. During the Term, Licensor may, at Licensor’s sole option and discretion,
                                         provide Licensee with Maintenance Releases and updated Documentation. All Maintenance
                                         Releases are considered part of the Licensed Software and are subject to all applicable
                                         terms and conditions in this Agreement. Licensee agrees to install all Maintenance Releases
                                         as soon as practicable after receipt. Licensor agrees to provide any Maintenance Releases
                                         free of charge.

 

		11.	NEW
                                         VERSION. Licensee does not have any right or option to receive any New Versions of
                                         the Licensed Software that Licensor, in its sole discretion, may release neither during
                                         nor after the Term. Licensee may seek to negotiate a new, separate, or amended license
                                         grant for any New Version at Licensor’s then-current price for the New Version,
                                         provided Licensee is in compliance with the terms and conditions of this Agreement.

 

		12.	TITLE,
                                         INTELLECTUAL PROPERTY RIGHTS, AND INFRINGEMENT

 

		a.	Ownership.
                                         Licensee acknowledges and agrees that

 

		i.	Licensor
                                         is and will remain the sole and exclusive owner of all rights, title, and interest in
                                         and to the Licensed Software, Documentation, Maintenance Release, New Version, and all
                                         Intellectual Property Rights associated herein, subject only to the rights of any disclosed
                                         third parties, within any Open-Source Components, and the limited license granted to
                                         Licensee under this Agreement;

 

		ii.	the
                                         Licensed Software, Documentation, and Intellectual Property Rights are licensed, not
                                         sold, to Licensee. Licensee does not, has not, and will not acquire any ownership interest
                                         in the Licensed Software, Documentation, or any related Intellectual Property Rights
                                         through this Agreement;

 

		iii.	nothing
                                         in this Agreement grants any implied rights to Licensee, including by implication, waiver,
                                         or estoppel, in any Intellectual Property Rights or other rights, title, or interest
                                         in any portion of the Licensed Software and Documentation; and

 

		iv.	Licensee
                                         unconditionally and irrevocably assigns to Licensor its entire right, title, and interest
                                         in any Intellectual Property Rights that Licensee may have currently or in the future
                                         relating to the Licensed Software or Documentation, including any derivative works or
                                         patent improvement rights, however held or acquired.

 

		b.	Licensee
                                         Cooperation and Notice of Infringement. Licensee will, during the Term,

  

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		i.	secure
                                         and protect the Licensed Software and Documentation from infringement, misappropriation,
                                         misuse, theft, or other unauthorized access through all commercially reasonable measures
                                         and precautions similar to those Licensee would employ to secure and protect its own
                                         intellectual property;

 

		ii.	take
                                         all reasonable steps as Licensor may require and request to maintain the validity, enforceability,
                                         and ownership of all Licensor’s Intellectual Property Rights herein;

 

		iii.	promptly
                                         notify Licensor in writing if Licensee becomes aware of any actual or suspected infringement,
                                         misappropriation, misuse, theft, unauthorized access, or other violations of Licensor’s
                                         Intellectual Property Rights in or relating to the Licensed Software or Documentation;

 

		iv.	promptly
                                         notify Licensor in writing of any claim that the Licensed Software or Documentation,
                                         in whole or in part, infringes, misappropriates, or otherwise violates any rights, including
                                         Intellectual Property Rights, of other persons or entities; and

 

		v.	fully
                                         cooperate with and assist Licensor in all commercially reasonable ways, including but
                                         not limited to providing records, information, depositions, and testimonies, and at Licensor’s
                                         sole expense, in any claim, suit, action, or proceeding to prosecute or defend Licensor’s
                                         rights in the Licensed Software, Documentation, and any Intellectual Property Rights
                                         herein.

 

		13.	SECURITY
                                         MEASURE DISCLOSURE. The Licensed Software may contain security features that prevent
                                         unauthorized or illegal use of the Licensed Software. Licensee acknowledges and agrees
                                         that Licensor may use these features and other lawful measures to verify Licensee’s
                                         compliance and to enforce Licensor’s rights under this Agreement. Licensee further
                                         acknowledges and agrees that Licensor may, from time to time at Licensor’s sole
                                         discretion, gather Licensee’s technical, usage, and other related information without
                                         disruption to Licensee’s use and for the sole purpose of improving the Licensed
                                         Software’s performance, developing Maintenance Releases, and developing New Versions.

 

		14.	VERIFICATION
                                         AND AUDIT

 

		a.	Verification.
                                         At Licensor’s written request, Licensee will confirm in writing the actual
                                         scope of Licensee’s access and use of Licensed Software and list all locations
                                         of actual use if applicable.

  

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		b.	Audit
                                         Procedure. Licensor or its representative may inspect and audit Licensee’s
                                         use of the Licensed Software under this Agreement at any time during the Term upon reasonable
                                         notice and request. All such audits will be conducted during regular business hours.
                                         Licensor will cooperate with Licensee to ensure such audits do not unreasonably interfere
                                         with Licensee’s business operations. Licensee agrees to make available all technology,
                                         records, equipment, information, and personnel, and to provide all cooperation and assistance
                                         as necessary for Licensor to reasonably conduct the audit. Licensor agrees to only examine
                                         information directly related to Licensee’s Licensed Software use. Licensor will
                                         keep confidential any information Licensee deems confidential that may be directly or
                                         incidentally disclosed during such audits.

 

		c.	Excessive
                                         Use Result. If the verification or audit determines that Licensee’s Licensed
                                         Software use exceeds the usage or scope permitted by this Agreement, Licensee agrees
                                         to pay Licensor all amounts due for excessive use of the Licensed Software as negotiated
                                         at such time.

 

		15.	CONFIDENTIALITY

 

		a.	Confidential
                                         Information. In connection with this Agreement, each Party may disclose or make available
                                         to the other Party Confidential Information which includes, but is not limited to, the
                                         Licensed Software, Documentation, and any terms of this Agreement.

 

		b.	Exclusions
                                         and Exceptions. Confidential Information excludes information that

 

		i.	was
                                         rightfully and lawfully known to the recipient without any restrictions on use or disclosure
                                         prior to disclosure by disclosing Party in connection with this Agreement;

 

		ii.	was
                                         or becomes part of the public domain by means other than by the recipient or any of the
                                         recipient’s representatives’ violations of this Agreement;

 

		iii.	was
                                         or is received by the recipient on a non-confidential basis from a third party that was
                                         not, or is not, at the time of such receipt, under any obligation to maintain its confidentiality;
                                         or

 

		iv.	was
                                         or is independently developed by the recipient without reference to or use of any Confidential
                                         Information.

 

		c.	Protection
                                         of Confidential Information. As a condition of receiving any Confidential Information,
                                         the recipient will, for Throughout the active licensing agreement, plus one year after.,

  

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		i.	only
                                         access or use Confidential Information if absolutely necessary to exercise the recipient’s
                                         rights or perform the recipient’s obligations under this Agreement;

 

		ii.	except
                                         when compelled by Law, not disclose or permit access to Confidential Information other
                                         than to the recipient’s representatives on a need-to-know basis for the recipient
                                         to exercise its rights or perform its obligations under this Agreement, under strict
                                         information and understanding of the confidential nature of Confidential Information
                                         and the recipient’s obligations to protect Confidential Information, and with acknowledgment
                                         from such representatives that they too are bound by the confidentiality and restricted
                                         use obligations set forth herein;

 

		iii.	use,
                                         at minimum, the same degree of care that recipient uses to protect its own similarly
                                         sensitive information, and no less than a generally commercially reasonable degree of
                                         care, to secure and protect Confidential Information from unauthorized use, access, or
                                         disclosure;

 

		iv.	promptly
                                         notify the disclosing Party in writing of any actual or suspected unauthorized use or
                                         disclosure of Confidential Information and cooperate with disclosing Party by taking
                                         all reasonable steps to prevent further unauthorized use or disclosure; and

 

		v.	ensure
                                         recipient’s representatives comply with the terms of this section and are responsible
                                         and liable for their noncompliance, if any.

 

		d.	Trade
                                         Secrets Confidentiality Duration. Notwithstanding any other provisions in this Agreement,
                                         the recipient is obligated to protect any Confidential Information that constitutes as
                                         trade secrets under any applicable Law until such Confidential Information ceases to
                                         qualify for trade secret protection by operation of Law.

 

		e.	Compelled
                                         Disclosure. To the extent permitted by Law, if the recipient or its representatives
                                         are compelled by Law to disclose any Confidential Information, the recipient must promptly,
                                         and prior to such disclosure, notify the disclosing Party in writing of such requirement
                                         to allow the disclosing Party the opportunity to seek a protective order or other legal
                                         remedy. The recipient must also provide reasonable assistance to the disclosing Party
                                         to oppose such disclosure, to seek a protective order, or to seek other disclosure limitations
                                         or remedies. If disclosure is unavoidable, the recipient may disclose only such Confidential
                                         Information that recipient is legally required to disclose. Upon disclosing Party’s
                                         request, the recipient must use commercially reasonable efforts to obtain assurances
                                         of confidential treatment of all compelled Confidential Information from the applicable
                                         court or legal authority.

  

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		16.	TERMINATION.
                                         This Agreement may be terminated at any time

 

		a.	by
                                         Licensor if Licensee fails to make payment where such failures continue more than five
                                         business days after the due date, effective on written notice of termination to Licensee;

 

		b.	by
                                         either Party for the other Party’s material breach of this Agreement that is incurable
                                         or uncured by breaching party for 30 days after being served with notice of breach and
                                         demand for cure, effective on written termination notice to the breaching Party;

 

		c.	by
                                         Licensor, effective immediately irrespective of written notice, if Licensee

 

		i.	is
                                         dissolved or liquidated or takes any corporate action for such purposes;

 

		ii.	becomes
                                         insolvent or is generally unable to pay its debts as they become due;

 

		iii.	becomes
                                         the subject of any bankruptcy proceedings, voluntary or involuntary, under any domestic
                                         or foreign bankruptcy or insolvency Law;

 

		iv.	makes
                                         or seeks to make a general assignment for the benefit of its creditors; or

 

		v.	applies
                                         for, or consents to, the appointment of a trustee, receiver, or custodian for a substantial
                                         part of its property; and

 

		d.	by
                                         both Parties upon mutual written agreement.

 

		17.	TERMINATION
                                         OR EXPIRATION EFFECTS. Upon early termination or the natural expiration of this Agreement,

 

		a.	all
                                         licenses, rights, and authorizations granted to Licensee herein will immediately terminate
                                         and Licensee will

 

		i.	promptly
                                         cease all use of the Licensed Software and Documentation;

 

		ii.	within
                                         five business days deliver to Licensor, or at Licensor’s written request, destroy
                                         and permanently erase from all Licensee’s and their representatives’ devices,
                                         equipment, and systems, the Licensed Software, Documentation, and all Licensor’s
                                         Confidential Information; and

 

		iii.	certify
                                         in writing that Licensee, and any of Licensee’s representatives, has complied with
                                         the termination requirements herein; and

  

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		b.	all
                                         amounts payable of any kind under this Agreement are immediately due and payable effective
                                         on the expiration date or early termination date.

 

		18.	MUTUAL
                                         REPRESENTATIONS AND WARRANTIES. Each Party represents, warrants, and covenants to
                                         the other Party that

 

		a.	it
                                         is duly established, validly existing, and in good standing to conduct business as a
                                         sole proprietorship, partnership, company, corporation, trust, organization, or any other
                                         valid entity under the Laws of its jurisdiction;

 

		b.	it
                                         has the full right, power, and authority to enter into this Agreement;

 

		c.	it
                                         is capable of performing its obligations and granting any licenses, rights, and authorizations
                                         specified under this Agreement;

 

		d.	the
                                         executing representative for each Party is duly authorized to represent each Party in
                                         this Agreement by all necessary business formalities and organizational actions; and

 

		e.	this
                                         Agreement is legal, valid, binding on, and enforceable against each Party when fully
                                         and mutually executed and delivered.

 

		19.	LIMITED
                                         WARRANTY

 

		a.	Warranty.
                                         Licensor warrants to Licensee, for 180 calendar days from the Effective Date or for
                                         the Term, whichever is less, that

 

		i.	the
                                         Licensed Software substantially conforms in all material respect to the Documentation
                                         specifications when it is installed, operated, and used as recommended in the Documentation
                                         and in accordance with this Agreement;

 

		ii.	all
                                         Maintenance Releases, when correctly and promptly installed in compliance with the Documentation
                                         and this Agreement, will not materially affect the Licensed Software’s functionality;
                                         and

 

		iii.	any
                                         storage media on which the Licensed Software may be provided will be free of substantial
                                         defect under normal use.

 

		b.	Conditions.
                                         Licensor’s aforementioned limited warranties are valid and apply only if Licensee
                                         complies with the following conditions:

  

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		i.	Licensee
                                         notifies Licensor in writing of any warranty breach during the limited warranty period.

 

		ii.	Licensee
                                         promptly installs all Maintenance Releases that Licensor previously made available to
                                         Licensee in order of distribution.

 

		iii.	Licensee
                                         is in compliance with and current on all terms and conditions of this Agreement, including
                                         the payment terms, as of the warranty breach notification date.

 

		c.	Exceptions.
                                         Notwithstanding any provisions to the contrary, Licensor’s aforementioned limited
                                         warranties are not valid and do not apply to problems arising out of or relating to

 

		i.	any
                                         modification or damage to the Licensed Software or its storage media caused by the Licensee
                                         or its representatives;

 

		ii.	any
                                         Licensed Software operation or use not expressly specified and permitted in the Documentation
                                         or this Agreement, including incorporating the Licensed Software in or with any non-Licensor
                                         approved technology or service unless otherwise expressly permitted by Licensor in writing;

 

		iii.	Licensee’s,
                                         its representatives’, or any third party’s negligence, abuse, misapplication,
                                         or misuse of the Licensed Software, including any use not expressly specified and permitted
                                         in the Documentation or otherwise expressly authorized by Licensor in writing;

 

		iv.	Licensee’s
                                         failure to promptly install the Maintenance Releases previously provided by Licensor
                                         in the order it was received;

 

		v.	Licensee’s
                                         or a third party’s system or network;

 

		vi.	any
                                         Open-Source Components, beta software, incomplete sample, demonstration or testing software,
                                         temporary software modules, or any software for which Licensor does not receive a license
                                         fee;

 

		vii.	Licensee’s
                                         breach of any material provision of this Agreement; or

 

		viii.	any
                                         other causes or conditions outside Licensor’s reasonable control.

 

		d.	Remedy.
                                         If Licensor breaches, or is alleged to have breached, any limited warranties herein,
                                         Licensor may, at its sole option and expense, take any of the following steps to appropriately
                                         remedy such breach:

  

    	 	13	 

    

    

 

		i.	Repair
                                         the Licensed Software.

 

		ii.	Amend,
                                         supplement, or replace any incomplete or inaccurate Documentation.

 

		iii.	Replace
                                         the Licensed Software or Maintenance Releases with functionally equivalent software that,
                                         upon its replacement, constitutes the Licensed Software hereunder.

 

		iv.	Replace
                                         any defective storage media on which Licensor provided the Licensed Software.

 

		v.	Terminate
                                         this Agreement and, provided that Licensee fully complies with its post-termination obligations,
                                         promptly prorate and refund Licensee any prepaid amount by Licensee for any period after
                                         the termination date.

 

		e.	Sole
                                         Remedy. Should Licensor fail to cure a warranty breach or terminate this Agreement
                                         within a reasonable time period after Licensor’s receipt of Licensee’s timely
                                         written notice of such breach, Licensee can terminate this Agreement as provided herein.
                                         Provided Licensee fully complies with its post-termination obligations, Licensor must
                                         promptly prorate and refund Licensee any prepaid amount by Licensee for any period after
                                         the termination date. THIS IS LICENSEE’S SOLE REMEDY AND LICENSOR’S ENTIRE
                                         OBLIGATION AND LIABILITY FOR ANY LIMITED WARRANTY BREACH UNDER THIS AGREEMENT.

 

		f.	Disclaimer
                                         of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT AND FOR THE EXPRESS
                                         LIMITED WARRANTIES HEREIN, ALL LICENSED SOFTWARE, DOCUMENTATION, MAINTENANCE RELEASE,
                                         PRODUCTS, INFORMATION, MATERIAL, AND SERVICES PROVIDED BY LICENSOR ARE PROVIDED “AS
                                         IS, WHERE IS,” WITH ALL FAULTS AND WITHOUT WARRANTY OF ANY KIND, WHETHER WRITTEN,
                                         ORAL, EXPRESS, IMPLIED, STATUTORY, OR ARISING FROM ANY COURSE OF DEALING, USAGE, OR TRADE
                                         PRACTICE. LICENSOR SPECIFICALLY AND EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY,
                                         FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS
                                         TO THIRD PARTIES, PATENT VALIDITY, OPERATION WITHOUT INTERRUPTION, ACHIEVEMENT OF LICENSEE’S
                                         REQUIREMENTS OR INTENDED RESULTS, OR COMPATIBILITY WITH ANY OTHER GOODS, SERVICES, TECHNOLOGIES,
                                         OR MATERIALS EXCEPT AS EXPRESSLY SET FORTH IN THE DOCUMENTATION. FURTHERMORE, AND WITHOUT
                                         LIMITING THE FOREGOING, LICENSOR MAKES NO WARRANTY OF ANY KIND THAT THE LICENSED SOFTWARE
                                         OR DOCUMENTATION IS OR WILL BE SECURE, ACCURATE, COMPLETE, OR FREE OF HARMFUL CODE OR
                                         ERROR. ALL OPEN-SOURCE COMPONENTS AND OTHER THIRD-PARTY MATERIALS ARE PROVIDED “AS
                                         IS” WITH ALL FAULTS AND WITHOUT WARRANTY OF ANY KIND. ANY OPEN-SOURCE COMPONENTS
                                         OR THIRD-PARTY REPRESENTATION OR WARRANTY IS STRICTLY LIMITED TO LICENSEE AND THE THIRD-PARTY
                                         OWNER OR DISTRIBUTOR OF SUCH OPEN-SOURCE COMPONENTS AND THIRD-PARTY MATERIALS AND UNRELATED
                                         TO LICENSOR.

  

    	 	14	 

    

    

 

		20.	INDEMNIFICATION

 

		a.	Licensor
                                         Indemnification. Licensor will indemnify, defend, and hold harmless Licensee, its
                                         officers, directors, employees, agents, affiliates, and other representatives from and
                                         against any and all losses incurred by Licensee arising from any third-party action,
                                         suit, or claim that alleges the Licensed Software, or any use of the Licensed Software
                                         in accordance with this Agreement, infringes any Intellectual Property Rights.

 

		b.	Licensor
                                         Indemnification Exceptions. The foregoing Licensor indemnification does not apply
                                         to the extent that such actions or losses arise from any allegation of or relating to
                                         any

 

		i.	patent,
                                         copyright, or trademarks issued on a patent, copyright, or trademark application published
                                         or granted after the Effective Date;

 

		ii.	unauthorized,
                                         unlicensed, and unpermitted modification of the Licensed Software without Licensor’s
                                         express knowledge, written consent, and in direct contradiction to Licensor’s Documentation
                                         specifications;

 

		iii.	unauthorized,
                                         unlicensed, and unpermitted use of the Licensed Software outside the purpose, scope,
                                         or manner authorized by this Agreement or in any manner contrary to Licensor’s
                                         instructions;

 

		iv.	Open-Source
                                         Components, other third-party materials, or any material outside of Licensor’s
                                         exclusive control;

 

		v.	failure
                                         to promptly install and implement any Maintenance Release or Licensed Software replacement
                                         in order received and made available to Licensee by Licensor;

 

		vi.	Licensed
                                         Software use after Licensee’s receipt of Licensor’s written notice that such
                                         continued use may be alleged to or actually infringe upon, misappropriate, or otherwise
                                         violate a third party’s rights;

  

    	 	15	 

    

    

 

		vii.	Open-Source
                                         Components or other third-party materials;

 

		viii.	negligence,
                                         abuse, misapplication, or misuse of the Licensed Software by or on behalf of Licensee,
                                         its representatives, or a third party;

 

		ix.	causes
                                         or conditions outside Licensor’s commercially reasonable control, including, but
                                         not limited to, any third-party equipment error or Licensee’s own system bugs,
                                         defects, or malfunctions; or

 

		x.	actions
                                         or losses for which Licensee is obligated to indemnify Licensor pursuant to this Agreement.

 

		c.	Licensee
                                         Indemnification. Licensee will indemnify, defend, and hold harmless Licensor and
                                         its officers, directors, employees, agents, affiliates, and other representatives from
                                         and against any and all losses incurred by Licensor due to any third-party actions, claims,
                                         or suits should such losses relate to any allegation

 

		i.	that
                                         any rights, including Intellectual Property Rights, is or will be infringed, misappropriated,
                                         or otherwise violated by Licensee’s unauthorized Licensed Software use in a manner
                                         inconsistent with the license grant in this Agreement and Documentation;

 

		ii.	of
                                         or relating to matters that would be deemed a Licensee breach of representation, obligation,
                                         covenant, or warranty under this Agreement if proven true;

 

		iii.	of
                                         or relating to negligence, abuse, misapplication, misuse, or other culpable acts or omissions
                                         by or on behalf of Licensee or its representatives with respect to the Licensed Software
                                         or otherwise in connection with this Agreement; or

 

		iv.	of
                                         or relating to the unauthorized, unlicensed, and unpermitted use of the Licensed Software
                                         or Documentation outside the purpose, scope, or manner authorized by this Agreement or
                                         in any manner contrary to Licensor’s instructions.

 

		d.	Mitigation.
                                         Should Licensor believe the Licensed Software, in whole or in part, may be claimed
                                         by any third party to be in violation of another’s Intellectual Property Right,
                                         or if Licensee’s use of the Licensed Software is enjoined or threatened to be enjoined,
                                         Licensor may mitigate the situation at its own option and expense by

  

    	 	16	 

    

    

 

		i.	obtaining
                                         the right from the appropriate third party for Licensee to continue to use the Licensed
                                         Software materially as intended in and for the Term duration of this Agreement;

 

		ii.	modifying
                                         or replacing the Licensed Software to the extent that it becomes non-infringing while
                                         still providing the materially equivalent features and functionalities of the original
                                         software, and such modification or replacement will constitute the Licensed Software
                                         thereunder; or

 

		iii.	terminating
                                         this Agreement, in whole or in part, effective immediately upon written notice to Licensee
                                         and, provided that Licensee fully complies with its post-termination obligations, promptly
                                         prorate and refund Licensee any prepaid amount by Licensee for any period after the termination
                                         date.

 

		e.	Sole
                                         Remedy. THIS SECTION CONSTITUTES LICENSEE’S SOLE REMEDIES AND LICENSOR’S
                                         SOLE OBLIGATIONS AND LIABILITIES FOR ANY CLAIMS OR ALLEGATIONS, WHETHER ACTUAL OR THREATENED,
                                         THAT THIS AGREEMENT, SOFTWARE, DOCUMENTATION, OR ANY SUBJECT MATTER HEREOF, INFRINGES,
                                         MISAPPROPRIATES, OR OTHERWISE VIOLATES ANY INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD
                                         PARTY.

 

		21.	LIMITATION
                                         OF LIABILITY. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, UNDER NO CIRCUMSTANCE,
                                         INCLUDING WHERE PARTIES WERE ADVISED THAT LOSSES OR DAMAGES WERE POSSIBLE OR FORESEEABLE,
                                         WILL EITHER PARTY BE LIABLE UNDER OR IN CONNECTION WITH THIS AGREEMENT FOR ANY: COST
                                         INCREASE; BUSINESS, PRODUCTION, REVENUES, OR PROFITS LOST; VALUE DIMINUTION; REPUTATIONAL
                                         LOSS; DAMAGED GOOD WILL; USE, INABILITY TO USE, DELAY, INTERRUPTION, LOSS, OR RECOVERY
                                         OF ANY LICENSED SOFTWARE, OPEN-SOURCE COMPONENTS, OR ANY THIRD-PARTY MATERIALS; DATA
                                         OR SYSTEM SECURITY BREACH, CORRUPTION, DAMAGE OR RECOVERY; REPLACEMENT COST OF GOODS,
                                         SOFTWARE, OR SERVICES; OR SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY, ENHANCED, OR PUNITIVE
                                         DAMAGES UNDER ANY LEGAL OR EQUITABLE THEORY, INCLUDING, BUT NOT LIMITED TO, BREACH OF
                                         CONTRACT, TORT, NEGLIGENCE, AND STRICT LIABILITY.

 

		22.	EXPORT
                                         REGULATION. Licensee acknowledges that the Licensed Software may be subject to applicable
                                         United States export Laws, including the United States Export Administration Act and
                                         its associated regulations. Licensee agrees to comply with provisions of such export
                                         Laws. Compliance may include, but is not limited to, obtaining any and all necessary
                                         export license or other governmental approval. Licensee shall not itself or permit any
                                         third party to directly or indirectly export, re-export, or release the Licensed Software,
                                         or use the Licensed Software, in any country prohibited or restricted under United States
                                         export Laws.

  

    	 	17	 

    

    

 

		23.	FORCE
                                         MAJEURE. Neither Party will be liable to the other by reason of failure or delay
                                         in the performance of this Agreement if the failure arises out of any circumstance beyond
                                         such Party’s reasonable control, including acts of God, flood, fire, natural disaster,
                                         war, terrorism, invasion, riot, civil unrest, embargos, national or regional emergency,
                                         strikes, labor disruptions, Law changes, or power or telecommunication interruptions
                                         or shortages. The Party failing or delaying in performance of this Agreement due to circumstances
                                         beyond their control must give prompt written notice to the other Party stating the estimated
                                         length of time the occurrence is expected to continue. Either Party may terminate this
                                         Agreement if such uncontrollable circumstance continues for longer than 30 days.

 

		24.	GENERAL
                                         PROVISIONS

 

		a.	Relationship
                                         of the Parties. Nothing contained in this Agreement shall be construed as creating
                                         any agency, partnership, or any other form of joint enterprise, employment, or fiduciary
                                         relationship between the Parties. Neither Party shall have the authority to bind the
                                         other in any manner.

 

		b.	Notices.
                                         Notices will be deemed effectively given when received if delivered by hand; when
                                         received if sent by a nationally recognized courier with required signature upon receipt;
                                         when sent if delivered by email with transmission confirmation and sent during receiving
                                         party’s normal business hours; and on the next business day if delivered by email
                                         with transmission confirmation and sent after normal business hours.

                                         

                                         Any notice, request, consent, claim demand, waiver, or other communication under this
                                         Agreement must be in writing and addressed to Parties as follows:

 

		i.	Licensor
                                         

                                         Address: 8100 East Union Ave. STE 1809, Denver, Colorado 80237

                                         Email: Ken@SocialNetwor.ai

 

		ii.	Licensee
                                         

                                         Address: 3465 South Gaylord Ct. STE. A401, Englewood, Colorado 80113

                                         Email: Britt@LikeRE.com

 

		c.	Publicity.
                                         Each Party agree to seek express permission and written consent before using the
                                         other Party’s trademarks, service marks, trade names, logo, domain names, or other
                                         indicia of source, association, or sponsorship for any purpose but specifically relating
                                         to publicity, marketing, or commercial materials.

  

    	 	18	 

    

    

 

		d.	Governing
                                         Law. This Agreement is governed by and construed in accordance with the Laws of the
                                         State of Colorado without giving effect to any choice or conflict of law provisions or
                                         rules that would permit the application of the laws of any other jurisdiction.

 

		e.	Arbitration.
                                         Unless all Parties agree otherwise, Licensor and Licensee agree that any dispute,
                                         claim, or controversy arising out of or relating to this Agreement will be resolved through
                                         mandatory binding arbitration administered by the American Arbitration Association (AAA)
                                         in accordance with its Commercial Arbitration Rules, and the judgment of its arbitrator(s)
                                         may be entered by any court of competent jurisdiction. Licensor and Licensee further
                                         agree that the U.S. Federal Arbitration Act governs the interpretation and enforcement
                                         of this provision. EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED BY LAW,
                                         ALL RIGHTS TO TRIAL BY JURY AND ALL RIGHTS TO BRING OR PARTICIPATE IN A CLASS ACTION
                                         OR MULTI-PARTY ACTION IN ANY ACTION, PROCEEDING, OR COUNTER-CLAIM ARISING OUT OF OR RELATING
                                         TO THIS AGREEMENT. ALL CLAIMS AND DISPUTES ARISING OUT OF THIS AGREEMENT MUST BE ARBITRATED
                                         OR LITIGATED ON AN INDIVIDUAL BASIS AND NOT ON A CLASS BASIS. ANY DISPUTE, CLAIM, OR
                                         CAUSE OF ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT MUST BE COMMENCED WITHIN
                                         ONE YEAR AFTER THE CAUSE ACCRUES; OTHERWISE, SUCH CAUSE OF ACTION WILL BE PERMANENTLY
                                         BARRED. This provision will survive the termination of this Agreement.

 

		f.	Headings.
                                         The section and subsection headings or captions in this Agreement are for reference
                                         only and do not affect the meaning or interpretation of this Agreement.

 

		g.	Further
                                         Assurances. The Parties will cooperate with each other, execute and deliver such
                                         documents or instruments, and take all further actions as may be reasonably requested
                                         by the Parties from time to time in order to carry out, evidence, or confirm their rights
                                         or obligations or as may be reasonably necessary or helpful to give full effect to this
                                         Agreement.

 

		h.	Amendment
                                         and Modifications. This Agreement may be supplemented, amended, or modified only
                                         by mutual and written agreement of all Parties. No amendment, modification, rescission,
                                         or termination is effective unless it is in writing and executed by all Parties or their
                                         authorized representatives.

 

		i.	Waiver.
                                         No Party to this Agreement is deemed to have waived any of their rights, powers,
                                         remedies, or privileges under this Agreement unless such waiver is expressly set forth
                                         in writing and signed by the waiving Party. Except as otherwise set forth in this Agreement,
                                         the failure to exercise or enforce any rights, powers, remedies, or privileges under
                                         this Agreement will in no way be construed as a present or future waiver of such rights,
                                         powers, remedies, or privileges.

  

    	 	19	 

    

    

 

		j.	Assignment.
                                         Except as otherwise expressly permitted in this Agreement, Licensee may not, directly
                                         or indirectly, sell, assign, sublicense, lease, rent, distribute, or otherwise transfer
                                         the Licensed Software or any license rights and obligations under this Agreement, to
                                         any other person or entity without express written consent by Licensor.

 

		k.	No
                                         Third-Party Beneficiaries. This Agreement is made and entered into for the sole benefit
                                         of the Parties. Nothing in this Agreement, express or implied, is intended to or shall
                                         confer on or create to any other person or entity any legal or equitable right, benefit,
                                         or remedy of any kind whatsoever.

 

		l.	Counterparts.
                                         This Agreement may be executed in counterparts, each of which is deemed an original,
                                         but all of which together are deemed to be one and the same agreement. A signed copy
                                         of this Agreement delivered by electronic transmission, including email or facsimile,
                                         is deemed to have the same legal effect as delivery of an original signed copy of this
                                         Agreement.

 

		m.	Severability.
                                         If any provision of this Agreement or the application thereof is held to be invalid
                                         or unenforceable for any reason and to any extent, then that provision will be considered
                                         removed from this Agreement. However, the remaining provisions will continue to be valid
                                         and enforceable according to the intentions of all Parties and to the maximum extent
                                         permitted by Law. If it is held that any provision of this Agreement is invalid or unenforceable,
                                         but that by limiting such provision it would become valid and enforceable, then such
                                         provision will be deemed to be written, construed, and enforced as so limited.

 

		n.	Entire
                                         Agreement. This Agreement, together with any other documents incorporated herein
                                         by reference, constitutes the sole, entire, and final agreement of the Parties with respect
                                         to the subject of this Software License Agreement. This Agreement supersedes all prior
                                         and contemporaneous understandings, representations, agreements, and warranties, whether
                                         written, oral, or implied. Should any inconsistency occur between statements made in
                                         the body of this Agreement, any related exhibits, schedules, attachments, and appendices,
                                         and any other documents incorporated herein by reference, the following order of precedence
                                         governs: (i) this Agreement, excluding any exhibits, schedules, attachments, appendices,
                                         or any other documents incorporated herein by reference; (ii) this Agreement’s
                                         exhibits, schedules, attachments, and appendices, if any; and (iii) any other documents
                                         incorporated in this Agreement by reference.

  

    	 	20	 

    

    

 

IN
WITNESS WHEREOF, the Parties execute this Agreement as of the date affixed to each signature.

  

	Licensor: Social Life Network,
    Inc.	 
	 	 
	Signed:  	/s/ Ken
    Tapp	Date: January 1, 2017	 
	 	 
	Name: 	Ken Shawn Tapp		 
	Title: 	CEO		 
	 	 
	Licensee: Sports Social
    Network, Inc.	 
	 	 
	Signed:	/s/ Lynn
    Murphy	Date: January 1, 2017	 
	 	 
	Name: 	Lynn Murphy

		 
	Title: 	CEO		 

  

    	 	21	 

    

    

 

Instructions
for Your Software License Agreement

 

For
a business, its software is intellectual property and a valued business asset. It deserves certain protections and defined terms
and conditions when the software is being used by a customer. LegalNature’s software license agreement helps articulate
how the Licensor and Licensee want the software to be used and help the parties establish a sound business relationship based
on the benefits that the software offers.

 

Important:
This software license agreement is appropriate for situations where the software owner (the Licensor) permits or licenses
the software “as is” to the user (the Licensee) for their use. It does not provide any additional development, customization,
or servicing by the Licensor. This is not a software development contract to customize the software to the Licensee’s unique
specifications. This agreement is also not a “Software as a Service” (SaaS) agreement where the software is generally
hosted by the Licensor and made available to the Licensee for access on a pay-per-use or subscription basis.

 

Definitions

 

The
Definitions section contains a list of words or concepts that have very specific meaning within this agreement alone. For example,
the word “Documentation” in the context of this agreement does not mean any information or records, but manuals and
documents specifically relating to the software’s functionality, components, features, or requirements. When reading through
the agreement, remember to consult this section for any defined terms to understand their specific significance and effect within
this software license agreement.

 

License
Details and Grant

 

This
section contains the main details about the scope of the license granted using the answers and license parameters you supplied
regarding the license’s nature and access and use parameters.

 

Exclusive
or Non-Exclusive License

 

An
exclusive license gives the Licensee exclusive right to use the software. No one else will have the right to use the software
during the time frame that the Licensee has the right to the software as its sole user. This type of license generally garners
a higher fee from the Licensor since the Licensor cannot generate additional profits by licensing the same software to other customers.
A non-exclusive license can be used by many unrelated users so long as the Licensor grants permission for their use.

  

    	 	22	 

    

    

 

Sublicense

 

Sublicensing
concerns how the Licensee can use the software in relation to third parties not included in this contract. Software sublicensing
is the concept that a third party may use a part or all of the software through their relationship with the Licensee alone. For
example, if sublicensing is allowed, the Licensee may allow a non-related third party to use the Licensor’s software and
even receive payment for the third party’s use of the Licensor’s software. If sublicensing is acceptable to the Licensor
and Licensee, you should select “Yes” when asked if this license is sublicensable.

 

Licensors
generally want control over the distribution of their software and may prefer to grant licenses that do not allow sublicensing.
Select “No” to the question regarding sublicensing if this is the case for this agreement. In making this license
non-sublicensable, any third party that wants to use the software will need to obtain a license directly from the Licensor, instead
of going around the Licensor.

 

License
Assignment or Unilateral Transfer of Rights

 

An
assignment is different from sublicensing in that it transfers all the Licensee’s rights and responsibilities contained
in this agreement onto a third party. This is a major change to any agreement and essentially changes who the Licensor is contracting
with. Customarily, such a change to the parties in a contract would require the consent of all parties. However, if the Licensor
is comfortable with contracting with any third party as long as they accept all the terms in this agreement just as the Licensee
did, select “Yes” when asked if this license grant can be transferred unilaterally by the Licensee. If the Licensor
wants full control and the opportunity to vet who uses their software, select “No” when asked whether the Licensee
can unilaterally transfer their rights and obligations.

 

Access
and Use

 

Software
access and use is particularly important in a software license agreement because, unlike a traditional business asset like a physical
computer or machine, software can be extremely easy to copy, duplicate, or transfer. To control the value of the asset, Licensors
can place contractual limitations on the license granted to the Licensee. For example, this software could be limited for use
1) on only 10 of Licensee’s computers, or 2) for 30 Licensee employees, or 3) on an unlimited number of computers and users
but only at Licensee’s offices in the state of Nevada, or 4) on two of Licensee’s computers and keep one copy as backup
for disaster recovery only. LegalNature allows you to customize the software’s access and use criteria and create your unique
license grant. If the license grant does not have any restrictions on the number of copies or locations of access, select “Yes”
when asked if the Licensee may use unlimited copies of the software from any location.

  

    	 	23	 

    

    

 

Open-Source
Licenses

 

Some
software contains open-source code or technology that is widely available for a variety of uses. However, such use of open-source
code or technology actually comes with its only open-source or public license. The Licensor should be aware that, if any part
of their software contains open-source components, the open-source or public license information often requires the components
to be readily identifiable and documented.

 

License
Restrictions

 

Beyond
the number of copies or location access for the software, there are some general prohibitions that the Licensee must comply with.
This section articulates these prohibitions. The prohibitions generally protect the intellectual property of the Licensor and
include common sense restrictions. For instance, the Licensee may not copy the software, lend out the software without the Licensor’s
permission, reverse engineer the software, bypass the software’s security measures, misappropriate the Licensor’s
intellectual property in any part of the software, use the license in applications that could result in injury or death, or use
the software outside of the limitations of the license grant in general.

 

Term

 

The
term establishes how long the Licensee can use the software under the parameters set by this agreement. If the parties want to
continue this software license agreement indefinitely until one party decides the relationship is no longer suitable, select “Perpetual”
under “License Term Duration.” If the parties know in advance exactly when the Licensee will stop using the software
under the terms of this agreement, select “Ends on a specific date” to input that date. If the parties want to establish
the duration of the contract in terms of a period basis such as “five years” or “18 months,” select “Ends
after a specific period” and write in the duration.

 

Delivery

 

Software
may be delivered to the Licensee in a variety of ways. The traditional method is a physical delivery on a tangible storage media
such as CD, DVD, USB, external hard drive, and the like. This may add physical delivery time through the post or require coordination
between the Licensor and Licensee to meet and receive the physical storage media. It has also become commonplace to deliver software
electronically via email, through private networks, downloaded from hosted websites, and more. This method could make the delivery
time more instantaneous but may require a certain degree of technological sophistication from both the Licensor and Licensee.
The Licensor and Licensee should consider and select the delivery method, timeframe, and location that suits both parties’
needs.

 

Installation

 

Some
Licensors offer installation services as an added bonus for the Licensee’s convenience and to ensure their software is installed
properly. Other Licensors prefer to leave the installation to the Licensee and avoid any liability that may arise from using the
Licensee’s computers or network systems. The details regarding installation service, if any, should be decided in this agreement
so both parties have the same expectations about who will set up the software.

  

    	 	24	 

    

    

 

Fees
and Taxes

 

The
license fee is basically the cost of licensing the software. It can be measured by different metrics. Some companies prefer a
lump sum total for unlimited use restrictions; others prefer to pay for their exact use, such as having a fix fee per user, per
computer used, per installation, or per location used. LegalNature allows you to choose from all these options to decide the appropriate
pricing basis for your agreement.

 

While
the license fee is the most common type of fee in a software license agreement, your agreement may include other fee types and
structures such as an installation fee and training fee for the Licensor to teach the Licensee and their employees or representatives
how to make the most out of the software. Taxes are not included in this contract, so the Licensee should be aware that it is
responsible for any taxes that may be assessed in this agreement.

 

Payment

 

In
addition to the manner in which the software is used and the fee structure considerations, payment for the fee is often dependent
on the business relationship between the Licensor and Licensee. When deciding on what kind of payment structure to use, the Licensor
may wish to take into consideration the duration of the agreement, the creditworthiness of the Licensee, and how the Licensee
will use the software and then evaluate what is commercially reasonable based on all these factors.

 

This
agreement also includes a standard late payment term that provides some remedy options for the Licensor if the Licensee is late
on payment. These remedies include the ability to charge interest or obtain reimbursement for the Licensor’s costs, such
as the cost of using a collection agency, disabling the software technically, or suspending or terminating this software license
agreement altogether.

 

Acceptance

 

This
section affords the Licensee the ability to reject the software or make sure the software works properly before the Licensor is
deemed to have completed their obligation of delivering on the software. It sets out a process by which the Licensee determines
the criteria of what it means for the software to be working properly. For example, a test for spreadsheet-like software function
could be to calculate the appropriate numbers in a formula with expected results. The Licensor will carry out the test with the
Licensee or its representative present and both parties can witness the software being tested.

  

    	 	25	 

    

    

 

Ideally,
the software test will succeed and the Licensee will accept that the software is working properly. However, if the software should
fail and generate unacceptable or unexpected results, the Licensor has the opportunity to correct the software error. Additionally,
if the Licensor is unable to address the software error, the Licensee has the opportunity to reject the software and terminate
the agreement.

 

Acceptance
testing may be appropriate if the Licensor and Licensee both want a process that assures the software functions as described.
It is a quality test for the Licensee and documentation of properly functioning software for the Licensor. This is an optional
process available in this form to help both the Licensor and Licensee establish a fair way to test the software.

 

Maintenance
and New Version 

 

From
time to time, the Licensor may release updates on the software that does not substantially change the software’s functions
but enhances the software in minute but helpful ways. This is a maintenance release and is offered at no cost to the Licensee.
It is vastly different from a new version of the software that contains many more changes and upgrades.

 

This
software license agreement grants the Licensee the right to receive any maintenance releases that may be released at the Licensor’s
sole discretion during the term of this agreement. However, the Licensee does not have any rights to new versions of the software.
If the Licensee wishes to use a new version of the software, the Licensee must enter into a separate negotiation and software
license agreement with the Licensor.

 

Title,
Intellectual Property Rights, and Infringement

 

This
section affirms that the Licensor is the proper owner of the software and no part of the software is sold to the Licensee. This
is purely a license, or a permission, to use the software. The Licensee also agrees to cooperate with the Licensor to protect
the intellectual property that is this software during the duration of this agreement. This includes safeguarding the software,
informing the Licensor of suspected or known intellectual property infringement, and assisting the Licensor in any claims or actions
where the Licensor tries to prosecute third parties for infringing on the Licensor’s rights over this software.

 

Security
Measures and Usage Tracking Disclosure

 

If
this software contains any mechanisms that detect unauthorized use that includes a certain degree of the Licensor’s control
or monitoring of the Licensee’s use, select “Yes” to the question on whether the Licensor can control or monitor
the Licensee’s access. This disclosure is included to ensure transparency to the Licensee that their information may be
collected or viewed incidental to their ordinary software use.

 

    	 	26	 

    

    

 

Verification
(On-Site Compliance Monitoring)

 

The
Licensor may, from time to time, request verification from the Licensee that the software is being used according to this software
license agreement. If the Licensee agrees, this agreement can also include a right for the Licensor to conduct a non-intrusive
on-site audit. If the verification or audit indicates that the Licensee is using the software beyond the scope agreed upon in
this agreement, additional fees would be negotiated at that time.

 

Confidentiality

 

As
with any business relationship, confidential information and trade secrets may be disclosed and exchanged. Both parties must determine
and agree on how long to keep such confidential information private and only to disclose such information when compelled to do
so by law. The duration of confidentiality may be the same as the duration of the license or much longer.

 

Termination
and Effects

 

This
section outlines all the ways in which this agreement could be terminated and which party can seek to terminate this agreement
under the described circumstances. Upon termination of this agreement, it is important that the Licensee immediately stops using
the software, returns or destroys the software and any confidential information, and pays all amounts due under this agreement.

 

Mutual
Representations and Warranties

 

In
order to enter into a commercially reasonable agreement, the Licensor and Licensee affirm and assure each other in this section
that they are legally constituted entities that can do business, either under their own personal name or as an LLC or corporation,
and have the full right, power, and capacity to enter into such a contract.

 

Licensor’s
Limited Warranty

 

This
agreement provides a limited warranty of the software for six months or for the duration of the agreement, whichever is less.
The warranty assures the Licensee that the software and any maintenance release operate as described when properly installed,
and if the software is provided on a separate media, that media is not defective. Everything else, if not included specifically
in this section, is not warranted and is to be accepted “as is” by the Licensee. The limited warranty is additionally
limited and not applicable if the software is improperly used, damaged, or modified by the Licensee, or in error because of causes
outside of the Licensor’s reasonable control.

 

The
Licensee’s remedies under the limited warranty include the Licensor replacing the software, the Licensor repairing the software,
or either the Licensor or Licensee terminating this agreement early with appropriate pro rata refund by the Licensor of any prepaid
license fee.

 

Indemnification

 

Indemnification
is a concept for securing another party against loss or damage. In the case of the Licensor’s indemnification, the Licensor
agrees to secure the Licensee and its representatives against actual losses from actions where a third party claims the Licensor’s
software is an infringement of the third party’s intellectual property rights.

  

    	 	27	 

    

    

 

In
the case of the Licensee’s indemnification, the Licensee agrees to indemnify the Licensor and its representatives against
actual losses from actions from a third party that somehow relates to this agreement.

 

Limitation
of Liability

 

Limitation
of liability is a standard contract provision that protects both the Licensor and Licensee from the amount of exposure they each
face if any action is filed against either party in relation to this agreement. It caps the amount of potential damage the parties
may seek from each other and should always be read carefully so all contracting parties understand their risk exposures.

 

Export
Regulation

 

Software,
like other commercial objects, may be subject to export control rules and regulations such as the United States Export Administration
Act. For example, there is sensitive software that cannot be exported to certain restricted countries. If the Licensee seeks to
export the software, the Licensee must conduct its own due diligence regarding applicable export laws and affirm their compliance
with all applicable laws.

 

Force
Majeure

 

On
rare occasions, there may be events or circumstances out of the Licensor’s or Licensee’s reasonable control that prevents
this agreement from operating as intended for a period of time. For example, the Licensee may be late on payment when their bank’s
server experienced a severe weather-induced power outage. In such uncontrollable and unpredictable circumstances where no party
is intentionally at fault, this term provides an allowance for the breach if it is under 30 days and the ability for either party
to cancel this agreement if the event continues for longer than 30 days.

 

Governing
Law and Dispute Resolution Options

 

The
choice of law that governs this agreement is an important selection. Often, parties select the law of the state where they are
located because of familiarity. This form allows the parties to select the agreed-upon state law that will dictate how this agreement
will be interpreted if any conflict should arise in the future.

 

Furthermore,
this document allows the parties to decide whether conflict should be resolved in a public court of law or in private arbitration.
If the Licensor and Licensee wish to litigate in public court, select “No” when asked if arbitration is required.
If the parties wish to resolve any issues privately as decided by an independent arbitrator, select “Yes” for the
same question.

  

28trtc_ex446.htm

EXHIBIT 4.46

 

EXECUTION COPY

 

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE 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. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

	
Original Issue Date: January 25, 2018
	
Principal Amount: $5,000,000

	
Original Conversion Price (subject to adjustment herein): $0.40
	

 

12% SENIOR CONVERTIBLE PROMISSORY NOTE

DUE JULY 25, 2019

 

THIS 12% SENIOR CONVERTIBLE PROMISSORY NOTE is one of a series of duly authorized and validly issued convertible promissory notes of Terra Tech Corp., a Nevada corporation, (the “Company”), having its principal place of business at 2040 Main Street, Suite 225, Irvine, California 92614, designated as its 12% Senior Convertible Promissory Note due July 25, 2019 (this “Note”, or the “Note” and collectively with the other Notes of such series, the “Notes”).

 

FOR VALUE RECEIVED, the Company promises to pay to _______________ or its registered assigns (the “Holder”), or shall have paid pursuant to the terms hereunder, the principal sum of $5,000,000 on July 25, 2019 (the “Maturity Date”) or such earlier date as this Note is required or permitted to be repaid as provided hereunder, and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Note in accordance with the provisions hereof. This Note is subject to the following additional provisions:

 

Section 1. Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Note, (a) capitalized terms not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following meanings:

 

“Alternate Consideration” shall have the meaning set forth in Section 5(e).

 

“Alternate Conversion Price” means 70% of the average of the three (3) lowest VWAPs in the twenty (20) consecutive Trading Days prior to the Conversion Date.

 
	 
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“Bankruptcy Event” means any of the following events: (a) the Company or any Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Subsidiary thereof, (b) there is commenced against the Company or any Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Company or any Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the Company or any Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) the Company or any Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts or (g) the Company or any Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

 

“Base Conversion Price” shall have the meaning set forth in Section 5(b).

 

“Beneficial Ownership Limitation” shall have the meaning set forth in Section 4(e). 

 

“Buy-In” shall have the meaning set forth in Section 4(b)(v).

 

“Change of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of one-third (1/3rd) of the aggregate votes of the then-issued and outstanding voting securities of the Company on such basis as is then required by the Company’s charter documents (other than by means of conversion or exercise of the Notes and the Securities issued together with the Notes), (b) the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own less than two-thirds (2/3rds) of the aggregate voting power of the Company or the successor entity of such transaction, (c) the Company sells or transfers all or substantially all of its assets to another Person and the stockholders of the Company immediately prior to such transaction own less than two-thirds (2/3rds) of the aggregate voting power of the acquiring entity immediately after the transaction, (d) a replacement at one time or within a three year period of more than one-half (1/2) of the members of the Board of Directors which is not approved by a majority of those individuals who are members of the Board of Directors on the Original Issue Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board of Directors was approved by a majority of the members of the Board of Directors who are members on the date hereof), or (e) the execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.

 
	 
	2
	

 
	 

 

“Common Stock Equivalents” means any securities of the Company or any of its subsidiaries which would entitle the holder thereof to acquire at any time shares of Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the Holder to receive, Common Stock.

 

“Conversion Date” shall have the meaning set forth in Section 4(a).

 

“Conversion Price” shall have the meaning set forth in Section 4(b).

 

“Conversion Schedule” means the Conversion Schedule in the form of Schedule 1 attached hereto.

 

“Conversion Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the terms hereof.

 

“Default Redemption Amount” means the product of (i) 130% multiplied by (ii) the sum of (x) the aggregate principal amount outstanding of this Note through and including the Default Redemption Payment Date; (y) all accrued but unpaid principal due on this Note, including, but not limited to, as provided in the last sentence of Section 6 hereof, and (z) all other amounts owed under this Note including, but not limited to, Late Fees and liquidated damages, all through and including the date all amounts herein are paid in cash to the Holder.

 

“Dilutive Issuance” shall have the meaning set forth in Section 5(b).

 

“Dilutive Issuance Notice” shall have the meaning set forth in Section 5(b).

 

“Documents” shall have the meaning set forth in the Purchase Agreement.

 

“DTC” means the Depository Trust Company.

 

“DTC/FAST Program” means the DTC’s Fast Automated Securities Transfer Program.

 

“DWAC Eligible” means that (a) the Common Stock is eligible at DTC for full services pursuant to DTC’s Operational Arrangements, including, without limitation, transfer through DTC’s DWAC system, (b) the Company has been approved (without revocation) by the DTC’s underwriting department, (c) the Transfer Agent is approved as an agent in the DTC/FAST Program, (d) the Conversion Shares are otherwise eligible for delivery via DWAC, and (e) the Transfer Agent does not have a policy prohibiting or limiting delivery of the Conversion Shares via DWAC.

 
	 
	3
	

 
	 

 

“Event of Default” shall have the meaning set forth in Section 6(a).

 

“Exempt Issuance” means the issuance of (a) shares of Common Stock, options or other equity awards (including, without limitation, restricted awards) to employees, consultants, officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose and subsequently ratified by the Shareholders of the Company, (b) securities upon the exercise or exchange of or conversion of any Securities issued pursuant to the Purchase Agreement and/or other securities directly or indirectly exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the Original Issue Date, provided that such securities have not been amended since the Original Issue Date to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities, financings, commercial property lease transactions or similar transactions, (c) shares issued pursuant to any equipment loan or leasing arrangement, real property leasing arrangement or debt financing from a bank or similar financial institution approved by the Company’s board of directors, (d) securities issued pursuant to mergers, consolidations, acquisitions, similar business combinations or strategic transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, or (e) securities to the Holder or an Affiliate of the Holder.

 

“Fundamental Transaction” shall have the meaning set forth in Section 5(e). 

 

“Late Fees” shall have the meaning set forth in Section 2(c).

 

“Mandatory Default Amount” means the payment of 130% of the outstanding principal amount of this Note and accrued and unpaid interest hereon, in addition to the payment of all other amounts, costs, expenses, late fees, and liquidated damages due in respect of this Note.

 

“New York Courts” shall have the meaning set forth in Section 8(d).

 

“Note Register” shall have the meaning set forth in Section 2(b).

 

“Notice of Conversion” shall have the meaning set forth in Section 4(a).

 
	 
	4
	

 
	 

 

“Original Issue Date” means the date of the first issuance of this Note, regardless of any transfers of any Note and regardless of the number of instruments which may be issued to evidence such Notes.

 

“Purchase Agreement” means the Securities Purchase Agreement, dated as of August 21, 2017 by and among the Company, the original Holder, and the other parties named therein, if any, as amended, modified or supplemented from time to time in accordance with its terms. 

 

“Registration Statement” means a registration statement covering the resale of the Underlying Shares by each Holder.

 

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

 

“Share Delivery Date” shall have the meaning set forth in Section 4(d)(ii).

 

“Successor Entity” shall have the meaning set forth in Section 5(e). 

 

“Trading Market” means any of the following markets or exchanges on which the Common Stock (or any other common stock of any other Person that references the Trading Market for its common stock) is listed or quoted for trading on the date in question: the OTC Bulletin Board, The NASDAQ Global Market, The NASDAQ Global Select Market, The NASDAQ Capital Market, the New York Stock Exchange, NYSE Arca, the NYSE MKT, or the OTCQX Marketplace, the OTCQB Marketplace, the OTCPink Marketplace or any other tier operated by OTC Markets Group Inc. (or any successor to any of the foregoing).

 

“VWAP” means, for or as of any date, the dollar volume-weighted average price for such security on the Trading Market (or, if the Trading Market is not the principal trading market for such security, then on the principal securities exchange or securities market on which such security is then traded) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “HP” function (set to weighted average) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.

 
	 
	5
	

 
	 

 

Section 2. Interest.

 

a) Payment of Interest in Cash or Kind. The Company shall pay interest to the Holder in an amount equal to the product of 12% (which interest rate may be increased as provided elsewhere herein), multiplied by the original principal amount (the “Original Principal Amount”), for the 18-month period beginning on the Original Issuance Date. All interest provided for in this Section (2)(a) shall be due and payable on the Maturity Date (the Fixed Interest Payment Date”); provided, however, notwithstanding anything to the contrary provided herein or elsewhere, interest due hereunder will be due and payable prior to the Fixed Interest Payment Date, upon any conversion, prepayment, Event of Default, and/or other acceleration of principal outstanding on this Note, with respect to the interest relating to the principal so converted, prepaid and/or accelerated whether as a result of an Event of Default, or otherwise. All interest payments hereunder will be payable in cash or Common Stock in the Company’s discretion. Interest paid in Common Stock will be the Conversion Price or Alternate Conversion Price, as applicable. 

 

b) Interest Calculations. Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30-calendar day periods, and shall accrue commencing on the Original Issue Date until payment in full of the outstanding principal, together with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. Interest hereunder will be paid to the Person in whose name this Note is registered on the records of the Company regarding registration and transfers of this Note (the “Note Register”).

 

c) Late Fees. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law (the “Late Fees”) that shall accrue daily from the date such interest is due hereunder through and including the date of actual payment in full. 

 

Section 3. Registration of Transfers and Exchanges. 

 

a) Different Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.

 

b) Investment Representations. This Note has been issued subject to certain investment representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with therewith and applicable federal and state securities laws and regulations. 

 

c) Reliance on Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

 
	 
	6
	

 
	 

 

Section 4. Conversion.

 

a) Voluntary Conversion. At any time after the Original Issue Date until all amounts due under this have been paid in full, this Note shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from time to time (subject to the conversion limitations set forth in Section 4(e) hereof). The Holder shall effect conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (each, a “Notice of Conversion”), specifying therein the principal amount of this Note and/or any other amounts due under this Note to be converted and the date on which such conversion shall be effected (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. To effect conversions hereunder, the Holder shall not be required to physically surrender this Note to the Company unless the entire principal amount of this Note, all accrued and unpaid interest thereon and all other amounts due under this Note have been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion amount. The Holder and the Company shall maintain a Conversion Schedule showing the principal amount(s) and/or any other amounts due under this Note converted and the date of such conversion(s). The Company may deliver an objection to any Notice of Conversion within one (1) Business Day of delivery of such Notice of Conversion. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof.

 

b) Conversion Price. The conversion price in effect on any Conversion Date shall be equal to the lesser of the Original Conversion Price or 85% of the lowest daily VWAP in the fifteen (15) trading days prior to the Conversion Date (“Conversion Price”). Should an Event of Default occur pursuant to Section 6 hereof, the Conversion Price will automatically be replaced by the Alternate Conversion Price and remain in effect as long as the Event of Default remains. All such foregoing determinations will be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately decreases or increases the Common Stock during such measuring period. Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 6 hereof and the Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law. 

 
	 
	7
	

 
	 

 

c) Optional Company Conversion. At any time that (i) the daily VWAP for the prior ten (10) consecutive Trading Days is $0.70 or more and (ii) the average daily trading value is greater than $2,500,000 for the prior ten (10) consecutive Trading Days (as reported by Bloomberg through its “HP” function) (the “Conditions”), then the Company can demand, upon one (1) day’s notice that the Holder convert the Note, pursuant to Section 4(d) hereof and subject to the limitations of Section 4(e), as long as the Conditions remain in effect. The conversion referenced in this subparagraph 4(c) shall be at the Conversion Price.

 

d) Mechanics of Conversion.

 

i. Conversion Shares Issuable Upon a Conversion. The number of Conversion Shares issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the sum of all outstanding (i) principal, (ii) interest, and (iii) any other amount due under this Note to be converted as provided in the applicable Notice of Conversion by (y) the Conversion Price.

 

ii. Delivery of Certificate Upon Conversion. Not later than two (2) Trading Days after each Conversion Date (the “Share Delivery Date”), the Company shall deliver, or cause to be delivered, to the Holder (A) a certificate or certificates representing the Conversion Shares, which, on or after the date on which if the resale of such Conversion Shares are covered by and are being sold pursuant to an effective Registration Statement or such Conversion Shares are eligible to be sold under Rule 144 without the need for current public information and the Company has received an opinion of counsel to such effect reasonably acceptable to the Company (which opinion the Company will be responsible for obtaining at its own cost) shall be free of restrictive legends and trading restrictions (other than those which may then be required by the Purchase Agreement) representing the number of Conversion Shares being acquired or being sold, as the case may be, upon the conversion of this Note, and (B) a bank check in the amount of accrued and unpaid interest (if the Company has elected to pay accrued interest in cash). All certificate or certificates required to be delivered by the Company under this Section 4(d) shall be delivered electronically through DTC or another established clearing corporation performing similar functions, unless the Company or its Transfer Agent does not have an account with DTC and/or is not participating in the DTC Fast Automated Securities Transfer Program; then, the Company shall issue and deliver to the address as specified in such Notice of Conversion, a certificate (or certificates), registered in the name of the Holder or its designee, for the number of Conversion Shares to which the Holder shall be entitled. If the Conversion Shares are not being sold pursuant to an effective Registration Statement or if the Conversion Date is prior to the date on which such Conversion Shares are eligible to be sold under Rule 144, as promulgated under the Securities Act (“Rule 144”), without the need for current public information, the Conversion Shares shall bear a restrictive legend in the following form, as appropriate:

 

 

	
“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE 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.”

 

 
	 
	8
	

 
	 

 

Notwithstanding the foregoing, commencing on such date that the Conversion Shares are eligible for sale under Rule 144 subject to current public information requirements, the Company, upon request and at the Company’s expense, shall obtain a legal opinion to allow for such sales under Rule 144.

 

iii. Failure to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates are not delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in which event the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly return to the Company the Common Stock certificates issued to such Holder pursuant to the rescinded Notice of Conversion. 

 

iv. Obligation Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance that might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In the event the Holder of this Note shall elect to convert any or all of the outstanding principal or interest amount hereof, the Company may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Note shall have been sought. If the injunction is not granted, the Company shall promptly comply with all conversion obligations herein. If the injunction is obtained, the Company must post a surety bond for the benefit of the Holder in the amount of 150% of the outstanding principal amount of this Note, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to the Holder to the extent it obtains judgment. In the absence of seeking such injunction, the Company shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If the Company fails for any reason to deliver to the Holder such certificate or certificates pursuant to Section 4(d)(ii) by the Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, $1,000 per Trading Day for each Trading Day after such Share Delivery Date until such certificates are delivered or Holder rescinds such conversion. Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 6 hereof for the Company’s failure to deliver Conversion Shares within the period specified herein and the Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law. Liquidated Damages that arise from this Note are to be capped at $150,000.

 
	 
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v. Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to the Holder, if the Company fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery Date pursuant to Section 4(d)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm 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 Conversion Shares which the Holder was entitled to receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in addition to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of the Holder, either reissue (if surrendered) this Note in a principal amount equal to the principal amount of the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued if the Company had timely complied with its delivery requirements under Section 4(d)(ii). 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 conversion of this Note with respect to which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was a total 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 certificates representing shares of Common Stock upon conversion of this Note as required pursuant to the terms hereof.

 

vi. Reservation of Shares Issuable Upon Conversion. Notwithstanding anything to the contrary herein, the Company shall not be required to reserve any shares of Common Stock from its duly authorized shares of Common Stock for issuance in connection with the transactions contemplated hereby; provided, however, that, from and after August 21, 2017, the Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock a number of shares of Common Stock at least equal 100% of the Required Minimum for the sole purpose of issuance upon conversion of this Note and payment of interest on this Note, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Notes), not less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Purchase Agreement) be issuable (taking into account the adjustments and restrictions of Section 5, but ignoring any Beneficial Ownership Limitations or other restrictions and/or limitations on conversions set forth herein or elsewhere) upon the conversion of the then-outstanding principal amount of this Note and payment of interest hereunder. The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable, and, at such times as a Registration Statement covering such shares is then effective under the Securities Act, will be registered for public resale in accordance with such Registration Statement. For purposes of this Note, the “Required Minimum” shall be defined as all outstanding debt plus interest and any fees divided by the Conversion Price or the Alternate Conversion Price then in effect, as applicable. The Company shall be required to calculate the Required Minimum on the first trading day of each month that the Note is outstanding and provide such calculation to the Holder and the transfer agent promptly. For purposes of calculating the Required Minimum, Company shall assume that all then-outstanding principal will remain outstanding until the Maturity Date and that all accrued but unpaid interest hereon accrues at the rate of 12% per annum is paid on the Maturity Date and all amounts convert into shares of Common Stock at the Conversion Price or Alternate Conversion Price then in effect.

 
	 
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vii. Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note. As to any fraction of a share that the Holder would otherwise be entitled to purchase upon such conversion, 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 Conversion Price or round up to the next whole share.

 

viii. Transfer Taxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates, provided that, the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Note so converted and the Company shall not be required to issue or deliver such certificates unless or until the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion.

 

e) Holder’s Conversion Limitations. The Company shall not effect any conversion of principal and/or interest of this Note, and a Holder shall not have the right to convert any principal and/or interest of this Note, to the extent that, after giving effect to the conversion set forth on the applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any Persons acting as a group together with the Holder or any of the Holder’s Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of this Note with respect to which such determination is being made, but shall exclude the number of shares of Common Stock that are issuable upon (i) conversion of the remaining, unconverted principal amount of this Note beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other Notes) beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 4(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section 4(e) applies, the determination of whether this Note is convertible (in relation to other securities owned by the Holder together with any Affiliates) and of which principal amount of this Note is convertible shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination of whether this Note may be converted (in relation to other securities owned by the Holder together with any Affiliates) and which principal amount of this Note is convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed to represent to the Company each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph 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 4(e), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (ii) a more recent public announcement by the Company, or (iii) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two (2) 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 Note, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Note held by the Holder. The Holder, upon not less than 61 days’ prior written notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 4(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 conversion of this Note held by the Holder and the Beneficial Ownership Limitation provisions of this Section 4(e) shall continue to apply. Any such increase or decrease will not be effective until the 61st day after such notice is delivered to the Company. The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 4(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein 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 Note.

 
	 
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Section 5. Certain Adjustments.

 

a) Stock Dividends and Stock Splits. If the Company, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion of, or payment of interest on, the Notes), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification.

 

b) Subsequent Equity Sales. If, at any time while this Note is outstanding, the Company or any Subsidiary, as applicable, sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling any Person to acquire shares of Common Stock at an effective price per share that is lower than the then Conversion Price (such lower price, the “Base Conversion Price” and such issuances, collectively, a “Dilutive Issuance”) (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance), then the Conversion Price shall be reduced and only reduced to equal the Base Conversion Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing, no adjustment will be made under this Section 5(b) in respect of an Exempt Issuance. The Company shall notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common Stock Equivalents subject to this Section 5(b), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 5(b), upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the date of such Dilutive Issuance, regardless of whether the Holder accurately refers to the Base Conversion Price in the Notice of Conversion.

 
	 
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c) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights that the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

d) Pro Rata Distributions. During such time as this Note 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 Note, 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 Note (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.

 
	 
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e) Fundamental Transaction. The Company shall not, directly or indirectly, in one or more related transactions, effect any merger or consolidation of the Company and/or or any of its Subsidiaries with and/or into another Person, without the express written consent of 90% of the then-issued and outstanding principal amount of Notes (the “90% Amount”). If, subject to the Company obtaining written consent of the 90% Amount, at any time while this Note is outstanding (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person, whereby such other Person 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 conversion of this Note, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 4(e) on the conversion of this Note), 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 Note is convertible immediately prior to such Fundamental Transaction (without regard to any limitation in Section 4(e) on the conversion of this Note). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Conversion 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 conversion of this Note 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 Note and the other Documents (as defined in the Purchase Agreement) in accordance with the provisions of this Section 5(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 of this Note, deliver to the Holder in exchange for this Note a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Note that is convertible 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 conversion of this Note (without regard to any limitations on the conversion of this Note) prior to such Fundamental Transaction, and with a conversion price which applies the conversion 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 conversion price being for the purpose of protecting the economic value of this Note 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 Note and the other Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Note and the other Documents with the same effect as if such Successor Entity had been named as the Company herein.

 
	 
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f) Calculations. All calculations under this Section 5 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 5, 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 any treasury shares of the Company) issued and outstanding.

 

g) Notice to the Holder.

 

i. Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, the Company shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. 

 

ii. Notice to Allow Conversion 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 of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding-up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder at its last address as it shall appear upon the Note Register, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice, stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to convert this Note during the 20-day period commencing on the date of such notice through the effective date of the event triggering such notice except as may otherwise be expressly set forth herein. 

 
	 
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Section 6. Events of Default. 

 

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

 

i. any default in the payment of (A) the principal amount of any Note or (B) interest, liquidated damages, Late Fees and other amounts owing to a Holder on any Note, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above, is not cured within three (3) Trading Days;

 

ii. the Company shall fail to observe or perform any other material covenant or agreement contained in the Notes (and other than a breach by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause (x) below), which failure is not cured, if possible to cure, within the earlier to occur of (A) five (5) Trading Days after notice of such failure sent by the Holder or by any other Holder to the Company and (B) ten (10) Trading Days after the Company has become or should have become aware of such failure;

 

iii. a material default or material event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall occur under (A) any of the Documents or (B) any other material agreement, lease, document or instrument to which the Company or any Subsidiary is obligated and/or which any of their respective assets are subject to or bound by (and not covered by clause (vi) below); 

 
	 
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iv. any representation or warranty made in this Note, any other Documents, any written statement pursuant hereto or thereto or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or incorrect in any material respect as of the date when made or deemed made or the Company has failed to fulfill any material covenant contained in this Note, any other Documents, any written statement pursuant hereto or thereto;

 

v. the Company or any Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy Event;

 

vi. the Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater than $50,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable; 

 

vii. the Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume listing or quotation for trading thereon within five (5) Trading Days or the transfer of shares of Common Stock through the Depository Trust Company System is no longer available, “frozen” or “chilled”;

 

viii. the Company shall be a party to any Change of Control Transaction or Fundamental Transaction or shall agree to sell or dispose of all or a portion of its assets in one transaction or a series of related transactions, without the approval of the Holder or Holders as provided in the Purchase Agreement (whether or not such sale would constitute a Change of Control Transaction);

 

ix. the Company does not meet the current public information requirements under Rule 144;

 

x. the Company shall fail for any reason to deliver certificates to a Holder prior to the third (3rd) Trading Day after a Conversion Date pursuant to Section 4(d) or the Company shall provide at any time notice to the Holder, including by way of public announcement, of the Company’s intention to not honor requests for conversions of any Notes in accordance with the terms hereof; 

 

xi. the Company fails to file with the Commission any required reports under Section 13 or 15(d) of the Exchange Act such that it is not in compliance with Rule 144(c)(1) (or Rule 144(i)(2), if applicable);

 
	 
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xii. the Company or any Subsidiary shall: (i) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator of it or any of its properties, (ii) admit in writing its inability to pay its debts as they mature, (iii) make a general assignment for the benefit of creditors, (iv) be adjudicated a bankrupt or insolvent or be the subject of an order for relief under Title 11 of the United States Code or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute of any other jurisdiction or foreign country, or (v) file a voluntary petition in bankruptcy, or a petition or an answer seeking reorganization or an arrangement with creditors or to take advantage or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of a petition filed against it in any proceeding under any such law, or (vi) take or permit to be taken any action in furtherance of or for the purpose of effecting any of the foregoing;

 

xiii. if any order, judgment or decree shall be entered, without the application, approval or consent of the Company or any Subsidiary, by any court of competent jurisdiction, approving a petition seeking liquidation or reorganization of the Company or any Subsidiary, or appointing a receiver, trustee, custodian or liquidator of the Company or any Subsidiary, or of all or any substantial part of its assets, and such order, judgment or decree shall continue unstayed and in effect for any period of sixty (60) days;

 

xiv. the occurrence of any levy upon or seizure or attachment of, or any uninsured loss of or damage to, any property of the Company or any Subsidiary having an aggregate fair value or repair cost (as the case may be) in excess of $100,000 individually or in the aggregate, and any such levy, seizure or attachment shall not be set aside, bonded or discharged within thirty (30) days after the date thereof;

 

xv. the Company shall fail to maintain sufficient reserved shares pursuant to the Purchase Agreement; 

 

xvi. any monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their respective property or other assets for more than $50,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of forty-five (45) calendar days; 

 

xvii. the Company, without the written consent of the Holders, shall enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money of any kind for more than $50,000, 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; or

 

xviii. the Company enters into any transaction with any Affiliate of the Company that would be required to be disclosed in any public filing with the Commission.

 
	 
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b) Remedies Upon Event of Default. Subject to the Beneficial Ownership Limitation as set forth in Section 4(e), if any Event of Default occurs, then the outstanding principal amount of this Note, plus accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder’s election, immediately due and payable in cash at the Mandatory Default Amount. After the occurrence of any Event of Default that results in the eventual acceleration of this Note, the interest rate on this Note shall accrue at an additional interest rate equal to the lesser of 1.5% per month (18% per annum) or the maximum rate permitted under applicable law. Upon the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 6(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon. Alternatively, at the election of the Holder, the Holder may require the Company to redeem all of the Notes then held by such Holder through the issuance to such Holder of such number of shares of Common Stock equal to the quotient of (x) the Default Redemption Amount, divided by (y) Alternate Conversion Price percentage rate. The Default Redemption Amount, whether payable in cash or in shares, shall be due and payable or issuable, as the case may be, within five (5) Trading Days of the date on which the notice for the payment therefor is provided by a Holder (the “Default Redemption Payment Date”). If the Company fails to pay in full the Default Redemption Amount hereunder on the date such amount is due in accordance with this Section (whether in cash or shares of Common Stock), the Company will pay interest thereon at a rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law, accruing from such date until the Default Redemption Amount, plus all such interest thereon, is paid in full. 

 

Section 7. Prepayment.

 

At any time upon ten (10) days’ prior written notice to the Holder, but subject to the Holder’s conversion rights set forth herein, the Company may prepay any portion of the principal amount of this Note, all accrued and unpaid interest relating to such prepaid portion of the principal and all other amounts due under this Note. The written notice shall, among other items, state the date such Prepayment Amount (as defined below) is to be paid to the Holder, which shall not in any event be later than ten (10) calendar days from the date of mailing of the prepayment notice to the Holder (the “Prepayment Date”). If the Company exercises its right to prepay the Note, the Company shall make payment to the Holder of an amount in cash equal to the product of (i) the sum of (x) the then-outstanding principal amount of this Note and (y) all accrued but unpaid interest, multiplied by (ii) (x) 110%, if the Prepayment Date is within 90 days of the Original Issue Date, (y) 115%, if the Prepayment Date is between 91 days and 180 days following the Original Issue Date or (z) 125%, if the Prepayment Date is after the 180th day following the Original Issue Date, to which calculated amount the Company shall add all other amounts owed pursuant to this Note, including, but not limited to, all Late Fees and liquidated damages (collectively, the “Prepayment Amount”). The Holder may continue to convert the Note from the date notice of the prepayment is given until the date the Holder receives in full, the Prepayment Amount. 

 
	 
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Section 8. Miscellaneous. 

 

a) Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service, addressed to the Company, at Terra Tech Corp., 2040 Main Street, Suite 225, Irvine, California 92614, fax no. 888-330-6883, or such other facsimile number or address as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section 8(a). Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of the Holder appearing on the books of the Company, or if no such facsimile number or address appears on the books of the Company, at the principal place of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 12:00 noon (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 12:00 noon (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt by the party to whom such notice is required to be given.

 

b) Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company. This Note ranks pari passu with all other Notes now or hereafter issued under the terms set forth herein. 

 

c) Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.

 
	 
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d) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Note 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 conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. 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 Note or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

 

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

 

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

 
	 
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g) Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note and any of the other Documents (including, without limitation, the security agreements referenced in the Purchase Agreement), at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other security being required. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Note.

 

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

 

i) Headings. The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect any of the provisions hereof.

 

Section 10. Disclosure. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Note, unless the Company has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries, the Company shall within two (2) Business Days after such receipt or delivery publicly disclose such material, nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, non-public information relating to the Company or its Subsidiaries, the Company so shall indicate to the Holder contemporaneously with delivery of such notice, and in the absence of any such indication, upon the passage of two (2) Business Days, the Holder shall be allowed to presume that all matters relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries.

 

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

 

(Signature Pages Follow)

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

 

 

	
 
	
TERRA TECH CORP.
	
 

	
 
	
 
	
 
	
 

	
 
	
By:
		
 

	
 
	
Name:
		
 

	
 
	
Title:
		
 

	
 
	
Facsimile No. for delivery of Notices: _______________
	
 

 
	 
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ANNEX A

 

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert principal, accrued but unpaid interest and/or any of amounts due under the 12% Senior Convertible Promissory Note due July 25, 2019 of Terra Tech Corp., a Nevada corporation (the “Company”), into shares of common stock (the “Common Stock”), of the Company according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.

 

By the delivery of this Notice of Conversion, the undersigned represents and warrants to the Company that its ownership of the Common Stock does not exceed the amounts specified under Section 4 of this Note, as determined in accordance with Section 13(d) of the Exchange Act.

 

The undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid shares of Common Stock, if the resale of any such shares of Common Stock are covered by and are being sold pursuant to an effective Registration Statement. 

 

Conversion calculations:

 

	
 
	
Date to Effect Conversion: _________________________________

 

Principal Amount of Note to be Converted: ____________________

 

Payment of Interest in Common Stock __ yes __ no

If yes, $__________ of Interest Accrued on Account of
Conversion at Issue.

 

Other Amounts Owed Under this Note to be Converted
including Late Fees: ______________________________________

 

Number of shares of Common Stock to be issued: _______________

 

Signature: ______________________________________________

 

Name: _________________________________________________

 

Delivery Instructions:

 

	 
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Schedule 1

 

CONVERSION SCHEDULE

 

This 12% Senior Convertible Promissory Note due on July 25, 2019 in the principal amount of $5,000,000 is issued by Terra Tech Corp., a Nevada corporation. This Conversion Schedule reflects conversions made under Section 4 of the above referenced Note.

 

Dated: 

 

	
Date of Conversion

(or for first entry, Original Issue Date)
	
Amount of Conversion
	
Aggregate Principal Amount Remaining Subsequent to Conversion

(or original Principal Amount)
	
Company Attest

	 			
	 			
	 			
	 			
	 			
	 			
	 			
	 			
	 			

 

	 
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