Document:

Exhibit 10.2

 

NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAS 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 BORROWER.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR”
AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

Original
Issue Date: March 7, 2019

 

Principal
Amount: $275,000.00

 

Purchase
Price: $250,000.00

 

Original
Conversion Price (subject to adjustment herein): $0.05

 

CONVERTIBLE
NOTE

DUE
MARCH 7, 2020

 

THIS
CONVERTIBLE NOTE is one of a series of duly authorized and validly issued Notes of GRATITUDE HEALTH, INC., a Nevada corporation,
(the “Borrower”), having its principal place of business at 11231 US Highway 1, Suite 200, North Palm Beach,
FL 33408, due March 7, 2020 (this note, the “Note” and, collectively with the other notes of such series, the
“Notes”).

 

FOR
VALUE RECEIVED, Borrower promises to pay to ALPHA CAPITAL ANSTALT or its registered assigns (the “Holder”),
with an address at: Lettstrasse 32, 9490 Vaduz, Liechtenstein, Fax: 011-423-2323196, or shall have paid pursuant to the terms
hereunder, the principal sum of Two Hundred and Seventy-Five Thousand Dollars ($250,000.00) on March 7, 2020 (the “Maturity
Date”) or such earlier date as this Note is required or permitted to be repaid or such later if extended by the Holder
as provided hereunder, and to pay interest, if any, 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(d).

 

     

     

    

 

“Bankruptcy
Event” means any of the following events: (a) Borrower or any Subsidiary 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 Borrower or any Subsidiary thereof, (b) there is commenced against Borrower or
any Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement, (c) Borrower 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) Borrower 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) Borrower or any Subsidiary
thereof makes a general assignment for the benefit of creditors, (f) Borrower 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) Borrower 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.

 

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

 

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

 

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

 

“Change
of Control Transaction” means, other than by means of conversion or exercise of the Notes and the Securities issued
together with the Notes, 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 Borrower, by contract or otherwise) of in excess of 50% of
the voting securities of Borrower, (b) Borrower merges into or consolidates with any other Person, or any Person merges into or
consolidates with Borrower and, after giving effect to such transaction, the stockholders of Borrower immediately prior to such
transaction own less than 50% of the aggregate voting power of Borrower or the successor entity of such transaction, (c) Borrower
sells or transfers all or substantially all of its assets to another Person and the stockholders of Borrower immediately prior
to such transaction own less than 50% 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 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 Borrower of an agreement to which Borrower is a party or by which it is bound, providing for any of the events set forth in
clauses (a) through (d) above.

 

“Closing
Price” means on any particular date (a) the last reported closing bid price per share of Common Stock on such date
on the Trading Market (as reported by Bloomberg L.P. at 4:15 p.m. (New York City time)), or (b) if there is no such price on such
date, then the closing bid price on the Trading Market on the date nearest preceding such date (as reported by Bloomberg L.P.
at 4:15 p.m. (New York City time)), or (c)  if the Common Stock is not then listed or quoted on a Trading Market and if prices
for the Common Stock are then reported in the “pink sheets” published by Pink OTC Markets, Inc. (or a similar organization
or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported,
or (d) if the shares of Common Stock are not then publicly traded the fair market value of a share of Common Stock as determined
by an independent appraiser selected in good faith by the Holder and reasonably acceptable to Borrower, the fees and expenses
of which shall be paid by Borrower.

 

    2

     

    

 

“Conversion”
shall have the meaning ascribed to such term in Section 4.

 

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

 

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

 

“Equity
Conditions” means, during the period in question, (a) Borrower shall have duly honored all conversions scheduled to
occur or occurring by virtue of one or more Notices of Conversion of the applicable Holder on or prior to the dates so requested
or required, if any, (b) Borrower shall have paid all liquidated damages and other amounts owing to the applicable Holder in respect
of this Note and the other Transaction Documents, (c) there is either (i) an effective registration statement pursuant to which
the Holders are permitted to utilize the prospectus thereunder to resell all of the Conversion Shares and Warrant Shares (and
Borrower believes, in good faith, that such effectiveness will continue uninterrupted for the foreseeable future), or (ii) all
of the Underlying Shares (and shares issuable in lieu of cash payments of interest) may be resole pursuant to Rule 144 without
volume or manner of sale restrictions or current public information requirements; and Company counsel has delivered to the Company’s
transfer agent and Holder a standing, written unqualified opinion that resales may then be made by the Holder of all of the Holders
Conversion Shares and Warrant Shares pursuant to such effective registration statement, (d) the Common Stock is trading on a Trading
Market and all of the shares issuable pursuant to the Transaction Documents are listed or quoted for trading on the Trading Market
(and Borrower believes, in good faith, that trading of the Common Stock on such Trading Market will continue uninterrupted for
the foreseeable future), (e) there is a sufficient number of authorized, but unissued and otherwise unreserved, shares of Common
Stock for the issuance of all of the shares then issuable pursuant to the Transaction Documents, (f) an Event of Default has not
occurred, whether or not such Event of Default has been cured, (g) there is no existing event which, with the passage of time
or the giving of notice, would constitute an Event of Default, (h) the issuance of the shares in question to the applicable Holder
would not exceed the Beneficial Ownership Limitation, (i) there has been no public announcement of a pending or proposed Fundamental
Transaction or Change of Control Transaction that has not been consummated, and (j) the applicable Holder is not in possession
of any information provided by Borrower that constitutes, or may constitute, material non-public information.

 

“Event
of Default” shall have the meaning set forth in Section 8(a).

 

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

 

“Mandatory
Default Amount” means the sum of (a) the greater of (i) the outstanding principal amount of this Note divided by the
Conversion Price on the date the Mandatory Default Amount is either (A) demanded (if demand or notice is required to create an
Event of Default) or otherwise due or (B) paid in full, whichever has a lower Conversion Price, multiplied by the VWAP on the
date the Mandatory Default Amount is either (x) demanded, (y) due, or (z) paid in full, whichever is highest, or (ii) 125% of
the outstanding principal amount of this Note plus (b) all other amounts, costs, expenses and liquidated damages due in respect
of this Note.

 

“New
York Courts” shall have the meaning set forth in Section 9(d).

 

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

 

    3

     

    

 

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

 

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

 

“Other
Holders” means holders of Other Notes.

 

“Other
Notes” means Notes nearly identical to this Note issued to other Holders pursuant to the Purchase Agreement.

 

“Permitted
Indebtedness” means (a) any liabilities for borrowed money or amounts owed not in excess of $50,000 in the aggregate
(other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent
obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Borrower’s consolidated
balance sheet (or the notes thereto) not affecting more than $50,000 in the aggregate, except guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary course of business; and (c) the present value of
any lease payments not in excess of $50,000 due under leases required to be capitalized in accordance with GAAP.

 

“Permitted
Lien” means the individual and collective reference to the following: (A) Liens for taxes, assessments and other governmental
charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good
faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Borrower)
have been established in accordance with GAAP, (B) Liens imposed by law which were incurred in the ordinary course of the Borrower’s
business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other
similar Liens arising in the ordinary course of the Borrower’s business, and which (x) do not individually or in the aggregate
materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business
of the Company and its consolidated Subsidiaries, or (y) are being contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien,
and (C) Liens incurred prior to or subsequent to the Closing Date in connection with: (1) any accounts receivable factoring arrangement,
(2) capital lease obligations and purchase money indebtedness incurred in connection with the acquisition of capital assets up
to the purchase price of such assets and lease obligations with respect to newly acquired or leased assets, and (3) any asset-backed
credit line or similar facility.

 

“Purchase
Agreement” means the Securities Purchase Agreement, dated as of March ___, 2019 among Borrower and the original Holders,
as amended, modified or supplemented from time to time in accordance with its terms.

 

“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(c)(ii).

 

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

 

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

 

    4

     

    

 

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

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if any of the NASDAQ markets
or exchanges is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and
if prices for the Common Stock are then reported on the OTCQX, OTCQB or OTC Pink Marketplace maintained by the OTC Markets Group,
Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the volume weighted average price
of the Common Stock on the first such facility (or a similar organization or agency succeeding to its functions of reporting prices),
or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected
in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to Borrower,
the fees and expenses of which shall be paid by Borrower.

 

Section
2. General.

 

a) Interest.
Interest may accrue on the Principal Amount of this Note pursuant to Section 8(b) below.

 

b) Payment
Grace Period. The Borrower shall not have any grace period to pay any monetary amounts due under this Note.

 

c) Conversion
Privileges. The Conversion Rights set forth in Section 4 shall remain in full force and effect immediately from the date
hereof and until the Note is paid in full regardless of the occurrence of an Event of Default. This Note shall be payable in
full on the Maturity Date, unless previously converted into Common Stock in accordance with Section 4 hereof.

 

d) Application of Payments. Interest, if any, on this Note shall be calculated on the basis of a 360-day year and the actual
number of days elapsed. Payments made in connection with this Note shall be applied first to amounts due hereunder other than
principal and interest, thereafter to interest and finally to principal.

 

e) Pari Passu. Except as otherwise set forth herein, all payments made on this Note and the Other Notes and all actions
taken by the Borrower with respect to this Note and the Other Notes, including but not limited to Optional Redemption, shall
be made and taken pari passu with respect to this Note and the Other Notes and the Holders thereof.

 

f) Manner
and Place of Payment. Principal and interest, if any, on this Note and other payments in connection with this Note shall
be payable at the Holder’s offices as designated above in lawful money of the United States of America in immediately
available funds without set-off, deduction or counterclaim. Upon assignment of the interest of Holder in this Note, Borrower
shall instead make its payment pursuant to the assignee’s instructions upon receipt of written notice thereof. Except
as set forth herein, this Note may not be prepaid or mandatorily converted without the consent of the Holder.

 

    5

     

    

 

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 the Purchase Agreement and applicable federal and state securities laws and regulations.

 

c) Reliance on Note Register. Prior to due presentment for transfer
to Borrower of this Note, Borrower and any agent of Borrower 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 Borrower nor any such agent shall be affected by notice to the contrary.

 

Section
4. Conversion.

 

a)
Voluntary Conversion. At any time after the Original Issue Date until
this Note is no longer outstanding, 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(d) hereof).
The Holder shall effect conversions by delivering to Borrower 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 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. To effect conversions hereunder, the Holder shall not be required to physically surrender this Note
to Borrower unless the entire principal amount of this Note has 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. The Holder and Borrower
shall maintain records showing the principal amount(s) converted and the date of such conversion(s). Borrower 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 for the principal and interest in connection with voluntary conversions by the Holder
shall be $0.05, subject to adjustment herein (the “Conversion Price”).

 

c)
Mechanics of Conversion.

 

i. 
Conversion Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon
a conversion hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note
to be converted by (y) the Conversion Price.

 

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ii. Delivery
of Certificate Upon Conversion. Not later than two (2) Trading Days after each Conversion Date (the “Share Delivery
Date”), Borrower shall deliver, or cause to be delivered, to the Holder a certificate or certificates representing the
Conversion Shares which, on or after the earlier of (i) the six month anniversary of the Original Issue Date or (ii) the Effective
Date, 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 upon the conversion of this Note. On or after the earlier
of (i) the six month anniversary of the Original Issue Date or (ii) the Effective Date, Borrower shall use its best efforts to
deliver any certificate or certificates required to be delivered by Borrower under this Section 4(c) electronically through the
Depository Trust Company or another established clearing corporation performing similar functions.

 

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
Borrower at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in which event
Borrower shall promptly return to the Holder any original Note delivered to Borrower and the Holder shall promptly return to Borrower
the Common Stock certificates issued to such Holder pursuant to the rescinded Conversion Notice.

 

iv. Obligation
Absolute. Borrower’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 Borrower or any violation or alleged violation of law by the Holder or any other Person,
and irrespective of any other circumstance which might otherwise limit such obligation of Borrower to the Holder in connection
with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver
by Borrower of any such action Borrower may have against the Holder. In the event the Holder of this Note shall elect to convert
any or all of the outstanding principal amount hereof, Borrower 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 and obtained, and Borrower posts 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 such injunction, Borrower shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If Borrower
fails for any reason to deliver to the Holder such certificate or certificates pursuant to Section 4(c)(ii) by the Share Delivery
Date, Borrower shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of principal amount
being converted, $10 per Trading Day (increasing to $20 per Trading Day on the fifth (5th) Trading Day after such liquidated
damages being to accrue) 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 8 hereof for Borrower’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.

 

    7

     

    

 

v. Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to the
Holder, if Borrower fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery Date
pursuant to Section 4(c)(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 or 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 Borrower 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 Borrower had
timely complied with its delivery requirements under Section 4(c)(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, Borrower shall be required to pay
the Holder $1,000. The Holder shall provide Borrower written notice indicating the amounts payable to the Holder in respect
of the Buy-In and, upon request of Borrower, 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 Borrower’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. Borrower covenants that it will at all times reserve and keep available out of its
authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Note 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) upon the conversion of the then outstanding principal amount of this Note on such principal amount. Borrower
covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued,
fully paid and nonassessable.

 

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 which the Holder would otherwise be entitled to purchase upon such conversion, Borrower 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, Borrower 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 Borrower 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 Borrower the amount of such tax or shall have established to the satisfaction
of Borrower that such tax has been paid. Borrower shall pay all Transfer Agent fees required for same-day processing of any Notice
of Conversion.

 

    8

     

    

 

d) Holder’s
Conversion Limitations. Borrower shall not effect any conversion of this Note, and a Holder shall not have the right to
convert any portion 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 which 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 Borrower
subject to a limitation on conversion or exercise analogous to the limitation contained herein (including, without
limitation, any other Notes or the Warrants) beneficially owned by the Holder or any of its Affiliates.  Except as set
forth in the preceding sentence, for purposes of this Section 4(d), beneficial ownership shall be calculated in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the
limitation contained in this Section 4(d) 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
Borrower each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set
forth in this paragraph and Borrower 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(d), 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) Borrower’s most recent periodic or annual report filed with the
Commission, as the case may be, (ii) a more recent public announcement by Borrower, or (iii) a more recent written notice by
Borrower or Borrower’s transfer agent setting forth the number of shares of Common Stock outstanding.  Upon the
written or oral request of a Holder, Borrower shall within two Trading Days confirm orally and in writing to the Holder the
number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the conversion or exercise of securities of Borrower, 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 9.99% 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 may decrease the Beneficial Ownership Limitation at any time and the Holder, upon not less than 61
days’ prior notice to Borrower, may increase the Beneficial Ownership Limitation provisions of this Section 4(d),
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(d) shall continue to apply. Any such
increase will not be effective until the 61st day after such notice is delivered to Borrower. 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(d) 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.

 

    9

     

    

 

Section
5. Certain Adjustments.

 

a)
Stock Dividends and Stock Splits. If Borrower, 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 Borrower upon conversion of 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 Borrower, 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 Borrower) 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 re-classification.

 

b)
Subsequent Rights Offerings. In addition to any adjustments pursuant
to Section 5(a) above, if at any time Borrower 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 which 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).

 

c) Pro
Rata Distributions. During such time as this Note is outstanding, if Borrower shall declare or make any dividend whether or
not permitted, or makes any 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).

 

    10

     

    

 

d) Fundamental
Transaction. If, at any time while this Note is outstanding, (i) Borrower, directly or indirectly, in one or more
related transactions effects any merger or consolidation of Borrower with or into another Person, (ii) Borrower, 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 Borrower 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) Borrower, 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, (v) Borrower,
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(d) on the conversion of this Note),
the number of shares of Common Stock of the successor or acquiring corporation or of Borrower, 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(d) 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 Borrower 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. Borrower shall cause any successor entity in a
Fundamental Transaction in which Borrower is not the survivor (the “Successor Entity”) to assume in
writing all of the obligations of Borrower under this Note and the other Transaction Documents (as defined in the
Purchase Agreement) in accordance with the provisions of this Section 5(d) 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
which 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 Transaction
Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right
and power of Borrower and shall assume all of the obligations of Borrower under this Note and the other Transaction Documents
with the same effect as if such Successor Entity had been named as Borrower herein.

 

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e) Adjustment
Upon Issuance of Shares of Common Stock. If and whenever on or after the date hereof, the Company issues or sells, or in accordance
with this Section 5 is deemed to have issued or sold, any shares of Common Stock (including the issuance or sale of shares of
Common Stock owned or held by or for the account of the Company, but excluding any Exempt Issuance issued or sold or deemed to
have been issued or sold) for a consideration per share (the “New Issuance Price”) less than a price equal
to the Conversion Price in effect immediately prior to such issue or sale or deemed issuance or sale (such Conversion Price then
in effect is referred to as the “Applicable Price”) (the foregoing a “Dilutive Issuance”),
then immediately after such Dilutive Issuance, the Conversion Price then in effect shall be reduced to the New Issuance Price.
For all purposes of the foregoing (including, without limitation, determining the adjusted Conversion Price and consideration
per share under this Section 5(e)), the following shall be applicable:

 

(i) Issuance
of Options. If the Company in any manner grants or sells any Options (other than Options that qualify as Exempt Issuances)
and the lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion,
exercise or exchange of any Convertible Securities issuable upon exercise of any such Option is less than the Applicable Price,
then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time
of the granting or sale of such Option for such price per share. For purposes of this Section 5(e)(i), the “lowest price
per share for which one share of Common Stock is issuable upon the exercise of any such Options or upon conversion, exercise or
exchange of any Convertible Securities issuable upon exercise of any such Option” shall be equal to (1) the lower of (x)
the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of
Common Stock upon the granting or sale of such Option, upon exercise of such Option and upon conversion, exercise or exchange
of any Convertible Security issuable upon exercise of such Option and (y) the lowest exercise price set forth in such Option for
which one share of Common Stock is issuable upon the exercise of any such Options or upon conversion, exercise or exchange of
any Convertible Securities issuable upon exercise of any such Option minus (2) the sum of all amounts paid or payable to the holder
of such Option (or any other Person) upon the granting or sale of such Option, upon exercise of such Option and upon conversion,
exercise or exchange of any Convertible Security issuable upon exercise of such Option plus the value of any other consideration
received or receivable by, or benefit conferred on, the holder of such Option (or any other Person). Except as contemplated below,
no further adjustment of the Conversion Price shall be made upon the actual issuance of such shares of Common Stock or of such
Convertible Securities upon the exercise of such Options or upon the actual issuance of such shares of Common Stock upon conversion,
exercise or exchange of such Convertible Securities.

 

(ii) Issuance
of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities (other than Convertible
Securities that qualify as Exempt Issuances) and the lowest price per share for which one share of Common Stock is issuable upon
the conversion, exercise or exchange thereof is less than the Applicable Price, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale of such Convertible Securities
for such price per share. For the purposes of this Section 5(e)(ii), the “lowest price per share for which one share of
Common Stock is issuable upon the conversion, exercise or exchange thereof” shall be equal to (1) the lower of (x) the sum
of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common Stock
upon the issuance or sale of the Convertible Security and upon conversion, exercise or exchange of such Convertible Security and
(y) the lowest conversion price set forth in such Convertible Security for which one share of Common Stock is issuable upon conversion,
exercise or exchange thereof minus (2) the sum of all amounts paid or payable to the holder of such Convertible Security (or any
other Person) upon the issuance or sale of such Convertible Security plus the value of any other consideration received or receivable
by, or benefit conferred on, the holder of such Convertible Security (or any other Person). Except as contemplated below, no further
adjustment of the Conversion Price shall be made upon the actual issuance of such shares of Common Stock upon conversion, exercise
or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise
of any Options for which adjustment of this Note has been or is to be made pursuant to other provisions of this Section 5(e),
except as contemplated below, no further adjustment of the Conversion Price shall be made by reason of such issue or sale.

 

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(iii) Change
in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional
consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at
which any Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or
decreases at any time, the Conversion Price in effect at the time of such increase or decrease shall be adjusted to the
Conversion Price which would have been in effect at such time had such Options or Convertible Securities provided for such
increased or decreased purchase price, additional consideration or increased or decreased conversion rate, as the case may
be, at the time initially granted, issued or sold. For purposes of this Section 5(e)(iii), if the terms of any Option or
Convertible Security that was outstanding as of the date of issuance of this Note are increased or decreased in the manner
described in the immediately preceding sentence, then such Option or Convertible Security and the shares of Common Stock
deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such
increase or decrease. No adjustment pursuant to this Section 5(e) shall be made if such adjustment would result in an
increase of the Conversion Price then in effect.

 

(iv) Calculation of Consideration Received. If any Option and/or Convertible Security and/or Adjustment Right is issued in
connection with the issuance or sale or deemed issuance or sale of any other securities of the Company (as determined by the
Holder, the “Primary Security”, and such Option and/or Convertible Security and/or Adjustment Right, the
“Secondary Securities”), together comprising one integrated transaction, the consideration per share of
Common Stock with respect to such Primary Security shall be deemed to be equal to the difference of (x) the lowest price per
share for which one share of Common Stock was issued in such integrated transaction (or was deemed to be issued pursuant to
Section 5(e)(i) or 5(e)(ii) above, as applicable) solely with respect to such Primary Security, minus (y) with respect to
such Secondary Securities, the fair market value of such Secondary Securities as agreed to by the Company and Holder and
absent such agreement by an independent, reputable appraiser jointly selected by the Company and the Holder. The
determination of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses
of such appraiser shall be borne by the Company.

 

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 Borrower)
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, Borrower
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.

 

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ii. Notice
to Allow Conversion by Holder. If (A) Borrower shall declare a dividend (or any other distribution in whatever form) on
the Common Stock, (B) Borrower shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)
Borrower 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 Borrower shall be required
in connection with any reclassification of the Common Stock, any consolidation or merger to which Borrower is a party, any
sale or transfer of all or substantially all of the assets of Borrower, or any compulsory share exchange whereby the
Common Stock is converted into other securities, cash or property or (E) Borrower shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of Borrower, then, in each case, Borrower 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 Borrower or any of the Subsidiaries, Borrower 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.

 

Section
6. Negative Covenants. As long as any portion of this Note remains outstanding, unless the holders of a Majority
in Interest (as defined in the Purchase Agreement) shall have otherwise given prior written consent, Borrower shall not, and shall
not permit any of the Subsidiaries to, directly or indirectly:

 

a) other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer
to exist any indebtedness for borrowed money of any kind, including, but not limited to, a guarantee, on or with respect to any
of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

 

b) other
than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect to any of
its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

 

c) amend
its charter documents, including without limitation, its certificate of incorporation and bylaws, in any matter that materially
and adversely affects any rights of the Holder;

 

d) repay,
repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common Stock
or Common Stock Equivalents other than as to the Conversion Shares as permitted or required under the Transaction Documents;

 

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e) redeem,
defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or in part,
whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any Indebtedness
(other than the Notes if on a pro-rata basis), whether by way of payment in respect of principal of (or premium, if any) or interest
on, such Indebtedness, the foregoing restriction shall also apply to Permitted Indebtedness from and after the occurrence of an
Event of Default;

 

f) declare
or make any dividend or other distribution of its assets or rights to acquire its assets to holders of shares of Common Stock,
preferred stock, or any other equity security 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;

 

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

 

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

 

Section
8. 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 or interest, if any, amount of this Note or (B) liquidated damages 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 a default under clause (B) above, is not cured within
3 Trading Days after Borrower has become or should have become aware of such default;

 

ii. Borrower
shall fail to observe or perform any other covenant or agreement contained in the Notes which failure is not cured, if possible
to cure, within the earlier to occur of (A) 5 Trading Days after notice of such failure sent by the Holder or by any Other Holder
to Borrower and (B) 10 Trading Days after Borrower has become or should have become aware of such failure;

 

iii. a
default or 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 Transaction Documents, including but not limited to failure for an Initial listing, or (B) any
other material agreement, lease, document or instrument to which Borrower or any Subsidiary is obligated (and not covered by clause
(vi) below);

 

iv. any
representation or warranty made in this Note, any other Transaction 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;

 

v. Borrower
or any Subsidiary shall be subject to a Bankruptcy Event;

 

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vi. Borrower
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. Borrower
shall be a party to any Change of Control Transaction or Fundamental Transaction;

 

viii. Borrower
does not meet the current public information requirements under Rule 144;

 

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

 

x. 
any Person shall breach any agreement delivered to the initial Holders pursuant to Section 2.2 of the Purchase Agreement;

 

xi. any monetary judgment, writ or similar final process shall be entered or filed against Borrower, 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 90 calendar days;

 

xii. any
dissolution, liquidation or winding up by Borrower or a material Subsidiary of a substantial portion of their business;

 

xiii. cessation
of operations by Borrower or a material Subsidiary;

 

xiv. an
event resulting in the Common Stock no longer being listed or quoted on a Trading Market, or notification from a Trading Market
that the Borrower is not in compliance with the conditions for such continued quotation and such non-compliance continues for
twenty (20) days following such notification;

 

xv. a
Commission or judicial stop trade order or suspension from the Borrower’s Principal Trading Market;

 

xvi. the
Borrower effectuates a reverse split of its Common Stock without ten (10) days prior written notice to the Holder;

 

xvii. a
failure by Borrower to notify Holder of any material event of which Borrower is obligated to notify Holder pursuant to the terms
of this Note or any other Transaction Document;

 

xviii. a
default by the Borrower of a material term, covenant, warranty or undertaking of any other agreement to which the Borrower and
Holder are parties, or the occurrence of an event of default under any such other agreement to which Borrower and Holder are parties
which is not cured after any required notice and/or cure period;

 

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xix. the
occurrence of an Event of Default under any Other Note;

 

xx. any
material provision of any Transaction Document shall at any time for any reason (other than pursuant to the express terms thereof)
cease to be valid and binding on or enforceable against the Borrower, or the validity or enforceability thereof shall be contested
by Borrower, or a proceeding shall be commenced by Borrower or any governmental authority having jurisdiction over Borrower or
Holder, seeking to establish the invalidity or unenforceability thereof, or Borrower shall deny in writing that it has any liability
or obligation purported to be created under any Transaction Document;

 

xxi. the
failure by Borrower or any material Subsidiary to maintain any material intellectual property rights, personal, real property,
equipment, leases or other assets which are necessary to conduct its business (whether now or in the future) and such breach is
not cured with twenty (20) days after written notice to the Borrower from the Holder;

 

xxii. the
restatement after the date hereof of any financial statements filed by the Borrower with the Commission for any date or period
from two years prior to the Original Issue Date and until this Note is no longer outstanding, if the result of such restatement
would, by comparison to the unrestated financial statements, have constituted a Material Adverse Effect. For the avoidance of
doubt, any restatement related to new accounting pronouncements shall not constitute a default under this Section; or

 

xxiii.
the occurrence of an Event of Default as defined in and under any other debt instrument issued by Borrower to Holder or Other
Holder.

 

b)
Remedies Upon Event of Default, Fundamental Transaction and Change of
Control Transaction. If any Event of Default or a Fundamental Transaction or a Change of Control Transaction occurs, the outstanding
principal amount of this Note, 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. Commencing
on the Maturity Date and also five (5) days after the occurrence of any Event of Default interest on this Note shall accrue at
an interest rate equal to the lesser of 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 Borrower. In connection
with such acceleration described herein, the Holder need not provide, and Borrower 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 8(b). No such rescission or annulment shall affect
any subsequent Event of Default or impair any right consequent thereon.

 

Section
9. Miscellaneous.

 

a)
Notices. All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i)
personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered
by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or
other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by
facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below
(if delivered on a business day during normal business hours where such notice is to be received), or the first business day following
such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or
(b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address,
or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be: (i) if to
Borrower, to: Gratitude Health, Inc., 11231 US Highway 1, Suite 200, North Palm Beach, FL 33408, Attn: Roy Warren, Chief Executive
Officer, e-mail: roy@organicgratitude.com, and (ii) if to the Holder, to: the address and fax number indicated on the front page
of this Note, with an additional copy by fax only to (which shall not constitute notice): Grushko & Mittman, P.C., 515 Rockaway
Avenue, Valley Stream, New York 11581, facsimile: (212) 697-3575.

 

    17

     

    

 

b)
Absolute Obligation. Except as expressly provided herein, no provision
of this Note shall alter or impair the obligation of Borrower, 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 Borrower. This Note ranks pari passu with all other Notes now or hereafter issued
under the terms set forth herein pursuant to the Purchase Agreement. 

 

c)
Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen
or destroyed, Borrower 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 Borrower.

 

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 Transaction 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 Transaction
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 hereby irrevocably waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this
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. This
Note shall be deemed an unconditional obligation of Borrower for the payment of money and, without limitation to any other remedies
of Holder, may be enforced against Borrower by summary proceeding pursuant to New York Civil Procedure Law and Rules Section 3213
or any similar rule or statute in the jurisdiction where enforcement is sought. For purposes of such rule or statute, any other
document or agreement to which Holder and Borrower are parties or which Borrower delivered to Holder, which may be convenient
or necessary to determine Holder’s rights hereunder or Borrower’s obligations to Holder are deemed a part of this
Note, whether or not such other document or agreement was delivered together herewith or was executed apart from this Note.

 

    18

     

    

 

e) Waiver.
Any waiver by Borrower 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 Borrower 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 Borrower 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.

 

g) Usury.
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. Borrower 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 Borrower 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
Borrower (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.

 

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.

 

j) Amendment. Unless otherwise provided for hereunder, this Note may not be modified or amended or the provisions hereof
waived without the written consent of Borrower and the Holder.

 

k) Facsimile
Signature. In the event that the Borrower’s signature is delivered by facsimile transmission, PDF, electronic
signature or other similar electronic means, such signature shall create a valid and binding obligation of the Borrower with
the same force and effect as if such signature page were an original thereof.

 

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

 

(Signature
Pages Follow)

 

    19

     

    

 

IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an authorized officer as of the ____ day of March,
2019.

 

	 	GRATITUDE HEALTH, INC.
	 	 	 
	 	By:	 
	 	 	Name: Roy Warren
	 	 	Title:   Chief Executive Officer

 

WITNESS:

 

______________________________________

 

    20

     

    

 

ANNEX
A

 

NOTICE
OF CONVERSION

 

The
undersigned hereby elects to convert principal under the Convertible Note Due March 7, 2020 of Gratitude Health, Inc., a Nevada
corporation (the “Company”), into shares of common stock (the “Common Stock”), of Borrower
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 Borrower 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 Borrower 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.

 

Conversion
calculations:

 

	 	Date
    to Effect Conversion: ____________________________
	 	 
	 	Principal Amount of Note to be Converted: $__________________
	 	 
	 	Number of shares of Common Stock to be issued:
    ______________
	 	 
	 	Signature: _________________________________________
	 	 
	 	Name: ____________________________________________
	 	 
	 	Address for Delivery
    of Common Stock Certificates: __________
	 	_____________________________________________________ 
	 	_____________________________________________________
	 	 
	 	Or
	 	 
	 	DWAC Instructions: _________________________________
	 	 
	 	Broker No:_____________
	 	Account No: _______________

 

 

21svra-ex419_591.htm

 

EXHIBIT 4.19

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN SECTIONS 5.3 AND 5.4 BELOW, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

 

WARRANT TO PURCHASE COMMON STOCK

 

Company: SAVARA INC.

Number of Shares of Common Stock:  5,666 

Warrant Price: $8.824

Issue Date: December 4, 2018

Expiration Date:  December 4, 2028          See also Section 5.1(b).

	
Credit Facility: 
	
This Warrant to Purchase Common Stock (“Warrant”) is issued in connection with that certain Loan and Security Agreement between Silicon Valley Bank and the Company dated April 28, 2017, as amended by that certain First Amendment dated October 31, 2017 and that certain Second Amendment of even date herewith (the “Loan Agreement”).

 

THIS WARRANT CERTIFIES THAT, for good and valuable consideration, LIFE SCIENCE LOANS II, LLC (together with any successor or permitted assignee or transferee of this Warrant or of any shares issued upon exercise hereof, “Holder”) is entitled to purchase the number of fully paid and non-assessable shares (the “Shares”) of the above-stated common stock (the “Common Stock”) of the above-named company (the “Company”) at the above-stated Warrant Price, all as set forth above and as adjusted pursuant to Section 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant.

 

SECTION 1.  EXERCISE.

 

1.1Method of Exercise. Holder may at any time and from time to time exercise this Warrant, in whole or in part, by delivering to the Company the original of this Warrant together with a duly executed Notice of Exercise in substantially the form attached hereto as Appendix 1 and, unless Holder is exercising this Warrant pursuant to a cashless exercise set forth in Section 1.2, a check, wire transfer of same-day funds (to an account designated by the Company), or other form of payment acceptable to the Company for the aggregate Warrant Price for the Shares being purchased.

 

1

 

 

 

1.2Cashless Exercise. On any exercise of this Warrant, in lieu of payment of the aggregate Warrant Price in the manner as specified in Section 1.1 above, but otherwise in accordance with the requirements of Section 1.1, Holder may elect to receive Shares equal to the value of this Warrant, or portion hereof as to which this Warrant is being exercised. Thereupon, the Company shall issue to the Holder such number of fully paid and non-assessable Shares as are computed using the following formula:

 

X = Y(A-B)/A

 

where:

 

	
 
	
X =
	
the number of Shares to be issued to the Holder;

 

	
 
	
Y =
	
the number of Shares with respect to which this Warrant is being exercised (inclusive of the Shares surrendered to the Company in payment of the aggregate Warrant Price);

 

	
 
	
A =
	
the Fair Market Value (as determined pursuant to Section 1.3 below) of one Share; and

 

	
 
	
B =
	
the Warrant Price.

 

1.3Fair Market Value. If the Company’s Common Stock is then traded or quoted on a nationally recognized securities exchange, inter-dealer quotation system or over-the-counter market (a “Trading Market”), the fair market value of a Share shall be the closing price or last sale price of a share of Common Stock reported for the Business Day immediately before the date on which Holder delivers this Warrant together with its Notice of Exercise to the Company. If the Company’s Common Stock is not traded in a Trading Market, the Board of Directors of the Company shall determine the fair market value of a Share in its reasonable good faith judgment.

 

1.4Delivery of Certificate and New Warrant. Within a reasonable time after Holder exercises this Warrant in the manner set forth in Section 1.1 or 1.2 above, the Company shall deliver to Holder a certificate representing the Shares issued to Holder upon such exercise and, if this Warrant has not been fully exercised and has not expired, a new warrant of like tenor representing the Shares not so acquired.

 

1.5Replacement of Warrant. On receipt of evidence reasonably satisfactory  to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form, substance and amount to the Company or, in the case of mutilation, on surrender of this Warrant to the Company for cancellation, the Company shall, within a reasonable time, execute and deliver to Holder, in lieu of this Warrant, a new warrant of like tenor and amount.

 

2

 

 

 

1.6Treatment of Warrant Upon Acquisition of Company.

 

(a)Acquisition. For the purpose of this Warrant, “Acquisition” means any transaction or series of related transactions involving: (i) the sale, lease, exclusive license, or other disposition of all or substantially all of the assets of the Company (ii) any merger or consolidation of the Company into or with another person or entity (other than a merger or consolidation effected exclusively to change the Company’s domicile), or any other corporate reorganization, in which the stockholders of the Company in their capacity as such immediately prior to such merger, consolidation or reorganization, own less than a majority of the Company’s (or the surviving or successor entity’s) outstanding voting power immediately after such merger, consolidation or reorganization; or (iii) any sale or other transfer by the stockholders of the Company of shares representing at least a majority of the Company’s then-total outstanding combined voting power.

 

(b)Treatment of Warrant at Acquisition. In the event of an Acquisition in which the consideration to be received by the Company’s stockholders consists solely of cash, solely of Marketable Securities or a combination of cash and Marketable Securities (a “Cash/Public Acquisition”), and the fair market value of one Share as determined in accordance with Section 1.3 above would be greater than the Warrant Price in effect on such date immediately prior to such Cash/Public Acquisition, and Holder has not exercised this Warrant pursuant to Section 1.1 above as to all Shares, then this Warrant shall automatically be deemed to be Cashless Exercised pursuant to Section 1.2 above as to all Shares effective immediately prior to and contingent upon the consummation of a Cash/Public Acquisition. In connection with such Cashless Exercise, Holder shall be deemed to have restated each of the representations and warranties in Section 4 of the Warrant as the date thereof and the Company shall promptly notify the Holder of the number of Shares (or such other securities) issued upon exercise. In the event of a Cash/Public Acquisition where the fair market value of one Share as determined in accordance with Section 1.3 above would be less than the Warrant Price in effect immediately prior to such Cash/Public Acquisition, then this Warrant will expire immediately prior to the consummation of such Cash/Public Acquisition.

 

(c)Upon the closing of any Acquisition other than a Cash/Public Acquisition defined above, the acquiring, surviving or successor entity shall assume the obligations of this Warrant, and this Warrant shall thereafter be exercisable for the same securities and/or other property as would have been paid for the Shares issuable upon exercise of the unexercised portion of this Warrant as if such Shares were outstanding on and as of the closing of such Acquisition, subject to further adjustment from time to time in accordance with the provisions of this Warrant.

 

(d)As used in this Warrant, “Marketable Securities” means securities meeting all of the following requirements: (i) the issuer thereof is then subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is then current in its filing of all required reports and other information under the Act and the Exchange Act; (ii) the class and series of shares or other security of the issuer that would be received by Holder in connection with the Acquisition were Holder to exercise this Warrant on or prior to the closing thereof is then traded in Trading Market, and (iii) following the closing of such Acquisition, Holder would not be restricted from publicly re-selling all of the issuer’s shares and/or other securities that would be received by Holder in such Acquisition were Holder to exercise or convert this Warrant in full on or prior to the closing of such Acquisition, except to the extent that any such restriction (x) arises solely under federal or state securities laws, rules or regulations, and (y) does not extend beyond six (6) months from the closing of such Acquisition.

3

 

 

 

 

SECTION 2. ADJUSTMENTS TO THE SHARES AND WARRANT PRICE.

 

2.1Stock Dividends, Splits, Etc. If the Company declares or pays a dividend or distribution on the outstanding shares of the Common Stock payable in securities or property (other than cash), then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without additional cost to Holder, the total number and kind of securities and property which Holder would have received had Holder owned the Shares of record as of the date the dividend or distribution occurred. If the Company subdivides the outstanding shares of the Common Stock by reclassification or otherwise into a greater number of shares, the number of Shares purchasable hereunder shall be proportionately increased and the Warrant Price shall be proportionately decreased. If the outstanding shares of the Common Stock are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased and the number of Shares shall be proportionately decreased.

 

2.2Reclassification, Exchange, Combinations or Substitution. Upon  any event whereby all of the outstanding shares of the Common Stock are reclassified, exchanged, combined, substituted, or replaced for, into, with or by Company securities of a different class and/or series, then from and after the consummation of such event, this Warrant will be exercisable for the number, class and series of Company securities that Holder would have received had the Shares been outstanding on and as of the consummation of such event, and subject to further adjustment thereafter from time to time in accordance with the provisions of this Warrant. The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, combinations substitutions, replacements or other similar events.

 

2.3Intentionally Omitted.

 

2.4Intentionally Omitted.

 

2.5No Fractional Share. No fractional Share shall be issuable upon exercise of this Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share. If a fractional Share interest arises upon any exercise of the Warrant, the Company shall eliminate such fractional Share interest by paying Holder in cash the amount computed by multiplying the fractional interest by (i) the fair market value (as determined in accordance with Section 1.3 above) of a full Share, less (ii) the then-effective Warrant Price.

 

2.6Notice/Certificate as to Adjustments. Upon each adjustment of the Warrant Price, Common Stock and/or number of Shares, the Company, at the Company’s expense, shall notify Holder in writing within a reasonable time setting forth the adjustments to the Warrant Price, class and/or number of Shares and facts upon which such adjustment is based. The Company shall, upon written request from Holder, furnish Holder with a certificate of its Chief Financial Officer, including computations of such adjustment and the Warrant Price, class and number of Shares in effect upon the date of such adjustment.

 

4

 

 

 

SECTION 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.

 

3.1Representations and Warranties. The Company represents and warrants to, and agrees with, the Holder as follows: All Shares which may be issued upon the exercise of this Warrant, shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws. The Company covenants that it shall at all times cause to be reserved and kept available out of its authorized and unissued capital stock such number of securities as will be sufficient to permit the exercise in full of this Warrant.

 

3.2Notice of Certain Events. If the Company proposes at any time to:

 

(a)declare any dividend or distribution upon the outstanding shares of the Company’s stock, whether in cash, property, stock, or other securities and whether or not a regular cash dividend;

 

(b)offer for subscription or sale pro rata to the holders of the outstanding shares any additional shares of any class or series of the Company’s stock (other than pursuant to contractual pre-emptive rights);

 

(c)effect any reclassification, exchange, combination, substitution, reorganization or recapitalization of the outstanding shares of the Common Stock; or

 

(d)effect an Acquisition or to liquidate, dissolve or wind up; then, in connection with each such event, the Company shall give Holder:

 

(1)in the case of the matters referred to in (a) and (b) above, at least seven (7) Business Days prior written notice of the earlier to occur of the effective date thereof or the date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of outstanding shares of the Common Stock will be entitled thereto) or for determining rights to vote, if any; and

 

(2)in the case of the matters referred to in (c) and (d) above at least seven (7) Business Days prior written notice of the date when the same will take place (and specifying the date on which the holders of outstanding shares of the Class will be entitled to exchange their shares for the securities or other property deliverable upon the occurrence of such event and such reasonable information as Holder may reasonably require regarding the treatment of this Warrant in connection with such event giving rise to the notice).

 

Company will also provide information requested by Holder that is reasonably necessary to enable Holder to comply with Holder’s accounting or reporting requirements.

 

5

 

 

 

SECTION 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER.

 

The Holder represents and warrants to the Company as follows:

 

4.1Purchase for Own Account. This Warrant and the Shares to be acquired upon exercise of this Warrant by Holder are being acquired for investment for Holder’s account, not as a nominee or agent, and not with a view to the public resale or distribution within the meaning of the Act. Holder also represents that it has not been formed for the specific purpose  of acquiring this Warrant or the Shares.

4.2Disclosure of Information. Holder is aware of the Company’s business affairs and financial condition and has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the acquisition of this Warrant and its underlying securities. Holder further has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of this Warrant and its underlying securities and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to Holder or to which Holder has access.

 

4.3Investment Experience. Holder understands that the purchase of this Warrant and its underlying securities involves substantial risk. Holder has experience as an investor in securities of companies in the development stage and acknowledges that Holder can bear the economic risk of such Holder’s investment in this Warrant and its underlying securities and has such knowledge and experience in financial or business matters that Holder is capable of evaluating the merits and risks of its investment in this Warrant and its underlying securities and/or has a preexisting personal or business relationship with the Company and certain of its officers, directors or controlling persons of a nature and duration that enables Holder to be aware of the character, business acumen and financial circumstances of such persons.

 

4.4Accredited Investor Status. Holder is an “accredited investor” within the meaning of Regulation D promulgated under the Act.

 

4.5The Act. Holder understands that this Warrant and the Shares issuable upon exercise hereof have not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the Holder’s investment intent as expressed herein. Holder understands that this Warrant and the Shares issued upon any exercise hereof must be held indefinitely unless subsequently registered under the Act and qualified under applicable state securities laws, or unless exemption from such registration and qualification are otherwise available. Holder is aware of the provisions of Rule 144 promulgated under the Act.

 

4.6No Voting Rights. Holder, as a Holder of this Warrant, will not have any voting rights until the exercise of this Warrant.

 

6

 

 

 

SECTION 5. MISCELLANEOUS.

 

5.1Term and Automatic Conversion Upon Expiration.

 

(a)Term. Subject to the provisions of Section 1.6 above, this Warrant is exercisable in whole or in part at any time and from time to time on or before 6:00 PM, Pacific time, on the Expiration Date and shall be void thereafter.

 

(b)Automatic Cashless Exercise upon Expiration. In the event that, upon the Expiration Date, the fair market value of one Share (or other security issuable upon the exercise hereof) as determined in accordance with Section 1.3 above is greater than the Warrant Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be exercised pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised, and the Company shall, within a reasonable time, deliver a certificate representing the Shares (or such other securities) issued upon such exercise to Holder.

 

5.2Legends. The Shares (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) shall be imprinted with a legend in substantially the following form:

 

THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE COMMON STOCK ISSUED BY THE ISSUER TO LIFE SCIENCE LOANS II, LLC DATED DECEMBER 4, 2018, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

 

5.3Compliance with Securities Laws on Transfer. This Warrant and the Shares issuable upon exercise of this Warrant (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) may not be transferred or assigned in whole or in part except in compliance with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company). The Company shall not require Holder to provide an opinion of counsel if the transfer is to SVB Financial Group (Silicon Valley Bank’s parent company) or any other affiliate of Holder, provided that any such transferee is an “accredited investor” as defined in Regulation D promulgated under the Act. Additionally, the Company shall also not require an opinion of counsel if there is no material question as to the availability of Rule 144 promulgated under the Act.

 

7

 

 

 

5.4Notices. All notices and other communications hereunder from the Company to the Holder, or vice versa, shall be deemed delivered and effective (i) when given personally, (ii) on the third (3rd) Business Day after being mailed by first-class registered or certified mail, postage prepaid, (iii) upon actual receipt if given by facsimile or electronic mail and such receipt is confirmed in writing by the recipient, or (iv) on the first Business Day following delivery to a reliable overnight courier service, courier fee prepaid, in any case at such address as may have been furnished to the Company or Holder, as the case may be, in writing by the Company or such Holder from time to time in accordance with the provisions  of  this Section 5.5. All notices to Holder shall be addressed as follows until the Company receives notice of a change of address in connection with a transfer or otherwise:

 

Life Science Loans II, LLC 

c/o Chief Financial Officer 

3720 Carillon Point

Kirkland, Washington 98033-7455 

Attention: Trent Dawson 

Telephone:  (425) 952-3951 

Email: tdawson@wrg.vc

 

Notice to the Company shall be addressed as follows until Holder receives notice of a change in address:

 

SAVARA INC.

6836 Bee Cave Road, Building III, Suite 200 Austin, TX 78746

Attn: David Lowrance, CFO

Email: dave.lowrance@savarapharma.com

 

With a copy (which shall not constitute notice) to:

 

WILSON SONSINI GOODRICH & ROSATI, P.C.

Attn: J. Robert Suffoletta

900 S. Capital of Texas Highway Las Cimas IV, Fifth Floor Austin, TX 78746

Telephone: (512) 338-5400

Facsimile: (512) 338-5499 

Email: rsuffoletta@wsgr.com

 

5.5Waiver. This Warrant and any term hereof may be changed, waived, discharged or terminated (either generally or in a particular instance and either retroactively or prospectively) only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.

 

5.6Attorney’s Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees.

 

8

 

 

 

5.7Counterparts; Facsimile/Electronic Signatures. This Warrant may be executed in counterparts, all of which together shall constitute one and the same agreement. Any signature page delivered electronically or by facsimile shall be binding to the same extent as an original signature page with regards to any agreement subject to the terms hereof or any amendment thereto.

 

5.8Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of California, without giving effect to its principles regarding conflicts of law.

 

5.9Headings. The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.

 

5.10Business Days. “Business Day” is any day that is not a Saturday, Sunday or a day on which Silicon Valley Bank is closed.

 

[Remainder of page left blank intentionally]

[Signature page follows]

 

 

9

 

 

 

 

IN WITNESS WHEREOF, the parties have caused this Warrant to Purchase Common Stock to be executed by their duly authorized representatives effective as of the Issue Date written above.

 

"COMPANY"

 

SAVARAINC.

 

	
By:
	
 
	
/s/ David L. Lowrance

	
Name:
	
 
	
David L. Lowrance

	
Title:
	
 
	
CFO

 

"HOLDER"

 

Life Science Loans II, LLC 

By: Loan Manager, LLC 

Managing Member

 

	
By:
	
 
	
/s/ Trent Dawson

	
 
	
 
	
Trent Dawson, Chief Financial Officer

 

 

[Signature Page to Warrant to Purchase Common Stock]

 

 

 

APPENDIX 1

NOTICE OF EXERCISE

1.The undersigned Holder hereby exercises its right purchase               shares of the Common Stock of SAVARA INC. (the “Company”) in accordance with the attached Warrant To Purchase Common Stock, and tenders payment of the aggregate Warrant Price for such shares as follows:

 

	
 
	
[      ]
	
check in the amount of $             payable to order of the Company enclosed herewith

 

	
 
	
[      ]
	
Wire transfer of immediately available funds to the Company’s account 

 

	
 
	
[      ]
	
Cashless Exercise pursuant to Section 1.2 of the Warrant

 

	
 
	
[      ]
	
Other [Describe]                                                                                             

 

2.Please issue a certificate or certificates representing the Shares in the name specified below:

 

	
	
 

	
Holder’s Name

	
 

	
 

	
 

	
 

	
 

	
(Address)

 

3.By its execution below and for the benefit of the Company, Holder hereby restates each of the representations and warranties in Section 4 of the Warrant to Purchase Common Stock as of the date hereof.

 

	
	
HOLDER:

	
 

 

	
By:
	
 
	
 

	
 
	
 
	
 

	
Name:
	
 
	
 

	
 
	
 
	
 

	
Title:
	
 
	
 

	
 
	
 
	
 

	
(Date):

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00293-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00293-of-00352.parquet"}]]