Document:

ex_109126.htm

Exhibit 10.2

 

CONFIDENTIAL

 

SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”) is entered into and effective simultaneously with the execution of this Agreement on this 23rd day of March 2018, by and between BIO-key International, Inc., a Delaware corporation (the “Company”), and Micron Technology Development Limited (the “Purchaser”). 

 

R E C I T A L S:

 

WHEREAS, subject to the terms and conditions of this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), Purchaser desires to purchase and the Company desires to sell securities on the terms and conditions set forth herein. 

 

NOW, THEREFORE, in consideration of the premises hereof and the agreements set forth herein below, the parties hereto hereby agree as follows:

 

1.           Sale and Purchase of Securities. 

 

(a)     Purchase and Sale. Subject to the terms and conditions hereof, the Company agrees to sell, and Purchaser agrees to purchase Eighty Two Thousand Seven Hundred Fifty Five (82,755) shares (the “Shares”) of the Company’s common stock, $0.0001 par value per share (the “Common Stock”), at a purchase price of $3.60 per Share for an aggregate purchase price of $297,197 (the “Purchase Price”). The Purchase Price shall be paid by the conversion of a dividend payable in the amount of $297,197 on the Company’s Series B-1 Convertible Preferred Stock (the “Series B-1 Preferred”) presently due and payable to the Purchaser. Within a reasonable time following the date hereof, the Company shall deliver to Purchaser, a certificate evidencing the Shares.

 

2.           Representations and Warranties of Purchaser. Purchaser represents and warrants to the Company as follows:

 

(a)     Authority Validity and Effect of Agreement. The execution and delivery of each of this Agreement by Purchaser and the performance by Purchaser of its obligations hereunder have been duly authorized by all necessary organizational proceedings on the part of the Purchaser. This Agreement has been duly and validly executed and delivered by Purchaser and, assuming that it has been duly authorized, executed and delivered by the Company, constitutes a legal, valid and binding obligation of Purchaser, in accordance with its terms. 

 

(b)     Acknowledgement Regarding Conversion of Dividend Payable. Purchaser acknowledges that the accrued dividend payable on the Series B-1 Preferred due and owing to Purchaser as of February 2, 2018 is $297,197 (the “Dividend Payable”) and hereby releases and relinquishes any right, title and interest to the Dividend Payable as consideration for the payment of the Shares. 

 

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(c)     Accredited Investor.      Purchaser is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D under the Securities Act.

 

(d)     Investment Intent. The Securities are being acquired for Purchaser’s own account for investment purposes only, not as a nominee or agent and not with a view to the resale or distribution of any part thereof, and Purchaser has no present intention of selling, granting any participation in or otherwise distributing the same.

 

(e)     Restrictions on Transfer. Purchaser understands that the Securities are “restricted securities” as such term is defined in Rule 144 under the Securities Act and have not been registered under the Securities Act or registered or qualified under any state securities law, and may not be, directly or indirectly, sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without registration under the Securities Act and registration or qualification under applicable state securities laws or the availability of an exemption therefrom.

 

(f)     Short Sales. Purchaser has not directly or indirectly, nor has any person acting on behalf of or pursuant to any understanding with Purchaser, executed any disposition, including Short Sales (as such term is defined in Rule 200 of Regulation SHO under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), in the securities of the Company during the period commencing from the time that Purchaser first received written or oral notice of the transactions contemplated herby until the date hereof (“Discussion Time”).

 

(g)     No Disqualification Events. Purchaser is not subject to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a "Disqualification Event"), except for a Disqualification Event covered by Rule 506(d)(2) under the Securities Act. 

 

3.           Representations and Warranties of the Company. The Company represents and warrants to Purchaser as follows:

 

(a)     Authority Validity and Effect of Agreement. The execution and delivery of each of this Agreement by the Company and the performance by the Company of its obligations hereunder have been duly authorized by all necessary corporate proceedings on the part of the Company. This Agreement has been duly and validly executed and delivered by the Company and, assuming that it has been duly authorized, executed and delivered by Purchaser, constitutes a legal, valid and binding obligation of the Company, in accordance with its terms.

 

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(b)     Issuance of the Securities. The Shares have been duly authorized and, when issued and paid for in accordance with the terms of this Agreement, will be duly and validly issued, fully paid and nonassessable, free and clear of all liens, other than restrictions on transfer provided for in this Agreement or imposed by applicable securities laws, and shall not be subject to preemptive or similar rights of shareholders. 

 

4.           Other Agreements of the Parties.

 

(a)     Legends. The certificates and agreements evidencing the Shares shall have endorsed thereon a standard and customary legend respecting the Securities Act and stop transfer instructions reflecting these restrictions on transfer will be placed with the transfer agent of the Securities.

 

(b)     Standstill. Reference is hereby made to that certain Securities Purchase Agreements dated November 11, 2015 (the “Series B-1 Agreement”) by and between the Company and the Purchaser, pursuant to which the Purchaser purchased 75,000 shares of Series B-1 Convertible Preferred Stock. The Series B-1 Agreement contains a standstill provision (the “Standstill Provision”), which prevents Purchaser, either alone or together with any other person, from acquiring additional shares of the Company’s Common Stock or any of the Company’s assets, soliciting proxies, or seeking further representation on the Company’s board of directors. The Purchaser hereby acknowledges and agrees that: (i) the Company is hereby waiving the Standstill Provisions solely to permit Purchaser to waive the “blocker provision” set forth in Section 5.1.3 of the Certificate of Designation of Preferences, Rights and Limitations of Series B-1 Convertible Preferred Stock of Bio-key International, Inc. for the purpose of converting additional shares of Series B-1 Preferred provided that after giving effect to any such conversions, Purchaser does not beneficially own in excess of 19.99% of the Company’s Common Stock and (ii) notwithstanding the foregoing, the Standstill Provisions remain in full force and effect.

 

(c)     Notice of Disqualification Events. Purchaser will notify the Company in writing, of (i) any Disqualification Event relating to Purchaser and (ii) any event that would, with the passage of time, become a Disqualification Event relating to Purchaser.

 

5.           Non-Public Information. Purchaser acknowledges that certain information concerning the matters that are the subject matter of this Agreement constitute material non-public information under United States federal securities laws, and that United States federal securities laws prohibit any person who has received material non-public information relating to the Company from purchasing or selling securities of the Company, or from communicating such information to any person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell securities of the Company. Accordingly, until such time as any such non-public information has been adequately disseminated to the public, Purchaser shall not purchase or sell any securities of the Company, or communicate such information to any other person 

 

6.           Entire Agreement. This Agreement contains the entire agreement between the parties and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereto. 

 

7.           Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey, without regard to the laws that might otherwise govern under applicable principles of conflicts of laws thereof, except to the extent that the General Corporation Law of the State of Delaware shall apply to the internal corporate governance of the Company.

 

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8.           Arbitration. If a dispute arises as to the interpretation of this Agreement, it shall be decided in an arbitration proceeding conforming to the Rules of the American Arbitration Association applicable to commercial arbitration then in effect at the time of the dispute. The arbitration shall take place in the State of New Jersey. The decision of the arbitrators shall be conclusively binding upon the parties and final and such decision shall be enforceable as a judgment in any court of competent jurisdiction. The parties shall share equally the costs of the arbitration.

 

9.           Counterparts. This Agreement may be executed and delivered by facsimile in counterparts, each of which shall be deemed to be an original, and both of which together shall constitute one and the same agreement.

 

WITNESS WHEREOF, intending to be legally bound, the parties hereto have caused this Agreement to be executed as of the date set forth above.

 

	
			 

				
			PURCHASER

			 

			 

			MICRON TECHNOLOGY DEVELOPMENT LIMITED

			 

			By: /s/Chen Hoo

			 

			Name: Chen Hoo 

			 

			Title: Director

			
	 	 
	 	 
	 	 
	 	 
	 	 
	 	
			BIO-KEY INTERNATIONAL, INC.

			 

			 

			By: /s/ Michael W. DePasquale

			 

			Name: Michael W. DePasquale

			 

			       Title: Chief Executive Officer

			

 

4Blueprint

  EXHIBIT
10.24

 

ESCONDIDO INNOVATIONS, INC.

 

Warrant To Purchase Common Stock

 

Warrant
No.: _____

Number
of Shares of Common Stock: ________________

Date of
Issuance: ________________
(“Issuance
Date”)

 

Escondido
Innovations, Inc., a Delaware corporation (the “Company” or “Escondido”), hereby certifies
that, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, ________________, the registered holder
hereof or its permitted assigns (the “Holder”), is entitled, subject to
the terms set forth below, to purchase from the Company, at the
Exercise Price (as defined below) then in effect, upon surrender of
this Warrant to Purchase Common Stock (including any Warrants to
Purchase Common Stock issued in exchange, transfer or replacement
hereof, the “Warrant”), at any time or times on
or before the ten-year (10th) anniversary of the
date hereof, but not after 11:59 p.m., New York time, on the
Expiration Date (as defined
below), ________________
(________________) fully
paid nonassessable shares of Common Stock (as defined below); (the
“Warrant
Shares”). Except as otherwise defined herein,
capitalized term in this Warrant shall have the meanings set forth
in Section 12.

 

1. EXERCISE OF
WARRANT.

 

(a) Mechanics of Exercise. Subject
to the terms and conditions hereof, this Warrant may be exercised
by the Holder on any day on or after the Issuance Date, in whole or
in part, by (i) delivery to the Company of a written notice, in the
form attached hereto as Exhibit A (the “Exercise Notice”), of the
Holder’s election to exercise this Warrant and
(ii) either (A) payment to the Company of an amount equal to
the applicable Exercise Price multiplied by the number of Warrant
Shares as to which this Warrant is being exercised (the
“Aggregate Exercise
Price”) in cash or by wire transfer of immediately
available funds or (B) by notifying the Company that this
Warrant is being exercised pursuant to a Cashless Exercise (as
defined in Section
1(c)). The Holder shall not be required
to deliver the original Warrant in order to effect an exercise
hereunder. Execution and delivery of the Exercise Notice with
respect to less than all of the Warrant Shares shall have the same
effect as cancellation of the original Warrant and issuance of a
new Warrant evidencing the right to purchase the remaining number
of Warrant Shares. On or before the first (1st) Trading Day
following the date on which the Company has received the Exercise
Notice or if there is no Principal Exchange on which the Common
Stock trades, then on the tenth (10th) day following the
date of receipt of the Exercise Notice (such date, the
“Exercise
Date”), the Company shall transmit by facsimile an
acknowledgment of confirmation of receipt of the Exercise Notice to
the Holder and the Company’s transfer agent (the
“Transfer
Agent”).

 

 

1

 

 

On or
before the third (3rd) Trading Day following the date on which the
Company has received the Exercise Notice (the “Share Delivery Date”), so long as
the Holder delivers the Aggregate Exercise Price (or notice of
Cashless Exercise) on or prior to the Share Delivery Date, the
Company shall (X) provided that the Transfer Agent is participating
in The Depository Trust Company (“DTC”) Fast Automated Securities
Transfer Program, upon the request of the Holder, credit such
aggregate number of Warrant Shares to which the Holder is entitled
pursuant to such exercise to the Holder’s or its
designee’s balance account with DTC through its
Deposit/Withdrawal At Custodian system, or (Y) if the Transfer
Agent is not participating in the DTC Fast Automated Securities
Transfer Program, issue and dispatch by overnight courier to the
address as specified in the Exercise Notice, a certificate,
registered in the Company’s share register in the name of the
Holder or its designee, for the number of shares of Common Stock to
which the Holder is entitled pursuant to such exercise. The Company
shall be responsible for all fees and expenses of the Transfer
Agent and all fees and expenses with respect to the issuance of
Warrant Shares via DTC, if any. Upon delivery of the Exercise
Notice, so long as the Holder delivers the Aggregate Exercise Price
(or notice of a Cashless Exercise) on or prior to the Share
Delivery Date, the Holder shall be deemed for all corporate
purposes to have become the holder of record of the Warrant Shares
with respect to which this Warrant has been exercised, irrespective
of the date such Warrant Shares are credited to the Holder’s
DTC account or the date of delivery of the certificates evidencing
such Warrant Shares, as the case may be. If the Common Stock is not
trading on any Principal Market, then so long as the Aggregate
Exercise Price has been delivered or cashless exercise selected in
lieu thereof, the Company itself within ten (10) days after receipt
of the Exercise Notice will issue and dispatch by overnight courier
to the address as specified in the Exercise Notice, a certificate
registered in the Company’s share register in the name of the
Holder or its designee, for the number of shares of Common Stock to
which the Holder is entitled pursuant to such exercise. If this
Warrant is submitted in connection with any exercise pursuant to
this Section 1(a) and the number of Warrant Shares
represented by this Warrant submitted for exercise is greater than
the number of Warrant Shares being acquired upon an exercise, then
the Company shall as soon as practicable and in no event later than
three (3) Trading Days after any exercise or if the Common Stock is
not trading on a Principal Exchange, then within ten (10) days and
at its own expense, issue a new Warrant (in accordance with
Section 5(d)) representing the right to purchase
the number of Warrant Shares issuable immediately prior to such
exercise under this Warrant, less the number of Warrant Shares with
respect to which this Warrant is exercised. No fractional shares of
Common Stock are to be issued upon the exercise of this Warrant,
but rather the number of shares of Common Stock to be issued shall
be rounded up to the nearest whole number. The Company shall pay
any and all taxes which may be payable with respect to the issuance
and delivery of Warrant Shares upon exercise of this
Warrant.

 

(b) Exercise Price. For purposes of
this Warrant, “Exercise
Price” means $0.25 (subject to adjustment for stock
splits, stock dividends, recapitalizations, reorganizations,
reclassification, combinations, reverse stock splits or other
similar events).

 

(c) Cashless Exercise.  Notwithstanding anything contained
herein to the contrary, the Holder may, in its sole discretion,
exercise this Warrant in whole or in part and, in lieu of making
the cash payment otherwise contemplated to be made to the Company
upon such exercise in payment of the Aggregate Exercise Price,
elect instead to receive upon such exercise the “Net Number” of shares of Common
Stock determined according to the following formula (a
“Cashless
Exercise”):

 

 

2

 

 

	
Net Number
=

	(A x B) - (A x C)
	
 

	

           
B

 

For
purposes of the foregoing formula:

 

A= the
total number of shares with respect to which this Warrant is then
being exercised.

 

B= the
Weighted Average Price of the Common Stock (as reported by
Bloomberg) for the five (5) consecutive Trading Days ending on the
date immediately preceding the date of the Exercise Notice or if
the Common Stock is not trading on a Principal Exchange, then at
the price of the Common Stock as determined by the Board of
Directors of the Company at the time of exercise.

 

C= the
Exercise Price then in effect for the applicable Warrant Shares at
the time of such exercise.

 

2. ADJUSTMENT OF EXERCISE PRICE.
The Exercise Price shall be adjusted from time to time as follows:
If the Company at any time on or after the date of issuance
subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common
Stock into a greater number of shares, the Exercise Price in effect
immediately prior to such subdivision will be proportionately
reduced and the number of Warrant Shares will be proportionately
increased. If the Company at any time on or after the date of
issuance combines (by combination, reverse stock split or
otherwise) one or more classes of its outstanding shares of Common
Stock into a smaller number of shares, the Exercise Price in effect
immediately prior to such combination will be proportionately
increased and the number of Warrant Shares will be proportionately
decreased. Any adjustment under this Section 2 shall become effective at the close of
business on the date the subdivision or combination becomes
effective.

 

3. RIGHTS UPON DISTRIBUTION OF
ASSETS. If the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets)
to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of
cash, stock or other securities, property or options by way of a
dividend, spin off, reclassification, corporate rearrangement,
scheme of arrangement or other similar transaction) (a
“Distribution”),
at any time after the issuance of this Warrant, then, in each such
case, upon an exercise of this Warrant, in whole or in part, the
Holder will be entitled to receive the amount of any such
Distribution that the Holder would have received if the Holder had
held, immediately before the date on which a record is taken for
the declaration or payment of the Distribution, or, if no such
record date is taken, the date as of which the record holders of
shares of Common Stock are to be determined for the declaration or
payment of the Distribution, the number of shares of Common Stock
that the Holder is entitled to receive upon such exercise (without
taking into account any limitations or restrictions on the
convertibility of this Warrant).

 

	

 

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4. WARRANT HOLDER NOT DEEMED A
STOCKHOLDER. Except as otherwise specifically provided
herein, the Holder, solely in such Person’s capacity as a
holder of this Warrant, shall not be entitled to vote or receive
dividends or be deemed the holder of share capital of the Company
for any purpose, nor shall anything contained in this Warrant be
construed to confer upon the Holder, solely in such Person’s
capacity as the Holder of this Warrant, any of the rights of a
stockholder of the Company or any right to vote, give or withhold
consent to any corporate action (whether any reorganization, issue
of stock, reclassification of stock, consolidation, merger,
conveyance or otherwise), receive notice of meetings, receive
dividends or subscription rights, or otherwise, prior to the
issuance to the Holder of the Warrant Shares which such Person is
then entitled to receive upon the due exercise of this Warrant. In
addition, nothing contained in this Warrant shall be construed as
imposing any liabilities on the Holder to purchase any securities
(upon exercise of this Warrant or otherwise) or as a stockholder of
the Company, whether such liabilities are asserted by the Company
or by creditors of the Company. Notwithstanding this Section 4, the Company shall provide the Holder
with copies of the same notices and other information given to the
stockholders of the Company generally, contemporaneously with the
giving thereof to the stockholders.

 

5. REISSUANCE OF
WARRANTS.

 

(a) Transfer of Warrant. If this
Warrant is to be transferred, the Holder shall surrender this
Warrant to the Company, whereupon the Company will forthwith issue
and deliver upon the order of the Holder a new Warrant, registered
as the Holder may request, representing the right to purchase the
number of Warrant Shares being transferred by the Holder and, if
less than the total number of Warrant Shares then underlying this
Warrant is being transferred, a new Warrant to the Holder
representing the right to purchase the number of Warrant Shares not
being transferred. No transfer of this
warrant may be completed unless and until (i) the Company has
received an opinion of counsel for the Company that such securities
may be sold pursuant to an exemption from registration under the
Securities Act of 1933, as amended (the “Securities
Act”), or (ii) a
registration statement relating to this Warrant has been filed by
the Company and declared effective by the Commission. Subject to
the foregoing, this Warrant and all rights hereunder are
transferable, in whole or in part, at the principal office of the
Company by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant properly endorsed to any person or
entity who represents in writing that he/she/it is acquiring the
Warrant for investment and without any view to the sale or other
distribution thereof. Each Holder of this Warrant, by taking or
holding the same, consents and agrees that the bearer of this
Warrant, when endorsed, may be treated by the Company and all other
persons dealing with this Warrant as the absolute owner hereof for
any purpose and as the person entitled to exercise the rights
represented by this Warrant or perform the obligations required
hereby, or to the transfer hereof on the books of the Company, any
notice to the contrary notwithstanding; but until such transfer on
such books, the Company may treat the registered owner hereof as
the owner for all purposes.

 

(b) Lost, Stolen or Mutilated
Warrant. Upon receipt by the Company 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, of any indemnification undertaking by the Holder to
the Company in customary form and, in the case of mutilation, upon
surrender and cancellation of this Warrant, the Company shall
execute and deliver to the Holder a new Warrant representing the
right to purchase the Warrant Shares then underlying this
Warrant.

 

 

4

 

 

(c) Exchangeable for Multiple
Warrants. This Warrant is exchangeable, upon the surrender
hereof by the Holder at the principal office of the Company, for a
new Warrant or Warrants representing in the aggregate the right to
purchase the number of Warrant Shares then underlying this Warrant,
and each such new Warrant will represent the right to purchase such
portion of such Warrant Shares as is designated by the Holder at
the time of such surrender; provided, however, that no Warrants for
fractional shares of Common Stock shall be given.

 

(d) Issuance of New Warrants.
Whenever the Company is required to issue a new Warrant pursuant to
the terms of this Warrant, such new Warrant (i) shall be of like
tenor with this Warrant, (ii) shall represent, as indicated on the
face of such new Warrant, the right to purchase the Warrant Shares
then underlying this Warrant (or in the case of a new Warrant being
issued pursuant to Section
10, the Warrant Shares
designated by the Holder which, when added to the number of shares
of Common Stock underlying the other new Warrants issued in
connection with such issuance, does not exceed the number of
Warrant Shares then underlying this Warrant), (iii) shall have an
issuance date, as indicated on the face of such new Warrant which
is the same as the original issuance date, and (iv) shall have the
same rights and conditions as this Warrant.

 

6. NOTICES. Whenever notice is
required to be given under this Warrant, unless otherwise provided
herein, such notice shall be given in accordance with Section 6 of the Agreement. The Company shall
provide the Holder with prompt written notice of all actions taken
pursuant to this Warrant, including in reasonable detail a
description of such action and the reason therefor. Without
limiting the generality of the foregoing, the Company will give
written notice to the Holder (i) immediately upon any adjustment of
the Exercise Price, setting forth in reasonable detail, and
certifying, the calculation of such adjustment and (ii) at least
fifteen days prior to the date on which the Company closes its
books or takes a record (A) with respect to any dividend or
distribution upon the shares of Common Stock, or (B) with respect
to any grants, issuances or sales of any Options, Convertible
Securities or rights to purchase stock, warrants, securities or
other property to holders of shares of Common Stock.

 

7. AMENDMENT AND WAIVER. Except as
otherwise provided herein, the provisions of this Warrant may be
amended and the Company may take any action herein prohibited, or
omit to perform any act herein required to be performed by it, only
if the Company has obtained the written consent of the
Holder.

 

8. GOVERNING LAW. This Warrant
shall be governed by and construed and enforced in accordance with,
and all questions concerning the construction, validity,
interpretation and performance of this Warrant shall be governed
by, the internal laws of the State of Delaware, without giving
effect to any choice of law or conflict of law provision or rule
(whether of the State of Delaware or any other jurisdictions) that
would cause the application of the laws of any jurisdictions other
than the State of Delaware.

 

9. HEADINGS. The headings of this
Warrant are for convenience of reference and shall not form part
of, or affect the interpretation of, this Warrant.

 

 

5

 

 

10. TRANSFER. This Warrant may be
offered for sale, sold, transferred or assigned without the consent
of the Company.

 

11. SEVERABILITY. If any provision
of this Warrant is prohibited by law or otherwise determined to be
invalid or unenforceable by a court of competent jurisdiction, the
provision that would otherwise be prohibited, invalid or
unenforceable shall be deemed amended to apply to the broadest
extent that it would be valid and enforceable, and the invalidity
or unenforceability of such provision shall not affect the validity
of the remaining provisions of this Warrant so long as this Warrant
as so modified continues to express, without material change, the
original intentions of the parties as to the subject matter hereof
and the prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the
respective expectations or reciprocal obligations of the parties or
the practical realization of the benefits that would otherwise be
conferred upon the parties. The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable
provision(s) with a valid provision(s), the effect of which comes
as close as possible to that of the prohibited, invalid or
unenforceable provision(s).

 

12. CERTAIN DEFINITIONS. For
purposes of this Warrant, the following terms shall have the
following meanings:

 

(a) “Bloomberg” means Bloomberg
Financial Markets.

 

(b) “Business Day” means any day other
than Saturday, Sunday or other day on which commercial banks in The
City of New York are authorized or required by law to remain
closed.

 

(c) “Common Stock” means (i) the
Company’s shares of Common Stock, par value $0.001 per share,
and (ii) any share capital into which such Common Stock shall
have been changed or any share capital resulting from a
reclassification of such Common Stock.

 

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

 

(e) “Expiration Date” means the date
ten (10) years after the date of issuance, or, if such date falls
on a day other than a Business Day or on which trading does not
take place on the Principal Market (a “Holiday”), the next date that is
not a Holiday.

 

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

 

(g) “Person” means an individual, a
limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization, any other
entity and a government or any department or agency
thereof.

 

(h) “Principal Market” means the
principal market or stock exchange on which the equities trade at
time of exercise of the Warrants.

 

 

6

 

 

(i) “Trading Day” means any day on
which the Common Stock is traded on the Principal Market, or, if
the Principal Market is not the principal trading market for the
Common Stock, then on the principal securities exchange or
securities market on which the Common Stock is then traded;
provided that “Trading
Day” shall not include any day on which the Common
Stock is scheduled to trade on such exchange or market for less
than 4.5 hours or any day that the Common Stock is suspended from
trading during the final hour of trading on such exchange or market
(or if such exchange or market does not designate in advance the
closing time of trading on such exchange or market, then during the
hour ending at 4:00 p.m., New York time).

 

[Signature Page Follows]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	

 

 

7

 

 

IN WITNESS WHEREOF, the Company has
caused this Warrant to Purchase Common Stock to be duly executed as
of the Issuance Date set out above.

 

 

	

ESCONDIDO
INNOVATIONS, INC.

	
  

	
 

	
By: 

	
 

	
Name:

	

Michael
Witherill

	
Title:

	
 CEO and Chairman

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	

 

 

8

 

 

 EXHIBIT A

EXERCISE NOTICE

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE
THIS

WARRANT TO PURCHASE COMMON STOCK

 

ESCONDIDO INNOVATIONS, INC.

 

The
undersigned holder hereby exercises the right to purchase
_________________ of the shares of Common Stock
(“Warrant
Shares”) of Escondido Innovations, Inc., a Delaware
corporation (the “Company”), evidenced by the
attached Warrant to Purchase Common Stock (the “Warrant”). Capitalized terms used
herein and not otherwise defined shall have the respective meanings
set forth in the Warrant.

 

1. Form
of Exercise Price. The Holder intends that payment of the Exercise
Price shall be made as:

 

____________ 

a
“Cash Exercise”
with respect to _________________ Warrant Shares;
and/or

 

____________ 

a
“Cashless
Exercise” with respect to _______________ Warrant
Shares.

 

2.
Payment of Exercise Price. In the event that the holder has elected
a Cash Exercise with respect to some or all of the Warrant Shares
to be issued pursuant hereto, the holder shall pay the Aggregate
Exercise Price in the sum of $___________________ to the Company in
accordance with the terms of the Warrant.

 

3.
Delivery of Warrant Shares. The Company shall deliver to the holder
__________ Warrant Shares in accordance with the terms of the
Warrant.

 

Date:
_______________ __, ______

 

 

	
 

	
 

	
 Name of
Registered Holder 

	
 

	
 

	
By:

	
 

	
 

	
 Name:

	
 

	
 Title:

 

 

 

 

 

 

 

 

ACKNOWLEDGMENT

 

 

The
Company hereby acknowledges this Exercise Notice and hereby directs
its transfer agent to issue the above indicated number of shares of
Common Stock in accordance with the Transfer Agent Instructions
dated ___________ from the Company and acknowledged and agreed to
by its transfer agent.

 

 

	

ESCONDIDO INNOVATIONS, INC.

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
    
Name:

	
 

	
    
Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00281-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00281-of-00352.parquet"}]]