Document:

sfiv_ex102.htm

EXHIBIT 10.2
  
 REGISTRATION RIGHTS AGREEMENT
  
 REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of September 27, 2018, by and between SECTOR 5, INC., a Nevada corporation (the "Company"), and AUCTUS FUND, LLC, a Delaware limited liability company (together with it permitted assigns, the “Buyer”). Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the equity purchase agreement by and between the parties hereto, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the "Purchase Agreement").
  
 WHEREAS:
  
 The Company has agreed, upon the terms and subject to the conditions of the Purchase Agreement, to sell to the Buyer up to Ten Million Dollars ($10,000,000.00) of Put Shares and to induce the Buyer to enter into the Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the "Securities Act"), and applicable state securities laws.
  
 NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Buyer hereby agree as follows:
  
 1. DEFINITIONS.
  
 As used in this Agreement, the following terms shall have the following meanings:
  
 a. "Investor" means the Buyer, any transferee or assignee thereof to whom a Buyer assigns its rights under this Agreement in accordance with Section 9 and who agrees to become bound by the provisions of this Agreement, and any transferee or assignee thereof to whom a transferee or assignee assigns its rights under this Agreement in accordance with Section 9 and who agrees to become bound by the provisions of this Agreement.
  
 b. "Person" means any individual or entity including but not limited to any corporation, a limited liability company, an association, a partnership, an organization, a business, an individual, a governmental or political subdivision thereof or a governmental agency.
  
 c. "Register," "registered," and "registration" refer to a registration effected by preparing and filing one or more registration statements of the Company in compliance with the Securities Act and/or pursuant to Rule 415 under the Securities Act or any successor rule providing for offering securities on a continuous basis ("Rule 415"), and the declaration or ordering of effectiveness of such registration statement(s) by the United States Securities and Exchange Commission (the "SEC").
  
 d. "Registrable Securities" means all of the Put Shares which have been, or which may, from time to time be issued, including without limitation all of the shares of common stock which have been issued or will be issued to the Investor under the Purchase Agreement (without regard to any limitation or restriction on purchases), and any and all shares of capital stock issued or issuable with respect to the Put Shares, shares of common stock issued to the Investor as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, without regard to any limitation on purchases under the Purchase Agreement, and the Commitment Shares (as defined in the Purchase Agreement) (the “Commitment Shares”).
  
 e. "Registration Statement" means one or more registration statements of the Company covering only the sale of the Registrable Securities.
  
  	 
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 2. REGISTRATION.
  
 a. Mandatory Registration. The Company shall, on or before November 30, 2018, file with the SEC an initial Registration Statement covering the maximum number of Registrable Securities (beginning first with three (3) times the total number of Commitment Shares, and second with the Put Shares) as shall be permitted to be included thereon in accordance with applicable SEC rules, regulations and interpretations so as to permit the resale of such Registrable Securities by the Investor, including but not limited to under Rule 415 under the Securities Act at then prevailing market prices (and not fixed prices), as mutually determined by both the Company and the Investor in consultation with their respective legal counsel, subject to the aggregate number of authorized shares of the Company’s Common Stock then available for issuance in its Certificate of Incorporation. The initial Registration Statement shall register only the Registrable Securities. The Investor and its counsel shall have a reasonable opportunity to review and comment upon such Registration Statement and any amendment or supplement to such Registration Statement and any related prospectus prior to its filing with the SEC, and the Company shall give due consideration to all reasonable comments. The Investor shall furnish all information reasonably requested by the Company for inclusion therein. The Company shall use its reasonable best efforts to have the Registration Statement and any amendment declared effective by the SEC at the earliest possible date (in any event, within ninety (90) calendar days after the date of this Agreement). The Company shall use reasonable best efforts to keep the Registration Statement effective, including but not limited to pursuant to Rule 415 promulgated under the Securities Act and available for the resale by the Investor of all of the Registrable Securities covered thereby at all times until the earlier of (i) the date as of which the Investor may sell all of the Registrable Securities without restriction pursuant to Rule 144 promulgated under the Securities and (ii) the date on which the Investor shall have sold all the Registrable Securities covered thereby and no Available Amount remains under the Purchase Agreement (the "Registration Period"). The Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading.
  
 b. Rule 424 Prospectus. The Company shall, as required by applicable securities regulations, from time to time file with the SEC, pursuant to Rule 424 promulgated under the Securities Act, the prospectus and prospectus supplements, if any, to be used in connection with sales of the Registrable Securities under the Registration Statement. The Investor and its counsel shall have a reasonable opportunity to review and comment upon such prospectus prior to its filing with the SEC, and the Company shall give due consideration to all such comments. The Investor shall use its reasonable best efforts to comment upon such prospectus within one (1) Business Day from the date the Investor receives the final pre-filing version of such prospectus. 
  
 c. Sufficient Number of Shares Registered. In the event the number of shares available under the Registration Statement is insufficient to cover all of the Registrable Securities, the Company shall amend the Registration Statement or file a new Registration Statement (a “New Registration Statement”), so as to cover all of such Registrable Securities (subject to the limitations set forth in Section 2(a)) as soon as practicable, but in any event not later than ten (10) Business Days after the necessity therefor arises, subject to any limits that may be imposed by the SEC pursuant to Rule 415 under the Securities Act. The Company shall use it reasonable best efforts to cause such amendment and/or New Registration Statement to become effective as soon as practicable following the filing thereof. In the event that any of the Put Shares are not included in the Registration Statement, or have not been included in any New Registration Statement and the Company files any other registration statement under the Securities Act (other than on Form S-4, Form S-8, or with respect to other employee related plans or rights offerings) (“Other Registration Statement”) then the Company shall include in such Other Registration Statement first all of the Commitment Shares, second all of such Put Shares that have not been previously registered, and third any other securities the Company wishes to include in such Other Registration Statement. The Company agrees that it shall not file any such Other Registration Statement unless all of the Put Shares and Commitment Shares have been included in such Other Registration Statement or otherwise have been registered for resale as described above.
  
  	 
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 d. Offering. If the staff of the SEC (the “Staff”) or the SEC seeks to characterize any offering pursuant to a Registration Statement filed pursuant to this Agreement as constituting an offering of securities that does not permit such Registration Statement to become effective and be used for resales by the Investor under Rule 415 at then-prevailing market prices (and not fixed prices), or if after the filing of the initial Registration Statement with the SEC pursuant to Section 2(a), the Company is otherwise required by the Staff or the SEC to reduce the number of Registrable Securities included in such initial Registration Statement, then the Company shall reduce the number of Registrable Securities to be included in such initial Registration Statement (with the prior consent, which shall not be unreasonably withheld, of the Investor and its legal counsel as to the specific Registrable Securities to be removed therefrom) until such time as the Staff and the SEC shall so permit such Registration Statement to become effective and be used as aforesaid. In the event of any reduction in Registrable Securities pursuant to this paragraph, the Company shall file one or more New Registration Statements in accordance with Section 2(c) until such time as all Registrable Securities have been included in Registration Statements that have been declared effective and the prospectus contained therein is available for use by the Investor. Notwithstanding any provision herein or in the Purchase Agreement to the contrary, the Company’s obligations to register Registrable Securities (and any related conditions to the Investor’s obligations) shall be qualified as necessary to comport with any requirement of the SEC or the Staff as addressed in this Section 2(d).
  
 3. RELATED OBLIGATIONS.
  
 With respect to the Registration Statement and whenever any Registrable Securities are to be registered pursuant to Section 2 including on any New Registration Statement, the Company shall use its reasonable best efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition thereof and, pursuant thereto, the Company shall have the following obligations:
  
 a. The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to any registration statement and the prospectus used in connection with such registration statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may be necessary to keep the Registration Statement or any New Registration Statement effective at all times during the Registration Period, and, during such period, comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered by the Registration Statement or any New Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such registration statement.
  
 b. The Company shall permit the Investor to review and comment upon the Registration Statement or any New Registration Statement and all amendments and supplements thereto at least two (2) Business Days prior to their filing with the SEC, and not file any document in a form to which Investor reasonably objects. The Investor shall use its reasonable best efforts to comment upon the Registration Statement or any New Registration Statement and any amendments or supplements thereto within two (2) Business Days from the date the Investor receives the final version thereof. The Company shall furnish to the Investor, without charge any correspondence from the SEC or the staff of the SEC to the Company or its representatives relating to the Registration Statement or any New Registration Statement.
  
  	 
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 c. Upon request of the Investor, the Company shall furnish to the Investor, (i) promptly after the same is prepared and filed with the SEC, at least one copy of such registration statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits, (ii) upon the effectiveness of any registration statement, a copy of the prospectus included in such registration statement and all amendments and supplements thereto (or such other number of copies as the Investor may reasonably request) and (iii) such other documents, including copies of any preliminary or final prospectus, as the Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by the Investor. For the avoidance of doubt, any filing available to the Investor via the SEC’s live EDGAR system shall be deemed “furnished to the Investor” hereunder.
  
 d. The Company shall use reasonable best efforts to (i) register and qualify the Registrable Securities covered by a registration statement under such other securities or "blue sky" laws of such jurisdictions in the United States as the Investor reasonably requests, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify the Investor who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or "blue sky" laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.
  
 e. As promptly as practicable after becoming aware of such event or facts, the Company shall notify the Investor in writing of the happening of any event or existence of such facts as a result of which the prospectus included in any registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and promptly prepare a supplement or amendment to such registration statement to correct such untrue statement or omission, and deliver a copy of such supplement or amendment to the Investor (or such other number of copies as the Investor may reasonably request). The Company shall also promptly notify the Investor in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when a registration statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to the Investor by email or facsimile on the same day of such effectiveness and by overnight mail), (ii) of any request by the SEC for amendments or supplements to any registration statement or related prospectus or related information, and (iii) of the Company's reasonable determination that a post-effective amendment to a registration statement would be appropriate.
  
 f. The Company shall use its reasonable best efforts to prevent the issuance of any stop order or other suspension of effectiveness of any registration statement, or the suspension of the qualification of any Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify the Investor of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.
  
  	 
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 g. The Company shall (i) cause all the Registrable Securities to be listed on each securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange, or (ii) secure designation and quotation of all the Registrable Securities on the Principal Market. The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section.
  
 h. The Company shall cooperate with the Investor to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to any registration statement and enable such certificates to be in such denominations or amounts as the Investor may reasonably request and registered in such names as the Investor may request.
  
 i. The Company shall at all times provide a transfer agent and registrar with respect to its Common Stock.
  
 j. If reasonably requested by the Investor, the Company shall (i) immediately incorporate in a prospectus supplement or post-effective amendment such information as the Investor believes should be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities; (ii) make all required filings of such prospectus supplement or post-effective amendment as soon as practicable upon notification of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) supplement or make amendments to any registration statement.
  
 k. The Company shall use its reasonable best efforts to cause the Registrable Securities covered by any registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities.
  
 l. Within one (1) Business Day after any registration statement which includes the Registrable Securities is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies to the Investor) confirmation that such registration statement has been declared effective by the SEC in the form attached hereto as Exhibit A. Thereafter, if requested by the Buyer at any time, the Company shall require its counsel to deliver to the Buyer a written confirmation whether or not the effectiveness of such registration statement has lapsed at any time for any reason (including, without limitation, the issuance of a stop order) and whether or not the registration statement is current and available to the Buyer for sale of all of the Registrable Securities.
  
 m. The Company shall take all other reasonable actions necessary to expedite and facilitate disposition by the Investor of Registrable Securities pursuant to any registration statement.
  
  	 
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 4. OBLIGATIONS OF THE INVESTOR.
  
 a. The Company shall notify the Investor in writing of the information the Company reasonably requires from the Investor in connection with any registration statement hereunder. The Investor shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request.
  
 b. The Investor agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any registration statement hereunder.
  
 c. The Investor agrees that, upon receipt of any notice from the Company of the happening of any event or existence of facts of the kind described in Section 3(f) or the first sentence of 3(e), the Investor will immediately discontinue disposition of Registrable Securities pursuant to any registration statement(s) covering such Registrable Securities until the Investor's receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(f) or the first sentence of 3(e). Notwithstanding anything to the contrary, the Company shall cause its transfer agent to promptly deliver shares of Common Stock without any restrictive legend in accordance with the terms of the Purchase Agreement in connection with any sale of Registrable Securities with respect to which an Investor has entered into a contract for sale prior to the Investor's receipt of a notice from the Company of the happening of any event of the kind described in Section 3(f) or the first sentence of Section 3(e) and for which the Investor has not yet settled.
  
 5. EXPENSES OF REGISTRATION.
  
 All reasonable expenses, other than sales or brokerage commissions, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, and fees and disbursements of counsel for the Company, shall be paid by the Company.
  
  	 
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 6. INDEMNIFICATION.
  
 a. To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend the Investor, each Person, if any, who controls the Investor, the members, the directors, officers, partners, employees, agents, representatives of the Investor and each Person, if any, who controls the Investor within the meaning of the Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange Act") (each, an "Indemnified Person"), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, attorneys' fees, amounts paid in settlement or expenses, joint or several, (collectively, "Claims") incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto ("Indemnified Damages"), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in the Registration Statement, any New Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other "blue sky" laws of any jurisdiction in which Registrable Securities are offered ("Blue Sky Filing"), or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading, (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to the Registration Statement or any New Registration Statement or (iv) any material violation by the Company of this Agreement (the matters in the foregoing clauses (i) through (iv) being, collectively, "Violations"). The Company shall reimburse each Indemnified Person promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with information about the Investor furnished in writing to the Company by such Indemnified Person expressly for use in connection with the preparation of the Registration Statement, any New Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant to Section 3(c) or Section 3(e); (ii) with respect to any superseded prospectus, shall not inure to the benefit of any such person from whom the person asserting any such Claim purchased the Registrable Securities that are the subject thereof (or to the benefit of any person controlling such person) if the untrue statement or omission of material fact contained in the superseded prospectus was corrected in the revised prospectus, as then amended or supplemented, if such revised prospectus was timely made available by the Company pursuant to Section 3(c) or Section 3(e), and the Indemnified Person was promptly advised in writing not to use the incorrect prospectus prior to the use giving rise to a violation and such Indemnified Person, notwithstanding such advice, used it; (iii) shall not be available to the extent such Claim is based on a failure of the Investor to deliver or to cause to be delivered the prospectus made available by the Company, if such prospectus was timely made available by the Company pursuant to Section 3(c) or Section 3(e); and (iv) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by the Investor pursuant to Section 9.
  
 b. Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding. The Indemnified Party or Indemnified Person shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which relates to such action or claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effectuated without its written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability in respect to such claim or litigation. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action.
  
  	 
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 c. The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Damages are incurred.
  
 d. The indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.
  
 7. CONTRIBUTION.
  
 To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that: (i) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any seller of Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities.
  
 8. REPORTS AND DISCLOSURE UNDER THE SECURITIES ACTS.
  
 With a view to making available to the Investor the benefits of Rule 144 promulgated under the Securities Act or any other similar rule or regulation of the SEC that may at any time permit the Investor to sell securities of the Company to the public without registration ("Rule 144"), the Company agrees, at the Company’s sole expense, to:
  
 a. make and keep public information available, as those terms are understood and defined in Rule 144;
  
 b. file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act so long as the Company remains subject to such requirements and the filing of such reports and other documents is required for the applicable provisions of Rule 144;
  
 c. furnish to the Investor so long as the Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company that it has complied with the reporting and or disclosure provisions of Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the Investor to sell such securities pursuant to Rule 144 without registration; and
  
  	 
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 d. take such additional action as is requested by the Investor to enable the Investor to sell the Registrable Securities pursuant to Rule 144, including, without limitation, delivering all such legal opinions, consents, certificates, resolutions and instructions to the Company’s Transfer Agent as may be requested from time to time by the Investor and otherwise fully cooperate with Investor and Investor’s broker to effect such sale of securities pursuant to Rule 144.
  
 The Company agrees that damages may be an inadequate remedy for any breach of the terms and provisions of this Section 8 and that Investor shall, whether or not it is pursuing any remedies at law, be entitled to equitable relief in the form of a preliminary or permanent injunctions, without having to post any bond or other security, upon any breach or threatened breach of any such terms or provisions.
  
 9. ASSIGNMENT OF REGISTRATION RIGHTS.
  
 The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investor. The Investor may not assign its rights under this Agreement without the written consent of the Company.
  
 10. AMENDMENT OF REGISTRATION RIGHTS.
  
 No provision of this Agreement may be amended or waived by the parties from and after the date that is one Business Day immediately preceding the initial filing of the Registration Statement with the SEC. Subject to the immediately preceding sentence, no provision of this Agreement may be (i) amended other than by a written instrument signed by both parties hereto or (ii) waived other than in a written instrument signed by the party against whom enforcement of such waiver is sought. Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.
  
 11. MISCELLANEOUS.
  
 a. A Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the registered owner of such Registrable Securities.
  
 b. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile or email (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one (1) Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses for such communications shall be:
  
  	 
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 If to the Company:
  
 Sector 5, Inc. 
 200 Duke Street, Suite 110
 Alexandria, VA 22314
 Email: contact@sector-five.com
 Attention: Erick Kuvshinikov, Chief Executive Officer
  
 If to the Investor:
  
 Auctus Fund, LLC
 545 Boylston Street, 2nd Floor
 Boston, MA 02116
 Attn: Lou Posner 
 Facsimile: (617) 532-6420
  
 or at such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified by written notice given to each other party three (3) Business Days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender's facsimile machine or email account containing the time, date, recipient facsimile number or email address, as applicable, and an image of the first page of such transmission or (C) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.
  
 c. The corporate laws of the State of Nevada shall govern all issues concerning this Agreement. All other questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of Nevada, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Nevada or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Nevada. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the Commonwealth of Massachusetts, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
  
  	 
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 d. This Agreement and the Purchase Agreement constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement and the Purchase Agreement supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof.
  
 e. Subject to the requirements of Section 9, this Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties hereto.
  
 f. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
  
 g. This Agreement may be executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission or by e-mail in a “.pdf” format data file of a copy of this Agreement bearing the signature of the party so delivering this Agreement.
  
 h. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
  
 i. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict construction will be applied against any party.
  
 j. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
  
 * * * * * *
  
  	 
	11
	 
 
	 

  
 IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of day and year first above written.
  
  	 	 THE COMPANY:
	
	  
	  
	  

	  
	 SECTOR 5, INC. 
	  

	 	 	 	 
		By:	/s/ Erick Kuvshinikov 	
	  
	 Name: 
	Erick Kuvshinikov	 
	 	Title: 	Chief Executive Officer	 
	 	 	 	 

  
  	 	 INVESTOR:
	
	  
	  
	  

	  
	 AUCTUS FUND, LLC
	  

	 	 	 	 
		By:	/s/ Lou Posner 	
	  
	 Name:
	Lou Posner	 
	 	Title: 	Managing Director	 

   
  
  	 12Wells Fargo &
Company 8-K  

Exhibit 4.1

 

[Face of Note]

 

Unless this certificate
is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”),
to the Company or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as requested by an authorized representative of DTC (and any payment is made to Cede
& Co. or such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

	CUSIP NO. 95001B6H2	FACE AMOUNT:  $____________
	REGISTERED NO. _____	 

 

 

WELLS FARGO & COMPANY

 

MEDIUM-TERM NOTE, SERIES S

 

Due Nine Months or More From Date of Issue

 

Principal at Risk Securities Linked to the
iShares® MSCI Emerging Markets ETF due October 3, 2023 

 

 

WELLS FARGO &
COMPANY, a corporation duly organized and existing under the laws of the State of Delaware (hereinafter called the “Company,”
which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises
to pay to CEDE & Co., or registered assigns, an amount equal to the Maturity Payment Amount (as defined below), in such
coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts,
on the Stated Maturity Date. The “Initial Stated Maturity Date” shall be October 3, 2023. If the Calculation
Day (as defined below) is not postponed, the Initial Stated Maturity Date will be the “Stated Maturity Date.”
If the Calculation Day is postponed, the “Stated Maturity Date” shall be the later of (i) the Initial Stated
Maturity Date and (ii) three Business Days (as defined below) after the Calculation Day as postponed. This Security shall
not bear any interest.

Any payments on
this Security at Maturity will be made against presentation of this Security at the office or agency of the Company maintained
for that purpose in the City of Minneapolis, Minnesota and at any other office or agency maintained by the Company for such purpose.

“Face Amount”
shall mean, when used with respect to this Security, the amount set forth on the face of this Security as its “Face Amount.”

    	 		 

    	 

    

Determination of Maturity Payment
Amount

The “Maturity
Payment Amount” of this Security will equal:

 

		•	if the Ending Price is greater than the Starting Price: the Face Amount plus the lesser of:

 

	 	(i)		Face Amount x		Ending Price – Starting Price

Starting Price		x Participation Rate		; and

 

(ii)       the
Maximum Return;

 

		•	if the Ending Price is less than or equal to the Starting Price, but greater than or equal to the Threshold Price: the Face
Amount; or

 

		•	if the Ending Price is less than the Threshold Price: the Face Amount minus:

 

	 		Face Amount x	 	Threshold Price - Ending Price

Starting Price		 

 

All calculations with respect to the Maturity
Payment Amount will be rounded to the nearest one hundred-thousandth, with five one-millionths rounded upward (e.g., 0.000005 would
be rounded to 0.00001); and the Maturity Payment Amount will be rounded to the nearest cent, with one-half cent rounded upward.

 

The “Fund”
shall mean the iShares® MSCI Emerging Markets ETF.

The “Pricing
Date” shall mean September 28, 2018.

The “Starting
Price” is $42.92, the Fund Closing Price of the Fund on the Pricing Date.

The “Ending
Price” will be the Fund Closing Price of the Fund on the Calculation Day.

The
“Threshold Price” is $34.336, which is equal to 80% of the Starting Price.

The
“Participation Rate” is 150%.

The
“Maximum Return” is 55% of the Face Amount of this Security.

“Business
Day” shall mean a day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law or regulation to close in New York, New York.

The “Fund
Closing Price” with respect to the Fund on any Trading Day means the product of (i) the Closing Price of one share
of the Fund (or one unit of any other security for which a Fund Closing Price must be determined) on such Trading Day and (ii) the
Adjustment Factor applicable to the Fund on such Trading Day.

    	 	2	 

    	 

    

The “Closing
Price” for one share of the Fund (or one unit of any other security for which a Closing Price must be determined) on
any Trading Day means the official closing price on such day published by the principal United States securities exchange registered
under the Securities Exchange Act of 1934, as amended, on which the Fund (or any such other security) is listed or admitted to
trading.

The “Adjustment
Factor” means, with respect to a share of the Fund (or one unit of any other security for which a Fund Closing Price
must be determined), 1.0, subject to adjustment in the event of certain events affecting the shares of the Fund. See “—Anti-dilution
Adjustments Relating to the Fund; Alternate Calculation—Anti-dilution Adjustments” below.

The “Underlying
Index” is the MSCI Emerging Markets Index.

A “Trading
Day” means a day, as determined by the Calculation Agent, on which the Relevant Stock Exchange (as defined below) and
each Related Futures or Options Exchange (as defined below) with respect to the Fund, or any successor thereto, if applicable,
are scheduled to be open for trading for their respective regular trading sessions.

The “Relevant
Stock Exchange” for the Fund means the primary exchange or quotation system on which shares (or other applicable securities)
of the Fund are traded, as determined by the Calculation Agent.

The “Related
Futures or Options Exchange” for the Fund means each exchange or quotation system where trading has a material effect
(as determined by the Calculation Agent) on the overall market for futures or options contracts relating to the Fund.

The “Calculation
Day” shall be September 26, 2023. If such day is not a Trading Day, the Calculation Day will be postponed to the next
succeeding Trading Day. The Calculation Day is also subject to postponement due to the occurrence of a Market Disruption Event
(as defined below). If a Market Disruption Event occurs or is continuing on the Calculation Day, then the Calculation Day will
be postponed to the first succeeding Trading Day on which a Market Disruption Event has not occurred and is not continuing; however,
if such first succeeding Trading Day has not occurred as of the eighth Trading Day after the originally scheduled Calculation Day,
that eighth Trading Day shall be deemed to be the Calculation Day. If the Calculation Day has been postponed eight Trading Days
after the originally scheduled Calculation Day and a Market Disruption Event occurs or is continuing on such eighth Trading Day,
the Calculation Agent will determine the Closing Price of the Fund on such eighth Trading Day based on its good faith estimate
of the value of the shares (or other applicable securities) of the Fund as of the close of trading on such eighth Trading Day.

 

“Calculation Agent
Agreement” shall mean the Calculation Agent Agreement dated as of January 24, 2018 between the Company and the Calculation
Agent, as amended from time to time.

 

“Calculation
Agent” shall mean the Person that has entered into the Calculation Agent Agreement with the Company providing for, among
other things, the determination of the Maturity Payment Amount, the Starting Price and the Ending Price, which term shall, unless
the

    	 	3	 

    	 

    

context otherwise requires, include
its successors under such Calculation Agent Agreement. The initial Calculation Agent shall be Wells Fargo Securities, LLC. Pursuant
to the Calculation Agent Agreement, the Company may appoint a different Calculation Agent from time to time after the initial issuance
of this Security without the consent of the Holder of this Security and without notifying the Holder of this Security.

Market
Disruption Events 

A “Market
Disruption Event” means any of the following events as determined by the Calculation Agent in its sole discretion:

		(A)	The occurrence or existence of a material suspension of or limitation imposed on trading by the
Relevant Stock Exchange or otherwise relating to the shares (or other applicable securities) of the Fund or any Successor Fund
(as defined below) on the Relevant Stock Exchange at any time during the one-hour period that ends at the Close of Trading on such
day, whether by reason of movements in price exceeding limits permitted by such Relevant Stock Exchange or otherwise.

		(B)	The occurrence or existence of a material suspension of or limitation imposed on trading by any
Related Futures or Options Exchange or otherwise in futures or options contracts relating to the shares (or other applicable securities)
of the Fund or any Successor Fund on any Related Futures or Options Exchange at any time during the one-hour period that ends at
the Close of Trading on that day, whether by reason of movements in price exceeding limits permitted by the Related Futures or
Options Exchange or otherwise.

		(C)	The occurrence or existence of any event, other than an early closure, that materially disrupts
or impairs the ability of market participants in general to effect transactions in, or obtain market values for, shares (or other
applicable securities) of the Fund or any Successor Fund on the Relevant Stock Exchange at any time during the one-hour period
that ends at the Close of Trading on that day.

		(D)	The occurrence or existence of any event, other than an early closure, that materially disrupts
or impairs the ability of market participants in general to effect transactions in, or obtain market values for, futures or options
contracts relating to shares (or other applicable securities) of the Fund or any Successor Fund on any Related Futures or Options
Exchange at any time during the one-hour period that ends at the Close of Trading on that day.

		(E)	The closure of the Relevant Stock Exchange or any Related Futures or Options Exchange with respect
to the Fund or any Successor Fund prior to its Scheduled Closing Time unless the earlier closing time is announced by the Relevant
Stock Exchange or Related Futures or Options Exchange, as applicable, at least one hour prior to the earlier of (1) the actual
closing time for the regular trading session on such Relevant Stock Exchange or Related Futures or Options Exchange, as applicable,
and (2) the submission deadline for orders to be entered

    	 	4	 

    	 

    

into the
Relevant Stock Exchange or Related Futures or Options Exchange, as applicable, system for execution at the Close of Trading on
that day.

		(F)	The Relevant Stock Exchange or any Related Futures or Options Exchange with respect to the Fund
or any Successor Fund fails to open for trading during its regular trading session.

For purposes of
determining whether a Market Disruption Event has occurred:

		(1)	“Close of Trading” means the Scheduled Closing Time of the Relevant Stock Exchange
with respect to the Fund or any Successor Fund; and

		(2)	the “Scheduled Closing Time” of the Relevant Stock Exchange or any Related Futures
or Options Exchange on any Trading Day for the Fund or any Successor Fund means the scheduled weekday closing time of such Relevant
Stock Exchange or Related Futures or Options Exchange on such Trading Day, without regard to after hours or any other trading outside
the regular trading session hours.

Anti-dilution
Adjustments Relating to the Fund; Alternate Calculation

Anti-dilution Adjustments

The Calculation
Agent will adjust the Adjustment Factor as specified below if any of the events specified below occurs with respect to the Fund
and the effective date or ex-dividend date, as applicable, for such event is after the Pricing Date and on or prior to the Calculation
Day.

The adjustments
specified below do not cover all events that could affect the Fund. The Calculation Agent may, in its sole discretion, make additional
adjustments to any terms of this Security upon the occurrence of other events that affect or could potentially affect the market
price of, or shareholder rights in, the Fund, with a view to offsetting, to the extent practical, any such change, and preserving
the relative investment risks of this Security. In addition, the Calculation Agent may, in its sole discretion, make adjustments
or a series of adjustments that differ from those described herein if the Calculation Agent determines that such adjustments do
not properly reflect the economic consequences of the events specified herein or would not preserve the relative investment risks
of this Security. All determinations made by the Calculation Agent in making any adjustments to the terms of this Security, including
adjustments that are in addition to, or that differ from, those described herein, will be made in good faith and a commercially
reasonable manner, with the aim of ensuring an equitable result. In determining whether to make any adjustment to the terms of
this Security, the Calculation Agent may consider any adjustment made by the Options Clearing Corporation or any other equity derivatives
clearing organization on options contracts on the Fund.

    	 	5	 

    	 

    

For any event
described below, the Calculation Agent will not be required to adjust the Adjustment Factor unless the adjustment would result
in a change to the Adjustment Factor then in effect of at least 0.10%. The Adjustment Factor resulting from any adjustment will
be rounded up or down, as appropriate, to the nearest one-hundred thousandth.

		(A)	Stock Splits and Reverse Stock Splits

If a stock split or reverse stock
split has occurred, then once such split has become effective, the Adjustment Factor will be adjusted to equal the product of the
prior Adjustment Factor and the number of securities which a holder of one share (or other applicable security) of the Fund before
the effective date of such stock split or reverse stock split would have owned or been entitled to receive immediately following
the applicable effective date.

		(B)	Stock Dividends

If a dividend or distribution
of shares (or other applicable securities) to which this Security is linked has been made by the Fund ratably to all holders of
record of such shares (or other applicable security), then the Adjustment Factor will be adjusted on the ex-dividend date to equal
the prior Adjustment Factor plus the product of the prior Adjustment Factor and the number of shares (or other applicable security)
of the Fund which a holder of one share (or other applicable security) of the Fund before the ex-dividend date would have owned
or been entitled to receive immediately following that date; provided, however, that no adjustment will be made for a distribution
for which the number of securities of the Fund paid or distributed is based on a fixed cash equivalent value.

		(C)	Extraordinary Dividends

If an Extraordinary Dividend
(as defined below) has occurred, then the Adjustment Factor will be adjusted on the ex-dividend date to equal the product of the
prior Adjustment Factor and a fraction, the numerator of which is the Closing Price per share (or other applicable security) of
the Fund on the Trading Day preceding the ex-dividend date, and the denominator of which is the amount by which the Closing Price
per share (or other applicable security) of the Fund on the Trading Day preceding the ex-dividend date exceeds the Extraordinary
Dividend Amount (as defined below).

For purposes of determining
whether an Extraordinary Dividend has occurred:

		(1)	“Extraordinary Dividend” means any cash dividend or distribution (or portion
thereof) that the Calculation Agent determines, in its sole discretion, is extraordinary or special; and

		(2)	“Extraordinary Dividend Amount” with respect to an Extraordinary Dividend for
the securities of the Fund will equal the amount per share (or other applicable security) of the Fund of the applicable cash dividend
or

    	 	6	 

    	 

    

distribution that is attributable
to the Extraordinary Dividend, as determined by the Calculation Agent in its sole discretion.

A distribution on the securities
of the Fund described below under the section entitled “—Reorganization Events” below that also constitutes an
Extraordinary Dividend will only cause an adjustment pursuant to that “—Reorganization Events” section.

		(D)	Other Distributions

If the Fund declares
or makes a distribution to all holders of the shares (or other applicable security) of the Fund of any non-cash assets, excluding
dividends or distributions described under the section entitled “—Stock Dividends” above, then the Calculation
Agent may, in its sole discretion, make such adjustment (if any) to the Adjustment Factor as it deems appropriate in the circumstances.
If the Calculation Agent determines to make an adjustment pursuant to this paragraph, it will do so with a view to offsetting,
to the extent practical, any change in the economic position of a holder of this Security that results solely from the applicable
event.

		(E)	Reorganization Events

If the Fund, or any Successor
Fund, is subject to a merger, combination, consolidation or statutory exchange of securities with another exchange traded fund,
and the Fund to which this Security is linked is not the surviving entity (a “Reorganization Event”), then,
on or after the date of such event, the Calculation Agent shall, in its sole discretion, make an adjustment to the Adjustment Factor
or the method of determining the Maturity Payment Amount or any other terms of this Security as the Calculation Agent determines
appropriate to account for the economic effect on this Security of such event, and determine the effective date of that adjustment.
If the Calculation Agent determines that no adjustment that it could make will produce a commercially reasonable result, then the
Calculation Agent may deem such event a Liquidation Event (as defined below).

Liquidation Events

If the Fund is de-listed,
liquidated or otherwise terminated (a “Liquidation Event”), and a successor or substitute exchange traded fund
exists that the Calculation Agent determines, in its sole discretion, to be comparable to the Fund, then, upon the Calculation
Agent’s notification of that determination to the Trustee and the Company, any subsequent Fund Closing Price for the Fund
will be determined by reference to the Fund Closing Price of such successor or substitute exchange traded fund (such exchange traded
fund being referred to herein as a “Successor Fund”), with such adjustments as the Calculation Agent determines
are appropriate to account for the economic effect of such substitution on the holder of this Security.

If the Fund undergoes
a Liquidation Event prior to, and such Liquidation Event is continuing on, the date that any Fund Closing Price of the Fund is
to be determined and the

    	 	7	 

    	 

    

Calculation Agent determines that no
Successor Fund is available at such time, then the Calculation Agent will, in its discretion, calculate the Fund Closing Price
for the Fund on such date by a computation methodology that the Calculation Agent determines will as closely as reasonably possible
replicate the Fund, provided that if the Calculation Agent determines in its discretion that it is not practicable to replicate
the Fund (including but not limited to the instance in which the sponsor of the Underlying Index discontinues publication of the
Underlying Index), then the Calculation Agent will calculate the Fund Closing Price for the Fund in accordance with the formula
last used to calculate such Fund Closing Price before such Liquidation Event, but using only those securities that were held by
the Fund immediately prior to such Liquidation Event without any rebalancing or substitution of such securities following such
Liquidation Event.

If a Successor
Fund is selected or the Calculation Agent calculates the Fund Closing Price as a substitute for the Fund, such Successor Fund or
Fund Closing Price will be used as a substitute for the Fund for all purposes, including for purposes of determining whether a
Market Disruption Event exists.

If any event is
both a Reorganization Event and a Liquidation Event, such event will be treated as a Reorganization Event for purposes of this
Security unless the Calculation Agent makes the determination referenced in the last sentence of the section entitled “—Anti-dilution
Adjustments—Reorganization Events” above.

Alternate Calculation

If at any time the
method of calculating the Fund or a Successor Fund, or the Underlying Index, is changed in a material respect, or if the Fund or
a Successor Fund is in any other way modified so that the Fund does not, in the opinion of the Calculation Agent, fairly represent
the price of the securities of the Fund or such Successor Fund had such changes or modifications not been made, then the Calculation
Agent may, at the close of business in New York City on the date that any Fund Closing Price is to be determined, make such calculations
and adjustments as, in the good faith judgment of the Calculation Agent, may be necessary in order to arrive at a Closing Price
of an exchange traded fund comparable to the Fund or such Successor Fund, as the case may be, as if such changes or modifications
had not been made, and calculate the Fund Closing Price and the Maturity Payment Amount with reference to such adjusted Closing
Price of the Fund or such Successor Fund, as applicable.

Calculation
Agent

The
Calculation Agent will determine the Maturity Payment Amount, the Starting Price and the Ending Price. In addition, the Calculation
Agent will (i) determine if adjustments are required to the Fund Closing Price and/or the Adjustment Factor under the circumstances
described in this Security, (ii) if the Fund undergoes a Liquidation Event, select a Successor Fund or, if no Successor Fund
is available, determine the Fund Closing Price of the Fund, and (iii) determine whether a Market Disruption Event or non-Trading
Day has occurred.

    	 	8	 

    	 

    

The
Company covenants that, so long as this Security is Outstanding, there shall at all times be a Calculation Agent (which shall be
a broker-dealer, bank or other financial institution) with respect to this Security.

All
determinations made by the Calculation Agent with respect to this Security will be at the sole discretion of the Calculation Agent
and, in the absence of manifest error, will be conclusive for all purposes and binding on the Company and the Holder of this Security.

Tax
Considerations

The
Company agrees, and by acceptance of a beneficial ownership interest in this Security each Holder of this Security will be deemed
to have agreed (in the absence of a statutory, regulatory, administrative or judicial ruling to the contrary), for United States
federal income tax purposes to characterize and treat this Security as a prepaid derivative contract that is an “open transaction.”

Redemption and Repayment

This Security is
not subject to redemption at the option of the Company or repayment at the option of the Holder hereof prior to October 3, 2023.
This Security is not entitled to any sinking fund.

Acceleration

If an Event of Default,
as defined in the Indenture, with respect to this Security shall occur and be continuing, the Maturity Payment Amount (calculated
as set forth in the next sentence) of this Security may be declared due and payable in the manner and with the effect provided
in the Indenture. The amount payable to the Holder hereof upon any acceleration
permitted under the Indenture will be equal to the Maturity Payment Amount hereof calculated as provided herein as
though the date of acceleration was the Calculation Day. 

__________________

Reference
is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.

Unless the certificate
of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature or its duly authorized
agent under the Indenture referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.

[The remainder of this page has
been left intentionally blank]

 

    	 	9	 

    	 

    

IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

DATED:

 

	 	WELLS FARGO & COMPANY
	 	 	 
	 	By:	 
	 	 	 
	 	 	Its:
	 	 	 
	 	 	 
	 	Attest:	 
	 	 	 
	 	 	Its:

 

TRUSTEE’S
CERTIFICATE OF

AUTHENTICATION

This
is one of the Securities of the 

series
designated therein described

in
the within-mentioned Indenture.

 

	CITIBANK, N.A.,	 
	 	as Trustee	 
	 	 	 
	By:	 	 
	 	Authorized Signature	 
	 	 	 
	OR	 
	 	 	 
	WELLS FARGO BANK, N.A.,	 
	 	as Authenticating Agent for the Trustee	 
	 	 	 
	By:	 	 
	 	Authorized Signature	 

 

 

    	 	10	 

    	 

    

[Reverse of Note]

 

 

WELLS FARGO & COMPANY

 

MEDIUM-TERM NOTE, SERIES S

 

Due Nine Months or More From Date of Issue

 

Principal at Risk Securities Linked to the
iShares® MSCI Emerging Markets ETF due October 3, 2023

 

This Security is
one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to
be issued in one or more series under an indenture dated as of February 21, 2017, as amended or supplemented from time to
time (herein called the “Indenture”), between the Company and Citibank, N.A., as Trustee (herein called the
“Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Securities, and of the terms upon which the Securities are, and are
to be, authenticated and delivered. This Security is one of the series of the Securities designated as Medium-Term Notes, Series
S, of the Company. The amount payable on the Securities of this series may be determined by reference to the performance of one
or more equity-, commodity- or currency-based indices, exchange traded funds, securities, commodities, currencies, statistical
measures of economic or financial performance, or a basket comprised of two or more of the foregoing, or any other market measure
or may bear interest at a fixed rate or a floating rate. The Securities of this series may mature at different times, be redeemable
at different times or not at all, be repayable at the option of the Holder at different times or not at all and be denominated
in different currencies.

The Securities are
issuable only in registered form without coupons and will be either (a) book-entry securities represented by one or more
Global Securities recorded in the book-entry system maintained by the Depositary or (b) certificated securities issued to and
registered in the names of, the beneficial owners or their nominees.

The Company agrees,
to the extent permitted by law, not to voluntarily claim the benefits of any laws concerning usurious rates of interest against
a Holder of this Security.

Modification and Waivers 

The Indenture permits,
with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company
and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of all
series to be affected, acting together as a class. The Indenture also contains provisions permitting the Holders of a majority
in principal amount of the Securities of all series at the time Outstanding affected by certain provisions of the Indenture, acting
together as a class, on

    	 	11	 

    	 

    

behalf of the Holders of all Securities
of such series, to waive compliance by the Company with those provisions of the Indenture. Certain past defaults under the Indenture
and their consequences may be waived under the Indenture by the Holders of a majority in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of all Securities of such series. Solely
for the purpose of determining whether any consent, waiver, notice or other action or Act to be taken or given by the Holders of
Securities pursuant to the Indenture has been given or taken by the Holders of Outstanding Securities in the requisite aggregate
principal amount, the principal amount of this Security will be deemed to be equal to the amount set forth on the face hereof as
the “Face Amount” hereof. Any such consent or waiver by the Holder of this Security shall
be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this
Security.

Defeasance

Section 403
and Article Fifteen of the Indenture and the provisions of clause (ii) of Section 401(1)(B) of the Indenture, relating
to defeasance at any time of (a) the entire indebtedness on this Security and (b) certain restrictive covenants, upon
compliance by the Company with certain conditions set forth therein, shall not apply to this Security. The remaining provisions
of Section 401 of the Indenture shall apply to this Security.

Authorized Denominations

This Security is
issuable only in registered form without coupons in denominations of $1,000 or any amount in excess thereof which is an integral
multiple of $1,000.

Registration of Transfer

Upon due presentment
for registration of transfer of this Security at the office or agency of the Company in the City of Minneapolis, Minnesota, a new
Security or Securities of this series, with the same terms as this Security, in authorized denominations for an equal aggregate
Face Amount will be issued to the transferee in exchange herefor, as provided in the Indenture and subject to the limitations provided
therein and to the limitations described below, without charge except for any tax or other governmental charge imposed in connection
therewith.

This Security is
exchangeable for definitive Securities in registered form only if (x) the Depositary notifies the Company that it is unwilling
or unable to continue as Depositary for this Security or if at any time the Depositary ceases to be a clearing agency registered
under the Securities Exchange Act of 1934, as amended, and a successor depositary is not appointed within 90 days after the
Company receives such notice or becomes aware of such ineligibility, (y) the Company in its sole discretion determines that
this Security shall be exchangeable for definitive Securities in registered form and notifies the Trustee thereof or (z) an Event
of Default with respect to the Securities represented hereby has occurred and is continuing. If this Security is exchangeable pursuant
to the preceding sentence, it shall be exchangeable for definitive Securities in registered form, having the same date of issuance,
Stated Maturity Date and other terms and of authorized denominations aggregating a like amount.

    	 	12	 

    	 

    

This Security may
not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor of the Depositary or a
nominee of such successor. Except as provided above, owners of beneficial interests in this Global Security will not be entitled
to receive physical delivery of Securities in definitive form and will not be considered the Holders hereof for any purpose under
the Indenture.

Prior to due presentment
of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue,
and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

Obligation of the Company Absolute

No reference herein
to the Indenture and no provision of this Security or the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the Maturity Payment Amount at the times, place and rate, and in the coin or currency, herein
prescribed, except as otherwise provided in this Security.

No Personal Recourse

No recourse shall
be had for the payment of the Maturity Payment Amount or for any claim based hereon, or otherwise in respect hereof, or based on
or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, officer or director,
as such, past, present or future, of the Company or any successor corporation, whether by virtue of any constitution, statute or
rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof
and as part of the consideration for the issuance hereof, expressly waived and released.

Defined Terms

All terms used in
this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture unless otherwise defined
in this Security.

Governing Law

This Security shall
be governed by and construed in accordance with the law of the State of New York, without regard to principles of conflicts of
laws.

    	 	13	 

    	 

    

ABBREVIATIONS 

 

The
following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written
out in full according to applicable laws or regulations:

 

	TEN COM	--	as tenants in common
	 	 	 
	TEN ENT	--	as tenants by the entireties
	 	 	 
	JT TEN	--	as joint tenants with right
	 	 	of survivorship and not
	 	 	as tenants in common

 

	UNIF GIFT MIN ACT --	 	 Custodian 	 
	 	(Cust)	 	(Minor)

 

	Under Uniform Gifts to Minors Act	 
	 	 
	 	 
	(State)	 

 

Additional abbreviations
may also be used though not in the above list.

 

FOR VALUE RECEIVED,
the undersigned hereby sell(s) and transfer(s) unto

 

	Please Insert Social Security or	 
	Other Identifying Number of Assignee
	 	 
	 	 

 

 

	 
	 
	 

(Please
print or type name and address including postal zip code of Assignee)

 

    	 	14	 

    	 

    

the within Security of WELLS FARGO & COMPANY
and does hereby irrevocably constitute and appoint __________________ attorney to transfer the said Security on the books of the
Company, with full power of substitution in the premises.

 

 

Dated:
_________________________

  

	 	 
	 	 
	 	 
	 	 

 

 

NOTICE:
The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular,
without alteration or enlargement or any change whatever.

 

 

 

 

 

    	 	15

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