Document:

Exhibit 10.1

 

Securities Purchase Agreement

 

This
Securities Purchase Agreement (this “Agreement”), dated as of March 10, 2022, is entered into by and between
Intrusion Inc., a Delaware corporation (“Company”), and Streeterville
Capital, LLC, a Utah limited liability company, its successors and/or assigns (“Investor”).

 

A.            Company
and Investor are executing and delivering this Agreement in reliance upon an exemption from securities registration afforded by the Securities
Act of 1933, as amended (the “1933 Act”), and the rules and regulations promulgated thereunder by the United States
Securities and Exchange Commission (the “SEC”).

 

B.             Investor
desires to purchase and Company desires to issue and sell, upon the terms and conditions set forth in this Agreement: (a) Promissory Note
#1, in the form attached hereto as Exhibit A, in the original principal amount of $5,350,000.00 (the “Note #1”),
which may in certain circumstances be redeemed for shares of common stock, $0.01 par value per share, of Company (the “Common
Stock”), upon the terms and subject to the limitations and conditions set forth in Note #1; and (b) Promissory Note #2, in the
form attached hereto as Exhibit B, in the original principal amount of $5,350,000.00 (“Note #2”, and together
with Note #1, the “Notes”), which may in certain circumstances be redeemed for shares of Common Stock upon the terms
and subject to the limitations and conditions set forth in Note #2.

 

C.             This
Agreement, the Notes, and all other certificates, documents, agreements, resolutions and instruments delivered to any party under or in
connection with this Agreement, as the same may be amended from time to time, are collectively referred to herein as the “Transaction
Documents”.

 

D.             For
purposes of this Agreement: “Redemption Conversion Shares” means all shares of Common Stock issuable upon redemption
of all or any portion of the Notes pursuant to the terms of the Notes; and “Securities” means the Notes and the Redemption
Conversion Shares.

 

NOW, THEREFORE, in
consideration of the above recitals and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Company and Investor hereby agree as follows:

 

1.             
Purchase and Sale of Securities.

 

1.1.          
Purchase of Notes. Company shall issue and sell to Investor and Investor shall purchase from Company the Notes. In consideration
thereof, Investor shall pay the Purchase Price (as defined below) to Company; provided, however, that Investor’s obligation
to deliver the Note #2 Purchase Price (as defined below) is subject to the satisfaction of each of the following conditions (the “Note
#2 Purchase Conditions”): (i) Company has obtained the Approval (as defined in the Note) within 180 days of the First Closing
Date (as defined below); (ii) no Trigger Event (as defined in the Note) has occurred under the Note; and (iii) Company has not received
a listing notice from Nasdaq. After Company provides notice to Investor of its satisfaction of the Note #2 Purchase Conditions and its
decision to sell Note #2, Company shall issue, and Investor shall purchase, Note #2 at the Note #2 Purchase Price on the Second Closing
Date (as defined below).

 

1.2.          
Form of Payment. On the First Closing Date, Investor shall pay the Note #1 Purchase Price to Company via wire transfer of
immediately available funds against delivery of Note #1. On the Second Closing Date, Investor shall pay the Note #2 Purchase Price to
Company wire transfer of immediately available funds against delivery of Note #2.

 

 

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1.3.          
Closing Date. Subject to the satisfaction (or written waiver) of the conditions set forth in Section 5 and Section 6 (as
applicable) below, the date of the issuance and sale of Note #1 pursuant to this Agreement (the “First Closing Date”)
shall be March 10, 2022, or another mutually agreed upon date. The closing of the purchase and sale of Note #1 pursuant to this Agreement
(the “First Closing”) shall occur on the First Closing Date by means of the exchange by email of signed .pdf documents,
but shall be deemed for all purposes to have occurred at the offices of Hansen Black Anderson Ashcraft PLLC in Lehi, Utah. Subject to
the satisfaction of the conditions set forth in Section 5 and Section 6 (as applicable) below, the date of the issuance and sale of Note
#2 pursuant to this Agreement (the “Second Closing Date” and, together with the First Closing Date, the “Closing
Dates”, and individually, each a “Closing Date”) shall be a mutually agreed upon date, but in no event later
than three (3) Trading Days following satisfaction of the Note #2 Purchase Conditions. The closing of the purchase and sale of Note #2
pursuant to this Agreement (the “Second Closing”, together with the First Closing, the “Closings”,
and individually, each a “Closing”) shall occur on the Second Closing Date by means of the exchange by email of signed
..pdf documents, but shall be deemed for all purposes to have occurred at the offices of Hansen Black Anderson Ashcraft PLLC in Lehi, Utah.

 

1.4.          
Collateral for the Notes. The Notes shall be unsecured.

 

1.5.          
Original Issue Discount; Transaction Expense Amount. Note #1 carries an original issue discount (“OID”)
of $350,000.00. In addition, Company agrees to pay $20,000.00 to Investor to cover Investor’s legal fees, accounting costs, due
diligence, monitoring and other transaction costs incurred in connection with the purchase and sale of the Securities (the “Transaction
Expense Amount”). The Transaction Expense Amount shall be deducted from the Note #1 Purchase Price at the First Closing. The
“Note #1 Purchase Price”, therefore, shall be $5,000,000.00, computed as follows: $5,350,000.00 initial principal balance,
less the OID. Note #2 carries an OID of $350,000.00. The “Note #2 Purchase Price”, therefore, shall be $5,000,000.00,
computed as follows: $5,350,000.00 initial principal balance, less the OID.

 

2.             
Investor’s Representations and Warranties. Investor represents and warrants to Company that as of each Closing Date:
(i) this Agreement has been duly and validly authorized; (ii) this Agreement constitutes a valid and binding agreement of Investor enforceable
in accordance with its terms; (iii) Investor is an “accredited investor” as that term is defined in Rule 501(a) of Regulation
D of the 1933 Act; (iv) Investor is duly organized, validly existing and in good standing under the jurisdiction of its formation; (v)
Investor acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Securities and that
it is able to fend for itself in the transactions contemplated herein, has exercised its independent judgment in evaluating its investment
in the Securities, has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks
of an investment in the Securities, and has sought such accounting, legal, economic and tax advice as Investor has considered necessary
to make an informed investment decision; and (vi) Investor is not (A) a person or entity named on the List of Specially Designated Nationals
and Blocked Persons, the Executive Order 13599 List, the Foreign Sanctions Evaders List, or the Sectoral Sanctions Identification List,
each of which is administered by the U.S. Treasury Department’s Office of Foreign Assets Control (collectively “OFAC Lists”),
(B) owned or controlled by, or acting on behalf of, a person, that is named on an OFAC List, (C) organized, incorporated, established,
located, resident or born in, or a citizen, national, or the government, including any political subdivision, agency, or instrumentality
thereof, of, Cuba, Iran, North Korea, Syria, the Crimea region of Ukraine, or any other country or territory embargoed or subject to substantial
trade restrictions by the United States, (D) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part
515 or (E) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank.

 

 

 

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3.             
Company’s Representations and Warranties. Company represents and warrants to Investor that as of each Closing Date:
(i) Company is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and has
the requisite corporate power to own its properties and to carry on its business as now being conducted; (ii) Company is duly qualified
as a foreign corporation to do business and is in good standing in each jurisdiction where the nature of the business conducted or property
owned by it makes such qualification necessary; (iii) Company has registered its Common Stock under Section 12(b) or 12(g) of the
Securities Exchange Act of 1934, as amended (the “1934 Act”), and is obligated to file reports pursuant to Section 13
or Section 15(d) of the 1934 Act; (iv) each of the Transaction Documents and the transactions contemplated hereby and thereby, have
been duly and validly authorized by Company and all necessary actions have been taken; (v) each of the Transaction Documents has been
duly executed and delivered by Company and constitute the valid and binding obligations of Company enforceable in accordance with their
terms, except that such enforcement may be subject to (a) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other
similar laws affecting or relating to enforcement of creditors’ rights generally, and (b) general principles of equity, whether
such enforceability is considered in a proceeding at law or in equity; (vi) the execution and delivery of the Transaction Documents by
Company, the issuance of Securities in accordance with the terms hereof, and the consummation by Company of the other transactions contemplated
by the Transaction Documents do not and will not conflict with or result in a breach by Company of any of the terms or provisions of,
or constitute a default under (a) Company’s formation documents or bylaws, each as currently in effect, (b) any indenture, mortgage,
deed of trust, or other material agreement or instrument to which Company is a party or by which it or any of its properties or assets
are bound, including, without limitation, any listing agreement for the Common Stock, or (c) any existing applicable law, rule, or regulation
or any applicable decree, judgment, or order of any court, United States federal, state or foreign regulatory body, administrative agency,
or other governmental body having jurisdiction over Company or any of Company’s properties or assets (other than, in the case of
clauses (b) and (c), conflicts, breaches or defaults that would not have a material adverse effect on the legal authority or ability of
Company to timely comply with the terms of the Transaction Documents); (vii) other than obtaining the requisite Nasdaq approval to issue
the Redemption Conversion Shares and other than any required filings Company must make with the SEC in connection the transactions contemplated
by the Transaction Documents under the 1933 Act and 1934 Act, no further authorization, approval or consent of any court, governmental
body, regulatory agency, self-regulatory organization, or stock exchange or market or the stockholders or any lender of Company is required
to be obtained by Company for the issuance of the Securities to Investor or the entering into of the Transaction Documents; (viii) since
January 1, 2021, none of Company’s filings with the SEC contained, at the time they were filed, any untrue statement of a material
fact or omitted to state any material fact required to be stated therein or necessary to make the statements made therein, in light of
the circumstances under which they were made, not misleading; (ix) since January 1, 2021, Company has filed all reports, schedules, forms,
statements and other documents required to be filed by Company with the SEC under the 1934 Act on a timely basis or has received a valid
extension of such time of filing and has filed any such report, schedule, form, statement or other document prior to the expiration of
any such extension; (x) there is no action, suit, proceeding, inquiry or investigation before or by any court, public board or body pending
or, to the knowledge of Company, threatened against or affecting Company before or by any governmental authority or non-governmental department,
commission, board, bureau, agency or instrumentality or any other person, wherein an unfavorable decision, ruling or finding would reasonably
be expected to have a material adverse effect on Company or which would reasonably be expected to adversely affect the validity or enforceability
of, or the authority or ability of Company to perform its obligations under, any of the Transaction Documents; (xi) Company has not consummated
any material financing transaction that has not been disclosed in a periodic filing or current report with the SEC under the 1934 Act;
(xii) Company is not, nor has it been at any time in the previous twelve (12) months, a “Shell Company,” as such type of “issuer”
is described in Rule 144(i)(1) under the 1933 Act; (xiii) with respect to any commissions, placement agent or finder’s fees or similar
payments that will or would become due and owing by Company to any person or entity as a result of this Agreement or the transactions
contemplated hereby (“Broker Fees”), any such Broker Fees will be made in full compliance with all applicable laws
and regulations and only to a person or entity that is a registered investment adviser or registered broker-dealer; (xiv) Investor shall
have no obligation with respect to any Broker Fees or with respect to any claims made by or on behalf of other persons for fees of a type
contemplated in this subsection that may be due in connection with the transactions contemplated hereby and Company shall indemnify and
hold harmless each of Investor, Investor’s employees, officers, directors, stockholders, members, managers, agents, and partners,
and their respective affiliates, from and against all claims, losses, damages, costs (including reasonable costs of preparation and attorneys’
fees) and expenses suffered in respect of any such claimed Broker Fees; (xv) neither Investor nor any of its officers, directors, stockholders,
members, managers, employees, agents or representatives has made any representations or warranties to Company or any of its officers,
directors, employees, agents or representatives except as expressly set forth in the Transaction Documents and, in making its decision
to enter into the transactions contemplated by the Transaction Documents, Company is not relying on any representation, warranty, covenant
or promise of Investor or its officers, directors, members, managers, employees, agents or representatives other than as set forth in
the Transaction Documents; (xvi) Company acknowledges that the State of Utah has a reasonable relationship and sufficient contacts to
the transactions contemplated by the Transaction Documents and any dispute that may arise related thereto such that the laws and venue
of the State of Utah, as set forth more specifically in Section 8.2 below, shall be applicable to the Transaction Documents and the transactions
contemplated therein; (xvii) Company has consulted with counsel and conducted its own due diligence, and understands that Investor is
not registered as a ‘dealer’ under the 1934 Act; and (xviii) Company has performed due diligence and background research on
Investor and its affiliates, including, without limitation, John M. Fife, and, to its satisfaction, has made inquiries with respect to
all matters Company may consider relevant to the undertakings and relationships contemplated by the Transaction Documents, including,
among other things, the following: http://investing.businessweek.com/research/stocks/people/person.asp?personId=7505107&ticker=UAHC;
SEC Civil Case No. 07-C-0347 (N.D. Ill.); SEC Civil Action No. 07-CV-347 (N.D. Ill.); and FINRA Case #2011029203701. In addition, various
affiliates of Investor are involved in ongoing litigation with the SEC regarding broker-dealer registration (see SEC Civil Case
No. 1:20-cv-05227 (N.D. Ill.)). Company, being aware of the matters and legal issues described in subsections (xvii) and (xviii) above,
acknowledges and agrees that such matters, or any similar matters, have no bearing on the transactions contemplated by the Transaction
Documents and covenants and agrees it will not use any such information or legal theory as a defense to performance of its obligations
under the Transaction Documents or in any attempt to modify, reduce, rescind or void such obligations.

 

 

 

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4.             
Company Covenants. Until all of Company’s obligations under the Notes are paid and performed in full, or within the
timeframes otherwise specifically set forth below, Company will at all times comply with the following covenants: (i) so long as Investor
beneficially owns any of the Securities and for at least twenty (20) Trading Days thereafter, Company will timely file on the applicable
deadline all reports required to be filed with the SEC pursuant to Sections 13 or 15(d) of the 1934 Act, and will take all reasonable
action under its control to ensure that adequate current public information with respect to Company, as required in accordance with Rule
144 of the 1933 Act, is publicly available, and will not terminate its status as an issuer required to file reports under the 1934 Act
even if the 1934 Act or the rules and regulations thereunder would permit such termination unless Company is acquired by, or otherwise
merges or combines with, an entity that is required to make public filings under Sections 13 or 15(d) of the 1934 Act; (ii) if issued
in accordance with Note #1 or Note #2, as applicable, the Redemption Conversion Shares will be duly authorized, validly issued, fully
paid for and non-assessable, free and clear of all liens, claims, charges and encumbrances; (iii) the Common Stock will be listed for
trading on Nasdaq or NYSE; (iv) trading in the Common Stock will not be suspended, halted, chilled, frozen, reach zero bid or otherwise
cease trading on Company’s principal trading market; (v) neither Company, nor any of its subsidiaries, will make any Restricted
Issuance (as defined below) or issue any debt securities (which, for avoidance of doubt, excludes bank loans, lines of credit, mortgages,
leases, asset-backed loans, and other similar commercial lending agreements) without Investor’s prior written consent, which consent
may be granted or withheld in Investor’s sole and absolute discretion; (vi) Company shall not enter into any agreement or otherwise
agree to any covenant, condition, or obligation other than the Transaction Documents that locks up, restricts in any way or otherwise
prohibits Company from issuing Redemption Conversion Shares to Investor or any affiliate of Investor; and (vii) Company shall offer to
Investor the right to participate (in each case, at Investor’s discretion) in any Restricted Issuance (provided Investor has consented
to such Restricted Issuance), other equity securities offering (excluding offerings under ATMs (as defined below)) or debt securities
offering (which for avoidance of doubt excludes bank loans, lines of credit, mortgages, leases, asset-backed loans, and other similar
commercial lending agreements) of Company. Under such participation right, Company shall provide Investor written notice of such proposed
transaction, along with copies of the proposed transaction documents (including any underwriting agreement, if any) or, if proposed documentation
is not available, a term sheet of the proposed terms, and Investor shall then have (A) for offerings that are not registered under the
1933 Act, up to three (3) calendar days to notify Company of its election to participate in such issuance or offering or (B) for offerings
that are registered under the 1933 Act, up to twenty four (24) hours to notify Company of its election to participate in such issuance.
Such participation right for offerings that are not registered under the 1933 Act shall only allow Investor to purchase up to ten percent
(10%) of the debt or equity securities proposed to be issued in such transaction, and Investor shall have a right to participate on the
most favorable terms and conditions offered to any other purchaser in such offering. Such participation right for offerings that are registered
under the 1933 Act shall only allow Investor to be allocated up to ten percent (10%) of the debt or equity securities proposed to be issued
in such transaction on the most favorable terms and conditions offered to any other purchaser of the same securities. The parties agree
that in the event Company breaches the covenant set forth in Section 4(vii) above, Investor’s sole and exclusive remedy shall be
to receive, as liquidated damages, an amount equal to twenty percent (20%) of the amount Investor would have been entitled to invest under
the participation right, which may be added to the Outstanding Balance of either Note if not otherwise paid in cash by Company. For
purposes hereof, the term “Restricted Issuance” means any issuance of any Company securities, or the incurrence or
guaranty of any debt securities obligations, that (A) have or may have conversion rights of any kind, contingent, conditional or otherwise,
in which the number of shares that may be issued pursuant to such conversion right varies with the market price of the Common Stock, and/or
(B) are or may become convertible into Common Stock (including without limitation convertible debt, warrants or convertible preferred
stock), with a conversion price that varies with the market price of the Common Stock, even if such security only becomes convertible
following an event of default, the passage of time, or another trigger event or condition; excluding the issuance by Company of any convertible
notes, warrants or convertible preferred stock that provides for adjustments to the conversion rate, conversion price or exercise price,
as the case maybe, as a result of any stock split, stock combination, stock dividend, reclassification, other distributions of property
or assets to all or substantially all holder of the Company’s Common Stock or similar events. For the avoidance of doubt, the issuance
of Common Stock under, pursuant to, in exchange for or in connection with any contract or instrument, whether convertible or not, is deemed
a Restricted Issuance for purposes hereof if the number shares of Common Stock to be issued is based upon or related in any way to the
market price of the Common Stock, including, but not limited to, Common Stock issued in connection with a Section 3(a)(9) exchange, a
Section 4(a)(2) exchange, a Section 3(a)(10) settlement, or any other similar settlement or exchange. Notwithstanding the foregoing, the
term Restricted Issuance shall not extend to any issuance made under one of Company’s equity compensation plans filed with the SEC.
For purposes hereof, the term “ATM” means a continuous primary offering, whereby Company, with one or more broker-dealers
acting as an agent, may sell equity securities of the Company in an offering registered under the 1933 Act at prevailing market prices.

 

 

 

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5.             
Conditions to Company’s Obligation to Sell. The obligation of Company hereunder to issue and sell the applicable Securities
to Investor at the applicable Closing is subject to the satisfaction, on or before each applicable Closing Date, of each of the following
conditions:

 

5.1.          
Investor shall have executed this Agreement and delivered the same to Company.

 

5.2.          
Investor shall have delivered the Note #1 Purchase Price or the Note #2 Purchase Price, as applicable, to Company in accordance
with Section 1.2 above.

 

6.             
Conditions to Investor’s Obligation to Purchase. The obligation of Investor hereunder to purchase the applicable Securities
at the applicable Closing is subject to the satisfaction, on or before each applicable Closing Date, of each of the following conditions,
provided that these conditions are for Investor’s sole benefit and may be waived by Investor at any time in its sole discretion:

 

6.1.          
Company shall have executed this Agreement delivered the same to Investor.

 

6.2.          
Solely with respect to the First Closing, Company shall have executed and delivered Note #1 to Investor.

 

6.3.          
Solely with respect to the Second Closing, Company shall have executed and delivered Note #2 to Investor.

 

6.4.          
Company shall have delivered to Investor a fully executed Irrevocable Letter of Instructions to Transfer Agent (the “TA
Letter”) substantially in the form attached hereto as Exhibit C acknowledged and agreed to in writing by Company’s
transfer agent (the “Transfer Agent”).

 

6.5.          
Company shall have delivered to Investor a fully executed Officer’s Certificate substantially in the form attached hereto
as Exhibit D evidencing Company’s approval of the Transaction Documents.

 

6.6.          
Solely with respect to the Second Closing, Company shall have satisfied the Note #2 Purchase Conditions.

 

7.             
Reservation of Shares. On the date hereof, Company will reserve, so long as the Notes are outstanding, 6,500,000 shares
of Common Stock from its authorized and unissued Common Stock to provide for all issuances of Common Stock under Note #1, which reservation
shall be increased (within three business days of issuance of Note #2) by an additional 6,500,000 shares of Common Stock (the “Share
Reserve”). Company further agrees to add additional shares of Common Stock to the Share Reserve in increments of 100,000 shares
as and when requested by Investor if as of the date of any such request the number of shares being held in the Share Reserve is less than
three (3) times the number of shares of Common Stock obtained by dividing the aggregate Outstanding Balance (as defined in the Notes)
of the Notes as of the date of the request by the Redemption Conversion Price (as defined in the Notes); provided that Company shall not
be obligated to increase the Share Reserve to cover more than 19.99% of outstanding Common Stock unless Company has obtained the Approval.
In the event the Share Reserve exceeds four (4) times the number of shares of Common Stock obtained by dividing the aggregate Outstanding
Balance of the Notes as of the date of the request by the Redemption Conversion Price (the “Share Reserve Max”), then
at Company’s request, Investor will agree to reduce the Share Reserve to the Share Reserve Max. Company shall further direct the
Transfer Agent to hold the shares of Common Stock reserved pursuant to the Share Reserve exclusively for the benefit of Investor and to
issue such shares to Investor promptly upon Investor’s delivery of a Redemption Notice under either of the Notes. Finally, Company
shall direct the Transfer Agent to issue shares of Common Stock other than Redemption Conversion Shares out of its authorized and unissued
shares, and not the Share Reserve.

 

 

 

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8.             
Miscellaneous. The provisions set forth in this Section 8 shall apply to this Agreement, as well as all other Transaction
Documents as if these terms were fully set forth therein; provided, however, that in the event there is a conflict between any provision
set forth in this Section 8 and any provision in any other Transaction Document, the provision in such other Transaction Document shall
govern.

 

8.1.           Arbitration of Claims. The parties shall submit all Claims (as defined in Exhibit E) arising under this Agreement
or any other Transaction Document or any other agreement between the parties and their affiliates or any Claim relating to the relationship
of the parties to binding arbitration pursuant to the arbitration provisions set forth in Exhibit E attached hereto (the “Arbitration
Provisions”). For the avoidance of doubt, the parties agree that the injunction described in Section 8.3 below may be pursued
in an arbitration that is separate and apart from any other arbitration regarding all other Claims arising under the Transaction Documents.
The parties hereby acknowledge and agree that the Arbitration Provisions are unconditionally binding on the parties hereto and are severable
from all other provisions of this Agreement. By executing this Agreement, Company represents, warrants and covenants that Company has
reviewed the Arbitration Provisions carefully, consulted with legal counsel about such provisions (or waived its right to do so), understands
that the Arbitration Provisions are intended to allow for the expeditious and efficient resolution of any dispute hereunder, agrees to
the terms and limitations set forth in the Arbitration Provisions, and that Company will not take a position contrary to the foregoing
representations. Company acknowledges and agrees that Investor may rely upon the foregoing representations and covenants of Company regarding
the Arbitration Provisions.

 

8.2.         
Governing Law; Venue. This Agreement shall be construed and enforced in accordance with, and all questions concerning the
construction, validity, interpretation and performance of this Agreement shall be governed by, the internal laws of the State of Utah,
without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the State of Utah. Each party consents to and expressly agrees
that the exclusive venue for arbitration of any dispute arising out of or relating to any Transaction Document or the relationship of
the parties or their affiliates shall be in Salt Lake County, Utah. Without modifying the parties’ obligations to resolve disputes
hereunder pursuant to the Arbitration Provisions, for any litigation arising in connection with any of the Transaction Documents, each
party hereto hereby (i) consents to and expressly submits to the exclusive personal jurisdiction of any state or federal court sitting
in Salt Lake County, Utah, (ii) expressly submits to the exclusive venue of any such court for the purposes hereof, (iii) agrees to not
bring any such action outside of any state or federal court sitting in Salt Lake County, Utah, and (iv) waives any claim of improper venue
and any claim or objection that such courts are an inconvenient forum or any other claim, defense or objection to the bringing of any
such proceeding in such jurisdiction or to any claim that such venue of the suit, action or proceeding is improper. Company acknowledges
that the governing law and venue provisions set forth in this Section 8.2 are material terms to induce Investor to enter into the Transaction
Documents and that but for Company’s agreements set forth in this Section 8.2 Investor would not have entered into the Transaction
Documents.

 

8.3.         
Specific Performance. Each party acknowledges and agrees that the other party may suffer irreparable harm in the event that
it fails to perform any material provision of this Agreement or any of the other Transaction Documents in accordance with its specific
terms. It is accordingly agreed that each party shall be entitled to one or more injunctions to prevent or cure breaches of the provisions
of this Agreement or such other Transaction Document and to enforce specifically the terms and provisions hereof or thereof, this being
in addition to any other remedy to which such party may be entitled under the Transaction Documents, at law or in equity. Company specifically
agrees that: (a) following an Event of Default (as defined in the Notes) for failure to timely make a required payment or deliver Redemption
Conversion Shares under either Note, Investor shall have the right to seek and receive injunctive relief from a court or an arbitrator
prohibiting Company from issuing any of its common or preferred stock to any party unless the Notes are being paid in full simultaneously
with such issuance; and (b) following a breach of Section 4(vi) above, Investor shall have the right to seek and receive injunctive relief
from a court or arbitrator invalidating such lock-up. Company specifically acknowledges that Investor’s right to obtain specific
performance constitutes bargained for leverage and that the loss of such leverage would result in irreparable harm to Investor. For the
avoidance of doubt, in the event Investor seeks to obtain an injunction from a court or an arbitrator against Company or specific performance
of any provision of any Transaction Document, such action shall not be a waiver of any right of Investor under any Transaction Document,
at law, or in equity, including without limitation its rights to arbitrate any Claim pursuant to the terms of the Transaction Documents,
nor shall Investor’s pursuit of an injunction prevent Investor, under the doctrines of claim preclusion, issues preclusion, res
judicata or other similar legal doctrines, from pursuing other Claims in the future in a separate arbitration.

 

 

 

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8.4.          
No Shorting. During the period beginning thirty (30) days prior to the Closing Date and ending on the date the Notes have
been repaid in full or sold by Investor to a third party that is not an affiliate of Investor, neither Investor nor any of its subsidiaries,
directors, officers, employees or other affiliates has or will directly or indirectly engage in any open market Short Sales (as defined
below) of the Common Stock; provided; however, that unless and until Company has affirmatively demonstrated by the use of specific
evidence that Investor is engaging in open market Short Sales, Investor shall be assumed to be in compliance with the provisions of this
Section 8.4 and Company shall remain fully obligated to fulfill all of its obligations under the Transaction Documents; and provided,
further, that (i) Company shall under no circumstances be entitled to request or demand that Investor either (A) provide trading or other
records of Investor or of any party or (B) affirmatively demonstrate that Investor or any other party has not engaged in any such Short
Sales in breach of these provisions as a condition to Company’s fulfillment of its obligations under any of the Transaction Documents,
(ii) Company shall not assert Investor’s or any other party’s failure to demonstrate such absence of such Short Sales or provide
any trading or other records of Investor or any other party as all or part of a defense to any breach of Company’s obligations under
any of the Transaction Documents, and (iii) Company shall have no setoff right with respect to any such Short Sales. As used herein,
“Short Sale” has the meaning provided in Rule 200 promulgated under Regulation SHO under the 1934 Act, and all short
positions effected through any direct or indirect stock pledges (other than pledges in the ordinary course of business as part of prime
brokerage arrangements), forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis),
or sales or other short transactions through non-U.S. broker dealers or foreign regulated brokers.

 

8.5.         
Calculation Disputes. Notwithstanding the Arbitration Provisions, in the case of a dispute as to any determination or arithmetic
calculation under the Transaction Documents, including without limitation, calculating the Outstanding Balance, Redemption Conversion
Price, Conversion Shares (as defined in the Note), or VWAP (as defined in the Note) (each, a “Calculation”), Company
or Investor (as the case may be) shall submit any disputed Calculation via email or facsimile with confirmation of receipt (i) within
two (2) Trading Days after receipt of the applicable notice giving rise to such dispute to Company or Investor (as the case may be) or
(ii) if no notice gave rise to such dispute, at any time after Investor learned of the circumstances giving rise to such dispute. If Investor
and Company are unable to agree upon such Calculation within two (2) Trading Days of such disputed Calculation being submitted to Company
or Investor (as the case may be), then Investor will promptly submit via email or facsimile the disputed Calculation to Unkar Systems
Inc. (“Unkar Systems”). Investor shall cause Unkar Systems to perform the Calculation and notify Company and Investor
of the results no later than ten (10) Trading Days from the time it receives such disputed Calculation. Unkar Systems’ determination
of the disputed Calculation shall be made in good faith and in a commercially reasonable manner and shall be binding upon all parties
absent demonstrable error. Unkar Systems’ fee for performing such Calculation shall be paid by the incorrect party, or if both parties
are incorrect, by the party whose Calculation is furthest from the correct Calculation as determined by Unkar Systems. Notwithstanding
the foregoing, the parties may mutually agree to designate an independent, reputable investment bank or accounting firm other than Unkar
Systems to resolve any such dispute and in such event, all references to “Unkar Systems” herein will be replaced with references
to such independent, reputable investment bank or accounting firm.

 

8.6.          
Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including
pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method
and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

8.7.          
Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the
interpretation of, this Agreement.

 

8.8.          
Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute
or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified
to conform to such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect
the validity or enforceability of any other provision hereof.

 

 

 

    	 	7	 

     

    

 

8.9.          
Entire Agreement. This Agreement, together with the other Transaction Documents, contains the entire understanding of the
parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither Company
nor Investor makes any representation, warranty, covenant or undertaking with respect to such matters. For the avoidance of doubt, all
prior term sheets or other documents between Company and Investor, or any affiliate thereof, related to the transactions contemplated
by the Transaction Documents (collectively, “Prior Agreements”), that may have been entered into between Company and
Investor, or any affiliate thereof, are hereby null and void and deemed to be replaced in their entirety by the Transaction Documents.
To the extent there is a conflict between any term set forth in any Prior Agreement and the term(s) of the Transaction Documents, the
Transaction Documents shall govern.

 

8.10.        
Amendments. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by both
parties hereto.

 

8.11.        
Notices. Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall
be deemed effectively given on the earliest of: (i) the date delivered, if delivered by personal delivery as against written receipt therefor
or by email to an executive officer named below or such officer’s successor, or by facsimile (with successful transmission confirmation
which is kept by sending party), (ii) the earlier of the date delivered or the third Trading Day after deposit, postage prepaid, in the
United States Postal Service by certified mail, or (iii) the earlier of the date delivered or the third Trading Day after mailing by express
courier, with delivery costs and fees prepaid, in each case, addressed to each of the other parties thereunto entitled at the following
addresses (or at such other addresses as such party may designate by five (5) calendar days’ advance written notice similarly given
to each of the other parties hereto):

 

If to Company:

 

Intrusion Inc.

Attn: Anthony Scott

101 East Park Blvd, Suite 1200

Plano, Texas 75074

 

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

 

Wilson Sonsini Goodrich & Rosati, P.C.

Attn: J. Robert Suffoletta and Austin D. March

900 S. Capital of Texas Highway

Las Cimas IV, 5th Floor

Austin, Texas 78746

 

If to Investor:

 

Streeterville Capital, LLC

Attn: John Fife

303 East Wacker Drive, Suite 1040

Chicago, Illinois 60601

 

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

 

Hansen Black Anderson Ashcraft PLLC

Attn: Jonathan Hansen

3051 West Maple Loop Drive, Suite 325

Lehi, Utah 84043

 

 

 

    	 	8	 

     

    

 

8.12.        
Successors and Assigns. This Agreement or any of the severable rights and obligations inuring to the benefit of or to be
performed by Investor hereunder may be assigned by Investor to a third party (other than to its affiliates), in whole or in part, upon
receipt of Company’s consent thereto, which consent cannot be unreasonably withheld, conditioned or delayed; provided, however,
that no assignment or transfer of any rights or obligations under any Transaction Document shall be valid unless and until such assignee
or transferee agrees to be bound by the ongoing obligations and limitations that Investor is then subject to under any Transaction Document.
Company may not assign its rights or obligations under this Agreement or delegate its duties hereunder without the prior written consent
of Investor, which consent cannot be unreasonably withheld, conditioned or delayed.

 

8.13.       
Survival. The representations and warranties of each party and the agreements and covenants set forth in this Agreement
shall survive the Closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the other party. Each
party agrees to indemnify and hold harmless the other party and all its officers, directors, employees, attorneys, and agents for loss
or damage arising as a result of or related to any breach or alleged breach by such party of any of its representations, warranties and
covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses
as they are incurred.

 

8.14.        
Further Assurances. 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.

 

8.15.        
Investor’s Rights and Remedies Cumulative. All rights, remedies, and powers conferred in this Agreement and the Transaction
Documents are cumulative and not exclusive of any other rights or remedies, and shall be in addition to every other right, power, and
remedy that Investor may have, whether specifically granted in this Agreement or any other Transaction Document, or existing at law, in
equity, or by statute, and any and all such rights and remedies may be exercised from time to time and as often and in such order as Investor
may deem expedient.

 

8.16.        
Attorneys’ Fees and Cost of Collection. In the event of any arbitration or action at law or in equity to enforce or
interpret the terms of this Agreement or any of the other Transaction Documents, the parties agree that the party who is awarded the most
money (which, for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges
awarded to any party) shall be deemed the prevailing party for all purposes and shall therefore be entitled to an additional award of
the full amount of the attorneys’ fees, deposition costs, and expenses paid by such prevailing party in connection with arbitration
or litigation without reduction or apportionment based upon the individual claims or defenses giving rise to the fees and expenses. Nothing
herein shall restrict or impair an arbitrator’s or a court’s power to award fees and expenses for frivolous or bad faith pleading.
If (i) the Notes are placed in the hands of an attorney for collection or enforcement prior to commencing arbitration or legal proceedings,
or is collected or enforced through any arbitration or legal proceeding, or Investor otherwise takes action to collect amounts due under
the Notes or to enforce the provisions of the Notes, or (ii) there occurs any bankruptcy, reorganization, receivership of Company
or other proceedings affecting Company’s creditors’ rights and involving a claim under the Notes; then Company shall pay the
costs incurred by Investor for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership
or other proceeding, including, without limitation, attorneys’ fees, expenses, deposition costs, and disbursements.

 

8.17.        
Waiver. No waiver of any provision of this Agreement shall be effective unless it is in the form of a writing signed by
the party granting the waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision
or consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent
or commit a party to provide a waiver or consent in the future except to the extent specifically set forth in writing.

 

8.18.        
Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH
PARTY MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, ANY OTHER
TRANSACTION DOCUMENT, OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND
A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT
SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING SUCH PARTY’S RIGHT TO DEMAND TRIAL BY JURY.

 

8.19.       
Time is of the Essence. Time is expressly made of the essence with respect to each and every provision of this Agreement
and the other Transaction Documents.

 

8.20.        
Voluntary Agreement. Each party has carefully read this Agreement and each of the other Transaction Documents and has asked
any questions needed for such party to understand the terms, consequences and binding effect of this Agreement and each of the other Transaction
Documents and fully understand them. Each party has had the opportunity to seek the advice of an attorney, or has waived the right to
do so, and is executing this Agreement and each of the other Transaction Documents voluntarily and without any duress or undue influence
by the other party or anyone else.

 

[Remainder of page intentionally left blank;
signature page follows]

 

 

 

    	 	9	 

     

    

 

IN WITNESS WHEREOF, the undersigned
Investor and Company have caused this Agreement to be duly executed as of the date first above written.

 

	 	INVESTOR:
	 	 
	 	Streeterville Capital, LLC
	 	 	 
	 	 	 
	 	By:	/s/ John M. Fife
	 	 	John M. Fife, President 
	 	 	 
	 	 	 
	 	COMPANY:
	 	 
	 	Intrusion Inc.
	 	 	 
	 	 	 
	 	By:	/s/ Anthony Scott
	 	 	Anthony Scott, CEO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Securities Purchase Agreement]

 

 

 

    	 	10EX-4.3

  Exhibit 4.3

  DESCRIPTION OF THE REGISTRANT’S SECURITIES 

   

  As of December 31, 2021, FIGS, Inc. (the “Company,” “we,” “our” or “us”) had one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): our Class A common stock, $0.0001 par value per share.  The following description summarizes our capital stock and certain provisions of our amended and restated certificate of incorporation, our amended and restated bylaws, the amended and restated stockholders’ agreement, the voting agreement to which our co-founders are parties, and the Delaware General Corporation Law. Because the following is only a summary, it does not contain all of the information that may be important to you. For a complete description, you should refer to our amended and restated certificate of incorporation, amended and restated bylaws, amended and restated stockholders’ agreement and voting agreement, copies of which have been filed as exhibits to our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

   

  General

   

  Our authorized capital stock consists of 1,000,000,000 shares of our Class A common stock and 150,000,000 shares of our Class B common stock, in each case, $0.0001 par value per share, and 100,000,000 shares of undesignated preferred stock, $0.0001 par value per share. We have no shares of preferred stock issued and outstanding.  

   

  Common Stock 

   

  We have two classes of authorized common stock: Class A common stock and Class B common stock. The rights of the holders of each class of our common stock are identical, except with respect to voting and conversion rights.

   

  Dividend Rights 

   

  Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of our common stock are entitled to receive dividends out of funds legally available if our board of directors, in its discretion, determines to issue dividends and then only at the times and in the amounts that our board of directors may determine. 

   

  Voting Rights 

   

  Holders of our Class A common stock are entitled to one vote for each share of Class A common stock held on all matters submitted to a vote of stockholders. Holders of our Class B common stock are entitled to 20 votes for each share of Class B common stock held on all matters submitted to a vote of stockholders. 

   

  All outstanding shares of our Class B common stock are held by our co-founders and co-Chief Executive Officers, Heather Hasson and Trina Spear, and Tulco, LLC, our majority stockholder. Holders of shares of our Class A common stock and Class B common stock vote together as a single class on all matters (including the election of directors) submitted to a vote of stockholders, unless otherwise required by Delaware law or our amended and restated certificate of incorporation. Delaware law could require either holders of our Class A common stock or Class B common stock to vote separately as a single class in the following circumstances: 

   

  •if we were to seek to amend our amended and restated certificate of incorporation to increase or decrease the par value of a class of our capital stock, then that class would be required to vote separately to approve the proposed amendment; and 

  •if we were to seek to amend our amended and restated certificate of incorporation in a manner that alters or changes the powers, preferences or special rights of a class of our capital stock in a manner that affected its holders adversely, then that class would be required to vote separately to approve the proposed amendment.

    

  Our amended and restated certificate of incorporation does not provide for cumulative voting for the election of directors. As a result, the holders of a majority of our voting shares can elect all of the directors then standing for election. Our amended and restated certificate of incorporation establishes a classified board of directors, to be 

  

  divided into three classes with staggered three-year terms. Only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms.

   

  No Preemptive or Similar Rights 

   

  None of our common stock is entitled to preemptive rights or subject to redemption or sinking fund provisions. 

   

  Right to Receive Liquidation Distributions 

   

  Upon our liquidation, dissolution or winding up, the assets legally available for distribution to our stockholders would be distributable ratably among the holders of our common stock and any participating preferred stock outstanding at that time, subject to the prior satisfaction of all outstanding debt and liabilities and the preferential rights of and the payment of liquidation preferences, if any, on any shares of preferred stock outstanding at that time.

    

  Change of Control Transactions 

   

  In the case of any distribution or payment in respect of the shares of our Class A common stock or Class B common stock upon a merger or consolidation with or into any other entity, or other substantially similar transaction, the holders of our Class A common stock and Class B common stock will be treated equally and identically with respect to shares of Class A common stock or Class B common stock owned by them, unless the only difference in the per share distribution to the holders of the Class A common stock and Class B common stock is that any securities distributed to the holder of a share of Class B common stock have 20 times the voting power of any securities distributed to the holder of a share of Class A common stock, or such merger, consolidation or other transaction is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A common stock and Class B common stock, each voting as a separate class. 

   

  Subdivisions and Combinations 

   

  If we subdivide or combine in any manner outstanding shares of Class A common stock or Class B common stock, the outstanding shares of the other class will be subdivided or combined in the same manner, unless different treatment of the shares of each class is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A common stock and Class B common stock, each voting as a separate class. 

   

  Conversion 

   

  Each outstanding share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock. In addition, each share of Class B common stock will convert automatically into one share of Class A common stock upon any transfer, whether or not for value, except for certain permitted transfers described in our amended and restated certificate of incorporation, including transfers for estate planning purposes or charitable transfers where voting control is retained by the transferring holder or transfers to affiliates or certain other related entities of the transferring holder. Once converted or transferred and converted into Class A common stock, the Class B common stock may not be reissued.

   

  All outstanding shares of our Class B common stock will convert automatically into shares of our Class A common stock upon the earlier of (1) the date fixed by our board of directors that is not less than 60 days or more than 180 days following the death or disability of both Ms. Hasson and Ms. Spear and (2) June 1, 2031, the 10-year anniversary of the date of the closing of our initial public offering, each of which we refer to as a final conversion event. In addition, if prior to a final conversion event Tulco, LLC and its permitted transferees cease to hold at least 20% of the aggregate number of shares of all classes of common stock then outstanding (calculated on a diluted basis to include any issued and outstanding stock options, RSUs or other equity awards, whether vested or unvested), then any shares of Class B common stock then held by Tulco, LLC and its permitted transferees will convert automatically into shares of our Class A common stock on a date fixed by our board of directors that is not less than 60 days or more than 180 days following such occurrence. Once converted into Class A common stock, the Class B common stock may not be reissued. 

   

  

  Upon the conversion of all shares of Class B common stock into shares of Class A common stock, the rights of the holders of all outstanding common stock will be identical. 

   

  Preferred Stock 

   

  Pursuant to the provisions of our amended and restated certificate of incorporation, our board of directors is authorized, subject to limitations prescribed by Delaware law, to issue preferred stock in one or more series, to establish from time to time the number of shares to be included in each series and to fix the designation, powers, preferences and rights of the shares of each series and any of its qualifications, limitations or restrictions, in each case without further vote or action by our stockholders. Our board of directors can also increase or decrease the number of shares of any series of preferred stock, but not below the number of shares of that series then outstanding, without any further vote or action by our stockholders. Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of our common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in control of our company and might adversely affect the market price of our Class A common stock and the voting and other rights of the holders of our Class A common stock and Class B common stock. 

   

  Voting Agreement 

   

  We, Ms. Hasson. Ms. Spear and Tulco, LLC, and certain related persons and entities have entered into a voting agreement, under which such parties agreed upon the terms set forth in the voting agreement, to vote their shares for the election of each of Ms. Hasson, Ms. Spear and for so long as Tulco, LLC and its permitted transferees hold, in the aggregate, at least 10% of the total number of outstanding shares of all classes of our common stock (calculated on a diluted basis to include any issued and outstanding options, RSUs or other equity awards, whether vested or unvested), an individual designated by Tulco, LLC to our board of directors, and to vote against their removal. The voting agreement will be in effect until: (1) the time at which neither of the co-founders nor any of their permitted transferees hold shares of Class B common stock, (2) with respect to Tulco, LLC, the time at which Tulco, LLC and its permitted transferees cease to hold, in the aggregate, at least 10% of the total number of outstanding shares of all classes of our common stock (calculated on a diluted basis to include any issued and outstanding options, restricted stock units or other equity awards, whether vested or unvested) or (3) a final conversion event. The conversion of our Class B common stock to Class A common stock is provided for in our amended and restated certificate of incorporation, see section titled “—Common Stock—Conversion.” 

   

  Registration Rights 

   

  Our amended and restated stockholders’ agreement between us and certain holders of our capital stock, which was entered into in October 2020, grants the parties thereto certain registration rights in respect of the “voting securities”, as defined in the amended and restated stockholders’ agreement, held by them, which securities include our common stock and any other securities entitled to voting rights as set forth in our amended and restated certificate of incorporation, including, without limitation, such securities acquired by conversion, exercise, exchange, or settlement of convertible securities, rights, options, restricted stock units and warrants.  The registration of shares of our common stock by the exercise of registration rights described below would enable the holders to sell these shares without restriction under the Securities Act of 1933, as amended (the “Securities Act”) when the applicable registration statement is declared effective. Our amended and restated stockholders’ agreement does not provide for any maximum cash penalties or any penalties connected with delays in registering our common stock. 

   

  In any registration made pursuant to such amended and restated stockholders’ agreement, all fees, costs, and expenses of underwritten registrations, including reasonable fees and disbursements not to exceed $50,000 of one special counsel to the selling stockholders, will be borne by us and all selling expenses, including the estimated underwriting discounts and commissions, will be borne by the holders of the shares being registered. However, we will not be required to bear the expenses in connection with the exercise of the requested and Form S-3 registration rights of a registration if the request is subsequently withdrawn at the request of the selling stockholders holding a majority of registrable securities to be registered, unless such holders agree to forfeit their right to either one demand 

  

  registration or one Form S-3 registration.  Generally, in an underwritten offering, the managing underwriter, if any, has the right, subject to specified conditions, to limit the number of shares such holders may include. 

   

  The registration rights terminate upon the earliest of: (1) three years following the completion of our initial public offering, (2) as to any given holder of registration rights, at such time following our initial public offering when such holder of registration rights can sell all of such holder’s registrable securities in compliance with Rule 144(b)(1)(i) and all registrable securities held by such holder can be sold in any three-month period without registration pursuant to Rule 144 under the Securities Act and (3) a transaction or series of related transactions (whether by merger, consolidation, share transfer, new issuance of “voting securities,” as defined in the amended and restated stockholders’ agreement, or otherwise) in which a “person” as defined in the amended and restated stockholders’ agreement, acquires, directly or indirectly, (i) a majority of the voting power of our company (or the surviving or acquiring entity) or (ii) all or substantially all of the assets of our company and its direct and indirect subsidiaries (on a consolidated basis). 

   

  Demand Registration Rights 

   

  The holders of certain shares of our common stock, or their permitted transferees, are entitled to demand registration rights. Under the terms of the amended and restated stockholders’ agreement, at any time after 180 days following the effective date of the registration statement for our initial public offering, holders of at least 35% of the voting securities (as defined in the amended and restated stockholders’ agreement) then-outstanding can request that we register the offer and sale of their shares on a registration statement on Form S-1 under the Securities Act with an anticipated aggregate offering price, net of selling expenses, of at least $25.0 million. We are required to effect only one registration pursuant to this provision of the amended and restated stockholders’ agreement. We may postpone the filing of a registration statement no more than once during any 12-month period for up to 90 days if our board of directors determines that the filing would be detrimental to us and our stockholders. We are not required to effect a requested registration under certain additional circumstances specified in the amended and restated stockholders’ agreement. 

   

  Form S-3 Registration Rights 

   

  The holders of certain shares of our common stock or their permitted transferees are also entitled to Form S-3 registration rights. If we are eligible and qualified to file a registration statement on Form S-3, holders can request that we register the offer and sale of all or part of their shares on a registration statement on Form S-3 with an anticipated aggregate offering price, net of selling expenses, of at least $10.0 million. We are required to effect at most two registration statements on Form S-3 in any 12-month period. We may postpone the filing of a registration statement on Form S-3 no more than once during any 12-month period for up to 90 days if our board of directors determines that the filing would be detrimental to us and our stockholders. We are not required to effect a registration on Form S-3 under certain additional circumstances specified in the amended and restated stockholders’ agreement. 

   

  Piggyback Registration Rights 

   

  If we register any of our common stock for public sale, the holders of certain shares of our common stock or their permitted transferees are entitled to piggyback registration rights. However, this right does not apply to (1) a registration relating to the sale or grant of securities to our employees pursuant to a stock option, stock purchase, equity incentive or similar plan; (2) a registration relating to an SEC Rule 145 transaction; (3) a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the voting securities, as defined in the amended and restated stockholders’ agreement; or (4) a registration in which the only common stock being registered is common stock issuable upon conversion of debt securities that are also being registered. The underwriters of any underwritten offering will have the right, in their sole discretion, to limit, because of marketing reasons, the number of shares registered by these holders, in which case the number of shares to be registered will be apportioned, first, to us, and second, pro rata among these holders, according to the total amount of securities entitled to be included by each holder, subject to additional circumstances specified in the amended and restated stockholders’ agreement. 

   

  Anti-Takeover Provisions 

  

   

  The provisions of Delaware law, our amended and restated certificate of incorporation and our amended and restated bylaws could have the effect of delaying, deferring, or discouraging another person from acquiring control of our company. These provisions, which are summarized below, may have the effect of discouraging takeover bids. They are also designed, in part, to encourage persons seeking to acquire control of us to negotiate first with our board of directors. We believe that the benefits of increased protection of our potential ability to negotiate with an unfriendly or unsolicited acquirer outweigh the disadvantages of discouraging a proposal to acquire us because negotiation of these proposals could result in an improvement of their terms. 

   

  Delaware Law 

   

  We are subject to the provisions of Section 203 of the Delaware General Corporation Law, or DGCL, regulating corporate takeovers. In general, DGCL Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years following the date on which the person became an interested stockholder unless: 

   

  •prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

  •the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, but not the outstanding voting stock owned by the interested stockholder, (1) shares owned by persons who are directors and also officers and (2) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or 

  •at or subsequent to the date of the transaction, the business combination is approved by the board of directors of the corporation and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder. 

   

  Generally, a “business combination” includes a merger, asset or stock sale, or other transaction or series of transactions together resulting in a financial benefit to the interested stockholder. An “interested stockholder” is a person who, together with affiliates and associates, owns or, within three years prior to the determination of interested stockholder status, did own 15% or more of a corporation’s outstanding voting stock. We expect the existence of this provision to have an anti-takeover effect with respect to transactions our board of directors does not approve in advance. We also anticipate that DGCL Section 203 may also discourage attempts that might result in a premium over the market price for the shares of common stock held by stockholders.

   

  Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws Provisions 

   

  Our amended and restated certificate of incorporation and our amended and restated bylaws includes a number of provisions that could deter hostile takeovers or delay or prevent changes in control of our management team, including the following: 

   

  •Dual-Class Common Stock. As described above in the section titled “—Common Stock—Voting Rights,” our amended and restated certificate of incorporation provides for a dual-class common stock structure pursuant to which holders of our Class B common stock have the ability to control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of all outstanding shares of our common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets. Current investors, executives and employees have the ability to exercise significant influence over those matters. 

  •Board of Directors Vacancies. Our amended and restated certificate of incorporation and amended and restated bylaws authorize only our board of directors to fill vacant directorships, including newly created seats. In addition, the number of directors constituting our board of directors is permitted to be set only by a resolution adopted by a majority vote of our entire board of directors. These provisions would prevent a stockholder from increasing the size of our board of directors and then gaining control of our board of 

  

  directors by filling the resulting vacancies with its own nominees. This makes it more difficult to change the composition of our board of directors but promotes continuity of management. 

  •Classified Board. Our amended and restated certificate of incorporation and amended and restated bylaws provides that our board of directors is classified into three classes of directors. The existence of a classified board of directors could discourage a third party from making a tender offer or otherwise attempting to obtain control of us as it is more difficult and time consuming for stockholders to replace a majority of the directors on a classified board of directors. 

  •Directors Removed Only for Cause. Our amended and restated certificate of incorporation provides that stockholders may remove directors only for cause. 

  •Supermajority Requirements for Amendments of Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws. Our amended and restated certificate of incorporation further provides that the affirmative vote of holders of at least two-thirds of the voting power of all of the then outstanding shares of voting stock is required to amend certain provisions of our amended and restated certificate of incorporation, including provisions relating to the classified board, the size of the board, removal of directors, special meetings, actions by written consent, and designation of our preferred stock. In addition, the affirmative vote of holders of 66 2/3% of the voting power of each of our Class A common stock and Class B common stock, voting separately by class, is required to amend the provisions of our amended and restated certificate of incorporation relating to the terms of our Class B common stock. The affirmative vote of holders of at least 66 2/3% of the voting power of all of the then outstanding shares of voting stock is required to amend or repeal our amended and restated bylaws, although our amended and restated bylaws may be amended by a simple majority vote of our board of directors. 

  •Stockholder Action; Special Meeting of Stockholders. Our amended and restated certificate of incorporation provides that special meetings of our stockholders may be called only by our board of directors, the chairman of our board of directors, or either of our co-Chief Executive Officers. Our amended and restated certificate of incorporation provides that our stockholders may act by written consent until such time as holders of our Class B common stock beneficially own less than a majority of the voting power, at which time our stockholders will no longer be able to act by written consent and instead must take action at an annual or special meeting of our stockholders. As a result, holders of our capital stock will not be able to amend our amended and restated bylaws or remove directors without holding a meeting of our stockholders called in accordance with our amended and restated bylaws. Further, our amended and restated bylaws provides that special meetings of our stockholders may be called only by our board of directors, the chairman of our board of directors, or our co-Chief Executive Officers, thus prohibiting a stockholder from calling a special meeting. These provisions might delay the ability of our stockholders to force consideration of a proposal or for stockholders to take any action, including the removal of directors. 

  •Advance Notice Requirements for Stockholder Proposals and Director Nominations. Our amended and restated bylaws provide advance notice procedures for stockholders seeking to bring business before our annual meeting of stockholders or to nominate candidates for election as directors at our annual meeting of stockholders. Our amended and restated bylaws also specify certain requirements regarding the form and content of a stockholder’s notice. These provisions might preclude our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders if the proper procedures are not followed. We expect that these provisions might also discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company. 

  •No Cumulative Voting. The DGCL provides that stockholders are not entitled to the right to cumulate votes in the election of directors unless a corporation’s certificate of incorporation provides otherwise. Our amended and restated certificate of incorporation and amended and restated bylaws do not provide for cumulative voting. 

  •Issuance of Undesignated Preferred Stock. Our board of directors have the authority, without further action by the stockholders, to issue up to 100,000,000 shares of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by our board of directors. The existence of authorized but unissued shares of preferred stock enables our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or other means. 

  •Choice of Forum. Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, (A)(i) any derivative action or proceeding brought on 

  

  behalf of us, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers, other employees or stockholders to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or amended and restated bylaws (as either may be amended or restated) or as to which the DGCL confers exclusive jurisdiction on the Court of Chancery of the State of Delaware, or (iv) any action asserting a claim governed by the internal affairs doctrine of the law of the State of Delaware shall, to the fullest extent permitted by law, be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, the federal district court of the State of Delaware, and (B) the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Notwithstanding the foregoing, the exclusive forum provision shall not apply to claims seeking to enforce any liability or duty created by the Exchange Act. Our amended and restated certificate of incorporation also provides that, to the fullest extent permitted by law, any person or entity purchasing or otherwise acquiring or holding any interest in shares of our capital stock shall be deemed to have notice of and consented to the foregoing. By agreeing to this provision, however, stockholders have not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.

   

  Limitations on Liability and Indemnification Matters 

   

  Our amended and restated certificate of incorporation provides that we will indemnify each of our directors and executive officers to the fullest extent permitted by the DGCL. We have entered into indemnification agreements with each of our directors and executive officers that may, in some cases, be broader than the specific indemnification provisions contained under Delaware law. Further, pursuant to our indemnification agreements and directors’ and officers’ liability insurance, our directors and executive officers are indemnified and insured against the cost of defense, settlement or payment of a judgment under certain circumstances. In addition, as permitted by Delaware law, our amended and restated certificate of incorporation includes provisions that eliminate the personal liability of our directors for monetary damages resulting from breaches of certain fiduciary duties as a director. The effect of this provision is to restrict our rights and the rights of our stockholders in derivative suits to recover monetary damages against a director for breach of fiduciary duties as a director. 

   

  These provisions may be held not to be enforceable for violations of the federal securities laws of the United States. 

   

  Listing 

   

  Our Class A common stock is listed on the NYSE under the symbol “FIGS.” 

   

  Transfer Agent and Registrar 

   

  The transfer agent and registrar for our Class A common stock is Computershare Trust Company, N.A.

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