Document:

Exhibit 4.5

 

 

 

 

 

 

 

 

 

 

B. Riley Financial, Inc.

 

and

 

The Bank of New York Mellon Trust Company,
N.A.,

 

as Trustee

 

FOURTH SUPPLEMENTAL INDENTURE

 

Dated as of January 25, 2021

 

to the Indenture dated as of May 7, 2019

 

6.00% Senior Notes due 2028

 

 

 

 

 

 

 

 

 

 

 

     

     

    

 

Table
of Contents

 

	 	 	Page
	 	 	 
	ARTICLE 1 APPLICATION OF FOURTH SUPPLEMENTAL INDENTURE	1
	 	 	 
	Section 1.01.	Application of Fourth Supplemental Indenture.	1
	 	 	 
	ARTICLE 2 DEFINITIONS	2
	 	 	 
	Section 2.01.	Certain Terms Defined in the Indenture.	2
	 	 	 
	Section 2.02.	Definitions.	2
	 	 	 
	ARTICLE 3 FORM AND TERMS OF THE NOTES	2
	 	 	 
	Section 3.01.	Form and Dating.	2
	 	 	 
	Section 3.02.	Terms of the Notes.	3
	 	 	 
	Section 3.03.	Optional Redemption.	3
	 	 	 
	ARTICLE 4 CERTAIN COVENANTS	4
	 	 	 
	Section 4.01.	Merger, Consolidation or Sale of Assets.	4
	 	 	 
	Section 4.02.	Reporting.	5
	 	 	 
	Section 4.03.	Payment of Taxes.	5
	 	 	 
	ARTICLE 5 EVENTS OF DEFAULT	5
	 	 	 
	Section 5.01.	Events of Default.	5
	 	 	 
	ARTICLE 6 MISCELLANEOUS	6
	 	 	 
	Section 6.01.	Trust Indenture Act Controls.	6
	 	 	 
	Section 6.02.	New York Law to Govern.	6
	 	 	 
	Section 6.03.	Counterparts.	6
	 	 	 
	Section 6.04.	Severability.	7
	 	 	 
	Section 6.05.	Ratification.	7
	 	 	 
	Section 6.06.	Effectiveness.	7
	 	 	 
	Section 6.07.	Trustee Makes No Representation.	7
	 	 	 
	EXHIBIT A 	Form of 6.00% Senior Note due 2028	A-1

 

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FOURTH SUPPLEMENTAL INDENTURE

 

FOURTH SUPPLEMENTAL INDENTURE (this “Fourth
Supplemental Indenture”), dated as of January 25, 2021, between B. Riley Financial, Inc., a Delaware corporation (the
“Company”), and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”).

 

RECITALS OF THE COMPANY

 

WHEREAS, the Company and the Trustee
executed and delivered an Indenture, dated as of May 7, 2019 (the “Base Indenture”), as supplemented by the
First Supplemental Indenture, dated as of May 7, 2019 (the “First Supplemental Indenture”), the Second Supplemental
Indenture, dated as of September 23, 2019 (the “Second Supplemental Indenture”) and the Third Supplemental Indenture,
dated as of February 12, 2020 (the “Third Supplemental Indenture,” and, together with the Base Indenture, the
First Supplemental Indenture, the Second Supplemental Indenture and the Third Supplemental Indenture, the “Indenture”)
to provide for the issuance by the Company from time to time of Securities to be issued in one or more series as provided in the
Indenture;

 

WHEREAS, Section 9.1 of the Base
Indenture provides, among other things, that the Company and the Trustee may enter into indentures supplemental to the Base Indenture,
without the consent of any Holders of Securities, to establish the form of any Security, as permitted by Section 2.1 of the Base
Indenture, and to provide for the issuance of the Notes (as defined below), as permitted by Section 3.1 of the Base Indenture,
and to set forth the terms thereof;

 

WHEREAS, the Company desires to
execute this Fourth Supplemental Indenture, pursuant to Section 2.1 of the Base Indenture, to establish the form and, pursuant
to Section 3.1 of the Base Indenture, to provide for the issuance, of a series of its senior notes designated as its 6.00% Senior
Notes due 2028 (the “Notes”), in an initial aggregate principal amount of $200,000,000. The Notes are a series
of securities as referred to in Section 3.1 of the Base Indenture.

 

WHEREAS, the Company has requested
and hereby requests that the Trustee execute and deliver this Fourth Supplemental Indenture;

 

WHEREAS, the execution and delivery
of this Fourth Supplemental Indenture has been duly authorized by the Company and all things necessary have been done by the Company
to make this Fourth Supplemental Indenture, when executed and delivered by the Company, a valid and binding supplement to the Indenture
and agreement of the Company;

 

WHEREAS, all things necessary have
been done by the Company to make the Notes, when executed by the Company and authenticated and delivered by the Trustee in accordance
with the provisions of the Indenture, the valid and binding obligations of the Company; and

 

WHEREAS, all conditions precedent
provided for in the Indenture relating to this Fourth Supplemental Indenture have been complied with.

 

NOW, THEREFORE, in consideration
of the premises stated herein and the purchase of the Notes by the Holders thereof, the Company and the Trustee mutually covenant
and agree for the equal and proportionate benefit of the respective Holders from time to time of the Notes as follows:

 

ARTICLE
1

APPLICATION OF FOURTH SUPPLEMENTAL INDENTURE

 

Section 1.01. Application of Fourth Supplemental Indenture.

 

Notwithstanding any other provision of
this Fourth Supplemental Indenture, all provisions of this Fourth Supplemental Indenture are expressly and solely for the benefit
of the Holders of the Notes, and any such provisions shall not be deemed to apply to any other Securities issued under the Base
Indenture and shall not be deemed to amend, modify or supplement the Base Indenture for any purpose other than with respect to
the Notes. Unless otherwise expressly specified, references in this Fourth Supplemental Indenture to specific Article numbers or
Section numbers refer to Articles and Sections contained in this Fourth Supplemental Indenture and not the Base Indenture or any
other document. All Initial Notes and Additional Notes, if any, shall be treated as a single class for all purposes of the Indenture,
including waivers, amendments, redemptions and offers to purchase.

 

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ARTICLE
2

DEFINITIONS

 

Section 2.01. Certain Terms Defined in the Indenture.

 

For purposes of this Fourth Supplemental
Indenture, all capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Base Indenture.

 

Section 2.02. Definitions. (a) For
the benefit of the Holders of the Notes, the following terms shall have the meanings set forth in this Section 2.02:

 

“Additional Notes” has
the meaning specified in Section 3.02(b) of this Fourth Supplemental Indenture.

 

“Depositary” has the
meaning specified in Section 3.01(c) of this Fourth Supplemental Indenture.

 

“Global Notes” means
the Notes in the form of Global Securities issued to the Depositary or its nominee, substantially in the form of Exhibit A.

 

“Initial Notes” has
the meaning specified in Section 3.02(b) of this Fourth Supplemental Indenture.

 

“Notes” has the meaning
specified in the recitals of this Fourth Supplemental Indenture.

 

ARTICLE
3

FORM AND TERMS OF THE NOTES

 

Section 3.01. Form and Dating.

 

a) The Notes and the Trustee’s certificate
of authentication shall be substantially in the form of Exhibit A attached hereto. The Notes shall be executed on behalf of the
Company by an Officer of the Company. The Notes may have notations, legends or endorsements required by law, stock exchange rules
or usage. Each Note shall be dated the date of its authentication. The Notes and any beneficial interest in the Notes shall be
in minimum denominations of $25 and integral multiples of $25 in excess thereof.

 

b) The terms and notations contained in
the Notes shall constitute, and are hereby expressly made, a part of the Indenture, and the Company and the Trustee, by their execution
and delivery of this Fourth Supplemental Indenture, expressly agree to such terms and provisions and to be bound thereby.

 

c) Global Notes. The Notes shall be issued
initially in the form of fully registered Global Securities, which shall be deposited on behalf of the purchasers of the Notes
represented thereby with The Depository Trust Company, New York, New York (the “Depositary”) or its custodian
and registered in the name of Cede & Co., the Depositary’s nominee, duly executed by the Company and authenticated by
the Trustee.

 

d) Book-Entry Provisions. This Section
3.01(d) shall apply only to the Global Notes deposited with or on behalf of the Depositary. The Company shall execute and the Trustee
shall, in accordance with this Section 3.01(d), authenticate and deliver the Global Notes that shall be registered in the name
of the Depositary or the nominee of the Depositary and shall be delivered by the Trustee to the Depositary or its custodian.

 

e) Paying Agent. The Company initially
appoints the Trustee as Paying Agent for the payment of the principal of (and premium, if any) and interest on the Notes and the
Corporate Trust Office of the Trustee, is hereby designated as the Place of Payment where the Notes may be presented for payment.

 

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Section 3.02. Terms of the Notes. The following terms
relating to the Notes are hereby established:

 

a) Title. The Notes shall constitute a
series of Securities having the title “6.00% Senior Notes due 2028”.

 

b) Principal Amount. The aggregate principal
amount of the Notes that may be initially authenticated and delivered under the Indenture (the “Initial Notes”)
shall be $200,000,000 (except for Notes authenticated and delivered upon registration of, transfer of, or in exchange for, or in
lieu of, other Notes pursuant to Sections 3.4, 3.5, 3.6, 9.6 or 11.7 of the Base Indenture). The Company may from time to time,
without the consent of the Holders of Notes, issue additional Notes (in any such case “Additional Notes”) having
the same terms as to status, redemption or otherwise (except the price to public, the issue date and, if applicable, the initial
interest accrual date and the initial interest payment date) that may constitute a single fungible series with the Initial Notes;
provided that if any such Additional Notes are not fungible with the Initial Notes for U.S. federal income tax purposes, such Additional
Notes will have one or more separate CUSIP numbers. Any Additional Notes and the Initial Notes shall constitute a single series
under the Indenture and all references to the Notes shall include the Initial Notes and any Additional Notes unless the context
otherwise requires.

 

c) Maturity Date. The entire outstanding
principal amount of the Notes shall be payable on January 31, 2028 (the “Maturity Date”).

 

d) Interest Rate. The rate at which the
Notes shall bear interest shall be 6.00% per annum; the date from which interest shall accrue on the Notes shall be January 25,
2021, or the most recent Interest Payment Date to which interest has been paid or provided for; the Interest Payment Dates for
the Notes shall be January 31, April 30, July 31 and October 31 of each year and on the Maturity Date, beginning April 30, 2021;
the interest so payable, and punctually paid or duly provided for, on any Interest Payment Date, will be paid, in immediately available
funds, to the Persons in whose names the Notes (or predecessor Notes) are registered (which shall initially be the Depositary)
at the close of business on the Regular Record Date for such interest, which shall be the January 15, April 15, July 15 or October
15 (whether or not a Business Day), as the case may be, preceding such Interest Payment Date, and the January 15 immediately preceding
the Maturity Date. Interest shall be computed on the basis of a 360-day year comprised of twelve 30-day months. For so long as
the Notes are represented in global form by one or more Global Securities, all payments of principal (and premium, if any) and
interest shall be made by wire transfer of immediately available funds to the Depositary or its nominee, as the case may be, as
the registered owner of the Global Security representing such Notes. In the event that definitive Notes shall have been issued,
all payments of principal (and premium, if any) and interest shall be made by wire transfer of immediately available funds to the
accounts of the registered Holders thereof; provided, that the Company may elect to make such payments at the office of the Paying
Agent in the City of Chicago; and provided further, that the Company may at its option pay interest by check to the registered
address of each Holder of a definitive Note.

 

e) Currency. The currency of denomination
of the Notes is United States Dollars. Payment of principal of and interest and premium, if any, on the Notes shall be made in
United States Dollars.

 

f) Sinking Fund. The Notes are not subject
to any sinking fund.

  

g) Additional Interest. At the Company’s
election, the sole remedy with respect to an Event of Default due to a failure to comply with reporting requirements under the
Trust Indenture Act or under Section 4.02 below, for the first 180 calendar days after the occurrence of such Event of Default,
consists exclusively of the right to receive additional interest on the Notes at an annual rate equal to (1) 0.25% for the first
90 calendar days after such default and (2) 0.50% for calendar days 91 through 180 after such default. On the 181st day after such
Event of Default, if such violation is not cured or waived, the Trustee or the Holders of not less than 25% of the outstanding
principal amount of the Notes may declare the principal, together with accrued and unpaid interest, if any, on the Notes to be
due and payable immediately. If the Company chooses to pay such additional interest, the Company must notify the Trustee and the
Holders of the Notes by certificate of the Company’s election at any time on or before the close of business on the first
business day following the Event of Default.

 

Section 3.03. Optional Redemption.

 

a) The provisions of Article 11 of the
Base Indenture, as supplemented by the provisions of this Fourth Supplemental Indenture, shall apply to the Notes.

 

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b) The Notes shall be redeemable as a whole
or in part, at any time and from time to time at the Company’s option (i) on or after January 31, 2022 and prior to January
31, 2023, at a price equal to $25.75 per $25.00 principal amount of a Note, plus accrued and unpaid interest to, but excluding,
the Redemption Date, (ii) on or after January 31, 2023 and prior to January 31, 2024, at a price equal to $25.50 per $25.00 principal
amount of a Note, plus accrued and unpaid interest to, but excluding, the Redemption Date, (iii) on or after January 31, 2024 and
prior to January 31, 2025, at a price equal to $25.25 per $25.00 principal amount of a Note, plus accrued and unpaid interest to,
but excluding, the Redemption Date, and (iv) on or after January 31, 2025 and prior to maturity, at a price equal to 100% of their
principal amount, plus accrued and unpaid interest to, but excluding, the Redemption Date. In each case, redemption shall be upon
notice not fewer than 30 days and not more than 60 days prior to the Redemption Date.

 

c) If less than all of the Notes are to
be redeemed, the particular Notes to be redeemed will be selected not more than 45 days prior to the redemption date by the Trustee
from the outstanding Notes not previously called for redemption, by lot, or in the Trustee’s discretion, on a pro-rata basis,
provided that the unredeemed portion of the principal amount of any Notes will be in an authorized denomination (which will not
be less than the minimum authorized denomination) for such Notes. The Trustee will promptly notify us in writing of the Notes selected
for redemption and, in the case of any Notes selected for partial redemption, the principal amount thereof to be redeemed.

 

d) Unless the Company defaults on the payment
of the redemption price, on and after the Redemption Date, interest will cease to accrue on the Notes called for redemption.

 

ARTICLE
4

CERTAIN COVENANTS

 

The following covenants shall be applicable
to the Company for so long as any of the Notes are Outstanding. Nothing in this Article will, however, affect the Company’s
rights or obligations under any other provision of the Base Indenture or this Fourth Supplemental Indenture.

 

Section 4.01. Merger, Consolidation or Sale of Assets.

 

The Company shall not merge or consolidate
with or into any other Person (other than a merger of a wholly owned Subsidiary of the Company into the Company) or sell, transfer,
lease, convey or otherwise dispose of all or substantially all of its property (provided that, for the avoidance of doubt, a pledge
of assets pursuant to any secured debt instrument of the Company or its Subsidiaries shall not be deemed to be any such sale, transfer,
lease, conveyance or disposition) in one transaction or series of related transactions unless:

  

a) the Company shall be the surviving Person
(the “Surviving Person”) or the Surviving Person (if other than the Company) formed by such merger or consolidation
or to which such sale, transfer, lease, conveyance or disposition is made shall be a corporation or limited liability company organized
and existing under the laws of the United States of America, any state thereof or the District of Columbia;

 

b) the Surviving Person (if other than
the Company) expressly assumes, by supplemental indenture in form reasonably satisfactory to the Trustee, executed and delivered
to the Trustee by such Surviving Person, the due and punctual payment of the principal of, and premium, if any, and interest on,
all the Notes Outstanding, and the due and punctual performance and observance of all the covenants and conditions of this Indenture
to be performed by the Company;

 

c) immediately before and immediately after
giving effect to such transaction or series of related transactions, no Default or Event of Default shall have occurred and be
continuing; and

 

d) in the case of a merger where the Surviving
Person is other than the Company, the Company shall deliver, or cause to be delivered, to the Trustee, an Officer’s Certificate
and an Opinion of Counsel, each stating that such transaction and the supplemental indenture, if any, in respect thereto comply
with this Section 4.01 and that all conditions precedent in this Indenture relating to such transaction have been complied with.

 

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Section 4.02. Reporting.

 

If, at any time, the Company is not subject
to the reporting requirements of Sections 13 or 15(d) of the Exchange Act to file any periodic reports with the Securities and
Exchange Commission, the Company agrees to furnish to Holders and the Trustee, for the period of time during which the Notes are
outstanding, its audited annual consolidated financial statements, within 75 days of its fiscal year end, and unaudited interim
consolidated financial statements, within 40 days of its fiscal quarter end (other than our fourth fiscal quarter). All such financial
statements will be prepared, in all material respects, in accordance with Generally Accepted Accounting Principles, as applicable.

 

Delivery of such reports, information and
documents to the Trustee pursuant to this Section 4.02 is for informational purposes only and the Trustee’s receipt of such
shall not constitute actual or constructive knowledge or notice of any information contained therein or determinable from information
contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled
to rely exclusively on an Officer’s Certificate).

 

Section 4.03. Payment of Taxes.

 

The Company will pay or discharge or cause
to be paid or discharged, before the same shall become delinquent, all taxes, assessments and governmental charges levied or imposed
upon the Company or upon the income, profits or property of the Company, except where the failure to do so would not be reasonably
expected to have a material adverse effect on the business, assets, financial condition or results of operations of the Company;
provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment
or charge whose amount, applicability or validity is being contested in good faith by appropriate proceedings.

 

ARTICLE
5

EVENTS
OF DEFAULT

 

Section 5.01. Events of Default.

 

Solely for the benefit of the Holders of
the Notes, Section 5.1 of the Base Indenture is hereby deleted in its entirety and replaced with the following:

 

“Section 5.1 Events of Default

 

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

 

(1) default in the payment of any interest
upon any Note when it becomes due and payable, and continuance of such default for a period of 30 days;

 

(2) default in the payment of the principal
of any Note when due and payable;

  

(3) default in the performance, or breach,
of any covenant of the Company in this Indenture with respect to the Notes, and continuance of such default or breach for a period
of 60 days after there has been sent to the Company by the Trustee or to the Company and the Trustee by the Holders of at least
25% in principal amount of the Notes, a written notice specifying such default or breach and requiring it to be remedied and stating
that such notice is a “Notice of Default” hereunder;

 

(4) the entry by a court having jurisdiction
in the premises of (A) a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company a bankrupt
or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed
and in effect for a period of 90 consecutive days; or

 

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(5) the commencement by the Company of
a voluntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law
or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or
order for relief in respect of the Company in an involuntary case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal or state
law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of the Company or of any substantial part of its property, or the
making by the Company of an assignment for the benefit of creditors, or the admission by the Company in writing of its inability
to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action.

 

The Trustee shall not be deemed to have notice or be charged
with knowledge of an Event of Default hereunder (except for those described in paragraphs (1) and (2) above if the Trustee is then
the Paying Agent) unless written notice of such default or Event of Default from the Company or any Holder is received by a Responsible
Officer of the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture.”

 

ARTICLE
6

MISCELLANEOUS

 

Section 6.01. Trust Indenture Act Controls.

 

If any provision of this Fourth Supplemental
Indenture limits, qualifies or conflicts with another provision which is required to be included in this Fourth Supplemental Indenture
by the Trust Indenture Act, the required provision shall control. If any provision of this Fourth Supplemental Indenture modifies
or excludes any provision of the Trust Indenture Act which may be so modified or excluded, the latter provision shall be deemed
to apply to this Fourth Supplemental Indenture as so modified or to be excluded, as the case may be.

 

Section 6.02. New York Law to Govern.

 

This Fourth Supplemental Indenture and
the Notes shall be governed by and construed in accordance with the laws of the State of New York.

  

Section 6.03. Counterparts.

 

This Fourth Supplemental Indenture may
be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument. The exchange of copies of this Fourth Supplemental Indenture and of
signature pages that are executed by manual signatures that are scanned, photocopied or faxed or by other electronic signing created
on an electronic platform (such as DocuSign) or by digital signing (such as Adobe Sign), in each case that is approved by the Trustee,
shall constitute effective execution and delivery of this Fourth Supplemental Indenture for all purposes. Signatures of the parties
hereto that are executed by manual signatures that are scanned, photocopied or faxed or by other electronic signing created on
an electronic platform (such as DocuSign) or by digital signing (such as Adobe Sign), in each case that is approved by the Trustee,
shall be deemed to be their original signatures for all purposes of this Fourth Supplemental Indenture as to the parties hereto
and may be used in lieu of the original.

 

Anything in the Base Indenture, this Fourth
Supplemental Indenture or the Notes to the contrary notwithstanding, for the purposes of the transactions contemplated by the Base
Indenture, this Fourth Supplemental Indenture, the Notes and any document to be signed in connection with the Base Indenture, this
Fourth Supplemental Indenture or the Notes (including the Trustee’s Certificate of Authentication on the Notes, amendments,
waivers, consents and other modifications, Officer’s Certificates, Company Requests, Company Orders and Opinions of Counsel
and other issuance, authentication and delivery documents) or the transactions contemplated hereby may be signed by manual signatures
that are scanned, photocopied or faxed or other electronic signatures created on an electronic platform (such as DocuSign) or by
digital signature (such as Adobe Sign), in each case that is approved by the Trustee, and contract formations on electronic platforms
approved by the Trustee, and the keeping of records in electronic form, are hereby authorized, and each shall be of the same legal
effect, validity or enforceability as a manually executed signature in ink or the use of a paper-based recordkeeping system, as
the case may be.

 

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Section 6.04. Severability. If any
provision of this Fourth Supplemental Indenture or the Notes shall be held to be illegal or unenforceable under applicable law,
then the remaining provisions hereof shall be construed as though such invalid, illegal or unenforceable provision were not contained
therein.

 

Section 6.05. Ratification.

 

The Indenture, as supplemented by this
Fourth Supplemental Indenture, is in all respects ratified and confirmed. All provisions included in this Fourth Supplemental Indenture
supersede any conflicting provisions included in the Indenture, unless not permitted by law. The Trustee accepts the trusts created
by the Indenture, as supplemented by this Fourth Supplemental Indenture, and agrees to perform the same upon the terms and conditions
of the Indenture.

 

Section 6.06. Effectiveness.

 

The provisions of this Fourth Supplemental
Indenture shall become effective as of the date hereof.

 

Section 6.07. Trustee Makes No Representation.

 

The recitals and statements contained herein
and in the Notes are made solely by the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness
thereof. The Trustee makes no representation as to the validity, adequacy or sufficiency of this Fourth Supplemental Indenture
or the Notes. All rights, protections, privileges, indemnities, immunities and benefits granted or afforded to the Trustee under
the Base Indenture shall be deemed incorporated herein by this reference and shall be deemed applicable to all actions taken, suffered
or omitted to be taken by the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed
to act under this Fourth Supplemental Indenture.

 

[Remainder of page intentionally left blank.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Supplemental Indenture to be duly executed as of the date first above written.

 

	 	B. RILEY FINANCIAL, INC.
	 	 
	 	By:	/s/ Phillip J. Ahn
	 	 	Name:  	Phillip J. Ahn
	 	 	Title: 	Chief Financial Officer and Chief Operating Officer

 

[Signature Page to Fourth Supplemental
Indenture]

 

     

     

    

  

	 	
        THE BANK OF NEW YORK MELLON TRUST COMPANY N.A., as
Trustee

	 	 
	 	By:	/s/ Manjari Purkayastha
	 	 	Name:  	Manjari Purkayastha
	 	 	Title: 	Vice President

 

[Signature Page to B. Riley Financial,
Inc. Fourth Supplemental Indenture]

 

     

     

    

 

EXHIBIT A

 

THIS NOTE IS A GLOBAL SECURITY WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY (AS DEFINED IN THE INDENTURE) OR
A NOMINEE THEREOF. THIS GLOBAL SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY
OR ITS NOMINEE ONLY IN LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR SECURITIES IN DEFINITIVE FORM, THIS GLOBAL 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 DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY
(AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY 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 TO 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.

 

B. RILEY FINANCIAL, INC.

 

6.00% Senior Note due 2028

 

	No. 	Principal Amount
	CUSIP No. 05580M 835	$[______]

ISIN No. US05580M8358

 

B. Riley Financial, Inc., a Delaware corporation
(hereinafter called the “Company”, which term includes any successor Person under the Indenture referred to
below), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of [________] Dollars
(U.S. $[________]) on January 31, 2028 (the “Maturity Date”) and to pay interest thereon from January 25, 2021
or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly on January 31, April
30, July 31 and October 31 in each year and on the Maturity Date (each an “Interest Payment Date”), beginning
April 30, 2021 at the rate of 6.00% per annum, until the principal hereof is paid or duly made available for payment. The interest
so payable and punctually paid or duly provided for on any Interest Payment Date shall, as provided in such Indenture, be paid
to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the January 15, April 15, July 15 or October 15 (whether or not a Business Day),
as the case may be, preceding such Interest Payment Date, and the January 15 immediately preceding the Maturity Date. Any such
interest which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date shall forthwith cease
to be payable to the Holder hereof on the relevant Regular Record Date by virtue of having been such Holder, and may be paid to
the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
the Notes not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture.

 

The amount of interest payable for any
interest period, including interest payable for any partial interest period, will be computed on the basis of a 360-day year comprised
of twelve 30-day months. If an interest payment date falls on a non-Business Day, the applicable interest payment will be made
on the next Business Day and no additional interest will accrue as a result of such delayed payment.

 

    A-1

     

    

 

Payment of the principal of (and premium,
if any) and the interest on this Note shall be made at the designated office of the Trustee (as defined below) at The Bank of New
York Mellon Trust Company, N.A., 2 North LaSalle Street, 7th Floor, Chicago, IL 60602, in such currency of the United
States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, for so
long as the Notes are represented in global form by one or more Global Securities, all payments of principal (and premium, if any)
and interest shall be made by wire transfer of immediately available funds to the Depositary or its nominee, as the case may be,
as the registered owner of the Global Security representing such Notes. In the event that definitive Notes shall have been issued,
all payments of principal (and premium, if any) and interest shall be made by wire transfer of immediately available funds to the
accounts of the registered Holders thereof; provided, that the Company may at its option pay interest by check to the registered
address of each Holder of a definitive Note.

 

This Note is one of the duly authorized
series of Securities of the Company, designated as the Company’s “6.00% Senior Notes due 2028”, initially limited
to an aggregate principal amount of $200,000,000 all issued or to be issued under and pursuant to an Indenture (the “Base
Indenture”), dated as of May 7, 2019, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee
(hereinafter referred to as the “Trustee”), as supplemented by the First Supplemental Indenture thereto, dated
as of May 7, 2019 (the “First Supplemental Indenture”), the Second Supplemental Indenture thereto, dated as
of September 23, 2019 (the “Second Supplemental Indenture”), the Third Supplemental Indenture thereto, dated
as of February 12, 2020 (the “Third Supplemental Indenture”) and the Fourth Supplemental Indenture thereto,
dated as of January 25, 2021 (the “Fourth Supplemental Indenture,” and, together with the Base Indenture, the
First Supplemental Indenture, the Second Supplemental Indenture and the Third Supplemental Indenture, the “Indenture”).
Reference is hereby made to the Indenture for a description of the respective rights, limitation of rights, obligations, duties
and immunities thereunder of the Trustee, the Company and the Holders of the Notes.

 

The Company may redeem the Notes as a whole
or in part, at any time and from time to time at the Company’s option (i) on or after January 31, 2022 and prior to January
31, 2023, at a price equal to $25.75 per $25.00 principal amount of a Note, plus accrued and unpaid interest to, but excluding,
the date of redemption, (ii) on or after January 31, 2023 and prior to January 31, 2024, at a price equal to $25.50 per $25.00
principal amount of a Note, plus accrued and unpaid interest to, but excluding, the date of redemption, (iii) on or after January
31, 2024 and prior to January 31, 2025, at a price equal to $25.25 per $25.00 principal amount of a Note, plus accrued and unpaid
interest to, but excluding, the date of redemption, and (iv) on or after January 31, 2025 and prior to maturity, at a price equal
to 100% of their principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption. In each case, redemption
shall be upon notice not fewer than 30 days and not more than 60 days prior to the date fixed for redemption.

 

If less than all of the Notes are to be
redeemed, the Notes to be redeemed shall be selected not more than 45 days prior to the redemption date by the Trustee from the
outstanding Notes not previously called for redemption, by lot, or in the Trustee’s discretion, on a pro-rata basis, provided
that the unredeemed portion of the principal amount of any Notes will be in an authorized denomination (which will not be less
than the minimum authorized denomination) for such Notes. The Trustee will promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Notes selected for partial redemption, the principal amount thereof to be redeemed.

 

The Notes are not subject to any sinking
fund.

 

If an Event of Default with respect to
the Notes shall occur and be continuing, the principal of the Notes may be declared due and payable in the manner and with the
effect provided in the Indenture.

  

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 not less than a majority in aggregate principal amount of the Securities at the time Outstanding
of each series affected thereby. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities of any series at the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note
shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note 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
Note.

 

    A-2

     

    

 

No reference herein to the Indenture and
no provision of this Note or of the Indenture shall alter or impair the right of the Holder of this Note, which is absolute and
unconditional, to receive payment of the principal of and interest on this Note at the times herein and in the Indenture prescribed
and to institute suit for the enforcement of any such payment unless the Holder of this Note shall have consented to the impairment
of such right.

 

As provided in the Indenture and subject
to certain limitations set forth therein, the transfer of this Note may be registered in the Security Register, upon surrender
of this Note for registration of transfer at the office or agency of the Company in any place where the principal of (and premium,
if any) and interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory
to the Company and the Security Registrar duly executed by, the Holder hereof or by his attorney duly authorized in writing, and
thereupon one or more new Notes of this series and of any authorized denominations and of a like aggregate principal amount and
tenor, shall be issued to the designated transferee or transferees.

 

The Notes are issuable only in registered
form without coupons in minimum denominations of $25 and integral multiples of $25 in excess thereof. Subject to certain limitations
therein set forth in the Indenture and in this Note, the Notes are exchangeable for a like aggregate principal amount of Notes
of this series in different authorized denominations, as requested by the Holders surrendering the same.

 

No service charge shall be made for any
such registration of transfer or for exchange of this Note, but the Company or the Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of
a Note, other than in certain cases provided in the Indenture.

 

Prior to due presentment of this Note 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 Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

 

The Indenture contains provisions whereby
(i) the Company may be discharged from its obligations with respect to the Notes (subject to certain exceptions) or (ii) the Company
may be released from its obligations under specified covenants and agreements in the Indenture, in each case if the Company irrevocably
deposits with the Trustee money or U.S. Government Obligations sufficient to pay and discharge the entire indebtedness on all Notes
of this series, and satisfies certain other conditions, all as more fully provided in the Indenture.

 

This Note shall be governed by and construed
in accordance with the laws of the State of New York.

 

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

 

    A-3

     

    

 

Unless the certificate of authentication hereon has been executed
by or on behalf of the Trustee under the Indenture by the manual signature (which may be scanned, photocopied or faxed or otherwise
signed electronically (including by DocuSign or Adobe Sign)) of one of its authorized signatories, this Note shall not be entitled
to any benefits under the Indenture or be valid or obligatory for any purpose.

 

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

 

Dated:

 

	 	B. RILEY FINANCIAL, INC.
	 	 
	 	By:	     
	 	 	Name: 
	 	 	Title: 

 

[Signature Page to B. Riley Financial,
Inc. Global Note]

 

     

     

    

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.

 

Dated:

 

	 	The Bank
    of New York Mellon Trust Company, N.A., as
    Trustee
	 	 

	 	By: 	      
	 	 	Name:
	 	 	Title:

 

[Authentication Certificate to B. Riley,
Financial, Inc. Global Note]

 

     

     

    

 

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	UNIF GIFT MIN ACT - . . .Custodian
	in common	(Cust) (Minor)
	TEN ENT - as tenants by	Under Uniform Gifts to
	the entireties	Minor Act
	JT TEN - as joint tenants	 	 
	with right of	 
	survivorship and	 
	not as tenants in	 
	common	 	(State)

 

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

 

 

 

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

 

 

 

(Please insert Assignee’s legal name)

 

 

 

(Please insert Social Security or other identifying number of
Assignee)

 

 

 

 

 

 

 

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

 

the within Note of B. RILEY FINANCIAL, INC. and does hereby
irrevocably constitute and appoint attorney to transfer the said Note on the books of the Company, with full power
of substitution in the premises.

Dated:

 

	 	Your Signature: 	 
	 	 	(Sign exactly as your name appears on the
	 	 	face of this Note)

 

 

[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.]Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of January 6, 2021, by and between VERDE BIO HOLDINGS, INC., a Nevada corporation, with its address at 5 Cowboys Way, Suite 300, Frisco TX 75034 (the “Company”), and POWER UP LENDING GROUP LTD., a Virginia corporation, with its address at 111 Great Neck Road, Suite 216, Great Neck, NY 11021 (the “Buyer”).

 

WHEREAS:

 

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

 

B.Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement a convertible note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount of $55,500.00 (together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, the “Note”), convertible into shares of common stock, $0.001 par value per share, of the Company (the “Common Stock”), upon the terms and subject to the limitations and conditions set forth in such Note with additional tranches of financing of up to $775,000.00 in the aggregate subject further agreement between the Company and the Buyer.  

 

NOW THEREFORE, the Company and the Buyer severally (and not jointly) hereby agree as follows:

 

1.Purchase and Sale of Note.  

 

a.Purchase of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase from the Company such principal amount of Note as is set forth immediately below the Buyer’s name on the signature pages hereto. 

 

b.Form of Payment. On the Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the Note to be issued and sold to it at the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately available funds to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Note in the principal amount equal to the Purchase Price as is set forth immediately below the Buyer’s name on the signature pages hereto, and (ii) the Company shall deliver such duly executed Note on behalf of the Company, to the Buyer, against delivery of such Purchase Price. 

 

c.Closing Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below, the date and time of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be 12:00 noon, Eastern Standard Time on or about January 7, 2021, or such other mutually agreed upon time. The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to by the parties. 

2.Buyer’s Representations and Warranties. The Buyer represents and warrants to the Company that: 

 

a.Investment Purpose. As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable upon conversion of or otherwise pursuant to the Note (such shares of Common Stock being collectively referred to herein as the “Conversion Shares” and, collectively with the Note, the “Securities”) for its own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act. 

 

b.Accredited Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”). 

 

c.Reliance on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities. 

 

d.Information. The Company has not disclosed to the Buyer any material nonpublic information and will not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure to the Buyer. 

 

e.Legends. The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the 1933 Act; or may be sold pursuant to an applicable exemption from registration, the Conversion Shares may bear a restrictive legend in substantially the following form: 

 

"THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS, AND MAY NOT BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR (2) THE ISSUER OF SUCH SECURITIES RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY ACCEPTABLE TO THE ISSUER’S TRANSFER AGENT, THAT SUCH SECURITIES MAY BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE

2

 

TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS."

 

The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to an exemption from registration without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities, including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144, at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note.

 

f.Authorization; Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms. 

 

3.Representations and Warranties of the Company. The Company represents and warrants to the Buyer that: 

 

a.Organization and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted. “Subsidiaries” means any corporation or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly, any equity or other ownership interest. 

 

b.Authorization; Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement, the Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and the consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company’s Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its shareholders is required, (iii) this Agreement has been duly executed and delivered by the Company by its authorized representative, and such authorized representative is the true and official representative with authority to sign this Agreement and the other documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms. 

3

 

c.Capitalization. As of the date hereof, the authorized common stock of the Company consists of 5,000,000,000 authorized shares of Common Stock, $0.001 par value per share, of which 49,260,578 shares are issued and outstanding; and 45,566,502 shares are reserved for issuance upon conversion of the Note. All of such outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable. . 

 

d.Issuance of Shares. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note in accordance with its respective terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof. 

 

e.No Conflicts. The execution, delivery and performance of this Agreement, the Note by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations of any self-regulatory organizations to which the Company or its securities are subject) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). The businesses of the Company and its Subsidiaries, if any, are not being conducted, and shall not be conducted so long as the Buyer owns any of the Securities, in violation of any law, ordinance or regulation of any governmental entity. “Material Adverse Effect” means any material adverse effect on the business, operations, assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith. 

 

f.SEC Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being hereinafter referred to herein as the “SEC Documents”). Upon written request the Company will deliver to the Buyer true and complete copies of the SEC Documents, except for such exhibits and incorporated documents. As of their respective dates or if amended, as of the dates of the amendments, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior the date hereof).  

4

As of their respective dates or if amended, as of the dates of the amendments, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with United States generally accepted accounting principles, consistently applied, during the periods involved and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). The Company is subject to the reporting requirements of the 1934 Act.

 

g.Absence of Certain Changes. Since September 30, 2020, except as set forth in the SEC Documents, there has been no material adverse change and no material adverse development in the assets, liabilities, business, properties, operations, financial condition, results of operations, prospects or 1934 Act reporting status of the Company or any of its Subsidiaries. 

 

h.Absence of Litigation. Except as set forth in the SEC Documents, there is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such, that could have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing. 

 

i.No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes of any shareholder approval provisions applicable to the Company or its securities.  

 

j.No Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage commissions, transaction fees or similar payments relating to this Agreement or the transactions contemplated hereby. 

 

k.No Investment Company. The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement will not be an “investment company” required to be registered under the Investment Company Act of 1940 (an “Investment Company”). The Company is not controlled by an Investment Company. 

 

l.Breach of Representations and Warranties by the Company. If the Company breaches any of the representations or warranties set forth in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of default under Section 3.4 of the Note. 

5

 

4.COVENANTS.  

 

a.Best Efforts. The Company shall use its best efforts to satisfy timely each of the conditions described in Section 7 of this Agreement. 

 

b.Form D; Blue Sky Laws. The Company agrees to timely make any filings required by federal and state laws as a result of the closing of the transactions contemplated by this Agreement. 

 

c.Use of Proceeds. The Company shall use the proceeds for general working capital purposes. 

 

d.Expenses. At the Closing, the Company’s obligation with respect to the transactions contemplated by this Agreement is to reimburse Buyer’ expenses shall be $3,500.00 for Buyer’s legal fees and due diligence fee. 

 

e.Corporate Existence. So long as the Buyer beneficially owns any Note, the Company shall maintain its corporate existence and shall not sell all or substantially all of the Company’s assets, except with the prior written consent of the Buyer. 

 

f.Breach of Covenants. If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an event of default under Section 3.4 of the Note. 

 

g.Failure to Comply with the 1934 Act. So long as the Buyer beneficially owns the Note, the Company shall comply with the reporting requirements of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of the 1934 Act. 

 

h.Trading Activities. Neither the Buyer nor its affiliates has an open short position in the common stock of the Company and the Buyer agrees that it shall not, and that it will cause its affiliates not to, engage in any short sales of or hedging transactions with respect to the common stock of the Company. 

 

i.The Buyer is Not a “Dealer”. The Buyer and the Company hereby acknowledge and agree that the Buyer has not: (i) acted as an underwriter; (ii) acted as a market maker or specialist; (iii) acted as “de facto” market maker; or (iv) conducted any other professional market activities such as providing investment advice, extending credit and lending securities in connection; and thus that the Buyer is not a “Dealer” as such term is defined in the 1934 Act. 

 

j.Right of First Refusal. Unless it shall have first delivered to the Buyer, at least forty eight (48) hours prior to the closing of such Future Offering (as defined herein), written notice describing the proposed Future Offering (“ROFR Notice”), including the terms and conditions thereof, identity of the proposed purchaser and proposed definitive documentation to be entered into in connection therewith, and providing the Buyer an option during the forty eight (48) hour period following delivery of such notice to purchase the securities being offered in the Future Offering on the same terms as contemplated by such Future Offering (the limitations referred to in this sentence and the preceding sentence are collectively referred to as the “Right of First Refusal”), the Company will not conduct any equity (or debt with an equity component) financing in an amount less than $150,000 (“Future Offering(s)”)  

6

during the period beginning on the Closing Date and ending nine (9) months following the Closing Date. In the event the terms and conditions of a proposed Future Offering are amended in any respect after delivery of the notice to the Buyer concerning the proposed Future Offering, the Company shall deliver a new notice to the Buyer describing the amended terms and conditions of the proposed Future Offering and the Buyer thereafter shall have an option during the forty eight (48) hour period following delivery of such new notice to purchase its pro rata share of the securities being offered on the same terms as contemplated by such proposed Future Offering, as amended. Notwithstanding anything contained herein to the contrary, any subsequent offer by an investor, or an affiliate of such investor, identified on an ROFR Notice is subject to this Section 4(h) and the Right of First Refusal.

 

5.Transfer Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent to issue certificates, registered in the name of the Buyer or its nominee, for the Conversion Shares in such amounts as specified from time to time by the Buyer to the Company upon conversion of the Note in accordance with the terms thereof (the “Irrevocable Transfer Agent Instructions”). In the event that the Company proposes to replace its transfer agent, the Company shall provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to this Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount as such term is defined in the Note) signed by the successor transfer agent to Company and the Company. Prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to an exemption from registration, all such certificates shall bear the restrictive legend specified in Section 2(e) of this Agreement. The Company warrants that: (i) no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5, will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the Note; (ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or issuing)(electronically or in certificated form) any certificate for Conversion Shares to be issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement; and (iii) it will not fail to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Conversion Shares issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and/or this Agreement. If the Buyer provides the Company and the Company’s transfer, at the cost of the Buyer, with an opinion of counsel in form, substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of such Securities may be made without registration under the 1933 Act, the Company shall permit the transfer, and, in the case of the Conversion Shares, promptly instruct its transfer agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations as specified by the Buyer. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5 may be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section, that the Buyer shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer, without the necessity of showing economic loss and without any bond or other security being required. 

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6.Conditions to the Company’s Obligation to Sell. The obligation of the Company hereunder to issue and sell the Note to the Buyer at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions thereto, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion: 

 

a.The Buyer shall have executed this Agreement and delivered the same to the Company. 

 

b.The Buyer shall have delivered the Purchase Price in accordance with Section 1(b) above. 

 

c.The representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and the Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date. 

 

d.No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement. 

 

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

 

a.The Company shall have executed this Agreement and delivered the same to the Buyer. 

 

b.The Company shall have delivered to the Buyer the duly executed Note (in such denominations as the Buyer shall request) in accordance with Section 1(b) above. 

 

c.The Irrevocable Transfer Agent Instructions, in form and substance satisfactory to the Buyer, shall have been delivered to and acknowledged in writing by the Company’s Transfer Agent. 

 

d.The representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Buyer shall have received a certificate or certificates, executed by the chief executive officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters  

8

as may be reasonably requested by the Buyer including, but not limited to certificates with respect to the Board of Directors’ resolutions relating to the transactions contemplated hereby.

 

e.No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement. 

 

f.No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act reporting obligations. 

 

g.The Conversion Shares shall have been authorized for quotation on an exchange or electronic quotation system and trading in the Common Stock on such exchange or electronic quotation system shall not have been suspended by the SEC or an exchange or electronic quotation system. 

 

8.Governing Law; Miscellaneous.  

 

a.Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Virginia without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the Eastern District of New York. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Company and Buyer waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith 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 with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement, the Note or any related document or agreement by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this 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 other manner permitted by law. 

 

b.Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. 

 

c.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. 

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d.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 with 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. 

 

e.Entire Agreement; Amendments. This Agreement and the instruments referenced herein contain 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 the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer. 

 

f.Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be as set forth in the heading of this Agreement with a copy by fax only to (which copy shall not constitute notice) to Naidich Wurman LLP, 111 Great Neck Road, Suite 214, Great Neck, NY 11021, Attn: Allison Naidich, facsimile: 516-466-3555, e-mail:  allison@nwlaw.com. Each party shall provide notice to the other party of any change in address. 

 

g.Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, the Buyer may assign its rights hereunder to any person that purchases Securities in a private transaction from the Buyer or to any of its “affiliates,” as that term is defined under the 1934 Act, without the consent of the Company. 

 

h.Survival. The representations and warranties of the Company 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 Buyer. The Company agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage arising as a result of or related to any breach or alleged breach by the Company 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. 

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i.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. 

 

j.No Strict Construction. 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.

 

k.Remedies. The Company acknowledges that a breach by it of its  

obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.

 

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

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

 

 

	VERDE BIO HOLDINGS, INC.

	 

	 

	 

	 

	By:

	 

	 

	 

	Scott A. Cox

	 

	 

	Chief Executive Officer

	 

	 

	 

	 

	 

	 

	 

	POWER UP LENDING GROUP LTD.

	 

	 

	 

	 

	By:

	 

	 

	 

	Curt Kramer

	 

	 

	Chief Executive Officer

	 

 

 

	AGGREGATE SUBSCRIPTION AMOUNT:

	 

	 

	 

	Aggregate Principal Amount of Note:

	$55,500.00 

	 

	 

	Aggregate Purchase Price:

	$55,500.00 

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