Document:

Blueprint

 

 Exhibit 10.7

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS
WARRANT NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN
OPINION OF COUNSEL TO THE REGISTERED HOLDER (IF REQUESTED BY THE
COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR
ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.

 

	Warrant No.:
2017-_____	
 

	Number of Shares:
________
	Date of Issuance:
__________, 2017	
 

	(subject to
adjustment)

 

 

ROOT9B HOLDINGS, INC.

A Delaware Corporation

 

Warrant

 

root9B
Holdings, Inc., a Delaware corporation (the “Company”),
for value received, hereby certifies that _____________ (the “Initial
Holder”), or its registered assigns (the Initial
Holder or such registered assigns shall be referred to as the
“Registered
Holder”), is entitled, subject to the terms set forth
below, to purchase from the Company at any time on or after the
Exercise Date (as hereinafter defined) and on or before the
Expiration Date (as hereinafter defined), in whole or in part,
________ shares (as adjusted
from time to time pursuant to the provisions of this Warrant) of
the Company’s common stock, $0.001 par value per share
(“Common
Stock”), at an Exercise Price equal to $10.00 per
share (the “Exercise
Price”). The shares purchasable upon exercise of this
Warrant are sometimes hereinafter referred to as the
“Warrant
Stock”. “Exercise
Date” means any date on or after February 9, 2017 (the
“Initial Exercise
Date”) and prior to the Expiration Date on which the
Registered Holder elects by written notice to the Company to
exercise this Warrant. This Warrant is one of a series of Warrants
issued pursuant to that certain Securities Purchase Agreement,
dated as of September 9, 2016, as amended from time to time (the
“Purchase
Agreement”), by and among the Company and the
investors (the “Holders”)
referred to therein. Capitalized terms used but not defined herein
shall have the meaning set forth in the Purchase
Agreement.

 

1. Exercise.

 

(a) Manner
of Exercise. This Warrant may
be exercised by the Registered Holder, in whole or in part with the
purchase/exercise form appended hereto as Exhibit A (the
“Notice of
Exercise”) duly executed by such Registered Holder or
by such Registered Holder’s duly authorized attorney, at the
principal office of the Company, or at such other office or agency
as the Company may designate in writing, accompanied by payment in
full of the Exercise Price payable in respect of the number of
shares of Warrant Stock purchased upon such exercise. The Exercise
Price may be paid by cash, check, or wire transfer in immediately
available funds.

 

(b) Effective
Time of Exercise. Each exercise of
this Warrant shall be deemed to have been effected immediately
prior to the close of business as of the date the Warrant has been
exercised pursuant to a Notice of Exercise, with payment to the
Company of the Exercise Price and all transfer taxes required to be
paid by the Holder, if any, prior to the issuance of such shares,
having been paid. At such time, the person or persons in whose name
or names any certificates for Warrant Stock shall be issuable upon
such exercise as provided in Section 1(c) below shall be deemed to
have become the holder or holders of record of the Warrant Stock
represented by such certificates.

 

(c) Delivery
to Holder. As soon as
practicable after the exercise of this Warrant, in whole or in
part, and in any event within ten (10) calendar days thereafter,
the Company at its expense will cause to be issued in the name of,
and delivered to, the Registered Holder, or as such Registered
Holder (upon payment by such Registered Holder of any applicable
transfer taxes) may direct, certificates for Warrant Stock
purchased hereunder which shall be transmitted by the
Company’s transfer agent to the Registered Holder by (i)
crediting the account of the Registered Holder’s broker with
the Depository Trust Company through its Deposit Withdrawal Agent
Commission (“DWAC”)
system if the Company is then a participant in such system and
either (A) there is an effective registration statement permitting
the resale of the Warrant Stock by the Registered Holder or (B) the
Warrant Stock is eligible for resale without volume or
manner-of-sale limitations pursuant to Rule 144 of the Act, as
amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC having substantially the same effect
as such Rule (“Rule
144”), or (ii) if the conditions specified in (i)(A)
or (i)(B) are not satisfied, by physical delivery to the address
specified by the Registered Holder in the Notice of
Exercise.

 

 

 

 

 

(d) Delivery of New Warrants Upon
Exercise. If this Warrant shall have been exercised in part,
the Company shall, at the request of the Registered Holder, at the
time of delivery of the certificate or certificates representing
the Warrant Stock, deliver to the Registered Holder a new Warrant
evidencing the rights of Registered Holder to purchase the
unpurchased Warrant Stock called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant.
The Registered Holder shall not be required to deliver the original
of this Warrant in order to effect an exercise
hereunder.

 

(e) Limitations on Exercise. This
Warrant shall not be exercisable by the Registered Holder to the
extent (but only to the extent) that, following exercise, the
Registered Holder or any of its Affiliates would beneficially own
in excess of 9.99% (the “Maximum
Percentage”) of the Outstanding Shares of Common
Stock. No prior limitation on the number of shares of Common Stock
subject to this Warrant or the inability to exercise this Warrant
pursuant to this Section 1(e) shall have any effect on the
applicability of the provisions of this Section 1(e) with respect
to any subsequent determinations of the number of shares subject to
a Warrant or the exercisability hereof. For the purpose of this
Section 1(e), beneficial ownership and all determinations and
calculations (including, without limitation, with respect to
calculations of percentage ownership) shall be determined in
accordance with Section 13(d) of the Exchange Act. For
clarification, the foregoing calculation of beneficial ownership
shall take into account all securities which give rise to
beneficial ownership by the Registered Holder or its Affiliates of
such Common Stock under such rules and regulations and not solely
this Warrant. The provisions of this Section 1(e) shall be
implemented in a manner otherwise than in strict conformity with
the terms of this Section 1(e) in order to correct this Section
1(e) or any portion hereof which may be defective or inconsistent
with the intended Maximum Percentage beneficial ownership
limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such Maximum
Percentage limitation. The limitations contained in this Section
1(e) shall apply to a successor holder of this Warrant.
“Affiliate”
means, with respect to any Person, any other Person that, directly
or indirectly through one or more intermediaries, Controls, is
controlled by or is under common control with such Person, as such
terms are used in and construed under Rule 405 under the Securities
Act. With respect to the Registered Holder, any investment fund or
managed account that is managed on a discretionary basis by the
same investment manager Registered Holder will be deemed to be an
Affiliate of Registered Holder. “Person”
means any individual, firm, corporation, partnership, limited
liability company, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or
political subdivision thereof, or other entity of any kind and
includes any successor (by merger or otherwise) of such entity.
“Outstanding Shares
of Common Stock” means, as of any particular
measurement time, the sum of (i) the total number of outstanding
shares of Common Stock of the Company as of such time, and (ii) the
total number of shares of Common Stock which Registered Holder has
the right to acquire beneficial ownership of within sixty days of
such measurement time (to the extent not included in (i)),
including but not limited to any right to acquire shares of Common
Stock through the exercise of any option, warrant or right
(including this Warrant) or through the conversion of another
security. “Exchange
Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Securities and
Exchange Commission thereunder.

 

2. Adjustments.

 

(a) Stock
Splits and Dividends. If outstanding
shares of the Company’s Common Stock shall be subdivided into
a greater number of shares or a dividend in Common Stock shall be
paid in respect of Common Stock, then the Exercise Price in effect
immediately prior to such subdivision or at the record date of such
dividend shall simultaneously with the effectiveness of such
subdivision or immediately after the record date of such dividend
be proportionately reduced. If outstanding shares of Common Stock
shall be combined into a smaller number of shares, then the
Exercise Price in effect immediately prior to such combination
shall, simultaneously with the effectiveness of such combination,
be proportionately increased. When any adjustment is required to be
made in the Exercise Price, the number of shares of Warrant Stock
purchasable upon the exercise of this Warrant shall be changed to
the number determined by dividing (i) an amount equal to the
number of shares issuable upon the exercise of this Warrant
immediately prior to such adjustment, multiplied by the Exercise
Price in effect immediately prior to such adjustment, by
(ii) the Exercise Price in effect immediately after such
adjustment.

 

 

2

 

 

 

(b) Reclassification,
Etc. As a condition of
the consummation of any Fundamental Transaction occurring at any
time while any portion of this Warrant remains outstanding, the
Company shall cause any Successor Entity in such Fundamental
Transaction to assume in writing all of the obligations of the
Company under this Warrant in accordance with the provisions of
this Section 2(b) pursuant to written agreements in form and
substance reasonably satisfactory to the Holder, including
agreements to deliver to the Holder in exchange for this Warrant a
security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant,
including, without limitation, which is, at the time of
consummation of the Fundamental Transaction, exercisable into a
corresponding number of shares of capital stock of the Successor
Entity equivalent to the shares of Common Stock acquirable and
receivable upon exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) prior to such
Fundamental Transaction, and with an exercise price equal to the
Exercise Price (but taking into account the relative value of the
shares of Common Stock pursuant to such Fundamental Transaction and
the value of such shares of capital stock, such adjustments to the
number of shares of capital stock and such exercise price being for
the purpose of protecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental
Transaction). Upon the consummation of each Fundamental
Transaction, the Successor Entity shall succeed to, and be
substituted for (so that from and after the date of the applicable
Fundamental Transaction, the provisions of this Warrant referring
to the “Company” shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and
shall assume all of the obligations of the Company under this
Warrant with the same effect as if such Successor Entity had been
named as the Company herein. Notwithstanding anything to the
contrary, the Company or any Successor Entity shall, at the
Holder’s option, exercisable at any time concurrently with,
or within 30 days after, the consummation of the Fundamental
Transaction, (a) purchase all or any portion of this Warrant from
the Holder by paying to the Holder an amount of cash equal to the
Black Scholes Value of the remaining unexercised portion of such
Warrant on the date of such Fundamental Transaction or (b) deliver,
in exchange for surrender of this Warrant, the same amount and kind
of securities, cash or property as such Holder would have been
entitled to receive upon the occurrence of such Fundamental
Transaction if it had been, immediately prior to such Fundament
Transaction, the holder of the number of shares of Warrant Stock
then issuable upon exercise in full of the Warrant (without regard
to any limitations on the exercise of this Warrant).

 

"Fundamental
Transaction" means that the Company shall, directly or
indirectly, in one or more related transactions, (i) consolidate or
merge with or into (whether or not the Company is the surviving
corporation) another Person or Persons, if the holders of the
Voting Stock (not including any shares of Voting Stock held by the
Person or Persons making or party to, or associated or affiliated
with the Persons making or party to, such consolidation or merger)
immediately prior to such consolidation or merger shall hold or
have the right to direct the voting of less than 50% of the Voting
Stock or such voting securities of such other surviving Person
immediately following such transaction, or (ii) sell, assign,
transfer, convey or otherwise dispose of all or substantially all
of the properties or assets of the Company (other than the sale of
IPSA International, Inc., the Company’s wholly-owned
subsidiary (“IPSA”),
or any assets related to IPSA) to another Person, or (iii) allow
another Person to make a purchase, tender or exchange offer that is
accepted by the holders of more than the 50% of the outstanding
shares of Voting Stock of the Company (not including any shares of
Voting Stock held by the Person or Persons making or party to, or
associated or affiliated with the Persons making or party to, such
purchase, tender or exchange offer) (other than the acquisition of
the Voting Stock of IPSA), or (iv) consummate a stock purchase
agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme
of arrangement) with another Person whereby such other Person
acquires more than the 50% of the outstanding shares of Voting
Stock of the Company (not including any shares of Voting Stock held
by the other Person or other Persons making or party to, or
associated or affiliated with the other Persons making or party to,
such stock purchase agreement or other business combination) (other
than a sale of the Voting Stock of IPSA), (v) reorganize,
recapitalize or reclassify its Common Stock (other than pursuant to
the Amendment, if approved) or (vi) any "person" or "group" (as
these terms are used for purposes of Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended) is or shall become
the "beneficial owner" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended), directly or
indirectly, of 50% of the aggregate ordinary voting power
represented by issued and outstanding Common Stock.

 

 

3

 

 

 

“Successor
Entity” means the Person formed by, resulting from or
surviving any Fundamental Transaction or the Person with which such
Fundamental Transaction shall have been entered into.

 

"Voting
Stock" of a Person means capital stock of such Person of the
class or classes pursuant to which the holders thereof have the
general voting power to elect, or the general power to appoint, at
least a majority of the board of directors, managers or trustees of
such Person (irrespective of whether or not at the time capital
stock of any other class or classes shall have or might have voting
power by reason of the happening of any contingency).

 

(c) Adjustment Certificate. When
any adjustment is required to be made in the Warrant Stock or the
Exercise Price pursuant to this Section 2, the Company shall
promptly mail to the Registered Holder a certificate setting forth
(i) a brief statement of the facts requiring such adjustment,
(ii) the Exercise Price after such adjustment and
(iii) the kind and amount of stock or other securities or
property into which this Warrant shall be exercisable after such
adjustment.

 

3. Transfers.

 

(a) Unregistered
Security. Each Registered
Holder acknowledges that this Warrant and the Warrant Stock have
not been registered under the Securities Act of 1933, as amended
(the “Act”),
and agrees not to sell, pledge, distribute, offer for sale,
transfer or otherwise dispose of this Warrant or any Warrant Stock
issued upon its exercise in the absence of (i) an effective
registration statement under the Act as to this Warrant or such
Warrant Stock and registration or qualification of this Warrant or
such Warrant Stock under any applicable U.S. federal or state
securities law then in effect or (ii) an opinion of counsel,
reasonably satisfactory to the Company, that such registration or
qualification is not required. Each certificate or other instrument
for Warrant Stock issued upon the exercise of this Warrant shall
bear a legend substantially to the foregoing effect.

 

(b) Transferability.
Subject to the provisions of Section 3(a) hereof, this
Warrant and all rights hereunder are transferable, in whole or in
part, upon surrender of the Warrant with a properly executed
assignment (in the form of Exhibit B
hereto) at the principal office of the Company. The Company shall,
upon receipt of a transfer notice and appropriate documentation,
register any transfer on the Company’s warrant register;
provided, however, that the Company may require, as a condition to
such transfer, an opinion reasonably satisfactory to the Company
that said transfer does not require registration pursuant to one or
more exemptions provided under the Act.

 

(c) Warrant
Register. The Company will
maintain a register containing the names and addresses of the
Registered Holders of this Warrant. Until any transfer of this
Warrant is made in the warrant register, the Company may treat the
Registered Holder of this Warrant as the absolute owner hereof for
all purposes; provided, however, that if this Warrant
is properly assigned in blank, the Company may (but shall not be
required to) treat the bearer hereof as the absolute owner hereof
for all purposes, notwithstanding any notice to the contrary. Any
Registered Holder may change such Registered Holder’s address
as shown on the warrant register by written notice to the Company
requesting such change.

 

4. No Impairment. The Company will
not, by amendment of its charter or through reorganization,
consolidation, merger, dissolution, sale of assets or any other
voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of this
Warrant against impairment. Notwithstanding any other provision of
this Agreement to the contrary (including by way of implication),
the Company (a) will not increase the par value of any shares of
Common Stock receivable on the exercise of any Warrant above the
amount payable therefor on such exercise and (b) will take all such
action as may be necessary or appropriate so that the Company may
validly and legally issue fully paid and nonassessable shares of
Common Stock on the exercise of any Warrant. The Company covenants
and agrees that it shall not, without the prior written consent of
the Registered Holder, enter into or agree to become subject to any
term, condition, provision or agreement that would restrict in any
material way the performance of the Company’s obligations
under this Agreement. The Company represents to each Holder that
the Company is not subject to or bound by any such term, condition,
provision or agreement as of the date hereof.

 

 

4

 

 

 

5. Termination. This
Warrant (and the right to purchase securities upon exercise hereof)
shall terminate five (5) years from the date of issuance of this
Warrant (the “Expiration
Date”).

 

6. Notices of Certain
Transactions. In case:

 

(a) the Company shall
take a record of the holders of its Common Stock (or other stock or
securities at the time deliverable upon the exercise of this
Warrant) for the purpose of entitling or enabling them to receive
any dividend or other distribution, or to receive any right to
subscribe for or purchase any shares of stock of any class or any
other securities, or to receive any other right, to subscribe for
or purchase any shares of stock of any class or any other
securities, or to receive any other right, or

 

(b) of any
reclassification of the capital stock of the Company,
or

 

(c) of the voluntary or
involuntary dissolution, liquidation or winding-up of the Company
((a), (b) and (c) of this Section 6 being referred to herein as a
“Liquidation
Event”), then, and in each such case, the Company will
mail or cause to be mailed to the Registered Holder of this Warrant
a notice specifying, as the case may be, (i) the date on which
a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such
dividend, distribution or right, or (ii) the effective date on
which such reclassification, dissolution, liquidation or winding-up
is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock (or such other stock or
securities at the time deliverable upon such reclassification,
dissolution, liquidation or winding-up) are to be determined. Such
notice shall be mailed at least ten (10) days prior to the record
date or effective date for the event specified in such notice.
Failure to so notify a Registered Holder shall not invalidate any
such action.

 

7. Reservation of
Stock.

 

(a) Notwithstanding
anything herein to the contrary, the Registered Holder acknowledges
and agrees that this Warrant may not be exercised if, at the time
of such exercise, the Company does not have a sufficient number of
authorized shares of Common Stock pursuant to the Company’s
Certificate of Incorporation (the “Certificate of
Incorporation”), as in effect as of such date, to
cover such issuance. Notwithstanding anything herein to the
contrary, the Company shall hold a Special Meeting of Stockholders
prior to December 31, 2016 (the “Meeting”),
in order to seek stockholder approval (the “Approval”)
to amend its Certificate of Incorporation (the “Amendment”)
in order to, among other thing, to provide for a number of
authorized shares of Common Stock such that, following the
effectiveness of the Amendment, sufficient shares of Common Stock
will be available to provide for the exercise in full of the
Warrants without regard to any limitation on exercise set forth in
the Warrants. Following, and subject to, the effectiveness of the
Amendment, the Company will at all times reserve and keep available
out of its authorized but unissued stock, solely for the issuance
and delivery upon the exercise of this Warrant and other similar
Warrants, and free of preemptive rights, such number of its duly
authorized shares of Common Stock as from time to time shall be
issuable upon the exercise in full of this Warrant and other
similar Warrants without regard to any limitation on exercise set
forth herein or therein. All of the shares of Common Stock issuable
upon exercise of this Warrant and other similar Warrants, when
issued and delivered in accordance with the terms hereof and
thereof, will be duly authorized, validly issued, fully paid and
non-assessable, subject to no lien or other encumbrance other than
restrictions on transfer arising under applicable securities laws
and restrictions imposed by Section 3 hereof.

 

(b) If the Company does
not receive the Approval on or prior to December 31, 2016, then the
Holder shall have the right at any time through January 31, 2017,
at its option, to require the Company to purchase all or any
portion of this Warrant from the Holder by paying to the Holder an
amount of cash equal to the Black Scholes Value of the remaining
unexercised portion of such Warrant on December 31,
2016.

 

8. Exchange of Warrants. Upon the
surrender by the Registered Holder of any Warrant or Warrants,
properly endorsed, to the Company at the principal office of the
Company, the Company will, subject to the provisions of Section 3
hereof, issue and deliver to or upon the order of such Registered
Holder, at the Company’s expense, a new Warrant or Warrants
of like tenor, in the name of such Registered Holder or as such
Registered Holder (upon payment by such Registered Holder of any
applicable transfer taxes) may direct, calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock
called for on the face or faces of the Warrant or Warrants so
surrendered.

 

 

5

 

 

 

9. Replacement of Warrants. Upon
receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant and (in the
case of loss, theft or destruction) upon delivery of an indemnity
agreement (with surety if reasonably required) in an amount
reasonably satisfactory to the Company, or (in the case of
mutilation) upon surrender and cancellation of this Warrant, the
Company will issue, in lieu thereof, a new Warrant of like
tenor.

 

10. 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, electronic mail 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,
electronic mail or delivery by facsimile, with accurate
confirmation generated by the transmitting facsimile machine, if
sent by electronic mail with confirmed receipt, 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.

 

If to the
Company:

root9B Holdings,
Inc.

4521
Sharon Road #300

Charlotte, NC
28211-3627

Attn:
Joseph J. Grano, Jr., Chief Executive Officer

 

 

If to the Registered
Holder: 

At the address
provided by the Registered Holder.

 

11. No Rights as Stockholder. Until
the exercise of this Warrant, the Registered Holder of this Warrant
shall not have or exercise any rights by virtue hereof as a
stockholder of the Company, and this Warrant shall not impose on
the Registered Holder any obligation to purchase any securities or
impose any liability on such Registered Holder as a stockholder
whether such obligation or liabilities are asserted by the Company
or creditors of the Company.

 

12. Representations of Registered
Holder. The Registered Holder hereby represents and
acknowledges to the Company that:

 

(a) It understands that
this Warrant and the Warrant Stock will be “restricted securities” as
such term is used in the rules and regulations under the Act and
that such securities have not been and will not be registered under
the Act or any state securities law, and that such securities must
be held indefinitely unless registration is effected or transfer
can be made pursuant to appropriate exemptions;

 

(b) the Registered
Holder has read, and fully understands, the terms of this Warrant
set forth on its face and the attachments hereto, including the
restrictions on transfer contained herein;

 

 

6

 

 

 

(c) the Registered
Holder is purchasing for investment for its own account and not
with a view to or for sale in connection with any distribution of
this Warrant and the Warrant Stock and it has no intention of
selling such securities in a public distribution in violation of
the federal securities laws or any applicable state securities
laws; provided that nothing contained herein will prevent the
Registered Holder from transferring such securities in compliance
with the terms of this Warrant and the applicable federal and state
securities laws; and

 

(d) the Company may
affix the following legend (in addition to any other legend(s), if
any, required by applicable state corporate and/or securities laws)
to certificates for shares issued upon exercise of this
Warrant:

 

“These
securities have not been registered under the Securities Act of
1933, as amended. They may not be sold, offered for sale, pledged
or hypothecated in the absence of a registration statement in
effect with respect to the securities under such Act or an opinion
of counsel satisfactory to the Company that such registration is
not required or unless sold pursuant to Rule 144 of such
Act.”

 

13. No Fractional Shares. No
fractional shares will be issued in connection with any exercise
hereunder. In lieu of any fractional shares which would otherwise
be issuable, the Company shall pay cash equal to the product of
such fraction multiplied by the fair market value of one such share
on the date of exercise, as determined in good faith by the
Company’s Board of Directors.

 

14. Securities Law Reporting
Requirements. The Company covenants and agrees that it will
comply with the reporting requirements of Sections 13 and 15(d) of
the Exchange Act and will comply with all other public information
reporting requirements of the Securities and Exchange Commission
(including Rule 144 promulgated under the Securities Act) from time
to time in effect and applicable to the Company and relating to the
availability of an exemption from the Securities Act for the sale
of restricted securities.

 

15. Amendment or Waiver. Any term
of this Warrant may be amended or waived upon written consent of
the Company and the Registered Holder. No consideration shall be
offered or paid to the Registered Holder or to the initial holder
or registered assigns of any warrant to purchase Common Stock
(other than this Warrant) issued by the Company pursuant to the
Purchase Agreement (the "Other Warrants") to amend or consent to a
waiver or modification of any provision of this Warrant and/or the
Other Warrants unless the same consideration is also offered to the
Registered Holder and all initial holders or registered assigns of
the Other Warrants.

 

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

 

17. Governing Law. All questions
concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of
Delaware, without regard to the principles of conflicts of law
thereof. Each party agrees that all proceedings concerning the
interpretations, enforcement and defense of the transactions
contemplated by this Agreement shall be commenced exclusively in
courts of the State of Delaware (the “Delaware
Courts”). Each party hereto hereby irrevocably submits
to the exclusive jurisdiction of the Delaware Courts for the
adjudication of any dispute hereunder or in connection herewith or
with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any
proceeding, any claim that it is not personally subject to the
jurisdiction of any such Delaware Court, or that such proceeding
has been commenced in an improper or inconvenient forum. Each party
hereto hereby irrevocably waives personal service of process and
consents to process being served in any such proceeding by mailing
a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any manner
permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

 

 

7

 

 

 

18. More Favorable Terms. So long
as this Warrant remains outstanding, if after the date hereof the
Company amends the terms of any Warrant issued pursuant to the
Purchase Agreement and such amendment results in the holder of the
applicable Warrant receiving terms and conditions that are,
individually or in the aggregate, more favorable than the terms and
conditions of this Warrant, then this Warrant shall be deemed to
immediately be amended as of the date of such other amendment so as
to reflect substantially equivalent terms and conditions applicable
to this Warrant. For purposes of this Section 18, the determination
regarding whether any such terms and conditions are more favorable
than those granted hereunder shall be made by the Company’s
Board of Directors in its reasonable good faith
judgment.

 

 

 

[Remainder of Page Intentionally Left Blank]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

 

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed and delivered by its authorized officer as of the date
first above written.

 

ROOT9B
HOLDINGS, INC. , a Delaware corporation

 

Signed:
___________________________
                                                        

By:                 

Title:

 

 

Company
Address:            
root9B Holdings, Inc.

4521
Sharon Road #300

Charlotte, NC
28211-3627

Attn:
Joseph J. Grano, Jr., Chief Executive Officer

 

 

 

 

 

 

[SIGNATURE PAGE TO ROOT9B HOLDINGS COMMON STOCK
WARRANT]

 

EXHIBIT A

 

PURCHASE/EXERCISE FORM

 

To:            

ROOT9B HOLDINGS,
INC. Dated:_________________

 

The
undersigned holder, pursuant to the provisions set forth in the
attached Warrant No. ___, hereby exercises the right to purchase
_________________ shares of Common Stock covered by such Warrant.
Capitalized terms used herein and not otherwise defined shall have
the respective meanings set forth in the Warrant.

 

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

 

____________ 

a
“Cash
Exercise” with respect to _________________ shares of
Warrant Stock; and

 

2.           Payment
of Exercise Price. The Registered Holder shall pay the
aggregate Exercise Price in the sum of $___________________ to the
Company in accordance with the terms of the Warrant.

 

The
undersigned acknowledges that it has reviewed the representations
and warranties contained in Section 13 of the Warrant and by its
signature below hereby makes such representations and warranties to
the Company.

 

Signature:                                                                       

 

Name
(print):                                                               
       

 

Title (if applic.)
______________________________

 

Company (if
applic.): __________________________

 

 

 

EXHIBIT B

 

ASSIGNMENT FORM

 

FOR
VALUE RECEIVED, _________________________________________ hereby
sells, assigns and transfers all of the rights of the undersigned
under the attached Warrant No. ___ with respect to the number of
shares of Common Stock covered thereby set forth below,
to:

 

	

Name of Assignee

	

Address/Fax Number

	

No. of Shares

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

 

Dated:                                                      

Signature:                                                                      

 

                                                              

 

                                                                 
Witness:
_________________________

  

 

 

 

 11Blueprint

 

Exhibit 10.8

 

AMENDMENT NO. 2 TO

SECURED CONVERTIBLE PROMISSORY NOTE

 

 

This Amendment No.
2 (the “Amendment”) to that
certain Secured Convertible Promissory Note (the
“Note”)
issued to the undersigned (the “Holder”) pursuant to that
certain Securities Purchase Agreement dated as of September 9, 2016
(as amended, the “Agreement”), by and among
root9B Holdings, Inc. (f/k/a root9B Technologies, Inc.), a Delaware
corporation (the “Company”) and the
Purchasers (as defined therein), is entered into effective as of
March 24, 2017 (the “Effective Date”).
Capitalized terms used in this Amendment that are not otherwise
defined herein shall have the respective meanings assigned to them
in the Note.

 

RECITALS

 

Whereas, the
Company desires to raise additional capital pursuant to the
Agreement;

 

Whereas, the
Company and the Holder have agreed to amend the Note as set forth
herein;

 

Whereas,
pursuant to Section 11 of the Note, the Note may be amended only
with the written consent of the Company and the Holder;
and

 

Whereas, the
Holder and the Company desire to amend the Note as set forth
herein.

 

 

AGREEMENT

 

Now, Therefore, in consideration of the foregoing and of the
mutual promises and conditions hereinafter set forth, the parties
hereto agree as follows:

 

 

A.

Amendment of Definition of Maturity
Date. The definition of “Maturity Date” set
forth in the Note is hereby amended to be September 9,
2019.

 

B.

Amendment of Section 1(c).
Section 1(c) of the Note is hereby amended in order to add the
following sentence at the end of such section:

 

“Notwithstanding
the provisions of this Section 1(c), the Company shall only be
permitted to prepay this Note if concurrently with such prepayment
the Company prepays all Notes issued pursuant to the Purchase
Agreement on a pro-rata basis.”

 

C.

Amendment of Section 1(e).
Section 1(e) of the Note is hereby amended and restated as
follows:

 

“(e)    

Ranking. The
Note shall rank senior in all respects to indebtedness, liabilities
or obligations of the Company to other parties outstanding as of
the date of this Note and shall rank pari passu with any Note
issued pursuant to the Purchase Agreement.”

 

D.

Amendment of Section 1(f)(i).
The definition of “Interest Conversion Rate” set forth
in Section 1(f)(i) of the Note is hereby amended and restated as
follows:

 

(i)      

“Interest Conversion Rate”
means a per share price equal to 85% of the quotient of the sum of
the VWAP of the Common Stock as of each Trading Day during the five
(5) consecutive Trading Day period ending and including the Trading
Day ended immediately prior to the Additional Closing Date, divided
by five (5), but in no event less than $10.00 per
share.”

 

 

 

 

E.

Amendment of Section 2(a). The
definition of “Conversion Price” set forth in Section
2(a) of the Note is hereby amended to reduce the “Conversion
Price” of the Note from $12.00 per share (as previously adjusted to reflect
the Company’s one-for-fifteen reverse stock split on December
1, 2016) to $10.00 per share.

 

F.

Amendment of Section 4(g).
Section 4(g) of the Note is hereby amended and restated as
follows:

 

“(g)      

Cross-Default.
There shall have occurred an “Event of Default” (or
other comparable event) under any currently or future existing
indebtedness of the Company and such “Event of Default”
(or other comparable event) shall be continuing and not subject to
forbearance. For clarity, a default under any Note shall constitute
a default under this Section 4(g);
or”

 

G.

Amendment of Section 4. Section
4 of the Note is hereby amended to include the following Sections
4(i) and 4(j):

 

“(i)     

Working
Capital. Following April 30, 2017, the Company, excluding
IPSA, shall fail to maintain positive Working Capital (at least $1)
as of each month end. For purposes of this Note, “Working
Capital” shall mean cash plus accounts receivable within 60 days
old minus accounts payable
more than 60 days old of a measurement date.

 

(j)

Payroll
Requirement. Following April 30, 2017, the Company,
excluding IPSA, shall fail to have sufficient cash on hand
(“COH”)
equal to or greater than 1.0 times the largest salary payroll paid
during the preceding 90 days, as adjusted for any reductions in
force (but in any event after April 30, 2017). COH will be computed
at the end of each calendar month and equal to the average COH for
that month. For purposes of clarity, this payroll amount is
exclusive of any severance, bonus or commission payments made but
shall include payroll taxes on salary.”

 

H.

Amendment of Section 5. Section
5 of the Note is hereby amended and restated as
follows:

 

“5.      

Rights of Holder
upon Default.

 

(a)           

Rights upon Default. Upon the
occurrence or existence of any Event of Default (other than an
Event of Default referred to in Sections 4(b) or 4(c)) and at any
time thereafter during the continuance of such Event of Default,
following the applicable cure or grace period, the Holder, may, by
written notice to the Company, declare all Outstanding Amounts
hereunder to be immediately due and payable without presentment,
demand, protest or any other notice of any kind, all of which are
hereby expressly waived, anything contained herein to the contrary
notwithstanding. Upon the occurrence or existence of any Event of
Default described in Sections 4(b) or 4(c), immediately and without
notice, all Outstanding Amounts payable by the Company hereunder
shall automatically become immediately due and payable, without
presentment, demand, protest or any other notice of any kind, all
of which are hereby expressly waived, anything contained herein to
the contrary notwithstanding. In addition to the foregoing
remedies, upon the occurrence or existence of any Event of Default,
and following the applicable cure or grace period, Holder may
exercise any other right power or remedy granted to it by this Note
or otherwise permitted to it by law, either by suit in equity or by
action at law, or both. Any payment made by the Company upon an
Event of Default shall be made on a pro-rata basis to all Notes
issued pursuant to the Purchase Agreement.

 

 

 

(b)           

Right to Designate Directors.
In addition to any other right or remedy, upon the occurrence or
existence of any Event of Default, and until the Event of Default
is cured or the Notes are converted, the Majority Note Holders (as
such term as defined in the Agreement) may designate up to two (2)
candidates (the “Note Designees”)
reasonably acceptable to the Company to serve as directors on the
Company’s Board of Directors and the Company shall take such
actions necessary to cause such candidates to be added to the
Company’s Board of Directors. The right to designate the Note
Designees set forth in Section 5(b) may only be
exercised once and in no event may the Note Designees elected
pursuant to this provision constitute a majority of the
Company’s Board of Directors.

 

(c)           

Right of First Refusal. In
addition to any other right or remedy, upon the occurrence or
existence of any Event of Default, until such Event of Default is
cured, Holder shall have a right of first refusal to match any Deal
offered by a third party (which may include directors, officers or
stockholders, or affiliates or associates thereof). A
“Deal”
shall mean any written proposal or offer involving (i) a debt or
equity financing transaction involving the receipt by the Company
of at least $2,000,000, or (ii) the sale or exclusive license of
substantially all of the Company’s assets or acquisition of
control of the Company in whatever form. The Company shall provide
to Holder written notice of the Company’s receipt of any
proposal relating to a Deal that the Company receives after the
occurrence of an Event of Default until such Event of Default is
cured, which Holder shall maintain in confidence until publicly
disclosed by the Company. If more than one Holder of a Note issued
pursuant to the Agreement exercises its right of first refusal,
then the right shall be apportioned based on the principal owed to
each Holder. Holder must provide written notice of its desire to
match any proposal relating to a Deal within 7 business days of its
receipt of written notice of such proposal, and if one or more
holders of Notes elects to match such proposal, the parties shall
endeavor to close any such Deal as promptly as practicable
thereafter.”

 

I.

Amendment of Section 7(b)(ix).
Section 7(b)(ix) of the Note is hereby amended and restated as
follows:

 

(ix)
Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default;

 

J.

New Section 14. Section 14 is
hereby added to the Note as follows:

 

 

 

 

“14.     

Company
Covenants.

 

(a)           

Following April 30,
2017, within fifteen (15) days following each month end, the
Company shall deliver to holder a certificate setting forth the
Company’s Working Capital at the end of such month certified
by the Company’s chief financial officer.

 

(b)           

Following April 30,
2017, the Company shall provide written notice to Holder, within
twenty-four hours of a determination by the Company, excluding
IPSA, that it ceases to have sufficient cash on hand
(“COH”)
equal to or greater than 1.0 times the largest salary payroll paid
during the preceding 90 days, as adjusted for any reductions in
force (but in any event after April 30, 2017). COH will be computed
at the end of each calendar month and equal to the average COH for
that month. For purposes of clarity, this payroll amount is
exclusive of any severance, bonus or commission payments made but
shall include payroll taxes on salary.”

 

K.

New Section
15.

 

“15.     

More Favorable
Terms. So long as any portion of the principal amount of
this Note is unpaid and outstanding, if after the date hereof the
Company issues a convertible promissory note(s) (each, a
“Future
Note”) to any lender having terms and conditions that
are, individually or in the aggregate, more favorable than the
terms and conditions granted to the Holder hereunder, then this
Note shall be deemed to immediately be amended as of the date of
the first issuance of such Future Note to reflect substantially
equivalent terms and conditions to the Holder hereunder. For
purposes of this Section 15, the determination regarding whether
any such terms and conditions are more favorable than those granted
hereunder shall be made by the Company’s Board of Directors
in its reasonable good faith judgment.

 

L.

Representations of the Company.
The Company represents and warrants as follows:

 

a.

Organization. The Company is a
corporation duly organized and validly existing under the laws of
the jurisdiction of its incorporation and has all requisite
corporate power and legal authority to own and use its properties
and assets and carry on its business as now conducted. The Company
is not in violation of any of the provisions of its Certificate of
Incorporation or Bylaws.

 

b.

Authorization; Enforcement. The
Company has all corporate right, power and authority to enter into
this Amendment and to consummate the transactions contemplated
hereby. All corporate action on the part of the Company, its
directors and stockholders necessary for the authorization,
execution, delivery and performance of this Amendment by the
Company, the authorization, sale, issuance and delivery of the
Securities contemplated herein and the performance of the
Company’s obligations hereunder and thereunder has been
taken, other than obtaining the requisite filings necessary to
authorize and effect the issuance or the shares upon conversion of
the Note or the Interest Shares. This Amendment has been duly
executed and delivered by the Company and constitutes the legal,
valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except: (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

 

 

 

 

M.

Representations of Holder.
Holder hereby represents and warrants as follows:

 

a.

Organization; Authority. Holder
is either an individual or an entity duly incorporated or formed,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation with full right,
corporate, partnership, limited liability company or similar power
and authority to enter into and to consummate the transactions
contemplated by this Amendment and otherwise to carry out its
obligations hereunder. The execution and delivery of this Amendment
and performance by Holder of the transactions contemplated by this
Amendment have been duly authorized by all necessary corporate,
partnership, limited liability company or similar action, as
applicable, on the part of Holder. This Amendment has been duly
executed by Holder, and when delivered by Holder in accordance with
the terms hereof, shall constitute the valid and legally binding
obligation of Holder, enforceable against it in accordance with its
terms, except: (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of
creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or
other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable
law.

 

b.

Holder Status. As of the date
hereof, Holder is an “accredited investor” as defined
in Rule 501 under the Securities Act. Holder is not a broker-dealer
registered under Section 15 of the Exchange Act. Holder is acting
alone in its determination as to whether to invest in the Notes.
Such Holder is not a party to any voting agreements or similar
arrangements with respect to the Notes. Except as expressly
disclosed in a Schedule 13D or Schedule 13G (or amendments thereto)
filed by Holder with the Securities and Exchange Commission with
respect to the beneficial ownership of the Company’s Common
Stock, Holder is not a member of a partnership, limited
partnership, syndicate, or other group for the purpose of
acquiring, holding, voting or disposing of the Notes. Each Holder
represents and warrants that it (i) is not and shall not become a
party to (A) any agreement, arrangement or understanding with, and
has not given any commitment or assurance to, any Person as to how
such Person, if serving as a director or if elected as a director
of the Company, shall act or vote on any issue or question (a
“Voting Commitment”) or (B) any Voting Commitment that
could limit or interfere with such Person’s ability to
comply, if serving as or elected as a director of the Company, with
such Person’s fiduciary duties under applicable law; (ii) is
not and shall not become a party to any agreement, arrangement or
understanding with any Person other than the corporation with
respect to any direct or indirect compensation, reimbursement or
indemnification in connection with service or action as a director
of the Company.

 

 

 

c.

Compliance with Laws. Holder
has complied, or will comply, with the reporting requirements of
the Securities Exchange Act of 1934, as amended, including, but not
limited to, Section 13 and 16 thereunder, arising from, or in
connection with, the transactions contemplated by this Amendment,
the Agreement and the Note.

 

N.

Full Force and Effect. All of
the provisions of the Note are ratified and confirmed except as
modified by this Amendment.

 

O.

Counterpart. This Amendment may
be executed in counterparts, each of which shall be deemed an
original but all of which together shall be deemed one original.
PDF or facsimile copies of manually executed signature pages to
this Amendment are fully binding and enforceable without the need
for delivery of the original manually executed signature
page.

 

P.

Governing Law. This Amendment
shall be governed by the laws of the state of Delaware, without
giving effect to conflict of law principles.

 

Q.

Independent Counsel. Each of
the Holder and the Company represents that it has had the
opportunity to consult with independent counsel concerning entry
into this Amendment, including, but not limited to, any potential
reporting requirements and trading restrictions under the
Securities Exchange Act of 1934, as amended (the
“Exchange
Act”), arising from or in connection with the
transactions contemplated by this Amendment and the Agreement
(including Sections 10, 13 and 16 of the Exchange
Act).

 

R.

Cooperation. Each party hereto
agrees to execute and deliver such additional documents and
instruments and to perform such additional acts as any party may
reasonably request or as may be reasonably necessary or appropriate
to effectuate, consummate and perform any other terms, provisions,
or conditions of this Amendment.

 

[Remainder of page intentionally left blank. Signature page
follows.]

 

 

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective authorized signatories as of
the Effective Date.

 

 

	

 

	
ROOT9B
HOLDINGS, INC.

	

 

	

 

	

 

	

 

	

 

	
 

	
By:  

	
/s/ 

	

 

	

 

	Name:	
 

	

 

	

 

	Title:	

 

	

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

[SIGNATURE
PAGE FOR HOLDER FOLLOWS]

 

 

 

 

Agreed
to and accepted:

 

HOLDER:

 

By:

 

By:           

Name:

Its:

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