Document:

Exhibit 10.1

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of April 5, 2022 (“Effective Date”),
by and between AudioEye, Inc. (the “Company”), and David Moradi, a natural person (“Executive”).

 

RECITALS

 

WHEREAS, Executive is a senior executive
and officer of the Company and has made and is expected to continue to make major contributions to the profitability, growth and financial
strength of the Company; and

 

WHEREAS, Executive and the Company
are parties to that certain Employment Agreement (the “Prior Employment Agreement”) entered into as of August 20, 2020
(the “Prior Employment Agreement Effective Date”), and the Company and Executive desire to amend and restate the Prior
Employment Agreement, as set forth in this Agreement.

 

AGREEMENT

 

The Company and Executive
hereby agree as follows:

 

1.       Employment and Duties. (a) The Company agrees to employ Executive and Executive agrees to serve as Chief Executive Officer
of the Company (“CEO”). Executive shall report to the Board of Directors of the Company (the “Board”).
The duties and responsibilities of Executive shall include the duties and responsibilities typical of a Chief Executive Officer and such
other duties and responsibilities as the Board may from time to time reasonably assign to Executive. The Company and Executive acknowledge
that by agreeing to be employed as herein set forth, Executive is not resigning from his position as a member of the Board.

 

(b) The Board understands
that Executive has significant other responsibilities and is unable to devote all of his business time, attention, and energies to the
business of the Company and, accordingly, Executive shall devote such time as he reasonably believes to be necessary to discharge his
fiduciary duties to the Company.

 

2.       Term. This Agreement and Executive’s employment shall commence on the Effective Date and shall continue for a period
ending on the 5th anniversary of the Prior Employment Agreement Effective Date (August 20, 2025) unless earlier terminated
pursuant to Section 7. For the avoidance of doubt, the provisions of Sections 9, 10, 12 and 13 shall survive the expiration of the term
of employment.

 

3.       Place of Employment. Executive’s job site shall be in the sole discretion of the Executive.

 

     

     

    

 

4.      Salary.
The Company agrees to pay Executive a salary (the “Salary”) during his employment at an annual rate of $1 per year
payable in arrears. The Salary shall be paid on an annual basis.

 

5.       Equity.
Executive was previously granted a performance share award (the “PSA”) under the Company’s 2019 Equity Incentive
Plan. Subject to approval by the Board and the Company’s stockholders of an amendment or replacement of the Company’s 2020
Equity Incentive Plan (as amended, replaced or otherwise modified, the “Plan”) to include a sufficient number of shares
available under the Plan to grant such an award, the Board (or its Compensation Committee) will grant Executive, as of the date of the
necessary amendment or replacement is effective, an award of restricted stock units (“RSUs”) under the Plan (the “RSU
Award”) entitling Executive to 400,000 shares of the Company’s Common Stock, which restricted stock units shall vest on
the following schedule:

 

		·	111,706 RSUs on January 20, 2023

		·	111,706 RSUs on January 20, 2024

		·	111,706 RSUs on January 20, 2025

		·	64,882 RSUs on August 20, 2025

 

The RSU Award will be subject
to the Plan and the form of award agreement thereunder approved by the Board (or its Compensation Committee) and will provide that (i)
tax withholdings required in connection with the vesting of the RSUs and settlement of shares with respect thereto shall be satisfied
by a share withholding procedure pursuant to which the Company will withhold, immediately as shares are issued under the RSU Award, a
portion of those shares with a fair market value (measured as of the issuance date) equal to the statutory minimum withholding amount
and (ii) that each RSU will be settled upon vesting in one share of the Company’s common stock

 

Notwithstanding anything to
the contrary in this Agreement, the RSU Award will accelerate vesting and become 100% vested if, on or prior to the 5th anniversary of
the Prior Employment Agreement Effective Date (August 20, 2025), Executive’s employment is terminated by the Company without Cause
or due to Executive’s death. For this purpose, “Cause” shall consist of a termination due to the following as specified
in the notice of termination (and in each case Executive fails to cure within thirty (30) days of delivery of such notice of termination,
except as to clauses (v) or (vi), which shall not be subject to cure) (i) Executive’s failure, subject to the relaxed standard in
Section 1(b), to substantially perform the fundamental duties and responsibilities associated with the position(s) he holds for any reason,
including Executive’s failure or refusal to carry out reasonable instructions; (ii) Executive’s material breach of any material
written Company policy; (iii) Executive’s gross misconduct in the performance of Executive’s duties for the Company; (iv)
Executive’s material breach of the terms of this Agreement; (v) Executive being convicted of, or pleading nolo contendere
or equivalent to, any fraudulent or felony criminal offense or any other criminal offense which reflects adversely on the Company or reflects
conduct or character that the Board reasonably concludes is inconsistent with continued employment; or (vi) any criminal conduct that
is a “statutory disqualifying event” (as defined under federal securities laws, rules and regulations). Prior to any termination
for Cause, and subsequent to any applicable thirty (30) day period of time within which Executive may be permitted to cure, Executive
will be entitled to appear (with counsel) before the full Board to present information regarding his views on the Cause event, and after
such hearing, there must be at least a majority vote of the full Board (other than Executive) to terminate him for Cause. After providing
the notice in foregoing sentence, the Board may suspend Executive with full pay and benefits until a final determination pursuant to this
paragraph has been made.

 

    	 	2	 

     

    

 

Notwithstanding anything to
the contrary in this Agreement, in the event of a Change in Control that involves a Corporate Transaction (each as defined in the Plan),
the RSU Award shall become fully vested immediately prior to the effective time of such Change in Control.

 

The Company and Executive
agree that the change to Executive’s title from “Interim Chief Executive Officer” to “Chief Executive Officer”
pursuant to this Agreement shall not be treated as Executive ceasing to serve as “Interim Chief Executive Officer” or “ICEO”
for purposes of the PSA award or any other outstanding equity award. The Company and Executive further agree that the removal of Executive’s
 “Chief Strategy Officer” title does not result in the vesting of the PSA Award (or any portion thereof) or any other outstanding
equity award.

 

6.
     The obligations of the Company under the Agreement shall be binding upon any successor corporation or organization resulting from
the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to all
or substantially all of the assets and business of the Company, with equitable adjustments as appropriate as determined by the Board.

 

7.       Termination
of Employment; Severance Compensation. Executive’s employment under this Agreement is at-will; either Executive or the Company
(through the Board) may terminate Executive’s employment and this Agreement at any time. Upon such termination of employment, the
Company shall have no further obligations or liability hereunder to Executive or his heirs, administrators or executors with respect to
compensation and benefits accruing thereafter, except for the obligation to pay Executive or Executive’s heirs, administrators or
executors, as applicable: (i) any earned but unpaid Salary accrued through the date of termination of employment, (ii) reimbursement of
any and all reasonable business expenses paid or incurred by Executive in connection with and related to the performance of his duties
and responsibilities for the Company during the period ending on the date of termination of employment, and (iii) any accrued but unused
vacation through the date of termination in accordance with Company policy. There is no severance compensation hereunder (except as set
forth in any equity award agreement between the Company and Executive, including the award agreement for the PSA and in any award agreement
with respect to the acceleration of the RSU Award as provided for herein). To the extent all or any portion of the PSA or the RSU Award
becomes vested prior to or in connection with Executive’s termination of employment, the Company shall honor its settlement obligations
thereunder. Any termination of Executive’s employment by the Company or by Executive (other than termination by reason of Executive’s
death) shall be communicated by written notice of termination to the other party of this Agreement.

 

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8.       Deductions
and Withholdings. The Company shall deduct and withhold, from all payments made pursuant to this Agreement, including but not limited
to the Salary, all applicable taxes, including income tax, FICA and FUTA, and other deductions and withholdings required by law.

 

9.      Clawback
Rights. All amounts paid to Executive by the Company under this Agreement or the Prior Employment Agreement (other than Executive’s
Salary, accrued but unused vacation, and reimbursement of expenses) (collectively, the “Clawback Benefits”) shall be
subject to the Company’s “Clawback Rights” policy as follows: during the period that Executive is employed by
the Company and for a period of three (3) years thereafter, if there occurs a restatement (a “Restatement”) of any
financial results from which any Clawback Benefits to Executive shall have been determined, including vesting due to the achievement of
stock price targets (such restatement resulting from material non-compliance of the Company with any financial reporting requirement under
the federal securities laws and shall not include a restatement of financial results resulting from subsequent changes in accounting pronouncements
or requirements which were not in effect on the date the financial statements were originally prepared), then Executive agrees to immediately
repay or surrender upon demand by the Company any Clawback Benefits which were determined by reference to any Company financial results
which were later restated, but only to the extent the Clawback Benefits amounts paid exceed the Clawback Benefits amounts that would have
been paid, based on the restatement of the Company’s financial information. All Clawback Benefits amounts resulting from such Restatements
shall be retroactively adjusted by the Compensation Committee (or the Board, if there is no Compensation Committee) to take into account
the restated results and if any excess portion of the Clawback Benefits resulting from such restated results is not so repaid or surrendered
by Executive within ninety (90) days of the revised calculation being provided to Executive by the Company following a publicly announced
restatement, the Company shall have the right to take any and all action to effectuate such adjustment.

 

The Clawback Rights shall
terminate following a Change in Control (as defined in the Plan as in effect on the date of this Agreement), subject to applicable law,
rules, and regulations. The amount of Clawback Benefits to be repaid or surrendered to the Company shall be determined by the Compensation
Committee (or the Board, if there is no Compensation Committee) in its sole judgment in accordance with applicable law, rules and regulations.
All determinations by the Compensation Committee (or the Board, if there is no Compensation Committee) with respect to the Clawback Rights
shall be final and binding on the Company and Executive. The parties acknowledge it is their intention that the foregoing Clawback Rights
as relates to Restatements conform in all respects to the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act
of 2010 (the “Dodd Frank Act”) and requires recovery of all “incentive-based” compensation, pursuant to
the provisions of the Dodd Frank Act and any and all rules and regulations promulgated thereunder from time to time in effect. Accordingly,
the terms and provisions of this Agreement shall be deemed automatically amended from time to time to assure compliance with the Dodd
Frank Act and such rules and regulations, if any, as hereafter may be adopted and in effect.

 

    	 	4	 

     

    

 

10.     Expenses.
Executive shall be entitled to prompt reimbursement by the Company for all reasonable ordinary and necessary travel, entertainment, and
other expenses incurred by Executive while employed (in accordance with the policies and procedures established by the Company for its
senior executive officers) in the performance of his duties and responsibilities under this Agreement; provided, that Executive
shall properly account for such expenses in accordance with Company policies and procedures. Executive shall be entitled to prompt reimbursement
by the Company for reasonable and documented legal fees and expenses incurred by Executive in connection with this Agreement and the RSU
Award agreement contemplated hereby.

 

11.     Other
Benefits; Vacation. During the term of employment, Executive shall be eligible to participate in incentive, stock purchase, savings,
retirement (401(k)), and welfare benefit plans, including, without limitation, health, medical, dental, vision, life (including accidental
death and dismemberment) and disability insurance plans to the extent provided by the Company generally to its employees (collectively,
 “Benefit Plans”), in substantially the same manner and at substantially the same levels as the Company makes such opportunities
available to the Company’s managerial or salaried executive employees, subject to the terms and conditions, including eligibility
provisions, of any such Benefit Plans, which may be amended or terminated from time to time. During the term of employment, Executive
shall be entitled to accrue, on a pro rata basis, twenty (20) paid vacation days per year, which if not taken, will accrue and be carried
forward into the next year. Vacation shall be taken at such times as are mutually convenient to Executive and the Company and no more
than twenty (20) consecutive days shall be taken at any one time without the advance written approval of the Board. In addition, Executive
shall be entitled to receive future awards under the Plan or any other equity plan maintained by the Company at such times and on such
terms as may be determined by the Board or the Compensation Committee.

 

12.     Section
280G Gross-Up. Notwithstanding anything in this Agreement or any other plan, program, policy, agreement or arrangement to the contrary,
if any of the payments, rights, benefits, distributions, or entitlements provided or to be provided by the Company or any of its affiliates
to Executive or for the Executive’s benefit pursuant to the terms of this Agreement, the PSA award agreement, the RSU Award agreement
or otherwise (a “Covered Payment”) would constitute parachute payments (“Parachute Payments”) within
the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and will be subject to the
excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any interest or penalties with respect to such
excise tax (collectively, the “Excise Tax”), then the Company shall pay to Executive, no later than the time the Excise
Tax is required to be paid by Executive or withheld by the Company, an additional amount (the “Gross-Up Payment”) equal
to the sum of the Excise Tax payable by Executive, plus the amount necessary to put Executive in the same after-tax position (taking into
account any and all applicable federal, state, local and foreign income, employment, excise and any other applicable taxes (including
the Excise Tax and any income and employment taxes imposed on the Gross-Up Payment”) that he would have been in if Executive had
not incurred any tax liability under Section 4999 of the Code. For purposes of determining the amount of the Gross-Up Payment, unless
Executive specifies that other rates apply, Executive shall be deemed to pay federal income tax and employment taxes at the highest marginal
rate of federal income and employment taxation in the calendar year in which the Gross-Up Payment is to be made, and state and local income
taxes at the highest marginal rate of taxation in the state and locality of Executive’s residence on the date of change of control,
net of the maximum reduction in federal income taxes that may be obtained from the deduction of such state and local taxes. All determinations
to be made under this Section 12 shall be made in writing and in good faith by an independent accounting firm selected by the Company
which is reasonably acceptable to Executive (the “Accountants”), which shall provide detailed supporting calculations
to the Company and Executive as requested by the Company or Executive and any such determination shall be binding upon the Company and
Executive. All fees and expenses of the Accountants shall be borne by the Company.

 

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13.     Section
409A.

 

No compensation under this
agreement is intended to constitute deferred compensation. The provisions of this Agreement are intended to comply with or meet an exemption
from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and any regulations and guidance promulgated
thereunder (“Section 409A”) and shall be construed in a manner consistent with the requirements for avoiding taxes
or penalties under Section 409A. The Company and Executive agree to work together in good faith to consider amendments to this Agreement
and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income
recognition prior to actual payment to Executive under Section 409A.

 

To the extent that Executive
will be reimbursed for costs and expenses or in-kind benefits, except as otherwise permitted by Section 409A, (a) the right to reimbursement
or in-kind benefits is not subject to liquidation or exchange for another benefit, (b) the amount of expenses eligible for reimbursement,
or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to
be provided, in any other taxable year; provided that the foregoing clause (b) shall not be violated with regard to expenses
reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to
the period the arrangement is in effect and (c) such payments shall be made on or before the last day of the taxable year following the
taxable year in which the expense was incurred.

 

A termination of employment
shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits
upon or following a termination of employment that constitute “nonqualified deferred compensation” (within the meaning of
Section 409A) unless such termination constitutes a “Separation from Service” within the meaning of Section 409A and, for
purposes of any such provision of this Agreement references to a “termination,” “termination of employment” or
like terms shall mean Separation from Service.

 

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Each installment payable hereunder
shall constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b), including Treasury Regulation Section 1.409A-2(b)(2)(iii).
Each payment that is made within the terms of the “short-term deferral” rule set forth in Treasury Regulation Section 1.409A-1(b)(4)
is intended to meet the “short-term deferral” rule. Each other payment is intended to be a payment upon an involuntary termination
from service and payable pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii), et. seq., to the maximum extent permitted by that
regulation, with any amount that is not exempt from Code Section 409A being subject to Code Section 409A.

 

Notwithstanding anything to
the contrary in this Agreement, if Executive is a “specified employee” within the meaning of Section 409A, any payment otherwise
due to Executive on or within the six (6) month period following Executive’s termination will accrue during such six (6) month period
and will become payable in one lump sum cash payment on the date six (6) months and one (1) day following the date of Executive’s
termination of employment, to the extent required to avoid any adverse tax consequences under Section 409A. Any remaining payment(s) will
be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary,
if Executive dies following termination but prior to the six (6) month anniversary of Executive’s termination date, then any payments
delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Executive’s
death and all other amounts will be payable in accordance with the payment schedule applicable to each payment or benefit, to the extent
and in a manner consistent with Section 409A.

  

14.     Miscellaneous.

 

 (a)      This Agreement constitutes
and embodies the full and complete understanding and agreement of the parties with respect to Executive’s employment by the Company
(it being understood that the Company’s 2019 Equity Incentive Plan and PSA award agreement shall apply to the PSA, and the Plan
and RSU Award agreement shall apply to any RSU Award), supersedes all prior understandings and agreements, whether oral or written, between
Executive and the Company, including without limitation the Prior Employment Agreement, and shall not be amended, modified or changed
except by an instrument in writing executed by the party to be charged. The invalidity or partial invalidity of one or more provisions
of this Agreement shall not invalidate any other provision of this Agreement. No waiver by either party of any provision or condition
to be performed shall be deemed a waiver of similar or dissimilar provisions or conditions at the same time or any prior or subsequent
time.

 

(b)       Neither
Executive nor the Company may assign or delegate any of their rights or duties under this Agreement without the express written consent
of the other; provided, however, that the Company shall have the right to delegate its obligation of payment of
all sums due to Executive hereunder, provided that such delegation shall not relieve the Company of any of its obligations
hereunder.

 

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(c)       This
Agreement shall inure to the benefit of, be binding upon and enforceable against, the parties hereto and their respective successors,
heirs, beneficiaries and permitted assigns.

 

(d)       The
headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation
of this Agreement.

 

(e)       All
notices, requests, demands and other communications required or permitted to be given hereunder shall be in writing and shall be deemed
to have been duly given when personally delivered, sent by registered or certified mail, return receipt requested, postage prepaid, or
by reputable national overnight delivery service (e.g. Federal Express) for overnight delivery to the Company at its principal executive
office or to Executive at his address of record in the Company’s records, or to such other address as either party may hereafter
give the other party notice of in accordance with the provisions hereof. Notices shall be deemed given on the sooner of the date actually
received or the third business day after deposited in the mail or one business day after deposited with an overnight delivery service
for overnight delivery.

 

(f)       This
Agreement shall be governed by and construed in accordance with the internal laws of the State of Florida without reference to principles
of conflicts of laws and each of the parties hereto irrevocably consents to the exclusive jurisdiction and venue of the federal and state
courts located in the Miami-Dade County, Florida.

 

(g)       This
Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but which together shall
constitute one of the same instrument. The parties hereto have executed this Agreement as of the date set forth above. 

 

(h)       Executive
represents and warrants to the Company that he has the full power and authority to enter into this Agreement and to fully perform his
obligations hereunder and that the execution and delivery of this Agreement and the performance of all of his obligations under this Agreement
will not conflict with any agreement to which Executive is a party.

 

(i)       The
Company represents and warrants to Executive that (i) it has the full power and authority to enter into this Agreement and to perform
its obligations hereunder and (ii) the execution and delivery of this Agreement and the performance of its obligations hereunder will
not conflict with any agreement to which the Company is a party.

 

[SIGNATURE
PAGE TO FOLLOW]

 

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IN WITNESS WHEREOF, Executive and the Company have
caused this Amended and Restated Employment Agreement to be executed as of the date first above written.

 	 	AudioEye, Inc.	 	 
	 	 	 	 
	 	 	 	 
	By:	/s/ Carr Bettis	 	/s/ David Moradi
	 	Carr Bettis 	 	David Moradi
	 	Chairman of the Board and 	 	 
	 	Executive Chairman	  	 

 

    	 	9ex_356469.htm

 

Exhibit 10.23

 

No.                           

UNSECURED DEBENTURE

 

THIS DEBENTURE IS SUBJECT TO A DEBENTURE SUBSCRIPTION AGREEMENT OF EVEN DATE HEREWITH (THE “SUBSCRIPTION AGREEMENT”) AND FORMS A PART OF AN OFFERING BY MAKER OF UP TO $5,500,000 USD IN AGGREGATE DEBENTURES.

 

AS DESCRIBED IN THE SUBSCRIPTION AGREEMENT, THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“SECURITIES ACT”), OR ANY APPLICABLE STATE (“BLUE SKY LAWS”) OR FOREIGN SECURITIES LAWS AND WILL BE ISSUED IN RELIANCE UPON AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS PROVIDED BY RULE 506(b) OF REGULATION D AND/OR SECTION 4(a)(2) UNDER THE SECURITIES ACT AND OUTSIDE THE UNITED STATES PURSUANT TO REGULATION S UNDER THE SECURITIES ACT. ANY TRANSFER OF SUCH SECURITIES WILL BE INVALID UNLESS A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND AS REQUIRED BY APPLICABLE BLUE SKY AND/OR FOREIGN LAWS IS IN EFFECT AS TO SUCH TRANSFER OR IN THE OPINION OF COUNSEL SATISFACTORY TO THE BORROWER SUCH REGISTRATION IS UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE SECURITIES ACT AND APPLICABLE BLUE SKY AND FOREIGN LAWS.

 

$___________                                                               __________________, 202__

 

For Value Received, CLS Holdings USA, Inc, a Nevada corporation with a principal address of 11767 S. Dixie Highway, Suite 115, Miami, Florida 33156 (“Maker”), under the terms of this Debenture (“Debenture”), promises to pay to the order of ____________________________________ (“Purchaser”), by check or wire, in lawful money of the United States of America and in immediately available funds, the principal amount of $____________________ (the “Original Principal Amount”), together with such interest on the Original Principal Amount as provided for below on July 10, 2024 (the “Maturity Date”), if not sooner indefeasibly paid in full.

 

Interest payable on the Original Principal Amount shall accrue at a rate per annum equal to fifteen percent (15%) calculated on the basis of a 360 day year (“Interest”).

 

Capitalized terms used herein but not otherwise defined shall have the meanings given to them in the Subscription Agreement.

 

1.  Repayment.  Maker shall make payments to Purchaser as follows: (i) payment of accrued Interest on July 10, 2022, for accrued interest from the date hereof through such payment date; (ii) commencing with the quarter ending on September 30, 2022, quarterly payments of accrued interest, payable within fifteen (15) days after the end of each such quarter; (iii) payment of one-half (50%) of the Original Principal Amount on July 10, 2023; and (iv) payment of all outstanding principal and accrued Interest on the Maturity Date.

 

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2.  Additional Payments. Commencing 90 days after the end of the first fiscal quarter of the Company that occurs after January 10, 2025 and for a period of five (5) years thereafter, Maker shall pay to Purchaser cash payments equal to the greater of (i) fifteen percent (15%) of the Original Principal Amount, or (ii) Purchaser’s pro rata portion of five percent (5% ) of the annual distributions the Maker receives as a result of the Maker’s joint venture with the Fort McDermitt Cannabis Commission and CSI Health MCD, LLC for the prior fiscal year, which percentage shall be computed by dividing the Original Principal Amount by the total amount sold in the Offering (not to exceed $5,500,000) and multiplying it by 0.05 (the “Additional Payments”). The Additional Payments shall be paid quarterly, based on the prior fiscal year, and shall be pro rated for partial fiscal quarters, as applicable.

 

3.   Prepayment. This Debenture may not be prepaid in full or in part.

 

4.   Default.

 

4.1  Events of Default.  With respect to the Debenture, the following events are “Events of Default”:

 

(a)  Default of Maker in the payment of principal or accrued interest under the Debenture after fifteen (15) business days’ written notice from Purchaser following the date when the same is due and payable; or

 

(b)  the occurrence of any of the following:

 

	 	
			(i)

				
			Maker files a petition in bankruptcy or for reorganization or for the adoption of an arrangement under the United States Bankruptcy Code (as now or in the future amended, the “Bankruptcy Code”);

			

 

	 	
			(ii)

				
			Maker makes a general assignment for the benefit of its creditors;

			

 

	 	
			(iii)

				
			Maker consents to the appointment of a receiver or trustee for all or a substantial part of the property of Maker or approves as filed in good faith a petition filed against Maker under the Bankruptcy Code; or

			

 

	 	
			(iv)

				
			the commencement of a proceeding or case, without the application or consent of Maker, in any court of competent jurisdiction, seeking (i) its liquidation, reorganization, dissolution or winding-up, or the composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of Maker or of all or any substantial part of its assets, or (iii) similar relief in respect of Maker under any law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment of debts, and such proceeding or case set forth in (i), (ii), or (iii) above continues undismissed or uncontroverted, or an order, judgement or decree approving or ordering any of the foregoing is entered and continues unstayed and in effect, for a period of sixty (60) business days.

			

 

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4.2  Acceleration.  If any one or more Events of Default described in Section 4.1 shall occur and be continuing, then Purchaser may, at Purchaser’s option and by written notice to Maker, declare the unpaid balance of the Debenture owing to Purchaser to be forthwith due and payable.

 

5. Unsecured. This Debenture is an unsecured obligation of Maker and will rank pari passu in right of payment of principal and interest with all other unsecured obligations of Maker.

 

6. Notices. Any notice, request or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given if personally delivered or if faxed with confirmation of receipt or if mailed by registered or certified mail, postage prepaid, at the address of Maker on the first page of this Debenture, or if to Purchaser, to the address set forth in the Subscription Agreement. Any party hereto may by notice so given change its address for future notice hereunder. Notice shall conclusively be deemed to have been received when personally delivered or faxed, or five business days after being deposited in the mail in the manner set forth above.

 

7. Usury. This Debenture is hereby expressly limited so that in no event whatsoever, whether by reason of acceleration of maturity of the loan evidenced hereby, payment of the Additional Payments or otherwise, shall the amount paid or agreed to be paid to Purchaser hereunder for the loan, use, forbearance or detention of money exceed that permissible under applicable law. If at any time the performance of any provision of this Debenture or of any other agreement or instrument entered into in connection with this Debenture involves a payment exceeding the limit of interest that may be validly charged for the loan, use, forbearance or detention of money under applicable law, then automatically and retroactively, ipso facto, the obligation to be performed shall be reduced to such limit, it being the specific intent of Maker and Purchaser that all payments under this Debenture are to be credited first to interest as permitted by law, but not in excess of (i) the agreed rate of interest set forth herein or therein or (ii) that permitted by law, whichever is the lesser, and the balance toward the reduction of principal. The provisions of this Section 7 shall never be superseded or waived and shall control every other provision of this Debenture and all other agreements and instruments between Maker and Purchaser entered into in connection with this Debenture.

 

8. WAIVER OF RIGHT TO TRIAL BY JURY. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION DOCUMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES’ ACCEPTANCE OF THIS AGREEMENT.

 

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9.   Governing Law; Jurisdiction. Maker and Purchaser each hereby submits to personal jurisdiction in the State of Florida, consents to the exclusive jurisdiction of any competent state or federal district court sitting in Miami-Dade County, Florida, and waives any and all rights to raise lack of personal jurisdiction as a defense in any action, suit, or proceeding in connection with this Debenture or any related matter. This Debenture shall be governed by, and construed and interpreted in accordance with, the laws of the State of Florida, without reference to conflicts of law provisions of such state. Exclusive venue for any legal proceedings brought in connection with, or relating to, this Debenture shall be in Miami-Dade County, Florida.

 

10. Successors. The provisions of this Debenture shall inure to the benefit of and be binding on any permitted successor of Purchaser. This Debenture cannot be assigned by any party hereto except as described in the Subscription Agreement.

 

 

[Signature Page Follows]

 

 

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This Debenture is executed in the State of Nevada as of the date first set forth above.

 

CLS Holdings, USA, Inc.,

a Nevada corporation

 

By:                                                             

Name:                                                        

Title:                                                          

 

 

 

 

 

 

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