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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July
10, 2024
AppTech
Payments Corp.
(Exact
name of registrant as specified in its charter)
Delaware
(State
or other jurisdiction of incorporation)
000-27569 |
|
65-0847995 |
(Commission
File Number) |
|
(IRS
Employer Identification No.) |
5876
Owens Ave, Suite
100
Carlsbad,
California 92008
(Address
of principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code (760)
707-5959
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
|
☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
|
|
☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
|
|
☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
|
|
☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title
of Each Class |
|
Trading
Symbol(s) |
|
Name
of Each Exchange on Which Registered |
Common
stock, par value $0.001 per share |
|
APCX |
|
Nasdaq
Capital Market |
Warrants,
each whole warrant exercisable for one share of common stock at an exercise price of $4.15 |
|
APCXW |
|
Nasdaq
Capital Market |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive
Agreement.
On July 11, 2024, AppTech Payments Corp. (the
“Company”) closed a private placement offering (the “Offering”) of One Million One Hundred Thousand Dollars ($1,100,000.00)
in principal amount of the Company’s 6% convertible debenture (the “Debenture”) and a warrant (the “Warrant”)
to purchase up to Seven Hundred and Fifty Thousand (750,000) shares of the Company’s common stock, to a certain investor (the “Purchaser”).
Pursuant to a Securities Purchase Agreement (the “Purchase Agreement”), dated July 10, 2024, the Debenture was sold to the
Purchaser for a purchase price of $1,000,000 (the “Purchase Price”), representing an original issue discount of ten percent
(10%).
In connection with the Offering, a non-accountable
fee of $20,000 was withheld from the Purchase Price by the Purchaser to cover its accounting fees, legal fees and other transactional
costs incurred in connection with the transactions contemplated by the Purchase Agreement. The Company also paid certain placement fees
and legal fees. The Company issued an aggregate of 100,000 shares of restricted common stock (the “Commitment Shares”) on
the closing date as follows: 50,000 of the Commitment Shares to the Purchaser and 50,000 of the Commitment Shares to the Purchaser’s
designee.
The Debenture matures twelve months from its date
of issuance and bears interest at a rate of 6% per annum payable on the maturity date. The Debenture is convertible, at the option of
the holder, at any time, into such number of shares of common stock of the Company equal to the principal amount of the Debenture plus
all accrued and unpaid interest at a conversion price equal to $1.07 (the “Conversion Price”), subject to adjustment for any
stock splits, stock dividends, recapitalizations and similar events and in the event the Company, at any time while the Debenture is outstanding,
issues, sells or grants any option to purchase, or sells or grants any right to reprice, or otherwise disposes of, or issues common stock
or other securities convertible into, exercisable for, or otherwise entitles any person the right to acquire, shares of common stock,
at an effective price per share that is lower than the then Conversion Price. In the event of any such anti-dilutive event, the Conversion
Price will be reduced at the option of the holder to such lower effective price of the dilutive event.
The Debenture is redeemable by the Company at
a redemption price equal to 110% of the sum of the principal amount to be redeemed plus accrued interest, if any. In no event will the
holder be entitled to convert any portion of the Debenture in excess of that portion which would result in beneficial ownership by the
holder and its affiliates of more than 4.99% of the outstanding shares of common stock, unless the holder delivers to the Company written
notice at least sixty-one (61) days prior to the effective date of such notice that the provision be adjusted to 9.99%.
While the Debenture is outstanding, if the Company
or subsidiary of the Company receives cash proceeds of more than $1,500,000.00 (“Minimum Threshold”) in the aggregate from
any source or series of related or unrelated sources, the Company shall, within two (2) business days of Company’s or respective
subsidiary’s receipt of such proceeds, inform the holder of such receipt, following which the holder shall have the right in its
sole discretion to require the Company or subsidiary of the Company to immediately apply up to 50% of all proceeds received by the Company
(from any source except with respect to proceeds from the issuance of equity or debt to officers and directors of the Company or subsidiary
of the Company) after the Minimum Threshold is reached to repay the outstanding amounts owed under the Debenture.
Upon the occurrence of certain events of default
specified in the Debenture, such as a failure to honor a conversion request, failure to maintain the Company’s listing, the Company’s
failure to comply with its obligations under Securities Exchange Act of 1934, as amended, a breach of the Company’s representations
or covenants, or the failure obtain shareholder approval within 30 days after the Exchange Cap (as defined herein) is reached, as amended,
120% of all amounts owed to holder under the Debenture, together with default interest at 18% per annum if any, shall then become due
and payable.
The Warrant expires five years from its date of
issuance. The Warrant is exercisable, at the option of the holder, at any time, for up to 750,000 of shares of common stock of the Company
at an exercise price equal to $1.16 (the “Exercise Price”), subject to adjustment for any stock splits, stock dividends, recapitalizations
and similar events and in the event the Company, at any time while the Warrant is outstanding, issues, sells or grants any option to purchase,
or sells or grants any right to reprice, or otherwise disposes of, or issues common stock or other securities convertible into, exercisable
for, or otherwise entitle any person the right to acquire, shares of common stock, at an effective price per share that is lower than
the then Exercise Price. In the event of any such anti-dilutive event, the Exercise Price will be reduced at the option of the holder
to such lower effective price of the dilutive event.
The number of shares of the Company’s common
stock that may be issued upon conversion of the Debenture and exercise of the Warrant, and inclusive of the Commitment Shares and any
shares issuable under and in respect of the Purchase Agreement, is subject to an exchange cap (the “Exchange Cap”) of 19.99%
of the outstanding number of shares of the Corporation’s common stock on the closing date, 4,946,388 shares, unless shareholder
approval to exceed the Exchange Cap is approved. The Exchange Cap is subject to adjustment for any reorganization, recapitalization, non-cash
dividend, stock split (including forward and reverse), or other similar transaction.
In connection with the Offering, the Company entered
into a Registration Rights Agreement, dated July 10, 2024, with the Purchaser where it agreed to file a registration statement within
30 days to register the Commitment Shares, the shares of common stock issuable under the Debenture and the Warrant, and shares of common
stock issued to the Purchaser and the Purchaser’s designee as a result of any stock split, stock dividend, recapitalization, exchange
or similar event or otherwise, without regard to any limitation on beneficial ownership in the Debenture or Warrant, with the Securities
and Exchange Commission.
The Purchase Agreement and the Registration Rights
Agreement contain customary representations, warranties, agreements and conditions to completing future sale transactions, indemnification
rights and obligations of the parties. Among other things, the Purchaser represented to the Company, that it is an “accredited investor”
(as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”)),
and the Company sold the securities in reliance upon an exemption from registration contained in Section 4(a)(2) of the Securities Act
and Regulation D promulgated thereunder.
The foregoing descriptions of the Purchase Agreement,
the Debenture, the Warrant, and the Registration Rights Agreement are qualified in their entirety by reference to the full text of such
agreements, the forms of which are attached hereto as Exhibit 10.1, 4.1, 4.2 and 10.2, respectively, and each of which is incorporated
herein in its entirety by reference. The representations, warranties and covenants contained in such agreements were made only for purposes
of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject to limitations
agreed upon by the contracting parties.
Item 2.03. Creation of a Direct Financial Obligation
or an Obligation Under an Off-balance Sheet Arrangement of a Registrant.
The information
set forth under Item 1.01 above of this Current Report on Form 8-K is incorporated by reference in this Item 2.03.
Item 3.02. Unregistered Sales of Equity Securities.
The information set forth under Item 1.01 above of this Current Report on Form 8-K is incorporated by reference in this Item 3.02. The
Commitment Shares, the Debenture, the Warrant, and the shares of common stock underlying the Debenture and the Warrant, were, and will
be, sold pursuant to an exemption from the registration requirements under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation
D promulgated thereunder. The investor is an accredited investor who has purchased the securities as an investment in a private placement
that did not involve a general solicitation. The aforementioned securities have not been registered under the Securities Act and may not
be offered or sold in the United States in the absence of an effective registration statement or exemption from the registration requirements.
Item 9.01. Exhibits.
Exhibit No. |
|
Description |
4.1 |
|
Form of Debenture, dated July 10, 2024, in the principal amount of $1,100,000 |
4.2 |
|
Form of Warrant, dated July 10, 2024 |
10.1 |
|
Form of Securities Purchase Agreement, dated July 10, 2024 |
10.2 |
|
Form of Registration Rights Agreement, dated July 10, 2024 |
104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of
the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
|
APPTECH
PAYMENTS CORP. |
|
|
|
Date:
July 12, 2024 |
By: |
/s/
Luke D’Angelo |
|
|
Luke
D’Angelo |
|
|
Chief
Executive Officer |
Exhibit 4.1
NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE
UPON CONVERSION HEREOF HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF
ANY STATE OR UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES ARE RESTRICTED AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED
EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION REQUIREMENTS THEREOF OR EXEMPTION THEREFROM.
APPTECH PAYMENTS CORP.
CONVERTIBLE DEBENTURE
Issuance Date: July 10, 2024 |
Principal Amount: $1,100,000.00 |
FOR VALUE RECEIVED, APPTECH
PAYMENTS CORP., a corporation organized and existing under the laws of the State of Delaware (the “Company”), hereby promises
to pay to [_______________________] (the “Holder”), the initial principal sum of One Million One Hundred Thousand and 00/100
Dollars ($1,100,000.00) (subject to adjustment as provided herein, the “Principal Amount”) and any accrued and unpaid interest
and other fees under this Debenture on the date that is twelve (12) calendar months after the Issuance Date (the “Maturity Date”),
subject to the terms of this Debenture. The Company has the option to redeem this Debenture prior to the Maturity Date pursuant to Section
2(b). The Holder has the option to cause any outstanding principal and accrued interest, if any, on this Debenture to be converted into
Common Stock of the Company, par value $0.001 per share (the “Common Stock”) at any time. The Company shall pay interest on
the unpaid Principal Amount hereof at the rate of six percent (6%) per annum from the Issuance Date until the same becomes due and payable,
whether at maturity or upon acceleration or by prepayment or otherwise, as further provided herein.
This Debenture is being issued
pursuant to that securities purchase agreement dated as of July 10, 2024, between the Company and the Holder (the “Purchase Agreement”).
Capitalized terms used but not defined herein shall have the meanings set forth in the Purchase Agreement. This Debenture is also subject
to the provisions of the Purchase Agreement and further is subject to the following additional provisions:
1.
This Debenture has been issued subject to investment representations of the original purchaser hereof and may be transferred or
exchanged only in compliance with the Securities Act and other applicable state and foreign securities laws. The Holder may transfer or
assign this Debenture (or any part thereof) without the prior consent of the Company, and the Company shall cooperate with any such transfer.
In the event of any proposed transfer of this Debenture, the Company may require, prior to issuance of a new Debenture in the name of
such other Person, that it receive reasonable transfer documentation including legal opinions that the issuance of the Debenture in such
other name does not and will not cause a violation of the Securities Act or any applicable state or foreign securities laws or is exempt
from the registration requirements of the Securities Act. Prior to due presentment for transfer of this Debenture to which the Company
has consented, the Company and any agent of the Company may treat the Person in whose name this Debenture is duly registered on the Company's
books and records of outstanding debt securities and obligations (“Debenture Register”) as the owner hereof for the purpose
of receiving payment as herein provided and for all other purposes, whether or not this Debenture be overdue, and neither the Company
nor any such agent shall be affected by notice to the contrary. In addition to all other rights provided in this Debenture, the Holder
shall also have an unlimited number of exchange rights which are options and not obligations to exchange all or a portion of this Debenture
into any transaction consummated by the Company with any individual or entity (an “Other Investor”). At the time of such transaction,
and in addition to all other rights provided in this Debenture, the Holder would have the option of either (a) retaining the Debenture
or one of the previous transactions into which the Holder previously exchanged into, or (b) exchanging the Debenture or such previous
transaction into which they exchanged, into the transaction consummated with an Other Investor.
2.
Conversion at Holder’s Option; Redemption at Company’s Option.
a.
The Holder is entitled to, at any time or from time to time on or after the Issuance Date, convert the Conversion Amount (as defined
below) into Conversion Shares, at a conversion price for each share of Common Stock (the “Conversion Price”) equal to $1.07,
subject to equitable adjustments resulting from any stock splits, stock dividends, recapitalizations or similar events. The Company shall
issue irrevocable instructions to its Transfer Agent regarding conversions such that the Transfer Agent shall be authorized and instructed
to issue Conversion Shares upon its receipt of a Notice of Conversion without further approval or authorization from the Company. For
purposes of this Debenture, the “Conversion Amount” shall mean the sum of (A) all or any portion of the outstanding Principal
Amount of this Debenture, as designated by the Holder upon exercise of its right of conversion plus (B) any interest, pursuant to Section
10 or otherwise, that has accrued on the portion of the Principal Amount that has been designated for payment pursuant to (A).
Conversion shall be effectuated
by delivering by facsimile, email or other delivery method to the Transfer Agent of the completed form of conversion notice attached hereto
as Annex A (the “Notice of Conversion”), executed by the Holder of the Debenture evidencing such Holder's intention
to convert this Debenture or a specified portion hereof. No fractional shares of Common Stock or scrip representing fractions of shares
will be issued on conversion, but the number of shares issuable shall be rounded to the nearest whole share. The Holder may, at its election,
deliver a Notice of Conversion to either the Company or the Transfer Agent. The date on which notice of conversion is given (the “Conversion
Date”) shall be deemed to be the date on which the Company or the Transfer Agent, as the case may be, receives by fax, email or
other means of delivery used by the Holder the Notice of Conversion (such receipt being evidenced by electronic confirmation of delivery
by facsimile or email or confirmation of delivery by such other delivery method used by the Holder). Delivery of a Notice of Conversion
to the Transfer Agent may be given by the Holder by facsimile, or by delivery to the Transfer Agent at the address set forth in the Transfer
Agent Instruction Letter (or such other contact facsimile number, email or street address as may be designated by the Transfer Agent to
the Holder). Delivery of a Notice of Conversion to the Company shall be given by the Holder pursuant to the notice provisions set forth
in Section 10 of the Agreement. The Conversion Shares must be delivered to the Holder within one (1) business day from the date of delivery
of the Notice of Conversion to the Transfer Agent or Company, as the case may be (the “Deadline”). Conversion shares shall
be delivered by DWAC if such Conversion Shares bear no restrictive legend, so long as the Company is then DWAC Operational, unless the
Holder expressly requests delivery in certificated form or the Conversion Shares are in the form of Restricted Stock and are required
to bear a restrictive legended. Conversion Shares shall be deemed delivered (i) if delivered by DWAC, upon deposit into the Holder’s
brokerage account, or (ii) if delivered in certificated form, upon the Holder’s actual receipt of the Conversion Shares in certificated
form at the address specified by the Holder in the Notice of Conversion, as confirmed by written receipt. All expenses owed to the transfer
agent and other expenses and fees of the transfer agent or of counsel to the Company to issue an opinion to remove any restrictive legend,
for the issuance and clearing of the Common Stock into which this Debenture is convertible into, shall be payable by the Company. In addition
to the foregoing, if on or prior to the Deadline the Company shall fail to issue and deliver such Conversion Shares and credit the Holder’s
balance account with DTC for the number of Conversion Shares to which the Holder is entitled upon the Holder’s exercise hereunder
or pursuant to the Company’s obligation pursuant to clause (ii) below, and if on or after such Trading Day the Holder purchases
(in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common
Stock issuable upon such exercise that the Holder anticipated receiving from the Company, then the Company shall, within two (2) Trading
Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the
Holder’s total purchase price (including brokerage commissions and other reasonable and customary out-of-pocket expenses, if any)
for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver
such Conversion Shares and credit such Holder’s balance account with DTC for such Conversion Shares shall terminate, or (ii) promptly
honor its obligation to deliver to the Holder such Conversion Shares and credit such Holder’s balance account with DTC and pay cash
to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock,
times (B) the closing sales price of the Common Stock on the date of exercise. Nothing shall limit the Holder’s right to pursue
any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver the Conversion Shares and credit the Holder’s balance
account with DTC for the number of Conversion Shares to which the Holder is entitled upon the conversion of this Debenture as required
pursuant to the terms hereof.
Notwithstanding the foregoing,
unless the Holder delivers to the Company written notice at least sixty-one (61) days prior to the effective date of such notice that
the provisions of this paragraph (the “Limitation on Ownership”) shall be adjusted to 9.99% with respect to the Holder, in
no event shall a holder of Debenture have the right to convert Debenture into, nor shall the Company issue to such Holder, shares of Common
Stock to the extent that such conversion would result in the Holder and its affiliates together beneficially owning more than 4.99% of
the then issued and outstanding shares of Common Stock. For purposes hereof, beneficial ownership shall be determined in accordance with
Section 13(d) of the Exchange Act and Regulation 13D-G under the Exchange Act. Notwithstanding anything in this Debenture to the contrary,
and in addition to the beneficial ownership limitations provided herein, the sum of the number of shares of Common Stock that may be issued
under the Purchase Agreement (including the Commitment Shares (as defined in the Purchase Agreement) (the “Commitment Shares”),
under the Debenture (as defined in the Purchase Agreement), and under the Warrant (as defined in the Purchase Agreement), shall be limited
to the Exchange Cap (as defined in the Purchase Agreement) (the “Exchange Cap”) unless Shareholder Approval (as defined in
the Purchase Agreement) (“Shareholder Approval”) is obtained by the Company to issue more than the Exchange Cap.
b.So
long as no Event of Default (as defined in Section 10) shall have occurred and be continuing (whether or not such Event of Default has
been declared by the Holder), the Company may at its option call for redemption all or part of the Debenture, with the exception of any
portion thereof which is the subject of a previously-delivered Notice of Conversion, as follows:
(i)
The Debenture called for redemption shall be redeemable by the Company, upon not more than two (2) calendar days written notice,
for an amount (the “Redemption Price”) equal to the sum of One Hundred Ten percent (110%) of the Principal Amount plus One
Hundred Ten percent (110%) of the accrued interest, if any. The date upon which the Debenture is redeemed and paid shall be referred to
as the “Redemption Date” (and, in the case of multiple redemptions of less than the entire outstanding Principal Amount, each
such date shall be a Redemption Date with respect to the corresponding redemption).
(ii)
[Reserved]
(iii)
[Reserved]
(iv)
On the Redemption Date, the Company shall cause the Holder whose Debenture have been presented for redemption to be issued payment
of the Redemption Price. In the case of a partial redemption, the Company shall also issue new Debenture to the Holder for the Principal
Amount remaining outstanding after the Redemption Date promptly after the Holder’s presentation of the Debenture called for redemption.
(v)
To effect a redemption the Company shall provide a written notice to the Holder(s) not more than two (2) calendar days prior to
the Redemption Date (the “Redemption Notice”), setting forth the following:
| 3. | the aggregate Principal Amount of the Debenture being called for redemption; and |
| 4. | in the case of a partial redemption, a statement advising the Holder that after the Redemption Date a
substitute Debenture will be issued by the Company after deduction the portion thereof called for redemption, at no cost to the Holder,
if the Holder so requests. |
Notwithstanding the foregoing, in the event the
Company issues a Redemption Notice but fails to fund the redemption on the Redemption Date, then such Redemption Notice shall be null
and void, and (i) the Holder(s) shall be entitled to convert the Debenture previously the subject of the Redemption Notice, and (ii) the
Company may not redeem such Debenture for at least thirty (30) days following the intended Redemption Date that was voided, and the Company
shall be required to pay to the Holder(s) the Redemption Price simultaneously with the issuance of a Redemption Notice in connection with
any subsequent redemption pursued by the Company.
3.
If the Company, at any time while this Debenture or any amounts due hereunder are outstanding, issues, sells or grants any option
to purchase, or sells or grants any right to reprice, or otherwise disposes of, or issues (or announces any sale, grant or any option
to purchase or other disposition), any Common Stock or other securities convertible into, exercisable for, or otherwise entitle any person
or entity the right to acquire, shares of Common Stock (including, without limitation, upon conversion of this Debenture, pursuant to
any convertible securities outstanding as of or following the Issuance Date, any issuance pursuant to an Equity Line of Credit (as defined
in this Debenture), and any issuance pursuant to an ATM Offering (as defined in this Debenture)), in each or any case at an effective
price per share that is lower than the then Conversion Price (such lower price, the “Base Conversion Price” and such issuances,
collectively, a “Dilutive Issuance”) (it being agreed that if the holder of the Common Stock or other securities so issued
shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices
or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive
shares of Common Stock at an effective price per share that is lower than the Conversion Price, such issuance shall be deemed to have
occurred for less than the Conversion Price on such date of the Dilutive Issuance), then the Conversion Price shall be reduced, at the
option of the Holder, to a price equal the Base Conversion Price. If the Company enters into a Variable Rate Transaction (as defined in
this Debenture), despite the prohibition set forth in this Debenture, the Company shall be deemed to have issued Common Stock at the lowest
possible price per share at which such securities could be issued in connection with such Variable Rate Transaction. Such adjustment shall
be made at the option of the Holder whenever such Common Stock or other securities are issued. Upon the occurrence of each adjustment
or readjustment of the Conversion Price as a result of the events described in Section 3 of this Debenture, the Company shall, at its
expense and within one (1) calendar day after the occurrence of each respective adjustment or readjustment of the Conversion Price, compute
such adjustment or readjustment and prepare and furnish to the Holder a certificate setting forth (i) the Conversion Price in effect at
such time based upon the Dilutive Issuance, (ii) the number of shares of Common Stock and the amount, if any, of other securities or property
which at the time would be received upon conversion of the Debenture, (iii) the detailed facts upon which such adjustment or readjustment
is based, and (iv) copies of the documentation (including but not limited to relevant transaction documents) that evidences the adjustment
or readjustment. In addition, the Company shall, within one (1) calendar day after each written request from the Holder, furnish to such
Holder a like certificate setting forth (i) the Conversion Price in effect at such time based upon the Dilutive Issuance, (ii) the number
of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion
of the Debenture, (iii) the detailed facts upon which such adjustment or readjustment is based, and (iv) copies of the documentation (including
but not limited to relevant transaction documents) that evidences the adjustment or readjustment. For the avoidance of doubt, each adjustment
or readjustment of the Conversion Price as a result of the events described in Section 3 of this Debenture shall occur without any action
by the Holder and regardless of whether the Company complied with the notification provisions in Section 3 of this Debenture.
4.
No provision of this Debenture shall alter or impair the obligation of the Company, which is absolute and unconditional to convert
this Debenture into Common Stock, at the time, place, and rate herein prescribed. This Debenture is a direct obligation of the Company.
5.
If, at any time after the Issuance Date, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization,
or other similar event, as a result of which shares of Common Stock of the Company shall be changed into the same or a different number
of shares of another class or classes of stock or securities of the Company or another entity, or in case of any sale or conveyance of
all or substantially all of the assets of the Company, then the Holder of this Debenture shall thereafter have the right to receive upon
conversion of this Debenture, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock
immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive
in such transaction had this Debenture been converted in full immediately prior to such transaction (without regard to any limitations
on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of
the Holder of this Debenture to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion
Price and of the number of shares issuable upon conversion of the Debenture) shall thereafter be applicable, as nearly as may be practicable
in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Company shall not effectuate any transaction
described in this Section 5 unless (a) it first gives, to the extent practicable, at least thirty (30) days prior written notice (but
in any event at least fifteen (15) days prior written notice) of the record date of the special meeting of shareholders to approve, or
if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization
or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Debenture), (b) the resulting
successor or acquiring entity (if not the Company) assumes by written instrument all of the obligations of this Debenture, and (c) the
Holder provides written consent to the Company with respect to the consummation of the transaction described in this Section 5. The above
provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.
6.
If, at any time while any portion of this Debenture remains outstanding, the Company effectuates a forward stock split or reverse
stock split of its Common Stock or issues a dividend on its Common Stock consisting of shares of Common Stock or otherwise recapitalizes
its Common Stock, the Conversion Price shall be equitably adjusted to reflect such action.
7.
All payments contemplated hereby to be made “in cash” shall be made by wire transfer of immediately available funds
in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.
All payments of cash and each delivery of shares of Common Stock issuable to the Holder as contemplated hereby shall be made to the Holder
to an account designated by the Holder to the Company and if the Holder has not designated any such accounts at the address last appearing
on the Debenture Register of the Company as designated in writing by the Holder from time to time; except that the Holder may designate,
by notice to the Company, a different delivery address for any one or more specific payments or deliveries.
8.
The Holder of the Debenture, by acceptance hereof, agrees that this Debenture is being acquired for investment and that such Holder
will not offer, sell or otherwise dispose of this Debenture or the Shares of Common Stock issuable upon conversion thereof except in compliance
with the terms of the Purchase Agreement and under circumstances which will not result in a violation of the Securities Act or any applicable
state Blue Sky or foreign laws or similar laws relating to the sale of securities.
9.
This Debenture shall be governed by and construed in accordance with the laws of the State of Delaware. Each of the parties consents
to the exclusive jurisdiction and venue of the state located in Miami-Dade County, Florida and/or
federal courts located in Miami-Dade County, Florida in connection with any dispute arising under this Agreement, and each waives
any objection based on forum non conveniens. This provision is intended to be a “mandatory” forum selection clause and governed
by and interpreted consistent with Florida law (Delaware law governing all other, substantive matters). Each
of the parties hereby consents to the exclusive jurisdiction and venue of any state or federal court having its situs in Miami-Dade County,
Florida, and each waives any objection based on forum non conveniens. To the extent determined by such court, the Company shall
reimburse the Holder for any reasonable legal fees and disbursements incurred by the Holder in enforcement of or protection of any of
its rights under this Debenture or the Purchase Agreement.
10.
The following shall constitute an “Event of Default”:
a.The
Company fails in the payment of principal and/or interest (to the extent that interest is imposed under this Section 10) on this Debenture
as required to be paid in cash hereunder, at the Maturity Date, upon acceleration, or otherwise; or
b.
Any of the representations or warranties made by the Company herein, in the Purchase Agreement or in any certificate or financial
or other written statements heretofore or hereafter furnished by the Company to the Holder in connection with the issuance of this Debenture,
shall be false or misleading (including without limitation by way of the misstatement of a material fact or the omission of a material
fact) in any material respect at the time made (as to which no cure period shall apply); or
c.
The Company (i) fails to timely file required SEC reports when due (including extensions), becomes, is deemed to be or asserts
that it is a “shell company” at any time for purposes of the 1933 Act, and Rule 144 promulgated thereunder or otherwise takes
any action, or refrains from taking any action, the result of which makes Rule 144 under the 1933 unavailable to the Holder for the sale
of their Securities, (ii) fails to issue shares of Common Stock to the Holder or to cause its Transfer Agent to issue shares of Common
Stock upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Debenture, (iii) fails to
transfer or to cause its Transfer Agent to transfer any certificate for shares of Common Stock issued to the Holder upon conversion of
this Debenture as and when required by this Debenture and such transfer is otherwise lawful, (iv) fails to remove any restrictive legend
or to cause its Transfer Agent to transfer any certificate or any shares of Common Stock issued to the Holder upon conversion of this
Debenture as and when required by the relevant Transaction Document(s) and such legend removal is otherwise lawful, or (v) the Company
fails to perform or observe any of its obligations under the Section 5 of the Agreement or under the Transfer Agent Instruction Letter
(no cure period shall apply in the case of clauses (i) through (v) above, inclusive); or
d.
The Company fails to perform or observe, in any material respect (i) any other covenant, term, provision, condition, agreement
or obligation set forth in the Debenture, (subject to a cure period of three (3) days other than in the case of a failure under Section
5 hereof, as to which no cure period shall apply), (ii) any other covenant, term, provision, condition, agreement or obligation of the
Company set forth in the Purchase Agreement and such failure shall continue uncured for a period of either (1) three (3) days after the
occurrence of the Company’s failure under Section 4(d), (e), (f), (g) or (h) of the Purchase Agreement, or (2) ten (10) days after
the occurrence of the Company’s failure under any other provision of the Purchase Agreement not otherwise specifically addressed
in the Events of Default set forth in this Section 10, or (iii) any other covenant, term, provision, condition, agreement or obligation
set forth in the Registration Rights Agreement (as defined in the Purchase Agreement) subject to a cure period of five (5) days; or
e.
The Company shall (1) admit in writing its inability to pay its debts generally as they mature; (2) make an assignment for the
benefit of creditors or commence proceedings for its dissolution; or (3) apply for or consent to the appointment of a trustee, liquidator
or receiver for its or for a substantial part of its property or business (as to which no cure period shall apply); or
f.
A trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without
its consent and shall not be discharged within sixty (60) days after such appointment (as to which no cure period shall apply); or
g.
Any governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody
or control of the whole or any substantial portion of the properties or assets of the Company and shall not be dismissed within sixty
(60) days thereafter (as to which no cure period shall apply); or
h.
Any money judgment, writ or warrant of attachment, or similar process (including an arbitral determination), in excess of Two Hundred
Thousand Dollars ($200,000) in the aggregate shall be entered or filed against the Company or any of its properties or other assets (as
to which no cure period shall apply); or
i.
The occurrence of a breach or an event of default under the terms of any indebtedness or financial instrument of the Company or
any subsidiary (including but not limited to any Subsidiary) of the Company in an aggregate amount in excess of Two Hundred Thousand Dollars
($200,000) or more which is not waived by the creditors under such indebtedness (as to which no cure period shall apply); or
j.
Bankruptcy, reorganization, insolvency or liquidation proceedings or other proceedings for relief under any bankruptcy law or any
law for the relief of debtors shall be instituted by or against the Company and, if instituted against the Company, shall not be dismissed
within sixty (60) days after such institution or the Company shall by any action or answer approve of, consent to, or acquiesce in any
such proceedings or admit the material allegations of, or default in answering a petition filed in any such proceeding (as to which no
further cure period shall apply); or
k.
The issuance of an order, ruling, finding or similar adverse determination the SEC, the Secretary of State of the State of Delaware
or other applicable state of incorporation of the Company, FINRA, or any other securities regulatory body (whether in the United States,
Canada or elsewhere) having proper jurisdiction that the Company and/or any of its past or present directors or officers have committed
a material violation of applicable securities laws or regulations (as to which no cure period shall apply); or
l.
The occurrence of a breach or default by the Company under any agreement identified by the Company in its SEC filings as a material
agreement, subject to a ten (10) calendar day cure period; or
m.
Notice of a Material Adverse Effect is provided by the Company or the determination in good faith by the Holder that a Material
Adverse Effect has occurred (as to which no cure period shall apply); or
n.
The Company attempts to modify, amend, withdraw, rescind, disavow or repudiate any part of the Irrevocable Instructions (as to
which no cure period shall apply); or
o.
[Intentionally Omitted]; or
p.
The failure by Company to maintain any material intellectual property rights, personal, real property or other assets which are
necessary to conduct its business (whether now or in the future); or
q.
If, at any time on or after the Issuance Date, the Company’s Common Stock (i) is suspended from trading for a period of longer
than one (1) Trading Day, (ii) halted from trading for a period of longer than one (1) Trading Day, and/or (iii) fails to be listed on
the Nasdaq Capital Market; or
r.
If, at any time on or after the date which is six (6) months after the Issuance Date, the Holder is unable to (i) obtain a standard
“144 legal opinion letter” from an attorney reasonably acceptable to the Holder, the Holder’s brokerage firm (and respective
clearing firm), and the Company’s transfer agent in order to facilitate the Holder’s conversion of any portion of the Debenture
into free trading shares of the Company’s Common Stock pursuant to Rule 144, and/or (ii) thereupon deposit such shares into the
Holder’s brokerage account; or
s.
Any attempt by the Company or its officers, directors, and/or affiliates to transmit, convey, disclose, or any actual transmittal,
conveyance, or disclosure by the Company or its officers, directors, and/or affiliates of, material non-public information concerning
the Company, to the Holder or its successors and assigns, which is not immediately cured by Company’s filing of a Form 8-K pursuant
to Regulation FD on that same date; or
t.
The Company fails to obtain the Shareholder Approval within thirty (30) calendar days after the Exchange Cap is reached.
Then, or at any time thereafter,
the Company shall immediately give written notice of the occurrence of such Event of Default to the Holder, and in each and every such
case, unless such Event of Default shall have been waived in writing by the Holder of the Debenture (which waiver shall not be deemed
to be a waiver of any subsequent default), then at the option of the Holder and in the discretion of the Holder, take any or all of the
following actions: (i) pursue remedies against the Company in accordance with any of the Holder’s rights, (ii) increase the interest
rate applicable to the Debenture to the lesser of eighteen percent (18%) per annum and the maximum interest rate allowable under applicable
law (the “Default Interest”), and (iii) accelerate the full indebtedness under this Debenture, in an amount equal to one hundred
twenty percent (120%) of the outstanding Principal Amount and accrued and unpaid interest (the “Acceleration Amount”), whereupon
the Acceleration Amount shall be immediately due and payable, without presentment, demand, protest or notice of any kinds, all of which
are hereby expressly waived, anything contained herein, in the Purchase Agreement or in any other note or instruments to the contrary
notwithstanding. In the case of an Event of Default under Section 10(d)(ii), the Holder may either (i) declare the Acceleration Amount
to exclude the Conversion Amount that is the subject of the Event of Default, in which case the Acceleration Amount shall be based on
the remaining Principal Amount and accrued interest (if any), in which case the Company shall continue to be obligated to issue the Conversion
Shares, or (ii) declare the Acceleration Amount to include the Conversion Amount that is the subject of the Event of Default, in which
case the Acceleration Amount shall be based on the full Principal Amount, including the Conversion Amount, and accrued interest (if any),
whereupon the Notice of Conversion shall be deemed withdrawn. At its option, the Holder may elect to convert the Debenture pursuant to
Section 2 notwithstanding the prior declaration of a default and acceleration, in the sole discretion of such Holder. The Holder may immediately
enforce any and all of the Holder's rights and remedies provided herein or any other rights or remedies afforded by applicable law. The
Company expressly acknowledges and agrees that the Holder’s exercise of any or all of the remedies provided herein or under applicable
law, including without limitation the increase(s) in the Principal Amount and the Acceleration Amount as may be declared in the case of
a default, is reasonable and appropriate due to the inability to define the financial hardship that the Company’s default would
impose on the Holder. To the extent that the Holder’s exercise of any of its remedies in the case of an Event of Default shall be
construed to exceed the maximum interest rate allowable under applicable law, then such remedies shall be reduced to equal the maximum
interest rate allowable under applicable law.
11.
Nothing contained in this Debenture shall be construed as conferring upon the Holder the right to vote or to receive dividends
or to consent or receive notice as a shareholder in respect of any meeting of shareholders or any rights whatsoever as a shareholder of
the Company, unless and to the extent converted in accordance with the terms hereof.
12.
[Intentionally Omitted].
13.
This Debenture may be amended only by the written consent of the parties hereto. Notwithstanding the foregoing, the Principal Amount
of this Debenture shall automatically be reduced by any and all Conversion Amounts (to the extent that the same relate to principal hereof).
In the absence of manifest error, the outstanding Principal Amount of the Debenture on the Holder’s book and records shall be the
correct amount.
14.
In the event of any inconsistency between the provisions of this Debenture and the provisions of any other Transaction Document,
the provisions of this Debenture shall prevail. Without limiting the generality of the foregoing, in the event the Transfer Agent is not
required to transfer any Common Stock, issue Conversion Shares or de-legended shares of Restricted Stock pursuant to the Transfer Agent
Instruction Letter, this shall not operate as an excuse, extension or waiver of the Company’s obligation to issue and deliver Conversion
Shares or de-legended Restricted Stock.
15.
The Company specifically acknowledges and agrees that in the event of a breach or threatened breach by the Company of any provision
hereof or of any other Transaction Document, the Holder will be irreparably damaged, and that damages at law would be an inadequate remedy
if this Debenture or such other Transaction Document were not specifically enforced. Therefore, in the event of a breach or threatened
breach by the Company, the Holder shall be entitled, in addition to all other rights and remedies, to an injunction restraining such breach,
without being required to show any actual damage or to post any bond or other security, and/or to a decree for a specific performance
of the provisions of this Debenture and the other Transaction Documents.
16.
No waivers or consents in regard to any provision of this Debenture may be given other than by an instrument in writing signed
by the Holder.
17.
So long as this Debenture is outstanding, the Company shall not enter into any transaction or arrangement structured in accordance
with, based upon, or related or pursuant to, in whole or in part, either Section 3(a)(9) of the Securities Act (a “3(a)(9) Transaction”)
or Section 3(a)(l0) of the Securities Act (a “3(a)(l0) Transaction”). In the event that the Company does enter into, or makes
any issuance of Common Stock related to a 3(a)(9) Transaction or a 3(a)(l0) Transaction while this Debenture is outstanding, a liquidated
damages charge of 20% of the outstanding principal balance of this Debenture, but not less than Fifteen Thousand Dollars, will be assessed
and will become immediately due and payable to the Holder at its election in the form of cash payment or addition to the balance of this
Debenture.
18.[Intentionally
Omitted].
19. From
the Issuance Date until the Debenture is paid in full, the Company shall be prohibited from entering into an agreement involving a Variable
Rate Transaction (as defined herein), except with respect to an agreement between the Company and the Holder. “Variable Rate Transaction”
means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or
exercisable for, or include the right to receive, shares of Common Stock either (A) at a conversion price, exercise price or exchange
rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock at any
time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject
to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent
events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into any agreement,
including, but not limited to, an Equity Line of Credit (as defined in this Debenture), whereby the Company may issue securities at a
future determined price. The Holder shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which
remedy shall be in addition to any right to collect damages. “Common Stock Equivalents” means any securities of the Company
that would entitle the holder thereof to acquire at any time Common Stock, including without limitation any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the
holder thereof to receive, Common Stock. From the Issuance Date until the Debenture is paid in full, the Company shall not issue any Common
Stock or Common Stock Equivalents pursuant to any “at the market offering” with any broker-dealer (each an “ATM Offering”),
including but not limited to any ATM Offering entered into on or prior to the Issuance Date, unless the Company obtains written consent
from the Holder. From the Issuance Date until the Debenture is paid in full, the Company shall not issue any Common Stock Equivalents
with any dilutive issuance provisions that are the same as, or substantially similar to, the dilutive issuance provisions contained in
Section 3 of this Debenture.
20.Notwithstanding
any provision in this Debenture or the related transaction documents to the contrary, the total liability for payments of interest and
payments in the nature of interest, including, without limitation, all charges, fees, exactions, or other sums which may at any time be
deemed to be interest, shall not exceed the limit imposed by the usury laws of the jurisdiction governing this Debenture or any other
applicable law. In the event the total liability of payments of interest and payments in the nature of interest, including, without limitation,
all charges, fees, exactions or other sums which may at any time be deemed to be interest, shall, for any reason whatsoever, result in
an effective rate of interest, which for any month or other interest payment period exceeds the limit imposed by the usury laws of the
jurisdiction governing this Debenture, all sums in excess of those lawfully collectible as interest for the period in question shall,
without further agreement or notice by, between, or to any party hereto, be applied to the reduction of the outstanding principal balance
due hereunder immediately upon receipt of such sums by the Holder hereof, with the same force and effect as though the Company had specifically
designated such excess sums to be so applied to the reduction of the principal balance then outstanding, and the Holder hereof had agreed
to accept such sums as a penalty-free payment of principal; provided, however, that the Holder may, at any time and from time to time,
elect, by notice in writing to the Company, to waive, reduce, or limit the collection of any sums in excess of those lawfully collectible
as interest, rather than accept such sums as a prepayment of the principal balance then outstanding. It is the intention of the parties
that the Company does not intend or expect to pay, nor does the Holder intend or expect to charge or collect any interest under this Debenture
greater than the highest non-usurious rate of interest which may be charged under applicable law.
21.While
any portion of this Debenture is outstanding, if the Company or subsidiary of the Company receives cash proceeds of more than $1,500,000.00
(the “Minimum Threshold”) in the aggregate from any source or series of related or unrelated sources, including but not limited
to the issuance of equity or debt (except with respect to the issuance of equity or debt to officers and directors of the Company or subsidiary
of the Company), the conversion of outstanding warrants of the Company or subsidiary of the Company, the issuance of securities pursuant
to an Equity Line of Credit (as defined in this Debenture), or the sale of assets by the Company or subsidiary of the Company (for the
avoidance of doubt, each time that the Company or subsidiary of the Company receives cash proceeds from any of the aforementioned sources,
then such amount shall be aggregated together and aggregated for purposes of calculating whether the Minimum Threshold has been reached),
the Company shall, within two (2) business days of Company’s or respective subsidiary’s receipt of such proceeds, inform the
Holder of such receipt, following which the Holder shall have the right in its sole discretion to require the Company or subsidiary of
the Company to immediately apply up to 50% of all proceeds received by the Company (from any source except with respect to proceeds from
the issuance of equity or debt to officers and directors of the Company or subsidiary of the Company) after the Minimum Threshold is reached
to repay the outstanding amounts owed under this Debenture. “Equity Line of Credit” shall mean any transaction involving a
written agreement between the Company or subsidiary of the Company and an investor or underwriter whereby the Company or subsidiary of
the Company has the right to “put” its Common Stock to the investor or underwriter over an agreed period of time and at an
agreed price or price formula (such Common Stock must be registered pursuant to a registration statement of the Company or subsidiary
of the Company for the investor’s or underwriter’s resale). For the avoidance of doubt, Section 2(b)(i) of this Debenture
shall apply to any repayment of the Debenture under this Section 21 prior to the occurrence of an Event of Default.
22.From
the Issuance Date until the Debenture is paid in full, the Company shall not (directly or indirectly) incur or suffer to exist or guarantee
any indebtedness that is senior to the Debenture or secured by the assets of the Company. “Permitted Debt” shall mean (i)
any indebtedness in existence prior to the Issuance Date, (ii) purchase money indebtedness to finance the purchase of fixed or capital
assets, including all capital lease obligations of the Company, which does not exceed the purchase price of the assets funded, and (iii)
indebtedness evidenced by a mortgage on real property which does not exceed the appraised value of the respective real property.
[Signature Page Follows]
IN WITNESS WHEREOF,
the Company has caused this Debenture to be duly executed by an officer thereunto duly authorized as of the date of issuance set forth
above.
|
AppTech
Payments Corp.
|
|
By: |
|
Name: Luke D’Angelo
Title: Chief Executive Officer |
|
|
[Signature Page to Convertible Debenture]
ANNEX A
APPTECH PAYMENTS CORP.
NOTICE OF
CONVERSION
(To Be Executed
by the Registered Holder in Order to Convert the Debenture)
The undersigned hereby irrevocably
elects to convert $ ________________ of the Principal Amount of the above Debenture into Shares of Common Stock of AppTech Payments Corp.,
a Delaware corporation (the “Company”), according to the conditions hereof, as of the date written below. After giving effect
to the conversion requested hereby, the outstanding Principal Amount of such debenture is $____________________, absent manifest
error.
Pursuant to the Debenture, certificates
representing Common Stock upon conversion must be delivered (including delivery by DWAC or DRS) to the undersigned within two (2) business
days from the date of delivery of the Notice of Conversion to the Transfer Agent.
Conversion Date
____________________________________________________________________________
Applicable Conversion Price
____________________________________________________________________________
Signature
____________________________________________________________________________
Print Name
____________________________________________________________________________
Address
____________________________________________________________________________
____________________________________________________________________________
Exhibit 4.2
NEITHER THIS SECURITY NOR THE SECURITIES
AS TO WHICH THIS SECURITY MAY BE EXERCISED HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT. THIS SECURITY AND THE
SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED
BY SUCH SECURITIES.
COMMON
STOCK PURCHASE WARRANT
APPTECH PAYMENTS CORP.
Warrant Shares: 750,000
Date of Issuance: July 10, 2024 (“Issuance
Date”)
This COMMON
STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received (in connection with the issuance of the convertible
debenture in the principal amount of $1,100,000.00 to [_____________] (the “Fund”) on or around the Issuance Date (the “Debenture”)),
[_____________] (including any permitted and registered assigns, the “Holder”), is entitled, upon the terms and subject
to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date of issuance hereof, to purchase
from APPTECH PAYMENTS CORP., a Delaware corporation (the “Company”), 750,000 shares of Common Stock (as defined below)
(the “Warrant Shares”) (whereby such number may be adjusted from time to time pursuant to the terms and conditions
of this Warrant) at the Exercise Price per share then in effect. This Warrant is issued by the Company as of the date hereof in connection
with that certain securities purchase agreement dated July 10, 2024, by and among the Company and the Fund (the “Purchase Agreement”).
Capitalized
terms used in this Warrant shall have the meanings set forth in the Purchase Agreement unless otherwise defined in the body of this Warrant
or in Section 12 below. For purposes of this Warrant, the term “Exercise Price” shall mean $1.16, subject to adjustment as
provided herein (including but not limited to cashless exercise), and the term “Exercise Period” shall mean the period commencing
on the Issuance Date and ending on 5:00 p.m. eastern standard time on the five-year anniversary thereof.
(a)
Mechanics of Exercise. Subject to the terms and conditions hereof, the rights represented by this Warrant may be exercised
in whole or in part at any time or times during the Exercise Period by delivery of a written notice, in the form attached hereto as Exhibit
A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. The Holder shall not be required
to deliver the original Warrant in order to effect an exercise hereunder. Partial exercises of this Warrant resulting in purchases of
a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant
Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. On or before the first Trading Day
(the “Warrant Share Delivery Date”) following the date on which the Holder sent the Exercise Notice to the Company
or the Company’s transfer agent, and upon receipt by the Company of payment to the Company of an amount equal to the applicable
Exercise Price multiplied by the number of Warrant Shares as to which all or a portion of this Warrant is being exercised (the “Aggregate
Exercise Price” and together with the Exercise Notice, the “Exercise Delivery Documents”) in cash or by wire
transfer of immediately available funds (or by cashless exercise, in which case there shall be no Aggregate Exercise Price provided),
the Company shall (or direct its transfer agent to) issue and deliver by overnight courier to the address as specified in the Exercise
Notice, a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of shares
of Common Stock to which the Holder is entitled pursuant to such exercise (or deliver such shares of Common Stock in electronic format
if requested by the Holder). Upon delivery of the Exercise Delivery Documents, the Holder shall be deemed for all corporate purposes to
have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date
of delivery of the certificates evidencing such Warrant Shares. If this Warrant is submitted in connection with any exercise and the number
of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon
an exercise, then the Company shall as soon as practicable and in no event later than three business days after any exercise and at its
own expense, issue a new Warrant (in accordance with Section 6) representing the right to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised.
If the Company
fails to cause its transfer agent to issue to the Holder the respective shares of Common Stock by the respective Warrant Share Delivery
Date, then the Holder will have the right to rescind such exercise in Holder’s sole discretion in addition to all other rights and
remedies at law, under this Warrant, or otherwise, and such failure shall also be deemed an event of default under the Debenture, material
breach under this Warrant, and a material breach under the Purchase Agreement.
If the Market
Price of one share of Common Stock is greater than the Exercise Price, then the Holder may elect to receive Warrant Shares pursuant to
a cashless exercise, in lieu of a cash exercise, equal to the value of this Warrant determined in the manner described below (or of any
portion thereof remaining unexercised) by surrender of this Warrant and an Exercise Notice, in which event the Company shall issue to
Holder a number of Common Stock computed using the following formula:
X = Y (A-B)
A
Where | X= | he number of Shares to be issued to Holder. |
| Y = | the number of Warrant Shares that the Holder elects to purchase under this Warrant (at the date of such
calculation). |
| | |
| A = | the Market
Price (at the date of such calculation). |
| | |
| B = | Exercise Price
(as adjusted to the date of such calculation). |
(b)
No Fractional Shares. No fractional shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment
pursuant hereto. All Warrant Shares (including fractions) issuable upon exercise of this Warrant may be aggregated for purposes of determining
whether the exercise would result in the issuance of any fractional share. If, after aggregation, the exercise would result in the issuance
of a fractional share, the Company shall, in lieu of issuance of any fractional share, pay the Holder otherwise entitled to such fraction
a sum in cash equal to the product resulting from multiplying the then-current fair market value of a Warrant Share by such fraction.
(c)
Holder’s Exercise Limitations. Notwithstanding anything to the contrary contained herein, the Company shall not effect
any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 1 or
otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Exercise Notice, the
Holder (together with the Holder’s affiliates (the “Affiliates”), and any other Persons acting as a group together with
the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess
of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock
beneficially owned by the Holder and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of
this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would
be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates
or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company
(including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the
limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the
preceding sentence, for purposes of this Section 1(c), beneficial ownership shall be calculated in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Holder is solely responsible
for any schedules required to be filed in accordance therewith. In addition, a determination as to any group status as contemplated above
shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes
of this Section 1(c), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding
shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the
case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Company’s
transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company
shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any
case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities
of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number
of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of
shares of the Common Stock outstanding at the time of the respective calculation hereunder. In addition to the Beneficial Ownership Limitation
provided in this Warrant, the sum of the number of shares of Common Stock that may be issued under the Purchase Agreement (including the
Commitment Shares (as defined in the Purchase Agreement)), the Debenture, and this Warrant shall be limited to the Exchange Cap (as defined
in the Purchase Agreement) (the “Exchange Cap”), unless Shareholder Approval (as defined in the Purchase Agreement) (“Shareholder
Approval”) is obtained by the Company to issue more than the Exchange Cap. The limitations contained in this paragraph shall apply
to a successor holder of this Warrant.
(d)
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available
to the Holder, if the Company fails to cause the Company’s transfer agent to transmit to the Holder the Warrant Shares in accordance
with the provisions of this Warrant (including but not limited to Section 1(a) above) pursuant to an exercise on or before the respective
Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or
otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the
Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall
(A) pay in cash to the Holder, within one (1) business day of Holder’s request, the amount, if any, by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the product of
(1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times
(2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either
reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such
exercise shall be deemed rescinded) or deliver to the Holder within one (1) business day of Holder’s request the number of shares
of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For
example, if the Holder purchases, or effectuates a cashless exercise hereunder for, Common Stock having a total purchase price of $11,000
to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase
obligation of $10,000, under clause (A) of the immediately preceding sentence, the Company shall be required to pay the Holder $1,000.
The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request
of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available
to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect
to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms
hereof.
2.
ADJUSTMENTS. The Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows:
(a)
Distribution of Assets. If the Company shall declare or make any dividend or other distribution of its assets (or rights
to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including without limitation any
distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement
or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such
case:
(i)
any Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders
of shares of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such record
date, to a price determined by multiplying such Exercise Price by a fraction (i) the numerator of which shall be the Closing Sale Price
of the shares of Common Stock on the Trading Day immediately preceding such record date minus the value of the Distribution (as determined
in good faith by the Company’s Board of Directors) applicable to one share of Common Stock, and (ii) the denominator of which shall
be the Closing Sale Price of the shares of Common Stock on the Trading Day immediately preceding such record date; and
(ii)
the number of Warrant Shares shall be increased to a number of shares equal to the number of shares of Common Stock obtainable
immediately prior to the close of business on the record date fixed for the determination of holders of shares of Common Stock entitled
to receive the Distribution multiplied by the reciprocal of the fraction set forth in the immediately preceding clause (i); provided,
however, that in the event that the Distribution is of shares of common stock of a company (other than the Company) whose common stock
is traded on a national securities exchange or a national automated quotation system (“Other Shares of Common Stock”),
then the Holder may elect to receive a warrant to purchase Other Shares of Common Stock in lieu of an increase in the number of Warrant
Shares, the terms of which shall be identical to those of this Warrant, except that such warrant shall be exercisable into the number
of shares of Other Shares of Common Stock that would have been payable to the Holder pursuant to the Distribution had the Holder exercised
this Warrant immediately prior to such record date and with an aggregate exercise price equal to the product of the amount by which the
exercise price of this Warrant was decreased with respect to the Distribution pursuant to the terms of the immediately preceding clause
(i) and the number of Warrant Shares calculated in accordance with the first part of this clause (ii).
(b)
Anti-Dilution Adjustments to Exercise Price. If the Company or any Subsidiary thereof, as applicable, at any time while
this Warrant is outstanding, shall sell or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose of
or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Stock or securities (including
but not limited to Common Stock Equivalents) entitling any person or entity (for purposes of clarification, including but not limited
to the Fund and/or Holder pursuant to (i) any other security of the Company currently held by the Fund and/or Holder, (ii) any other security
of the Company issued to Holder on or after the Issuance Date, or (iii) any other agreement entered into between the Company and Fund
and/or Holder (including but not limited to the Purchase Agreement)) to acquire shares of Common Stock (upon conversion, exercise or otherwise),
at an effective price per share less than the then Exercise Price (such lower price, the “Base Share Price” and such issuances
collectively, a “Dilutive Issuance”) (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any
time, whether by operation of purchase price adjustments, elimination of an applicable floor price for any reason in the future (including
but not limited to the passage of time or satisfaction of certain condition(s)), reset provisions, floating conversion, exercise or exchange
prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled or
potentially entitled to receive shares of Common Stock at an effective price per share which is less than the Exercise Price at any time
while such Common Stock or Common Stock Equivalents are in existence, such issuance shall be deemed to have occurred for less than the
Exercise Price on such date of the Dilutive Issuance (regardless of whether the Common Stock or Common Stock Equivalents are (i) subsequently
redeemed or retired by the Company after the date of the Dilutive Issuance or (ii) actually converted or exercised at such Base Share
Price), then the Exercise Price shall be reduced at the option of the Holder and only reduced to equal the Base Share Price. Such adjustment
shall be made whenever such Common Stock or Common Stock Equivalents are issued, regardless of whether the Common Stock or Common Stock
Equivalents are (i) subsequently redeemed or retired by the Company after the date of the Dilutive Issuance or (ii) actually converted
or exercised at such Base Share Price by the holder thereof (for the avoidance of doubt, the Holder may utilize the Base Share Price even
if the Company did not actually issue shares of its common stock at the Base Share Price under the respective Common stock Equivalents).
The Company shall notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common Stock
Equivalents subject to this Section 2(b), indicating therein the applicable issuance price, or applicable reset price, exchange price,
conversion price and other pricing terms (such notice the “Dilutive Issuance Notice”). For purposes of clarification, regardless
of whether (i) the Company provides a Dilutive Issuance Notice pursuant to this Section 2(b) upon the occurrence of any Dilutive Issuance
or (ii) the Holder accurately refers to the Base Share Price in the Exercise Notice, the Holder is entitled to utilize the Base Share
Price at all times on and after the date of such Dilutive Issuance.
(c)
Subdivision or Combination of Common Stock. If the Company at any time on or after the Issuance Date subdivides (by any
stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater
number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of
Warrant Shares will be proportionately increased. If the Company at any time on or after the Issuance Date combines (by combination, reverse
stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Exercise
Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately
decreased. Any adjustment under this Section 2(c) shall become effective at the close of business on the date the subdivision or combination
becomes effective. Each such adjustment of the Exercise Price shall be calculated to the nearest one-hundredth of a cent. Such adjustment
shall be made successively whenever any event covered by this Section 2(c) shall occur.
3.
FUNDAMENTAL TRANSACTIONS. If, at any time while this Warrant is outstanding, (i) the Company effects any merger of the Company
with or into another entity and the Company is not the surviving entity (such surviving entity, the “Successor Entity”),
(ii) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (iii) any tender
offer or exchange offer (whether by the Company or by another individual or entity, and approved by the Company) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their shares of Common Stock for other securities, cash or property
and the holders of at least 50% of the Common Stock accept such offer, or (iv) the Company effects any reclassification of the Common
Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities,
cash or property (other than as a result of a subdivision or combination of shares of Common Stock) (in any such case, a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive the number of
shares of Common Stock of the Successor Entity or of the Company and any additional consideration (the “Alternate Consideration”)
receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a holder of
the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event (disregarding any limitation
on exercise contained herein solely for the purpose of such determination). For purposes of any such exercise, the determination of the
Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among
the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.
If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any Successor Entity in such Fundamental Transaction
shall issue to the Holder a new warrant consistent with the foregoing provisions and evidencing the Holder’s right to exercise such
warrant into Alternate Consideration.
4.
NON-CIRCUMVENTION. The Company covenants and agrees that it will not, by amendment of its certificate of incorporation,
bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of
securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and
will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights
of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common
Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be
necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock
upon the exercise of this Warrant, and (iii) shall, for so long as this Warrant is outstanding, have authorized and reserved, free from
preemptive rights, two (2) times the number of shares of Common Stock into which the Warrants are then exercisable into to provide for
the exercise of the rights represented by this Warrant (without regard to any limitations on exercise).
5.
WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, this Warrant, in and of itself,
shall not entitle the Holder to any voting rights or other rights as a stockholder of the Company. In addition, nothing contained in this
Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise)
or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.
6. REISSUANCE.
(a)
Lost, Stolen or Mutilated Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company will, on such terms
as to indemnity or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof),
issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.
(b)
Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant,
such new Warrant shall be of like tenor with this Warrant, and shall have an issuance date, as indicated on the face of such new Warrant
which is the same as the Issuance Date.
7.
TRANSFER. This Warrant shall be binding upon the Company and its successors and assigns, and shall inure to be the benefit
of the Holder and its successors and assigns. Notwithstanding anything to the contrary herein, the rights, interests or obligations of
the Company hereunder may not be assigned, by operation of law or otherwise, in whole or in part, by the Company without the prior signed
written consent of the Holder, which consent may be withheld at the sole discretion of the Holder (any such assignment or transfer shall
be null and void if the Company does not obtain the prior signed written consent of the Holder). This Warrant or any of the severable
rights and obligations inuring to the benefit of or to be performed by Holder hereunder may be assigned by Holder to a third party, in
whole or in part, without the need to obtain the Company’s consent thereto.
8.
NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall
be given in accordance with the notice provisions contained in the Purchase Agreement. The Company shall provide the Holder with prompt
written notice (i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, the calculation of such
adjustment and (ii) at least 20 days prior to the date on which the Company closes its books or takes a record (A) with respect to any
dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any stock or other securities
directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock or other property, pro rata to the holders
of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation,
provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided
to the Holder.
9.
AMENDMENT AND WAIVER. The terms of this Warrant may be amended or waived (either generally or in a particular instance and
either retroactively or prospectively) only with the written consent of the Company and the Holder.
10.
GOVERNING LAW AND VENUE. This Warrant shall be governed by and construed in accordance with the laws of the State of Delaware
without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated
by this Warrant shall be brought only in the state courts located in the State of Florida, County of Miami-Dade or federal courts located
in the State of Florida, County of Miami-Dade. The parties to this Warrant 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. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT ENTERED INTO IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT,
OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY. 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 Warrant 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 Warrant or any other transaction document entered into in connection with this Warrant 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 the
Purchase 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.
11.
ACCEPTANCE. Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and
conditions contained herein.
12.
CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:
(a) [Intentionally Omitted].
(b)
“Closing Sale Price” means, for any security as of any date, (i) the last closing trade price for such security
on the Principal Market, as reported by Bloomberg, L.P. or other similar quotation service provider designated by the Holder, or, if the
Principal Market begins to operate on an extended hours basis and does not designate the closing trade price, then the last trade price
of such security prior to 4:00 p.m., New York time, as reported by Bloomberg, L.P. or other similar quotation service provider designated
by the Holder, or (ii) if the foregoing does not apply, the last trade price of such security in the over-the-counter market for such
security as reported by Bloomberg, L.P. or other similar quotation service provider designated by the Holder, or (iii) if no last trade
price is reported for such security by Bloomberg, L.P. or other similar quotation service provider designated by the Holder, the average
of the bid and ask prices of any market makers for such security as reported by Bloomberg, L.P. or other similar quotation service provider
designated by the Holder. If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases,
the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder.
All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction
during the applicable calculation period.
(c)
“Common Stock” means the Company’s common stock, par value $0.001, and any other class of securities into
which such securities may hereafter be reclassified or changed.
(d)
“Common Stock Equivalents” means any securities of the Company that would entitle the holder thereof to acquire
at any time Common Stock, including without limitation any debt, preferred stock, rights, options, warrants or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
(e)
“Person” and “Persons” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization, any other entity and any governmental entity or any department
or agency thereof.
(f)
“Principal Market” means the principal securities exchange or trading market where such Common Stock is listed
or quoted, including but not limited to any tier of the OTC Markets, any tier of the NASDAQ Stock Market (including NASDAQ Capital Market),
or the NYSE American, or any successor to such markets.
(g)
“Market Price” means the highest traded price of the Common Stock during the one hundred and fifty Trading Days
prior to the date of the respective Exercise Notice.
(h)
“Trading Day” means any day on which the Common Stock is listed or quoted on its Principal Market, provided,
however, that if the Common Stock is not then listed or quoted on any Principal Market, then any calendar day.
* * * * * * *
IN WITNESS WHEREOF, the Company has caused
this Warrant to be duly executed as of the Issuance Date set forth above.
APPTECH PAYMENTS
CORP.
[___________]
Name: Luke D’Angelo
Title: Chief Executive Officer
EXHIBIT A
EXERCISE NOTICE
(To be executed by the registered holder
to exercise this Common Stock Purchase Warrant)
THE
UNDERSIGNED holder hereby exercises the right to purchase ______________of the shares of Common
Stock (“Warrant Shares”) of APPTECH PAYMENTS CORP., a Delaware corporation (the “Company”), evidenced by the attached
copy of the Common Stock Purchase Warrant (the “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 Holder intends that payment of the Exercise Price shall be made as
(check one): |
| ☐ | a
cash exercise with respect to _______________ Warrant Shares; or |
| ☐ | by cashless exercise pursuant to the Warrant. |
| 2. | Payment of Exercise
Price. If cash exercise is selected above, the holder shall pay the applicable Aggregate Exercise Price in the sum of $ ______________to the Company
in accordance with the terms of the Warrant. |
| 3. | Delivery of Warrant Shares. The Company shall deliver to the holder ______________ Warrant
Shares in accordance with the terms of the Warrant. |
Date: __________________________________
|
__________________________________________ |
|
(Print Name of Registered Holder) |
|
|
|
|
|
By:________________________________________ |
|
Name:______________________________________ |
|
Title: ______________________________________ |
EXHIBIT B
ASSIGNMENT OF WARRANT
(To be signed only upon authorized
transfer of the Warrant)
FOR VALUE
RECEIVED, the undersigned hereby sells, assigns, and transfers unto ________________the right
to purchase _____________shares of common stock of APPTECH PAYMENTS CORP., to which the within Common Stock Purchase Warrant relates and
appoints _______________, as attorney-in-fact, to transfer said right on the books of APPTECH PAYMENTS CORP. with full power of substitution
and re-substitution in the premises. By accepting such transfer, the transferee has agreed to be bound in all respects by the terms and
conditions of the within Warrant.
Date: __________________________________
|
|
|
(Signature) |
|
|
|
|
|
(Name) |
|
|
|
|
|
(Address) |
|
|
|
|
|
(Social Security or Tax Identification No.) |
* The signature on this Assignment
of Warrant must correspond to the name as written upon the face of the Common Stock Purchase Warrant in every particular without alteration
or enlargement or any change whatsoever. When signing on behalf of a corporation, partnership, trust or other entity, please indicate
your position(s) and title(s) with such entity.
Exhibit 10.1
SECURITIES PURCHASE
AGREEMENT
THIS SECURITIES PURCHASE
AGREEMENT (the “Agreement”), dated as of July 10, 2024, is entered into by and between APPTECH PAYMENTS CORP., a Delaware
corporation, (the “Company”) and [_______________] (the “Buyer”).
WITNESSETH:
WHEREAS, the Company
and the Buyer are executing and delivering this Agreement in accordance with and in reliance upon the exemption from securities registration
afforded, inter alia, by Rule 506 under Regulation D (“Regulation D”) as promulgated by the United States Securities
and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act” or the “Securities
Act”), and/or Section 4(a)(2) of the 1933 Act; and
WHEREAS, the Buyer
wishes to purchase from the Company, and the Company wishes to sell the Buyer, upon the terms and subject to the conditions of this Agreement,
securities consisting of the Company’s convertible debenture (the “Debenture”), in the form of Exhibit A hereto,
which will be convertible into shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”),
in the aggregate principal amount of One Million One Hundred Thousand and 00/100 Dollars ($1,100,000.00), for an aggregate Purchase Price
of One Million and 00/100 Dollars ($1,000,000.00), as well as issue the Warrant (as defined in this Agreement) to Investments (as defined
in this Agreement), all upon the terms and subject to the conditions of this Agreement, the Debenture, Warrant, and other related documents;
NOW THEREFORE, in consideration
of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1.
DEFINITIONS; AGREEMENT TO PURCHASE.
a.
Certain Definitions. As used herein, each of the following terms has the meaning set forth below, unless the context otherwise
requires:
(i)
“Affiliate” means, with respect to a specific Person referred to in the relevant provision, another Person who or which
controls or is controlled by or is under common control with such specified Person.
(ii)
“Certificates” means certificates representing the Shares issuable hereunder, each duly executed on behalf of the Company
and issued hereunder.
(iii)
“Closing Date” means the date on which the Closing is held.
(iv)
“Commitment Fee” shall have the meaning ascribed to such term in Section 12(a).
(v)
“Common Stock” shall have the meaning ascribed to such term in the Recitals.
(vi)
“Conversion Amount” shall mean the Conversion Amount as defined in the Debenture, provided, however that for
purposes of the foregoing calculation, the full indebtedness under the Debenture shall be deemed immediately convertible, notwithstanding
the 4.99% limitation on ownership set forth in the Debenture.
(vii)
“Conversion Price” means the Conversion Price as defined in the Debenture.
(viii)
“Conversion Shares” means the shares of Common Stock issuable upon conversion of the Debenture.
(ix)
“DWAC Operational” means that the Common Stock is eligible for clearing through the Depository Trust Company (“DTC”)
via the DTC’s Deposit Withdrawal Agent Commission or “DWAC” system and active and in good standing for DWAC issuance
by the Transfer Agent (as defined herein).
(x)
“Dollars” or “$” means United States Dollars.
(xi)
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
(xii)
“Investments” means [_______________], the general partner of the Buyer.
(xiii)
“Irrevocable Resolutions” has the meaning set forth in Section 8(i).
(xiv)
“Market Price of the Common Stock” means (x) the closing bid price of the Common Stock for the period indicated in
the relevant provision hereof (unless a different relevant period is specified in the relevant provision), as reported by Bloomberg, LP
or, if not so reported, as reported on the OTCQB, OTCQX or OTC Pink or (y) if the Common Stock is listed on a stock exchange, the closing
price on such exchange, as reported by Bloomberg LP.
(xv)
“Material Adverse Effect” means a material adverse effect on the business, operations or condition (financial or otherwise)
or results of operation of the Company and its Subsidiaries taken as a whole, in the reasonable commercial discretion of the Buyer, irrespective
of any finding of fault, magnitude of liability (or lack of financial liability). Without limiting the generality of the foregoing, the
occurrence of any of the following, in the reasonable commercial discretion of the Buyer, shall be considered a Material Adverse Effect:
(i) any final money, judgment, writ or warrant of attachment, or similar process (including an arbitral determination) in excess of Two
Hundred Thousand Dollars ($200,000) shall be entered or filed against the Company or any of its Subsidiaries (including, in any event,
products liability claims against the Company or its Subsidiaries), (ii) the suspension or withdrawal of any governmental authority or
permit pertaining to a material amount of the Company’s or any Subsidiary’s products or services, (iii) the loss of any material
insurance coverage (including, in any case, comprehensive general liability coverage, products liability coverage or directors and officers
coverage, in each case in effect at the time of execution and delivery of this Agreement), (iv) an action by a regulatory agency or governmental
body affecting the Common Stock (including, without limitation, (1) the commencement of any regulatory investigation of which the Company
is aware, the suspension of trading of the Common Stock by the Financial Industry Regulation Authority (“FINRA”), the SEC,
or the Principal Market (as defined in this Agreement), the failure of the Common Stock to be DTC eligible or the placing of the Common
Stock on the DTC “chill list” or (2) the engaging in any market manipulation or other unlawful or improper trading or other
activity by any Affiliate), (v) the Company’s independent registered accountants shall resign under circumstances where a disagreement
exists between the Company and its independent registered accountants, (vi) the Company shall fail to timely file any disclosure document
as required by applicable federal or state securities laws and regulations or by the rules and regulations of any exchange, trading market
or quotation system to which the Company or the Common Stock is subject, or (vii) the Chief Executive Officer of the Company or any other
key full-time officer or director of the Company, shall, for any reason (including, without limitation, termination, resignation, retirement,
death or disability) cease to act on behalf of the Company in the same role and to the same extent as his or her involvement as of the
date of execution and delivery of this Agreement.
(xvi)
“Person” means any living person or any entity, such as, but not necessarily limited to, a corporation, partnership
or trust.
(xvii)
“Placement Agent” means [_______________].
(xviii)
“Purchase Price” shall be One Million and 00/100 Dollars ($1,000,000.00).
(xix)
“Registrable Securities” shall mean the Conversion Shares, Warrant Shares, Commitment Shares (as defined in this Agreement),
and, to the extent applicable, and any other shares of capital stock or other securities of the Company or any successor to the Company
that are issued upon exchange of Conversion Shares, Warrant Shares, and/or such Commitment Shares.
(xx)
“Registration Statement” shall mean any registration statement filed or contemplated to be filed by the Company with
the SEC under the Securities Act.
(xxi)
“Restricted Stock” shall mean shares of Common Stock which are not freely trading shares when issued.
(xxii)
“Securities” means the Debenture, Warrant, and the Shares.
(xxiii)
“Shares” means the Conversion Shares and Warrant Shares.
(xxiv)
“Subsidiary” shall have the meaning ascribed to such term in Section 3(b).
(xxv)
“Transaction Documents” means, collectively, this Agreement, the Registration Rights Agreement, the Debenture, Warrant,
the Transfer Agent Instruction Letter, the Irrevocable Resolutions and the other agreements, documents and instruments entered into in
connection therewith.
(xxvi)
“Transfer Agent” shall have the meaning ascribed to such term in Section 4(a).
(xxvii)
“Transfer Agent Instruction Letter” shall have the meaning ascribed to such term in Section 5(a).
(xxviii)
“Warrant” shall mean that certain common stock purchase warrant to purchase 750,000 shares of the Company’s Common
Stock pursuant to the terms therein.
(xxix)
“Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrant.
b.
Purchase and Sale of Debenture.
(i)
The Buyer agrees to purchase from the Company, and the Company agrees to sell to the Buyer, the Debenture on the terms and conditions
set forth below in this Agreement and the other Transaction Documents.
(ii)
Subject to the terms and conditions of this Agreement and the other Transaction Documents, the Buyer will purchase the Debenture
at closing (the “Closing”) to be held on the Closing Date.
2.
BUYER’S REPRESENTATIONS, WARRANTIES, ETC.
The Buyer represents and warrants
to, and covenants and agrees with, the Company as follows:
a.
Investment Purpose. Without limiting the Buyer’s right to sell the Shares pursuant to a Registration Statement, Buyer
is purchasing the Debenture, and will be acquiring the Shares, for its own account for investment only and not with a view towards the
public sale or distribution thereof and not with a view to or for sale in connection with any distribution thereof.
b.
Accredited Investor Status. Buyer is (i) an “accredited investor” as that term is defined in Rule 501 of the
General Rules and Regulations under the 1933 Act by reason of Rule 501(a)(3), (ii) experienced in making investments of the kind described
in this Agreement and the related documents, (iii) able, by reason of the business and financial experience of its officers (if an entity)
and professional advisors (who are not affiliated with or compensated in any way by the Company or any of its affiliates or selling agents),
to protect its own interests in connection with the transactions described in this Agreement, and the related documents, and (iv) able
to afford the entire loss of its investment in the Securities.
c.
Subsequent Offers and Sales. All subsequent offers and sales of the Securities by the Buyer shall be made pursuant to registration
of the Shares under the 1933 Act or pursuant to an exemption from registration and compliance with applicable states’ securities
laws.
d.
Reliance on Exemptions. Buyer understands that the Securities are being offered and sold to it in reliance on 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.
e.
Information. Buyer and its advisors have been furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer. Buyer and its advisors
have been afforded the opportunity to ask questions of the Company and have received complete and satisfactory answers to any such inquiries.
Without limiting the generality of the foregoing, Buyer has also had the opportunity to obtain and to review the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2023, and Quarterly Report on Form 10-Q for the fiscal quarter ended March
31, 2024 (collectively, the “SEC Documents”).
f.
Investment Risk. Buyer understands that its investment in the Securities involves a high degree of risk, including the risk
of loss of the Buyer’s entire investment.
g.
Governmental Review. Buyer understands that no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Securities.
h.
Organization; Authorization. Buyer is duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization. This Agreement and the other Transaction Documents have been duly and validly authorized, executed and delivered
on behalf of the Buyer and create a valid and binding agreement of the Buyer enforceable in accordance with its terms, subject as to enforceability
to general principles of equity and to bankruptcy, insolvency, moratorium and other similar laws affecting the enforcement of creditors’
rights generally.
3.
COMPANY REPRESENTATIONS AND WARRANTIES, ETC.
The Company represents and
warrants to the Buyer that:
a.
Concerning the Debenture and the Shares. There are no preemptive rights of any stockholder of the Company to acquire the
Debenture or the Shares.
b.
Organization; Subsidiaries; Reporting Company Status. Attached hereto as Schedule 3(b) is an organizational chart
describing all of the Company’s wholly-owned and majority-owned subsidiaries (the “Subsidiaries”) and other Affiliates,
including the relationships among the Company and such Subsidiaries, including as to each Subsidiary its jurisdiction of organization
and the percentage of ownership held by the Company, and the parent company of the Subsidiary, including the percentage of ownership of
the Company held by it. The Company and each Subsidiary is a corporation or other form of businesses entity duly organized, validly existing
and in good standing under the laws of its respective jurisdiction of organization, and each of them has the requisite corporate or other
power to own its properties and to carry on its business as now being conducted. The Company and each Subsidiary is duly qualified as
a foreign corporation or other entity to do business and is in good standing in each jurisdiction where the nature of the business conducted
or property owned by it makes such qualification necessary, other than those jurisdictions in which the failure to so qualify would not
have a Material Adverse Effect. The Common Stock is listed and traded on the Nasdaq Capital Markets (trading symbol: APCX). The Company
has received no notice, either oral or written, from FINRA, the SEC, or any other organization, with respect to the continued eligibility
of the Common Stock for such listing, and the Company has maintained all requirements for the continuation of such listing. The Company
is an operating company in that, among other things (A) it primarily engages, wholly or substantially, directly or indirectly through
a majority owned Subsidiary or Subsidiaries, in the production or sale, or the research or development, of a product or service other
than the investment of capital, (B) it is not an individual or sole proprietorship, (C) it is not an entity with no specific business
plan or purpose and its business plan is not to engage in a merger or acquisition with an unidentified company or companies or other entity
or person, and (D) it intends to use the proceeds from the sale of the Debenture solely for the operation of the Company’s business
and uses other than personal, family, or household purposes.
c.
Authorized Shares. Schedule 3(c) sets forth all capital stock and derivative securities of the Company that are authorized
for issuance and that are issued and outstanding. All issued and outstanding shares of Common Stock have been duly authorized and validly
issued and are fully paid and nonassessable. The Company has sufficient authorized and unissued shares of Common Stock as may be necessary
to effect the issuance of the Shares, assuming the prior issuance and exercise, exchange or conversion, as the case may be, of all derivative
securities authorized, as indicated in Schedule 3(c). The Shares have been duly authorized and, when issued upon conversion of,
or as interest on, the Debenture, the Shares will be duly and validly issued, fully paid and non-assessable and will not subject the holder
thereof to personal liability by reason of being such holder. At all times, the Company shall keep available and reserved for issuance
to the holders of the Debenture shares of Common Stock duly authorized for issuance against the Debenture. As of the effective date of
this Agreement, other than as reflected in the SEC Documents (as defined in this Agreement) of the Company or as indicated on Schedule
3(c) of this Agreement, (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first
refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by which the
Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries,
(ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any
of its or their securities under the 1933 Act and (iii) there are no anti-dilution or price adjustment provisions contained in any security
issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Securities.
d.
Authorization. This Agreement, the issuance of the Debenture (including without limitation the incurrence of indebtedness
thereunder), the issuance of the Conversion Shares under the Debenture and Warrant Shares under the Warrant, and the other transactions
contemplated by the Transaction Documents, have been duly, validly and irrevocably authorized by the Company, and this Agreement has been
duly executed and delivered by the Company. The Company’s board of directors, in the exercise of its fiduciary duties, has irrevocably
approved the entry into and performance of the Transaction Documents, including, without limitation the issuance of the Securities, based
upon a reasonable inquiry concerning the Company’s financing objectives and financial situation. Each of the Transaction Documents,
when executed and delivered by the Company, are and will be, valid, legal and binding agreements of the Company, enforceable in accordance
with their respective terms, subject as to enforceability to general principles of equity and to bankruptcy, insolvency, moratorium, and
other similar laws affecting the enforcement of creditors’ rights generally.
e.
Non-contravention. The execution and delivery of the Transaction Documents, the issuance of the Securities and the consummation
by the Company of the other transactions contemplated by this Agreement and the Debenture (including without limitation the incurrence
of indebtedness thereunder) do not and will not conflict with or result in a breach by the Company of any of the terms or provisions of,
or constitute a default under (i) the articles of incorporation or by-laws of the Company, each as currently in effect, (ii) any indenture,
mortgage, deed of trust, or other material agreement or instrument to which the Company is a party or by which it or any of its properties
or assets are bound, including any listing agreement for the Common Stock, except as herein set forth or an event which results in the
creation of any lien, charge or encumbrance upon any assets of the Company or the triggering of any anti-dilution rights, rights of first
refusal or first offer on the part of holders of the Company’s securities, (iii) to its knowledge, any existing applicable law,
rule, or regulation or any applicable decree, judgment, or order of any court, United States federal or state regulatory body, administrative
agency, or other governmental body having jurisdiction over the Company or any of its properties or assets, or (iv) the Company’s
listing agreement for its Common Stock (if applicable).
f.
Approvals. No authorization, approval or consent of any court, governmental body, regulatory agency, self-regulatory organization,
or stock exchange or market or the stockholders of the Company is required to be obtained by the Company for the entering into and performing
this Agreement and the other Transaction Documents (including without limitation the issuance and sale of the Securities to the Buyer
as contemplated by this Agreement) except such authorizations, approvals and consents that have been obtained, or such authorizations,
approvals and consents, the failure of which to obtain would not have a Material Adverse Effect.
g.
SEC Documents; Rule 144 Status. None of the SEC Documents contained, at the time they were filed, any untrue statement of
a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements made therein in
light of the circumstances under which they were made, not misleading. 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 (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”). The Company is not aware of any event occurring on or prior to the execution and delivery of this
Agreement that would require the filing of, or with respect to which the Company intends to file, a Form 8-K after such time. The Company
satisfies the requirements of Rule 144(i)(2), and the Company shall continue to satisfy all applicable requirements of Rule 144 (or any
successor thereto) for so long as any Securities are outstanding and not registered pursuant to an effective Registration Statement filed
with the SEC.
h.
Absence of Certain Changes. Since March 31, 2024, when viewed from the perspective of the Company and its Subsidiaries taken
as a whole, there has been no material adverse change and no material adverse development in the business, properties, operations, condition
(financial or otherwise), or results of operations of the Company and its Subsidiaries (including, without limitation, a change or development
which constitutes, or with the passage of time is reasonably likely to become, a Material Adverse Effect), except as disclosed in the
SEC Documents. Since March 31, 2024, except as provided in the SEC Documents, the Company has not (i) incurred or become subject to any
material liabilities (absolute or contingent) except liabilities incurred in the ordinary course of business consistent with past practices;
(ii) discharged or satisfied any material lien or encumbrance or paid any material obligation or liability (absolute or contingent), other
than current liabilities paid in the ordinary course of business consistent with past practices; (iii) declared or made any payment or
distribution of cash or other property to stockholders with respect to its capital stock, or purchased or redeemed, or made any agreements
to purchase or redeem, any shares of its capital stock; (iv) sold, assigned or transferred any other tangible assets, or canceled any
debts or claims, except in the ordinary course of business consistent with past practices; (v) suffered any substantial losses or waived
any rights of material value, whether or not in the ordinary course of business, or suffered the loss of any material amount of existing
business; (vi) made any changes in employee compensation, except in the ordinary course of business consistent with past practices; or
(vii) experienced any material problems with labor or management in connection with the terms and conditions of their employment.
i.
Full Disclosure. There is no fact known to the Company (other than general economic conditions known to the public generally
or as disclosed in the SEC Documents) that has not been disclosed in writing to the Buyer that (i) would reasonably be expected to have
a Material Adverse Effect, (ii) would reasonably be expected to materially and adversely affect the ability of the Company to perform
its obligations pursuant to the Transaction Documents, or (iii) would reasonably be expected to materially and adversely affect the value
of the rights granted to the Buyer in the Transaction Documents.
j.
Absence of Litigation. Except as described in the SEC Documents, there is no action, suit, proceeding, inquiry or investigation
before or by any court, public board or body pending or, to the knowledge of the Company, threatened against or affecting the Company,
wherein an unfavorable decision, ruling or finding would have a Material Adverse Effect or which would adversely affect the validity or
enforceability of, or the authority or ability of the Company to perform its obligations under, any of the Transaction Documents. The
Company is not a party to or subject to the provisions of, any order, writ, injunction, judgment or decree of any court or government
agency or instrumentality which could reasonably be expected to have a Material Adverse Effect.
k.
Absence of Liens. The Company’s assets are not encumbered by any liens or mortgages except as described in the SEC
Documents.
l.
Absence of Events of Default. No event of default (or its equivalent term), as defined in the respective agreement, indenture,
mortgage, deed of trust or other instrument, to which the Company is a party, and no event which, with the giving of notice or the passage
of time or both, would become an event of default (or its equivalent term) (as so defined in such document), has occurred and is continuing,
which would have a Material Adverse Effect.
m.
No Undisclosed Liabilities or Events. The Company has no liabilities or obligations other than those disclosed in the SEC
Documents or those incurred in the ordinary course of the Company’s business since March 31, 2024, and which individually or in
the aggregate, do not or would not have a Material Adverse Effect. No event or circumstances has occurred or exists with respect to the
Company or its properties, business, condition (financial or otherwise), or results of operations, which, under applicable law, rule or
regulation, requires public disclosure or announcement prior to the date hereof by the Company but which has not been so publicly announced
or disclosed. There are no proposals currently under consideration or currently anticipated to be under consideration by the Board of
Directors or the executive officers of the Company which proposal would (x) change the articles of incorporation, by-laws or any other
charter document of the Company, each as currently in effect, with or without shareholder approval, which change would reduce or otherwise
adversely affect the rights and powers of the shareholders of the Common Stock or (y) materially or substantially change the business,
assets or capital of the Company.
n.
No Integrated Offering. Neither the Company nor any of its affiliates nor any Person acting on its or their behalf has,
directly or indirectly, at any time during the six month period immediately prior to the date of this Agreement made any offer or sales
of any security or solicited any offers to buy any security under circumstances that would eliminate the availability of the exemption
from registration under Rule 506 of Regulation D in connection with the offer and sale of the Securities as contemplated hereby. Neither
the Company nor any of its affiliates nor any Person acting on its or their behalf has, 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 Securities
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.
o.
Dilution. The number of Shares issuable upon conversion of the Debenture may increase substantially in certain circumstances,
including, but not necessarily limited to, the circumstance wherein the Market Price of the Common Stock declines prior to the conversion
of the Debenture. The Company’s executive officers and directors have studied and fully understand the nature of the securities
being sold hereby and recognize that they have a potential dilutive effect and further that the conversion of the Debenture, exercise
of the Warrant, and/or sale of the Conversion Shares and/or Warrant Shares may have an adverse effect on the Market Price of the Common
Stock. The Board of Directors of the Company has concluded, in its good faith business judgment that such issuance is in the best interests
of the Company. The Company specifically acknowledges that its obligation to issue the Conversion Shares upon conversion of the Debenture
and Warrant Shares upon exercise of the Warrant is binding upon the Company and enforceable regardless of the dilution such issuance may
have on the ownership percentages of other shareholders of the Company.
p.
Regulatory Permits. The Company has all such permits, easements, consents, licenses, franchises and other governmental and
regulatory authorizations from all appropriate federal, state, local or other public authorities (“Permits”) as are necessary
to own and lease its properties and conduct its businesses in all material respects in the manner described in the SEC Documents and as
currently being conducted. All such Permits are in full force and effect and the Company has fulfilled and performed all of its material
obligations with respect to such Permits, and no event has occurred that allows, or after notice or lapse of time would allow, revocation
or termination thereof or will result in any other material impairment of the rights of the holder of any such Permit, subject in each
case to such qualification as may be disclosed in the SEC Documents. Such Permits contain no restrictions that would materially impair
the ability of the Company to conduct businesses in the manner consistent with its past practices. The Company has not received notice
or otherwise has knowledge of any proceeding or action relating to the revocation or modification of any such Permit.
q.
Residency. The state in which any offer to sell Securities hereunder was made or accepted by the Seller is the state shown
as the Seller’s address contained herein, and Seller is a resident of such state only.
r.
Hazardous Materials. The Company is in compliance with all applicable Environmental Laws in all respects except where the
failure to comply does not have and could not reasonably be expected to have a Material Adverse Effect. For purposes of the foregoing:
“Environmental Laws”
means, collectively, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, the Superfund Amendments
and Reauthorization Act of 1986, the Resource Conservation and Recovery Act, the Toxic Substances Control Act, as amended, the Clean Air
Act, as amended, the Clean Water Act, as amended, any other “Superfund” or “Superlien” law or any other applicable
federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to, or imposing liability
or standards of conduct concerning, the environment or any Hazardous Material.
“Hazardous Material”
means and includes any hazardous, toxic or dangerous waste, substance or material, the generation, handling, storage, disposal, treatment
or emission of which is subject to any Environmental Law.
s.
Independent Public Accountants. The Company’s auditor is an independent registered public accounting firm with respect
to the Company, as required by the 1933 Act, the Exchange Act and the rules and regulations promulgated thereunder.
t.
Internal Accounting Controls. The Company maintains a system of internal accounting controls sufficient to provide reasonable
assurances that (1) transactions are executed in accordance with management’s general or specific authorization; (2) transactions
are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and
to maintain accountability for assets; (3) access to assets is permitted only in accordance with management’s general or specific
authorization; and (4) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
u.Brokers;
No Solicitation. Except with respect to the Placement Agent, no Person (other than the Buyer and its principals, employees and agents)
is entitled to receive any consideration from the Company or the Buyer arising from any finder’s agreement, brokerage agreement
or other agreement to which the Company is a party. The Company represents and warrants that neither the Buyer nor its employee(s), member(s),
beneficial owner(s), or partner(s) solicited the Company to enter into this Agreement and consummate the transactions described in this
Agreement. The Company represents and warrants that the Investor is not required to be registered as a broker-dealer under the Securities
Exchange Act of 1934 in order to (i) consummate the transactions encompassed by the Transaction Documents or (ii) fulfill the Investor’s
obligations under the Transaction Documents.
v.
DWAC Operational; DRS. The Company is currently and shall remain DWAC Operational and eligible for DRS.
w. Regulation M Compliance.
The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause
or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any
of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii)
paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than,
in the case of clauses (ii) and (iii), compensation paid to the Placement Agent in connection with the placement of the Securities.
x. No Disqualification Events.
With respect to the Securities to be offered and sold hereunder in reliance on Rule 506 under the Securities Act, none of the Company,
any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the offering
hereunder, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of
voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity
at the time of sale (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is
subject to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification
Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care
to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable,
with its disclosure obligations under Rule 506(e), and has furnished to the Buyer a copy of any disclosures provided thereunder.
y. Other Covered Persons.
Other than the Placement Agent, the Company is not aware of any person (other than any Issuer Covered Person) that has been or will be
paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Securities.
z. Notice of Disqualification
Events. The Company will notify the Buyer and the Placement Agent in writing, prior to the Closing Date of (i) any Disqualification
Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating
to any Issuer Covered Person.
aa. No General Solicitation.
Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Securities by any form of general solicitation
or general advertising. The Company has offered the Securities for sale only to the Buyers and certain other “accredited investors”
within the meaning of Rule 501 under the Securities Act.
bb. Money Laundering.
The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping
and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes
and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no action or proceeding
by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect
to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
cc. Foreign Corrupt Practices.
Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf
of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other
unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government
officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully
any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which
is in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.
dd. Office of Foreign Assets
Control. Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director, officer, agent, employee or affiliate
of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the
U.S. Treasury Department.
4.
CERTAIN COVENANTS AND ACKNOWLEDGMENTS.
a.
Transfer Restrictions. The parties acknowledge and agree that (1) the Debenture have not been registered under the provisions
of the 1933 Act and the Shares have not been registered under the 1933 Act, and may not be transferred unless (A) subsequently registered
thereunder or (B) the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration;
(2) any sale of the Securities made in reliance on Rule 144 promulgated under the 1933 Act (“Rule 144”) may be made only in
accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of such Securities under circumstances in
which the seller, or the Person through whom the sale is made, may be deemed to be an underwriter, as that term is used in the 1933 Act,
may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder, (3) at the request
of the Buyer, the Company shall, from time to time, within two (2) business days of such request, at the sole cost and expense of the
Company, either (i) deliver to its transfer agent and registrar for the Common Stock (the “Transfer Agent”) a written letter
instructing and authorizing the Transfer Agent to process transfers of the Shares at such time as the Buyer has held the Securities for
the minimum holding period permitted under Rule 144 or the applicable exemption, subject to the Buyer’s providing to the Transfer
Agent certain customary representations contemporaneously with any requested transfer, or (ii) at the Buyer’s option or if the Transfer
Agent requires further confirmation of the availability of an exemption from registration, furnish to the Buyer an opinion of the Company’s
counsel in favor of the Buyer (and, at the request of the Buyer, any agent of the Buyer, including but not limited to the Buyer’s
broker or clearing firm) and the Transfer Agent, reasonably satisfactory in form, scope and substance to the Buyer and the Transfer Agent,
to the effect that a contemporaneously requested transfer of shares does not require registration under the 1933 Act, pursuant to the
1933 Act, Rule 144 or other regulations promulgated under the 1933 Act and (4) neither the Company nor any other Person is under any obligation
to register the Securities (other than pursuant to this Agreement) under the 1933 Act or to comply with the terms and conditions of any
exemption thereunder.
b.
Restrictive Legend. The Buyer acknowledges and agrees that the Debenture, and, until such time as the Shares have been registered
under the 1933 Act as contemplated hereby and sold in accordance with an effective Registration Statement, certificates and other instruments
representing any of the Securities shall bear a restrictive legend in substantially the following form (and a stop-transfer order may
be placed against transfer of any such Securities):
THIS SECURITY HAS NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
c.
Registration Rights; Piggy-Back Registration Rights. On the Closing Date, the Company and Buyer shall enter into that certain
registration rights agreement with respect to the registration of the Conversion Shares, Warrant Shares, and Commitment Shares (the “Registration
Rights Agreement”). In addition, from and after the Closing Date and until the later of (i) eighteen (18) months after the Closing
Date or (ii) the date that the Debenture is extinguished in the entirety, if the Company contemplates making an offering of Common Stock
(or other equity securities convertible into or exchangeable for Common Stock) registered for sale under the Securities Act or proposes
to file a Registration Statement covering any of its securities, the Company shall at each such time give prompt written notice to Investments
and Buyer of its intention to do so and of the registration rights granted under this Agreement. Upon the written request of Investments
and/or Buyer made within thirty (30) days after the receipt of any such notice (which request shall specify the Registrable Securities
intended to be disposed of by Investments and/or Buyer and the intended method of disposition thereof), the Company shall, at its sole
cost and expense, use its best efforts to effect the registration of all Registrable Securities which the Company has been so requested
to register by Investments and/or Buyer, to the extent requisite to permit the disposition (in accordance with the intended methods of
disposition) of the Registrable Securities by Investments and/or Buyer, by inclusion of such Registrable Securities in the Registration
Statement which covers the securities which the Company proposes to register; provided, that if the Company is unable to register the
full amount of Registrable Securities in an “at the market offering” under SEC rules and regulations due to the high percentage
of the Company’s Common Stock the Registrable Securities represents (giving effect to all other securities being registered in the
Registration Statement), then the Company may reduce, on a pro rata basis, the amount of Registrable Securities subject to the Registration
Statement to a lesser amount which equals the maximum number of Registrable Securities that the Company is permitted to register in an
“at the market offering”; and provided, further, that if, at any time after giving written notice of its intention to register
any Registrable Securities and prior to the effective date of the Registration Statement filed in connection with such registration, the
Company shall determine for any reason either not to register or to delay registration of such Registrable Securities, the Company may,
at its election, give written notice of such determination to Investments and/or the Buyer and, thereupon, (i) in the case of a determination
not to register, the Company shall be relieved of its obligation to register any Registrable Securities in connection with such registration
(but not from its obligation to pay the expenses of registration in connection therewith), and (ii) in the case of a determination to
delay registering such Registrable Securities, shall be permitted to delay registering any Registrable Securities, for the same period
as the delay in registering such other securities. If Buyer shall have transferred all or part of its Registrable Securities, then for
purposes of this Section, the term “Buyer” shall reference Buyer and/or such transferee(s).
d.
Securities Filings. The Company undertakes and agrees to make all necessary filings (including, without limitation, a Form
D) in connection with the sale of the Securities to the Buyer required under any United States laws and regulations applicable to the
Company (including without limitation state “blue sky” laws), or by any domestic securities exchange or trading market, and
to provide a copy thereof to the Buyer promptly after such filing.
e.
Reporting Status; Public Trading Market; DTC Eligibility. So long as the Buyer and/or Investments beneficially own any Securities,
(i) the Company shall timely file, prior to or on the date when due, all reports that would be required to be filed with the SEC pursuant
to Section 13 or 15(d) of the Exchange Act if the Company had securities registered under Section 12(b) or 12(g) of the Exchange Act;
(ii) the Company shall not be operated as, or report, to the SEC or any other Person, that the Company is a “shell company”
or indicate to the contrary to the SEC or any other Person; (iii) the Company shall take all other action under its control necessary
to ensure the availability of Rule 144 under the 1933 Act for the sale of Shares by the Buyer at the earliest possible date; and (iv)
the Company shall at all times while any Securities are outstanding maintain its engagement of an independent registered public accounting
firm. Except as otherwise set forth in Transaction Documents, the Company shall take all action under its control necessary to obtain
and to continue the listing and trading of its Common Stock (including, without limitation, all Registrable Securities) on the OTC Markets,
Inc., OTC Pink, OTCQB, OTCQX, Nasdaq Stock Market, NYSE, or any other exchange (the “Principal Market”) and will comply in
all material respects with the Company’s reporting, filing and other obligations under the by-laws or rules of the Financial Industry
Regulatory Authority (“FINRA”). If, so long as the Buyer and/or Investments beneficially own any of the Securities, the Company
receives any written notice from the Principal Market, FINRA, or the SEC with respect to either any alleged deficiency in the Company’s
compliance with applicable rules and regulations (including without limitation any comments from the SEC on any of the Company’s
documents filed with respect to the registration of the Securities (or the failure to have made any such filing) under the 1933 Act or
the Exchange Act) (each, a “Regulatory Notice”), then the Company shall promptly, and in any event within two (2) business
days, provide copies of the Regulatory Notice to the Buyer, and shall promptly, and in any event within five (5) business days of receipt
of the Regulatory Notice, other than with respect to comments on any of the Company’s filings with the SEC in which case Company
shall have such period of time as may be reasonably necessary (a “Regulatory Response”), respond in writing to the Principal
Market, FIRNA and/or SEC (as the case may be), setting forth the Company’s explanation and/or response to the issues raised in the
Regulatory Notice, with a view towards maintaining and/or regaining full compliance with the applicable rules and regulations of the Principal
Market, FIRNA and/or SEC and maintaining or regaining good standing of the Company with the Principal Market, FINRA and/or SEC, as the
case may be, the intent being to ensure that the Company maintain its reporting company status with the SEC and that its Common Stock
be and remain available for trading on the Principal Market. Further, at all times while any Securities are outstanding, the Common Stock
shall be DWAC Operational, and the Common Stock shall not be subject to any DTC “chill” designation or similar restriction
on the clearing of the Common Stock through DTC.
f.
Use of Proceeds. The Company shall use the proceeds from the sale of the Debenture for working capital purposes only subject
to customary restrictions. Absent the prior written approval of a majority of the principal amount of the Debenture then outstanding,
the Company shall not use any portion of the proceeds of the sale of the Debenture to (i) repay any indebtedness or other obligation of
the Company incurred prior to the date of this Agreement outside the normal course of business other than indebtedness not to exceed $150,000
incurred in connection with the membership interest purchase agreement entered into by the Company on or around October 13, 2023, for
the acquisition of Alliance Partners, LLC, a Nevada limited liability company, (ii) pay any dividends or redemption amount on any of the
Company’s equity or equity equivalents, (iii) pay any amounts, whether on account of debt obligations of the Company or otherwise,
except for compensation, to any officer, director or other related party of the Company or (iv) pay deferred compensation or any compensation
to any of the directors or officers of the Company in excess of the rate or amount paid or accrued during the fiscal year ended December,
2023 (as base compensation and excluding any discretionary amounts), other than modest increases consistent with prior practice that are
approved by the Company’s Board of Directors.
g.
Available Shares. Commencing on the date of execution and delivery of this Agreement, the Company shall have and maintain
authorized and reserved for issuance, free from preemptive rights, that number of shares equal to Two Hundred percent (200%) of the number
of shares of Common Stock (1) issuable based upon the conversion of the then-outstanding Debenture (including accrued interest thereon)
as may be required to satisfy the conversion rights of the Buyer pursuant to the terms and conditions of the Debenture (for the avoidance
of doubt, this shall be calculated based on the Conversion Price (as defined in the Debenture) (without giving effect to the 4.99% limitation
on ownership as set forth in the Debenture) and (2) issuable upon full exercise of the Warrant (without giving effect to the 4.99% limitation
on ownership as set forth in the Warrant) (collectively in the aggregate the “Required Reserve Amount”). The Company shall
monitor its compliance with the foregoing requirements on an ongoing basis. If at any time the Company does not have available an amount
of authorized and non-issued Shares required to be reserved pursuant to this Section, then the Company shall, without notice or demand
by the Buyer, call within thirty (30) days of such occurrence and hold within sixty (60) days of such occurrence a special meeting of
shareholders, for the sole purpose of increasing the number of shares authorized. Management of the Company shall recommend to shareholders
to vote in favor of increasing the number of Common Stock authorized at the meeting. Members of the Company’s management shall also
vote all of their own shares in favor of increasing the number of Common Stock authorized at the meeting. If the increase in authorized
shares is approved by the stockholders at the meeting, the Company shall implement the increase in authorized shares within one (1) business
day following approval at such meeting. Alternatively, to the extent permitted by applicable law, in lieu of calling and holding a meeting
as described above, the Company may, within thirty (30) days of the date when the Company does not have available an amount of authorized
and non-issued Shares required to be reserved as described above, procure the written consent of stockholders to increase the number of
shares authorized, and provide the stockholders with notice thereof as may be required under applicable law (including without limitation
Section 14(c) of the Exchange Act and Regulation 14C thereunder). Upon obtaining stockholder approval as aforesaid, the Company shall
cause the appropriate increase in its authorized shares of Common Stock within one (1) business day (or as soon thereafter as permitted
by applicable law). Company’s failure to comply with these provisions will be an Event of Default (as defined in the Debenture).
h.
[Intentionally Omitted].
i.
The Company shall provide the Transfer Agent and/or the Buyer, Investments or their respective brokerage and/or clearing firm with
all relevant legal opinions and other documentation requested by the Buyer or Investments in connection with the issuance of the Shares
or the Restricted Stock, or the sale thereof, to confirm the share issuance(s) such that the Shares and/or Restricted Stock may be deposited
with the applicable brokerage and/or clearing firm.
j.
No Payments to Affiliates or Related Parties. So long as any of the Debenture remains outstanding, the Company shall
not, absent the prior written consent of the holder of the Debenture, make any payments to any of the Company’s or the Subsidiaries’
respective affiliates or related parties, including without limitation payments or prepayments of principal or interest accrued on any
indebtedness or obligation in favor of affiliates or related parties. Notwithstanding anything to the contrary contained herein,
the provisions of this Section 4(j) shall not apply to payments to the Subsidiaries, or other businesses in which affiliates have an interest,
made in the ordinary course of business and consistent with past practice as disclosed in the SEC Documents.
k.
Notice of Material Adverse Effect. The Company shall notify the Buyer (and any subsequent holder of the Debenture), as soon
as practicable and in no event later than three (3) business days of the Company’s knowledge of any Material Adverse Effect on the
Company. For purposes of the foregoing, “knowledge” means the earlier of the Company’s actual knowledge or the Company’s
constructive knowledge upon due inquiry.
l.
Public Disclosure. Except to the extent required by applicable law, absent the Buyer’s prior written consent, the
Company shall not reference the name of the Buyer in any press release, securities disclosure, business plan, marketing or funding proposal.
m.
Nature of Transaction; Savings Clause. It is the parties’ express understanding and agreement that the transactions
contemplated by the Transaction Documents constitute an investment and not a loan. If nonetheless such transactions are deemed to be a
loan (as adjudicated by a court of law having proper jurisdiction and such adjudication is not subject to appeal), the Company shall not
be obligated or required to pay interest at a rate that could subject Buyer to either civil or criminal liability as a result of such
rate exceeding the maximum rate that the Buyer is permitted to charge under applicable law, and the Company’s obligations under
the Transaction Documents shall not be void or voidable on the basis of the Buyer’s lack of any license or registration as a lender
with any governmental authority. It is expressly understood and agreed by the parties that neither the amounts payable pursuant to Section
12, any redemption premium, remedy upon an Event of Default (as defined in the Debenture) or any Acceleration Amount (as defined in the
Debenture), original issue discount nor any investment returns of the Buyer on the sale of the Debenture, Warrant, or the sale of any
Shares (whether unrealized or realized) shall be construed as interest. If, by the terms of the Debenture, any other Transaction Document
or any other instrument, Company is at any time required or obligated to pay interest at a rate exceeding such maximum rate, interest
payable under the Debenture and/or such other Transaction Documents or other instrument shall be computed (or recomputed) at such maximum
rate, and the portion of all prior interest payments (if any) exceeding such maximum shall be applied to payment of the outstanding principal
of the Debenture.
n. No Integration.
The Company shall not make any offers or sales of any security (other than the Securities) under circumstances that would require
registration of the Securities being offered or sold hereunder under the Securities Act or cause the offering of the Securities to
be integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision applicable
to the Company or its securities.
o.
Corporate Existence. The Company will, so long as the Buyer beneficially owns any of the Securities, maintain its corporate
existence and shall not sell all or substantially all of the Company’s assets.
p.
Payment Set Aside. To the extent that the (i) Company makes a payment or payments to the Buyer hereunder, pursuant to this
Agreement, the Debenture, or any other agreement, certificate, instrument or document contemplated hereby or thereby, or (ii) the Buyer
enforces or exercises its rights hereunder, pursuant to this Agreement, the Debenture, or any other agreement, certificate, instrument
or document contemplated hereby or thereby, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof
(including but not limited to the sale of the Securities) are for any reason (i) subsequently invalidated, declared to be fraudulent or
preferential, set aside, recovered from, or disgorged by the Buyer, or (ii) are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver, government entity, or any other person or entity under any law (including, without limitation, any
bankruptcy law, foreign, state or federal law, common law or equitable cause of action), then (i) to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred and (ii) the Company shall immediately pay to the Buyer a dollar
amount equal to the amount that was for any reason (i) subsequently invalidated, declared to be fraudulent or preferential, set aside,
recovered from, or disgorged by the Buyer, or (ii) required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver,
government entity, or any other person or entity under any law (including, without limitation, any bankruptcy law, foreign, state or federal
law, common law or equitable cause of action).
q.
Shareholder Approval. “Shareholder Approval” means: the approval of a sufficient amount of holders of the Company’s
Common Stock to satisfy the shareholder approval requirements for such action as provided in Nasdaq Rule 5635, to effectuate the transactions
contemplated by this Agreement, including but not limited to the issuance of all of the Shares (including the Conversion Shares and Warrant
Shares) and Commitment Shares in excess of 19.99% of the issued and outstanding Common Stock on the Closing Date (the “Exchange
Cap”, of which at least 4,946,388 shares of Common Stock shall be allocated to the transactions contemplated by this Agreement),
subject to appropriate adjustment for any stock dividend, stock split, stock combination, rights offerings, reclassification or similar
transaction that proportionately decreases or increases the Common Stock). The Company shall hold a special meeting of shareholders within
ninety (90) calendar days after the date of this Agreement for the purpose of obtaining Shareholder Approval, with the recommendation
of the Company’s Board of Directors that such proposal be approved, and the Company shall solicit proxies from its shareholders
in connection therewith in the same manner as all other management proposals in such proxy statement and all management-appointed proxyholders
shall vote their proxies in favor of such proposal. The Company shall use its reasonable best efforts to obtain such Shareholder Approval.
If the Company does not obtain Shareholder Approval at the first meeting, the Company shall call a meeting as often as possible thereafter
to seek Shareholder Approval until the Shareholder Approval is obtained. Until such approval is obtained, the number of shares of Common
Stock issued in the aggregate, pursuant to this Agreement, upon conversion of the Debenture, and exercise of the Warrant shall be limited
to the Exchange Cap.
r.
No Broker-Dealer Acknowledgement. Absent a final adjudication from a court of competent jurisdiction stating otherwise,
the Company shall not to any person, institution, governmental or other entity, state, claim, allege, or in any way assert, that Buyer
is currently, or ever has been, a broker-dealer under the Securities Exchange Act of 1934.
5.
TRANSFER AGENT INSTRUCTIONS.
a.
Transfer Agent Instruction Letter. On or before the Closing Date, the Company shall irrevocably instruct its Transfer Agent
in writing using the letter substantially in the form of Exhibit B annexed hereto, with only such modifications as the Buyer agrees
to, executed by the Company, the Buyer and the Transfer Agent (the “Transfer Agent Instruction Letter”), to (i) reserve that
number of shares of Common Stock as is required under Section 4(g) hereof, and (ii) issue Common Stock from time to time upon conversion
of the Debenture in such amounts as specified from time to time by the Buyer to the Transfer Agent in a Notice of Conversion, in such
denominations to be specified by the Buyer in connection with each conversion of the Debenture. The Transfer Agent shall not be restricted
from issuing shares from only the allotment reserved hereunder for the Conversion Amount (as defined in the Debenture), but instead may,
to the extent necessary to satisfy the amount of shares issuable upon conversion, issue shares above and beyond the amount reserved on
account of the Conversion Amount, without any additional instructions or authorization from the Company, and the Company shall not provide
the Transfer Agent with any instructions or documentation contrary to the foregoing. As of the date of this Agreement, the Transfer Agent
is Transfer Online, Inc.. The Company shall at all times while any Debenture is outstanding engage a Transfer Agent which is a party to
the Transfer Agent Instruction Letter. If for any reason the Company’s Transfer Agent is not a signatory of the Transfer Agent Instruction
Letter while any Debenture, Warrant, or Restricted Stock are outstanding and held by the Buyer and/or Investments, then such Transfer
Agent shall nonetheless be deemed bound by the Transfer Agent Instruction Letter, and the Company shall neither (i) permit the Transfer
Agent to disclaim, disregard or refuse to abide by the Transfer Agent’s obligations, terms and agreements set forth in the Transfer
Agent Instruction Letter, nor (ii) issue any instructions to the Transfer Agent contrary to the obligations, terms and agreements set
forth in the Transfer Agent Instruction Letter . The Company shall not terminate the Transfer Agent or otherwise change Transfer Agents
without at least fifteen (15) days prior written notice to the Buyer and with the Buyer’s prior written consent to such change,
which the Buyer may grant or withhold in its sole discretion. The Company shall continuously monitor its compliance with the share reservation
requirements and, if and to the extent necessary to increase the number of reserved shares to remain and be at least the Required Reserve
Amount to account for any decrease in the Market Price of the Common Stock, the Company shall immediately (and in any event within three
(3) business days) notify the Transfer Agent in writing of the reservation of such additional shares, provided that in the event
that the number of shares reserved for conversion of the Debenture is less than the Required Reserve Amount, the Buyer may also directly
instruct the Transfer Agent to increase the reserved shares as necessary to satisfy the minimum reserved share requirement, and the Transfer
Agent shall act accordingly, provided, further, that the Company shall within one (1) business day provide any written confirmation,
assent or documentation thereof as the Transfer Agent may request to act upon a share increase instruction delivered by the Buyer. The
Company shall provide the Buyer with a copy of all written instructions to the Company’s Transfer Agent with respect to the reservation
of shares simultaneously with the issuance of such instructions to the Transfer Agent. The Company covenants that no instruction other
than such instructions referred to in this Section 5 and stop transfer instructions to give effect to Section 4(a) hereof prior to registration
and sale of the Shares under the 1933 Act will be given by the Company to the Transfer Agent and that the Shares shall otherwise be freely
transferable on the books and records of the Company as and to the extent provided in this Agreement and applicable law. If the Buyer
provides the Company and/or the Transfer Agent with an opinion of counsel reasonably satisfactory to the Company that registration of
a resale by the Buyer of any of the Securities in accordance with clause (1)(B) of Section 4(a) of this Agreement is not required under
the 1933 Act, the Company shall (except as provided in clause (2) of Section 4(a) of this Agreement) permit the de-legending or transfer
of the Securities and, in the case of the Shares, instruct the Company’s Transfer Agent to issue one or more certificates for Common
Stock without legend in such name and in such denominations as specified by the Buyer.
b.
Conversion. (i) The Company shall permit the Buyer to exercise the right to convert the Debenture by faxing, emailing or
delivering overnight an executed and completed Notice of Conversion to the Company or the Transfer Agent. If so requested by the Buyer
or the Transfer Agent, the Company shall within one (1) business day respond with its endorsement so as to confirm the outstanding principal
amount of any Debenture submitted for conversion or shall reconcile any difference with the Buyer promptly after receiving such Notice
of Conversion.
(ii)
The term “Conversion Date” means, with respect to any conversion elected by the holder of the Debenture, the date specified
in the Notice of Conversion, provided the copy of the Notice of Conversion is given either via mail or facsimile to or otherwise delivered
to the Transfer Agent and/or the Company in accordance with the provisions hereof so that it is received by the Transfer Agent and/or
the Company on or before such specified date.
(iii)
The Company shall deliver (or will cause the Transfer Agent to deliver) the Shares issuable upon conversion as follows: (1) if
the Company is then DWAC Operational, via DWAC, (2) if the Common Stock is then eligible for the Depository Trust Company’s Direct
Registration System (“DRS”), if so requested by the Buyer, or (3) if the Company is not then DWAC Operational or the Common
Stock is not then eligible for DRS, in certificated form, to the Buyer at the address specified in the Notice of Conversion (which may
be the Buyer’s address for notices as contemplated by Section 10 hereof or a different address) or Investments at the address specified
in the Exercise Notice (as defined in the Warrant) (each an “Exercise Notice”), via express courier, in each case within two
(2) business days (the “Delivery Date”) after the business day on which the Company or the Transfer Agent has received the
Notice of Conversion or Exercise Notice (by facsimile, email or other delivery).
c.
Failure to Timely Issue Shares or De-Legended Shares. The Company’s failure to issue and deliver Shares to the Buyer
(either by DWAC, DRS or in certificated form, as required by Section 5(b)) on or before the Delivery Date shall be considered an Event
of Default, which shall entitle the Buyer to certain remedies set forth in the Debenture, Warrant, and provided by applicable law.
Similarly, the Company’s failure to issue and deliver Common Stock in unrestricted form without a restrictive legend when required
under the Transaction Documents shall entitle the Buyer to damages for the diminution in value (if any) of the relevant shares between
the date delivery was due versus the date ultimately delivered in unrestricted form. The Company acknowledges that its failure to timely
honor a Notice of Conversion (or the occurrence of any other Event of Default) and/or Exercise Notice shall cause definable financial
hardship on the Buyer(s) and that the remedies set forth herein and in the Debenture is reasonable and appropriate.
d.
Duties of Company; Authorization. The Company shall inform the Transfer Agent of the reservation of shares contemplated
by Section 4(g) and this Section 5, and shall keep current in its payment obligations to the Transfer Agent such that the Transfer Agent
will continue to process share transfers and the initial issuance of shares of Common Stock upon the conversion of Debenture. The Company
hereby authorizes and agrees to authorize the Transfer Agent to correspond and otherwise communicate with the Buyer or their representatives
in connection with the foregoing and other matters related to the Common Stock. Further, the Company hereby authorizes the Buyer or its
representative to provide instructions to the Transfer Agent that are consistent with the foregoing and instructs the Transfer Agent to
honor any such instructions. Should the Company fail for any reason to keep current in its payment obligations to the Transfer Agent,
the Buyer and/or Investments may pay such amounts as are necessary to compensate the Transfer Agent for performing its duties with respect
to share reservation, issuance of Shares and/or de-legending certificates representing Restricted Stock, and all amounts so paid shall
be promptly reimbursed by the Company. If not so reimbursed within thirty (30) days, such amounts shall, at the option of the Buyer and
without prior notice to or consent of the Company, be added to the principal amount due under the Debenture held by the Buyer, whereupon
interest will begin to accrue on such amounts at the rate specified in the Debenture.
e.
Effect of Bankruptcy. The Buyer shall be entitled to exercise its conversion privilege with respect to the Debenture notwithstanding
the commencement of any case under 11 U.S.C. §101 et seq. (the “Bankruptcy Code”). In the event the Company is
a debtor under the Bankruptcy Code, the Company hereby waives, to the fullest extent permitted, any rights to relief it may have under
11 U.S.C. §362 in respect of the Buyer’s conversion privilege. The Company hereby waives, to the fullest extent permitted,
any rights to relief it may have under 11 U.S.C. §362 in respect of the conversion of the Debenture. The Company agrees, without
cost or expense to the Buyer, to take or to consent to any and all action necessary to effectuate relief under 11 U.S.C. §362.
6.
CLOSING.
a.
Closing. Promptly upon the execution and delivery of this Agreement, the Debenture, and all conditions in Sections 7 and
8 herein are met (the “Closing Date”), (A) the Company shall deliver to the Buyer the following: (i) the Debenture; (ii) the
Transfer Agent Instruction Letter; (iii) duly executed counterparts of the Transaction Documents; and (iv) an officer’s certificate
of the Company confirming the accuracy of the Company’s representations and warranties contained herein, and (B) the Buyer shall
deliver to the Company the following: (i) the Purchase Price and (ii) duly executed counterparts of the Transaction Documents (as applicable).
The Company shall immediately pay the fees due under Section 12 of this Agreement upon receipt of the Purchase Price if Buyer does not
withhold such amounts from the Purchase Price pursuant to Section 12.
b.
Location and Time of Closing. The Closing shall be deemed to occur on the related Closing Date at the office of the Buyer’s
counsel and shall take place no later than 5:00 P.M., east coast time, on such day or such other time as is mutually agreed upon by the
Company and the Buyer.
7.
CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.
The Company’s obligation
to sell the Debenture to the Buyer pursuant to this Agreement on each Closing Date is conditioned upon:
a.
Purchase Price. Delivery to the Company of good funds as payment in full of the respective Purchase Price for the Debenture
at each Closing in accordance with this Agreement;
b.
Representations and Warranties; Covenants. The accuracy on the Closing Date of the representations and warranties of the
Buyer contained in this Agreement, each as if made on such date, and the performance by the Buyer on or before such date of all covenants
and agreements of the Buyer required to be performed on or before such date; and
c.
Laws and Regulations; Consents and Approvals. There shall not be in effect any law, rule or regulation prohibiting or restricting
the transactions contemplated hereby, or requiring any consent or approval which shall not have been obtained.
8.
CONDITIONS TO THE BUYER’S OBLIGATION TO PURCHASE.
The Buyer’s obligation
to purchase the Debenture at each Closing is conditioned upon:
a.
Transaction Documents. The execution and delivery of this Agreement by the Company;
b.
Debenture. Delivery by the Company to the Buyer of the Debenture to be purchased in accordance with this Agreement, as well
as the execution and delivery of the Registration Rights Agreement and Warrant by the Company;
c.
Section 4(a)(2) Exemption. The Debenture, Warrant, and the Shares shall be exempt from registration under the Securities
Act of 1933 (as amended), pursuant to Section 4(a)(2) thereof;
d.
DWAC Status. The Common Stock shall be DWAC Operational;
e.
Representations and Warranties; Covenants. The accuracy in all material respects on the Closing Date of the representations
and warranties of the Company contained in this Agreement, each as if made on such date, and the performance by the Company on or before
such date of all covenants and agreements of the Company required to be performed on or before such date;
f.
Good-faith Opinion. It should be Buyer’s reasonable belief that (i) no Event of Default under the terms of any outstanding
indebtedness of the Company shall have occurred or would likely occur with the passage of time and (ii) no material adverse change in
the financial condition or business operations of the Company shall have occurred;
g.
Legal Proceedings. There shall be no litigation, criminal or civil, regulatory impairment or other legal and/or administrative
proceedings challenging or seeking to limit the Company’s ability to issue the Securities or the Common Stock;
h.
Company Counsel Opinion Letter. Delivery by the Company of an opinion letter issued by the Company’s counsel, in the
form acceptable to the Buyer and the Placement Agent, covering the transactions contemplated by this Agreement and the issuance of the
Securities.
i.
Corporate Resolutions. Delivery by the Company to the Buyer a copy of resolutions of the Company’s board of directors,
approving and authorizing the execution, delivery and performance of the Transaction Documents and the transactions contemplated thereby
in the form attached hereto as Exhibit C (the “Irrevocable Resolutions”);
j.
Officer’s Certificate. Delivery by the Company to the Buyer of a certificate of the Chief Executive Officer of the
Company in the form attached hereto as Exhibit D;
k.
Certificate of Good Standing. Delivery by the Company to the Buyer of a copy of a certificate of good standing with respect
to the Company, issued by the Secretary of State of the state of incorporation of the Company, dated such a date as is reasonably acceptable
to Buyer, evidencing the good standing thereof;
l.
Laws and Regulations; Consents and Approvals. There shall not be in effect any law, rule or regulation prohibiting or restricting
the transactions contemplated hereby, or requiring any consent or approval which shall not have been obtained; and
m.
Adverse Changes. From and after the date hereof to and including each Closing Date, (i) the trading of the Common Stock
shall not have been suspended by the SEC, FINRA, or any other governmental or self-regulatory organization, and trading in securities
generally on the Principal Market shall not have been suspended or limited, nor shall minimum prices been established for securities traded
on the Principal Market; (ii) there shall not have occurred any outbreak or escalation of hostilities involving the United States or any
material adverse change in any financial market that in either case in the reasonable judgment of the Buyer makes it impracticable or
inadvisable to purchase the Debenture.
9.
GOVERNING LAW; MISCELLANEOUS.
a.
MANDATORY FORUM SELECTION. Any dispute arising under, relating to, or in connection
with the Agreement or related to any matter which is the subject of or incidental to the Agreement (whether or not such claim is based
upon breach of contract or tort) shall be subject to the exclusive jurisdiction and venue of the state COURTS located in MIAMI-DADE County,
FLORIDA and/or federal courts located in MIAMI-DADE County, FLORIDA. This provision is intended to be a “mandatory”
forum selection clause and governed by and interpreted consistentLY with FLORIDA law.
b.
Governing Law. Except in the case of the Mandatory Forum Selection clause above, this Agreement shall be delivered and accepted
in and shall be deemed to be contracts made under and governed by the internal laws of the State of Delaware, and for all purposes shall
be construed in accordance with the laws of the State of Delaware, without giving effect to the choice of law provisions. To the extent
determined by the applicable court described above, the Company shall reimburse the Buyer for any reasonable legal fees and disbursements
incurred by the Buyer in enforcement of or protection of any of its rights under any of the Transaction Documents.
c.
Waivers. Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in
exercising such right or remedy, shall not operate as a waiver thereof.
d.
Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each
of the parties hereto.
e.
Construction. All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as
the context may require.
f.
Facsimiles; E-mails. A facsimile or email transmission of this signed Agreement or a Notice of Conversion under the Debenture
shall be legal and binding on all parties hereto. Such electronic signatures shall be the equivalent of original signatures.
g.
Counterparts. This Agreement may be signed in one or more counterparts, each of which shall be deemed an original.
h.
Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation
of, this Agreement.
i.
Enforceability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement or the validity or enforceability
of this Agreement in any other jurisdiction.
j.
Amendment. This Agreement may be amended only by the written consent of a majority in interest of the holders of the Debenture
and an instrument in writing signed by the Company.
k.
Entire Agreement. This Agreement, together with the other Transaction Documents, supersedes all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof.
l.
No Strict Construction. This Agreement shall be construed as if both Parties had equal say in its drafting, and thus shall
not be construed against the drafter.
m.
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.
n.
Placement Agent as Third Party Beneficiary. The Placement Agent shall be the third-party beneficiary of the representations
and warranties of the Company in Section 3 and the representations and warranties of the Buyer in Section 2.
10.
NOTICES.
Any notice required or permitted
hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively given on the earliest of:
a.
the date delivered, if delivered by personal delivery as against written receipt therefor or by facsimile or email transmission,
b.
the third (3rd) business day after deposit, postage prepaid, in the United States Postal Service by registered or certified
mail, or
c.
the first (1st) business day after deposit with a recognized courier service (e.g. FedEx, UPS, DHL, US Postal Service)
for delivery by next-day express courier, with delivery costs and fees prepaid,
in each case, addressed to each
of the other parties thereunto entitled at the following addresses (or at such other addresses as such party may designate by ten (10)
days’ advance written notice similarly given to each of the other parties hereto):
COMPANY: |
AppTech Payments Corp.
5876 Owens Ave, Suite 100
Carlsbad, CA 92008
Attention: Luke D’Angelo, Chief Executive
Officer
Email: Ldangelo@apptechcorp.com
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BUYER: |
[_______________]
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11.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The Company’s representations and warranties herein shall survive for
so long as any Debenture is outstanding, and shall inure to the benefit of the Buyer, its successors and assigns.
12.
FEES; EXPENSES.
a.
Commitment Fee. A non-accountable fee (the “Commitment Fee”) of $20,000.00 shall be withheld from the Purchase
Price by the Buyer on the Closing Date to cover the Buyer’s accounting fees, legal fees, and other transactional costs incurred
in connection with the transactions contemplated by this Agreement. Further, the Company shall issue 100,000 shares of Restricted Stock
(the “Commitment Shares”) on the Closing Date as follows: 50,000 of the Commitment Shares to Investments and 50,000 of the
Commitment Shares to Buyer, as a commitment fee in connection with the issuance of the Debenture. Further, the Company shall issue the
Warrant to Investments on the Closing Date as a commitment fee in connection with the issuance of the Debenture, and such Warrant shall
be earned in full as of the Closing Date.
[Signature Page Follows]
IN WITNESS WHEREOF,
this Agreement has been duly executed by the Buyer and the Company as of the date first set forth above.
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COMPANY:
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APPTECH
PAYMENTS CORP.
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By: [___________] |
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Name: Luke D’Angelo
Title: Chief Executive Officer |
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BUYER:
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[_______________] |
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[Signature Page to Securities Purchase Agreement]
SCHEDULE 3(b)
COMPANY ORGANIZATION CHART
Subsidiary / Affiliate
Name and Relationship |
Jurisdiction of Incorporation |
Percentage of Ownership |
[___________] |
[___________] |
[___________] |
[___________] |
[___________] |
[___________] |
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SCHEDULE 3(c)
COMPANY CAPITALIZATION TABLE
COMMON STOCK AND COMMON STOCK EQUIVALENTS
ISSUED, OUTSTANDING AND RESERVED
DESCRIPTION |
AMOUNT |
Authorized Capital Stock |
105,363,158 |
Authorized Common Stock |
105,263,158 |
Issued Common Stock |
[___________] |
Outstanding Common Stock |
[___________] |
Treasury Stock |
[___________] |
Common Stock Previously Reserved (Warrants below) |
[___________] |
Authorized, but unissued |
[___________] |
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Authorized Preferred Stock |
100,000 |
Issued Preferred Stock (14 shares, each convert to 82 shares = 1,148 shares) |
1,148 |
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Reserved for Equity Incentive Plans |
[___________] |
Reserved for Convertible Debt |
[___________] |
Reserved for Warrants |
[___________] |
Reserved for Options |
[___________] |
Reserved for Other Purposes |
[___________] |
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EXHIBITS
Exhibit A |
FORM OF DEBENTURE |
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Exhibit B |
FORM OF TRANSFER AGENT INSTRUCTION
LETTER |
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Exhibit C |
FORM OF RESOLUTIONS OF THE BOARD OF DIRECTORS |
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Exhibit D |
FORM OF OFFICER’S CERTIFICATE |
EXHIBIT A
FORM OF DEBENTURE
(see attached)
EXHIBIT B
APPTECH PAYMENTS CORP.
IRREVOCABLE TRANSFER AGENT INSTRUCTION LETTER
(see attached)
EXHIBIT C
IRREVOCABLE CORPORATE RESOLUTIONS
OF THE
BOARD OF DIRECTORS OF
APPTECH PAYMENTS CORP.
(see attached)
EXHIBIT D
OFFICER'S CERTIFICATE
(see attached)
EXHIBIT I
ARTICLES OF INCORPORATION
(see attached)
EXHIBIT II
BYLAWS
(see attached)
EXHIBIT III
RESOLUTIONS OF THE BOARD OF DIRECTORS
(see attached)
Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS
AGREEMENT (this "Agreement"), dated as of July 10, 2024, is entered into by and between APPTECH PAYMENTS CORP.,
a Delaware corporation (the "Company"), and [________________] (together with it permitted assigns, the “Investor”).
Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the securities purchase
agreement by and between the parties hereto, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from
time to time, the "Purchase Agreement").
WHEREAS:
The Company has agreed, upon
the terms and subject to the conditions of the Purchase Agreement, to sell to the Investor the Securities (as defined in the Purchase
Agreement) and to induce the Investor to enter into the Purchase Agreement, the Company has agreed to provide certain registration rights
under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively,
the "Securities Act"), and applicable state securities laws.
NOW, THEREFORE, in
consideration of the promises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Company and the Investor hereby agree as follows:
1.DEFINITIONS.
As used in this Agreement, the
following terms shall have the following meanings:
a."Investor"
shall have the meaning set forth above.
b."Person"
means any individual or entity including but not limited to any corporation, a limited liability company, an association, a partnership,
an organization, a business, an individual, a governmental or political subdivision thereof or a governmental agency.
c."Register,"
"registered," and "registration" refer to a registration effected by preparing and filing one or more
registration statements of the Company in compliance with the Securities Act and/or pursuant to Rule 415 under the Securities Act or any
successor rule providing for offering securities on a continuous basis ("Rule 415"), and the declaration or ordering
of effectiveness of such registration statement(s) by the United States Securities and Exchange Commission (the "SEC").
d."Registrable
Securities" means all of the Conversion Shares (as defined in the Purchase Agreement) (the “Conversion Shares”)
which may, from time to time, be issued to the Investor under the Debenture (as defined in the Purchase Agreement) (the “Debenture”),
without regard to any limitation on beneficial ownership, all of the Warrant Shares (as defined in the Purchase Agreement) (the “Warrant
Shares”) which may, from time to time, be issued to [_______________] (“Investments”) under the Warrant (as
defined in the Purchase Agreement) (the “Warrant”), without regard to any limitation on beneficial ownership, and the
Commitment Shares (as defined in the Purchase Agreement) (the “Commitment Shares”) (which shall be issued to Investor
and Investments pursuant to the Purchase Agreement), and shares of Common Stock issued to the Investor and Investments as a result of
any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, without regard to any limitation on beneficial
ownership in the Debenture or Warrant.
e."Registration
Statement" means one or more registration statements of the Company covering only the sale of the Registrable Securities.
2.REGISTRATION.
a.Mandatory
Registration. The Company shall, within thirty (30) calendar days from the date of this Agreement, file with the SEC an initial Registration
Statement covering the maximum number of Registrable Securities (beginning with the Commitment Shares issued to Investor and Investments)
as shall be permitted to be included thereon in accordance with applicable SEC rules, regulations and interpretations so as to permit
the resale of such Registrable Securities by the Investor and Investments, including but not limited to under Rule 415 under the Securities
Act at then prevailing market prices (and not fixed prices), subject to the aggregate number of authorized shares of the Company’s
Common Stock then available for issuance in its Certificate of Incorporation. The initial Registration Statement shall register only the
Registrable Securities. The Investor and its counsel shall have a reasonable opportunity to review
and comment upon such Registration Statement and any amendment or supplement to such Registration Statement and any related prospectus
prior to its filing with the SEC, and the Company shall give due consideration to all reasonable comments. The Investor shall furnish
all information reasonably requested by the Company for inclusion therein. The Company shall use its reasonable best efforts to have the
Registration Statement declared effective by the SEC within sixty (60) calendar days from the date hereof (or at the earliest possible
date if prior to sixty (60) calendar days from the date hereof), and any amendment declared effective by the SEC at the earliest possible
date. The Company shall use reasonable best efforts to keep the Registration Statement effective, including but not limited to pursuant
to Rule 415 promulgated under the Securities Act and available for the resale by the Investor and Investments of all of the Registrable
Securities covered thereby at all times until the date on which the Investor and Investments shall have sold all the Registrable Securities
covered thereby (the "Registration Period"). The Registration Statement (including any amendments or supplements thereto
and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein, or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading.
In the event that the Registration Statement becomes stale, the Company shall immediately file one or more post-effective amendments to
obtain an effective Registration Statement.
b.Rule
424 Prospectus. The Company shall, as required by applicable securities regulations, from time to time file (in each case, at the
earliest possible date) with the SEC, pursuant to Rule 424 promulgated under the Securities Act, the prospectus and prospectus supplements,
if any, to be used in connection with sales of the Registrable Securities under the Registration Statement. The Company shall file such
initial prospectus covering the Investor’s and Investments’ sale of the Registrable Securities on the same date that the Registration
Statement is declared effective by the SEC. The Investor and its counsel shall have a reasonable opportunity to review and comment upon
such prospectus prior to its filing with the SEC, and the Company shall give due consideration to all such comments. The Investor shall
use its reasonable best efforts to comment upon such prospectus within one (1) Business Day from the date the Investor receives the final
pre-filing version of such prospectus.
c.Sufficient
Number of Shares Registered. In the event the number of shares available under the Registration Statement is insufficient to cover
all of the Registrable Securities, the Company shall amend the Registration Statement or file a new Registration Statement (a “New
Registration Statement”), so as to cover all of such Registrable Securities (subject to the limitations set forth in Section
2(a)) as soon as practicable, but in any event not later than ten (10) Business Days after the necessity therefor arises, subject to any
limits that may be imposed by the SEC pursuant to Rule 415 under the Securities Act. The Company shall use it reasonable best efforts
to cause such amendment and/or New Registration Statement to become effective as soon as practicable following the filing thereof. In
the event that any of the Registrable Securities are not included in the Registration Statement, or have not been included in any New
Registration Statement and the Company files any other registration statement under the Securities Act (other than on Form S-4, Form S-8,
or with respect to other employee related plans or rights offerings) (“Other Registration Statement”) then the Company
shall include such remaining Registrable Securities in such Other Registration Statement. The Company agrees that it shall
not file any such Other Registration Statement unless all of the Registrable Securities have been included in such Other Registration
Statement or otherwise have been registered for resale as described above.
d. Offering. If the staff
of the SEC (the “Staff”) or the SEC seeks to characterize any offering pursuant to a Registration Statement filed pursuant
to this Agreement as constituting an offering of securities that does not permit such Registration Statement to become effective and be
used for resales by the Investor or Investments under Rule 415 at then-prevailing market prices (and not fixed prices), or if after the
filing of the initial Registration Statement with the SEC pursuant to Section 2(a), the Company is otherwise required by the Staff or
the SEC to reduce the number of Registrable Securities included in such initial Registration Statement, then the Company shall reduce
the number of Registrable Securities to be included in such initial Registration Statement (with the prior consent, which shall not be
unreasonably withheld, of the Investor and its legal counsel as to the specific Registrable Securities to be removed therefrom) until
such time as the Staff and the SEC shall so permit such Registration Statement to become effective and be used as aforesaid. In the event
of any reduction in Registrable Securities pursuant to this paragraph, the Company shall file one or more New Registration Statements
in accordance with Section 2(c) until such time as all Registrable Securities have been included in Registration Statements that have
been declared effective and the prospectus contained therein is available for use by the Investor and Investments. Notwithstanding any
provision herein or in the Purchase Agreement to the contrary, the Company’s obligations to register Registrable Securities (and
any related conditions to the Investor’s and Investments’ obligations) shall be qualified as necessary to comport with any
requirement of the SEC or the Staff as addressed in this Section 2(d).
3.RELATED
OBLIGATIONS.
With respect to the Registration
Statement and whenever any Registrable Securities are to be registered pursuant to Section 2 including on any New Registration Statement,
the Company shall use its reasonable best efforts to effect the registration of the Registrable Securities in accordance with the intended
method of disposition thereof and, pursuant thereto, the Company shall have the following obligations:
a.The
Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to any registration
statement and the prospectus used in connection with such registration statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the Securities Act, as may be necessary to keep the Registration Statement or any New Registration Statement effective
at all times during the Registration Period, and, during such period, comply with the provisions of the Securities Act with respect to
the disposition of all Registrable Securities of the Company covered by the Registration Statement or any New Registration Statement until
such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by
the seller or sellers thereof as set forth in such registration statement.
b.The
Company shall permit the Investor to review and comment upon the Registration Statement or any New Registration Statement and all amendments
and supplements thereto at least two (2) Business Days prior to their filing with the SEC, and not file any document in a form to which
Investor reasonably objects. The Investor shall use its reasonable best efforts to comment upon the Registration Statement or any New
Registration Statement and any amendments or supplements thereto within two (2) Business Days from the date the Investor receives the
final version thereof. The Company shall furnish to the Investor, without charge any correspondence from the SEC or the staff of the SEC
to the Company or its representatives relating to the Registration Statement or any New Registration Statement.
c.Upon
request of the Investor, the Company shall furnish to the Investor, (i) promptly after the same is prepared and filed with the SEC, at
least one copy of such registration statement and any amendment(s) thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits, (ii) upon the effectiveness of any registration statement, a copy of the prospectus
included in such registration statement and all amendments and supplements thereto (or such other number of copies as the Investor may
reasonably request) and (iii) such other documents, including copies of any preliminary or final prospectus, as the Investor may reasonably
request from time to time in order to facilitate the disposition of the Registrable Securities owned by the Investor. For the avoidance
of doubt, any filing available to the Investor via the SEC’s live EDGAR system shall be deemed “furnished to the Investor”
hereunder.
d.The
Company shall use reasonable best efforts to (i) register and qualify the Registrable Securities covered by a registration statement under
such other securities or "blue sky" laws of such jurisdictions in the United States as the Investor and Investments reasonably
requests, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration
Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business
in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d), (y) subject itself to general taxation
in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify
the Investor and Investments who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension
of the registration or qualification of any of the Registrable Securities for sale under the securities or "blue sky" laws of
any jurisdiction in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.
e.As
promptly as practicable after becoming aware of such event or facts, the Company shall notify the Investor and Investments in writing
of the happening of any event or existence of such facts as a result of which the prospectus included in any registration statement, as
then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they were made, not misleading, and promptly prepare a supplement
or amendment to such registration statement to correct such untrue statement or omission, and deliver a copy of such supplement or amendment
to the Investor and Investments (or such other number of copies as the Investor may reasonably request). The Company shall also promptly
notify the Investor and Investments in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been
filed, and when a registration statement or any post-effective amendment has become effective (notification of such effectiveness shall
be delivered to the Investor and Investments by email on the same day of such effectiveness and by overnight mail), (ii) of any request
by the SEC for amendments or supplements to any registration statement or related prospectus or related information, and (iii) of the
Company's reasonable determination that a post-effective amendment to a registration statement would be appropriate.
f.The
Company shall use its reasonable best efforts to prevent the issuance of any stop order or other suspension of effectiveness of any registration
statement, or the suspension of the qualification of any Registrable Securities for sale in any jurisdiction and, if such an order or
suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify the Investor
and Investments of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of
any proceeding for such purpose.
g.The
Company shall (i) cause all the Registrable Securities to be listed on each securities exchange on which securities of the same class
or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules
of such exchange, or (ii) secure designation and quotation of all the Registrable Securities on the Principal Market (as defined in the
Purchase Agreement). The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section.
h.The
Company shall cooperate with the Investor and Investments to facilitate the timely preparation and delivery of the Registrable Securities
(not bearing any restrictive legend) either by DWAC, DRS, or in certificated form if DWAC or DRS is unavailable, to be offered pursuant
to any registration statement and enable such Registrable Securities to be in such denominations or amounts as the Investor and Investments
may reasonably request and registered in such names as the Investor and Investments may request.
i.The
Company shall at all times provide a transfer agent and registrar with respect to its Common Stock.
j.If
reasonably requested by the Investor or Investments, the Company shall (i) immediately incorporate in a prospectus supplement or post-effective
amendment such information as the Investor or Investments believes should be included therein relating to the sale and distribution of
Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being sold, the
purchase price being paid therefor and any other terms of the offering of the Registrable Securities; (ii) make all required filings of
such prospectus supplement or post-effective amendment as soon as practicable upon notification of the matters to be incorporated in such
prospectus supplement or post-effective amendment; and (iii) supplement or make amendments to any registration statement.
k.The
Company shall use its reasonable best efforts to cause the Registrable Securities covered by any registration statement to be registered
with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable
Securities.
l.Within
one (1) Business Day after any registration statement which includes the Registrable Securities is ordered effective by the SEC, the Company
shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies
to the Investor and Investments) confirmation that such registration statement has been declared effective by the SEC in the form attached
hereto as Exhibit A. Thereafter, if requested by the Investor or Investments at any time, the Company shall require its counsel
to deliver to the Investor and Investments a written confirmation whether or not the effectiveness of such registration statement has
lapsed at any time for any reason (including, without limitation, the issuance of a stop order) and whether or not the registration statement
is current and available to the Investor and Investments for sale of all of the Registrable Securities.
m.The
Company shall take all other reasonable actions necessary to expedite and facilitate disposition by the Investor and Investments of Registrable
Securities pursuant to any registration statement.
4.OBLIGATIONS
OF THE INVESTOR.
a.The
Company shall notify the Investor in writing of the information the Company reasonably requires from the Investor in connection with any
registration statement hereunder. The Investor shall furnish to the Company such information regarding itself, the Registrable Securities
held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect the
registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably
request.
b.The
Investor agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of
any registration statement hereunder.
c.The
Investor agrees that, upon receipt of any notice from the Company of the happening of any event or existence of facts of the kind described
in Section 3(f) or the first sentence of 3(e), the Investor will immediately discontinue disposition of Registrable Securities pursuant
to any registration statement(s) covering such Registrable Securities until the Investor's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3(f) or the first sentence of 3(e). Notwithstanding anything to the contrary, the Company shall
cause its transfer agent to promptly deliver shares of Common Stock without any restrictive legend in accordance with the terms of the
Purchase Agreement, Debenture, and Warrant as applicable in connection with any sale of Registrable Securities with respect to which the
Investor has entered into a contract for sale prior to the Investor's receipt of a notice from the Company of the happening of any event
of the kind described in Section 3(f) or the first sentence of Section 3(e) and for which the Investor has not yet settled.
5.EXPENSES
OF REGISTRATION.
All reasonable expenses, other
than sales or brokerage commissions, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3,
including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, and fees and disbursements
of counsel for the Company, shall be paid by the Company.
6.INDEMNIFICATION.
a.To
the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend the Investor, Investments,
the members, the directors, officers, partners, employees, agents, representatives of the Investor, the members, the directors, officers,
partners, employees, agents, representatives of the Investments, and each Person, if any, who controls the Investor or Investments within
the meaning of the Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange Act") (each, an "Indemnified
Person"), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, attorneys' fees, amounts
paid in settlement or expenses, joint or several, (collectively, "Claims") incurred in investigating, preparing or defending
any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental,
administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may
be a party thereto ("Indemnified Damages"), to which any of them may become subject insofar as such Claims (or actions
or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged
untrue statement of a material fact in the Registration Statement, any New Registration Statement or any post-effective amendment thereto
or in any filing made in connection with the qualification of the offering under the securities or other "blue sky" laws of
any jurisdiction in which Registrable Securities are offered ("Blue Sky Filing"), or the omission or alleged omission
to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement
or alleged untrue statement of a material fact contained in the final prospectus (as amended or supplemented, if the Company files any
amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary
to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading, (iii)
any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any other law, including, without limitation,
any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to
the Registration Statement or any New Registration Statement or (iv) any material violation by the Company of this Agreement (the matters
in the foregoing clauses (i) through (iv) being, collectively, "Violations"). The Company shall reimburse each Indemnified
Person promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred
by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation
which occurs in reliance upon and in conformity with information about the Investor furnished in writing to the Company by such Indemnified
Person expressly for use in connection with the preparation of the Registration Statement, any New Registration Statement or any such
amendment thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant to Section 3(c) or Section
3(e); (ii) with respect to any superseded prospectus, shall not inure to the benefit of any such person from whom the person asserting
any such Claim purchased the Registrable Securities that are the subject thereof (or to the benefit of any person controlling such person)
if the untrue statement or omission of material fact contained in the superseded prospectus was corrected in the revised prospectus, as
then amended or supplemented, if such revised prospectus was timely made available by the Company pursuant to Section 3(c) or Section
3(e), and the Indemnified Person was promptly advised in writing not to use the incorrect prospectus prior to the use giving rise to a
violation and such Indemnified Person, notwithstanding such advice, used it; (iii) shall not be available to the extent such Claim is
based on a failure of the Investor to deliver or to cause to be delivered the prospectus made available by the Company, if such prospectus
was timely made available by the Company pursuant to Section 3(c) or Section 3(e); and (iv) shall not apply to amounts paid in settlement
of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably
withheld. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified
Person and shall survive the transfer of the Registrable Securities by the Investor or Investments pursuant to Section 9.
b.Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or proceeding
(including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice
of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party
so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually
satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that
an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses to be paid by the
indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of
the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or potential differing interests
between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding. The Indemnified
Party or Indemnified Person shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such
action or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified
Party or Indemnified Person which relates to such action or claim. The indemnifying party shall keep the Indemnified Party or Indemnified
Person fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying
party shall be liable for any settlement of any action, claim or proceeding effected without its written consent, provided, however, that
the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the consent
of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise which
does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person
of a release from all liability in respect to such claim or litigation. Following indemnification as provided for hereunder, the indemnifying
party shall be subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations
relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within
a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified
Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend
such action.
c.The
indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Damages are incurred.
d.The
indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified
Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.
7.CONTRIBUTION.
To the extent any indemnification
by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any seller of Registrable Securities who was not guilty of fraudulent misrepresentation; and
(ii) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller
from the sale of such Registrable Securities.
8.REPORTS
AND DISCLOSURE UNDER THE SECURITIES ACTS.
With a view to making available
to the Investor and Investments the benefits of Rule 144 promulgated under the Securities Act or any other similar rule or regulation
of the SEC that may at any time permit the Investor and Investments to sell securities of the Company to the public without registration
("Rule 144"), the Company agrees, at the Company’s sole expense, to:
a.make
and keep public information available, as those terms are understood and defined in Rule 144;
b.file
with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act
so long as the Company remains subject to such requirements and the filing of such reports and other documents is required for the applicable
provisions of Rule 144;
c.furnish
to the Investor and Investments so long as the Investor or Investments owns Registrable Securities, promptly upon request, (i) a written
statement by the Company that it has complied with the reporting and or disclosure provisions of Rule 144, the Securities Act and the
Exchange Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested to permit the Investor and Investments to sell such securities
pursuant to Rule 144 without registration; and
d.take
such additional action as is requested by the Investor or Investments to enable the Investor and Investments to sell the Registrable Securities
pursuant to Rule 144, including, without limitation, delivering all such legal opinions, consents, certificates, resolutions and instructions
to the Company’s transfer agent as may be requested from time to time by the Investor or Investments and otherwise fully cooperate
with Investor, Investments, Investor’s broker, and Investments’ broker to effect such sale of securities pursuant to Rule
144.
The Company agrees that damages
may be an inadequate remedy for any breach of the terms and provisions of this Section 8 and that Investor and Investments shall, whether
or not it is pursuing any remedies at law, be entitled to equitable relief in the form of a preliminary or permanent injunctions, without
having to post any bond or other security, upon any breach or threatened breach of any such terms or provisions.
9. ASSIGNMENT OF REGISTRATION RIGHTS.
The Company shall not assign
this Agreement or any rights or obligations hereunder without the prior written consent of the Investor and Investments.
10.AMENDMENT
OF REGISTRATION RIGHTS.
No provision of this Agreement
may be amended or waived by the parties from and after the date that is one Business Day immediately preceding the initial filing of the
Registration Statement with the SEC. Subject to the immediately preceding sentence, no provision of this Agreement may be (i) amended
other than by a written instrument signed by both parties hereto or (ii) waived other than in a written instrument signed by the party
against whom enforcement of such waiver is sought. Failure of any party to exercise any right or remedy under this Agreement or otherwise,
or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.
11.MISCELLANEOUS.
a.A
Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable Securities.
If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities,
the Company shall act upon the basis of instructions, notice or election received from the registered owner of such Registrable Securities.
b.Any
notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing
and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by email (provided
confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one (1) Business
Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the
same. The addresses for such communications shall be:
If to the Company:
AppTech
Payments Corp.
5876
Owens Ave, Suite 100
Carlsbad,
CA 92008
Email: Ldangelo@apptechcorp.com
Attention: Luke D’Angelo
If to the Investor:
[_______________]
If to the Investments:
[_______________]
or at such other address email address and/or
to the attention of such other person as the recipient party has specified by written notice given to each other party three (3) Business
Days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver
or other communication, (B) mechanically or electronically generated by the sender's email account containing the time, date, recipient
email address, as applicable, and an image of the first page of such transmission or (C) provided by a nationally recognized overnight
delivery service, shall be rebuttable evidence of personal service, receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.
c.The
corporate laws of the State of Delaware shall govern all issues concerning this Agreement. All other questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of Delaware, without giving
effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State of Delaware. Each party hereby irrevocably submits to the
exclusive jurisdiction of the state courts sitting in the State of Florida, County of Miami-Dade and federal courts sitting in the State
of Florida, County of Miami-Dade, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient
forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for
such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If any
provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect
the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision
of this Agreement in any other jurisdiction.
d.The
Agreement, Purchase Agreement, Debenture, Warrant, and ancillary documentation entered into between the Company and Investor therewith
constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to herein and therein. The Agreement, Purchase Agreement,
Debenture, Warrant, and ancillary documentation entered into between the Company and Investor therewith supersede all prior agreements
and understandings among the parties hereto with respect to the subject matter hereof and thereof.
e.Subject
to the requirements of Section 9, this Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns
of each of the parties hereto.
f.The
headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
g.This
Agreement may be executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute one and
the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by e-mail in a “.pdf”
format data file of a copy of this Agreement bearing the signature of the party so delivering this Agreement.
h.Each
party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such
other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
i.The
language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of
strict construction will be applied against any party.
j.This
Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.
* * * * * *
IN WITNESS WHEREOF,
the parties have caused this Agreement to be duly executed as of day and year first above written.
|
THE COMPANY:
|
|
APPTECH
PAYMENTS CORP.
|
|
By: [___________] |
|
Name: Luke D’Angelo
Title: Chief Executive Officer |
|
|
|
|
|
INVESTOR:
|
|
[_______________] |
|
|
|
|
|
|
|
|
[Signature Page to registration rights agreement]
EXHIBIT A
TO REGISTRATION RIGHTS AGREEMENT
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
______, 2024
Transfer Online, Inc.
512 SE Salmon Street
Portland, OR 97214
Re: Effectiveness of Registration Statement
Ladies and Gentlemen:
We are counsel to APPTECH
PAYMENTS CORP., a Delaware corporation (the “Company”), and have represented the Company in connection with that
certain securities purchase agreement, dated as of June 28, 2024 (the “Purchase Agreement”), entered into by and between
the Company and [_______________] (the “Investor”) pursuant to which the Company has agreed to issue to the Investor
shares of the Company's Common Stock, $0.001 par value (the “Common Stock”), consisting of the Conversion Shares (as
defined in the Purchase Agreement) (the “Conversion Shares”) in accordance with the terms of the Debenture (as defined
in the Purchase Agreement) (the “Debenture”), as well as issue to Investments (as defined in the Purchase Agreement)
(“Investments”) the Warrant Shares (as defined in the Purchase Agreement) (the “Warrant Shares”)
in accordance with the terms of the Warrant (as defined in the Purchase Agreement) (the “Warrant”), as well as issue
the Commitment Shares (as defined in the Purchase Agreement) (the “Commitment Shares”) to Investor and Investments.
In connection with the transactions contemplated by the Purchase Agreement, the Company has registered with the U.S. Securities &
Exchange Commission the following shares of Common Stock:
__________ Conversion
Shares issued and/or to be issued to the Investor upon conversion of the Debenture in accordance with the Debenture; and
__________ Warrant
Shares issued and/or to be issued to Investments upon exercise of the Warrant in accordance with the Warrant; and
__________ Commitment
Shares issued and/or to be issued to Investor and Investments in accordance with the Purchase Agreement.
Pursuant to the Purchase
Agreement, the Company also has entered into a Registration Rights Agreement, of even date with the Purchase Agreement with the Investor
(the “Registration Rights Agreement”) pursuant to which the Company agreed, among other things, to register the Conversion
Shares, Warrant Shares, and Commitment Shares under the Securities Act of 1933, as amended (the “Securities Act”). In connection
with the Company's obligations under the Purchase Agreement and the Registration Rights Agreement, on [_____], 2024, the Company filed
a Registration Statement (File No. 333-[_________]) (the “Registration Statement”) with the Securities and Exchange Commission
(the “SEC”) relating to the resale of the Conversion Shares, Warrant Shares, and Commitment Shares.
In connection with the foregoing,
we advise you that a member of the SEC's staff has advised us by telephone that the SEC has entered an order declaring the Registration
Statement effective under the Securities Act at [_____] [A.M./P.M.] on [__________], 2024 and we have no knowledge, after telephonic inquiry
of a member of the SEC's staff, that any stop order suspending its effectiveness has been issued or that any proceedings for that purpose
are pending before, or threatened by, the SEC and the Conversion Shares, Warrant Shares, and Commitment Shares are available for resale
under the Securities Act pursuant to the Registration Statement and may be issued without any restrictive legend.
Very truly yours,
[Company Counsel]
By:____________________
cc:[_______________]
v3.24.2
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AppTech Payments (NASDAQ:APCX)
過去 株価チャート
から 8 2024 まで 9 2024
AppTech Payments (NASDAQ:APCX)
過去 株価チャート
から 9 2023 まで 9 2024