HODO 8-K
House of Doge Inc. (HODO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
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
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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 December 4, 2025, Brag House Holdings, Inc. (the “Company”) entered into an agreement (the “Purchase Agreement”) by and among the Company, House of Doge Inc., (“HOD”), and an institutional investor (the “Investor”). Under the terms and subject to the conditions set forth in the Purchase Agreement, the Company has the right, but not the obligation, to sell to the Investor, and the Investor is obligated to purchase, up to the lesser of (a) $100,000,000 in aggregate gross purchase price of newly issued shares of the Company’s common stock (the “Equity Line Securities”) and (b) the Exchange Cap (as defined in the Purchase Agreement).
Upon the initial satisfaction of the conditions set forth in the Purchase Agreement (the “Commencement”), including that the initial registration statement required to be filed by the Company pursuant to the Registration Rights Agreement (as defined below) described under “Registration Rights Agreement” below has been declared effective by the Securities and Exchange Commission, the Company will have the right, but not the obligation, from time to time at its sole discretion over the 36-month period beginning on the date the Commencement occurs (the “Commencement Date”), to direct the Investor to purchase a specified number of Equity Line Securities, not to exceed certain limitations as set forth in the Purchase Agreement (each, a “Purchase”). Any such direction will be made by the Company timely delivering written notice to the Investor (each, a “Purchase Notice”) prior to 9:00 a.m., New York City time, on any trading day (each, a “Purchase Date”), subject to certain requirements as set forth in the Purchase Agreement.
From and after Commencement, the Company will control the timing and amount of any sales of its Common Shares to the Investor. Actual sales of the Company’s Common Shares to the Investor under the Purchase Agreement will depend on a variety of factors to be determined by the Company from time to time, including, among other things, market conditions, the trading price of the Securities and determinations by the Company as to the appropriate sources of funding for the Company’s business and operations.
The per share purchase price that the Investor is required to pay for the Equity Line Securities in a Purchase effected by the Company pursuant to the Purchase Agreement, if any, will be equal to 97% of the volume weighted average price of the Securities (the “VWAP”), calculated in accordance with the Purchase Agreement, during the applicable Purchase Date (the “Purchase Valuation Period”). The Company may elect in the applicable Purchase Notice that the Purchase Valuation Period will also be determined by the Minimum Price Threshold (as defined below), at such time that the trading price of the Equity Line Securities on Nasdaq during such Purchase Valuation Period (calculated in accordance with the Purchase Agreement) falls below the applicable minimum price threshold for such Purchase specified by the Company in the Purchase Notice for such Purchase, (the “Minimum Price Threshold”).
In addition to the regular Purchases described above, after the Commencement, the Company will also have the right, but not the obligation, subject to the continued satisfaction of the conditions set forth in the Purchase Agreement, to direct the Investor to purchase, on any trading day, including the same Purchase Date on which a regular Purchase is effected, a specified number of Equity Line Securities, not to exceed certain limitations set forth in the Purchase Agreement (each, an “Intraday Purchase”). Any such direction will be made by the Company delivering to the Investor an irrevocable written purchase notice, after 10:00 a.m., New York City time (and after the Purchase Valuation Period for any prior regular Purchase (if any) and the Intraday Purchase Valuation Period for the most recent prior Intraday Purchase effected on the same Purchase Date (if any) have ended), and prior to 3:30 p.m., New York City time, on such Purchase Date.
The per share purchase price for the Equity Line Securities that the Company elects to sell to the Investor in an Intraday Purchase pursuant to the Purchase Agreement, if any, will be calculated in the same manner as in the case of a regular Purchase (including the same fixed percentage discounts to the applicable VWAP as in the case of a regular Purchase, as described above), provided that the VWAP for each Intraday Purchase effected on a Purchase Date will be calculated over different periods during the regular trading session on Nasdaq on such Purchase Date, each of which will commence and end at different times on such Purchase Date.
As consideration for the Investor’s commitment to purchase the Equity Line Securities pursuant to the Purchase Agreement, the Company agreed to pay the Investor a cash commitment fee of $1,000,000 (the “Cash Commitment Fee”). The Cash Commitment Fee was deemed earned in full on December 4, 2025 (the “Closing Date”) and is payable in an amount equal to 10% of the gross proceeds received by the Company from any purchases of Equity Line Securities by the Investor pursuant to VWAP Purchases (as defined in the Purchase Agreement) or Intraday VWAP Purchases (as defined in the Purchase Agreement) under the Purchase Agreement until the Commitment Fee has been paid in full. In addition, as required under the Purchase Agreement, the Company has reimbursed the Investor for the reasonable legal fees and disbursements of the Investor’s legal counsel in the amount of $100,000 to cover the reasonable legal fees incurred by the Investor before the Closing Date. Following Closing Date, the Company has agreed to reimburse the Investor up to $10,000 per fiscal quarter as reimbursement for the reasonable fees and disbursements of the Investor’s legal counsel incurred by the Investor in connection with the Investor’s ongoing due diligence and review of deliverables, provided that purchases of the Equity Line Securities under the Purchase Agreement are not suspended.
Concurrently with the Purchase Agreement, Company and HOD, jointly and severally, authorized the issuance of a convertible promissory note to the Investor, in the aggregate original principal amount of up to $11,000,000 (the “Convertible Note”), pursuant to which the Investor agreed to advance the aggregate principal amount to the Company in two advances (each an “Advance”); in respect of each Advance the Investor will pay a purchase price equal to 90% of the principal amount of such Advance. The first Advance under the Convertible Note in the original principal amount of $3,850,000 was issued on the Closing Date, and the second Advance in the original principal amount of $7,150,000 will be issued upon the satisfaction of the conditions set forth in the Convertible Note. The Convertible Note is convertible into shares of common stock, $0.0001 par value per share (the “Common Stock”), in certain circumstances in accordance with the terms of the Convertible Notes at a conversion price equal to 95% of the lowest daily volume-weighted average price of the common stock during the five consecutive trading days immediately preceding the relevant conversion date, subject to adjustment pursuant to the terms of the Convertible Notes. The Company received gross proceeds of $3,465,000, prior to the deduction of transaction related expenses, from the closing of the first Advance pursuant to the Convertible Note, with the resulting net proceeds being delivered to HOD at the direction of the Company and HOD.
Concurrently with the entry into the Convertible Note and the Purchase Agreement, (a) the Company, together with HOD, entered into a registration rights agreement (the “Registration Rights Agreement”); (b) the subsidiaries of the Company and HOD entered into a global guaranty agreement (the “Global Guaranty Agreement”); (c) the Company entered into a subordination and intercreditor agreement (the “Subordination and Intercreditor Agreement”); and (d) the Company and a subsidiary of HOD entered into a pledge agreement (the “Pledge Agreement”), in each case, with the Investor.
Consistent with certain applicable Nasdaq rules, the Company may not issue to the Investor more than 3,957,838 Equity Line Securities under the Purchase Agreement or the Convertible Note, which number of shares is equal to 19.99% of the shares of Common Stock issued and outstanding immediately prior to the execution of the Purchase Agreement, unless the Company obtains stockholder approval to issue shares of its Equity Line Securities in excess of such limit in accordance with applicable rules of Nasdaq.
Moreover, the Company may not issue or sell any Equity Line Securities to the Investor, which, when aggregated with all other shares of common stock then beneficially owned by the Investor and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result in the Investor beneficially owning more than 4.99% of the issued and outstanding shares of Common Stock, unless such limit is increased by the Investor up to a maximum of 9.99%.
The Purchase Agreement provides customary representations, warranties, and covenants of the Company and the Investor.
Pursuant to the Registration Rights Agreement, the Company agreed to file a registration statement covering the resale of the Registrable Securities (as defined in the Registration Rights Agreement) with the SEC by December 25, 2025, and to use commercially reasonable efforts to cause such resale registration statement to be declared effective by the Securities and Exchange Commission (“SEC”) as soon as reasonably practicable following the filing thereof, no later than (i) with respect to the initial registration statement, February 2, 2026; (ii) with respect to an additional registration statement, the 45th calendar day after the day on which such additional registration statement required to be filed by the Company is initially filed with the SEC; and (iii) with respect to any other subsequent registration statements that may be required to be filed by the Company pursuant to the Registration Rights Agreement, the earlier of the (A) 60th calendar day following the date on which such other subsequent registration statement was initially filed by the Company (or the 90th calendar day following the filing thereof if the SEC notifies the Company that the SEC shall “review” such subsequent registration statement), and (B) the 5th business day after the date on which the Company is notified by the SEC that such subsequent registration statement shall not be reviewed or shall not be subject to further review.
The Convertible Note was offered pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended and Rule 506(b) of Regulation D promulgated thereunder, and applicable state securities laws.
Company and HOD Loan Documents
As previously disclosed, on October 14, 2025, the Company loaned to HOD $8,000,000 (the “Loan”), which was evidenced by a secured promissory note (the “HOD Note”) issued by HOD in favor of the Company. Under the terms of the Note, HOD could borrow up to $8,000,000 from the Company. On December 4, the Company and HOD entered into an amendment to the HOD Note (the “HOD Note Amendment”) to (i) increase the principal amount of the HOD to $10,000,000, (ii) permit the issuance of the Convertible Promissory Note, and (iii) provide for the subordination of the Company’s lien over HOD securing HOD’s obligations under the HOD Note to the lien of the Investor.
The foregoing does not purport to be a complete description of the Purchase Agreement, Convertible Note, Registration Rights Agreement, Subordination and Intercreditor Agreement, the Guaranty Agreement, Pledge Agreement, HOD Note Amendment and each such description is qualified in its entirety by reference to the full text of each such document, forms of which are filed as Exhibit 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, and 10.7 to this Current Report on Form 8-K (this “Form 8-K”), respectively, which are incorporated herein by reference.
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 of this Form 8-K is incorporated herein by reference into this Item 2.03.
Item 3.02 Unregistered Sale of Equity Securities.
The applicable information contained above in Item 1.01 of this Form 8-K relating to the issuance of the Convertible Notes is hereby incorporated by reference into this Item 3.02.
Neither this Form 8-K nor any exhibit attached hereto is an offer to sell or the solicitation of an offer to buy securities of the Company.
Item 8.01. Other Events.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number | Exhibits | |
| 10.1† | Form of Common Stock Purchase Agreement, by and among Brag House Holdings, Inc., House of Doge, Inc., and the Investor | |
| 10.2 | Form of Convertible Promissory Note | |
| 10.3† | Form of Registration Rights Agreement, by and among Brag House Holdings, Inc., House of Doge, Inc. and the Investor | |
| 10.4† | Form of Pledge Agreement, by and among Brag House Holdings, Inc, House of Doge, Inc., and the Investor | |
| 10.5 | Form of Global Guaranty Agreement | |
| 10.6 | Form of Subordination and Intercreditor Agreement | |
| 10.7 | Amendment to Secured Promissory Note | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| † | Certain of the schedules, exhibits or similar attachments to this exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K under the Securities Act because they do not contain information material to an investment or voting decision and that information is not otherwise disclosed in the exhibit or the disclosure document. A copy of any omitted schedule, exhibit or similar attachment will be furnished to the SEC upon request. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: December 10, 2025 |
BRAG HOUSE HOLDINGS, INC. | |
| By: | /s/ Lavell Juan Malloy, II | |
| Name: | Lavell Juan Malloy, II | |
| Title: | Chief Executive Officer | |
Exhibit 10.1
COMMON STOCK PURCHASE AGREEMENT
Dated as of December 4, 2025
by and between
BRAG HOUSE HOLDINGS, INC.
HOUSE OF DOGE INC.
and
[●]
Table of Contents
| Page | ||
| Article I DEFINITIONS | 2 | |
| Article II PURCHASE AND SALE OF COMMON STOCK | 2 | |
| Section 2.1. | Purchase and Sale of Stock | 2 |
| Section 2.2. | Closing Date; Settlement Dates | 2 |
| Section 2.3. | Initial Public Announcements and Required Filings | 2 |
| Article III PURCHASE TERMS | 3 | |
| Section 3.1. | VWAP Purchases | 4 |
| Section 3.2. | Intraday VWAP Purchases | 4 |
| Section 3.3. | Settlement | 5 |
| Section 3.4. | Compliance with Rules of Trading Market | 7 |
| Section 3.5. | Beneficial Ownership Limitation | 8 |
| Article IV REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR | 8 | |
| Section 4.1. | Organization and Standing of the Investor | 8 |
| Section 4.2. | Evaluation of Risks | 8 |
| Section 4.3. | No Legal, Investment or Tax Advice from the Company | 9 |
| Section 4.4. | Investment Purpose | 9 |
| Section 4.5. | Accredited Investor | 9 |
| Section 4.6. | Not an Affiliate | 9 |
| Section 4.7. | General Solicitation | 10 |
| Section 4.8. | Trading Activities | 10 |
| Section 4.9. | Statutory Underwriter Status | 10 |
| Article V REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY | 10 | |
| Section 5.1. | Organization, Good Standing and Power | 10 |
| Section 5.2. | Authorization, Enforcement | 10 |
| Section 5.3. | Capitalization | 11 |
| Section 5.4. | Issuance of Securities | 11 |
| Section 5.5. | No Conflicts | 12 |
| Section 5.6. | Commission Documents, Financial Statements; Disclosure Controls and Procedures; Internal Controls Over Financial Reporting; Accountants | 12 |
| Section 5.7. | Subsidiaries | 15 |
| Section 5.8. | No Material Adverse Effect or Material Adverse Change | 15 |
| Section 5.9. | No Undisclosed Liabilities | 15 |
| Section 5.10. | No Material Defaults on Indebtedness | 15 |
| Section 5.11. | Solvency | 15 |
| Section 5.12. | Title to Real and Personal Property | 15 |
| Section 5.13. | Litigation | 16 |
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| Section 5.14. | Compliance With Laws | 16 |
| Section 5.15. | Certain Fees | 16 |
| Section 5.16. | Disclosure | 16 |
| Section 5.17. | Material Permits | 17 |
| Section 5.18. | Environmental Matters | 17 |
| Section 5.19. | Intellectual Property Rights | 18 |
| Section 5.20. | Material Contracts | 18 |
| Section 5.21. | Transactions With Affiliates | 19 |
| Section 5.22. | Labor Relations | 19 |
| Section 5.23. | Use of Proceeds | 19 |
| Section 5.24. | Investment Company Act Status | 19 |
| Section 5.25. | Tax Matters | 19 |
| Section 5.26. | Insurance | 20 |
| Section 5.27. | Exemption from Registration | 20 |
| Section 5.28. | No General Solicitation or Advertising | 20 |
| Section 5.29. | No Integrated Offering | 20 |
| Section 5.30. | Dilutive Effect | 20 |
| Section 5.31. | Manipulation of Price | 21 |
| Section 5.32. | Securities Act | 21 |
| Section 5.33. | Listing and Maintenance Requirements; DTC Eligibility | 21 |
| Section 5.34. | Application of Takeover Protections | 21 |
| Section 5.35. | Foreign Corrupt Practices | 22 |
| Section 5.36. | Office of Foreign Assets Control | 22 |
| Section 5.37. | Money Laundering | 22 |
| Section 5.38. | ERISA | 22 |
| Section 5.39. | IT Systems | 23 |
| Section 5.40. | Privacy Laws | 23 |
| Section 5.41. | U.S | 24 |
| Section 5.42. | Margin Rules | 24 |
| Section 5.43. | Emerging Growth Company Status | 24 |
| Section 5.44. | Smaller Reporting Company Status | 24 |
| Section 5.45. | No Disqualification Events | 24 |
| Section 5.46. | Market Capitalization | 25 |
| Section 5.47. | [Reserved] | 25 |
| Section 5.48. | Broker/Dealer Relationships; FINRA Information | 25 |
| Section 5.49. | Acknowledgement Regarding Relationship with Investor and YS | 25 |
| Section 5.50. | Acknowledgement Regarding Investor’s Affiliate Relationships | 26 |
| Article VA REPRESENTATIONS, WARRANTIES AND COVENANTS OF HOD | 27 | |
| Section 5A.1. | HOD Financial Statements; Accountants | 27 |
| Section 5A.2. | No Material Adverse Effect or Material Adverse Change | 27 |
| Section 5A.3. | Litigation | 27 |
| Section 5A.4. | Compliance With Laws | 28 |
| Section 5A.5. | Certain Fees | 28 |
ii
| Section 5A.6. | No Disqualification Events | 28 |
| Section 5A.7. | Disclosure | 28 |
| Article VI ADDITIONAL COVENANTS | 29 | |
| Section 6.1. | Securities Compliance | 29 |
| Section 6.2. | Reservation of Common Stock | 29 |
| Section 6.3. | Registration and Listing | 29 |
| Section 6.4. | Compliance with Laws | 30 |
| Section 6.5. | Keeping of Records and Books of Account; Due Diligence | 31 |
| Section 6.6. | No Frustration; No Dilutive Issuances; No Other Similar Transactions | 31 |
| Section 6.7. | Corporate Existence | 33 |
| Section 6.8. | Fundamental Transaction | 33 |
| Section 6.9. | Selling Restrictions | 33 |
| Section 6.10. | Effective Registration Statement | 34 |
| Section 6.11. | Blue Sky | 34 |
| Section 6.12. | Non-Public Information | 34 |
| Section 6.13. | Broker-Dealer | 35 |
| Section 6.14. | FINRA Filing | 35 |
| Section 6.15. | Qualified Independent Underwriter | 36 |
| Section 6.16. | Disclosure Schedule | 36 |
| Section 6.17. | Delivery of Compliance Certificates, Bring-Down Negative Assurance Letters, Bring-Down CFO Certificates and Bring-Down Comfort Letters Upon Occurrence of Certain Events | 37 |
| Article VII CONDITIONS TO CLOSING, COMMENCEMENT AND PURCHASES | 38 | |
| Section 7.1. | Conditions Precedent to Closing | 38 |
| Section 7.2. | Conditions Precedent to Commencement | 39 |
| Section 7.3. | Conditions Precedent to Purchases after Commencement Date | 43 |
| Article VIII TERMINATION | 48 | |
| Section 8.1. | Automatic Termination | 48 |
| Section 8.2. | Other Termination | 48 |
| Section 8.3. | Effect of Termination | 48 |
| Article IX INDEMNIFICATION | 49 | |
| Section 9.1. | Indemnification of Investor | 49 |
| Section 9.2. | Indemnification Procedures | 50 |
| Article X MISCELLANEOUS | 50 | |
| Section 10.1. | Certain Fees and Expenses; Commitment Fee; Commencement Irrevocable Transfer Agent Instructions | 50 |
| Section 10.2. | Specific Enforcement, Consent to Jurisdiction, Waiver of Jury Trial | 52 |
| Section 10.3. | Entire Agreement | 53 |
| Section 10.4. | Notices | 53 |
| Section 10.5. | Waivers | 54 |
iii
| Section 10.6. | Amendments | 55 |
| Section 10.7. | Headings | 55 |
| Section 10.8. | Construction | 55 |
| Section 10.9. | Binding Effect | 55 |
| Section 10.10. | No Third Party Beneficiaries | 55 |
| Section 10.11. | Governing Law | 55 |
| Section 10.12. | Survival | 55 |
| Section 10.13. | Counterparts | 56 |
| Section 10.14. | Publicity | 56 |
| Section 10.15. | Severability | 56 |
| Section 10.16. | Further Assurances | 56 |
Annex I. Definitions
iv
COMMON STOCK PURCHASE AGREEMENT
This COMMON STOCK PURCHASE AGREEMENT is made and entered into as of December 4, 2025 (this “Agreement”), by and between [●]., a Cayman Islands exempt limited company (the “Investor”), House of Doge Inc., a Texas corporation (“HOD”), and Brag House Holdings, Inc., a Delaware corporation (the “Company”). For purposes of this Agreement, applicable references to the “Company” shall include, after the consummation of the Transactions (as defined below), HOD as a wholly owned subsidiary of the Company pursuant to the transactions contemplated by the BCA (as defined below).
RECITALS
WHEREAS, the Company has entered into a Merger Agreement dated as of October 12, 2025 (the “BCA”), by and among the Company, Brag House Merger Sub, Inc., a Delaware corporation and direct wholly owned subsidiary of the Company (“Merger Sub”) and HOD, pursuant to which HOD will merge with and into Merger Sub, with HOD continuing as the surviving entity and a wholly owned subsidiary of the Company (the “Business Combination”), together with the transactions contemplated thereby, the “Transactions.”
WHEREAS, the parties desire that, upon the terms and subject to the conditions and limitations set forth herein, the Company may issue and sell to the Investor, from time to time as provided herein, and the Investor shall purchase from the Company, up to the lesser of (i) $100,000,000 in aggregate gross purchase price of newly issued shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), and (ii) the Exchange Cap (to the extent applicable under Section 3.4);
WHEREAS, the Company will make such sales of Common Stock without registration under the Securities Act in reliance upon Section 4(a)(2) thereof (“Section 4(a)(2)”), or upon such other exemption from the registration requirements of the Securities Act as may be available with respect to any or all of the sales of Common Stock to the Investor to be made hereunder;
WHEREAS, the parties hereto are concurrently entering into a Registration Rights Agreement in the form attached as Exhibit A hereto (the “Registration Rights Agreement”), pursuant to which the Company shall register under the Securities Act the resale of the Registrable Securities (as defined in the Registration Rights Agreement) by the Investor, upon the terms and subject to the conditions set forth therein;
WHEREAS, in consideration for the Investor’s execution and delivery of this Agreement, the Company shall pay the Commitment Fee to the Investor in such manner, at such time(s) and otherwise pursuant to and in accordance with Section 10.1(ii); and
WHEREAS, the Company acknowledges that the Investor is an Affiliate of Yorkville Securities, LLC. (“YS”), is acting as the Investor’s representative in connection with the transactions contemplated by the Transaction Documents.
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:
Article I
DEFINITIONS
Capitalized terms used in this Agreement shall have the meanings ascribed to such terms in Annex I hereto, and hereby made a part hereof, or as otherwise set forth in this Agreement.
Article II
PURCHASE AND SALE OF COMMON STOCK
Section 2.1. Purchase and Sale of Stock. Upon the terms and subject to the conditions of this Agreement, during the Investment Period, the Company, in its sole discretion, shall have the right, but not the obligation, to issue and sell to the Investor, and the Investor shall purchase from the Company, up to the lesser of (i) $100,000,000 (the “Total Commitment”) in aggregate gross purchase price of duly authorized, validly issued, fully paid and non-assessable shares of Common Stock and (ii) the Exchange Cap, to the extent applicable under Section 3.4 (such lesser amount of shares of Common Stock, the “Aggregate Limit”), by the delivery to the Investor of VWAP Purchase Notices and Intraday VWAP Purchase Notices as provided in Article III.
Section 2.2. Closing Date; Settlement Dates. This Agreement shall become effective and binding (the “Closing”) upon (a) the delivery of counterpart signature pages of this Agreement and the Registration Rights Agreement executed by each of the parties hereto and thereto, and (b) the delivery of all other documents, instruments and writings required to be delivered at the Closing, in each case as provided in Section 7.1(iv), to the offices of Duane Morris LLP, at 22 Vanderbilt, 335 Madison Avenue, New York, NY 10017, at 3:45 p.m., New York City time, on the Closing Date. In consideration of and in express reliance upon the representations, warranties and covenants contained in, and upon the terms and subject to the conditions of, this Agreement, during the Investment Period, the Company, at its sole option and discretion, may issue and sell to the Investor, and, if the Company elects to so issue and sell, the Investor shall purchase from the Company, the Shares in respect of each VWAP Purchase and each Intraday VWAP Purchase (as applicable). The delivery of Shares in respect of each VWAP Purchase and each Intraday VWAP Purchase, and the payment for such Shares, shall occur in accordance with Section 3.3.
Section 2.3. Initial Public Announcements and Required Filings. The Company shall, not later than 9:00 a.m., New York City time, on the Trading Day immediately after the date of this Agreement, file with the Commission a Current Report on Form 8-K disclosing the execution of this Agreement and the Registration Rights Agreement by the Company and the Investor and describing the material terms thereof, including, without limitation, the Commitment Fee payable by the Company to the Investor pursuant to Section 10.1(ii) of this Agreement, and attaching as exhibits thereto copies of each of this Agreement and the Registration Rights Agreement and, if applicable, any press release issued by the Company disclosing the execution of this Agreement and the Registration Rights Agreement by the Company (including all exhibits thereto, the “Current Report”). The Company shall provide the Investor a reasonable opportunity to comment on a draft of the Current Report prior to filing the Current Report with the Commission and shall give due consideration to all such comments. From and after the filing of the Current Report with the Commission, the Company shall have publicly disclosed all material, nonpublic information delivered to the Investor (or the Investor’s representatives or agents) by the Company, or any of their respective officers, directors, employees, agents or representatives (if any) in connection with the transactions contemplated by the Transaction Documents. The Investor covenants that until such time as the transactions contemplated by this Agreement and the Registration Rights Agreement are publicly disclosed by the Company as described in this Section 2.3, the Investor shall maintain the confidentiality of all disclosures made to it in connection with the transactions contemplated by the Transaction Documents (including the existence and terms of the transactions contemplated thereby), except that the Investor may disclose the terms of such transactions to its financial, accounting, legal and other professional advisors (provided that the Investor directs such Persons to maintain the confidentiality of such information). The Company shall use its commercially reasonable efforts to prepare and, as soon as practicable, but in no event later than the applicable Filing Deadline, file with the Commission the Initial Registration Statement and any New Registration Statement covering only the resale by the Investor of the Registrable Securities in accordance with the Securities Act and the Registration Rights Agreement. On or before the second (2nd) Trading Day immediately following the Effective Date of the Initial Registration Statement and any New Registration Statement (or any post-effective amendment thereto), the Company shall file with the Commission in accordance with Rule 424(b) under the Securities Act the final Prospectus to be used in connection with resales of the Registrable Securities by the Investor pursuant to such Registration Statement (or post-effective amendment thereto).
2
Article III
PURCHASE TERMS
Subject to the satisfaction of the conditions set forth in Article VII, the parties agree as follows:
Section 3.1. VWAP Purchases. Upon the initial satisfaction of all of the conditions set forth in Section 7.2 (the “Commencement” and the date of initial satisfaction of all of such conditions, the “Commencement Date”) and from time to time thereafter, subject to the satisfaction of all of the conditions set forth in Section 7.3, the Company shall have the right, but not the obligation, to direct the Investor, by its timely delivery to the Investor of a VWAP Purchase Notice for a VWAP Purchase (each, a “VWAP Purchase”), specifying in such VWAP Purchase Notice (a) the VWAP Purchase Percentage for such VWAP Purchase and (b) whether a Limit Order Continue Election or a Limit Order Discontinue Election shall apply to such VWAP Purchase, on the applicable Purchase Date therefor, to purchase a specified VWAP Purchase Share Amount, which shall not exceed the applicable VWAP Purchase Maximum Amount, at the applicable VWAP Purchase Price therefor on such Purchase Date in accordance with this Agreement. The Company may timely deliver to the Investor a VWAP Purchase Notice for a VWAP Purchase on any Trading Day selected by the Company as the Purchase Date for such VWAP Purchase, so long as all Shares subject to all prior VWAP Purchases and Intraday VWAP Purchases (as applicable) pursuant to this Agreement have been received by the Investor as DWAC Shares prior to the Company’s delivery to the Investor of such VWAP Purchase Notice for such VWAP Purchase on such Purchase Date.
The Investor is obligated to accept each VWAP Purchase Notice prepared and delivered by the Company in accordance with the terms of and subject to the satisfaction of the conditions contained in this Agreement. If the Company delivers any VWAP Purchase Notice directing the Investor to purchase a VWAP Purchase Share Amount in excess of the applicable VWAP Purchase Maximum Amount that the Company is then permitted to include in such VWAP Purchase Notice (taking into account the VWAP Purchase Percentage specified by the Company in the applicable VWAP Purchase Notice for such VWAP Purchase), such VWAP Purchase Notice shall be void ab initio to the extent of the amount by which the VWAP Purchase Share Amount set forth in such VWAP Purchase Notice exceeds such applicable VWAP Purchase Maximum Amount, and the Investor shall have no obligation to purchase, and shall not purchase, such excess Shares pursuant to such VWAP Purchase Notice; provided, however, that the Investor shall remain obligated to purchase the applicable VWAP Purchase Maximum Amount pursuant to such VWAP Purchase.
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At or prior to 5:30 p.m., New York City time, on the Purchase Date for each VWAP Purchase, the Investor shall provide to the Company, by email correspondence to each of the individual notice recipients of the Company set forth in the applicable VWAP Purchase Notice, a written confirmation for such VWAP Purchase, setting forth the applicable VWAP Purchase Price per Share to be paid by the Investor for the Shares purchased by the Investor in such VWAP Purchase, and the total aggregate VWAP Purchase Price to be paid by the Investor for the total VWAP Purchase Share Amount purchased by the Investor in such VWAP Purchase. Notwithstanding the foregoing, the Company shall not deliver any VWAP Purchase Notices to the Investor during the PEA Period, any Allowable Grace Period or any MPA Period.
Section 3.2. Intraday VWAP Purchases. Upon the initial satisfaction of all of the conditions set forth in Section 7.2 on the Commencement Date and from time to time thereafter, subject to the satisfaction of all of the conditions set forth in Section 7.3, in addition to VWAP Purchases as described in Section 3.1, the Company shall also have the right, but not the obligation, to direct the Investor, by its timely delivery to the Investor of an Intraday VWAP Purchase Notice for an Intraday VWAP Purchase (each, an “Intraday VWAP Purchase”), specifying in such Intraday VWAP Purchase Notice (a) the Intraday VWAP Purchase Percentage for such Intraday VWAP Purchase and (b) whether a Limit Order Continue Election or a Limit Order Discontinue Election shall apply to such Intraday VWAP Purchase, on the applicable Purchase Date therefor, to purchase a specified Intraday VWAP Purchase Share Amount, which shall not exceed the applicable Intraday VWAP Purchase Maximum Amount, at the applicable Intraday VWAP Purchase Price therefor on such Purchase Date in accordance with this Agreement.
The Company may timely deliver to the Investor an Intraday VWAP Purchase Notice for an Intraday VWAP Purchase on any Trading Day selected by the Company as the Purchase Date for such Intraday VWAP Purchase, so long as all Shares subject to all prior VWAP Purchases and Intraday VWAP Purchases (as applicable) have been received by the Investor as DWAC Shares prior to the Company’s delivery to the Investor of such Intraday VWAP Purchase Notice for such Intraday VWAP Purchase on such Purchase Date. The Investor is obligated to accept each Intraday VWAP Purchase Notice prepared and delivered by the Company in accordance with the terms of and subject to the satisfaction of the conditions contained in this Agreement.
If the Company delivers any Intraday VWAP Purchase Notice directing the Investor to purchase an Intraday VWAP Purchase Share Amount in excess of the applicable Intraday VWAP Purchase Maximum Amount that the Company is then permitted to include in such Intraday VWAP Purchase Notice (taking into account the Intraday VWAP Purchase Percentage specified by the Company in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase), such Intraday VWAP Purchase Notice shall be void ab initio to the extent of the amount by which the Intraday VWAP Purchase Share Amount set forth in such Intraday VWAP Purchase Notice exceeds such applicable Intraday VWAP Purchase Maximum Amount, and the Investor shall have no obligation to purchase, and shall not purchase, such excess Shares pursuant to such Intraday VWAP Purchase Notice; provided, however, that the Investor shall remain obligated to purchase the applicable Intraday VWAP Purchase Maximum Amount pursuant to such Intraday VWAP Purchase.
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At or prior to 5:30 p.m., New York City time, on the Purchase Date on which one or more Intraday VWAP Purchases shall have occurred, the Investor shall provide to the Company, by email correspondence to each of the individual notice recipients of the Company set forth in the applicable Intraday VWAP Purchase Notice, a written confirmation for each such Intraday VWAP Purchase, setting forth the applicable Intraday VWAP Purchase Price per Share to be paid by the Investor for the Shares purchased by the Investor in such Intraday VWAP Purchase, and the total aggregate Intraday VWAP Purchase Price to be paid by the Investor for the total Intraday VWAP Purchase Share Amount purchased by the Investor in such Intraday VWAP Purchase. Notwithstanding the foregoing, the Company shall not deliver any Intraday VWAP Purchase Notices to the Investor during the PEA Period, any Allowable Grace Period or any MPA Period.
Section 3.3. Settlement. The Shares constituting the applicable VWAP Purchase Share Amount purchased by the Investor in each VWAP Purchase, and the Shares constituting the applicable Intraday VWAP Purchase Share Amount purchased by the Investor in each Intraday VWAP Purchase (as applicable), in each case shall be delivered to the Investor as DWAC Shares not later than 10:00 a.m., New York City time, on the Trading Day immediately following the Purchase Date for such VWAP Purchase and for each such Intraday VWAP Purchase (as applicable) (the “Purchase Share Delivery Date”). For (a) each VWAP Purchase, the Investor shall pay to the Company an amount in cash equal to the product of (1) the total number of Shares purchased by the Investor in such VWAP Purchase and (2) the applicable VWAP Purchase Price for such Shares, as full payment for such Shares purchased by the Investor in such VWAP Purchase, and for (b) each Intraday VWAP Purchase, the Investor shall pay to the Company an amount in cash equal to the product of (1) the total number of Shares purchased by the Investor in such Intraday VWAP Purchase and (2) the applicable Intraday VWAP Purchase Price for such Shares, as full payment for such Shares purchased by the Investor in such Intraday VWAP Purchase, in each case via wire transfer of immediately available funds, not later than 5:00 p.m., New York City time, on the Trading Day immediately following the applicable Purchase Share Delivery Date for such VWAP Purchase and for each such Intraday VWAP Purchase (as applicable), provided the Investor shall have timely received, as DWAC Shares, all of such Shares purchased by the Investor in such VWAP Purchase and such Intraday VWAP Purchase(s) (as applicable) on such Purchase Share Delivery Date in accordance with the first sentence of this Section 3.3, or, if any of such Shares are received by the Investor after 1:00 p.m., New York City time, then the Company’s receipt of such funds in its designated account may occur on the Trading Day next following the Trading Day on which the Investor shall have received all of such Shares as DWAC Shares, but not later than 5:00 p.m., New York City time, on such next Trading Day.
The Company and the Investor acknowledge and agree that the Investor shall withhold an amount in cash equal to the Cash Commitment Fee from the total aggregate VWAP Purchase Price payable by the Investor to the Company in connection with the first VWAP Purchase effected by the Company pursuant to this Agreement, or, if the Company effects an Intraday VWAP Purchase prior to the first VWAP Purchase effected pursuant to this Agreement, then the Investor shall withhold an amount in cash equal to the Cash Commitment Fee from the total aggregate Intraday VWAP Purchase Price payable by the Investor to the Company in connection with the first Intraday VWAP Purchase effected by the Company pursuant to this Agreement, without duplication, as payment by the Company to the Investor of the Cash Commitment Fee pursuant to and in accordance with Section 10.1(ii)(b), and upon such withholding by the Investor of such cash amount equal to the Cash Commitment Fee from such total aggregate VWAP Purchase Price or from such total aggregate Intraday VWAP Purchase Price, as applicable, payable by the Investor to the Company pursuant to this Agreement, the Investor shall not withhold any additional cash amounts from the total aggregate purchase prices payable by the Investor to the Company in connection with any VWAP Purchase or Intraday VWAP Purchase effected pursuant to this Agreement.
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For the avoidance of doubt, (x) the Cash Commitment Fee shall be fully earned by the Investor as of the Closing Date and shall be non-refundable when withheld by the Investor (or when paid by the Company to the Investor, as applicable) in accordance with this Section 3.3 and Section 10.1(ii)(b), regardless of whether any additional VWAP Purchases or Intraday VWAP Purchases are effected by the Company or settled hereunder or any subsequent termination of this Agreement, and (y) in the event that the Commencement shall not occur under this Agreement or, if the Commencement shall occur, in the event that no VWAP Purchase or Intraday VWAP Purchase is effected pursuant to this Agreement prior to the termination of this Agreement pursuant to Article VIII, then, in either case, upon the termination of this Agreement pursuant to Article VIII, the Company shall pay the Cash Commitment Fee to the Investor, by wire transfer of immediately available funds to an account designated by the Investor, not later than 5:00 p.m., New York City time, on the third (3rd) the Trading Day immediately following the date of termination of this Agreement pursuant to Article VIII.
If the Company or its transfer agent shall fail for any reason to deliver to the Investor, as DWAC Shares, any Shares purchased by the Investor in a VWAP Purchase or an Intraday VWAP Purchase prior to 10:00 a.m., New York City time, on the Trading Day immediately following the applicable Purchase Share Delivery Date for such VWAP Purchase and for each such Intraday VWAP Purchase (as applicable), and if on or after such Trading Day the Investor purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Investor of such Shares that the Investor anticipated receiving from the Company on such Purchase Share Delivery Date in respect of such VWAP Purchase or such Intraday VWAP Purchase (as applicable), then the Company shall, within one (1) Trading Day after the Investor’s request, either (i) pay cash to the Investor in an amount equal to the Investor’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the “Cover Price”), at which point the Company’s obligation to deliver such Shares as DWAC Shares shall terminate, or (ii) promptly honor its obligation to deliver to the Investor such Shares as DWAC Shares and pay cash to the Investor in an amount equal to the excess (if any) of the Cover Price over the total purchase price paid by the Investor pursuant to this Agreement for all of the Shares purchased by the Investor in such VWAP Purchase or such Intraday VWAP Purchase (as applicable).
The Company shall not issue any fraction of a share of Common Stock to the Investor in connection with any VWAP Purchase or Intraday VWAP Purchase effected pursuant to this Agreement. If the issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up or down to the nearest whole share. All payments to be made by the Investor pursuant to this Agreement shall be made by wire transfer of immediately available funds to such account as the Company may from time to time designate by written notice to the Investor in accordance with the provisions of this Agreement.
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Section 3.4. Compliance with Rules of Trading Market.
(a) Exchange Cap. Subject to Section 3.4(b), the Company shall not issue or sell any shares of Common Stock pursuant to this Agreement, and the Investor shall not purchase or acquire any shares of Common Stock pursuant to this Agreement, to the extent that after giving effect thereto, the aggregate number of shares of Common Stock that would be issued pursuant to this Agreement and the Warrant and the transactions contemplated hereby and thereby would exceed 3,957,838 shares of Common Stock (such number of shares equal to approximately 19.99% of the aggregate number of shares of Common Stock issued and outstanding immediately prior to the execution of this Agreement), which number of shares shall be reduced, on a share-for-share basis, by the number of shares of Common Stock issued or issuable pursuant to any transaction or series of transactions that may be aggregated with the transactions contemplated by this Agreement under applicable rules of the Trading Market (such maximum number of shares of Common Stock, the “Exchange Cap”), unless the Company’s stockholders have approved the issuance of Common Stock pursuant to this Agreement in excess of the Exchange Cap in accordance with the applicable rules of the Trading Market. For the avoidance of doubt, the Company may, but shall be under no obligation to, request its stockholders to approve the issuance of Common Stock pursuant to this Agreement; provided, that if such stockholder approval is not obtained, the Exchange Cap shall be applicable for all purposes of this Agreement and the transactions contemplated hereby at all times during the term of this Agreement (except as set forth in Section 3.4(b)).
(b) At-Market Transaction. Notwithstanding Section 3.4(a) above, the Exchange Cap shall not be applicable for any purposes of this Agreement and the transactions contemplated hereby, solely to the extent that (and only for so long as) the Average Price shall equal or exceed the Base Price (it being hereby acknowledged and agreed that the Exchange Cap shall be applicable for all purposes of this Agreement and the transactions contemplated hereby at all other times during the term of this Agreement, unless the stockholder approval referred to in Section 3.4(a) is obtained). The parties acknowledge and agree that the Minimum Price used to determine the Base Price hereunder represents the lower of (i) the Nasdaq Stock Market (the “Nasdaq”) official closing price of the Common Stock on the Trading Market (as reflected on nasdaq.com) on the Trading Day immediately prior to the date of this Agreement and (ii) the average Nasdaq official closing price of the Common Stock on the Trading Market (as reflected on Nasdaq.com) for the five (5) consecutive Trading Days ending on the Trading Day immediately prior to the date of this Agreement.
(c) General. The Company shall not issue or sell any shares of Common Stock pursuant to this Agreement if such issuance or sale would reasonably be expected to result in (A) a violation of the Securities Act or (B) a breach of the rules of the Trading Market. The provisions of this Section 3.4 shall be implemented in a manner otherwise than in strict conformity with the terms of this Section 3.4 only if necessary to ensure compliance with the Securities Act and the applicable rules of the Trading Market.
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Section 3.5. Beneficial Ownership Limitation. Notwithstanding anything to the contrary contained in this Agreement, the Company shall not issue or sell, and the Investor shall not purchase or acquire, any shares of Common Stock under this Agreement which, when aggregated with all other shares of Common Stock then beneficially owned by the Investor and its Affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result in the beneficial ownership by the Investor of more than 4.99% of the outstanding shares of Common Stock (the “Beneficial Ownership Limitation”). Upon the written request of the Investor, the Company shall promptly (but not later than the next business day on which the Company’s transfer agent is open for business) confirm orally or in writing to the Investor the number of shares of Common Stock then outstanding. The Investor and the Company shall each cooperate in good faith in the determinations required under this Section 3.5 and the application of this Section 3.5. The Investor’s written certification to the Company of the applicability of the Beneficial Ownership Limitation, and the resulting effect thereof hereunder at any time, shall be conclusive with respect to the applicability thereof and such result absent manifest error. The provisions of this Section 3.5 shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 3.5 to the extent necessary to properly give effect to the limitations contained in this Section 3.5.
Article IV
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR
The Investor hereby makes the following representations, warranties and covenants to HOD and to the Company as of the date hereof and as of the date of any VWAP Purchase Notice or Intraday VWAP Purchase Notice:
Section 4.1. Organization and Standing of the Investor. The Investor is duly organized, validly existing and in good standing under the laws of the Cayman Islands and has the requisite corporate power and authority to enter into and perform its obligations under the Transaction Documents to which it is a party and to purchase or acquire the Shares in accordance with the terms hereof. The decision to invest and the execution and delivery of the Transaction Documents to which it is a party by the Investor, the performance by the Investor of its obligations hereunder and the consummation by the Investor of the transactions contemplated hereby have been duly authorized and require no other proceedings on the part of the Investor. The undersigned has the right, power and authority to execute and deliver the Transaction Documents to which it is a party and all other instruments on behalf of the Investor or its shareholders. This Agreement and the Transaction Documents to which it is a party have been duly executed and delivered by the Investor and, assuming the execution and delivery hereof and acceptance thereof by HOD and the Company, will constitute the legal, valid and binding obligations of the Investor, enforceable against the Investor in accordance with its terms.
Section 4.2. Evaluation of Risks. The Investor has such knowledge and experience in financial, tax and business matters as to be capable of evaluating the merits and risks of, and bearing the economic risks entailed by, an investment in the Common Stock and of protecting its interests in connection with the transactions contemplated hereby. The Investor acknowledges and agrees that its investment in the Company hereunder involves a high degree of risk, and that the Investor may lose all or a part of its investment hereunder.
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Section 4.3. No Legal, Investment or Tax Advice from the Company. The Investor acknowledges that it had the opportunity to review the Transaction Documents, and the transactions contemplated by the Transaction Documents with its own legal counsel and investment and tax advisors. The Investor is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of the Company’s representatives or agents for legal, tax, investment or other advice with respect to the Investor’s investment hereunder, the transactions contemplated by this Agreement or the laws of any jurisdiction, and the Investor acknowledges that it may lose all or a part of its investment hereunder.
Section 4.4. Investment Purpose. The Investor is acquiring the Common Stock and any Promissory Note for its own account, for investment purposes and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered under or exempt from the registration requirements of the Securities Act; provided, however, that by making the representations herein, the Investor does not agree, or make any representation or warranty, to hold any of the Shares for any minimum or other specific term and reserves the right to dispose of the Shares at any time in accordance with, or pursuant to, a Registration Statement filed pursuant to this Agreement or an applicable exemption under the Securities Act. The Investor does not presently have any agreement or understanding, directly or indirectly, with any Person to sell or distribute any of the Shares. This Investor is acquiring the Shares and the Promissory Note hereunder in the ordinary course of its business.
Section 4.5. Accredited Investor. The Investor is an “Accredited Investor” as that term is defined in Rule 501(a)(3) of Regulation D.
Section 4.6. Not an Affiliate. The Investor is not an officer, director or a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with the Company or HOD or any “Affiliate” (as that term is defined in Rule 405 promulgated under the Securities Act) of the Company or HOD. During the Investment Period, the Investor will not acquire for its own account any shares of Common Stock or securities exercisable for or convertible into shares of Common Stock, other than pursuant to this Agreement; provided, however, that nothing in this Agreement shall prohibit or be deemed to prohibit the Investor from purchasing, in an open market transaction or otherwise, shares of Common Stock necessary to make delivery by the Investor in satisfaction of a sale by the Investor of Shares that the Investor anticipated receiving from the Company in connection with the settlement of a VWAP Purchase or an Intraday VWAP Purchase (as applicable) if the Company or its transfer agent shall have failed for any reason (other than a failure of the Investor or its Broker-Dealer to set up a DWAC and required instructions) to electronically transfer all of the Shares subject to such VWAP Purchase or such Intraday VWAP Purchase (as applicable) to the Investor on the applicable Purchase Share Delivery Date by crediting the Investor’s or its designated Broker-Dealer’s account at DTC through its DWAC delivery system in compliance with Section 3.3 of this Agreement. For the avoidance of doubt, the foregoing restriction does not apply to any Affiliate of the Investor, provided that any such purchases do not cause the Investor to violate any applicable Exchange Act requirement, including Regulation M.
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Section 4.7. General Solicitation. Neither the Investor, nor any of its affiliates, nor any person acting on its or their behalf, has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with any offer or sale of the Common Stock by the Investor hereunder.
Section 4.8. Trading Activities. The Investor has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with the Investor, engaged in any transactions in the securities of the Company (including, without limitation, any Short Sales (as defined below) involving the Company’s securities) during the period commencing as of the time that the Investor first contacted the Company or the Company’s agents regarding the specific investment in the Company contemplated by this Agreement and ending immediately prior to the execution of this Agreement by the Investor.
Section 4.9. Statutory Underwriter Status. The Investor acknowledges that it will be disclosed as an “underwriter” and a “selling stockholder” in each Registration Statement and in any Prospectus contained therein to the extent required by applicable law and to the extent the Prospectus is related to the resale of Registrable Securities.
Article V
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
Except as set forth in the disclosure schedule delivered by the Company to the Investor, if any (which is hereby incorporated by reference in, and constitutes an integral part of, this Agreement) (the “Disclosure Schedule”), the Company hereby makes the following representations, warranties, acknowledgments, and covenants to the Investor:
Section 5.1. Organization, Good Standing and Power. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the corporate power and authority to own, lease or operate its assets and properties and to conduct its business as now being conducted in all material respects. The Company and each of its Subsidiaries is duly licensed or qualified to do business and in good standing (or equivalent status as applicable) in each jurisdiction in which the assets owned or leased by it or the character of its activities require it to be licensed or qualified or in good standing (or equivalent status as applicable), except where the failure to be so licensed or qualified, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect.
Section 5.2. Authorization, Enforcement. The Company has the requisite corporate power and authority to enter into and perform its obligations under each of the Transaction Documents to which it is a party and to issue the Securities in accordance with the terms hereof and thereof. Except for approvals of the Company’s Board of Directors or a committee thereof as may be required in connection with any issuance and sale of Shares to the Investor hereunder (which approvals shall be obtained prior to the delivery of any VWAP Purchase Notice and any Intraday VWAP Purchase Notice), the execution, delivery and performance by the Company of each of the Transaction Documents to which it is a party and the consummation by it of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate action, and no further consent or authorization of the Company, its Board of Directors or its stockholders is required. Each of the Transaction Documents to which the Company is a party has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditor’s rights and remedies or by other equitable principles of general application (including any limitation of equitable remedies).
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Section 5.3. Capitalization. The authorized capital stock of the Company and the shares thereof issued and outstanding were as set forth in the Commission Documents as of the dates reflected therein. All of the outstanding shares of Common Stock have been duly authorized and validly issued, and are fully paid and non-assessable. Except as set forth in the Commission Documents, this Agreement and the Registration Rights Agreement, there are no agreements or arrangements under which the Company is obligated to register the sale of any securities under the Securities Act. Except as set forth in the Commission Documents, no shares of Common Stock are entitled to preemptive rights and there are no outstanding debt securities and no contracts, commitments, understandings, or arrangements by which the Company is or may become bound to issue additional shares of the capital stock of the Company or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, any shares of capital stock of the Company other than those issued or granted in the ordinary course of business pursuant to the Company’s equity incentive and/or compensatory plans or arrangements. Except for customary transfer restrictions contained in agreements entered into by the Company to sell restricted securities or as set forth in the Commission Documents, the Company is not a party to, and it has no Knowledge of, any agreement restricting the voting or transfer of any shares of the capital stock of the Company. Except as set forth in the Commission Documents, there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by this Agreement, the Registration Rights Agreement or any of the other Transaction Documents, or the consummation of the transactions described herein or therein. The Company has filed with the Commission true and correct copies of the Company’s Certificate of Incorporation as in effect on the Closing Date (the “Charter”), and the Company’s Bylaws as in effect on the Closing Date (the “Bylaws”).
Section 5.4. Issuance of Securities. Payment of the Commitment Fee by the Company to the Investor in such manner, at such time(s) and otherwise pursuant to and in accordance with Section 10.1(ii) of this Agreement has been, and the Total Commitment worth of Shares available for issuance by the Company to the Investor under this Agreement have been, or with respect to the amount of Shares to be purchased by the Investor pursuant to a particular VWAP Purchase Notice or pursuant to a particular Intraday VWAP Purchase Notice (as applicable) will be, prior to the delivery to the Investor hereunder of such VWAP Purchase Notice and prior to the delivery to the Investor hereunder of such Intraday VWAP Purchase Notice (as applicable), in each case duly authorized by all necessary corporate action on the part of the Company. The Shares, when issued and sold against payment therefor in accordance with this Agreement, shall be validly issued and outstanding, fully paid and non-assessable and free from all liens, charges, taxes, security interests, encumbrances, rights of first refusal, preemptive or similar rights and other encumbrances with respect to the issue thereof, and the Investor shall be entitled to all rights accorded to a holder of Common Stock. An aggregate of 100,090,010 shares of Common Stock have been duly authorized and reserved by the Company for issuance and sale to the Investor as Shares pursuant to VWAP Purchases and Intraday VWAP Purchases under this Agreement.
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Section 5.5. No Conflicts. The execution, delivery and performance by the Company of each of the Transaction Documents to which it is a party and the consummation by the Company of the transactions contemplated hereby and thereby do not and shall not (i) result in a violation of any provision of the Company’s Charter or Bylaws, (ii) result in a breach or violation of any of the terms or provisions of, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give rise to any rights of termination, amendment, acceleration or cancellation of, any material agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which the Company or any of its Subsidiaries is a party or is bound, (iii) create or impose a lien, charge or encumbrance on any property or assets of the Company or any of its Subsidiaries under any agreement or any commitment to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or to which any of its, or any of its Subsidiaries’ properties or assets is subject, or (iv) result in a violation of any federal, state, local or foreign statute, rule, regulation or Order applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected (including federal and state securities laws and regulations and the rules and regulations of the Trading Market or applicable Eligible Market), except, in the case of clauses (ii), (iii) and (iv), for such conflicts, defaults, terminations, amendments, acceleration, cancellations, liens, charges, encumbrances and violations as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as specifically contemplated by this Agreement or the Registration Rights Agreement and as required under the Securities Act and any applicable state securities laws, the Company is not required under any federal, state, local or foreign law, rule or regulation to obtain any consent, authorization or Order of, or make any filing or registration with, any Governmental Entity (including, without limitation, the Trading Market) in order for it to execute, deliver or perform any of its obligations under the Transaction Documents to which it is a party (except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect), or to issue the Securities to the Investor in accordance with the terms hereof and thereof (other than such consents, authorizations, Orders, filings or registrations as have been obtained or made prior to the Closing Date); provided, however, that, for purposes of the representation made in this sentence, the Company is assuming and relying upon the accuracy of the representations and warranties of the Investor in this Agreement and the compliance by it with its covenants and agreements contained in this Agreement and the Registration Rights Agreement.
Section 5.6. Commission Documents, Financial Statements; Disclosure Controls and Procedures; Internal Controls Over Financial Reporting; Accountants.
(a) The Company has timely filed (giving effect to permissible extensions in accordance with Rule 12b-25 under the Exchange Act) all Commission Documents required to be filed with or furnished to the Commission by the Company under the Securities Act or the Exchange Act, including those required to be filed with or furnished to the Commission under Section 13(a) or Section 15(d) of the Exchange Act. As of its filing date (or, if amended or superseded by a filing prior to the Closing Date, as of the date of such amended or superseded filing), each Commission Document filed with or furnished to the Commission complied in all material respects with the requirements of the Securities Act or the Exchange Act, as applicable. Each Registration Statement, on the date it is filed with the Commission, on the date it is declared effective by the Commission and on each Purchase Date, shall comply in all material respects with the requirements of the Securities Act (including, without limitation, Rule 415 under the Securities Act) and shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, except that this representation and warranty shall not apply to statements in or omissions from such Registration Statement made in reliance upon and in conformity with information relating to the Investor furnished to the Company in writing by or on behalf of the Investor expressly for use therein. The Prospectus and each Prospectus Supplement required to be filed pursuant to this Agreement or the Registration Rights Agreement after the Closing Date, when taken together, on its date and on each Purchase Date, shall comply in all material respects with the requirements of the Securities Act (including, without limitation, Rule 424(b) under the Securities Act) and shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that this representation and warranty shall not apply to statements in or omissions from the Prospectus or any Prospectus Supplement made in reliance upon and in conformity with information relating to the Investor furnished to the Company in writing by or on behalf of the Investor expressly for use therein. Each Commission Document (other than the Initial Registration Statement or any New Registration Statement, or the Prospectus included therein or any Prospectus Supplement thereto) to be filed with or furnished to the Commission after the Closing Date and filed as part of or incorporated by reference in the Initial Registration Statement or any New Registration Statement, or the Prospectus included therein or any Prospectus Supplement thereto required to be filed pursuant to this Agreement or the Registration Rights Agreement (including, without limitation, the Current Report), when such document is filed with or furnished to the Commission and, if applicable, when such document becomes effective, as the case may be, shall comply in all material respects with the requirements of the Securities Act or the Exchange Act, as applicable. The Company has delivered or made available to the Investor via EDGAR or otherwise true and complete copies of all comment letters and substantive correspondence received by the Company from the Commission relating to the Commission Documents filed with or furnished to the Commission as of the Closing Date, together with all written responses of the Company thereto in the form such responses were filed via EDGAR. Except as disclosed in the Commission Documents, there are no outstanding or unresolved comments or undertakings in such comment letters received by the Company from the Commission. The Commission has not issued any stop order or other Order suspending the effectiveness of any registration statement filed by the Company under the Securities Act or the Exchange Act.
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(b) The financial statements of the Company and its Subsidiaries included or incorporated by reference in the Commission Documents filed with the Commission, together with the related notes and schedules, present fairly, in all material respects, the financial position of the Company as of the dates indicated and the consolidated results of operations, cash flows and changes in stockholders’ equity of the Company for the periods specified (subject, in the case of unaudited statements, to normal year-end audit adjustments which will not be material, either individually or in the aggregate) and have been prepared in compliance with the published requirements of the Securities Act and the Exchange Act, as applicable, and in conformity with generally accepted accounting principles in the United States (“GAAP”) applied on a consistent basis (except (i) for such adjustments to accounting standards and practices as are noted therein and (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) during the periods involved. The pro forma financial statements or data included or incorporated by reference in the Commission Documents filed with the Commission, comply in all material respects with the applicable requirements of Regulation S-X of the Securities Act, including, without limitation, Article 11 thereof, and the assumptions used in the preparation of such pro forma financial statements and data are reasonable, the pro forma adjustments used therein are appropriate to give effect to the circumstances referred to therein and the pro forma adjustments have been properly applied to the historical amounts in the compilation of those statements and data. The other financial and statistical data with respect to the Company contained or incorporated by reference in the Commission Documents filed with the Commission, if any, are accurately and fairly presented in all material respects and prepared on a basis consistent with the financial statements and books and records of the Company. There are no financial statements (historical or pro forma) that are required to be included or incorporated by reference in the Commission Documents filed with the Commission that are not included or incorporated by reference as required. All disclosures contained or incorporated by reference in the Commission Documents filed with the Commission regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply in all material respects with Regulation G of the Exchange Act and Item 10 of Regulation S-K under the Securities Act, to the extent applicable.
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(c) Except as set forth in the Commission Documents filed with the Commission, the Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as set forth in the Commission Documents filed with the Commission, the Company is not aware of any material weaknesses in its internal control over financial reporting. Except as set forth in the Commission Documents filed with the Commission, since the date of the latest audited financial statements of the Company included in the Commission Documents filed with the Commission, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. Except as set forth in the Commission Documents filed with the Commission, the Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15) that comply with the requirements of the Exchange Act.
(d) Marcum LLP (the “Accountant”), whose report on the financial statements of the Company was filed with the Commission as part of the Form S-4 Registration Statement and is to be filed with the Commission as a part of the Initial Registration Statement, are and, during the periods covered by their report, were independent public accountants within the meaning of the Securities Act and the Public Company Accounting Oversight Board (United States). To the Company’s Knowledge, the Accountant is not in violation of the auditor independence requirements of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) with respect to the Company.
(e) The Company has timely filed all certifications and statements the Company is required to file under (i) Rule 13a-14 or Rule 15d-14 under the Exchange Act or (ii) 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act) with respect to all Commission Documents with respect to which the Company is required to file such certifications and statements thereunder.
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Section 5.7. Subsidiaries. Exhibit 21.1 to the Form S-4 Registration Statement sets forth each Subsidiary of the Company as of the Closing Date, other than those that may be omitted pursuant to Item 601 of Regulation S-K, and the Company does not have any other Subsidiaries as of the Closing Date, other than those that may be omitted pursuant to Item 601 of Regulation S-K. All Subsidiaries of the Company are duly organized and in good standing under the laws of the place of organization or incorporation, and each Subsidiary is in good standing in each jurisdiction in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to qualify would not have a Material Adverse Effect.
Section 5.8. No Material Adverse Effect or Material Adverse Change. Except as otherwise disclosed in any Commission Documents,: (i) the Company has not experienced or suffered any Material Adverse Effect, and there exists no current state of facts, condition or event which would reasonably be expected to have a Material Adverse Effect; (ii) the Company has conducted its business consistent with past practice in all material respects.
Section 5.9. No Undisclosed Liabilities. The Company does not have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations or any “variable interest entities” as that term is used in Accounting Standards Codification Paragraph 810-10-25-20), not described in Commission Documents which are required to be described in such Commission Documents.
Section 5.10. No Material Defaults on Indebtedness. Except as set forth in the Commission Documents, neither the Company nor any of its Subsidiaries is (i) in violation of its charter or bylaws or similar organizational documents or (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, promissory note, or loan agreement or other instrument relating to Indebtedness to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or to which any of the property or assets of the Company or any of its Subsidiaries is subject, except, in the case of clause (ii) above, for any such default that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 5.11. Solvency. The Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to any Bankruptcy Law, nor does the Company have any Knowledge that its creditors intend to initiate involuntary bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for relief under any Bankruptcy Law. Except as set forth in the Commission Documents, the Company is financially solvent and is generally able to pay its debts as they become due.
Section 5.12. Title to Real and Personal Property. The Company has good and valid title to all items of real property and good and valid title to all personal property described in the Commission Documents as being owned by the Company that are material to the business of the Company, in each case, free and clear of all liens, encumbrances and claims, except those that (i) do not materially interfere with the use made and proposed to be made of such property by the Company, (ii) would reasonably be expected to not, individually or in the aggregate, have a Material Adverse Effect or (iii) are disclosed in the Commission Documents filed with the Commission. Any real property described in the Commission Documents filed with the Commission as being leased by the Company is held by the Company under valid, existing and enforceable leases, except those that (i) do not materially interfere with the use made or proposed to be made of such property by the Company or the Subsidiaries or (ii) would not be reasonably be expected, individually or in the aggregate, have a Material Adverse Effect.
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Section 5.13. Litigation. Except as disclosed in the Commission Documents, there is no Proceeding pending or, to the Company’s Knowledge, threatened in writing against the Company that, if adversely decided or resolved, would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as disclosed in the Commission Documents, neither the Company, nor any director or officer of the Company, is or has been the subject of any Proceeding involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty, which would reasonably expected to result in a judgment, decree or order having a Material Adverse Effect. Except as disclosed in the Commission Documents, there has not been, and to the Knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company, which would reasonably expected to result in a judgment, decree or order having a Material Adverse Effect.
Section 5.14. Compliance With Laws. Except as disclosed in the Commission Documents, the business of the Company has been and is presently being conducted in compliance with all applicable Laws, except for such non-compliance which, individually or in the aggregate, would not have a Material Adverse Effect. Except as disclosed in the Commission Documents, neither the Company nor any of its Subsidiaries is in violation of any Order applicable to the Company, except in all cases for any such violations which could not, individually or in the aggregate, have a Material Adverse Effect.
Section 5.15. Certain Fees. Except as previously disclosed to the Investor in writing, no brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Investor shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section 5.15 incurred by the Company that may be due or payable in connection with the transactions contemplated by the Transaction Documents.
Section 5.16. Disclosure. The Company confirms that neither it nor any other Person acting on its behalf has provided the Investor or any of its agents, advisors or counsel with any information that constitutes or could reasonably be expected to constitute material, nonpublic information concerning the Company that has not been publicly disclosed by the Company in a Commission Document filed by the Company with the Commission, other than the existence of the transactions contemplated by the Transaction Documents. The Company understands and confirms that the Investor will rely on the foregoing representations in effecting resales of Securities under the Registration Statement. All disclosure provided to Investor regarding the Company, its business and the transactions contemplated by the Transaction Documents (including, without limitation, the representations and warranties of the Company contained in the Transaction Documents to which it is a party (as modified by the Disclosure Schedule)) furnished in writing by or on behalf of the Company for purposes of or in connection with the Transaction Documents, taken together, is true and correct in all material respects on the date on which such information is dated or certified, and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading at such time. Each press release issued by the Company since the Closing Date did not at the time of release (or, if amended or superseded by a later dated press release issued by the Company prior to the Closing Date or by a later dated Commission Document filed with or furnished to the Commission by the Company prior to the Closing Date, at the time of issuance of such later dated press release or filing or furnishing of such Commission Document, as applicable) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading.
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Section 5.17. Material Permits. Except as disclosed in the Commission Documents, the Company has all Permits that are required to own, lease or operate its properties and assets and to conduct its business as currently conducted, except for such Permits that are not, individually or in the aggregate, material to the Company (the “Material Permits”). Except as disclosed in the Commission Documents or as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) each Material Permit is in full force and effect in accordance with its terms, (ii) no written notice of revocation, cancellation or termination of any Material Permit has been received by the Company and (iii) there are, and have been, no Proceedings pending or, to the Company’s Knowledge, threatened relating to the suspension, revocation or material and adverse modification of any of such Material Permit. This Section 5.17 does not relate to environmental matters, such items being the subject of Section 5.18.
Section 5.18. Environmental Matters. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or other approvals required of it under applicable Environmental Laws to conduct its business; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. The Company has not received any written notice from any Governmental Entity or any third party alleging any material violation thereof or liability thereunder (including, without limitation, liability for costs of investigating or remediating sites containing hazardous substances and/or damages to natural resources). Except as disclosed in the Commission Documents, there has been no storage, generation, transportation, use, handling, treatment, Release or threat of Release (as defined below) of Hazardous Materials by or caused by the Company (or, to the knowledge of the Company, any other Person (including any predecessor of the Company) for whose acts or omissions the Company is or could reasonably be expected to be liable) at, on, under or from any property or facility now or previously owned, operated or leased by the Company, or at, on, under or from any other property or facility, in violation of any Environmental Laws or in a manner or amount or to a location that would reasonably be expected to result in any liability under any Environmental Law, except for any violation or liability which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. “Release” means any spilling, leaking, seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing, or migrating in, into or through the environment, or in, into from or through any building or structure.
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Section 5.19. Intellectual Property Rights. Except as disclosed in the Commission Documents, the Company or one of its the Subsidiaries has, or has rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights as necessary or required for use in connection with its business as conducted by the Company and the Subsidiaries immediately prior to the Closing and which the failure to so have would, individually or in the aggregate, reasonably expected to have a Material Adverse Effect (collectively, the “Intellectual Property Rights”), provided that the foregoing shall not be interpreted as a representation or warranty of non-infringement. Except as disclosed in the Commission Documents, none of, and the Company or any of its Subsidiaries has not received any written notice that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement, except for such expiration, termination or abandonment that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as disclosed in the Commission Documents, neither the Company nor any of its Subsidiaries has received a written notice of a claim or otherwise has any Knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person. To the Knowledge of the Company, except as disclosed in the Commission Documents, all such Intellectual Property Rights that are owned or controlled by the Company are enforceable and there is no existing infringement by another Person of any such Intellectual Property rights, except for such infringement that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as disclosed in the Commission Documents, the Company or any of its Subsidiaries has taken reasonable security measures to protect the secrecy, confidentiality and value of all of its intellectual properties, except where failure to do so would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 5.20. Material Contracts. Except as set forth in the Commission Documents filed with the Commission, the descriptions in such Commission Documents of the material Contracts therein described present fairly in all material respects the information required to be shown, and there are no material Contracts of a character required to be described in such Commission Documents or to be filed as exhibits thereto which are not described or filed as required; all material Contracts between the Company and third parties expressly referenced in such Commission Documents are legal, valid and binding obligations of the Company and, to the Knowledge of the Company, each other contracting party thereto, enforceable in accordance with their respective terms, except to the extent enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles, and except where the failure of any such Contract to be enforceable in accordance with its terms would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
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Section 5.21. Transactions With Affiliates. Except as set forth in the Commission Documents, there are no loans, leases, agreements, contracts, royalty agreements, management contracts, service arrangements or other continuing transactions exceeding $120,000 between (a) the Company, on the one hand, and (b) any person or entity who would be covered by Item 404(a) of Regulation S-K, on the other hand, for the time period as required under Item 404(a) thereof. Except as disclosed in the Commission Documents, there are no outstanding amounts payable to or receivable from, or advances by the Company to, and the Company is not otherwise a creditor of or debtor to, any beneficial owner of more than 5% of the outstanding shares of Common Stock, or any director, employee or affiliate of the Company, other than (i) reimbursement for reasonable expenses incurred on behalf of the Company or (ii) as part of the normal and customary terms of such person’s employment or service as a director with the Company.
Section 5.22. Labor Relations. Except as disclosed in the Commission Documents, no material labor dispute exists or, to the Knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. Except as disclosed in the Commission Documents, the Company is in compliance with all Laws relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 5.23. Use of Proceeds. The proceeds from the sale of the Shares by the Company to Investor shall be used by the Company in the manner as will be set forth in the Prospectus included in any Registration Statement (and any post-effective amendment thereto) and any Prospectus Supplement thereto filed pursuant to the Registration Rights Agreement.
Section 5.24. Investment Company Act Status. The Company is not, and as a result of the consummation of the transactions contemplated by the Transaction Documents and the application of the proceeds from the sale of the Shares as will be set forth in the Prospectus included in any Registration Statement (and any post-effective amendment thereto) and any Prospectus Supplement thereto filed pursuant to the Registration Rights Agreement, will not be required to register as an “investment company” under the Investment Company Act of 1940, as amended.
Section 5.25. Tax Matters. Except as otherwise disclosed in the Commission Documents and except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company or any of its Subsidiaries (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject as and when due subject to any applicable extensions, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, whether or not shown or determined to be due on such returns, reports and declarations, and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. Except as otherwise disclosed in the Commission Documents and except for matters that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, there are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the Company has no Knowledge of any basis for any such claim.
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Section 5.26. Insurance. The Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as, to the Company’s knowledge, are adequate for the conduct of its business, and to the Company’s knowledge is prudent and customary in the business in which the Company is engaged, including, but not limited to, directors and officers insurance coverage, except where the failure to be so insured, would reasonably be expected to not, individually or in the aggregate, have a Material Adverse Effect. As of the date of this Agreement, no written notice of cancellation has been received by the Company, non-renewal disallowance or reduction in coverage or claim or termination has been received by the Company, other than in connection with ordinary renewals.
Section 5.27. Exemption from Registration. Subject to, and in reliance on, the representations, warranties and covenants made herein by the Investor, the offer and sale of the Securities by the Company to the Investor in accordance with the terms and conditions of this Agreement is exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2); provided, however, that at the request of and with the express agreement of the Investor (including, without limitation, the representations, warranties and covenants of Investor set forth in Sections 4.10 through 4.13), the Securities to be issued from and after Commencement to or for the benefit of the Investor pursuant to this Agreement shall be issued to the Investor or its designee only as DWAC Shares.
Section 5.28. No General Solicitation or Advertising. Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf, has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Shares hereunder.
Section 5.29. No Integrated Offering. None of the Company or any of its Affiliates, nor any Person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the offer, issuance and sale by the Company to the Investor of any of the Securities under the Securities Act, whether through integration with prior offerings or otherwise, or cause this offering of the Securities to require approval of stockholders of the Company under any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of the Trading Market. None of the Company, its Affiliates nor any Person acting on their behalf will take any action or steps referred to in the preceding sentence that would require registration of the offer, issuance and sale by the Company to the Investor of any of the Securities under the Securities Act or cause the offering of any of the Securities to be integrated with any other offering of securities of the Company.
Section 5.30. Dilutive Effect. The Company is aware and acknowledges that issuance of the Securities could cause dilution to existing stockholders and could significantly increase the number of outstanding shares of Common Stock. The Company further acknowledges that its obligation to issue the Shares pursuant to the terms of a VWAP Purchase Notice and pursuant to the terms of an Intraday VWAP Purchase Notice (as applicable) in accordance with this Agreement is, in each case, absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other stockholders of the Company.
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Section 5.31. Manipulation of Price. Neither the Company nor any of its officers, directors or to the Knowledge of the Company, its Affiliates has, and, to the Knowledge of the Company, no Person acting on their behalf has, (i) taken, directly or indirectly, any action designed or intended to cause or to result in the stabilization or manipulation of the price of any security of the Company, or which caused or resulted in, or which would in the future reasonably be expected to cause or result in, the stabilization or manipulation of the price of any security of the Company, in each case 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. Neither the Company nor any of its officers, directors or to the Knowledge of the Company, its Affiliates will during the term of this Agreement, and, to the Knowledge of the Company, no Person acting on their behalf will during the term of this Agreement, take any of the actions referred to in the immediately preceding sentence.
Section 5.32. Securities Act. The Company has complied and shall comply with all applicable federal and state securities laws in connection with the offer, issuance and sale of the Securities hereunder, including, without limitation, the applicable requirements of the Securities Act. Each Registration Statement, upon filing with the Commission and at the time it is declared effective by the Commission, shall satisfy all of the requirements of the Securities Act to register the resale of the Registrable Securities included therein by the Investor in accordance with the Registration Rights Agreement on a delayed or continuous basis under Rule 415 under the Securities Act at then-prevailing market prices, and not fixed prices. The Company is not currently, and has not been since the Closing Date, an issuer identified in, or subject to, Rule 144(i)(1).
Section 5.33. Listing and Maintenance Requirements; DTC Eligibility. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to, or which to its Knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act, nor has the Company received any notification that the Commission is contemplating terminating such registration. The Company has not received written notice from the Trading Market (or, if the Common Stock is then listed on an Eligible Market, from such Eligible Market) to the effect that the Company is not in compliance with the listing or maintenance requirements of the Trading Market (or of such Eligible Market, as applicable). Except as disclosed in the Commission Documents filed with the Commission, the Company is in compliance with all applicable listing and maintenance requirements of the Trading Market. The Common Stock may be issued and transferred electronically to third parties via DTC through its Deposit/Withdrawal at Custodian (“DWAC”) delivery system. The Company has not received written notice from DTC to the effect that a suspension of, or restriction on, accepting additional deposits of the Common Stock, electronic trading or book-entry services by DTC with respect to the Common Stock is being imposed or is contemplated.
Section 5.34. Application of Takeover Protections. The Company and its Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s Charter or the Delaware General Corporation Law, as amended, that is or could become applicable to the Investor as a result of the Investor and the Company fulfilling their respective obligations or exercising their respective rights under the Transaction Documents (as applicable), including, without limitation, as a result of the Company’s issuance of the Securities and the Investor’s ownership of the Securities.
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Section 5.35. Foreign Corrupt Practices. Neither the Company, nor, to the Knowledge of the Company, any director, officer, agent or employee of the Company has, directly or indirectly, (1) made any unlawful contribution to any federal, state, local and foreign candidate for public office, or failed to disclose fully any contribution in violation of law, (2) made any payment to any federal, state, local and foreign governmental officer or official, or other person charged with similar public or quasi-public duties, other than payments required or permitted by the laws of the United States or any jurisdiction thereof, (3) violated or is in violation of any provisions of the U.S. Foreign Corrupt Practices Act of 1977 (the “FCPA”), or (4) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.
Section 5.36. Office of Foreign Assets Control. Neither the Company nor, to the Knowledge of the Company, any director, officer, agent or employee of the Company is currently subject to any U.S. sanctions (the “Sanctions Regulations”) administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the net proceeds from the sale of the Shares, or lend, contribute or otherwise make available such net proceeds to any subsidiary, joint venture partner or other Person, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC or listed on the OFAC Specially Designated Nationals and Blocked Persons List. Neither the Company nor, to the Knowledge of the Company, any director, officer, agent or employee of the Company, is named on any denied party or entity list administered by the Bureau of Industry and Security of the U.S. Department of Commerce pursuant to the Export Administration Regulations (“EAR”); and the Company will not, directly or indirectly, use the proceeds of the sale of the Shares hereunder, or lend, contribute or otherwise make available such proceeds to any Person, for the purpose of financing the activities of any person currently subject to any Sanctions Regulations or to support activities in or with countries sanctioned by said authorities, or for engaging in transactions that violate the EAR.
Section 5.37. Money Laundering. To the Company’s Knowledge, the operations of the Company is and has been conducted at all times in the last five (5) years in compliance in all material respects with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “Money Laundering Laws”) and no material action, suit or proceeding by or before any Governmental Entity involving the Company with respect to the Money Laundering Laws is pending or, to the Knowledge of the Company, threatened.
Section 5.38. ERISA. Except as disclosed in the Commission Documents and except as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, each material employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and all stock purchase, stock option, stock-based severance, employment, change-in-control, medical, disability, fringe benefit, bonus, incentive, deferred compensation, employee loan and all other employee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA, that is maintained, administered or contributed to by the Company or any of its Affiliates for employees or former employees, directors or independent contractors of the Company, or under which the Company has had or has any present or future obligation or liability, has been maintained in material compliance with its terms and the requirements of any applicable federal, state, local and foreign Laws, including but not limited to ERISA and the Internal Revenue Code of 1986, as amended (the “Code”); no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred which would result in a material liability to the Company with respect to any such plan excluding transactions effected pursuant to a statutory or administrative exemption; no event has occurred (including a “reportable event” as such term is defined in Section 4043 of ERISA) and no condition exists that would subject the Company to any material tax, fine, lien, penalty, or liability imposed by ERISA, the Code or other applicable Law; and for each such plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no “accumulated funding deficiency” as defined in Section 412 of the Code has been incurred, whether or not waived, and the fair market value of the assets of each such plan (excluding for these purposes accrued but unpaid contributions) exceeds the present value of all benefits accrued under such plan determined using reasonable actuarial assumptions.
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Section 5.39. IT Systems. To the Knowledge of the Company and except as otherwise described in the Commission Documents, and except as would not, individually or in the aggregate, result in a Material Adverse Effect, (i) there has been no security breach or attack or other compromise of or relating to any of the Company’s information technology and computer systems, networks, hardware, software, data (including the data of its customers, employees, suppliers, vendors and any third party data maintained by or on its behalf), equipment or technology (“IT Systems and Data”), (ii) the Company has not been notified of any event or condition that would reasonably be expected to result in any security breach, attack or compromise to its IT Systems and Data, (iii) the Company has complied in all material respects, and is presently in material compliance with, all applicable Laws of any Governmental Entity and all industry guidelines, standards, internal policies and contractual obligations relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification and (iv) the Company has implemented backup and disaster recovery technology consistent with industry standards and practice.
Section 5.40. Privacy Laws. Except as otherwise described in the Commission Documents, and except as would not, individually or in the aggregate, result in a Material Adverse Effect, the Company is, and at all prior times was, in compliance with all applicable data privacy and security Laws; and the Company has taken all necessary actions to comply in all respects with the European Union General Data Protection Regulation (“GDPR”) (EU 2016/679) (collectively, “Privacy Laws”). The Company has in place, complies with, and takes appropriate steps reasonably designed to ensure compliance in all material respects with its policies and procedures relating to data privacy and security and the collection, storage, use, disclosure, handling and analysis of Personal Data (the “Policies”). The Company provides accurate notice of its Policies to its customers, employees, third party vendors and representatives. The Policies provide accurate and sufficient notice of the Company’s then-current privacy practices relating to its subject matter and such Policies do not contain any material omissions of the Company’s then-current privacy practices. “Personal Data” means (i) a natural persons’ name, street address, telephone number, email address, photograph, social security number, bank information, or customer or account number; (ii) any information which would qualify as “personally identifying information” under the Federal Trade Commission Act, as amended; (iii) “personal data” as defined by GDPR; and (iv) any other piece of information that allows the identification of such natural person, or his or her family, or permits the collection or analysis of any data related to an identified person’s health or sexual orientation. Except as would not, individually or in the aggregate, result in a Material Adverse Effect, none of such disclosures made or contained in any of the Policies have been inaccurate, misleading, deceptive or in violation of any Privacy Laws or Policies. The execution, delivery and performance of this Agreement, the Registration Rights Agreement or any of the other Transaction Documents will not result in a breach of any Privacy Laws or Policies. Except as would not, individually or in the aggregate, result in a Material Adverse Effect, the Company (i) has not received written notice of any actual or potential liability under or relating to, or actual or potential violation of, any of the Privacy Laws, and has no Knowledge of any event or condition that would reasonably be expected to result in any such notice; (ii) is not currently conducting or paying for, in whole or in part, any investigation, remediation or other corrective action pursuant to any Privacy Law; or (iii) is not a party to any Order or agreement that imposed any obligation or liability under any Privacy Law.
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Section 5.41. U.S. Real Property Holding Corporation. Except as disclosed in the Commission Documents, to the Company’s Knowledge, the Company is not and has not been at any time during the five (5)-year period ending on the date of this Agreement, a U.S. real property holding corporation within the meaning of Section 897 of the Code.
Section 5.42. Margin Rules. Neither the issuance, sale and delivery of the Securities nor the application of the proceeds thereof by the Company as described in the Commission Documents filed with the Commission will violate Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors.
Section 5.43. Emerging Growth Company Status. As of the Closing Date, the Company was, and as of the Commencement Date the Company will be, an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012.
Section 5.44. Smaller Reporting Company Status. As of the Closing Date, the Company was, and as of the Commencement Date the Company will be, a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act.
Section 5.45. No Disqualification Events. None of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the offering contemplated hereby, 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”) 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) under the Securities Act. The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event.
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Section 5.46. Market Capitalization. As of the date of this Agreement, the aggregate market value of the outstanding voting and non-voting common equity (as defined in Rule 405 of the Securities Act) of the Company held by Persons other than Affiliates of the Company (pursuant to Rule 144, those that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the Company) (the “Non-Affiliate Shares”), was approximately $46,286,331.64 (calculated by multiplying (i) the highest price at which the common equity of the Company closed on the Trading Market within 60 days of the date of this Agreement by (ii) the number of Non-Affiliate Shares).
Section 5.47. [Reserved].
Section 5.48. Broker/Dealer Relationships; FINRA Information. The Company (i) is not required to register as a “broker” or “dealer” in accordance with the provisions of the Exchange Act or (ii) does not, directly or indirectly through one or more intermediaries, control or is a “person associated with a member” or “associated person of a member” (within the meaning set forth in the FINRA Manual). All of the information provided to the Investor, YS or to their counsel, specifically for use by YS in connection with the FINRA Filing (and related disclosure) with FINRA, by the Company, its counsel, its officers and directors and the holders of any securities (debt or equity) or options to acquire any securities of the Company in connection with the transactions contemplated by the Transaction Documents is true, complete, correct and compliant with FINRA’s rules and any letters, filings or other supplemental information provided to FINRA pursuant to FINRA Rules.
Section 5.49. Acknowledgement Regarding Relationship with Investor and YS. The Company acknowledges and agrees, to the fullest extent permitted by Law, that the Investor is acting solely in the capacity of an arm’s-length purchaser with respect to this Agreement, the Registration Rights Agreement and the transactions contemplated by the Transaction Documents, and YS is acting as a representative of the Investor in connection with the transactions contemplated by the Transaction Documents, and of no other party, including the Company.
The Company further acknowledges that while the Investor will be deemed to be a statutory “underwriter” with respect to certain of the transactions contemplated by the Transaction Documents in accordance with interpretive positions of the Staff of the Commission, the Investor maintains that it is a “trader” that is not required to register with the Commission as a broker-dealer under Section 15(a) of the Securities Exchange Act of 1934. The Company further acknowledges that the Investor and its representatives are not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement, the Registration Rights Agreement and the transactions contemplated by the Transaction Documents, and any advice given by the Investor or any of its representatives (including YS) or agents in connection therewith is merely incidental to the Investor’s acquisition of the Securities. The Company understands and acknowledges that, consistent with applicable legal and regulatory requirements, employees of YS may discuss market color, VWAP Purchase Notice and Intraday VWAP Purchase Notice timing and parameter considerations and other related capital markets considerations with the Company in connection with the Transaction Documents and the transactions contemplated thereby, in all cases on behalf of the Investor. The Company acknowledges and agrees that the Investor has not made and does not make any representations or warranties with respect to the transactions contemplated by the Transaction Documents other than those specifically set forth in Article IV.
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Section 5.50. Acknowledgement Regarding Investor’s Affiliate Relationships. Affiliates of the Investor, including YS, engage in a wide range of activities for their own accounts and the accounts of customers, including corporate finance, mergers and acquisitions, merchant banking, equity and fixed income sales, trading and research, derivatives, foreign exchange, futures, asset management, custody, clearance and securities lending. In the course of their respective business, Affiliates of the Investor may, directly or indirectly, hold long or short positions, trade and otherwise conduct such activities in or with respect to debt or equity securities or bank debt of, or derivative products relating to, the Company. Any such position will be created, and maintained, independently of the position the Investor takes in the Company. In addition, at any given time Affiliates of the Investor, including YS, may have been or in the future may be engaged by one or more entities that may be competitors with, or otherwise adverse to, the Company in matters unrelated to the transactions contemplated by the Transaction Documents, and Affiliates of the Investor, including YS may have or may in the future provide investment banking or other services to the Company in matters unrelated to the transactions contemplated by the Transaction Documents. Activities of any of the Investor’s Affiliates performed on behalf of the Company may give rise to actual or apparent conflicts of interest given the Investor’s potentially competing interests with those of the Company.
The Company expressly acknowledges the benefits it receives from the Investor’s participation in the transactions contemplated by the Transaction Documents, on the one hand, and the Investor’s Affiliates’ activities, if any, on behalf of the Company unrelated to the transactions contemplated by the Transaction Documents, on the other hand, and understands the conflict or potential conflict of interest that may arise in this regard, and has consulted with such independent advisors as it deems appropriate in order to understand and assess the risks associated with these potential conflicts of interest. Consistent with applicable legal and regulatory requirements, applicable Affiliates of the Investor have adopted policies and procedures to establish and maintain the independence of their research departments and personnel from their investment banking groups and the Investor. As a result, research analysts employed by Affiliates of the Investor may hold views, make statements or investment recommendations or publish research reports with respect to the Company or the transactions contemplated by the Transaction Documents that differ from the views of the Investor.
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Article VA
REPRESENTATIONS, WARRANTIES AND COVENANTS OF HOD
Except as set forth in the disclosure schedule delivered by HOD to the Investor, if any (which is hereby incorporated by reference in, and constitutes an integral part of, this Agreement) (the “HOD Disclosure Schedule”), HOD hereby makes the following representations, warranties, acknowledgments, and covenants to the Investor:
Section 5A.1. HOD Financial Statements; Accountants.
(a) The financial statements of HOD and its Subsidiaries included or incorporated by reference in the Commission Documents filed with the Commission, together with the related notes and schedules, present fairly, in all material respects, the financial position of HOD as of the dates indicated and the consolidated results of operations, cash flows and changes in stockholders’ equity of HOD for the periods specified (subject, in the case of unaudited statements, to normal year-end audit adjustments which will not be material, either individually or in the aggregate) and have been prepared in compliance with the requirements of the Securities Act and the Exchange Act, as applicable, and in conformity with GAAP applied on a consistent basis (except (i) for such adjustments to accounting standards and practices as are noted therein and (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) during the periods involved. The pro forma financial statements or data included or incorporated by reference in the Commission Documents filed with the Commission, comply in all material respects with the applicable requirements of Regulation S-X of the Securities Act, including, without limitation, Article 11 thereof, and the assumptions used in the preparation of such pro forma financial statements and data are reasonable, the pro forma adjustments used therein are appropriate to give effect to the circumstances referred to therein and the pro forma adjustments have been properly applied to the historical amounts in the compilation of those statements and data. The other financial and statistical data with respect to HOD contained or incorporated by reference in the Commission Documents filed with the Commission, if any, are accurately and fairly presented in all material respects and prepared on a basis consistent with the financial statements and books and records of HOD. There are no financial statements (historical or pro forma) that are required to be included or incorporated by reference in the Commission Documents filed with the Commission that are not included or incorporated by reference as required.
(b) Davidson & Company LLP (the “HOD Accountant”), whose report on the financial statements of the Company was filed with the Commission as part of the Form S-4 Registration Statement and is to be filed with the Commission as a part of the Initial Registration Statement, are and, during the periods covered by their report, were independent public accountants within the meaning of the Securities Act and the Public Company Accounting Oversight Board (United States). To the Company’s Knowledge, the Accountant is not in violation of the auditor independence requirements of the Sarbanes-Oxley Act with respect to the Company.
Section 5A.2. No Material Adverse Effect or Material Adverse Change. Except as otherwise disclosed in any Commission Documents: (i) HOD has not experienced or suffered any HOD Material Adverse Effect, and there exists no current state of facts, condition or event which would reasonably be expected to have an HOD Material Adverse Effect; (ii) HOD has conducted its business consistent with past practice in all material respects.
Section 5A.3. Litigation. Except as disclosed in the Commission Documents, there is no Proceeding pending or, to HOD’s Knowledge, threatened in writing against HOD, if adversely decided or resolved, would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as disclosed in the Commission Documents, neither HOD, nor any director or officer of HOD, is or has been the subject of any Proceeding involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty, which would reasonably expected to result in a judgment, decree or order having an HOD Material Adverse Effect. Except as disclosed in the Commission Documents, there has not been, and to the Knowledge of HOD, there is not pending or contemplated, any investigation by the Commission involving HOD or any current or former director or officer of HOD, which would reasonably expected to result in a judgment, decree or order having an HOD Material Adverse Effect.
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Section 5A.4. Compliance With Laws. Except as disclosed in the Commission Documents, the business of HOD has been and is presently being conducted in compliance with all applicable Laws, except for such non-compliance which, individually or in the aggregate, would not have an HOD Material Adverse Effect. Except as disclosed in the Commission Documents, neither HOD nor any of its Subsidiaries is in violation of any Order applicable to HOD, except in all cases for any such violations which could not, individually or in the aggregate, have an HOD Material Adverse Effect.
Section 5A.5. Certain Fees. No brokerage or finder’s fees or commissions are or will be payable by HOD to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Investor shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section 5A.5 incurred by HOD that may be due or payable in connection with the transactions contemplated by the Transaction Documents.
Section 5A.6. No Disqualification Events. No person who would be subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act is or shall be a director, executive officer, employee, consultant, advisory board member or perform a policy-making function or any similar role of HOD or any of its Subsidiaries.
Section 5A.7. Disclosure. HOD confirms that neither it nor any other Person acting on its behalf has provided the Investor or any of its agents, advisors or counsel with any information that constitutes or could reasonably be expected to constitute material, nonpublic information concerning HOD that has not been publicly disclosed by the Company or HOD in a Commission Document filed by the Company or HOD with the Commission, other than the existence of the transactions contemplated by the Transaction Documents. HOD understands and confirms that the Investor will rely on the foregoing representations in effecting resales of Securities under the Registration Statement. All disclosure provided to Investor regarding HOD, its business and the transactions contemplated by the Transaction Documents (including, without limitation, the representations and warranties of HOD contained in the Transaction Documents to which it is a party (as modified by the HOD Disclosure Schedule)) furnished in writing by or on behalf of HOD for purposes of or in connection with the Transaction Documents, taken together, is true and correct in all material respects on the date on which such information is dated or certified, and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading at such time. Each press release issued by HOD since the Closing Date did not at the time of release (or, if amended or superseded by a later dated press release issued by HOD prior to the Closing Date or by a later dated Commission Document filed with or furnished to the Commission by the Company prior to the Closing Date, at the time of issuance of such later dated press release or filing or furnishing of such Commission Document, as applicable) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading.
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Article VI
ADDITIONAL COVENANTS
The Company covenants with the Investor, and the Investor covenants with the Company, as follows, which covenants of one party are for the benefit of the other party, during the Investment Period (and with respect to the Company, for the period following the termination of this Agreement specified in Section 8.3 pursuant to and in accordance with Section 8.3):
Section 6.1. Securities Compliance. The Company shall notify the Commission and the Trading Market, if and as applicable, in accordance with their respective rules and regulations, of the transactions contemplated by the Transaction Documents, and shall take all necessary action, undertake all proceedings and obtain all registrations, permits, consents and approvals for the legal and valid issuance of the Securities to the Investor in accordance with the terms of the Transaction Documents, as applicable.
Section 6.2. Reservation of Common Stock. The Company has available and the Company shall reserve and keep available at all times, free of preemptive and other similar rights of stockholders, the requisite aggregate number of authorized but unissued shares of Common Stock to enable the Company to timely effect (i) the issuance, sale and delivery of all Shares to be issued, sold and delivered in respect of each VWAP Purchase effected under this Agreement, in the case of this clause (i), at least prior to the delivery by the Company to the Investor of the applicable VWAP Purchase Notice in connection with such VWAP Purchase, and (ii) the issuance, sale and delivery of all Shares to be issued, sold and delivered in respect of each Intraday VWAP Purchase effected under this Agreement, in the case of this clause (iii), at least prior to the delivery by the Company to the Investor of the applicable Intraday VWAP Purchase Notice in connection with such Intraday VWAP Purchase. Without limiting the generality of the foregoing, as of the date of this Agreement the Company has reserved, and as of the Commencement Date shall have continued to reserve, out of its authorized and unissued Common Stock, 100,090,010 shares of Common Stock solely for the purpose of issuing Shares pursuant to one or more VWAP Purchases and pursuant to one or more Intraday VWAP Purchases (as applicable) that may be effected by the Company, in its sole discretion, from time to time from and after the Commencement Date under this Agreement. The number of shares of Common Stock so reserved for the purpose of effecting issuances of Shares pursuant to VWAP Purchases and pursuant to Intraday VWAP Purchases under this Agreement (as applicable) may be increased from time to time by the Company from and after the Commencement Date, and such number of reserved shares may be reduced from and after the Commencement Date only by the number of Shares actually issued, sold and delivered to the Investor pursuant to any VWAP Purchase and any Intraday VWAP Purchase (as applicable) effected from and after the Commencement Date pursuant to this Agreement.
Section 6.3. Registration and Listing. The Company shall use its commercially reasonable efforts to cause the Common Stock to continue to be registered as a class of securities under Sections 12(b) of the Exchange Act, and to comply with its reporting and filing obligations under the Exchange Act, and shall not take any action or file any document (whether or not permitted by the Securities Act or the Exchange Act) to terminate or suspend such registration or to terminate or suspend its reporting and filing obligations under the Exchange Act or Securities Act, except as permitted herein. The Company shall use its commercially reasonable efforts to continue the listing and trading of its Common Stock and the listing of the Securities purchased or acquired by the Investor hereunder on the Trading Market (or another Eligible Market) and to comply with the Company’s reporting, filing and other obligations under the rules and regulations of the Trading Market (or other Eligible Market, as applicable). The Company shall not take any action which could be reasonably expected to result in the delisting or suspension of the Common Stock on the Trading Market (or other Eligible Market, as applicable). If the Company receives any final and non-appealable notice that the listing or quotation of the Common Stock on the Trading Market (or other Eligible Market, as applicable) shall be terminated on a date certain, the Company shall promptly (and in any case within 24 hours) notify the Investor of such fact in writing and shall use its commercially reasonable efforts to cause the Common Stock to be listed or quoted on another Eligible Market.
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Section 6.4. Compliance with Laws.
(i) During the Investment Period, the Company (a) shall comply, and cause each Subsidiary to comply, with all laws, rules, regulations and Orders applicable to the business and operations of the Company, except as would not have a Material Adverse Effect and (b) with applicable provisions of the Securities Act and the Exchange Act, including Regulation M thereunder, applicable state securities or “Blue Sky” laws (but only to the extent set forth in Section 6.11), and applicable listing rules of the Trading Market (or Eligible Market, as applicable), except as would not, individually or in the aggregate, prohibit or otherwise interfere with the ability of the Company to enter into and perform its obligations under this Agreement in any material respect or for Investor to conduct resales of Securities under the Registration Statement in any material respect. Without limiting the foregoing, neither the Company, nor any of its Subsidiaries, nor to the Knowledge of the Company, any of their respective directors, officers, agents, employees or any other Persons acting on their behalf shall, in connection with the operation of the Company’s and its Subsidiaries’ respective businesses, (1) use any corporate funds for unlawful contributions, payments, gifts or entertainment or to make any unlawful expenditures relating to political activity to government officials, candidates or members of political parties or organizations, (2) pay, accept or receive any unlawful contributions, payments, expenditures or gifts, or (3) violate or operate in noncompliance with any export restrictions, anti-boycott regulations, embargo regulations or other applicable domestic or foreign laws and regulations, including, without limitation, the FCPA and Money Laundering Laws.
(ii) The Investor shall comply with all laws, rules, regulations and Orders applicable to the performance by it of its obligations under this Agreement and its investment in the Securities, except as would not, individually or in the aggregate, prohibit or otherwise interfere with the ability of the Investor to enter into and perform its obligations under this Agreement in any material respect. Without limiting the foregoing, the Investor shall comply with all applicable provisions of the Securities Act and the Exchange Act, including Regulation M thereunder, the rules and regulations of FINRA, and all applicable state securities or “Blue Sky” laws.
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Section 6.5. Keeping of Records and Books of Account; Due Diligence.
(i) The Investor and the Company shall each maintain records showing the remaining Total Commitment, the remaining Aggregate Limit, the dates and VWAP Purchase Share Amount for each VWAP Purchase, and the dates and Intraday VWAP Purchase Share Amount for each Intraday VWAP Purchase.
(ii) Subject to the requirements of Section 6.12, from time to time from and after the Closing Date, the Company shall make available for inspection and review by the Investor during normal business hours and after reasonable notice, customary documentation reasonably requested by the Investor and/or its appointed counsel or advisors to conduct due diligence; provided, however, that after the Closing Date, the Investor’s continued due diligence shall not be a condition precedent to the Commencement or to the Investor’s obligation to accept each VWAP Purchase Notice and each Intraday VWAP Purchase Notice timely delivered by the Company to the Investor in accordance with this Agreement.
Section 6.6. No Frustration; No Dilutive Issuances; No Other Similar Transactions.
(i) No Frustration. The Company shall not enter into, announce or recommend to its shareholders any agreement, plan, arrangement or transaction in or of which the terms thereof would restrict, materially delay, conflict with or impair the ability or right of the Company to perform its obligations under the Transaction Documents to which it is a party, including, without limitation, the obligation of the Company to (i) pay the Cash Commitment Fee to the Investor in such manner, at such time and otherwise pursuant to and in accordance with Section 10.1(ii)(b), and (ii) deliver the Shares to the Investor in respect of each VWAP Purchase and each Intraday VWAP Purchase effected by the Company pursuant to this Agreement, in each case not later than the applicable Purchase Share Delivery Date with respect to such VWAP Purchase and such Intraday VWAP Purchase (as applicable) in accordance with Section 3.3. For the avoidance of doubt, nothing in this Section 6.6(i) shall in any way limit the Company’s right to terminate this Agreement in accordance with Section 8.2 (subject in all cases to Section 8.3).
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(ii) No Dilutive Issuances Before Settlement of a Pending VWAP Purchase or Pending Intraday VWAP Purchase. None of the Company or any Subsidiary shall issue, sell or grant any right, option or warrant to purchase, or allot issue, sell or grant any right to reprice (or reset the purchase price therefor), or otherwise dispose of for cash (or enter into any agreement, plan or arrangement contemplating any of the foregoing, or seek to utilize any existing agreement, plan or arrangement to effect any of the foregoing), or announce any offer, issuance, sale or grant of any option or warrant to purchase or other disposition for cash (or any agreement, plan or arrangement therefor), at any time (i) during the period beginning on the Trading Day immediately preceding the Purchase Date for a VWAP Purchase and ending on the third (3rd) Trading Day following the date of full settlement thereof and the issuance to the Investor of all of the Shares that are issuable to the Investor pursuant to such VWAP Purchase, and (ii) during the period beginning on the Trading Day immediately preceding the Purchase Date for an Intraday VWAP Purchase and ending on the third (3rd) Trading Day following the date of full settlement thereof and the issuance to the Investor of all of the Shares that are issuable to the Investor pursuant to such Intraday VWAP Purchase (each such period specified in clauses (i) and (ii) above, a “Reference Period”), any shares of Common Stock or Common Stock Equivalents, at an effective price per Share less than the applicable VWAP Purchase Price per Share for such VWAP Purchase, or the applicable Intraday VWAP Purchase Price per Share for such Intraday VWAP Purchase, as the case may be (each such price, the “Reference Price”) to be paid by the Investor in such VWAP Purchase or such Intraday VWAP Purchase, as the case may be, effected during such Reference Period (each such issuance, a “Dilutive Issuance”), other than an Exempt Issuance (it being understood and agreed that if the holder of Common Stock or Common Stock Equivalents 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 Common Stock at an effective price per Share that is less than the applicable Reference Price, such issuance shall be deemed to have occurred for less than the applicable Reference Price on such date of the Dilutive Issuance at such effective price). If the Company enters into a Variable Rate Transaction involving the issuance of Common Stock Equivalents having a conversion price, exercise price, exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the Common Stock at any time after the initial issuance of such Common Stock Equivalents, the Company shall be deemed to have issued, as of the date the Common Stock Equivalents were issued (whether or not such Common Stock Equivalents are then immediately exercisable or convertible), the Common Stock underlying such Common Stock Equivalents at the lowest possible conversion or exercise price at which such Common Stock Equivalents may be converted or exercised for Common Stock (and if such Common Stock Equivalents include a “floor price” representing the lowest conversion or exercise price at which such Common Stock Equivalents may be converted or exercised, the Company shall be deemed to have issued the Common Stock underlying such Common Stock Equivalents at a price equal to such floor price). The Investor shall be entitled to seek injunctive relief against the Company, and any Subsidiary (as applicable) to preclude any such Dilutive Issuance that does not constitute an Exempt Issuance, which remedy shall be in addition to any right to collect damages, without the necessity of showing economic loss and without any bond or other security being required.
(iii) No Other Similar Transactions. From and after the date of this Agreement until the earliest of (i) the date of automatic termination of this Agreement pursuant to Section 8.1, (ii) the effective date of termination of this Agreement by the mutual written consent of the parties hereto pursuant to Section 8.2, and (iii) the effective date of termination of this Agreement by the Investor pursuant to Section 8.2, neither the Company nor any Subsidiary shall issue, sell or grant any, or otherwise dispose of or issue (or enter into any agreement, plan or arrangement contemplating any of the foregoing, or seek to utilize any existing agreement, plan or arrangement to effect any of the foregoing), or announce any offer, issuance, sale or grant or other disposition or issuance (or any agreement, plan or arrangement therefor) any Common Stock or Common Stock Equivalents (or a combination of units thereof) in any “equity line of credit” or “at the market offering,” Variable Rate Transaction, or other substantially similar continuous offering in which the Company may offer, issue or sell Common Stock or Common Stock Equivalents (or any combination of units thereof) at a future determined price, other than (a) Securities issued to the Investor pursuant to this Agreement and any of the other Transaction Documents, or pursuant to any other agreement entered into by the Company, on the one hand, and the Investor or any of its Affiliates, on the other hand, at any time after the date of termination of this Agreement or (b) any Exempt Issuance.
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Section 6.7. Corporate Existence. The Company shall take all steps necessary to preserve and continue the corporate existence of the Company; provided, however, that, except as provided in Section 6.8, nothing in this Agreement shall be deemed to prohibit the Company from engaging in any Fundamental Transaction with another Person. For the avoidance of doubt, nothing in this Section 6.7 shall in any way limit the Company’s right to terminate this Agreement in accordance with Section 8.2 (subject in all cases to Section 8.3).
Section 6.8. Fundamental Transaction. If a VWAP Purchase Notice or an Intraday VWAP Purchase Notice has been delivered to the Investor and the transactions contemplated therein have not yet been fully settled in accordance with Section 3.3 of this Agreement, the Company shall not effect any Fundamental Transaction until the expiration of five (5) Trading Days following the date of full settlement thereof and the issuance to the Investor of all of the Shares that are issuable to the Investor pursuant to the VWAP Purchase or Intraday VWAP Purchase (as applicable) to which such VWAP Purchase Notice or Intraday VWAP Purchase Notice (as applicable) relates.
Section 6.9. Selling Restrictions.
(i) Except as expressly set forth below, the Investor covenants that from and after the Closing Date through and including the Trading Day next following the expiration or termination of this Agreement as provided in Article VIII (the “Restricted Period”), none of the Investor, its sole member, any of their respective officers, or any entity managed or controlled by the Investor or its sole member (collectively, the “Restricted Persons” and each of the foregoing is referred to herein as a “Restricted Person”) shall, directly or indirectly, (i) engage in any Short Sales of the Common Stock or (ii) hedging transaction, which establishes a net short position with respect to the Common Stock, with respect to each of clauses (i) and (ii) hereof, either for its own account or for the account of any other Restricted Person. Notwithstanding the foregoing, it is expressly understood and agreed that nothing contained herein shall (without implication that the contrary would otherwise be true) prohibit any Restricted Person during the Restricted Period from: (1) selling “long” (as defined under Rule 200 promulgated under Regulation SHO) the Securities; or (2) selling a number of shares of Common Stock equal to the number of Shares that the Investor is unconditionally obligated to purchase under any pending VWAP Purchase Notice or any pending Intraday VWAP Purchase Notice (as applicable), but has not yet received from the Company or its transfer agent pursuant to this Agreement, so long as (X) the Investor (or its Broker-Dealer, as applicable) delivers the Shares purchased pursuant to such pending VWAP Purchase Notice and the Shares purchased pursuant to such pending Intraday VWAP Purchase Notice (as applicable) to the purchaser thereof promptly upon the Investor’s receipt of such Shares from the Company in accordance with Section 3.3 of this Agreement and (Y) neither the Company or its transfer agent shall have failed for any reason to deliver such Shares to the Investor or its Broker-Dealer so that such Shares are timely received by the Investor as DWAC Shares on the applicable Purchase Share Delivery Date for such VWAP Purchase and on the applicable Purchase Share Delivery Date for such Intraday VWAP Purchases (as applicable) in accordance with Section 3.3 of this Agreement.
(ii) In addition to the foregoing, in connection with any sale of Securities (including any sale permitted by paragraph (i) above), the Investor shall comply in all respects with all applicable laws, rules, regulations and Orders, including, without limitation, the requirements of the Securities Act and the Exchange Act.
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(iii) The Investor covenants and agrees that during the Restricted Period, none of the Investor or any other Restricted Person shall, directly or indirectly, allow any shares of Common Stock beneficially owned by the Investor to be borrowed against for any third Person to utilize in any Short Sale of Common Stock. Without limiting the generality of the immediately preceding sentence, the Investor covenants and agrees that, with respect to each brokerage account of the Investor and each other Restricted Person in which shares of Common Stock beneficially owned by the Investor are held or to be held during the Restricted Period, the Investor and each other Restricted Person (as applicable) shall provide written instructions to the applicable broker that the Investor or the Restricted Person (as applicable) does not wish to participate in, and expressly opts out of, any “fully paid lending program” or similar program with respect to such brokerage account so that shares of Common Stock beneficially owned by the Investor that are or to be held in such brokerage account during the Restricted Period will not be made available by the broker for lending to any third Person in connection with, to effect or otherwise to facilitate any Short Sale of Common Stock by any Person.
Section 6.10. Effective Registration Statement. During the Investment Period, the Company shall use its commercially reasonable efforts to maintain the continuous effectiveness of the Initial Registration Statement and each New Registration Statement filed with the Commission under the Securities Act for the applicable Registration Period pursuant to and in accordance with the Registration Rights Agreement.
Section 6.11. Blue Sky. The Company shall take such action, if any, as is necessary by the Company in order to obtain an exemption for or to qualify the Securities for sale by the Company to the Investor pursuant to the Transaction Documents, and at the request of the Investor, the subsequent resale of Registrable Securities by the Investor, in each case, under applicable state securities or “Blue Sky” laws and shall provide evidence of any such action so taken to the Investor from time to time following the Closing Date; 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 6.11, (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction.
Section 6.12. Non-Public Information. Neither the Company nor or any of its Subsidiaries, nor any of their directors, officers, employees or agents shall disclose any material non-public information about the Company, including without limitation, any non-public information regarding HOD, to the Investor, unless a simultaneous public announcement thereof is made by the Company in the manner contemplated by Regulation FD. In the event of a breach of the foregoing covenant by the Company, or any of its directors, officers, employees and agents (as determined in the reasonable good faith judgment of the Investor), (i) the Investor shall promptly provide written notice of such breach to the Company and (ii) after such notice has been provided to the Company and, provided that the Company shall have failed demonstrate to the Investor in writing within 48 hours that such information does not constitute material, non-public information or the Company shall have failed to publicly disclose such material, non-public information within 48 hours following demand therefor by the Investor, in addition to any other remedy provided herein or in the other Transaction Documents, if the Investor is holding any Shares at the time of the disclosure of material, non-public information, the Investor shall have the right to make a public disclosure, in the form of a press release, public advertisement or otherwise, of such material, nonpublic information without the prior approval by the Company, or any of its directors, officers, employees or agents. The Investor shall not have any liability to the Company, or any of its directors, officers, employees, stockholders or agents, for any such disclosure.
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Section 6.13. Broker-Dealer. The Investor shall use one or more broker-dealers (one of which is YS, an Affiliate of the Investor) to effectuate all sales, if any, of the Securities that it may purchase or otherwise acquire from the Company pursuant to the Transaction Documents, as applicable, which (or whom) shall be a DTC participant (collectively, the “Broker-Dealer”). The Investor shall, from time to time, provide the Company and the Company’s transfer agent with all information regarding the Broker-Dealer reasonably requested by the Company. The Investor shall be solely responsible for all fees and commissions of the Broker-Dealer (if any), which shall not exceed customary brokerage fees and commissions and shall be responsible for designating only a DTC participant eligible to receive DWAC Shares.
Section 6.14. FINRA Filing. The Company shall assist the Investor and YS with YS’s preparation and filing with FINRA’s Corporate Financing Department via the Public Offering System of all documents and information required to be filed with FINRA pursuant to FINRA Rule 5110 with regard to the transactions contemplated by this Agreement (the “FINRA Filing”). In connection therewith, on or prior to the date the FINRA Filing is first made by YS with FINRA, the Company shall pay to FINRA by wire transfer of immediately available funds the applicable filing fee with respect to the FINRA Filing, and the Company shall be solely responsible for payment of such fee. The parties hereby agree to provide each other and YS all requisite information and otherwise to assist each other and YS in a timely fashion in order for YS to complete the preparation and submission of the FINRA Filing in accordance with this Section 6.14 and to assist YS in promptly responding to any inquiries or requests from FINRA or its staff. Each party hereto shall (a) promptly notify the other party and YS of any communication to that party or its Affiliates from FINRA, including, without limitation, any request from FINRA or its staff for amendments or supplements to or additional information in respect of the FINRA Filing and permit the other party and YS to review in advance any proposed written communication to FINRA and (b) furnish the other party and YS with copies of all written correspondence, filings and communications between them and their affiliates and their respective representatives and advisors, on the one hand, and FINRA or members of its staff, on the other hand, with respect to this Agreement, the Registration Rights Agreement or the transactions contemplated by the Transaction Documents. Each of the parties hereto agrees to use its commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other party and YS in doing, all things necessary, proper or advisable in order for YS to obtain as promptly as practicable written confirmation from FINRA to the effect that FINRA’s Corporate Financing Department has determined not to raise any objection with respect to the fairness and reasonableness of the terms of the transactions contemplated by the Transaction Documents. Notwithstanding anything to the contrary contained in this Agreement, the Commencement Date shall not occur, unless and until YS shall have received written confirmation from FINRA to the effect that FINRA’s Corporate Financing Department has determined not to raise any objection with respect to the fairness and reasonableness of the terms of the transactions contemplated by this Agreement.
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Section 6.15. Qualified Independent Underwriter. If the Investor or any of its Affiliates, including YS, reasonably determines that a Qualified Independent Underwriter is required to participate in the transactions contemplated by the Transaction Documents in order for such transactions to be in full compliance with the rules and regulations of FINRA, including, without limitation, FINRA Rule 5121, each of the parties hereto shall have executed such documentation as may reasonably be required to engage a Qualified Independent Underwriter to participate in the transactions contemplated by the Transaction Documents in accordance with the rules and regulations of FINRA, including, without limitation, FINRA Rule 5121. The Company shall pay the fees and expenses of such Qualified Independent Underwriter pursuant to an engagement letter between the Company and such Qualified Independent Underwriter at such time and otherwise as set forth in such engagement letter. On the Commencement Date, the Investor shall reimburse (or shall cause one of its Affiliates to reimburse) the Company, by wire transfer of immediately available funds to an account designated by the Company on or prior to the Commencement Date, an amount in cash equal to the full amount of the fees and expenses of such Qualified Independent Underwriter that were paid by the Company to such Qualified Independent Underwriter prior to the Commencement Date pursuant to the engagement letter between the Company and such Qualified Independent Underwriter.
Section 6.16. Disclosure Schedule.
(i) The Company may, from time to time, update the Disclosure Schedule as may be required to satisfy the conditions set forth in Section 7.2(i) and Section 7.3(i) (to the extent such condition set forth in Section 7.3(i) relates to the condition in Section 7.2(i) as of a specific Purchase Condition Satisfaction Time). For purposes of this Section 6.16, any disclosure made in a schedule to the Compliance Certificate shall be deemed to be an update of the Disclosure Schedule. Notwithstanding anything in this Agreement to the contrary, no update to the Disclosure Schedule pursuant to this Section 6.16 shall cure any breach of a representation or warranty of the Company contained in this Agreement and made prior to the update and shall not affect any of the Investor’s rights or remedies with respect thereto.
(ii) Notwithstanding anything to the contrary contained in the Disclosure Schedule or in this Agreement, the information and disclosure contained in any Schedule of the Disclosure Schedule shall be deemed to be disclosed and incorporated by reference in any other Schedule of the Disclosure Schedule as though fully set forth in such Schedule for which applicability of such information and disclosure is readily apparent on its face. The fact that any item of information is disclosed in the Disclosure Schedule shall not be construed to mean that such information is required to be disclosed by this Agreement. Except as expressly set forth in this Agreement, such information and the thresholds (whether based on quantity, qualitative characterization, dollar amounts or otherwise) set forth herein shall not be used as a basis for interpreting the terms “material” or “Material Adverse Effect” or other similar terms in this Agreement.
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Section 6.17. Delivery of Compliance Certificates, Bring-Down Negative Assurance Letters, Bring-Down CFO Certificates and Bring-Down Comfort Letters Upon Occurrence of Certain Events. Within three (3) Trading Days immediately following: (i) each date on which the Company files with the Commission (A) an annual report on Form 10-K under the Exchange Act, (B) a Form 10-K/A containing amended (or restated) financial information or a material amendment to a previously filed annual report on Form 10-K, (C) a quarterly report on Form 10-Q under the Exchange Act, or (D) a current report on Form 8-K containing amended (or restated) financial information (other than information “furnished” pursuant to Items 2.02 or 7.01 of Form 8-K or to provide disclosure pursuant to Item 8.01 of Form 8-K relating to the reclassification of certain properties as discontinued operations in accordance with Statement of Financial Accounting Standards No. 144) under the Exchange Act; and (ii) the effective date of (A) each post-effective amendment to the Initial Registration Statement, (B) each New Registration Statement and (C) each post-effective amendment to each New Registration Statement, and in any case, not more than once per calendar quarter (each, a “Representation Date”), the Company shall (I) deliver to the Investor a Compliance Certificate, dated the date of delivery to the Investor, (II) cause to be furnished to the Investor an opinion and negative assurance letter “bring-down” from outside counsel to the Company, dated the date of delivery to the Investor, substantially in the form mutually agreed to by the Company and the Investor prior to the date of this Agreement, modified, as necessary, to relate to a New Registration Statement or a post-effective amendment to the Initial Registration Statement or a New Registration Statement, and the Prospectus contained in a Registration Statement or post-effective amendment as then amended or supplemented by any Prospectus Supplement thereto as of the date of such letter, as applicable (each, a “Bring-Down Negative Assurance Letter”) and (III) other than with respect to a Representation Date pursuant to clause (i)(C) above, cause to be furnished to the Investor (A) a customary “comfort letter” provided by each of the Accountant and the HOD Accountant or a successor independent registered public accounting firm for the Company or HOD (as applicable), dated the date of delivery to the Investor, substantially in the form, scope and substance as the information contained in the Initial Comfort Letter (to the extent such information is then applicable), stating, as of such date, the conclusions and findings of such firm with respect to the financial information and other matters covered by the Initial Comfort Letter (to the extent such financial information or other matters are then applicable), modified, as necessary, to address such new, amended or restated financial information contained in any of the Commission Documents referred to in clause (i)(A) or clause (i)(B) above or to relate to a New Registration Statement or a post-effective amendment to the Initial Registration Statement or a New Registration Statement, or the Prospectus contained in a Registration Statement or post-effective amendment as then amended or supplemented by any Prospectus Supplement thereto as of the date of such letter, as applicable (each, a “Bring-Down Comfort Letter”) and (B) a certificate of the Chief Financial Officer, dated the date of delivery to the Investor, substantially in the form mutually agreed to by the Company and the Investor prior to the date of this Agreement, modified, as necessary, to relate to a New Registration Statement or a post-effective amendment to the Initial Registration Statement or a New Registration Statement, and the Prospectus contained in a Registration Statement or post-effective amendment as then amended or supplemented by any Prospectus Supplement thereto as of the date of such letter, as applicable (each, a “Bring-Down CFO Certificate”).
The requirement to provide the documents identified in the previous sentence shall be tolled with respect to any Representation Date, if (A) the Company has given written notice to the Investor (with a copy to its counsel) in accordance with Section 10.4, not later than one (1) Trading Day prior to the applicable Representation Date, of the Company’s decision to suspend delivery of VWAP Purchase Notices for future VWAP Purchases and delivery of Intraday VWAP Purchase Notices for future Intraday VWAP Purchases (each, a “Future Purchase Suspension”) (it being hereby acknowledged and agreed that no Future Purchase Suspension shall limit, alter, modify, change or otherwise affect any of the Company’s or the Investor’s rights or obligations under the Transaction Documents with respect to any pending VWAP Purchase and any pending Intraday VWAP Purchase (as applicable) that has not been fully settled in accordance with the terms and conditions of this Agreement, and that the parties shall fully perform their respective obligations with respect to any such pending VWAP Purchase and any pending Intraday VWAP Purchase under the Transaction Documents), and (B) such Representation Date does not occur during the period beginning on the Trading Day immediately preceding the Purchase Date for a VWAP Purchase or an Intraday VWAP Purchase (as applicable) and ending on the third (3rd) Trading Day following the date of full settlement thereof and the issuance to the Investor of all of the Shares that are issuable to the Investor pursuant to such VWAP Purchase or such Intraday VWAP Purchase (as applicable), which tolling shall continue until the Trading Day immediately preceding the Purchase Date for a VWAP Purchase or an Intraday VWAP Purchase (as applicable), which for such calendar quarter shall be considered a Representation Date. Notwithstanding the foregoing, if the Company subsequently decides to deliver a VWAP Purchase Notice or an Intraday VWAP Purchase Notice following a Representation Date when a Future Purchase Suspension was in effect and did not provide the Investor with the documents identified in clauses (I), (II) and (III) of the first sentence of this Section 6.17, then prior to the Company’s delivery to the Investor of such VWAP Purchase Notice or such Intraday VWAP Purchase Notice (as applicable) on a Purchase Date, the Company shall provide the Investor with the documents identified in clauses (I), (II) and (III) of the first sentence of this Section 6.17, dated as of the applicable Purchase Date.
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Article VII
CONDITIONS TO CLOSING, COMMENCEMENT AND PURCHASES
Section 7.1. Conditions Precedent to Closing. The Closing is subject to the satisfaction of each of the conditions set forth in this Section 7.1 on the Closing Date.
(i) Accuracy of the Investor’s Representations and Warranties. The representations and warranties of the Investor contained in this Agreement (a) that are not qualified by “materiality” shall be true and correct in all material respects as of the Closing Date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall be true and correct in all material respects as of such other date and (b) that are qualified by “materiality” shall be true and correct as of the Closing Date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall be true and correct as of such other date.
(ii) Accuracy of the Company’s and HOD’s Representations and Warranties. (A) The representations and warranties of the Company contained in this Agreement (a) that are not qualified by “materiality” or “Material Adverse Effect” shall be true and correct in all material respects as of the Closing Date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall be true and correct in all material respects as of such other date and (b) that are qualified by “materiality” or “Material Adverse Effect” shall be true and correct as of the Closing Date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall be true and correct as of such other date.
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(A) The representations and warranties of HOD contained in this Agreement (a) that are not qualified by “materiality” or “HOD Material Adverse Effect” shall be true and correct in all material respects as of the Closing Date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall be true and correct in all material respects as of such other date and (b) that are qualified by “materiality” or “HOD Material Adverse Effect” shall be true and correct as of the Closing Date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall be true and correct as of such other date.
(iii) Payment of Initial Investor Expense; Reimbursement. On or prior to the Closing Date, the Company shall have paid by wire transfer of immediately available funds to an account designated by the Investor on or prior to the date hereof, the Initial Investor Expense Reimbursement in accordance with Section 10.1(i), which shall be fully earned and non-refundable as of the Closing Date, regardless of whether the Commencement occurs or whether any VWAP Purchases or Intraday VWAP Purchases are made or settled hereunder or any subsequent termination of this Agreement.
(iv) Closing Deliverables. At the Closing, counterpart signature pages of this Agreement and the Registration Rights Agreement executed by each of the parties hereto shall be delivered as provided in Section 2.2. Simultaneously with the execution and delivery of this Agreement and the Registration Rights Agreement, the Investor’s counsel shall have received (a) the opinions of outside counsel to the Company, dated the Closing Date, in the forms mutually agreed to by the Company and the Investor prior to the date of this Agreement, and (b) the closing certificate from the Company, dated the Closing Date, in the form of Exhibit B hereto.
Section 7.2. Conditions Precedent to Commencement. The right of the Company to commence delivering VWAP Purchase Notices and Intraday VWAP Purchase Notices under this Agreement, and the obligation of the Investor to accept VWAP Purchase Notices and Intraday VWAP Purchase Notices timely delivered to the Investor by the Company under this Agreement, are subject to the initial satisfaction, at Commencement, of each of the conditions set forth in this Section 7.2.
(i) Accuracy of the Company’s and HOD’s Representations and Warranties.
(A) The representations and warranties of the Company contained in this Agreement (a) that are not qualified by “materiality” or “Material Adverse Effect” shall have been true and correct in all material respects when made and shall be true and correct in all material respects as of the Commencement Date with the same force and effect as if made on such date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall be true and correct in all material respects as of such other date and (b) that are qualified by “materiality” or “Material Adverse Effect” shall have been true and correct when made and shall be true and correct as of the Commencement Date with the same force and effect as if made on such date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall be true and correct as of such other date.
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(B) The representations and warranties of HOD contained in this Agreement (a) that are not qualified by “materiality” or “HOD Material Adverse Effect” shall be true and correct in all material respects as of the Closing Date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall be true and correct in all material respects as of such other date and (b) that are qualified by “materiality” or “HOD Material Adverse Effect” shall be true and correct as of the Closing Date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall be true and correct as of such other date.
(ii) Performance of the Company. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement and the Registration Rights Agreement to be performed, satisfied or complied with by the Company at or prior to the Commencement. The Company shall deliver to the Investor on the Commencement Date the compliance certificate substantially in the form attached hereto as Exhibit C (the “Compliance Certificate”).
(iii) Initial Registration Statement Effective. The Initial Registration Statement covering the resale by the Investor of the Registrable Securities included therein required to be filed by the Company with the Commission pursuant to Section 2(a) of the Registration Rights Agreement shall have been declared effective under the Securities Act by the Commission, and the Investor shall be permitted to utilize the Prospectus therein to resell all of the Shares included in such Prospectus.
(iv) No Material Notices. None of the following events shall have occurred and be continuing: (a) receipt of any request by the Commission or any other Governmental Entity for any additional information relating to the Initial Registration Statement, the Prospectus contained therein or any Prospectus Supplement thereto, or for any amendment of or supplement to the Initial Registration Statement, the Prospectus contained therein or any Prospectus Supplement thereto; (b) the issuance by the Commission or any other Governmental Entity of any stop order suspending the effectiveness of the Initial Registration Statement or prohibiting or suspending the use of the Prospectus contained therein or any Prospectus Supplement thereto, or of the suspension of qualification or exemption from qualification of the Securities for offering or sale in any jurisdiction, or the initiation or contemplated initiation of any proceeding for such purpose; (c) the objection of FINRA to the terms of the transactions contemplated by the Transaction Documents or (d) the occurrence of any event or the existence of any condition or state of facts, which makes any statement of a material fact made in the Initial Registration Statement, the Prospectus contained therein or any Prospectus Supplement thereto untrue or which requires the making of any additions to or changes to the statements then made in the Initial Registration Statement, the Prospectus contained therein or any Prospectus Supplement thereto in order to state a material fact required by the Securities Act to be stated therein or necessary in order to make the statements then made therein (in the case of the Prospectus or any Prospectus Supplement, in light of the circumstances under which they were made) not misleading, or which requires an amendment to the Initial Registration Statement or a supplement to the Prospectus contained therein or any Prospectus Supplement thereto to comply with the Securities Act, or any other applicable law. The Company shall have no Knowledge of any event that could reasonably be expected to have the effect of causing the suspension of the effectiveness of the Initial Registration Statement or the prohibition or suspension of the use of the Prospectus contained therein or any Prospectus Supplement thereto in connection with the resale of the Registrable Securities by the Investor.
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(v) Other Commission Filings. The Current Report shall have been filed with the Commission as required pursuant to Section 2.3. The final Prospectus included in the Initial Registration Statement shall have been filed with the Commission prior to Commencement in accordance with Section 2.3 and the Registration Rights Agreement. All reports, schedules, registrations, forms, statements, information and other documents required to have been filed by the Company with the Commission pursuant to the reporting requirements of the Exchange Act, including all material required to have been filed pursuant to Section 13(a) or 15(d) of the Exchange Act, prior to Commencement shall have been filed with the Commission.
(vi) No Suspension of Trading in or Notice of Delisting of Common Stock. Trading in the Common Stock shall not have been suspended by the Commission, the Trading Market or FINRA (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to the Commencement Date), the Company shall not have received any final and non-appealable notice that the listing or quotation of the Common Stock on the Trading Market shall be terminated on a date certain (unless, prior to such date certain, the Common Stock is listed or quoted on any other Eligible Market), nor shall there have been imposed any suspension of, or restriction on, accepting additional deposits of the Common Stock, electronic trading or book-entry services by DTC with respect to the Common Stock that is continuing, the Company shall not have received any notice from DTC to the effect that a suspension of, or restriction on, accepting additional deposits of the Common Stock, electronic trading or book-entry services by DTC with respect to the Common Stock is being imposed or is contemplated (unless, prior to such suspension or restriction, DTC shall have notified the Company in writing that DTC has determined not to impose any such suspension or restriction).
(vii) Compliance with Laws. The Company shall have complied with all applicable federal, state and local governmental laws, rules, regulations and ordinances in connection with the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby, including, without limitation, the Company shall have obtained all permits and qualifications required by any applicable state securities or “Blue Sky” laws for the offer and sale of the Securities by the Company to the Investor and the subsequent resale of the Registrable Securities by the Investor (or shall have the availability of exemptions therefrom).
(viii) No Injunction. No statute, regulation or Order shall have been enacted, entered, promulgated, threatened or endorsed by any court or Governmental Entity of competent jurisdiction which prohibits the consummation of or which would materially modify or delay the Business Combination or any of the transactions contemplated by the Transaction Documents.
(ix) No Proceedings or Litigation. No action, suit or proceeding before any arbitrator or any court or Governmental Entity shall have been commenced, and no inquiry or investigation by any Governmental Entity shall have been commenced, against the Company, or any of the officers, directors or Affiliates of the Company, seeking to restrain, prevent or change the Business Combination or the transactions contemplated by the Transaction Documents, or seeking material damages in connection with such transactions.
(x) Listing of Securities. All of the Securities that have been and may be issued pursuant to this Agreement shall have been approved for listing or quotation on the Trading Market (or on an Eligible Market) as of the Commencement Date, subject only to notice of issuance.
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(xi) No Material Adverse Effect. No condition, occurrence, state of facts or event constituting a Material Adverse Effect shall or an HOD Material Adverse Effect have occurred and be continuing.
(xii) No Bankruptcy Proceedings. No Person shall have commenced a proceeding against the Company or HOD pursuant to or within the meaning of any Bankruptcy Law. Neither the Company nor HOD shall have, pursuant to or within the meaning of any Bankruptcy Law, (a) commenced a voluntary case, (b) consented to the entry of an Order for relief against it in an involuntary case, (c) consented to the appointment of a Custodian of the Company or HOD or for all or substantially all of their respective property, or (d) made a general assignment for the benefit of its creditors. A court of competent jurisdiction shall not have entered an Order or decree under any Bankruptcy Law that (I) is for relief against the Company or HOD in an involuntary case, (II) appoints a Custodian of the Company or HOD or for all or substantially all of their respective property, or (III) orders the liquidation of the Company or HOD.
(xiii) Due Diligence. Each director identified in the disclosure schedules to the Form S-4 Registration Statement has submitted information reasonably requested by the Investor to permit the Investor to conduct customary due diligence screening on each such director, the results of which shall be satisfactory to the Investor.
(xiv) Delivery of Commencement Irrevocable Transfer Agent Instructions and Notice of Effectiveness. The Commencement Irrevocable Transfer Agent Instructions shall have been executed by the Company and delivered to acknowledged in writing by the Company’s transfer agent, and the Notice of Effectiveness relating to the Initial Registration Statement shall have been executed by the Company’s outside counsel and delivered to the Company’s transfer agent, in each case directing such transfer agent to issue to the Investor or its designated Broker-Dealer all of the Shares included in the Initial Registration Statement as DWAC Shares in accordance with this Agreement and the Registration Rights Agreement.
(xv) Reservation of Shares. As of the Commencement Date, the Company shall have reserved out of its authorized and unissued Common Stock, 100,090,010 shares of Common Stock solely for the purpose of issuing Shares pursuant to VWAP Purchases and Intraday VWAP Purchases that may be effected by the Company, in its sole discretion, from and after the Commencement Date under this Agreement.
(xvi) Opinions and Negative Assurances of Company Counsel. On the Commencement Date, the Investor shall have received the opinions and negative assurances from outside counsel to the Company, dated the Commencement Date, in the forms mutually agreed to by the Company and the Investor prior to the date of this Agreement.
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(xvii) Initial Comfort Letter of Accountant and HOD Accountant. On the Commencement Date, the Investor shall have received from the Accountant and the HOD Accountant, or a successor independent registered public accounting firm for the Company or HOD (as applicable), a letter dated the Commencement Date and addressed to the Investor, in substantially the form, scope and substance mutually agreed to by the Company and the Investor at least one (1) Trading Day prior to the date on which the Initial Registration Statement is first filed with the Commission, stating the conclusions and findings of such firm with respect to the audited and unaudited financial statements and certain financial information contained or incorporated by reference in the Registration Statement and the Prospectus (as supplemented by any Prospectus Supplement filed with the Commission on or prior to the Commencement Date), and certain other matters customarily covered by auditor “comfort letters” (the “Initial Comfort Letter”).
(xviii) CFO Certificate. On the Commencement Date, the Investor shall have received from the Company, a certificate of the Chief Financial Officer dated the Commencement Date, in the form mutually agreed to by the Company and the Investor prior to the date of this Agreement.
(xix) FINRA No Objections. Prior to the Commencement Date, FINRA’s Corporate Financing Department shall have confirmed in writing that it has determined not to raise any objection with respect to the fairness and reasonableness of the terms and arrangements of the transactions contemplated by the Transaction Documents.
Section 7.3. Conditions Precedent to Purchases after Commencement Date. The right of the Company to deliver VWAP Purchase Notices and Intraday VWAP Purchase Notices under this Agreement after the Commencement Date, and the obligation of the Investor to accept VWAP Purchase Notices and Intraday VWAP Purchase Notices timely delivered to the Investor by the Company under this Agreement after the Commencement Date, are subject to the satisfaction of each of the conditions set forth in this Section 7.3, (X) with respect to a VWAP Purchase Notice for a VWAP Purchase that is timely delivered by the Company to the Investor in accordance with this Agreement, as of the VWAP Purchase Commencement Time of the applicable VWAP Purchase Period for such VWAP Purchase to be effected pursuant to such VWAP Purchase Notice and (Y) with respect to an Intraday VWAP Purchase Notice for an Intraday VWAP Purchase that is timely delivered by the Company to the Investor in accordance with this Agreement, as of the Intraday VWAP Purchase Commencement Time of the applicable Intraday VWAP Purchase Period for such Intraday VWAP Purchase to be effected pursuant to such Intraday VWAP Purchase Notice (each such VWAP Purchase Commencement Time (with respect to a VWAP Purchase Notice) and each such Intraday VWAP Purchase Commencement Time (with respect to an Intraday VWAP Purchase Notice), at which time all such conditions must be satisfied, a “Purchase Condition Satisfaction Time”).
(i) Satisfaction of Certain Prior Conditions. Each of the conditions set forth in subsections (i), (ii), and (vii) through (xiv) set forth in Section 7.2 shall be satisfied at the applicable Purchase Condition Satisfaction Time after the Commencement Date (with the terms “Commencement” and “Commencement Date” in the conditions set forth in subsections (i) and (ii) of Section 7.2 replaced with “applicable Purchase Condition Satisfaction Time”); provided, however, that the Company shall not be required to deliver the Compliance Certificate after the Commencement Date, except as provided in Section 6.17 and Section 7.3(x).
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(ii) Initial Registration Statement Effective. The Initial Registration Statement covering the resale by the Investor of the Registrable Securities included therein filed by the Company with the Commission pursuant to Section 2(a) of the Registration Rights Agreement, and any post-effective amendment thereto required to be filed by the Company with the Commission after the Commencement Date and prior to the applicable Purchase Date pursuant to the Registration Rights Agreement, in each case shall have been declared effective under the Securities Act by the Commission and shall remain effective for the applicable Registration Period, and the Investor shall be permitted to utilize the Prospectus therein, and any Prospectus Supplement thereto, to resell (a) all of the Shares included in the Initial Registration Statement, and any post-effective amendment thereto, that have been issued and sold to the Investor hereunder pursuant to all VWAP Purchase Notices and Intraday VWAP Purchase Notices (as applicable) delivered by the Company to the Investor prior to such applicable Purchase Date and (b) all of the Shares included in the Initial Registration Statement, and any post-effective amendment thereto, that are issuable pursuant to the applicable VWAP Purchase Notice or Intraday VWAP Purchase Notice (as applicable) delivered by the Company to the Investor with respect to a VWAP Purchase or an Intraday VWAP Purchase (as applicable) to be effected hereunder on such applicable Purchase Date.
(iii) Any Required New Registration Statement Effective. Any New Registration Statement covering the resale by the Investor of the Registrable Securities included therein, and any post-effective amendment thereto, required to be filed by the Company with the Commission pursuant to the Registration Rights Agreement after the Commencement Date and prior to the applicable Purchase Date for such VWAP Purchase or Intraday VWAP Purchase (as applicable), in each case shall have been declared effective under the Securities Act by the Commission and shall remain effective for the applicable Registration Period, and the Investor shall be permitted to utilize the Prospectus therein, and any Prospectus Supplement thereto, to resell (a) all of the Shares included in such New Registration Statement, and any post-effective amendment thereto, that have been issued and sold to the Investor hereunder pursuant to all VWAP Purchase Notices and Intraday VWAP Purchase Notices (as applicable) delivered by the Company to the Investor prior to such applicable Purchase Date and (b) all of the Shares included in such new Registration Statement, and any post-effective amendment thereto, that are issuable pursuant to the applicable VWAP Purchase Notice or Intraday VWAP Purchase Notice (as applicable) delivered by the Company to the Investor with respect to a VWAP Purchase or an Intraday VWAP Purchase (as applicable) to be effected hereunder on such applicable Purchase Date.
(iv) Delivery of Subsequent Irrevocable Transfer Agent Instructions and Notice of Effectiveness. With respect to any post-effective amendment to the Initial Registration Statement, any New Registration Statement or any post-effective amendment to any New Registration Statement, in each case declared effective by the Commission after the Commencement Date, the Company shall have delivered or caused to be delivered to the Company’s transfer agent (a) irrevocable instructions in the form substantially similar to the Commencement Irrevocable Transfer Agent Instructions executed by the Company and acknowledged in writing by its transfer agent and (b) the Notice of Effectiveness, in each case modified as necessary to refer to such Registration Statement or post-effective amendment and the Registrable Securities included therein, to issue the Registrable Securities included therein as DWAC Shares in accordance with the terms of this Agreement and the Registration Rights Agreement.
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(v) No Material Notices. None of the following events shall have occurred and be continuing: (a) receipt of any request by the Commission or any other Governmental Entity for any additional information relating to the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or any post-effective amendment thereto, or the Prospectus contained in any of the foregoing or any Prospectus Supplement thereto, or for any amendment of or supplement to the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or any post-effective amendment thereto, or the Prospectus contained in any of the foregoing or any Prospectus Supplement thereto; (b) the issuance by the Commission or any other Governmental Entity of any stop order suspending the effectiveness of the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or any post-effective amendment thereto, or prohibiting or suspending the use of the Prospectus contained in any of the foregoing or any Prospectus Supplement thereto, or of the suspension of qualification or exemption from qualification of the Securities for offering or sale in any jurisdiction, or the initiation or contemplated initiation of any proceeding for such purpose; (c) the objection of FINRA to the terms of the transactions contemplated by the Transaction Documents or (d) the occurrence of any event or the existence of any condition or state of facts, which makes any statement of a material fact made in the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or any post-effective amendment thereto, or the Prospectus contained in any of the foregoing or any Prospectus Supplement thereto untrue or which requires the making of any additions to or changes to the statements then made in the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or any post-effective amendment thereto, or the Prospectus contained in any of the foregoing or any Prospectus Supplement thereto in order to state a material fact required by the Securities Act to be stated therein or necessary in order to make the statements then made therein (in the case of the Prospectus or any Prospectus Supplement, in light of the circumstances under which they were made) not misleading, or which requires an amendment to the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or any post-effective amendment thereto, or the Prospectus contained in any of the foregoing or any Prospectus Supplement thereto to comply with the Securities Act, or any other applicable law (other than the transactions contemplated by the applicable VWAP Purchase Notice delivered by the Company to the Investor with respect to a VWAP Purchase, or the applicable Intraday VWAP Purchase Notice delivered by the Company to the Investor with respect to an Intraday VWAP Purchase (as applicable) to be effected hereunder on such applicable Purchase Date and the settlement thereof). The Company shall have no Knowledge of any event that could reasonably be expected to have the effect of causing the suspension of the effectiveness of the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or any post-effective amendment thereto, or the prohibition or suspension of the use of the Prospectus contained in any of the foregoing or any Prospectus Supplement thereto in connection with the resale of the Registrable Securities by the Investor.
(vi) Other Commission Filings. The final Prospectus included in any post-effective amendment to the Initial Registration Statement, and any Prospectus Supplement thereto, required to be filed by the Company with the Commission pursuant to Section 2.3 and the Registration Rights Agreement after the Commencement Date and prior to the applicable Purchase Date for such VWAP Purchase or such Intraday VWAP Purchase (as applicable), shall have been filed with the Commission in accordance with Section 2.3 and the Registration Rights Agreement. The final Prospectus included in any New Registration Statement and in any post-effective amendment thereto, and any Prospectus Supplement thereto, required to be filed by the Company with the Commission pursuant to Section 2.3 and the Registration Rights Agreement after the Commencement Date and prior to the applicable Purchase Date for such VWAP Purchase or such Intraday VWAP Purchase (as applicable), shall have been filed with the Commission in accordance with Section 2.3 and the Registration Rights Agreement. All reports, schedules, registrations, forms, statements, information and other documents required to have been filed by the Company with the Commission pursuant to the reporting requirements of the Exchange Act, including all material required to have been filed pursuant to Section 13(a) or 15(d) of the Exchange Act, after the Commencement Date and prior to the applicable Purchase Date for such VWAP Purchase or such Intraday VWAP Purchase (as applicable), shall have been filed with the Commission and, if any Registrable Securities are covered by a Registration Statement on Form S-3, such filings shall have been made within the applicable time period prescribed for such filing under the Exchange Act.
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(vii) No Suspension of Trading in or Notice of Delisting of Common Stock. Trading in the Common Stock shall not have been suspended by the Commission, the Trading Market (or Eligible Market, as applicable) or FINRA (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to the applicable Purchase Date for such VWAP Purchase or such Intraday VWAP Purchase (as applicable)), the Company shall not have received any final and non-appealable notice that the listing or quotation of the Common Stock on the Trading Market (or Eligible Market, as applicable) shall be terminated on a date certain (unless, prior to such date certain, the Common Stock is listed or quoted on any other Eligible Market), nor shall there have been imposed any suspension of, or restriction on, accepting additional deposits of the Common Stock, electronic trading or book-entry services by DTC with respect to the Common Stock that is continuing, the Company shall not have received any notice from DTC to the effect that a suspension of, or restriction on, accepting additional deposits of the Common Stock, electronic trading or book-entry services by DTC with respect to the Common Stock is being imposed or is contemplated (unless, prior to such suspension or restriction, DTC shall have notified the Company in writing that DTC has determined not to impose any such suspension or restriction).
(viii) Certain Limitations. The issuance and sale of the Shares issuable pursuant to the applicable VWAP Purchase Notice or the applicable Intraday VWAP Purchase Notice (as applicable) shall not (a) exceed, in the case of a VWAP Purchase Notice, the VWAP Purchase Maximum Amount applicable to such VWAP Purchase Notice or, in the case of an Intraday VWAP Purchase Notice, the Intraday VWAP Purchase Maximum Amount applicable to such Intraday VWAP Purchase Notice, (b) cause the aggregate number of shares of Common Stock issued pursuant to this Agreement to exceed the Aggregate Limit, (c) cause the Investor to beneficially own (under Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder) shares of Common Stock in excess of the Beneficial Ownership Limitation, or (d) if and to the extent the Exchange Cap is then applicable under Section 3.4, cause the aggregate number of shares of Common Stock issued pursuant to this Agreement to exceed the Exchange Cap, unless in the case of this clause (d), the Company’s stockholders have theretofore approved the issuance of such shares of Common Stock in excess of the Exchange Cap in accordance with the applicable rules of the Trading Market.
(ix) Shares Authorized and Delivered. All of the Shares issuable pursuant to the applicable VWAP Purchase Notice or Intraday VWAP Purchase Notice (as applicable) shall have been duly authorized by all necessary corporate action of the Company. All Shares relating to all prior VWAP Purchase Notices and all prior Intraday VWAP Purchase Notices required to have been received by the Investor as DWAC Shares under this Agreement prior to the applicable Purchase Condition Satisfaction Time for the applicable VWAP Purchase or Intraday VWAP Purchase (as applicable) shall have been delivered to the Investor as DWAC Shares in accordance with this Agreement.
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(x) Bring-Down Negative Assurance Letters; Bring-Down Comfort Letters; Bring-Down CFO Certificates; and Compliance Certificates. The Investor shall have received (a) all Bring-Down Negative Assurance Letters from outside counsel to the Company, which the Company was obligated to instruct its outside counsel to deliver to the Investor prior to the applicable Purchase Condition Satisfaction Time for the applicable VWAP Purchase or Intraday VWAP Purchase (as applicable), (b) all Bring-Down Comfort Letters from the Accountant and HOD Accountant, or a successor independent registered public accounting firm for the Company or HOD (as applicable), which the Company was obligated to instruct such firm to deliver to the Investor prior to the applicable Purchase Condition Satisfaction Time for the applicable VWAP Purchase or Intraday VWAP Purchase (as applicable), (c) all Bring-Down CFO Certificates from the Company, which the Company was obligated to deliver to the Investor prior to the applicable Purchase Condition Satisfaction Time for the applicable VWAP Purchase or Intraday VWAP Purchase (as applicable), and (d) all Compliance Certificates from the Company that the Company was obligated to deliver to the Investor prior to the applicable Purchase Condition Satisfaction Time for the applicable VWAP Purchase or Intraday VWAP Purchase (as applicable), in each case in accordance with Section 6.17.
(xi) Payment of Additional Investor Expense Reimbursement and Cash Commitment Fee. The Company shall have paid, by wire transfer of immediately available funds to an account designated by the Investor all Additional Investor Expense Reimbursement payments that the Company was obligated to pay to the Investor prior to the applicable Purchase Condition Satisfaction Time for the applicable VWAP Purchase or Intraday VWAP Purchase (as applicable) in accordance with Section 10.1(i), each of which Additional Investor Expense Reimbursement payments shall be fully earned and non-refundable as of the date such payments are made by the Company to the Investor, regardless of whether any additional VWAP Purchases or Intraday VWAP Purchases are made or settled hereunder or any subsequent termination of this Agreement. Prior to the applicable Purchase Condition Satisfaction Time for any VWAP Purchase or any Intraday VWAP Purchase occurring after the date on which the first VWAP Purchase effected by the Company pursuant to this Agreement is fully settled in accordance with Section 3.3 (or, if the Company effects an Intraday VWAP Purchase prior to the first VWAP Purchase effected pursuant to this Agreement, the date on which the first Intraday VWAP Purchase effected by the Company pursuant to this Agreement is fully settled in accordance with Section 3.3), the Cash Commitment Fee shall have been paid to the Investor in the manner, at such time and otherwise pursuant to and in accordance with Section 10.1(ii)(b). For the avoidance of doubt, the Cash Commitment Fee shall be fully earned by the Investor as of the Closing Date and shall be non-refundable as of the date such Cash Commitment Fee is paid to the Investor as set forth in Section 10.1(ii)(b), regardless of whether any additional VWAP Purchases or Intraday VWAP Purchases are made or settled hereunder or any subsequent termination of this Agreement.
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Article VIII
TERMINATION
Section 8.1. Automatic Termination. Unless earlier terminated as provided hereunder, this Agreement shall terminate automatically on the earliest to occur of (i) the first day of the month next following the 36-month anniversary of the Commencement Date, (ii) the date on which the Investor shall have purchased from the Company, pursuant to all VWAP Purchases and Intraday VWAP Purchases that have occurred and fully settled pursuant to this Agreement, an aggregate number of Shares for a total aggregate gross purchase price to the Company equal to the Total Commitment, (iii) the date on which the Common Stock shall have failed to be listed or quoted on the Trading Market or any Eligible Market for a period of one (1) Trading Day, (iv) the thirtieth (30th) Trading Day next following the date on which, pursuant to or within the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences a proceeding against the Company, in each case that is not discharged or dismissed prior to such thirtieth (30th) Trading Day, and (v) the date on which, pursuant to or within the meaning of any Bankruptcy Law, a Custodian is appointed for the Company or for all or substantially all of its property, or the Company makes a general assignment for the benefit of its creditors.
Section 8.2. Other Termination. Subject to Section 8.3, the Company or HOD may terminate this Agreement after the Commencement Date effective upon ten (10) Trading Days’ prior written notice to the Investor in accordance with Section 10.4; provided, however, that (i) the Company shall have (A) paid the Cash Commitment Fee required to be paid to the Investor ((to the extent the full amount of the Cash Commitment Fee shall not theretofore have been withheld by the Investor, and (B) paid the Initial Investor Expense Reimbursement and all Additional Investor Expense Reimbursement payments required to be paid to the Investor pursuant to Section 10.1(i) of this Agreement, in each case in this clause (i) prior to such termination, and (ii) prior to issuing any press release, or making any public statement or announcement, with respect to such termination, the Company or (if prior to the completion of the Transactions) HOD shall consult with the Investor and its counsel on the form and substance of such press release or other disclosure. Subject to Section 8.3, this Agreement may be terminated at any time by the mutual written consent of the parties, effective as of the date of such mutual written consent unless otherwise provided in such written consent. Subject to Section 8.3, the Investor shall have the right to terminate this Agreement effective upon ten (10) Trading Days’ prior written notice to the Company or (if prior to the completion of the Transactions) HOD, as the case may be, in accordance with Section 10.4, if: (a) any condition, occurrence, state of facts or event constituting a Material Adverse Effect has occurred and is continuing; (b) a Fundamental Transaction shall have occurred; (c) the Initial Registration Statement and any New Registration Statement is not filed by the applicable Filing Deadline therefor or declared effective by the Commission by the applicable Effectiveness Deadline (as defined in the Registration Rights Agreement) therefor, or the Company is otherwise in breach or default in any material respect under any of the other provisions of the Registration Rights Agreement, and, if such failure, breach or default is capable of being cured, such failure, breach or default is not cured within ten (10) Trading Days after notice of such failure, breach or default is delivered to the Company pursuant to Section 10.4; (d) while a Registration Statement, or any post-effective amendment thereto, is required to be maintained effective pursuant to the terms of the Registration Rights Agreement and the Investor holds any Registrable Securities, the effectiveness of such Registration Statement, or any post-effective amendment thereto, lapses for any reason (including, without limitation, the issuance of a stop order by the Commission) or such Registration Statement or any post-effective amendment thereto, the Prospectus contained therein or any Prospectus Supplement thereto otherwise becomes unavailable to the Investor for the resale of all of the Registrable Securities included therein in accordance with the terms of the Registration Rights Agreement, and such lapse or unavailability continues for a period of forty-five (45) consecutive Trading Days or for more than an aggregate of ninety (90) Trading Days in any 365-day period, other than due to acts of the Investor; (e) trading in the Common Stock on the Trading Market (or if the Common Stock is then listed on an Eligible Market, trading in the Common Stock on such Eligible Market) shall have been suspended and such suspension continues for a period of five (5) consecutive Trading Days; or (f) the Company is in material breach or default of this Agreement, and, if such breach or default is capable of being cured, such breach or default is not cured within ten (10) Trading Days after notice of such breach or default is delivered to the Company pursuant to Section 10.4. Unless notification thereof is required elsewhere in this Agreement (in which case such notification shall be provided in accordance with such other provision), the Company shall promptly (but in no event later than twenty-four (24) hours) notify the Investor (and, if required under applicable law, including, without limitation, Regulation FD promulgated by the Commission, or under the applicable rules and regulations of the Trading Market (or Eligible Market, as applicable), the Company shall publicly disclose such information in accordance with Regulation FD and the applicable rules and regulations of the Trading Market (or Eligible Market, as applicable)) upon becoming aware of any of the events set forth in the immediately preceding sentence.
Section 8.3. Effect of Termination. In the event of termination by the Company, HOD or the Investor (other than by mutual termination) pursuant to Section 8.2, written notice thereof shall forthwith be given to the other party as provided in Section 10.4 and the transactions contemplated by this Agreement shall be terminated without further action by either party. If this Agreement is terminated as provided in Section 8.1 or Section 8.2, this Agreement shall become void and of no further force and effect, except that (i) the provisions of Article V (Representations, Warranties and Covenants of the Company), Article IX (Indemnification), Article X (Miscellaneous) and this Article VIII (Termination) shall remain in full force and effect indefinitely notwithstanding such termination, and, (ii) so long as the Investor owns any Securities, the covenants and agreements of the Company contained in Article VI (Additional Covenants) shall remain in full force and notwithstanding such termination for a period of six (6) months following such termination.
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Notwithstanding anything in this Agreement to the contrary, no termination of this Agreement by any party shall (i) become effective prior to the fifth (5th) Trading Day immediately following the settlement date related to any pending VWAP Purchase or any pending Intraday VWAP Purchase (as applicable) that has not been fully settled in accordance with the terms and conditions of this Agreement (it being hereby acknowledged and agreed that no termination of this Agreement shall limit, alter, modify, change or otherwise affect any of the Company’s or the Investor’s rights or obligations under the Transaction Documents with respect to any pending VWAP Purchase and any pending Intraday VWAP Purchase (as applicable), and that the parties shall fully perform their respective obligations with respect to any such pending VWAP Purchase and any pending Intraday VWAP Purchase under the Transaction Documents), (ii) limit, alter, modify, change or otherwise affect the Company’s or the Investor’s rights or obligations under the Registration Rights Agreement, all of which shall survive any such termination, (iii) affect the Cash Commitment Fee payable to the Investor pursuant to Section 10.1(ii)(b), it being hereby acknowledged and agreed that the entire amount of the Cash Commitment Fee shall be fully earned by the Investor as of the Closing Date and shall be non-refundable as of the date such Cash Commitment Fee is paid to the Investor, in the manner, at such time and otherwise pursuant to and in accordance with Section 10.1(ii)(b), regardless of whether any additional VWAP Purchases or Intraday VWAP Purchases are made or settled hereunder or any subsequent termination of this Agreement, (iv) affect the Initial Investor Expense Reimbursement payable or paid to the Investor, all of which Initial Investor Expense Reimbursement shall be fully earned by the Investor and non-refundable when paid on the Closing Date pursuant to Section 10.1(i), regardless of whether the Commencement shall have occurred, whether any VWAP Purchases or Intraday VWAP Purchases are made or settled hereunder or any subsequent termination of this Agreement, and (v) affect any Additional Investor Expense Reimbursement payments payable or paid to the Investor, all of which Additional Investor Expense Reimbursement payments shall be fully earned by the Investor and non-refundable when paid by the Company to the Investor pursuant to Section 10.1(i), regardless of whether any additional VWAP Purchases or Intraday VWAP Purchases are made or settled hereunder or any subsequent termination of this Agreement. Nothing in this Section 8.3 shall be deemed to release the Company or the Investor from any liability for any breach or default under this Agreement or any of the other Transaction Documents to which it is a party, or to impair the rights of the Company and the Investor to compel specific performance by the other party of its obligations under the Transaction Documents to which it is a party.
Article IX
INDEMNIFICATION
Section 9.1. Indemnification of Investor. In consideration of the Investor’s execution and delivery of this Agreement and acquiring the Securities hereunder and in addition to all of the Company’s other obligations under the Transaction Documents to which it is a party, subject to the provisions of this Section 9.1, the Company and HOD, jointly and severally, shall indemnify and hold harmless the Investor, each of its directors, officers, stockholders, members, partners, employees, representatives, agents and advisors (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other title), each Person, if any, who controls the Investor (within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act), and the respective directors, officers, stockholders, members, partners, employees, representatives, agents and advisors (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other title) of such controlling Persons (each, an “Investor Party”), from and against all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses (including all judgments, amounts paid in settlement, court costs, reasonable and documented attorneys’ fees and costs of defense and investigation) (collectively, “Damages”) that any Investor Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company or HOD in this Agreement, the Registration Rights Agreement or in the other Transaction Documents to which it is a party or (b) any action, suit, claim or proceeding (including for these purposes a derivative action brought on behalf of the Company or HOD) instituted against such Investor Party arising out of or resulting from the execution, delivery, performance or enforcement of the Transaction Documents, other than claims for indemnification within the scope of Section 6 of the Registration Rights Agreement; provided, however, that (x) the foregoing indemnity shall not apply to any Damages to the extent, but only to the extent, that such Damages resulted directly and primarily from a breach of any of the Investor’s representations, warranties, covenants or agreements contained in this Agreement or the Registration Rights Agreement, and (y) the Company or HOD, as applicable, shall not be liable under subsection (b) of this Section 9.1 to the extent, but only to the extent, that a court of competent jurisdiction shall have determined by a final judgment (from which no further appeals are available) that such Damages resulted directly and primarily from any acts or failures to act, undertaken or omitted to be taken by such Investor Party through its fraud, bad faith, gross negligence, or willful or reckless misconduct.
The Company and HOD, jointly and severally, shall reimburse any Investor Party promptly upon demand (with accompanying presentation of sufficiently detailed documentary evidence) for all reasonable and documented legal and other costs and expenses incurred by such Investor Party in connection with (i) any action, suit, claim or proceeding, whether at law or in equity, to enforce compliance by the Company or HOD with any provision of the Transaction Documents or (ii) any other any action, suit, claim or proceeding, whether at law or in equity, with respect to which it is entitled to indemnification under this Section 9.1; provided that the Investor shall promptly reimburse the Company or HOD, as applicable, for all such legal and other costs and expenses to the extent a court of competent jurisdiction determines that any Investor Party was not entitled to such reimbursement.
An Investor Party’s right to indemnification or other remedies based upon the representations, warranties, covenants and agreements of the Company and HOD set forth in the Transaction Documents shall not in any way be affected by any investigation or knowledge of such Investor Party. Such representations, warranties, covenants and agreements shall not be affected or deemed waived by reason of the fact that an Investor Party knew or should have known that any representation or warranty might be inaccurate or that the Company or HOD failed to comply with any agreement or covenant. Any investigation by such Investor Party shall be for its own protection only and shall not affect or impair any right or remedy hereunder.
To the extent that the foregoing undertakings by the Company and HOD set forth in this Section 9.1 may be unenforceable for any reason, the Company and HOD shall each make the maximum contribution to the payment and satisfaction of each of the Damages which is permissible under applicable law.
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Section 9.2. Indemnification Procedures. Promptly after an Investor Party receives notice of a claim or the commencement of an action for which the Investor Party intends to seek indemnification under Section 9.1, the Investor Party will notify the Company and HOD in writing of the claim or commencement of the action, suit or proceeding; provided, however, that failure to notify the Company and HOD will not relieve the Company or HOD from liability under Section 9.1, except to the extent it has been materially prejudiced by the failure to give notice. The Company and HOD will be entitled to participate in the defense of any claim, action, suit or proceeding as to which indemnification is being sought, and if the Company and HOD acknowledge in writing the obligation to indemnify the Investor Party against whom the claim or action is brought, the Company or HOD may (but will not be required to) assume the defense against the claim, action, suit or proceeding with counsel satisfactory to it. After the Company or HOD notifies the Investor Party that the Company or HOD wishes to assume the defense of a claim, action, suit or proceeding, neither the Company nor HOD will be liable for any further legal or other expenses incurred by the Investor Party in connection with the defense against the claim, action, suit or proceeding except that if, in the opinion of counsel to the Investor Party, it would be inappropriate under the applicable rules of professional responsibility for the same counsel to represent both the Company and HOD and such Investor Party. In such event, the Company and HOD will pay the reasonable and documented fees and expenses of no more than one separate counsel for all such Investor Parties promptly as such fees and expenses are incurred. Each Investor Party, as a condition to receiving indemnification as provided in Section 9.1, will cooperate in all reasonable respects with the Company and HOD in the defense of any action or claim as to which indemnification is sought. Neither the Company nor HOD will be liable for any settlement of any action effected without its prior written consent, which consent shall not be unreasonably withheld, delayed or conditioned. Neither the Company nor HOD will, without the prior written consent of the Investor Party, which consent shall not be unreasonably withheld, delayed or conditioned, effect any settlement of a pending or threatened action with respect to which an Investor Party is, or is informed that it may be, made a party and for which it would be entitled to indemnification, unless the settlement includes an unconditional release of the Investor Party from all liability and claims which are the subject matter of the pending or threatened action.
The remedies provided for in this Article IX are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Investor Party at law or in equity.
Article X
MISCELLANEOUS
Section 10.1. Certain Fees and Expenses; Commitment Fee; Commencement Irrevocable Transfer Agent Instructions.
(i) Certain Fees and Expenses. Each party shall bear its own fees and expenses related to the transactions contemplated by this Agreement; provided, however, that the Company, (1) on or prior to the Closing Date, shall have paid to the Investor, by wire transfer of immediately available funds to an account designated by the Investor prior to the date of this Agreement, in an amount of up to $100,000 as reimbursement for the reasonable and documented fees and disbursements of the Investor’s legal counsel incurred by the Investor prior to the Closing (the “Initial Investor Expense Reimbursement”), and (2) within ten (10) Business Days after each Representation Date (provided a Future Purchase Suspension is not then in effect), shall have paid to the Investor, by wire transfer of immediately available funds to an account designated by the Investor, up to an additional $10,000 per fiscal quarter as reimbursement for the reasonable fees and disbursements of the Investor’s legal counsel incurred by the Investor in connection with the Investor’s ongoing due diligence and review of deliverables subject to Section 6.17 (the “Additional Investor Expense Reimbursement”), in each case in connection with the transactions contemplated by this Agreement and the Registration Rights Agreement. For the avoidance of doubt, (1) the Initial Investor Expense Reimbursement shall be fully earned by the Investor and shall be non-refundable as of the Closing Date, regardless of whether the Commencement shall have occurred, any VWAP Purchases or Intraday VWAP Purchases are effected by the Company or settled hereunder or any subsequent termination of this Agreement and (2) each Additional Investor Expense Reimbursement payment shall be fully earned by the Investor and shall be nonrefundable when paid in accordance with this Section 10.1(i), regardless of whether any additional VWAP Purchases or Intraday VWAP Purchases are effected by the Company or settled hereunder or any subsequent termination of this Agreement. The Company shall pay all U.S. federal, state and local stamp and other similar transfer and other taxes and duties levied in connection with issuance of the Securities pursuant hereto.
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(ii) Commitment Fee. In consideration of for the Investor’s execution and delivery of this Agreement, the Company agrees to pay to the Investor a Commitment Fee of 1.0% of the Aggregate Commitment Amount, in the form of the Cash Commitment Fee. The Commitment Fee shall be fully earned on the Closing Date but shall be payable in the amount of 10% of the proceeds to the Company from any VWAP Purchases or Intraday VWAP Purchases until paid in full.
(a) [Omitted].
(b) Cash Commitment Fee. In consideration for the Investor’s execution and delivery of this Agreement, the Company shall pay to the Investor the Cash Commitment Fee in the manner, at such time and otherwise as set forth in this Section 10.1(ii)(b). As set forth in Section 3.3, on the settlement date of each VWAP Purchase and Intraday VWAP Purchase effected by the Company pursuant to this Agreement, the Investor shall withhold an amount in cash equal to ten percent (10%) of the Cash Commitment Fee from the total aggregate VWAP Purchase Price payable by the Investor to the Company in connection with each such VWAP Purchase or Intraday VWAP Purchase effected by the Company pursuant to this Agreement, until the Cash Commitment Fee is paid in full, as payment by the Company to the Investor of the Cash Commitment Fee pursuant to this Section 10.1(ii)(b). For the avoidance of doubt, (x) the Cash Commitment Fee shall be fully earned by the Investor as of the Closing Date and shall be non-refundable when withheld by the Investor (or when paid by the Company to the Investor, as applicable) in accordance with Section 3.3 and this Section 10.1(ii)(b), regardless of whether any additional VWAP Purchases or Intraday VWAP Purchases are effected by the Company or settled hereunder or any subsequent termination of this Agreement, and (y) in the event that the Commencement shall not occur under this Agreement or, if the Commencement shall occur, in the event that no VWAP Purchase or Intraday VWAP Purchase is effected pursuant to this Agreement prior to the termination of this Agreement pursuant to Article VIII, then, in either case, upon the termination of this Agreement pursuant to Article VIII, the Company shall pay the Cash Commitment Fee to the Investor, by wire transfer of immediately available funds to an account designated by the Investor, not later than 5:00 p.m., New York City time, on the third (3rd) the Trading Day immediately following the date of termination of this Agreement pursuant to Article VIII.
(iii) [Omitted].
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(iv) Irrevocable Transfer Agent Instructions; Notice of Effectiveness. On the Effective Date of the Initial Registration Statement and prior to Commencement, the Company shall deliver or cause to be delivered to its transfer agent (and thereafter, shall deliver or cause to be delivered to any subsequent transfer agent of the Company), irrevocable instructions executed by the Company and acknowledged in writing by the Company’s transfer agent (the “Commencement Irrevocable Transfer Agent Instructions”), together with a written notification from the Company’s outside counsel advising the transfer agent the Initial Registration Statement has been declared effective by the Commission (the “Notice of Effectiveness”), directing the Company’s transfer agent to issue to the Investor or its designee all the Shares included in the Initial Registration Statement as DWAC Shares in accordance with this Agreement and the Registration Rights Agreement. With respect to any post-effective amendment to the Initial Registration Statement, any New Registration Statement or any post-effective amendment to any New Registration Statement, in each case declared effective by the Commission after the Commencement Date, the Company shall deliver or cause to be delivered to its transfer agent (and thereafter, shall deliver or cause to be delivered to any subsequent transfer agent of the Company) (i) irrevocable instructions in the form substantially similar to the Commencement Irrevocable Transfer Agent Instructions executed by the Company and acknowledged in writing by the Company’s transfer agent and (ii) the Notice of Effectiveness, in each case modified as necessary to refer to such Registration Statement or post-effective amendment and the Registrable Securities included therein, to issue the Registrable Securities included therein as DWAC Shares in accordance with the terms of this Agreement and the Registration Rights Agreement. For the avoidance of doubt, all Shares to be issued and delivered from and after Commencement to or for the benefit of the Investor pursuant to this Agreement shall be issued and delivered to the Investor or its designee only as DWAC Shares. The Company represents and warrants to the Investor that, while this Agreement is effective, no instruction other than those referred to in this Section 10.1(iv) will be given by the Company to its transfer agent, or any successor transfer agent of the Company, with respect to the Shares from and after Commencement, and the Shares covered by the Initial Registration Statement or any post-effective amendment thereof, or any New Registration Statement or post-effective amendment thereof, as applicable, shall otherwise be freely transferable on the books and records of the Company and no stop transfer instructions shall be maintained against the transfer thereof. The Company agrees that if the Company fails to fully comply with the provisions of this Section 10.1(iv) within three (3) Trading Days after the date on which the Investor has provided the deliverables referred to above that the Investor is required to provide to the Company or its transfer agent, the Company shall, at the Investor’s written instruction, purchase from the Investor all shares of Common Stock acquired by the Investor pursuant to this Agreement that contain the restrictive legend referred to in Section 10.1(iii) hereof (or any similar restrictive legend), or that have any stop transfer orders maintained that prohibit or impede the transfer thereof in any respect, at the greater of (i) the purchase price paid for such shares of Common Stock (as applicable) and (ii) the Closing Sale Price of the Common Stock on the date of the Investor’s written instruction.
Section 10.2. Specific Enforcement, Consent to Jurisdiction, Waiver of Jury Trial.
(i) The Company, HOD and the Investor acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that either party shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement by the other party and to enforce specifically the terms and provisions hereof (without the necessity of showing economic loss and without any bond or other security being required), this being in addition to any other remedy to which either party may be entitled by law or equity.
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(ii) Each of the Company, HOD and the Investor (a) hereby irrevocably submits to the jurisdiction of the U.S. District Court and other courts of the United States sitting in The City of New York, Borough of Manhattan, in the State of New York for the purposes of any suit, action or proceeding arising out of or relating to this Agreement, and (b) hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper. Each of the Company, HOD and the Investor consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this Section 10.2 shall affect or limit any right to serve process in any other manner permitted by law.
(iii) EACH OF THE COMPANY, HOD AND THE INVESTOR HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR DISPUTES RELATING HERETO. EACH OF THE COMPANY, HOD AND THE INVESTOR (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.2.
Section 10.3. Entire Agreement. The Transaction Documents set forth the entire agreement and understanding of the parties with respect to the subject matter hereof and supersede all prior and contemporaneous agreements, negotiations and understandings between the parties, both oral and written, with respect to such matters. There are no promises, undertakings, representations or warranties by either party relative to the subject matter hereof not expressly set forth in the Transaction Documents. The Disclosure Schedule and all exhibits to this Agreement are hereby incorporated by reference in, and made a part of, this Agreement as if set forth in full herein.
Section 10.4. Notices. Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be effective (a) upon hand delivery or electronic mail delivery at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The address for such communications shall be:
If to the Company (prior to consummation of the Transactions):
Attention: Lavell Juan Malloy, II, CEO
Email: [email protected]
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With a copy (which shall not constitute notice) to:
Email: [email protected]
Attention: Joseph Lucosky, Esq.
If to HOD (or the Company following consummation of the Transactions):
Email: [email protected] and [email protected]
Attention: Marco Margiotta, CEO and Charles Park, CFO
With a copy (which shall not constitute notice) to:
Email: [email protected]
Attention: Chief Legal Officer
If to the Investor:
[●]
With a copy (which shall not constitute notice) to:
David Fine, Esq.
1012 Springfield Avenue
Mountainside, NJ 07092
E-mail: [email protected]
Either party hereto may from time to time change its address for notices by giving at least five (5) days’ advance written notice of such changed address to the other party hereto.
Section 10.5. Waivers. No provision of this Agreement may be waived by the parties from and after the date that is one (1) Trading Day immediately preceding the date on which the Initial Registration Statement is initially filed with the Commission. Subject to the immediately preceding sentence, no provision of this Agreement may be waived other than in a written instrument signed by the party against whom enforcement of such waiver is sought. No failure or delay in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercises thereof or of any other right, power or privilege.
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Section 10.6. Amendments. No provision of this Agreement may be amended by the parties from and after the date that is one (1) Trading Day immediately preceding the date on which the Initial Registration Statement is initially filed with the Commission. Subject to the immediately preceding sentence, no provision of this Agreement may be amended other than by a written instrument signed by both parties hereto.
Section 10.7. Headings. The article, section and subsection headings in this Agreement are for convenience only and shall not constitute a part of this Agreement for any other purpose and shall not be deemed to limit or affect any of the provisions hereof. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision in which they are found.
Section 10.8. Construction. The parties agree that each of them and their respective counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents. In addition, each and every reference to share prices and number of shares of Common Stock in any Transaction Document shall, in all cases, be subject to adjustment for any stock splits, stock combinations, stock dividends, recapitalizations, reorganizations and other similar transactions that occur on or after the date of this Agreement. Any reference in this Agreement to “Dollars” or “$” shall mean the lawful currency of the United States of America. Any references to “Section” or “Article” in this Agreement shall, unless otherwise expressly stated herein, refer to the applicable Section or Article of this Agreement.
Section 10.9. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors. Neither the Company, HOD nor the Investor may assign this Agreement or any of their respective rights or obligations hereunder to any Person.
Section 10.10. No Third Party Beneficiaries. Except as expressly provided in Article IX, this Agreement is intended only for the benefit of the parties hereto and their respective successors, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
Section 10.11. Governing Law. This Agreement shall be governed by and construed in accordance with the internal procedural and substantive laws of the State of New York, without giving effect to any laws or rules of such state that would cause the application of the laws of any other jurisdiction.
Section 10.12. Survival. The representations, warranties, covenants and agreements of the Company and the Investor contained in this Agreement shall survive the execution and delivery hereof until the termination of this Agreement; provided, however, that (i) the provisions of Article V (Representations, Warranties and Covenants of the Company), Article VA (Representations, Warranties and Covenants of HOD) Article VIII (Termination), Article IX (Indemnification) and this Article X (Miscellaneous) shall remain in full force and effect indefinitely notwithstanding such termination, and, (ii) so long as the Investor owns any Securities, the covenants and agreements of the Company and the Investor contained in Article VI (Additional Covenants), shall remain in full force and effect notwithstanding such termination for a period of six (6) months following such termination.
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Section 10.13. Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature or signature delivered by e-mail in a “.pdf” format data file, including any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com, www.echosign.adobe.com, etc., shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original signature.
Section 10.14. Publicity. The Company shall afford the Investor and its counsel with a reasonable opportunity to review and comment upon, shall consult with the Investor and its counsel on the form and substance of, and shall give due consideration to all such comments from the Investor or its counsel on, any press release, Commission filing or any other public disclosure made by or on behalf of the Company relating to the Investor, its purchases hereunder or any aspect of the Transaction Documents or the transactions contemplated thereby, including any press release disclosing the execution of this Agreement and the Registration Rights Agreement by the Company, prior to the issuance, filing or public disclosure thereof. For the avoidance of doubt, the Company shall not be required to submit for review any such disclosure (i) contained in periodic reports filed with the Commission under the Exchange Act if it shall have previously provided substantially the same disclosure to the Investor or its counsel for review in connection with a previous filing or (ii) any Prospectus Supplement if it contains disclosure that does not reference the Investor, its purchases hereunder or any aspect of the Transaction Documents or the transactions contemplated thereby.
Section 10.15. Severability. The provisions of this Agreement are severable and, in the event that any court of competent jurisdiction shall determine that any one or more of the provisions or part of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Agreement, and this Agreement shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part of such provision, had never been contained herein, so that such provisions would be valid, legal and enforceable to the maximum extent possible.
Section 10.16. Further Assurances. From and after the Closing Date, upon the request of the Investor or the Company, each of the Company and the Investor shall execute and deliver such instrument, documents and other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officer as of the date first above written.
| THE COMPANY: | ||
| BRAG HOUSE HOLDINGS, INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| HOD: | ||
| HOUSE OF DOGE INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| THE INVESTOR: | |
| [●] |
| By: | ||
| Its: |
| By: | |||
| Its: |
| By: | |||
| Name: | |||
| Title: |
[Signature Page to Stock Purchase Agreement]
ANNEX I TO THE
COMMON STOCK PURCHASE AGREEMENT
DEFINITIONS
“Accountant” shall have the meaning assigned to such term in Section 5.6(d).
“Additional Investor Expense Reimbursement” shall have the meaning assigned to such term in Section 10.1(i).
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with a Person, as such terms are used in and construed under Rule 144.
“Aggregate Limit” shall have the meaning assigned to such term in Section 2.1.
“Agreement” shall have the meaning assigned to such term in the preamble of this Agreement.
“Allowable Grace Period” shall have the meaning assigned to such term in the Registration Rights Agreement.
“Average Price” means a price per Share (rounded to the nearest tenth of a cent) equal to the quotient obtained by dividing (i) the aggregate gross purchase price paid by the Investor for all Shares purchased pursuant to this Agreement, by (ii) the aggregate number of Shares issued pursuant to this Agreement.
“Bankruptcy Law” means Title 11, U.S. Code, or any similar U.S. federal or state bankruptcy Law or any Law for the relief of debtors.
“Base Price” means a price per Share equal to the sum of (i) the Minimum Price and (ii) $0.00 (subject to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction that occurs on or after the date of this Agreement).
“Beneficial Ownership Limitation” shall have the meaning assigned to such term in Section 3.5.
“Bloomberg” means Bloomberg, L.P.
“Bring-Down CFO Certificate” shall have the meaning assigned to such term in Section 6.17.
“Bring-Down Comfort Letter” shall have the meaning assigned to such term in Section 6.17.
“Bring-Down Negative Assurance Letter” shall have the meaning assigned to such term in Section 6.17.
I-1
“Broker-Dealer” shall have the meaning assigned to such term in Section 6.13.
“Bylaws” shall have the meaning assigned to such term in Section 5.3.
“Cash Commitment Fee” means an amount in cash equal to $1,000,000.00, which shall be paid to the Investor in the manner, at such time and otherwise pursuant to and in accordance with Section 10.1(ii)(b).
“Charter” shall have the meaning assigned to such term in Section 5.3.
“Closing” shall have the meaning assigned to such term in Section 2.2.
“Closing Date” means the date of this Agreement.
“Closing Sale Price” means, for the Common Stock as of any date, the last closing trade price for the Common Stock on the Trading Market (or, if the Common Stock is then listed on an Eligible Market, on such Eligible Market), as reported by Bloomberg, or, if the Trading Market (or such Eligible Market, as applicable) begins to operate on an extended hours basis and does not designate the closing trade price for the Common Stock, then the last trade price for the Common Stock prior to 4:00 p.m., New York City time, as reported by Bloomberg. All such determinations shall be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions during such period.
“Code” shall have the meaning assigned to such term in Section 5.38.
“Commencement” shall have the meaning assigned to such term in Section 3.1.
“Commencement Date” shall have the meaning assigned to such term in Section 3.1.
“Commencement Irrevocable Transfer Agent Instructions” shall have the meaning assigned to such term in Section 10.1(iv).
“Commission” means the U.S. Securities and Exchange Commission or any successor entity.
“Commission Documents” shall mean (1) the Company’s registration statement on Form S-4 to be filed with the Commission, including any related prospectus or prospectuses, for the registration of the Common Stock and other securities to be issued pursuant to the Business Combination Agreement (as the same may be amended from time to time), by and among the Company, House of Doge Inc., a Texas corporation and Merger Sub, on file with the Commission at the time such registration statement became effective, including the financial statements, schedules, exhibits and all other documents filed as a part thereof or incorporated therein and all information deemed to be a part thereof as of the effective date of such registration statement under the Securities Act (the “Form S-4 Registration Statement”), (2) the Company’s final proxy statement/prospectus included in the Form S-4 Registration Statement at the time of effectiveness, including the Annexes thereto and accompanying financial statements and all related soliciting materials under Rule 14a-12 under the Exchange Act, and all documents incorporated therein by reference, in the form in which such proxy statement/prospectus was filed with the Commission pursuant to Rule 424(b) under the Securities Act, (3) all reports, schedules, registrations, forms, statements, information and other documents filed with or furnished to the Commission by the Company pursuant to the reporting requirements of the Exchange Act, including all material filed with or furnished to the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, (4) each Registration Statement, as the same may be amended from time to time, the Prospectus contained therein and each Prospectus Supplement thereto and (5) all information contained in such filings and all documents and disclosures that have been and heretofore shall be incorporated by reference therein.
I-2
“Commitment Fee” means, collectively, the Cash Commitment Fee.
“Common Stock” shall have the meaning assigned to such term in the recitals of this Agreement.
“Common Stock Equivalents” means any securities of the Company which 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.
“Company” shall have the meaning assigned to such term in the preamble of this Agreement.
“Compliance Certificate” shall have the meaning assigned to such term in Section 7.2(ii).
“Contracts” means any legally binding contracts, agreements, subcontracts, leases, and purchase orders.
“Cover Price” shall have the meaning assigned to such term in Section 3.3.
“COVID-19” means SARS-CoV-2 or COVID-19, and any evolutions thereof or any other related or associated epidemics, pandemics or disease outbreaks.
“Current Report” shall have the meaning assigned to such term in Section 2.3.
“Custodian” shall mean any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.
“Damages” shall have the meaning assigned to such term in Section 9.1.
“Dilutive Issuance” shall have the meaning assigned to such term in Section 6.6(ii).
“Disclosure Schedule” shall have the meaning assigned to such term in the preamble to Article V.
“DTC” means The Depository Trust Company, a subsidiary of The Depository Trust & Clearing Corporation, or any successor thereto.
I-3
“DWAC” shall have the meaning assigned to such term in Section 5.33.
“DWAC Shares” means shares of Common Stock issued pursuant to this Agreement that are (i) issued in electronic form, (ii) freely tradable and transferable and without restriction on resale and without stop transfer instructions maintained against the transfer thereof and (iii) timely credited by the Company’s transfer agent to the Investor’s (or its designee’s) specified DWAC account with DTC under its Fast Automated Securities Transfer (FAST) Program, or any similar program hereafter adopted by DTC performing substantially the same function.
“EAR” shall have the meaning assigned to such term in Section 5.36.
“EDGAR” means the Commission’s Electronic Data Gathering, Analysis and Retrieval System.
“Effective Date” means, with respect to the Initial Registration Statement filed pursuant to Section 2(a) of the Registration Rights Agreement (or any post-effective amendment thereto) or any New Registration Statement filed pursuant to Section 2(c) of the Registration Rights Agreement (or any post-effective amendment thereto), as applicable, the date on which the Initial Registration Statement (or any post-effective amendment thereto) or any New Registration Statement (or any post-effective amendment thereto) is declared effective by the Commission.
“Effectiveness Deadline” shall have the meaning assigned to such term in the Registration Rights Agreement.
“Eligible Market” means the New York Stock Exchange, the NYSE American, The Nasdaq Global Select or The Nasdaq Global (or any nationally recognized successor to any of the foregoing).
“Environmental Laws” shall have the meaning assigned to such term in Section 5.18.
“ERISA” shall have the meaning assigned to such term in Section 5.38.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder.
“Exchange Cap” shall have the meaning assigned to such term in Section 3.4(a).
I-4
“Exempt Issuance” means the issuance of (a) Common Stock, options or other equity incentive awards to employees, officers, directors or vendors of the Company pursuant to any equity incentive plan duly adopted for such purpose, by the Company’s Board of Directors or a majority of the members of a committee of the Board of Directors established for such purpose, (b) (1) any Securities issued to the Investor (or its designee) pursuant to the Transaction Documents, (2) any securities issued upon the exercise or exchange of or conversion of any shares of Common Stock or Common Stock Equivalents held by the Investor at any time, or (3) any securities issued upon the exercise or exchange of or conversion of any Common Stock Equivalents issued and outstanding on the date of this Agreement, provided that such securities referred to in this clause (3) have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities, (c) securities issued pursuant to acquisitions, divestitures, licenses, partnerships, collaborations or strategic transactions approved by the Company’s Board of Directors or a majority of the members of a committee of directors established for such purpose, which acquisitions, divestitures, licenses, partnerships, collaborations or strategic transactions can have a Variable Rate Transaction component, provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (d) shares of Common Stock issued by the Company to the Investor (or its designee) in connection with any “equity line of credit” or other continuous offering or similar offering of Common Stock (other than the transactions contemplated by the Transaction Documents) pursuant to one or more written agreements between the Company and the Investor or an Affiliate of the Investor executed after the date of this Agreement (if any), whereby the Company may sell shares of Common Stock to the Investor or an Affiliate of the Investor at a future determined price, (e) shares of Common Stock issued by the Company in any “at the market offering” or “equity distribution program” or similar offering of Common Stock exclusively to or through YS pursuant to one or more written agreements between the Company and YS, or (f) any debt or debt securities of the Company.
“FCPA” shall have the meaning assigned to such term in Section 5.36.
“Filing Deadline” shall have the meaning assigned to such term in the Registration Rights Agreement.
“FINRA” means the Financial Industry Regulatory Authority, Inc.
“FINRA Filing” shall have the meaning assigned to such term in Section 6.14.
“Form S-4 Registration Statement” shall have the meaning assigned to such term in the definition of Commission Documents.
“Fundamental Transaction” means that (i) the Company shall, directly or indirectly, in one or more related transactions, (1) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Person, with the result that the holders of the Company’s capital stock immediately prior to such consolidation or merger together beneficially own less than 50% of the outstanding voting power of the surviving or resulting corporation, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company to another Person, or (3) take action to facilitate a purchase, tender or exchange offer by another Person that is accepted by the holders of more than 50% of the outstanding shares of Common Stock (excluding any shares of Common Stock held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (4) consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination), or (5) reorganize, recapitalize or reclassify its Common Stock, or (ii) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock.
I-5
“Future Purchase Suspension” shall have the meaning assigned to such term in Section 6.17.
“GAAP” shall have the meaning assigned to such term in Section 5.6(b).
“GDPR” shall have the meaning assigned to such term in Section 5.40.
“Merger Sub” means Brag House Merger Sub, Inc., a Delaware corporation and wholly owned direct subsidiary of the Company.
“Global Guaranty Agreement” means that certain global guaranty agreement dated the date of this agreement by the Subsidiaries of the Company in favor of the holder of the Promissory Note.
“Governmental Entity” means any United States or non-United States (a) federal, state, regional, provincial, local, municipal or other government, (b) governmental or quasi-governmental entity of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal) or (c) body exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature, including any arbitral tribunal (public or private).
“Hazardous Materials” shall have the meaning assigned to such term in Section 5.18.
“HOD Disclosure Schedule” shall have the meaning assigned to such term in the preamble to Article VA.
HOD Material Adverse Effect” means (i) any condition, occurrence, state of facts or event having, or insofar as reasonably can be foreseen would likely have, any effect on the business, operations, properties or financial condition of HOD as set forth in the Commission Documents that is material and adverse to HOD, taken as a whole, excluding any facts, circumstances, changes or effects, individually or in the aggregate, exclusively and directly resulting from, relating to or arising out of any of the following: (a) changes in conditions in the U.S. or global capital, credit or financial markets generally, including changes in the availability of capital or currency exchange rates, provided such changes shall not have affected HOD in a materially disproportionate manner as compared to other similarly situated companies, (b) changes generally affecting the industries in which HOD operates, provided such changes shall not have affected HOD, taken as a whole, in a materially disproportionate manner as compared to other similarly situated companies, (c) any effect of the announcement of, or the consummation of the transactions contemplated by, this Agreement on HOD’s relationships, contractual or otherwise, with customers, suppliers, vendors, bank lenders, strategic venture partners or employees, (d) changes arising in connection with earthquakes, hostilities, acts of war, sabotage or terrorism or military actions or any escalation or material worsening of any such hostilities, acts of war, sabotage or terrorism or military actions existing as of the date hereof, (e) any effect of COVID-19 or any Law, directive, pronouncement or guideline issued by a Governmental Entity, the Centers for Disease Control and Prevention, the World Health Organization or industry group providing for business closures, changes to business operations, “sheltering-in-place” or other restrictions that relate to, or arise out of, an epidemic, pandemic or disease outbreak (including the COVID-19 pandemic) or any change in such Law, directive, pronouncement or guideline or interpretation thereof following the date of this Agreement, (f) any action taken by the Investor, any of its officers, its sole member or the Investor’s Broker-Dealer, or any of such Person’s successors with respect to the transactions contemplated by this Agreement and the Registration Rights Agreement, and (g) the effect of any changes in applicable laws or accounting rules, provided such changes shall not have affected HOD in a materially disproportionate manner as compared to other similarly situated companies; (ii) any condition, occurrence, state of facts or event having, or insofar as reasonably can be foreseen would likely have, any material adverse effect on the legality, validity or enforceability of any of the Transaction Documents or the transactions contemplated thereby; or (iii) any condition, occurrence, state of facts or event that would, or insofar as reasonably can be foreseen would likely, prohibit or otherwise materially interfere with or delay the ability of HOD to perform any of its obligations under any of the Transaction Documents to which it is a party.
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“Indebtedness” means, with respect to any Person as of any time, without duplication, (a) any liabilities for borrowed money or amounts owed (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements, indemnities and other contingent obligations in respect of Indebtedness of others, whether or not the same are or should be reflected in the Company’s balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (c) the present value of any lease payments due under leases required to be capitalized in accordance with GAAP.
“Initial Comfort Letter” shall have the meaning assigned to such term in Section 7.2(xvi).
“Initial Investor Expense Reimbursement” shall have the meaning assigned to such term in Section 10.1(i).
“Initial Purchase Notice” shall have the meaning assigned to such term in the recitals hereof.
“Initial Registration Statement” shall have the meaning assigned to such term in the Registration Rights Agreement.
“Intellectual Property Rights” shall have the meaning assigned to such term in Section 5.19.
“Intraday VWAP Purchase” shall have the meaning assigned to such term in Section 3.2.
“Intraday VWAP Purchase Commencement Time” means, with respect to an Intraday VWAP Purchase made pursuant to Section 3.2, the time that is the latest of: (i) the VWAP Purchase Ending Time of the VWAP Purchase Period for the VWAP Purchase preceding the Intraday VWAP Purchase Period for such Intraday VWAP Purchase occurring on the same Purchase Date as such earlier VWAP Purchase, if the Company has timely delivered a VWAP Purchase Notice to the Investor for a VWAP Purchase on such Purchase Date, (ii) the Intraday VWAP Purchase Ending Time of the Intraday VWAP Purchase Period for the most recent prior Intraday VWAP Purchase, if any, occurring on the same Purchase Date as such Intraday VWAP Purchase, and (iii) the Investor’s timely receipt (acknowledged by email correspondence to each of the individual notice recipients of the Company set forth in the applicable Intraday VWAP Purchase Notice, other than via auto-reply) from the Company of the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase on the applicable Purchase Date therefor.
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“Intraday VWAP Purchase Ending Time” means, with respect to an Intraday VWAP Purchase made pursuant to Section 3.2, the time on the Purchase Date for such Intraday VWAP Purchase that is the earliest of: (i) 3:59 p.m., New York City time, on the applicable Purchase Date for such Intraday VWAP Purchase, or such earlier time publicly announced by the Trading Market (or, if the Common Stock is then listed on an Eligible Market, by such Eligible Market) as the official close of the primary (or “regular”) trading session on the Trading Market (or on such Eligible Market, as applicable) on such Purchase Date; (ii) immediately at such time following the Intraday VWAP Purchase Commencement Time of the Intraday VWAP Purchase Period for such Intraday VWAP Purchase that the total number (or volume) of shares of Common Stock traded on the Trading Market (or on such Eligible Market, as applicable) during such Intraday VWAP Purchase Period has exceeded the applicable Intraday VWAP Purchase Share Volume Maximum for such Intraday VWAP Purchase (taking into account the Intraday VWAP Purchase Percentage specified by the Company in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase); provided, however, that the calculation of the total number (or volume) of shares of Common Stock traded on the Trading Market (or on such Eligible Market, as applicable) during such Intraday VWAP Purchase Period shall exclude from such calculation all shares of Common Stock traded in any of the following transactions, to the extent they occur during such Intraday VWAP Purchase Period (as applicable): (A) the opening or first purchase of Common Stock at or following the official open of such primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date, (B) the last or closing sale of Common Stock at or prior to the official close of such primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date (as applicable), and (C) provided the Company shall have specified in the applicable Intraday VWAP Purchase Notice that clause (iii) below shall not trigger the Intraday VWAP Purchase Ending Time for such Intraday VWAP Purchase (such specification by the Company, whether in an Intraday VWAP Purchase Notice or in a VWAP Purchase Notice, a “Limit Order Continue Election”), all sales of Common Stock on the Trading Market (or on such Eligible Market, as applicable) during such Intraday VWAP Purchase Period at a Sale Price that is less than the applicable Intraday VWAP Purchase Minimum Price Threshold; and (iii) provided the Company shall have specified in the applicable Intraday VWAP Purchase Notice that this clause (iii) shall trigger the Intraday VWAP Purchase Ending Time for such Intraday VWAP Purchase (such specification by the Company, whether in an Intraday VWAP Purchase Notice or in a VWAP Purchase Notice, a “Limit Order Discontinue Election”), immediately at such time following the Intraday VWAP Purchase Commencement Time of the Intraday VWAP Purchase Period for such Intraday VWAP Purchase that the Sale Price of any share of Common Stock traded on the Trading Market (or on such Eligible Market, as applicable) during such Intraday VWAP Purchase Period is less than the applicable Intraday VWAP Purchase Minimum Price Threshold; provided, however, that the determination of whether the Sale Price of any share of Common Stock traded during such Intraday VWAP Purchase Period is less than the applicable Intraday VWAP Purchase Minimum Price Threshold shall exclude (A) the opening or first purchase of Common Stock at or following the official open of such primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date and (B) the last or closing sale of Common Stock at or prior to the official close of such primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date (as applicable). All such calculations shall be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction.
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“Intraday VWAP Purchase Maximum Amount” means, with respect to an Intraday VWAP Purchase made pursuant to Section 3.2, such number of shares of Common Stock equal to the lesser of: (i) one (1) million shares, and (ii) the product of (A) the Intraday VWAP Purchase Percentage specified by the Company in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase, multiplied by (B) the total number (or volume) of shares of Common Stock traded on the Trading Market (or, if the Common Stock is then listed on an Eligible Market, by such Eligible Market) during the Intraday VWAP Purchase Period for such Intraday VWAP Purchase; provided, however, that the calculation of the total number (or volume) of shares of Common Stock traded on the Trading Market (or on such Eligible Market, as applicable) during such Intraday VWAP Purchase Period referred to in clause (ii)(B) above shall exclude from such calculation all shares of Common Stock traded in any of the following transactions, to the extent they occur during such Intraday VWAP Purchase Period (as applicable): (1) the opening or first purchase of Common Stock at or following the official open of such primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date, (2) the last or closing sale of Common Stock at or prior to the official close of such primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date (as applicable), and (3) provided the Company shall have specified a Limit Order Continue Election in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase, all sales of Common Stock on the Trading Market (or on such Eligible Market, as applicable) during such Intraday VWAP Purchase Period at a Sale Price that is less than the applicable Intraday VWAP Purchase Minimum Price Threshold. All such calculations shall be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction.
“Intraday VWAP Purchase Minimum Price Threshold” means, with respect to an Intraday VWAP Purchase made pursuant to Section 3.2, either (a) the dollar amount specified by the Company in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase as the per share minimum Sale Price threshold to be used in determining whether the event in clause (iii) of the definition of “Intraday VWAP Purchase Ending Time” shall have occurred during the applicable Intraday VWAP Purchase Period for such Intraday VWAP Purchase, if the Company shall have specified a Limit Order Discontinue Election in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase, or (b) the dollar amount specified by the Company in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase as the per share minimum Sale Price threshold to be used in determining the sales of Common Stock during the applicable Intraday VWAP Purchase Period that shall be excluded from the calculation of the total number (or volume) of shares of Common Stock traded on the Trading Market (or on such Eligible Market, as applicable) during such Intraday VWAP Purchase Period, if the Company shall have specified a Limit Order Continue Election in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase; provided, however, that in each case if the Company has not specified any such dollar amount as the per share minimum Sale Price threshold in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase, then the per share minimum Sale Price threshold to be used in such Intraday VWAP Purchase shall be such dollar amount equal to the product of (a) the Closing Sale Price of the Common Stock on the Trading Day immediately preceding the Purchase Date for such Intraday VWAP Purchase, multiplied by (b) 0.75. All such calculations shall be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction.
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“Intraday VWAP Purchase Notice” means, with respect to an Intraday VWAP Purchase made pursuant to Section 3.2, an irrevocable written notice from the Company to the Investor, specifying the Intraday VWAP Purchase Percentage that shall apply to such Intraday VWAP Purchase and whether a Limit Order Continue Election or a Limit Order Discontinue Election shall apply to such Intraday VWAP Purchase, and directing the Investor to subscribe for and purchase a specified Intraday VWAP Purchase Share Amount (such specified Intraday VWAP Purchase Share Amount subject to adjustment as set forth in Section 3.2 as necessary to give effect to the applicable Intraday VWAP Purchase Maximum Amount for such Intraday VWAP Purchase), at the applicable Intraday VWAP Purchase Price therefor on the Purchase Date for such Intraday VWAP Purchase in accordance with this Agreement, that is delivered by the Company to the Investor and received by the Investor (i) after the latest of (X) 10:00 a.m., New York City time, on such Purchase Date, if the Company has not timely delivered a VWAP Purchase Notice to the Investor for a VWAP Purchase on such Purchase Date, (Y) the VWAP Purchase Ending Time of the VWAP Purchase Period for the VWAP Purchase preceding the Intraday VWAP Purchase Period for such Intraday VWAP Purchase occurring on the same Purchase Date as such earlier VWAP Purchase, if the Company has timely delivered a VWAP Purchase Notice to the Investor for a VWAP Purchase on such Purchase Date, and (Z) the Intraday VWAP Purchase Ending Time of the Intraday VWAP Purchase Period for the most recent prior Intraday VWAP Purchase, if any, occurring on the same Purchase Date as such Intraday VWAP Purchase, and (ii) prior to the earlier of (X) 3:30 p.m., New York City time, on such Purchase Date and (Y) such time that is exactly thirty (30) minutes immediately prior to the official close of the primary (or “regular”) trading session on the Trading Market (or, if the Common Stock is then listed on an Eligible Market, on such Eligible Market) on such Purchase Date, if the Trading Market (or such Eligible Market, as applicable) has theretofore publicly announced that the official close of the primary (or “regular”) trading session on the Trading Market (or on such Eligible Market, as applicable) on such Purchase Date shall be earlier than 4:00 p.m., New York City time, on such Purchase Date.
“Intraday VWAP Purchase Percentage” means, with respect to an Intraday VWAP Purchase made pursuant to Section 3.2, the percentage specified by the Company in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase, which shall not exceed 25.0%, for purposes of calculating, among other things, the Intraday VWAP Purchase Maximum Amount, the Intraday VWAP Purchase Share Amount and the Intraday VWAP Purchase Share Volume Maximum, in each case applicable to such Intraday VWAP Purchase.
“Intraday VWAP Purchase Period” means, with respect to an Intraday VWAP Purchase made pursuant to Section 3.2, the period on the Purchase Date for such Intraday VWAP Purchase, beginning at the applicable Intraday VWAP Purchase Commencement Time and ending at the applicable Intraday VWAP Purchase Ending Time on such Purchase Date for such Intraday VWAP Purchase.
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“Intraday VWAP Purchase Price” means, with respect to an Intraday VWAP Purchase made pursuant to Section 3.2, the purchase price per Share to be purchased by the Investor in such Intraday VWAP Purchase, equal to the product of (i) 97%, multiplied by (ii) the VWAP of the Common Stock for the applicable Intraday VWAP Purchase Period on the applicable Purchase Date for such Intraday VWAP Purchase; provided, however, that the calculation of the VWAP for the Common Stock for the Intraday VWAP Purchase Period for an Intraday VWAP Purchase shall exclude each of the following transactions, to the extent they occur during such Intraday VWAP Purchase Period (as applicable): (A) the opening or first purchase of Common Stock at or following the official open of such primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date, (B) the last or closing sale of Common Stock at or prior to the official close of such primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date (as applicable), and (C) provided the Company shall have specified a Limit Order Continue Election in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase, all sales of Common Stock on the Trading Market (or on such Eligible Market, as applicable) during such Intraday VWAP Purchase Period at a Sale Price that is less than the applicable Intraday VWAP Purchase Minimum Price Threshold for such Intraday VWAP Purchase. All such calculations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction.
“Intraday VWAP Purchase Share Amount” means, with respect to an Intraday VWAP Purchase made pursuant to Section 3.2, the total number of Shares to be purchased by the Investor in such Intraday VWAP Purchase as specified by the Company in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase, which total number of Shares shall not exceed the Intraday VWAP Purchase Maximum Amount applicable to such Intraday VWAP Purchase, taking into account the Intraday VWAP Purchase Percentage specified by the Company in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase (and such number of Shares specified by the Company in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase shall be subject to automatic adjustment in accordance with Section 3.2 hereof as necessary to give effect to the Intraday VWAP Purchase Maximum Amount limitation applicable to such Intraday VWAP Purchase, taking into account the Intraday VWAP Purchase Percentage specified by the Company in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase, as set forth in this Agreement).
“Intraday VWAP Purchase Share Volume Maximum” means, with respect to an Intraday VWAP Purchase made pursuant to Section 3.2, a number of shares of Common Stock equal to the quotient obtained by dividing (i) the Intraday VWAP Purchase Share Amount to be subscribed for and purchased by the Investor in such Intraday VWAP Purchase, by (ii) the Intraday VWAP Purchase Percentage specified by the Company in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase (to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction).
“Investment Period” means the period commencing on the Commencement Date and expiring on the date this Agreement is subsequently terminated pursuant to Article VIII.
“Investor” shall have the meaning assigned to such term in the preamble of this Agreement.
“Investor Party” shall have the meaning assigned to such term in Section 9.1.
I-11
“IT Systems and Data” shall have the meaning assigned to such term in Section 5.39.
“Knowledge” means with respect to any entity, the actual knowledge of any of (i) the Chief Executive Officer of such entity or (ii) the Chief Financial Officer of such entity, in each case after reasonable and prudent inquiry of all officers, directors and employees under such Person’s direct supervision who would reasonably be expected to have knowledge or information with respect to the matter in question.
“Law” means any federal, state, provincial, local, foreign, national or supranational statute, law (including common law), act, statute, ordinance, treaty, rule, code, regulation or other binding directive issued, promulgated or enforced by a Governmental Entity having jurisdiction over a given matter.
“Limit Order Continue Election” shall have the meaning assigned to such term in the definition of “Intraday VWAP Purchase Ending Time,” which election shall be applicable to an Intraday VWAP Purchase, if such election is specified by the Company in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase, and shall be applicable to a VWAP Purchase, if such election is specified by the Company in the applicable VWAP Purchase Notice for such VWAP Purchase, as the case may be.
“Limit Order Discontinue Election” shall have the meaning assigned to such term in the definition of “Intraday VWAP Purchase Ending Time,” which election shall be applicable to an Intraday VWAP Purchase, if such election is specified by the Company in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase, and shall be applicable to a VWAP Purchase, if such election is specified by the Company in the applicable VWAP Purchase Notice for such VWAP Purchase, as the case may be.
“Material Adverse Effect” means (i) any condition, occurrence, state of facts or event having, or insofar as reasonably can be foreseen would likely have, any effect on the business, operations, properties or financial condition of the Company as set forth in the Commission Documents that is material and adverse to the Company, taken as a whole, excluding any facts, circumstances, changes or effects, individually or in the aggregate, exclusively and directly resulting from, relating to or arising out of any of the following: (a) changes in conditions in the U.S. or global capital, credit or financial markets generally, including changes in the availability of capital or currency exchange rates, provided such changes shall not have affected the Company in a materially disproportionate manner as compared to other similarly situated companies, (b) changes generally affecting the industries in which the Company operate, provided such changes shall not have affected the Company, taken as a whole, in a materially disproportionate manner as compared to other similarly situated companies, (c) any effect of the announcement of, or the consummation of the transactions contemplated by, this Agreement and the Registration Rights Agreement on the Company’s relationships, contractual or otherwise, with customers, suppliers, vendors, bank lenders, strategic venture partners or employees, (d) changes arising in connection with earthquakes, hostilities, acts of war, sabotage or terrorism or military actions or any escalation or material worsening of any such hostilities, acts of war, sabotage or terrorism or military actions existing as of the date hereof, (e) any effect of COVID-19 or any Law, directive, pronouncement or guideline issued by a Governmental Entity, the Centers for Disease Control and Prevention, the World Health Organization or industry group providing for business closures, changes to business operations, “sheltering-in-place” or other restrictions that relate to, or arise out of, an epidemic, pandemic or disease outbreak (including the COVID-19 pandemic) or any change in such Law, directive, pronouncement or guideline or interpretation thereof following the date of this Agreement, (f) any action taken by the Investor, any of its officers, its sole member or the Investor’s Broker-Dealer, or any of such Person’s successors with respect to the transactions contemplated by this Agreement and the Registration Rights Agreement, and (g) the effect of any changes in applicable laws or accounting rules, provided such changes shall not have affected the Company in a materially disproportionate manner as compared to other similarly situated companies; (ii) any condition, occurrence, state of facts or event having, or insofar as reasonably can be foreseen would likely have, any material adverse effect on the legality, validity or enforceability of any of the Transaction Documents or the transactions contemplated thereby; or (iii) any condition, occurrence, state of facts or event that would, or insofar as reasonably can be foreseen would likely, prohibit or otherwise materially interfere with or delay the ability of the Company to perform any of its obligations under any of the Transaction Documents to which it is a party.
I-12
“Material Permits” shall have the meaning assigned to such term in Section 5.17.
“Minimum Price” means $0.86, representing the Nasdaq official closing price of the Common Stock on the Trading Market (as reflected on Nasdaq.com) on the Trading Day immediately preceding the date of this Agreement (subject to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction that occurs on or after the date of this Agreement).
“Money Laundering Laws” shall have the meaning assigned to such term in Section 5.38.
“MPA Period” means the period commencing at 5:00 p.m., New York City time, on the Trading Day immediately preceding the Trading Day on which any Affiliate of the Investor, including, without limitation, YS, shall have published or distributed any research report (as such term is defined in Rule 500 of Regulation AC) concerning the Company, and ending at 6:00 a.m., New York City time, on the sixth (6th) Trading Day immediately following the Trading Day on which any Affiliate of the Investor, including, without limitation, YS, shall have published or distributed any research report (as such term is defined in Rule 500 of Regulation AC) concerning the Company.
“New Registration Statement” shall have the meaning assigned to such term in the Registration Rights Agreement.
“Non-Affiliate Shares” shall have the meaning assigned to such term in Section 5.46.
“Notice of Effectiveness” shall have the meaning assigned to such term in Section 10.1(iv).
“Notified Body” means an entity licensed, authorized or approved by the applicable Governmental Entity to assess and certify the conformity of a medical device with the requirements of applicable legislation on medical devices in the European Union and United Kingdom, each as may be amended from time to time, and applicable harmonized standards “OFAC” shall have the meaning assigned to such term in Section 5.36.
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“Order” means any outstanding writ, order, judgment, injunction, binding decision or determination, award, ruling, subpoena, verdict or decree entered, issued or rendered by any Governmental Entity.
“PEA Period” means the period commencing at 9:30 a.m., New York City time, on the fifth (5th) Trading Day immediately prior to the filing of (i) any post-effective amendment to the Initial Registration Statement or any New Registration Statement or (ii) any New Registration Statement, as applicable, and ending at 9:30 a.m., New York City time, on the Trading Day immediately following, the Effective Date of such post-effective amendment or New Registration Statement, as applicable.
“Permits” means any approvals, authorizations, clearances, licenses, registrations, permits or certificates of a Governmental Entity.
“Person” means any person or entity, whether a natural person, trustee, corporation, partnership, limited partnership, limited liability company, trust, unincorporated organization, business association, firm, joint venture or Governmental Entity.
“Personal Data” shall have the meaning assigned to such term in Section 5.40.
“Policies” shall have the meaning assigned to such term in Section 5.40.
“Privacy Laws” shall have the meaning assigned to such term in Section 5.40.
“Proceeding” means any lawsuit, litigation, action, audit, investigation, examination, claim, complaint, charge, proceeding, suit, arbitration, investigation, or mediation (in each case, whether civil, criminal or administrative and whether public or private) pending by or before or otherwise involving any Governmental Entity.
“Promissory Note” shall mean that certain promissory note dated the date hereof issued by the Company in favor of the Investor.
“Prospectus” shall have the meaning assigned to such term in the Registration Rights Agreement.
“Prospectus Supplement” shall have the meaning assigned to such term in the Registration Rights Agreement.
“Purchase Condition Satisfaction Time” shall have the meaning assigned to such term in Section 7.3.
I-14
“Purchase Date” means, (i) with respect to a VWAP Purchase made pursuant to Section 3.1, the Trading Day on which the Investor timely receives, (A) after 6:00 a.m., New York City time, and (B) prior to 9:00 a.m., New York City time, on such Trading Day, a valid VWAP Purchase Notice for such VWAP Purchase in accordance with this Agreement, and (ii) with respect to an Intraday VWAP Purchase made pursuant to Section 3.2, the Trading Day on which the Investor timely receives a valid Intraday VWAP Purchase Notice for such Intraday VWAP Purchase in accordance with this Agreement, (A) after the latest of (X) 10:00 a.m., New York City time, on such Trading Day, if the Company has not timely delivered a valid VWAP Purchase Notice to the Investor for a VWAP Purchase on such Trading Day, (Y) the VWAP Purchase Ending Time of the VWAP Purchase Period for the VWAP Purchase preceding the applicable Intraday VWAP Purchase Period for such Intraday VWAP Purchase occurring on the same Trading Day as such earlier VWAP Purchase, if the Company has timely delivered a valid VWAP Purchase Notice to the Investor for a VWAP Purchase on such Trading Day, and (Z) the Intraday VWAP Purchase Ending Time of the Intraday VWAP Purchase Period for the most recent prior Intraday VWAP Purchase, if any, occurring on the same Trading Day as such Intraday VWAP Purchase, and (B) prior to the earlier of (X) 3:30 p.m., New York City time, on such Trading Day for such Intraday VWAP Purchase and (Y) such time that is exactly thirty (30) minutes immediately prior to the official close of the primary (or “regular”) trading session on the Trading Market (or, if the Common Stock is then listed on an Eligible Market, on such Eligible Market) on such Trading Day, if the Trading Market (or such Eligible Market, as applicable) has publicly announced that the official close of the primary (or “regular”) trading session shall be earlier than 4:00 p.m., New York City time, on such Trading Day.
“Purchase Share Delivery Date” shall have the meaning assigned to such term in Section 3.3.
“Qualified Independent Underwriter” shall have the meaning assigned to such term in FINRA Rule 5121(f)(12).
“Reference Period” shall have the meaning assigned to such term in Section 6.6(ii).
“Reference Price” shall have the meaning assigned to such term in Section 6.6(ii).
“Registrable Securities” shall have the meaning assigned to such term in the Registration Rights Agreement.
“Registration Period” shall have the meaning assigned to such term in the Registration Rights Agreement.
“Registration Rights Agreement” shall have the meaning assigned to such term in the recitals hereof.
“Registration Statement” shall have the meaning assigned to such term in the Registration Rights Agreement.
“Regulation D” means Rule 506(b) of Regulation D promulgated by the Commission under the Securities Act.
“Release” shall have the meaning assigned to such term in Section 5.18.
“Representation Date” shall have the meaning assigned to such term in Section 6.17.
“Representatives” means with respect to a Person, such Person’s directors, officers, employees, and legal, financial, internal and independent accounting and other advisors and representatives.
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“Restricted Period” shall have the meaning assigned to such term in Section 6.9(i).
“Restricted Person” shall have the meaning assigned to such term in Section 6.9(i).
“Restricted Persons” shall have the meaning assigned to such term in Section 6.9(i).
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect.
“Sale Price” means any trade price for a share of Common Stock on the Trading Market, or if the Common Stock is then traded on an Eligible Market, on such Eligible Market, as reported by Bloomberg.
“Sanctions Laws” shall have the meaning assigned to such term in Section 5.36.
“Sarbanes-Oxley Act” shall have the meaning assigned to such term in Section 5.6(d).
“Section 4(a)(2)” shall have the meaning assigned to such term in the recitals of this Agreement.
“Securities” means the Shares.
“Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder.
“Shares” shall mean the shares of Common Stock that may be purchased by the Investor under this Agreement pursuant to one or more VWAP Purchase Notices or one or more Intraday VWAP Purchase Notices.
“Short Sales” shall mean “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act.
“Subsidiary” shall mean any corporation or other entity of which at least a majority of the securities or other ownership interest having ordinary voting power for the election of directors or other persons performing similar functions are at the time owned directly or indirectly by an entity and/or any of its other Subsidiaries. For purposes of Article IV hereof, “Subsidiary” shall include HOD both before and after the Business Combination.
“Total Commitment” shall have the meaning assigned to such term in Section 2.1.
“Trading Day” shall mean any day on which the Trading Market or, if the Common Stock is then listed on an Eligible Market, such Eligible Market is open for “regular” trading, including any day on which the Trading Market (or such Eligible Market, as applicable) is open for “regular” trading for a period of time less than the customary “regular” trading period.
“Trading Market” means the Nasdaq Stock Market (or any nationally recognized successor thereto).
I-16
“Transaction Documents” means, collectively, this Agreement (as qualified by the Disclosure Schedule) and the exhibits hereto, the Registration Rights Agreement, and the exhibits thereto, the Promissory Note, the Global Guaranty Agreement, the Warrant, and each of the other agreements, documents, certificates and instruments entered into or furnished by the parties hereto in connection with the transactions contemplated hereby and thereby.
“Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any equity or debt securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional shares of Common Stock or Common Stock Equivalents either (A) at a conversion price, exercise price, exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the Common Stock at any time after the initial issuance of such equity or debt 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 equity or debt 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 (including, without limitation, any “full ratchet” or “weighted average” anti-dilution provisions, but not including any standard anti-dilution protection for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction), (ii) issues or sells any equity or debt securities, including, without limitation, Common Stock or Common Stock Equivalents, either (A) at a 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 (other than standard anti-dilution protection for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction), or (B) that are subject to or contain any put, call, redemption, buy-back, price-reset or other similar provision or mechanism (including, without limitation, a “Black-Scholes” put or call right, other than in connection with a “fundamental transaction”) that provides for the issuance of additional equity securities of the Company or the payment of cash by the Company, or (iii) enters into any agreement, including, but not limited to, an “equity line of credit” or “at the market offering” or other continuous offering or similar offering of Common Stock or Common Stock Equivalents, whereby the Company may sell Common Stock or Common Stock Equivalents at a future determined price.
“VWAP” means, for the Common Stock for a specified period, the dollar volume-weighted average price for the Common Stock on the Trading Market (or, if the Common Stock is then listed on an Eligible Market, on such Eligible Market), for such period, as reported by Bloomberg through its “AQR” function; provided, however, that (i) the calculation of the dollar volume-weighted average price for the Common Stock for the VWAP Purchase Period for each VWAP Purchase shall exclude each of the following transactions, to the extent they occur during such VWAP Purchase Period (as applicable): (A) the opening or first purchase of Common Stock at or following the official open of such primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date, (B) the last or closing sale of Common Stock at or prior to the official close of such primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date (as applicable), and (C) provided the Company shall have specified a Limit Order Continue Election in the applicable VWAP Purchase Notice for such VWAP Purchase, all sales of Common Stock on the Trading Market (or on such Eligible Market, as applicable) during such VWAP Purchase Period at a Sale Price that is less than the applicable VWAP Purchase Minimum Price Threshold for such VWAP Purchase; and (ii) the calculation of the dollar volume-weighted average price for the Common Stock for the Intraday VWAP Purchase Period for each Intraday VWAP Purchase shall exclude each of the following transactions, to the extent they occur during such Intraday VWAP Purchase Period (as applicable): (A) the opening or first purchase of Common Stock at or following the official open of such primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date, (B) the last or closing sale of Common Stock at or prior to the official close of such primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date (as applicable), and (C) provided the Company shall have specified a Limit Order Continue Election in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase, all sales of Common Stock on the Trading Market (or on such Eligible Market, as applicable) during such Intraday VWAP Purchase Period at a Sale Price that is less than the applicable Intraday VWAP Purchase Minimum Price Threshold for such Intraday VWAP Purchase. All such calculations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction.
I-17
“VWAP Purchase” shall have the meaning assigned to such term in Section 3.1.
“VWAP Purchase Commencement Time” means, with respect to a VWAP Purchase made pursuant to Section 3.1, 9:30:01 a.m., New York City time, on the Purchase Date for such VWAP Purchase, or such later time on such Purchase Date publicly announced by the Trading Market (or, if the Common Stock is then listed on an Eligible Market, by such Eligible Market) as the official open of the primary (or “regular”) trading session on the Trading Market (or on such Eligible Market, as applicable) on such Purchase Date.
“VWAP Purchase Ending Time” means, with respect to a VWAP Purchase made pursuant to Section 3.1, the time on the Purchase Date for such VWAP Purchase that is the earliest of: (i) 3:59 p.m., New York City time, on the applicable Purchase Date for such VWAP Purchase, or such earlier time publicly announced by the Trading Market (or, if the Common Stock is then listed on an Eligible Market, by such Eligible Market) as the official close of the primary (or “regular”) trading session on the Trading Market (or on such Eligible Market, as applicable) on such Purchase Date; (ii) immediately at such time following the VWAP Purchase Commencement Time of the VWAP Purchase Period for such VWAP Purchase that the total number (or volume) of shares of Common Stock traded on the Trading Market (or on such Eligible Market, as applicable) during such VWAP Purchase Period has exceeded the applicable VWAP Purchase Share Volume Maximum for such VWAP Purchase (taking into account the VWAP Purchase Percentage specified by the Company in the applicable VWAP Purchase Notice for such VWAP Purchase); provided, however, that the calculation of the total number (or volume) of shares of Common Stock traded on the Trading Market (or on such Eligible Market, as applicable) during such VWAP Purchase Period shall exclude from such calculation all shares of Common Stock traded in any of the following transactions, to the extent they occur during such VWAP Purchase Period (as applicable): (A) the opening or first purchase of Common Stock at or following the official open of such primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date, (B) the last or closing sale of Common Stock at or prior to the official close of such primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date (as applicable), and (C) provided the Company shall have specified a Limit Order Continue Election in the applicable VWAP Purchase Notice for such VWAP Purchase, all sales of Common Stock on the Trading Market (or on such Eligible Market, as applicable) during such VWAP Purchase Period at a Sale Price that is less than the applicable VWAP Purchase Minimum Price Threshold; and (iii) provided the Company shall have specified a Limit Order Discontinue Election in the applicable VWAP Purchase Notice for such VWAP Purchase, immediately at such time following the VWAP Purchase Commencement Time of the VWAP Purchase Period for such VWAP Purchase that the Sale Price of any share of Common Stock traded on the Trading Market (or on such Eligible Market, as applicable) during such VWAP Purchase Period is less than the applicable VWAP Purchase Minimum Price Threshold; provided, however, that the determination of whether the Sale Price of any share of Common Stock traded during such VWAP Purchase Period is less than the applicable VWAP Purchase Minimum Price Threshold shall exclude (A) the opening or first purchase of Common Stock at or following the official open of such primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date and (B) the last or closing sale of Common Stock at or prior to the official close of such primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date (as applicable). All such calculations shall be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction.
I-18
“VWAP Purchase Maximum Amount” means, with respect to a VWAP Purchase made pursuant to Section 3.1, such number of shares of Common Stock equal to the lesser of: (i) one (1) million shares, and (ii) the product of (A) the VWAP Purchase Percentage specified by the Company in the applicable VWAP Purchase Notice for such VWAP Purchase, multiplied by (B) the total number (or volume) of shares of Common Stock traded on the Trading Market (or, if the Common Stock is then listed on an Eligible Market, by such Eligible Market) during the VWAP Purchase Period for such VWAP Purchase; provided, however, that the calculation of the total number (or volume) of shares of Common Stock traded on the Trading Market (or on such Eligible Market, as applicable) during such VWAP Purchase Period referred to in clause (ii)(B) above shall exclude from such calculation all shares of Common Stock traded in any of the following transactions, to the extent they occur during such VWAP Purchase Period (as applicable): (1) the opening or first purchase of Common Stock at or following the official open of such primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date, (2) the last or closing sale of Common Stock at or prior to the official close of such primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date (as applicable), and (3) provided the Company shall have specified a Limit Order Continue Election in the applicable VWAP Purchase Notice for such VWAP Purchase, all sales of Common Stock on the Trading Market (or on such Eligible Market, as applicable) during such VWAP Purchase Period at a Sale Price that is less than the applicable VWAP Purchase Minimum Price Threshold. All such calculations shall be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction.
“VWAP Purchase Minimum Price Threshold” means, with respect to a VWAP Purchase made pursuant to Section 3.1, either (a) the dollar amount specified by the Company in the applicable VWAP Purchase Notice for such VWAP Purchase as the per share minimum Sale Price threshold to be used in determining whether the event in clause (iii) of the definition of “VWAP Purchase Ending Time” shall have occurred during the applicable VWAP Purchase Period for such VWAP Purchase, if the Company shall have specified a Limit Order Discontinue Election in the applicable VWAP Purchase Notice for such VWAP Purchase, or (b) the dollar amount specified by the Company in the applicable VWAP Purchase Notice for such VWAP Purchase as the per share minimum Sale Price threshold to be used in determining the sales of Common Stock during the applicable VWAP Purchase Period that shall be excluded from the calculation of the total number (or volume) of shares of Common Stock traded on the Trading Market (or on such Eligible Market, as applicable) during such VWAP Purchase Period, if the Company shall have specified a Limit Order Continue Election in the applicable VWAP Purchase Notice for such VWAP Purchase; provided, however, that in each case if the Company has not specified any such dollar amount as the per share minimum Sale Price threshold in the applicable VWAP Purchase Notice for such VWAP Purchase, then the per share minimum Sale Price threshold to be used in such VWAP Purchase shall be such dollar amount equal to the product of (a) the Closing Sale Price of the Common Stock on the Trading Day immediately preceding the Purchase Date for such VWAP Purchase, multiplied by (b) 0.75. All such calculations shall be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction.
I-19
“VWAP Purchase Notice” means, with respect to a VWAP Purchase made pursuant to Section 3.1, an irrevocable written notice delivered by the Company to the Investor, and received by the Investor, after 6:00 a.m., New York City time, and prior to 9:00 a.m., New York City time, on the Purchase Date for such VWAP Purchase, specifying the VWAP Purchase Percentage that shall apply to such VWAP Purchase and whether a Limit Order Continue Election or a Limit Order Discontinue Election shall apply to such VWAP Purchase, and directing the Investor to subscribe for and purchase a specified VWAP Purchase Share Amount (such specified VWAP Purchase Share Amount subject to adjustment as set forth in Section 3.1 as necessary to give effect to the applicable VWAP Purchase Maximum Amount for such VWAP Purchase), at the applicable VWAP Purchase Price therefor on such Purchase Date for such VWAP Purchase in accordance with this Agreement.
“VWAP Purchase Percentage” means, with respect to a VWAP Purchase made pursuant to Section 3.1, the percentage specified by the Company in the applicable VWAP Purchase Notice for such VWAP Purchase, which shall not exceed 25.0%, for purposes of calculating, among other things, the VWAP Purchase Maximum Amount, the VWAP Purchase Share Amount and the VWAP Purchase Share Volume Maximum, in each case applicable to such VWAP Purchase.
“VWAP Purchase Period” means, with respect to a VWAP Purchase made pursuant to Section 3.1, the period on the Purchase Date for such VWAP Purchase, beginning at the applicable VWAP Purchase Commencement Time and ending at the applicable VWAP Purchase Ending Time on such Purchase Date for such VWAP Purchase.
“VWAP Purchase Price” means, with respect to a VWAP Purchase made pursuant to Section 3.1, the purchase price per Share to be purchased by the Investor in such VWAP Purchase, equal to the product of (i) 97.0%, multiplied by (ii) the VWAP of the Common Stock for the applicable VWAP Purchase Period on the applicable Purchase Date for such VWAP Purchase; provided, however, that the calculation of the VWAP for the Common Stock for the VWAP Purchase Period for a VWAP Purchase shall exclude each of the following transactions, to the extent they occur during such VWAP Purchase Period (as applicable): (A) the opening or first purchase of Common Stock at or following the official open of such primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date, (B) the last or closing sale of Common Stock at or prior to the official close of such primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date (as applicable), and (C) provided the Company shall have specified a Limit Order Continue Election in the applicable VWAP Purchase Notice for such VWAP Purchase, all sales of Common Stock on the Trading Market (or on such Eligible Market, as applicable) during such VWAP Purchase Period at a Sale Price that is less than the applicable VWAP Purchase Minimum Price Threshold for such VWAP Purchase. All such calculations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction.
“VWAP Purchase Share Amount” means, with respect to a VWAP Purchase made pursuant to Section 3.1, the total number of Shares to be purchased by the Investor in such VWAP Purchase as specified by the Company in the applicable VWAP Purchase Notice for such VWAP Purchase, which total number of Shares shall not exceed the VWAP Purchase Maximum Amount applicable to such VWAP Purchase, taking into account the VWAP Purchase Percentage specified by the Company in the applicable VWAP Purchase Notice for such VWAP Purchase (and such number of Shares specified by the Company in the applicable VWAP Purchase Notice for such VWAP Purchase shall be subject to automatic adjustment in accordance with Section 3.1 hereof as necessary to give effect to the VWAP Purchase Maximum Amount limitation applicable to such VWAP Purchase, taking into account the VWAP Purchase Percentage specified by the Company in the applicable VWAP Purchase Notice for such VWAP Purchase, as set forth in this Agreement).
“VWAP Purchase Share Volume Maximum” means, with respect to a VWAP Purchase made pursuant to Section 3.1, a number of shares of Common Stock equal to the quotient obtained by dividing (i) the VWAP Purchase Share Amount to be subscribed for and purchased by the Investor in such VWAP Purchase, by (ii) the VWAP Purchase Percentage specified by the Company in the applicable VWAP Purchase Notice for such VWAP Purchase (to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction).
“Warrant” shall have the meaning assigned to such term in the Promissory Note.
“YS” shall have the meaning assigned to such term in the Recitals.
I-20
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
A-1
EXHIBIT B
CLOSING CERTIFICATE
[ ], 2025
The undersigned, the [●] of [●], a Delaware corporation (the “Company”), delivers this certificate in connection with the Common Stock Purchase Agreement, dated as of December 4, 2025 (the “Agreement”), by and between the Company and [●]., a Cayman Islands exempt limited company the “Investor”), and hereby certifies on the date hereof that (capitalized terms used herein without definition have the meanings assigned to them in the Agreement):
1. Attached hereto as Exhibit A is a true, complete and correct copy of the Certificate of Incorporation of the Company, as amended through the date hereof, as filed with the Secretary of State of the State of Delaware (the “Certificate of Incorporation”). The Certificate of Incorporation of the Company has not been further amended or restated, and no document with respect to any amendment to the Certificate of Incorporation of the Company has been filed in the office of the Secretary of State of the State of Delaware since the date shown on the face of the state certification relating to the Company’s Certificate of Incorporation, which is in full force and effect on the date hereof, and no action has been taken by the Company in contemplation of any such amendment or the dissolution, merger or consolidation of the Company.
2. Attached hereto as Exhibit B is a true and complete copy of the Bylaws of the Company, as amended through, and as in full force and effect on, the date hereof (the “Bylaws”), and no proposal for any amendment, repeal or other modification to the Bylaws of the Company has been taken or is currently pending before the Board of Directors or stockholders of the Company.
3. The Board of Directors of the Company has approved the transactions contemplated by the Transaction Documents; said approval has not been amended, rescinded or modified and remains in full force and effect as of the date hereof. Attached hereto as Exhibit C are true, correct and complete copies of the resolutions duly adopted by the Board of Directors of the Company on [●], 2025.
4. Each person who, as an officer of the Company, or as attorney-in-fact of an officer of the Company, signed the Transaction Documents to which the Company is a party, was duly elected, qualified and acting as such officer or duly appointed and acting as such attorney-in-fact, and the signature of each such person appearing on any such document is his genuine signature.
[ ] LLP and Duane Morris LLP shall be entitled to rely on the representations and warranties set forth herein for purposes of rendering its opinion and negative assurance letter.
B-1
IN WITNESS WHEREOF, I have signed my name as of the date first above written.
| Name: | |
| Title: |
[Signature Page to Closing Certificate]
B-2
EXHIBIT C
COMPLIANCE CERTIFICATE
The undersigned, the [●] of [●], a Delaware corporation (the “Company”), delivers this certificate in connection with the Common Stock Purchase Agreement, dated as of December 4, 2025 (the “Agreement”), by and between the Company and [●]., a Cayman Islands exempt limited company (the “Investor”), and hereby certifies on the date hereof that, to the best of his knowledge after reasonable investigation, on behalf of the Company (capitalized terms used herein without definition have the meanings assigned to them in the Agreement):
1. The undersigned is the duly appointed [●] of the Company.
2. Except as set forth in the attached Disclosure Schedule, the representations and warranties of the Company set forth in Article V of the Agreement (i) that are not qualified by “materiality” or “Material Adverse Effect” are true and correct in all material respects as of [the Commencement Date] [the date hereof] with the same force and effect as if made on [the Commencement Date] [the date hereof], except to the extent such representations and warranties are as of another date, in which case, such representations and warranties are true and correct in all material respects as of such other date and (ii) that are qualified by “materiality” or “Material Adverse Effect” are true and correct as of [the Commencement Date] [the date hereof] with the same force and effect as if made on [the Commencement Date] [the date hereof], except to the extent such representations and warranties are as of another date, in which case, such representations and warranties are true and correct as of such other date.
3. The Company has performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Agreement and the Registration Rights Agreement to be performed, satisfied or complied with by the Company [at or prior to Commencement][on or prior to the date hereof].
4. The Shares issuable in respect of each VWAP Purchase Notice and each Intraday VWAP Purchase Notice effected pursuant to the Agreement shall be delivered to the Investor electronically as DWAC Shares, and shall be freely tradable and transferable and without restriction on resale and without any stop transfer instructions maintained against such Shares.
5. As of [the Commencement Date][the date hereof], the Company does not possess any material non-public information.
6. As of [the Commencement Date][the date hereof], the Company has reserved out of its authorized and unissued Common Stock, [●] shares of Common Stock solely for the purpose of issuing Shares pursuant to VWAP Purchases and Intraday VWAP Purchases effected under the Agreement.
7. No stop order suspending the effectiveness of the Registration Statement or the use of the Prospectus under the Securities Act has been issued and no proceedings for such purpose or pursuant to Section 8A of the Securities Act are pending before or, to the Knowledge of the Company, threatened by the Commission.
C-1
[ ] LLP and Duane Morris LLP shall be entitled to rely on the representations and warranties set forth herein for purposes of rendering its opinion and negative assurance letter.
The undersigned has executed this Certificate this [●] day of [●], 202[●].
| By: | ||
| Name: | ||
| Title: |
C-2
COMPANY DISCLOSURE SCHEDULE
Unless the context otherwise requires, all capitalized terms are used herein as defined in the Agreement. The numbers below correspond to the section numbers of representations and warranties in the Agreement most directly modified by the below exceptions.
HOD DISCLOSURE SCHEDULE
Unless the context otherwise requires, all capitalized terms are used herein as defined in the Agreement. The numbers below correspond to the section numbers of representations and warranties in the Agreement most directly modified by the below exceptions.
Exhibit 10.2
THIS NOTE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THESE SECURITIES HAVE BEEN SOLD 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. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
BRAG HOUSE HOLDINGS, INC.
HOUSE OF DOGE INC.
Convertible Promissory Note
Original Principal Amount: Up to $11,000,000
Issuance Date: December 4, 2025
Number: TBH-1
FOR VALUE RECEIVED, BRAG HOUSE HOLDINGS, INC., a corporation organized under the laws of the State of Delaware (“Pubco”), and HOUSE OF DOGE INC., a corporation organized under the laws of the State of Texas (“HOD”; and Pubco and HOD, collectively and individually herein referred to as the “Company”), hereby jointly and severally promise to pay to the order of [●]., or its registered assigns (the “Holder”), the amount set out above as the Original Principal Amount (or such amount as advanced or as reduced pursuant to the terms hereof pursuant to repayment, redemption, otherwise, the “Principal”), and to pay interest (“Interest”) on any outstanding Principal at the applicable Interest Rate (as defined below) from the date set out above as the Issuance Date (the “Issuance Date”) until the same becomes due and payable, whether upon the Maturity Date (as defined below) or acceleration, redemption or otherwise (in each case in accordance with the terms hereof). Certain capitalized terms used herein are defined in Section (11). The Issuance Date is the date of the first issuance of this Convertible Promissory Note (as amended, amended and restated, extended, supplemented or otherwise modified in writing from time to time, this “Note”) regardless of the number of transfers and regardless of the number of instruments, which may be issued to evidence such Note. References throughout this Note to obligations of the “Company” shall refer to and be deemed to include the joint and several obligations of Pubco and HOD hereunder. The Company and the Holder are referred to herein at times, collectively, as the “Parties,” and each, a “Party.”
This Note is being issued in connection with the Common Stock Purchase Agreement, dated December 4, 2025 (as may be amended, amended and restated, extended, supplemented or otherwise modified in writing from time to time, the “CEF”), by and among Pubco, HOD and [●]., as the “Investor” thereunder. Terms used but not defined herein shall have the meaning given them in the CEF.
(1) GENERAL TERMS
(a) Advances. The Holder agrees to make each of the following advances (each an “Advance” and, collectively, the “Advances”), subject to the final sentence of this Section (1)(a) set forth below:
(i) on the Issuance Date, subject to the satisfaction of the terms and conditions in this Note, including Section (6)(c) hereof, the Holder shall advance to the Company the Principal amount of $3,850,000, for a purchase price equal to $3,465,000; and
(ii) upon the satisfaction of each of the terms and conditions set forth in this Note, including those identified below, the Holder shall advance to the Company an additional principal amount of $7,150,000, for a purchase price equal to $6,435,000:
(1) the effectiveness of the Registration Statement (as defined in the CEF),
(2) Pubco shall have obtained the approval of its stockholders as required by the applicable rules of the Principal Market for issuances of shares in excess of the Exchange Cap,
(3) Pubco stockholder approval of the Business Combination (in accordance with the terms of the BCA as in effect on the Issuance Date),
(4) the Business Combination shall occur prior to or substantially concurrently with the proposed second Advance to be made under this Section (1)(a)(ii),
(5) no Event of Default shall have occurred and be continuing or could result in connection with such Advance,
(6) the conditions set forth in Section (6)(c) shall have been satisfied and remain satisfied at the time of funding the additional Advance,
(7) each director identified in the disclosure schedules to the Form S-4 Registration Statement has submitted information reasonably requested by the Holder to permit the Holder to conduct customary due diligence screening on each such director, the results of which shall be satisfactory to the Holder, and
(8) the Holder shall have received from the Company and its Subsidiaries agreements, documents and instruments reasonably requested by the Holder or its counsel to create, assume, or to assure continued first priority security interest and Lien on the Collateral, which agreements, documents and instruments shall include an reaffirmation by HOD following the Business Combination of its obligations under this Note, any Other Note and the other Transaction Documents to which it is a party and opinions of counsel to the Company and its Subsidiaries.
2
For each Advance made under Section (1)(a) above, Pubco and HOD each hereby acknowledges and agrees that each Advance made hereunder will be allocated between Pubco and HOD as determined by Pubco and HOD. Upon each funding of an Advance hereunder and without limiting the foregoing, Pubco hereby directs the Holder to fund its share of each Advance to HOD concurrently with the funding of HOD’s share of such Advance.
(b) Other Transaction Documents.
(i) Subsidiary Guaranty. On the date hereof, each Subsidiary shall enter into the Global Guaranty Agreement in the form of Exhibit A hereto (as amended, restated, supplemented, or otherwise modified from time to time, the “Guaranty Agreement”).
(ii) Pledge Agreement. On the date hereof, Pubco and Dogecoin shall enter into the Pledge Agreement in the form of Exhibit B hereto (as amended, restated, supplemented, or otherwise modified from time to time, the “Pledge Agreement”).
(iii) Subordination and Intercreditor Agreement. On the date hereof, Pubco and HOD shall enter into the Subordination and Intercreditor Agreement in the form of Exhibit C hereto (as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Subordination Agreement”), and the Subsidiaries of Pubco and HOD, including Dogecoin shall acknowledge such Subordination Agreement as therein provided.
(c) Warrant. In further consideration of the Holder entering into the CEF and making the initial advance under this Note, on the date hereof, Pubco shall issue to the Holder a warrant, in the form attached as Exhibit D hereto (as amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms thereof, the “Warrant”).
(d) Maturity Date. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal, accrued and unpaid Interest, the Premium (if any) and any other amounts outstanding pursuant to the terms of this Note. The “Maturity Date” shall be the earlier of (i) August 31, 2026, provided that if a BCA Delay (as defined below) occurs, then October 30, 2026 or (ii) April 1, 2026, if the Business Combination Event (as defined in Section (1)(f) below) has not occurred on prior to 11:59 p.m. (Eastern Time) on March 31, 2026, as determined by the Holder in its reasonable business discretion, in either such case, as may be extended at the sole option of the Holder in writing.
(e) Interest Rate and Payment of Interest. Interest shall accrue on the outstanding Principal balance hereof at an annual rate equal to 0% (“Interest Rate”), which Interest Rate shall increase to an annual rate of 15% upon the occurrence of an Event of Default (for so long as such event continues). Interest shall be calculated based on a 365-day year and the actual number of days elapsed, to the extent permitted by applicable law.
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(f) Monthly Payments. The Company shall make monthly cash amortization payments on the first day of each Calendar Month (each such date, an “Amortization Payment Date”), commencing on February 1, 2026, as provided in this paragraph (f), until all Obligations under this Note have been paid in full in cash.
(i) On each Amortization Payment Date, the Company shall pay to the Holder in cash an amount equal to the Base Amortization Payment Amount (as defined below). If, however, as of 12:00 am (Eastern Time), February 1, 2026 the Business Combination Event has not occurred (as determined by the Holder in its reasonable business judgment), then for the cash amortization payment to be made on February 1, 2026, the Company shall pay to the Holder in cash an amount equal to the Adjusted Amortization Payment Amount. If, however, for the monthly cash amortization payment due on March 1, 2026, if the Business Combination Event Date has not occurred prior to 11:59 pm (Eastern Time) on February 28, 2026 (as determined by the Holder in its reasonable business judgment) and if the Company has paid the Premium to the Holder referred to in Section (1)(g) below on or prior to the date such payment is due, then the Company shall have not have an obligation to make any cash amortization payment on March 1, 2026.
(ii) As used herein, the following terms have the following meanings:
“Adjusted Amortization Payment Amount” means, as of any date of determination, an amount equal to (x) 50% of the Principal Amount as of such date, plus (y) all accrued and unpaid interest hereunder as of such date.
“Base Amortization Payment Amount” means, as of the date of determination, an amount equal to (x) the Principal Amount as of such date, plus (y) all accrued and unpaid interest hereunder as of such date.
“Business Combination Event” means the Business Combination shall have occurred in accordance with the terms of the BCA and shall be effective.
“Business Combination Event Date” means the date on which the Business Combination Event occurs.
“Principal Amount” means, as of the date of determination, (i) the principal amount in the amount equal to the greater of (i) $1,375,000 or (ii) fifty percent (50%) of the proceeds to the Company from the sale of Shares (as defined in the CEF) for the immediately preceding thirty (30) days.
(g) Premium. If a BCA Delay occurs, then on the first Business Day after the day the BCA Delay occurs, the Company shall pay the Holder in cash an amount equal to five percent (5.0%) of the then outstanding Principal amount of the Note, without demand. The amount to be paid under this Section (1)(g) is herein referred to as the “Premium”. The Company agrees that the Premium is due and payable as herein provided and non-refundable under any circumstances. The Company acknowledges the impossibility of ascertaining the amount of damages that would be suffered by the Holder by reason of any BCA Delay and acknowledges that the Premium is not a penalty.
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(h) Optional Redemption. The Company at its option shall have the right, but not the obligation, to redeem (“Optional Redemption”) early a portion or all amounts outstanding under this Note as described in this Section; provided, that the Company provides the Holder with ten (10) Trading Days’ prior written notice (each, a “Redemption Notice”) of its desire to exercise an Optional Redemption, which Redemption Notice shall be delivered to the Holder after the close of regular trading hours on a Trading Day. Each Redemption Notice shall be irrevocable and shall specify the outstanding balance of the Note to be redeemed and the Redemption Amount. The “Redemption Amount” shall be an amount equal to (a) the outstanding Principal balance being redeemed by the Company plus (b) all accrued and unpaid interest hereunder as of the date of such redemption.
(i) Payment Dates. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.
(j) No Voluntary Prepayments. Other than as specifically set forth in this Note, the Company shall not have the ability to make any early repayments without the consent of or at the request of the Holder.
(2) EVENTS OF DEFAULT.
(a) An “Event of Default”, wherever used herein, means any one of the following events (whatever the reason and whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body) shall have occurred:
(i) The Company’s failure to pay to the Holder any amount of Principal, Interest, Premium or other amounts when and as due under this Note or any other Transaction Document within five (5) Trading Days after such payment is due;
(ii) (A) The Company or any Subsidiary of the Company shall commence, or there shall be commenced against the Company or any Subsidiary of the Company any proceeding under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or the Company or any Subsidiary of the Company commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction, whether now or hereafter in effect relating to the Company or any Subsidiary of the Company, in any such bankruptcy, insolvency or other proceeding which remains undismissed for a period of sixty one (61) days; (B) the Company or any Subsidiary of the Company is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; (C) the Company or any Subsidiary of the Company suffers any appointment of any custodian, private or court appointed receiver or the like for it or all or substantially all of its property which continues undischarged or unstayed for a period of sixty one (61) days; (D) the Company or any Subsidiary of the Company makes a general assignment of all or substantially all of its assets for the benefit of creditors; (E) the Company or any Subsidiary of the Company shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due; (F) the Company or any Subsidiary of the Company shall call a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; (G) the Company or any Subsidiary of the Company shall by any act or failure to act expressly indicate its consent to, approval of or acquiescence in any of the foregoing; or (H) any corporate or other action is taken by the Company or any Subsidiary of the Company for the purpose of effecting any of the foregoing;
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(iii) The Company or any Subsidiary of the Company shall default, in any of its obligations under any note, debenture, mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement of the Company or any Subsidiary of the Company in an amount exceeding $500,000, whether such indebtedness now exists or shall hereafter be created, and such default is not cured within the time prescribed by the documents governing such indebtedness or if no time is prescribed, within ten (10) Trading Days, and as a result, such indebtedness becomes or is declared due and payable;
(iv) A final judgment or judgments for the payment of money in excess of $500,000 in the aggregate are rendered against the Company and/or any of its Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged, settled or stayed pending appeal, or are not discharged within thirty (30) days after the expiration of such stay; provided, however, any judgment which is covered by insurance or an indemnity from a creditworthy party shall not be included in calculating the $500,000 amount set forth above so long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company or such Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance of such judgment;
(v) The Common Shares shall cease to be quoted or listed for trading, as applicable, on any Principal Market for a period of ten (10) consecutive Trading Days;
(vi) The Company or any Subsidiary of the Company shall be a party to any Change of Control Transaction unless in connection with such Change of Control Transaction this Note is retired;
(vii) The Company’s failure to deliver the required number of Common Shares to the Holder within two (2) Trading Days after the applicable Share Delivery Date:
(viii) The Company shall fail for any reason to deliver the payment in cash pursuant to a Buy-In (as defined in Annex A hereof or the Warrant, as applicable) within five (5) Business Days after such payment is due;
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(ix) Pubco’s failure to timely file with the Commission any Periodic Report on or before the due date of such filing as established by the Commission, it being understood, for the avoidance of doubt, that due date includes any permitted filing deadline extension under Rule 12b-25 under the Exchange Act;
(x) An Event (as defined in the Registration Rights Agreement) shall occur and be continuing under the Registration Rights Agreement;
(xi) Any representation or warranty made or deemed to be made by or on behalf of the Company or any Subsidiary of the Company in or in connection with any Transaction Document, or any waiver hereunder or thereunder, shall prove to have been incorrect in any material respect (or, in the case of any such representation or warranty already qualified by materiality, such representation or warranty shall prove to have been incorrect) when made or deemed made;
(xii) The Company uses the proceeds of the issuance of this Note, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulations T, U and X of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof), or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose;
(xiii) (A ) Any “Event of Default” (howsoever defined under any Other Note, any Security Document, the Guaranty Agreement or in any other Transaction Document other than this Note) occurs with respect to any Other Note, any Security Document, the Guaranty Agreement or any other Transaction Document (it being acknowledged and agreed that the failure to deliver any certificated securities, together with undated transfer powers, or enter into any securities account control agreement as and when set forth in the Pledge Agreement, shall be an “Event of Default” under this sub-clause (xiii); or (B) any breach, default, or event of default (howsoever defined under the Subordination Agreement) occurs under the Subordination Agreement;
(xiv) Other than in respect of any Transaction Document held by the Holder in the Company and its Subsidiaries, (A) any breach of any material term of any other debenture, note, or instrument held by the Holder in the Company or its Subsidiaries; or (B) any breach, default, event of default (howsoever defined) under any agreement between or among the Company or its Subsidiaries, on the one hand, and the Holder, on the other hand shall occur;
(xv) Failure by the Company or any of its Subsidiaries to comply with or to perform any covenant set forth in (A) Section (6)(a) of this Note or any Other Note, (B) Article III or Article V of the Pledge Agreement or Sections 4.03, 4.04 or 4.05 of the Pledge Agreement;
(xvi) (A) Any provision of any Security Document or the Guaranty Agreement shall at any time for any reason (other than pursuant to the express terms thereof) cease to be valid and binding on or enforceable against the Company, any Guarantor or any Grantor, or the validity or enforceability thereof shall be contested by any party thereto or any other Person; or (B) a proceeding shall be commenced by the Company, any Guarantor, any Grantor or any of their respective Subsidiaries, or any Governmental Entity having jurisdiction over any of them or any other Person that seeks to establish the invalidity or unenforceability of any provision of any Security Document or the Guaranty Agreement at any time for any reason; or (C) the Company, any Guarantor, any Grantor or any of their respective Subsidiaries shall deny in writing that it has any liability or obligation purported to be created under any Security Document or the Guaranty Agreement;
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(xvii) At any time, (A) any Security Document shall for any reason fail or cease to create a valid and perfected and first priority Lien in favor of the Holder in the Collateral set forth therein; or (B) the Holder shall cease to have a valid, perfected, first priority Lien over any portion of the Collateral; or (C) the Holder shall fail or cease to have rights to readily enforce any remedial rights under any Security Document for any reason; unless, in each of sub-clauses (A), (B) or (C) herein, such invalidity or lack of perfection is a direct result of any action or inaction on the part of the Holder;
(xviii) Any material damage to, or loss, theft or destruction of any portion of any Collateral, whether or not insured (it being acknowledged and agreed that the de-listing of the Common Shares or any inability of the Holder, as Secured Party under the Pledge Agreement, to exercise any rights under the CleanCore Warrant (as defined in the Pledge Agreement) as provided in the Pledge Agreement shall be an Event of Default hereunder);
(xix) (A) The Subordination Agreement ceases to be in full force and effect (other than because all other Indebtedness subject thereto is no longer outstanding); or (B) the Senior Creditor (as defined therein) ceases to have the rights set forth in the Subordination Agreement for any reason whatsoever;
(xx) The Company, any Guarantor or any Subsidiary makes any payment on account of any Indebtedness that has been subordinated to any of the Obligations, other than payments specifically permitted by the terms of such subordination;
(xxi) Except as may be otherwise covered by the abovementioned paragraphs of this Section (2), (A) the Company, any Guarantor, any Grantor or any of their respective Subsidiaries shall fail to observe or perform any material covenant, agreement or warranty contained in, or otherwise commit any material breach or default of any provision of this Note or any other Transaction Document, which is not cured or remedied within the time prescribed or if no time is prescribed within ten (10) Business Days; or (B) any material provision of any Transaction Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder, ceases to be in full force and effect; or (C) the Company, any of its Subsidiaries or any other Person contests in writing the validity or enforceability of any provision of any Transaction Document; or (D) the Company or any of its Subsidiaries denies in writing that it has any further liability or obligation under any Transaction Document, or purports in writing to revoke, terminate (other than in accordance with the relevant termination provisions) or rescind any Transaction Document.
(b) During the time that any portion of this Note is outstanding, if any Event of Default has occurred (other than an event with respect to the Company or any Subsidiary of the Company described in Section (2)(a)(ii)), the full unpaid Principal amount of this Note, together with all interest and other amounts owing in respect of this Note to the date of acceleration, shall become, at the Holder’s election given by notice pursuant to Section (5), immediately due and payable in cash; provided that, in the case of any event with respect to the Company or any of its Subsidiaries described in Section (2)(a)(ii), the full unpaid Principal amount of this Note, together with all accrued and unpaid interest and other amounts owing in respect of this Note to the date of acceleration, shall automatically become due and payable, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Company. The Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such declaration may be rescinded and annulled by the Holder in writing at any time prior to payment hereunder. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.
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(c) If any Event of Default shall have occurred and be continuing, the Holder may exercise, without any other notice to or demand upon the Company or any of its Subsidiaries, all rights and remedies provided in this Note and under applicable law, in addition to the other rights and remedies provided to the Holder or the Secured Party under any Security Document or in any other Transaction Document or otherwise available to it. In addition to the foregoing, and without any obligation to exercise any rights or remedies in any particular order or concurrently, the exercise of which shall be at the sole discretion of the Holder and the Secured Party, the Holder shall have the option to, and no obligation to, convert on one or more occasions all or part of the then outstanding balance under this Note by delivering to the Company one or more Conversion Notices (as defined in Annex A hereto) as set forth on Annex A hereto. All rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies provided by law or in any other Transaction Document.
(d) Other Provisions.
(i) All calculations under this Section (3) shall be rounded to the nearest $0.0001 or whole share.
(ii) So long as this Note or any Other Notes remain outstanding, the Company shall have reserved from its duly authorized share capital, and shall have instructed the Transfer Agent to irrevocably reserve, the maximum number of Common Shares issuable upon (x) conversion of this Note and the Other Notes (assuming for purposes hereof that any such conversion shall not take into account any limitations on the conversion of the Note or Other Notes set forth herein or therein) and (y) the exercise of the Warrants (the “Required Reserve Amount”), provided that at no time shall the number of Common Shares reserved pursuant to this Section (2)(d)(ii) be reduced other than pursuant to the exercise of the Warrants in accordance with their terms, and/or cancellation, or reverse stock split. If at any time while this Note or any Other Notes remain outstanding, the Company does not have a sufficient number of authorized and unreserved Common Shares to satisfy the obligation to reserve for the issuance the Required Reserve Amount, the Company will promptly take all corporate action necessary to propose to a meeting of its shareholders an increase of its authorized share capital necessary to meet the Company’s obligations pursuant to this Note, and cause its board of directors to recommend to the shareholders that they approve such proposal. If at any time the number of Common Shares that remain available for issuance under the Exchange Cap is less than 100% of the maximum number of shares issuable (x) upon conversion of all the Notes and Other Notes then outstanding (assuming for purposes hereof that (i) the Notes are convertible at the Conversion Price then in effect, and (ii) any such conversion shall not take into account any limitations on the conversion of the Note) and (y) upon exercise of the Warrants outstanding, the Company will use commercially reasonable efforts to promptly call and hold a shareholder meeting for the purpose of seeking the approval of its shareholders as required by the applicable rules of the Principal Market, for issuances of shares in excess of the Exchange Cap. The Company covenants that, upon issuance in accordance with conversion of this Note in accordance with its terms, the Common Shares, when issued, will be validly issued, fully paid and nonassessable.
(iii) Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section (2) herein for the Company’s failure to deliver certificates representing Common Shares upon conversion of the Notes or exercise of the Warrants within the period specified therein and such Holder shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief, in each case without the need to post a bond or provide other security. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.
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(iv) The Company is obligated to cause its legal counsel to deliver legal opinions to the Company’s transfer agent in connection with any legend removal upon the expiration of any holding period or other requirement for which the Underlying Shares or Warrant Shares may bear legends restricting the transfer thereof. To the extent that a legal opinion is not provided (either timely or at all), then, in addition to being an Event of Default hereunder, the Company agrees to reimburse the Holder for all reasonable costs incurred by the Holder in connection with any legal opinions paid for by the Holder in connection with the sale or transfer of the Underlying Shares or Warrant Shares. The Holder shall notify the Company of any such costs and expenses it incurs that are referred to in this section from time to time and all amounts owed hereunder shall be paid by the Company with reasonable promptness.
(3) REISSUANCE OF THIS NOTE.
(a) Transfer. If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Note (in accordance with Section (3)(d)), registered in the name of the registered transferee or assignee, representing the outstanding Principal being transferred by the Holder (along with any accrued and unpaid interest thereof) and, if less than the entire outstanding Principal is being transferred, a new Note (in accordance with Section (3)(d)) to the Holder representing the outstanding Principal not being transferred.
(b) Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary form and substance and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute and deliver to the Holder a new Note (in accordance with Section (3)(d)) representing the outstanding Principal.
(c) Note Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Note or Notes (in accordance with Section (3)(d)) representing in the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion of such outstanding Principal as is designated by the Holder at the time of such surrender.
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(d) Issuance of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms hereof, such new Note (i) shall be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding (or in the case of a new Note being issued pursuant to Section (3)(a) or Section (3)(c), the Principal designated by the Holder which, when added to the Principal represented by the other new Note(s) issued in connection with such issuance, does not exceed the Principal remaining outstanding under this Note immediately prior to such issuance of such new Note), (iii) shall have an issuance date, as indicated on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions as this Note, and (v) shall represent accrued and unpaid Interest from the Issuance Date.
(4) NOTICES. Any notices, consents, waivers or other communications required or permitted to be given under the terms hereof must be in writing by letter or electronic mail (“e-mail”) and will be deemed to have been delivered (i) upon receipt, when delivered personally, (ii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, as applicable or (iii) receipt, when sent by e-mail, and, in each case of the foregoing clauses (i), (ii) and (iii), properly addressed to the party to receive the same. The addresses and e-mail addresses for such communications shall be:
|
If to the Company (Pubco), to: |
Brag House Holdings, Inc. 45 Park Street Montclair, NJ 07042 Attention: Lavell Juan Malloy, II, CEO Email: [email protected] |
| If to the Company (HOD), to: |
House of Doge Inc. 2045 NW 1st Ave Miami, Florida, 33127 Attn: Marco Margiotta, CEO and Charles Park, CFO Email: [email protected] and [email protected] |
| With copies (which shall not constitute notice or delivery of process to): |
House of Doge Inc. 2045 NW 1st Ave Miami, Florida, 33127 Attn: Chief Legal Officer Email: [email protected] |
| If to the Holder: |
[●] |
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or at such other address and/or e-mail address and/or to the attention of such other person as the recipient party has specified by written notice given to each other party in accordance with this Section at least 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) electronically generated by the sender’s email service provider containing the time, date, recipient email address 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 or receipt by e-mail in accordance with clause (i), (ii) or (iii) above, respectively.
(5) OBLIGATIONS ABSOLUTE. Except as expressly provided herein, no provision of this Note shall alter or impair the obligations of the Company, which are absolute and unconditional, to pay the Principal of, and interest and other charges (if any) on, this Note at the time, place, and rate, and in the currency, herein prescribed. This Note is a direct obligation of the Company.
(6) COVENANTS; CONDITIONS TO EFFECTIVENESS OF THIS NOTE.
(a) Covenants.
(i) The Company shall not, and shall not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness other than Permitted Indebtedness.
(ii) The Company shall not, and shall not permit any of its Subsidiaries to, create or permit to exist any Liens on any of its real or personal properties, assets or rights of whatsoever nature (whether now owned or hereafter acquired) except Permitted Liens.
(iii) The Company shall not, and shall not permit any of its Subsidiaries to, (A) amend, amended and restate, replace, supplement, or otherwise modified any term, condition or provision of the Subordinated Note or any Subordinated Note Document or (B) to assign or otherwise transfer any of its rights or obligations thereunder, in either such case of sub-clauses (iii)(A) or (iii)(B), without the prior written consent of the Holder.
(iv) In the event the Company or any of its Subsidiaries receives any Distribution (as defined in the Subordination Agreement) from any Shared Collateral (as defined in the Subordination Agreement), such Distribution shall not be commingled with any of the assets of the Company or such Subsidiary, shall be held in trust by the Company or such Subsidiary for the benefit of Holder and shall be promptly paid over to Holder for application to the payment of the Obligations then remaining unpaid, all as determined by the Holder in its sole discretion.
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(v) As long as this Note is outstanding, the Company shall not and shall cause each of its Subsidiaries not to, without the written consent of the Holder, (A) amend its certificate of incorporation, bylaws or other charter documents so as to adversely affect any rights of the Holder; (B) repay, repurchase or offer to repay, repurchase or otherwise acquire shares of its Common Shares or other equity securities; (C) enter into any agreement with respect to any of the foregoing, (D) enter into any agreement, arrangement or transaction in or of which the terms thereof would restrict, materially delay, conflict with or impair the ability of the Company to perform its obligations under the this Note, including, without limitation, the obligation of the Company to make cash payments hereunder, or (E) the Company shall not, and shall cause each of its Subsidiaries not to, pay any brokerage or finder’s fees or commissions that are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents, except following the Commencement Date the Company may pay those brokerage or finder’s fees payable to the extent disclosed to the Holder under Section 5.15 of the CEF on or prior to the Issuance Date.
(vi) The Company shall not enter into any Variable Rate Transaction (as defined in the CEF).
(vii) Concurrently with the Business Combination, the Company shall take such further actions, and execute and/or deliver to the Holder such additional financing statements, amendments, assignments, agreements, supplements, powers and instruments, and opinion letters, as the Holder may in its reasonable judgment deem necessary or appropriate in order to create and/or maintain the validity, perfection or priority of and protect any security interest granted or purported to be granted in the Collateral and the rights and interests granted to the Holder under the Security Documents, and enable the Holder to exercise and enforce its rights, powers and remedies under the Security Documents with respect to the Collateral.
(viii) The Company shall take such actions identified in this Section (6)(a)(viii) by the dates set forth herein:
(1) On or before the date that is three (3) Business Days after the Issuance Date, deliver to Duane Morris LLP, counsel to the Holder, manually executed, wet ink signature pages to each of the following documents: Note, Warrant, Stock Transfer Powers and Warrant Powers.
(2) On or before the date that is 10 calendar days after the Issuance Date, deliver to the Holder evidence satisfactory to the Holder that Brag House Inc. is in good standing under the laws of the State of Delaware.
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(b) Representations and Warranties.
(i) Pubco makes the representations and warranties set forth in Article 5 of the CEF herein as of the Issuance Date and as of each date on which an Advance is made hereunder.
(ii) HOD makes the representations and warranties set forth in Article 5A of the CEF herein as of the Issuance Date and as of each date on which an Advance is made hereunder.
(iii) Pubco and HOD, for itself and behalf of its respective Subsidiaries, makes the representations and warranties set forth in the Guaranty Agreement and each Security Document herein as of the Issuance Date and as of each date on which an Advance is made hereunder.
(c) Conditions to Effectiveness of this Note. This Note shall be effective upon the satisfaction of the following conditions:
(i) the Holder shall have received a duly executed signature page to this Note executed by an authorized officer of each Company.
(ii) the Holder shall have received duly executed copies of each of the following documents executed by an authorized offer of each Company or its Subsidiaries, as applicable: Perfection Certificate (Pubco), Perfection Certificate (Dogecoin), the Guaranty Agreement, the Pledge Agreement, each other Security Document, the Subordination Agreement, the Warrant and such other agreements as requested by the Holder, all in form and substance satisfactory to the Holder.
(iii) the Holder shall have received executed original stock certificates and the CleanCore Warrant (as defined in the Pledge Agreement) evidencing the Pledged Securities (as defined in the Pledge Agreement), together with undated stock or other applicable transfer powers, all in form and substance satisfactory to the Holder.
(iv) the Holder shall have received a customary officer’s certificate (or secretary’s certificate), certifying and attaching certified copies of its and each of its Subsidiaries’ charter, bylaws, operating agreement and shareholders’ agreement (or any similar organizational documents), as applicable, resolutions (as set forth in sub-clause (v) below) and incumbency, in form and substance reasonably satisfactory to the Holder.
(v) (A) the board of directors of each Company and its Subsidiaries party to any Transaction Document has approved the transactions contemplated by the Transaction Documents, (B) said approval has not been amended, rescinded or modified and remains in full force and effect as of the Issuance Date, and (C) a true, correct and complete copy of such approval duly adopted by the board of directors of each such Company shall have been provided to the Holder.
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(vi) the Holder shall have received a certificate evidencing the incorporation and good standing of each Company as of a date within thirty (30) days of the Issuance Date.
(vii) the Holder shall have received (A) all customary UCC, tax, pending litigation, judgment, bankruptcy and other diligence searches (and the foreign equivalent thereof for any foreign Subsidiary), in each case, reasonably requested by the Holder and (B) payoff letters and UCC-3 Amendment (termination statements) requested by the Holder for debt or Liens not permitted pursuant to the terms of the Transaction Documents (if any).
(viii) the Holder shall have received a customary closing opinion of counsel to Pubco and its Subsidiaries and separately from counsel to HOD and its Subsidiaries, each in form and substance reasonably satisfactory to the Holder.
(ix) the representations and warranties of Pubco and HOD contained in this Note (A) that are not qualified by “materiality” shall be true and correct in all material respects as of the Issuance Date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall be true and correct in all material respects as of such other date and (B) that are qualified by “materiality” shall be true and correct as of the Issuance Date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall be true and correct as of such other date.
(x) no Event of Default (assuming the effectiveness of this Note, shall have occurred or could arise as a result of the effectiveness of this Note or the Advances to be made hereunder.
(xi) (A) the Holder shall have received an amendment to the Subordinated Note and Subordinated Pledge Agreement, each in form, scope and substance reasonably satisfactory to the Holder, and (B) an officer’s certificate, executed by a duly authorized officer, certifying and attaching true, correct and complete copies of the Subordinated Note, the Subordinated Guaranty Agreement, the Subordinated Pledge Agreement and each other Subordinated Note Document.
(xii) each Company and its Subsidiaries shall have delivered to the Holder such other customary documents, instruments or certificates relating to the transactions contemplated by the Transaction Documents as the Holder or its counsel may reasonably request.
(xiii) the Holder shall have received a closing compliance certificate executed by the chief executive officer of each Company certifying that such Company has complied with all of the conditions precedent to the Issuance Date set forth herein and which may be relied upon by the Holder as evidence of satisfaction of such conditions without any obligation to independently verify such satisfaction.
(7) CHOICE OF LAW; VENUE; WAIVER OF JURY TRIAL
(a) Governing Law. This Note and the rights and obligations of the Parties hereunder shall, in all respects, be governed by, and construed in accordance with, the laws (excluding the principles of conflict of laws) of the State of New York (the “Governing Jurisdiction”) (including Section 5-1401 and Section 5-1402 of the General Obligations Law of the State of New York), including all matters of construction, validity and performance.
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(b) Jurisdiction; Venue; Service.
(i) The Company hereby irrevocably consents to the non-exclusive personal jurisdiction of the state courts of the Governing Jurisdiction sitting in New York County and, if a basis for federal jurisdiction exists, the non-exclusive personal jurisdiction of any United States District Court for the Southern District of New York
(ii) The Company agrees that venue shall be proper in any court of the Governing Jurisdiction selected by the Holder or, if a basis for federal jurisdiction exists, in any United States District Court in the Governing Jurisdiction selected by the Holder. The Company waives any right to object to the maintenance of any suit, claim, action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, in any of the state or federal courts of the Governing Jurisdiction on the basis of improper venue or inconvenience of forum.
(iii) Any suit, claim, action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or tort or otherwise, brought by the Company against the Holder arising out of or based upon this Note or any matter relating to this Note, or any other Transaction Document, or any contemplated transaction, shall be brought in a court only in the Governing Jurisdiction. The Company shall not file any counterclaim against the Holder in any suit, claim, action, litigation or proceeding brought by the Holder against the Company in a jurisdiction outside of the Governing Jurisdiction unless under the rules of the court in which the Holder brought such suit, claim, action, litigation or proceeding the counterclaim is mandatory, and not permissive, and would be considered waived unless filed as a counterclaim in the suit, claim, action, litigation or proceeding instituted by the Holder against the Company. The Company agrees that any forum outside the Governing Jurisdiction is an inconvenient forum and that any suit, claim, action, litigation or proceeding brought by the Company against the Holder in any court outside the Governing Jurisdiction should be dismissed or transferred to a court located in the Governing Jurisdiction. Furthermore, the Company irrevocably and unconditionally agrees that it will not bring or commence any suit, claim, action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against the Holder arising out of or based upon this Note or any matter relating to this Note, or any other Transaction Document, or any contemplated transaction, in any forum other than the courts of the State of New York sitting in New York County, and the United States District Court of the Southern District of New York, and any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such suit, claim, action, litigation or proceeding may be heard and determined in such New York State Court or, to the fullest extent permitted by applicable law, in such federal court. The Company and the Holder agree that a final judgment in any such suit, claim, action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
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(iv) The Company and the Holder irrevocably consent to the service of process out of any of the aforementioned courts in any such suit, claim, action, litigation or proceeding by e-mail or the mailing of copies thereof by registered or certified mail postage prepaid, to it at the e-mail address or physical address, as applicable, provided for notices in this Note, such service to become effective thirty (30) days after the date of such e-mail or mailing, as applicable. The Company and the Holder each irrevocably waive any defense it may have on the grounds of insufficient or improper service with respect to service of process effected in accordance with this Section (7)(b)(iv).
(v) Nothing herein shall affect the right of the Holder to serve process in any other manner permitted by law or to commence legal proceedings or to otherwise proceed against the Company or any other Person in the Governing Jurisdiction or in any other jurisdiction.
(c) Waiver of Jury Trial. THE PARTIES MUTUALLY WAIVE ALL RIGHT TO TRIAL BY JURY OF ALL CLAIMS OF ANY KIND ARISING OUT OF OR BASED UPON THIS NOTE OR ANY MATTER RELATING TO THIS NOTE, OR ANY OTHER TRANSACTION DOCUMENT, OR ANY CONTEMPLATED TRANSACTION. THE PARTIES ACKNOWLEDGE THAT THIS IS A WAIVER OF A LEGAL RIGHT AND THAT THE PARTIES EACH MAKE THIS WAIVER VOLUNTARILY AND KNOWINGLY AFTER CONSULTATION WITH COUNSEL OF THEIR RESPECTIVE CHOICE. THE PARTIES AGREE THAT ALL SUCH CLAIMS SHALL BE TRIED BEFORE A JUDGE OF A COURT HAVING JURISDICTION, WITHOUT A JURY.
(8) Fees and Expenses. If the Company fails to strictly comply with the terms of this Note, then the Company shall reimburse the Holder promptly for all fees, costs and expenses, including, without limitation, attorneys’ fees and expenses incurred by the Holder in any action in connection with this Note, including, without limitation, those incurred: (i) during any workout, attempted workout, and/or in connection with the rendering of legal advice as to the Holder’s rights, remedies and obligations, (ii) collecting any sums which become due to the Holder, (iii) defending or prosecuting any proceeding or any counterclaim to any proceeding or appeal; or (iv) the protection, preservation or enforcement of any rights or remedies of the Holder.
(9) Waivers and Amendments. Any waiver by the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note. No provision of this Note may be waived or amended other than by a written agreement signed by the parties to this Note.
(10) Miscellaneous. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder shall violate applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the Principal of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such power as though no such law has been enacted.
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(11) CERTAIN DEFINITIONS. For purposes of this Note, the following terms shall have the following meanings:
(a) “Advance” and “Advances” have the meaning set forth in Section (1)(a) hereof.
(b) “BCA” refers to the Business Combination Agreement (as in effect on the Issuance Date) as defined in the CEF.
(c) “BCA Delay” occurs if the Business Combination has not occurred or is not effective on or prior to 11:59 p.m. (Eastern Time) on February 13, 2026, as determined by the Holder in its reasonable business judgment.
(d) “Business Combination” has the meaning set forth in CEF as in effect on the Issuance Date.
(e) “Business Combination Event” has the meaning set forth in Section (1)(f) herein.
(f) “Business Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday in the United States or a day on which banking institutions are authorized or required by law or other government action to close.
(g) “Buy-In” shall have the meaning (i) in connection with any conversion made in accordance with Annex A, as set forth in Annex A and (ii) in connection with the Warrant, as set forth in the Warrant.
(h) “Buy-In Price” shall have the meaning (i) in connection with any conversion made in accordance with Annex A, as set forth in Annex A and (ii) in connection with the Warrant, as set forth in the Warrant.
(i) “Calendar Month” means one of the twelve months of the year.
(j) “Change of Control Transaction” means the occurrence of (a) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of fifty percent (50%) of the voting power of the Company (except that the acquisition of voting securities by the Holder or any other current holder of convertible securities of the Company shall not constitute a Change of Control Transaction for purposes hereof), (b) a replacement at one time or over time of more than one-half of the members of the board of directors of the Company (other than as due to the death or disability of a member of the board of directors) which is not approved by a majority of those individuals who are members of the board of directors on the date hereof (or by those individuals who are serving as members of the board of directors on any date whose nomination to the board of directors was approved by a majority of the members of the board of directors who are members on the date hereof), (c) the merger, consolidation or sale of fifty percent (50%) or more of the assets of the Company or any Subsidiary of the Company in one or a series of related transactions with or into another entity, or (d) the execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events set forth above in (a), (b) or (c). No transfer to a wholly-owned Subsidiary shall be deemed a Change of Control Transaction under this provision.
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(k) “Collateral” means, collectively, (i) the “Pledged Collateral” as defined in the Pledge Agreement, (ii) the “Collateral” as defined in any other Security Document and (iii) any assets or property pledged or purported to be pledged pursuant to any document, agreement or instrument in connection with this Note or any other Transaction Document.
(l) “Commission” means the Securities and Exchange Commission.
(m) “Common Shares” means the shares of common stock, par value $0.0001, of Pubco and stock of any other class into which such shares may hereafter be changed or reclassified.
(n) “Conversion Price” has the meaning set forth on Annex A hereto.
(o) “Dogecoin” means Dogecoin Ventures, Inc., a Texas corporation.
(p) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(q) “Governmental Entity” shall have the meaning given in the CEF.
(r) “Grantor” refers to each Person identified in the Pledge Agreement or any other Security Document as a “Grantor” or “Pledgor” (or words of similar effect) thereunder.
(s) “Guarantor” refers to each Person identified in the Guaranty Agreement as a “Guarantor”.
(t) “Guaranty Agreement” shall have the meaning set forth in Section (1)(b)(i) hereof.
(u) “Indebtedness” of any Person means, without duplication (i) all indebtedness for borrowed money, (ii) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including, without limitation, “capital leases” in accordance with GAAP) (other than trade payables entered into in the ordinary course of business consistent with past practice), (iii) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (iv) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (v) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (vi) all monetary obligations under any leasing or similar arrangement which, in connection with GAAP, consistently applied for the periods covered thereby, is classified as a capital lease, (vii) all indebtedness referred to in clauses (i) through (vi) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, and (viii) all contingent obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (i) through (vii) above.
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(v) “Lien” shall mean any (i) mortgage, (ii) right of way, (iii) easement, (iv) encroachment, (v) restriction on use, (vi) servitude, (vii) pledge, (viii) lien, (ix) charge, (x) hypothecation, (xi) security interest, (xii) encumbrance, (xiii) adverse right, interest or claim, (xiv) community or other marital property interest, (xv) condition, (xvi) equitable interest, (xvii) encumbrance, (xviii) license, (xix) covenant, (xx) title defect, (xxi) option, (xxii) right of first refusal or offer or similar restriction, (xxiii) voting right, (xxiv) transfer restriction, or (xxv) receipt of income or exercise of any other attribute of ownership.
(w) “Obligations means, collectively, (a) all liabilities (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), agreements and other obligations owing to the Holder contained in the Transaction Documents, (b) all “Obligations” (as defined in the Guaranty Agreement), (c) all “Secured Obligations” (as defined in the Pledge Agreement), and (d) all other “Obligations” as defined in any Transaction Document.
(x) “Other Notes” means any other notes issued pursuant to the CEF and any other debentures, notes, or other instruments issued in exchange, replacement, or modification of the foregoing.
(y) “Periodic Reports” shall mean all of the Company’s reports required to be filed by the Company with the Commission under applicable laws and regulations (including, without limitation, Regulation S-K), including annual reports (on Form 10-K), quarterly reports (on Form 10-Q), and current reports (on Form 8-K), for so long as any amounts are outstanding under this Note or any Other Note; provided that all such Periodic Reports shall include, when filed, all information, financial statements, audit reports (when applicable) and other information required to be included in such Periodic Reports in compliance with all applicable laws and regulations.
(z) “Permitted Indebtedness” shall mean: (i) indebtedness in respect of this Note and any Other Note, (ii) indebtedness incurred under the Subordinated Note so long as such Subordinated Note and the holder thereof is subject to the terms of the Subordination Agreement, (iii) other subordinated indebtedness so long as (A) the repayment thereof has been subordinated to the payment of this Notes on terms and conditions acceptable to the Holder, including with regard to interest payments and repayment of principal, (B) the maturity date therefor or other required or permissible redemption or repayment shall not occur prior to or on the 91st day after the maturity date of this Note; and (C) such indebtedness is not secured by any assets of the Company or Dogecoin; and (iv) any indebtedness (other than the indebtedness set out in (i) – (iii) above) incurred after the date hereof and incurred with the prior written consent of the Holder.
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(aa) “Permitted Liens” shall mean (i) Liens in favor of the Holder arising under the Security Documents, (ii) subordinated, junior Liens in favor of Pubco securing indebtedness evidenced by the Subordinated Note so long as such Liens are subject to the terms of the Subordination Agreement, and (iii) those Liens approved by the Holder in writing in its sole discretion over assets or property of the Company or Dogecoin so long as such Liens do not attach to any Collateral.
(bb) “Person” means a corporation, an association, a partnership, organization, a business, an individual, a government or political subdivision thereof or a governmental agency.
(cc) “Pledge Agreement” shall have the meaning set forth in Section (1)(b)(ii) hereof.
(dd) “Principal Market” means any of The New York Stock Exchange, the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market or the Nasdaq Global Select Market, and any successor to any of the foregoing markets or exchanges.
(ee) “Registration Rights Agreement” means the registration rights agreement entered into between the Company and the Holder on the date hereof.
(ff) “Registration Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement, covering among other things the resale of the Underlying Shares and naming the Holder as a “selling stockholder” thereunder.
(gg) “Secured Party” shall have the meaning set forth in the Pledge Agreement.
(hh) “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(ii) “Security Documents” means, individually and collectively, the Pledge Agreement, each other pledge or security agreement entered into in connection with the Notes or Other Notes or any other Transaction Document, and any other documents, agreements or instruments executed and/or delivered in connection with any of the foregoing.
(jj) “Share Delivery Date” shall have the meaning set forth in the Warrant.
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(kk) “Subordinated Guaranty Agreement” that certain Guaranty, dated as of October 14, 2025 (as in effect on the Issuance Date or otherwise amended, restated, supplemented or modified with the prior written consent of the Holder), among the “Guarantors” identified therein, including Dogecoin, and Pubco.
(ll) “Subordinated Note” means that certain Secured Promissory Note, dated as of October 14, 2025 (as in effect on the Issuance Date (after giving effect to the Amendment to Secured Promissory Note dated as of the Issuance Date, or otherwise amended, restated, supplemented or modified with the prior written consent of the Holder), executed by HOD in favor of Pubco, in the original principal amount of $8,000,000, as amended to $10,000,000 pursuant to the Amendment to Secured Promissory Note.
(mm) “Subordinated Pledge Agreement” means that certain Security and Pledge Agreement, dated as of October 14, 2025 (as in effect on the Issuance Date or otherwise amended, restated, supplemented, or modified with the prior written consent of the Holder), among the “Grantors” identified therein, including Dogecoin, and Pubco.
(nn) “Subordinated Note Documents” means the Subordinated Note, the Subordinated Guaranty Agreement, the Subordinated Pledge Agreement and all other agreements, documents and instruments executed from time to time in connection therewith, as the same may be amended, supplemented or otherwise modified from time to time with the prior written consent of the Holder.
(oo) “Subordination Agreement” shall have the meaning set forth in Section (1)(b)(iii) hereof.
(pp) “Subsidiary” shall mean any Person in which the Company, directly or indirectly, (x) owns a majority of the outstanding capital stock or holds a majority of the equity or similar interest of such Person or (y) controls or operates all or substantially all of the business, operations or administration of such Person, and the foregoing are collectively referred to herein as “Subsidiaries.”
(qq) “Trading Day” means a day on which the Common Shares are quoted or traded on a Principal Market on which the Common Shares are then quoted or listed; provided, that in the event that the Common Shares are not listed or quoted, then Trading Day shall mean a Business Day.
(rr) “Transaction Document” means this Note, the Other Notes, the CEF, the Registration Rights Agreement, the Warrants, the Guaranty Agreement, the Pledge Agreement, the Subordination Agreement, each other Security Document, the Subordination and Intercreditor Agreement, any other subordination or intercreditor agreement or provision thereof and any and all other documents, agreements, instruments or other items executed or delivered in connection with this Note or any of the foregoing.
(ss) “Underlying Shares” means the Common Shares issuable upon conversion of this Note or as payment of interest in accordance with the terms hereof.
(tt) “Warrant” shall have the meaning set forth in Section (1)(c) hereof.
(uu) “Warrant Shares” shall have the meaning set forth in the Warrant.
[Remainder of Page Intentionally Left Blank; Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Promissory Note to be duly executed by a duly authorized officer as of the date set forth above.
| COMPANY: | |||
| BRAG HOUSE HOLDINGS, INC. | |||
| By: | |||
| Name: | |||
| HOUSE OF DOGE INC. | |||
| By: | ||
| Name: | ||
| Title: | ||
EXHIBIT A
Form of Global Guaranty Agreement
EXHIBIT B
Form of Pledge Agreement
EXHIBIT C
Form of Subordination Agreement
EXHIBIT D
Form of Warrant
ANNEX A
CONVERSION OF NOTE
This Note shall be convertible into Common Shares, on the terms and conditions set forth in this Annex A.
(a) Conversion Right. Subject to the limitations of paragraph (c) hereof at any time or times on or after the Issuance Date following the occurrence of an Event of Default, the Holder shall be entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into fully paid and nonassessable Common Shares in accordance with paragraph (b) hereof at the Conversion Price (as defined below). The number of Common Shares issuable upon conversion of any Conversion Amount pursuant to paragraph (a) shall be determined by dividing (x) such Conversion Amount by (y) the Conversion Price. The Company shall not issue any fraction of a Common Share upon any conversion. All calculations under this Annex A shall be rounded to the nearest $0.0001. If the issuance would result in the issuance of a fraction of a Common Share, the Company shall round such fraction of a Common Share up to the nearest whole share. The Company shall pay any and all transfer, stamp and similar taxes that may be payable with respect to the issuance and delivery of Common Shares upon conversion of any Conversion Amount.
(b) Mechanics of Conversion.
(i) Optional Conversion. To convert any Conversion Amount into Common Shares on any date (a “Conversion Date”), the Holder shall (A) transmit by email (or otherwise deliver), for receipt on or prior to 11:59 p.m., New York Time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit 1 (the “Conversion Notice”) to the Company and (B) if required by paragraph (b)(iii) hereof, surrender the Note to a nationally recognized overnight delivery service for delivery to the Company (or an indemnification undertaking reasonably satisfactory to the Company with respect to this Note in the case of its loss, theft or destruction). On or before the first (1st) Trading Day following the date of receipt of a Conversion Notice (the “Share Delivery Date”), the Company shall (X) if legends are not required to be placed on certificates or the book-entry position of the Common Shares and provided that the Transfer Agent is participating in the Depository Trust Company’s (“DTC”) Fast Automated Securities Transfer Program, instruct such transfer agent to credit such aggregate number of Common Shares to which the Holder shall be entitled to the Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal at Custodian (DWAC) system or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer (FAST) Program, issue and deliver to the address as specified in the Conversion Notice, a certificate or book-entry position, registered in the name of the Holder or its designee, for the number of Common Shares to which the Holder shall be entitled which certificates shall not bear any restrictive legends unless required pursuant to rules and regulations of the Commission. If the Note is physically surrendered for conversion and the outstanding Principal of the Note is greater than the Principal portion of the Conversion Amount being converted, then the Company shall as soon as practicable and in no event later than three (3) Business Days after receipt of the Note and at its own expense, issue and deliver to the holder a new Note representing the outstanding Principal not converted. The Person or Persons entitled to receive the Common Shares issuable upon a conversion of the Note shall be treated for all purposes as the record holder or holders of such Common Shares upon the transmission of a Conversion Notice.
(ii) Company’s Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, on or prior to the applicable Share Delivery Date to issue and deliver a certificate to the Holder or credit the Holder’s balance account with DTC for the number of Common Shares to which the Holder is entitled upon such Holder’s conversion of any Conversion Amount (a “Conversion Failure”), and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) Common Shares to deliver in satisfaction of a sale by the Holder of Common Shares issuable upon such conversion that the Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within three (3) Business 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 out of pocket expenses, if any) for the Common Shares so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and to issue such Common Shares) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such Common Shares to which the Holder is entitled with respect to such Conversion Notice 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 Common Shares multiplied by (B) the Closing Price on the Conversion Date.
(iii) Book-Entry. Notwithstanding anything to the contrary set forth herein, upon conversion of any portion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless (A) the full Conversion Amount represented by this Note is being converted or (B) the Holder has provided the Company with prior written notice (which notice may be included in a Conversion Notice) requesting reissuance of this Note upon physical surrender of this Note. The Holder and the Company shall maintain records showing the Principal and Interest converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Note upon conversion.
(c) Limitations on Conversions.
(i) Beneficial Ownership. The Holder shall not have the right to convert any portion of the Note to the extent that after giving effect to such conversion, the Holder, together with any affiliate thereof, would beneficially own (as determined in accordance with Section 13(d) of the Exchange Act and the rules promulgated thereunder) in excess of 4.99% of the number of Common Shares outstanding immediately after giving effect to such conversion. Since the Holder will not be obligated to report to the Company the number of Common Shares it may hold at the time of a conversion hereunder, unless the conversion at issue would result in the issuance of Common Shares in excess of 4.99% of the then outstanding Common Shares without regard to any other shares which may be beneficially owned by the Holder or an affiliate thereof, the Holder shall have the authority and obligation to determine whether the restriction contained in this Section will limit any particular conversion hereunder and to the extent that the Holder determines that the limitation contained in this Annex applies, the determination of which portion of the Principal amount of the Note is convertible shall be the responsibility and obligation of the Holder. If the Holder has delivered a Conversion Notice for a Principal amount of the Note that, without regard to any other shares that the Holder or its affiliates may beneficially own, would result in the issuance in excess of the permitted amount hereunder, the Company shall notify the Holder of this fact and shall honor the conversion for the maximum Principal amount permitted to be converted on such Conversion Date in accordance with paragraph (a) hereof and, any Principal amount tendered for conversion in excess of the permitted amount hereunder shall remain outstanding under this Note. The provisions of this Annex may be waived by a Holder (but only as to itself and not to any other Holder) upon not less than 65 days prior notice to the Company. Other Holders shall be unaffected by any such waiver.
(ii) Principal Market Limitation. Notwithstanding anything in the Note to the contrary, the Company shall not issue any Common Shares upon conversion of the Note, or otherwise, if the issuance of such Common Shares, together with any Common Shares issued in connection the CEF and any other related transactions that may be considered part of the same series of transactions, would exceed the aggregate number Common Shares that the Company may issue in a transaction in compliance with the Company’s obligations under the rules or regulations of The Nasdaq Stock Market LLC (“Nasdaq”) and shall be referred to as the “Exchange Cap,” except that such limitation shall not apply if the Company’s stockholders have approved such issuances on such terms in excess of the Exchange Cap in accordance with the rules and regulations of Nasdaq.
(d) Other Provisions. Section 2(d) of the Note is incorporated in this Annex A mutates mutandis.
(e) As used herein, the following terms have the following meanings:
(i) “Closing Price” means the price per share in the last reported trade of the Common Shares on a Principal Market or on the exchange which the Common Shares are then listed as quoted by Bloomberg.
(ii) “Conversion Amount” means the portion of the Principal, Interest, or other amounts outstanding under this Note to be converted, redeemed or otherwise with respect to which this determination is being made.
(iii) “Conversion Price” means, as of any Conversion Date or other date of determination 95% of the lowest daily VWAP during the five (5) consecutive Trading Days immediately preceding the Conversion Date or other date of determination. The Conversion Price shall be adjusted from time to time pursuant to the other terms and conditions of the Note.
(iv) “VWAP” means, for any Trading Day, the daily volume weighted average price of the Common Shares for such Trading Day on the Principal Market during regular trading hours as reported by Bloomberg L.P.
EXHIBIT 1 TO ANNEX A
FORM OF CONVERSION NOTICE
(To be executed by the Holder in order to Convert the Note)
TO: BRAG HOUSE HOLDINGS, INC.
Via Email:
The undersigned hereby irrevocably elects to convert a portion of the outstanding and unpaid Conversion Amount of Note No. TBH-[1][2] into Common Shares of 1 BRAG HOUSE HOLDINGS, INC., according to the conditions stated therein, as of the Conversion Date written below.
| Conversion Date: | ||
| Principal Amount to be Converted: | ||
| Accrued Interest to be Converted: | ||
| Total Conversion Amount to be converted: | ||
| Applicable Conversion Price: | ||
| Number of Common Shares to be issued: | ||
| Please issue the Common Shares in the following name and deliver them to the following account: | ||
| Issue to: | ||
| Broker DTC Participant Code: | ||
| Account Number: | ||
| Authorized Signature: | ||
| Name: | ||
| Title: | ||
| 1 | Name to be updated following any name change post-Business Combination. |
Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) dated as of December 4, 2025 is made by and between [●]., a Cayman Islands exempt limited company (the “Investor”), and House of Doge Inc., a Texas corporation (the “HOD”) and Brag House Holdings, Inc., a Delaware corporation (the “Company”). The Investor, HOD and the Company may be referred to herein individually as a “Party” and collectively as the “Parties.” For purposes of this Agreement, applicable references to the “Company” shall include, after the consummation of the merger pursuant to Merger Agreement (the “BCA”) dated as of October 12, 2025 by and among the Company, Brag House Merger Sub, Inc., a Delaware corporation and direct wholly owned subsidiary of the Company and HOD, pursuant to which HOD will merge with and into Merger Sub, with HOD continuing as the surviving entity and a wholly owned subsidiary of the Company, HOD.
WHEREAS, the Company, HOD and the Investor have entered into that certain Common Stock Purchase Agreement, dated as of the date hereof (the “Purchase Agreement”), pursuant to which the Company may issue, from time to time, to the Investor up to $100 million of newly issued shares of the Company’s shares of Common Stock, par value $0.0001 per share (the “Common Shares”); and
WHEREAS, the Company, HOD and certain other parties identified therein are parties to the BCA; and
WHEREAS, pursuant to the terms of, and in consideration for the Investor entering into, the Purchase Agreement, and to induce the Investor to execute and deliver the Purchase Agreement, the Company and HOD have agreed that the Company will provide the Investor with 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”).
AGREEMENT
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 Company and the Investor hereby agree as follows:
1. DEFINITIONS.
Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:
(a) “Applicable Date” means the earlier to occur of (I) the first date on which the initial Registration Statement is declared effective by the SEC (and each Prospectus contained therein is available for use on such date) or (II) the first date on which all of the Registrable Securities are eligible to be resold by the Investor pursuant to Rule 144.
(b) “Business Day” shall mean any day on which Principal Market is open for trading, other than any day on which commercial banks are authorized or required to be closed in New York City.
(c) “Effectiveness Deadline” means, with respect to the initial Registration Statement filed hereunder, the 60th calendar day following the date hereof, provided, however, in the event the Company is notified by the SEC that the Registration Statement will not be reviewed or is no longer subject to further review and comments, the Effectiveness Deadline as to such Registration Statement shall be the fifth Business Day following the date on which the Company is so notified if such date precedes the date required above.
(d) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(e) “Filing Deadline” means, with respect to the initial Registration Statement required hereunder, the 21st calendar day following date hereof.
(f) “Person” means a 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.
(g) “Principal Market” means the Nasdaq Stock Market.
(h) “Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.
(i) “Registrable Securities” means all of (i) the Shares (as defined in the Purchase Agreement), (ii) the Warrant Shares, and (iii) any capital stock issued or issuable with respect to the Shares or Warrant Shares, including, without limitation, (1) as a result of any stock split, stock dividend or other distribution, recapitalization or similar event or otherwise, and (2) shares of capital stock of the Company into which the Common Shares are converted or exchanged and shares of capital stock of a successor entity into which the Common Shares are converted or exchanged.
(j) “Registration Statement” means any registration statement of the Company filed pursuant to this Agreement, including the Prospectus, amendments and supplements to such registration statement or Prospectus, including post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.
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(k) “Required Registration Amount” means with respect to the initial Registration Statement, at least [________]shares of Common Shares issued or to be issued pursuant to the Purchase Agreement and the Warrant Shares.
(l) “Rule 144” means Rule 144 under the Securities Act or any successor rule thereto.
(m) “Rule 415” means Rule 415 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such Rule.
(n) “SEC” means the Securities and Exchange Commission or any other federal agency administering the Securities Act and the Exchange Act at the time.
(o) “Securities Act” shall have the meaning set forth in the Recitals above.
2. REGISTRATION.
(a) The Company’s registration obligations set forth in this Section 2 including its obligations to file Registration Statements, obtain effectiveness of Registration Statements, and maintain the continuous effectiveness of any Registration Statement that has been declared effective shall begin on the date hereof and continue until all the earlier of (i) the date on which the Investor has sold all of the Registrable Securities and (ii) the date of termination of the Purchase Agreement if as of such termination date the Investor holds no Registrable Securities (the “Registration Period”).
(b) Subject to the terms and conditions of this Agreement, the Company shall (i) as soon as practicable, but in no case later than the Filing Deadline, prepare and file with the SEC an initial Registration Statement on Form S-3 (or, if the Company is not then eligible, on Form S-1) or any successor form thereto covering the resale by the Investor of the Required Registration Amount in accordance with applicable SEC rules, regulations and interpretations so as to permit the resale of such Registrable Securities by the Investor under Rule 415 at then prevailing market prices (and not fixed prices). The Registration Statement shall contain “Selling Stockholders” and “Plan of Distribution” sections. The Company shall use its best efforts to have the Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the Effectiveness Deadline. By 9:30 am on the business day following the date of effectiveness, the Company shall file with the SEC in accordance with Rule 424 under the Securities Act the final Prospectus to be used in connection with sales pursuant to such Registration Statement. Prior to the filing of the Registration Statement with the SEC, the Company shall furnish a draft of the Registration Statement to the Investor for their review and comment.
(c) Sufficient Number of Shares Registered. If at any time all Registrable Securities are not covered by a Registration Statement filed pursuant to Section 2(a) as a result of Section 2(e) or otherwise, the Company shall use its best efforts to file with the SEC one (1) or more additional Registration Statements so as to cover all of the Registrable Securities not covered by such initial Registration Statement, in each case as soon as practicable (taking into account any position of the staff of the SEC with respect to the date on which the Staff will permit such additional Registration Statement(s) to be filed with the SEC and the rules and regulations of the SEC). The Company shall use its best efforts to cause each such new Registration Statement to become effective as soon as reasonably practicable following the filling thereof with the SEC.
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(d) During the Registration Period, the Company shall (i) promptly prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the Prospectus used in connection with a Registration Statement, which Prospectus is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may be necessary to keep such Registration Statement effective at all times during the Registration Period, (ii) prepare and file with the SEC additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (iii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and as so supplemented or amended to be filed pursuant to Rule 424; (iv) respond as promptly as reasonably possible to any comments received from the SEC with respect to a Registration Statement or any amendment thereto and as promptly as reasonably possible provide the Investor true and complete copies of all correspondence from and to the SEC relating to a Registration Statement (provided that the Company may excise any information contained therein which would constitute material non-public information as to any Investor which has not executed a confidentiality agreement with the Company); and (v) comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered by such 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. In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this Section 2(c)) by reason of the Company’s filing a report on Form 10-K, Form 10-Q, or Form 8-K or any analogous report under the Exchange Act, the Company shall incorporate such report by reference into the Registration Statement, if applicable, or shall file such amendments or supplements with the SEC on the same day on which the Exchange Act report is filed which created the requirement for the Company to amend or supplement the Registration Statement.
(e) Reduction of Registrable Securities Included in a Registration Statement. Notwithstanding anything contained herein, in the event that the SEC requires the Company to reduce the number of Registrable Securities to be included in a Registration Statement in order to allow the Company to rely on Rule 415 with respect to a Registration Statement, then the Company shall reduce the number of Registrable Securities to be included in such Registration Statement (after consultation with the Investor as to the specific Registrable Securities to be removed therefrom) to the maximum number of securities as is permitted to be registered by the SEC. In the event of any reduction in Registrable Securities pursuant to this paragraph, the Company shall use its best efforts to file one (1) or more New Registration Statements with the Commission 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 Prospectuses contained therein are available for use by the Investor.
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(f) Failure to File or Obtain Effectiveness of the Registration Statement or Remain Current. If: (i) a Registration Statement is not filed on or prior to its Filing Date, or (ii) a Registration Statement is not declared effective on or prior to the Effectiveness Deadline, or the Company fails to file with the SEC a request for acceleration in accordance with Rule 461 promulgated under the Securities Act, within five (5) Business Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the SEC that a Registration Statement will not be “reviewed,” or not subject to further review, or (iii) after the effectiveness, a Registration Statement ceases for any reason to remain continuously effective as to all Registrable Securities for which it is required to be effective, or (iv) the Investor is not permitted to utilize the Prospectus therein to resell such Registrable Securities for more than 15 consecutive calendar days or more than an aggregate of 30 calendar days during any 12-month period (which need not be consecutive calendar days), or (v) if after the date that is six (6) months from the date hereof, the Company does not have available adequate current public information as set forth in Rule 144(c) (any such failure or breach being referred to as an “Event”), then in addition to any other rights the Investor may have hereunder or under applicable law, such Event shall be deemed an Event of Default (as defined in the Promissory Note) for so long as such Event remains uncured. During the period of the existence of an uncured Event, the Investor shall have no obligation to accept an Intraday VWAP Purchase Notice or a VWAP Purchase Notice or accept or purchase any Shares (other than any Shares purchased by the Investor prior to the occurrence of the Event).
(g) Piggy-Back Registrations. If at any time there is not an effective Registration Statement covering all of the Registrable Securities, and the Company proposes to register the offer and sale of any Common Shares under the Securities Act (other than a registration (i) pursuant to a Registration Statement on Form S-8 (or other registration solely relating to an offering or sale to employees or directors of the Company pursuant to any employee stock plan or other employee benefit arrangement), (ii) pursuant to a Registration Statement on Form S-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor rule thereto), or (iii) in connection with any dividend or distribution reinvestment or similar plan), whether for its own account or for the account of one (1) or more stockholders of the Company and the form of Registration Statement to be used may be used for any registration of Registrable Securities, the Company shall give prompt written notice (in any event no later than five (5) days prior to the filing of such Registration Statement) to the holders of Registrable Securities of its intention to effect such a registration and, shall include in such registration all Registrable Securities with respect to which the Company has received written requests for inclusion from the holders of Registrable Securities; provided, however, that, the Company shall not be required to register any Registrable Securities pursuant to this Section 2(g) that have been sold or may permanently be sold without any restrictions pursuant to Rule 144, as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company’s transfer agent.
(h) No Inclusion of Other Securities; Other Registration Statements. In no event shall the Company (i) include any securities other than Registrable Securities on any Registration Statement pursuant to Section 2(b) or Section 2(c) without the Investor’s prior written consent or (ii) prior to the Applicable Date, or at any time thereafter while any Registration Statement is not effective or the Prospectus contained therein is not available for use, the Company shall not file a registration statement or an offering statement under the Securities Act relating to securities that are not the Registrable Securities (other than a registration statement on Form S-8 or such supplements or amendments to registration statements that are outstanding and have been declared effective by the SEC as of the date hereof) (solely to the extent necessary to keep such registration statements effective and available and not for any other reason).
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3. RELATED OBLIGATIONS.
(a) The Company shall, not less than three (3) Business Days prior to the filing of each Registration Statement and not less than one (1) business day prior to the filing of any related amendments and supplements to all Registration Statements (except for annual reports on Form 10-K, supplements and amendments to update the Registration Statement solely for information reflected in the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q or current reports on Form 8-K), furnish to each Investor copies of all such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the reasonable and prompt review of such Investor. The Company shall not file a Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Investor shall reasonably object in good faith; provided that, the Company is notified of such objection in writing no later than two (2) Trading Days after the Investor have been so furnished copies of a Registration Statement.
(b) The Company shall furnish to each Investor whose Registrable Securities are included in any Registration Statement, without charge (i) at least one (1) copy (which may be in electronic form) of such Registration Statement as declared effective by the SEC and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, all exhibits and each preliminary prospectus, (ii) at least one (1) copy (which may be in electronic form) of the final prospectus included in such Registration Statement and all amendments and supplements thereto, and (iii) any documents, which are not publicly available through EDGAR, as such Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by such Investor.
(c) The Company shall use its 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 any Investor 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 (w) make any change to its articles of incorporation or by-laws, (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(c), (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 each Investor 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 threat of any proceeding for such purpose.
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(d) The Company shall notify each Investor in writing of the happening of any event or development, as promptly as practicable after becoming aware of such event or development, as a result of which the Prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission 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 (provided that in no event shall such notice contain any material, nonpublic information), and promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission and deliver one (1) electronic copy of such supplement or amendment to the Investor. The Company shall also promptly notify each Investor 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 each Investor by email on the same day of such effectiveness), (ii) of any request by the SEC for amendments or supplements to a 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. The Company shall respond as promptly as reasonably practicable to any comments received from the SEC with respect to a Registration Statement or any amendment thereto.
(e) The Company shall use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction within the United States of America 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 each Investor who holds Registrable Securities being sold 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.
(f) Without limiting any obligation of the Company under the Purchase Agreement, the Company shall use its best efforts to cause all of the Registrable Securities covered by each Registration Statement to be listed on the Principal Market. The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section 3(f).
(g) The Company shall hold in confidence and not make any disclosure of information concerning the Investor provided to the Company unless (i) disclosure of such information is necessary to comply with applicable laws, (ii) the disclosure of such information is necessary to avoid or correct a material misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made available to the public other than by disclosure in violation of this Agreement or any other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning the Investor is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to the Investor and allow the Investor, at the Investor’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.
(h) The Company shall cooperate with the holders of the Registrable Securities to facilitate the timely preparation and delivery of certificates representing the Registrable Securities to be sold pursuant to such Registration Statement or Rule 144 free of any restrictive legends and representing such number of Common Shares and registered in such names as the holders of the Registrable Securities may reasonably request prior to sales of Registrable Securities pursuant to such Registration Statement or Rule 144; provided, that the Company may satisfy its obligations hereunder without issuing physical stock certificates through the use of The Depository Trust Company's Direct Registration System.
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(i) The Company shall use its best efforts to cause the Registrable Securities 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.
(j) The Company shall otherwise use its best efforts to comply with all applicable rules and regulations of the SEC in connection with any registration hereunder.
(k) Within two (2) Business Days after a Registration Statement which covers Registrable Securities is declared effective by the SEC, the Company shall deliver, or shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies to the Investor whose Registrable Securities are included in such Registration Statement) confirmation that such Registration Statement has been declared effective by the SEC.
4. OBLIGATIONS OF THE INVESTOR.
(a) The Investor agrees that upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(d) the Investor shall as soon as reasonably practicable discontinue disposition of Registrable Securities pursuant to any Registration Statement covering such Registrable Securities until the Investor’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(d) or receipt of notice that no supplement or amendment is required. Notwithstanding anything to the contrary contained herein, subject to compliance with the securities laws, the Company shall cause its transfer agent to deliver unlegended certificates for Common Shares to a transferee of the Investor in accordance with the terms of the Purchase Agreement 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(d) and for which the Investor has not yet settled.
(b) The Investor covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it or an exemption therefrom in connection with sales of Registrable Securities pursuant to the Registration Statement.
(c) The Investor, by its acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of each Registration Statement hereunder, unless the Investor has notified the Company in writing of the Investor’s election to exclude all of the Investor’s Registrable Securities from such Registration Statement.
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5. EXPENSES OF REGISTRATION.
All expenses incurred by the Company in complying with its obligations pursuant to this Agreement and in connection with the registration and disposition of Registrable Securities shall be paid by the Company, including, without limitation, all registration, listing and qualifications fees, printers, fees and expenses of the Company's counsel and accountants (except legal fees of Investor’s counsel associated with the review of the Registration Statement).
6. INDEMNIFICATION.
With respect to Registrable Securities which are included in a Registration Statement under this Agreement:
(a) To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend the Investor and its directors, officers, partners, employees, agents, and representatives, and each Person, if any, who controls the Investor within the meaning of the Securities Act or the Exchange Act (each, an “Investor Indemnified Person”), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in settlement or expenses, joint or several (collectively, “Indemnified Damages”), 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 (“Claims”), 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 a 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 any final prospectus (as amended or supplemented, if the Company files any amendment 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; or (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 a Registration Statement (the matters in the foregoing clauses (i) through (iii) being, collectively, “Violations”). The Company shall reimburse the Investor and each such Investor Indemnified Person promptly as Indemnified Damages are incurred and are due and payable, including reasonable legal fees, disbursements and other expenses incurred by an Investor Indemnified Person 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): (x) shall not apply to a Claim arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by such Investor Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto; (y) 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); and (z) 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, conditioned or delayed. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of an Investor Indemnified Person.
(b) In connection with a Registration Statement, the Investor agrees to indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its officers, employees, representatives, or agents and each Person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act (each a “Company Indemnified Person”), against any Claim or Indemnified Damages to which any of them may become subject, under the Securities Act, the Exchange Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or is based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs (i) in reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use in connection with such Registration Statement or (ii) from the Investor’s violation of any prospectus delivery requirements under 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 a Registration Statement; and, subject to Section 6(d), such Investor will reimburse any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Claim; provided, that the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Investor, which consent shall not be unreasonably withheld, conditioned or delayed; provided, further, that, other than in connection with fraud or gross negligence on the part of the Investor, the Investor shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor as a result of the sale of Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Company Indemnified Person. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(b) with respect to any prospectus shall not inure to the benefit of any Company Indemnified Person if the untrue statement or omission of material fact contained in the prospectus was corrected and such new prospectus was delivered to the Investor prior to such Investor’s use of the prospectus to which the Claim relates.
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(c) Promptly after receipt by an Investor Indemnified Person or Company Indemnified Person under this Section 6 of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving a Claim, such Investor Indemnified Person or Company Indemnified Person shall, if indemnification in respect of such Claim is to be sought from 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, assume control of the defense thereof with counsel reasonably and mutually satisfactory to the indemnifying party and the Investor Indemnified Person or the Company Indemnified Person, as the case may be; provided, however, that an Investor Indemnified Person or Company Indemnified Person shall have the right to retain its own counsel with the fees and expenses of not more than one (1) counsel for such Investor Indemnified Person or Company Indemnified Person 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 Investor Indemnified Person or Company Indemnified Person and the indemnifying party would be inappropriate due to actual or potential differing interests between such Investor Indemnified Person or Company Indemnified Person and any other party represented by such counsel in such proceeding. The Investor Indemnified Person or Company Indemnified Person shall reasonably cooperate with the indemnifying party in connection with any negotiation or defense of any Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Investor Indemnified Person or Company Indemnified Person which relates to such action or claim. The indemnifying party shall keep the Investor Indemnified Person or Company 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 prior written consent; provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Investor Indemnified Person or Company Indemnified Person, as the case may be, which consent shall not be unreasonably withheld, conditioned or delayed, 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 Investor Indemnified Person or Company Indemnified Person of a full and unconditional 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 Investor Indemnified Person or Company Indemnified Person with respect to all third parties, firms or corporations relating to the Claim(s) 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 Claim shall not relieve such indemnifying party of any liability to the Investor Indemnified Person or Company Indemnified Person under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such Claim.
(d) 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.
(e) The indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Investor Indemnified Person or Company 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.
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8. REPORTS UNDER THE EXCHANGE ACT.
With a view to making available to the Investor the benefits of Rule 144 promulgated under the Securities Act or any similar rule or regulation of the SEC that may at any time permit the Investor to sell securities of the Company to the public without registration, and as a material inducement to the Investor’s purchase of the Promissory Note, the Company represents, warrants, and covenants to the following:
(a) The Company is subject to the reporting requirements of section 13 or 15(d) of the Exchange Act and has timely filed all required reports under section 13 or 15(d) of the Exchange Act during the 12 months prior to the date hereof (or for such shorter period that the issuer was required to file such reports), other than Form 8-K reports.
(b) During the Registration Period, the Company shall file with the SEC in a timely manner all required reports under section 13 or 15(d) of the Exchange Act (it being understood that nothing herein shall limit the Company’s obligations under the Purchase Agreement), and such reports shall conform to the requirement of the Exchange Act and the SEC for filing thereunder.
(c) The Company shall furnish to the Investor so long as such Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144, (ii) a copy (which may be an electronic version or a link to such report or document on the SEC’s EDGAR system) 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 to sell such securities pursuant to Rule 144 without registration.
9. AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the Investor. Any amendment or waiver effected in accordance with this Section 9 shall be binding upon each of the Investor and the Company. No such amendment shall be effective to the extent that it applies to fewer than all of the holders of the Registrable Securities. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of this Agreement unless the same consideration also is offered to all of the parties to this Agreement.
10. 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 or owns the right to receive the Registrable Securities. If the Company receives conflicting instructions, notices or elections from two (2) 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) Neither this Agreement nor any rights or obligations of the Investor or the Company hereunder may be assigned to any other Person, except for assignments by the Investor to any of its affiliates.
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(c) 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 pursuant to the notice provisions of the Purchase Agreement or to such other address and/or electronic mail address and/or to the attention of such other person as the recipient party has specified by written notice given to each other party five (5) 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) electronically generated by the sender’s email service provider containing the time, date, and recipient email or (C) provided by a courier or overnight courier service shall be rebuttable evidence of personal service, receipt by email or receipt from a nationally recognized overnight delivery service in accordance with this section.
(d) 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.
(e) The internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York, shall govern all issues concerning the relative rights of the Company and the Investor as its stockholder. All other questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York. Each party hereby irrevocably submits to the non-exclusive jurisdiction of the Supreme Court of the State of New York, sitting in New York County, New York and federal courts for the Southern District of New York sitting New York, New York, 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. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(f) This Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns of each of the parties hereto.
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(g) The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
(h) This Agreement may be executed in identical counterparts, both of which shall be considered one (1) and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. Electronically scanned and delivered signatures (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com), including by e-mail attachment, shall be deemed to have been duly and validly delivered and be valid and effective for all purposes of this Agreement.
(i) Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
(j) The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict construction will be applied against any party.
(k) This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Investor and the Company have caused their signature page to this Registration Rights Agreement to be duly executed as of the date first above written.
| COMPANY: | |||
| BRAG HOUSE HOLDINGS, INC. | |||
| By: | |||
| Name: | |||
| HOUSE OF DOGE INC. | |||
| By: | |||
| Name: | |||
| Title: | |||
| INVESTOR: | |||
[●] | |||
| By: | |||
| Its: | |||
| By: | |||
| Its: | |||
| By: | |||
| Name: | |||
| Title: | |||
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Exhibit 10.4
Execution Version
PLEDGE AGREEMENT
This PLEDGE AGREEMENT, dated as of December 4, 2025 (the “Effective Date”) (as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the provisions hereof, this “Agreement”), made by and among BRAG HOUSE HOLDINGS, INC., a Delaware corporation (“Pubco”) and DOGECOIN VENTURES, INC., a Texas corporation (“Dogecoin”; and, Dogecoin, together with Pubco, collectively the “Grantors” and, each individually, a “Grantor”), in favor of [●]., a Cayman Islands exempt limited company, as pledgee, assignee, and secured party (in such capacities and together with any successors in such capacities, the “Secured Party”).
RECITALS
Pubco has in connection with the execution and delivery of this Agreement, entered into that certain Common Stock Purchase Agreement, dated as of the Effective Date (as amended, amended and restated, supplemented or otherwise modified from time to time, the “CEF”), by and among Pubco, House of Doge Inc., a Texas corporation (“HOD”), and [●], as investor, pursuant to which, among other things, Pubco and HOD has sold one or more Notes (as defined in the CEF) to the Secured Party (such persons, individually a “Holder” and, collectively, the “Holders”), and Pubco will issue Warrants (as defined in any Note) to each Holder (such persons, individually a “Warrant Holder” and, collectively, the “Warrant Holders”).
Substantially concurrently herewith, Pubco and HOD have executed and delivered Notes in favor of the Secured Party and may hereafter execute and deliver additional Notes to the Secured Party, as set forth in such Notes.
Substantially concurrently herewith, Dogecoin, together with each of Subsidiary of Pubco and HOD, has executed and delivered the Guaranty Agreement (as defined below) to guaranty all liabilities and obligations as therein provided, which includes the Secured Obligations (as defined below).
Each Grantor will receive substantial direct and indirect benefits from the execution, delivery and performance of the obligations under the Note, the Guaranty Agreement, the CEF and the other Transaction Documents (as defined below), and each is, therefore, willing to enter into this Agreement.
This Agreement is given by each Grantor in favor of the Secured Party to secure the payment and performance of all of the Secured Obligations.
It is a condition to the obligations of the Holders to purchase the Notes that each Grantor execute and deliver this Agreement.
NOW THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Grantor and the Secured Party hereby agree as follows:
Article
I
DEFINITIONS AND INTERPRETATION
Section 1.01 Definitions.
(a) Unless otherwise defined herein or in the Note, as applicable, capitalized terms used herein that are defined in the UCC shall have the meanings assigned to them in the UCC. However, if a term is defined in Article 9 of the UCC differently than in another Article of the UCC, the term has the meaning specified in Article 9.
(b) The following terms shall have the following meanings:
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with a Person, as such terms are used in and construed under Rule 144. As used herein, (a) “Rule 144” means Rule 144 promulgated by the U.S. Securities and Exchange Commission or any successor entity (the “Commission”) pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect; and (b) “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder.
“Agreement” has the meaning set forth in the Preamble hereof.
“Applicable Law” means, as to any Person, all applicable Laws binding upon such Person or to which such a Person is subject.
“Business Day” has the meaning set forth in any Note.
“CEF” has the meaning set forth in the first Recital hereof.
“Claims” means any and all property and other taxes, assessments and special assessments, levies, fees and all governmental charges imposed upon or assessed against, and landlords’, carriers’, mechanics’, workmen’s, repairmen’s, laborers’, materialmen’s, suppliers’ and warehousemen’s Liens, and other claims arising by operation of law against, all or any portion of the Pledged Collateral.
“CleanCore” means CleanCore Solutions, Inc., a Nevada corporation.
“CleanCore Warrant” means that certain Pre-Funded Common Stock Purchase Warrant of CleanCore Solutions, Inc., dated September 5, 2025 (as amended, restated, supplemented or otherwise modified from time to time), executed by CleanCore in favor of Dogecoin and for 1,000,000 Warrant Shares.
“Collateral” means “Pledged Collateral” as defined herein.
“Contested Liens” means, collectively, any Liens incurred in respect of any Claims to the extent that the amounts owing in respect thereof are not yet delinquent, or are being contested in good faith and with proper reserves established with respect thereto in accordance with GAAP, and otherwise comply with the provisions of Section 4.10; provided, however, that such Liens shall in all respects be subject and subordinate in priority to the Lien and security interest created by this Agreement, except if and to the extent that the law or regulation creating, permitting or authorizing such Lien provides that such Lien must be superior to the Lien and security interest created and evidenced hereby.
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“Control” means (i) with respect to any Securities Account and Security Entitlement, control within the meaning of Section 9-106 of the UCC, (ii) with respect to any Uncertificated Security, control within the meaning of Section 8-106(c) of the UCC, (iii) with respect to any Certificated Security, control within the meaning of Section 8-106(a) or (b) of the UCC, and (iv) with respect to any “transferable record” (as that term is defined in Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or in Section 16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction), control within the meaning of Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or in Section 16 of the Uniform Electronic Transactions Act as in effect in the jurisdiction relevant to such transferable record.
“Distributions” means, collectively, with respect to each Grantor, all dividends, cash, options, warrants, rights, instruments, distributions, returns of capital or principal, income, interest, profits, and other property, interests (debt or equity) or proceeds, including as a result of a split, revision, reclassification or other like change of the Pledged Securities, from time to time received, receivable or otherwise distributed or distributable to such Grantor in respect of or in exchange for any or all of the Pledged Securities.
“Dogecoin” has the meaning set forth in the Preamble.
“Equity Interests” means, with respect to any Person, all of the shares of capital stock, limited liability company interests or membership interests of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock, limited liability company interests or membership interests of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock, limited liability company interests or membership interests of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.
“Event of Default” has the meaning set forth in any Note.
“First Priority” means, with respect to any Lien purported to be created in any Pledged Collateral pursuant to this Agreement, such Lien is the most senior lien to which such Pledged Collateral is subject.
“Grantor” has the meaning set forth in the Preamble hereof.
“Guaranty” means that certain Global Guaranty Agreement, dated as of the Effective Date (as amended, restated, supplemented or otherwise modified from time to time) among the “Guarantors” identified therein, including Dogecoin, and the Secured Party.
“HOD” has the meaning set forth in the first Recital hereof.
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“Holder” and “Holders” each has the meaning set forth in the first Recital hereof.
“Issuer” means Pubco and HOD.
“Issuer Party” means, individually, each Issuer and each Grantor and their respective subsidiaries, and “Issuer Parties” means, collectively, the Issuer, all Grantors and their respective subsidiaries.
“Laws” means, collectively, all international, foreign, federal, state, and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Entity charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Entity, in each case whether or not having the force of Law.
“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, easement, right-of-way or other encumbrance on title to real property, lien (statutory or other), hypothec, charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing) whether arising by contract, as a matter of law, by judicial process or otherwise.
“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the assets, business, properties or financial condition of an Issuer or a Grantor or, (b) a material impairment of the ability of any Issuer or any Grantor to pay or perform any of the Secured Obligations under the Note or any other Transaction Documents, or (c) a material adverse effect on (i) any portion of the Collateral (as defined in any Note), (ii) the legality, validity, binding effect or enforceability against any Issuer or any Grantor of any of the Transaction Documents to which it is party, (iii) the perfection or priority of any Lien granted to the Secured Party under any Security Document (as defined in any Note), or (iv) the rights or remedies of the Secured Party under any Transaction Document.
“Organizational Documents” means the certificate of incorporation and by-laws or any comparable organizational documents of any corporate entity (including limited liability companies and partnerships).
“Pledged Collateral” has the meaning set forth in Section 2.01.
“Pledged Securities” means, collectively, with respect to each Grantor, (i) on the Effective Date, all issued and outstanding Equity Interests of CleanCore that are owned by such Grantor, including Equity Interests identified on Schedule 1 hereof as of the Effective Date (as such Schedule 1 may be updated by the Secured Party to identify additional Pledged Securities but any such update is not required for the inclusion of any such additional Equity Interests as part of the “Pledged Securities”), the CleanCore Warrant (and, upon exercise thereof, the Equity Interests of CleanCore issued thereunder), and all options, warrants, rights, agreements and additional Equity Interests of whatever class of CleanCore acquired by such Grantor in any manner, together with all claims, rights, privileges, authority and powers of such Grantor relating to such Equity Interests in CleanCore or under any Organizational Document of CleanCore, and the certificates, instruments and agreements representing such Equity Interests and any and all interest of such Grantor in the entries on the books of any financial intermediary pertaining to such Equity Interests, and (ii) all Equity Interests issued in respect of the Equity Interests referred to in clause (i) above, upon any stock split, reclassification of such Equity Interests or otherwise arising in respect of such Equity Interests or in connection with any consolidation or merger of any issuer of such Equity Interests/all Equity Interests of any successor issuer owned by such Grantor formed by or resulting from any consolidation or merger in which any Person listed in Schedule 1 hereof is not the surviving entity.
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“Pubco” has the meaning set forth in the Preamble.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the directors, officers, employees, partners, agents, trustees, administrators, managers, advisors and representatives of it and its Affiliates.
“Secured Obligations” means (i) obligations of Pubco, HOD and the other Issuer Parties from time to time arising under each Note, the Guaranty Agreement, this Agreement or any other Transaction Document or otherwise with respect to the due and prompt payment of (A) the principal of and premium, if any, and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding (“Postpetition Interest”)) on the outstanding obligations under the Notes, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, and (B) all other monetary obligations, including fees, costs, attorneys’ fees and disbursements, reimbursement obligations, contract causes of action, expenses and indemnities, whether primary, secondary, direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), of Pubco, HOD and the other Issuer Parties under or in respect of any Transaction Document, and (ii) the due and prompt performance of all other covenants, duties, debts, obligations and liabilities of any kind of Pubco, HOD and the other Issuer Parties, individually or collectively, under or in respect of the Notes, this Agreement, the Guaranty Agreement, and the other Transaction Documents or any other document made, delivered or given in connection with any of the foregoing, in each case whether evidenced by a note or other writing, whether allowed in any bankruptcy, insolvency, receivership or other similar proceeding, whether arising from an extension of credit, issuance of a letter of credit, acceptance, loan, guaranty, indemnification or otherwise, and whether primary, secondary, direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, fixed or otherwise.
“Secured Party” has the meaning set forth in the Preamble hereof.
“Securities Account Control Agreement” means a securities account control agreement reasonably satisfactory to the Secured Party establishing the Secured Party’s full dominion and Control with respect to the Securities Account(s) identified therein and under which the applicable Grantor shall not have any rights to withdraw any Pledged Collateral (including any cash deposited, held or otherwise maintained in such Securities Account) therefrom without the prior written consent of the Secured Party.
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“Securities Collateral” means, collectively, the Pledged Securities and the Distributions.
“Transaction Documents” has the meaning set forth in each Note.
“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided, however, that if by reason of mandatory provisions of law, any or all of the perfection or priority of the Secured Party’s security interest in any item or portion of the Pledged Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection or priority and for purposes of definitions relating to such provisions.
“Warrant Holder” and “Warrant Holders” each has the meaning set forth in the first Recital hereof.
Section 1.02 Interpretation. All references in this Agreement to Sections are references to Sections of this Agreement unless otherwise specified.
Section 1.03 Resolution of Drafting Ambiguities. Each Grantor acknowledges and agrees that it was represented by counsel in connection with the execution and delivery of this Agreement, that it and its counsel reviewed and participated in the preparation and negotiation of this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party (i.e., the Secured Party) shall not be employed in the interpretation of this Agreement.
Section 1.04 Schedules. The Secured Party and each Grantor and each Secured Party agree that the Schedules hereof and all descriptions of Pledged Collateral contained in the Schedules and all amendments and supplements thereto are and shall at all times remain a part of this Agreement.
Article
II
Grant of security interest
Section 2.01 Grant of Security Interest. As collateral security for the payment and performance in full of all the Secured Obligations, each Grantor hereby pledges to the Secured Party, and grants to the Secured Party a Lien on and security interest in and to, all of the right, title and interest of such Grantor in, to and under the following property, wherever located, and whether now existing or hereafter arising or acquired from time to time (collectively, the “Pledged Collateral”):
(a) all Securities Collateral, whether constituting Securities, General Intangibles, Investment Property or otherwise;
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(b) all Investment Property relating to the Securities Collateral;
(c) all Financial Assets, Securities Entitlements and Securities Accounts relating to the Securities Collateral;
(d) all Supporting Obligations relating to the foregoing;
(e) all Organizational Documents relating to the foregoing and all books and records and other materials and records relating to the Pledged Collateral and any General Intangibles at any time evidencing or relating to any of the foregoing; and
(f) to the extent not covered by clauses (a) through (e) of this sentence, all Proceeds and products of each of the foregoing and all accessions of and to, substitutions and replacements for, each of the foregoing, and any and all Proceeds of any insurance, indemnity, warranty or guaranty payable to such Grantor from time to time with respect to any of the foregoing.
The failure to identify any Pledged Securities on Schedule 1 shall not adversely affect the security grant made under this Section 2.01.
Section 2.02 Filings. Each Grantor hereby irrevocably authorizes the Secured Party at any time and from time to time to file in any relevant jurisdiction any financing statements (including fixture filings) and amendments thereto that contain the information required by Article 9 of the UCC of each applicable jurisdiction for the filing of any financing statement or amendment relating to the Pledged Collateral, including whether such Grantor is an organization, the type of organization and, if required, any organizational identification number issued to such Grantor, and any financing or continuation statements or other documents for the purpose of perfecting, confirming, continuing, enforcing or protecting the security interest granted by such Grantor hereunder, without the signature of such Grantor where permitted by law, including the filing of a financing statement describing the Pledged Collateral of such Grantor or words of similar effect or as being of an equal or lesser scope or with greater detail. Each Grantor agrees to provide all information described in the immediately preceding sentence to the Secured Party promptly upon reasonable request by the Secured Party.
Article
III
Perfection and further assurances
Section 3.01 Perfection of Certificated Securities Collateral. Each Grantor represents and warrants that all certificates, agreements or instruments representing or evidencing the Securities Collateral and other Pledged Collateral have been delivered to the Secured Party in suitable form for transfer by delivery or accompanied by duly executed undated instruments of transfer or assignment in blank and that (assuming continuing possession by the Secured Party of any such Securities Collateral and such Pledged Collateral) the Secured Party has a perfected First Priority security interest and Lien therein. Each Grantor hereby covenants and agrees that all certificates, agreements or instruments representing or evidencing the Securities Collateral and other Pledged Collateral acquired by such Grantor after the Effective Date shall be held by or on behalf of the Secured Party in trust for the Secured Party and promptly (and in any event within three (3) Business Days’ upon receipt thereof by such Grantor) shall be delivered to the Secured Party in suitable form for transfer by delivery or accompanied by duly executed undated instruments of transfer or assignment in blank, all in form and substance satisfactory to the Secured Party.
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The Secured Party shall have the right, at any time upon the occurrence and during the continuance of any Event of Default, to endorse, assign or otherwise transfer to or to register in the name of the Secured Party or any of its nominees or endorse for negotiation any or all of the Securities Collateral, without any indication that such Securities Collateral is subject to the security interest hereunder; provided, that after any such Event of Default has been waived in accordance with the provisions of the Notes and to the extent the Secured Party has exercised its rights under this sentence, the Secured Party shall, promptly after the reasonable request of the applicable Grantor(s), cause such Securities Collateral to be transferred to, or request that such Securities Collateral is registered in the name of, the applicable Grantor(s) to the extent it or its nominees holds an interest in such Securities Collateral at such time. In addition, at any time/upon the occurrence and during the continuance of an Event of Default, the Secured Party shall have the right to exchange certificates representing or evidencing Securities Collateral for certificates of smaller or larger denominations.
Section 3.02 Perfection of Uncertificated Securities Collateral. Each Grantor represents and warrants that on the Effective Date none of the Pledged Securities or other Pledged Collateral are uncertificated Pledged Securities or uncertificated Pledged Collateral. Each Grantor hereby agrees that if any of the Pledged Securities or other Pledged Collateral are at any time not evidenced by certificates of ownership, such Grantor will, as directed by the Secured Party, cause the issuer thereof to any of (i) register the Secured Party as the registered owner of such securities, or (ii) agree in an authenticated record with such Grantor and the Secured Party that such issuer will comply with instructions with respect to such securities originated by the Secured Party without further consent of such Grantor, such authenticated record to be in form and substance satisfactory to the Secured Party, or (iii) if held by any securities intermediary, to cause the Secured Party to retain Control over such Pledged Collateral to the extent required to perfect a security interest in such Pledged Collateral under the UCC. Each Grantor hereby covenants and agrees, with respect to Pledged Securities that are partnership interests or limited liability company interests, that after the occurrence and during the continuance of any Event of Default, upon request by the Secured Party, such Grantor will (A) cause the Organizational Documents of each issuer that is a subsidiary of the Pubco or HOD, as applicable, to be amended to provide that such Pledged Securities shall be treated as “securities” for purposes of the UCC and (B) cause such Pledged Securities to become certificated and delivered to the Secured Party in accordance with the provisions of Section 3.01.
Section 3.03 Maintenance of Perfected Security Interest. Each Grantor represents and warrants that on the Effective Date all financing statements, agreements, instruments and other documents necessary to perfect the security interest granted by it to the Secured Party in respect of the Pledged Collateral have been delivered to the Secured Party in completed and, to the extent necessary or appropriate, duly executed form for filing in each governmental, municipal or other office specified in Schedule 2 hereof. Each Grantor agrees that at its sole cost and expense, such Grantor will maintain the security interest created by this Agreement in and the Lien on the Pledged Collateral as a perfected First Priority security interest in and Lien on such Pledged Collateral.
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Section 3.04 Securities Accounts. As of the Effective Date, no Grantor has any Securities Accounts in which any Pledged Collateral is deposited, held or otherwise maintained. No Grantor shall hereafter establish or maintain any Securities Account in which any Pledged Collateral is (or is to be) deposited, held or otherwise maintained with any Securities Intermediary unless the Secured Party consents in writing prior to the establishment of any such Securities Account and unless (A) the Securities Intermediary for such Securities Account shall be reasonably acceptable to the Secured Party and (B) such Grantor and such Securities Intermediary shall have duly executed and delivered a Securities Account Control Agreement with respect to such Securities Account to the Secured Party. If any Securities Account is established as herein provided, then each Grantor shall accept any Pledged Collateral (including cash) in trust for the benefit of the Secured Party and within one (1) Business Day of actual receipt thereof, deliver such Pledged Collateral to the Securities Account over which a Securities Account Control Agreement is in place. The provisions of this Section 3.04 shall not apply to any Financial Assets credited to a Securities Account for which the Secured Party is the Securities Intermediary. No Grantor shall grant Control over any Pledged Collateral to any Person other than the Secured Party.
Section 3.05 Additional Pledged Collateral.
(i) If any Grantor shall at any time hold or acquire any certificated securities constituting Pledged Collateral, such Grantor shall promptly (1) endorse, assign and deliver the same to the Secured Party, accompanied by such undated instruments of transfer or assignment duly executed in blank, all in form and substance satisfactory to the Secured Party or (2) at the request of the Secured Party, within one (1) Business Day of receipt thereof, deliver such securities into a Securities Account with respect to which a Securities Account Control Agreement is in effect in favor of the Secured Party.
(ii) If any securities now or hereafter acquired by any Grantor constituting Pledged Collateral are uncertificated and are issued to such Grantor or its nominee directly by the issuer thereof, such Grantor shall promptly notify the Secured Party thereof and pursuant to an agreement in form and substance reasonably satisfactory to the Secured Party, either (1) cause the issuer to agree to comply with instructions from the Secured Party as to such securities, without further consent of any Grantor or such nominee, (2) arrange for the Secured Party to become the registered owner of such securities, or (3) cause a Security Entitlement with respect to such uncertificated security to be held in a Securities Account with respect to which the Secured Party has Control.
Section 3.06 Further Assurances.
(a) Further Assurances. Each Grantor shall take such further actions, and execute and/or deliver to the Secured Party such additional financing statements, amendments, assignments, agreements, supplements, powers and instruments, as the Secured Party may in its reasonable judgment deem necessary or appropriate in order to create and/or maintain the validity, perfection or priority of and protect any security interest granted or purported to be granted in the Pledged Collateral as provided herein and the rights and interests granted to the Secured Party hereunder, and enable the Secured Party to exercise and enforce its rights, powers and remedies hereunder with respect to any Pledged Collateral, including the filing of any financing statements, continuation statements and other documents under the UCC (or other similar laws) in effect in any jurisdiction with respect to the security interest created hereby, and delivery of Securities Account Control Agreements with respect to Securities Accounts, all in form reasonably satisfactory to the Secured Party and in such offices wherever required by law to perfect, continue and maintain the validity, enforceability and priority of the security interest in the Pledged Collateral as provided herein and to preserve the other rights and interests granted to the Secured Party hereunder, as against third parties, with respect to the Pledged Collateral. If an Event of Default has occurred and is continuing, the Secured Party may institute and maintain, in its own name or in the name of any Grantor, such suits and proceedings as the Secured Party may reasonably believe are necessary or expedient to prevent any impairment of the security interest in or the perfection thereof in the Pledged Collateral. All of the foregoing shall be at the sole cost and expense of the Grantors.
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(b) Report. Within 30 days after the end of each calendar month the Company shall furnish the Secured Party with a report listing for such quarter:
(i) any subsidiary formed or acquired by any Grantor;
(ii) any change in name or jurisdiction of organization of any Grantor as permitted by the Transaction Documents;
(iii) any certificated securities, uncertificated securities, other equity interests or Indebtedness not held in a Securities Account acquired by any Grantor that constitute Pledged Collateral; and
(iv) the opening of any Securities Account in which Pledged Collateral is intended to be deposited, held or otherwise maintained.
Article
IV
Representations, warranties and covenants
Each Grantor represents, warrants and covenants as follows (as used herein, each reference to “Grantor” in this Article IV refers to such Person in its capacity as a Grantor under this Agreement):
Section 4.01 Representations Generally.
(a) Existence. Each Grantor (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, (ii) is duly qualified as a foreign corporation or other organization and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification except to the extent that the failure to qualify in such jurisdiction could not reasonably be expected to have a Material Adverse Effect and (iii) is in compliance with all applicable Law except to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
(b) Power and Authorization. Each Grantor has the power and authority, and the legal right, to own or lease and operate its property, and to carry on the business as now conducted and as proposed to be conducted, and to execute, deliver and perform the Transaction Documents to which it is a party. Each Grantor has taken all necessary organizational action to authorize the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party. No consent or authorization of, filing with, notice to or other act by, or in respect of, any Governmental Entity or any other Person is required in connection with the execution, delivery, performance, validity or enforceability of this Agreement or any of the Transaction Documents, except the filings referred to in Schedule 2. This Agreement and each other Transaction Document to which such Grantor is a party has been duly executed and delivered by each Grantor thereto.
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(c) Enforceability. This Agreement constitutes, and each other Transaction Document to which a Grantor is a party when delivered hereunder will constitute, a legal, valid and binding obligation of such Grantor thereto, enforceable against such Grantor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
(d) No Contravention. The execution, delivery and performance of this Agreement and the other Transaction Documents will not violate any Applicable Law or any contractual obligation of any Grantor and will not result in, or require, the creation or imposition of any Lien on any of their respective properties or assets pursuant to any Applicable Law or any such contractual obligation (other than the Liens created by this Agreement and the other Transaction Documents), except, for such defaults, liens, charges and encumbrances as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(e) No Litigation. No action, suit, litigation, investigation or proceeding of or before any arbitrator or Governmental Entity is pending or, to the knowledge of any Grantor, threatened in writing by or against any Grantor or against any of its property or assets (i) with respect to this Agreement or any of the other Transaction Documents or any of the transactions contemplated hereby or thereby, or (ii) that could reasonably be expected to have a Material Adverse Effect.
Section 4.02 Perfected First Priority Security Interest. This Agreement is effective to create in favor of the Secured Party a legal, valid and enforceable security interest in the Pledged Collateral and the Proceeds thereof. In the case of the certificated Pledged Securities, when stock certificates representing such Pledged Securities are delivered to the Secured Party and in the case of the other Pledged Collateral, when financing statements and other filings specified on Schedule 2 hereof in appropriate form are filed in the offices specified on Schedule 2 hereof and other actions described in Schedule 2 hereof are taken, this Agreement shall constitute, and will at all times constitute, a fully perfected First Priority Lien on, and security interest in, all rights, title and interest of the Grantors in such Pledged Collateral and the Proceeds thereof, as security for the Secured Obligations.
Section 4.03 No Transfer of Pledged Collateral. No Grantor shall sell, offer to sell, dispose of, convey, assign or otherwise transfer, or grant any option with respect to, restrict, or grant, create, permit or suffer to exist any Lien on, any of the Pledged Collateral pledged by it hereunder or any interest therein except as permitted by each Note.
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Section 4.04 Claims Against Pledged Collateral. Each Grantor shall, at its own cost and expense, use its best efforts to defend title to the Pledged Collateral and the First Priority security interest granted to and Lien created in favor of the Secured Party with respect thereto against all claims and demands of all Persons at any time affecting the Grantor’s title to such Collateral or otherwise claiming any interest therein adverse to the Secured Party other than Liens expressly permitted under the terms of any Note that are subject to subordination agreements acceptable to the Secured Party. Except as expressly permitted by each Note, there is no agreement to which any Grantor is a party, order, judgment or decree, and no Grantor shall enter into any agreement or take any other action, that could reasonably be expected to restrict the transferability of any of the Pledged Collateral or otherwise impair or conflict with such Grantors’ obligations or the rights of the Secured Party hereunder.
Section 4.05 Other Financing Statements. No financing statement or other instrument similar in effect covering all or any part of the Pledged Collateral or listing such Grantor as debtor is on file in any recording office, except such as have been filed in favor of the Secured Party pursuant to this Agreement or as otherwise permitted under each Note. No Grantor shall execute, authorize or permit to be filed in any recording office any financing statement or other instrument similar in effect covering all or any part of the Pledged Collateral or listing such Grantor as debtor with respect to all or any part of the Pledged Collateral, except financing statements and other instruments filed in respect of Liens permitted under the Notes.
Section 4.06 Changes in Name, Jurisdiction of Organization, Etc. On the Effective Date, such Grantor’s type of organization, jurisdiction of organization, legal name, Federal Taxpayer Identification Number, organizational identification number (if any) and chief executive office or principal place of business are indicated next to its name in Schedule 4 hereof. Schedule 4 also lists all of such Grantor’s jurisdictions and types of organization, legal names and locations of chief executive office or principal place of business at any time during the four months preceding the Effective Date, if different from those referred to in the preceding sentence.
Such Grantor shall not, except upon not less than 15 days’ prior written notice (in the form of an officer’s certificate), or such lesser notice period agreed to by the Secured Party, to the Secured Party, and delivery to the Secured Party of all additional financing statements, information and other documents reasonably requested by the Secured Party to maintain the validity, perfection and priority of the security interests provided for herein:
(a) change its legal name, identity, type of organization or corporate structure;
(b) change the location of its chief executive office or its principal place of business;
(c) change its Federal Taxpayer Identification Number or organizational identification number (if any); or
(d) change its jurisdiction of organization (in each case, including by merging with or into any other entity, reorganizing, organizing, dissolving, liquidating, reincorporating or incorporating in any other jurisdiction).
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Such Grantor shall, prior to any change described in the preceding sentence, take all actions reasonably requested by the Secured Party to maintain the perfection and priority of the security interest of the Secured Party in the Pledged Collateral intended to be granted hereunder.
Each Grantor agrees to promptly provide the Secured Party with certified Organizational Documents reflecting any of the changes described in this Section 4.06. Each Grantor also agrees to promptly notify the Secured Party of any change in the location of any office in which it maintains books or records relating to Pledged Collateral owned by it or any office or facility at which Pledged Collateral is located (including the establishment of any such new office or facility).
Section 4.07 Pledged Securities. Schedule 1 sets forth a complete and accurate list of all Pledged Securities held by such Grantor as of the Effective Date. The Pledged Securities pledged by such Grantor hereunder constitute all of the issued and outstanding Equity Interests of CleanCore or warrants issued by CleanCore held by such Grantor unless otherwise noted in Schedule 1. All of the Pledged Securities existing on the Effective Date have been, and to the extent any Pledged Securities are hereafter issued, such Pledged Securities will be, upon such issuance, duly authorized, validly issued, fully paid and non-assessable. There is no amount or other obligation owing by any Grantor to any issuer of the Pledged Securities in exchange for or in connection with the issuance of the Pledged Securities or any Grantor’s status as a partner or a member of any issuer of the Pledged Securities. No Grantor is in default or violation of any material provisions of any agreement to which such Grantor is a party relating to the Pledged Securities.
No Securities Collateral pledged by such Grantor is subject to any defense, offset or counterclaim, nor have any of the foregoing been asserted or alleged against such Grantor by any Person with respect thereto, except as have been disclosed in writing to the Secured Party and there are no certificates, instruments, documents or other writings (other than the Organizational Documents and certificates representing such Pledged Securities that have been delivered to the Secured Party) which evidence any Pledged Securities of such Grantor.
Each Grantor shall, upon obtaining any Pledged Securities, accept the same in trust for the benefit of the Secured Party and promptly (but in any event within three (3) Business Days after receipt thereof) deliver to the Secured Party an updated Schedule 1 (it is acknowledged and agreed that the Secured Party may update such Schedule 1 if a Grantor shall fail to deliver such updated Schedule 1 (and Secured Party agrees to use commercially reasonable efforts to deliver a copy of any such updated Schedule 1 prepared by the Secured Party to the Grantors (it being acknowledged and agreed by the Grantors that the failure of the Secured Party to provide a copy of such updated Schedule 1 prepared by the Secured Party shall not constitute a breach hereunder or under any other Transaction Document))), and the certificates and other documents required under Section 3.01 and Section 3.02 in respect of the additional Pledged Securities which are to be pledged pursuant to this Agreement, and confirming the Lien hereby created on such additional Pledged Securities.
Section 4.08 Approvals. In the event that the Secured Party desires to exercise any remedies, voting or consensual rights or attorney-in-fact powers set forth in this Agreement and determines it necessary to obtain any approvals or consents of any Governmental Entity or any other Person therefor, then, upon the request of the Secured Party, such Grantor agrees to use its best efforts to assist the Secured Party in obtaining as soon as practicable any necessary approvals or consents for the exercise of any such remedies, rights and powers.
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Section 4.09 Pledged Collateral Information. All information set forth herein, including the schedules annexed hereto, and all information contained in any documents, schedules and lists heretofore delivered to the Secured Party or any Secured Party, in connection with this Agreement, in each case, relating to the Pledged Collateral, is accurate and complete in all material respects. The Pledged Collateral described on the schedules hereof constitutes all of the property of such type of Pledged Collateral owned or held by the Grantors.
Section 4.10 Compliance With Laws. Each Grantor shall pay promptly when due all Claims upon the Pledged Collateral or incurred in connection with the use or operation of the Pledged Collateral or incurred in connection with this Agreement. All Claims imposed upon or assessed against the Pledged Collateral have been paid and discharged except to the extent such Claims constitute a Lien not yet due and payable which is a Contested Lien or a Lien permitted by each Note. In the event any Grantor shall fail to make such payment contemplated in the immediately preceding sentence, the Secured Party may (following notice to the Grantor, to the extent practicable) do so for the account of such Grantor and the Grantors shall promptly reimburse and indemnify the Secured Party for all costs and expenses incurred by the Secured Party under this Section 4.10 in accordance with Section 7.07. Each Grantor shall comply with all Applicable Law applicable to the Pledged Collateral the failure to comply with which could reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.
Article
V
Securities collateral
Section 5.01 Existing Voting Rights and Distributions.
(a) So long as no Event of Default shall have occurred and be continuing:
(i) Each Grantor shall be entitled to exercise any and all voting and other consensual rights pertaining to the Securities Collateral or any part thereof for any purpose not inconsistent with the terms or purposes hereof, any Note, the CEF or any other Transaction Document; provided, however, that no Grantor shall in any event exercise such rights in any manner which could reasonably be expected to have a Material Adverse Effect.
(ii) Each Grantor shall be entitled to receive and retain, and to utilize free and clear of the Lien hereof, any and all cash Distributions; provided, however, that any and all such Distributions consisting of rights or interests in the form of securities that would constitute Collateral shall be immediately delivered to the Secured Party to hold as Pledged Collateral and shall, if received by any Grantor, be received in trust for the benefit of the Secured Party, be segregated from the other property or funds of such Grantor and be promptly (but in any event within three (3) Business Days after receipt thereof) delivered to the Secured Party as Pledged Collateral in the same form as so received (with any necessary endorsement).
(b) The Secured Party shall be deemed without further action to have granted to each Grantor all necessary consents relating to voting rights and shall, if necessary, upon written request of any Grantor and at the sole cost and expense of such Grantor, from time to time execute and deliver (or cause to be executed and delivered) to such Grantor all such instruments as such Grantor may reasonably request in order to permit such Grantor to exercise the voting and other rights which it is entitled to exercise pursuant to Section 5.01(a)(i) and to receive the Distributions which it is authorized to receive and retain pursuant to Section 5.01(a)(ii).
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(c) Upon the occurrence and during the continuance of any Event of Default:
(i) All rights of each Grantor to exercise the voting and other consensual rights it would otherwise be entitled to exercise pursuant to Section 5.01(a)(i) shall immediately cease, and all such rights shall thereupon become vested in the Secured Party, which shall have the sole right to exercise such voting and other consensual rights.
(ii) All rights of each Grantor to receive Distributions which it would otherwise be authorized to receive and retain pursuant to Section 5.01(a)(ii) shall immediately cease and all such rights shall thereupon become vested in the Secured Party, which shall have the sole right to receive and hold such Distributions as Pledged Collateral.
(d) Each Grantor shall, at its sole cost and expense, from time to time execute and deliver to the Secured Party appropriate instruments as the Secured Party may request in order to permit the Secured Party to exercise the voting and other rights which it may be entitled to exercise pursuant to Section 5.01(c)(i) and to receive all Distributions which it may be entitled to receive under Section 5.01(c)(ii).
(e) All Distributions which are received by any Grantor contrary to the provisions of Section 5.01(a)(ii) or Section 5.01(c) shall be received in trust for the benefit of the Secured Party, shall be segregated from other funds of such Grantor and shall promptly (but in any event within one (1) Business Days after receipt thereof by such Grantor) be paid over to the Secured Party as Pledged Collateral in the same form as so received (with any necessary endorsement).
Section 5.02 Certain Agreements of Grantors.
(a) In the case of each Grantor which is an issuer of Securities Collateral, such Grantor agrees to be bound by the terms of this Agreement relating to the Securities Collateral issued by it and will comply with such terms insofar as such terms are applicable to it.
(b) In the case of each Grantor which is a partner, shareholder or member, as the case may be, in a partnership, limited liability company or other entity, such Grantor hereby (i) consents to the extent required by the applicable Organizational Document to the pledge by each other Grantor, pursuant to the terms hereof, of the Pledged Securities in such partnership, limited liability company or other entity and, upon the occurrence and during the continuance of an Event of Default, to the transfer of such Pledged Securities to the Secured Party or its nominee and to the substitution of the Secured Party or its nominee as a substituted partner, shareholder or member in such partnership, limited liability company or other entity with all the rights, powers and duties of a general partner, limited partner, shareholder or member, as the case may be and (ii) irrevocably waives any and all provisions of the applicable Organizational Documents that conflict with the terms of this Agreement or prohibit, restrict, condition or otherwise affect the grant hereunder of any Lien on any of the Pledged Collateral or any enforcement action which may be taken in respect of any such Lien.
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(c) In the case of each Grantor which is a partner, shareholder or member, as the case may be, in a partnership, limited liability company or other entity, following an Event of Default and upon the request of the Secured Party such Grantor will cause each partnership or limited liability company included in the Pledged Collateral to amend its partnership agreement or limited liability company agreement to include the following provision:
“Notwithstanding any other provision of this agreement (including any transfer restrictions set forth herein), in the event that an Event of Default shall have occurred under that certain CEF or Note referred to therein (as such CEF or any such Note may be amended, modified, supplemented or restated from time to time) dated as of December 4, 2025 (the “CEF”) among Brag House Holdings, Inc. and House of Doge Inc., collectively as issuer (the “Company’), and [●]., as Secured Party (together with its successors and assigns, in such capacity the “Secured Party”), (i) the holders and buyers from time to time parties thereto and the agents party thereto and the Secured Party shall be entitled to exercise any of their respective rights and remedies with respect to equity interests in the [Company], and (ii) each [Member] hereby irrevocably consents to the transfer of any equity interest and all related management and other rights in the [Company] to the Secured Party or any nominee of the Secured Party. The Secured Party is a third-party beneficiary of this provision and this provision cannot be amended or repealed, without the consent of the Secured Party until the CEF and the other Transaction Documents and all obligations thereunder have been indefeasibly paid in full in cash and such agreements have been terminated.”
Article
VI
Remedies
Section 6.01 Remedies.
(a) If any Event of Default shall have occurred and be continuing, the Secured Party may exercise, without any other notice to or demand upon any Grantor, in addition to the other rights and remedies provided for herein, any Note or in any other Transaction Document or otherwise available to it, all the rights and remedies of a secured party upon default under the UCC (whether or not the UCC applies to the affected Pledged Collateral) and also may:
(i) require each Grantor to, and each Grantor hereby agrees that it will at its expense and upon request of the Secured Party immediately, assemble the Pledged Collateral or any part thereof, as directed by the Secured Party and make it available to the Secured Party at a place and time to be designated by the Secured Party;
(ii) without notice (A) Secured Party may exercise any rights under the CleanCore Warrant in any manner as determined by the Secured Party in its sole discretion and (B) except as specified below, sell, resell, assign and deliver or otherwise dispose of the Pledged Collateral or any part thereof, in one or more parcels on any exchange on which the Equity Interests of CleanCore are traded or other recognized market, at any public or private sale, at any of the Secured Party’s offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Secured Party may deem commercially reasonable;
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(iii) exercise any and all rights and remedies of any of the Grantors under or in connection with the Pledged Collateral, or otherwise in respect of the Pledged Collateral, including without limitation, (A) any and all rights of such Grantor to demand or otherwise require payment of any amount under, or performance of any provision of, any Pledged Collateral, (B) exercise all other rights and remedies with respect to the Pledged Collateral, including without limitation, those set forth in Section 9-607 of the UCC and (C) exercise any and all voting, consensual and other rights with respect to any Pledged Collateral.
(b) Each Grantor agrees that, unless the Pledged Collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, to the extent notice of sale shall be required by law in connection with the exercise of remedies following an Event of Default, at least ten days’ notice to such Grantor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. At any sale of the Pledged Collateral, if permitted by applicable law, the Secured Party may be the purchaser, licensee, assignee or recipient of the Pledged Collateral or any part thereof and shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Pledged Collateral sold, assigned or licensed at such sale, to use and apply any of the Secured Obligations as a credit on account of the purchase price of the Pledged Collateral or any part thereof payable at such sale. To the extent permitted by applicable law, each Grantor waives all claims, damages and demands it may acquire against the Secured Party arising out of the exercise by it of any rights hereunder. Each Grantor hereby waives and releases to the fullest extent permitted by law any right or equity of redemption with respect to the Pledged Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling the Pledged Collateral and any other security for the Secured Obligations or otherwise. The Secured Party shall not be liable for failure to collect or realize upon any or all of the Pledged Collateral or for any delay in so doing nor shall it be under any obligation to take any action with regard thereto. The Secured Party shall not be obligated to make any sale of Pledged Collateral regardless of notice of sale having been given. The Secured Party may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Grantor agrees that it would not be commercially unreasonable for the Secured Party to dispose of the Pledged Collateral or any portion thereof by utilizing internet sites that provide for the auction of assets of the type included in the Pledged Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of assets. The Secured Party shall not be obligated to clean-up or otherwise prepare the Pledged Collateral for sale.
(c) If any Event of Default shall have occurred and be continuing, all payments received by any Grantor in respect of the Pledged Collateral shall be received in trust for the benefit of the Secured Party, shall be segregated from other funds of such Grantor and shall be forthwith paid over the Secured Party in the same form as so received (with any necessary endorsement).
(d) If any Event of Default shall have occurred and be continuing, the Secured Party may, without notice to any Grantor except as required by law and at any time or from time to time, charge, set off and otherwise apply all or part of the Secured Obligations against any funds deposited with it or held by it.
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(e) If the Secured Party shall determine to exercise its right to sell all or any of the Securities Collateral of any Grantor pursuant to this Section 6.01, each Grantor agrees that, upon request of the Secured Party, such Grantor will, at its own expense:
(i) provide the Secured Party with such information and projections as may be necessary or, in the opinion of the Secured Party, advisable to enable the Secured Party to effect the sale of such Securities Collateral;
(ii) cause any registration, qualification under or compliance with any Federal or state securities law or laws to be effected with respect to all or any part of the Securities Collateral as soon as practicable and at the sole cost and expense of the Grantors. Each Grantor will cause such registration to be effected (and be kept effective) and will cause such qualification and compliance to be effected (and be kept effective) as may be so requested and as would permit or facilitate the sale and distribution of such Securities Collateral including registration under the Securities Act (or any similar statute then in effect), appropriate qualifications under applicable blue sky or other state securities laws and appropriate compliance with all other requirements of any Governmental Entity; and
(iii) do or cause to be done all such other acts and things as may be necessary to make such sale of such Securities Collateral or any part thereof valid and binding and in compliance with applicable law.
(f) The Secured Party is authorized, in connection with any sale of the Securities Collateral pursuant to this Section 6.01, to deliver or otherwise disclose to any prospective purchaser of the Securities Collateral: (i) any registration statement or prospectus, and all supplements and amendments thereto, prepared pursuant to Section 6.01(e); (ii) any information and projections provided to it pursuant to Section 6.01(e), and (iii) any other information in its possession relating to such Securities Collateral.
Section 6.02 No Waiver and Cumulative Remedies. No failure on the part of the Secured Party to exercise, no course of dealing with respect to, and no delay on the part of the Secured Party in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power, privilege or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power, privilege or remedy; nor shall the Secured Party be required to look first to, enforce or exhaust any other security, collateral or guaranties. All rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies provided by law.
Section 6.03 Application of Proceeds; Deficiency. Upon the exercise by the Secured Party of its remedies hereunder, any proceeds received by the Secured Party in respect of any realization upon any Pledged Collateral shall be applied, together with any other sums then held by the Secured Party pursuant to this Agreement, as determined by the Secured Party in its sole discretion. Following indefeasible payment in full in cash of the Secured Obligations, any remaining proceeds received by the Secured Party in respect of any realization upon any Pledged Collateral shall be delivered to the Grantors or as any applicable Governmental Entity may direct. Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Pledged Collateral are insufficient to pay the Secured Obligations and the fees and other charges of any attorneys employed by the Secured Party to collect such deficiency.
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Article
VII
MISCELLANEOUS
Section 7.01 Concerning Secured Party.
(a) Duty of care. The Secured Party’s sole duty with respect to the custody, safekeeping and physical preservation of the Pledged Collateral in its possession, under Section 9-207 of the UCC or otherwise, shall be to deal with it in the same manner as the Secured Party deals with its own property consisting of similar instruments or interests. The Secured Party shall not have responsibility for (i) ascertaining or taking action whatsoever with regard to any Pledged Collateral (including matters relating to the Pledged Securities, whether or not the Secured Party or any other Person has or is deemed to have knowledge of such matters) or (ii) taking any necessary steps to preserve rights against any Person with respect to any Pledged Collateral.
(b) Reliance. The Secured Party shall be entitled to rely upon any written notice, statement, certificate, order or other document or any telephone message reasonably believed by it to be genuine and correct and to have been signed, sent or made by the proper Person, and, with respect to all matters pertaining to this Agreement and its duties hereunder.
(c) Conflict. If any item of Pledged Collateral also constitutes collateral granted to the Secured Party under any other deed of trust, mortgage, security agreement, pledge or instrument of any type, in the event of any conflict between the provisions hereof and the provisions of such other document in respect of such collateral, the provisions of this Agreement shall control unless the other deed of trust, mortgage, security agreement, pledge or instrument expressly states otherwise.
Section 7.02 Performance By Secured Party. If any Grantor shall fail to perform any covenants contained in this Agreement after giving effect to all applicable grace periods (including covenants to pay insurance, taxes and claims arising by operation of law in respect of the Pledged Collateral and to pay or perform any Grantor obligations under any Pledged Collateral) or if any representation or warranty on the part of any Grantor contained herein shall be breached, the Secured Party may (but shall not be obligated to) during the existence of an Event of Default do the same or cause it to be done or remedy any such breach, and may make payments for such purpose; provided, however, that the Secured Party shall in no event be bound to inquire into the validity of any tax, Lien, imposition or other obligation which such Grantor fails to pay or perform as and when required hereby and which such Grantor does not contest in accordance with the provisions of the Notes. Any and all amounts so paid by the Secured Party shall be reimbursed by the Grantors in accordance with the provisions of Section 7.07. Neither the provisions of this Section 7.02 nor any action taken by the Secured Party pursuant to the provisions of this Section 7.02 shall prevent any such failure to observe any covenant contained in this Agreement nor any breach of representation or warranty from constituting an Event of Default.
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Section 7.03 Power of Attorney. Each Grantor hereby appoints the Secured Party its attorney-in-fact, with full power and authority in the place and stead of such Grantor and in the name of such Grantor, or otherwise, from time to time during the existence of a default or an Event of Default in the Secured Party’s discretion to take any action and to execute any instrument consistent with the terms of the Notes and the other Transaction Documents which the Secured Party may deem necessary or advisable to accomplish the purposes hereof (but the Secured Party shall not be obligated to and neither the Secured Party nor any Secured Party shall have any liability to such Grantor or any third party for failure to so do or take action). The foregoing grant of authority is a power of attorney coupled with an interest and such appointment shall be irrevocable for the term hereof. Each Grantor hereby ratifies all that such attorney shall lawfully do or cause to be done by virtue hereof.
Section 7.04 Continuing Security Interest and Assignment. This Agreement shall create a continuing security interest in the Pledged Collateral and shall (a) be binding upon the Grantors, their respective successors and assigns and (b) inure, together with the rights and remedies of the Secured Party hereunder, to the benefit of the Secured Party and its permitted successors, transferees and assigns and its officers, directors, employees, affiliates, agents, advisors and controlling Persons; provided that, no Grantor shall assign or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the Secured Party and any attempted assignment or transfer without such consent shall be null and void. Without limiting the generality of the foregoing clause (b), any Secured Party may assign or otherwise transfer any indebtedness held by it secured by this Agreement to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Secured Party, herein or otherwise, subject however, to the provisions of the Notes.
Section 7.05 Modification in Writing. None of the terms or provisions of this Agreement may be amended, modified, supplemented, terminated or waived, and no consent to any departure by any Grantor therefrom shall be effective, except by a written instrument signed by the Secured Party. Any amendment, modification or supplement of any provision hereof, any waiver of any provision hereof and any consent to any departure by any Grantor from the terms of any provision hereof, in each case, shall be effective only in the specific instance and for the specific purpose for which made or given. This Agreement shall be construed as a separate agreement with respect to each Grantor and may be amended, modified, supplemented, terminated or waived with respect to any Grantor without the approval of any other Grantor and without affecting the obligations of any other Grantor hereunder.
Section 7.06 Notices. Unless otherwise provided herein, any notice or other communication required or permitted to be given under this Agreement shall be in writing and shall be given in the manner and become effective as set forth in the CEF, and, as to any Grantor, addressed to it at the address of such Grantor set forth in Schedule 5 hereof and as to the Secured Party, addressed to it at the address set forth in the CEF, or in each case at such other address as shall be designated by such party in a written notice to the other party.
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Section 7.07 Indemnity and Expenses.
(a) Each Grantor hereby agrees to indemnify and hold harmless the Secured Party (and any sub-agent thereof), and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) from any losses, damages, liabilities, claims and related expenses (including the fees and expenses of any counsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all fees, expenses and time charges for attorneys who are employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any Person (including any Grantor or any other Issuer Party) other than such Indemnitee and its Related Parties arising out of, in connection with or resulting from this Agreement (including, without limitation, enforcement of this Agreement) or any failure of any Secured Obligations to be the legal, valid, and binding obligations of any Issuer Party enforceable against such Issuer Party in accordance with their terms, whether brought by a third party or by such Grantor or any other Issuer Party, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses resulted from the gross negligence or willful misconduct of such Indemnitee as determined by a court of competent jurisdiction in a final non-appealable order.
(b) To the fullest extent permitted by applicable law, each Grantor hereby agrees not to assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Transaction Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, or the use of proceeds thereof. No Indemnitee shall be liable for any damages arising from the use of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Transaction Documents or the transactions contemplated hereby or thereby by unintended recipients.
(c) Each Grantor agrees to pay or reimburse the Secured Party for all its costs and expenses incurred in collecting against such Grantor in its Secured Obligations or otherwise protecting, enforcing or preserving any rights or remedies under this Agreement and the other Transaction Documents to which such Grantor is a party, including the fees and other charges of counsel to the Secured Party.
(d) All amounts due under this Section 7.07 shall be payable promptly (and in any event within five Business Days) after demand therefor, shall constitute Secured Obligations and, if not timely paid, shall bear interest until paid at a rate the Default Rate (as defined in the Notes).
(e) Without prejudice to the survival of any other agreement of any Grantor under this Agreement or any other Transaction Documents, the agreements and obligations of each Grantor contained in this Section 7.07 shall survive termination of the Transaction Documents and payment in full of the Secured Obligations and all other amounts payable under this Agreement.
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Section 7.08 Governing Law, Consent to Jurisdiction and Waiver of Jury Trial. This Agreement and the rights and obligations of the parties hereunder shall, in all respects, be governed by, and construed in accordance with, the laws (excluding the principles of conflict of laws) of the State of New York (including Section 5-1401 and Section 5-1402 of the General Obligations Laws of the State of New York), including all matters of construction, validity and performance. The other provisions of Section 7(b) and 7(c) of each Note are incorporated herein, mutatis mutandis, as if a part hereof.
Section 7.09 Severability of Provisions. Any provision hereof which is invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without invalidating the remaining provisions hereof or affecting the validity, legality or enforceability of such provision in any other jurisdiction.
Section 7.10 Counterparts; Integration; Effectiveness. This Agreement and any amendments, waivers, consents or supplements hereto may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all taken together shall constitute a single contract. This Agreement and the other Transaction Documents, and any separate letter agreements with respect to fees payable to the Secured Party, constitute the entire contract among the parties with respect to the subject matter hereof and supersede all previous agreements and understandings, oral or written, with respect thereto. Except as provided in Section 6(c) of each Note, this Agreement shall become effective when it shall have been executed by the Secured Party and when the Secured Party shall have received counterparts hereof signed by each of the other parties hereto. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement. The words “execution,” “signed,” “signature,” and words of similar import in this Agreement shall be deemed to include electronic or digital signatures or electronic records, each of which shall be of the same effect, validity, and enforceability as manually executed signatures or a paper-based recordkeeping system, as the case may be, to the extent and as provided for under applicable law, including the Electronic Signatures in Global and National Commerce Act of 2000 (15 U.S.C. §§ 7001 to 7031), the Uniform Electronic Transactions Act (UETA), or any state law based on the UETA, including the New York Electronic Signatures and Records Act (N.Y. Tech. §§ 301 to 309).
Section 7.11 No Release. Nothing set forth in this Agreement or any other Transaction Document, nor the exercise by the Secured Party of any of the rights or remedies hereunder, shall relieve any Grantor from the performance of any term, covenant, condition or agreement on such Grantor’s part to be performed or observed in respect of any of the Pledged Collateral or from any liability to any Person in respect of any of the Pledged Collateral or shall impose any obligation on the Secured Party to perform or observe any such term, covenant, condition or agreement on any Grantor’s part to be so performed or observed or shall impose any liability on the Secured Party for any act or omission on the part of such Grantor relating thereto or for any breach of any representation or warranty on the part of such Grantor contained in this Agreement, any Note, the CEF or the other Transaction Documents, or in respect of the Pledged Collateral or made in connection herewith or therewith. Anything herein to the contrary notwithstanding, the Secured Party shall not have any obligation or liability under any contracts, agreements and other documents included in the Pledged Collateral by reason of this Agreement, nor shall the Secured Party be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any action to collect or enforce any such contract, agreement or other document included in the Pledged Collateral. The obligations of each Grantor contained in this Section 7.11 shall survive the termination hereof and the discharge of such Grantor’s other obligations under this Agreement, the Notes, the CEF and the other Transaction Documents.
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Section 7.12 Obligations Absolute. Each Grantor hereby waives demand, notice, protest, notice of acceptance of this Agreement, notice of loans made, credit extended, Pledged Collateral received or delivered or other action taken in reliance hereon and all other demands and notices of any description. All obligations of each Grantor hereunder shall be absolute and unconditional irrespective of:
(a) any illegality or lack of validity or enforceability of any Secured Obligation or any Transaction Document or any related agreement or instrument;
(b) any change in the time, place or manner of payment of, or in any other term of, the Secured Obligations or any other obligation of any Issuer Party under any Transaction Document, or any rescission, waiver, amendment or other modification of any Transaction Document or any other agreement, including any increase in the Secured Obligations resulting from any extension of additional credit or otherwise;
(c) any taking, exchange, substitution, release, impairment or non-perfection of any Pledged Collateral, or any taking, release, impairment, amendment, waiver or other modification of any guaranty, for the Secured Obligations;
(d) any manner of sale, disposition or application of proceeds of any Pledged Collateral or any other collateral or other assets to all or part of the Secured Obligations;
(e) any default, failure or delay, willful or otherwise, in the performance of the Secured Obligations;
(f) any change, restructuring or termination of the corporate structure, ownership or existence of any Issuer Party or any of its subsidiaries or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Company or its assets or any resulting release or discharge of any Secured Obligations;
(g) any failure of the Secured Party to disclose to any Issuer Party any information relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of any other Issuer Party now or hereafter known to the Secured Party; and each Grantor waiving any duty of the Secured Party to disclose such information;
(h) the failure of any other Person to execute or deliver this Agreement or any other agreement or the release or reduction of liability of any other grantor or surety with respect to the Secured Obligations;
(i) the failure of the Secured Party to assert any claim or demand or to exercise or enforce any right or remedy under the provisions of any Transaction Document or otherwise;
(j) any defense, set-off or counterclaim (other than a defense of payment or performance) that may at any time be available to, or be asserted by, Pubco, HOD or any Issuer Party against the Secured Party; or
(k) any other circumstance (including, without limitation, any statute of limitations) or manner of administering the financing arrangements or any existence of or reliance on any representation by any Secured Party that might vary the risk of any Grantor or otherwise operate as a defense available to, or a legal or equitable discharge of, any Issuer Party or any other guarantor or surety.
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Section 7.13 Termination; Revival and Reinstatement of Secured Obligations. At such time as all Notes and the other Transaction Documents and all Secured Obligations have been indefeasibly paid in cash (other than contingent indemnification obligations in which no claim has been made or is reasonably foreseeable) and performed in full, this Agreement (other than those provisions hereunder that by their express terms survive termination) shall automatically terminate. At the request and sole expense of the Grantors following such termination, the Secured Party shall (without representation, warranty or recourse), deliver to such Grantor any Pledged Collateral of such Grantor held by the Secured Party and execute and deliver to such Grantor termination documents to evidence such termination. If the incurrence or payment of the Secured Obligations or the transfer to the Secured Party of any property should for any reason subsequently be declared to be void or voidable under any state or federal law relating to creditors’ rights, including provisions of the Bankruptcy Code relating to fraudulent conveyances, preferences, or other voidable or recoverable payments of money or transfers of property (collectively, a “Voidable Transfer”), and if the Secured Party is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice of its counsel, then, as to any such Voidable Transfer, or the amount thereof that the Secured Party is required or elects to repay or restore, and as to all reasonable costs, expenses, and attorney’s fees of the Secured Party, the Secured Obligations shall automatically shall be revived, reinstated, and restored and shall exist as though such Voidable Transfer had never been made and shall be secured by the Liens set forth in this Agreement. The provisions of this Section shall survive the satisfaction and payment of the Secured Obligations and the termination of this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
| GRANTOR | ||
| BRAG HOUSE HOLDINGS, INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
| GRANTOR | ||
| DOGECOIN VENTURES, INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
| [●]., in its capacity as Secured Party | ||
| By: | ||
| Its: | ||
| By: | |||
| Its: | |||
| By: | |||
| Name: | |||
| Title: | |||
Schedule 1
Pledged Securities
| Owner of Equity Interests | Name of Issuer | Number and Class of Issued Shares | Certificated? | Percentage Pledged |
Schedule 2
Filings and Maintenance of Perfected Security Interest
| Type of Filing | Entity | Applicable Collateral Document | Filing Office |
Delivery of the following Stock Certificates and Undated Transfer Power
Brag House Holdings, Inc.: Stock Certificate Number 537, dated November 24, 2025, issued by CleanCore Solutions, Inc., a Nevada corporation, in favor of Brag House Holdings, Inc. representing 4,000,000 shares of Class B common stock
Dogecoin Ventures, Inc.: Stock Certificate Number 505, dated November 13, 2025, issued by CleanCore Solutions, Inc., a Nevada corporation, in favor of Dogecoin Ventures, Inc., representing 9,000,000 shares of Class B common stock
Delivery of the following Pre-Funded Warrant and Undated Transfer Power
Dogecoin Ventures, Inc.: Pre-Funded Common Stock Purchase Warrant, dated September 5, 2025, issued by CleanCore Solutions, Inc., a Nevada corporation, in favor of Dogecoin Ventures, Inc. for 1,000,000 Warrant Shares
Schedule 3
Securities Accounts
| Respondent | Financial Institution(s) / Securities Intermediary where Accounts Maintained | Account Numbers | Descriptions of Accounts |
None.
Schedule 4
Grantor Information
Pubco
| Legal Name: | |
| Jurisdiction of Incorporation: | |
| Type of Organization: | |
| Organizational ID Number: | |
| EIN Number | |
| Chief Executive Office: |
Dogecoin
| Legal Name: | |
| Jurisdiction of Incorporation: | |
| Type of Organization: | |
| Organizational ID Number: | |
| EIN Number | |
| Chief Executive Office: |
Schedule 5
Grantor Notice Information
| If to Pubco, to: | Brag House Holdings, Inc. |
| 45 Park Street Montclair, NJ 07042 Attention: Lavell Juan Malloy, II, CEO Email: [email protected] | |
| If to Dogecoin, to: | Dogecoin Ventures, Inc. |
| 2045 NW 1st Ave Miami, Florida 33127 Attention: Marco Margiotta, CEO and Charles Park, CFO; Email: [email protected] and [email protected] | |
| With copy to (which shall not constitute notice): | Dogecoin Ventures, Inc. 2045 NW 1st Ave Miami, Florida 33127 Attention: Chief Legal Officer Email: [email protected] |
Exhibit 10.5
Execution Version
GLOBAL GUARANTY AGREEMENT
This Guaranty (as amended, amended and restated, supplemented or otherwise modified from time to time, this “Guaranty”) is made as of December 4, 2025, by (a) Brag House Inc., a Delaware corporation, Brag House Ltd., a company incorporated pursuant to the laws of the United Kingdom, and Brag House Merger Sub, Inc., a Delaware corporation (collectively, the “Brag House Guarantors”), (b) Dogecoin Ventures, Inc., a Texas corporation, The Official Dogecoin Treasury and Reserve Inc., a Texas corporation, and House of Doge Canada Inc., a corporation organized under the laws of Canda (collectively, the “Doge Guarantors”; and the Brag House Guarantors, the Doge Guarantors and any subsequent party that may join this Guaranty, collectively, the “Guarantors” and, each individually, a “Guarantor”, in favor of (c) [●]. (“[●]” or the “Creditor”), with respect to all obligations of BRAG HOUSE HOLDINGS, INC., a Delaware corporation (“Pubco”) and HOUSE OF DOGE INC., Texas corporation (“HOD”; and HOD, together with Pubco, collectively and individually, the “Debtor”) owed to the Creditor.
RECITALS
WHEREAS, the Creditor and the Debtor have entered into a Common Stock Purchase Agreement (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Agreement”) dated as of December 4, 2025 and a certain convertible promissory note (the “Promissory Note”) pursuant to which the Creditor shall provide advances to the Debtor (the “Advances”) pursuant to and upon the terms and conditions of the Agreement and the Promissory Note, in the aggregate amount of up to $11,000,000;
WHEREAS, it is a condition precedent to the Creditor’s obligation to provide the Advances to the Debtor that each Guarantor guarantees all of the Debtor’s obligations under the Agreement and the Promissory Note evidencing the Advances, and all other instruments, agreements or other items (collectively, the “Transaction Documents”) executed or delivered by the Debtor to the Creditor in connection with or related to the Agreement. The Creditor is only willing to enter into the Agreement and provide the Advances pursuant to the Promissory Note to the Debtor if each Guarantor agrees to execute and deliver to the Creditor this Guaranty; and
WHEREAS, the Guarantors are, or will be at the time of making the Advances, wholly-owned, or majority-owned subsidiaries of the Debtor and will benefit, directly or indirectly, from the Debtor entering into the Agreement, the making of the Advances, and other Transaction Documents and extensions of credit the Creditor will make to Debtor;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Guarantor covenants and agrees as follows:
1. Guaranty of Payment and Performance. Each Guarantor, jointly and severally, hereby guarantees to the Creditor the full, prompt and unconditional payment when due (whether at maturity, by acceleration or otherwise) and the performance, of all liabilities (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), agreements and other obligations of the Debtor to the Creditor contained in the Transaction Documents (all the foregoing, collectively, the “Obligations”). This Guaranty is an absolute, unconditional and continuing guaranty of the full and punctual payment and performance of the Obligations and not of their collectability only and is in no way conditioned upon any requirement that the Creditor first attempt to collect or require the performance of any of the Obligations from the Debtor or resort to any security or other means of obtaining their payment. Should the Debtor default in the payment or performance of any of the Obligations, the obligations of the Guarantors hereunder shall become immediately due and payable to the Creditor, without demand or notice of any nature, all of which are expressly waived by the Guarantors.
2. Limited Guaranty. The liability of the Guarantors hereunder shall be limited to the amount of the Obligations due to the Creditor.
3. Waivers by Guarantors; Creditor’s Freedom to Act. Each Guarantor hereby agrees that the Obligations will be paid and performed strictly in accordance with their terms regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Creditor with respect thereto. Each Guarantor waives presentment, demand, protest, notice of acceptance, notice of Obligations incurred and all other notices of any kind, all defenses that may be available by virtue of any valuation, stay, moratorium law or other similar law now or hereafter in effect (other than payment in full of the Obligations), any right to require the marshalling of assets of the Debtor, and all suretyship defenses generally. Without limiting the generality of the foregoing, each Guarantor agrees to the provisions of any instrument evidencing, securing or otherwise executed in connection with any Obligation and agrees that the obligations of such Guarantor hereunder shall not be released or discharged, in whole or in part, or otherwise affected by (i) the failure of the Creditor to assert any claim or demand or to enforce any right or remedy against the Debtor; (ii) any extensions or renewals of, or alteration of the terms of, any Obligation or any portion thereof unless entered into by the Creditor; (iii) any rescissions, waivers, amendments or modifications of any of the terms or provisions of any agreement evidencing, securing or otherwise executed in connection with any Obligation unless entered into by the Creditor; (iv) the substitution or release of any entity primarily or secondarily liable for any Obligation; (v) the adequacy of any rights the Creditor may have against any collateral or other means of obtaining payment or performance of the Obligations; (vi) the impairment of any collateral securing the Obligations, including without limitation the failure to perfect or preserve any rights the Creditor might have in such collateral or the substitution, exchange, surrender, release, loss or destruction of any such collateral; (vii) failure to obtain or maintain a right of contribution for the benefit of such Guarantor; (viii) errors or omissions in connection with the Creditor’s administration of the Obligations (except behavior constituting bad faith); or (ix) any other act or omission that might in any manner or to any extent vary the risk of any Guarantor or otherwise operate as a release or discharge of any Guarantor, all of which may be done without notice to any Guarantor.
4. Unenforceability of Obligations Against Debtor. If for any reason the Debtor is under no legal obligation to discharge or perform any of the Obligations, or if any of the Obligations have become irrecoverable from the Debtor by operation of law or for any other reason, this Guaranty shall nevertheless be binding on the Guarantors to the same extent as if the Guarantors at all times had been the principal obligors on all such Obligations. In the event that acceleration of the time for payment of the Obligations is stayed upon the insolvency, bankruptcy or reorganization of the Debtor, or for any other reason, all such amounts otherwise subject to acceleration under the terms of any agreement evidencing, securing or otherwise executed in connection with any Obligation shall be immediately due and payable by the Guarantors.
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5. Subrogation; Subordination. Until the payment and performance in full of all Obligations, the Guarantors shall not exercise any rights against the Debtor arising as a result of payment by the Guarantors hereunder, by way of subrogation or otherwise, and will not prove any claim in competition with the Creditor in respect of any payment hereunder in bankruptcy or insolvency proceedings of any nature; the Guarantors will not claim any set-off or counterclaim against the Debtor in respect of any liability of the Guarantors to the Debtor; and the Guarantors waive any benefit of and any right to participate in any collateral that may be held by the Creditor. The payment of any amounts due with respect to any indebtedness of the Debtor now or hereafter held by the Guarantor is hereby subordinated to the prior payment in full of the Obligations. The Guarantor agrees that after the occurrence of any default in the payment or performance of the Obligations, the Guarantors will not demand, sue for or otherwise attempt to collect any such indebtedness of the Debtor to the Guarantors until the Obligations shall have been paid or performed in full. If, notwithstanding the foregoing sentence, the Guarantors shall collect, enforce or receive any amounts in respect of such indebtedness, such amounts shall be collected, enforced and received by the Guarantor as trustee for the Creditor and be paid over to the Creditor on account of the Obligations without affecting in any manner the liability of the Guarantors under the other provisions of this Guaranty.
7. Termination; Reinstatement. This Guaranty is irrevocable and shall continue until such time as the Obligations have been indefeasibly paid in cash or performed in full. This Guaranty shall be reinstated if at any time any payment made or value received with respect to an Obligation is rescinded or must otherwise be returned by the Creditor upon the insolvency, bankruptcy or reorganization of the Debtor, or otherwise, all as though such payment had not been made or value received.
8. Successors and Assigns. This Guaranty shall be binding upon each Guarantor, its successors and assigns, and shall inure to the benefit of and be enforceable by the Creditor and the Creditor’s shareholders, officers, directors, agents, successors and assigns.
9. Amendments and Waivers. No amendment or waiver of any provision of this Guaranty nor consent to any departure by the Guarantor therefrom shall be effective unless the same shall be in writing and signed by the Creditor. No failure on the part of the Creditor to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right.
10. Notices. All notices and other communications called for hereunder to the Creditor or the Debtor shall be made in writing as provided in the Agreement. All notices and other communications called for hereunder to the Guarantors shall be made in writing as provided on Schedule I attached hereto or as the Guarantors may otherwise notify the Creditor.
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11. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Guaranty is intended to take effect as a sealed instrument and shall be governed by, and construed in accordance with, the laws (excluding the principles of conflicts of laws) of the State of New York (including Section 5-1401 and Section 5-1402 of the General Obligations Law of the State of New York), including all matters of construction, validity and performance. The Guarantor agrees that any suit for the enforcement of this Guaranty may be brought in the state courts of the State of New York sitting in New York County and, if a basis for federal jurisdiction exists, the non-exclusive personal jurisdiction of any United States District Court for the Southern District of New York, and consents to the non-exclusive jurisdiction of such court and to service of process in any such suit’s being made upon any Guarantor by mail at the address set forth at the head of this Guaranty. The Guarantor hereby waives any objection that it may now or hereafter have to the venue of any such suit or any such court or that such suit was brought in an inconvenient court. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREIN, THE PERFORMANCE THEREOF OR THE FINANCINGS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO THIS GUARANTY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH.
12. Counterparts; Effectiveness. This Guaranty may be executed in identical counterparts, both which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. Facsimile or other electronically scanned and delivered signatures (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com), including by e-mail attachment, shall be deemed to have been duly and validly delivered and be valid and effective for all purposes of this Guaranty.
[Rest of page intentionally left blank. Signature page follows.]
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IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed and delivered as a sealed instrument as of the date appearing on page one.
| BRAG HOUSE INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| BRAG HOUSE LTD. | ||
| By: | ||
| Name: | ||
| Title: | ||
| BRAG HOUSE MERGER SUB, INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
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| DOGECOIN VENTURES, INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| THE OFFICIAL DOGECOIN TREASURY AND RESERVE INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| HOUSE OF DOGE CANADA INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
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Schedule I
The Guarantors
| Brag House Inc. |
45 Park Street, Montclair, NJ 07042 Attention: Lavell Juan Malloy, II, President Email: [email protected] Telephone: (413) 398-2845 |
| Brag House Ltd. |
6 Heddon Street, London, England,W1B 4BT Attention: Lavell Juan Malloy, II, President Email: [email protected] Telephone: (413) 398-2845 |
| Brag House Merger Sub, Inc. |
45 Park Street, Montclair, NJ 07042 Attention: Daniel Leibovich, President Email: [email protected] Telephone: (413) 398-2845 |
| Dogecoin Ventures, Inc. |
2045 NW 1st Ave Miami, Florida 33127 Attention: Marco Margiotta, CEO and Charles Park, CFO; Email: [email protected] and [email protected] |
| The Official Dogecoin Treasury and Reserve Inc. |
2045 NW 1st Ave Miami, Florida 33127 Attention: Marco Margiotta, CEO and Charles Park, CFO; Email: [email protected] and [email protected] |
| House of Doge Canada Inc. |
2045 NW 1st Ave Miami, Florida 33127 Attention: Marco Margiotta, CEO and Charles Park, CFO; Email: [email protected] and [email protected] |
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Exhibit 10.6
Execution Version
SUBORDINATION AND INTERCREDITOR AGREEMENT
THIS SUBORDINATION AND INTERCREDITOR AGREEMENT (as amended, restated, supplemented, or otherwise modified from time to time, this “Agreement”) is entered into as of December 4, 2025 (the “Effective Date”), by and between [●]., a Cayman Islands exempt limited company, in its capacity as noteholder and as secured party under the Senior Note Documents (as defined herein), including its successors and assigns in such capacity from time to time (“Senior Noteholder”), and BRAG HOUSE HOLDINGS, INC., a Delaware corporation (“Pubco”), in its capacity as noteholder and as secured party under the Subordinated Note Documents (as defined below), including its successors and assigns in such capacity from time to time (“Subordinated Noteholder”); and acknowledged by the signatories to the Acknowledgement Page attached hereto.
R E C I T A L S
WHEREAS, Pubco and House of Doge Inc., a Texas corporation (“HOD”; and HOD, together with Pubco, collectively, the “Borrowers”), issued a Convertible Promissory Note, with Number TBH-1, dated as of December 4, 2025, in favor of Senior Noteholder (such Promissory Note, as amended, restated, supplemented or otherwise modified from time to time, the “Senior Note”), in the original principal amount of up to $11,000,000.
WHEREAS, in connection with the issuance of the Senior Note, Dogecoin Ventures, Inc., a Texas corporation (“Dogecoin”), together with certain affiliates of Dogecoin and Pubco, executed and delivered that certain Global Guaranty Agreement, dated as of December 4, 2025 (such Global Guaranty Agreement, as amended, restated, supplemented or otherwise modified from time to time, the “Senior Guaranty Agreement”), in favor of Senior Noteholder, pursuant to which, among other things, the “Guarantors” identified therein guaranteed all obligations, debts and liabilities of the Borrowers and the other Guarantors under the Senior Note Documents.
WHEREAS, in connection with the issuance of the Senior Note, Pubco and Dogecoin executed and delivered that certain Pledge Agreement, dated as of December 4, 2025 (such Pledge Agreement, as amended, restated, supplemented, or otherwise modified from time to time, the “Senior Pledge Agreement”), with Senior Noteholder, pursuant to which, among other things, Pubco and Dogecoin pledged certain equity interests in CleanCore Solutions, Inc., a Nevada corporation (“CleanCore”) and the CleanCore Warrant (as defined below) issued by CleanCore, as therein provided.
WHEREAS, on October 14, 2025, HOD executed and delivered that certain Secured Promissory Note in favor of Pubco in the original principal amount of up to $8,000,000, of which the principal amount of $8,779,000 is outstanding as of the Effective Date (such Secured Promissory Note, as amended by the Amendment to Secured Promissory Note dated as of Effective Date, and as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms hereof, the “Subordinated Note”).
WHEREAS, in connection with the execution and delivery of the Subordinated Note, HOD, (i) Dogecoin and certain other “Grantors” identified therein executed and delivered that certain Security and Pledge Agreement, dated as of October 14, 2025 (as amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms hereof, the “Subordinated Pledge Agreement”), pursuant to which, among other things, Dogecoin pledged the CleanCore Equity Interests (as defined below); and (ii) Dogecoin and certain other “Guarantors” identified therein executed and delivered that certain Guaranty, dated as of October 14, 2025 (as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms hereof, the “Subordinated Guaranty Agreement”), pursuant to which, among other things, the “Guarantors” identified therein guaranteed the obligations under the Subordinated Note.
WHEREAS, to facilitate the issuance of the Senior Note, Subordinated Noteholder, Dogecoin and the other “Guarantors” under the Subordinated Guaranty Agreement and other “Grantors” under the Subordinated Pledge Agreement have agreed to enter into this Agreement to, among other things, acknowledge senior priority, perfected Lien of Senior Creditor over the CleanCore Equity Interests and other Shared Collateral (as defined below) and to subordinated the Lien of Subordinated Creditor in such CleanCore Equity Interests and other Shared Collateral as herein provided.
WHEREAS, Senior Noteholder and Subordinated Noteholder desire to enter into this Agreement in order to set forth the relative rights and priorities of Senior Creditor and Subordinated Creditor under the Senior Note Documents and the Subordinated Note Documents.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and obligations herein set forth, and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties hereto hereby agree as follows:
1. Definitions.
1.1 Definitions. The following terms shall have the following meanings in this Agreement:
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with a Person, as such terms are used in and construed under Rule 144. As used herein, (a) “Rule 144” means Rule 144 promulgated by the U.S. Securities and Exchange Commission or any successor entity (the “Commission”) pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect; and (b) “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder.
“Agreement” has the meaning given to such term in the preamble.
“Bankruptcy Code” means Title 11 of the United States Code, as amended from time to time and any successor statute and all rules and regulations promulgated thereunder.
“Borrowers” has the meaning given to such term in the recitals.
“CleanCore” has the meaning given to such term in the recitals.
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“CleanCore Equity Interests” means, collectively, (a) the Equity Interests of CleanCore identified on Schedule 1 to the Senior Pledge Agreement as of the Effective Date and (b) the CleanCore Warrant and any Warrant Shares (as defined therein) acquired upon exercise thereof, and (c) the Equity Interests of CleanCore acquired by any “Grantor” to the Senior Pledge Agreement after the Effective Date that are pledged to Senior Creditor pursuant to the terms of the Senior Pledge Agreement.
“CleanCore Warrant” means that certain Pre-Funded Common Stock Purchase Warrant of CleanCore Solutions, Inc., dated September 5, 2025 (as amended, restated, supplemented or otherwise modified from time to time), executed by CleanCore in favor of Dogecoin and for 1,000,000 Warrant Shares.
“Companies” or “Company” means Pubco, HOD, Dogecoin and any other Person that provides a guaranty of or collateral for any Senior Note Obligations, currently existing or arising in the future.
“Disposition” means the sale, assignment, transfer, license, lease (as lessor), exchange, or other disposition (including any sale and leaseback transaction) of any property by any Person (or the granting of any option or other right to do any of the foregoing).
“Distribution” means, with respect to any indebtedness, obligation or security: (a) any payment, contribution, distribution or other transfer by or on behalf of any Person of cash, securities or other property, by set-off or otherwise, on account of such indebtedness, obligation or security; (b) any redemption, purchase, exercise of rights under or other acquisition of such indebtedness, obligation or security by any Person; or (c) the granting of any lien or security interest to or for the benefit of the holders of such indebtedness, obligation or security in or upon any property of any Person.
“Dogecoin” has the meaning given to such term in the recitals.
“Effective Date has the meaning given to such term in the preamble.
“Equity Interests” means, with respect to any Person, all of the shares of capital stock, limited liability company interests or membership interests of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock, limited liability company interests or membership interests of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock, limited liability company interests or membership interests of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination..
“Final Payout Date” means the date on which all Senior Debt is indefeasible paid in full in cash and all other Senior Note Obligations have been performed in full.
“Governmental Entity” has the meaning set forth in each Senior Note.
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“HOD” has the meaning given to such term in the recitals.
“Lien” means (a) any lien, mortgage, pledge, assignment, hypothecation, deed of trust, security interest, charge or encumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any lease in the nature thereof) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing, and (b) in the case of Equity Interests, any purchase option, call or similar right of a third party with respect to such Equity Interests.
“Person” means a natural individual, partnership, sole proprietorship, corporation (including a business trust), joint stock company, trust, unincorporated association, joint venture, limited liability company, any Governmental Entity or any other entity of whatever nature.
“Pledged Collateral” has the meaning given to such term in Section 4.3.
“Proceeding” means any voluntary or involuntary insolvency, bankruptcy, receivership, custodianship, liquidation, dissolution, reorganization, assignment for the benefit of creditors, appointment of a custodian, receiver, trustee or other officer with similar powers or any other proceeding for the liquidation, dissolution or other winding up of a Person.
“Pubco” has the meaning given to such term in the preamble.
“Senior Event of Default” means any “Event of Default” under the Senior Note Documents or any condition or event that, after notice or lapse of time or both, would constitute such an “Event of Default” if that condition or event were not cured or removed within any applicable grace or cure period set forth therein.
“Senior Creditor” means Senior Noteholder and each Person from time to time that becomes a holder of any Senior Debt now or hereafter outstanding, and, in each case, their respective successors and permitted assigns.
“Senior Debt” means all of the obligations of Pubco, HOD, Dogecoin and any other Person evidenced by or incurred pursuant to the Senior Note Documents, including the Senior Note Obligations.
“Senior Guaranty Agreement” has the meaning given to such term in the recitals.
“Senior Note” has the meaning given to such term in the recitals.
“Senior Note Documents” means the Senior Note, the Senior Guaranty Agreement, the Senior Pledge Agreement, this Agreement and all other agreements, documents and instruments executed from time to time in connection therewith, as the same may be amended, supplemented or otherwise modified from time to time to the extent permitted by the terms of this Agreement.
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“Senior Note Obligations” means all obligations, liabilities and indebtedness of every nature of Pubco, HOD, Dogecoin or any other “Guarantor” under the Senior Guaranty Agreement or any other Company from time to time owed to Senior Creditor under the Senior Note Documents, including, without limitation, the “Secured Obligations” (as defined in the Senior Pledge Agreement) and the “Obligations” (as defined in the Senior Guaranty Agreement) and any other indebtedness, reimbursement obligations, claims and other liabilities and obligations, whether primary, secondary, direct, indirect, absolute, contingent, fixed or otherwise, heretofore, now and from time to time hereafter owing, due or payable, whether before or after the commencement of a Proceeding under the Bankruptcy Code, together with (a) any amendments, modifications, renewals, supplements, restatements, increases or extensions thereof and (b) any interest, fees, premiums and other obligations that accrue thereon after the commencement of a Proceeding, without regard to whether or not such claims are allowed or allowable in a Proceeding.
“Senior Noteholder” has the meaning given to such term in the preamble.
“Senior Pledge Agreement” has the meaning given to such term in the recitals.
“Shared Collateral” means the CleanCore Equity Interests and all other “Pledged Collateral” as defined in the Senior Pledge Agreement.
“Subordinated Creditor” means Subordinated Noteholder and each Person from time to time that becomes a holder of any Subordinated Debt now or hereafter outstanding, and, in each case, their respective successors and permitted assigns.
“Subordinated Debt” means all of the obligations of HOD, Dogecoin and any other Person evidenced by or incurred pursuant to the Subordinated Note Documents, including the Subordinated Note Obligations.
“Subordinated Guaranty Agreement” has the meaning given to such term in the recitals.
“Subordinated Note” has the meaning given to such term in the recitals.
“Subordinated Note Documents” means the Subordinated Note, the Subordinated Guaranty Agreement, the Subordinated Pledge Agreement and all other agreements, documents and instruments executed from time to time in connection therewith, as the same may be amended, supplemented or otherwise modified from time to time to the extent permitted by the terms of this Agreement.
“Subordinated Note Obligations” means all obligations, liabilities and indebtedness of every nature of HOD or any other Company from time to time owed to Subordinated Creditor under the Subordinated Note Documents, including, without limitation, any other indebtedness, reimbursement obligations, claims and other liabilities and obligations, whether primary, secondary, direct, indirect, absolute, contingent, fixed or otherwise, heretofore, now and from time to time hereafter owing, due or payable, whether before or after the commencement of a Proceeding under the Bankruptcy Code, together with (a) any amendments, modifications, renewals, supplements, restatements, increases or extensions thereof and (b) any interest, fees, premiums and other obligations that accrue thereon after the commencement of a Proceeding, without regard to whether or not such claims are allowed or allowable in a Proceeding.
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“Subordinated Noteholder” has the meaning given to such term in the preamble.
“Subordinated Pledge Agreement” has the meaning given to such term in the recitals.
“Subordinated Securities” means any notes, other debt securities, or equity securities of Pubco, HOD or any Company that are issued in a Proceeding in substitution of all or any portion of the Subordinated Debt pursuant to a confirmed plan of reorganization or adjustment, in each case that (a) are subordinated in right of payment, performance, and otherwise to the Senior Debt (or any replacement of the Senior Debt, including any notes or other securities issued in substitution of all or any portion of the Senior Debt) to at least the same extent that the Subordinated Debt is subordinated to the Senior Debt pursuant to this Agreement, (b) do not have the benefit of any obligation of any Company (whether as issuer, guarantor, or otherwise) unless the Senior Debt has at least the same benefit of the obligation of such Person and the obligations of such Person to Subordinated Creditor are subordinated to the same extent as the obligations of such Persons pursuant to this Agreement, and (c) do not have any terms, and are not subject to or entitled to the benefit of any agreement or instrument that has terms, that are more burdensome to the issuer, Pubco, HOD or such Company on such debt or equity securities than are the terms of the Subordinated Debt, provided in each case that Subordinated Creditor shall have entered into such supplements to or modifications of this Agreement as Senior Creditor may reasonably request to reflect the continued subordination of the Subordinated Securities to the Senior Debt (or any replacement of the Senior Debt, including any notes or other securities issued in substitution of all or any portion of the Senior Debt), provided, further, that, in either case, no such securities shall provide for cash payments or distribution of any kind including, but not limited to, dividends or distribution of assets, until the Final Payout Date.
“Uniform Commercial Code” means the Uniform Commercial Code, as enacted in the applicable jurisdiction.
1.2 Rules of Construction. Unless the context of this Agreement clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the term “including” is not limiting and shall be deemed to be followed by the phrase “without limitation,” and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. Article, section, subsection, clause, schedule and exhibit references herein are to this Agreement unless otherwise specified. Any reference in this Agreement to any agreement, instrument, or document shall include all alterations, amendments, changes, restatements, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, restatements, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). Headings used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
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2. Lien Subordination; Liquidation, Dissolution, Bankruptcy; Etc.
2.1 Subordination of Liens and Security Interests; Agreement Not to Contest; Agreement to Release Liens; Additional Covenants.
(a) Subordinated Creditor hereby covenants and agrees that the Lien of Subordinated Creditor in the Shared Collateral shall be subordinate and subject to the Lien and rights against the Shared Collateral of Senior Creditor arising from or out of the Senior Debt, regardless of the order, time or manner in which any Liens attach to or are perfected in the Shared Collateral. The proceeds of any Disposition by Senior Creditor or Subordinated Creditor of all or any part of the Shared Collateral shall be applied in the following order of priorities, irrespective of the application of any rule of law or the defect or impairment of any Senior Note Document, Subordinated Note Document or security interest, Lien or assignment thereunder: (i) first, to Senior Creditor for payment of the Senior Debt until the Final Payout Date has occurred, (ii) second to Subordinated Creditor until all Subordinated Debt has been paid in full in cash, and (ii) third, to the applicable grantor of the Shared Collateral or as a court of competent jurisdiction may otherwise direct. Subordinated Creditor shall not, without the prior written consent of Senior Creditor, receive any Lien from Pubco, Dogecoin or any Company with respect to the Subordinated Debt other than Subordinated Creditor’s Lien in the Shared Collateral (as defined herein and granted under the Subordinated Pledge Agreement as in effect on the Effective Date) and the Lien in the “Collateral” (as defined in and granted under the Subordinated Pledge Agreement as in effect on the Effective Date).
(b) Subordinated Creditor agrees that it will not at any time (1) contest the validity, perfection, priority or enforceability of the Senior Debt, the Senior Note Documents, or the Liens of Senior Creditor in the collateral (including the Shared Collateral) securing the Senior Debt, (2) contest or challenge, or join any other Person in contesting or challenging, the transfers of any Collateral pursuant to the Senior Note Documents, whether on the grounds that such transfers were disguised financings, preferential transfers, fraudulent conveyances or otherwise, (3) assert that any Person and any Company should be substantively consolidated, (4) institute, or cause to require Pubco or any of its Affiliates to institute, any action or suit or exercise, or cause or require Pubco or any of its Affiliates to exercise, any rights or remedies upon or with respect to any breach or default by any Company or any other Person under any Senior Note Documents or attempt to prohibit or restrict any sale or other transfer of Shared Collateral or to interfere in any manner with the transactions contemplated by the Senior Note Documents.
(c) In the event Senior Creditor releases or agrees to release any of its Liens in the Shared Collateral in connection with a Disposition that is in connection with Senior Creditor’s exercise of remedies following a Senior Event of Default, then any Lien held by Subordinated Creditor in such Shared Collateral shall be automatically, unconditionally, and simultaneously released. Subordinated Creditor shall be deemed to have consented to such Disposition and Subordinated Creditor shall execute such releases or other instruments with respect to the Shared Collateral as Senior Creditor requests to evidence the release of Subordinated Creditor’s Lien in the Shared Collateral. Subordinated Creditor hereby irrevocably appoints Senior Creditor as the true and lawful attorneys of Subordinated Creditor for the purpose of executing and filing any such releases or instruments which Subordinated Creditor may be required to execute, file and/or deliver pursuant to this Section 2.1(c).
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(d) Until the Final Payout Date, Senior Creditor shall be entitled to deal with the Shared Collateral in accordance with the terms of the Senior Note Documents as if the Liens under the Subordinated Note Documents did not exist. The rights of Subordinated Creditor with respect to the Shared Collateral shall at all times be subject to the terms of this Agreement.
2.2 Liquidation, Dissolution, Bankruptcy.
(a) In the event of any Proceeding involving Pubco or any Company, the Final Payout Date shall have occurred before any Distribution, whether in cash, securities or other property (other than Subordinated Securities) arising in connection with the Shared Collateral, shall be made by Pubco or any Company to Subordinated Creditor on account of any Subordinated Debt.
(b) In the event of any Proceeding involving Pubco or any Company, any Distribution, whether in cash, securities or other property (other than Subordinated Securities) which would otherwise, but for the terms hereof, be payable or deliverable in respect of the Subordinated Debt shall be paid or delivered directly to Senior Creditor (to be held and/or applied by Senior Creditor in accordance with the terms of the Senior Note Documents) until the Final Payout Date has occurred. Subordinated Creditor irrevocably authorizes, empowers and directs any debtor, debtor in possession, receiver, trustee, liquidator, custodian, conservator or other Person having authority, to pay or otherwise deliver all such Distributions to Senior Creditor. Subordinated Creditor also irrevocably authorizes and empowers Senior Creditor, in the name of Subordinated Creditor, to demand, sue for, collect and receive any and all such Distributions.
(c) Subordinated Creditor agrees not to initiate, prosecute or participate in any claim, action or other proceeding challenging the enforceability, validity, perfection or priority of the Senior Debt or any liens and security interests securing the Senior Debt.
(d) Subordinated Creditor agrees that Senior Creditor may consent to the use of cash collateral or provide debtor-in-possession financing to any of the Companies on such terms and conditions and in such amounts as Senior Creditor, in its sole discretion, may decide and, in connection therewith, such Company may grant to Senior Creditor liens and security interests upon all or any of the property of such Company, which liens and security interests (i) may secure payment of the Senior Debt (whether such Senior Debt arose prior to the commencement of any Proceeding or at any time thereafter) and any other financing provided by Senior Creditor and (ii) may be superior in priority to the liens and security interests in favor of Subordinated Creditor on the Shared Collateral and any other property of the Companies. Subordinated Creditor agrees that it shall be deemed to consent to, and will not object to, any of the foregoing. Subordinated Creditor agrees that it will: (x) not seek to provide financing to any Company in any Proceeding; (y) support, and not object to or oppose, any Disposition of any property (or any process pertaining to such Disposition of any property) securing all of any part of the Senior Debt free and clear of security interests, liens or other claims of Subordinated Creditor under Section 363 of the Bankruptcy Code or any other provision of the Bankruptcy Code or applicable law if Senior Creditor has consented to such Disposition and is releasing its security interests and liens as well; and (z) not propose, seek and/or support confirmation of any plan of reorganization with respect to any Company which Senior Creditor has not consented in writing. Subordinated Creditor agrees to object to and vote to reject confirmation of any plan of reorganization with respect to any Company which Senior Creditor has objected to and/or rejected in writing. Subordinated Creditor further agrees not to assert any right it may have to “adequate protection” of any interest in any Shared Collateral in any Proceeding and agrees that it will not seek to have the automatic stay lifted with respect to any Shared Collateral without the prior written consent of Senior Creditor. Subordinated Creditor waives any claim it may now or hereafter have arising out of Senior Creditor’s election, in any Proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy Code, and/or any borrowing or grant of a security interest under Section 364 of the Bankruptcy Code by any Company, as debtor in possession. Subordinated Creditor further agrees that it will not seek to participate or participate on any creditor’s committee without Senior Creditor’s prior written consent.
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(e) Subordinated Creditor agrees to execute, verify, deliver and file any proofs of claim in respect of the Subordinated Debt requested by Senior Creditor in connection with any such Proceeding and hereby irrevocably authorizes, empowers and appoints Senior Creditor its agent and attorney-in-fact to (i) execute, verify, deliver and file such proofs of claim upon the failure of Subordinated Creditor promptly to do so prior to 30 days before the expiration of the time to file any such proof of claim and (ii) vote such claim in any such Proceeding upon the failure of Subordinated Creditor to do so prior to 15 days before the expiration of the time to vote any such claim; provided, however, that Senior Creditor shall have no obligation to execute, verify, deliver, file and/or vote any such proof of claim. In the event that Senior Creditor votes any claim in accordance with the authority granted hereby, Subordinated Creditor shall not be entitled to change or withdraw such vote.
(f) The Senior Debt shall continue to be treated as senior to the Subordinated Debt and the provisions of this Agreement shall continue to govern the relative rights and priorities of Senior Creditor and Subordinated Creditor even if all or part of the Senior Debt or the security interests securing the Senior Debt are subordinated, set aside, avoided, invalidated or disallowed in connection with any Proceeding of any Company or its subsidiaries, and this Agreement shall be reinstated if at any time any payment of any of the Senior Debt is rescinded or must otherwise be returned by any holder of Senior Debt or any representative of such holder.
(g) This Agreement is intended to be and shall be enforceable as a “subordination agreement” within the meaning of Section 510(a) of the Bankruptcy Code.
2.3 Subordinated Debt Enforcement Actions. Until the Final Payout Date, Subordinated Creditor shall not, without the prior written consent of Senior Creditor, take any action under the provisions of any state or federal law, including, without limitation, the Uniform Commercial Code, or under any contract or agreement, to enforce, foreclose upon, take possession of or sell any Shared Collateral.
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2.4 Incorrect Payments; Turnover. If any Distribution on account of the Subordinated Debt not permitted to be made by the Companies or accepted by Subordinated Creditor under this Agreement is made and received by Subordinated Creditor, such Distribution shall not be commingled with any of the assets of Subordinated Creditor, shall be held in trust by Subordinated Creditor for the benefit of Senior Creditor and shall be promptly paid over to Senior Creditor for application (in accordance with the Senior Note Documents) to the payment of the Senior Debt then remaining unpaid, until the Final Payout Date has occurred. In the event Subordinated Creditor receives collateral or proceeds to which it is not entitled hereunder, Subordinated Creditor shall be deemed to hold all of such collateral or proceeds in trust for the benefit of Senior Creditor and shall promptly pay over to each such party such collateral or proceeds in the same form as received, with any necessary endorsements.
2.5 Obligations Hereunder Not Affected. All rights and interest of Senior Creditor hereunder and of Subordinated Creditor hereunder, and all agreements and obligations of Senior Creditor hereunder and of Subordinated Creditor, Pubco and the Companies hereunder, shall remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of any document evidencing any of the Senior Debt or any document evidencing any of the Subordinated Debt;
(b) (i) any change in the time, manner or place of payment of, or any other term of, all or any of the Senior Debt, or any other amendment or waiver of or any release or consent to departure from any of the Senior Note Documents; and (ii) subject to Section 3.1 hereof, any change in the time, manner or place of payment of, or any other term of, all or any of the Subordinated Debt, or any other amendment or waiver of or any release or consent to departure from any of the Subordinated Note Documents;
(c) any exchange or release of any Shared Collateral in connection with the enforcement or collection of the Senior Debt or any non-perfection of liens constituting the Senior Debt; and any non-perfection of liens constituting the Subordinated Debt;
(d) (i) any failure of Senior Creditor to assert any claim or to enforce any right or remedy against any other party hereto under the provisions of this Agreement or any Senior Note Document; and (ii) any failure of Subordinated Creditor to assert any claim or to enforce any right or remedy against any other party hereto under the provisions of this Agreement or any Subordinated Note Document;
(e) (i) any reduction, limitation, impairment or termination of the Senior Debt for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to (and the Companies and Subordinated Creditor hereby waive any right to or claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of invalidity, illegality, nongenuiness, irregularity, compromise, unenforceability of, or any other event or occurrence affecting, any Senior Debt; and (ii) any reduction, limitation, impairment or termination of the Subordinated Debt for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to (and the Companies and Senior Creditor hereby waive any right to or claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of invalidity, illegality, nongenuiness, irregularity, compromise, unenforceability of, or any other event or occurrence affecting, any Subordinated Debt; and
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(f) any other circumstance which might otherwise constitute a defense available to, or a discharge of, the Companies in respect of the Senior Debt or of the Subordinated Debt or in respect of this Agreement (other than the defense of payment in full of the Senior Debt or the Subordinated Debt, as applicable).
Subordinated Creditor acknowledges and agrees that Senior Creditor may in accordance with the terms of the Senior Note Documents, unless otherwise required hereunder, without notice or demand and without affecting or impairing Subordinated Creditor’s obligations hereunder, (i) modify the Senior Note Documents; (ii) take or hold security for the payment of the Senior Debt and exchange, enforce, foreclose upon, waive and release any such security; (iii) apply such security and direct the order or manner of sale thereof as Senior Creditor in its sole discretion, may determine; (iv) release and substitute one or more endorsers, warrantors, borrowers or other obligors; and (v) exercise or refrain from exercising any rights against any Company or any other Person.
2.6 Sale, Transfer or other Disposition of Subordinated Debt.
(a) Subordinated Creditor shall not sell, assign, dispose of or otherwise transfer all or any portion of the Subordinated Debt or any Subordinated Note Document unless (i) prior to the consummation of any such action, Senior Creditor shall have consented in writing to such action and provided that, (i) the transferee thereof shall have executed and delivered to Senior Creditor an agreement substantially identical to this Agreement, providing for the continued subordination of the Liens securing the Subordinated Debt to the Liens securing Senior Debt as provided herein and for the continued effectiveness of all of the rights of Senior Creditor arising under this Agreement and (ii) if any such transfer or other disposition would cause there to be more than two (2) non-Affiliated or related holders of the Subordinated Debt, then all such existing and proposed transferee holders of Subordinated Debt shall appoint one Subordinated Creditor as the “designated representative” of all Subordinated Creditors as such term is used in this Agreement and any notices required to be delivered hereunder to Subordinated Creditors shall be satisfied to the extent delivered to the designated representative in lieu of such Subordinated Creditors.
(b) Notwithstanding the failure of any transferee to execute or deliver an agreement substantially identical to this Agreement, the subordination effected hereby shall survive any sale, assignment, pledge, disposition or other transfer of all or any portion of the Subordinated Debt, and the terms of this Agreement shall be binding upon the successors and assigns of Subordinated Creditor, as provided in Section 10 hereof.
2.7 Nonreliance. Subordinated Creditor agrees that (a) it has, independently and without reliance upon Senior Creditor and based on such documents and information as it has deemed appropriate, made its own credit analyses and decisions to enter into the Subordinated Note Documents to which it is party, and (b) it will, independently and without reliance upon Senior Creditor, and based on such documents and information as it shall from time to time deem appropriate, continue to make its own credit decisions in taking or not taking any action under this Agreement or any Subordinated Note Documents to which it is party in accordance with this Agreement. Senior Creditor shall have no duty to disclose to Subordinated Creditor any information relating to any Company, Pubco, HOD or any of their subsidiaries or any other circumstance bearing upon the risk of nonpayment of the Senior Debt or Subordinated Debt, as the case may be, that is known or becomes known to Senior Creditor or any of their Affiliates. Prior to the closing of any purchase and sale pursuant to Section 18 hereof, Subordinated Creditor shall have no rights under the Senior Note Documents.
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3. Modifications.
3.1 Modifications to Subordinated Note Documents. Until the Final Payout Date has occurred, Subordinated Creditor shall not, without the prior written consent of Senior Creditor, agree to any amendment, restatement, modification or other supplement to any Subordinated Note Document.
4. Waiver of Certain Rights by Subordinated Creditor.
4.1 Marshaling. Subordinated Creditor hereby waives any rights it may have under applicable law to assert the doctrine of marshaling or to otherwise require Senior Creditor to marshal any property of the Companies or any other guarantor of the Senior Debt for the benefit of Subordinated Creditor.
4.2 Rights Relating to Senior Creditor’s Actions with respect to the Shared Collateral. Subordinated Creditor hereby waives to the extent permitted by applicable law, any rights which it may have to enjoin or otherwise obtain a judicial or administrative order preventing Senior Creditor from taking, or refraining from taking, any action with respect to the Senior Note Documents or all or any part of the Shared Collateral not in violation of the terms of this Agreement. Without limitation of the foregoing but subject to the terms of this Agreement, Subordinated Creditor hereby agrees: (a) that it has no right to direct or object to the manner in which Senior Creditor exercises (or forbears from exercising) rights and remedies under the Senior Note Documents or applies the proceeds of the Shared Collateral or any other collateral resulting from the exercise by Senior Creditor of rights and remedies under the Senior Note Documents to the Senior Debt; and (b) that Senior Creditor has not assumed any obligation to act as the agent for Subordinated Creditor with respect to the Shared Collateral. Senior Creditor shall have the exclusive right to enforce rights and exercise remedies with respect to the Senior Note Documents and Shared Collateral until the Final Payout Date has occurred. In exercising rights and remedies with respect to the Senior Note Documents or Shared Collateral, Senior Creditor may enforce the provisions of the Senior Note Documents and exercise remedies thereunder, all in such order and in such manner as it may determine in the exercise of its sole business judgment. Such exercise and enforcement shall include, without limitation, the rights to sell or otherwise dispose of Shared Collateral, to incur expenses in connection with such Disposition and to exercise all the rights and remedies of a secured lender under the Uniform Commercial Code. In conducting any public or private sale under the Uniform Commercial Code, Senior Creditor shall give Subordinated Creditor such notice (if any) of such sale as may be required by the Uniform Commercial Code; provided, however, that ten (10) days’ notice to Subordinated Creditor shall be deemed to be commercially reasonable notice.
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4.3 Gratuitous Bailee for Perfection.
(a) Senior Creditor acknowledges and agrees it shall hold any certificates evidencing the Shared Collateral (the “Pledged Collateral”) as sub-agent or gratuitous bailee for Subordinated Creditor, in each case solely for the purpose of perfecting the Lien granted under the Subordinated Note Documents in the Pledged Collateral and subject to the terms and conditions of this Section 4.3. Until the Final Payout Date, Subordinated Creditor shall deliver to Senior Creditor any Pledged Collateral in its possession.
(b) Except as otherwise specifically provided in this Agreement, until Final Payout Date, Senior Creditor shall be entitled to deal with the Pledged Collateral in accordance with the terms of the Senior Note Documents as if the Liens under the Subordinated Note Documents did not exist. The rights of Subordinated Creditor with respect to the Pledged Collateral shall at all times be subject to the terms of this Agreement.
(c) Senior Creditor shall have no obligation whatsoever to Subordinated Creditor to assure that any of the Pledged Collateral is genuine or owned by Pubco or Dogecoin, as applicable, or to protect or preserve rights or benefits of any Person or any rights pertaining to the Pledged Collateral, except as expressly set forth in this Section 4.3. The duties or responsibilities of Senior Creditor under this Section 4.3 shall be limited solely to holding the Pledged Collateral as sub-agent and gratuitous bailee for Subordinated Creditor for purposes of perfecting the Lien held by Subordinated Creditor.
(d) Senior Creditor shall not have by reason of the Subordinated Note Documents or this Agreement, or any other document, a fiduciary relationship in respect of Subordinated Creditor, and Subordinated Creditor hereby waives and releases Senior Creditor from all claims and liabilities arising pursuant to Senior Creditor’s role under this Section 4.3 as sub-agent and gratuitous bailee with respect to the Pledged Collateral.
(e) Senior Creditor hereby agrees that promptly following the occurrence of the Final Payout Date, to the extent permitted by applicable law, Senior Creditor shall transfer to Subordinated Creditor any certificates evidencing the Pledged Collateral and any other possessory collateral constituting the Shared Collateral, in each case, to the extent then in the physical possession of Senior Creditor or its agents.
5. Representations and Warranties.
5.1 Representations and Warranties of Subordinated Creditor. Subordinated Creditor hereby represents and warrants to Senior Creditor that as of the date hereof: (i) Subordinated Creditor is a corporation under the laws of Delaware; (ii) Subordinated Creditor has the power and authority to enter into, execute, deliver and carry out the terms of this Agreement; (iii) the execution of this Agreement by Subordinated Creditor will not violate or conflict with any material agreement binding upon Subordinated Creditor or any law, regulation or order or require any consent or approval which has not been obtained; (iv) this Agreement is the legal, valid and binding obligation of Subordinated Creditor, enforceable against Subordinated Creditor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles; (v) Subordinated Creditor is the sole owner, beneficially and of record, of the Subordinated Note Documents and the Subordinated Debt and (vi) as of the Effective Date, there have been no amendments, restatements, supplements or other modifications to the Subordinated Note Documents since the execution and delivery thereof.
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5.2 Representations and Warranties of Senior Creditor. Senior Creditor hereby represents and warrants to Subordinated Creditor that as of the date hereof: (i) Senior Creditor has the power and authority to enter into, execute, deliver and carry out the terms of this Agreement, all of which have been duly authorized by all proper and necessary action; (ii) the execution of this Agreement by Senior Creditor will not violate or conflict with the organizational documents of Senior Creditor, any material agreement binding upon Senior Creditor or any law, regulation or order or require any consent or approval which has not been obtained; and (iii) this Agreement is the legal, valid and binding obligation of Senior Creditor, enforceable against Senior Creditor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles.
6. Subrogation. In the event of any Distribution to Senior Creditor that, if not for this Agreement, would have been made to Subordinated Creditor, Subordinated Creditor shall be subrogated to the rights of Senior Creditor to receive Distributions with respect to the Senior Debt; provided, that Subordinated Creditor hereby agrees not to assert or enforce any such rights of subrogation it may acquire as a result of any payment hereunder until the Final Payout Date. Subordinated Creditor agrees that in the event that all or any part of a payment made with respect to the Senior Debt is recovered from the holders of the Senior Debt in a Proceeding or otherwise, any Distribution received by Subordinated Creditor with respect to the Subordinated Debt at any time after the date of the payment that is so recovered, whether pursuant to the right of subrogation provided for in this Agreement or otherwise, shall be deemed to have been received by Subordinated Creditor in trust as property of the holders of the Senior Debt and Subordinated Creditor shall forthwith deliver the same to Senior Creditor for application to the Senior Debt until the Final Payout Date has occurred. A Distribution made pursuant to this Agreement to Senior Creditor which otherwise would have been made to Subordinated Creditor is not, as between the Companies and Subordinated Creditor, a payment by the Companies to or on account of the Senior Debt.
7. Modification. Any amendment, modification or waiver of any provision of this Agreement, or any consent to any departure by any party from the terms hereof, shall not be effective in any event unless the same is in writing and signed by Senior Creditor and Subordinated Creditor, and then such amendment, modification, waiver or consent shall be effective only in the specific instance and for the specific purpose given. Any notice to or demand on any party hereto in any event not specifically required hereunder shall not entitle the party receiving such notice or demand to any other or further notice or demand in the same, similar or other circumstances unless specifically required hereunder.
8. Further Assurances. Each party to this Agreement promptly will execute and deliver such further instruments and agreements and do such further acts and things as may be reasonably requested in writing by any other party hereto that may be necessary or desirable in order to effect fully the purposes of this Agreement.
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9. Notices.
9.1 Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:
Notices shall be addressed as follows:
If to Subordinated Creditor:
Brag House Holdings, Inc.
45 Park Street
Montclair, New Jersey 07412
Attn: Lavell Juan Malloy, II, Chief Executive Officer
Email: [email protected]
If to Senior Creditor:
[●]
With a copy to (which shall not constitute notice):
Duane Morris LLP
1540 Broadway
New York, NY 10036
Attn: James T. Seery
Telephone: (973) 424-2088
Email: [email protected]
9.2 Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient).
9.3 Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice pursuant to this Section 9 to the other parties hereto.
10. Successors and Assigns. This Agreement shall inure to the benefit of, and shall be binding upon, the respective successors and assigns of Senior Creditor and Subordinated Creditor. Subordinated Creditor shall not have any rights to assign or transfer any of its rights or obligations under the Subordinated Note Documents, including any or all of the Subordinated Debt, to any Person except as expressly provided in Section 2.3 hereof. No Person other than Senior Creditor and Subordinated Creditor and their respective successors and permitted assigns and pledgees shall have any rights hereunder.
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11. Relative Rights. This Agreement shall define the relative rights of Senior Creditor and Subordinated Creditor. Nothing in this Agreement shall: (a) impair, as among Senior Creditor and the Companies and, separately, as among Subordinated Creditor and the Companies, the obligation of the Companies and Senior Creditor and Subordinated Creditor with respect to the payment of the Senior Debt and the Subordinated Debt in accordance with their respective terms; or (b) affect the relative rights of Senior Creditor or Subordinated Creditor with respect to any other creditors of the Companies.
12. Conflict. In the event of any conflict between any term, covenant or condition of this Agreement and any term, covenant or condition of any of the Senior Note Documents or the Subordinated Note Documents, the provisions of this Agreement shall control and govern.
13. Counterparts; Integration; Effectiveness; Electronic Execution.
13.1 This Agreement may be executed in any number of counterparts (and by different parties hereto on different counterparts), each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. Delivery of an executed counterpart hereof by facsimile or other electronic means shall be equally effective as delivery of an originally executed counterpart.
13.2 This Agreement contains the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof superseding all prior oral or written understandings.
13.3 This Agreement shall become effective when it shall have been executed by Senior Creditor and when Senior Creditor shall have received counterparts hereof which, when taken together, bear the signatures of Senior Creditor, Subordinated Creditor and the Companies set forth on the Acknowledgment Page hereof, and thereafter shall be binding upon and inure to the benefit of Senior Creditor and Subordinated Creditor and their respective successors and assigns, and the Companies and their successors and assigns.
14. Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
15. Continuation of Subordination; Termination of Agreement. Subject to Section 2.2(f), this Agreement shall remain in full force and effect until one year and one day (or any longer period required to give effect to Section 19) following the Final Payout Date after which this Agreement shall terminate without further action on the part of the parties hereto. The Senior Note Documents, including the Senior Pledge Agreement, and all of the rights of Senior Creditor thereunder, shall survive and remain in effect until the Final Payout Date has occurred.
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16. Governing Law; Jurisdiction; Consent to Service of Process.
16.1 THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL, IN ALL RESPECTS, BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS (EXCLUDING THE PRINCIPLES OF CONFLICT OF LAWS) OF THE STATE OF NEW YORK (THE “GOVERNING JURISDICTION”)(INCLUDING SECTION 5-1401 AND SECTION 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), INCLUDING ALL MATTERS OF CONSTRUCTION OF, VALIDITY AND PERFORMANCE.
16.2 ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST SUBORDINATED CREDITOR OR COMPANY ARISING OUT OF OR RELATING HERETO MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, SENIOR CREDITOR, SUBORDINATED CREDITOR AND COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NON-EXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; AND (III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO IT AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 9 IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER IT IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT.
16.3 SENIOR CREDITOR, SUBORDINATED CREDITOR AND COMPANY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO IT AT ITS ADDRESS SPECIFIED IN SECTION 9. NOTHING IN THIS SECTION 16.3 SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
17. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 17 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
18. [RESERVED].
19. Nonpetition Covenant. Notwithstanding anything herein to the contrary, prior to the date that is one year (or, if longer, the applicable preference period then in effect) and one day after the Final Payout Date, Subordinated Creditor shall not initiate against, or join any Person in initiating against, any Company, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under any applicable federal or state bankruptcy or similar law, or the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of a Company or any substantial part of such Company’s property or the ordering or winding up or liquidation of the affairs of a Company.
[Signatures Immediately Follow]
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IN WITNESS WHEREOF, Subordinated Creditor and Senior Creditor have caused this Subordination and Intercreditor Agreement to be executed as of the date first above written.
| SUBORDINATED CREDITOR: | ||
| BRAG HOUSE HOLDINGS, INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page to Subordination and Intercreditor Agreement]
| SENIOR CREDITOR: | |||
| [●] | |||
| By: | |||
| Its: | |||
| By: | |||
| Its: | |||
| By: | |||
| Name: | Matt Beckman | ||
| Title: | Manager | ||
[Signature Page to Subordination and Intercreditor Agreement]
ACKNOWLEDGMENT
Each undersigned Company hereby acknowledges that they have received a copy of the foregoing Subordination and Intercreditor Agreement (as in effect on the date hereof, the “Subordination Agreement”) and agree that they will not do any act or perform any obligation which is not in accordance with the Subordination Agreement and recognize all rights granted by the Subordination Agreement to Senior Creditor and Subordinated Creditor thereunder. Each Company further acknowledge and agree that they are not an intended beneficiary or third party beneficiary under the Subordination Agreement, as such may be amended, restated, supplemented, or otherwise modified hereafter.
| COMPANIES: | ||
| HOUSE OF DOGE INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| DOGECOIN VENTURES INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| THE OFFICIAL DOGECOIN TREASURY AND RESERVE INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| HOUSE OF DOGE CANADA INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
[Acknowledgment Page to Subordination and Intercreditor Agreement]
| BRAG HOUSE LTD. | ||
| By: | ||
| Name: | ||
| Title: | ||
| BRAG HOUSE INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| BRAG HOUSE MERGER SUB, INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
[Acknowledgment Page to Subordination and Intercreditor Agreement]
Exhibit 10.7
AMENDMENT TO SECURED PROMISSORY NOTE
This AMENDMENT (this “Amendment”) to the Secured Promissory Note dated October 14, 2025 (the “Note”) is dated effective as of December 4, 2025 (the “Amendment Effective Date”), by and between House of Doge Inc., a Texas corporation (the “Company”), and Brag House Holdings, Inc. as holder of the Note issued by the Company in favor of the holder (the “Holder” and, together with the Company, the “Parties”).
WHEREAS, the Company and the Holder desire to amend the Note to, among other things, acknowledge the debt incurred by the Company and the Holder, jointly and severally, under that certain Convertible Promissory Note, dated of even date herewith, among the Company and Holder, as issuers, and YA II PN, Ltd., as holder, and to acknowledge the security interest and liens of YA II PN, Ltd. granted in connection therewith and the other Transaction Documents (as defined therein).
WHEREAS, it is a condition to YA II PN, Ltd.’s agreement to make advances under such Convertible Promissory Note that the Company and the Holder enter into this Amendment to recognize the debt incurred under such Convertible Promissory Note and the liens granted in connection therewith as permitted under the Note and to acknowledge that the security interest granted to and the liens of YA II PN, Ltd. in the “Collateral” (as defined in such Convertible Promissory Note) are senior to the security interest granted to and the liens of the Holder in such “Collateral”.
WHEREAS, pursuant to Section 12.11 of the Note, the Company and the Holder desire to amend the terms of the Note as set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants of the parties hereinafter expressed and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto, each intending to be legally bound, agree as follows:
1. Recitals. The recitations set forth in the preamble of this Amendment are true and correct and incorporated herein by this reference.
2. Capitalized Terms. All capitalized terms used in this Amendment shall have the same meaning ascribed to them in the Note, except as otherwise specifically set forth herein.
3. Conflicts. In the event of any conflict or ambiguity by and between the terms and provisions of this Amendment and the terms and provisions of the Note, the terms and provisions of this Amendment shall control, but only to the extent of any such conflict or ambiguity.
4. Amendments to the Note.
| (a) | Section 1.1 (Definitions; Interpretation) of the Note is hereby amended to include the following additional definition in the correct alphabetical order: |
“Subordination Agreement” has the meaning set forth on the face page of this Note.
1
“Yorkville Note” mean that certain Convertible Promissory Note, dated December 4, 2025 issued by the Company and the Holder, jointly and severally, to YA II PN LTD. (“Yorkville”), in connection with the transactions contemplated thereby, in an aggregate principal amount of up to $11,000,000, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Yorkville Transaction Documents” means the “Transaction Documents” as defined in the Yorkville Note, each as amended, restated, supplemented, or otherwise modified from time to time.
| (b) | The definition of "Loan" contained in Section 1.1 (Definitions; Interpretation) of the Note is hereby deleted in its entirety and replaced as follows: |
“Loan” means the principal amount of up to Ten Million Dollars ($10,000,000) being the aggregate of all Advances made to the Borrower under the terms of this Note, including, without limitation, all amounts set forth on Exhibit “D” hereof, with the express understanding that, subject to the terms of the Subordination Agreement, such amount may be increased by mutual agreement in accordance with the terms hereof.”
| (c) | The definition of "Permitted Debt" contained in Section 1.1 (Definitions; Interpretation) of the Note is hereby deleted in its entirety and replaced as follows: |
“Permitted Debt” means Debt (a) existing or arising under this Note and any refinancing thereof; (b) reserved; (c) which may be deemed to exist with respect to swap contracts; (d) owed in respect of any netting services, overdrafts, and related liabilities arising from treasury, depository, and cash management services in connection with any automated clearinghouse transfers of funds; (e) unsecured insurance premiums owing in the Ordinary Course of Business; (f) incurred by the Borrower pursuant to the Yorkville Note and any refinancing thereof; and (g) any other Debt incurred by the Borrower provided that such Debt shall be subordinate to and second in priority to this Note and the Obligations hereunder.”
| (d) | The definition of "Permitted Liens" contained in Section 1.1 (Definitions; Interpretation) of the Note is hereby deleted in its entirety and replaced as follows: |
“Permitted Liens” means (a) Liens for taxes not yet due or which are being contested in good faith by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of the Borrower in conformity with GAAP; (b) [reserved]; (c) Liens created pursuant to the Security Agreement; (d) Liens in favor of Yorkville pursuant to the terms and conditions of, and securing the obligations of the Company and Holder under, the Yorkville Note and the Yorkville Transaction Documents (the “Yorkville Liens”); and (e) non-consensual Liens arising by operation of law, arising in the Ordinary Course of Business, and for amounts which are not overdue for a period of more than thirty (30) days or that are being contested in good faith by appropriate proceedings.”
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| (e) | The reference to “$8,000,000.00” set forth on the face page of the Note is hereby deleted in its entirety and replaced with “$10,000,000.” |
The first paragraph of the Note is hereby deleted in its entirety and replaced as follows:
“FOR VALUE RECEIVED, and subject to the terms and conditions set forth herein, House of Doge Inc., a corporation incorporated under the laws of the state of Texas (the "Borrower"), hereby unconditionally promises to pay to the order of Brag House Holdings, Inc., or its assigns (the "Noteholder," and together with the Borrower, the "Parties"), the principal amount of up to $10,000,000 to be disbursed in amounts to be mutually agreed to by the Parties in accordance with Section 2.2 hereof, with the express understanding that any increase in such principal amount shall be subject to mutual agreement of the Parties in accordance with the terms hereof, together with all accrued interest thereon as provided in this Secured Promissory Note (this “Note”). All references to “$” or “Dollars” in this Note shall mean U.S. Dollars, lawful money of the United States of America.”
| (f) | Section 2.2 of the Note is hereby deleted in its entirety and replaced as follows: |
“2.2 Advances. Provided that no Event of Default has occurred and is continuing, solely upon, and following, the mutual agreement of the Parties, the Borrower may request one or more advances of Loan proceeds (each, an “Advance,” and collectively, the “Advances”) during the Interim Period by delivering to the Noteholder a written notice (a “Borrowing Notice”), in the form attached hereto as Exhibit “A”, at least one (1) Business Day prior to the requested disbursement date, specifying that (a) no Default or Event of Default has occurred and is continuing, (b) the requested principal amount of such Advance, and (c) the requested disbursement date. Each Borrowing Notice shall be deemed to restate and reaffirm the Borrower’s representations and warranties set forth in Section 7 as of both the date of such Borrowing Notice and the requested disbursement date. Upon timely receipt of a conforming Borrowing Notice and satisfaction (or written waiver by the Noteholder) of the applicable conditions precedent (including those set forth in Section 2.4), the Noteholder shall fund the requested Advance on the specified disbursement date in immediately available funds. For the avoidance of doubt, the aggregate principal amount of all Advances under this Section 2.2 shall not exceed the then-available, undrawn portion of the Loan.”
| (g) | The Note is hereby amended to include a new Exhibit D, which is attached to this Amendment as Exhibit “A” and is incorporated into the Note by reference. All amounts set forth on Exhibit D shall constitute additional amounts due and owing under the Note and shall be included in the principal amount as amended hereby. |
3
| (h) | Section 4 of the Note is hereby deleted in its entirety and replaced as follows: |
“The Borrower’s performance of its obligations hereunder is secured by a security interest in the collateral specified in the Security Agreement, which security interest is subject to the terms of the Subordination Agreement, and is further subject to Permitted Liens. The Noteholder hereby acknowledges, affirms and covenants that Yorkville Lien is senior in priority to all Liens granted in favor of the Noteholder, and all Liens of the Noteholder are junior in priority to the Yorkville Liens, in each case, regardless of the order, time or manner in which any Liens attach to or are perfected. Yorkville is a third-party beneficiary of this Section 4. Any reference in any Transaction document to the priority of the Noteholder’s Liens shall be read subject to this Section 4.”
| (i) | The Parties hereby agree that a legend shall be inserted on the face of the Note, the Security Agreement and each other Transaction Document, and shall read as follows: |
“This instrument and the rights and obligations evidenced hereby and any security interests or other liens securing such obligations are subordinate in the manner and to the extent set forth in that certain Subordination and Intercreditor Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Subordination Agreement”) dated as of December 4, 2025, by and among YA PN II, Ltd. and Brag House Holdings, Inc. (as acknowledged by House of Doge Inc., and its subsidiaries, among others); and each holder of this instrument, by its acceptance hereof, irrevocably agrees to be bound by the provisions of the Subordination Agreement.”
5. Borrowings. For the avoidance of doubt, any proceeds funded under the Yorkville Note to the Company and Holder, jointly and severally, shall not constitute an Advance (as defined in the Note) from the Holder to the Company under the Note.
6. Not a Novation. This Amendment is a modification of the Note only and not a novation.
7. Effect on Transaction Documents. Except as expressly amended by this Amendment, all of the terms and provisions of the Note shall remain and continue in full force and effect after the execution of this Amendment, are hereby ratified and confirmed, and incorporated herein by this reference.
8. Execution. This Amendment may be executed in one or more counterparts, all of which taken together shall be deemed and considered one and the same Amendment. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format file or other similar format file, such signature shall be deemed an original for all purposes and shall create a valid and binding obligation of the party executing same with the same force and effect as if such facsimile or “.pdf” signature page was an original thereof.
9. Governing Law. This Amendment shall be construed in accordance with and governed by the law of the State of New York.
[signature page follows]
4
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the day and year first above written.
| HOUSE OF DOGE INC. | ||
| By: | ||
| Name: | ||
| Title: | Chief Executive Officer | |
| BRAG HOUSE HOLDINGS, INC. | ||
| By: | ||
| Name: | ||
| Title: | Authorized Signatory | |
5
EXHIBIT “A”
(see attached)
EXHIBIT D
$779,000