KOAN 8-K
Resonate Blends, Inc. (KOAN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 15, 2021
Resonate Blends, Inc.
(Exact name of registrant as specified in its charter)
| Nevada | 000-21202 | 58-1588291 | ||
| (State or other jurisdiction of incorporation) | (Commission File Number) |
(I.R.S. Employer Identification No.) |
26565 Agoura Road, Suite 200 Calabasas, CA |
91302 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: 571-888-0009
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425) |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||
| Common Shares | KOAN | OTCQB |
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
SECTION 1 – Registrant’s Business and Operations
Item 1.01 Entry into a Material Definitive Agreement
From December 1, 2021 through March 15, 2021 (collectively, the “Closing”), Resonate Blends, Inc. (the “Company”) entered into note subscription agreements (each, a “ Note Subscription Agreement”) with accredited investors (collectively the “Investors”), pursuant to which the Company issued and sold units (the “Units”) where each Unit priced at $25,000 consists of (i) an 8.0% Note in the principal amount of $25,000 convertible into Common Stock (the “Note) and (ii) a warrant for the purchase of 83,333 shares of the Company’s Common Stock (the “Warrant”).
We sold 90 Units for total proceeds of $2,265,000. After paying finder fees of $187,450 to its placement agent, the Company netted $2,077,550, which will be used for working capital.
The Notes are due on January 3, 2022 (the “Maturity Date”) and accrue simple interest at an annual rate of 8% on the aggregate unconverted and outstanding principal amount, payable on the Maturity Date. The Notes will bear interest at the rate of 21% per year (the “Default Rate”) following a default.
In the event there is a Qualified Financing, defined as the issuance by the Company, other than an Excluded Issuance (as defined in the Note), of shares of Common Stock, in one transaction or series of related transactions, which transaction(s) result in aggregate gross proceeds actually received by the Company of at least $5,000,000, Holders must convert their Notes (including accrued interest) at the lesser of $1.00 per share or 75% of the weighted average sale price of the Common Stock across all transactions constituting a part of the Qualified Financing (the “Base Conversion Price”).
If not earlier converted under a Qualified Financing, on the Maturity Date, the principal under the Note shall automatically convert along with accrued interest into shares of Common Stock at the lesser of (i) $0.10 and (ii) 75% of the VWAP (the “Base Maturity Conversion Price”).
Both the Base Conversion Price and Base Maturity Conversion Price is subject to adjustment for any stock dividend, stock split, combination or other similar recapitalization event.
The Warrant may be exercised at $0.15 per share and provides for cashless exercise. The Warrant may be exercised following the first to occur of a Qualified Financing or January 2, 2022 and expires 5 years from the occurrence of first of either event.
The shares of Common Stock issuable on exercise of the Warrants or on conversion of the Note shall have “piggyback” registration rights in the event that the Company files certain registration statements for the Common Stock.
The Units and the shares of Common Stock underlying the Notes and Warrant have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
The summary set forth above does not purport to be complete and is qualified in its entirety by reference to the forms of Note, Warrant and Note Subscription Agreement and filed as Exhibits 4.1, 4.2 and 10.1 to this Current Report on Form 8-K, which are incorporated by reference herein.
In addition, we also entered into subscription agreements (the “Equity Subscription Agreements”) with certain accredited investor subscribers (the “Subscribers”) in connection with an equity placement offering of a maximum of $2,000,000 in units (the “Equity Units”) where each Equity Unit consists of one share of Common Stock at a purchase price of $0.15 and a warrant to purchase 0.5 share(s) of Common Stock at an exercise price of $0.225 per share. We sold 6,983,333 Equity Units for total proceeds of $1,047,500. After paying finder fees of $100,763 to its placement agent, the Company netted $946,737, which was used to pay off the remaining convertible note debt and will also be used for working capital.
The Units and the shares of Common Stock underlying the Warrant have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
The summary set forth above does not purport to be complete and is qualified in its entirety by reference to the form of Equity Subscription Agreement and filed as Exhibit 10.2 to this Current Report on Form 8-K, which are incorporated by reference herein
SECTION 2 – Financial Information
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information provided in Item 1.01 is incorporated by reference in this Item 2.03.
SECTION 3 – Securities and Trading Markets
Item 3.02 Unregistered Sales of Equity Securities
The information provided in Item 1.01 is incorporated by reference in this Item 3.02.
The Units were issued in reliance upon the exemption from registration contained in Rule 506(c).
SECTION 8 - Other Events
Item 8.01 Other Events
On March 18, 2021, we issued a press release concerning our fundraising. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information in Item 8.01 of this Current Report on Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.
SECTION 9 – Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
| Exhibit | Description | |
| 4.1 | Form of Convertible Promissory Note | |
| 4.2 | Form of Warrant | |
| 4.3 | Form of Warrant | |
| 10.1 | Form of Note Subscription Agreement | |
| 10.2 | Form of Equity Subscription Agreement | |
| 99.1 | Press Release dated March 18, 2021 |
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.
Resonate Blends, Inc.
| /s/ Geoffrey Selzer | |
| Geoffrey Selzer | |
| Chief Executive Officer | |
| Date: March 18, 2021 |
Exhibit 4.1
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION ARE NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE SET FORTH HEREIN.
| Principal Amount: $[______________] | Issue Date: [________], 2021 |
Resonate Blends, Inc.
8% UNSECURED CONVERTIBLE PROMISSORY NOTE
FOR VALUE RECEIVED, pursuant to the terms and conditions of this 8% Unsecured Convertible Promissory Note (this “Note”), Resonate Blends, Inc., a Nevada corporation (the “Company”), hereby promises to pay to the order of the holder as set forth on the signature page hereof (the “Holder”), on January 3, 2022 (the “Maturity Date”) or earlier as required pursuant to the terms and conditions herein, the Principal Amount as set forth above (the “Principal Amount”), and to pay interest on the outstanding Principal Amount at the rate of eight percent (8%) per annum (the “Interest Rate”), simple interest, in the manner as set forth herein, in each case to the extent that this Note and the Principal Amount and any accrued interest hereunder (the “Indebtedness”) has not been converted into Conversion Shares (as defined below) prior to or upon the Maturity Date. Interest shall commence accruing on the date hereof (the “Issue Date”), computed on the basis of a 360-day year and the actual number of days elapsed, and shall be payable as set forth herein.
This Note is not a certificate of deposit or similar obligation of, and is not guaranteed or insured by, any depository institution, the Federal Deposit Insurance Corporation, the Securities Holder Protection Corporation or any other governmental or private fund or entity. This Note and the amounts payable hereunder, including principal and accrued interest are general unsecured obligations of the Company.
The following terms shall apply to this Note:
Section 1. Definitions. Defined terms used herein without definition have the following meanings:
(a) “Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with such Person.
(b) “Business Day” means any day that is not a Saturday, Sunday or other day on which banking institutions in Nevada are authorized or required by law or executive order to close.
(c) “Common Stock” means the common stock, par value $0.0001 per share of the Company.
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(d) “Control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise. “Controlled”, “Controlling” and “under common Control with” have correlative meanings. Without limiting the foregoing a Person (the “Controlled Person”) shall be deemed Controlled by (a) any other Person (the “10% Owner”) (i) owning beneficially, as meant in Rule 13d-3 under the Exchange Act, securities entitling such Person to cast 10% or more of the votes for election of directors or equivalent governing authority of the Controlled Person or (ii) entitled to be allocated or receive 10% or more of the profits, losses, or distributions of the Controlled Person; (b) an officer, director, general partner, partner (other than a limited partner), manager, or member (other than a member having no management authority that is not a 10% Owner ) of the Controlled Person; or (c) a spouse, parent, lineal descendant, sibling, aunt, uncle, niece, nephew, mother-in-law, father-in-law, sister-in-law, or brother-in-law of an Affiliate of the Controlled Person or a trust for the benefit of an Affiliate of the Controlled Person or of which an Affiliate of the Controlled Person is a trustee.
(e) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(f) “Governmental Authority” means any federal, state, provincial, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.
(g) “Law” means any domestic or foreign, federal, state, provincial, municipality or local law, statute, ordinance, code, rule, or regulation.
(h) “Parties” means the Holder and the Company.
(i) “Party” means either the Holder or the Company, as applicable.
(j) “Person” means an individual, corporation, partnership (including a general partnership, limited partnership or limited liability partnership), limited liability company, association, trust or other entity or organization, including a Governmental Authority, domestic or foreign, or political subdivision thereof, or an agency or instrumentality thereof.
(k) “SEC” means the United States Securities and Exchange Commission.
(l) “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
Section 2. Interest; Late Fees; Prepayment.
(a) Interest on this Note shall accrue on a simple interest, non-compounded basis, and shall be added to the Principal Amount on the Maturity Date or such earlier date as the Indebtedness may be due hereunder, at which time all Indebtedness shall be due and payable, unless earlier converted into Conversion Shares (as defined below). In the event that any amount due hereunder is not paid as and when due, such amounts shall accrue interest at the rate of 21% per year, simple interest, non-compounding, until paid.
(b) The Company may pre-pay or redeem this Note, in whole or in part, at any time, on seven (7) days’ prior written notice to the Holder.
(c) 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.
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Section 3. Automatic Conversion Following Qualified Financing.
(a) Conversion. Subject to the terms and conditions herein, on the first Business Day following the occurrence of a Qualified Financing (as defined below) after the Issue Date and prior to the Maturity Date, this Note and all of the Indebtedness outstanding as of such time shall be automatically converted into such number of fully paid and non-assessable shares of Common Stock (the “Conversion Shares”) as is determined by dividing the Indebtedness by the Qualified Financing Conversion Price (as defined below).
(b) Definitions.
| (i) | For purposes herein, a “Qualified Financing” means the issuance by the Company, other than an “Excluded Issuance” (as defined below), of shares of Common Stock, in one transaction or series of related transactions, which transaction(s) result in aggregate gross proceeds actually received by the Company of at least $5,000,000. | |
| (ii) | For purposes herein “Qualified Financing Conversion Price” shall mean the lesser of (1) $1.00 (subject to adjustments as set forth herein, the “Base Conversion Price”) and (2) 75% of the weighted average sale price of the Common Stock across all transactions constituting a part of the Qualified Financing, with equitable adjustments being made for any splits, combinations or dividends relating to the Common Stock, or combinations, recapitalization, reclassifications, extraordinary distributions and similar events, that occur following one transaction constituting a part of the Qualified Financing and prior to one or more other transactions constituting a part of the Qualified Financing. |
(c) Excluded Issuances. Notwithstanding anything herein to the contrary, a Qualified Financing shall not include any Excluded Issuance. An “Excluded Issuance” means any issuances of Common Stock:
| (i) | for compensatory or incentive purposes to officers, employees or directors of, or consultants to, the Company or any of its Affiliates including, without limitation, the grant of stock options, deferred share units, restricted share units or restricted shares, duly adopted for such purposes by a majority of the non-employee members of the board of directors of the Company or a majority of the members of the committee of nonemployee members of the board of directors established for such purpose; | |
| (ii) | pursuant to a rights offering by the Company or pursuant to a shareholder rights plan of the Company that is carried out on a pro rata basis among all holders of the applicable class of securities of the Company; | |
| (iii) | upon the exercise, conversion or exchange of any securities exercisable, convertible or exchangeable for or into shares of Common Stock; | |
| (iv) | pursuant to any over-allotment option granted to the underwriters in a securities offering; | |
| (v) | as a result of the consolidation or subdivision of any securities of the Company, or as a special distribution or stock dividend or similar transaction that is carried out on a pro rata basis among all holders of the applicable class of securities of the Company; or |
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| (vi) | in connection with or pursuant to any merger, business combination, joint venture, exchange offer, take-over bid, arrangement, amalgamation, asset purchase transaction or acquisition of assets or shares of a third party where such transaction is approved by a majority of the disinterested directors of the Company. |
Section 4. Automatic Conversion on Maturity Date.
(a) Subject to the terms and conditions herein, unless earlier converted pursuant to Section 3, on the Maturity Date, and immediately prior to this Note being required to be repaid on such date, this Note and all of the Indebtedness outstanding as of such time shall be automatically converted into such number of fully paid and non-assessable Conversion Shares as is determined by dividing the Indebtedness by the lesser of (i) $0.10 (subject to adjustments as set forth herein, the “Base Maturity Conversion Price”) and (ii) 75% of the VWAP (as defined below).
(b) For purposes herein, “VWAP” shall, for any date, mean the price determined by the first of the following clauses that applies: (1) if the Common Stock is then listed for trading on the OTC Markets or a United States national securities exchange (as applicable, the “Trading Market”), the daily volume weighted average closing price of the Common Stock during the 20 Trading Day period immediately prior to the Maturity Date, as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), with equitable adjustments being made for any splits, combinations or dividends relating to the Common Stock, or combinations, recapitalization, reclassifications, extraordinary distributions and similar events, that occur during such measurement period, (2) if the Common Stock is not then listed or quoted for trading on a Trading Market, and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (3) in all other cases, the fair market value of a share of Common Stock as is determined in good faith by the Board of Directors of the Company after taking into consideration factors it deems appropriate, including, without limitation, recent sale and offer prices of the capital stock of the Company in private transactions negotiated at arm’s length. For purposes herein, “Trading Day” shall mean any day on which the Trading Market is generally open for business and on which the Common Stock is then traded.
Section 5. Additional Terms Applicable to all Conversions.
(a) Fractional Shares. Any fractional Conversion Shares resulting from any conversion hereunder may be issued as such fractional shares of Common Stock, may be paid in cash or may be rounded up to the next nearest share of Common Stock, in each case at the election of the Company.
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(b) Certain Events. In the event that, prior to any conversion hereunder, the Common Stock is converted into another class of securities of the Company or any successor entity to the Company, whether by way of merger, reorganization, re-incorporation or otherwise (the “Replacement Securities”), any reference herein to the Common Stock (whether standing alone or as part of another defined term herein) automatically upon the consummation of the applicable transaction shall be deemed a reference to such Replacement Securities. In the event that, prior to any conversion hereunder, the Company completes a share exchange with another entity wherein all of the issued and outstanding shares of Common Stock are exchanged for equity interests in the other entity (the “Exchanged Securities”), any reference herein to the Common Stock (whether standing alone or as part of another defined term herein) automatically upon the consummation of the applicable transaction shall be deemed a reference to such Exchanged Securities. Then, upon any subsequent conversion of this Note, the Holder shall have the right to receive the number of Replacement Securities or Exchanged Securities and any additional consideration (the “Alternate Consideration”) receivable upon or as a result of such merger, reorganization, re-incorporation or exchange. In each case, the Base Conversion Price shall be equitably adjusted based on a valuation of the Common Stock of $1.00 and the Base Maturity Conversion Price shall be equitably adjusted based on a valuation of the Common Stock of $0.10. By way of example and not limitation, in the event of a merger of the Company wherein each share of Common Stock is converted into four shares of common stock of the surviving entity, the Base Conversion Price shall be reduced to $0.25 and the Base Maturity Conversion Price shall be reduced to $0.025.
(c) Adjustment of Base Conversion Price and Base Maturity Conversion Price. The Base Conversion Price and the Base Maturity Conversion Price shall each be subject to proportional and equitable adjustments following the Issue Date for any splits, combinations or dividends relating to the Common Stock, or combinations, recapitalization, reclassifications, extraordinary distributions and similar events that occur on or after the Issue Date. By way of example and not limitation, in the event of forward split of the Common Stock following the Issue Date in which each share of Common Stock is converted into two shares of Common Stock, the Base Conversion Price then in effect and the Base Maturity Conversion Price then in effect shall each be reduced by 50%, and in the event of a reverse split of the Common Stock following the Issue Date in which each two shares of Common Stock are converted into one share of Common Stock, the Base Conversion Price then in effect and the Base Maturity Conversion Price then in effect shall each be increased by 100%.
(d) Delivery. Not later than three Business Days after each applicable conversion date (the “Delivery Date”), the Company as soon as permitted under applicable law shall immediately issue (including by way of a share certificate or a direct registration system statement) to the Holder the number of Conversion Shares issuable to the Holder hereunder in connection with such conversion. Notwithstanding anything herein to the contrary, if the Common Stock is listed or quoted for public trading as of a Delivery Date, the Company may deliver the Conversion Shares electronically through the Depository Trust Company or another established clearing corporation performing similar functions. In order to effect a conversion of this Note, and as a condition precedent thereto, the Holder shall be required to, and hereby agrees to, execute and join any shareholders’ agreement or similar agreement relating to the Company and its shareholders, or to any successor entity to the Company and its members or shareholders, as requested by the Company.
(e) Surrender of Note. Notwithstanding anything to the contrary set forth herein, upon full conversion of this Note in accordance with the terms hereof, and as a condition of receiving the Conversion Shares, the Holder shall be required to physically surrender this Note to the Company. Any surrender of this Note to the Company shall be at the offices of the Company at the address as set forth herein and, if so required by the Company, this Note shall be accompanied by written instrument or instruments of transfer, in form satisfactory to the Company, duly executed by Holder or by his, her or its attorney duly authorized in writing
(f) Indebtedness. The Company shall maintain records showing the amount of Indebtedness which shall, in the event of any dispute or discrepancy related thereto, be controlling and determinative in the absence of manifest error. Any surrender of this Note to the Company shall be at the offices of the Company at the address as set forth herein and, if so required by the Company, this Note shall be accompanied by written instrument or instruments of transfer, in form satisfactory to the Company, duly executed by Holder or by his, her or its attorney duly authorized in writing.
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(g) Transfer Taxes and Expenses. Subject to withholding of taxes in respect of non-United States persons, the issuance of Conversion Shares on conversion of this Note shall be made without charge to any Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares, provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the Holder and the Company shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.
(h) Status as Shareholder. Upon issuance of the Conversion Shares, the Holder’s rights as a Holder of this Note shall cease and terminate, excepting only the right to receive certificates or other evidence for such Conversion Shares as set out herein and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Company to comply with the terms of this Note.
(i) Registration Rights. The Company and the Holder acknowledge and agree that the Conversion Shares, if and when issued, shall be subject to the Registration Rights Agreement to be entered into between the Company and the Holder (the “Registration Rights Agreement”).
(j) Other Registration. The Company and the Holder acknowledge and agree that the SEC has recently proposed certain amendments to Rule 144 pursuant to the Securities Act, as disclosed by the SEC in Release Nos. 33-10911; 34-90773; File No. S7-24-20, dated as of December 22, 2020 (the “Proposed Rules”), which Proposed Rules, if adopted in the form as proposed, would revise the holding period determination for securities acquired upon the conversion or exchange of certain market-adjustable securities of issuers that do not have securities listed on a national securities exchange, and which rules, if adopted, are currently expected to apply to the Conversion Shares. In the event that the Proposed Rules are adopted as proposed, or in a form which would adversely affect the holding period determination for the Conversion Shares as held by Holder at such time, or which would be or could be issued to Holder in the future, the Company shall utilize its commercially reasonable efforts to cause such Conversion Shares to be registered on an appropriate registration statement pursuant to the Securities Act, provided that, as a condition thereof, Holder agrees to execute and delivery such documents and items as reasonably requested by the Company in connection with any such registration of the Conversion Shares. The provisions of this Section 5(j) shall not apply as to any Conversion Shares which have previously been registered, or are in the process of being registered, pursuant to the terms of the Registration Rights Agreement.
Section 6. Events of Default.
(a) For purposes herein, an “Event of Default” shall mean the occurrence of any of the following:
| (i) | the Company fails to pay the then-outstanding principal amount and accrued interest on this Note on any date any such amounts become due and payable, and any such failure is not cured within twenty Business Days of written notice thereof by Holder; |
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| (ii) | the Company fails to comply in any material respect with any other covenant or agreement hereunder and any such failure is not cured within twenty Business Days of written notice thereof by Holder; | |
| (iii) | if at any time commencing six (6) months from the Issue Date the Company is not subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act or has failed to file all reports required to be filed thereunder during the then-preceding twelve (12) months; | |
| (iv) | the Company fails to maintain the listing of the Common Stock on at least one of the Over-the-Counter Bulletin Board, the OTCQB Market, any level of the OTC Markets, or any level of the Nasdaq Stock Market or the New York Stock Exchange (including the NYSE American); | |
| (v) | In addition to the Event of Default in Section 6(a)(iii), the Common Stock of the Company is otherwise not eligible for trading through the DTC’s Fast Automated Securities Transfer or Deposit/Withdrawal at Custodian programs; | |
| (vi) | Any representation or warranty of the Company made in this Note, the Subscription Agreement, or the Confidential Private Placement Memorandum shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Subscription Agreement. | |
| (vii) | the Company shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator; (ii) make a general assignment for the benefit of the Company’s creditors; or (iii) commence a voluntary case under the U.S. Bankruptcy Code as now and hereafter in effect, or any successor statute; or | |
| (viii) | a proceeding or case shall be commenced, without the application or consent of the Company, in any court of competent jurisdiction, seeking (i) liquidation, reorganization or other relief with respect to it or its assets or the composition or readjustment of its debts, or (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of any substantial part of its assets, and, in each case, such proceedings or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 60 days, if in the United States, or 90 days, if outside of the United States; or an order for relief against the Company shall be entered in an involuntary case under any bankruptcy, insolvency, composition, readjustment of debt, liquidation of assets or similar Law of any jurisdiction. |
(b) If an Event of Default has occurred and is continuing the Holder may, by notice to the Company, declare all, but only all, of the Indebtedness due and payable, and this Note shall thereupon become immediately due and payable in cash.
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(c) Notice of Known Events of Default. The Company shall furnish to the Holder a notice of any occurrence of an Event of Default, and what action the Company is taking or proposes to take with respect thereto, promptly after such Event of Default becomes known to the Company.
Section 7. Transfer Restrictions. This Note may not be assigned or transferred or sold, directly or indirectly, by Holder to any Person without the prior written consent of the Company and without compliance with the other provisions of this Note, and any purported transfer of this Note in violation of this Section 7 shall be null and void. The Holder agrees that Holder shall not transfer or sell, directly or indirectly, any of the Conversion Shares other than in compliance with all applicable Laws.
Section 8. Arbitration.
(a) The Parties shall promptly submit any dispute, claim, or controversy arising out of or relating to this Note (including with respect to the meaning, effect, validity, termination, interpretation, performance, or enforcement of this Note) or any alleged breach thereof (including any action in tort, contract, equity, or otherwise), to binding arbitration before one arbitrator (the “Arbitrator”) jointly selected by the Parties. Binding arbitration shall be the sole means of resolving any dispute, claim, or controversy arising out of or relating to this Note (including with respect to the meaning, effect, validity, termination, interpretation, performance or enforcement of this Note) or any alleged breach thereof (including any claim in tort, contract, equity, or otherwise).
(b) If the Company and the Holder cannot agree upon the Arbitrator within ten (10) Business Days of the commencement of the efforts to so agree on an Arbitrator, the Company and the Holder shall each select one arbitrator and the two arbitrators so selected shall select the sole Arbitrator which shall resolve the dispute, claim, or controversy.
(c) The Laws of the State of Nevada shall apply to any arbitration hereunder, without application of the conflicts of laws provisions thereof. In any arbitration hereunder, this Note and any agreement contemplated hereby shall be governed by the Laws of the State of Nevada applicable to a contract negotiated, signed, and wholly to be performed in the State of Nevada, which Laws the Arbitrator shall apply in rendering his decision. The Arbitrator shall issue a written decision, setting forth findings of fact and conclusions of Law, within sixty (60) days after he or she shall have been selected. The Arbitrator shall have no authority to award punitive or other exemplary damages.
(d) The arbitration shall be held in Calabasas, California in accordance with and under the then-current provisions of the rules of the American Arbitration Association, except as otherwise provided herein.
(e) On application to the Arbitrator, any Party shall have rights to discovery to the same extent as would be provided under the Federal Rules of Civil Procedure, and the Federal Rules of Evidence shall apply to any arbitration under this Note; provided, however, that the Arbitrator shall limit any discovery or evidence such that his decision shall be rendered within the period referred to in Section 8(c).
(f) The Arbitrator may, at his discretion and at the expense of the Party who will bear the cost of the arbitration, employ experts to assist him in his determinations.
(g) The costs of the arbitration proceeding and any proceeding in court to confirm any arbitration award or to obtain relief, as applicable (including actual attorneys’ fees and costs), shall be borne by the unsuccessful Party and shall be awarded as part of the Arbitrator’s decision, unless the Arbitrator shall otherwise allocate such costs in such decision. The determination of the Arbitrator shall be final and binding upon the Parties and not subject to appeal.
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(h) Any judgment upon any award rendered by the Arbitrator may be entered in and enforced by any court of competent jurisdiction. The Parties expressly consent to the non-exclusive jurisdiction of the courts (Federal and state) in Los Angeles County, California to enforce any award of the Arbitrator or to render any provisional, temporary, or injunctive relief in connection with or in aid of the Arbitration. The Parties expressly consent to the personal and subject matter jurisdiction of the Arbitrator to arbitrate any and all matters to be submitted to arbitration hereunder. None of the Parties hereto shall challenge any arbitration hereunder on the grounds that any party necessary to such arbitration (including the Parties) shall have been absent from such arbitration for any reason, including that such Party shall have been the subject of any bankruptcy, reorganization, or insolvency proceeding.
Section 9. Governing Law; Consent to Jurisdiction. This Note shall be governed, construed and enforced in accordance with the Laws of the State of Nevada, without application of the conflicts of laws provisions thereof. Subject to Section 8, each Party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by this Note (whether brought against a Party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in Los Angeles County, California (the “Selected Courts”). Each Party hereto hereby irrevocably submits to the exclusive jurisdiction of the Selected Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such Selected Courts, or such Selected Courts are improper or inconvenient venue for such proceeding. 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 via registered or certified mail or overnight delivery (with evidence of delivery) to such Party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof.
Section 10. Waiver of Jury Trial; Exemplary Damages.
(a) 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 NOTE OR THE TRANSACTIONS CONTEMPLATED HEREIN (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 PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS NOTE BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS Section 10(a).
(b) Each of the Parties acknowledge that each has been represented in connection with the signing of the waiver set forth in Section 10(a) by independent legal counsel selected by the respective Party and that such Party has discussed the legal consequences and import of such waiver with legal counsel. Each of the Parties further acknowledge that each has read and understands the meaning of such waiver and grants such waiver knowingly, voluntarily, without duress and only after consideration of the consequences of this waiver with legal counsel.
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(c) In no event will any Party be liable to any other Party under or in connection with this Note or in connection with the transactions contemplated herein for special, general, indirect, consequential, or punitive or exemplary damages, including damages for lost profits or lost opportunity, even if the Party sought to be held liable has been advised of the possibility of such damage.
Section 11. Indemnification.
(a) By the Company. The Company will indemnify and hold the Holder, the officers, directors, members, partners, agents and employees (and any other individuals or entities with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of Holder (each, a “Holder Party”) harmless from any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) liabilities, obligations, contingencies, damages, and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees, costs of investigation (collectively, “Losses”) that any Holder Party may suffer or incur as a result of any breach of any of the representations, warranties, covenants or agreements made by the Company in this Note. If any action shall be brought against any Holder Party in respect of which indemnity may be sought pursuant to this Note, Holder Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Holder Party. Any Holder Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of Holder Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position of Holder Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company shall not settle or compromise any claim for which a Holder Party seeks indemnification hereunder without the prior written consent of Holder Party and such consent not to be unreasonably withheld, conditioned or delayed, unless such settlement involves a full and complete release of the applicable Holder Party. The indemnification required by this Section 11(a) 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 are incurred, provided, however, that the recipient thereof shall execute a customary undertaking to repay any such amounts in the event that such recipient is ultimately determined not to be entitled to indemnification hereunder.
(b) By the Holder. The Holder agrees to indemnify and hold the Company, the officers, directors, members, partners, agents and employees (and any other individuals or entities with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of the Company (each, a “Company Party”, with an Holder Party and Company Party each being referred to as an “Indemnified Party”) harmless from any and all Losses that any such Company Party may suffer or incur as a result of any breach of any of the representations, warranties, covenants or agreements made by Holder in this Note. If any action shall be brought against any Company Party in respect of which indemnity may be sought pursuant to this Note, such Company Party shall promptly notify the Holder in writing, and Holder shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Company Party. Any Company Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Company Party except to the extent that (i) the employment thereof has been specifically authorized by the Holder in writing, (ii) the Holder has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company Party and the position of such Holder, in which case the Holder shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Holder shall not settle or compromise any claim for which a Company Party seeks indemnification hereunder without the prior written consent of such Company Party and such consent not to be unreasonably withheld, conditioned or delayed, unless such settlement involves a full and complete release of the applicable Company Party. The indemnification required by this Section 11(b) 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 are incurred, provided, however, that the recipient thereof shall execute a customary undertaking to repay any such amounts in the event that such recipient is ultimately determined not to be entitled to indemnification hereunder.
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Section 12. Specific Performance. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Note were not performed by them in accordance with the terms hereof or were otherwise breached and that each Party hereto shall be entitled to an injunction or injunctions, specific performance and other equitable relief to prevent breaches of the provisions hereof and to enforce specifically the terms and provisions hereof, without the proof of actual damages, in addition to any other remedy to which they are entitled at law or in equity. Each Party agrees to waive any requirement for the security or posting of any bond in connection with any such equitable remedy and agrees that it will not oppose the granting of an injunction, specific performance or other equitable relief on the basis that (a) the other Party has an adequate remedy at law, or (b) an award of specific performance is not an appropriate remedy for any reason at law or equity.
Section 13. Miscellaneous.
(a) Notices. Any notice or other communications required or permitted hereunder shall be in writing and shall be sufficiently given if personally delivered to it or sent by email, overnight courier or registered mail or certified mail, postage prepaid, addressed as follows:
If to the Company, to:
Resonate Blends, Inc.
Attn: Geoffrey Selzer
26565 Agoura Road, Suite 200
Calabasas, CA 91302
Email: [email protected]
With a copy to (which shall not constitute notice):
Anthony L.G., PLLC
Attn: John Cacomanolis
625 N. Flagler Drive, Suite 600
West Palm Beach, FL 33401
Email: [email protected]
If to Holder, to the address as set forth on the signature page hereof.
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(b) Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay principal, damages and accrued interest, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed.
(c) Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of this Note, and of the ownership hereof reasonably satisfactory to the Company.
(d) Attorneys’ Fees. In the event that any Party institutes any action or suit to enforce this Note or to secure relief from any default hereunder or breach hereof, the prevailing Party shall be reimbursed by the losing Party for all costs, including reasonable attorney’s fees, incurred in connection therewith and in enforcing or collecting any judgment rendered therein.
(e) Severability. If any term or provision of this Note is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable in any situation in any jurisdiction, such determination shall not affect the validity or enforceability of the remaining terms and provisions hereof or thereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction or other authority declares that any term or provision hereof or thereof is invalid, void or unenforceable, each of the Company and the Holder agrees that the court making such determination shall have the power to reduce the scope, duration, area or applicability of the term or provision; to delete specific words or phrases; or to replace any invalid, void or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid, void or unenforceable term or provision.
(f) Entire Agreement. This Note and the Registration Rights Agreement constitute the entire agreement between the Parties with respect to the subject matter hereof and thereof and supersede all prior agreements, understandings and negotiations, whether written or oral, of the Parties.
(g) Arm’s Length Bargaining; No Presumption Against Drafter. This Note has been negotiated at arm’s-length by parties of equal bargaining strength, each represented by counsel or having had but declined the opportunity to be represented by counsel and having participated in the drafting of this Note. This Note creates no fiduciary or other special relationship between the Parties, and no such relationship otherwise exists. No presumption in favor of or against any Party in the construction or interpretation of this Note or any provision hereof shall be made based upon which Person might have drafted this Note or such provision.
(h) Amendment; Waiver. Other than as specifically set forth herein, this Note may be amended, and the observance of any term hereof may be waived (either retroactively or prospectively), only upon the written consent of the Company and the Holder.
(i) Assignment by the Company. The Parties acknowledge and agree that, in the event that the Company completes a transaction with another Person or an affiliate of another Person, in which transaction a majority of the issued and outstanding shares of Common Stock are acquired by such Person (“Assignee”), the Company may freely assign this Note and the Registration Rights Agreement to such Assignee and may freely amend the terms of this Note and the Registration Rights Agreement as necessary to effect such amendment and, upon any such assignment the Company shall have no further obligations hereunder provided that assignee assumes all of the rights and obligations of the Company hereunder and pursuant to the Note and Registration Rights Agreement.
(j) Descriptive Headings. The descriptive headings herein are inserted for convenience of reference only and shall in no way be construed to define, limit, describe, explain, modify, amplify, or add to the interpretation, construction or meaning of any provision of, or scope or intent of, this Note nor in any way affect this Note.
(k) Third Party Beneficiaries. This contract is strictly between the Parties and, except as specifically provided, no other Person and no director, officer, shareholder, employee, agent, independent contractor or any other Person shall be deemed to be a third-party beneficiary of this Note.
Section 14. Counterparts. This Note may be executed in any number of counterparts with the same force and effect as if all parties had executed the same document. The execution and delivery of a facsimile or other electronic transmission of this Note shall constitute delivery of an executed original and shall be binding upon the person whose signature appears on the transmitted copy.
[Signature page follows]
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IN WITNESS WHEREOF, the undersigned have executed this Note as of the Issue Date.
| Resonate Blends, Inc. | ||
| By: | ||
| Name: | Geoffrey Selzer | |
| Title: | Chief Executive Officer | |
Agreed and accepted:
| Holder Name: | ||
| By: | ||
| Name: | ||
| Title: | ||
| (if applicable) |
Address for notices:
| Email: | ||
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Exhibit 4.2
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS SUCH SALE, TRANSFER, PLEDGE OR HYPOTHECATION IS IN ACCORDANCE WITH SUCH ACT AND APPLICABLE STATE SECURITIES LAWS.
Warrant No.
No. of Shares of Common Stock: ______________ shares
WARRANT
to Purchase Common Stock of
Resonate Blends, Inc.
a Nevada Corporation
This Warrant certifies that ________________ (“Purchaser”), is entitled to purchase from Resonate Blends, Inc. , a Nevada corporation (the “Company”), _______________ shares of Common Stock (or any portion thereof) at an exercise price of $._____ per share of Common Stock, all on the terms and conditions hereinafter provided.
Section 1. Certain Definitions. As used in this Warrant, unless the context otherwise requires:
“Articles” shall mean the Articles of Incorporation of the Company, as in effect from time to time.
“Common Stock” shall mean the Company’s authorized common stock, $0.0001 par value per share.
“Exercise Price” shall mean the exercise price per share of Common Stock set forth above, as adjusted from time to time pursuant to Section 3 hereof.
“Securities Act” shall mean the Securities Act of 1933, as amended.
“Warrant” shall mean this Warrant and all additional or new warrants issued upon division or combination of, or in substitution for, this Warrant. All such additional or new warrants shall at all times be identical as to terms and conditions and date, except as to the number of shares of Common Stock for which they may be exercised.
“Warrant Stock” shall mean the shares of Common Stock purchasable by the holder of this Warrant upon the exercise of such Warrant.
“Warrant holder” shall mean the Purchaser, as the initial holder of this Warrant, and its nominees, successors or assigns, including any subsequent holder of this Warrant to whom it has been legally transferred.
Section 2. Exercise of Warrant; Vesting.
(a) The Purchaser may, at any time and from time to time, exercise this Warrant, in whole or in part. This warrant expires on February 21, 2026.
(b) (i) The Warrant holder shall exercise this Warrant by means of delivering to the Company at its office identified in Section 14 hereof (i) a written notice of exercise, including the number of shares of Warrant Stock to be delivered pursuant to such exercise, (ii) this Warrant and (iii) payment equal to the Exercise Price in accordance with Section 2(b)(ii). In the event that any exercise shall not be for all shares of Warrant Stock purchasable hereunder, the Company shall deliver to the Warrant holder a new Warrant registered in the name of the Warrant holder, of like tenor to this Warrant and for the remaining shares of Warrant Stock purchasable hereunder, within ten (10) days of any such exercise. Such notice of exercise shall be in the Subscription Form set out at the end of this Warrant.
(ii) The Warrant holder may elect to pay the Exercise Price to the Company either by cash, certified check or wire transfer.
(c) Upon exercise of this Warrant and delivery of the Subscription Form with proper payment relating thereto, the Company shall cause to be executed and delivered to the Warrant holder a certificate or certificates representing the aggregate number of fully-paid and nonassessable shares of Common Stock issuable upon such exercise.
(d) The stock certificate or certificates for Warrant Stock to be delivered in accordance with this Section 2 shall be in such denominations as may be specified in said notice of exercise and shall be registered in the name of the Warrant holder or such other name or names as shall be designated in said notice. Such certificate or certificates shall be deemed to have been issued and the Warrant holder or any other person so designated to be named therein shall be deemed to have become the holder of record of such shares, including to the extent permitted by law the right to vote such shares or to consent or to receive notice as stockholders, as of the time said notice is delivered to the Company as aforesaid.
(e) The Company shall pay all expenses payable in connection with the preparation, issue and delivery of stock certificates under this Section 2, resulting from the exercise of the Warrant and the issuance of Warrant Stock hereunder.
(f) All shares of Warrant Stock issuable upon the exercise of this Warrant in accordance with the terms hereof shall be validly issued, fully paid and nonassessable, and free from all liens and other encumbrances thereon, other than liens or other encumbrances created by the Warrant holder.
(g) In no event shall any fractional share of Common Stock of the Company be issued upon any exercise of this Warrant. If, upon any exercise of this Warrant, the Warrant holder would, except as provided in this paragraph, be entitled to receive a fractional share of Common Stock, then the Company shall deliver in cash to such holder an amount equal to such fractional interest.
Section 3. Adjustment of Exercise Price and Warrant Stock.
(a) If, at any time prior to the Expiration Date, the number of outstanding shares of Common Stock is (i) increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up of shares of Common Stock, or (ii) decreased by a combination of shares of Common Stock, then, following the record date fixed for the determination of holders of Common Stock entitled to receive the benefits of such stock dividend, subdivision, split-up, or combination, the Exercise Price shall be adjusted to a new amount equal to the product of (I) the Exercise Price in effect on such record date and (II) the quotient obtained by dividing (x) the number of shares of Common Stock outstanding on such record date (without giving effect to the event referred to in the foregoing clause (i) or (ii)), by (y) the number of shares of Common Stock which would be outstanding immediately after the event referred to in the foregoing clause (i) or (ii), if such event had occurred immediately following such record date.
(b) Upon each adjustment of the Exercise Price as provided in Section 3 (a), the Warrant holder shall thereafter be entitled to subscribe for and purchase, at the Exercise Price resulting from such adjustment, the number of shares of Warrant Stock equal to the product of (i) the number of shares of Warrant Stock existing prior to such adjustment and (ii) the quotient obtained by dividing (I) the Exercise Price existing prior to such adjustment by (II) the new Exercise Price resulting from such adjustment.
Section 4. Division and Combination. This Warrant may be divided or combined with other Warrants upon presentation at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Warrant holder or its agent or attorney. The Company shall pay all expenses in connection with the preparation, issue and delivery of Warrants under this Section 4, including any transfer taxes resulting from the division or combination hereunder. The Company agrees to maintain at its aforesaid office books for the registration of the Warrants.
Section 5. Reclassification, Etc. In case of any reclassification or change of the outstanding Common of the Company (other than as a result of a subdivision, combination or stock dividend), or in case of any consolidation of the Company with, or merger of the Company into, another corporation or other business organization (other than a consolidation or merger in which the Company is the continuing corporation and which does not result in any reclassification or change of the outstanding Common Stock of the Company) at any time prior to the Expiration Date, then, as a condition of such reclassification, reorganization, change, consolidation or merger, lawful provision shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Warrant holder, so that the Warrant holder shall have the right prior to the Expiration Date to purchase, at a total price not to exceed that payable upon the exercise of this Warrant, the kind and amount of shares of stock and other securities and property receivable upon such reclassification, reorganization, change, consolidation or merger by a holder of the number of shares of Common Stock of the Company which might have been purchased by the Warrant holder immediately prior to such reclassification, reorganization, change, consolidation or merger, in any such case appropriate provisions shall be made with respect to the rights and interest of the Warrant holder to the end that the provisions hereof (including provisions for the adjustment of the Exercise Price and of the number of shares purchasable upon exercise of this Warrant) shall thereafter be applicable in relation to any shares of stock and other securities and property thereafter deliverable upon exercise hereof.
Section 6. Reservation and Authorization of Capital Stock. The Company shall at all times reserve and keep available for issuance such number of its authorized but unissued shares of Common Stock as will be sufficient to permit the exercise in full of all outstanding Warrants.
Section 7. Stock and Warrant Books. The Company will not at any time, except upon dissolution, liquidation or winding up, close its stock books or Warrant books so as to result in preventing or delaying the exercise of any Warrant.
Section 8. Limitation of Liability. No provisions hereof, in the absence of affirmative action by the Warrant holder to purchase Warrant Stock hereunder, shall give rise to any liability of the Warrant holder to pay the Exercise Price or as a stockholder of the Company (whether such liability is asserted by the Company or creditors of the Company).
Section 9. Registration Rights. There are no registration rights or piggyback registration rights for the Warrant Stock issuable upon exercise of this Warrant.
Section 10. Transfer. Subject to compliance with the Securities Act and the applicable rules and regulations promulgated thereunder, this Warrant and all rights hereunder shall be transferable in whole or in part. Any such transfer shall be made at the office or agency of the Company at which this Warrant is exercisable, by the registered holder hereof in person or by its duly authorized attorney, upon surrender of this Warrant together with the assignment hereof properly endorsed, and promptly thereafter a new warrant shall be issued and delivered by the Company, registered in the name of the assignee. Until registration of transfer hereof on the books of the Company, the Company may treat the Purchaser as the owner hereof for all purposes.
Section 11. Investment Representations; Restrictions on Transfer of Warrant Stock. Unless a current registration statement under the Securities Act shall be in effect with respect to the Warrant Stock to be issued upon exercise of this Warrant, the Warrant holder, by accepting this Warrant, covenants and agrees that, at the time of exercise hereof, and at the time of any proposed transfer of Warrant Stock acquired upon exercise hereof, such Warrant holder will deliver to the Company a written statement that the securities acquired by the Warrant holder upon exercise hereof are for the account of the Warrant holder or are being held by the Warrant holder as trustee, investment manager, investment advisor or as any other fiduciary for the account of the beneficial owner or owners for investment and are not acquired with a view to, or for sale in connection with, any distribution thereof (or any portion thereof) and with no present intention (at any such time) of offering and distributing such securities (or any portion thereof).
Section 12. Loss, Destruction of Warrant Certificates. Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction, upon receipt of indemnity and/or security satisfactory to the Company or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Company will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the right to purchase the same aggregate number of shares of Common Stock.
Section 13. Amendments. The terms of this Warrant may be amended, and the observance of any term herein may be waived, but only with the written consent of the Company and the Warrant holder.
Section 14. Notices Generally. Any notice, request, consent, other communication or delivery pursuant to the provisions hereof shall be in writing and shall be sent by one of the following means: (i) by registered or certified first class mail, postage prepaid, return receipt requested; (ii) by facsimile transmission with confirmation of receipt; (iii) by nationally recognized courier service guaranteeing overnight delivery; or (iv) by personal delivery, and shall be properly addressed to the Warrant holder at the last known address or facsimile number appearing on the books of the Company, or, except as herein otherwise expressly provided, to the Company at its principal executive office, or such other address or facsimile number as shall have been furnished to the party giving or making such notice, demand or delivery.
Section 15. Successors and Assigns. This Warrant shall bind and inure to the benefit of and be enforceable by the parties hereto and their respective permitted successors and assigns.
Section 16. Governing Law. In all respects, including all matters of construction, validity and performance, this Warrant and the obligations arising hereunder shall be governed by, and construed and enforced in accordance with the laws of the State of Nevada.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in its name by its Chief Executive Officer.
Dated: ___________, 2021
| Resonate Blends, Inc. | ||
| a Nevada Corporation | ||
| By: | ||
| Name: | Geoffrey Selzer | |
| Title: | CEO | |
| Holder of Warrant | ||
| By: | ||
| Name: | ||
SUBSCRIPTION FORM
(to be executed only upon exercise of Warrant)
To: Resonate Blends, Inc.
The undersigned, pursuant to the provisions set forth in the attached Warrant (No. __ ), hereby irrevocably elects to purchase __________ shares of the Common Stock covered by such Warrant and herewith makes payment of $__________, representing the full purchase price for such shares at the price per share provided for in such Warrant.
| Dated: | Name: | |||
| Signature: | ||||
| Address: | ||||
| Tax ID: | ||||
Exhibit 4.3
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION ARE NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE SET FORTH HEREIN.
RESONATE BLENDS, INC.
Warrant for the Purchase of Shares of Common Stock
| No. [____] | ___________________________ Shares of Common Stock |
| Issue Date: ____________________, 2021 |
THIS CERTIFIES that, for value received, the holder as set forth on the signature page hereof (the “Holder”), is entitled to subscribe for and purchase from Resonate Blends, Inc., a Nevada corporation (the “Company”), upon the terms and conditions set forth herein, the number of shares of common stock, par value $0.0001 per share (the “Common Stock”) of the Company as set forth above, as such number may be adjusted as set forth herein (as so adjusted, the “Warrant Shares”) at an exercise price as set forth herein. As used herein the term “Warrant” shall mean and include this Warrant and warrants hereafter issued as a consequence of the exercise or transfer of this Warrant in whole or in part.
| 1. | Defined Terms. Defined terms used herein without definition have the following meanings: |
| (a) | “Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with such Person. | |
| (b) | “Business Day” means any day that is not a Saturday, Sunday or other day on which banking institutions in Nevada are authorized or required by law or executive order to close. | |
| (c) | “Common Stock” means the common stock, par value $0.0001 per share of the Company. | |
| (d) | “Control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise. “Controlled”, “Controlling” and “under common Control with” have correlative meanings. Without limiting the foregoing a Person (the “Controlled Person”) shall be deemed Controlled by (a) any other Person (the “10% Owner”) (i) owning beneficially, as meant in Rule 13d-3 under the Exchange Act, securities entitling such Person to cast 10% or more of the votes for election of directors or equivalent governing authority of the Controlled Person or (ii) entitled to be allocated or receive 10% or more of the profits, losses, or distributions of the Controlled Person; (b) an officer, director, general partner, partner (other than a limited partner), manager, or member (other than a member having no management authority that is not a 10% Owner ) of the Controlled Person; or (c) a spouse, parent, lineal descendant, sibling, aunt, uncle, niece, nephew, mother-in-law, father-in-law, sister-in-law, or brother-in-law of an Affiliate of the Controlled Person or a trust for the benefit of an Affiliate of the Controlled Person or of which an Affiliate of the Controlled Person is a trustee. |
| 1 |
| (e) | “Exchange Act” means the Securities Exchange Act of 1934, as amended. | |
| (f) | “Governmental Authority” means any federal, state, provincial, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction. | |
| (g) | “Law” means any domestic or foreign, federal, state, provincial, municipality or local law, statute, ordinance, code, rule, or regulation. | |
| (h) | “Parties” means the Holder and the Company. | |
| (i) | “Party” means either the Holder or the Company, as applicable. | |
| (j) | “Person” means an individual, corporation, partnership (including a general partnership, limited partnership or limited liability partnership), limited liability company, association, trust or other entity or organization, including a Governmental Authority, domestic or foreign, or political subdivision thereof, or an agency or instrumentality thereof. | |
| (k) | “SEC” means the United States Securities and Exchange Commission. | |
| (l) | “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. |
| 2. | Exercise Period; Definitions; Exercise Price. |
| (a) | Exercise Period. Subject to the terms and conditions set forth herein, this Warrant may be exercised at any time or from time to time during the period commencing at 10:00 a.m. Eastern time on the first Business Day following the first to occur of (1) a Qualified Financing (as defined below) after the Issue Date and (2) January 2, 2022; and in each case expiring at 5:00 p.m. Eastern time on the fifth annual anniversary of the occurrence of the first event in clause (1) or (2) (the “Exercise Period”). For the avoidance of doubt, this Warrant may not be exercised prior to the commencement of the Exercise Period. | |
| (b) | Definitions and Additional Provisions. |
| (i) | For purposes herein, a “Qualified Financing” means the issuance by the Company, other than an “Excluded Issuance” (as defined below), of shares of Common Stock, in one transaction or series of related transactions, which transaction(s) result in aggregate gross proceeds actually received by the Company of at least $5,000,000. |
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| (ii) | Notwithstanding anything herein to the contrary, a Qualified Financing shall not include any Excluded Issuance. An “Excluded Issuance” means any issuances of Common Stock: |
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(1) | for compensatory or incentive purposes to officers, employees or directors of, or consultants to, the Company or any of its Affiliates including, without limitation, the grant of stock options, deferred share units, restricted share units or restricted shares, duly adopted for such purposes by a majority of the non-employee members of the board of directors of the Company or a majority of the members of the committee of nonemployee members of the board of directors established for such purpose; |
| (2) | pursuant to a rights offering by the Company or pursuant to a shareholder rights plan of the Company that is carried out on a pro rata basis among all holders of the applicable class of securities of the Company; |
| (3) | upon the exercise, conversion or exchange of any securities exercisable, convertible or exchangeable for or into shares of Common Stock; |
| (4) | pursuant to any over-allotment option granted to the underwriters in a securities offering; |
| (5) | as a result of the consolidation or subdivision of any securities of the Company, or as a special distribution or stock dividend or similar transaction that is carried out on a pro rata basis among all holders of the applicable class of securities of the Company; or |
| (6) | in connection with or pursuant to any merger, business combination, joint venture, exchange offer, take-over bid, arrangement, amalgamation, asset purchase transaction or acquisition of assets or shares of a third party where such transaction is approved by a majority of the disinterested directors of the Company. |
| (c) | Exercise Price. The Exercise Price for purposes herein shall be $0.15 per share, subject to adjustment as set forth herein. |
| 3. | Procedure for Exercise; Effect of Exercise. |
| (a) | Cash Exercise. This Warrant may be exercised, in whole or in part, by the Holder during normal business hours on any business day during the Exercise Period by (i) the presentation to the Company at its principal office along of a duly executed Notice of Exercise (in the form attached hereto) specifying the number of Warrant Shares to be purchased (each of which shall constitute at least 1 share of Common Stock, and integral multiples thereof), and (ii) delivery of payment to the Company of the aggregate Exercise Price for the number of Warrant Shares being purchase as specified in the Notice of Exercise by cash, wire transfer of immediately available funds to a bank account specified by the Company, or by certified or bank cashier’s check. The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. Any fractional Warrant Shares that may be issued on exercise of this Warrant may be issued as such fractional shares of Common Stock, may be paid in cash or may be rounded up to the next nearest share of Common Stock, in each case at the election of the Company. |
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| (b) | Cashless Exercise. Notwithstanding Section 3(a), if the “Fair Market Value” (as defined below) of one share of Common Stock is greater than the Exercise Price as of the applicable time of exercise, the Holder may elect to receive Warrant Shares pursuant to a cashless exercise, in lieu of a cash exercise, equal to the value of this Warrant determined in the manner described below (or of any portion thereof remaining unexercised) by surrender of this Warrant and a Notice of Exercise, in which event the Company shall issue to Holder a number of Common Stock computed using the following formula: |
X = Y (A-B)
A
Where:
| X = | the number of Warrant Shares to be issued to Holder. |
| Y = | the number of Warrant Shares that the Holder elects to purchase under this Warrant (at the date of such calculation). |
| A = | Fair Market Value of a Warrant Share at the date of such calculation. |
| B = | Exercise Price, as adjusted to the date of calculation. |
For purposes of this Warrant, the per share “Fair Market Value” shall mean (i) if the Common Stock is then listed for trading on the OTC Markets or a United States or Canadian national securities exchange (as applicable, the “Trading Market”), the highest traded price of the Common Stock during the twenty (20) day period during which the Common Stock is then tradeable on the primary Trading Market prior to the date of the applicable Exercise Notice or (ii) if the Common Stock is not then listed for trading on the OTC Markets or a United States or Canadian national securities exchange, the per share fair market value of the Warrant Shares as is determined in good faith by the Board of Directors of the Company after taking into consideration factors it deems appropriate, including, without limitation, recent sale and offer prices of the capital stock of the Company in private transactions negotiated at arm’s length.
| (c) | Effect of Exercise; Delivery. Upon receipt by the Company of this Warrant and a Notice of Exercise, together with proper payment of the Exercise Price (if applicable), as provided herein, the Company agrees that such Warrant Shares shall be deemed to be issued to the Holder as the record holder of such Warrant Shares as of the close of business on the date on which the Notice of Exercise has been delivered and payment has been made for such Warrant Shares in accordance with this Warrant and the Holder shall be deemed to be the holder of record of the Warrant Shares, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such Warrant Shares shall not then be actually delivered to the Holder. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via “cashless exercise”, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is two (2) Business Days after the delivery to the Company of the Notice of Exercise. The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 9 prior to the issuance of such shares, having been paid. |
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| (d) | Certain Adjustments. The number and kind of securities purchasable upon the exercise of this Warrant and the Exercise Price therefor shall be subject to adjustment from time to time upon the occurrence of certain events, as follows: |
| (i) | Fundamental Transactions. In the event that, prior to any exercise hereunder, the Common Stock is converted into another class of securities of the Company or any successor entity to the Company, whether by way of merger, reorganization, re-incorporation or otherwise (the “Replacement Securities”), any reference herein to the Common Stock (whether standing alone or as part of another defined term herein) automatically upon the consummation of the applicable transaction shall be deemed a reference to such Replacement Securities. In the event that, prior to any exercise hereunder, the Company completes a share exchange with another entity wherein all of the issued and outstanding shares of Common Stock are exchanged for equity interests in the other entity (the “Exchanged Securities”), any reference herein to the Common Stock (whether standing alone or as part of another defined term herein) automatically upon the consummation of the applicable transaction shall be deemed a reference to such Exchanged Securities. Then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive the number of Replacement Securities or Exchanged Securities and any additional consideration (the “Alternate Consideration”) receivable upon or as a result of such merger, reorganization, re-incorporation or exchange as receivable for the Warrant Shares had they been issued at that time, with appropriate and equitable adjustments being made to the Exercise Price, and for purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock. |
| (ii) | Adjustments. The number of Warrant Shares and the Exercise Price shall be subject to proportional and equitable adjustments following the Issue Date for splits, combinations or dividends relating to the Common Stock, or combinations, recapitalization, reclassifications, extraordinary distributions and similar events that occur on or after the Issue Date. By way of example and not limitation, in the event of a forward split of the Common Stock following the Issue Date in which each share of Common Stock is converted into two shares of Common Stock, the number of Warrant Shares shall be increased by 100% and the Exercise Price shall be reduced by 50%, and in the event of a reverse split of the Common Stock following the Issue Date in which each two shares of Common Stock are converted into one share of Common Stock, the number of Warrant Shares shall be reduced by 50% and the Exercise Price shall be increased by 100%. |
| (iii) | Notice of Adjustments. Whenever the number of Warrant Shares purchasable hereunder or the Exercise Price thereof shall be adjusted pursuant hereto, the Company shall provide notice to the Holder setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the number and class of shares which may be purchased thereafter and the Exercise Price therefor after giving effect to such adjustment. |
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| (e) | Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, to the extent that after giving effect to the exercise set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)) would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (i) exercise of the remaining, non-exercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 3(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act, and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section 3(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant may be exercised (in relation to other securities owned by the Holder together with any Affiliates or Attribution Parties) and which portion of this Warrant may be exercised, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed to represent to the Company each time it delivers a Notice of Exercise that such Notice of Exercise has not violated the restrictions set forth in this Section 3(e) and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 3(e), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Company’s most recent periodic or annual report filed with the SEC, as the case may be, (ii) a more recent public announcement by the Company, or (iii) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one Business Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant by the Holder. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 3(e), provided that any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The Beneficial Ownership Limitation provisions of this Section 3(e) shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 3(e) to correct this Section 3(e) (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this Section 3(e) shall apply to a successor holder of this Warrant. |
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| 4. | Registration of Warrants; Transfer of Warrants. Any Warrants issued upon the transfer or exercise in part of this Warrant shall be numbered and shall be registered in a Warrant Register as they are issued. The Company shall be entitled to treat the registered holder of any Warrant on the Warrant Register as the owner in fact thereof for all purposes and shall not be bound to recognize any equitable or other claim to or interest in such Warrant on the part of any other person, and shall not be liable for any registration or transfer of Warrants which are registered or to be registered in the name of a fiduciary or the nominee of a fiduciary unless made with the actual knowledge that a fiduciary or nominee is committing a breach of trust in requesting such registration or transfer, or with the knowledge of such facts that its participation therein amounts to bad faith. This Warrant shall be transferable only on the books of the Company upon delivery thereof duly endorsed by the Holder or by its duly authorized attorney or representative, or accompanied by proper evidence of succession, assignment, or authority to transfer. In all cases of transfer by an attorney, executor, administrator, guardian, or other legal representative, duly authenticated evidence of his or its authority shall be produced. Upon any registration of transfer, the Company shall deliver a new Warrant or Warrants to the person entitled thereto. This Warrant may be exchanged, at the option of the Holder thereof, for another Warrant, or other Warrants of different denominations, of like tenor and representing in the aggregate the right to purchase a like number of Warrant Shares, upon surrender to the Company or its duly authorized agent. |
| 5. | Registration Rights. The Company and the Holder acknowledge and agree that the Warrant Shares, if and when issued, shall be subject to the Registration Rights Agreement to be entered into between the Company and the Holder (the “Registration Rights Agreement”). |
| 6. | Restrictions on Transfer. |
| (a) | The Holder, as of the Issuance Date, represents to the Company that such Holder is acquiring this Warrant for its own account for investment purposes and not with a view to the distribution thereof or of the Warrant Shares. Notwithstanding any provisions contained in this Warrant to the contrary, this Warrant and the related Warrant Shares shall not be transferable except pursuant to the proviso contained in the following sentence or upon the conditions specified in this Section 6, which conditions are intended, among other things, to insure compliance with the provisions of the Securities Act of 1933, as amended (the “Securities Act”) and applicable state law in respect of the transfer of this Warrant or such Warrant Shares. The Holder by acceptance of this Warrant agrees that the Holder will not transfer this Warrant or the related Warrant Shares prior to delivery to the Company of an opinion of the Holder’s counsel (as such opinion and such counsel are described in Section 6(b)) or until registration of such Warrant Shares under the Securities Act has become effective or after a sale of such Warrant or Warrant Shares has been consummated pursuant to Rule 144 or Rule 144A under the Securities Act; provided, however, that the Holder may freely transfer this Warrant or such Warrant Shares (without delivery to the Company of an opinion of counsel) (i) to one of its nominees, affiliates or a nominee thereof, (ii) from a nominee to any of the aforementioned persons as beneficial owner of this Warrant or such Warrant Shares, (iii) to a qualified institutional buyer, so long as such transfer is effected in compliance with Rule 144A under the Securities Act, or (iv) to an accredited investor (as such term is defined in Regulation D under the Securities Act). |
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| (b) | The Holder, by its acceptance hereof, agrees that prior to any transfer of this Warrant or of the related Warrant Shares (other than as permitted by Section 6(a) or pursuant to a registration under the Securities Act), the Holder will give written notice to the Company of its intention to effect such transfer, together with an opinion of such counsel for the Holder as shall be reasonably acceptable to the Company, to the effect that the proposed transfer of this Warrant and/or such Warrant Shares may be effected without registration under the Securities Act. Upon delivery of such notice and opinion to the Company, the Holder shall be entitled to transfer this Warrant and/or such Warrant Shares in accordance with the intended method of disposition specified in the notice to the Company. |
| (c) | Each stock certificate representing Warrant Shares issued upon exercise or exchange of this Warrant shall bear the following legend unless the opinion of counsel referred to in Section 6(a) states such legend is not required: |
“THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.”
| (d) | The Holder understands that the Company may place and may instruct any transfer agent or depository for the Warrant Shares to place, a stop transfer notation in the securities records in respect of the Warrant Shares. |
| 7. | Reservation of Shares; Reissuance. The Company shall at all times during the Exercise Period reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of providing for the exercise of the rights to purchase all Warrant Shares granted pursuant to the Warrants, such number of shares of Common Stock as shall, from time to time, be sufficient therefor. The Company covenants that all shares of Common Stock issuable upon exercise of this Warrant, upon receipt by the Company of the full Exercise Price therefor, shall be validly issued, fully paid, non-assessable, and free of preemptive rights, and free from all taxes, claims, liens, charges and other encumbrances. If this Warrant is lost, stolen, mutilated or destroyed, the Company will, on such terms as to indemnity or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed. In the event that this Warrant is not fully exercised by the end of the Exercise Period it shall thereafter be void and of no further force and effect. |
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| 8. | Non-Circumvention. The Company covenants and agrees that it will not, by amendment of its certificate of incorporation, bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. |
| 9. | Transfer Taxes. The issuance of any shares or other securities upon the exercise of this Warrant, and the delivery of certificates or other instruments representing such shares or other securities, shall be made without charge to the Holder for any tax or other charge in respect of such issuance. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of any certificate in a name other than that of the Holder and the Company shall not be required to issue or deliver any such certificate unless and until the person or persons requesting the issue thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. |
| 10. | Loss or Mutilation of Warrant. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of any Warrant (and upon surrender of any Warrant if mutilated), and upon reimbursement of the Company’s reasonable incidental expenses, the Company shall execute and deliver to the Holder thereof a new Warrant of like date, tenor, and denomination. |
| 11. | No Rights as a Stockholder. The Holder of any Warrant shall not have, solely on account of such status, any rights of a stockholder of the Company, either at law or in equity, or to any notice of meetings of stockholders or of any other proceedings of the Company, except as provided in this Warrant. |
| 12. | Arbitration. |
| (a) | The Parties shall promptly submit any dispute, claim, or controversy arising out of or relating to this Warrant (including with respect to the meaning, effect, validity, termination, interpretation, performance, or enforcement of this Warrant) or any alleged breach thereof (including any action in tort, contract, equity, or otherwise), to binding arbitration before one arbitrator (the “Arbitrator”) jointly selected by the Parties. Binding arbitration shall be the sole means of resolving any dispute, claim, or controversy arising out of or relating to this Warrant (including with respect to the meaning, effect, validity, termination, interpretation, performance or enforcement of this Warrant) or any alleged breach thereof (including any claim in tort, contract, equity, or otherwise). |
| (b) | If the Company and the Holder cannot agree upon the Arbitrator within ten (10) Business Days of the commencement of the efforts to so agree on an Arbitrator, the Company and the Holder shall each select one arbitrator and the two arbitrators so selected shall select the sole Arbitrator which shall resolve the dispute, claim, or controversy. |
| (c) | The Laws of the State of Nevada shall apply to any arbitration hereunder, without application of the conflicts of laws provisions thereof. In any arbitration hereunder, this Warrant and any agreement contemplated hereby shall be governed by the Laws of the State of Nevada applicable to a contract negotiated, signed, and wholly to be performed in the State of Nevada, which Laws the Arbitrator shall apply in rendering his decision. The Arbitrator shall issue a written decision, setting forth findings of fact and conclusions of Law, within sixty (60) days after he or she shall have been selected. The Arbitrator shall have no authority to award punitive or other exemplary damages. |
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| (d) | The arbitration shall be held in Calabasas, California in accordance with and under the then-current provisions of the rules of the American Arbitration Association, except as otherwise provided herein. |
| (e) | On application to the Arbitrator, any Party shall have rights to discovery to the same extent as would be provided under the Federal Rules of Civil Procedure, and the Federal Rules of Evidence shall apply to any arbitration under this Warrant; provided, however, that the Arbitrator shall limit any discovery or evidence such that his decision shall be rendered within the period referred to in Section 12(c). |
| (f) | The Arbitrator may, at his discretion and at the expense of the Party who will bear the cost of the arbitration, employ experts to assist him in his determinations. |
| (g) | The costs of the arbitration proceeding and any proceeding in court to confirm any arbitration award or to obtain relief, as applicable (including actual attorneys’ fees and costs), shall be borne by the unsuccessful Party and shall be awarded as part of the Arbitrator’s decision, unless the Arbitrator shall otherwise allocate such costs in such decision. The determination of the Arbitrator shall be final and binding upon the Parties and not subject to appeal. |
| (h) | Any judgment upon any award rendered by the Arbitrator may be entered in and enforced by any court of competent jurisdiction. The Parties expressly consent to the non-exclusive jurisdiction of the courts (Federal and state) in Los Angeles County, California to enforce any award of the Arbitrator or to render any provisional, temporary, or injunctive relief in connection with or in aid of the Arbitration. The Parties expressly consent to the personal and subject matter jurisdiction of the Arbitrator to arbitrate any and all matters to be submitted to arbitration hereunder. None of the Parties hereto shall challenge any arbitration hereunder on the grounds that any party necessary to such arbitration (including the Parties) shall have been absent from such arbitration for any reason, including that such Party shall have been the subject of any bankruptcy, reorganization, or insolvency proceeding. |
| 13. | Governing Law; Consent to Jurisdiction. This Warrant shall be governed, construed and enforced in accordance with the Laws of the State of Nevada, without application of the conflicts of laws provisions thereof. Subject to Section 12, each Party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by this Warrant (whether brought against a Party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in Los Angeles County, California (the “Selected Courts”). Each Party hereto hereby irrevocably submits to the exclusive jurisdiction of the Selected Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such Selected Courts, or such Selected Courts are improper or inconvenient venue for such proceeding. 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 via registered or certified mail or overnight delivery (with evidence of delivery) to such Party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. |
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| 14. | Waiver of Jury Trial; Exemplary Damages. |
| (a) | 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 WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREIN (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 PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS WARRANT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS Section 14(a). |
| (b) | Each of the Parties acknowledge that each has been represented in connection with the signing of the waiver set forth in Section 14(a) by independent legal counsel selected by the respective Party and that such Party has discussed the legal consequences and import of such waiver with legal counsel. Each of the Parties further acknowledge that each has read and understands the meaning of such waiver and grants such waiver knowingly, voluntarily, without duress and only after consideration of the consequences of this waiver with legal counsel. |
| (c) | In no event will any Party be liable to any other Party under or in connection with this Warrant or in connection with the transactions contemplated herein for special, general, indirect, consequential, or punitive or exemplary damages, including damages for lost profits or lost opportunity, even if the Party sought to be held liable has been advised of the possibility of such damage. |
| 15. | Indemnification. |
| (a) | By the Company. The Company will indemnify and hold the Holder, the officers, directors, members, partners, agents and employees (and any other individuals or entities with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of Holder (each, a “Holder Party”) harmless from any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) liabilities, obligations, contingencies, damages, and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees, costs of investigation (collectively, “Losses”) that any Holder Party may suffer or incur as a result of any breach of any of the representations, warranties, covenants or agreements made by the Company in this Warrant. If any action shall be brought against any Holder Party in respect of which indemnity may be sought pursuant to this Warrant, Holder Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Holder Party. Any Holder Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of Holder Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position of Holder Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company shall not settle or compromise any claim for which a Holder Party seeks indemnification hereunder without the prior written consent of Holder Party and such consent not to be unreasonably withheld, conditioned or delayed, unless such settlement involves a full and complete release of the applicable Holder Party. The indemnification required by this 15 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 are incurred, provided, however, that the recipient thereof shall execute a customary undertaking to repay any such amounts in the event that such recipient is ultimately determined not to be entitled to indemnification hereunder. |
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| (b) | By the Holder. The Holder agrees to indemnify and hold the Company, the officers, directors, members, partners, agents and employees (and any other individuals or entities with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of the Company (each, a “Company Party”, with an Holder Party and Company Party each being referred to as an “Indemnified Party”) harmless from any and all Losses that any such Company Party may suffer or incur as a result of any breach of any of the representations, warranties, covenants or agreements made by Holder in this Warrant. If any action shall be brought against any Company Party in respect of which indemnity may be sought pursuant to this Warrant, such Company Party shall promptly notify the Holder in writing, and Holder shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Company Party. Any Company Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Company Party except to the extent that (i) the employment thereof has been specifically authorized by the Holder in writing, (ii) the Holder has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company Party and the position of such Holder, in which case the Holder shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Holder shall not settle or compromise any claim for which a Company Party seeks indemnification hereunder without the prior written consent of such Company Party and such consent not to be unreasonably withheld, conditioned or delayed, unless such settlement involves a full and complete release of the applicable Company Party. The indemnification required by this 15(a) 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 are incurred, provided, however, that the recipient thereof shall execute a customary undertaking to repay any such amounts in the event that such recipient is ultimately determined not to be entitled to indemnification hereunder. |
| 16. | Specific Performance. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Warrant were not performed by them in accordance with the terms hereof or were otherwise breached and that each Party hereto shall be entitled to an injunction or injunctions, specific performance and other equitable relief to prevent breaches of the provisions hereof and to enforce specifically the terms and provisions hereof, without the proof of actual damages, in addition to any other remedy to which they are entitled at law or in equity. Each Party agrees to waive any requirement for the security or posting of any bond in connection with any such equitable remedy and agrees that it will not oppose the granting of an injunction, specific performance or other equitable relief on the basis that (a) the other Party has an adequate remedy at law, or (b) an award of specific performance is not an appropriate remedy for any reason at law or equity. |
| 12 |
| 17. | Miscellaneous. |
| (a) | Notices. Any notice or other communications required or permitted hereunder shall be in writing and shall be sufficiently given if personally delivered to it or sent by email, overnight courier or registered mail or certified mail, postage prepaid, addressed as follows: |
If to the Company, to:
Resonate Blends, Inc.
Attn: Geoffrey Selzer
26565 Agoura Road, Suite 200
Calabasas, CA 91302
Email: [email protected]
With a copy to (which shall not constitute notice):
Anthony L.G., PLLC
Attn: John Cacomanolis
625 N. Flagler Drive, Suite 600
West Palm Beach, FL 33401
Email: [email protected]
If to Holder, to the address as set forth on the signature page hereof.
| (b) | Absolute Obligation. Except as expressly provided herein, no provision of this Warrant shall alter or impair the obligation of the Company, which is absolute and unconditional. |
| (c) | Lost or Mutilated Warrant. If this Warrant shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Warrant, or in lieu of or in substitution for a lost, stolen or destroyed Warrant, a new Warrant so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of this Warrant, and of the ownership hereof reasonably satisfactory to the Company. |
| (d) | Attorneys’ Fees. In the event that any Party institutes any action or suit to enforce this Warrant or to secure relief from any default hereunder or breach hereof, the prevailing Party shall be reimbursed by the losing Party for all costs, including reasonable attorney’s fees, incurred in connection therewith and in enforcing or collecting any judgment rendered therein. |
| (e) | Severability. If any term or provision of this Warrant is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable in any situation in any jurisdiction, such determination shall not affect the validity or enforceability of the remaining terms and provisions hereof or thereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction or other authority declares that any term or provision hereof or thereof is invalid, void or unenforceable, each of the Company and the Holder agrees that the court making such determination shall have the power to reduce the scope, duration, area or applicability of the term or provision; to delete specific words or phrases; or to replace any invalid, void or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid, void or unenforceable term or provision. |
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| (f) | Entire Agreement. This Warrant and the Registration Rights Agreement constitute the entire agreement between the Parties with respect to the subject matter hereof and thereof and supersede all prior agreements, understandings and negotiations, whether written or oral, of the Parties. |
| (g) | Arm’s Length Bargaining; No Presumption Against Drafter. This Warrant has been negotiated at arm’s-length by parties of equal bargaining strength, each represented by counsel or having had but declined the opportunity to be represented by counsel and having participated in the drafting of this Warrant. This Warrant creates no fiduciary or other special relationship between the Parties, and no such relationship otherwise exists. No presumption in favor of or against any Party in the construction or interpretation of this Warrant or any provision hereof shall be made based upon which Person might have drafted this Warrant or such provision. |
| (h) | Amendment; Waiver. Other than as specifically set forth herein, this Warrant may be amended, and the observance of any term hereof may be waived (either retroactively or prospectively), only upon the written consent of the Company and the Holder. |
| (i) | Assignment by the Company. The Parties acknowledge and agree that, in the event that the Company completes a transaction with another Person or an affiliate of another Person, in which transaction a majority of the issued and outstanding shares of Common Stock are acquired by such Person (“Assignee”), the Company may freely assign this Warrant and the Registration Rights Agreement to such Assignee and may freely amend the terms of this Warrant and the Registration Rights Agreement as necessary to effect such amendment and, upon any such assignment the Company shall have no further obligations hereunder provided that assignee assumes all of the rights and obligations of the Company hereunder and pursuant to the Warrant and Registration Rights Agreement. |
| (j) | Descriptive Headings. The descriptive headings herein are inserted for convenience of reference only and shall in no way be construed to define, limit, describe, explain, modify, amplify, or add to the interpretation, construction or meaning of any provision of, or scope or intent of, this Warrant nor in any way affect this Warrant. |
| (k) | Third Party Beneficiaries. This contract is strictly between the Parties and, except as specifically provided, no other Person and no director, officer, shareholder, employee, agent, independent contractor or any other Person shall be deemed to be a third-party beneficiary of this Warrant. |
| (l) | Currency. All dollar amounts are in U.S. dollars. |
| (m) | Counterparts. This Warrant may be executed in any number of counterparts with the same force and effect as if all parties had executed the same document. The execution and delivery of a facsimile or other electronic transmission of this Warrant shall constitute delivery of an executed original and shall be binding upon the person whose signature appears on the transmitted copy. |
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned have executed this Warrant as of the Issue Date.
| Resonate Blends, Inc. | ||
| By: | ||
| Name: | Geoffrey Selzer | |
| Title: | Chief Executive Officer | |
Agreed and accepted:
| Holder Name: | ||
| By: | ||
| Name: | ||
| Title: | ||
| (if applicable) |
Address for notices:
| Email: | ||
| 15 |
NOTICE OF EXERCISE
The Undersigned holder hereby exercises the right to purchase _________________ of the shares of Common Stock (“Warrant Shares”) of Resonate Blends, Inc., a Nevada corporation (the “Company”), evidenced by the attached copy of the Warrant to Purchase Shares of Common Stock (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.
| 1. | Exercise Price (subject to confirmation and acceptance by the Company): $____________ |
| 2. | Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as (check one): |
| [ ] | a cash exercise with respect to _________________ Warrant Shares; or |
[ ] by cashless exercise pursuant to the Warrant.
| 3. | Payment of Exercise Price. If cash exercise is selected above, the holder shall pay the applicable aggregate Exercise Price in the sum of $ __________________to the Company in accordance with the terms of the Warrant. |
| 4. | Delivery of Warrant Shares. The Company shall deliver to the holder _____________ Warrant Shares, to: |
(Print Name, Address and Social Security
or Tax Identification Number)
If such number of Warrant Shares shall not be all the Warrant Shares covered by the within Warrant, a new Warrant for the balance of the Warrant Shares covered by the within Warrant be registered in the name of, and delivered to, the undersigned at the address stated below.
| Dated: | ||
| By: | ||
| (Print Name) | ||
Signature |
||
Exhibit 10.1
SUBSCRIPTION AGREEMENT
Resonate Blends, Inc.
26565 Agoura Road, Suite 200
Calabasas, CA 91302
This Subscription Agreement (this “Agreement”) has been executed by the subscriber set forth in the signature page attached hereto (the “Subscriber”) in connection with the private placement offering (the “Offering”) of a maximum of $2,000,000 units (the “Units”) where each Unit consists of one share of common stock, par value $0.0001 par value (“Common Stock”) at a purchase price of $.15 and a warrant to purchase 0.5 share(s) of Common Stock at an exercise price of $0.225 per share, of Resonate Blends, Inc., a Nevada corporation (the “Company”). Any warrant exercises will be rounded down to the nearest whole number of shares.
The Company’s reports and forms heretofore or hereafter filed by the Company with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 are incorporated herein by reference. These reports and forms are located at www.sec.gov.
The Units being subscribed for pursuant to this Agreement have not been registered under the Securities Act of 1933, as amended (the “Securities Act”). The Offering is being made on a “best efforts” basis to “accredited investors,” as defined in Regulation D under the Securities Act, and non-”U.S. persons,” as defined in Regulation S under the Securities Act. The Company reserves the right, in its sole discretion and for any reason, to reject any Subscriber’s subscription in whole or in part, or to allot less than the number of Units subscribed for.
The closing of the Offering (the “Closing,” and the date on which such Closing occurs hereinafter referred to as the “Closing Date”) shall be at the offices of the Company. The Company may conduct multiple closings for the sale of the Units until the termination of the Offering.
1. Subscription. The undersigned Subscriber hereby subscribes to purchase the number of Units set forth on the signature page attached hereto, at an aggregate price as set forth on such signature page (the “Purchase Price”), subject to the terms and conditions of this Agreement and on the basis of the representations, warranties, covenants and agreements contained herein.
2. Subscription Procedure. To complete a subscription for the Units, the Subscriber must fully comply with the subscription procedure provided in this Section on or before the Closing Date.
a. Transaction Documents. On or before the Closing Date, the Subscriber shall review, complete and execute the Signature Page to this Agreement and the Investor Certification, attached hereto as Appendix A (collectively, the “Transaction Documents”), and deliver the Transaction Documents to the Company. Executed documents may be delivered to the Company by facsimile or electronic mail (e-mail), if the Subscriber delivers the original copies of the documents to the Company as soon as practicable thereafter.
b. Purchase Price. Simultaneously with the delivery of the Transaction Documents to the Company as provided herein, and in any event on or prior to the Closing Date, the Subscriber shall deliver to the Company the full Purchase Price by check or by wire transfer of immediately available funds.
c. Company Discretion. The Subscriber understands and agrees that the Company in its sole discretion reserves the right to accept or reject this or any other subscription for Units, in whole or in part, notwithstanding prior receipt by the Subscriber of notice of acceptance of this subscription. The Company shall have no obligation hereunder until the Company shall execute and deliver to the Subscriber an executed copy of this Agreement. If this subscription is rejected in whole, or the offering of Units is terminated, all funds received from the Subscriber will be returned without interest or offset, and this Agreement shall thereafter be of no further force or effect. If this subscription is rejected in part, the funds for the rejected portion of this subscription will be returned without interest or offset, and this Agreement will continue in full force and effect to the extent this subscription was accepted.
3. Representations and Warranties of the Company. The Company hereby represents and warrants to the Subscriber the following:
a. Organization and Qualification. The Company is a corporation duly organized and validly existing under the laws of the State of Nevada. The Company has all requisite power and authority to carry on its business as currently conducted. The Company is duly qualified to transact business in each jurisdiction in which the failure to be so qualified would reasonably be expected to have a material adverse effect on the Company’s business, properties or financial condition (a “Material Adverse Effect”).
b. Authorization. As of the Closing, all action on the part of the Company, its board of directors, officers and existing stockholders necessary for the authorization, execution and delivery of this Agreement and the performance of all obligations of the Company hereunder shall have been taken, and this Agreement, assuming due execution by the parties hereto, will constitute a valid and legally binding obligation of the Company, enforceable in accordance with its terms, subject to: (i) judicial principles limiting the availability of specific performance, injunctive relief, and other equitable remedies and (ii) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect generally relating to or affecting creditors’ rights.
c. Valid Issuance of the Common Stock. The Units of Common Stock, when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, shall be duly and validly issued, fully paid and nonassessable, and will be free of restrictions on transfer directly or indirectly created by the Company other than restrictions on transfer under this Agreement and under applicable federal and state securities laws.
d. Governmental Consents. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority on the part of the Company is required in connection with the offer, sale or issuance of the Units, except for the following: (i) the filing of such notices as may be required under the Securities Act and (ii) the compliance with any applicable state securities laws, which compliance will have occurred within the appropriate time periods therefor.
e. No General Solicitation. Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Units by any form of general solicitation or general advertising (within the meaning of Regulation D).
4. Representations and Warranties of the Subscriber. The Subscriber represents and warrants to the Company the following:
a. The Subscriber, its advisers, if any, and designated representatives, if any, have the knowledge and experience in financial and business matters necessary to evaluate the merits and risks of its prospective investment in the Company, and have carefully reviewed and understand the risks of, and other considerations relating to, the purchase of Units and the tax consequences of the investment, and have the ability to bear the economic risks of the investment.
b. The Subscriber is acquiring the Units for investment for its own account and not with the view to, or for resale in connection with, any distribution thereof. The Subscriber understands and acknowledges that the Units have not been registered under the Securities Act or any state securities laws, by reason of a specific exemption from the registration provisions of the Securities Act and applicable state securities laws, which depends upon, among other things, the bona fide nature of the investment intent of the Subscriber as expressed herein. The Subscriber further represents that it does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to any third person with respect to any of the Units.
c. The Subscriber understands, even though the Company has a trading symbol on the OTCQB, that a limited market now exists for the Company’s Common Stock, and that there may never be an active public market for the Units of Common Stock sold in the Offering.
d. The Subscriber, its advisers, if any, and designated representatives, if any, have received and reviewed such information about the Company as they have requested and have had an opportunity to discuss the Company’s business, management and financial affairs with its management. The Subscriber understands that such discussions, as well as any written information provided by the Company, were intended to describe the aspects of the Company’s business and prospects which the Company believes to be material, but were not necessarily a thorough or exhaustive description, and except as expressly set forth in this Agreement, the Company makes no representation or warranty with respect to the completeness of such information and makes no representation or warranty of any kind with respect to any information provided by any entity other than the Company. Some of such information may include projections as to the future performance of the Company, which projections may not be realized, are based on assumptions which may not be correct and are subject to numerous factors beyond the Company’s control.
e. As of the Closing, all action on the part of Subscriber, and its officers, directors and partners, if applicable, necessary for the authorization, execution and delivery of this Agreement and the other Transaction Documents and the performance of all obligations of the Subscriber hereunder and thereunder shall have been taken, and this Agreement and the other Transaction Documents, assuming due execution by the parties hereto and thereto, constitute valid and legally binding obligations of the Subscriber, enforceable in accordance with their respective terms, subject to: (i) judicial principles limiting the availability of specific performance, injunctive relief, and other equitable remedies and (ii) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect generally relating to or affecting creditors’ rights.
f. The Subscriber either (i) is an “accredited investor” as defined in Rule 501 of Regulation D as promulgated by the Securities and Exchange Commission under the Securities Act or (ii) is not a “U.S. Person” as defined in Regulation S as promulgated by the Securities and Exchange Commission under the Securities Act, and, in each case, shall submit to the Company such further assurances of such status as may be reasonably requested by the Company.
g. The Subscriber, if a non-U.S. Person, agrees that it is acquiring the Units in an offshore transaction pursuant to Regulation S and hereby represents to the Company as follows:
(i) The Subscriber is outside the United States when receiving and executing this Subscription Agreement;
(ii) The Subscriber has not acquired the Units as a result of, and will not itself engage in, any “directed selling efforts” (as defined in Regulation S) in the United States in respect of the Units which would include any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the resale of the Units; provided, however, that the Subscriber may sell or otherwise dispose of the Units pursuant to registration of the Units under the Securities Act and any applicable state and provincial securities laws or under an exemption from such registration requirements and as otherwise provided herein;
(iii) The Subscriber understands and agrees that offers and sales of any of the Units prior to the expiration of a period of one year after the date of transfer of the Units under this Agreement (the “Distribution Compliance Period”), shall only be made in compliance with the safe harbor provisions set forth in Regulation S, pursuant to the registration provisions of the Securities Act or an exemption therefrom, and that all offers and sales after the Distribution Compliance Period shall be made only in compliance with the registration provisions of the Securities Act or an exemption therefrom, and in each case only in accordance with all applicable securities laws;
(iv) The Subscriber understands and agrees not to engage in any hedging transactions involving the Units prior to the end of the Distribution Compliance Period unless such transactions are in compliance with the Securities Act; and
(v) The Subscriber hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Units or any use of this Subscription Agreement, including: (a) the legal requirements within its jurisdiction for the purchase of the Units; (b) any foreign exchange restrictions applicable to such purchase; (c) any governmental or other consents that may need to be obtained; and (d) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Units. Such Subscriber’s subscription and payment for, and its continued beneficial ownership of the Units, will not violate any applicable securities or other laws of the Subscriber’s jurisdiction.
h. The Subscriber or its duly authorized representative realizes that because of the inherently speculative nature of investments of the kind contemplated by the Company, the Company’s investment results may be expected to fluctuate from month to month and from period to period and will, generally, involve a high degree of financial and market risk that can result in substantial or, at times, even total losses.
i. The Subscriber has adequate means of providing for its current and anticipated financial needs and contingencies, is able to bear the economic risk for an indefinite period of time and has no need for liquidity of the investment in the Units and could afford complete loss of such investment.
j. The Subscriber is not subscribing for Units as a result of or subsequent to any advertisement, article, notice or other communication, published in any newspaper, magazine or similar media or broadcast over television, radio or the internet, or presented at any seminar or meeting, or any solicitation of a subscription by a person not previously known to the Subscriber in connection with investments in securities generally.
k. All of the information that the Subscriber has heretofore furnished, or which is set forth herein is correct and complete as of the date of this Agreement, and, if there should be any material change in such information prior to the admission of the undersigned to the Company, the Subscriber will immediately furnish revised or corrected information to the Company.
5. Registration Rights. No registration rights are granted in connection with the Offering of the Units.
6. Transfer Restrictions. The Subscriber acknowledges and agrees as follows:
a. The Subscriber understands that the certificates representing the Units shall bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such certificates or other instruments):
For U.S. Persons:
THESE SECURITIES HAVE BEEN ISSUED PURSUANT TO THE SECTION 4(2) EXEMPTION TO THE REGISTRATION PROVISIONS UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE SECURITIES CANNOT BE TRANSFERRED, OFFERED, OR SOLD UNLESS THE SECURITIES ARE REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS AVAILABLE AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE WITH THE SECURITIES ACT.
For Non-U.S. Persons:
THESE SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). ACCORDINGLY, NONE OF THE SECURITIES TO WHICH THIS CERTIFICATE RELATES HAVE BEEN REGISTERED UNDER THE SECURITIES ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE WITH THE SECURITIES ACT.
The legend(s) set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of the Units upon which it is stamped, if such holder delivers to the Company an opinion of counsel, in a reasonably acceptable form, to the Company that a disposition of the Units is being made pursuant to an exemption from registration.
b. No governmental agency has passed upon the Units or made any finding or determination as to the wisdom of any investments therein.
c. There are substantial restrictions on the transferability of the Units of Common Stock, and if the Company decides to issue certificates representing the shares of Common Stock, restrictive legends will be placed on any such certificates.
7. Indemnification. The Subscriber agrees to indemnify and hold harmless the Company and its respective officers, directors, employees, agents, control persons and affiliates from and against all losses, liabilities, claims, damages, costs, fees and expenses whatsoever (including, but not limited to, any and all expenses incurred in investigating, preparing or defending against any litigation commenced or threatened) based upon or arising out of any actual or alleged false acknowledgment, representation or warranty, or misrepresentation or omission to state a material fact, or breach by the Subscriber of any covenant or agreement made by the Subscriber herein or in any other document delivered in connection with this Agreement.
8. Irrevocability; Binding Effect. The Subscriber hereby acknowledges and agrees that the subscription hereunder is irrevocable by the Subscriber, except as required by applicable law, and that this Agreement shall survive the death or disability of the Subscriber and shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives and permitted assigns. If the Subscriber is more than one person, the obligations of the Subscriber hereunder shall be joint and several and the agreements, representations, warranties and acknowledgments herein shall be deemed to be made by and be binding upon each such person and such person’s heirs, executors, administrators, successors, legal representatives and permitted assigns.
9. Modification. This Agreement shall not be modified or waived except by an instrument in writing signed by the party against whom any such modification or waiver is sought.
10. Notices. All notices or other communications which are required or permitted under this Agreement shall be in writing and sufficient if transmitted by hand delivery, by facsimile transmission, by registered or certified mail, postage pre-paid, by electronic mail, or by nationally recognized overnight carrier, to the persons at the addresses set forth below (or at such other address as may be provided hereunder), and shall be deemed to have been delivered (i) if transmitted by hand delivery, as of the date delivered, (ii) if transmitted by facsimile or electronic mail, as of the date so transmitted with an automated confirmation of delivery, (iii) if transmitted by nationally recognized overnight carrier, as of the business day following the date of delivery to the carrier, and (iv) if transmitted by registered or certified mail, postage pre-paid, on the third business day following posting with the U.S. Postal Service: (a) if to the Company, at the address set forth above, or (b) if to the Subscriber, at the address set forth on the signature page hereof (or, in either case, to such other address as the party shall have furnished in writing in accordance with the provisions of this Section 10).
11. Assignability. This Agreement and the rights, interests and obligations hereunder are not transferable or assignable by the Subscriber and the transfer or assignment of the Units shall be made only in accordance with all applicable laws.
12. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada, without reference to the principles thereof relating to the conflict of laws.
13. Blue Sky Qualification. The purchase of Units under this Agreement is expressly conditioned upon the exemption from qualification of the offer and sale of the Units from applicable federal and state securities laws. The Company shall not be required to qualify this transaction under the securities laws of any jurisdiction and, should qualification be necessary, the Company shall be released from any and all obligations to maintain its offer, and may rescind any sale contracted, in the jurisdiction.
14. Use of Pronouns. All pronouns and any variations thereof used herein shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the person or persons referred to may require.
15. Confidentiality. The Subscriber acknowledges and agrees that any information or data the Subscriber has acquired from or about the Company, not otherwise properly in the public domain, including, without limitation, the business summary of the Company, was received in confidence. The Subscriber agrees not to divulge, communicate or disclose, except as may be required by law or for the performance of this Agreement, or use to the detriment of the Company or for the benefit of any other person, or misuse in any way, any confidential information of the Company, including any scientific, technical, trade or business secrets of the Company and any scientific, technical, trade or business materials that are treated by the Company as confidential or proprietary, including, but not limited to, ideas, discoveries, inventions, developments and improvements belonging to the Company and confidential information obtained by or given to the Company about or belonging to third parties.
16. Miscellaneous.
a. This Agreement constitutes the entire agreement between the Subscriber and the Company with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings, if any, relating to the subject matter hereof. The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by a written document executed by the party entitled to the benefits of such terms or provisions.
b. The representations and warranties of the Company and the Subscriber made in this Agreement shall survive the execution and delivery hereof and delivery of the Units.
c. Each of the parties hereto shall pay its own fees and expenses (including the fees of any attorneys, accountants, appraisers or others engaged by such party) in connection with this Agreement and the transactions contemplated hereby, whether or not the transactions contemplated hereby are consummated.
d. This Agreement may be executed in one or more original or facsimile counterparts, each of which shall be deemed an original, but all of which shall together constitute one and the same instrument.
e. Each provision of this Agreement shall be considered separable and, if for any reason any provision or provisions hereof are determined to be invalid or contrary to applicable law, such invalidity or illegality shall not impair the operation of or affect the remaining portions of this Agreement.
f. Paragraph titles are for descriptive purposes only and shall not control or alter the meaning of this Agreement as set forth in the text.
g. The Subscriber understands and acknowledges that there may be multiple Closings for the Offering, but the Closing Date shall be the conclusion of the entire Offering.
h. The Subscriber hereby agrees to furnish the Company such other information as the Company may request prior to the Closing with respect to its subscription hereunder.
18. Public Disclosure. Neither the Subscriber nor any officer, manager, director, member, partner, stockholder, employee, affiliate, affiliated person or entity of the Subscriber shall make or issue any press releases or otherwise make any public statements or make any disclosures to any third person or entity with respect to the transactions contemplated herein and will not make or issue any press releases or otherwise make any public statements of any nature whatsoever with respect to the Company without the Company’s express prior approval. The Company has the right to withhold such approval in its sole discretion.
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How to subscribe for Units in the private offering of Resonate Blends, Inc.:
| 1. | Date and Fill in the number of Units being purchased and Complete and Sign the Signature Page. |
| 2. | Initial the Investor Certification page. |
| 3. | Fax or email all forms and then send all signed original documents, along with a check or wire transfer representing the exact dollar amount of the number of Units for subscription, to: |
Resonate Blends, Inc.
26565 Agoura Road, Suite 200
Calabasas, CA 91302
| 4. | Any check for the subscription of Units should be made payable to the order of “Resonate Blends, Inc.” |
| 5. | If the funds are being sent by wire transfer to the Company, please see the following instructions: |
Account Name: Resonate Blends LLC
Bank: Lead Bank
Address: 200 North 3rd Street, Garden City, MO 64747
Routing Number: 101206101
Account Number: 5680003943
RESONATE BLENDS, INC.SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT
IN WITNESS WHEREOF, the Subscriber hereby executes this Subscription Agreement.
Dated: ___________________________, 2021
| SUBSCRIBER (individual) | SUBSCRIBER (entity) | |||
| Signature | Name of Entity | |||
| Print Name | Signature | |||
| Print Name: | ||||
Signature (if Joint Tenants or Tenants in Common) |
||||
| Title: | ||||
| Address of Principal Residence: | Address of Executive Offices: | |||
| Social Security Number(s) | IRS Tax Identification Number | |||
|
|
| |||
| Telephone Number: | Telephone Number: | |||
| Facsimile Number: | Facsimile Number: | |||
| E-mail Address: | E-mail Address: | |||
| X | $.15 | = | $____________ | |
| Number of Units | Price per Unit | Purchase Price |
RESONATE BLENDS, INC. SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT
IN WITNESS WHEREOF, on ______________, 2021, the Company has duly executed this Subscription Agreement.
| Resonate Blends, Inc. | ||
| By | ||
| Name: | Geoffrey Selzer | |
| Title: | Chief Executive Officer | |
Appendix A
RESONATE BLENDS, INC. INVESTOR CERTIFICATION
For Individual Accredited Investors Only (all Individual Accredited Investors must INITIAL where appropriate):
| Initial _______ | I have a net worth (excluding the value of the person’s primary residence) in excess of $1,000,000 either individually or through aggregating my individual holdings and those in which I have a joint, community property or other similar shared ownership interest with my spouse. |
| Initial _______ | I have had an annual gross income for the past two years of at least $200,000 (or $300,000 jointly with my spouse) and expect my income (or joint income, as appropriate) to reach the same level in the current year. |
For Non-Individual Accredited Investors (all Non-Individual Accredited Investors must INITIAL where appropriate):
| Initial _______ | The investor certifies that it is a partnership, corporation, limited liability company or business trust that is 100% owned by persons who meet at least one of the criteria for Individual Investors set forth above. |
| Initial _______ | The investor certifies that it is a partnership, corporation, limited liability company or business trust that has total assets of at least $5 million and was not formed for the purpose of investing in the Company. |
| Initial _______ | The investor certifies that it is an employee benefit plan whose investment decision is made by a plan fiduciary (as defined in ERISA §3(21)) that is a bank, savings and loan association, insurance company or registered investment adviser. |
| Initial _______ | The investor certifies that it is an employee benefit plan whose total assets exceed $5,000,000 as of the date of this Agreement. |
| Initial _______ | The undersigned certifies that it is a self-directed employee benefit plan whose investment decisions are made solely by persons who meet either of the criteria for Individual Investors. |
| Initial _______ | The investor certifies that it is a U.S. bank, U.S. savings and loan association or other similar U.S. institution acting in its individual or fiduciary capacity. |
| Initial _______ | The undersigned certifies that it is a broker-dealer registered pursuant to §15 of the Securities Exchange Act of 1934. |
| Initial _______ | The investor certifies that it is an organization described in §501(c)(3) of the Internal Revenue Code with total assets exceeding $5,000,000 and not formed for the specific purpose of investing in the Company. |
| Initial _______ | The investor certifies that it is a trust with total assets of at least $5,000,000, not formed for the specific purpose of investing in the Company, and whose purchase is directed by a person with such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment. |
| Initial _______ | The investor certifies that it is a plan established and maintained by a state or its political subdivisions, or any agency or instrumentality thereof, for the benefit of its employees, and which has total assets in excess of $5,000,000. |
| Initial _______ | The investor certifies that it is an insurance company as defined in §2(13) of the Securities Act, or a registered investment company. |
| Initial _______ | Revocable Trust: The grantor(s) of the trust may revoke the trust at any time and regain title to the trust assets and has (have) retained sole investment control over the assets of the trust and each grantor(s) meets at least one of the conditions described. I had an individual income of more than 200,000 in each of the two most recent calendar years, and I reasonably expect to have an individual income in excess of $200,000 in the current calendar year; or my spouse or spousal equivalent and I had joint income in excess of $300,000 in each of the two most recent calendar years, and we reasonably expect to have a joint income in excess of $300,000 the current calendar year; OR I have an individual net worth, or my spouse or spousal equivalent and I have a joint net worth, in excess of $1,000,000 (excluding my (our) primary residence). |
For Non-U.S. Person Investors
(all Investors who are not a U.S. Person must INITIAL this section):
| Initial_______ | The Investor is not a “U.S. Person” as defined in Regulation S; and specifically the Purchaser is not: |
| A. | a natural person resident in the United States of America, including its territories and possessions (“United States”); | |
| B. | a partnership or corporation organized or incorporated under the laws of the United States; | |
| C. | an estate of which any executor or administrator is a U.S. Person; | |
| D. | a trust of which any trustee is a U.S. Person; | |
| E. | an agency or branch of a foreign entity located in the United States; | |
| F. | a non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. Person; | |
| G. | a discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident in the United States; or | |
| H. | a partnership or corporation: (i) organized or incorporated under the laws of any foreign jurisdiction; and (ii) formed by a U.S. Person principally for the purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a) under the Act) who are not natural persons, estates or trusts. | |
| And, in addition: | ||
| I. | the Purchaser was not offered the Units in the United States; | |
| J. | at the time the buy-order for the Units was originated, the Purchaser was outside the United States; and | |
| K. | the Purchaser is purchasing the Units for its own account and not on behalf of any U.S. Person (as defined in Regulation S) and a sale of the Units has not been pre-arranged with a purchaser in the United States. | |
Exhibit 10.2
Exhibit A-1
Subscription Agreement for Accredited Investors
(Attached)
| Exhibit A-1 - Page 1 |
Resonate Blends, Inc.
Subscription Agreement for Accredited Investors
This Subscription Agreement should be used only by investors who are investing on the basis of
being an “Accredited Investor” (as defined below).
Investors who are investing on the basis of being a “Non-U.S. Person” should complete the
Subscription Agreement attached to the Memorandum (as defined below) as Exhibit A-2.
Together with this Subscription Agreement, please compete and return the Investor
Representation and Suitability Questionnaire attached to the Memorandum as Exhibit E.
The undersigned “Subscriber”, on the terms and conditions herein set forth, hereby irrevocably submits this subscription agreement (the “Subscription Agreement”) to Resonate Blends, Inc., a Nevada corporation (the “Company”), in connection with a private offering by the Company (the “Offering”) to raise a maximum of $2,000,000 through the sale to Subscriber as an “accredited investor” (as defined below) of “Units” of securities of the Company (each a “Unit” and collectively the “Units”), as described in the Confidential Private Placement Memorandum for Accredited Investors and Non-U.S. Persons, dated as of January 12, 2021 (the “Memorandum”) at $25,000 per Unit.
The minimum subscription per investor is $25,000 for 1 Unit, provided that the Company may elect to accept subscriptions in a lesser amount in its sole discretion.
| 1. | Subscription for the Purchase of Units. |
The undersigned hereby subscribes to purchase ______________ Units at $25,000 per Unit for a total subscription of US$___________________ (the “Subscription Price”). In this regard, the Subscriber agrees to forward payment in the amount of the Subscription Price by wiring payment of the Subscription Price in accordance with the information set forth below:
For financial institutions in the United States, give your bank this information:
Send to:
Sutter Securities Clearing
6 Venture, Suite 395
Irvine, CA 92618
Account #45250040
For the benefit of:
(Your Name and/or Business Entity)
Your street address
City, State Zip
United States
Phone Number/email address
| Exhibit A-1 - Page 2 |
For financial institutions outside the United States, give your bank this information:
Send to:
Sutter Securities Clearing
6 Venture, Suite 395
Irvine, CA 92618
Account #45250040
For the benefit of:
(Your Name and/or Business Entity)
Your street address
City, State Zip
United States
Phone Number/email address
You must also deliver a fully completed and executed copy of this Subscription Agreement, the Note, the Warrant and the Registration Rights Agreement, as attached to the Memorandum, to the Placement Agent at:
Boustead Securities LLC
6 Venture, Suite 395
Irvine, CA 92618
The Company’s private offering of Units is being made to “accredited” investors within the meaning of Rule 506 of Regulation D promulgated by the Securities Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”) and to non-U.S. Persons in an “offshore transaction,” as defined in Rule 902 of Regulation S promulgated under the Securities Act. (This Subscription Agreement should be used only by Subscribers investing on the basis of being an Accredited Investor. Subscribers investing on the basis of being a Non-U.S. Person should complete the Subscription Agreement attached to the Memorandum as Exhibit A-2.)
You as an individual or you on behalf of the subscribing entity are being asked to complete this Subscription Agreement so that a determination can be made as to whether or not you (or it) are qualified to purchase the Units under applicable federal and state securities laws. Your answers to the questions contained herein must be true and correct in all respects, and a false representation by you may constitute a violation of law for which a claim for damages may be made against you.
Your answers will be kept strictly confidential; however, by signing this Subscription Agreement, you will be authorizing the Company to present a completed copy of this Subscription Agreement to such parties as they may deem appropriate in order to make certain that the offer and sale of the securities will not result in a violation of the Securities Act or of the securities laws of any state.
All questions must be answered. If the appropriate answer is “None” or “Not Applicable,” please state so. Please print or type your answers to all questions and attach additional sheets if necessary to complete your answers to any item. Please initial any corrections.
| 2. | Offer to Purchase. Subscriber hereby irrevocably offers to purchase the Units and tenders herewith the total price noted above. Subscriber recognizes and agrees that (i) this subscription is irrevocable and, if Subscriber is a natural person, shall survive Subscriber’s death, disability or other incapacity, and (ii) the Company has complete discretion to accept or to reject this Subscription Agreement in its entirety and shall have no liability for any rejection of this Subscription Agreement. This Subscription Agreement shall be deemed to be accepted by the Company only when it is executed by the Company. |
| Exhibit A-1 - Page 3 |
| 3. | Effect of Acceptance. Subscriber hereby acknowledges and agrees that on the Company’s acceptance of this Subscription Agreement, it shall become a binding and fully enforceable agreement between the Company and the Subscriber. As a result, upon acceptance by the Company of this Subscription Agreement, Subscriber will become the record and beneficial holder of the Units and the Company will be entitled to receive the purchase price of the Units as specified herein. |
| 4. | Additional Representations and Warranties of Subscriber. Subscriber hereby represents and warrants to the Company as follows: |
| (a) | Subscriber has been furnished the Confidential Private Placement Memorandum for Accredited Investors and Non-U.S. Persons of the Company, dated as of January 12, 2021 (the “Memorandum”) and, if requested by the Subscriber, other documents related to the Company and its operations. The Subscriber has carefully read the Memorandum and any such other requested documents. Subscriber has been furnished with all documents and materials relating to the business, finances and operations of the Company and information that Subscriber requested and deemed material to making an informed investment decision regarding its purchase of the Units. Subscriber has been afforded the opportunity to review such documents and materials and the information contained therein. Subscriber has been afforded the opportunity to ask questions of the Company and its management. Subscriber understands that such discussions, as well as any written information provided by the Company, were intended to describe the aspects of the Company’s business and prospects which the Company believes to be material, but were not necessarily a thorough or exhaustive description, and except as expressly set forth in this Subscription Agreement, the Company makes no representation or warranty with respect to the completeness of such information and makes no representation or warranty of any kind with respect to any information provided by any entity other than the Company. Some of such information may include projections as to the future performance of the Company, which projections may not be realized, may be based on assumptions which may not be correct and may be subject to numerous factors beyond the Company’s control. Additionally, Subscriber understands and represents that Subscriber is purchasing the Units notwithstanding the fact that the Company may disclose in the future certain material information that the Subscriber has not received, including the financial results of the Company for their current fiscal quarters. Neither such inquiries nor any other due diligence investigations conducted by such Subscriber shall modify, amend or affect such Subscriber’s right to rely on the Company’s representations and warranties, if any, contained in this Subscription Agreement. Subscriber has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its investment in the Units. Subscriber has full power and authority to make the representations referred to herein, to purchase the Units and to execute and deliver this Subscription Agreement. |
| (b) | Subscriber has read and understood, and is familiar with, this Subscription Agreement, the Units and the business and financial affairs of the Company. |
| Exhibit A-1 - Page 4 |
| (c) | Subscriber, either personally, or together with Subscriber’s advisors (other than any securities broker/dealers who may receive compensation from the sale of any of the Units), has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Units, is able to bear the risks of an investment in the Units and understands the risks of, and other considerations relating to, a purchase of a Unit, including the matters set forth under the caption “Risk Factors” in the Memorandum. The Subscriber and its advisors have had a reasonable opportunity to ask questions of and receive answers from the Company concerning the Units. Subscriber’s financial condition is such that Subscriber is able to bear the risk of holding the Units that Subscriber may acquire pursuant to this Agreement, for an indefinite period of time, and the risk of loss of Subscriber’s entire investment in the Company. |
| (d) | Subscriber has investigated the acquisition of the Units to the extent Subscriber deemed necessary or desirable and the Company has provided Subscriber with any reasonable assistance Subscriber has requested in connection therewith. |
| (e) | The Units are being acquired for Subscriber’s own account for investment, with no intention by Subscriber to distribute or sell any portion thereof within the meaning of the Securities Act, and will not be transferred by Subscriber in violation of the Securities Act or the then applicable rules or regulations thereunder. No one other than Subscriber has any interest in or any right to acquire the Units. Subscriber understands and acknowledges that the Company will have no obligation to recognize the ownership, beneficial or otherwise, of the Units by anyone but Subscriber. |
| (f) | No representations or warranties have been made to Subscriber by the Company, or any representative of the Company, or any securities broker/dealer, other than as set forth in this Subscription Agreement. |
| (g) | Subscriber is aware that Subscriber’s rights to transfer the Units is restricted by the Securities Act and applicable state securities laws, and Subscriber will not offer for sale, sell or otherwise transfer the Units without registration under the Securities Act and qualification under the securities laws of all applicable states, unless such sale would be exempt therefrom. |
| (h) | Subscriber understands and agrees that the Units it acquires have not been registered under the Securities Act or any state securities act in reliance on exemptions therefrom and that the Company has no obligation to register any of the Units offered by the Company. |
| (i) | The Subscriber has had an opportunity to ask questions of, and receive answers from, representatives of the Company concerning the terms and conditions of this investment and all such questions have been answered to the full satisfaction of the undersigned. Subscriber understands that no person other than the Company has been authorized to make any representation and if made, such representation may not be relied on unless it is made in writing and signed by the Company. The Company has not, however, rendered any investment advice to the undersigned with respect to the suitability. |
| Exhibit A-1 - Page 5 |
| (j) | Subscriber understands that the certificates or other instruments representing the Units shall bear a restrictive legend in substantially the following form (and a stop transfer order may be placed against transfer of such certificates): |
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE SECURITIES LAWS, AND NO INTEREST MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING SAID SECURITIES, (B) THIS CORPORATION RECEIVES AN OPINION OF LEGAL COUNSEL FOR THE HOLDER OF THESE SECURITIES SATISFACTORY TO THIS CORPORATION STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR (C) THIS CORPORATION OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION.
| (k) | Subscriber also acknowledges and agrees that an investment in the Units is highly speculative and involves a high degree of risk of loss of the entire investment in the Company and there is no assurance that a public market for the Securities will be available and that, as a result, Subscriber may not be able to liquidate Subscriber’s investment in the Units should a need arise to do so. |
| (l) | Subscriber is not dependent for liquidity on any of the amounts Subscriber is investing in the Units. |
| (m) | Subscriber represents, warrants and confirms that Subscriber is not a “broker” or “dealer” as defined in the Securities Act of 1934, as amended, and the rules and regulations thereunder, and is not required to be registered as such with the United States Securities and Exchange Commission, the Financial Industry Regulatory Authority or any other self-regulatory organization. Subscriber acknowledges and agrees that neither the Company nor any of its legal counsel has advised Subscriber with respect to the representations, warranties and confirmations herein and that Subscriber is undertaking the actions as contemplated herein having received such other legal advice and counsel as Subscriber has determined to be necessary in connection therewith. |
| (n) | Subscriber has full power and authority to make the representations referred to herein, to purchase the Units and to execute and deliver this Subscription Agreement. |
| (o) | Subscriber understands that the foregoing representations and warranties are to be relied upon by the Company as a basis for the exemptions from registration and qualification of the sale of the Units under the federal and state securities laws and for other purposes. |
| 5. | Representations and Warranties Regarding Patriot Act; Anti-Money Laundering; OFAC. The Subscriber should check the Office of Foreign Assets Control (“OFAC”) website at http://www.treas.gov/ofac before making the following representations. Subscriber hereby represents and warrants to the Company as follows: |
| (a) | The Subscriber represents that (i) no part of the funds used by the Subscriber to acquire the Units or to satisfy his/her capital commitment obligations with respect thereto has been, or shall be, directly or indirectly derived from, or related to, any activity that may contravene United States federal or state or non-United States laws or regulations, including anti-money laundering laws and regulations, and (ii) no capital commitment, contribution or payment to the Company by the Subscriber and no distribution to the Subscriber shall cause the Company to be in violation of any applicable anti-money laundering laws or regulations including, without limitation, Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001 and the United States Department of the Treasury Office of Foreign Assets Control regulations. The Subscriber acknowledges and agrees that, notwithstanding anything to the contrary contained in the Memorandum or any other agreement, to the extent required by any anti-money laundering law or regulation, the Company may prohibit capital contributions, restrict distributions or take any other reasonably necessary or advisable action with respect to the Units, and the Subscriber shall have no claim, and shall not pursue any claim, against the Company or any other person in connection therewith. U.S. federal regulations and executive orders administered by OFAC prohibit, among other things, the engagement in transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals. The lists of OFAC prohibited countries, territories, persons and entities can be found on the OFAC website at http://www.treas.gov/ofac. In addition, the programs administered by OFAC (the “OFAC Programs”) prohibit dealing with individuals1 or entities in certain countries regardless of whether such individuals or entities appear on the OFAC lists. |
1 These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs.
| Exhibit A-1 - Page 6 |
| (b) | To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any person controlling or controlled by the Subscriber; (3) if the Subscriber is a privately-held entity, any person having a beneficial interest in the Subscriber; or (4) any person for whom the Subscriber is acting as agent or nominee in connection with this investment is a country, territory, individual or entity named on an OFAC list, or a person or entity prohibited under the OFAC Programs. Please be advised that the Company may not accept any amounts from a prospective investor if such prospective investor cannot make the representation set forth in this paragraph. The Subscriber agrees to promptly notify the Company should the Subscriber become aware of any change in the information set forth in these representations. The Subscriber understands and acknowledges that, by law, the Company may be obligated to “freeze the account” of the Subscriber, either by prohibiting additional subscriptions from the Subscriber, declining any redemption requests and/or segregating the assets in the account in compliance with governmental regulations, and any broker may also be required to report such action and to disclose the Subscriber’s identity to OFAC. The Subscriber further acknowledges that the Company may, by written notice to the Subscriber, suspend the redemption rights, if any, of the Subscriber if the Company reasonably deems it necessary to do so to comply with anti-money laundering regulations applicable to the Company or any Broker or any of the Company’s other service providers. These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs. |
| (c) | To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any person controlling or controlled by the Subscriber; (3) if the Subscriber is a privately-held entity, any person having a beneficial interest in the Subscriber; or (4) any person for whom the Subscriber is acting as agent or nominee in connection with this investment is a senior foreign political figure2, or any immediate family3 member or close associate4 of a senior foreign political figure, as such terms are defined in the footnotes below. |
2 A “senior foreign political figure” is defined as a senior official in the executive, legislative, administrative, military or judicial branches of a foreign government (whether elected or not), a senior official of a major foreign political party, or a senior executive of a foreign government-owned corporation. In addition, a “senior foreign political figure” includes any corporation, business or other entity that has been formed by, or for the benefit of, a senior foreign political figure.
3 “Immediate family” of a senior foreign political figure typically includes the figure’s parents, siblings, spouse, children and in-laws.
4 A “close associate” of a senior foreign political figure is a person who is widely and publicly known to maintain an unusually close relationship with the senior foreign political figure, and includes a person who is in a position to conduct substantial domestic and international financial transactions on behalf of the senior foreign political figure.
| Exhibit A-1 - Page 7 |
| (d) | If the Subscriber is affiliated with a non-U.S. banking institution (a “Foreign Bank”), or if the Subscriber receives deposits from, makes payments on behalf of, or handles other financial transactions related to a Foreign Bank, the Subscriber represents and warrants to the Company that: (1) the Foreign Bank has a fixed address, other than solely an electronic address, in a country in which the Foreign Bank is authorized to conduct banking activities; (2) the Foreign Bank maintains operating records related to its banking activities; (3) the Foreign Bank is subject to inspection by the banking authority that licensed the Foreign Bank to conduct banking activities; and (4) the Foreign Bank does not provide banking services to any other Foreign Bank that does not have a physical presence in any country and that is not a regulated affiliate. |
| (e) | The Subscriber acknowledges that, to the extent applicable, the Company will seek to comply with the Foreign Account Tax Compliance Act provisions of the U.S. Internal Revenue Code and any rules, regulations, forms, instructions or other guidance issued in connection therewith (the “FATCA Provisions”). In furtherance of these efforts, the Subscriber agrees to promptly deliver any additional documentation or information, and updates thereto as applicable, which the Company may request in order to comply with the FATCA Provisions. The Subscriber acknowledges and agrees that, notwithstanding anything to the contrary contained in the Memorandum, any side letter or any other agreement, the failure to promptly comply with such requests, or to provide such additional information, may result in the withholding of amounts with respect to, or other limitations on, distributions made to the Subscriber and such other reasonably necessary or advisable action by the Company with respect to the Units (including, without limitation, required withdrawal), and the Subscriber shall have no claim, and shall not pursue any claim, against the Company or any other person in connection therewith |
| (f) | The foregoing representations and warranties are true and accurate as of the date hereof and shall survive such date. If any of the above representations and warranties shall cease to be true and accurate prior to the acceptance of this Subscription Agreement, Subscriber shall give prompt notice of such fact to the Company by telegram, or facsimile or e-mail, specifying which representations and warranties are not true and accurate and the reasons therefor. |
| 6. | Representations and Warranties of the Company. The Company hereby represents and warrants to the Subscriber as follows: |
| (a) | The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada, having full power and authority to own its properties and carry on its business as conducted. |
| Exhibit A-1 - Page 8 |
| (b) | The Company has the requisite power and authority to deliver this Agreement, perform its obligations herein and consummate the transactions contemplated hereby. |
| (c) | The Note and Warrant to be issued to the Subscriber pursuant to this Agreement, when issued and delivered in accordance with the terms of this Agreement, will be duly authorized, validly issued, fully paid and non-assessable. |
| (d) | The Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the Securities and Exchange Commission (the “SEC”) pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being hereinafter referred to herein as the “SEC Documents”), other than for any late filings which would not reasonably be expected to materially and adversely affect the Company. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior the date hereof). As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with United States generally accepted accounting principles, consistently applied, during the periods involved and fairly present in all material respects the consolidated financial position of the Company and its consolidated subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). Except as set forth in the financial statements of the Company included in the SEC Documents, the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to December 31, 2019, and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not required under generally accepted accounting principles to be reflected in such financial statements, which, individually or in the aggregate, are not material to the financial condition or operating results of the Company. The Company is subject to the reporting requirements of the 1934 Act. |
| (e) | All information relating to or concerning the Company or any of its subsidiaries set forth in this Agreement and provided to the Subscriber pursuant to Section 5 hereof and otherwise in connection with the transactions contemplated hereby is true and correct in all material respects and the Company has not omitted to state any material fact necessary in order to make the statements made herein or therein, in light of the circumstances under which they were made, not misleading. No event or circumstance has occurred or exists with respect to the Company or any of its subsidiaries or its or their business, properties, prospects, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed. |
| Exhibit A-1 - Page 9 |
| 7. | Indemnification. Subscriber acknowledges that Subscriber understands the meaning and legal consequences of the representations and warranties made by Subscriber herein, and that the Company is relying on such representations and warranties in making the determination to accept or reject this Subscription Agreement. Subscriber hereby agrees to indemnify and hold harmless the Company and each employee and agent thereof from and against any and all losses, damages or liabilities due to or arising out of a breach of any representation or warranty of Subscriber contained in this Subscription Agreement. The Company agrees that if any of the representations or warranties set forth in this Section 7 shall be false or misleading in any material respect, and in addition to any other remedies available to the Subscriber pursuant to this Agreement, it will be considered an Event of Default under the Note. Except for the Placement Agent, who is an intended third party beneficiary of this Agreement and who may rely on all of the representations and warranties of the Company made in this Agreement as if such representations and warranties were made directly to the Placement Agent, 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. |
| 8. | Transferability. Subscriber agrees not to transfer or assign this Subscription Agreement, or any interest herein, and further agrees that the assignment and transferability of the Units acquired pursuant hereto shall be made only in accordance with applicable federal and state securities laws. |
| 9. | Termination of Agreement; Return of Funds. In the event that, for any reason, this Subscription Agreement is rejected in its entirety by the Company, this Subscription Agreement shall be null and void and of no further force and effect, and no party shall have any rights against any other party hereunder. In the event that the Company rejects this Subscription Agreement, the Company shall promptly return or cause to be returned to Subscriber any money tendered hereunder without interest or deduction. |
| 10. | Notices. All notices or other communications given or made hereunder shall be in writing and shall be delivered or mailed by registered or certified mail, return receipt requested, postage prepaid, or delivered by, facsimile or e-mail to Subscriber at the address set forth in the Investor Representation and Suitability Questionnaire attached to the Memorandum as Exhibit E (the “Questionnaire”) and to the Company at the address set forth on the first page of this Agreement, or at such other place as the Company may designate by written notice to Subscriber. |
| 11. | Agreement and Amendments. This Subscription Agreement shall be read, interpreted and enforced in conjunction with the Questionnaire and any references herein to this “Subscription Agreement” shall be deemed to refer to this document together with the Questionnaire. Neither this Subscription Agreement nor any term hereof may be changed, waived, discharged or terminated except in a writing signed by Subscriber and the Company. |
| 12. | Governing Law. This Subscription Agreement and all amendments hereto shall be governed by and construed in accordance with the laws of the State of Nevada without application of the conflicts of laws provisions thereof. |
| 13. | Headings. The headings in this Subscription Agreement are for convenience of reference, and shall not by themselves determine the meaning of this Subscription Agreement or of any part hereof. |
| 14. | Counterparts. This Subscription Agreement may be executed in any number of counterparts with the same force and effect as if all parties had executed the same document. The execution and delivery of a facsimile or other electronic transmission of this Subscription Agreement shall constitute delivery of an executed original and shall be binding upon the person whose signature appears on the transmitted copy. |
| 15. | Continuing Obligation of Subscriber to Confirm Investor Status. Upon the request of the Company and for as long as the Subscriber holds Units or other securities in the Company, the Subscriber shall confirm Subscriber’s investor status as an “Accredited Investor,” as defined by the Securities and Exchange Commission at the time of such request. In connection therewith, the Company shall deliver to the Subscriber a questionnaire that elicits the necessary information to determine the Subscriber’s investor status. Upon receipt of the questionnaire, the Subscriber shall: (i) complete it, (ii) execute the signature page therein, and (iii) return it to the Company, or its designee, in accordance with the instructions therein, no later than ten (10) days after receipt of the questionnaire. |
[Remainder of page intentionally left blank. Signatures appear on the following pages.]
| Exhibit A-1 - Page 10 |
INDIVIDUALS
In witness whereof, the parties hereto have executed this Agreement as of the dates set forth below.
Dated:____________, 2021.
Signature(s):___________________________________________
Name(s) (Please Print):__________________________________
Signature(s):___________________________________________
Name(s) (Please Print):__________________________________
ACCEPTANCE
Resonate Blends, Inc.
Date: ____________, 2021.
| By: | ||
| Name: | Geoffrey Selzer | |
| Title: | Chief Executive Officer |
| Exhibit A-1 - Page 11 |
CORPORATIONS, PARTNERSHIPS, TRUSTS OR OTHER ENTITIES
In witness whereof, the parties hereto have executed this Agreement as of the dates set forth below.
Dated:____________, 2021.
Name of Purchaser (Please Print): ____________________________________
By:___________________________________
Name (Please Print):____________________________________
Title:____________________________________
ACCEPTANCE
Resonate Blends, Inc.
Date: ____________, 2021.
| By: | ||
| Name: | Geoffrey Selzer | |
| Title: | Chief Executive Officer |
| Exhibit A-1 - Page 12 |
Exhibit 99.1
Resonate Blends, Inc. Closes Private Placement
The Company Plans to Launch KOAN® Cordials Into The Wellness Lifestyle Market
CALABASAS, Calif.—March 18, 2021 – Resonate Blends, Inc. (OTCQB:KOAN), a Wellness Lifestyle cannabis holding company (“Resonate” or “the Company”), announced today it has closed its private placement raising $3,312,500 in gross proceeds. After paying finder fees of $288,213 to its placement agent, the Company netted $3,024,287 which provides some of the needed capital to launch Resonate’s first value-added cannabis-based KOAN®Cordials. The Cordials are designed to be uniquely formulated, single serving, precisely targeted experiences that are directly ingested or mixed with a drink for use in social or private settings.
The proceeds from the private placement were also used to retire the Company’s remaining Promissory Convertible Notes, pay off vendor obligations and to provide general working capital. The Company worked diligently the past year to align the capital structure of the public company to the financial requirements of its operating entities.
“We have worked diligently to get to this point and are extremely excited as we plan for our full scale production of our highly anticipated KOAN® Cordials product line with six unique formulations later this month. Given our corporate philosophy that our capital structure, strategic focus and quality of employees are the 3 legs upon which to build a great company, we are delighted to announce that the capital structure is aligned with the needs of our product launch and evolving product roadmap. Our goal has been to establish a broad network of strategic investors committed to our long term growth and values who support the management team and vision. The success of this round of funding has provided precisely that. We look forward to working with this network and others to build a next generation cannabis company founded on the idea that the future of cannabis will be value-added brands supporting the Wellness Lifestyle through the integration of art and science in service of extraordinary products.”
The securities mentioned will not be or have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
About Resonate Blends, Inc. (OTCQB:KOAN)
Based in Calabasas, California, Resonate Blends, Inc. is a cannabis holding company centered on valued-added holistic Wellness and Lifestyle brands. The company strategy is to ignite future growth by building a purpose-driven portfolio of research organizations, innovative and emerging brands and retail channels. The holding company’s focus is finding mutual value between product and consumer by optimizing quality, supply chain resources and financial performance. The Company offers a family of premium cannabis-based products of consistent quality based on unique formations calibrated to Resonate Blends effects system, the industry gold standard in user experience. Visit www.koan.life for more information on the KOAN® consumer brands.
For Corporate information: www.resonateblends.com
Safe Harbor Provision:
This document contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forward-looking events discussed in this document and other statements made from time to time by us or our representatives might not occur. Potential risks and uncertainties include, but are not limited to, the risks described in Resonate Blends’ filings with the Securities and Exchange Commission. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release and any document referred to in this press release.
Contact:
David Thielen
Chief Investment Officer/Director
Resonate Blends, Inc.
571-888-0009