STEK 8-K
Stemtech Corp (STEK)
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):
September 17th, 2021
GLOBE NET WIRELESS CORP.
(Exact name of registrant as specified in its charter)
| Nevada | 333-172172 | N/A |
| (State of incorporation) | (Commission File Number) | (IRS Employer No.) |
10370 USA Today Way
Miramar, FL 33025
(Address of principal executive offices and Zip Code)
(954) 715-6000
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.01. | Entry into a Material Definitive Agreement. |
On September 17th, 2021, the Company finalized a $1,400,000 investment into our Company with Sharing Services Global Corporation, a publicly traded company (“SHRG”) via a Convertible Promissory Note, a Share Purchase Agreement and Warrant Agreement.
Per the terms of the Agreements, the Company was tendered the full $1,400,0000, which is open with right of redemption at 10% interest per annum until September 9th, 2024. Should the holder prefer to have its debt converted, the conversion rate shall be based on the 30-day VWAP from 8/20/21 to 9/20/21, which is $3.2431.
Also per the Agreements, Sharing Services Global Corporation has been tendered 1,400,000 Warrants with a three year life span and can convert at the market price of the previous 10 day VWAP of the date of Conversion.
Pursuant to the Agreements, we shall use the net proceeds for immediate cash infusion for normative working capital purposes and capital expenditures. There are no other restrictions on future financing transactions. The Agreement does not contain any right of first refusal or penalties. Sharing Services Global Corporation has agreed that neither it nor any of its affiliates shall engage in any short-selling or hedging of our Common Stock during any time during the term of the Agreements. Pursuant to the Agreements, the Company is required to register all shares which the Leonite Fund I LP may acquire.
The foregoing is a summary description of certain terms of the Agreements. For a full description of all terms, please refer to the copy of the Agreements which are filed herewith as Exhibits 10.1 et seq. to this Current Report on Form 8-K and incorporated herein by reference. All interested parties are encouraged to read the entire text of the listed
Agreements.
Item 5.02: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.
As part of the Agreements referenced supra, Sharing Services Global Corporation has the right to appoint one Board Member to our Company. As such, Mr. John “JT” Thatch, CEO of Sharing Services, put forth his name as their candidate to join our Board, and the Board enthusiastically approved the same.
John “JT” Thatch, 59, serves as Chief Executive Officer and Vice Chairman of Sharing Services Global Corporation a publicly traded company with over $100M in annual revenues. Mr. Thatch is an accomplished executive who has successfully started and operated businesses in various industries that include service companies, retail, wholesale, on-line learning, finance, real estate management and technology. From 2009 to 2016, Mr. Thatch served as Chief Executive Officer of Universal Education Group, in 2016 Mr. Thatch created Superior Wine and Spirits, LLC, a Florida-based wholesale distributor of wine and spirits. Prior to 2005, Mr. Thatch served as CEO of Orbital Energy Group, Inc. (“OEG”), a NASDAQ-listed company formerly known as OnScreen Technologies, Inc. Mr. Thatch currently serves on the board of directors of several other companies and is the lead independent director of Document Security Systems, Inc. (“DSS”), a NYSE listed company and is a current member of NACD.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
The following Exhibits are filed as part of this Report.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: September 21st, 2021
| Globe Net Wireless Corp. | |
| /s/ Charles Arnold | |
| By: Charles Arnold, Dir., CEO |
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Exhibit 10.1
THIS CONVERTIBLE PROMISSORY NOTE (“NOTE”) AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), APPLICABLE STATE LAW, OR APPLICABLE LAWS OF ANY FOREIGN JURISDICTION, AND MAY NOT BE SOLD, OFFERED FOR SALE, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE OR FOREIGN SECURITIES LAWS COVERING ANY SUCH TRANSACTION OR (B) SUCH TRANSACTION IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE OR FOREIGN SECURITIES LAWS COVERING SUCH TRANSACTION.
CONVERTIBLE PROMISSORY NOTE
| Principal Amount: $1,400,000 | September 10, 2021 |
FOR VALUE RECEIVED, Stemtech Corporation, a Delaware corporation, Stemtech HealthSciences Corp., a Florida corporation, (collectively, “Stemtech”) and Globe Net Wireless Corporation, a publicly listed company (“GNTW” and together with Stemtech, the ”Borrower”) promises to pay to Sharing Services Global Corporation, a Nevada corporation (the “Holder”), to its order, the principal sum of One Million Four Hundred Thousand Dollars (the “Principal Amount”), of which up to $1,400,000 and all accrued interest can be paid by the “Optional Conversion” (as hereinafter defined) of such amount into shares of GNTW’s $0.001 par value common stock (“Common Stock”) at the Conversion Price, provided all of the conditions precedent contained in Section 3 of this Note have been satisfied, together with interest in arrears, if any, on the unpaid principal balance from time to time outstanding from the date hereof until the entire Principal Amount due hereunder is paid in full at the rate(s) provided below. This Note is issued in connection with a Securities Purchase Agreement relating to the Note (the “Purchase Agreement”) executed on even date herewith between the Borrower and Holder. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Purchase Agreement. “Dollar” and “$” mean the lawful currency of the United States of America.
| 1. | Maturity. |
1.1 Maturity Date. The aggregate outstanding Principal Amount, together with all accrued interest, if any, thereon, reduced by unamortized prepaid interest, if any, (cumulatively, the “Outstanding Amount”), shall be due and payable on the earliest to occur of (the earliest of such events being the “Maturity Date”): (i) September 9, 2024 (the “Scheduled Maturity Date”); (ii) the acceleration of this Note upon the occurrence of an Event of Default; (iii) upon full conversion of this Note as provided herein; or (iv) upon full repurchase of this Note by Borrower as provided herein.
1.2 Redemption. Borrower at its option shall have the right to redeem a portion or all amounts of outstanding Principal Amount on or after the first anniversary of this Note without incurring penalties, additional interest, or other fees or charges; provided that Borrower shall send Holder written notice (“Redemption Notice”) of such redemption stating the amount of the Principal Amount being redeemed (“Redemption Amount”) and, if such redemption of the Note is in full, the place or places whether the Note is to be surrendered for payment. After a Redemption Notice is given, the Borrower shall deliver to the Holder the Redemption Amount within three (3) business days of such Redemption Notice, during which period of time the Holder shall not have the right to convert any portion of this Note. If the Borrower fails to deliver the Redemption Amount to Holder within three (3) business days, then: (i) all rights and remedies of the Holder under this Note, including conversion rights in accordance with Section 3 of this Note, shall continue as though no such Redemption Notice had been given, and (ii) the Borrower shall not have the right to redeem any portion of the Principal Amount for a period of thirty (30) calendar days following such failure to deliver the Redemption Amount.
| 2. | Interest. |
2.1 of this Note on March 31st, June 30th, September 30th and December 31st of each year during the term of Note. Interest shall be computed on the basis of a 360-day year and the actual number of days elapsed.
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2.2 Interest After Default. At Holder’s option, and to the extent permitted by applicable law, the unpaid principal balance shall bear interest after an Event of Default and after Maturity (whether by acceleration or otherwise) at the Default Interest Rate. The “Default Interest Rate” shall be, at Holder’s option: (a) eighteen percent (18%) per annum, or (b) such lesser rate of interest as Holder in its sole discretion may choose to charge; but never more than the Maximum Lawful Rate or at a rate that would cause the total interest contracted for, charged or received by Holder to exceed the Maximum Lawful Amount. The term “Maximum Lawful Rate” means the maximum rate of interest and the term “Maximum Lawful Amount” means the maximum amount of interest that is permissible under applicable state or federal law for the type of loan evidenced by this Note. If applicable state or federal law does not permit a higher interest rate, the “weekly ceiling” (as defined in Chapter 303 of the Texas Finance Code) shall be the interest rate ceiling applicable to this Note and shall be the basis for determining the Maximum Lawful Rate in effect from time to time during the term of this Note. If applicable state or federal law allows a higher interest rate or federal law preempts the state law limiting the rate of interest, then the foregoing interest rate ceiling shall not be applicable to this Note. If the interest rate ceiling is increased by statute or other governmental action subsequent to the date of this Note, then the new interest rate ceiling shall be applicable to this Note from the effective date thereof, unless otherwise prohibited by applicable law.
| 3. | Conversion. |
3.1. Optional Conversion. At any time during the term of this Note, except as otherwise provided herein, the Principal Amount less any unamortized prepaid interest, if any, and all accrued interest, if any, thereon (the “Maximum Conversion Amount”) may, at the sole option of the Holder, be converted, in whole or in part, into fully paid and non-assessable whole shares of Common Stock (“Optional Conversion”) in accordance with Section 3.4 below.
3.2. Mechanics of Conversion. The Holder shall notify the Borrower in writing of its election to convert all or part of the Maximum Conversion Amount (“Conversion Amount”) in accordance with Section 3.1 (“Conversion Notice”). Such conversion shall only become effective after all of the following conditions have been satisfied:
a. Borrower receives the Conversion Notice;
b. Holder executes any and all documents required in connection with becoming a holder of Common Stock;
c. Borrower issues and delivers to Holder a certificate or certificates for the number of Common Stock, if any, to which Holder shall be entitled as provided herein, within ten (10) calendar days of receipt of the Conversion Notice (“Certificates”); and
d. Holder provides Borrower with written confirmation that the outstanding balance of the Principal Amount and accrued interest, if any, has been reduced by the Conversion Amount (“Reduction Certificate”). Upon the occurrence of the events set forth in Sections 3.2a., b. and c. above, and this Section 3.2d., Borrower shall deliver to the Holder a Restated Note (“Restated Note”) evidencing the remaining outstanding balance of the Principal Amount, if any, which Restated Note shall in all other respects be identical with this Note, except that the Maximum Conversion Amount shall be reduced by the Conversion Amount.
3.3 Conversion Price. The number of whole shares of Common Stock into which this Note may be converted (the “Conversion Shares”) shall be determined by dividing the Conversion Amount by the Volume Weighted Average Price (VWAP) of the first thirty (30) days of the Company’s Common Stock based on the timeframe of August 20, 2021 through Sept ember 19, 2021. The VWAP shall be calculated on the price of the Common Stock of the Company as quoted by Bloomberg, LP or such other quotation service (the “Conversion Price”), and such shares of the Company’s Common Stock issued upon payment of the Origination Fee are referred to herein as the “Origination Fee Shares.” For purposes of this Section 3, “VWAP” shall mean the volume weighted average price of the Common Stock of the Borrower, GNTW. On the Closing Date, Company shall delivery to the Investor, the Origination Fee Shares to be issued at Closing. Immediately after the expiration of September 19, 2021 (but in any event no later than 3:00 p.m., New York City time, on September 23, 2021), the Company shall deliver to the Investor, the Origination Fee Shares.
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| 3.4 | [RESERVED] |
3.5 No Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of this Note. In lieu of the Borrower issuing any fractional shares to the Holder upon conversion of the Note, the Borrower shall pay to the Holder the amount of the fractional shares valued at the Conversion Price.
| 4. | Reservation of Authorized Shares. |
4.1 Reservation. Except as may be provided for in or in accordance with the Purchase Agreement, at the Closing (as defined in the Purchase Agreement), the Borrower shall have reserved an adequate amount of its authorized unissued shares of Common Stock, including treasury shares of Common Stock (“Initial Reserve Amount”), solely for the purpose of effecting the conversion of this Note or other convertible securities issued to the Holder pursuant to the Purchase Agreement. After the increase in Borrower’s authorized but unissued shares of Common Stock pursuant to and in accordance with the Purchase Agreement (“Authorized Share Increase”), Borrower shall at all times thereafter reserve out of its authorized but unissued shares of Common Stock, a number of shares of Common Stock equal to the Conversion Price with respect to Maximum Conversion Amount of this Note, solely for the purpose of effecting the conversion of this Note (the “Subsequent Reserve Amount”).
4.2 Insufficient Authorized Shares. Except as provided for in the Purchase Agreement, if at any time after the Authorized Share Increase and while this Note remains outstanding the Borrower does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve the Subsequent Reserve Amount (an “Authorized Share Failure”), then the Company shall take all action necessary to effect an Authorized Share Increase pursuant to and in accordance with the Purchase Agreement.
5. Usury. All agreements between the Borrower and the Holder are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration of maturity of the indebtedness evidenced hereby or otherwise, shall the amount paid or agreed to be paid to the Holder for the use, forbearance, or detention of the indebtedness evidenced hereby exceed the maximum permissible amount under applicable law. If, from any circumstance whatsoever, fulfillment of any provision hereof at the time performance of such provision shall be due shall involve transcending the limit of validity prescribed by law, the obligation to be fulfilled shall automatically be reduced to the limit of such validity, and if from any circumstances the Holder should ever receive as interest an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall be applied to the reduction of the balance of the Principal Amount evidenced hereby and not to the payment of interest, and, if the Principal Amount of this Note has been paid in full, such excess interest shall be refunded to the Borrower.
| 6. | Negative Covenants. |
6.1 General Prohibitions. So long as this Note shall remain in effect and until any Outstanding Amount (and liquidated damages, if any) and all fees and all other expenses or amounts payable under this Note and the Purchase Agreement have been paid in full, unless the Holders shall otherwise consent in writing, which consent shall not be unreasonably withheld or delayed, the Borrower shall not:
a. Senior or Pari Passu Indebtedness. Incur, create, assume, guaranty or permit to exist any indebtedness that ranks senior in priority to, or pari passu with, the obligations under this Note, except for: (i) indebtedness created as a result of the issuance of other notes up to a maximum original principal amount (including this Note) of $45,000,000, (ii) long-term indebtedness existing on the date hereof, which outstanding principal amount may be increased from time to time to not more than $5,000,000 ((i) and (ii) are cumulatively the “Indebtedness Cap”) in the aggregate and set forth in Schedule A attached hereto and only to the extent that such indebtedness ranks senior in priority to or pari passu with the obligations under this Note and the Purchase Agreement on the issuance date, (iii) indebtedness that refinances any of the indebtedness referenced in Schedule A as long as any such refinance does not result in the Indebtedness Cap being exceeded, (iv) long-term indebtedness; other than financing of personal property used in the business, secured by a lien in an aggregate amount outstanding not to exceed $1,000,000 (“Permitted Liens”), (v) indebtedness created as a result of a subsequent financing if the gross proceeds to the Borrower of such financing are equal to or greater than the aggregate principal amount of the Notes and the Notes are repaid in full upon the closing of such financing and (vi) trade payables and deferred employment compensation created in the ordinary course of business (in addition to the Permitted Liens, the Scheduled Lien shall not constitute a breach of this Section 6.1(a));
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b. Liens. Create, incur, assume or permit to exist any lien on any property or assets, other than: (i) financing of personal property used in the business, and (ii) financing of inventory, (including stock or other securities of the Borrower) now owned or hereafter acquired by the Borrower or on any income or revenues or rights in respect of any thereof, except Permitted Liens and the Scheduled Liens;
c. Dividends and Distributions. Declare or pay, directly or indirectly, any dividend or make any other distribution (by reduction of capital or otherwise), whether in cash, property, securities (other than shares of Common Stock of the Borrower in connection with a stock dividend, stock split or other recapitalization) or a combination thereof (other than a reverse stock split of the Common Stock of the Borrower), with respect to any shares of its capital stock or directly or indirectly redeem, purchase, retire or otherwise acquire for value any shares of any class of its capital stock or set aside any amount for any such purpose except as permitted under subsection d. below;
d. Stock Repurchases. Repay, repurchase, redeem or offer to repay, repurchase, redeem or otherwise acquire more than a de minimis number of shares of its Common Stock (or Common Stock equivalents) other than as to: (i) the Conversion Shares as permitted or required under this Note or Purchase Agreement and (ii) repurchases of Common Stock of departing officers and directors of the Borrower. Holder specifically agrees the redemption or conversion into Common Stock of Preferred Stock existing on the date hereof does not require Holder approval;
e. Certain Payments and Prepayments. Optionally prepay, repurchase or redeem or segregate funds with respect to any indebtedness with a remaining term of greater than twelve months of the Company at the time of the optional payment, other than for: (i) indebtedness existing on the date hereof and set forth in Schedule A attached hereto, and (ii) indebtedness under this Note or the Purchase Agreement;
f. Amendments to Constitutive Documents. Amend its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially and adversely affects any rights of the Holder; or
g. Other. Enter into any agreement with respect to any of the foregoing.
6.2 Scheduled Liens. The term “Scheduled Liens” shall mean those liens securing the indebtedness described on Schedule 1 attached hereto and incorporated herein.
6.3 IRS Liens. Borrower agrees that the IRS indebtedness (and related liens) (collectively, the “IRS Liens”) itemized on Schedule 1 shall be discharged within ten (10) days of the date of this Note. Borrower shall deliver to Holder, within such ten (10) day period, final proof of the discharge of the IRS Liens. In the event that Borrower fails to comply with this discharge requirement, Borrower shall immediately effect a draw under this Note in such amount so as to discharge in full such IRS indebtedness. Borrower further agrees to indemnify and defend Holder harmless from any liability arising out of relating to, the IRS Liens.
| 7. | Full Ratchet Anti-Dilution. |
7.1 Dilutive Issuance Prohibitions. If the Company or any subsidiary thereof, as applicable, at any time while this Note is outstanding or the Holder holds any Conversion Shares, shall sell or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Stock or Common Stock Equivalents, at an effective price per share less than the Conversion Price then in effect (such lower price, the “Base Share Price” and such issuances collectively, a “Dilutive Issuance”) (it being understood and agreed that if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive Common Stock at an effective price per share that is less than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance at such effective price), then simultaneously with the consummation of each Dilutive Issuance the Conversion Price shall be reduced and only reduced to equal the Base Share Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. The Company shall notify the Holder, in writing, no later than one business day following the issuance or deemed issuance of any Common Stock or Common Stock Equivalents subject to this Section 7.1, indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 7.1, upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the Base Share Price regardless of whether the Holder accurately refers to the Base Share Price in the Conversion Notice. If the Company enters into a Variable Rate Transaction, despite the prohibition thereon in the Purchase Agreement, the Company shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion or exercise price at which such securities may be converted or exercised.
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7.2 Exception. Notwithstanding the foregoing provisions of Section 7.1, Borrower shall have the right to discharge any obligations or responsibilities arising out of prior commitments and/or agreements entered into between Borrower and various employees of Borrower pursuant to a Stock Incentive Plan (e.g. ESOP, ISO and the like).
8. Replacement of Note. If this Note is mutilated, lost, stolen or destroyed, the Borrower shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Note, a new Note, but only upon receipt of evidence reasonably satisfactory to the Borrower of such loss, theft or destruction and customary and reasonable bond or indemnity, if requested.
| 9. | Events of Default. The following constitute an event of default (“Event of Default”): |
a. Borrower fails to pay any amount of principal or interest under this Note when due and said failure continues for a period of ten (10) days after Borrower’s receipt of written notice from Holder;
b. Borrower fails or neglects to perform, keep or observe any of the covenants, conditions or agreements contained in this Note and such failure or neglect continues after Holder provided Borrower with thirty (30) days written notice thereof;
c. Any warranty or representation now or hereafter made by the Borrower in connection with this Note is untrue or incorrect in any material respect, or any schedule, certificate, statement, report, financial data, notice, or writing furnished at any time pursuant to this Note by the Borrower to the Holder is untrue or incorrect in any material respect, on the date as of which the facts set forth therein are stated or certified and such failure or neglect continues after Holder provided Borrower with thirty (30) days written notice thereof;
d. A proceeding under any bankruptcy, reorganization, arrangement of debt, insolvency, readjustment of debt or receivership law or statute is filed against Borrower which is not dismissed within sixty (60) days of its filing, or a proceeding under any bankruptcy, reorganization, arrangement of debt, insolvency, readjustment of debt or receivership law or statute is filed by Borrower or the Borrower makes an assignment for the benefit of creditors or Borrower takes any corporate action to authorize any of the foregoing;
e. Borrower voluntarily or involuntarily dissolves or is dissolved, terminates or is terminated;
f. Borrower becomes insolvent or fails generally to pay its debts as they become due, and said failure continues for a period of thirty (30) days after written notice of same from the Holder to the Borrower; or
g. Borrower breaches any agreements or covenants, as modified or amended, set forth in the Purchase Agreement or any representation or warranty set forth in the Purchase Agreement shall be determined to be false at the time given and such failure or neglect continues after Holder provided Borrower with thirty (30) days written notice thereof;
10. Remedies. Upon the occurrence of an Event of Default, or Change of Control, at the option and upon the written declaration of the Holder (or automatically without such declaration if an Event of Default set forth in Section 9d. occurs), the entire Outstanding Amount shall, without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived, be forthwith due and payable, and Holder may, with a ten (10) day period of grace, enforce payment of all amounts due and owing under this Note and exercise any and all other remedies granted to it at law, in equity or otherwise, including the demand for immediate transfer to the Holder of any ownership interests in the Company held by the Borrower. For purposes of this Note, the term “Change of Control” shall mean the consummation of any bona fide third party tender offer, merger, amalgamation, consolidation or other similar transaction the result of which is that any “person” (as defined in Section 13(d)(3) of the Exchange Act), or group of persons, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) of a majority of total voting power of the voting stock of the Company. Change of Control specifically excludes any transactions involving Holder and/or any entity or person affiliated with Holder including, Sharing Services Global Corporation.
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| 11. | Miscellaneous. |
a. Notices. All notices to any party required or permitted hereunder shall be in writing and shall be sent to the physical address or email address set forth for such party as follows:
| i. | If to the Holder: |
Sharing Service Global Corporation Attn: John Thatch, CEO
1700 Coit Rd, Suite 100
Plano, Texas 75075
With a Copy to:
R. Steven Jones, Esq. Jones, Davis & Jackson, PC
15110 Dallas Parkway, #300
Dallas, Texas 75248
| ii. | If to Borrower: |
Stemtech Corporation Attn: Charles Arnold, CEO 10370 USA Today Way Miramar, Florida 33025
With a Copy to:
David E. Price, Esq.
#3 Bethesda Metro Center #700
Bethesda, Maryland 20814
Any such notice shall be deemed effectively given: (i) upon personal delivery to the party to be notified; (ii) when sent by confirmed electronic transmission or facsimile if sent during normal business hours of the recipient, if not, then on the next business day; (iii) three (3) business days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one (1) day after deposit with a recognized national overnight courier, specifying next day delivery, or two (2) days after deposit with a recognized international overnight courier, specifying two day delivery, in each case with written verification of receipt.
b. Waiver. No failure to exercise, and no delay in exercising, on the part of the Holder, any right, power, or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law.
c. Amendments. Any term, covenant, or condition of this Note may be amended or waived only by written consent of the Borrower and the Holder.
d. Expenses. Any reasonable expense incurred by the Holder (including, without limitation, reasonable attorneys’ fees and disbursements) in connection with the exercise of any right or remedy upon the occurrence of an Event of Default, including, without limitation, the costs of collection and reasonable attorneys’ fees and expenses, shall be paid by the Borrower within thirty (30) days of receiving written notice thereof from the Holder. Any such expense incurred by the Holder and not timely paid by the Borrower shall be added to the other obligations hereunder and shall earn interest at the same rate per annum as the principal hereunder.
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e. Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Texas without giving effect to any conflict or choice of laws principles. Any litigation involving this Note shall be brought in Collin County, Texas.
f. Transfer; Successors and Assigns. The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties. This Note and the rights, privileges and obligations of Holder hereunder, shall not be assigned, sold or transferred by Holder, in part or in full without the prior written consent of the Borrower, provided that the Holder may assign or transfer any of its rights, privileges, or obligations set forth in, arising under, or created by this Agreement to any entity controlled by, controlling or under common control with the Holder. The Borrower may not assign this Note without prior written consent of the Holder, provided that the Borrower may assign this Note to any successor of all or substantially all of its assets or business, or any entity surviving the merger, combination or consolidation with the Borrower. Notwithstanding the above, under no circumstances shall the Optional Conversion or the rights, privileges and obligations of Holder pursuant thereto be separately assigned by Holder.
g. Entire Agreement. This Note constitutes the full and entire agreement of the Borrower and the Holder with respect to the subject matter hereof.
h. Confidentiality. In addition to separate confidentiality agreement, if any, the Holder will at all times keep confidential and not divulge, use or make accessible to anyone the terms and conditions of this Note and the transactions described herein, and any non-public material information concerning or relating to the business or financial affairs of the Borrower to which such party has been or will become privy relating to this Note, except to its employees and advisors in such capacity, as required to perform its obligations hereunder, if required by law or rules of a stock exchange on which its or its parent’s securities are listed, or with the prior written consent of the Borrower.
i. Waiver of Jury Trial.
BORROWER AND HOLDER EACH HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY WITH REGARDS TO ANY “DISPUTE” AND ANY ACTION ON SUCH “DISPUTE”. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY BORROWER AND HOLDER, AND BORROWER AND HOLDER HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY PERSON OR ENTITY TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT. BORROWER AND HOLDER ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION HEREOF IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER OF JURY TRIAL. BORROWER FURTHER REPRESENTS AND WARRANTS THAT: (1) IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR (2) HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND (3) EACH HAVE HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
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IN WITNESS WHEREOF, the Borrower has caused this Note to be executed by its duly authorized representatives as of the day and year first above written.
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BORROWER:
STEMTECH CORPORATION, a Delaware corporation | ||
| By: | /s/ Charles Arnold | |
| Name: | Charles Arnold | |
| Title: | Chief Executive Officer | |
|
BORROWER:
STEMTECH HEALTHSCIENCES CORP., a Florida corporation | ||
| By: | /s/ Charles Arnold | |
| Name: | Charles Arnold | |
| Title: | Chief Executive Officer | |
|
GLOBE NET WIRELESS CORP., a Nevada corporation | ||
| By: | /s/ Charles Arnold | |
| Name: | Charles Arnold | |
| Title: | Chief Executive Officer | |
[Signature Page to Convertible Promissory Note]
| 8 |
Schedule 1
| A. | Schedule of Convertible Promissory Notes. |
| B. | Schedule Of Variable Rate Indebtedness. |
| Lender | Loan Amount | Security/Collateral | Maturity Date |
|
MCUS, LLC |
$568,182.00 ($500k Principal with $68,182.00 OID) |
-$568,182.00 Convertible Promissory Note,
-Registration Rights Agreement,
-Warrant of up to 500k shares of Common Stock with an exercise price equal to $3.00, and
-Security Agreement. |
9 months after execution – April 30, 2022 |
|
LEONITE FUND I, LP |
$455,555.56 ($410k Principal with $45,555.56 OID) |
-$455,555.56 Convertible Promissory Note,
-200M authorized shares of Common Stock,
-540k issued and outstanding shares of Common Stock,
-Warrant of up to 500k shares of Common Stock with an exercise price equal to $3.00 (3 years life), and Security Agreement. |
9 months after the date of each tranche of funds released to borrower |
| 9 |
| C. | Schedule Of IRS Liens. |
|
IRS Jacksonville Serial Number 354756619 |
Stemtech HealthSciences Corp. |
$47,666.19 covering certain periods in 2014, 2017 and 2018 |
Filed 5.18.2019 |
| 10 |
Exhibit 10.2
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (this “Agreement”), is dated as of September , 2021, entered into by and among Stemtech Corporation, a Delaware corporation and Globe Net Wireless Corp., a Nevada corporation (collectively, the “Company”), and Sharing Services Global Corporation, a Nevada corporation (the “Investor”).
WITNESSETH:
WHEREAS, the Company and Investor are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and rule 506(b) of Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act;
WHEREAS, the Company has authorized a new convertible note of the Company in the form attached hereto as Exhibit A (the “Note”), which Note shall be convertible into shares of Common Stock of the Company (such shares issuable pursuant to the terms of the Note upon conversion or otherwise, collectively, the “Note Conversion Shares”), in accordance with the terms of the Note;
WHEREAS, pursuant to the purchase of the Note, the Company will issue to the Investor warrants substantially in the form attached hereto as Exhibit B (the “Warrants”), which Warrants shall be exercisable into shares of Common Stock of the Company (such shares issuable pursuant to the terms of the Warrants upon conversion or otherwise, collectively, the “Warrant Conversion Shares”) (together with the Note Conversion Shares, the “Conversion Shares”), in accordance with the terms of the Warrants;
WHEREAS, the Investor wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, a Note in the amount of $1,400,000 (the “Investment Amount”); and
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
| 1. | PURCHASE AND SALE OF NOTE. |
(a) Purchase of Note. Subject to the terms and conditions of this Agreement, the Company shall issue and sell to the Investor, and the Investor agreed to purchase from the Company the Note in the original principal amount of the Investment Amount. The Note shall be substantially in the form attached as Exhibit A to this Agreement.
(b) Closing. The initial closing of the purchase and sale of the Note (the “Closing”) shall take place on the date when all of the Transaction Documents have been executed and delivered by the applicable parties and the other conditions to the Closing set forth herein and in Sections 5 and 6 below have been satisfied or waived (or such later date as is mutually agreed to by the Company and the Investor) (the “Closing Date”).
(c) Form of Payment. The Investor shall pay the Investment Amount to the Company for the Note to be issued and sold to the Investor, by wire transfer of immediately available fund. The Investment Amount shall be funded, by wire transfer, to a bank account of the Company that will be opened no later than five (5) days from signing this Agreement.
(d) Delivery of Notes. On the Closing Date, the Company shall deliver to the Investor: (i) the Note to be issued at such Closing, duly executed on behalf of the Company and (ii) the Commitment Fee Shares.
| 1 |
(e) Origination Fee. Subject to the terms and conditions of this Agreement, at the Closing (as defined herein) the Company hereby agrees to pay to the Investor an origination fee equal to Five Hundred Thousand Dollars ($500,000) (the “Origination Fee”) in Common Stock of the Company at a price equal to the VWAP (Volume Weighted Average Price) of the first thirty (30) days of the Company’s Common Stock based on the timeframe of August 20, 2021 through September 19, 2021. The VWAP shall be calculated on the price of the Common Stock of the Company as quoted by Bloomberg, LP or such other quotation service, and such shares of the Company’s Common Stock issued upon payment of the Origination Fee are referred to herein as the “Origination Fee Shares.” The Note, the Warrant, the Note Shares, the Warrant Shares, and Origination Fee Shares are sometimes collectively referred to herein as the “Securities.” On the Closing Date, Company shall deliver to the Investor, the Origination Fee Shares to be issued at Closing. Immediately after the expiration of September 19, 2021 (but in any event no later than 3:00 p.m., New York City time, on September 23, 2021), the Company shall deliver to the Investor, the Origination Fee Shares.
(f) No Variable Rate Transactions. While the Note is due and payable, the Company shall not enter into any new Variable Rate Transactions with any party other than the Investor. “Variable Rate Transaction” means a means a transaction in which the Company: (i) issues or sells any debt securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock either: (A) at a conversion price, exercise price or exchange rate or other price that varies with, the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may sell securities at a future determined price. Notwithstanding the foregoing, the Company represents and warrants to the Investor that the only variable rate transaction with any party which exist as of the date of this Agreement are those which are set out on Schedule 1 attached hereto and incorporated herein.
(g) Piggyback Registration Rights. If the Company at any time determines to file a registration statement under the Securities Act to register the offer and sale, by the Company, of Common Stock (other than (x) on Form S-4 or Form S-8 under the Securities Act or any successor forms thereto, (y) an at-the-market offering, or (z) a registration of securities solely relating to an offering and sale to employees or directors of the Company pursuant to any employee stock plan or other employee benefit plan arrangement), the Company shall, as soon as reasonably practicable, give written notice to the Investor of its intention to so register the offer and sale of Common Stock and, upon the written request, given within ten (10) business days after delivery of any such notice by the Company, of the Investor to include in such registration statement Conversion Shares (which request shall specify the number of Conversion Shares proposed to be included in such registration), the Company shall cause all such Registrable Shares up to one hundred percent (100%) of the total registered offering to be included in such registration statement on the same terms and conditions as the Common Stock otherwise being sold pursuant to such registered offering, subject to SEC rules and regulations.
| 2. | ISSUANCE OF WARRANTS. |
(a) Issuance of the Warrants. Subject to the terms and conditions of this Agreement, the Company shall issue to the Investor, detachable warrants to purchase up to 1.4 Million shares of the Company’s Common Stock (the “Warrants”). Such Warrants shall be in substantially in the form attached hereto as Exhibit B. The exercise price for the Warrants shall be equal to the VWAP based on the prior ten (10) day trading period of the Company’s Stock as more specifically described in the Warrant instrument. The Warrants shall be exercisable for a period of three (3) years from the Closing Date. Neither the Company nor the Investor shall undertake or permit any action in furtherance of conduct which constitutes or has the consequence of, the shorting of the Common Stock of the Company.
(b) Delivery of Warrants. On the Closing Date, the Company shall deliver to the Investor the Warrants to be issued at such Closing, duly executed on behalf of the Company. The Investor shall deliver to the Company a countersigned signature page.
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| 3. | REPRESENTATIONS AND WARRANTIES. |
(a) Representations and Warranties of the Company. The Company hereby makes the following representations and warranties to the Investor:
(i) Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing, and, if applicable under the laws of the jurisdiction in which they are formed, in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification. ”Subsidiaries” means any Person in which the Company, directly or indirectly, controls or operates all or any part of the business, operations or administration of such person, and each of the foregoing, is referred to herein as a “Subsidiary.”
(ii) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s shareholders in connection herewith or therewith. This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law. “Transaction Documents” means, collectively, this Agreement, the Note, the Warrants, the Irrevocable Transfer Agent Instructions (as defined below) and each of the other agreements and instruments entered into or delivered by any of the parties hereto in connection with the transaction contemplated hereby and thereby, as may be amended from time to time.
(iii) Issuance of Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. Upon issuance or conversion or conversion in accordance with the Note or Warrants, the Note Conversion Shares and/or Warrant Conversion Shares, respectively, when issued and payment is made, if required, will be validly issued, fully paid and non-assessable and free from all preemptive or similar rights or Liens with respect to the issue thereof, with the holder being entitled to all rights accorded to a holder of Common Stock. Subject to the accuracy of the representations and warranties of the Investor in this Agreement, the offer and issuance by the Company of the Securities is exempt from registration under the Securities Act.
(iv) Reservation of Conversion Shares. At the Closing, the Company shall initially have reserved an adequate amount of authorized and unissued shares of Common Stock, including treasury shares of Common Stock (“Initial Reserve Amount”), solely for the purpose of enabling it to issue the Warrant Conversion Shares upon exercise of the Warrants and/or Note Conversion Shares upon conversion of the Note. Following the Closing, as soon as practicable, the Company shall: (i) seek and obtain shareholder approval, either at a special meeting of shareholders or at the regular annual meeting of shareholders, in either case before October 15, 2021, for the increase in the number of authorized shares of Common Stock at least equal to the amount of shares necessary to provide for the issuance of Common Stock upon the full exercise of the Warrants and full conversion of the Note and (ii) shall use its commercially reasonable efforts to solicit its stockholder’s approval of the Authorized Share Increase and to cause its board of directors to recommend to the stockholders that they approve such proposal (the “Authorized Share Increase”). Following the Authorized Share Increase, the Company shall at all times during which the Warrants and Note are outstanding or the Investor owns any Warrant exercisable for shares of the Company’s Common Stock, the Company will reserve for the Investor from its authorized and unissued shares of Common Stock a number of shares of Common Stock equal to the amount of shares necessary to provide for the issuance of Common Stock upon the full exercise of Warrants and full conversion of the Note (the “Subsequent Reserve Amount”). The shares must be reserved for issuance upon the exercise of those Warrants in priority to the reservation of shares for issuance upon the conversion of the Note issued pursuant to this Agreement.
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(v) Insufficient Authorized Shares. If at any time after the Authorized Share Increase and while the Warrants and Note remain outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve the Subsequent Reserve Amount (an “Authorized Share Failure”), then the Company shall, as soon as practicable, but within ninety (90) days, take all action necessary to seek shareholder consent to effect an additional Authorized Share Increase.
(vi) No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not: (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.
(vii) Due Execution and Delivery. The Transaction Documents constitute a legal, valid and binding obligation of the Company and, when executed and enforced in accordance with their terms; no consent approval, authorization, order, filing, registration or qualification of or with any court, governmental authority or third person is required to obtained by the Company in connection with the execution and delivery of the Transaction Documents, or the performance of the Company’s obligations thereunder, other than in connection with the actions of its stock transfer agent, Empire Stock Transfer.
(viii) Capitalization. Other than previously existing agreements no person or entity has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. The issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to any person or entity (other than the Investor). Except with respect to various agreements with certain shareholders regarding lock up agreements and stock voting trusts, there are no outstanding securities or instruments of the Company or and Subsidiary with any provision that adjusts the exercise, conversion or reset price of such security or instrument upon an issuance of the Securities by the Company or any Subsidiary.
(ix) SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act of 1934, as amended (the “Exchange Act”), including pursuant to Section 13(a) or 15(d) thereof, for the one year preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, 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 the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing.
(x) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within the SEC Reports: (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than: (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements disclosed in filings made with the SEC, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its shareholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer or director, except as disclosed in the Company’s SEC Reports or pursuant to existing Company stock option plans.
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(xi) Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) which has not been previously disclosed to the Investor or disclosed through SEC filings. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the SEC involving the Company or any current or former director or officer of the Company. The SEC has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.
(xii) Listing and Maintenance Requirements. The Company has not, in the twelve (12) months preceding the date hereof, received written notice from the OTC Pink to the effect that the Company is not in compliance with the listing or maintenance requirements of the OTC Pink. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.
(xiii) Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case of (i), (ii) and (iii) as could not have or reasonably be expected to result in a Material Adverse Effect.
(xiv) No Integrated Offering. Neither the Company, nor any of its Affiliates (as defined in Rule 405 of the Securities Act, “Affiliate”), nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the Securities under the Securities Act or cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of the Securities Act.
(b) Representations and Warranties of the Investor. Investor hereby makes the following representations and warranties to the Company:
(i) Investment Purpose. Investor is acquiring the Securities, in each case, own account for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities Act; provided, however, that by making the representations herein, such Investor reserves the right to dispose of the Securities at any time in accordance with or pursuant to an effective registration statement covering such Securities, or an available exemption under the Securities Act. The Investor agrees not to sell, hypothecate or otherwise transfer the Securities unless such Securities are registered under the federal and applicable state securities laws or unless, in the opinion of counsel satisfactory to the Company, an exemption from such law is available.
(ii) Investor Status. At the time such Investor was offered the Securities, it was, and at the date hereof it is, an “accredited investor” as defined in Rule 501(a) under the Securities Act or a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act. Such Investor is not a registered broker dealer registered under Section 15(a) of the Exchange Act, or a member of the Financial Industry Regulatory Authority, Inc. or an entity engaged in the business of being a broker dealer. Such Investor is not affiliated with any broker dealer registered under Section 15(a) of the Exchange Act, or a member of the Financial Industry Regulatory Authority, Inc. or an entity engaged in the business of being a broker dealer.
(iii) General Solicitation. Investor is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media, broadcast over television or radio, disseminated over the Internet or presented at any seminar or any other general solicitation or general advertisement.
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(iv) Experience of Investor. Investor, either alone or together with its representatives has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. Such Investor understands that it must bear the economic risk of this investment in the Securities indefinitely, and is able to bear such risk and is able to afford a complete loss of such investment.
(v) Access to Information. Investor acknowledges that it has been afforded: (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and each Subsidiary and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Neither such inquiries nor any other investigation conducted by or on behalf of such Investor or its representatives or counsel shall modify, amend or affect such Investor’s right to rely on the truth, accuracy and completeness of the Company’s representations and warranties contained in the Transaction Documents.
(vi) Due Execution of the Delivery. The Transaction Documents constitute a legal, valid and binding obligation of the Investor and, when executed and enforced in accordance with their terms; no consent approval, authorization, order, filing, registration or qualification of or with any court, governmental authority or third person is required to obtained by the Company in connection with the execution and delivery of the Transaction Documents, or the performance of the Company’s obligations thereunder.
(vii) Familiarity. The Investor acknowledges that, by virtue of its existing relationship with members of the board of directors of the Company, it possesses certain knowledge about and is familiar with the business, financial condition, and affairs of the Company, and is making this investment, in part, in reliance upon such knowledge and familiarity .
| 4. | OTHER AGREEMENTS OF THE PARTIES. |
(a) Transfer Restrictions. The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities other than pursuant to an effective registration statement, or Rule 144, the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights and obligations of a Investor under this Agreement.
(b) Legends. The Investor agree to the imprinting, so long as is required by this Section 4, of a legend on any of the Securities in the following form:
[NEITHER] THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE] HAS [NOT] BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE SECURITIES [AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY] MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) IN COMPLIANCE WITH RULE 144 UNDER THE SECURITIES ACT, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, (C) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE COMPANY.
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The Company acknowledges and agrees that the Investor may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, the Investor may transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be required of such pledge. At the Investor’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities, including, if the Securities are subject to registration pursuant to the Transaction Documents, the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of selling shareholders of a registration statement thereunder.
| 5. | CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL. |
(a) The obligations of the Company hereunder to issue and sell the Securities to the Investor at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the sole benefit and may be waived by the Company at any time in its sole discretion by providing the Investor with prior written notice thereof:
(i) The Investor shall have executed each of the Transaction Documents to which it is a party and delivered the same to the Company.
(ii) The Investor shall have delivered to the Company the Investment Amount for the Note being purchased by the Investor, within five (5) days after signing this Agreement.
(iii) The representations and warranties of the Investor are true and accurate in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) when made and on the Closing Date in (unless as of a specific date therein in which case they shall be accurate as of such date).
| 6. | CONDITIONS TO THE INVESTOR’S OBLIGATION TO PURCHASE. |
(a) The obligations of the Investor hereunder to purchase the Securities at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the sole benefit and may be waived by the Investor at any time in its sole discretion by providing the Investor with prior written notice thereof:
(i) The Company shall have executed each of the Transaction Documents to which it is a party and delivered the same to the Company.
(ii) The Company shall have the obligation to deliver to the Investor the: (A) Prepaid Interest Shares; (B) Origination Fee Shares (which shall be issued pursuant to and in compliance with the provisions of Section 1(e) above); (C) Note; and (D) Warrants.
(iii) The Company shall have issued irrevocable instructions to its transfer agent, and any subsequent transfer agent, to issue certificates or credit shares to the applicable balance accounts of such transfer agent, registered in the name of the Investor or its respective nominee(s), for the Conversion Shares in such amounts as specified from time to time by the Investor substantially in the form of Exhibit C attached hereto (the “Irrevocable Transfer Agent Instructions”), an executed copy of which shall be delivered to the Investor.
(iv) The representations and warranties of the Company are true and accurate in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) when made and on the Closing Date in (unless as of a specific date therein in which case they shall be accurate as of such date).
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(iv) There shall have been no Material Adverse Effect with respect to the Company since the date hereof.
(v) From the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or any Trading Market and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of such Investor, makes it impracticable or inadvisable to purchase the Securities at the Closing. “Trading Market” means any of the following markets or exchanges on which the Ordinary Shares and/or ADSs are listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
(b) In addition to the foregoing matters described in Section 6(a) above, on the Effective Date, Investor shall have the sole authority and right to appoint an individual of its election to serve on the Board of Directors of the Company or its successor entity during: (i) the pendency of this Agreement and (ii) of any amounts remaining outstanding and unpaid under the Note. Such Board Member must be reasonably qualified to carry out the duties of this position and shall pass normative corporate due diligence. Such person may be removed and replaced within the discretion of the Investor, or may be replaced at an annual shareholder meeting vote, or upon the issuance of a final, non-appealable order of a court of competent jurisdiction. However, such Board Member must possess and adhere to normative SEC qualifications for such position and failure to maintain acceptable status per SEC and/or FINRA regulations shall immediately disqualify such Board Member. Upon the removal of the person serving on the Company’s Board, Investor shall have the right to appoint a replacement Director. The Company shall cause its Board to execute a binding voting agreement regarding the Investor Board Seat. Such Voting Agreement shall be duly authorized by the Board of Directors (evidenced by a formal Board resolution) and ratified by a requisite vote of the shareholders (evidenced by a formal Shareholder resolution). At the end of the term of this Note, Investor’s right to the Investor Board Seat shall be extinguished. In furtherance of the foregoing, the Company agrees that John “JT” Thatch (“Thatch”) shall be named to serve as a Director on the Company’s Board, effective as of the Closing Date. Upon the removal or inability to serve in such position by Thatch, the Investor shall have the right to appoint a replacement Director, which appointment shall be subject the requirements and qualifications as set out in this Section 6(b).
| 7. | MISCELLANEOUS. |
(a) Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.
(b) Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules. At or after the Closing, and without further consideration, the Company will execute and deliver to the Investors such further documents as may be reasonably requested in order to give practical effect to the intention of the parties under the Transaction Documents.
(c) Notices. Any notice, consents, waivers or other communication required or permitted to be given hereunder shall be in writing and will be deemed to have been delivered: (i) upon receipt, when personally delivered; (ii) upon receipt when sent by certified mail, return receipt requested, postage prepaid; (iii) when sent, if by e-mail, (provided that such sent e-mail is kept on file (whether electronically or otherwise) by the sending party and the sending party does not receive an automatically generated message from the recipient’s e-mail server that such e-mail could not be delivered to such recipient); or (iv) one (1) business day after deposit with a nationally recognized overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive the same. The addresses and email addresses for such communications shall be:
| 8 |
| If to the Company, to: | Globe Net Wireless Corporation | |
| Attn: Charles Arnold, CEO | ||
| 10370 USA Today Way | ||
| Miramar, Florida 33025 | ||
| With a Copy to: | David E. Price, Esq. | |
| #3 Bethesda Metro Center #700 | ||
| Bethesda, Maryland 20814 | ||
| If to the Investor, to: | Sharing Services Global Corporation | |
| Attn: John Thatch , CEO | ||
| 1700 Coit Rd, Suite 100 | ||
| Plano, Texas 75075 | ||
| With a Copy to: | R. Steven Jones, Esq. | |
| Jones, Davis & Jackson, PC | ||
| 15110 Dallas Parkway, #300 | ||
| Dallas, Texas 75248 |
(d) Waivers. Either hereto may by written notice to the other: (i) extend the time for the performance of any of the obligations or other actions of the other party under this Agreement; (ii) waive compliance with any of the conditions or covenants of the other party contained in this Agreement; and (iii) waive or modify performance of any of the obligations of the other party under this Agreement. Except as provided in the preceding sentence, no action taken pursuant to this Agreement, including, without any limitations, any investigation by or on behalf of either party, shall be deemed to constitute a wavier by the party taking such action of compliance with any representations, warranties, covenants or agreements contained herein. The wavier by the either party hereof of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any preceding or succeeding breach and no failure by either party to exercise any right or privilege hereunder shall be deemed a waiver of such party’s rights or privileges hereunder or shall be deemed a waiver of such party’s rights to exerciser the same at any subsequent time or times hereunder.
(e) Conflicts of Interest. The Company and the Investor, for themselves and on behalf of their affiliates, successors and assigns, expressly waive any conflicts of interest or potential conflicts of interest and agree that the each of the Company and the Investor, and its affiliates, respectively, shall have no liability to the other party or their affiliates, successors and assigns with respect to such conflicts of interest or potential conflicts of interest.
(f) Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.
(g) Assignability. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by either the Company or Investor without the prior written consent of the other parties hereto, which may not be unreasonably withheld provided that such Assignment is to an Affiliate.
(h) Amendments. Neither this Agreement nor any term or provision hereof may be amended, modified, waived or supplemented orally, but only by a written consent executed by the parties hereto.
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(i) Publicity. The Company and the Investor shall have the right to review a reasonable period of time before issuance of any press releases, SEC, Trading Market or FINRA filings, or any other public statements with respect to the transactions contemplated hereby; provided, however, that each of the Company and Investor shall be entitled, without the prior approval of the other party, to make any press release or SEC, Trading Market or FINRA filings with respect to such transactions as is required by applicable law and regulations (although the other party shall be consulted by the disclosing party in connection with any such press release prior to its release and shall be provided with a copy thereof and be given an opportunity to comment thereon).
(j) Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Texas without regard to the principles of conflict of laws. The parties further agree that any action between them shall be heard exclusively in federal or state court sitting in the Collin County, Texas.
(k) Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.
(l) Survival. Unless this Agreement is terminated under Section 7(n), the representations and warranties of the Company and the Investor contained in Sections 3 and 4, the agreements and covenants set forth in Sections 5 and 7 shall survive the Closing for a period of twelve (12) months following the later of the date on which: (x) the Note is repaid in full or converted into Note Conversion Shares in their entirety as provided in the Transaction Documents or (y) the Warrants are exercised in full; provided, however, that such representations and warranties shall in no way be affected by any investigation or knowledge of the subject matter thereof made by or on behalf of the Investor or the Company.
(m) Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
(n) Termination. In the event that the Closing shall not have occurred on or before October 15, 2021 due to the Company’s or the Investor’s failure to satisfy the conditions set forth in Sections 5 and 6 above (and the non-breaching party’s failure to waive such unsatisfied condition(s)), the non-breaching party shall have the option to terminate this Agreement with respect to such breaching party by providing ten (10) days’ written notice to such breaching party of the non-breaching party’s intent to terminate this Agreement (and if the non-breaching party is the Buyer, to also withdraw its subscription) at the close of business on such date without liability of any party to any other party.
(o) No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.
(p) Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Investor and the Company will be entitled to specific performance under this Agreement. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agree to waive in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Investor and the Company have caused this Securities Purchase Agreement to be duly executed as of the date first written above.
|
COMPANY:
GLOBE NET WIRELESS CORP., a Nevada corporation | ||
| By: | /s/ Charles Arnold | |
| Name: | Charles Arnold | |
| Title: | Chief Executive Officer | |
|
STEMTECH CORPORATION, a Delaware corporation | ||
| By: | /s/ Charles Arnold | |
| Name: | Charles Arnold | |
| Title: | Chief Executive Officer | |
| INVESTOR: | ||
|
SHARING SERVICES GLOBAL CORPORATION, a Nevada corporation | ||
| By: | /s/ John “JT” Thatch | |
| Name: | John “JT” Thatch | |
| Title: | President & Chief Executive Officer | |
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EXHIBIT A
Convertible Promissory Note
| 12 |
EXHIBIT B
Warrant
| 13 |
EXHIBIT C
Irrevocable Transfer Agent Instructions
| 14 |
SCHEDULE 1
| A. | Schedule of Convertible Promissory Notes. |
| 15 |
| B. | Schedule Of Variable Rate Indebtedness. |
| Lender | Loan Amount | Security/Collateral | Maturity Date |
|
MCUS, LLC |
$568,182.00 ($500k Principal with $68,182.00 OID) |
-$568,182.00 Convertible Promissory Note,
-Registration Rights Agreement,
-Warrant of up to 500k shares of Common Stock with an exercise price equal to $3.00, and
-Security Agreement. |
9 months after execution – April 30, 2022 |
|
LEONITE FUND I, LP |
$455,555.56 ($410k Principal with $45,555.56 OID) |
-$455,555.56 Convertible Promissory Note,
-200M authorized shares of Common Stock,
-540k issued and outstanding shares of Common Stock,
-Warrant of up to 500k shares of Common Stock with an exercise price equal to $3.00 (3 years life), and Security Agreement. |
9 months after the date of each tranche of funds released to borrower |
| C. | Schedule Of IRS Liens. |
|
IRS Jacksonville Serial Number 354756619 |
Stemtech HealthSciences Corp. |
$47,666.19 covering certain periods in 2014, 2017 and 2018 |
Filed 5.18.2019 |
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Exhibit 10.3
GLOBE NET WIRELESS CORP.
COMMON STOCK WARRANT
NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
| Warrant Shares: 1,400,000 | Issue Date: September 13, 2021 |
| Initial Exercise Date: [TBD] |
THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, Sharing Services Global Corporation, or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date set forth herein (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on September 13, 2024 (the “Expiration Date”) but not thereafter, to subscribe for and purchase from Globe Net Wireless Corp., a Nevada corporation (the “Company”), up to 1,400,000 shares (as subject to adjustment hereunder, the “Warrant Shares”) of the Company’s Common Stock (the “Common Stock”). The purchase price of one share of Common Stock under this Warrant shall be equal to the volume weighted average price (VWAP) of the previous ten (10) days closing price of the Common Stock immediately preceding the Initial Exercise Date as quoted by Bloomberg, LP or such other quotation service. (the “Exercise Price”). Subject to the terms and conditions of this Agreement, at the Closing (as defined herein) the Company hereby agrees to pay to the Investor an origination fee in Common Stock equal to the sum of Five Hundred Thousand Dollars ($500,000) (the “Origination Fee”) at a price equal to the VWAP (Volume Weighted Average Price) of the first thirty (30) days of the Company’s Common Stock based on the timeframe of August 20, 2021 through September 19, 2021. The VWAP shall be calculated on the price of the Common Stock of the Company as quoted by Bloomberg, LP or such other quotation service, and such shares of the Company’s Common Stock issued upon payment of the Origination Fee are referred to herein as the “Origination Fee Shares.” The Note, the Warrant, the Note Shares, the Warrant Shares, and Origination Fee Shares are sometimes collectively referred to herein as the “Securities.” On the Closing Date, Company shall delivery to the Investor the Origination Fee Shares to be issued at closing. Immediately after the expiration of September 19, 2021 (but in any event no later than 3:00 p.m., New York City time, on September 23, 2021), the Company shall deliver to the Investor, the Origination Fee Shares.
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| 1. | METHOD OF EXERCISE; PAYMENT. |
1.1 Cash Exercise. The purchase rights represented by this Warrant may be exercised by the Holder, in whole or in part, by the surrender of this Warrant (with the notice of exercise form attached hereto as Exhibit “A” duly executed) at the principal office of the Company, and by the payment to the Company, by wire, certified, cashier’s or other check acceptable to the Company or by wire transfer to an account designated by the Company, of an amount equal to the aggregate Exercise Price of the Warrant Shares being purchased.
1.2 Stock Certificates. In the event of any exercise of the rights represented by this Warrant, certificates for the Warrant Shares so purchased shall be delivered to the Holder by the Company’s transfer agent within a reasonable time and, unless this Warrant has been fully exercised or has expired, a new Warrant representing the Warrant Shares with respect to which this Warrant shall not have been exercised shall also be issued to the Holder within such time.
| 2. | STOCK FULLY PAID; RESERVATION OF SHARES. |
2.1 Fully Paid And Nonassessable Nature. All of the Warrant Shares issuable upon the exercise of the rights represented by this Warrant will, upon issuance and receipt of the Exercise Price, therefore, be fully paid and nonassessable, and such Warrant Shares shall be free from all taxes, liens and charges with respect to the issuance thereof.
2.2 Reservation Of Shares. Except as may be provided for in or in accordance with the Securities Purchase Agreement (as defined below), at the Closing (as defined in the Securities Purchase Agreement), the Company shall have reserved adequate authorized unissued shares of Common Stock, including treasury shares of Common Stock (“Initial Reserve Amount”), solely for the purpose of effecting the exercise of this Warrant or other convertible securities issued to the Holder pursuant to the Securities Purchase Agreement. After the increase in Company’s authorized but unissued shares of Stock pursuant to and in accordance with the Purchase Agreement (“Authorized Share Increase”), the Company shall at all times thereafter have authorized and reserved for issuance sufficient shares of its Common Stock, to provide for the exercise of the rights represented by this Warrant (the “Subsequent Reserve Amount”).
2.3 Insufficient Authorized Shares. Except as provided for in the Securities Purchase Agreement (defined in Section 17 below), if at any time after an Authorized Share Increase and while the rights represented by this Warrant may be exercised, the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve the Subsequent Reserve Amount (an “Authorized Share Failure”), then the Company shall take all action necessary to effect an Authorized Share Increase pursuant to and in accordance with the Securities Purchase Agreement.
| 3. | ADJUSTMENTS. |
3.1 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 set out in Sections 3.2 and 3.3, below.
3.2 Reclassification.
3.2.1 In the case of any: (i) reclassification or change of securities of the class issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination); or (ii) any merger of the Company with or into another corporation (other than a merger with another corporation in which the Company is the acquiring and the surviving corporation and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant); or (iii) any sale of all or substantially all of the assets of the Company, the Company, or such successor or purchasing corporation, as the case may be, shall duly execute and deliver to the holder of this Warrant a new Stock warrant (in form and substance reasonably satisfactory to the holder of this Warrant).
3.2.2 In addition to the foregoing, the Company shall make appropriate provision without the issuance of a new Stock warrant, so that the holder of this Warrant shall have the right to receive, at a total purchase price not to exceed that payable upon the exercise of the unexercised portion of this Warrant, and in lieu of the Warrant Shares of Common Stock theretofore issuable upon exercise of this Warrant: (i) the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, change, merger or sale by a holder of the number of Warrant Shares of Common Stock then purchasable under this Warrant, or (ii) in the case of such a merger or sale in which the consideration paid consists all or in part of assets other than securities of the successor or purchasing corporation, at the option of the Holder of this Warrant, the securities of the successor or purchasing corporation having a value at the time of the transaction equivalent to the fair market value of the Common Stock at the time of the transaction.
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3.2.3 The provisions of this Section 3.2 shall similarly apply to successive reclassifications, changes, mergers and transfers.
3.2.4 The provisions of this Section 3.2 shall not apply to any transaction with any related party or Affiliate (as defined in Rule 405 of the Securities Act, “Affiliate”) of the Holder,
| 3.3 | Stock Splits, Dividends And Combinations. |
3.3.1 In the event that the Company shall at any time subdivide the outstanding shares of Common Stock or shall issue a stock dividend on its outstanding shares of Common Stock, the number of Warrant Shares issuable upon exercise of this Warrant immediately prior to such subdivision or to the issuance of such stock dividend shall be proportionately increased, and the Exercise Price shall be proportionately decreased.
3.3.2 In the event that the Company shall at any time combine the outstanding shares of Common Stock the number of Warrant Shares issuable upon exercise of this Warrant immediately prior to such combination shall be proportionately decreased, and the Exercise Price shall be proportionately increased, effective at the close of business on the date of such subdivision, stock dividend or combination, as the case may be.
| 4. | NOTICE OF ADJUSTMENTS. |
Whenever the number of Warrant Shares purchasable hereunder or the Exercise Price thereof shall be adjusted pursuant to Section 3 hereof, 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.
| 5. | FRACTIONAL SHARES. |
5.1 No Requirement. The Company shall not be required to issue fractional shares of Common Stock on the exercise of Warrants.
5.2 Aggregation Calculation. If more than one (1) Warrant shall be presented for exercise in full at the same time by the same Holder, the number of full shares of Common Stock which shall be issuable upon such exercise shall be computed on the basis of the aggregate number of shares of Common Stock acquirable on exercise of the Warrants so presented.
5.3 Nearest Whole Value. If any fraction of a share of Common Stock would, except for the provisions of this Section 5, be issuable on the exercise of any Warrant (or specified portion thereof) then such fractional share shall be rounded up to the nearest whole share.
| 6. | REPRESENTATIONS OF THE COMPANY. |
Subject to shareholder approval for increasing the authorized Common Stock shares, the Company represents that all corporate actions on the part of the Company, its officers, directors and shareholders necessary for the sale and issuance of the Warrant Shares pursuant hereto and the performance of the Company’s obligations hereunder were taken prior to and are effective as of the Issue Date of this Warrant.
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| 7. | REPRESENTATIONS AND WARRANTIES BY THE HOLDER. |
The Holder represents and warrants to the Company as follows:
(i) This Warrant and the Warrant Shares issuable upon exercise thereof are being acquired for Holder’s own account, for investment and not with a view to, or for resale in connection with, any distribution or public offering thereof within the meaning of the Securities Act of 1933, as amended (the “Act”). Upon exercise of this Warrant, the Holder shall, if so requested by the Company, confirm in writing, in a form satisfactory to the Company, that the securities issuable upon exercise of this Warrant are being acquired for investment and not with a view toward distribution or resale.
(ii) The Holder understands that the Warrant and the Warrant Shares have not been registered under the Act by reason of their issuance in a transaction exempt from the registration and prospectus delivery requirements of the Act pursuant to Section 4(2) thereof, and that they must be held by the Holder indefinitely, and that the Holder must therefore bear the economic risk of such investment indefinitely, unless a subsequent disposition thereof is registered under the Act or is exempted from such registration.
(iii) The Holder has such knowledge and experience in financial and business matters that Holder is capable of evaluating the merits and risks of an investment in the Warrant and the Warrant Shares purchasable pursuant to the terms of this Warrant and of protecting its interests in connection therewith.
(iv) The Holder is able to bear the economic risk of the purchase of the Warrant Shares pursuant to the terms of this Warrant.
| 8. | RESTRICTIVE LEGEND. |
The Warrant Shares (unless registered under the Act) shall be stamped or imprinted with a legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT.
| 9. | RESTRICTIONS UPON TRANSFER AND REMOVAL OF LEGEND. |
9.1 Registration Condition. The Company need not register a transfer of this Warrant or Warrant Shares bearing the restrictive legend set forth in Section 8 above, unless the conditions specified in such legend are satisfied. The Company may also instruct its transfer agent not to register the transfer of the Warrant Shares, unless one of the conditions specified in the legend referred to in Section 8 above is satisfied.
9.2 Opinion Exemption. Notwithstanding the provisions of Section 9.1 above, no opinion of counsel shall be necessary for a transfer without consideration by any holder: (i) if such holder is a partnership, a partner or a retired partner of such partnership who retires after the date hereof or to the estate of any such partner or a retired partner, or (ii) if such holder is a corporation, to a shareholder of such corporation, or to any other corporation under common control, direct or indirect, with such holder. Holder, or any subsequent holder, shall immediately inform Company of any assignment, transfer, or other transfer of Warrant including the identification of parties; details of consideration; and other agreements evidencing the Warrant transfer.
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| 10. | LIMITATIONS ON RIGHTS OF WARRANT HOLDERS. |
10.1 Limitation On Voting And Economic Rights. The Holder of this Warrant shall not be entitled as a Warrant holder, to vote or receive dividends or be deemed the holder of any Warrant Shares or any other securities of the Company which may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the holder of this Warrant, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised and the Warrant Shares purchasable upon the exercise hereof shall have become deliverable, as provided herein.
10.2 No Liquidation Rights. The Holder of this Warrant will not be entitled to share in the assets of the Company in the event of a liquidation, dissolution or the winding up of the Company.
10.3 No Shorting Of The Common Stock. The Holder of this Warrant shall not undertake any action in furtherance of conduct which constitutes, or has the consequence of, the shorting of the Common Stock of the Company.
| 11. | NOTICES. |
11.1 Notice Method. All notices and other communications required or permitted hereunder shall be in writing, shall be effective when given, and shall in any event be deemed to be given upon receipt or, if earlier:
(a) five (5) days after deposit with the U.S. Postal Service or other applicable postal service, if delivered by first class mail, postage prepaid;
(b) upon delivery, if delivered by hand;
(c) one (1) Business Day after the business day of deposit with Federal Express or similar overnight courier, freight prepaid; or
(d) one (1) Business Day after the Business Day of facsimile transmission, if delivered by facsimile transmission with copy by first class mail, postage prepaid, and shall be addressed: (i) if to the Holder, at the Holder’s address as set forth on the books of the Company, and (ii) if to the Company, at the address of its principal corporate offices (Attention: Catherine J. McCain, General Counsel), or at such other address as a party may designate by ten (10) days advance written notice to the other party pursuant to the provisions above.
11.2 Business Day Defined. The term “Business Day” shall mean any “Market Day” (which term, Market Day, is defined as any day that the United States Public Stock Exchanges are open for trading).
| 12. | REGISTRATION RIGHTS AGREEMENT. |
For the term of this Warrant, the Holder shall have registration rights related to the Warrant Shares as set out in Sections 12.1, 12.2, 12.3 and 12.4 below:
12.1 Right To Piggyback. Whenever the Company proposes to register any of its securities (including any proposed registration of the Company’s securities by any third party) under the Securities Act and the registration form to be used may be used for the registration of any of the Warrant Shares, the Company shall give prompt written notice to the Holder of its intention to effect such a registration and, subject to the terms of this Section 12, shall include in such registration all Warrant Shares with respect to which the Company has received a written request, within ten (10) days after the receipt of the Company’s notice, for inclusion therein (“Piggyback Registration”).
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12.2 Piggyback Expenses. The registration expenses of the Holder shall be paid by the Company in all Piggyback Registrations.
12.3 Priority On Primary Registrations. If a Piggyback Registration is an underwritten primary registration on behalf of the Company, and the managing underwriters advise the Company that in their opinion the number of securities requested to be included in such registration exceeds the number which can be sold in such offering without adversely affecting the marketability of the offering, the Company shall include in such registration: (i) first, the securities the Company proposes to sell; (ii) second, the securities requested to be included in such registration by the Holder, pro rata with all other common stockholders with Piggyback Registration rights on the basis of the number of shares requested to be included therein by each such holder; and (iii) third, other securities requested to be included in such registration pro rata among the holders thereof on the basis of the number of shares requested to be included therein.
12.4 Priority On Secondary Registrations. If a Piggyback Registration is an underwritten secondary registration on behalf of holders of the Company’s securities and the managing underwriters advise the Company that, in their opinion, the number of securities requested to be included in such registration exceeds the number which can be sold in such offering without adversely affecting the marketability of the offering, the Company shall include in such registration: (i) first, the securities requested to be included therein by the holders requesting such registration; (ii) second, the securities requested to be included in such registration by the Holder, pro rata with all other common stockholders with Piggyback Registration rights on the basis of the number of shares requested to be included therein by each such Holder; and (iii) third, other securities requested to be included in such registration pro rata among the holders thereof on the basis of the number of shares requested to be included therein.
| 13. | FULL RATCHET ANTI-DILUTION. |
13.1 Dilutive Issuance Prohibitions. If the Company or any subsidiary thereof, as applicable, at any time while this Warrant is outstanding or the Holder holds any Conversion Shares, shall sell or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Stock or Common Stock Equivalents, at an effective price per share less than the Conversion Price then in effect (such lower price, the “Base Share Price” and such issuances collectively, a “Dilutive Issuance”) (it being understood and agreed that if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive Common Stock at an effective price per share that is less than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance at such effective price), then simultaneously with the consummation of each Dilutive Issuance the Conversion Price shall be reduced and only reduced to equal the Base Share Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. The Company shall notify the Holder, in writing, no later than one (1) Business Day following the issuance or deemed issuance of any Common Stock or Common Stock Equivalents subject to this Section 13, indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 13, upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the Base Share Price regardless of whether the Holder accurately refers to the Base Share Price in the Conversion Notice. If the Company enters into a Variable Rate Transaction, despite the prohibition thereon in the Purchase Agreement, the Company shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion or exercise price at which such securities may be converted or exercised.
13.2 Exception. Notwithstanding the foregoing provisions of Section 13.1, the Company shall have the right to discharge any obligations or responsibilities arising out of prior commitments and/or agreements entered into between Borrower and various employees of the Company pursuant to a Stock Incentive Plan (e.g. ESOP, ISO and the like).
| 14. | REPLACEMENT OF WARRANTS. |
On receipt of evidence reasonably satisfactory to the Company in its sole discretion of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor.
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| 15. | REPURCHASE ON SALE, MERGER, OR CONSOLIDATION OF THE COMPANY. |
15.1 Acquisition. For the purpose of this Warrant, “Acquisition" means: (a) any sale or other disposition of all or substantially all of the assets (including intellectual property) of the Company, or (b) any reorganization, consolidation, merger or sale of the voting securities of the Company or any other transaction where the holders of the Company’s securities before the transaction beneficially own less than fifty percent (50%) of the outstanding voting securities of the surviving entity after the transaction.
15.2 Assumption Of Warrant. If upon the closing of any Acquisition the successor entity assumes the obligations of this Warrant, then this Warrant shall be exercisable for the same securities, cash, and property as would be payable for the Shares issuable upon exercise of the unexercised portion of this Warrant as if such Shares were outstanding on the record date for the Acquisition and subsequent closing. The Warrant Price shall be adjusted accordingly so that the aggregate Warrant Price of all Shares is unchanged. The Company shall use reasonable efforts to cause the surviving corporation to assume the obligations of this Warrant.
15.3 Non-assumption. If upon the closing of any Acquisition the successor entity does not assume the obligations of this Warrant and Holder has not otherwise exercised this Warrant in full, then this Warrant shall be deemed to have been automatically converted pursuant to Section 15.2 above and thereafter Holder shall participate in the Acquisition on the same terms as other holders of the same class of securities of the Company.
| 16. | GOVERNING LAW. |
16.1 This Warrant and all actions arising out of or in connection with this Agreement shall be governed by and construed in accordance with the laws of the State of Nevada, without regard to the conflicts of law provisions of the State of Nevada or of any other state.
16.2 In the event of any controversy among the parties hereto arising out of or relating to this Agreement, which cannot be settled amicably by the parties, such controversy shall be settled by binding Arbitration. Both sides shall choose a mutually agreed upon competent jurist from a short list and informal Arbitration shall commence as expeditiously as possible. Either party may institute such arbitration proceeding by giving written notice to the other party. A hearing shall be held by the Arbitrator within Collin County, State of Texas, and a decision of the matter submitted to the Arbitrator shall be biding and enforceable against all parties in any Court of competent jurisdiction. The prevailing party shall be entitled to all costs and expenses with respect to such arbitration, including reasonable attorneys’ fees. The decision of the Arbitrator shall be final, binding upon all parties hereto and enforceable in any Court of competent jurisdiction. Each party hereto irrevocably waives any objection to the laying of venue of any such Arbitration action or proceeding brought and irrevocably waives any claim that any such action brought has been brought in an inconvenient forum. Each of the parties hereto waives any right to request a trial by jury in any litigation with respect to this agreement and represents that counsel has been consulted specifically as to this waiver.
| 17. | UNDERLYING AGREEMENT. |
This Warrant is issued in furtherance of the terms of that certain “Securities Purchase Agreement” executed by and between the Company and the Investor dated September 13, 2021.
This Warrant is effective as of the Issue Date.
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|
COMPANY:
GLOBE NET WIRELESS CORP., a Nevada corporation | ||
| By: | /s/ Charles Arnold | |
| Name: | Charles Arnold | |
| Title: | Chief Executive Officer | |
| HOLDER: | ||
|
SHARING SERVICES GLOBAL CORPORATION, a Nevada corporation | ||
| By: | /s/ John Thatch | |
| Name: | John Thatch | |
| Title: | President & Chief Executive Officer | |
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EXHIBIT “A”
NOTICE OF EXERCISE
| To: | Globe Net Wireless Corp. |
| 2302-3 Pacific Plaza | |
| 410 Des Voeux Road West | |
| Hong Kong, China | |
| Attention: [TBD] |
1. Warrants Being Exercised. I, the undersigned Warrant Holder, hereby elect to purchase Warrant Shares of Globe Net Wireless Corp. pursuant to the terms of the attached Warrant.
| 2. | Exercise Requisite. |
The undersigned shall exercise the attached Warrant by means of a cash payment, and tenders herewith or by concurrent wire transfer payment in full for the purchase price of the shares being purchased, together with all applicable transfer taxes, if any.
3. Stock Issuance. Please issue a certificate or certificates representing such Warrant Shares in the name of the undersigned or in such other name as is specified below:
(Name)
(Address)
4. Representations And Warrants Of Warrant Holder. The undersigned hereby represents and warrants that the Warrant Shares are being acquired for the account of the undersigned for investment and not with a view to, or for resale, in connection with the distribution thereof, and that the undersigned has no present intention of distributing or reselling such shares and all representations and warranties of the undersigned set forth in Section 7 of the attached Warrant are true and correct as of the date hereof.
| WARRANT HOLDER: | ||
|
SHARING SERVICES GLOBAL CORPORATION, a Nevada corporation | ||
| By: | ||
| Name: | ||
| Title: | ||
| Date: | ||
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Exhibit 10.4
THE BOARD OF DIRECTORS
OF
STEMTECH CORPORATION
The following is a true copy of the resolution duly adopted by the Board of Directors of this Corporation at a special meeting, notice to this meeting having been waived, held on this 17th day of September, 2021;
The Board of Directors which was present for this meeting & took active part therein was:
Charles Arnold
John Meyer
WHEREAS there has been presented to and considered by this meeting a Motion to add an additional Director and Board Member pursuant to the Agreements executed this day with Sharing Services Global Corporation.
NOW THEREFORE BE IT RESOLVED that the majority of Directors having considered this matter, and having opened the floor to all those who voice a preference in the issue, and pursuant to NRS §78.315 have unanimously decided and RESOLVED:
JOHN “JT” THATCH is hereby appointed as a full Director and Board Member of the Company.
Said Motion is hereby passed and the corporate books, records and the Secretary shall file this Resolution in the corporate records
DATED: September 17th, 2021
_____________________________
David E. Price, Esq., Secretary, Corp Counsel