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): April 27, 2020

 

INVESTVIEW INC.

(Exact name of registrant as specified in its charter)

 

Nevada     000-27019   87-0369205
(State or other jurisdiction of     (Commission   (IRS Employer

incorporation or organization)

  File Number)   Identification No.)

 

234 Industrial Way West,

Suite A202

   
Eatontown, New Jersey   07724
(Address of principal executive offices)   (Zip code)

 

Registrant’s telephone number, including area code:   888-778-5372

 

n/a

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
         

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (Section 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (Section 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 April 27, 2020, Investview, Inc., entered into a Securities Purchase Agreement and related agreements with DBR Capital, LLC. Under the Securities Purchase Agreement, DBR Capital purchased a $1.3 million convertible promissory note at closing and, subject to certain conditions, agreed to purchase a $700,000 convertible promissory note on or before May 28, 2020, and a $9.0 million convertible promissory note on or before October 31, 2020. The Securities Purchase Agreement also contemplates the creation of a new broker-dealer subsidiary by Investview and the exchange of a portion of the equity of that subsidiary to DBR Capital for the rights to certain proprietary software and other intellectual property owned by DBR Capital.

 

In connection with the Securities Purchase Agreement, Investview and DBR entered into an Investor Rights Agreement under which Investview agreed to file a registration statement with the SEC to register the resale of shares of common stock issuable to DBR Capital upon conversion of the convertible promissory notes. DBR Capital will also have a right of first offer for subsequent securities transactions proposed by Investview. The parties also agreed to enter into a Guaranty and Collateral Agreement giving DBR Capital a security interest in all of the assets of both Investview and its wholly owned subsidiary Safetek, LLC, as long as the convertible promissory notes are outstanding. That agreement has not yet been finalized.

 

Concurrently with the Securities Purchase Agreement, certain Investview stockholders and DBR Capital entered into a Voting Agreement and Lock Up Agreements. Under the Voting Agreement, the Investview stockholders agreed to vote to reduce the size of Investview’s board of directors from seven to five members and to elect two of DBR Capital’s designees to the board. DBR Capital’s right to designate two directors for election will continue for as long as DBR Capital holds the convertible promissory notes or any other securities issued by Investview. If Investview is in default under any of the convertible promissory notes, the Investview stockholders agreed to vote for designees of DBR Capital for all five positions on the Investview board of directors. Under the Lock Up Agreements, certain Investview stockholders agreed not to sell any of their Investview common stock until the earlier of April 25, 2022, or when certain trading price and volume benchmarks are met.

 

ITEM 3.02—UNREGISTERED SALES OF EQUITY SECURITIES

 

See Item 1.01 above. The convertible promissory note was issued as the result of arm’s-length negotiations directly with DBR Capital in reliance on the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended, and SEC Rule 506(b) for transactions not involving any public offering. No advertising or general solicitation was employed in offering the securities to DBR Capital. No underwriter participated in the offer and sale of these securities, and no commission or other remuneration was paid or given directly or indirectly in connection therewith.

 

ITEM 5.02—DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;

APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.

 

On April 27, 2020, Ryan Smith, Chad Miller, Brian McMullen, and Jeremy Roma voluntarily resigned as directors of Investview, Inc. These resignations were not the result of any disagreement between the directors and Investview on any matter relating to Investview’s operations, policies, or practices.

 

The remaining three Directors, Joseph Cammarata, Annette Raynor, and Mario Romano, voted to fill two of the resulting vacancies on the board with David Rothrock and James Bell, the persons designated by DBR Capital. See Item 1.01 above.

 

David B. Rothrock, 55, has extensive executive management, board, and operational expertise in the automobile industry, fintech, financial services, residential and commercial real estate, property management, corporate financing, private equity, utility technology, environmental remediation services, insurance, wine retail operations and distribution, and wealth management. Mr. Rothrock is the chief executive officer of DBR Capital, LLC. Through his key roles as president and chief executive officer of DBR Capital LLC, MPower Trading Systems, Cedar Crest Partners G.P. LLC, and Rothrock Motors Sales, Inc. (a group of franchised automobile dealerships), which collectively generate over $150 million in annual sales revenue. Mr. Rothrock is an active board member of charitable organizations that support breast cancer research and women’s health and fitness as well as the arts and theater in Lehigh Valley, PA. Mr. Rothrock has a B.S. in Business Management graduating Magna Cum Laude from Widener University, and holds a J.D. from the New York Law School with Bar admittance to New York, New Jersey, and Pennsylvania.

 

James Bell, 54, specializes in financial management with more than 30 years of experience in the capital markets. As co-founder and chief executive officer of MPower Trading Systems, Mr. Bell is responsible for charting the company’s business course and overseeing all principal functions of the firm, including corporate strategy and deployment of initiatives, product, and partnerships. Mr. Bell has been at the forefront of online trading since its infancy. Prior to co-founding MPower in 2004, Mr. Bell served as managing director of trading development of thinkorswim-TD Ameritrade, Inc. from 2002-2011, where he led the company’s product and technology team to develop client digital content. Mr. Bell is co-founder and managing partner of ShadowTrader Technologies, which provides real-time digital financial research and education content to TD Ameritrade, Inc. (2004-present). Prior to MPower, Mr. Bell also co-founded B/C Interactive Trading Technologies in 2001, which was ultimately sold to MPower in 2004. Prior to B/C, Mr. Bell served as SVP of Janney Montgomery Scott, and before that position, with Morgan Stanley. Mr. Bell studied economics and business management at Frostburg State University. Mr. Bell holds multiple business accreditations and securities licenses, including FINRA Series 7, FINRA Series 55, and FINRA Series 63.

 

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ITEM 9.01—FINANCIAL STATEMENTS AND EXHIBITS

 

The following are filed as exhibits to this report:

 

Exhibit Number*   Title of Document   Location
       
Item 10 Miscellaneous  
         
10.59 Securities Purchase Agreement between Investview, Inc., and DBR Capital, LLC dated as of April 27, 2020   Attached
       
10.60 Voting Rights Agreement between certain Investview, Inc., stockholders and DBR Capital, LLC dated as of April 27, 2020   Attached
       
10.61 Lock-up Agreement between certain Investview, Inc., stockholders and DBR Capital, LLC dated as of April 27, 2020   Attached
       
10.62 Investor Rights Agreement between Investview, Inc., and DBR Capital, LLC dated as of April 27, 2020   Attached
       
10.63 Convertible Secured Promissory Note by Investview, Inc., and DBR Capital, LLC dated as of April 27, 2020   Attached

 

 

* All exhibits are numbered with the number preceding the decimal indicating the applicable SEC reference number in Item 601 and the number following the decimal indicating the sequence of the particular document. Omitted numbers in the sequence refer to documents previously filed as an exhibit.

 

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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.

 

  INVESTVIEW, INC.
     
Dated: April 30, 2020 By: /s/ Joseph Cammarata
    Joseph Cammarata
    Chief Executive Officer

 

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EXHIBIT 10.59

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is made and entered into as of April 27, 2020 (the “Effective Date”) by and among Investview, Inc., a Nevada corporation (the “Company”), and DBR Capital, LLC, a Pennsylvania limited liability company (the “Purchaser”). Certain terms used and not otherwise defined in the text of this Agreement are defined in Section 10 hereof.

 

RECITALS

 

WHEREAS, the Company and the Purchaser are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”); and

 

WHEREAS, Purchaser desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement, one or more convertible notes of the Company, in the form attached hereto as Exhibit A (together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, the “Notes”), convertible into shares of common stock of the Company (the “Common Stock”), upon the terms and subject to the limitations and conditions set forth in such Notes.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties and covenants herein contained, the parties hereto hereby agree as follows:

 

SECTION 2. Sale and Purchase of the Notes.

 

2.01 First Closing Notes. On the First Closing Date, upon the terms and subject to the conditions herein contained, the Company agrees to issue and sell to the Purchaser, and the Purchaser agrees to purchase from the Company, $1,300,000 aggregate principal amount of Notes (the “First Closing Notes”).

 

2.02 Second Closing Notes. On the Second Closing Date, upon the terms and subject to the conditions herein contained, the Company agrees to issue and sell to the Purchaser, and the Purchaser agrees to purchase from the Company, $700,000 aggregate principal amount of Notes (the “Second Closing Notes”).

 

2.03 Third Closing Notes. On the Third Closing Date, upon the terms and subject to the conditions herein contained, the Company agrees to issue and sell to the Purchaser, and the Purchaser agrees to purchase from the Company, $9,000,000 aggregate principal amount of Notes (the “Third Closing Notes”).

 

2.04 Fourth Closing Equity. On the Fourth Closing Date, upon the terms and subject to the conditions herein contained, the Company agrees to sell and transfer to the Purchaser, and the Purchaser agrees to purchase from the Company, equity securities initially representing a sixty-five percent (65%) ownership interest in NewCo, free and clear of all encumbrances (the “Assigned NewCo Equity”), for the consideration specified in Section 2.05.

 

2.05 On the First Closing Date, Second Closing Date and Third Closing Date, the Purchaser shall pay the purchase price for the applicable Notes to be issued and sold to it at such closing (the “Purchase Price”) by wire transfer of immediately available funds to the Company, in accordance with the Company’s written wiring instructions, against delivery of the applicable Note in the principal amount equal to the Purchase Price, and the Company shall deliver such duly executed Note on behalf of the Company, to the Purchaser, against delivery of such Purchase Price. On the Fourth Closing Date, the Purchaser shall transfer the Prodigio IP, with an agreed value of $20,000,000, to the Company and the Company shall transfer the Assigned NewCo Equity to the Purchaser.

 

SECTION 3. Closings. Subject to the satisfaction of the closing conditions set forth in Section 7:

 

3.01 the closing with respect to the transactions contemplated in Section 2.01 hereof (the “First Closing”) shall occur upon the satisfaction of the closing conditions set forth in Section 7 (the “First Closing Date”) and shall be on or about April 27, 2020; and

 

3.02 the closing with respect to the transactions contemplated in Section 2.02 hereof (the closing at which the Second Closing Notes are issued, if any, is referred to herein as the “Second Closing”) shall occur on or about May 28, 2020 and shall be held on or before the fifth day following delivery of written notice (the “Second Closing Notice”) by the Purchaser to the Company of the Purchaser’s determination to effect the Second Closing (the “Second Closing Date”), or at such other date as the Company and the Purchaser may agree, remotely via the exchange of documents and signatures, which Second Closing Notice shall set forth the Second Closing Date; and

 

3.03 the closing with respect to the transactions contemplated in Section 2.03 hereof (the closing at which the Third Closing Notes are issued, if any, is referred to herein as the “Third Closing”) shall occur on or prior to October 31, 2020 (provided that such date may be extended by up to 30 days by the Purchaser in its sole discretion) and shall be held on or before the fifth day following delivery of written notice (the “Third Closing Notice”) by the Purchaser to the Company of the Purchaser’s determination to effect the Third Closing (the “Third Closing Date”), or at such other date as the Company and the Purchaser may agree, remotely via the exchange of documents and signatures, which Third Closing Notice shall set forth the Third Closing Date; and

 

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3.04 the closing with respect to the transactions contemplated in Section 2.04 hereof (the closing at which the Assigned NewCo Equity is transferred to the Purchaser is referred to herein as the “Fourth Closing”) shall occur on or prior to November 15, 2020 or, if later, within 15 days of the Third Closing Date and shall be held on or before the fifth day following delivery of written notice (the “Fourth Closing Notice”) by the Purchaser to the Company of the Purchaser’s determination to effect the Fourth Closing (the “Fourth Closing Date” and, together with the First Closing Date, the Second Closing Date and the Third Closing Date, the “Closing Dates” and each a “Closing Date”), or at such other date as the Company and the Purchaser may agree, remotely via the exchange of documents and signatures, which Fourth Closing Notice shall set forth the Fourth Closing Date.

 

SECTION 4. Representations and Warranties of the Purchaser. The Purchaser represents and warrants to the Company that the statements contained in this Section 4 are true and correct as of the First Closing Date, and will be true and correct as of each subsequent Closing Date:

 

4.01 Investment Purpose. The Purchaser is purchasing the Notes, the shares of Common Stock issuable upon conversion of or otherwise pursuant to the Notes (such shares of Common Stock being collectively referred to herein as the “Conversion Shares”) and the Assigned NewCo Equity (collectively with the Notes and the Conversion Shares, the “Securities”) for its own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act.

 

4.02 Accredited Investor Status. The Purchaser is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D.

 

4.03 Reliance on Exemptions. The Purchaser understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of the Purchaser to acquire the Securities.

 

4.04 Information. The Company has not disclosed to the Purchaser any material nonpublic information and will not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure to the Purchaser.

 

4.05 Registration. The Purchaser understands that the Notes, until such time as the Conversion Shares have been registered under the 1933 Act or may be sold pursuant to an applicable exemption from registration, the Conversion Shares, and, until such time as the Assigned NewCo Equity has been registered under the 1933 Act or may be sold pursuant to an applicable exemption from registration, the Assigned NewCo Equity may bear a restrictive legend in substantially the following form:

 

“THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS, AND MAY NOT BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR (2) THE ISSUER OF SUCH SECURITIES RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY ACCEPTABLE TO THE ISSUER’S TRANSFER AGENT, THAT SUCH SECURITIES MAY BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.”

 

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The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to an exemption from registration without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected. In the event that the Company does not accept the opinion of counsel provided by the Purchaser with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144, at the Deadline (as defined in the Notes), it will be considered an Event of Default pursuant to Section 3.1(b) of the Notes.

 

4.06 Authorization; Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed and delivered on behalf of the Purchaser, and this Agreement constitutes a valid and binding agreement of the Purchaser enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

 

SECTION 5. Representations and Warranties by the Company. The Company represents and warrants to the Purchaser that the statements contained in this Section 5 are true and correct as of the First Closing Date, and will be true and correct as of each subsequent Closing Date:

 

5.01 SEC Reports. The Company has timely filed all of the reports, schedules, forms, statements and other documents required to be filed by the Company with the SEC pursuant to the reporting requirements of the 1934 Act (the “SEC Reports”). The SEC Reports, at the time they were filed with the SEC, (i) complied as to form in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations and (ii) did not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

5.02 Independent Accountants. The accountants who certified the audited consolidated financial statements of the Company included in the SEC Reports are independent public accountants as required by the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations, and the Public Company Accounting Oversight Board.

 

5.03 Financial Statements; Non-GAAP Financial Measures. (a) The consolidated financial statements included or incorporated by reference in the SEC Reports, together with the related notes, present fairly, in all material respects, the financial position of the Company and its consolidated subsidiaries at the dates indicated and the statement of operations, stockholders’ equity and cash flows of the Company and its consolidated subsidiaries for the periods specified; said financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods involved, except in the case of unaudited, interim financial statements, subject to normal year-end audit adjustments and the exclusion of certain footnotes.

 

(b) Except as specifically set forth in the financial statements included in the SEC Reports for the fiscal year ending March 31, 2019 (the “2019 Financial Statements”), the Company has no liability or obligation, absolute or contingent, including without limitation any Indebtedness, except (i) obligations and liabilities incurred after the date of such financial statements in the ordinary course of business that are not material, individually or in the aggregate, and (ii) obligations under contracts made in the ordinary course of business that would not be required to be reflected in financial statements prepared in accordance with general accepted accounting principles.

 

5.04 No Material Adverse Change in Business. Except as otherwise expressly stated in the 2019 Financial Statements, since March 31, 2019, there has been no material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business (a “Material Adverse Effect”), there have been no transactions entered into by the Company or any of its subsidiaries, other than those in the ordinary course of business and except as contemplated in this Agreement, which are material with respect to the Company and its subsidiaries considered as one enterprise, and there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock.

 

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5.05 Good Standing of the Company. The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Nevada and has corporate power and authority to own, lease and operate its properties and to conduct its business as disclosed in the SEC Reports and to enter into and perform its obligations under this Agreement; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect.

 

5.06 Good Standing of Subsidiaries. Each “significant subsidiary” of the Company, as such term is defined in Rule 1-02 of Regulation S-X (each, a “Subsidiary” and, collectively, the “Subsidiaries”) has been duly incorporated or organized and is validly existing in good standing under the laws of the jurisdiction of its incorporation or organization, has corporate or similar power and authority to own, lease and operate its properties and to conduct its business as described in the SEC Reports and is duly qualified to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or to be in good standing would not result in a Material Adverse Effect. All of the issued and outstanding capital stock of each Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable and is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity. None of the outstanding shares of capital stock of any Subsidiary were issued in violation of the preemptive or similar rights of any securityholder of such Subsidiary.

 

5.07 Capitalization; Issuance of Shares. (a) The Company has an authorized capitalization as set forth in the SEC Reports. The outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable. None of the outstanding shares of capital stock of the Company were issued in violation of the preemptive or other similar rights of any securityholder of the Company which have not been waived. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of each Note in accordance with its respective terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof. As of the Fourth Closing Date, all of the Assigned NewCo Equity will be duly authorized, validly issued, fully paid and non-assessable, and, immediately prior to the Fourth Closing Date, will be owned of record and beneficially by the Company, free and clear of all encumbrances. Upon the consummation of the transactions contemplated by this Agreement, the Purchaser will own all of the Assigned NewCo Equity, free and clear of all encumbrances.

 

(b) There are no outstanding options, warrants, rights (including conversion or preemptive rights) or agreements for the purchase or acquisition from the Company of any shares of its capital stock. No stock plan, stock purchase, stock option or other agreement or understanding between the Company and any holder of any equity securities or rights to purchase equity securities provides for acceleration or other changes in the vesting provisions or other terms of such agreement or understanding as the result of (i) termination of employment or consulting services (whether actual or constructive); (ii) any merger, consolidated sale of stock or assets, change in control or any other transaction(s) by the Company; (iii) the transactions contemplated hereby; or (iv) the occurrence of any other event or combination of events.

 

5.08 Validity. This Agreement has been duly authorized, executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against it in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies. Upon the execution and delivery thereof in accordance herewith, each Note will have been duly authorized, executed and delivered by the Company and will constitute a valid and binding obligation of the Company, enforceable against it in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

 

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5.09 Authorization; Enforcement. (A) The Company has all requisite corporate power and authority to enter into and perform this Agreement, the Notes and to consummate the transactions contemplated hereby and thereby, to issue the Notes and Conversion Shares, in accordance with the terms hereof and thereof, and to transfer the Assigned NewCo Equity in accordance with the terms hereof and thereof, and (B) the execution and delivery of this Agreement and the Notes by the Company and the consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Notes and the issuance and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company’s Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its shareholders is required, this Agreement has been duly executed and delivered by the Company by its authorized representative, and such authorized representative is the true and official representative with authority to sign this Agreement and the other documents executed in connection herewith and bind the Company accordingly.

 

5.10 Absence of Violations, Defaults and Conflicts. Neither the Company nor any of its subsidiaries is (A) in violation of its charter, bylaws or similar organizational document, (B) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound or to which any of the properties or assets of the Company or any subsidiary is subject (collectively, “Agreements and Instruments”), except for such defaults that would not, singly or in the aggregate, result in liability to the Company in excess of $50,000, or (C) in violation of any law, statute, rule, regulation, judgment, order, writ or decree of any arbitrator, court, governmental body, regulatory body, administrative agency or other authority, body or agency having jurisdiction over the Company or any of its subsidiaries or any of their respective properties, assets or operations (each, a “Governmental Entity”), except for such violations that would not, singly or in the aggregate, result in liability to the Company in excess of $50,000. The execution, delivery and performance of this Agreement and the Notes and the consummation of the transactions contemplated herein and therein (including the issuance and sale of the Securities and the Conversion Shares and the sale of the Assigned NewCo Equity) and compliance by the Company with its obligations hereunder and thereunder do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any properties or assets of the Company or any subsidiary pursuant to, the Agreements and Instruments, or require notice to or consent of any party to any agreement or commitment to which the Company is a party that has not been obtained, nor will such action result in any violation of (i) the provisions of the articles of incorporation, bylaws or similar organizational document of the Company or any of its subsidiaries or (ii) any applicable law, statute, rule, regulation, judgment, order, writ or decree of any Governmental Entity. As used herein, a “Repayment Event” means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its subsidiaries.

 

5.11 Absence of Labor Dispute. No labor dispute with the employees of the Company or any of its subsidiaries exists or, to the knowledge of the Company, is imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its or any subsidiary’s principal suppliers, manufacturers, customers or contractors, which, in either case, would result in a Material Adverse Effect.

 

5.12 Absence of Proceedings. There is no action, suit, proceeding, inquiry or investigation before or brought by any Governmental Entity now pending or, to the knowledge of the Company, threatened, against or affecting the Company or any of its subsidiaries, which would reasonably be expected to result in a liability in excess of $50,000, or which would reasonably be expected to adversely affect the consummation of the transactions contemplated in this Agreement or the Notes or the performance by the Company of its obligations hereunder and thereunder. The foregoing includes, without limitation, actions pending or, to the Company’s knowledge, threatened involving the prior employment of any of the Company’s employees, their use in connection with the Company’s business of any information or techniques allegedly proprietary to any of their former employers, or their obligations under any agreements with prior employers. The Company is not a party or, to its knowledge, subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality.

 

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5.13 Absence of Further Requirements. No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any Governmental Entity, and no notice under, or consent pursuant to, any Agreements and Instruments, is necessary or required for the performance by the Company of its obligations hereunder, in connection with the offering, issuance, or sale of the Securities hereunder or the consummation of the transactions contemplated by this Agreement, except such as have been already obtained or as may be required in connection with the formation of NewCo.

 

5.14 Possession of Licenses and Permits. The Company and its subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively, “Governmental Licenses”) issued by the appropriate Governmental Entities necessary to conduct the business now operated by Company, except where the failure so to possess would not, singly or in the aggregate, result in a Material Adverse Effect. The Company and its subsidiaries are in compliance with the terms and conditions of all Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate, result in a Material Adverse Effect. All of the Governmental Licenses are valid and in full force and effect, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not, singly or in the aggregate, result in a Material Adverse Effect. No Governmental License has expired, terminated or been suspended and no Governmental License will expire, terminate or be suspended within 90 days. Neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any Governmental Licenses which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect.

 

5.15 Title to Property. The Company and its subsidiaries do not own any real property. The Company and its subsidiaries have title to all tangible personal property owned by them, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind except such restrictions and encumbrances as do not, singly or in the aggregate, materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company or any of its subsidiaries; and all of the leases and subleases material to the business of the Company and its subsidiaries, considered as one enterprise, and under which the Company or any of its subsidiaries holds properties, are in full force and effect, and neither the Company nor any such subsidiary has any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company or any subsidiary under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or such subsidiary to the continued possession of the leased or subleased premises under any such lease or sublease.

 

5.16 Intellectual Property. The Company and its subsidiaries own or possess the right to use all patents, patent applications, inventions, licenses, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information or procedures), trademarks, service marks, trade names, domain names, copyrights, and other intellectual property, and registrations and applications for registration of any of the foregoing (collectively, “Intellectual Property”) necessary to conduct their business as presently conducted and currently contemplated to be conducted in the future and, to the knowledge of the Company, neither the Company nor any of its subsidiaries, whether through their respective products and services or the conduct of their respective businesses, has infringed, misappropriated, conflicted with or otherwise violated, or is currently infringing, misappropriating, conflicting with or otherwise violating, and none of the Company or its subsidiaries have received any heretofore unresolved communication or notice of infringement of, misappropriation of, conflict with or violation of, any Intellectual Property of any other person or entity. Neither the Company nor any of its subsidiaries has received any communication or notice (in each case that has not been resolved) alleging that by conducting their business as described in the SEC Reports or as otherwise currently conducted, such parties would infringe, misappropriate, conflict with, or violate, any of the Intellectual Property of any other person or entity. The Company knows of no infringement, misappropriation or violation by others of Intellectual Property owned by or licensed to the Company or its subsidiaries which would reasonably be expected to result in a Material Adverse Effect. The Company and its subsidiaries have taken all reasonable steps necessary to secure their interests in such Intellectual Property from their employees and contractors and to protect the confidentiality of all of their confidential information and trade secrets. None of the Intellectual Property employed by the Company or its subsidiaries has been obtained or is being used by the Company or its subsidiaries in violation of any contractual obligation binding on the Company or any of its subsidiaries or, to the knowledge of the Company, any of their respective officers, directors or employees. All Intellectual Property owned or exclusively licensed by the Company or its subsidiaries is free and clear of all liens, encumbrances, defects or other restrictions (other than non-exclusive licenses granted in the ordinary course of business). The Company and its subsidiaries are not subject to any judgment, order, writ, injunction or decree of any court or any Governmental Entity, nor has the Company or any of its subsidiaries entered into or become a party to any agreement made in settlement of any pending or threatened litigation, which materially restricts or impairs their use of any Intellectual Property or which would reasonably be expected to result in a Material Adverse Effect.

 

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5.17 Company IT Systems. The Company and its subsidiaries own or have a valid right to access and use all computer systems, networks, hardware, software, databases, websites, and equipment used to process, store, maintain and operate data, information, and functions used in connection with the business of the Company and its subsidiaries (the “Company IT Systems”). The Company IT Systems are adequate for, and operate and perform in all material respects as required in connection with, the operation of the business of the Company and its subsidiaries as currently conducted. The Company and its subsidiaries have implemented commercially reasonable backup, security and disaster recovery technology consistent in all material respects with applicable regulatory standards and customary industry practices.

 

5.18 Cybersecurity. (A) There has been no security breach or other compromise of or relating to the Company IT Systems; (B) the Company has not been notified of, and has no knowledge of any event or condition that would reasonably be expected to result in, any such security breach or other compromise of the Company IT Systems; (C) the Company and its subsidiaries have implemented policies and procedures with respect to the Company IT Systems that are reasonably consistent with industry standards and practices, or as required by applicable regulatory standards; and (D) the Company and its subsidiaries are presently in material compliance with all applicable laws or statutes, judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority and contractual obligations relating to the privacy and security of the Company IT Systems and to the protection of the Company IT Systems from unauthorized use, access, misappropriation or modification.

 

5.19 Environmental Laws. Except as would not, singly or in the aggregate, result in a Material Adverse Effect, (A) neither the Company nor any of its subsidiaries is in violation of any applicable federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products, asbestos-containing materials or mold (collectively, “Hazardous Materials”) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”), (B) the Company and its subsidiaries have all permits, authorizations and approvals required for their operations under any applicable Environmental Laws and are each in compliance with their requirements, (C) there are no pending or, to the knowledge of the Company, threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigations or proceedings relating to any Environmental Law against the Company or any of its subsidiaries and (D) to the knowledge of the Company, there are no events or circumstances that would reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or Governmental Entity, against or affecting the Company or any of its subsidiaries relating to Hazardous Materials or any Environmental Laws.

 

5.20 Accounting Controls and Disclosure Controls. Except as set forth in the Company’s SEC Reports, the Company and its subsidiaries maintain effective internal control over financial reporting (as defined under Rule 13a-15 and 15d-15 under the 1934 Act Regulations) and a system of internal accounting controls sufficient to provide reasonable assurances that (A) transactions are executed in accordance with management’s general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (C) access to assets is permitted only in accordance with management’s general or specific authorization; and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Since the end of the Company’s most recent audited fiscal year, there has been (1) no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (2) no change in the Company’s internal control over financial reporting that has materially adversely affected, or is reasonably likely to materially adversely affect, the Company’s internal control over financial reporting.

 

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5.21 Compliance with the Sarbanes-Oxley Act. The Company is in compliance in all material respects with all provisions of the Sarbanes-Oxley Act of 2002 and all rules and regulations promulgated thereunder or implementing the provisions thereof that are in effect and with which the Company is required to comply.

 

5.22 Payment of Taxes. All United States federal income tax returns of the Company and its subsidiaries required by law to be filed have been filed and all taxes shown by such returns or otherwise assessed, which are due and payable, have been paid, except assessments against which appeals have been or will be promptly taken and as to which adequate reserves have been provided. No assessment in connection with United States federal tax returns has been made against the Company. The Company and its subsidiaries have filed all other tax returns that are required to have been filed by them or have timely requested extensions thereof pursuant to applicable foreign state, local or other law and have paid all taxes due pursuant to such returns or all taxes due and payable pursuant to any assessment received by the Company and its subsidiaries, except for such taxes, if any, as are being contested in good faith and as to which adequate reserves have been established by the Company or its subsidiaries. The charges, accruals and reserves on the books of the Company in respect of any income and corporation tax liability for any years not finally determined have been determined in accordance with GAAP and are reasonably expected by the Company to be adequate to meet any assessments or reassessments for additional income tax for any years not finally determined.

 

5.23 ERISA. (i) At no time in the past six years has the Company or any ERISA Affiliate maintained, sponsored, participated in, contributed to or had any liability or obligation in respect of any Employee Benefit Plan subject to Title IV of ERISA or Section 412 of the Code, any “multiemployer plan” as defined in Section 3(37) of ERISA or any multiple employer plan for which the Company or any ERISA Affiliate has incurred or could incur material liability under Section 4063 or 4064 of ERISA, (ii) no “welfare benefit plan” as defined in Section 3(1) of ERISA provides or promises, or at any time provided or promised, retiree health, or other post-termination benefits except to the extent such benefit is fully insured or as may be required by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or similar state law and (iii) each Employee Benefit Plan is and has been operated in compliance with its terms and all applicable laws, including but not limited to ERISA and the Code. Each Employee Benefit Plan intended to be qualified under Code Section 401(a) has a favorable determination or opinion letter from the Internal Revenue Service (the “IRS”) upon which it can rely, and any such determination or opinion letter remains in effect and has not been revoked and no event has occurred and no facts or circumstances exist that could reasonably be expected to result in the loss of qualification or tax exemption of any such Employee Benefit Plan. With respect to each Foreign Benefit Plan, such Foreign Benefit Plan (1) if intended to qualify for special tax treatment, meets, in all material respects, the requirements for such treatment, and (2) if required to be funded, is funded to the extent required by applicable law. The Company does not have any obligations under any collective bargaining agreement with any union. As used in this Section 5.23, “Code” means the Internal Revenue Code of 1986, as amended; “Employee Benefit Plan” means any “employee benefit plan” within the meaning of Section 3(3) of ERISA, including, without limitation, all equity and equity-based, severance, employment, change-in-control, medical, disability, fringe benefit, bonus, incentive, deferred compensation, employee loan and all other employee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA, under which (x) any current or former employee, director, independent contractor or other service provider of the Company or its subsidiaries has any present or future right to benefits and which are contributed to, sponsored by or maintained by the Company or any of the Subsidiaries or (y) the Company or any of the Subsidiaries has had or has any present or future direct or contingent obligation or liability; “ERISA” means the Employee Retirement Income Security Act of 1974, as amended; “ERISA Affiliate” means any member of the company’s controlled group as determined pursuant to Code Section 414(b), (c), (m) or (o), with respect to any Person, each business or entity under “common control” with such Person within the meaning of Section 4001(a)(14) of ERISA; and “Foreign Benefit Plan” means any Employee Benefit Plan established, maintained or contributed to outside of the United States of America and which is not subject to United States law.

 

5.24 Insurance. The Company and its subsidiaries carry or are entitled to the benefits of insurance, with what the Company reasonably believes to be financially sound and reputable insurers, in such amounts and covering such risks as is adequate for the conduct of their respective businesses and the value of their respective properties and assets, and all such insurance is in full force and effect. The Company has no reason to believe that it or any of its subsidiaries will not be able (A) to renew its existing insurance coverage as and when such policies expire or (B) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that is comparable to its existing cost.

 

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5.25 Investment Company Act. The Company is not required, and upon the issuance and sale of the Securities will not be required, to register as an “investment company” under the Investment Company Act of 1940, as amended (the “1940 Act”).

 

5.26 No Unlawful Payments. None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee, Affiliate or other person acting on behalf of the Company or any of its subsidiaries has taken any action, directly or indirectly, that would result in a violation of any applicable anti-corruption laws, including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “government official” (including any officer or employee of a government or government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office) in violation of any applicable anti-corruption laws, and the Company and its subsidiaries have conducted their businesses in compliance with applicable anti-corruption laws and have instituted and maintain policies and procedures designed to ensure continued compliance therewith.

 

5.27 Compliance with Anti-Money Laundering Laws. The operations of the Company and its subsidiaries are and have been conducted at all times in compliance in all material respects with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “Anti-Money Laundering Laws”); and no action, suit or proceeding by or before any Governmental Entity involving the Company or any of its subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

 

5.28 No Conflicts with Sanctions Laws. None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee, Affiliate or other person acting on behalf of the Company or any of its subsidiaries is an individual or entity (“Person”) currently the subject or target of any sanctions administered or enforced by the United States Government, including, without limitation, the U.S. Department of the Treasury’s Office of Foreign Assets Control, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”), nor is the Company or any of its subsidiaries located, organized or resident in a country or territory that is the subject of Sanctions; and the Company will not knowingly directly or indirectly use the proceeds of the sale of the Securities, or lend, contribute or otherwise make available such proceeds to any subsidiaries, joint venture partners or other Person, to fund any activities of or the business with any Person, or in any country or territory, that, at the time of such funding, is the subject of Sanctions or in any other manner that will result in violation by any Person of Sanctions.

 

5.29 Private Placement. Neither the Company nor its subsidiaries, 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 any circumstances that would require registration under the 1933 Act of the Securities being sold pursuant to this Agreement. Assuming the accuracy of the representations and warranties of the Purchaser contained in Section 4 hereof, the issuance of the Securities, including the issuance of the Conversion Shares, is exempt from registration under the 1933 Act.

 

5.30 Transactions with Affiliates. Neither the Company nor any of its subsidiaries is a party to any agreement, written or oral, to sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its employees, officers, directors, former employees, officers or directors, or Affiliates, except in the ordinary course of business at prices and on terms and conditions not less favorable to the Company or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties and which has been disclosed in writing to the Purchaser. Neither the Company nor any of its subsidiaries has liability or obligation, absolute or contingent, including without limitation any Indebtedness, to any of its employees, officers, directors, former employees, officers or directors, or Affiliates, except (i) current employee compensation payable in the ordinary course for amounts which have not accrued more than 30 days or as disclosed in writing to the Purchaser.

 

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5.31 Registration Rights; Voting Agreements. Except as required pursuant to Section 8 of this Agreement and except as shall be entered into with Purchaser in connection herewith, (a) the Company is presently not under any obligation, and has not granted any rights, to register under the 1933 Act any of the Company’s presently outstanding securities or any of its securities that may hereafter be issued that have not expired or been satisfied, (b) no shareholder of the Company has entered into any agreements to which the Company is a party with respect to the voting of shares of capital stock of the Company and (c) the Company is not subject to or a party to any agreement providing any holder of securities of the Company or its subsidiaries with preemptive rights, approval rights or similar arrangements, other than as provided in the articles of incorporation of the Company as currently in effect.

 

SECTION 6. Covenants.

 

6.01 Reasonable Best Efforts. Each party shall use its reasonable best efforts to timely satisfy each of the conditions to be satisfied by it as provided in Section 7 of this Agreement.

 

6.02 Use of Proceeds. The Company shall use the proceeds from the sale of (i) the First Closing Notes to either (A) make a $1,300,000 contribution to SafeTek solely for the prompt purchase by SafeTek of Bitman Equipment or (B) repay $1,300,000 aggregate principal indebtedness of the Company advanced by Joseph Cammarata on or about April 23, 2020 and used by the Company to acquire Bitman Equipment, (ii) the Second Closing Notes to repay $700,000 aggregate principal amount of outstanding indebtedness of the Company, and (iii) the Third Closing Notes to (A) make a $5,700,000 contribution to SafeTek solely for the prompt purchase by SafeTek of Bitman Equipment, (B) repay $1,300,000 aggregate principal amount of outstanding indebtedness of the Company and (C) invest $2,000,000 in NewCo to finance the establishment of NewCo’s broker dealer business.

 

6.03 Disclosure of Transactions and Other Material Information. Within the applicable period of time required by the 1934 Act, the Company shall file a Current Report on Form 8-K describing the terms and conditions of the transactions contemplated by this Agreement in the form required by the 1934 Act. The Company shall provide the Purchaser with a reasonable opportunity to review and provide comments on the draft of such 8-K filing. The Company shall be permitted to issue press releases or other public statement with respect to the transactions contemplated hereby, provided that the Company shall not publicly disclose the name of the Purchaser or an Affiliate of the Purchaser except as otherwise provided in this Section 6.03. Notwithstanding the foregoing, and unless required by the rules and regulations of the SEC or otherwise agreed to in writing by the Company and the Purchaser, the Company shall not publicly disclose the name of the Purchaser or an Affiliate of the Purchaser, or include the name of the Purchaser or an Affiliate of the Purchaser in any press release or filing with the SEC or any regulatory agency or the Principal Trading Market, without the prior written consent of such Purchaser.

 

6.04 Expenses. Each of the Company and the Purchaser is liable for, and will pay, its own expenses incurred in connection with the negotiation, preparation, execution and delivery of this Agreement, including, without limitation, attorneys’ and consultants’ fees and expenses, except that (i) to assist Company, the Purchaser has agreed to advance funds on behalf of Company for the Company’s reasonable legal fees and other direct expenses incurred in connection with preparation, execution and delivery of the Transaction Documents and (ii) the Company has agreed to reimburse the Purchaser in an amount of up to $40,000.00 for reasonable legal fees and other direct expenses incurred in connection with the negotiation, preparation, execution and delivery of this Agreement, provided that the Purchaser has agreed to defer the reimbursement for such amounts until the earlier of seven (7) days following the completion of the Second Closing and sixty (60) days from the date hereof.

 

6.05 Reservation of Common Stock. The Company shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance, the Conversion Shares.

 

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6.06 Investor Rights Agreement; Voting Agreement; Security Agreement; Lock-Up Agreements; Series B Consent; Opinion of Counsel.

 

(a) Concurrently with the execution of this Agreement, (i) the Company and the Purchaser shall enter into an investor rights agreement, in the form attached hereto as Exhibit B (the “Investor Rights Agreement”), (ii) the Company, certain key stockholders of the Company and the Purchaser shall enter into a voting agreement, in the form attached hereto as Exhibit C (the “Voting Agreement”) and (iii) certain officers and stockholders of the Company shall enter into lock-up agreements, in the form attached hereto as Exhibit D (the “Lock-Up Agreements”).

 

(b) Promptly after the execution of this Agreement and in any event not later than May 15, 2020, (a) the Company, SafeTek and the Purchaser shall enter into a guaranty and collateral agreement, in the form attached hereto as Exhibit E (the “Security Agreement”), (b) the Company shall obtain from all of the holders of the Company’s 13% Series B Cumulative Redeemable Perpetual Preferred Stock written evidence of consent to the issuance of the Notes and the transactions contemplated by this Agreement and waiver of any preemptive or other rights to receive Notes or similar instruments in connection with this Agreement and the transactions contemplated hereunder, in form and substance satisfactory to the Purchaser (the “Series B Consent”) and (c) the Company shall have delivered to the Purchaser the opinion of Michael Best & Friedrich LLP, counsel for the Company, or such other counsel for the Company acceptable to the Purchaser in its sole and absolute discretion, dated as of the First Closing Date addressing corporate authority, due execution and delivery, enforceability, the creation and perfection security interests, the absence of conflicts and such other matters as the Purchaser shall reasonably request, which opinion shall be in form and substance satisfactory to the Purchaser.

 

6.07 SafeTek Proceeds. As additional consideration for the purchase by the Purchaser of the Notes hereunder, the Company shall pay to the Purchaser an amount (the “SafeTek Payment”) equal to 25% of the (i) Designated Revenue, calculated for each calendar month, less (ii) the sum of (A) the aggregate interest payable on the Notes for such calendar month, and (B) the SafeTek Data Center Hosting/Power Expense (the result of (i) and (ii) above, the “SafeTek Net Monthly Revenue”). The SafeTek Payment (equal to 25% of the SafeTek Net Monthly Revenue) shall be paid to the Purchaser not later than the 10th business day following the end of such month. The Company shall cause SafeTek to use the remaining SafeTek Net Monthly Revenue (less the SafeTek Payment) as follows: (i) 56.25% of the SafeTek Net Monthly Revenue shall be used by SafeTek for the purchase of additional Bitman Equipment and (ii) 18.75% of the SafeTek Net Monthly Revenue shall be used by SafeTek for its general operating expenses. As used herein, “Designated Revenue” shall mean revenue of SafeTek derived from Bitman Equipment acquired using proceeds of the Notes as provided in Section 6.02 above and Bitman Equipment acquired with SafeTEk Net Monthly Revenue as provided in the immediately preceding sentence. The Company shall cause SafeTek to retain, and not to sell or transfer, all Bitman Equipment, including other mining equipment and other assets held by it. The Company and Purchaser shall continue to participate as otherwise set forth herein in the purchase and operation of additional Bitman Equipment, including other mining equipment.

 

6.08 Broker-Dealer Subsidiary. Not later than 30 days following the Third Closing Date, the Company will commence actions to form a subsidiary (“NewCo”) to act as a broker-dealer, and shall promptly take all actions necessary to register such entity with the SEC as a broker-dealer under the 1934 Act. The proceeds allocated by Section 6.02(iii) for the establishment of NewCo shall be used for development and operation of a U.S. and non-U.S. brokerage and financial services firm intended to deliver professional trading services catering primarily to a diverse base of self-directed (DIY) and active online brokerage investors, professional fund managers, buy-side professionals, and registered investment advisors (the “Broker-Dealer Business”). The structure and organizational documents of NewCo, including all terms and conditions of the equity structure thereof, shall be acceptable in form and substance to the Purchaser, and shall provide that the majority of the board of directors or similar management body shall be appointed by the Purchaser, notwithstanding any dilution of the Purchaser’s interests. Such documents shall provide, among other rights, that any equity interest in NewCo issued in connection with the satisfaction of the conditions precedent set forth in Section 7.03 below shall not cause the then-diluted ownership percentage held by the Purchaser to be less than 45% on a fully-diluted basis.

 

6.09 Transfer of Prodigio IP; Retention of Rights.

 

(a) Pursuant to Section 2.04 of this Agreement, on the Fourth Closing Date, the Company shall transfer to the Purchaser, and the Purchaser shall receive from the Company, the Assigned NewCo Equity. Within 30 days following the date thereof, the Purchaser shall provide to NewCo copies of all source codes for the Prodigio SMART software technology or other software included in the Prodigio IP, and such copies and the use thereof shall be the property of NewCo. Notwithstanding the foregoing, each of the Company and NewCo acknowledges and agrees that the Purchaser and its direct affiliates shall retain a right to, and a property interest in, all Prodigio IP, for use in business lines consisting of: (i) custom software development services to any third party; (ii) algorithmic trading strategy custom software development services to any third party; (iii) internal and external prop trading; (iv) private managed money services, including algorithmic trading services operated by certain principals of the Purchaser; (v) merchant banking, investment banking, private equity, and venture capital services and transactions, and (vi) such other uses as are not competitive with the business of NewCo and as conducted by NewCo as of the Fourth Closing Date.

 

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(b) Each of the Company and NewCo shall promptly provide to the Purchaser and its direct affiliates at all times a complete up-to-date version of the software, including object and sources code, to the extent updated or improved by the Company or NewCo as well as any intellectual property developed or derived from the Prodigio IP.

 

(c) At the time of such transfer of Prodigio IP, the parties will enter into such further agreements relating to such transfer and the maintenance, updates and improvements thereof, as shall be acceptable to the Purchaser.

 

SECTION 7. Conditions of Purchaser’s Obligations.

 

7.01 Conditions of the Purchaser’s Obligations at each Closing. The obligations of the Purchaser under Section 2 hereof are subject to the fulfillment, at or prior to the applicable Closing, of all of the following conditions, any of which may be waived in whole or in part by the Purchaser in Purchaser’s sole and absolute discretion.

 

(a) Representations and Warranties. The representations and warranties of the Company contained in this Agreement shall be true and correct on and as of the Closing Date with the same effect as though such representations and warranties had been made on and as of the Closing Date (except to the extent expressly made as of an earlier date in which case as of such earlier date).

 

(b) Performance. The Company shall have performed and complied with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or prior to the Closing Date.

 

(c) Compliance Certificate. The Chief Executive Officer of the Company shall have delivered to the Purchaser at the Closing Date a certificate certifying that the conditions specified in Sections 7.01(a) and 7.01(b) of this Agreement have been fulfilled.

 

(d) Qualification under State Securities Laws. All registrations, qualifications, permits and approvals, if any, required under applicable state securities laws shall have been obtained by Company for the lawful execution, delivery and performance of this Agreement.

 

(e) Adverse Changes. The Purchaser shall have determined, in its sole discretion, that there have not been any events, conditions or changes, material, adverse or otherwise, that are reasonably likely to result in changes to the condition, financial or otherwise, earnings, business affairs or prospects of the Company or any of its subsidiaries.

 

7.02 Conditions of the Purchaser’s Obligations at First Closing. In addition to the conditions set forth in Section 7.01 above, the obligations of the Purchaser under Section 2 hereof are subject to the fulfillment, at or prior to the First Closing, of all of the following conditions, any of which may be waived in whole or in part by the Purchaser in its sole and absolute discretion.

 

(a) Secretary’s Certificate. The Secretary of the Company shall have delivered to the Purchaser at the First Closing Date a certificate certifying (i) the Articles of Incorporation, as amended, of the Company; (ii) the Bylaws of the Company; and (iii) resolutions of the Board of Directors approving this Agreement and the transactions contemplated by this Agreement.

 

7.03 Conditions of the Purchaser’s Obligations at the Fourth Closing. In addition to the conditions set forth in Section 7.01 above, the obligations of the Purchaser under Section 2.04 hereof are subject to the fulfillment, at or prior to the Fourth Closing, of all of the following conditions, any of which may be waived in whole or in part by the Purchaser in its absolute discretion.

 

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(a) Company Contribution. The Company shall contribute $2,000,000 to NewCo promptly after the Third Closing, and such funds shall be used as provided in Section 6.02(c)(iii) above.

 

(b) LevelX Contribution. LevelX Capital LLC shall contribute its broker-dealer subsidiary and associated licenses with an aggregate value of approximately $1,000,000 to NewCo.

 

(c) Redensky Contribution. Leon Redensky shall contribute certain order execution system software with an aggregate value of approximately $15,000,000 to NewCo, provide for a perpetual right to receive all updates and releases to the software contemporaneously with any release provided to any of Leon Redensky’s businesses, clients/users and execute such documents and instruments satisfactory to the Purchaser to evidence the foregoing.

 

SECTION 8. Transfer Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent to issue certificates, registered in the name of the Purchaser or its nominee, for the Conversion Shares in such amounts as specified from time to time by the Purchaser to the Company upon conversion of the Notes in accordance with the terms thereof (the “Irrevocable Transfer Agent Instructions”). In the event that the Company proposes to replace its transfer agent, the Company shall provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to this Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount as such term is defined in the Notes) signed by the successor transfer agent to Company and the Company. Prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to an exemption from registration, all such certificates shall bear the restrictive legend specified in Section 4.05 of this Agreement. The Company warrants that: (i) no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 8, will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the Notes; (ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or issuing)(electronically or in certificated form) any certificate for Conversion Shares to be issued to the Purchaser upon conversion of or otherwise pursuant to the Notes as and when required by the Notes and this Agreement; and (iii) it will not fail to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Conversion Shares issued to the Purchaser upon conversion of or otherwise pursuant to the Notes as and when required by the Notes and/or this Agreement. If the Purchaser provides the Company and the Company’s transfer agent, at the cost of the Purchaser, with an opinion of counsel in form, substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of such Securities may be made without registration under the 1933 Act, the Company shall permit the transfer, and, in the case of the Conversion Shares, promptly instruct its transfer agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations as specified by the Purchaser. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Purchaser, by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 8 may be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section, that the Purchaser shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer, without the necessity of showing economic loss and without any bond or other security being required.

 

SECTION 9. Events of Default and Remedies. The occurrence of an Event of Default (as defined in the Note) shall constitute an event of default hereunder and, in additional to all rights and remedies provided in each of the Transaction Documents, the Purchaser shall have the right to terminate all commitments of the Purchaser hereunder.

 

SECTION 10. Definitions. Unless the context otherwise requires, the terms defined in this Section 10 shall have the meanings specified for all purposes of this Agreement. All accounting terms used in this Agreement, whether or not defined in this Section 10, shall be construed in accordance with GAAP and such accounting terms shall be determined on a consolidated basis for the Company and each of its subsidiaries, and the financial statements and other financial information to be furnished by the Company pursuant to this Agreement shall be consolidated and presented with consolidating financial statements of the Company and each of its subsidiaries.

 

13

 

 

1933 Act Regulations” means the rules and regulations promulgated under the 1933 Act.

 

1934 Act” means the Securities Exchange Act of 1934, as amended.

 

1934 Act Regulations” means the rules and regulations promulgated under the 1934 Act.

 

Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the 1934 Act.

 

Bitman Equipment” means the purchase and operation of computing chip processor equipment for Blockchain cryptocurrency mining.

 

Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in the City of New York are authorized or required by law to remain closed.

 

Change of Control” means:

 

(1) any “person” or “group” of related persons (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than a Permitted Holder, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that such person or group shall be deemed to have “beneficial ownership” of all shares that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the total voting power of the voting stock of the Company; or

 

(2) the merger or consolidation of the Company with or into another Person or the merger of another Person with or into the Company or the merger of any Person with or into a Subsidiary of the Company, unless the holders of a majority of the aggregate voting power of the voting stock of the Company, immediately prior to such transaction, hold securities of the surviving or transferee Person that represent, immediately after such transaction, at least a majority of the aggregate voting power of the voting stock of the surviving or transferee Person;

 

(3) the adoption by the shareholders of the Company of a plan or proposal for the liquidation or dissolution of the Company; or

 

(4) Joseph Cammarata ceases to be chief executive officer of the Company or ceases to fulfill the duties of such role and a successor chief executive officer acceptable to the Purchaser shall not have been appointed within 90 days.

 

Indebtedness” means, with respect to any Person, without duplication, (a) all indebtedness of such Person for borrowed money; (b) all obligations of such Person for the deferred purchase price of property or services (other than trade payables or other accounts payable incurred in the ordinary course of such Person’s business); (c) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments or upon which interest payments are customarily made; (d) all reimbursement, payment or other obligations and liabilities of such Person created or arising under any conditional sales or other title retention agreement with respect to property used and/or acquired by such Person, even though the rights and remedies of the lessor, seller and/or lender thereunder may be limited to repossession or sale of such property; (e) all capitalized lease obligations of such Person; (f) all unpaid reimbursement obligations and liabilities, contingent or otherwise, of such Person, in respect of letters of credit, acceptances and similar facilities; (g) all obligations and liabilities, calculated on a basis reasonably satisfactory to the Agent and in accordance with accepted practice, of such Person under hedging agreements; (h) all monetary obligations under any receivables factoring, receivable sales or similar transactions and all monetary obligations under any synthetic lease, tax ownership lease, off-balance sheet financing or similar financing; and (i) all obligations referred to in clauses (a) through (h) of this definition of another Person secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) a Lien upon property owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness.

 

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Permitted Holder” means any of Joseph Cammarata, the Purchaser, David B. Rothrock, or any of Purchaser’s subsidiaries or affiliates.

 

“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust (including any beneficiary thereof), a joint venture, an unincorporated organization, and a governmental entity or any department, agency, or political subdivision thereof.

 

Prodigio IP means all software, including object and sources code, all patents, know-how and other intellectual property used in or useful to conduct the Broker-Dealer Business, including the Purchaser’s Prodigio SMART (Signal Management Automated Robotic Trading system) trading system software technology, and shall include the assignment (to the extent assignable) of all licenses under which the Purchaser has rights to use third party software or intellectual property and all source code copies for the Prodigio SMART software technology.

 

Principal Trading Market” means the OTCQB or such other Trading Market on which the Common Stock is primarily listed for trading.

 

Rule 144” means Rule 144 promulgated by the SEC pursuant to the 1933 Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such Rule.

 

SafeTek” means SafeTek, LLC, a Utah limited liability company and wholly-owned subsidiary of Company.

 

Trading Market” means whichever of the OTCQB, OTCQX, Pink Sheets electronic quotation system or other trading market on which the Common Stock is listed for trading on the date in question.

 

Transaction Documents” means this Agreement, the Notes, the Investor Rights Agreement, the Voting Agreement, the Lock-Up Agreements, the Security Agreement, the Series B Consent and any and all related agreements, instruments, certificates and other documents.

 

SECTION 11. Miscellaneous.

 

11.01 Waivers and Amendments. Upon the approval of the Company and the written consent of the Purchaser, the obligations of the Company and the rights of the Purchaser under this Agreement may be waived (either generally or in a particular instance, either retroactively or prospectively and either for a specified period of time or indefinitely). Neither this Agreement, nor any provision hereof, may be changed, waived, discharged or terminated orally or by course of dealing, but only by an instrument in writing executed by both the Company and the Purchaser.

 

11.02 Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted to be given pursuant to this Note shall be in writing and shall be delivered (a) in hand by person with written receipt of the person to whom such notice is intended; (b) by registered or certified mail, postage prepaid, return receipt requested; or (c) by a generally recognized commercial courier service or overnight delivery service, (Federal Express or UPS), for next business day delivery, postage prepaid, with delivery receipt requested. All notices sent in accordance with this Section 11.02 shall be deemed “Delivered” unless otherwise specified herein, the same day if delivered by hand in person with receipt and signature of the intended recipient or by an authorized officer of the intended recipient; if by registered or certified mail, three (3) business days after the same is deposited in the U.S. Mail; or if sent by a commercial courier service or overnight delivery service for next business day delivery, one (1) business day after payment and receipt of mailing. The addresses for such communications shall be:

 

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If to the Company:

 

Investview, Inc.

 

234 Industrial Way West

Building A, Suite 202

Eatontown, NJ 07724

Attn: Joseph Cammarata

Mario Romano

 

With a copy to:

 

Michael Best & Friedrish LLP

170 South Main Street, Suite 1000

Salt Lake City, UT 84101

 

Attention: Kevin C. Timken

 

If to the Purchaser:

 

DBR Capital, LLC

1645 Kecks Road

Breinigsville, PA 18031

Attn: David B. Rothrock

 

with copies to:

 

Morgan, Lewis & Bockius LLP

1701 Market Street

Philadelphia, Pennsylvania 19103-2921

Attn: Michael J. Pedrick, Esq.

 

The addresses of the parties set forth above may be changed from time to time by a party by notice to the other in accordance with the notice provisions as set forth herein this Section 11.02.

 

11.03 Cumulative Remedies. None of the rights, powers or remedies conferred upon the Purchaser on the one hand or the Company on the other hand shall be mutually exclusive, and each such right, power or remedy shall be cumulative and in addition to every other right, power or remedy, whether conferred by this Agreement or now or hereafter available at law, in equity, by statute or otherwise.

 

11.04 Successors and Assigns. All the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective parties hereto, the successors and permitted assigns of the Purchaser and the successors of the Company, whether so expressed or not. None of the parties hereto may assign its rights or obligations hereof without the prior written consent of the Company, except that the Purchaser may, without the prior consent of the Company, assign its rights to purchase the Securities hereunder to any of its Affiliates (provided each such Affiliate agrees to be bound by the terms of this Agreement and makes the same representations and warranties set forth in Section 4 hereof). This Agreement shall not inure to the benefit of or be enforceable by any other third party Person.

 

11.05 Headings. The headings of the Sections and paragraphs of this Agreement have been inserted for convenience of reference only and do not constitute a part of this Agreement.

 

11.06 Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to its conflict of law principles. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby may be brought in any federal or state court located in the Borough of Manhattan, the City of New York and State of New York, and each of the parties hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.

 

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11.07 Usury Laws. It is the intention of the Borrower and the Purchaser to conform strictly to all applicable usury laws now or hereafter in force, and any interest payable under this Agreement shall be subject to reduction to the amount not in excess of the maximum legal amount allowed under the applicable usury laws as now or hereafter construed by the courts having jurisdiction over such matters. If the maturity of the Notes is accelerated by reason of an election by the Purchaser resulting from an Event of Default (as defined in the Notes) or otherwise, then earned interest may never include more than the maximum amount permitted by law, computed from the date hereof until payment, and any interest in excess of the maximum amount permitted by law shall be canceled automatically and, if theretofore paid, shall at the option of the Purchaser either be rebated to the Borrower or credited on the principal amount under this Agreement, or if this Agreement has been paid, then the excess shall be rebated to Borrower. The aggregate of all interest (whether designated as interest, service charges, points, or otherwise) contracted for, chargeable, or receivable under this Agreement shall under no circumstances exceed the maximum legal rate upon the unpaid principal balance of this Agreement remaining unpaid from time to time. If such interest does exceed the maximum legal rate, it shall be deemed a mistake and such excess shall be canceled automatically and, if theretofore paid, rebated to the Borrower or credited on the principal amount of this Agreement, or if this Agreement has been repaid, then such excess shall be rebated to Borrower.

 

11.08 Further Assurances. The Borrower shall, and shall cause its Affiliates to, from time to time at the request of the Purchaser, without any additional consideration, furnish the Purchaser such further information or assurances; execute and deliver such additional agreements, documents and instruments; and take such other actions and do such other things, as may be necessary or appropriate to carry out the terms and provisions of this Agreement and give effect to the transactions contemplated hereby

 

11.09 Survival. The representations and warranties of the Company and the Purchaser contained in Sections 4 and 5, and the agreements and covenants set forth in Sections 6, 8 and 11 shall survive the Closing in accordance with their respective terms.

 

11.10 Counterparts; Effectiveness. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, with the same effect as if all parties had signed the same document. All such counterparts (including counterparts delivered by facsimile or other electronic format) shall be deemed an original, shall be construed together and shall constitute one and the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto.

 

11.11 Entire Agreement. This Agreement contains the entire agreement among the parties hereto with respect to the subject matter hereof and, except as set forth below, this agreement supersedes and replaces all other prior agreements, written or oral, among the parties hereto with respect to the subject matter hereof. Notwithstanding the foregoing or anything to the contrary in this Agreement, this Agreement shall not supersede any confidentiality or other non-disclosure agreements that may be in place between the Company and the Purchaser.

 

11.12 Severability. If any provision of this Agreement shall be found by any court of competent jurisdiction to be invalid or unenforceable, the parties hereby waive such provision to the extent that it is found to be invalid or unenforceable. Such provision shall, to the maximum extent allowable by law, be modified by such court so that it becomes enforceable, and, as modified, shall be enforced as any other provision hereof, all the other provisions hereof continuing in full force and effect.

 

[Signature page follows]

 

17

 

 

EXHIBIT 10.60

 

VOTING AGREEMENT

 

TABLE OF CONTENTS

 

    Page
1. Voting Provisions Regarding the Board 1
       
  1.1 Size of the Board 1
  1.2 Board Composition 1
  1.3 Failure to Designate a Board Member 2
  1.4 Removal of Board Members 2
  1.5 No Liability for Election of Recommended Directors 3
       
2. Vote to Increase Authorized Common Stock 2
       
3. Drag-Along Right 2
       
  3.1 Definitions 2
  3.2 Actions to be Taken 2
       
4. Remedies 3
       
  4.1 Covenants of the Company 3
  4.2 4.2 Irrevocable Proxy and Power of Attorney 4
  4.3 4.3 Remedies Cumulative 4
       
5. Miscellaneous 4
       
  5.1 Additional Parties 4
  5.2 Transfers 4
  5.3 Successors and Assigns 4
  5.4 Counterparts; Effectiveness 4
  5.5 Headings 5
  5.6 Notices 5
  5.7 Consent Required to Amend, Modify, Terminate or Waive 5
  5.8 Delays or Omissions 5
  5.9 Severability 6
  5.10 Entire Agreement 6
  5.11 Share Certificate Legend 6
  5.12 Stock Splits, Stock Dividends, etc. 6
  5.13 Manner of Voting 6
  5.14 Further Assurances 6
  5.15 Governing Law; Jurisdiction 6
  5.16 Costs of Enforcement 7
  5.17 Aggregation of Stock 7
  5.18 Spousal Consent 7

 

Schedule A - Key Holders
Exhibit A - Adoption Agreement
Exhibit B - Consent of Spouse

 

 

 

 

VOTING AGREEMENT

 

THIS VOTING AGREEMENT (this “Agreement”), is made and entered into as of this 27th day of April, 2020 by and among Investview, Inc., a Nevada corporation (the “Company”), DBR Capital, LLC, a Pennsylvania limited liability company (the “Investor”), and those certain stockholders of the Company listed on Schedule A (together with any subsequent stockholders, or any transferees, who become parties hereto as “Key Holders” pursuant to Subsections 5.1 or 5.2 below, the “Key Holders,” and together collectively with the Investor, the “Stockholders”).

 

RECITALS

 

A. Concurrently with the execution of this Agreement, the Company and the Investor are entering into a Securities Purchase Agreement (the “Purchase Agreement”), pursuant to which the Company will issue to the Investor one or more Convertible Secured Promissory Notes (the “Convertible Notes”), and in connection with that agreement the parties desire to provide the Investor with the right, among other rights, to designate the election of certain members of the board of directors of the Company (the “Board”) in accordance with the terms of this Agreement.

 

B. The parties also desire to enter into this Agreement to set forth their agreements and understandings with respect to how shares of the capital stock of the Company held by them will be voted.

 

NOW, THEREFORE, the parties agree as follows:

 

1. Voting Provisions Regarding the Board.

 

1.1 Size of the Board. Each Key Holder agrees to vote, or cause to be voted, all Shares (as defined below) owned by such Key Holder, or over which such Key Holder has voting control, from time to time and at all times, in whatever manner as shall be necessary to ensure that the size of the Board shall be set and remain at five (5) directors. For purposes of this Agreement, the term “Shares” shall mean and include any securities of the Company that the holders of which are entitled to vote for members of the Board, including without limitation, all shares of Common Stock and Preferred Stock, by whatever name called, now owned or subsequently acquired by a Stockholder, however acquired, whether through stock splits, stock dividends, reclassifications, recapitalizations, similar events or otherwise.

 

1.2 Board Composition. Each Key Holder agrees to vote, or cause to be voted, all Shares owned by such Key Holder, or over which such Key Holder has voting control, from time to time and at all times, in whatever manner as shall be necessary to ensure that at each annual or special meeting of stockholders at which an election of directors is held or pursuant to any written consent of the stockholders the following persons shall be elected to the Board:

 

(a) Two persons designated from time to time by the Investor, for so long as the Investor and its Affiliates (as defined below) continue to own beneficially the Convertible Note or any other securities of the Company, which individuals shall initially be David B. Rothrock and James R. Bell.

 

(b) If at any time and from time to time an Event of Default (as defined in the Convertible Notes) occurs and is continuing, for such period of time, in addition to the two persons elected pursuant to Subsection 1.2(a) above, the addition of three persons designated from time to time by the Investor (such that, for the avoidance of doubt, all directors shall be designated by the Investor), for so long as the Investor and its Affiliates (as defined below) continue to own beneficially the Convertible Note or any other securities of the Company.

 

(c) To the extent that clauses (a) and (b) shall not be applicable, any member of the Board who would otherwise have been designated in accordance with the terms thereof shall instead be voted upon by all the stockholders of the Company entitled to vote thereon in accordance with, and pursuant to, the Certificate of Incorporation of the Company.

 

(d) For purposes of this Agreement, an individual, firm, corporation, partnership, association, limited liability company, trust or any other entity (collectively, a “Person”) shall be deemed an “Affiliate” of another Person who, directly or indirectly, controls, is controlled by or is under common control with such Person, including, without limitation, any general partner, managing member, officer, director or trustee of such Person, or any venture capital fund or registered investment company now or hereafter existing that is controlled by one or more general partners, managing members or investment advisers of, or shares the same management company or investment adviser with, such Person.

 

     

 

 

1.3 Failure to Designate a Board Member. In the absence of any designation from the Persons or groups with the right to designate a director as specified above, the director previously designated by them and then serving shall be reelected if still eligible and willing to serve as provided herein and otherwise, such Board seat shall remain vacant.

 

1.4 Removal of Board Members. Each Key Holder also agrees to vote, or cause to be voted, all Shares owned by such Key Holder, or over which such Key Holder has voting control, from time to time and at all times, in whatever manner as shall be necessary to ensure that:

 

(a) no director elected pursuant to Subsections 1.2 or 1.3 of this Agreement may be removed from office unless (i) such removal is directed or approved by the affirmative vote of the Person(s) entitled under Subsection 1.2 to designate that director; or (ii) the Person(s) originally entitled to designate or approve such director pursuant to Subsection 1.2 is no longer so entitled to designate or approve such director;

 

(b) any vacancies created by the resignation, removal or death of a director elected pursuant to Subsections 1.2 or 1.3 shall be filled pursuant to the provisions of this Section 1; and

 

(c) upon the request of any party entitled to designate a director as provided in Subsection 1.2(a) or 1.2(b) to remove such director, such director shall be removed.

 

All Key Holders agree to execute any written consents required to perform the obligations of this Section 1, and the Company agrees at the request of any Person or group entitled to designate directors to call a special meeting of stockholders for the purpose of electing directors.

 

1.5 No Liability for Election of Recommended Directors. No Stockholder, nor any Affiliate of any Stockholder, shall have any liability as a result of designating a person for election as a director for any act or omission by such designated person in his or her capacity as a director of the Company, nor shall any Stockholder have any liability as a result of voting for any such designee in accordance with the provisions of this Agreement.

 

2. Vote to Increase Authorized Common Stock. Each Key Holder agrees to vote or cause to be voted all Shares owned by such Key Holder, or over which such Key Holder has voting control, from time to time and at all times, in whatever manner as shall be necessary to increase the number of authorized shares of Common Stock from time to time to ensure that there will be sufficient shares of Common Stock available for conversion of all of the Convertible Notes outstanding at any given time.

 

3. Drag-Along Right.

 

3.1 Definitions. A “Sale of the Company” shall mean (i) a transaction or series of related transactions in which a Person, or a group of related Persons, acquires from stockholders of the Company shares representing more than fifty percent (50%) of the outstanding voting power of the Company (a “Stock Sale”); (ii) a merger or consolidation in which (a) the Company is a constituent party or (b) a subsidiary of the Company is a constituent party and the Company issues shares of its capital stock pursuant to such merger or consolidation; or (iii) (1) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Company or any subsidiary of the Company of all or substantially all the assets of the Company and its subsidiaries taken as a whole or (2) the sale or disposition (whether by merger, consolidation or otherwise, and whether in a single transaction or a series of related transactions) of one or more subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the Company.

 

3.2 Actions to be Taken. In the event that (i) the Investor (in such capacity, the “Selling Investor”) and (ii) solely with respect to a Sale of the Company pursuant to clauses (ii) or (iii) of Subsection 3.1 above, the Board, including at least one Investor Director, approves a Sale of the Company in writing, specifying that this Section 3 shall apply to such transaction, then each Key Holder and the Company hereby agree:

 

(a) if such transaction requires stockholder approval, with respect to all Shares that such Key Holder owns or over which such Key Holder otherwise exercises voting power, to vote (in person, by proxy or by action by written consent, as applicable) all Shares in favor of, and adopt, such Sale of the Company (together with any related amendment or restatement to the Certificate of Incorporation of the Company required to implement such Sale of the Company) and to vote in opposition to any and all other proposals that could reasonably be expected to delay or impair the ability of the Company to consummate such Sale of the Company;

 

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(b) if such transaction is a Stock Sale, to sell the same proportion of shares of capital stock of the Company beneficially held by such Key Holder as is being sold by the Selling Investor to the Person to whom the Selling Investor proposes to sell their Shares, and on the same terms and conditions as the other stockholders of the Company;

 

(c) to execute and deliver all related documentation and take such other action in support of the Sale of the Company as shall reasonably be requested by the Company or the Selling Investor in order to carry out the terms and provision of this Section 3, including, without limitation, executing and delivering instruments of conveyance and transfer, and any purchase agreement, merger agreement, any associated indemnity agreement, or escrow agreement, any associated voting, support, or joinder agreement, consent, waiver, governmental filing, share certificates duly endorsed for transfer (free and clear of impermissible liens, claims and encumbrances), and any similar or related documents;

 

(d) not to deposit, and to cause their Affiliates not to deposit, except as provided in this Agreement, any Shares of the Company owned by such party or Affiliate in a voting trust or subject any Shares to any arrangement or agreement with respect to the voting of such Shares, unless specifically requested to do so by the acquirer in connection with the Sale of the Company;

 

(e) to refrain from (i) exercising any dissenters’ rights or rights of appraisal under applicable law at any time with respect to such Sale of the Company, or the consummation of the transactions contemplated thereby; or (ii) asserting any claim or commencing any suit (x) challenging the Sale of the Company or this Agreement, or (y) alleging a breach of any fiduciary duty of the Selling Investor or any Affiliate or associate thereof (including, without limitation, aiding and abetting breach of fiduciary duty) in connection with the evaluation, negotiation or entry into the Sale of the Company, or the consummation of the transactions contemplated thereby;

 

(f) if the consideration to be paid in exchange for the Shares pursuant to this Section 3 includes any securities and due receipt thereof by any Key Holder would require under applicable law (x) the registration or qualification of such securities or of any person as a broker or dealer or agent with respect to such securities; or (y) the provision to any Key Holder of any information other than such information as a prudent issuer would generally furnish in an offering made solely to “accredited investors” as defined in Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”), the Company may cause to be paid to any such Key Holder in lieu thereof, against surrender of the Shares which would have otherwise been sold by such Key Holder, an amount in cash equal to the fair value (as determined in good faith by the Board) of the securities which such Key Holder would otherwise receive as of the date of the issuance of such securities in exchange for the Shares; and

 

(g) in the event that the Selling Investor, in connection with such Sale of the Company, appoints a stockholder representative (the “Stockholder Representative”) with respect to matters affecting the Key Holders under the applicable definitive transaction agreements following consummation of such Sale of the Company, (x) to consent to (i) the appointment of such Stockholder Representative, (ii) the establishment of any applicable escrow, expense or similar fund in connection with any indemnification or similar obligations, and (iii) the payment of such Key Holder’s pro rata portion (from the applicable escrow or expense fund or otherwise) of any and all reasonable fees and expenses to such Stockholder Representative in connection with such Stockholder Representative’s services and duties in connection with such Sale of the Company and its related service as the representative of the Key Holders, and (y) not to assert any claim or commence any suit against the Stockholder Representative or any other Key Holder with respect to any action or inaction taken or failed to be taken by the Stockholder Representative, within the scope of the Stockholder Representative’s authority, in connection with its service as the Stockholder Representative, absent fraud, bad faith, gross negligence or willful misconduct.

 

4. Remedies.

 

4.1 Covenants of the Company. The Company agrees to use its best efforts, within the requirements of applicable law, to ensure that the rights granted under this Agreement are effective and that the parties enjoy the benefits of this Agreement. Such actions include, without limitation, the use of the Company’s best efforts to cause the nomination and election of the directors as provided in this Agreement.

 

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4.2 Irrevocable Proxy and Power of Attorney. Each party to this Agreement hereby constitutes and appoints as the proxy of the party and hereby grants a power of attorney to a designee of the Selling Investor, with full power of substitution, with respect to the matters set forth herein, including, without limitation, votes to increase authorized shares pursuant to Section 2 hereof and votes regarding any Sale of the Company pursuant to Section 2 hereof, and hereby authorizes him or her to represent and vote, if and only if the party (i) fails to vote, or (ii) attempts to vote (whether by proxy, in person or by written consent), in a manner which is inconsistent with the terms of Section 2 of this Agreement, all of such party’s Shares in favor of the election of persons as members of the Board determined pursuant to and in accordance with the terms and provisions of this Agreement or the increase of authorized shares or approval of any Sale of the Company pursuant to and in accordance with the terms and provisions of Sections 2 and 3 of this Agreement or to take any action reasonably necessary to effect Sections 2 and 3 of this Agreement. The power of attorney granted hereunder shall authorize such holder of such proxy to execute and deliver the documentation referred to in Section 3.2(c) on behalf of any party failing to do so within five (5) business days of a request by the Company. Each of the proxy and power of attorney granted pursuant to this Section 4.2 is given in consideration of the agreements and covenants of the Company and the parties in connection with the transactions contemplated by this Agreement and, as such, each is coupled with an interest and shall be irrevocable unless and until this Agreement is terminated pursuant to the terms hereof. Each party hereto hereby revokes any and all previous proxies or powers of attorney with respect to the Shares and shall not hereafter, unless and until this Agreement is terminated pursuant to the terms hereof, purport to grant any other proxy or power of attorney with respect to any of the Shares, deposit any of the Shares into a voting trust or enter into any agreement (other than this Agreement), arrangement or understanding with any person, directly or indirectly, to vote, grant any proxy or give instructions with respect to the voting of any of the Shares, in each case, with respect to any of the matters set forth in this Agreement.

 

4.3 Remedies Cumulative. The parties acknowledge that a breach by either party of its obligations hereunder will cause irreparable harm to the other party, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the parties acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by a party of the provisions of this Agreement, that the non-defaulting party shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein or allowed by law, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required. None of the rights, powers or remedies conferred upon the parties pursuant to the terms and provisions of this Agreement shall be mutually exclusive, and each such right, power or remedy shall be cumulative and in addition to every other right, power or remedy, whether conferred by this Agreement or now or hereafter available at law, in equity, by statute or otherwise.

 

5. Miscellaneous.

 

5.1 Additional Parties. In the event that after the date of this Agreement, the Company enters into an agreement with any Person to issue shares of capital stock to such Person, following which such Person shall hold Shares constituting one percent (1%) or more of the then outstanding capital stock of the Company (treating for this purpose all shares of Common Stock issuable upon exercise of or conversion of outstanding options, warrants or convertible securities, as if exercised and/or converted or exchanged), except as otherwise agreed by the Investor, then, the Company shall cause such Person, as a condition precedent to entering into such agreement, to become a party to this Agreement by executing an Adoption Agreement in the form attached hereto as Exhibit A, agreeing to be bound by and subject to the terms of this Agreement as a Stockholder and thereafter such Person shall be deemed a Stockholder for all purposes under this Agreement.

 

5.2 Transfers. Each transferee or assignee (“Transferee”) of any Shares subject to this Agreement shall continue to be subject to the terms hereof, and, as a condition precedent to the Company’s recognition of such transfer, each Transferee shall agree in writing to be subject to each of the terms of this Agreement by executing and delivering an Adoption Agreement substantially in the form attached hereto as Exhibit A. Upon the execution and delivery of an Adoption Agreement by any Transferee, such Transferee shall be deemed to be a party hereto as if such Transferee were the transferor and such Transferee’s signature appeared on the signature pages of this Agreement and shall be deemed to be an Investor and Stockholder, or Key Holder and Stockholder, as applicable. The Company shall not permit the transfer of the Shares subject to this Agreement on its books or issue a new certificate representing any such Shares unless and until such Transferee shall have complied with the terms of this Subsection 5.2. Each certificate instrument, or book entry representing the Shares subject to this Agreement if issued on or after the date of this Agreement shall be notated by the Company with the legend set forth in Subsection 5.11.

 

5.3 Successors and Assigns. All the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective parties hereto, the successors and permitted assigns of the Investor or any Key Holder and the successors of the Company, whether so expressed or not. None of the parties hereto may assign its rights or obligations hereof without the prior written consent of the Company, except that the Investor may, without the prior consent of the Company, assign its rights to any of its Affiliates that purchases Shares or to which the Investor transfers Shares. This Agreement shall not inure to the benefit of or be enforceable by any other third party Person.

 

5.4 Counterparts; Effectiveness. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, with the same effect as if all parties had signed the same document. All such counterparts (including counterparts delivered by facsimile, email or other electronic format) shall be deemed an original, shall be construed together and shall constitute one and the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto.

 

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5.5 Headings. The headings of the Sections and paragraphs of this Agreement have been inserted for convenience of reference only and do not constitute a part of this Agreement and are not to be considered in construing or interpreting this Agreement.

 

5.6 Notices.

 

(a) All notices, demands, requests, consents, approvals, and other communications required or permitted to be given pursuant to this Agreement shall be in writing and shall be delivered (a) in hand by person with written receipt of the person to whom such notice is intended; (b) by registered or certified mail, postage prepaid, return receipt requested; or (c) by a generally recognized commercial courier service or overnight delivery service, (Federal Express or UPS), for next business day delivery, postage prepaid, with delivery receipt requested. All notices sent in accordance with this Subsection 5.6 shall be deemed “Delivered” unless otherwise specified herein, the same day if delivered by hand in person with receipt and signature of the intended recipient or by an authorized officer of the intended recipient; if by registered or certified mail, three (3) business days after the same is deposited in the U.S. Mail; or if sent by a commercial courier service or overnight delivery service for next business day delivery, one (1) business day after payment and receipt of mailing. All communications shall be sent to the respective parties at their address as set forth on the signature pages hereto, or to such email address, facsimile number or address as subsequently modified by written notice given in accordance with this Subsection 5.6.

 

(b) Consent to Electronic Notice. Notwithstanding any contrary language set forth in subsection (a) immediately above, each Investor and Key Holder consents to the delivery of any stockholder notice by electronic transmission pursuant to the Nevada Revised Statutes, Title 7, Chapter 78, Section 370 (or any successor thereto) at the electronic mail address or the facsimile number set forth below such Investor’s or Key Holder’s name on the Schedules hereto, as updated from time to time by notice to the Company, or as on the books of the Company. To the extent that any notice given by means of electronic transmission is returned or undeliverable for any reason, the foregoing consent shall be deemed to have been revoked until a new or corrected electronic mail address has been provided, and such attempted Electronic Notice shall be ineffective and deemed to not have been given. Each Investor and Key Holder agrees to promptly notify the Company of any change in its electronic mail address, and that failure to do so shall not affect the foregoing.

 

5.7 Consent Required to Amend, Modify, Terminate or Waive. This Agreement may be amended, modified or terminated and the observance of any term hereof may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a written instrument executed by (a) the Company; (b) the Key Holders holding a majority of the Shares then held by the Key Holders; and (c) the Investor. Notwithstanding the foregoing:

 

(a) the consent of the Key Holders shall not be required for any amendment, modification, termination or waiver if such amendment, modification, termination, or waiver either (A) is not directly applicable to the rights of the Key Holders hereunder; or (B) does not adversely affect the rights of the Key Holders in a manner that is different than the effect on the rights of the other parties hereto; and

 

(b) any provision hereof may be waived by the waiving party on such party’s own behalf, without the consent of any other party.

 

The Company shall give prompt written notice of any amendment, modification, termination, or waiver hereunder to any party that did not consent in writing thereto. Any amendment, modification, termination, or waiver effected in accordance with this Subsection 5.7 shall be binding on each party and all of such party’s successors and permitted assigns, whether or not any such party, successor or assignee entered into or approved such amendment, modification, termination or waiver. For purposes of this Subsection 5.7, the requirement of a written instrument may be satisfied in the form of an action by written consent of the Stockholders circulated by the Company and executed by the Stockholder parties specified, whether or not such action by written consent makes explicit reference to the terms of this Agreement.

 

5.8 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default previously or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and signed by the party for whom it is being enforced, and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

 

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5.9 Severability. If any provision of this Agreement shall be found by any court of competent jurisdiction to be invalid or unenforceable, the parties hereby waive such provision to the extent that it is found to be invalid or unenforceable. Such provision shall, to the maximum extent allowable by law, be modified by such court so that it becomes enforceable, and, as modified, shall be enforced as any other provision hereof, all the other provisions hereof continuing in full force and effect. However, if any such invalid or unenforceable provision cannot by modified to become enforceable, then such provision(s) shall be stricken from the Agreement in its/their entirety and all the other provisions hereof shall be continuing in full force and effect.

 

5.10 Entire Agreement. This Agreement, the Purchase Agreement and that certain Investor Rights Agreement, dated as of the date hereof, by and between the Company and the Investor constitute the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and this agreement supersedes and replaces all other prior agreements, written or oral, among the parties hereto with respect to the subject matter hereof.

 

5.11 Share Certificate Legend. Each certificate, instrument, or book entry representing any Shares issued after the date hereof to any Key Holder shall be notated by the Company with a legend reading substantially as follows:

 

“The Shares REPRESENTED hereby are subject to a Voting Agreement, AS MAY BE AMENDED FROM TIME TO TIME, (a copy of which may be obtained upon written request from the Company), and by accepting any interest in such Shares the person accepting such interest shall be deemed to agree to and shall become bound by all the provisions of that Voting Agreement, including certain restrictions on transfer and ownership set forth therein.”

 

The Company, by its execution of this Agreement, agrees that it will cause the certificates instruments, or book entry evidencing the Shares issued after the date hereof to be notated with the legend required by this Subsection 5.11 of this Agreement, and it shall supply, free of charge, a copy of this Agreement to any holder of such Shares upon written request from such holder to the Company at its principal office. The parties to this Agreement do hereby agree that the failure to cause the certificates, instruments, or book entry evidencing the Shares to be notated with the legend required by this Subsection 5.11 herein and/or the failure of the Company to supply, free of charge, a copy of this Agreement as provided hereunder shall not affect the validity or enforcement of this Agreement.

 

5.12 Stock Splits, Stock Dividends, etc. In the event of any issuance of Shares or the voting securities of the Company after the date of this Agreement to any of the Key Holders (including, without limitation, in connection with any stock split, stock dividend, recapitalization, reorganization, or the like), such Shares shall become subject to this Agreement and shall be notated with the legend set forth in Subsection 5.11.

 

5.13 Manner of Voting. The voting of Shares pursuant to this Agreement may be effected in person, by proxy, by written consent or in any other manner permitted by applicable law. For the avoidance of doubt, voting of the Shares pursuant to the Agreement need not make explicit reference to the terms of this Agreement.

 

5.14 Further Assurances. At any time or from time to time after the date hereof, the parties agree to cooperate with each other, and at the request of any other party, and without any additional consideration, the parties agree to provide further information or assurances; execute and deliver such additional agreements, documents and instruments; and take such other actions and do such other things, as may be necessary or appropriate to carry out the terms and provisions of this Agreement, the intent of the parties and give effect to the transactions contemplated hereby.

 

5.15 Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to its conflict of law principles. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby may be brought in any federal or state court located in the Borough of Manhattan, the City of New York and State of New York, and each of the parties hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.

 

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Waiver of Jury Trial: EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

 

5.16 Costs of Enforcement. If any party to this Agreement seeks to enforce its rights under this Agreement by legal proceedings, the non-prevailing party shall pay all costs and expenses incurred by the prevailing party, including, without limitation, all reasonable attorneys’ fees.

 

5.17 Aggregation of Stock. All Shares held or acquired by a Stockholder and/or its Affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement, and such Affiliated Persons may apportion such rights as among themselves in any manner they deem appropriate.

 

5.18 Spousal Consent. If any individual Key Holder is married on the date of this Agreement (or on the date of execution of an Adoption Agreement pursuant to Sections 5.1 or 5.2) and such Key Holder resides in a state in which spousal consent is necessary to give full effect hereto, such Key Holder’s spouse shall execute and deliver to the Company a consent of spouse in the form of Exhibit B hereto (“Consent of Spouse”), effective on the date hereof (or as of the date of the execution of such Adoption Agreement). Notwithstanding the execution and delivery thereof, such consent shall not be deemed to confer or convey to the spouse any rights in such Key Holder’s Shares that do not otherwise exist by operation of law or the agreement of the parties. If any individual Key Holder should marry or remarry subsequent to the date of this Agreement, such Key Holder shall within thirty (30) days thereafter obtain his/her new spouse’s acknowledgement of and consent to the existence and binding effect of all restrictions contained in this Agreement by causing such spouse to execute and deliver a Consent of Spouse acknowledging the restrictions and obligations contained in this Agreement and agreeing and consenting to the same.

 

[Remainder of Page Intentionally Left Blank. Authorized Signatures on Following Page]

 

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IN WITNESS WHEREOF, the parties have executed this Voting Agreement as of the date first written above.

 

  INVESTVIEW, INC.
             
  By:  
  Name: Joseph Cammarata
  Title: Chief Executive Officer

 

  Address: Investview, Inc.
   

234 Industrial Way West

    Building A. Suite 202
    Eatontown, NJ 07724
  Email:

joe@investview.com

 

  With a copy to:
     
    Michael Best & Friedrish LLP
    790 N. Water Street
    Suite2500
    Milwaukee, WI 53202
    Attention: Kevin C. Timken

 

 

 

 

SCHEDULE A

 

KEY HOLDERS

 

CR Capital Holdings LLC

Chad Miller

Ryan Smith

Wealth Engineering LLC

Annette Raynor

Mario Romano

Pb Trade LLC

Joseph Cammarata

Freedom Enterprises

Jeremy Roma

William C. Kosoff

Brian Mcmullen

Jayme McWidner (CFO)

DBR Capital LLC

 

     

 

 

EXHIBIT A

 

ADOPTION AGREEMENT

 

This Adoption Agreement (“Adoption Agreement”) is executed on ___________________, 20__, by the undersigned (the “Holder”) pursuant to the terms of that certain Voting Agreement dated as of April 27, 2020 (the “Agreement”), by and among the Company and certain of its Stockholders, as such Agreement may be amended or amended and restated hereafter. Capitalized terms used but not defined in this Adoption Agreement shall have the respective meanings ascribed to such terms in the Agreement. By the execution of this Adoption Agreement, the Holder agrees as follows.

 

1.1 Acknowledgement. Holder acknowledges that Holder is acquiring certain shares of the capital stock of the Company (the “Stock”) or options, warrants, or other rights to purchase such Stock (the “Options”), for one of the following reasons (Check the correct box):

 

  [  ] In accordance with Subsection 5.2 of the Agreement, as a transferee of Shares from a party in such party’s capacity as a “Key Holder” bound by the Agreement, and after such transfer, Holder shall be considered a “Key Holder” and a “Stockholder” for all purposes of the Agreement.
     
  [  ] In accordance with Subsection 5.1 of the Agreement, as a new party, in which case Holder will be a “Key Holder” and “Stockholder” for all purposes of the Agreement.

 

1.2 Agreement. Holder hereby (a) agrees that the Stock [Options], and any other shares of capital stock or securities required by the Agreement to be bound thereby, shall be bound by and subject to the terms of the Agreement and (b) adopts the Agreement with the same force and effect as if Holder were originally a party thereto.

 

1.3 Notice. Any notice required or permitted by the Agreement shall be given to Holder at the address or facsimile number listed below Holder’s signature hereto in accordance with the Notice provisions of Section 5.6 of the Agreement.

 

HOLDER:     ACCEPTED AND AGREED:
         
By:   INVESTVIEW, INC.
Name and Title of Signatory                      
         
Address:   By:
         
  Title:
       
Facsimile Number:      

 

     

 

 

EXHIBIT B

 

CONSENT OF SPOUSE

 

I, [____________________], spouse of [______________], acknowledge that I have read the Voting Agreement, dated as of April 27, 2020, to which this Consent is attached as Exhibit B (the “Agreement”), and that I know the contents of the Agreement. I am aware that the Agreement contains provisions regarding the voting and transfer of shares of capital stock of the Company that my spouse may own, including any interest I might have therein.

 

I hereby agree that my interest, if any, in any shares of capital stock of the Company subject to the Agreement shall be irrevocably bound by the Agreement and further understand and agree that any community property interest I may have in such shares of capital stock of the Company shall be similarly bound by the Agreement.

 

I am aware that the legal, financial and related matters contained in the Agreement are complex and that I am free to seek independent professional guidance or counsel with respect to this Consent. I have either sought such guidance or counsel or determined after reviewing the Agreement carefully that I will and do hereby waive such right.

 

Dated:      
      [Name of Key Holder’s Spouse]

 

     

 

 

EXHIBIT 10.61

 

LOCK-UP AGREEMENT

 

Investview, Inc.

 

Lock-Up Agreement

 

April 27, 2020

 

DBR Capital, LLC

1645 Kecks Road

Breinigsville, PA 18031

 

Re: Investview, Inc. - Lock-Up Agreement

 

Ladies and Gentlemen:

 

The undersigned understands that Investview, Inc. (the “Company”) has entered into a Securities Purchase Agreement, dated as of the date hereof (the “Purchase Agreement”), with DBR Capital, LLC (the Purchaser”), pursuant to which the Company agreed to issue and sell, and DBR Capital agreed to purchase, upon the terms and conditions set forth in the Purchase Agreement, convertible notes of the Company (the “Notes”) convertible into shares of common stock, of the Company (the “Common Stock”).

 

1. Lock-Up. In consideration of the agreement by the Purchaser to purchase the Notes, and of other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the undersigned agrees that, during the period specified in the following paragraph (the “Lock-Up Period”), the undersigned will not (1) offer, pledge, sell, contract to sell, grant any option or contract to purchase, purchase any option or contract to sell or otherwise dispose of, directly or indirectly, any shares of Common Stock of the Company or any securities convertible into, exercisable for or exchangeable for shares of Common Stock or (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise (such transactions, each a “Transfer”).

 

The Lock-Up Period will commence on the date hereof and continue until the earlier to occur of: (A) April 25, 2022; (B) the date on which the Company completes a liquidation, merger, stock exchange or other similar transaction resulting in all Company shareholders having the right to exchange their shares of Common Stock for cash, securities or other property; or (C) the Full Lock-Up Release Date.

 

As used herein, a “Full Lock-Up Release Date” means the date on which, for a period of thirty (30) consecutive Trading Days (as defined below) commencing not sooner than 180 days after the date hereof, (i) the Trading Price (as defined below) for the Common Stock is equal to or greater than the minimum trade price of $0.20 per share (as adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations and similar transactions), (ii) the minimum average daily volume of the Common Stock is at least 800,000 shares per day for each day during such thirty (30) consecutive Trading Day period and (iii) the aggregate Transfers proposed to be made on such date by the undersigned and all other stockholders subject to a comparable lock-up agreement shall not exceed 20% of the average daily volume of the Common Stock for each day during the period of thirty (30) consecutive Trading Days preceding such proposed Transfer. Prior to any proposed Transfer following the Full Lock-Up Release Date, the undersigned shall submit a written request to the Company for approval of the proposed Transfer and the Board of Directors of the Company must approve in writing, in its sole and absolute discretion, such Transfer, including the right to determine all terms, conditions, and timing.

 

Notwithstanding the foregoing, the undersigned may complete a Transfer of:

 

(A) no more than 2% of the undersigned’s total aggregate shares of Common Stock held as of the date hereof if, for a period of thirty (30) consecutive Trading Days commencing not sooner than 150 days after the date hereof, (i) the Trading Price for the Common Stock is equal to or greater than the minimum trade price of $0.12 per share (as adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations and similar transactions) and (ii) the minimum average daily volume of the Common Stock is at least 800,000 shares per day for each day during such thirty (30) consecutive Trading Day period; or

 

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(B) no more than 5% of the undersigned’s total aggregate shares of Common Stock held as of the date hereof if, for a period of thirty (30) consecutive Trading Days commencing not sooner than 150 days after the date hereof, (i) the Trading Price for the Common Stock is equal to or greater than the minimum trade price of $0.16 per share (as adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations and similar transactions) and (ii) the minimum average daily volume of the Common Stock is at least 800,000 shares per day for each day during such thirty (30) consecutive Trading Day period, and

 

provided that (i) the aggregate Transfers proposed to be made on such date by the undersigned and all other stockholders subject to a comparable lock-up agreement shall not exceed 20% of the average daily volume of the Common Stock for each day during the period of thirty (30) consecutive Trading Days preceding such proposed Transfer and (ii) prior to any proposed Transfer pursuant to (A) or (B) above, the undersigned shall submit a written request to the Company for approval of the proposed Transfer and the Board of Directors of the Company must approve in writing, in its sole and absolute discretion, such Transfer, including the right to determine all terms, conditions, and timing.

 

2. Definitions.

 

(A) Trading Price. For purposes of this Lock-Up Agreement, Trading Price shall mean, for any security as of any date, the lowest minimum trade price of the Common Stock on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”) as reported by a reliable reporting service such as Bloomberg or, if the OTC is not the principal trading market for such security, the lowest minimum trade price of such security on the principal securities exchange or trading market where such security is listed or traded (and, for the avoidance of doubt, if no lowest minimum trade price of such security is available in any of the foregoing manners, then such day shall be disallowed for purposes of determining whether the release conditions set forth in this Lock-Up Agreement are satisfied).

 

(B) Trading Days. For purposes of this Lock-Up Agreement, Trading Days shall mean, any day on which the Common Stock is tradable for any period on the OTC, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.

 

3. No Stop Transfer Instructions; Further Assurances. The undersigned acknowledges, confirms, agrees, consents and authorizes the entry of stop transfer instructions with the Company’s transfer agent and registrar relating to the transfer of the undersigned’s shares of Common Stock except in compliance with the restrictions described above. The undersigned also agrees, from time to time at the request of the Company or the Purchaser, to execute and deliver such additional agreements, documents and instruments and take such other actions and do such other things, as may be necessary or appropriate to carry out the terms and provisions of this Lock-Up Agreement and to give effect to the transactions contemplated by the Purchase Agreement.

 

4. Acknowledgment; Remedies. The undersigned understands that the Company and the Purchaser are relying upon this Lock-Up Agreement in proceeding toward consummation of the transactions contemplated by the Purchase Agreement. The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement. The undersigned further understands that this Lock-Up Agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors, and assigns. Furthermore, the undersigned acknowledges, confirms and agrees that any breach of this Agreement would result in substantial harm to the Purchaser and the Company for which monetary damages alone could not adequately compensate. Therefore, the undersigned unconditionally and irrevocably agrees that the Purchaser and the Company shall be entitled to seek protective orders, injunctive relief, punitive damages, and other remedies available at law or in equity (including, without limitation, seeking specific performance or the rescission of purchases, sales and other transfers of Common Stock not made in strict compliance with this Agreement).

 

5. Governing Law. This Lock-Up Agreement and any claim, controversy or dispute arising under or related to this Lock-Up Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to its conflict of law principles. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Lock-Up Agreement or the transactions contemplated hereby may be brought in any federal or state court located in the Borough of Manhattan, the City of New York and State of New York, and the undersigned hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.

 

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6. Waiver of Jury Trial. THE UNDERSIGNED HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS LOCK-UP AGREEMENT OR THE SUBJECT MATTER HEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS LOCK-UP AGREEMENT, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE UNDERSIGNED ACKNOWLEDGES THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. THE UNDERSIGNED HEREBY FURTHER WARRANTS AND REPRESENTS THAT IT HAS CAREFULLY REVIEWED THIS WAIVER, AND THAT THE UNDERSIGNED KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.

 

7. Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted to be given pursuant to this Lock-Up Agreement shall be in writing and shall be delivered (a) in hand by person with written receipt of the person to whom such notice is intended; (b) by registered or certified mail, postage prepaid, return receipt requested; or (c) by a generally recognized commercial courier service or overnight delivery service, (Federal Express or UPS), for next business day delivery, postage prepaid, with delivery receipt requested. All notices sent in accordance with this Section 7 shall be deemed “Delivered” unless otherwise specified herein, the same day if delivered by hand in person with receipt and signature of the intended recipient or by an authorized officer of the intended recipient; if by registered or certified mail, three (3) business days after the same is deposited in the U.S. Mail; or if sent by a commercial courier service or overnight delivery service for next business day delivery, one (1) business day after payment and receipt of mailing. All written communications to the undersigned shall be sent to the address as set forth on the signature page hereto, or to such email address, facsimile number or address as subsequently modified by written notice given in accordance with this Section 7.

 

8. Cumulative Remedies. None of the rights, powers or remedies conferred upon the Purchaser on the one hand or the Company on the other hand shall be mutually exclusive, and each such right, power or remedy shall be cumulative and in addition to every other right, power or remedy, whether conferred by this Lock-Up Agreement or now or hereafter available at law, in equity, by statute or otherwise.

 

9. Beneficial Interest; Successors and Assigns. All the terms and provisions of this Lock-Up Agreement shall be binding upon the undersigned and the undersigned’s respective successors and assigns, and inure to the benefit of and be enforceable by the Company, the Purchaser and their respective successors and assigns, whether so expressed or not. The undersigned may not assign its rights or obligations hereof without the prior written consent of the Company and the Purchaser. This Lock-Up Agreement shall not inure to the benefit of or be enforceable by any third party person other than the Company and the Purchaser and their respective successors and assigns.

 

10. Entire Agreement. This Lock-Up Agreement contains the entire agreement among the undersigned, the Company and the Purchaser with respect to the subject matter hereof and, except as set forth below, this Lock-Up Agreement supersedes and replaces all other prior agreements, written or oral, among such parties with respect to the subject matter hereof. Notwithstanding the foregoing or anything to the contrary in this Lock-Up Agreement, this Lock-Up Agreement shall not supersede any confidentiality or other non-disclosure agreements that may be in place between the Company, the Purchaser and or the undersigned.

 

11. Severability. If any provision of this Lock-Up Agreement shall be found by any court of competent jurisdiction to be invalid or unenforceable, the parties hereby waive such provision to the extent that it is found to be invalid or unenforceable. Such provision shall, to the maximum extent allowable by law, be modified by such court so that it becomes enforceable, and, as modified, shall be enforced as any other provision hereof, all the other provisions hereof continuing in full force and effect.

 

12. Costs of Enforcement. If any party to this Agreement seeks to enforce its rights under this Agreement by legal proceedings, the non-prevailing party shall pay all costs and expenses incurred by the prevailing party, including, without limitation, all reasonable attorneys’ fees.

 

13. Termination. If Purchaser shall fail to complete the “Third Closing” (as defined in the Purchase Agreement) as contemplated by the Purchase Agreement (and subject to any agreement of the Company and the Purchaser to extend the date therefore), this Lock-Up Agreement shall terminate as of the date of such failure.

 

[Remainder of this Page Intentionally Left Blank. Authorized Signatures on Following Page]

 

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  Very truly yours the undersigned,
            
  CR CAPITAL HOLDINGS LLC
   
  By:
  Name:
  Title:
  Address:   
  Email:  

 

  4  

 

 

  Very truly yours the undersigned,
     
  Signature:  
  Name: Chad Miller
  Address:  
  Email:  

 

  5  

 

 

  Very truly yours the undersigned,
     
  Signature:  
  Name: Ryan Smith
  Address:  
 

Email:

 

 

  6  

 

 

  Very truly yours the undersigned,
                 
  WEALTH ENGINEERING LLC
   
  By:
  Name:
  Title:
  Address:  
  Email:  

 

  7  

 

 

  Very truly yours the undersigned,
        
  Signature:
  Name: Annette Raynor
  Address:  
  Email:  

 

  8  

 

 

  Very truly yours the undersigned,
     
  Signature:
  Name: Mario Romano
  Address:  
  Email:  

 

  9  

 

 

  Very truly yours the undersigned,
                
  PB TRADE LLC
   
  By:
  Name:
  Title:
  Address:  
  Email:  

 

  10  

 

 

  Very truly yours the undersigned,
        
  Signature:
  Name: Joseph Cammarata
  Address:  
  Email:  

 

  11  

 

 

  Very truly yours the undersigned,
               
  FREEDOM ENTERPRISES
   
  By:
  Name:
  Title:
  Address:  
  Email:  

 

  12  

 

 

  Very truly yours the undersigned,
     
  Signature:
  Name: Jeremy Roma
  Address:  
  Email:  

 

  13  

 

 

  Very truly yours the undersigned,
     
  Signature:  
  Name: William C. Kosoff
  Address:  
  Email:  

 

  14  

 

 

  Very truly yours the undersigned,
     
  Signature:
  Name: Brian Mcmullen
  Address:  
  Email:  

 

  15  

 

 

  Very truly yours the undersigned,
     
  Signature:
  Name: Jayme McWidner
  Address:  
  Email:  

 

  16  

 

 

  Very truly yours the undersigned,
   
  DBR CAPITAL, LLC
   
  By:
  Name: David B. Rothrock
  Title: Managing Member Executive
  Address: 1645 Kecks Road
     Breinigsville, PA 18031
  Email: dbr@rothrock.com

 

  with copies to:
  Morgan, Lewis & Bockius LLP
  1701 Market Street
  Philadelphia, Pennsylvania 19103-2921
  Attn: Michael J. Pedrick, Esq.

 

  17  

 

 

EXHIBIT 10.62

 

INVESTOR RIGHTS AGREEMENT

 

THIS INVESTOR RIGHTS AGREEMENT (this “Agreement”), is made as of the 27th day of April, 2020 by and among Investview, Inc. a Nevada corporation (the “Company”), and DBR Capital, LLC, a Pennsylvania limited liability company (the “Investor”).

 

RECITALS

 

WHEREAS, the Company and the Investor are parties to that certain Securities Purchase Agreement of even date herewith (the “Purchase Agreement”); and

 

WHEREAS, in order to induce the Company to enter into the Purchase Agreement and to induce the Investor to invest funds in the Company pursuant to the Purchase Agreement, the Investor and the Company hereby agree that this Agreement shall govern the rights of the Investor to cause the Company to register shares of Common Stock issuable to the Investor, to receive certain information from the Company, and to participate in future equity offerings by the Company, and shall govern certain other matters as set forth in this Agreement;

 

NOW, THEREFORE, the parties hereby agree as follows:

 

1. Definitions. For purposes of this Agreement:

 

1.1 “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including without limitation any general partner, managing member, officer, director or trustee of such Person, or any venture capital fund or registered investment company now or hereafter existing that is controlled by one or more general partners, managing members or investment adviser of, or shares the same management company or investment adviser with, such Person.

 

1.2 “Board of Directors” means the board of directors of the Company.

 

1.3 “Certificate of Incorporation” means the Company’s Certificate of Incorporation, as amended and/or restated from time to time.

 

1.4 “Common Stock” means shares of the Company’s common stock, par value $0.001 per share.

 

1.5 “Convertible Notes” means those certain Convertible Secured Promissory Notes issued by the Company to the Investor pursuant to the Purchase Agreement.

 

1.6 “Damages” means any loss, damage, claim or liability (joint or several) to which a party hereto may become subject under the Securities Act, the Exchange Act, or other federal or state law, insofar as such loss, damage, claim or liability (or any action in respect thereof) arises out of or is based upon: (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement of the Company, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (ii) an omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (iii) any violation or alleged violation by the indemnifying party (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law.

 

1.7 “Derivative Securities” means any securities or rights convertible into, or exercisable or exchangeable for (in each case, directly or indirectly), Common Stock, including options, warrants and the convertible notes issued pursuant to the Purchase Agreement.

 

1.8 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

1.9 “Excluded Registration” means (i) a registration relating to the sale or grant of securities to employees of the Company or a subsidiary pursuant to a stock option, stock purchase, equity incentive or similar plan; (ii) a registration relating to an SEC Rule 145 transaction; (iii) a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities; or (iv) a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered.

 

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1.10 “Form S-1” means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC.

 

1.11 “Form S-3” means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently adopted by the SEC that permits forward incorporation of substantial information by reference to other documents filed by the Company with the SEC.

 

1.12 “GAAP” means generally accepted accounting principles in the United States as in effect from time to time.

 

1.13 “IPO” means the Company’s first underwritten public offering of its Common Stock under the Securities Act.

 

1.14 Investor Director” means each of the directors of the Company designated by the Investor pursuant to Sections 1.2(a) and 1.2(b) of the Voting Agreement.

 

1.15 Key Employee” means any executive-level employee (including, division director and vice president-level positions) as well as any employee who, either alone or in concert with others, develops, invents, programs, or designs any Company Intellectual Property (as defined in the Purchase Agreement).

 

1.16 “New Securities” means, collectively, equity securities of the Company, whether or not currently authorized, as well as rights, options, or warrants to purchase such equity securities, or securities of any type whatsoever that are, or may become, convertible or exchangeable into or exercisable for such equity securities.

 

1.17 “Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.

 

1.18 “Registrable Securities” means (i) the Common Stock issuable or issued upon conversion of the Convertible Note; (ii) any Common Stock, or any Common Stock issued or issuable (directly or indirectly) upon conversion and/or exercise of any other securities of the Company, acquired by the Investor after the date hereof; and (iii) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the shares referenced in clauses (i) and (ii) above.

 

1.19 “Registrable Securities then outstanding” means the number of shares determined by adding the number of shares of outstanding Common Stock that are Registrable Securities and the number of shares of Common Stock issuable (directly or indirectly) pursuant to then exercisable and/or convertible securities that are Registrable Securities.

 

1.20 “SEC” means the Securities and Exchange Commission.

 

1.21 “SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.

 

1.22 “SEC Rule 145” means Rule 145 promulgated by the SEC under the Securities Act.

 

1.23 “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

1.24 “Selling Expenses” means all underwriting discounts, selling commissions, and stock transfer taxes applicable to the sale of Registrable Securities, and fees and disbursements of counsel for any Holder, except for the fees and disbursements of the Investor Counsel borne and paid by the Company as provided in Subsection 2.3.

 

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1.25 “Voting Agreement” means that certain Voting Agreement, dated as of the date hereof, by and among the Company, the Investor and the other parties thereto.

 

2. Registration Rights. The Company covenants and agrees as follows:

 

2.1 Mandatory Registration.

 

(a) The Company shall prepare, and, as soon as practicable, but in no event later than thirty (30) days from the date hereof, file with the SEC a registration statement on Form S-1 (or Form S-3 if available) covering the resale with respect to all Registrable Securities of Investor issued or issuable upon conversion of the Convertible Notes and use its commercially reasonable efforts to cause such registration statement to become effective and keep such registration statement effective for a period of up to one hundred twenty (120) days following the tenth (10th) anniversary of the date hereof or, if earlier, until the distribution contemplated in the registration statement has been completed; provided, however, that period shall be extended for a period of time equal to the period the Investor refrains, at the request of an underwriter of Common Stock (or other securities) of the Company, from selling any securities included in such registration. If such registration statement (or any successor registration statement) shall expire, the Company shall, prior to such expiration, file a replacement registration statement that is in compliance with this Subsection 2.1(a). If at any time and from time to time the Investor is issued any additional Registrable Securities, the Company shall prepare and file a registration statementwith respect to such additional Registrable Securities in compliance with this Subsection 2.1(a).

 

(b) In furtherance of Subsection 2.1(a), the Company shall, as expeditiously as reasonably possible:

 

(i) prepare and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with such registration statement, as may be necessary to comply with the Securities Act in order to enable the disposition of all securities covered by such registration statement;

 

(ii) furnish to the Investor such numbers of copies of a prospectus, including a preliminary prospectus, as required by the Securities Act, and such other documents as the Investor may reasonably request in order to facilitate their disposition of its Registrable Securities;

 

(iii) register and qualify the securities covered by such registration statement under such other securities or blue-sky laws of such jurisdictions as shall be reasonably requested by the Investor; provided that the Company shall not be required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

 

(iv) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the underwriter(s) of such offering;

 

(v) use its commercially reasonable efforts to cause all such Registrable Securities covered by such registration statement to be listed on a national securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by the Company are then listed;

 

(vi) provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;

 

(vii) promptly make available for inspection by the Investor, any managing underwriter(s) participating in any disposition pursuant to such registration statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the Investor, all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company’s officers, directors, employees, and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate due diligence in connection therewith;

 

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(viii) notify the Investor, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed; and

 

(ix) after such registration statement becomes effective, notify the Investor of any request by the SEC that the Company amend or supplement such registration statement or prospectus.

 

In addition, the Company shall ensure that, at all times after any registration statement covering a public offering of securities of the Company under the Securities Act shall have become effective, its insider trading policy shall provide that the Company’s directors may implement a trading program under Rule 10b5-1 of the Exchange Act.

 

2.2 Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2 with respect to the Registrable Securities that the Investor shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as is reasonably required to effect the registration of the Registrable Securities.

 

2.3 Expenses of Registration. All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or qualifications pursuant to Section 2, including all registration, filing, and qualification fees; printers’ and accounting fees; fees and disbursements of counsel for the Company, and the reasonable fees and disbursements of counsel for the Investor (“Investor Counsel”), shall be borne and paid by the Company.

 

2.4 Indemnification. If any Registrable Securities are included in a registration statement under this Section 2:

 

(a) To the extent permitted by law, the Company will indemnify and hold harmless the Investor, and the partners, members, officers, directors, and stockholders of the Investor; legal counsel and accountants for the Investor; any underwriter (as defined in the Securities Act) for the Investor; and each Person, if any, who controls the Investor or underwriter within the meaning of the Securities Act or the Exchange Act, against any Damages, and the Company will pay to the Investor, underwriter, controlling Person, or other aforementioned Person any legal, including reasonable attorney’s fees, or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Subsection 2.4 (a) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed, nor shall the Company be liable for any Damages to the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of the Investor, underwriter, controlling Person, or other aforementioned Person expressly for use in connection with such registration.

 

(b) To the extent permitted by law, the Investor, severally and not jointly, will indemnify and hold harmless the Company, and each of its directors, each of its officers who has signed the registration statement, each Person (if any), who controls the Company within the meaning of the Securities Act, legal counsel and accountants for the Company, any underwriter (as defined in the Securities Act), the Investor, and any controlling Person of any such underwriter or the Investor, against any Damages, in each case only to the extent that such Damages arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of the Investor expressly for use in connection with such registration; and the Investor will pay to the Company and each other aforementioned Person any legal, including reasonable attorney’s fees, or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Subsection 2.4 (b) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Investor, which consent shall not be unreasonably withheld, conditioned or delayed; and provided further that in no event shall the aggregate amounts payable by the Investor by way of indemnity or contribution under Subsections 2.4 (b) and 2.4(d) exceed the proceeds from the offering received by the Investor (net of any Selling Expenses paid by the Investor), except in the case of fraud or willful misconduct by the Investor.

 

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(c) Promptly after receipt, but no later than ten (10) business days after reciept by an indemnified party under this Subsection 2.4 of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Subsection 2.4, give the indemnifying party notice of the commencement thereof. The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such action. The failure to give notice to the indemnifying party within a reasonable time of the commencement of any such action as set forth herein this Subsection 2.4, shall relieve such indemnifying party of any liability to the indemnified party under this Subsection 2.4, to the extent that such failure materially prejudices the indemnifying party’s ability to defend such action. The failure to give notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Subsection 2.4.

 

(d) To provide for just and equitable contribution to joint liability under the Securities Act in any case in which either: (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Subsection 2.4 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Subsection 2.4 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is provided under this Subsection 2.4, then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, legal expenses, including attorney’s fees, or other expenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, legal expenses, including attorney’s fees, or other expenses, as well as to reflect any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact, or the omission of a material fact, relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case (x) the Investor will not be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by the Investor pursuant to such registration statement, and (y) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided further that in no event shall the Investor’s liability pursuant to this Subsection 2.4 (d), when combined with the amounts paid or payable by the Investor pursuant to Subsection 2.4 (b), exceed the proceeds from the offering received by the Investor (net of any Selling Expenses paid by the Investor), except in the case of willful misconduct or fraud by the Investor.

 

(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

 

(f) Unless otherwise superseded by an underwriting agreement entered into in connection with the underwritten public offering, the obligations of the Company and the Investor under this Subsection 2.4 shall survive the completion of any offering of Registrable Securities in a registration under this Section 2, and otherwise shall survive the termination of this Agreement.

 

2.5 Reports Under Exchange Act. With a view to making available to the Investor the benefits of SEC Rule 144 and any other rule or regulation of the SEC that may at any time permit the Investor to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company shall:

 

(a) make and keep available adequate current public information, as those terms are understood and defined in SEC Rule 144, at all times;

 

(b) use commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after the Company has become subject to such reporting requirements); and

 

(c) furnish to the Investor, so long as the Investor owns any Registrable Securities, forthwith upon request (i) to the extent accurate, a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144, the Securities Act, and the Exchange Act, or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after the Company so qualifies); and (ii) such other information as may be reasonably requested in availing the Investor of any rule or regulation of the SEC that permits the selling of any such securities without registration (at any time after the Company has become subject to the reporting requirements under the Exchange Act) or pursuant to Form S-3 (at any time after the Company so qualifies to use such form).

 

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3. Information Rights.

 

3.1 Delivery of Company Information. The Company shall deliver to the Investor each of the following; provided that the Investor may at any time and from time to time direct the Company to, for the period specified by the Investor, discontinue delivering all or any portion of the following:

 

(a) as soon as practicable, but in any event within ninety (90) days after the end of each fiscal year of the Company (i) a balance sheet as of the end of such year, (ii) statements of income and of cash flows for such year, and a comparison between (x) the actual amounts as of and for such fiscal year and (y) the comparable amounts for the prior year and as included in the Budget (as defined in Subsection 3.1(d)) for such year, with an explanation of any material differences between such amounts and a schedule as to the sources and applications of funds for such year, and (iii) a statement of stockholders’ equity as of the end of such year, all such financial statements audited and certified by Haynie & Company (or such other independent public accountant approved by the Board of Directors, including each of the Investor Directors);

 

(b) as soon as practicable, but in any event within forty-five (45) days after the end of each of the first three (3) quarters of each fiscal year of the Company, unaudited statements of income and cash flows for such fiscal quarter, and an unaudited balance sheet and a statement of stockholders’ equity as of the end of such fiscal quarter, all prepared in accordance with GAAP (except that such financial statements may (i) be subject to normal year-end audit adjustments; and (ii) not contain all notes thereto that may be required in accordance with GAAP);

 

(c) as soon as practicable, but in any event within fifteen (15) days of the end of each month, an unaudited income statement for such month, and an unaudited balance sheet as of the end of such month, all prepared in accordance with GAAP (except that such financial statements may (i) be subject to normal year-end audit adjustments and (ii) not contain all notes thereto that may be required in accordance with GAAP);

 

(d) as soon as practicable, but in any event thirty (30) days before the end of each fiscal year, a budget and business plan for the next fiscal year (collectively, the “Budget”), approved by the Board of Directors (including each of the Investor Directors) and prepared on a monthly basis, including balance sheets, income statements, and statements of cash flow for such months and, promptly after prepared, any other budgets or revised budgets prepared by the Company;

 

(e) with respect to the financial statements called for in Subsection 3.1(a), Subsection 3.1(b) and Subsection 3.1(c), an instrument executed by the chief financial officer and chief executive officer of the Company certifying that such financial statements were prepared in accordance with GAAP consistently applied with prior practice for earlier periods (except as otherwise set forth in Subsection 3.1(b) and Subsection 3.1(c)) and fairly present the financial condition of the Company and its results of operation for the periods specified therein;

 

(f) promptly following the occurrence thereof, notice of any material events or occurrences with respect to the Company or any of its subsidiaries, including material claims, proceedings, suits or actions (whether threatened or materialized), loss of or termination of material contracts or customers, material events that with the passage of time will materially impact future operations of the Company (or its subsidiary companies) or any facility or property where Company conducts its operations, loss of key employees, material or adverse changes with respect to regulatory or reporting matters and material defaults under any credit facilities, and any other event or occurrence that would reasonably be expected to cause a material adverse effect with respect to the Company or any of its subsidiaries; and

 

(g) such other information relating to the financial condition, business, prospects, or corporate affairs of the Company as the Investor may from time to time reasonably request.

 

If, for any period, the Company has any subsidiary whose accounts are consolidated with those of the Company, then in respect of such period all financial statements (including, for the avoidance of doubt, annual, quarterly and monthly financial statements) delivered pursuant to the foregoing sections shall include both the consolidated financial statements and consolidating financial statements of the Company and all such consolidated subsidiaries.

 

3.2 Inspection. The Company shall permit the Investor, at the Investor’s expense, to visit and inspect the Company’s properties; examine its books of account and records; and discuss the Company’s affairs, finances, and accounts with its officers, during normal business hours of the Company as may be reasonably requested by the Investor.

 

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3.3 Confidentiality. The Investor agrees that the Investor will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement (including notice of the Company’s intention to file a registration statement), unless such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of this Subsection 3.3 by the Investor), (b) is or has been independently developed or conceived by the Investor without use of the Company’s confidential information, or (c) is or has been made known or disclosed to the Investor by a third party without a breach of any obligation of confidentiality such third party may have to the Company; provided, however, that the Investor may disclose confidential information (i) to its attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring its investment in the Company; (ii) to any prospective purchaser of any Registrable Securities from the Investor, if such prospective purchaser agrees to be bound by the provisions of this Subsection 3.3; (iii) to any existing or prospective Affiliate, partner, member, stockholder, or wholly owned subsidiary of the Investor in the ordinary course of business, provided that the Investor informs such Person that such information is confidential and directs such Person to maintain the confidentiality of such information; or (iv) as may otherwise be required by law, regulation, rule, court order or subpoena, provided that the Investor promptly notifies the Company of such disclosure and takes reasonable steps to minimize the extent of any such required disclosure.

 

4. Rights to Future Stock Issuances.

 

4.1 Right of First Offer. Subject to the terms and conditions of this Subsection 4.1 and applicable securities laws, if the Company proposes to offer or sell any New Securities, the Company shall first offer such New Securities to the Investor. The Investor shall be entitled to apportion the right of first offer hereby granted to it in such proportions as it deems appropriate, among (i) itself, (ii) its Affiliates and (iii) its beneficial interest holders, such as limited partners, members or any other Person having “beneficial ownership,” as such term is defined in Rule 13d-3 promulgated under the Exchange Act, of the Investor (“Investor Beneficial Owners”).

 

(a) The Company shall give notice (the “Offer Notice”) to the Investor, stating (i) its bona fide intention to offer such New Securities, (ii) the number of such New Securities to be offered, and (iii) the price and terms, if any, upon which it proposes to offer such New Securities.

 

(b) By notification to the Company within thirty (30) days after the Offer Notice is given, the Investor may elect to purchase or otherwise acquire, at the price and on the terms specified in the Offer Notice, up to that portion of such New Securities which equals the proportion that the Common Stock then held by the Investor (including all shares of Common Stock then issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of any Derivative Securities then held by the Investor) bears to the total Common Stock of the Company then outstanding (assuming full conversion and/or exercise, as applicable, of all Derivative Securities then outstanding). The closing of any sale pursuant to this Subsection 4.1(b) shall occur within the later of thirty (30) days of the date that the Offer Notice is given and the date of initial sale of New Securities pursuant to Subsection 4.1 (c).

 

(c) If all New Securities referred to in the Offer Notice are not elected to be purchased or acquired as provided in Subsection 4.1(b), the Company may, during the thirty (30) day period following the expiration of the periods provided in Subsection 4.1(b), offer and sell the remaining unsubscribed portion of such New Securities to any Person or Persons at a price not less than, and upon terms no more favorable to the offeree than, those specified in the Offer Notice. If the Company does not enter into an agreement for the sale of the New Securities within such period, or if such agreement is not consummated within thirty (30) days of the execution thereof, the right provided hereunder shall be deemed to be revived and such New Securities shall not be offered unless first reoffered to the Investor in accordance with this Subsection 4.1.

 

5. Additional Covenants.

 

5.1 Insurance. To the extent not already in place, the Company shall obtain, within ninety (90) days of the date hereof, from financially sound and reputable insurers (i) Directors and Officers liability insurance, (ii) term “key-person” insurance on Joseph Cammarata and (iii) general commercial liability property insurance with respect to the Company and its subsidiaries, each in an amount and on terms and conditions satisfactory to the Board of Directors, including each of the Investor Directors, and will thereafter maintain such insurance policies until such time as the Board of Directors, including at least one Investor Director, determines that such insurance should be discontinued. The key-person policy shall name the Company as loss payee, and neither policy shall be cancelable by the Company without prior approval by the Board of Directors, including each of the Investor Directors. Notwithstanding any other provision of this Section 5.1 to the contrary, for so long as an Investor Director is serving on the Board of Directors, the Company shall not cease to maintain a Directors and Officers liability insurance policy in an amount of at least $2 million during the remainder of 2020 and $3 million during 2021 and thereafter unless approved by each Investor Director, and the Company, shall annually, within ninety (90) days after the end of each fiscal year of the Company, deliver to the Investor a certification that such a Directors and Officers liability insurance policy remains in effect. For clarification, Company at no time after the insurance is in place as required by this Section 5.1, allow such insurance to lapse without the approval of the Board of Directors, including at least one Investor Director.

 

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5.2 Employee Agreements. Within sixty (60) days of the date hereof, the Company will cause (i) each Person now or hereafter employed by it or by any subsidiary (or engaged by the Company or any subsidiary as a consultant/independent contractor) with access to confidential information and/or trade secrets to enter into a nondisclosure and proprietary rights assignment agreement; and (ii) each Key Employee to enter into a one (1) year noncompetition and nonsolicitation agreement, substantially in the form approved by the Board of Directors, including each of the Investor Directors. In addition, the Company shall not amend, modify, terminate, waive, or otherwise alter, in whole or in part, any of the above-referenced agreements or any restricted stock agreement between the Company and any employee, without the consent of the Investor Directors.

 

5.3 Matters Requiring Investor Director Approval. So long as the Investor is entitled to designate an Investor Director, the Company hereby covenants and agrees with the Investor that it shall not, without approval of the Board of Directors, which approval must include the affirmative vote of at least one Investor Director:

 

(a) liquidate, dissolve or wind-up the business and affairs of the Company, effect any merger or consolidation, any sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, of all or substantially all the assets of the Company, or any other similar transaction, or consent to any of the foregoing;

 

(b) amend, alter or repeal any provision of the Certificate of Incorporation or Bylaws of the Company;

 

(c) create, or authorize the creation of, or issue or obligate itself to issue shares of, any additional class or series of capital stock, or increase the authorized number of shares of any additional class or series of capital stock of the Company;

 

(d) purchase or redeem (or permit any subsidiary to purchase or redeem) or pay or declare any dividend or make any distribution on, any shares of capital stock of the Company other than repurchases of stock from former employees, officers, directors, consultants or other persons who performed services for the Company or any subsidiary in connection with the cessation of such employment or service at the lower of the original purchase price or the then-current fair market value thereof;

 

(e) create, or authorize the creation of, or issue, or authorize the issuance of any debt security or create any lien or security interest (except for purchase money liens or statutory liens of landlords, mechanics, materialmen, workmen, warehousemen and other similar persons arising or incurred in the ordinary course of business) or incur other indebtedness for borrowed money, including but not limited to obligations and contingent obligations under guarantees, or permit any subsidiary to take any such action with respect to any debt security lien, security interest or other indebtedness for borrowed money, other than equipment leases or trade payables incurred in the ordinary course of business;

 

(f) create, or hold capital stock in, any subsidiary that is not wholly owned (either directly or through one or more other subsidiaries) by the Company, or permit any subsidiary to create, or authorize the creation of, or issue or obligate itself to issue, any shares of any class or series of capital stock, or sell, transfer or otherwise dispose of any capital stock of any direct or indirect subsidiary of the Company, or permit any direct or indirect subsidiary to sell, lease, transfer, exclusively license or otherwise dispose (in a single transaction or series of related transactions) of all or substantially all of the assets of such subsidiary;

 

(g) increase or decrease the authorized number of directors constituting the Board of Directors;

 

(h) make any loan or advance to, or own any stock or other securities of, any subsidiary or other corporation, partnership, or other entity other than subsidiaries existing on the date hereof;

 

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(i) make any loan or advance to any Person, including, without limitation, any employee or director of the Company or any subsidiary, except advances and similar expenditures in the ordinary course of business or under the terms of an employee stock or option plan approved by the Board of Directors which includes the affirmative vote of at least one Investor Director;

 

(j) guarantee, directly or indirectly, any indebtedness except for trade accounts of the Company or any subsidiary arising in the ordinary course of business;

 

(k) otherwise enter into or be a party to any transaction with any director, officer, or employee of the Company or any “associate” (as defined in Rule 12b-2 promulgated under the Exchange Act) of any such Person, including without limitation any “management bonus” or similar plan providing payments to employees in connection with a change of control, except for transactions contemplated by this Agreement and transactions made in the ordinary course of business and pursuant to reasonable requirements of the Company’s business and upon fair and reasonable terms that are approved by the Investor Directors;

 

(l) enter into any agreement or engage in any transaction with a value (whether payable to or by the Company) in excess of $25,000;

 

(m) hire, terminate, or change the compensation of the executive officers, member of the Board of Directors or Key Employees, including approving any option grants or stock awards to executive officers, members of the Board of Directors or Key Employees;

 

(n) change the principal business of the Company, enter new lines of business, or exit the current line of business;

 

(o) sell, assign, license, pledge, or encumber any assets of the Company, including including but not limited to technology, software, patents or intellectual property, other than sales of inventory in the ordinary course of business and licenses granted in the ordinary course of business;

 

(p) enter into any corporate strategic relationship involving the payment, contribution, or assignment by the Company or to the Company of money or assets greater than $25,000;

 

(q) alter the Company’s tax status or make any material determination with respect to the Company’s tax obligations;

 

(r) effect transfers, including transfers of cash or assets, or enter into any agreement or engage in any other transaction between the Company and any Company subsidiary or between Company subsidiaries;

 

(s) make any change or determination with respect to any material or adverse compliance matters, or take any action that materially or adversely affects the Company’s compliance regime;

 

(t) make any change or determination with respect to any material or adverse regulatory or reporting matters of the Company, or take any action that materially or adversely affects the Company’s regulatory or reporting regime, or settle any material litigation or dispute;

 

(u) permit any subsidiary to do any of the foregoing.

 

5.4 Board Matters. Unless otherwise determined by the vote of a majority of the directors then in office (which shall include the Investor Directors), the Board of Directors shall meet at least monthly unless approved by each Investor Director, in accordance with an agreed-upon schedule. The Company shall reimburse the non-employee directors for all reasonable out-of-pocket travel expenses incurred (consistent with the Company’s travel policy) in connection with attending meetings of the Board of Directors. The Company shall cause to be established, as soon as practicable after such request, and will maintain, an (i) audit and (ii) compensation committee, each of which shall consist solely of non-management directors. Each non-employee director shall be entitled in such person’s discretion to be a member of any committee of the Board of Directors.

 

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5.5 Successor Indemnification. If the Company or any of its successors or assignees consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity of such consolidation or merger, then to the extent necessary, proper provision shall be made so that the successors and assignees of the Company assume the obligations of the Company with respect to indemnification of members of the Board of Directors as in effect immediately before such transaction, whether such obligations are contained in the Company’s Bylaws, the Certificate of Incorporation, or elsewhere, as the case may be.

 

5.6 Indemnification Matters. The Company hereby acknowledges that one (1) or more of the directors nominated to serve on the Board of Directors by the Investors (each an “Investor Director”) may have certain rights to indemnification, advancement of expenses and/or insurance provided by one or more of the Investors and certain of their Affiliates (collectively, the “Investor Indemnitors”). The Company hereby agrees (a) that it is the indemnitor of first resort (i.e., its obligations to any such Investor Director are primary and any obligation of the Investor Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by such Investor Director are secondary), (b) that it shall be required to advance the full amount of expenses incurred by such Investor Director and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement by or on behalf of any such Investor Director to the extent legally permitted and as required by the Company’s Certificate of Incorporation or Bylaws of the Company (or any agreement between the Company and such Investor Director), without regard to any rights such Investor Director may have against the Investor Indemnitors, and, (c) that it irrevocably waives, relinquishes and releases the Investor Indemnitors from any and all claims against the Investor Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by the Investor Indemnitors on behalf of any such Investor Director with respect to any claim for which such Investor Director has sought indemnification from the Company shall affect the foregoing and the Investor Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Investor Director against the Company. The Investor Directors and the Investor Indemnitors are intended third-party beneficiaries of this Subsection 5.6 and shall have the right, power and authority to enforce the provisions of this Subsection 5.6 as though they were a party to this Agreement.

 

5.7 Right to Conduct Activities. The Company hereby agrees and acknowledges that DBR Capital, LLC (together with its Affiliates) is a professional investment organization, and as such reviews the business plans and related proprietary information of many enterprises, some of which may compete directly or indirectly with the Company’s business (as currently conducted or as currently propose to be conducted). The Company hereby agrees that, to the extent permitted under applicable law, DBR Capital, LLC (and its Affiliates) shall not be liable to the Company for any claim arising out of, or based upon, (i) the investment by DBR Capital, LLC (or its Affiliates) in any entity competitive with the Company, or (ii) actions taken by any partner, officer, employee or other representative of DBR Capital, LLC (or its Affiliates) to assist any such competitive company, whether or not such action was taken as a member of the board of directors of such competitive company, an investor or otherwise, and whether or not such action has a detrimental effect on the Company; provided, however, that the foregoing shall not relieve (x) the Investor from liability associated with the unauthorized disclosure of the Company’s confidential information obtained pursuant to this Agreement, or (y) any director or officer of the Company from any liability associated with his or her fiduciary duties to the Company.

 

6. Miscellaneous.

 

6.1 Successors and Assigns. All the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective parties hereto, the successors and permitted assigns of the Investor and the successors of the Company, whether so expressed or not. None of the parties hereto may assign its rights or obligations hereof without the prior written consent of the other party, except that the Investor may, without the prior consent of the Company, assign its rights to any of its Affiliates that purchases Registrable Securities or to which the Investor transfers Registrable Securities. This Agreement shall not inure to the benefit of or be enforceable by any other third party Person.

 

6.2 Counterparts; Effectiveness. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, with the same effect as if all parties had signed the same document. All such counterparts (including counterparts delivered by facsimile, email or other electronic format) shall be deemed an original, shall be construed together and shall constitute one and the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto.

 

6.3 Headings. The headings of the Sections and paragraphs of this Agreement have been inserted for convenience of reference only and do not constitute a part of this Agreement and are not to be considered in construing or interpreting this Agreement.

 

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6.4 Notices.

 

(a) All notices, demands, requests, consents, approvals, and other communications required or permitted to be given pursuant to this Agreement shall be in writing and shall be delivered (a) in hand by person with written receipt of the person to whom such notice is intended; (b) by registered or certified mail, postage prepaid, return receipt requested; or (c) by a generally recognized commercial courier service or overnight delivery service, (Federal Express or UPS), for next business day delivery, postage prepaid, with delivery receipt requested. All notices sent in accordance with this Subsection 6.4 shall be deemed “Delivered” unless otherwise specified herein, the same day if delivered by hand in person with receipt and signature of the intended recipient or by an authorized officer of the intended recipient; if by registered or certified mail, three (3) business days after the same is deposited in the U.S. Mail; or if sent by a commercial courier service or overnight delivery service for next business day delivery, one (1) business day after payment and receipt of mailing. All communications shall be sent to the respective parties at their address as set forth on the signature pages hereto, or to such email address, facsimile number or address as subsequently modified by written notice given in accordance with this Subsection 6.4.

 

(b) Consent to Electronic Notice. Notwithstanding any contrary language set forth in subsection (a) immediately above, the Investor consents to the delivery of any stockholder notice by electronic transmission pursuant to the Nevada Revised Statutes, Title 7, Chapter 78, Section 370 (or any successor thereto) at the electronic mail address or the facsimile number set forth below such Investor’s name on the Schedules hereto, as updated from time to time by notice to the Company, or as on the books of the Company. The Investor agrees to promptly notify the Company of any change in such stockholder’s electronic mail address, and that failure to do so shall not affect the foregoing.

 

6.5 Amendments and Waivers. Any term of this Agreement may be amended, modified or terminated and the observance of any term of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written consent of the Company and the Investor. No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, condition, or provision.

 

6.6 Severability. If any provision of this Agreement shall be found by any court of competent jurisdiction to be invalid or unenforceable, the parties hereby waive such provision to the extent that it is found to be invalid or unenforceable. Such provision shall, to the maximum extent allowable by law, be modified by such court so that it becomes enforceable, and, as modified, shall be enforced as any other provision hereof, all the other provisions hereof continuing in full force and effect. However, if any such invalid or unenforceable provision cannot by modified to become enforceable, then such provision(s) shall be stricken from the Agreement in its/their entirety and all the other provisions hereof shall be continuing in full force and effect.

 

6.7 Aggregation of Stock. All shares of Registrable Securities held or acquired by Affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement and such Affiliated persons may apportion such rights as among themselves in any manner they deem appropriate.

 

6.8 Entire Agreement. This Agreement, the Purchase Agreement and that certain Investor Rights Agreement, dated as of the date hereof, by and between the Company and the Investor constitute the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and this agreement supersedes and replaces all other prior agreements, written or oral, among the parties hereto with respect to the subject matter hereof.

 

6.9 Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to its conflict of law principles. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby may be brought in any federal or state court located in the Borough of Manhattan, the City of New York and State of New York, and each of the parties hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.

 

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Waiver of Jury Trial: EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

 

6.10 Delays or Omissions. No delay or omission to exercise any right, power, or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power, or remedy of such nonbreaching or nondefaulting party, nor shall it be construed to be a waiver of or acquiescence to any such breach or default, or to any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. All remedies, whether under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

 

6.11 Remedies; Cumulative. The parties acknowledge that a breach by either party of its obligations hereunder will cause irreparable harm to the other party, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the parties acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by a party of the provisions of this Agreement, that the non-defaulting party shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein or allowed by law, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required. None of the rights, powers or remedies conferred upon the parties pursuant to the terms and provisions of this Agreement shall be mutually exclusive, and each such right, power or remedy shall be cumulative and in addition to every other right, power or remedy, whether conferred by this Agreement or now or hereafter available at law, in equity, by statute or otherwise.

 

6.12 Costs of Enforcement. If any party to this Agreement seeks to enforce its rights under this Agreement by legal proceedings, the non-prevailing party shall pay all costs and expenses incurred by the prevailing party, including, without limitation, all reasonable attorneys’ fees.

 

6.13 Further Assurances. At any time or from time to time after the date hereof, the parties agree to cooperate with each other, and at the request of any other party, and without any additional consideration, the parties agree to provide further information or assurances; execute and deliver such additional agreements, documents and instruments; and take such other actions and do such other things, as may be necessary or appropriate to carry out the terms and provisions of this Agreement, the intent of the parties and give effect to the transactions contemplated hereby.

 

[Remainder of Page Intentionally Left Blank. Authorized Signatures on Following Page]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

  INVESTVIEW, INC.
     
  By:  
  Name: Joseph Cammarata
  Title: Chief Executive Officer

 

  Address: Investview, Inc.
    234 Industrial Way West
    Building A. Suite 202
    Eatontown, NJ 07724
  Email: joe@investview.com

 

  With a copy to:
     
    Michael Best & Friedrish LLP
    790 N. Water Street
    Suite2500
    Milwaukee, WI 53202
    Attention: Kevin C. Timken

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

  INVESTOR:
   
  DBR CAPITAL, LLC
     
  By:  
  Name: David B. Rothrock
  Title: Managing Member Executive

 

Address: 1645 Kecks Road
    Breinigsville, PA 18031
  Email: dbr@rothrock.com

 

  with copies to:
     
    Morgan, Lewis & Bockius LLP
    1701 Market Street
    Philadelphia, Pennsylvania 19103-2921
    Attn: Michael J. Pedrick, Esq.

 

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EXHIBIT 10.63

 

CONVERTIBLE SECURED PROMISSORY NOTE

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.

 

Principal Amount: $1,300,000 Issue Date: April 27, 2020

 

CONVERTIBLE SECURED PROMISSORY NOTE

 

FOR VALUE RECEIVED, Investview, Inc., a Nevada corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of DBR Capital, LLC, a Pennsylvania limited liability company, or its registered assigns (the “Holder”) the sum of $1,300,000 together with all accrued interest thereon as provided in this Note. The aggregate unpaid principal amount of the Note, all accrued and unpaid interest, and all other amounts payable under this Note shall be due and payable on April 27, 2030 (the “Maturity Date”), unless otherwise provided herein. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase Agreement dated as of April 27, 2020, pursuant to which this Note was originally issued (the “Purchase Agreement”).

 

ARTICLE I. BASIC TERMS

 

1.1 Interest Rate. The unpaid principal balance of this Note shall bear interest at the rate of twenty percent (20%) per annum (the “Interest Rate”) from the date hereof (the “Issue Date”) until the same shall be paid in full, whether at maturity or upon acceleration or by prepayment or otherwise; provided that if the Borrower fails to make two or more Interest Payments (as defined herein) when due and payable, the Borrower shall pay interest on the unpaid principal balance hereof at the rate of twenty-five percent (25%) per annum (the “Penalty Interest Rate”) from the date of the second missed Interest Payment until the aggregate unpaid principal amounts of this Note shall be paid in full, whether at maturity or upon acceleration or by prepayment or otherwise. Interest shall be computed on the basis of a 360 day year and the actual number of days elapsed. Interest shall commence accruing on the Issue Date.

 

1.2 Payments. Interest shall be payable monthly in arrears to the Holder on the first day of each month (each, a “Payment Date”) commencing on the first such proceeding month to occur after the Issue Date provided such date is at least 30 days after the Issue Date (each, an “Interest Payment”). For the avoidance of doubt, the first Interest Payment shall include all accrued but unpaid interest from the Issue Date to the date of such Interest Payment. All payments due hereunder shall be made in lawful money of the United States of America. All payments shall be made at such address or to such account as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note.

 

1.3 Default Interest Rate. Upon the failure to pay any amount of principal or interest on this Note when due, this Note shall bear interest at the Interest Rate or Penalty Interest Rate, as applicable, plus five percent (5%) per annum from the due date thereof until the same is paid (“Default Interest”).

 

1.4 Prepayment. This Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein.

 

1.5 Security Agreement. The Borrower’s performance of its obligations hereunder is secured by a first priority security interest in the collateral specified in that certain Security Agreement, dated as of April 27, 2020, by and among the Borrower, SafeTek, LLC, a Utah Limited Liability Company and the Holder.

 

ARTICLE II. CONVERSION RIGHTS

 

2.1 Conversion Rights.

 

(a) Holder Conversion Right. The Holder shall have the right from time to time, and at any time during the period beginning on the Issue Date and ending on the Maturity Date, to convert all or any part of the outstanding and unpaid principal amount and any accrued and unpaid interest of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”) determined as provided herein (a “Holder Conversion”). The number of shares of Common Stock to be issued upon each Holder Conversion shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect. The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note on the Conversion Date, plus (3) Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2).

 

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(b) Borrower Conversion Right. The Borrower shall have the right from time to time during the period beginning on the Conversion Trigger Date and ending on the thirtieth (30th) day following the Conversion Trigger Date, to convert all or any part of the outstanding and unpaid principal amount and any accrued and unpaid interest of this Note into fully paid and non-assessable shares of common stock of the Company (the “Common Stock”), as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the Conversion Price (a “Borrower Conversion” and, together with any Holder Conversion, a “Conversion”). The number of shares of Common Stock to be issued upon each Borrower Conversion of this Note shall be determined by dividing the Conversion Amount by the applicable Conversion Price then in effect. The term “Conversion Trigger Date” means the date on which both of the following conditions are satisfied (i) the Trading Price (as defined below) for the Common Stock is equal to or greater than the minimum trade price of $0.14 per share for thirty (30) consecutive Trading Days (as defined below) and (ii) the minimum average daily volume of the Common Stock is at least 1,000,000 shares per day during such thirty (30) consecutive Trading Day period commencing at least twenty-four (24) months after the date hereof. “Trading Price” means, for any security as of any date, the lowest minimum trade price of the Common Stock on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”) as reported by a reliable reporting service designated by the Holder (i.e. Bloomberg) or, if the OTC is not the principal trading market for such security, the lowest minimum trade price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no lowest minimum trade price of such security is available in any of the foregoing manners, then such Borrower Conversion right shall be disallowed. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTC, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.

 

2.2 Conversion Price.

 

(a) Initial Conversion Price. The conversion price (subject to adjustment as set forth herein and other equitable adjustments by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, stock splits, reverse stock splits, recapitalization, reclassifications, extraordinary distributions and similar events, the “Conversion Price”) shall equal $0.012571428571429 per share of Common Stock.

 

(b) Adjustment to Conversion Price. If the Borrower shall, at any time or from time to time after the Issue Date, issue or sell any shares of Common Stock without consideration or for consideration per share less than the Conversion Price in effect immediately prior to such issuance or sale, then immediately upon such issuance or sale, the Conversion Price in effect immediately prior to such issuance or sale shall be reduced (and in no event increased) to a Conversion Price equal to the lowest price per share at which any share of Common Stock has been issued or sold, provided, that if such issuance or sale was without consideration, then the Company shall be deemed to have received an aggregate of $0.001 per share of consideration for such shares so issued or deemed to be issued.

 

2.3 Authorized Shares. The Borrower covenants that during the period the Conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note and each other Note to be issued pursuant to the Purchase Agreement, which the parties acknowledge equates currently to 875,000,000 shares of Common Stock (the “Reserved Amount”). The Reserved Amount shall be increased (or decreased with the written consent of the Holder) from time to time in accordance with the Borrower’s obligations hereunder. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure, including any stock split, reverse stock split or similar event, which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Note. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.

 

If, at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.1(b) of the Note.

 

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2.4 Delivery of Common Stock Upon Conversion.

 

(a) Upon receipt by (i) the Borrower from the Holder of a facsimile transmission or e-mail (or in accordance with the notice provisions in Section 4.2) of a notice of a Holder Conversion or (ii) the Holder from the Borrower of a facsimile transmission or e-mail (or in accordance with the notice provisions in Section 4.2) of a notice of a Borrower Conversion (each, a “Notice of Conversion”), the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such Conversion within two (2) business days after such receipt of the Notice of Conversion (the “Deadline”) in accordance with the terms hereof and the Purchase Agreement. Upon receipt by the Borrower or Holder, as applicable, of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such Conversion, and, unless the Borrower defaults on its obligations hereunder, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such Conversion. If the Holder or Borrower, as applicable, shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion.

 

(b) Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer program, upon request of the Holder and its compliance with the provisions set forth herein, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon a Conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission system.

 

2.5 Concerning the Shares. The shares of Common Stock issuable upon a Conversion of this Note may not be sold or transferred unless: (i) such shares are sold pursuant to an effective registration statement under the 1933 Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration (such as Rule 144 or a successor rule) (“Rule 144”); or (iii) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 2.5(a) and who is an “accredited investor” (as defined in Rule 501(a) of the SEC). Any restrictive legend on certificates representing shares of Common Stock issuable upon a Conversion of this Note shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if the Borrower or its transfer agent shall have received an opinion of counsel from Holder’s counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that (i) a public sale or transfer of such Common Stock may be made without registration under the 1933 Act, which opinion shall be accepted by the Borrower so that the sale or transfer is effected; or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the 1933 Act; or (iii) otherwise may be sold pursuant to an exemption from registration. In the event that the Borrower does not reasonably accept the opinion of counsel provided by the Holder with respect to the transfer of Securities pursuant to an exemption from registration (such as Rule 144), at the Deadline, it will be considered an Event of Default pursuant to Section 3.1(b) of the Note.

 

2.6 Adjustment Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (collectively, a “Distribution”), then the Holder of this Note shall be entitled to receive, at the time of such Distribution, the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon a Conversion of this Note had such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.

 

2.7 Mandatory Repurchase Option. In the event the Borrower proposes to issue and sell Common Stock or any other equity securities of the Borrower, or any instruments convertible into or exercisable for or exchangeable for Common Stock or other equity securities of the Borrower, to investors on or before the Maturity Date in an equity financing (a “Subsequent Financing”), the Borrower shall give the Holder written notice of the Subsequent Financing no less than thirty (30) Business Days prior to the closing of such Subsequent Financing. Promptly upon receipt of such notice, in the sole and absolute discretion of the Holder, the Holder may demand in writing payment by the Borrower to the Holder in an amount equal to 25% of the aggregate gross proceeds (net of out of pocket costs incurred in connection therewith) of the Subsequent Financing as a repurchase (in whole or in part) of this Note and each other Note issued pursuant to the Purchase Agreement at the Repurchase Price. As used herein, the “Repurchase Price” shall be the sum of (i) the aggregate amount of interest payable on the portion of the principal amount of such Note to be prepaid accruing from the date of the issuance thereof through the Maturity Date thereof, less the aggregate amount of interest paid in cash thereon through the date of, and immediately prior to, such repurchase and (ii) the principal amount thereof to be prepaid. Except as provided in this Section 2.7 (or by a Borrower Conversion as provided herein), this Note may not be redeemed by the Borrower at any time.

 

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ARTICLE III. EVENTS OF DEFAULT AND REMEDIES

 

3.1 Events of Default. Each of the following is an “Event of Default” hereunder:

 

(a) Failure to Pay Principal and Interest. The Borrower (i) fails to pay the principal hereof or interest thereon when due on this Note, whether monthly, at maturity or upon acceleration, as applicable, and such breach continues for a period of ten (10) days from the due date or (ii) fails to make any payment when due on this Note more than twice in any rolling twelve (12) month period.

 

(b) Conversion and the Shares. The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder or the Borrower of their respective Conversion rights in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon a Conversion of or otherwise pursuant to this Note as and when required by this Note, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon a Conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon a Conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for two (2) business days after the receipt of the applicable Notice of Conversion. It is an obligation of the Borrower to remain current in its obligations to its transfer agent. It shall be an event of default of this Note, if a Conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process a Conversion, such advanced funds shall be paid by the Borrower to the Holder within forty-eight (48) hours of a demand from the Holder.

 

(c) Breach of Covenants. The Borrower breaches any covenant or other term or condition contained in this Note and any Transaction Document.

 

(d) Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect when made, or Borrower knows with the passage of time that such representation or warranty of Borrower will become false or misleading in any material respect.

 

(e) Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.

 

(f) Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower.

 

(g) Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTC (which specifically includes the quotation platforms maintained by the OTC Markets Group) or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock Exchange.

 

(h) Failure to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requirements of the Exchange Act; and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.

 

(i) Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

 

(j) Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due.

 

(k) Financial Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC at any time after the Issue Date for any date or period until this Note is no longer outstanding, if the result of such restatement would, by comparison to the un-restated financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

 

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(l) Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

 

(m) Unavailability of Rule 144. If, at any time on or after the date which is six (6) months after the Issue Date, the Holder is unable to (i) obtain a standard “144 legal opinion letter” from an attorney reasonably acceptable to the Holder, the Holder’s brokerage firm (and respective clearing firm), and the Borrower’s transfer agent in order to facilitate the Holder’s Conversion of any portion of the Note into free trading shares of the Borrower’s Common Stock pursuant to Rule 144, and (ii) thereupon deposit such shares into the Holder’s brokerage account.

 

(n) Change of Control. A Change of Control shall occur.

 

3.2 Acceleration; Exercise of Remedies.

 

(a) UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN CLAUSE (b), (e), (f), (i), OR (m), THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AT THE REPURCHASE PRICE. Upon the occurrence and during the continuation of any Event of Default specified in Clauses (a), (c), (d), (g), (h), (j), (k), (l) and/or (n), exercisable through the delivery of written notice to the Borrower by such Holders, and all other amounts payable hereunder shall immediately become due and payable at the Repurchase Price, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity.

 

(b) If an Event of Default occurs and is continuing, Holder may pursue any available remedy to collect the payment of principal, premium and interest on the Notes at the Repurchase Price or to enforce the performance of any provision of the Notes, the Purchase Agreement or the Security Agreement.

 

ARTICLE IV. MISCELLANEOUS

 

4.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

4.2 Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted to be given pursuant to this Note shall be in writing and shall be delivered (a) in hand by person with written receipt of the person to whom such notice is intended; (b) by registered or certified mail, postage prepaid, return receipt requested; or (c) by a generally recognized commercial courier service or overnight delivery service, (Federal Express or UPS), for next business day delivery, postage prepaid, with delivery receipt requested. All notices sent in accordance with this Section 4.2. shall be deemed “Delivered” unless otherwise specified herein, the same day if delivered by hand in person with receipt and signature of the intended recipient or by an authorized officer of the intended recipient; if by registered or certified mail, three (3) business days after the same is deposited in the U.S. Mail; or if sent by a commercial courier service or overnight delivery service for next business day delivery, one (1) business day after payment and receipt of mailing. The addresses for such communications shall be:

 

If to the Borrower, to:

 

Investview, Inc.

234 Industrial Way West

Building A, Suite 202

Eatontown, NJ 07724

Attention: Joseph Cammarata, CEO and Mario Ramano

With a copy to:

 

Michael Best & Friedrish LLP

170 South Main Street, Suite 1000

Salt Lake City, UT 84101

Attention: Kevin C. Timken

 

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If to the Holder:

 

DBR Capital, LLC

1645 Kecks Road

Breinigsville, PA 18031

 

With a copy to:

 

Morgan, Lewis & Bockius LLP

1701 Market Street

Philadelphia, PA 19103

Attention: Michael J. Pedrick

 

The addresses of the parties set forth above may be changed from time to time by a party by Notice to the other in accordance with the notice provisions as set forth herein this Section 4.2.

 

4.3 Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by both the Borrower and the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

 

4.4 Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a) of the SEC). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement; and may be assigned by the Holder without the consent of the Borrower. The Borrower may not assign or transfer this Note or any of its rights hereunder without the prior written consent of the Holder.

 

4.5 Cost of Collection. Upon the occurrence of any Event of Default, the Borrower shall pay the Holder hereof all costs and expenses of collection, including reasonable attorneys’ fees.

 

4.6 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts of New York or in the federal courts located in the state of New York. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute, rule of law or as determined by a court of competent jurisdiction, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute, rule of law or as a court of competent jurisdiction shall determine was the intent of the parties. Any such provision which may prove invalid or unenforceable under any statute, rule of law or as determined by a court of competent jurisdiction shall be stricken from this Note or any other agreement delivered in connection herewith and shall not affect the validity or enforceability of this Note or any other provision of any agreement delivered in connection herewith. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Note, any agreement or any other document delivered in connection with this Note by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

4.7 Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.

 

4.8 Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required.

 

4.9 Most Favored Nations. If, while this Note is outstanding, the Borrower issues other indebtedness (excluding trade payables incurred in the ordinary course of business and indebtedness for borrowed money owing to a bank or similar financial institution) of the Borrower convertible into equity securities of the Borrower, or amends any existing indebtedness convertible into equity securities of the Borrower, and such newly issued or amended indebtedness would have material terms that are materially more favorable, from the perspective of the Holder (the “Other Debt”), than the terms of this Note, then the Borrower will provide the Holder with written notice thereof within three (3) business days of any issuance of the Other Debt, together with a copy of all documentation relating to the Other Debt and, upon request of the Holder, any additional information related to the Other Debt as may be reasonably requested by the Holder. In the event the Holder determines that the terms of the Other Debt are materially more preferable to the terms of this Note, the Holder will notify the Borrower in writing within ten (10) business days following the Holder’s receipt of such notice from the Borrower. Promptly after receipt of such written notice from the Holder, but in any event within thirty (30) days, the Borrower will amend and restate this Note to reflect such terms of the Other Debt as selected by the Holder with such changes to be effective as of the issue date of the Other Debt.

 

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IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this on April 27, 2020.

 

Investview, Inc.  
     
By:  
Name: Joseph Cammarata  
Title:

Chief Executive Officer

 

 

Address: Investview, Inc.  
  234 Industrial Way West  
  Building A, Suite 202  
  Eatontown, NJ 07724  
Email: joe@investview.com  

 

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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.

 

  INVESTVIEW, INC.
     
Dated: August 1, 2019 By: /s/ William C. Kosoff
    William Kosoff
    Acting Chief Financial Officer

 

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