Exhibit
4.1
NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE
OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON
STOCK PURCHASE WARRANT
GLOBAL DIVERSIFIED MARKETING GROUP INC.
| Warrant
Shares: |
Initial
Exercise Date: November 14, 2022 |
THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, Spencer Clarke LLC or its assigns
(the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter
set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New
York City time) on five years after the Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe
for and purchase from GLOBAL DIVERSIFIED MARKETING GROUP INC., a Delaware corporation (the “Company”), up to 310,715
shares of Common Stock (or Membership Interests as relevant) (as subject to adjustment hereunder, the “Warrant Shares”).
The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
The Warrant Value shall be equal to the Warrant Shares on the Initial Exercise Date multiplied by the Exercise Price on the Initial Exercise
Date.
Section
1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain
Letter of Engagement or Securities Purchase Agreement (the “Purchase Agreement”), dated November 14, 2022, among the
Company and the purchaser’s signatory thereto.
Section
2. Exercise.
a)
Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time
or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile
copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice
of Exercise”). No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee
or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required
to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and
the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within
three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant
resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding
number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and
the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver
any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance
of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the
Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount
stated on the face hereof.
b)
Exercise Price. The term “Exercise Price” herein shall mean the initial exercise price or the adjusted exercise price
at the exercise date and is subject to adjustment pursuant to the terms hereof, including but not limited to Section 3 below.
The
initial exercise price per share of Common Stock under this Warrant shall be one tenth of a penny $.001, which shall be lesser
than: (a) the last market price of the Company’s Common Stock, if the Company is a publicly traded company; or (b) the price of
the Common Stock, or conversion price for the Company’s Common Stock, as valued in the Company’s most recent capital raise,
if the Company is privately held.
If
the Company is Publicly Traded at the time of exercise: Notwithstanding any other provision in this Warrant, on any exercise date,
the Holder shall have the right to adjust the Exercise Price so that the Warrant Shares for which this Warrant is exercisable shall equal
the Warrant Value divided by the closing price of the Company’s Common Stock on the previous trading day.
If
the Company is Privately Held: Notwithstanding any other provision in this Warrant, on any exercise date, the Holder shall have the
right to adjust the Exercise Price so that the Warrant Shares for which this Warrant is exercisable shall equal the Warrant Value divided
by either the price of the Common Stock, or the conversion price for the Company’s Common Stock, as valued in the Company’s
most recent capital raise, or by a third party evaluation, as chosen by the Holder.
c)
Cashless Exercise.
Cashless
Exercise of Public Company Warrants. At any time, this Warrant may be exercised, in whole or in part, at such time by means of a “cashless
exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing
[(A-B) (X)] by (A), where:
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(A) |
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as
applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of
Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed
and delivered pursuant to Section 2(a)
hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(68) of Regulation
NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on
the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the
principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of
Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within
two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day)
pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of
Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close
of “regular trading hours” on such Trading Day; |
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(B) |
= |
the
Exercise Price of this Warrant, as adjusted hereunder; and |
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(X) |
= |
the
number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such
exercise were by means of a cash exercise rather than a cashless exercise. |
If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant
Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this
Section 2(c).
“Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock
is then listed or quoted on a national securities exchange (a “Trading Market”), the bid price of the Common Stock for the
time in question (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported
by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX
is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB
or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common
Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices),
the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common
Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities
then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or
a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common
Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the
Company, the fees and expenses of which shall be paid by the Company.
Notwithstanding
anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise
pursuant to this Section 2(c).
Cashless
Exercise of Private Company Warrants. At any time, this Warrant may be exercised, in whole or in part, at such time by means of a “cashless
exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing
[(A-B) (X)] by (A), where:
(A)
= the price of the Company’s Common Stock, or conversion price for the Company’s Common Stock, as valued in the Company’s
most recent capital raise.
(B)
= the Exercise Price of this Warrant, as adjusted hereunder;
(X)
= the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such
exercise were by means of a cash exercise rather than a cashless exercise.
d)
Mechanics of Exercise.
i.
Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by
the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository
Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant
in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale
of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale
limitations pursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered
in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder
is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest
of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise and (ii) one (1) Trading Day after delivery of
the aggregate Exercise Price to the Company (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice
of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect
to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate
Exercise Price (other than in the case of a cashless exercise) is received within two (2) Trading Days following delivery of the Notice
of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant
Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant
Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading
Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after
such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain
a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable.
ii.
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of
a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in
all other respects be identical with this Warrant.
iii. Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section
2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv.
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to
the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions
of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required
by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares
of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon
such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x)
the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds
(y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection
with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B)
at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise
was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock
that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the
Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares
of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating
the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares
of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
v.
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company
shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share.
vi.
Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company,
and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided,
however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company
shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company
(or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vii.
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
e)
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the
right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other
Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number
of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude
the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject
to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its
Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership
shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d)
of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent
that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to
other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable
shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination
of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution
Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company
shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status
as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on
the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed
with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of
a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date
as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common
Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership
Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number
of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of
this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership
Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall
be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph
(or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or
to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph
shall apply to a successor holder of this Warrant.
Section
3. Certain Adjustments.
a)
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares
of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this
Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the
Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which
the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of
shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant
shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for
the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or re classification.
b) Adjustments
for Issuance of Additional Securities. In the event that the Company shall, at any time after the issuance date, issue or sell
any additional shares of Common Stock or Common Stock Equivalents (hereafter defined) (“Additional Shares of Common
Stock”), in a transaction other than an Exempt Issuance, at a price per share less than the Exercise Price then in effect or
without consideration (a “Dilutive Issuance” based on a “Dilutive Issuance Price”), then the Exercise Price
upon each such issuance shall be reduced to the Dilutive Issuance Price. If the price per share for which Additional Shares of
Common Stock are sold, or may be issuable pursuant to any such Common Stock Equivalent, is less than the applicable Exercise Price
then in effect, or if, after any such issuance of Common Stock Equivalents, the price per share for which Additional Shares of
Common Stock may be issuable thereafter is amended or adjusted, and such price as so amended shall be less than the applicable
Exercise Price in effect at the time of such amendment or adjustment, then the applicable Exercise Price shall be reduced to the
Dilutive Issuance Price. In case any Common Stock Equivalent is issued in connection with the issue or sale of other securities of
the Company, together comprising one integrated transaction, (x) the Common Stock Equivalents will be deemed to have been issued for
the Option Value of such Common Stock Equivalents and (y) the other securities issued or sold in such integrated transaction shall
be deemed to have been issued or sold for the difference of (I) the aggregate consideration received by the Company less any
consideration paid or payable by the Company pursuant to the terms of such other securities of the Company, less (II) the Option
Value. If any shares of Common Stock or Common Stock Equivalents are issued or sold or deemed to have been issued or sold for cash,
the amount of such consideration received by the Company will be deemed to be the net amount received by the Company therefor. If
any shares of Common Stock or Common Stock Equivalents are issued or sold for a consideration other than cash, the amount of such
consideration received by the Company will be the fair value of such consideration, except where such consideration consists of
publicly traded securities, in which case the amount of consideration received by the Company will be the VWAP of such public traded
securities on the date of receipt. If any shares of Common Stock or Common Stock Equivalents are issued to the owners of the
non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration
therefor will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is
attributable to such shares of Common Stock or Common Stock Equivalents, as the case may be.
“Common Stock
Equivalents” means any rights or warrants or options to purchase any Common
Stock or Convertible Securities.
“Option
Value” means the value of a Common Stock Equivalent based on the Black Scholes Option Pricing model obtained from the “OV”
function on Bloomberg L.P. determined as of (A) the Trading Day prior to the public announcement of the issuance of the applicable Common
Stock Equivalent, if the issuance of such Common Stock Equivalent is publicly announced or (B) the Trading Day immediately following
the issuance of the applicable Common Stock Equivalent if the issuance of such Common Stock Equivalent is not publicly announced, for
pricing purposes and reflecting (i) a risk- free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining
term of the applicable Common Stock Equivalent as of the applicable date of determination, (ii) an expected volatility equal to the greater
of 100% and the 100 day volatility obtained from the HVT function on Bloomberg L.P. as of (A) the Trading Day immediately following the
public announcement of the applicable Common Stock Equivalent if the issuance of such Common Stock Equivalent is publicly announced or
(B) the Trading Day immediately following the issuance of the applicable Common Stock Equivalent if the issuance of such Common Stock
Equivalent is not publicly announced, (iii) the underlying price per share used in such calculation shall be the highest VWAP of the
Common Stock during the period beginning on the Trading Day prior to the execution of definitive documentation relating to the issuance
of the applicable Common Stock Equivalent and ending on (A) the Trading Day immediately following the public announcement of such issuance,
if the issuance of such Common Stock Equivalent is publicly announced or (B) the Trading Day immediately following the issuance of the
applicable Common Stock Equivalent if the issuance of such Common Stock Equivalent is not publicly announced, (iv) a zero cost of borrow
and (v) a 360 day annualization factor.
The
provisions of this Section 3(b) shall apply each time the Company, at any time after the Original Issuance Date, shall issue any securities
with a Dilutive Issuance Price. Notwithstanding the foregoing, no adjustment shall be made pursuant to this Section 3(b) with respect
to an Exempt Issuance (as defined in the Purchase Agreement).
c)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants,
issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire,
upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had
held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise
hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for
the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent
that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance
for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
d)
Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend,
spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in
the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation).
e)
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or
more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly
or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of
its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock,
(iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization
of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for
other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock
or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off
or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding
shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated
or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each
a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right
to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental
Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number
of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional
consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of
the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without
regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the
Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price
among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.
If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor
Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days after, the
consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction),
purchase this Warrant from the Holder the same type or form of consideration (and in the same proportion), at the Black Scholes Value
(as defined below) of the unexercised portion of this Warrant, that is being offered and paid to the holders of Common Stock of the Company
in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or any combination thereof,
or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connection with
the Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on the Black and Scholes
Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of
the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable Fundamental Transaction
and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function
on Bloomberg (determined utilizing a 365-day annualization date) as of the Trading Day immediately following the public announcement
of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the greater of (i) the
sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such
Fundamental Transaction and (ii) the greater of (x) the last VWAP immediately prior to the public announcement of such Fundamental Transaction
and (y) the last VWAP immediately prior to the consummation of such Fundamental Transaction, (D) a remaining option time equal to the
time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date and (E) a zero cost
of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds or such other consideration
within five Business Days of the Holder’s election (or, if later, on the effective date of the Fundamental Transaction).
The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor
Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents
in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to
the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of
the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor
Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without
regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies
the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock
pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such
exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions
of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity),
and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the
other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.
f)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the
case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date
shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
g)
Voluntary Adjustment By Company. The Company may at any time during the term of this Warrant, with the prior written consent of
the Holder, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors
of the Company.
h)
Notice to Holder.
i.
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company
shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting
adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii.
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on
the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile
number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common
Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on
which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock
for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange;
provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the
corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains,
material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice
with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period
commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly
set forth herein.
Section
4. Transfer of Warrant.
a)
Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof
and to the provisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation,
any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company
or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by
the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such
surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee
or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to
the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding
anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder
has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days
of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned
in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b) New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the
Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the
Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division
or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be
divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial
issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant
thereto.
c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the
“Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.
d) Transfer
Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of
this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under
applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current
public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the
Holder or transferee of this Warrant, as the case may be, comply with the provisions of Section 5.7 of the Purchase
Agreement.
e)
Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant
and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to
or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities
law, except pursuant to sales registered or exempted under the Securities Act.
Section
5. Miscellaneous.
a)
No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights,
dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly
set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant
to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be
required to net cash settle an exercise of this Warrant.
b)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares,
and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant,
shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the
Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant
or stock certificate.
c)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business
Day.
d)
Authorized Shares.
The
Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.
The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with
the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all
such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants
that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise
of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof
(other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary
or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the
foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof,
as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction thereof.
e)
Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined
in accordance with the provisions of the Purchase Agreement.
f)
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and
the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision
of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant,
which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover
any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred
by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h)
Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall
be delivered in accordance with the notice provisions of the Purchase Agreement.
i)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of
the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.
j)
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law would be adequate.
k)
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall
inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall
be enforceable by the Holder or holder of Warrant Shares.
l)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and
the Holder.
m)
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
n)
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed
a part of this Warrant.
********************
(Signature
Page Follows)
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above
indicated.
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GLOBAL DIVERSIFIED
MARKETING GROUP INC., |
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By: | /s/
Paul Adler |
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Name: | Paul
Adler |
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Title: | Chairman,
President & CEO |
NOTICE
OF EXERCISE
TO:
(1)
The undersigned hereby elects to purchase _____________ Warrant Shares of the Company pursuant to the terms of the attached Warrant
and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2)
Payment shall take the form of (check applicable box): [ ] in lawful money of the United States; or
[ ] if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2(c).
[ ] if permitted the cancellation of such number of Additional Warrant Shares as is necessary, in accordance with the formula set forth
in subsection 2(d), to exercise this Warrant with respect to the maximum number of Additional Warrant Shares purchasable pursuant to
the cashless exercise procedure set forth in subsection 2(d).
(3)
Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
____________________________________
The
Warrant Shares shall be delivered to the following DWAC Account Number:
____________________________________
____________________________________
____________________________________
(4) Accredited
Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities
Act of 1933, as amended.
[SIGNATURE
OF HOLDER]
Name
of Investing Entity: ___________________________________________________________________________
Signature
of Authorized Signatory of Investing Entity: _____________________________________________________
Name
of Authorized Signatory: _______________________________________________________________________
Title
of Authorized Signatory: ________________________________________________________________________
Date: ___________________________________________________________________________________________
EXHIBIT
B
ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
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| Dated:
__________________ __, _________ |
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Signature: ______________________________ |
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Address: _______________________________ |
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Exhibit
10.1
Spencer
Clarke
Investment
Banking
MEMBER
FINRA • SIPC
1111
Lincoln Road Suite 500
Miami
Beach, Florida 33154
(P)
305-600-3268 • (F) 212-446-6191
www.spencerclarke.com
November
14, 2022
Paul
Adler
President
& CFO
Global
Diversified Marketing Group Inc.
(Operates
through its wholly owned subsidiary Global Diversified Holdings, Inc.)
4042
Austin Blvd, Suite B Island Park, NY 11558
Publicly
Traded under the ticker GDMK
Mr.
Adler,
This
letter agreement (“Agreement”) confirms our understanding that Global Diversified Marketing Group Inc., a Delaware corporation,
its surviving entities, common interest entities, affiliates, and subsidiaries, (the “Company”) hereby engages Spencer Clarke
LLC (SC) (together with its affiliates and subsidiaries, “Spencer Clarke”, “SC” or the “Placement Agent”)
to act as the Company’s “exclusive” placement agent in connection with any capital/debt raise, securities offering,
warrant exercise (“Financing(s)”) and for any sale , joint venture, merger, acquisition, or similar transaction with the
Company and/or any special purpose subsidiary or affiliate of the Company created specifically for the purpose of consummating such a
transaction (“Transaction(s)”. Each of SC and the Company may be referred to herein as a “Party” and collectively
as the “Parties.”
Upon
acceptance, (indicated by your signature below), this Agreement will confirm the terms of the engagement of the Placement Agent by the
Company.
1.
Appointment.
(a)
Subject to the terms and conditions of this Agreement, the Company hereby retains the Placement Agent to pursue one or more Financings
and/or Transactions (collectively, “Corporate Financing Activity”) on the Company’s behalf, and the Placement Agent
hereby agrees to act, as the Company’s exclusive Placement Agent in connection with any Corporate Finance Activity during the Term
(as defined below). As Placement Agent, Spencer Clarke may advise and assist the Company in identifying and assisting the Company in
(i) formulating and implementing a strategy for consummating one or more Financings and/or Transactions, including the identification
of issuing the securities to one or more accredited investors, or institutions, and other parties that may have a potential interest
in a Financing and/or Transaction that are contacted through either email, text, telephone, or in person (each, a “Prospect”),
and developing procedures and timetables for implementing the same; (ii) review of marketing materials describing the Company, as well
as other materials requested by Prospects, (iii) approaching selected Prospects and providing such parties with the appropriate material,
including, by organizing and leading meetings between the Company and such parties, (iv) evaluating proposals from Prospects regarding
one or more potential Financings and/or Transactions, (v) formulating negotiation strategies, participating in negotiations with Prospects
and working with legal counsel and accountants of the Company to facilitate and negotiate letters of intent, term sheets, definitive
agreements and other customary agreements associated with consummation of a Financing or Transaction, and (vi) presenting analyses and
progress reports to the Company’s executive management and board of directors in a Financing and/or Transaction (collectively,
the “Services”). The Company acknowledges and agrees that the Placement Agent is only required to use its “commercially
reasonable best efforts” in connection with any Financing and/or Transaction, Services or Corporate Finance Activity and that this
Agreement does not constitute a commitment by the Placement Agent to purchase any securities or introduce the Company to Prospects. Spencer
Clarke will, in its sole discretion, determine the reasonableness of its efforts, and is under no obligation to perform at any level
other than what it deems reasonable. The Company retains the right to determine all of the terms and conditions of the Financing and/or
Transaction and to accept or reject any proposals submitted to it by the Placement Agent in its sole and absolute discretion.
www.SpencerClarke.com
1111 Lincoln Road Suite 500 Miami Beach, FL 33154 Tel 305-600-3268/Fax 212.446.6191/Compliance@SpencerClarke.com
(b)
During the Term (as defined in Section 4) of this Agreement, neither the Company nor any of its subsidiaries will, directly or indirectly,
solicit or otherwise encourage the submission of any proposal or offer regarding a potential Financing or Transaction ( each a “Investment/Transaction
Proposal”) from any person or entity relating to any issuance of the Company’s or any of its subsidiaries’ equity or
debt securities or participate in any discussions regarding an Investment/Transaction Proposal of Corporate Finance Activity other than
in coordination with Placement Agent pursuant to the engagement contemplated by this Agreement. Further, the Company will immediately
cease all direct contacts, discussion, and negotiations with third parties regarding any Investment/Transaction Proposal and, during
the Term, will promptly inform Spencer Clarke of any unsolicited Investment/Transaction Proposals or communications received by the Company
or its representatives. Should any such active or future Investment/Transaction Proposals be received during the Term, the Placement
Agent will act as the Company’s exclusive Placement Agent in connection with such Investment/Transaction Proposals.
(c)
The Placement Agent and the Company expressly agree that the nature of Services to be rendered by the Placement Agent hereunder shall
be limited as necessary to avoid the violation of any rules or regulations under the Securities Act of 1933, as amended (the “Securities
Act”), and other applicable securities laws.
2.
Information.
(a)
The Company recognizes that, in completing its engagement hereunder, the Placement Agent will be using and relying on both publicly available
information and on data, material and other information furnished to Placement Agent by the Company or the Company’s affiliates
and agents. The Company will cooperate with Spencer Clarke and furnish, and cause to be furnished, to Spencer Clarke, any and all information
and data concerning the Company, its subsidiaries and any potential Financing or Transaction that Spencer Clarke deems appropriate, including,
without limitation, the Company’s acquisition and/or merger plans and plans for raising capital or additional financing that is
reasonably requested by Spencer Clarke in order to provide the Services (the “Information”), including subscription agreements,
purchase agreements and any other forms of the offering material (the “Offering Materials”). Any Information and Offering
Materials forwarded to Prospects will be in form acceptable to the Company, the Placement Agent and their respective counsel. The Company
represents and warrants that all Information and Offering Materials, including, but not limited to, the Company’s financial statements
and all information incorporated by reference therein, will be complete and correct in all material respects and will not contain any
untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading.
The Placement Agent will not distribute any Information or Offering materials that have not been approved by the Company.
(b)
It is further agreed that Spencer Clarke will use its reasonable efforts to conduct a due diligence investigation of the Company and
the Company will reasonably cooperate with such investigation as a condition of Spencer Clarke’s obligations hereunder. The Company
recognizes and confirms that the Placement Agent: (i) will use and rely primarily on the Information, the Offering Materials and information
available from generally recognized public sources in performing the Services contemplated by this Agreement without having independently
verified the same; (ii) is authorized as the Placement Agent to transmit to any Prospect a copy or copies of those Offering Materials
and other legal documentation supplied to the Placement Agent for transmission to any prospective investors by or on behalf of the Company
or by any of the Company’s officers, representatives or agents, in connection with the performance of the Placement Agent’s
Services hereunder or any Financing or Transaction contemplated hereby; (iii) does not assume responsibility for the accuracy or completeness
of the Information or the Offering Materials and such other information, if any provided to the Prospects; (iv) will not make an appraisal
of any assets of the Company or the Company in general; and (v) retains the right to continue to perform due diligence of the Company,
its business and its officers and directors during the Term (as defined below).
www.SpencerClarke.com
1111 Lincoln Road Suite 500 Miami Beach, FL 33154 Tel 305-600-3268/Fax 212.446.6191/Compliance@SpencerClarke.com
(c)
Throughout the Term (as defined below), Spencer Clarke will keep all information obtained from the Company confidential except: (i)
Information which is otherwise publicly available, or previously known to or obtained by, Spencer Clarke independently of the
Company and without breach of any of Spencer Clarke’s agreements with the Company; (ii) Spencer Clarke may disclose such
information to its officers, directors, employees, agents, representatives, attorneys, and to its other advisors and financial
sources on a need to know basis. This agreement supersedes any prior non-disclosure or confidentiality agreement. No such obligation
of confidentiality shall apply to information that: (i) is in the public domain as of the date hereof or hereafter enters the public
domain without a breach by Spencer Clarke, (ii) was known or became known by Spencer Clarke prior to the Company’s disclosure
thereof to Spencer Clarke, (iii) becomes known to Spencer Clarke from a source other than the Company, who Spencer Clarke believes
can disclose such information other than by the breach of an obligation of confidentiality owed to the Company, (iv) is disclosed by
the Company to a third party without restrictions on its disclosure, (v) is independently developed by Spencer Clarke, (vi) is
required to be disclosed by Spencer Clarke or its officers, directors, employees, agents, attorneys and to its other advisors and
financial sources, pursuant to any order of a court of competent jurisdiction or other governmental body or as may otherwise be
required by law, or (vii) is required to be provided to Prospects pursuant to Spencer Clarke’s efforts to fulfill its
obligations hereunder.
(d)
The Company recognizes that in order for Spencer Clarke to perform properly its obligations in a fiduciary and professional manner, the
Company will keep Spencer Clarke informed of and, to the extent practicable, permit Spencer Clarke to participate in, meetings and discussions
between the Company and any third party relating to the matters covered by the terms of Spencer Clarke’s engagement or general
information about the Company relevant to Spencer Clarke or its Prospects. If at any time during the course of Spencer Clarke’s
engagement or during a period in which a Spencer Clarke Prospect is a lender or investor in the Company, and the Company becomes aware
of any material change in any of the information previously furnished to Spencer Clarke, it will promptly advise and provide Spencer
Clarke with updated information.
(e)
The Placement Agent acknowledges that the Company has a class of securities quoted on the OTC Markets OTC Pink marketplace and is subject
to the restrictions imposed by Regulation FD under the Securities Exchange Act of 1934, as amended. The Placement Agent agrees that (i)
it will not use the Information for the purpose of trading in the Company’s common stock or any other securities, and will take
all steps necessary to prevent use of the Information for such purpose by its subsidiaries and affiliates and all of their respective
officers, directors, shareholders, employees, agents, advisors, other representatives, and (ii) it will not disclose such Information
to any other party for the purpose of trading in the Company’s common stock
(e)
Spencer Clarke’s obligation to assist the Company regarding any Financing and/or Transaction shall be conditioned upon:
(i)
Satisfactory completion by Spencer Clarke of its due diligence investigation and analysis of: (a) the Company’s arrangements with
its officers, directors, employees, affiliates, customers, and suppliers, and (b) the audited and unaudited historical financial statements
of the Company; and
(ii)
Satisfaction of all the conditions to Closing (as defined below), and receipt of all deliverables, set forth in the Offering Materials.
3.
Compensation/Fees:
(a)
Upon signing of this Agreement, the Company will pay Spencer Clarke no activation fee.
(b)
As consideration for rendering the Services contemplated herein and services that may have been provide prior to this Agreement, the
Company will issue to Spencer Clarke or its designees, non-returnable retainer warrants to purchase 2% of the total shares outstanding
of the common stock of the Company (“Retainer Stock”) as of the execution date of this Agreement. Thereafter, upon the next
capital raise or corporate financing activity of over One million dollars in value, the Company will issue SC warrants to purchase 3%
of the total shares outstanding of the common stock of the Company (collectively, the “Retainer Stock”). These warrants will
entitle Spencer Clarke to purchase Retainer Stock, at an initial exercise price per warrant equal to [ .001] during the five (5)-year
period commencing on the date of execution of this Agreement. These warrants will be evidenced by a customary form of instrument (form
of warrant in Exhibit C); will not be exercisable until at least 6 months and 1 day after the execution date of this Agreement; will
provide for unlimited piggyback registration rights; will contain a cashless exercise provision; and will contain pre-emptive and full
ratchet anti- dilution protection.
www.SpencerClarke.com
1111 Lincoln Road Suite 500 Miami Beach, FL 33154 Tel 305-600-3268/Fax 212.446.6191/Compliance@SpencerClarke.com
(c)
In addition, as compensation for Services rendered and to be rendered hereunder by Placement Agent, the Company agrees to pay Placement
Agent at each and any closing of a Financing or Transaction (“Closing”), the fees set forth on Schedule A hereto in consideration
of the Services rendered by the Placement Agent in connection with such Financing or Transaction (collectively, the “Placement
Fees”). Each Financing, Transaction, offering or Closing will require a minimum cash fee of $100,000.
4.
Term of Engagement.
(a)
This Agreement will take effect upon the initial signing of this Agreement by both Parties (the “Effective Date”) and remain
in effect for SIX (6) months and shall automatically extend for THREE (3) month periods unless SC was given seven (7) days written notice
to cancel prior to any new extension period. This Agreement and Term will extend upon the Closing of any Corporate Financing Activity
as defined in Extensions (Section 9), after which either party shall have the right to terminate it on seven (7) days written notice
to cancel prior to any new extension period. The date of termination or expiration of this Agreement is referred to herein from time
to time as the “Termination Date”. The period of time during which this Agreement remains in effect is referred to herein
from time to time as the “Term”. In the event, however, that in the course of Spencer Clarke’s performance of due diligence
it deems it necessary to terminate the engagement, Spencer Clarke may do so upon immediate written notice. Notwithstanding the foregoing,
this Agreement may be terminated by the Company at any time upon conviction of the Placement Agent’s fraud, illegal or willful
misconduct or gross negligence.
(b)
If, within twelve (12) months after the Termination Date, the Company completes any Financing or Transaction or other Corporate Financing
Activity (including the exercise by any person or entity of any options, or convertible securities and warrants issued pursuant to this
Agreement) with any of the Prospect or Investors introduced to the Company by Spencer Clarke or as introduced via a potential financing
by the company, or with any other investor that Spencer Clarke had engaged in discussions with on behalf of the Company, or introduced
to the Company by a party originally introduced to the Company by SC, then the Company will pay to Spencer Clarke upon the Closing of
such Financing or Transaction the compensation set forth in Sections 3(a), 3(b)3(d) and Exhibit A as a “Source Fee”. For
the avoidance of doubt, a mutually approved list of Prospects shall be annexed hereto as Exhibit B.
(c)
Notwithstanding anything herein to the contrary, subject to the twelve (12) month limitation described in Section 4(a) above, the obligation
to pay any and all compensation and fees and expenses described in Section 3, this Section 4, Sections 7 and 9-18 and all of the Schedules
and Exhibits attached, hereto (the terms of which are incorporated by reference hereto), will survive any termination or expiration of
this Agreement. The termination of this Agreement shall not affect the Company’s obligation to pay fees to the extent provided
for in Section 3 and all of the Schedules and Exhibits attached herein and shall not affect the Company’s obligation to reimburse
the expenses accruing prior to such termination to the extent provided for herein. All such fees and reimbursements due shall be paid
to the Placement Agent on or before the Termination Date (in the event such fees and reimbursements are earned or owed as of the Termination
Date) or upon a Closing or any applicable portion thereof (in the event such fees are due pursuant to the terms of Section 3 hereof).
5.
Certain Placement Procedures. The Company and the Placement Agent each represents to the other that it has not taken, and the
Company and the Placement Agent each agrees with the other that it will not take, any action, directly or indirectly, so as to cause
ant Transaction to fail to be entitled to rely upon an exemption from registration otherwise afforded by Section 4(a)(2), or any other
exemption as may have been available, of the Securities Act of 1933, as amended (the “Act”). In effecting any Financing or
Transaction, the Company, and the Placement Agent each agrees to comply in all material respects with applicable provisions of the Act
and any regulations thereunder and any applicable state laws and requirements. In order to induce Spencer Clarke to enter into this Agreement,
the Company agrees that Spencer Clarke may rely upon any representations and warranties made to any Prospect in connection with a Financing
or Transaction (as if fully set forth herein) for its benefit, whether appearing in the Offering Materials or elsewhere, and that all
such representations and warranties shall be true and correct in all material respects, and shall be true and correct in all material
respects as of the date of each Closing. The Company agrees that it shall cause any opinion of its counsel delivered to any Prospect
in connection with the Closing of a Financing or Transaction also to be addressed and delivered to the Placement Agent, or to cause such
counsel to deliver to the Placement Agent a letter authorizing it to rely upon such opinion.
www.SpencerClarke.com
1111 Lincoln Road Suite 500 Miami Beach, FL 33154 Tel 305-600-3268/Fax 212.446.6191/Compliance@SpencerClarke.com
6.
Representations, Warranties and Covenants of Spencer Clarke.
Spencer
Clarke hereby represents and warrants to, and covenants with, the Company that:
(a)
(i) Sales of any securities of the Company to Prospects introduced by the Placement Agent will be made only in such jurisdictions in
which the Placement Agent is a registered broker-dealer; and (ii) the offering and sale of any such securities will be registered under,
or will be exempt from registration under, applicable laws.
(ii)
Offers and sales of the securities by the Company to Prospects introduced by the Placement Agent will be made in compliance with the
appropriate securities laws such as Regulation D under the Act and/or Section 4(a)(2) of the Act, and the Placement Agent shall furnish
to each Prospect a copy of the Offering Materials (including all Schedules and Exhibits thereto) prior to the Company accepting any payments
for securities.
(b)
The Placement Agent is: (i) a registered broker-dealer under the Securities Exchange Act of 1934, as amended; (ii) a member in good standing
of FINRA; and (iii) registered as a broker-dealer in each jurisdiction in which it is required to be registered as such in order for
the Company’s securities to be offered and sold in such jurisdiction.
(c)
The Placement Agent will periodically notify the Company of the jurisdiction in which it intends the securities to be offered pursuant
to this Agreement and will periodically notify the Company of the status of the offering conducted pursuant to this Agreement.
7.
Indemnification. The Company agrees to indemnify Placement Agent in accordance with the indemnification and other provisions attached
to the Agreement as Exhibit A (the “Indemnification Provisions”), which provisions are incorporated herein by reference and
shall survive the termination or expiration of the Agreement.
8.
Other Activities. The Company acknowledges that Spencer Clarke has been, and may in the future be, engaged to provide services
as an underwriter, placement agent, finder, advisor, and investment banker to other companies in the industry in which the Company is
involved. Subject to the confidentiality provisions of Spencer Clarke contained in Section 2 hereof, the Company acknowledges and agrees
that nothing contained in this Agreement shall limit or restrict the right of Spencer Clarke or of any member, manager, officer, employee,
agent or representative of Spencer Clarke, to be a member, manager, partner, officer, director, employee, agent or representative of,
investor in, or to engage in, any other business, whether or not of a similar nature to the Company’s business, nor to limit or
restrict the right of Spencer Clarke to render services of any kind to any other corporation, firm, individual or association; provided
that Spencer Clarke and its members, managers, officers, employees, agents and representatives shall not use the Information to the detriment
of the Company. Spencer Clarke may, but shall not be required to, present opportunities to the Company.
9.
Extensions. Upon the Closing of any Financing, Transaction, or other Corporate Finance Activity in excess of $1,000,000 during
the Term or thereafter (as provided for herein), the Company agrees to extend/retain/re-engage Spencer Clarke as its exclusive investment
banker and advisor for twelve (12) months from such Closing. This Agreement and all of its terms, fees and conditions will be used as
the only contract for future extensions unless mutually agreed upon in writing by both parties. This Agreement allows for extensions
up to a maximum of three (3) years.
10.
Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement will be governed as to validity, interpretation, construction,
effect and in all other respects by the internal law of the State of Florida. The Company and Spencer Clarke each (i) agree that any
legal suit, action or proceeding arising out of or relating to this Agreement shall be instituted and heard exclusively in the state
courts located in Broward County, Florida or if a basis for federal jurisdiction exists, the United States District Court for the Southern
District of Florida, Fort Lauderdale Division, (ii) waives any objection to the venue of any such suit, action or proceeding, and the
right to assert that such forum is an inconvenient forum, and (iii) irrevocably consents to the jurisdiction of such courts in any such
suit, action or proceeding. Each of the Company and Spencer Clarke further agrees to accept and acknowledge service of any and all process
that may be served in any such suit, action or proceeding in such courts and agree that service of process upon it mailed by certified
mail in accordance with the notice provisions of this Agreement shall be deemed in every respect effective service of process in any
such suit, action or proceeding. The parties hereby expressly waive all rights to trial by jury in any suit, action or proceeding arising
under this Agreement.
www.SpencerClarke.com
1111 Lincoln Road Suite 500 Miami Beach, FL 33154 Tel 305-600-3268/Fax 212.446.6191/Compliance@SpencerClarke.com
11.
Securities Law Compliance. The Company, at its own expense, will obtain any registration or qualification required to sell any
securities under federal or the state Blue-Sky laws of any applicable jurisdictions (including any foreign jurisdiction, if applicable)
within the required time periods.
12.
Representations and Warranties. The Company and Spencer Clarke each respectively represent and warrant that: (a) it has full right,
power and authority to enter into this Agreement and to perform all of its obligations hereunder; (b) this Agreement has been duly authorized
and executed and constitutes a legal, valid and binding agreement of such party enforceable in accordance with its terms; and (c) the
execution and delivery of this Agreement and the consummation of the transactions contemplated hereby does not conflict with or result
in a breach of (i) such party’s certificate of incorporation or by-laws or (ii) any agreement to which such party is a party or
by which any of its property or assets is bound.
13
Parties; Assignment; Independent Contractor. This Agreement has been and is made solely for the benefit of Spencer Clarke and
the Company and nothing contained in this Agreement will confer any rights upon, nor will this Agreement be construed to create any rights
in, any person who is not party to such Agreement, other than as set forth in this paragraph. The rights and obligations of either party
under this Agreement may not be assigned without the prior written consent of the other party hereto and any other purported assignment
will be null and void. Spencer Clarke has been retained under this Agreement as an independent contractor, and it is understood and agreed
that this Agreement does not create a fiduciary relationship between Spencer Clarke and the Company or their respective Boards of Directors.
Spencer Clarke shall not be considered to be the agent of the Company for any purpose whatsoever and Spencer Clarke is not granted any
right or authority to assume or create any obligation or liability, express or implied, on the Company’s behalf, or to bind the
Company in any manner whatsoever.
14.
Validity. This Agreement contains the entire agreement between the parties hereto. No party has made any statement, agreement,
or representation, either oral or written, in connection herewith, modifying, adding, or changing the terms and conditions herein set
forth. No present or past dealings between the parties shall be permitted to contradict or modify the terms hereof. No modification of
this Agreement shall be binding unless such modification is in writing and signed by the parties hereto. In case any term of this Agreement
will be held invalid, illegal, or unenforceable, in whole or in part, the validity of any of the other terms of this Agreement will not
in any way be affected thereby.
15.
Counterparts. This Agreement may be executed in counterparts and each of such counterparts will for all purposes be deemed to
be an original, and such counterparts will together constitute one and the same instrument.
16.
Notices. All notices and other communications required or permitted to be given hereunder must be in writing, in English, and
delivered either (a) personally (only by a credible service agency), (b) by certified mail, postage prepaid, return receipt requested,
(c) by overnight mail with a nationally recognized overnight courier with tracking capability, in each such case to the addresses set
forth below or such other address as a party may notify the other party via notice served in accordance herewith, or (d) for notices
other than those regarding indemnification or breach, by electronic mail to the address set forth below. Notices sent in accordance with
this paragraph will be effective (i) for methods (a) through (c), on the date of delivery or refusal of delivery (as confirmed by the
return receipt or tracking information, as applicable), and (ii) for method (d), upon the sender’s receipt of a reply email from
or on behalf of the intended recipient or other written or electronic acknowledgment or confirmation of such notice by or on behalf of
the intended recipient:
| To the Company: |
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Global Diversified Marketing Group Inc. |
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(Operates through its wholly owned subsidiary Global Diversified Holdings, Inc.) |
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Attention: Paul Adler, President, CEO and CFO |
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4042 Austin Blvd, Suite B |
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Island Park, NY 11558 |
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Email: paul@gdmginc.com |
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| With a copy to: |
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The Crone Law Group, P.C. |
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Eric C. Mendelson, Partner |
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420 Lexington Avenue, Suite 2446 |
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New York, NY 10170 |
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Email: emendelson@cronelawgroup.com |
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| To Spencer Clarke: |
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Spencer Clarke LLC |
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1111 Lincoln Road Suite 500 |
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Miami Beach. FL 33139 |
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Attention: Reid Drescher, Chief Executive Officer |
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Email: RDrescher@SpencerClarke.com |
www.SpencerClarke.com
1111 Lincoln Road Suite 500 Miami Beach, FL 33154 Tel 305-600-3268/Fax 212.446.6191/Compliance@SpencerClarke.com
17. Best
Efforts Engagement and Exclusivity. It is expressly understood and acknowledged that Spencer Clarke’s Engagement/Agreement
hereunder does not constitute any commitment, express or implied, on the part of Spencer Clarke or of any of its affiliates to
purchase or place any of the Company’s securities or to provide any type of financing and that any Financing or Transaction
will be conducted by Spencer Clarke on a “reasonable efforts” basis. Exclusivity: As defined here, the term
“Exclusive” shall mean neither the Company nor any of its officers, directors, employees, subsidiaries, agents or
representatives (“Representative”) will, directly or indirectly solicit or otherwise encourage or accept the submission
of any proposal or offer (“Investment Proposal”) from any person or entity relating to any issuance of the
Company’s equity, debt, or equity-linked securities (including warrants) or participate in any discussions regarding any joint
venture or merger or acquisition activity without the written pre-approval of Spencer Clarke LLC. The Company will immediately cease
all contacts, discussion, and negotiations with third parties regarding any Investment Proposal and, during the Term, will promptly
inform SC of any unsolicited Investment Proposals or communications received by the Company or its Representatives.
18.
Announcements. The Company agrees that Spencer Clarke shall, upon completion of any Financing, Transaction, Corporate Finance
Activity or portion thereof, have the right to place advertisements or announcements on its website or marketing materials or in financial
and other newspapers and journals at its own expense describing its services provided to the Company hereunder. The Company further agrees
that it shall not issue any press release in connection with any Financing, Transaction, Corporate Finance Activity without Spencer Clarke’s
prior written approval of such press release. The Company announce any Financing, Transaction, Corporate Finance Activity as required
by law; provided, however, that Spencer Clarke’s counsel shall have the right to review and comment on any Current Report on Form
8-K regarding any Financing, Transaction, Corporate Finance Activity completed hereunder that is prepared by or on behalf of the Company
before the same is filed with the SEC.
(Signature
Page Follows)
www.SpencerClarke.com
1111 Lincoln Road Suite 500 Miami Beach, FL 33154 Tel 305-600-3268/Fax 212.446.6191/Compliance@SpencerClarke.com
If
you are in agreement with the foregoing, please execute and return two copies of this engagement letter to the undersigned. This Agreement
may be executed in counterparts, electronic mail and by facsimile transmission.
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Sincerely
yours, |
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SPENCER
CLARKE LLC |
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Name: |
Reid
Drescher |
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Title: |
President
& CEO |
Agreed
to and accepted this 11th day of November 2022:
GLOBAL
DIVERSIFIED MARKETING GROUP INC.
(OPERATES
THROUGH ITS WHOLLY OWNED SUBSIDIARY GLOBAL DIVERSIFIED HOLDINGS, INC.)
| By: |
Paul
Adler |
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| Name: |
PAUL
ADLER PRESIDENT, CEO & CFO |
|
www.SpencerClarke.com
1111 Lincoln Road Suite 500 Miami Beach, FL 33154 Tel 305-600-3268/Fax 212.446.6191/Compliance@SpencerClarke.com
Schedule
A
Equity/Debt/Warrant Placement Fees
As
compensation for Services rendered and to be rendered hereunder by Placement Agent, or for any Corporate Finance Activity pursuant to
this Agreement, the Company agrees to pay Placement Agent for each and any Financing or Transaction, capital raise or corporate financing
activity (“Closing”), the following fees in consideration of the Services rendered by the Placement Agent in connection therewith
(collectively, the “Placement Fees”).
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Equity / Convertible Preferred / Convertible Debt Placement Success Fee (“Equity Placement”). Upon the Closing of an equity placement, equity linked or its equivalent, including warrant exercises, Spencer Clarke shall be entitled to and have earned and be immediately paid a success fee, in cash, for any and all financings to the Company in an amount equal to a % of the total gross amount raised or committed by any source of the financing. The % success fee will be: 10.00% (ten percent) on the first $4 million of each gross financing value; 8% (eight percent) on the next $4 million of each such financing, and then 6% (six percent) cash fee on all money and commitments above $10 million per financing. Equity Placement will include any debt structure that has any equity or warrant component. Fees shall be paid at each Closing. |
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Regulation A Offerings (Reg A): Notwithstanding the foregoing, upon the Closing of a Regulation A Offering (as defined under the Act), the percentage success fee for each Closing will be a 5% cash fee and a 5% warrant fee as per the Warrant Coverage section. The Regulation A offering will have No other fees or offsets. No proceeds from the Reg A offering will used to satisfy any outstanding obligations, nor monthly advisory fees. |
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Debt Offering / Mezzanine Credit Facility/Equipment Financing or Senior Debt Facility (“Mezzanine Credit Facility”) Fee: Upon the closing of a Mezzanine Credit Facility, Spencer Clarke will have earned, be entitled to and thus be immediately paid a success fee for any and all financing sources, in an amount equal to 6% (six percent) of the maximum amount for the mezzanine credit facility committed by the source of the financing. The term “Mezzanine Credit Facility” shall be defined as any debt instrument/credit facility (including any equipment loan, sale/lease back transaction, or any related financing agreement) which may be, but not necessarily subordinated to any security interest by any other lender in any asset or stock of the company, its subsidiaries and/or affiliates, and may other forms of yield enhancement in addition to a current cash pay interest coupon. |
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3(a)10 financings: Upon the Closing of a Qualified Transaction consisting of a 3(a)10 financing (as defined under the Act),the Company agrees to pay Placement Agent a cash fee of 8% of the face value of the claims purchased in such financing having a face value of up to $500,000; and 6% of the face value of the claims purchased in such financing having a face value between $500,000 and $ 1 million; and 5% of the face value of the claims purchased in such financing having a face value of over $1 million. (Additional placement agreement may be required) |
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Bank Debt: Upon the Closing of a bank debt transaction, the company will pay a cash fee of 1.5% on commitment amounts up to $10 million, and a 1% cash fee thereafter, due at initial Closing. |
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Non-Accountable Expense Allowance. In addition to the other fees payable, Spencer Clarke will be entitled to and have earned and be immediately paid a non-accountable expense allowance, in cash, (the “Non-Accountable Fee”) upon each Closing equal to 2% of the first 2 million dollars raised in each Closing (Closings include amounts raised via conversion of existing indebtedness of the Company or exercise of cash warrants). Non-Accountable Fees are excluded and shall not be payable for any offerings pursuant to Regulation A promulgated under the Securities Act of 1933, as amended. |
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Warrant Coverage: In addition to the other fees payable the Company agrees to issue to Spencer Clarke (or its designated affiliates or assignees)(“Holder”), upon the closing of any financing, issuances, warrant exercise or corporate finance activity, a five (5) year non-callable, cashless warrants for private companies or a five (5) year cashless non-callable warrant for public companies (“Warrants”) equal to ten percent (10%) of the Transaction value or capital/debt committed, warrants issued or exercised, debt incurred or Mezzanine Credit Facility that is secured. Warrants will exercisable into common stock of the Company issuable to Spencer Clarke or its designee, based on the lower strike price of the full net valuation of said financing, including all components of the financing or the current estimated market capitalization price of the Company which may be lower than investor strike prices. Warrants issued on warrants will be issued pari passu with other participating investor warrants, not withstanding any of other provision in this agreement and calculated on a fully diluted basis. Warrants granted based on transaction valuation will contain the provisions of the SC warrant template attached in Exhibit C. |
www.SpencerClarke.com
1111 Lincoln Road Suite 500 Miami Beach, FL 33154 Tel 305-600-3268/Fax 212.446.6191/Compliance@SpencerClarke.com
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The
Company will be responsible to disclose to investors of all placement agent compensation. The Company shall also reserve, and at
all times have available, a sufficient number of shares of its common stock to be issued upon the exercise of the Warrants. The Company
shall also grant unlimited “piggy back” registration rights, at the Company’s expense, and to include the shares
of the underlying Common Stock in any registration statement filed by the Company under the Securities Act of 1933 relating to the
sales of shares of common stock or other securities of the Company. The company will provide any documents needed to issue, convert,
or exercise such warrants. At the Company’s expense, any legal opinions on any issued shares or warrants will be paid for or
provided. Issuance of certificates for Warrant or Shares shall be made without charge to the Placement Agent/Holder for any issue
or transfer tax or other incidental expense in respect of the issuance of such certificate including any charges of any clearing
firm, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder
or in such name or names as may be directed by the Holder. (See Exhibit C) |
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Expenses: In addition to any fees payable to Spencer Clarke hereunder, the Company shall reimburse Spencer Clarke for all reasonable and documented out-of-pocket expenses (including, without limitation, fees and disbursements of counsel and all travel and other out-of-pocket expenses) incurred by Spencer Clarke in connection with its engagement hereunder; provided, however, that the Placement Agent shall obtain prior written approval from the President of the Company for any and all expense items which are in excess of $1,500. All fees and expenses are due as incurred. |
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Filing Fees. The Company shall assist and cooperate with legal counsel to Spencer Clarke in effecting a filing with respect to any public offering if a registration statement is filed in connection with any Transaction (an “Issuer Filing”) with the Financial Industry Regulatory Authority (“FINRA”) Corporate Financing Department pursuant to FINRA Rule 5110 and the Company shall pay the filing fee required by any such Issuer related Filings and the fees and expenses of counsel to Spencer Clarke in connection with any Issuer related Filing and clearing such filing with FINRA. The Company shall assist legal counsel to Spencer Clarke in pursuing the Issuer Filing until FINRA issues a letter confirming that it does not object to the terms of the offering contemplated by such registration statement. |
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Business Agreement Fee. The Company agrees that should any joint venture be consummated, or any manufacturing, production, distribution or joint development agreement(s) or any other sales or business arrangements that generate revenue or value, be entered into by the Company as a result of introductions arranged by, negotiations performed by, or other efforts of Spencer Clarke outside of the scope of the services above, The Company will pay to Spencer Clarke an industry-standard commission on the total consideration actually received or benefits actually derived from such transaction(s) by the Company at any time. |
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Non-Financings: In the event that the Issuer proceeds with a non-financing transaction with one or more Introduced Parties, then prior to closing the Issuer and SC shall mutually agree upon compensation payable to SC which may include an ownership interest in the resulting licensed, joint venture and/or merged/acquiring entity. In the event the Issuer completes a non-financing transaction with an Introduced Party, without first agreeing with SC on the fee for the non-financing transaction, then SC shall be entitled to receive a cash fee equal to 10% of any licensing fees or Value payable upon receipt by the licensor, a cash fee equal to 10% of the value of the Issuer related portion of the surviving entity resulting from any merger or acquisition payable upon closing of the transaction and, in the case of a joint venture, equal to 10% of SC’s ownership portion of the joint venture. |
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Payment Authorization: The Company authorizes Success Fee’s to be deducted from the Transaction Proceeds by the Financing Party (investor or financier), and the Financing Party will remit the Success Fee’s directly to SC on Company’s behalf. In addition, prior to closing of any Corporate Financing Activity, if requested, the Company will sign a payment authorization letter, in a form to be prepared at the sole discretion of SC, irrevocably instructing the source of the Financing to deduct the Success Fees due to SC from the financing and to remit those Success Fees directly to SC. |
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Merger or Acquisition Success Fee. Upon the Closing of a sale, acquisition, divestiture, merger, or other business combination, or other similar buy or sell side transaction involving the Company and any other party/entity, then the Company shall pay Spencer Clarke a fee (the “M&A Fee”) in an amount equal to a 4% (four percent) of the Aggregate Value of the transaction for acting as its advisor and placement agent. For purposes hereof, “Aggregate Value” is defined as the aggregate purchase price or value of the transaction plus any assumed debt of the target company or companies, forgiveness of debt, extraordinary dividends and any other consideration (in the form of compensation, stock purchase price or otherwise) paid to security holders, executives, or family members of security holders or executives, in connection with the transaction, including, but not limited to, any contingent consideration, post-closing payments, the value (as measured by the excess of acquisition price over exercise price or conversion price) of all unexercised options, warrants or other convertible securities assumed or acquired. The M&A Fee will consist of the same consideration as the Aggregate Value. The cash portion of the M & A Fee will be at least $100,000 and not offset the equity portion. The Company will pay all M&A Fees to Spencer Clarke immediately upon closing of the transaction, and at such other times subsequent to that closing when additional amounts of the Aggregate Value of the total transaction are received that were not previously calculated during the extension period. Any or each Financing or M&A Transaction will trigger extension of exclusivity of all investment banking and corporate finance and advisory services. |
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Discounted/Premium Cash Success Fee: If any Corporate Finance Activity is consummated within the first 60 days of the Engagement, with select Company referred Prospects that are listed in Exhibit B, the Company will have a 50% discount of such Placement Fees otherwise owed hereunder. |
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1111 Lincoln Road Suite 500 Miami Beach, FL 33154 Tel 305-600-3268/Fax 212.446.6191/Compliance@SpencerClarke.com
Exhibit
A
INDEMNIFICATION
PROVISIONS
Capitalized
terms used in this Exhibit shall have the meanings ascribed to such terms in the Agreement to which this Exhibit is attached.
The
Company agrees to indemnify and hold harmless Placement Agent and each of the other Indemnified Parties (as hereinafter defined) from
and against any and all losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses and disbursements,
and any and all actions, suits, proceedings and investigations in respect thereof and any and all legal and other costs, expenses and
disbursements in giving testimony or furnishing documents in response to a subpoena or otherwise (including, without limitation, the
costs, expenses and disbursements, as and when incurred, of investigating, preparing, pursing or defending any such action, suit, proceeding
or investigation (whether or not in connection with litigation in which any Indemnified Party is a party)) (collectively, “Losses”),
directly or indirectly, caused by, relating to, based upon, arising out of, or in connection with, Placement Agent’s acting for
the Company, including, without limitation, any act or omission by Placement Agent in connection with its acceptance of or the performance
or non-performance of its obligations under the Agreement between the Company and Placement Agent to which these indemnification provisions
are attached and form a part, any breach by the Company of any representation, warranty, covenant or agreement contained in the Agreement
or the subscription or securities purchase agreement with the investors (or in any instrument, document or agreement relating thereto,
including any agency agreement), or the enforcement by Placement Agent of its rights under the Agreement or these indemnification provisions,
except to the extent that any such Losses are found in a final judgment by a court of competent jurisdiction (not subject to further
appeal) to have resulted primarily and directly from the gross negligence or willful misconduct of the Indemnified Party seeking indemnification
hereunder.
The
Company also agrees that no Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise)
to the Company for or in connection with the engagement of Placement Agent by the Company or for any other reason, except to the extent
that any such liability is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted
primarily and directly from (a) such Indemnified Party’s gross negligence or willful misconduct, or (b) the breach of any representation,
warranty or covenant by the Placement Agent under this Agreement.
These
Indemnification Provisions shall extend to the following persons (collectively, the “Indemnified Parties”): Placement Agent,
its present and former affiliated entities, managers, members, officers, employees, legal counsel, agents and controlling persons (within
the meaning of the federal securities laws), and the officers, directors, partners, stockholders, members, managers, employees, legal
counsel, agents and controlling persons of any of them. These indemnification provisions shall be in addition to any liability which
the Company may otherwise have to any Indemnified Party.
If
any action, suit, proceeding or investigation is commenced, as to which an Indemnified Party proposes to demand indemnification, it shall
notify the Company with reasonable promptness; provided, however, that any failure by an Indemnified Party to notify the
Company shall not relieve the Company from its obligations hereunder. An Indemnified Party shall have the right to retain one counsel
of its own choice to represent it, and the fees, expenses and disbursements of such counsel shall be borne by the Company. Any such counsel
shall, to the extent consistent with its professional responsibilities, cooperate with the Company and any counsel designated by the
Company. The Company shall be liable for any settlement of any claim against any Indemnified Party made with the Company’s written
consent. The Company shall not, without the prior written consent of Placement Agent, settle or compromise any claim, or permit a default
or consent to the entry of any judgment in respect thereof, unless such settlement, compromise or consent (i) includes, as an unconditional
term thereof, the giving by the claimant to all of the Indemnified Parties of an unconditional release from all liability in respect
of such claim, and (ii) does not contain any factual or legal admission by or with respect to an Indemnified Party or an adverse statement
with respect to the character, professionalism, expertise or reputation of any Indemnified Party or any action or inaction of any Indemnified
Party.
www.SpencerClarke.com
1111 Lincoln Road Suite 500 Miami Beach, FL 33154 Tel 305-600-3268/Fax 212.446.6191/Compliance@SpencerClarke.com
Exhibit
A (pg2)
INDEMNIFICATION
PROVISIONS
In
order to provide for just and equitable contribution, if a claim for indemnification pursuant to these indemnification provisions is
made but it is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) that such indemnification
may not be enforced in such case, even though the express provisions hereof provide for indemnification in such case, then the Company
shall contribute to the Losses to which any Indemnified Party may be subject (i) in accordance with the relative benefits received by
the Company and its stockholders, subsidiaries and affiliates, on the one hand, and the Indemnified Party, on the other hand, and (ii)
if (and only if) the allocation provided in clause (i) of this sentence is not permitted by applicable law, in such proportion as to
reflect not only the relative benefits, but also the relative fault of the Company, on the one hand, and the Indemnified Party, on the
other hand, in connection with the statements, acts or omissions which resulted in such Losses as well as any relevant equitable considerations.
No person found liable for a fraudulent misrepresentation shall be entitled to contribution from any person who is not also found liable
for fraudulent misrepresentation. The relative benefits received (or anticipated to be received) by the Company and it stockholders,
subsidiaries and affiliates shall be deemed to be equal to the aggregate consideration payable or receivable by such parties in connection
with the transaction or transactions to which the Agreement relates relative to the amount of fees actually received by Placement Agent
in connection with such transaction or transactions. Notwithstanding the foregoing, in no event shall the amount contributed by all Indemnified
Parties exceed the amount of fees previously received by Placement Agent pursuant to the Agreement.
Neither
termination nor completion of the Agreement shall affect these Indemnification Provisions which shall remain operative and in full force
and effect. The Indemnification Provisions shall be binding upon the Company and its successors and assigns and shall inure to the benefit
of the Indemnified Parties and their respective successors, assigns, heirs and personal representatives.
www.SpencerClarke.com
1111 Lincoln Road Suite 500 Miami Beach, FL 33154 Tel 305-600-3268/Fax 212.446.6191/Compliance@SpencerClarke.com
Exhibit
B: COMPANY PROSPECT LIST
Exhibit
C: FORM OF WARRANT ATTACHED
END
www.SpencerClarke.com
1111 Lincoln Road Suite 500 Miami Beach, FL 33154 Tel 305-600-3268/Fax 212.446.6191/Compliance@SpencerClarke.com