UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
November 25, 2019
Date
of Report (Date of earliest event reported)
Friendable, Inc.
(Exact
name of registrant as specified in its charter)
Nevada
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000-52917
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98-0546715
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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1821 S Bascom Ave., Suite 353, Campbell, California
95008
(Address
of principal executive offices) (Zip Code)
(855) 473-7473
Registrant’s
telephone number, including area code
Check
the appropriate box below if the Form 8-K is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐ Written communications pursuant to Rule 425 under
the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under
the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On
December 26, 2019, Friendable, Inc. and Fan Pass Inc, (together,
the “Company”) entered into an amendment (the
“Amendment”) to the March 26, 2019 Debt Restructuring
Agreement (the “Agreement”) with Robert A. Rositano Jr.
(“Robert Rositano”), Dean Rositano (“Dean
Rositano”), Frank Garcia (“Garcia”), Checkmate
Mobile, Inc. (“Checkmate”), Alpha Capital Anstalt
(“Alpha”), Coventry Enterprises, LLC
(“Coventry”), Palladium Capital Advisors, LLC
(“Palladium”), EMA Financial, LLC (“EMA”),
Michael Finkelstein (“Finkelstein”), and Barbara R.
Mittman (“Mittman”), each being a debt holder of the
Company.
The
Amendment clarified the date upon which debt holders may each reset
the conversion price by fixing the reset dates as March 4, 2020 and
July 2, 2020.
Item 3.02 Unregistered Sales of Equity Securities.
On
December 11, 2019, the Company sold 58,300 shares of its Series C
Preferred Stock pursuant to a subscription agreement for a total
purchase price of $53,000. A description of the Series C Preferred
Stock is contained in Item 5.03 below and the Designation of the
Series C Preferred Stock is filed herewith as Exhibit
4.2.
The
shares were sold pursuant to an exemption from registration under
Section 4(a)(1) of the Securities Act of 1933 and Rule 506 of
Regulation D.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change
in Fiscal Year.
On
November 25, 2019 the Company filed a Designation of Series C
Preferred Stock with the state of Nevada, authorizing 1,000,000
shares of the Series C Preferred Stock.
The
Series C Preferred Stock will, with respect to dividend rights and
rights upon liquidation, winding-up or dissolution, rank: (a)
senior with respect to dividends with the Company's common stock,
par value 0.0001 per share ("Common Stock")(the Series C Preferred
Stock will convert into common stock immediately upon liquidation
and be pari passu with the common stock in the event of
litigation), and (b) junior with respect to dividends and right of
liquidation to all existing and future indebtedness of the
Company.
The
Series C Preferred Stock does not have any voting
rights.
Each
share of Series C Preferred Stock will carry an annual dividend in
the amount of eight percent (8%) of the Stated Value of $1.00 (the
"Divided Rate"), which shall be cumulative and compounded daily,
payable solely upon redemption, liquidation or
conversion.
The
Company has the right until 180 days after issuance, at the
Company's option, to redeem all or any portion of the shares of
Series C Preferred Stock, exercisable on not more than three (3)
Trading Days (as defined herein) prior written notice to the
Holders, in full. However, the Company will be required to redeem
the Series C Shares 24 months after issuance.
The
Holder shall have the right from time to time, and at any time
during the period beginning on the date which is six (6) months
following the Issuance Date, to convert all or any part of the
outstanding Series C Preferred Stock into fully paid and
non-assessable shares of Common Stock, subject to certain
exclusions stated with in the designation. The Conversion Price is
equal to 71% multiplied by the average of the two (2) lowest
Trading Prices (as defined here) for the Common Stock during the
twenty (20) Trading Day period ending on the latest complete
Trading Day prior to the Conversion Date.
The
forgoing description is qualified in its entirety by reference to
the Designation of the Series C Preferred Stock filed herewith as
Exhibit 4.2.
Item 9.01 Financial Statements and Exhibits.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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Friendable, Inc.
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Date: December
30, 2019
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By:
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/s/ Robert Rositano
Jr.
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Robert
Rositano
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CEO
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FRIENDABLE, INC.
CERTIFICATE
OF DESIGNATIONS, PREFERENCES,
RIGHTS
AND LIMITATIONS
OF
SERIES
C CONVERTIBLE PREFERRED STOCK
The
undersigned, Robert Rositano Jr., hereby certifies that:
1.
I am the Chief Executive Officer of FRIENDABLE, INC., a Nevada corporation (the
“Company”).
2.
The Company is authorized to issue 50,000,000 shares of preferred
stock, par value $0.001 per share
(the “Preferred Stock”) of which 21,267 shares are
currently issued and outstanding;
3.
The following resolutions were duly adopted by the Board of
Directors:
WHEREAS, the Board
of Directors of the Company is authorized to fix the dividend
rights, dividend rate, voting rights, conversion rights, rights and
terms of redemption and liquidation preferences of any wholly
unissued series of Preferred
Stock and the number of shares constituting any Series and
the designation thereof, of any of them;
WHEREAS, it is the
desire of the Board of Directors of the Company, pursuant to its
authority as aforesaid in accordance with the corporation law of
the State of Nevada, and as set forth in this Certificate of
Designations, Preferences, Rights and Limitations of Series C
Convertible Preferred Stock, to designate the rights, preferences,
restrictions and other matters relating to the Series C Convertible
Preferred Stock, which will
consist of 1,000,000 shares of Series C Convertible Preferred Stock, par value $0.0001 per
share (“Series C Preferred Stock”), which the Company
has the authority to issue, as follows:
NOW,
THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby
provide for the issuance of a series of Preferred Stock for cash or exchange of
other securities, rights or property and does hereby fix and
determine the rights, preferences, restrictions and other matters
relating to such series of Preferred
Stock as follows:
RESOLVED, FURTHER,
that the chairman, chief executive
officer, chief financial officer, president or any
vice-president, and the secretary or any assistant secretary, of
the Company be and they hereby are authorized and directed to
prepare and file a Certificate of Designations, Preferences, Rights
and Limitations of Series C Preferred Stock in accordance with the
foregoing resolution and the provisions of Nevada law.
ARTICLE
I
Series
C Preferred Stock
Section
1. Designation and
Amount. The number of shares so
designated as Series C Preferred Stock is 1,000,000 which will not
be subject to increase without the consent of the holders (each a
“Holder” and collectively, the “Holders”)
of a majority of the outstanding shares of Series C Preferred
Stock. The designations, powers, preferences, rights and
restrictions granted or imposed upon the Series C Preferred Stock
are as set forth in this Certificate of Designation (this
“Certificate of Designations”). Each share of Series C
Preferred Stock shall have, subject to Section 8(b), a stated value
of $1.00 (the “Stated Value”).
Section
2. Ranking and Voting.
Ranking. The Series C Preferred
Stock will, with respect to dividend rights and rights upon
liquidation, winding-up or dissolution, rank: (a) senior with
respect to dividends with the Company’s common stock, par
value 0.0001 per share (“Common Stock”)(the Series C
Preferred Stock will convert into common stock immediately upon
liquidation and be pari passu with the common stock in the event of
litigation), and (b) junior with respect to dividends and right of
liquidation to all existing and future indebtedness of the
Company.
Voting. Except as set forth herein, Series C Preferred Stock shall
have no right to vote on any matters requiring shareholder approval
or any matters on which the shareholders are permitted to vote.
With respect to any voting rights of the Series C Preferred Stock
set forth herein, the Series C Preferred Stock shall vote as a
class, each share of Series C Preferred Stock shall have one vote
on any such matter, and any such approval may be given via a
written consent in lieu of a meeting of the Series C Holders. Any
reference herein to a determination, decision or election being
made by the “Majority Holders” shall mean the
determination, decision or election as made by Holders holding a
majority of the issued and outstanding shares of Series C Preferred
Stock at such time.
Section
3. Dividends. Each share of Series C Preferred Stock will carry
an annual dividend in the amount of eight percent (8%) of the
Stated Value (the “Divided Rate”), which shall be
cumulative and compounded daily, payable solely upon redemption,
liquidation or conversion. Upon the occurrence of an Event of
Default (as defined herein), the Dividend Rate shall automatically
increase to twenty two percent (22%).
Section
4. Protective
Provision.
A. So
long as any shares of Series C Preferred Stock are outstanding, the
Company will not, without the affirmative approval of the Majority
Holders (i) alter or change adversely the powers, preferences or
rights given to the Series C Preferred Stock or alter or amend this
Certificate of Designations, (ii) authorize or create any class of
stock ranking as to distribution of dividends or a liquidation
preference senior to the Series C Preferred Stock, (iii) amend its
Articles of Incorporation, as amended, or other charter documents
in breach of any of the provisions hereof, (iv) increase the
authorized number of shares of Series C Preferred Stock, (v)
liquidate, dissolve or wind-up the business and affairs of the
Company, or effect any Deemed Liquidation Event (as defined below),
(vi) breach any of the provisions set forth herein; or (vii) enter
into any binding agreement with respect to any of the
foregoing.
B. A
“Deemed Liquidation Event” means: (a) a merger or
consolidation in which the Company is a constituent party or a
subsidiary of the Company is a constituent party and the Company
issues shares of its capital stock pursuant to such merger or
consolidation, except any such merger or consolidation involving
the Company or a subsidiary in which the shares of capital stock of
the Company outstanding immediately prior to such merger or
consolidation continue to represent, or are converted into or
exchanged for shares of capital stock that represent, immediately
following such merger or consolidation, at least a majority, by
voting power, of the capital stock of the surviving or resulting
corporation or, if the surviving or resulting corporation is a
wholly owned subsidiary of another corporation immediately
following such merger or consolidation, the parent corporation of
such surviving or resulting corporation; or (b) the sale, lease,
transfer, exclusive license or other disposition, in a single
transaction or series of related transactions, by the Company or
any subsidiary of the Company of all or substantially all the
assets of the Company and its subsidiaries taken as a whole, or the
sale or disposition (whether by merger or otherwise) of one or more
subsidiaries of the Company if substantially all of the assets of
the Company and its subsidiaries taken as a whole are held by such
subsidiary or subsidiaries, except where such sale, lease,
transfer, exclusive license or other disposition is to a wholly
owned subsidiary of the Company.
C. The
Company shall not have the power to effect a Deemed Liquidation
Event unless the agreement or plan of merger or consolidation for
such transaction provides that the consideration payable to the
stockholders of the Company will be allocated among the holders of
capital stock of the Company in accordance
hereof.
Section
5. Liquidation.
A. Upon
any liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary, or upon any Deemed Liquidation Event,
after payment or provision for payment of debts and other
liabilities of the Company, and after payment or provision for any
liquidation preference payable to the holders of any Preferred
Stock ranking senior upon liquidation to the Series C Preferred
Stock, if any, but prior to any distribution or payment made to the
holders of Common Stock or the holders of any Preferred Stock
ranking junior upon liquidation to the Series C Preferred Stock by
reason of their ownership thereof, the Holders will be entitled to
be paid out of the assets of the Company available for distribution
to its stockholders an amount with respect to each share of Series
C Preferred Stock equal to (i) the Stated Value plus (ii) any
accrued but unpaid dividends, the Default Adjustment (as defined
herein), if applicable, Failure to Deliver Fees (as defined
herein), if any, and any other fees as set forth herein (the
amounts in this clause (ii) collectively, the “Adjustment
Amount”).
B. If,
upon any liquidation, dissolution or winding up of the Company or
any Deemed Liquidation Event, the assets of the Company will be
insufficient to make payment in full to all Holders of the
liquidation preferences hereunder, then such assets will be
distributed among the Holders at the time outstanding, ratably in
proportion to the full amounts to which they would otherwise be
respectively entitled.
Section
6. Redemption.
A. Company’s
Redemption Option.
Notwithstanding anything to the contrary contained herein, at any
time during the periods set forth on the table immediately
following this paragraph (the “Redemption Periods”)
provided that an Event of Default has not occurred, the Company
will have the right, at the Company’s option, to redeem all
or any portion of the shares of Series C Preferred Stock,
exercisable on not more than three (3) Trading Days (as defined
herein) prior written notice to the Holders, in full, in accordance
with this Section 6. Any notice of redemption hereunder (an
“Optional Redemption Notice”) shall be delivered to
each Holder at its registered addresses and shall state: (1) that
the Company is exercising its right to redeem the Series C
Preferred Stock, and (2) the date of redemption which shall be not
more than three (3) Trading Days (as defined herein) from the date
of the Optional Redemption Notice. On the date fixed for redemption
(the “Optional Redemption Date”), the Company shall
make payment of the Optional Redemption Amount (as defined herein)
to the applicable Holder. If the Company exercises its right to
redeem the Series C Preferred Stock, the Company shall make payment
to the applicable Holder(s) of an amount in cash equal to the
percentage (“Redemption Percentage”) as set forth in
the table immediately following this paragraph opposite the
applicable Redemption Period, multiplied by the sum of an amount
equal to (i) the total number of Series C Preferred Stock held by
the applicable Holder multiplied by (ii) the Stated Value plus the
Adjustment Amount, (the “Optional Redemption Amount”).
If the Company delivers an Optional Redemption Notice and fails to
pay the Optional Redemption Amount due to the applicable Holder
within two (2) business days following the Optional Redemption
Date, the Company shall forever forfeit its right to redeem the
Series C Preferred Stock pursuant to this Section
6.
Redemption Period
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Redemption Percentage
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1.
The period beginning on the date of the issuance of shares of
Series C Preferred Stock (the “Issuance Date”) and
ending on the date which is thirty (30) days following the Issuance
Date.
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110%
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2.
The period beginning on the date that is thirty-one (31) days from
the Issuance Date and ending sixty (60) days following the Issuance
Date.
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115%
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3.
The period beginning on the date that is sixty-one (61) days from
the Issuance Date and ending ninety (90) days following the
Issuance Date.
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120%
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4.
The period beginning on the date that is ninety-one (91) days from
the Issuance Date and ending one hundred twenty (120) days
following the Issuance Date.
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125%
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5.
The period beginning on the date that is one hundred twenty-one
(121) days from the Issuance Date and ending one hundred fifty
(150) days following the Issuance Date.
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130%
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6.
The period beginning on the date that is one hundred fifty-one
(151) days from the Issuance Date and ending one hundred eighty
(180) days following the Issuance Date.
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135%
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After the expiration of one hundred eighty (180) days following the
Issuance Date of the applicable shares of Series C Preferred Stock,
the Company shall have no right of redemption, provided that, for
the avoidance of doubt, the provisions of Section 6(B) may continue
to apply. For the avoidance of doubt, any reference hereto to the
“Issuance Date” shall mean the date of the issuance of
the applicable share(s) of Series C Preferred Stock, and any
calculations or determinations hereunder shall apply to the
share(s) of Series C Preferred Stock based on the Issuance Date of
such share(s) of Series C Preferred Stock.
B. Company’s
Mandatory Redemption. On the
earlier to occur of (i) the date which is twenty-four (24) months
following the Issuance Date and (ii) the occurrence of an Event of
Default (the “Mandatory Redemption Date”), the Company
shall redeem all of the shares of Series C Preferred Stock of the
Holders (which have not been previously redeemed or converted).
With five (5) days of the Mandatory Redemption Date, the Company
shall make payment to each Holder of an amount in cash equal to (i)
the total number of Series C Preferred Stock held by such Holder
multiplied by (ii) the Stated Value plus the Adjustment Amount (the
“Mandatory Redemption Amount”).
Section
7.
Conversion.
A. Conversion
Right. The Holder shall have the right from time to time, and at
any time during the period beginning on the date which is six (6)
months following the Issuance Date, to convert all or any part of
the outstanding Series C Preferred Stock into fully paid and
non-assessable shares of Common Stock, as such Common Stock exists
on the Issuance Date, or any shares of capital stock or other
securities of the Company into which such Common Stock shall
hereafter be changed or reclassified at the conversion price
determined as provided herein (a “Conversion”);
provided, however, that in no event shall any Holder be entitled to
convert any portion of the Series C Preferred Stock in excess of
that number of Series C Preferred Stock that upon conversion of
which the sum of (1) the number of shares of Common Stock
beneficially owned by such Holder and its affiliates (other than
shares of Common Stock which may be deemed beneficially owned
through the ownership of the unconverted portion of the Series C
Preferred Stock or the unexercised or unconverted portion of any
other security of the Company subject to a limitation on conversion
or exercise analogous to the limitations contained herein) and (2)
the number of shares of Common Stock issuable upon the conversion
of the portion of the Series C Preferred Stock with respect to
which the determination of this proviso is being made, would result
in beneficial ownership by the Holder and its affiliates of more
than 4.99% of the outstanding shares of Common Stock. For purposes
of the proviso to the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of
the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and Regulations 13D-G thereunder,
except as otherwise provided in clause (1) of such proviso. The
beneficial ownership limitations on conversion as set forth in the
section may NOT be waived by the Holder. The number of shares of
Common Stock to be issued upon each conversion of Series C
Preferred Stock shall be determined by dividing the Conversion
Amount (as defined herein) by the applicable Conversion Price (as
defined herein) then in effect on the date specified in the notice
of conversion (the “Notice of Conversion”), attached
hereto as Exhibit
A, delivered to the Company by
a Holder in accordance with the terms hereof; provided that the
Notice of Conversion is submitted by facsimile or e-mail (or by
other means resulting in, or reasonably expected to result in,
notice) to the Company before 6:00 p.m., New York, New York time on
such conversion date (the “Conversion Date”); however,
if the Notice of Conversion is sent after 6:00 p.m., New York, New
York time the Conversion Date shall be the next business day. The
term “Conversion Amount” means, with respect to any
conversion of shares of the Series C Preferred Stock, the sum of
the Stated Value plus the Adjustment Amount with respect to the
shares of Series C Preferred Stock being converted in such
conversion.
B. Conversion
Price. The conversion price (the “Conversion Price”)
shall equal the Variable Conversion Price (as defined herein)
(subject to equitable adjustments by the Company relating to the
Company’s securities or the securities of any subsidiary of
the Company, combinations, recapitalization, reclassifications,
extraordinary distributions and similar events). The "Variable
Conversion Price" shall mean 71% multiplied by the Market Price (as
defined herein) (representing a discount rate of 29%).
“Market Price” means the average of the two (2) lowest
Trading Prices (as defined here) for the Common Stock during the
twenty (20) Trading Day period ending on the latest complete
Trading Day prior to the Conversion Date. “Trading
Price” means, for any security as of any date, the closing
bid price on the OTCQB, OTCQX, Pink Sheets electronic quotation
system or applicable trading market (the “OTC”) as
reported by a reliable reporting service (“Reporting
Service”) designated by the Holder (i.e. Bloomberg).
“Trading Day” shall mean any day on which the Common
Stock is tradable for any period on the OTC, or on the principal
securities exchange or other securities market on which the Common
Stock is then being traded. Notwithstanding any reference above or
elsewhere herein to any certificates representing the Series C
Preferred Stock, the Company expects that the Series C Preferred
Stock shall be recorded solely in book entry form, and in such case
any references hereto to certificates representing the Series C
Preferred Stock being required to be delivered or provided in
certain instances shall be deemed automatically waived, and such
book entry records shall take the place
thereof.
C. Authorized
Shares. The Company covenants that during the period the conversion
right exists, the Company will reserve from its authorized and
unissued Common Stock a sufficient number of shares, free from
preemptive rights, to provide for the issuance of Common Stock upon
the full conversion of this Series C Preferred Stock issued. The
Company is required at all times to have authorized and reserved
eight times the number of shares that would be issuable upon full
conversion of the Series C Preferred Stock (assuming that the 4.99%
limitation set forth in herein is not in effect) (based on the
respective Conversion Price of the Series C Preferred Stock in
effect from time to time) (the “Reserved Amount”). The
Reserved Amount shall be increased (or decreased unilaterally by
the Holder) from time to time in accordance with the
Company’s obligations hereunder. The Company represents that
upon issuance, such shares will be duly and validly issued, fully
paid and non-assessable. In addition, if the Company shall issue
any securities or make any change to its capital structure which
would change the number of shares of Common Stock into which the
Series C Preferred Stock shall be convertible at the then current
Conversion Price, the Company shall at the same time make proper
provision so that thereafter there shall be a sufficient number of
shares of Common Stock authorized and reserved, free from
preemptive rights, for conversion of the outstanding Series C
Preferred Stock. The Company (i) acknowledges that it has
irrevocably instructed its transfer agent to issue certificates for
the Common Stock issuable upon conversion of this Series C
Preferred Stock, and (ii) agrees that its issuance of the Series C
Preferred Stock shall constitute full authority to its officers and
agents who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for
shares of Common Stock in accordance with the terms and conditions
of the Purchase Agreement and the Series C Preferred Stock. If, at
any time the Company does not maintain the required Reserved
Amount, the Company shall be put on notice by the Holder, and shall
have five (5) days to cure its deficiency, after which time, such
failure will be deemed an Event of Default
hereunder.
D. Method
of Conversion.
i. Mechanics
of Conversion. As set forth in
hereof, the shares of Series C Preferred Stock may be converted by
the Holder thereof, either as to all of such Holder’s shares
of Series C Preferred Stock or as to a portion of such
Holder’s shares of Series C Preferred Stock, at any time from
time to time after six (6) months following the Issuance Date, by
submitting to the Company a Notice of Conversion (by facsimile,
e-mail or other reasonable means of communication dispatched on the
Conversion Date prior to 6:00 p.m., New York, New York time) and
within five (5) days following such conversion surrendering the
converted Series C Preferred Stock to the Company’s transfer
agent.
ii. Surrender
of Series C Preferred Stock Upon Conversion. Notwithstanding anything to the contrary set
forth herein, upon conversion of the Series C Preferred Stock in
accordance with the terms hereof, the converting Holder shall be
required to physically surrender the any certificate representing
the Series C Preferred Stock being converted to the Company (or its
transfer agent) and, in the event that less than all of the Series
C Stock represented by such certificate is being converted, the
Company shall return to the applicable Holder a new certificate
representing the unconverted shares of Series C Preferred
Stock.
iii. Delivery
of Common Stock Upon Conversion. Upon receipt by the Company from a Holder of a
facsimile transmission or e-mail (or other reasonable means of
communication) of a Notice of Conversion meeting the requirements
for conversion as set forth herein, and the certificate
representing the Series C Preferred Stock as required herein, the
Company shall issue and deliver or cause to be issued and delivered
to or upon the order of the applicable Holder certificates for the
Common Stock issuable upon such conversion, and any replacement
certificate representing the unconverted shares of Series C
Preferred Stock, if applicable, within two (2) business days after
such receipt (the “Deadline”). Upon receipt by the
Company of a Notice of Conversion, the applicable Holder shall be
deemed to be the holder of record of the Common Stock issuable upon
such conversion, the outstanding Series C Preferred Stock held by
such applicable Holder shall be reduced to reflect such conversion,
and, unless the Company defaults on its obligations hereunder, all
rights with respect to the shares of Series C Preferred Stock being
so converted shall forthwith terminate except the right to receive
the Common Stock or other securities, cash or other assets, as
herein provided, on such conversion. If the applicable Holder shall
have given a Notice of Conversion as provided herein and comply
with the other requirements herein, the Company’s obligation
to issue and deliver the certificates for Common Stock shall be
absolute and unconditional, irrespective of the absence of any
action by the applicable Holder to enforce the same, any waiver or
consent with respect to any provision thereof, the recovery of any
judgment against any person or any action to enforce the same, any
failure or delay in the enforcement of any other obligation of the
Company to the holder of record, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged
breach by the applicable Holder of any obligation to the Company,
and irrespective of any other circumstance which might otherwise
limit such obligation of the Company to the applicable Holder in
connection with such conversion.
iv. Delivery
of Common Stock by Electronic Transfer. In lieu of delivering physical certificates
representing the Common Stock issuable upon conversion, provided
the Company is participating in the Depository Trust Company
(“DTC”) Fast Automated Securities Transfer program,
upon request of the applicable Holder and its compliance with the
provisions set forth herein, the Company shall use its best efforts
to cause its transfer agent to electronically transmit the Common
Stock issuable upon conversion to the applicable Holder by
crediting the account of applicable Holder’s Prime Broker
with DTC through its Deposit and Withdrawal at Custodian
system.
v. Failure
to Deliver Common Stock Prior to Deadline. Without in any way limiting a Holder’s
right to pursue other remedies, including actual damages and/or
equitable relief, the parties agree that if delivery of the Common
Stock issuable upon conversion of the Series C Preferred Stock is
not delivered by the Deadline due to action and/or inaction of the
Company, the Company shall pay to the applicable Holder $2,000 per
day in cash, for each day beyond the Deadline that the Company
fails to deliver such Common Stock (the “Fail to Deliver
Fee”); provided, however, that the Fail to Deliver Fee shall
not be due if the failure is a result of a third party (i.e.
transfer agent; and not the result of any failure to pay such
transfer agent) despite the commercially reasonable efforts of the
Company to effect delivery of such Common Stock. Such cash amount
shall be paid to applicable Holder by the fifth
(5th)
day of the month following the month in which it has accrued. The
Company agrees that the right to convert is a valuable right to the
applicable Holder. The damages resulting from a failure, attempt to
frustrate, interference with such conversion right are difficult if
not impossible to qualify. Accordingly, the parties acknowledge
that the damages provision contained in this section are justified
and reasonable.
vi. Concerning
the Shares. The shares of
Common Stock issuable upon conversion of the Series C Preferred
Stock may not be sold or transferred unless: (i) such shares are
sold pursuant to an effective registration statement under the
Securities Act of 1933, as amended (together with the rules and
regulations thereunder, the “Securities Act”) or (ii)
the Company or its transfer agent shall have been furnished with an
opinion of counsel (which opinion shall be in form, substance and
scope customary for opinions of counsel in comparable transactions)
to the effect that the shares to be sold or transferred may be sold
or transferred pursuant to an exemption from such registration
(such as Rule 144 or a successor rule) (“Rule 144”); or
(iii) such shares are transferred to an “affiliate” (as
defined in Rule 144) of the applicable Holder who agrees to sell or
otherwise transfer the shares only in accordance with this section
and who is an accredited investor (as defined in Rule 501 under
Regulation D promulgated pursuant to the Securities Act). Any
restrictive legend on certificates representing shares of Common
Stock issuable upon conversion of the Series C Preferred Stock
shall be removed and the Company shall issue to the applicable
Holder a new certificate therefore free of any transfer legend if
the Company or its transfer agent shall have received an opinion of
counsel from applicable Holder’s counsel, in form, substance
and scope customary for opinions of counsel in comparable
transactions, to the effect that (i) a public sale or transfer of
such Common Stock may be made without registration under the
Securities Act, which opinion shall be accepted by the Company so
that the sale or transfer is effected; or (ii) in the case of the
Common Stock issuable upon conversion of the Series C Preferred
Stock such security is registered for sale by the applicable Holder
under an effective registration statement filed under the
Securities Act; or otherwise may be sold pursuant to an exemption
from registration. In the event that the Company does not
reasonably accept the opinion of counsel provided by the applicable
Holder with respect to the transfer of Securities pursuant to an
exemption from registration (such as Rule 144), at the Deadline, it
will be considered an Event of Default
hereunder.
E. Effect
of Certain Events.
i. Effect
of Merger, Consolidation, Etc. At the option of the Majority Holders, the sale,
conveyance or disposition of all or substantially all of the assets
of the Company, the effectuation by the Company of a transaction or
series of related transactions in which more than 50% of the voting
power of the Company is disposed of, or the consolidation, merger
or other business combination of the Company with or into any other
Person (as defined herein) or Persons when the Company is not the
survivor shall be deemed to be an Event of Default hereunder.
“Person” shall mean any individual, corporation,
limited liability company, partnership, association, trust or other
entity or organization.
ii. Adjustment
Due to Merger, Consolidation, Etc. If, at any time when the Series C Preferred Stock
are outstanding and prior to conversion of all of the Series C
Preferred Stock, there shall be any merger, consolidation, exchange
of shares, recapitalization, reorganization, or other similar
event, as a result of which shares of Common Stock of the Company
shall be changed into the same or a different number of shares of
another class or classes of stock or securities of the Company or
another entity, or in case of any sale or conveyance of all or
substantially all of the assets of the Company other than in
connection with a plan of complete liquidation of the Company, then
each Holder shall thereafter have the right to receive upon
conversion of the Series C Preferred Stock, upon the basis and upon
the terms and conditions specified herein and in lieu of the shares
of Common Stock immediately theretofore issuable upon conversion,
such stock, securities or assets which such Holder would have been
entitled to receive in such transaction had the Series C Preferred
Stock been converted in full immediately prior to such transaction
(without regard to any limitations on conversion set forth herein),
and in any such case appropriate provisions shall be made with
respect to the rights and interests of the Holders to the end that
the provisions hereof (including, without limitation, provisions
for adjustment of the Conversion Price and of the number of shares
issuable upon conversion of the Series C Preferred Stock) shall
thereafter be applicable, as nearly as may be practicable in
relation to any securities or assets thereafter deliverable upon
the conversion hereof. The Company shall not affect any transaction
described in this section unless (a) it first gives, to the extent
practicable, ten (10) days’ prior written notice (but in any
event at least five (5) days prior written notice) of the record
date of the special meeting of shareholders to approve, or if there
is no such record date, the consummation of, such merger,
consolidation, exchange of shares, recapitalization, reorganization
or other similar event or sale of assets (during which time a
Holder shall be entitled to convert the Series C Preferred Stock,
notwithstanding the 6 month limitation set forth in Section 7(A))
and (b) the resulting successor or acquiring entity (if not the
Company) assumes by written instrument the rights, preferences
afforded to the Holders hereunder and obligations set forth herein.
The above provisions shall similarly apply to successive
consolidations, mergers, sales, transfers or share
exchanges.
iii. Adjustment
Due to Distributions. If the
Company shall declare or make any distribution of its assets (or
rights to acquire its assets) to holders of Common Stock as a
dividend, stock repurchase, by way of return of capital or
otherwise (including any dividend or distribution to the
Company’s shareholders in cash or shares (or rights to
acquire shares) of capital stock of a subsidiary (i.e., a
spin-off)) (a “Distribution”), then each Holder shall
be entitled to receive the applicable portion of such Distribution
on an as-converted-to-Common-Stock basis, assuming that the Series
C Preferred Stock were converted to Common Stock on the day
immediately prior to the record date for holders of the Common
Stock entitled to receive such Distribution, but, for the avoidance
of doubt, without any conversion to Common Stock actually being
required.
F. Stock
Register. The Company will keep
at the offices of the transfer agent, a register of the Series C
Preferred Stock, which shall be prima facie indicia of ownership of
all outstanding shares of Series C Preferred Stock, and amounts so
converted and the dates of such conversions. Upon the surrender of
any certificate representing Series C Preferred Stock at such
place, the Company, at the request of the record Holder of such
certificate, will execute and deliver (at the Company’s
expense) a new certificate or certificates in exchange therefor
representing in the aggregate the number of shares represented by
the surrendered certificate. Each such new certificate will be
registered in such name and will represent such number of shares as
is requested by the Holder of the surrendered certificate and will
be substantially identical in form to the surrendered
certificate.
G. Taxes.
The Company shall pay any and all documentary, stamp, transfer (but
only in respect of the registered Holder thereof), issuance and
other similar taxes that may be payable with respect to the
issuance and delivery of shares of Common Stock upon the conversion
of Preferred Shares.
Section
8. Events of
Default.
A. If
any of the following events of default (each, an “Event of
Default”) shall occur:
i. Failure
to Redeem. The Company fails to
pay the Mandatory Redemption Amount when due as set forth herein
and such breach continues for a period of three (3) days after
written notice from the Majority Holders.
ii. Conversion
and the Shares. The Company
fails to issue shares of Common Stock to a Holder (or announces or
threatens in writing that it will not honor its obligation to do
so) upon exercise by a Holder of the conversion rights of a Holder
in accordance with the terms hereof, fails to transfer or cause its
transfer agent to transfer (issue) (electronically or in
certificated form) any certificate for shares of Common Stock
issued to a Holder upon conversion of or otherwise pursuant to the
terms hereof as and when required hereby, the Company directs its
transfer agent not to transfer or delays, impairs, and/or hinders
its transfer agent in transferring (or issuing) (electronically or
in certificated form) any certificate for shares of Common Stock to
be issued to a Holder upon conversion of the Series C Preferred
Stock or otherwise pursuant to the terms hereof, as and when
required by the terms hereof, or fails to remove (or directs its
transfer agent not to remove or impairs, delays, and/or hinders its
transfer agent from removing) any restrictive legend (or to
withdraw any stop transfer instructions in respect thereof) on any
certificate for any shares of Common Stock issued to the applicable
Holder upon conversion of or otherwise pursuant to the terms hereof
as and when required by the terms hereof (or makes any written
announcement, statement or threat that it does not intend to honor
the obligations described in this section) and any such failure
shall continue uncured (or any written announcement, statement or
threat not to honor its obligations shall not be rescinded in
writing) for two (2) business days after a Holder shall have
delivered a Notice of Conversion. It is an obligation of the
Company to remain current in its obligations to its transfer agent.
It shall be an event of default hereunder, if a conversion of the
Series C Preferred Stock is delayed, hindered or frustrated due to
a balance owed by the Company to its transfer agent. If at the
option of a Holder, such Holder advances any funds to the
Company’s transfer agent in order to process a conversion,
such advanced funds shall be paid by the Company to the applicable
Holder within two (2) business days of a demand from the applicable
Holder.
iii. Breach
of Covenants. The Company
breaches any material covenant or other material terms or
conditions contained in this Certificate of Designations or in any
purchase agreement, subscription agreement or other agreement
pursuant to which any Holder has acquired any shares of Series C
Preferred Stock, and such breach continues for a period of ten (10)
days after written notice thereof to the Company from the Majority
Holders.
iv. Breach
of Representations and Warranties. Any representation or warranty of the Company
made herein or in any agreement, statement or certificate given in
writing pursuant hereto or in connection herewith, or in any
purchase agreement, subscription agreement or other agreement
pursuant to which any Holder has acquired any shares of Series C
Preferred Stock, shall be false or misleading in any material
respect when made and the breach of which has (or with the passage
of time will have) a material adverse effect on the rights of the
Holders with respect to the Series C Preferred
Stock.
v. Receiver
or Trustee. The Company or any
subsidiary of the Company shall make an assignment for the benefit
of creditors, or apply for or consent to the appointment of a
receiver or trustee for it or for a substantial part of its
property or business, or such a receiver or trustee shall otherwise
be appointed.
vi. Bankruptcy.
Bankruptcy, insolvency, reorganization or liquidation proceedings
or other proceedings, voluntary or involuntary, for relief under
any bankruptcy law or any law for the relief of debtors shall be
instituted by or against the Company or any subsidiary of the
Company.
vii. Delisting
of Common Stock. The Company
shall fail to maintain the listing of the Common Stock on at least
one of the OTC electronic quotations systems (which specifically
includes the quotation platforms maintained by the OTC Markets
Group) or an equivalent replacement exchange.
viii. Failure
to Comply with the Exchange Act. The Company shall fail to comply with the
reporting requirements of the Exchange Act; and/or the Company
shall cease to be subject to the reporting requirements of the
Exchange Act (the filing of a Form 15 shall be an immediate Event
of Default).
ix. Liquidation.
Any dissolution, liquidation, or winding up of Company or any
substantial portion of its business occurs.
x. Cessation
of Operations. Any cessation of
operations by Company or Company admits it is otherwise generally
unable to pay its debts as such debts become due; provided,
however, that any disclosure of the Company’s ability to
continue as a “going concern” shall not be an admission
that the Company cannot pay its debts as they become
due.
xi. Financial
Statement Restatement. The
restatement of any financial statements filed by the Company with
the Securities and Exchange Commission (“SEC”) at any
time after 180 days after the Issuance Date for any date or period
until the Series C Preferred Stock is no longer outstanding, if the
result of such restatement would, by comparison to the un-restated
financial statement, have constituted a material adverse effect on
the rights of the Holders with respect to the terms hereof
(including the conversion rights hereof).
xii. Replacement
of Transfer Agent. In the event
that the Company proposes to replace its transfer agent, the
Company fails to provide, prior to the effective date of such
replacement, a fully executed Irrevocable Transfer Agent
Instructions in a form as initially delivered (including, but not
limited to, the provision to irrevocably reserve shares of Common
Stock in the Reserved Amount) signed by the successor transfer
agent and the Company.
B. Default
Adjustment. Upon the occurrence and during the continuation
of any Event of Default (other than as set forth in Section
8(A)(ii), the Stated Value shall immediately be increased to $1.50
per share of Series B Preferred Stock. Upon the occurrence and during the continuation of
any Event of Default specified in Section
8(A)(ii), the Stated Value shall
immediately be increased to $2.00 per share of Series B Preferred
Stock (the amounts referred to herein shall be referred to
collectively as the “Default Adjustment”). In the event
of a Default Adjustment, the Company shall immediately, upon the
demand of the Majority Holders, redeem the issued and outstanding
Series C Preferred Stock and pay to the Holders the amount which is
equal to (i) the number of shares of Series C Preferred Stock held
by such Holders multiplied by (ii) the Stated Value plus any
Adjustment Amount.
Section
9.
Miscellaneous.
A. Lost
or Mutilated Preferred Stock Certificate. Upon receipt of evidence reasonably satisfactory
to the Company (an affidavit of the registered Holder will be
satisfactory) of the ownership and the loss, theft, destruction or
mutilation of any certificate evidencing shares of Series C
Preferred Stock, and in the case of any such loss, theft or
destruction upon receipt of indemnity reasonably satisfactory to
the Company (provided that if the Holder is a financial institution
or other institutional investor its own agreement will be
satisfactory) or in the case of any such mutilation upon surrender
of such certificate, the Company will, at its expense, execute and
deliver in lieu of such certificate a new certificate of like kind
representing the number of shares of such class represented by such
lost, stolen, destroyed or mutilated certificate and dated the date
of such lost, stolen, destroyed or mutilated
certificate.
B. Failure
or Indulgence Not Waiver. No failure or delay on the part of
a Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other right, power or
privileges. All rights and remedies existing hereunder are
cumulative to, and not exclusive of, any rights or remedies
otherwise available.
C. Notices.
All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally
served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable
air courier service with charges prepaid, or (iv) transmitted by
hand delivery, telegram, email, or facsimile, and, if sent to the
Company, addressed to the Company at its principal office address
or, if sent to a Holder, to the address of the Holder as set forth
in the books and records of the Company. Any notice or other
communication required or permitted to be given hereunder shall be
deemed effective: (a) upon hand delivery or delivery by facsimile
or email, with accurate confirmation (if delivered on a business
day during normal business hours where such notice is to be
received), or the first (1st) business day
following such delivery (if delivered other than on a business day
during normal business hours where such notice is to be received)
or (b) on the second (2nd) business day
following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such
mailing, whichever shall first occur.
D. Jurisdiction.
Any action brought by any party against any other concerning this
Certificate of Designations shall be brought only in the state
courts of New York or in the federal courts located in the Eastern
District of New York. The Company and each Holder hereby
irrevocably waives any objection to jurisdiction and venue of any
action instituted hereunder and shall not assert any defense based
on lack of jurisdiction or venue or based upon forum non conveniens. The Company and
each Holder waives trial by jury. The prevailing party shall be
entitled to recover from the other party its reasonable attorney's
fees and costs. In the event that any provision of this Certificate
of Designations is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall
be deemed modified to conform with such statute or rule of law. Any
such provision which may prove invalid or unenforceable under any
law shall not affect the validity or enforceability of any other
provision of this Certificate of Designations. Each party hereby
irrevocably waives personal service of process and consents to
process being served in any suit, action or proceeding in
connection with the Series C Preferred Stock by mailing a copy
thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect
for notices to it and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to
serve process in any other manner permitted by law.
E. Remedies.
The Company and each Holder acknowledge that a breach by it of its
obligations hereunder will cause irreparable harm to the Company or
the Holder, as applicable, by vitiating the intent and purpose of
the transaction contemplated hereby. Accordingly, the Company and
each Holder acknowledges that the remedy at law for a breach of its
obligations under this Certificate of Designations will be
inadequate and agrees, in the event of a breach or threatened
breach of the provisions of this Certificate of Designations, that
the Company or the Holders, as applicable, shall be entitled, in
addition to all other available remedies at law or in equity, (the
parties will not be entitled of any punitive damages or penalties,
but, only real and actual damages), to an injunction or injunctions
restraining, preventing or curing any breach of this Certificate of
Designations and to enforce specifically the terms and provisions
thereof, without the necessity of showing economic loss and without
any bond or other security being required.
F. Headings.
The headings contained herein are for convenience only and will not
be deemed to limit or affect any of the provisions
hereof.
IN
WITNESS WHEREOF, the undersigned have executed this Certificate this
November 7, 2019.
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FRIENDABLE,
INC.
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By:
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/s/Robert Rositano Jr.
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Name:
Robert
Rositano Jr.
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Title:
Chief
Executive Officer
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EXHIBIT A
FRIENDABLE, INC.
CONVERSION NOTICE
Reference is made
to the Certificate of Designations, Preferences, Rights and
Limitations of the Series C Convertible Preferred Stock of
FRIENDABLE, INC. (the “Certificate of Designations”).
In accordance with and pursuant to the Certificate of Designations,
the undersigned hereby elects to convert the number of shares of
Series C Convertible Preferred Stock, $0.0001 par value per share
(the “Preferred Shares”), of FRIENDABLE, INC., a Nevada
corporation (the “Company”), indicated below into
shares of common stock, $0.0001 par value per share (the
“Common Stock”), of the Company, as of the date
specified below.
Date of
Conversion:
Number
of Preferred Shares to be converted:
Share
certificate no(s). of Preferred Shares to be
converted:
Tax ID
Number (If applicable):
Conversion
Price:_________________________________________________________
Number
of shares of Common Stock to be
issued:
Please
issue the shares of Common Stock into which the Preferred Shares
are being converted in the following name and to the following
address:
Issue
to: ___________________________________________
Address:
_________________________________________
Telephone Number:
________________________________
Facsimile
Number:
Holder:
By:
Title:
Dated:_____________________________
Account
Number (if electronic book entry transfer):
Transaction Code
Number (if electronic book entry transfer):
AMENDMENT
AMENDMENT,
made this 26th day of December 2019, to that certain Debt
Restructuring Agreement dated March 26, 2019, by and among
Friendable, Inc., (the “Company”), Fan Pass, Inc.
(“Fan Pass”),
Robert A. Rositano Jr. (“Robert Rositano”), Dean Rositano
(“Dean
Rositano”), Frank Garcia (“Garcia”), Checkmate Mobile, Inc.
(“Checkmate”),
Ellis International LP (“Ellis”), Coventry Enterprises, LLC
(“Coventry”),
Palladium Capital Advisors, LLC (“Palladium”), EMA Financial, LLC
(“EMA”), Michael
Finkelstein (“Finkelstein”), and Barbara R.
Mittman (“Mittman”). Robert Rositano, Dean
Rositano, Garcia and Checkmate, collectively, (the
“Company
Principals”). Ellis, Coventry, Palladium, EMA,
Finkelstein, and Mittman are each a “Holder” and collectively, the
“Holders.”
A.
Company Principals
and Holders entered into that certain Debt Restructuring Agreement
dated March 26, 2019 (“Agreement”).
B.
The Agreement
required the Company Principals to complete certain conditions of
closing as set forth in the Agreement.
C.
Company Principals
have given Holders notice that it has satisfied all conditions of
closing.
NOW,
THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Recitals.
Each of the parties hereto acknowledges and agrees that the
recitals set forth above in this Amendment are true and accurate
and are hereby incorporated into and made a part of this
Amendment.
2. Closing
Date. The Agreement is considered Closed as of November 5,
2019 and any conditions of closing not satisfied are
waived.
3. Reset
Dates. The “Reset Dates” as set forth in Section
1(h) of the Agreement shall be as follows: March 4, 2020 and July
2, 2020.
3. Certain
Acknowledgments. Each of the parties acknowledges and agrees
that no property or cash consideration of any kind whatsoever has
been or shall be given by Company Principals to Holders in
connection with any amendment to the Agreement granted
herein.
4. Other
Terms Unchanged. The Agreement, as amended by this
Amendment, remains and continues in full force and effect,
constitutes legal, valid, and binding obligations of each of the
parties, and is in all respects agreed to, ratified, and confirmed.
Any reference to the Agreement after the date of this Amendment is
deemed to be a reference to the Agreement as amended by this
Amendment. If there is a conflict between the terms of this
Amendment and the Agreement, the terms of this Amendment shall
control.
5. Counterparts.
This Amendment may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which together
shall constitute one instrument. The parties hereto confirm that
any electronic copy of another party’s executed counterpart
of this Amendment (or such party’s signature page thereof)
will be deemed to be an executed original thereof.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the undersigned have executed this Amendment to be
effective as December 26, 2019.
FRIENDABLE
INC.
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EMA
FINANCIAL, LLC
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By:
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/s/Robert Rositano
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By:
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/s/ Felicia
Preston
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Name:
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Robert Rositano
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Name:
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Felicia Preston
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Title:
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CEO
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Title:
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FAN
PASS INC.
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MICHAEL
FINKELSTEIN
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By:
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/s/Robert Rositano
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/s/ Michael
Finkelstein
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Name:
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Robert Rositano
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Michael
Finkelstein
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Title:
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CEO
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ELLIS
INTERNATIONAL LP
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BARBARA
MITTMAN
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By:
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/s/ Martin
Chopp
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/s/ Barbara
Mittman
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Name:
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Martin Chopp
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Barbara
Mittman
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Title:
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COVENTRY
ENTERPRISES LLC
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ROBERT
ROSITANO
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By:
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/s/ Jack
Bodenstein
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/s/Robert Rositano
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Name:
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Jack Bodenstein
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Robert
Rositano
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Title:
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PALLADIUM
CAPITAL ADVISORS, LLC
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By:
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/s/ Joel
Padowitz
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Name:
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Joel Padowitz
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Title:
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SERIES C PREFERRED STOCK PURCHASE AGREEMENT
This SERIES C PREFERRED STOCK
PURCHASE AGREEMENT (the
“Agreement”), dated as of December 10, 2019, by and
between FRIENDABLE,
INC., a Nevada corporation,
with its address at 1821 S Bascom Ave., Suite 353, Campbell,
California 95008 (the “Company”), and
GENEVA ROTH REMARK
HOLDINGS, INC., a New York
corporation, with its address at 111 Great Neck Road, Suite 216,
Great Neck, NY 11021 (the “Buyer”).
WHEREAS:
A. The
Company and the Buyer are executing and delivering this Agreement
in reliance upon the exemption from securities registration
afforded by the rules and regulations as promulgated by the United
States Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “1933
Act”); and
B. Buyer
desires to purchase and the Company desires to issue and sell, upon
the terms and conditions set forth in this Agreement,58,300 shares
of Series C Preferred Stock of the Company (“Series C
Shares”) with the rights and preferences as set forth on the
Certificate of Designation of the Series C Preferred Stock attached
hereto as Exhibit
A (“Certificate of
Designation”).
NOW
THEREFORE, in
consideration of the mutual covenants and agreements contained
herein, the receipt and sufficiency of which are hereby
acknowledged, the Company and the
Buyer severally (and not jointly) hereby agree as
follows:
1. Purchase
and Sale of Series C Shares.
a. Purchase
of Series C Shares. On the
Closing Date (as defined below), the Company shall issue and sell
to the Buyer and the Buyer agrees to purchase from the Company
58,300 Series C Shares with the rights and preferences as set forth
in the Certificate of Designation.
b. Form
of Payment. On the Closing Date
(as defined below), the Buyer shall pay $53,000.00 for the Series C
Shares to be issued and sold to it at the Closing (as defined
below) (the “Purchase Price”) by wire transfer of
immediately available funds to the Company, in accordance with the
Company’s written wiring instructions, against delivery of
the Series C Shares, and the Company shall deliver such duly
executed and authorized Series C Shares on behalf of the Company,
to the Buyer, against delivery of such Purchase
Price.
c. Closing
Date. Subject to the
satisfaction (or written waiver) of the conditions set forth in
Section 6 and Section 7 below, the date and time of the issuance
and sale of the Series C Shares pursuant to this Agreement (the
“Closing Date”) shall be 12:00 noon, Eastern Standard
Time on or about December 11,
2019, or such other mutually agreed upon time. The closing of the
transactions contemplated by this Agreement (the
“Closing”) shall occur on the Closing Date at such
location as may be agreed to by the parties.
2. Buyer’s
Representations and Warranties. The Buyer represents and warrants to the Company
that:
a. The Buyer has full
power and authority to enter into this Agreement, the execution and
delivery of which has been duly authorized and this Agreement
constitutes a valid and legally binding obligation of the Buyer,
except as may be limited by bankruptcy, reorganization, insolvency,
moratorium and similar laws of general application relating to or
affecting the enforcement of rights of creditors, and except as
enforceability of the obligations hereunder are subject to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or law).
b. The Buyer
acknowledges its understanding that the offering and sale of the
Series C Shares and the shares of
common stock issuable upon conversion of the Series C Shares (such
shares of common stock being collectively referred to herein as the
“Conversion Shares” and, collectively with the Series C
Shares, the “Securities”) is intended to be
exempt from registration under the 1933 Act, by virtue of Rule
506(b) promulgated under the Securities Act of 1933, as amended,
and the provisions of Regulation D promulgated thereunder. In
furtherance thereof, the Buyer represents and warrants to the
Company and its affiliates as follows:
i. The
Buyer realizes that the basis for the exemption from registration
may not be available if, notwithstanding the Buyer’s
representations contained herein, the Buyer is merely acquiring the
Securities for a fixed or determinable period in the future, or for
a market rise, or for sale if the market does not rise. The Buyer
does not have any such intention.
ii. The
Buyer realizes that the basis for exemption would not be available
if the offering is part of a plan or scheme to evade registration
provisions of the 1933 Act or any applicable state or federal
securities laws, except sales pursuant to a registration statement
or sales that are exempted under the 1933 Act.
iii. The
Buyer is acquiring the Securities solely for the Buyer’s own
beneficial account, for investment purposes, and not with a view
towards, or resale in connection with, any distribution of the
Securities.
iv. The
Buyer has the financial ability to bear the economic risk of the
Buyer’s investment, has adequate means for providing for its
current needs and contingencies, and has no need for liquidity with
respect to an investment in the Company.
v. The
Buyer and the Buyer’s attorney, accountant, purchaser
representative and/or tax advisor, if any (collectively, the
“Advisors”) has such knowledge and experience in
financial and business matters as to be capable of evaluating the
merits and risks of a prospective investment in the Securities. The
Buyer also represents it has not been organized solely for the
purpose of acquiring the Securities.
vii. The
Buyer (together with its Advisors, if any) has received all
documents requested by the Buyer, if any, and has carefully
reviewed them and understands the information contained therein,
prior to the execution of this Agreement.
c. The Buyer is not
relying on the Company or any of its employees, agents, sub-agents
or advisors with respect to the legal, tax, economic and related
considerations involved in this investment. The Buyer has relied on
the advice of, or has consulted with, only its
Advisors.
d. The Buyer has
carefully considered the potential risks relating to the Company
and a purchase of the Securities, and fully understands that the
Securities are a speculative investment that involves a high degree
of risk of loss of the Buyer’s entire investment. Among other
things, the Buyer has carefully considered each of the risks
described under the heading “Risk Factors” in the
Company’s SEC ffilings.
e. The
Buyer will not sell or otherwise transfer any Securities without
registration under the 1933 Act or an exemption therefrom, and
fully understands and agrees that the Buyer must bear the economic
risk of its purchase because, among other reasons, the Securities
have not been registered under the 1933 Act or under the securities
laws of any state and, therefore, cannot be resold, pledged,
assigned or otherwise disposed of unless they are subsequently
registered under the 1933 Act and under the applicable securities
laws of such states, or an exemption from such registration is
available. In particular, the Buyer is aware that the Securities
are “restricted securities,” as such term is defined in
Rule 144, and they may not be sold pursuant to Rule 144 unless all
of the conditions of Rule 144 are met. The Buyer also understands
that the Company is under no obligation to register the Securities
on behalf of the Buyer. The Buyer understands that any sales or
transfers of the Securities are further restricted by state
securities laws and the provisions of this Agreement.
f. The
Buyer and its Advisors, if any, have had a reasonable opportunity
to ask questions of and receive answers from a person or persons
acting on behalf of the Company concerning the offering and the
business, financial condition, results of operations and prospects
of the Company, and all such questions have been answered to the
full satisfaction of the Buyer and its Advisors, if
any.
g. The
Buyer represents and warrants that: (i) the Buyer was contacted
regarding the sale of the Securities by the Company (or an
authorized agent or representative thereof) with whom the Buyer had
a prior substantial pre-existing relationship; and (ii) no
Securities were offered or sold to it by means of any form of
general solicitation or general advertising, and in connection
therewith, the Buyer did not: (A) receive or review any
advertisement, article, notice or other communication published in
a newspaper or magazine or similar media or broadcast over
television or radio, whether closed circuit, or generally
available; or (B) attend any seminar meeting or industry
investor conference whose attendees were invited by any general
solicitation or general advertising; or (C) observe any website or
filing of the Company with the SEC in which any offering of
securities by the Company was described and as a result learned of
any offering of securities by the Company.
h. The
Buyer has taken no action that would give rise to any claim by any
person for brokerage commissions, finders’ fees or the like
relating to this Agreement or the transactions contemplated
hereby.
i. The
Buyer is an “accredited investor” as that term is
defined in Rule 501(a) of Regulation D.
j. Legends.
The Buyer understands that until such time as the Securities have
been registered under the 1933 Act or may be sold pursuant to an
applicable exemption from registration, the Securities shall bear a
restrictive legend in substantially the following
form:
"THE
SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR UNDER ANY STATE SECURITIES LAWS, AND MAY NOT BE PLEDGED,
SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS (1) A
REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR (2) THE
ISSUER OF SUCH SECURITIES RECEIVES AN OPINION OF COUNSEL TO THE
HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY
ACCEPTABLE TO THE ISSUER’S TRANSFER AGENT, THAT SUCH
SECURITIES MAY BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS."
The
legend set forth above shall be removed and the Company shall issue
a certificate without such legend to the holder of any Security
upon which it is stamped, if, unless otherwise required by
applicable state securities laws, (a) such Security is registered
for sale under an effective registration statement filed under the
1933 Act or otherwise may be sold pursuant to an exemption from
registration without any restriction as to the number of securities
as of a particular date that can then be immediately sold, or (b)
such holder provides the Company with an opinion of counsel, in
form, substance and scope customary for opinions of counsel in
comparable transactions, to the effect that a public sale or
transfer of such Security may be made without registration under
the 1933 Act, which opinion shall be accepted by the Company so
that the sale or transfer is effected. The Buyer agrees to sell all
Securities, including those represented by a certificate(s) from
which the legend has been removed, in compliance with applicable
prospectus delivery requirements, if any. In the event that the
Company does not accept the opinion of counsel provided by the
Buyer with respect to the transfer of Securities pursuant to an
exemption from registration, such as Rule 144, at the Deadline (as
defined in the Certificate of Designation), it will be considered
an Event of Default (as defined in the Certificate of
Designation).
3. Representations
and Warranties of the Company.
The Company represents and warrants to the Buyer
that:
a. Organization
and Qualification. The Company
and each of its Subsidiaries (as defined below), if any, is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is incorporated,
with full power and authority (corporate and other) to own, lease,
use and operate its properties and to carry on its business as and
where now owned, leased, used, operated and conducted.
“Subsidiaries” means any corporation or other
organization, whether incorporated or unincorporated, in which the
Company owns, directly or indirectly, any equity or other ownership
interest.
b. Authorization;
Enforcement. (i) The Company
has all requisite corporate power and authority to enter into and
perform this Agreement and to consummate the transactions
contemplated hereby and thereby and to issue the Securities, in
accordance with the terms hereof and thereof, (ii) the execution
and delivery of this Agreement by the Company and the consummation
by it of the transactions contemplated hereby and thereby
(including without limitation, the issuance of the Series C Shares
and the issuance and reservation for issuance of the Conversion
Shares issuable upon conversion or exercise thereof) have been duly
authorized by the Company’s Board of Directors and no further
consent or authorization of the Company, its Board of Directors, or
its shareholders is required, (iii) this Agreement has been duly
executed and delivered by the Company by its authorized
representative, and such authorized representative is the true and
official representative with authority to sign this Agreement and
the other documents executed in connection herewith and bind the
Company accordingly, and (iv) this Agreement constitutes, and upon
execution and delivery by the Company of the Series C Shares, each
of such instruments will constitute, a legal, valid and binding
obligation of the Company enforceable against the Company in
accordance with its terms except as may be limited by
bankruptcy, reorganization, insolvency, moratorium and similar laws
of general application relating to or affecting the enforcement of
rights of creditors, and except as enforceability of the
obligations hereunder are subject to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or law).
c. Capitalization.
As of the date hereof, the authorized common stock of the Company
consists of 15,000,000,000
authorized shares of common stock,
$0.0001 par value per share, of which 2,468,144
shares are issued and outstanding and
10,000,000 shares of preferred stock, $0.0001 par value per share.
On or prior to the Closing Date, the Certificate of Designation
shall be filed with the Nevada Secretary of State authorizing
1,000,000 Series C Shares. All of such outstanding shares of
capital stock are duly authorized, validly issued, fully paid and
non-assessable.
d. Issuance
of Securities. The Securities
upon issuance will be validly issued, fully paid and
non-assessable, and free from all taxes, liens, claims and
encumbrances with respect to the issue thereof and shall not be
subject to preemptive rights or other similar rights of
shareholders of the Company and will not impose personal liability
upon the holder thereof.
e. No
Conflicts. The execution,
delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby
and thereby (including, without limitation, the issuance of the
Securities and reservation for issuance of the Conversion Shares)
will not (i) conflict with or result in a violation of any
provision of the Articles of Incorporation, as amended or By-laws,
or (ii) violate or conflict with, or result in a breach of any
provision of, or constitute a default (or an event which with
notice or lapse of time or both could become a default) under, or
give to others any rights of termination, amendment, acceleration
or cancellation of, any agreement, indenture, patent, patent
license or instrument to which the Company or any of its
Subsidiaries is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including federal and
state securities laws and regulations and regulations of any
self-regulatory organizations to which the Company or its
securities are subject) applicable to the Company or any of its
Subsidiaries or by which any property or asset of the Company or
any of its Subsidiaries is bound or affected (except for such
conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the
aggregate, have a Material Adverse Effect (as defined herein)). The
businesses of the Company and its Subsidiaries, if any, are not
being conducted, and shall not be conducted so long as the Buyer
owns any of the Securities, in violation of any law, ordinance or
regulation of any governmental entity. “Material Adverse
Effect” means any material adverse effect on the business,
operations, assets or financial condition of the Company or its
Subsidiaries, if any, taken as a whole, or on the transactions
contemplated hereby or by the agreements or instruments to be
entered into in connection herewith.
f. SEC
Documents; Financial Statements. The Company has filed all reports, schedules,
forms, statements and other documents required to be filed by it
with the SEC pursuant to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the “1934
Act”) (all of the foregoing filed prior to the date hereof
and all exhibits included therein and financial statements and
schedules thereto and documents (other than exhibits to such
documents) incorporated by reference therein, being hereinafter
referred to herein as the “SEC Documents”). Upon
written request the Company will deliver to the Buyer true and
complete copies of the SEC Documents, except for such exhibits and
incorporated documents. As of their respective dates or if amended,
as of the dates of the amendments, the SEC Documents complied in
all material respects with the requirements of the 1934 Act and the
rules and regulations of the SEC promulgated thereunder applicable
to the SEC Documents, and none of the SEC Documents, at the time
they were filed with the SEC, contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading. None of the statements made in any such SEC
Documents is, or has been, required to be amended or updated under
applicable law (except for such statements as have been amended or
updated in subsequent filings prior the date hereof). As of their
respective dates or if amended, as of the dates of the amendments,
the financial statements of the Company included in the SEC
Documents complied as to form in all material respects with
applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial
statements have been prepared in accordance with United States
generally accepted accounting principles, consistently applied,
during the periods involved and fairly present in all material
respects the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments). The Company is subject to
the reporting requirements of the 1934 Act.
g. Absence
of Certain Changes. Since
September 30, 2019, except as set forth in the SEC Documents, there
has been no material adverse change and no material adverse
development in the assets, liabilities, business, properties,
operations, financial condition, results of operations, prospects
or 1934 Act reporting status of the Company or any of its
Subsidiaries.
h. Absence
of Litigation. Except as set
forth in the SEC Documents, there is no action, suit, claim,
proceeding, inquiry or investigation before or by any court, public
board, government agency, self-regulatory organization or body
pending or, to the knowledge of the Company or any of its
Subsidiaries, threatened against or affecting the Company or any of
its Subsidiaries, or their officers or directors in their capacity
as such, that could have a Material Adverse Effect. The Company and
its Subsidiaries are unaware of any facts or circumstances which
might give rise to any of the foregoing.
i. No
Integrated Offering. Neither
the Company, nor any of its affiliates, nor any person acting on
its or their behalf, has directly or indirectly made any offers or
sales in any security or solicited any offers to buy any security
under circumstances that would require registration under the 1933
Act of the issuance of the Securities to the Buyer. The issuance of
the Securities to the Buyer will not be integrated with any other
issuance of the Company’s securities (past, current or
future) for purposes of any shareholder approval provisions
applicable to the Company or its securities.
j. No
Investment Company. The Company
is not, and upon the issuance and sale of the Securities as
contemplated by this Agreement will not be an “investment
company” required to be registered under the Investment
Company Act of 1940 (an “Investment Company”). The
Company is not controlled by an Investment
Company.
4. COVENANTS.
a. Best
Efforts. The Company shall use
its commercially reasonable efforts to satisfy timely each of the
conditions described in Section 7 of this
Agreement.
b. Form
D; Blue Sky Laws. The Company
agrees to timely make any filings required by federal and state
laws as a result of the closing of the transactions contemplated by
this Agreement.
c. Use
of Proceeds. The Company shall
use the proceeds for general working capital
purposes.
d. Expenses.
At the Closing, the Company’s obligation with respect to the
transactions contemplated by this Agreement is to reimburse
Buyer’s expenses for Buyer’s legal fees and due
diligence fee in an amount not to exceed
$3,000.
e. Corporate
Existence. So long as the Buyer
beneficially owns any Series C Shares, the Company shall maintain
its corporate existence and shall not sell all or substantially all
of the Company’s assets, except with the prior written
consent of the Buyer.
f. Breach
of Covenants. If the Company
breaches any of the covenants set forth in this Section 4 and such
breach is not cured within five (5) days of written notice
thereof from Buyer, and in addition to
any other remedies available to the Buyer pursuant to this
Agreement, it will be considered an event of default under the
Certificate of Designation.
g. Failure
to Comply with the 1934 Act. So
long as the Buyer beneficially owns any Series C Shares, the
Company shall comply with the reporting requirements of the 1934
Act and the Company shall continue to be subject to the reporting
requirements of the 1934 Act; any breach of the foreging shall be
considered an event of default under the Certificate of
Designation, provided that such breach is not cured within
five (5) days of written notice thereof from Buyer.
h. Trading
Activities. Neither the Buyer
nor its affiliates has an open short position in the common stock
of the Company and the Buyer agrees that it shall not, and that it
will cause its affiliates not to, engage in any short sales of or
hedging transactions with respect to the common stock of the
Company.
5. Transfer Agent
Instructions. The Company shall
issue irrevocable instructions to its transfer agent to issue
certificates, registered in the name of the Buyer or its nominee,
for the Conversion Shares in such amounts as specified from time to
time by the Buyer to the Company upon conversion of the Series C
Shares in accordance with the terms of the Certificate of
Designation (the “Irrevocable Transfer Agent
Instructions”). In the event that the Company proposes
to replace its transfer agent, the Company shall provide, prior to
the effective date of such replacement, a fully executed
Irrevocable Transfer Agent Instructions in a form as initially
delivered pursuant to this Agreement (including but not limited to
the provision to irrevocably reserve shares of common stock in the
Reserved Amount (as defined in the Certificate of
Designation) signed by the successor
transfer agent to Company and the Company. Prior to registration of
the Conversion Shares under the 1933 Act or the date on which the
Conversion Shares may be sold pursuant to an exemption from
registration, all such certificates shall bear the restrictive
legend specified in Section 2(j) of this Agreement. The
Company warrants that: (i) no instruction other than the
Irrevocable Transfer Agent Instructions referred to in this Section
5, will be given by the Company to its transfer agent and that the
Securities shall otherwise be freely transferable on the books and
records of the Company as and to the extent provided in this
Agreement and the Certificate of Designation; (ii) it will not
direct its transfer agent not to transfer or delay, impair, and/or
hinder its transfer agent in transferring (or
issuing)(electronically or in certificated form) any certificate
for Conversion Shares to be issued to the Buyer upon conversion of
or otherwise pursuant to the Certificate of Designation or this
Agreement as and when required by thereby; and (iii) it will not
fail to remove (or direct its transfer agent not to remove or
impair, delay, and/or hinder its transfer agent from removing) any
restrictive legend (or to withdraw any stop transfer instructions
in respect thereof) on any certificate for any Conversion Shares
issued to the Buyer upon conversion of the Series C Shares of or
otherwise pursuant to the Certificate of Designation or this
Agreement as and when required thereby. If the Buyer
provides the Company and the Company’s transfer, at the cost
of the Buyer, with an opinion of counsel in form, substance and
scope customary for opinions in comparable transactions, to the
effect that a public sale or transfer of such Securities may be
made without registration under the 1933 Act, the Company shall
permit the transfer, and, in the case of the Conversion Shares,
promptly instruct its transfer agent to issue one or more
certificates, free from restrictive legend, in such name and in
such denominations as specified by the Buyer. The Company
acknowledges that a breach by it of its obligations hereunder will
cause irreparable harm to the Buyer, by vitiating the intent and
purpose of the transactions contemplated hereby. Accordingly,
the Company acknowledges that the remedy at law for a breach of its
obligations under this Section 5 may be inadequate and agrees, in
the event of a breach or threatened breach by the Company of the
provisions of this Section 5, that the Buyer shall be entitled, in
addition to all other available remedies, to an injunction
restraining any breach and requiring immediate transfer, without
the necessity of showing economic loss and without any bond or
other security being required.
6. Conditions
to the Company’s Obligation to Sell. The obligation of the Company hereunder to issue
and sell the Series C Shares to the Buyer at the Closing is subject
to the satisfaction, at or before the Closing Date of each of the
following conditions thereto, provided that these conditions are
for the Company’s sole benefit and may be waived by the
Company at any time in its sole discretion:
a. The
Buyer shall have executed this Agreement and delivered the same to
the Company.
b. The
Buyer shall have delivered the Purchase Price in accordance with
Section 1(b) above.
c. The
representations and warranties of the Buyer shall be true and
correct in all material respects as of the date when made and as of
the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date),
and the Buyer shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied
with by the Buyer at or prior to the Closing Date.
d. No
litigation, statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of
competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the
consummation of any of the transactions contemplated by this
Agreement.
7. Conditions
to The Buyer’s Obligation to Purchase. The obligation of the Buyer hereunder to
purchase the Series C Shares at the Closing is subject to the
satisfaction, at or before the Closing Date of each of the
following conditions, provided that these conditions are for the
Buyer’s sole benefit and may be waived by the Buyer at any
time in its sole discretion:
a. The
Company shall have executed this Agreement and delivered the same
to the Buyer.
b. The
Company shall have delivered to the Buyer the Series C Shares by
way of book entry as confirmed by the Company’s transfer
agent in accordance with Section 1(b) above.
c. The
Irrevocable Transfer Agent Instructions, in form and substance
satisfactory to the Buyer, shall have been delivered to and
acknowledged in writing by the Company’s Transfer
Agent.
d. The
representations and warranties of the Company shall be true and
correct in all material respects as of the date when made and as of
the Closing Date as though made at such time (except for
representations and warranties that speak as of a specific date)
and the Company shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Closing Date. The Buyer
shall have received a certificate or certificates, executed by the
chief executive officer of the Company, dated as of the Closing
Date, to the foregoing effect and as to such other matters as may
be reasonably requested by the Buyer including, but not limited to
certificates with respect to the Board of Directors’
resolutions relating to the transactions contemplated
hereby.
e. No
litigation, statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of
competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the
consummation of any of the transactions contemplated by this
Agreement.
f. No
event shall have occurred which could reasonably be expected to
have a Material Adverse Effect on the Company including, but not
limited, to a change in the 1934 Act reporting status of the
Company or the failure of the Company to be timely in its 1934 Act
reporting obligations.
g. The
Company’s transfer agent shall be engaged to act as the
transfer agent for the Series C Preferred Shares.
h. The Certificate of
Designation shall be properly authorized and filed with the
Secretary of State of the State of Nevada and declared
effective.
8. Governing
Law; Miscellaneous.
a. Governing
Law. This Agreement shall be
governed by and construed in accordance with the laws of the State
of New York without regard to principles of conflicts of laws. Any
action brought by either party against the other concerning the
transactions contemplated by this Agreement shall be brought only
in the state courts of New York or in the federal courts located in
the Eastern District of New York. The parties to this Agreement
hereby irrevocably waive any objection to jurisdiction and venue of
any action instituted hereunder and shall not assert any defense
based on lack of jurisdiction or venue or based upon
forum non
conveniens. The Company and
Buyer waive trial by jury. The prevailing party shall be entitled
to recover from the other party its reasonable attorney's fees and
costs. In the event that any provision of this Agreement or any
other agreement delivered in connection herewith is invalid or
unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it
may conflict therewith and shall be deemed modified to conform with
such statute or rule of law. Any such provision which may prove
invalid or unenforceable under any law shall not affect the
validity or enforceability of any other provision of any agreement.
Each party hereby irrevocably waives personal service of process
and consents to process being served in any suit, action or
proceeding in connection with this Agreement, the Series C Shares,
the Certificate of Designation or any related document or agreement
by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any other
manner permitted by law.
b. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which shall constitute
one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the
other party.
c. Headings.
The headings of this Agreement are for convenience of reference
only and shall not form part of, or affect the interpretation of,
this Agreement.
d. Severability.
In the event that any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it
may conflict therewith and shall be deemed modified to conform with
such statute or rule of law. Any provision hereof which may prove
invalid or unenforceable under any law shall not affect the
validity or enforceability of any other provision
hereof.
e. Entire
Agreement; Amendments. This
Agreement and the instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered
herein and therein and, except as specifically set forth herein or
therein, neither the Company nor the Buyer makes any
representation, warranty, covenant or undertaking with respect to
such matters. No provision of this Agreement may be waived or
amended other than by an instrument in writing signed by the
parties hereto.
f. Notices.
All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally
served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable
air courier service with charges prepaid, or (iv) transmitted by
hand delivery, telegram, email, or facsimile, addressed as set
forth below or to such other address as such party shall have
specified most recently by written notice. Any notice or other
communication required or permitted to be given hereunder shall be
deemed effective (a) upon hand delivery or delivery by facsimile,
with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on
a business day during normal business hours where such notice is to
be received), or the first (1st)
business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to
be received) or (b) on the second (2nd)
business day following the date of mailing by express courier
service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses
for such communications shall be as set forth in the heading of
this Agreement with a copy by fax only to (which copy shall not
constitute notice) to Naidich Wurman LLP, 111 Great Neck Road,
Suite 214, Great Neck, NY 11021, Attn: Allison Naidich,
facsimile: 516-466-3555, e-mail: allison@nwlaw.com. Each party shall provide notice to the other party
of any change in address.
g. Successors
and Assigns. This Agreement
shall be binding upon and inure to the benefit of the parties and
their successors and assigns. Neither the Company nor the Buyer
shall assign this Agreement or any rights or obligations hereunder
without the prior written consent of the other.
h. Survival
and Indemnification. The
representations and warranties and the agreements and covenants set
forth in this Agreement shall survive the closing hereunder
notwithstanding any due diligence investigation conducted by or on
behalf of the either party. The Company agrees to indemnify and
hold harmless the Buyer and all their officers, directors,
employees and agents for loss or damage arising as a result of or
related to any breach or alleged breach by the Company of any of
its representations, warranties and covenants set forth in this
Agreement or any of its covenants and obligations under this
Agreement, including advancement of expenses as they are incurred.
The Buyer agrees to indemnify and hold harmless the Company and all
their officers, directors, employees and agents for loss or damage
arising as a result of or related to any breach or alleged breach
by the Buyer of any of its representations, warranties and
covenants set forth in this Agreement or any of its covenants and
obligations under this Agreement, including advancement of expenses
as they are incurred.
i. Further
Assurances. Each party shall do
and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
j. No
Strict Construction. The
language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rules
of strict construction will be applied against any
party.
k. Remedies.
Each party acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the other party by
vitiating the intent and purpose of the transaction contemplated
hereby. Accordingly, each party acknowledges that the remedy at law
for a breach of its obligations under this Agreement will be
inadequate and agrees, in the event of a breach or threatened
breach by the other party of the provisions of this Agreement, that
the non-breaching party shall be entitled, in addition to all other
available remedies at law or in equity, and in addition to the
penalties assessable herein, to an injunction or injunctions
restraining, preventing or curing any breach of this Agreement and
to enforce specifically the terms and provisions hereof, without
the necessity of showing economic loss and without any bond or
other security being required.
IN
WITNESS WHEREOF, the undersigned Buyer and the Company have caused
this Agreement to be duly executed as of the date first above
written.
FRIENDABLE, INC.
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By:
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/s/Robert Rositano Jr.
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Name:
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Robert Rositano Jr.
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Title:
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Chief Executive Officer
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GENEVA ROTH REMARK HOLDINGS, INC.
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By:
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/s/Curt Kramer
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Name:
Curt Kramer
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Title:
Chief Executive Officer
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111
Great Neck Road, Suite 216
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Great
Neck, NY 11021
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AGGREGATE SUBSCRIPTION AMOUNT:
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Number of Series C Preferred Shares purchased
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58,300
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Aggregate Purchase Price:
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$53,000.00
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Price per Series C Preferred Share
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$0.91
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EXHIBIT A
Certificate of Designation
See attached.