Exactus, Inc. (Form: 8-K, Received: 02/18/2021 06:02:05)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 16, 2021

EXACTUS, INC.

(Exact name of the registrant as specified in its charter)

Nevada	000-55828	27-1085858
(State or other jurisdiction of	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

80 NE 4th Avenue, Suite 28, Delray Beach, FL 33483

(Address of principle executive offices) (Zip code)

Registrant’s telephone number, including area code: (561) 455-4822

_____________________________________________________________________

(Former name or address if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2 below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading symbol(s)		Name of exchange on which registered
N/A		N/A		N/A

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

SECTION 1 – REGISTRANT’S BUSINESS AND OPERATIONS

Item 1.01

Entry Into a Material Definitive Agreement

On February 16, 2021, we entered into a Securities Purchase Agreement with 3i, LP (“3i”) and an institutional investor (“Investor”) under which the Investor agreed to purchase and 3i agreed to sell that certain 8% senior secured convertible note dated November 27, 2019 (the “Note”) and all of our warrants previously issued to 3i and 3i agreed settle and release all claims asserted against us. As a result, 3i agreed to dismissal of all pending litigation against us.

As a result, the Subsidiary Guaranty, IP Security Agreement and Registration Rights Agreement with 3i were also terminated.

In addition, we entered into an Exchange Agreement with the Investor and filed with the Secretary of State of the State of Nevada a Certificate of Designation of Preferences, Rights and Limitations for Series A Preferred Stock under which the Note in the original principal amount of $750,000 would be exchanged for $500,000 of a new series of our preferred stock designated 0% Series A Convertible Preferred Stock (the “Series A Preferred”) with a stated value of $1,000 per share (the “Stated Value”).

We authorized the issuance of a total of 1,000 ($1,000,000) of our Series A Preferred for issuance. Each share of Series A Preferred is convertible at the option of the Holder, into that number of shares of our common stock, par value $0.0001 per share) (the “Common Stock”) (subject to certain limitations on beneficial ownership) determined by dividing the Stated Value by $0.05 per share (the “Conversion Price”), subject to adjustment in the event of stock dividends, stock splits, stock combinations, reclassifications or similar transactions that proportionately decrease or increase the Common Stock.

We are prohibited from effecting the conversion of the Series A Preferred to the extent that, as a result of such conversion, the holder beneficially owns more than 4.99% (which may be increased to 9.99% upon 61 days’ written notice to the Company), in the aggregate, of the issued and outstanding shares of the Common Stock calculated immediately after giving effect to the issuance of shares of Common Stock upon the conversion of the Series A Preferred. Holders of the Series A Preferred shall be entitled to vote on all matters submitted to the Company’s stockholders and shall be entitled to the number of votes equal to the number of shares of Common Stock into which the shares of Series A Preferred Stock are convertible, subject to applicable beneficial ownership limitations. The Series A Preferred Stock provides a liquidation preference equal to the Stated Value, plus any accrued and unpaid dividends, fees or liquidated damages.

The Series A Preferred can be redeemed at our option upon payment of a redemption premium between 120% to 135% of the Stated Value of the outstanding Series A Preferred redeemed. We are not obligated to file a registration statement under the Securities Act of 1933, as amended (the “Act”), with respect to the shares of Common Stock into which Series A Preferred may be converted however the Investor will be deemed to have held the Series A Preferred on the original issue date to 3i for the purposes of the availability of an exemption from registration provided by Rule 144 under the Act.

On February 16, 2021 we filed a Certificate of Cancellation and Withdrawal with the Secretary of State of the State of Nevada cancelling our previous Certificate of Designation of Preferences, Rights and Limitations for Series A Preferred Stock, all of which has been converted to Common Stock.

The foregoing description of the Securities Purchase Agreement, Exchange Agreement and Certificate of Designation of Preferences, Rights and Limitations for Series A Preferred Stock of is a summary of the material terms of such Agreements, which are filed herewith as Exhibits 10.1, 10.2 and 4.1, respectively, hereto. The Agreements contain additional terms, covenants, and conditions and should be reviewed in their entirety for additional information

SECTION 3 – SECURITIES AND TRADING MARKETS

Item 3.02

Unregistered Sales of Equity Securities

On February 16, 2021, our board of directors authorized the issuance of up to 1,000 shares of our Series A Preferred.

We also have offered to our Series B-1 and Series B-2 preferred stock inducements to voluntarily convert preferred shares into our Common Stock and expect to file a Certificate of Cancellation and Withdrawal with the Secretary of State of the State of Nevada cancelling our previous Certificate of Designation of Preferences, Rights and Limitations for Series B-1, B-2, C. D and E Preferred Stock upon conversion or cancellation of all such Series.

The foregoing issuances do not involve any public offering and are exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

Item 8.01

Other Events.

Strategic Alternatives Committee

On January 22, 2021, our Board of Directors formed a Strategic Alternatives Committee, for the purpose of evaluating potential acquisitions, mergers, and other strategic business combinations. The new committee consists of Directors Larry Wert and Julian Pittam, with Mr. Wert serving as its chairman. During January and February 2021, the Strategic Alternatives Committee reviewed various business combination proposals and entered into separate negotiations to acquire two companies with existing business and operations in the electric vehicle industry. Ongoing due diligence is continuing with respect to one of the two companies.

As previously reported, on January 22, 2021, our Board of Directors authorized a possible reverse split of our common stock at a ratio of between 1 share for every 40 shares held and 1 share for every 50 shares held, to be determined in the further discretion of the Board. The reverse split is subject to approval by our shareholders unless the number of authorized shares of our capital stock is reduced proportionately in accordance with Nevada law, and may be authorized, if at all, in connection with a recapitalization required in connection with an acquisition or similar event. In connection with a potential acquisition, we are continuing our recapitalization efforts through, among other things, cancellation and exchange of existing indebtedness for equity, cancellation of our outstanding series of preferred stock, and a reverse split. Under the terms under discussion for the possible acquisition of a company in the electric vehicle industry, we believe that a reverse split of our Common Stock of approximately 1:40 may be authorized by our Board of Directors.

Section 9 – FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01

Financial Statements and Exhibits

Exhibit No.	Description
4.1	Certificate of Designation of Preferences, Rights and Limitations for Series A Preferred Stock
10.1	Securities Purchase Agreement (redacted)
10.2	Exchange Agreement

(1)

Portions of this Exhibit have been redacted.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on behalf of the undersigned hereunto duly authorized.

	EXACTUS, INC.
Date: February 17, 2021	By: /s/ Alvaro Daniel Alberttis Alvaro Daniel Alberttis Principal Executive Officer

Exhibit 4.1

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (the “Agreement”) is dated as of February , 2021 among 3i, LP, a Delaware limited partnership (the “Seller”), ________________, LLC, a Delaware limited liability company (the “Purchaser”), and Exactus, Inc., a Nevada corporation (the “Company”, each of the Seller, Purchaser, or Company a “Party”, any two or more “Parties”).

WHEREAS, the Seller and the Company entered into that certain securities purchase agreement dated November 27, 2019 (the “SPA”) whereby Seller agreed, among other things, to make capital investments up to $1.75 million in the Company and in the first closing paid $750,000 to the Company for the purchase of an 8% senior secured convertible note due November 26, 2020 (the “Note”, attached hereto as Exhibit A) and a common stock purchase warrant for 275,612 warrant shares (the “Warrant”, attached hereto as Exhibit B, and together with the Note, the “Securities”);

WHEREAS, on November 19, 2020 Seller commenced litigation before the United States District Court for the Southern District of New York, case no. 1:20-cv-09734 (the “New York Lawsuit”) for various claims against the Company;

WHEREAS, without admitting or denying the allegations of Seller, the Seller and Company, each desires to resolve its disputes, dismiss, with prejudice, the New York Lawsuit, and release each other from all claims and liabilities, subject to Seller receiving the payments to be made pursuant to this Agreement and to provide for the sale of the Note and Warrants to Purchaser, all on the terms and subject to the conditions set forth herein (collectively, the Transactions”);

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows:

ARTICLE I PURCHASE AND SALE

1.1 Sale. Subject to the terms and conditions set forth in this Agreement, Purchaser shall purchase from the Seller and the Seller shall sell to Purchaser the Securities for an aggregate purchase price of $250,000.00 (“Purchase Price”).

1.2 Payment. Purchaser shall make payment of the Purchase Price to Seller pursuant to wire instructions provided by Seller (included herein as Exhibit C) on or before February 8, 2021 (the “Closing Date”).

1.3 Closing. Upon all of the conditions set forth herein, a closing shall occur by the electronic exchange of documents, or such other location or manner as the parties shall mutually agree. At the Closing, contingent upon Seller’s receipt of the Purchase Price, the Company is authorized to transfer on its books and record the Securities to Purchaser.

1.4 Releases. At the Closing, contingent upon Seller’s receipt of the Purchase Price, the Releases set forth herein shall become effective.

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Definitions:

Released Company Parties are Company, its past or present officers, directors, and employees, consultants, subsidiaries, shareholders, insurers, co-insurers or reinsurers, attorneys, advisors, agents, trustees, executors, heirs, spouses, marital communities, executors, estates, affiliates, subsidiaries and their respective successors-in-interest and assigns.

Released 3i Parties are 3i, LP, its past or present officers, investment managers, managers, and employees, consultants, subsidiaries, members, insurers, co-insurers, or reinsurers, attorneys, advisors, agents, trustees, executors, heirs, spouses, marital communities, executors, estates, affiliates, subsidiaries, and their respective successors-in-interest and assigns.

Settling Parties are Company and 3i.

Released 3i Parties irrevocably release and discharge the Released Company Parties from any and all actions, suits, debts, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, damages, judgments, extents, executions, claim, demand, action, or cause of action, known or unknown, in law or in equity, which the Released 3i Parties, ever had, now have or hereafter can, shall or may, have for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world through and including the date hereof, including any obligations arising under the Transaction Documents (as defined in the SPA), , and the Released 3i Parties further waive all claims against or in any way connected with the Released Company Parties or their officers or directors, including, without limitation, any claim, demand, action, cause of action, including money damages and claims for attorneys’ fees.

Released Company Parties irrevocably release and discharge the Released 3i Parties from any and all actions, suits, debts, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, damages, judgments, extents, executions, claim, demand, action, or cause of action, known or unknown, in law or in equity, which the Released Company Parties, ever had, now have or hereafter can, shall or may, have for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world through and including the date hereof, including any obligations arising under the Transaction Documents, , and the Released Company Parties further waive all claims against or in any way connected with the Released 3i Parties or their officers and directors, including, without limitation, any claim, demand, action, cause of action, including money damages and claims for attorneys’ fees.

1.5 At the Closing, contingent upon Seller’s receipt of the Purchase Price, the SPA, the Subsidiary Guaranty dated as of November 27, 2019 (the “Guaranty”), the Security Agreement dated as of November 27, 2019 (the “Security Agreement”), the Intellectual Property Security Agreement dated as of November 27, 2019 (the “IP Security Agreement”) and the Registration Rights Agreement dated as of November 27, 2019 (the “Registration Rights Agreement”) in each case by and between Company, any Affiliate of Company and Seller, shall terminate and be of no force and effect. Seller consents to the amendment and/or withdrawal of the Registration Statement on Form S-1 filed October 30, 2020 with the SEC and shall upon request execute and deliver a UCC3 Termination Statement for any and all liens created under the Security Agreement and/or IP security Agreement.

1.6 Following the Closing, contingent upon Seller’s receipt of the Purchase Price, the Settling Parties will prepare all necessary settlement documents to confirm the settlement and the dismissal, with prejudice of the New York Litigation and file such dismissal with the court within 5 days of the Closing. The releases herein shall include all claims raised in the New York Litigation or that could have been raised in the New York Litigation or brought in any other venue or forum under the SPA or involving the Securities.

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ARTICLE II REPRESENTATIONS AND WARRANTIES

2.1 Representations and Warranties of the Seller. Seller hereby makes the following representations and warranties to the Purchaser:

(a) The Seller has full power and authority to enter into this Agreement and to consummate the Transaction. This Agreement has been duly and validly executed and delivered by the Seller and constitutes the legal, valid and binding obligation of the Seller, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws from time to time in effect that affect creditors’ rights generally, and by legal and equitable limitations on the availability of specific remedies.

(b) The execution, delivery and performance by the Seller of this Agreement and consummation by the Seller of the Transaction do not and will not: (i) violate any decree or judgment of any court or other governmental authority applicable to or binding on the Seller; (ii) violate any provision of any federal or state statute, rule or regulation which is, to the Seller’s knowledge, applicable to the Seller; or (iii) violate any contract to which the Seller or any of its assets or properties are bound, or conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of , any agreement, indenture or instrument to which Seller is a party. No consent or approval of, or filing with, any governmental authority or other person not a party hereto is required for the execution, delivery and performance by the Seller of this Agreement or the consummation of the Transaction.

(c) With respect to the sale of the Securities, (i) the Seller is the sole record and beneficial owner of the Securities, free and clear of any taxes and encumbrances; (ii) the Securities, when delivered and paid for in accordance with the terms of this Agreement, will be validly issued, fully paid and non- assessable, free from all taxes and encumbrances; (iii) the Securities to be delivered are not and will not be as of the Closing Date subject to any transfer restriction, other than the restriction that the Securities have not been registered under the Securities Act and, therefore, cannot be resold unless it is registered under the Securities Act or in a transaction exempt from or not subject to the registration requirements of the Securities Act (“Permitted Securities Law Restriction”); and (iv) upon the transfer of the Securities to Purchaser, Purchaser will acquire good and marketable title thereto, and will be the legal and beneficial owner of such the Securities, free and clear of any encumbrances, other than the Permitted Securities Law Restriction.

(d) There are no outstanding rights, options, subscriptions or other agreements or commitments obligating the Seller with respect to the Securities.

(e) The Seller has taken no action that would give rise to any claim by any person for brokerage commissions, finder’s fees or similar payments relating to this Agreement or the transactions contemplated hereby.

(f) Other than the New York Litigation, Seller has not commenced any proceedings relating to the Securities that are pending or, to the knowledge of the Seller, threatened before any court, arbitrator or administrative or governmental body that would adversely affect the Seller’s right to transfer the Securities to the Purchaser.

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(g) The Seller is not now and has not been for the previous ninety-one (91) days an affiliate of the Company.

(h) Neither the Seller nor any person acting on behalf of the Seller has offered or sold any of the Securities by any form of general solicitation or general advertising.

(i) The amount due under the Note is not less than five hundred thousand dollars ($500,000.00).

2.2 Representations and Warranties of the Purchaser. Purchaser hereby represents, warrants and agrees to the Seller as of the date hereof:

(a) Purchaser has full power and authority to enter into this Agreement and to consummate the Transaction. This Agreement has been duly and validly executed and delivered by Purchaser and constitutes the legal, valid and binding obligation of Purchaser, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws in effect that affect the enforcement of creditors’ rights generally and by equitable limitations on the availability of specific remedies.

(b) The execution, delivery and performance by Purchaser of this Agreement and consummation by Purchaser of the Transaction do not and will not: (i) violate any decree or judgment of any court or other governmental authority applicable to or binding on Purchaser; (ii) violate any provision of any federal or state statute, rule or regulation which is, to Purchaser’s knowledge, applicable to the Purchaser; or (iii) violate any contract to which Purchaser is a party or by which Purchaser or any of its respective assets or properties are bound. No consent or approval of, or filing with, any governmental authority or other person not a party hereto is required for the execution, delivery and performance by Purchaser of this Agreement or the consummation of the Transaction.

(c) Purchaser is an “accredited investor” within the meaning of Rule 501(a) of Regulation D and is aware that the Securities are subject to restrictions on transfer pursuant to the Securities Act.

(d) The Purchaser is acquiring the Securities for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities Act; provided, however, that by making the representations herein, the Purchaser does not agree to hold the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act.

(e) Purchaser is aware of the Company’s business affairs and financial condition, and has acquired sufficient information about the issuer to reach an informed and knowledgeable decision to acquire the Securities.

(f) Purchaser has taken no action that would give rise to any claim by any person for brokerage commissions, finder’s fees or similar payments relating to this Agreement or the transactions contemplated hereby.

(g)

Purchaser is aware the Securities are not registered and unless registered, and are restricted unless and until registered or an exemption from registration exists. As such, until the Securities are either registered or the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, shall bear a legend substantially as follows:

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“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT OR OTHER APPLICABLE EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

The legend set forth above shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if (i) the Borrower or its transfer agent shall have received 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 Common Stock may be made without registration under the Act, which opinion shall be reasonably accepted by the Borrower so that the sale or transfer is effected; or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 or other applicable exemption without any restriction as to the number of securities as of a particular date that can then be immediately sold.

2.3 Representations and Warranties of the Company. Company hereby represents, warrants and agrees to the Parties as of the date hereof:

(a) Company has full power and authority to enter into this Agreement and to consummate the Transaction. This Agreement has been duly and validly executed and delivered by any authorized officer of the Company and constitutes the legal, valid and binding obligation of Company, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws in effect that affect the enforcement of creditors’ rights generally and by equitable limitations on the availability of specific remedies.

(b) The execution, delivery and performance by Company of this Agreement and consummation by the Company of the Transaction do not and will not: (i) violate any decree or judgment of any court or other governmental authority applicable to or binding on Company; (ii) violate any provision of any federal or state statute, rule or regulation which is, to Company’s knowledge, applicable to the Company; or (iii) violate any contract to which Company is a party or by which Company or any of its respective assets or properties are bound. No consent or approval of, or filing with, any governmental authority or other person not a party hereto is required for the execution, delivery and performance by Company of this Agreement or the consummation of the Transaction.

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(d) Company has taken no action that would give rise to any claim by any person for brokerage commissions, finder’s fees or similar payments relating to this Agreement or the transactions contemplated hereby.

(e) By executing this Agreement, the Company is providing any consents or acknowledgments that may be necessary to the consummation of the Transaction.

(f) Company acknowledges that Purchaser has not provided any additional consideration to the Company in connection with the consummation of this Transaction. It is further acknowledged by the Company that the Securities purchased herein by Purchaser shall inherit all of the characteristics, including but not limited to the holding period, of the Securities. As a result, for the purposes of Rule 144, the Purchaser shall be deemed to have held the Securities beginning on the date consideration was paid by the Seller therefore. Company further acknowledges that it shall not take any position to the contrary.

(g) Company shall file a Current Report of Form 8-K with the Securities and Exchange Commission to disclose the material terms of this Agreement within four (4) business days from the date this Agreement is executed and delivered by the Parties;

ARTICLE III MISCELLANEOUS

3.1 Entire Agreement; Amendments. The Agreement contains the entire understanding of the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

3.2 Amendments; Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of an amendment, by the Seller and the Purchaser or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter.

3.3 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.

3.4 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person other than the Released 3i Parties and the Released Company Parties.

3.5

Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by and construed under the laws of the State of New York, without regard to the choice of law principles thereof. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the State of New York, City of New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby, and hereby irrevocably waives any objection that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

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3.6 Survival. The representations, warranties, agreements and covenants contained herein shall survive the Closing.

3.7 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature page were an original thereof.

3.9 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 any 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.

3.10 Expenses. The parties hereto shall pay their own costs and expenses in connection herewith.

3.11 Headings. The headings used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

3.12 Drafting. Each of the Parties hereto acknowledges that each Party was actively involved in the negotiation and drafting of this Agreement and that no law or rule of construction shall be raised or used in which the provisions of this Agreement shall be construed in favor or against any Party hereto because one is deemed to be the author thereof.

[REST OF THIS PAGE LEFT INTENTIONALLY BLANK]

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IN WITNESS WHEREOF, the parties hereto have caused this Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

SELLER

By:

Name:

Title:

PURCHASER

By: LLC, Its Manager

By:

Name:

Title: Manager

COMPANY

By:

Name: Larry Wert

Title: Executive Chairman

[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]

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EXHIBIT A

(Note)

[EXHIBIT A TO SECURITIES PURCHASE AGREEMENT]

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EXHIBIT B

(Warrant)

[EXHIBIT B TO SECURITIES PURCHASE AGREEMENT]

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EXHIBIT C

(Wiring Instructions)

[EXHIBIT C TO SECURITIES PURCHASE AGREEMENT]

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Exhibit 10.2

EXCHANGE AGREEMENT

This Exchange Agreement (this “Agreement”), dated effective as of the purchase of the Exchanged Note (as defined below), is made by and among Exactus, Inc., a Nevada corporation (the “Company”), and _______________ LLC as the to-be holder of the Exchanged Note (the “Holder”).

WHEREAS, the Holder is purchasing the convertible note as more specifically set forth on Exhibit A attached hereto (the “Exchanged Note”);

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 3(a)(9) of the Securities Act of 1933 (the “Securities Act”), the Company desires to exchange with the Holder, and the Holder desires to exchange with the Company, the Exchanged Note for five hundred (500) shares of the Company’s Preferred Shares Convertible Preferred Stock (the “Preferred Shares”), with such designations, rights, preferences, limitations and restrictions as set forth in the Certificate of Designation contained in Exhibit B attached hereto.

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Holder agree as follows:

1. Terms of the Exchange. The Company and the Holder agree that the Holder will exchange the Exchanged Note held by the Holder and will relinquish any and all other rights it may have under the Exchanged Note in exchange for the Preferred Shares.

2. Closing. Upon of the conditions set forth herein, a closing shall occur at the principal offices of the Company, or such other location as the parties shall mutually agree. At closing, the Company shall deliver to the Holder the Preferred Shares. Upon closing, any and all obligations of the Company to Holder under the Exchanged Note shall be fully satisfied, the Holder will have no remaining rights, powers, privileges, remedies or interests under the Exchanged Note. On the closing date, the Company shall execute and cause its Transfer Agent to execute the form of reserve letter attached as Exhibit C.

3. 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 any 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.

4. Representations and Warranties of the Holder. The Holder represents and warrants as of the date hereof and as of the closing to the Company as follows:

a. Authorization; Enforcement. The Holder has the requisite power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement by the Holder and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Holder and no further action is required by the Holder. This Agreement has been (or upon delivery will have been) duly executed by the Holder and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Holder enforceable against the Holder in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies, and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

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b. Tax Advisors. The Holder has reviewed with its own tax advisors the U.S. federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement. With respect to such matters, the Holder relied solely on such advisors and not on any statements or representations of the Company or any of its agents, written or oral. The Holder understands that it (and not the Company) shall be responsible for its own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.

c. Information Regarding Holder. The Holder is an “accredited investor,” as such term is defined in Rule 501 of Regulation D promulgated by the United States Securities and Exchange Commission (the “Commission”) under the Securities Act, is experienced in investments and business matters, has made investments of a speculative nature and has purchased securities of companies in private placements in the past and, with its representatives, has such knowledge and experience in financial, tax and other business matters as to enable the Holder to utilize the information made available by the Company to evaluate the merits and risks of and to make an informed investment decision with respect to the proposed purchase, which represents a speculative investment. The Holder has the authority and is duly and legally qualified to purchase and hold the Preferred Shares. The Holder is able to bear the risk of such investment for an indefinite period and to afford a complete loss thereof.

d. Legend. The Holder understands that the Preferred Shares (including the shares of Common Stock issuable upon the conversion of the Preferred Shares (the “Underlying Shares”)) will be issued pursuant to an exemption from registration or qualification under the Securities Act and applicable state securities laws, and except as set forth below, the Preferred Shares shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):

THESE SECURITIES AND THE SECURITIES ISSUABLE UPON THEIR EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED UNLESS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, A “NO- ACTION” LETTER FROM THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION WITH RESPECT TO SUCH TRANSFER, A TRANSFER MEETING THE REQUIREMENTS OF RULE 144 OF THE COMMISSION, OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

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e. Restricted Securities. The Holder understands that: (i) the Preferred Shares (and the Underlying Securities) have not been and may never be registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless.

(A) subsequently registered thereunder, (B) the Holder shall have delivered to the Company (if requested by the Company) an opinion of counsel to the Holder, in a form reasonably acceptable to the Company, to the effect that such Preferred Shares to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) the Holder provides the Company with reasonable assurance that such Preferred Shares (or Underlying Securities, as applicable) can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the Securities Act (or a successor rule thereto) (collectively, “Rule 144”); and

(ii) any sale of the Preferred Shares (or Underlying Securities) made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144, and further, if Rule 144 is not applicable, any resale of the Preferred Shares (or Underlying Securities) under circumstances in which the seller (or the Person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the Commission promulgated thereunder.

5. Representations and Warranties of the Company. The Company hereby makes the following representations and warranties to the Holder:

a. Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other agreements entered into by the parties hereto in connection with the transactions contemplated by this Agreement (collectively, the “Exchange Documents”) and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the board of directors of the Company or the Company’s stockholders in connection therewith, including, without limitation, the issuance of the Preferred Shares has been duly authorized by the Company’s board of directors and no further filing, consent, or authorization is required by the Company, its board of directors or its stockholders. This Agreement has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

b. Organization and Qualification. Each of the Company and its subsidiaries (the “Subsidiaries”) are entities duly organized and validly existing and in good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authorization to own their properties and to carry on their business as now being conducted and as presently proposed to be conducted. Each of the Company and each of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect. As used in this Agreement, “Material Adverse Effect” means any material adverse effect on (i) the business, properties, assets, liabilities, operations (including results thereof), condition (financial or otherwise) or prospects of the Company or any Subsidiary, individually or taken as a whole, (ii) the transactions contemplated hereby or in any of the other Exchange Documents or (iii) the authority or ability of the Company to perform any of its obligations under any of the Exchange Documents. Other than its Subsidiaries, there is no Person (as defined below) in which the Company, directly or indirectly, owns capital stock or holds an equity or similar interest. “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any governmental entity or any department or agency thereof.

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c. No Conflict. The execution, delivery and performance of the Exchange Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Preferred Shares will not (i) result in a violation of the Certificate of Incorporation (as defined herein) or other organizational documents of the Company or any of its Subsidiaries, any capital stock of the Company or any of its Subsidiaries or Bylaws (as defined herein) of the Company or any of its Subsidiaries, (ii) except as set forth in the SEC Documents (as defined herein), conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture 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 foreign, federal and state securities laws and regulations and the rules and regulations of The OTC Markets Group (the “Principal Market”) 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, in the case of clause (ii) or (iii) above, to the extent such violations that could not reasonably be expected to have a Material Adverse Effect.

d. No Consents. Neither the Company nor any Subsidiary is required to obtain any consent from, authorization or order of, or make any filing or registration with, any court, governmental agency or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its respective obligations under or contemplated by the Exchange Documents, in each case, in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the Company or any Subsidiary is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date of this Agreement, and neither the Company nor any of its Subsidiaries is aware of any facts or circumstances which might prevent the Company or any of its Subsidiaries from obtaining or effecting any of the registration, application or filings contemplated by the Exchange Documents. The Company is not in violation of the requirements of the Principal Market and has no knowledge of any facts or circumstances which could reasonably lead to delisting or suspension of the Common Stock in the foreseeable future.

e. Securities Law Exemptions. Assuming the accuracy of the representations and warranties of the Holder contained herein, the offer and issuance by the Company of the Preferred Shares is exempt from registration under the Securities Act. The offer and issuance of the Preferred Shares is exempt from registration under the Securities Act pursuant to the exemption provided by Section 3(a)(9) thereof. The Company covenants and represents to the Holder that neither the Company nor any of its Subsidiaries has received, anticipates receiving, has any agreement to receive or has been given any promise to receive any consideration from the Holder or any other Person in connection with the transactions contemplated by the Exchange Documents. The Company hereby acknowledges that the holding period of the Preferred Shares (and Underlying Shares) shall tack back to the date the Exchanged Securities were originally issued by the Company to the Holder (or its assignor) and it covenants not to take any position to the contrary.

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f. Issuance of the Preferred Shares. The issuance of the Preferred Shares is duly authorized by the Company. The issuance of shares of the Underlying Shares upon conversion of the Preferred Shares is duly authorized and, when issued in accordance with the Preferred Shares, will be duly and validly issued, fully paid and non-assessable, free from all taxes, liens, charges and other encumbrances imposed by the Company other than restrictions on transfer provided for in such documents.

g. Equity Capitalization. Except as disclosed in the SEC Documents: (i) none of the Company’s or any Subsidiary’s capital stock is subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company or any Subsidiary; (ii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional capital stock of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any capital stock of the Company or any of its Subsidiaries; (iii) there are no outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing indebtedness of the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may become bound; (iv) there are no financing statements securing obligations in any amounts filed in connection with the Company or any of its Subsidiaries; (v) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities under the Securities Act; (vi) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries; (vii) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Preferred Shares; (viii) neither the Company nor any Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement; and (ix) neither the Company nor any of its Subsidiaries have any liabilities or obligations required to be disclosed in the Company’s filings with the Commission (the “SEC Documents”) which are not so disclosed in the SEC Documents, other than those incurred in the ordinary course of the Company’s or its Subsidiaries’ respective businesses and which, individually or in the aggregate, do not or could not have a Material Adverse Effect. The Company has furnished to the Holder true, correct and complete copies of the Company’s Amended and Restated Certificate of Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and the Company’s Amended and Restated Bylaws and as in effect on the date hereof (the “Bylaws”), and the terms of all securities convertible into, or exercisable or exchangeable for, shares of Common Stock and the material rights of the holders thereof in respect thereto that have not been disclosed in the SEC Documents.

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h. Shell Company Status. The Company is not, and has not been in the last three years, an issuer identified in, or subject to, Rule 144(i) of the Securities Act.

Additional Acknowledgments.

The Holder and the Company confirm that the Company has not received any consideration for the transactions contemplated by this Agreement. Pursuant to Rule 144 promulgated by the Commission pursuant to the Securities Act and the rules and regulations promulgated thereunder as such Rule 144 may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule 144, the holding period of the Preferred Shares (and Underlying Shares) tacks back to the issue date of the Exchanged Note. The Company hereby confirms that the Holder (who is exchanging the Exchanged Note) currently is not and will not be upon closing of this Agreement (individually or together as a group) deemed an “affiliate” as defined in Rule 144. The Company agrees not to take a position contrary to this paragraph.

For so long as any of the Series A Preferred Shares are held by Holder, Company shall not issue any Series A Preferred Shares to any other entity or investor (an “Other Investor”) without prior consent of Holder. Any issuance to an Other Investor without Holder’s consent shall be null and void.

Miscellaneous.

a. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.

b. Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by and construed under the laws of the State of New York, without regard to the choice of law principles thereof. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the State of New York, City of New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby, and hereby irrevocably waives any objection that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

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c. Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

d. Counterparts/Execution. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature is delivered by facsimile transmission or by an e-mail which contains an electronic file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or electronic file signature page (as the case may be) were an original thereof.

e. Notices. Any notice or communication permitted or required hereunder shall be in writing and shall be deemed sufficiently given if hand-delivered or sent (i) postage prepaid by registered mail, return receipt requested, or (ii) by email, to the respective parties as set forth below, or to such other address as either party may notify the other in writing.

If to the Company, to:

Exactus, Inc.

80 NE 4th Avenue, Suite 28 Delray Beach, Florida 33483

Attn: Larry Wert, Executive Chairman Email: ljw@larrywert.com

If to the Holder, to:

With a copy by e-mail only to (which copy shall not constitute notice): FABIAN VANCOTT

215 South State Street, Suite 1200 Salt Lake City, Utah 84111

Attn: Anthony Michael Panek

e-mail: apanek@fabianvancott.com

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f. Expenses. The parties hereto shall pay their own costs and expenses in connection herewith.

g. Entire Agreement; Amendments. This Agreement constitutes the entire agreement between the parties with regard to the subject matter hereof and thereof, superseding all prior agreements or understandings, whether written or oral, between the parties. This Agreement may be amended, modified, superseded, cancelled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by all parties, or, in the case of a waiver, by the party waiving compliance. Except as expressly stated herein, no delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any right, power or privilege hereunder preclude any other or future exercise of any other right, power or privilege hereunder.

h. Headings. The headings used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

i. Pledge of Preferred Shares. The Company acknowledges and agrees that the Preferred Shares may be pledged by the Holder in connection with a bona fide margin agreement or other loan or financing arrangement that is secured by the Preferred Shares. The pledge of the Preferred Shares shall not be deemed to be a transfer, sale or assignment of the Preferred Shares hereunder, and if the Holder effects a pledge of the Preferred Shares it shall not be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement. The Company hereby agrees to execute and deliver such documentation as a pledgee of the Preferred Shares may reasonably request in connection with a pledge of the Preferred Shares to such pledgee by the Holder.

[SIGNATURE PAGES FOLLOW]

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the day and year first above written.

HOLDER

By: \ LLC, Its Manager

By:

Name:

Title: Manager

COMPANY

By:

Name: Larry Wert

Title: Executive Chairman

[SIGNATURE PAGE TO EXCHANGE AGREEMENT]

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Exhibit A

(Exchanged Note)

[EXHIBIT A TO EXCHANGE AGREEMENT]

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Exhibit B

(Certificate of Designation)

[EXHIBIT B TO EXCHANGE AGREEMENT]

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Exhibit C

(TA Letter)

[EXHIBIT C TO EXCHANGE AGREEMENT]

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