0001104659-20-110040.txt : 20200930 0001104659-20-110040.hdr.sgml : 20200930 20200929202630 ACCESSION NUMBER: 0001104659-20-110040 CONFORMED SUBMISSION TYPE: 1-A PUBLIC DOCUMENT COUNT: 77 FILED AS OF DATE: 20200930 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TriplePulse, Inc. CENTRAL INDEX KEY: 0001603707 IRS NUMBER: 461514058 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 1-A SEC ACT: 1933 Act SEC FILE NUMBER: 024-11329 FILM NUMBER: 201210333 BUSINESS ADDRESS: STREET 1: 1316 3RD ST PROMENADE STREET 2: SUITE B2 CITY: SANTA MONICA STATE: CA ZIP: 90401 BUSINESS PHONE: (424) 256-9133 MAIL ADDRESS: STREET 1: 3103 NEILSON WAY, SUITE D STREET 2: SUITE B2 CITY: SANTA MONICA STATE: CA ZIP: 90405 1-A 1 primary_doc.xml 1-A LIVE 0001603707 XXXXXXXX TriplePulse, Inc. DE 2012 0001603707 5900 46-1514058 2 0 3103 NEILSON WAY, SUITE D SANTA MONICA CA 90405 650-241-8372 Edward Grenville Other 783147.00 0.00 0.00 0.00 1142520.00 181759.00 0.00 1384341.00 -241821.00 1142520.00 1942633.00 886539.00 0.00 17811.00 0.00 0.00 dbbmckennon Common 45329200 000000000 NA Series Seed Preferred 66666 000000000 NA Series Seed-B Preferred 41667 000000000 NA NA 0 000000000 NA true true Tier2 Audited Equity (common or preferred stock) Y N N Y Y Y 12618056 45329200 0.3600 3357500.24 592500.04 0.00 0.00 3950000.28 StartEngine Primary, LLC 291500.00 dbbmckennon 55000.00 Inspire Business Law Group, PC 30000.00 291773 3650000.00 Up to $592,500.00 will go to a selling stockholder. Company assumes an additional $50,000 in potential expenses to support this offering (including state fees, EDGARization, escrow, FINRA fee, and stock transfer agent). true AL AK AZ AR CA CO CT DE FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY DC PR AL AK AZ AR CA CO CT DE FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY DC PR TriplePulse, Inc. Common Stock 3119045 0 $1,066,396.85 for 2,962,213 shares @ $0.36 per share and 156,832 bonus shares @ $0.00 per share. Section 3(a)(9) for Regulation CF for Common Stock. PART II AND III 2 tm2031356d1_partiiandiii.htm PART II AND III

 

AN OFFERING CIRCULAR PURSUANT TO REGULATION A RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. INFORMATION CONTAINED IN THIS PRELIMINARY OFFERING CIRCULAR IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED BEFORE THE OFFERING CIRCULAR FILED WITH THE COMMISSION IS QUALIFIED. THIS PRELIMINARY OFFERING CIRCULAR SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR MAY THERE BE ANY SALES OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL BEFORE REGISTRATION OR QUALIFICATION UNDER THE LAWS OF SUCH STATE. WE MAY ELECT TO SATISFY OUR OBLIGATION TO DELIVER A FINAL OFFERING CIRCULAR BY SENDING YOU A NOTICE WITHIN TWO BUSINESS DAYS AFTER THE COMPLETION OF OUR SALE TO YOU THAT CONTAINS THE URL WHERE THE FINAL OFFERING CIRCULAR OR THE OFFERING CIRCULAR IN WHICH SUCH FINAL OFFERING CIRCULAR WAS FILED MAY BE OBTAINED.

 

OFFERING CIRCULAR

 

DATED: September 29, 2020

 

TRIPLEPULSE, INC.

 

Santa Monica, CA 90405

trubrain.com

 

Up to 12,618,056 shares of our Common Stock (the “Shares”), par value $0.0001 per share, at a price of $0.36 per share (the “Offering”), including up to 1,645,833 Shares to be sold by selling stockholders and up to 1,645,833 Shares eligible to be issued as Bonus Shares (as defined in this Offering Circular). The minimum investment is $351 (975 Shares).

 

SEE “SECURITIES BEING

OFFERED” AT PAGE 33

 

TriplePulse, Inc. is offering a maximum of 12,618,056 Shares, including up to 1,645,833   Shares to be sold by selling stockholders and up to 1,645,833 Bonus Shares, on a “best efforts” basis without a minimum investment target. The Offering will terminate at the earlier of: (1) the date at which the maximum Offering amount has been sold, (2) the date which is one year from this Offering being qualified by the Commission, or (3) the date at which the Offering is earlier terminated by us in our sole discretion. We may undertake one or more closings on a rolling basis. After each closing, funds tendered by investors will be available to us. Following the Offering, the Company shall be subject to the reporting requirements pursuant to Rule 257(b).

 

Subscription amounts shall be held in escrow by Prime Trust, our escrow agent, until the applicable closing.

 

The holders of Shares issued in this Offering will grant an irrevocable voting proxy to our CEO that will limit their ability to vote their shares until the occurrence of certain events specified in the proxy, none of which may ever occur. See “SUMMARY – Rights and Preferences of the Shares” for details.

 

GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(d)(2)(i)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO www.investor.gov.

 

   Price to
Public
   Broker-Dealer
discount and
commissions (1)
   Proceeds
to issuer
(2)
   Proceeds to
other
persons
 
Per share:  $0.36   $0.0266   $0.2794   $.0540 
Total Maximum:  $3,950,000.28   $291,500.00   $3,066,000.24   $592,500.04 

 

(1)The Company has engaged StartEngine Primary, LLC, member FINRA/SIPC ("StartEngine Primary"), to perform placement agent functions and its affiliate StartEngine Crowdfunding, Inc. ("StartEngine CF") to perform administrative and technology-related functions in connection with this Offering. The Company will pay a cash commission of 3.5% to StartEngine Primary on sales of the securities into states which it is registered, and the Company will issue Shares to StartEngine Primary in an amount equal to 2% of the shares issued to investors in this Offering (excluding Bonus Shares). Shares issued to StartEngine Primary will be subject to a lock-up provision in accordance with FINRA requirements. Based on historical experience with StartEngine, we have estimated that other fees (credit card, etc.) will add up to another 3.5% of these expenses. Company also assumes an additional $50,000 in potential expenses to support this offering (including state fees, EDGARization, escrow, FINRA fee, and stock transfer agent). The Company will also pay a $15,000 advance fee for reasonable accountable out of pocket expenses actually anticipated to be incurred by StartEngine Primary. Any unused portion of this fee not actually incurred by StartEngine Primary will be returned to the Company. FINRA fees will be paid by the Company. See "Plan of Distribution and Selling Securityholders" for details of compensation payable to third parties in connection with this Offering.

 

 

 

(2)The Company estimates that the minimum amount of professional fees directly related to the Offering that we will pay will be approximately $85,000 regardless of the number of shares that are sold in this Offering. Additional expenses will be incurred for state notice filing fees and EDGARization costs. In the event that the maximum Offering amount is sold, the Company anticipates the total Offering expenses will be approximately $426,500.00, which includes the commission payable to StartEngine Primary.

 

THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE “SEC” OR THE “COMMISSION”) DOES NOT PASS UPON THE MERITS OR GIVE ITS APPROVAL OF ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE SEC HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.

 

There is currently no trading market for our Shares.

 

The Shares have no voting rights.

 

These are speculative securities. Investing in our Shares involves significant risks. You should purchase these securities only if you can afford a complete loss of your investment. See “Risk Factors” beginning on page 5.

 

Sales of these securities will commence within two (2) days of the qualification of this Offering.

 

The Company shall file periodic reports as required pursuant to Rule 257(b).

 

We are following the “Offering Circular” format of disclosure under Regulation A.

 

 

 

TABLE OF CONTENTS
  Page
SUMMARY 3
RISK FACTORS 5
DILUTION 14
PLAN OF DISTRIBUTION 16
USE OF PROCEEDS 19
OUR BUSINESS 21
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 26
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES 29
COMPENSATION OF DIRECTORS AND OFFICERS 31
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS 32
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS 33
SECURITIES BEING OFFERED 33
FINANCIAL STATEMENTS F-1

 

In this Offering Circular (this “Offering Circular”), the terms “TruBrain,” “Company,” “us” and “we,” refer to TriplePulse, Inc.

 

THIS OFFERING CIRCULAR MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO OUR MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS “ESTIMATE,” “PROJECT,” “BELIEVE,” “ANTICIPATE,” “INTEND,” “EXPECT” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE OUR ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. WE DO NOT UNDERTAKE ANY OBLIGATION TO REVISE OR UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.

 

Implications of Being an Emerging Growth Company

 

As an issuer with less than $1.07 billion in total annual gross revenues during our last fiscal year, we will qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and this status will be significant if and when we become subject to the ongoing reporting requirements of the Exchange Act of 1934, as amended (the “Exchange Act”). An emerging growth company may take advantage of certain reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. In particular, as an emerging growth company we

 

·will not be required to obtain an auditor attestation on our internal controls over financial reporting pursuant to the Sarbanes-Oxley Act of 2002;

 

·will not be required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements and analyzing how those elements fit with our principles and objectives (commonly referred to as “compensation discussion and analysis”);

 

·will not be required to obtain a non-binding advisory vote from our stockholders on executive compensation or golden parachute arrangements (commonly referred to as the “say-on-pay,” “say-on-frequency” and “say-on-golden-parachute” votes);

 

·will be exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and CEO pay ratio disclosure;

 

·may present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A; and

 

·will be eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards.

 

1

 

 

We intend to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards under Section 107 of the JOBS Act. Our election to use the phase-in periods may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the phase-in periods under Section 107 of the JOBS Act.

 

Under the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions for up to five years after our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act of 1933, as amended (the “Securities Act”), or such earlier time that we no longer meet the definition of an emerging growth company. Note that this Offering, while a public offering, is not a sale of common equity pursuant to a registration statement, since the Offering is conducted pursuant to an exemption from the registration requirements. In this regard, the JOBS Act provides that we would cease to be an “emerging growth company” if we have more than $1.07 billion in annual revenues, have more than $700 million in market value of our Common Stock held by non-affiliates, or issue more than $1 billion in principal amount of non-convertible debt over a three-year period.

 

Certain of these reduced reporting requirements and exemptions are also available to us due to the fact that we may also qualify, once listed, as a “smaller reporting company” under the Commission’s rules. For instance, smaller reporting companies are not required to obtain an auditor attestation on their assessment of internal control over financial reporting; are not required to provide a compensation discussion and analysis; are not required to provide a pay-for-performance graph or CEO pay ratio disclosure; and may present only two years of audited financial statements and related MD&A disclosure.

 

2

 

 

SUMMARY

 

The Summary highlights information contained elsewhere in this Offering Circular and does not contain all the information that you should consider in making your investment decision. Before investing in our Shares, you should carefully read this entire Offering Circular, including our financial statements and related notes. You should consider among other information, the matters described under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

 

The Company

 

TriplePulse, Inc., a Delaware corporation formed on November 14, 2012, is a science-based Company engaged in the design, development, manufacturing, and distribution of premium food, beverage, and nutrition products. The Company’s flagship TruBrain brand is a community-driven, direct-to-consumer (“DTC”) brand focused on empowering people to do their best thinking. TruBrain helps people push the limits of their cognitive performance by bringing high function food and beverage to mainstream consumers that deliver meaningful and measurable outcomes. TruBrain engages customers through an online DTC membership experience at www.trubrain.com.

 

Our Products

 

TruBrain leverages data from leading universities and research institutions worldwide to discover, develop and create products. Our products include a line of food, beverage, and nutrition products that have premium formulation and novel form factors. Our product and science focus allows us to design products with proprietary formulations and innovative systems that we believe differentiates us from our competition.

 

We thoughtfully craft our product and service offerings and we offer a limited selection of distinct products in each category at various price points, which target a range of consumer needs and budgets. As we expand our product portfolio, we intend to develop cognitive products that address the factors of sleep, diet, meditation, mindfulness, stress, anxiety, distractions, motivation, creativity, and mental endurance across the cognitive range, which will offer distinct and complementary benefits to our existing offerings.

 

Our Mission

 

At TruBrain, our mission is to empower people to do their best thinking. We believe that ambitious people want to do more, do things smarter and better, and exceed goals. We believe one of the few weapons for people to get more important things done during their day is efficiency. Solely putting in more hours is not a unique advantage anymore - necessary, but not sufficient. To be more efficient, consumers first need to understand their unique equation for productivity. There are many factors affecting this, including sleep, workouts, mindfulness, meditation, stress, and anxiety. That’s where TruBrain seeks to add value by offering a wide array of products to help support those factors that are below baseline. Consumers are increasingly recognizing quality cognitive nutrition as a key component of a productive lifestyle.

 

We believe productive output starts with the human brain and how your brainwave states dictate your output. When we sleep better, eat better, workout better, and are better at managing stress, anxiety, and distractions, we experience more productive, creative, happy, and healthy hours while we are awake. As the wellness equation increasingly evolves to include advanced cognitive nutrition, we can help to accelerate this evolution. Our mission is to awaken the potential of a more productive state, and we want TruBrain to become the top-of-mind brand for best-in-class products and experiences that improve how we think and create.

 

3

 

 

THE OFFERING

 

We are offering up to 12,618,056 shares of our Common Stock (the “Shares”), par value $0.0001 per share, at a price of $0.36 per share (the “Offering”), including up to 1,645,833 Shares to be sold by selling stockholders and up to 1,645,833 Shares eligible to be issued as Bonus Shares (as defined in this Offering Circular). The minimum investment is $351 (975 Shares).

 

Rights and Preferences of the Shares

 

The holders of Shares will be entitled to receive pro rata dividends, if any, when, as, and if declared by our board of directors out of legally available funds, however, subject to any preferential right of the holders of any Preferred Stock or other preferential rights that may have been authorized or that may be authorized and issued in the future. Upon our liquidation, dissolution or winding-up, the holders of our Shares are entitled to share ratably in all assets that are legally available for distribution, subject to any preferential right of the holders of any Preferred Stock that may be authorized and issued in the future.

 

The holders of Shares issued in this Offering will grant an irrevocable voting proxy to our Chief Executive Officer, that will limit their ability to vote their Shares until the occurrence of certain events specified in the proxy, none of which may ever occur. Such events include (a) the closing of a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933 covering the offer and sale of Shares or the effectiveness of a registration statement under the Securities Exchange Act of 1934 covering the Shares, (b)  a transaction or series of related transactions in which Shares representing more than 50% of our outstanding voting power are acquired from our stockholders, (c) an acquisition by another entity, in which the holders of our voting securities outstanding immediately prior to such transaction, do not retain at least a majority of the total voting power represented by our outstanding voting securities or the voting securities of the other surviving or resulting entity, after such transaction, (d) a sale, exclusive license, transfer, lease or other disposition of all or substantially all of our assets, or (e) our liquidation, dissolution or winding up. See “Securities Being Offered.” The voting rights granted via the proxy are not limited, and include, among other things, the right to vote on the election of our directors, amendments to our organizational documents, and major corporate transactions. So long as the holder is an individual, the proxy will survive the death, incompetency and disability of the holder and, so long as the holder is an entity, the proxy will survive the merger or reorganization of the holder or any other entity holding the Shares. The proxy will also survive transfers of the shares and shall be binding on any transferee of the Shares. The proxy is granted to the person holding the title of Chief Executive Officer, in his capacity as an officer of the Company, and not in his personal capacity, and so would survive his death or removal. The Chief Executive Officer, in his sole discretion, may assign the voting proxy to any of our future officers. The proxy is set out in Section 6 of the Subscription Agreement which appears as Exhibit 4.1 to the Offering Statement of which this Offering Circular forms a part. There exists uncertainty as to whether a court would enforce the irrevocability of the proxy. In addition, the inability of the holders of Shares issued in this Offering to vote their Shares, and the provision of a voting proxy to our Chief Executive Officer, who will essentially have control of every vote of the stockholders, could have an anti-takeover effect as a potential acquirer may wish to call a special meeting of stockholders for the purpose of considering the removal of directors or an acquisition offer, in which case the investors would not have the right to vote in favor of the same.

 

4

 

 

RISK FACTORS

 

Investing in our Shares involves risk. In evaluating us and an investment in our Shares, careful consideration should be given to the following risk factors, in addition to the other information included in this Offering Circular. Each of these risk factors could materially adversely affect our business, operating results or financial condition, as well as adversely affect the value of an investment in our Shares. The following is a summary of the risk factors that we currently believe make this Offering speculative or substantially risky. We are still subject to all the same risks faced by all companies in our industry, and to which all such companies in the economy are exposed. These include risks relating to economic downturns, political and economic events and technological developments (such as cyber-security). Additionally, early-stage companies are inherently riskier than more developed companies. You should consider general risks as well as specific risks when deciding whether to invest.

 

The Commission requires the Company to identify risks that are specific to its business and its financial condition. The Company is still subject to all the same risks that all companies in its business, and all companies in the economy, are exposed to. These include risks relating to economic downturns, political and economic events and technological developments (such as hacking and the ability to prevent hacking). Additionally, early-stage companies are inherently more risky than more developed companies. You should consider general risks as well as specific risks when deciding whether to invest.

 

Our financial statements include a going concern note.

 

Our ability to continue as a going concern for the next twelve months is dependent upon our ability to generate sufficient cash flows from operations to meet our obligations, and/or to obtain additional capital financing from investors and/or third parties. No assurance can be given that we will be successful in these efforts. These factors, among others, raise substantial doubt about our ability to continue as a going concern for a reasonable period of time.

 

We depend on certain key personnel and must attract and retain additional talent.

 

Our future success depends on the efforts of key personnel and consultants, especially our founder, Christopher Thompson, and our ability to attract and retain additional talent. There can also be no assurance that we can attract and retain key personnel and consultants that we will require to successfully grow our business.

 

We have a limited operating history and have yet to earn a profit or any significant operating revenue, which makes it difficult to accurately evaluate our business prospects.

 

We have limited assets, a limited operating history, and minimal operating revenue to date.   Thus, our proposed business is subject to all the risks inherent in new business ventures. The likelihood of success must be considered in light of the expenses, complications, and delays frequently encountered with the start-up of new businesses and the competitive environment in which start-up companies operate.

 

We face significant competition.

 

We compete with larger, more established companies who currently have products on the market and/or various respective product development programs that are similar to ours. Many of our competitors have substantially greater financial and marketing resources, larger customer bases, longer operating histories, greater name recognition and more established relationships in the industry than us. Many of these competitors can secure better terms from vendors, adopt more aggressive pricing and devote more resources to technology, infrastructure and marketing. As a result, these competitors can likely take advantage of opportunities more readily, and devote greater resources to development, marketing and sales than us. In addition, there is nothing preventing the existing major supplements companies from adopting our business model and manufacturing and distributing competitive products. There can be no assurance that we will compete successfully with such competitors.

 

We may not be able to respond to consumer trends.

 

Demand for our products may be adversely affected by changes in consumer preferences or any inability on our part to innovate or market our products effectively, and any significant reduction in demand could adversely affect our business, financial condition or results of operations. We are a nutritional supplements Company operating in highly competitive categories and markets. To generate revenues and profits, we rely on continued demand for our products and therefore must sell products that appeal to our customers and consumers. In general, changes in consumption in our product categories or consumer demographics could result in reduced demand for our products. Demand for our products depends in part on our ability to anticipate and effectively respond to shifts in consumer trends and preferences, including increased demand for products that meet the needs of consumers who are interested in biohacking, productivity, self-improvement, and long term cognitive and physical health and wellness.

 

5

 

 

Convertible Promissory Notes currently in default and debt.

 

The Company currently has Convertible Promissory Notes in the aggregate principal amount of $850,000, that are in default, and which are accruing default interest at a rate of 10% per annum. As of June 30, 2020, there was $343,973 in accrued and outstanding interest due under such Convertible Promissory Notes. Although an Event of Default (as defined in the Convertible Promissory Notes) has occurred, as of the date of this Offering Circular, the Convertible Promissory Note holders have not taken enforcement action against the Company. It is our expectation that the noteholders will not take enforcement action and the noteholders will agree to automatically convert the notes to equity upon reaching their respective qualifying financing event, although it is possible that the Convertible Promissory Note holders may not agree to do so. If the Convertible Promissory Note holders were to take enforcement action against the Company, it could have a material adverse effect on the Company that could affect the ability of the Company to continue as a going concern. In addition, we may have to seek loans from financial institutions, or seek to raise additional capital through the issuance of other convertible debt instruments. Typical loan agreements might contain restrictive covenants which may impair our operating flexibility. A default under any loan agreement could result in a charging order that would have a material adverse effect on our business, results of operations or financial condition.

 

We will store personally identifiable information of consumers which is subject to vast regulation.

 

We capture and store certain data about our customers, including, credit card and payment information. Therefore, we are subject to federal, state, provincial and foreign laws regarding privacy and protection of data. Some jurisdictions have enacted laws requiring companies to notify individuals of data security breaches involving certain types of personal data. Evolving regulations regarding personal data and personal information, in the European Union and elsewhere, including, but not limited to, the General Data Protection Regulation, which we refer to as GDPR, the California Consumer Privacy Act of 2018 and similar privacy laws in other states and jurisdictions, may limit or inhibit our ability to operate or expand our business. Such laws and regulations require or may require us to implement privacy and security policies, permit consumers to access, correct or delete personal information stored or maintained by us, inform individuals of security incidents that affect their personal information, and, in some cases, obtain consent to use personal information for specified purposes. Such laws and regulations could restrict our ability and our customers’ ability to collect and use personal information, which may reduce demand for our solutions.

 

Changing industry standards and industry self-regulation regarding the collection, use and disclosure of data may have similar effects. Existing and future privacy and data protection laws and increasing sensitivity of consumers to unauthorized disclosures and use of personal information may also negatively affect the public’s perception of our brand. If our brand is perceived to cause, or are otherwise unfavorably associated with, invasions of privacy, whether or not illegal, we or our customers may be subject to public criticism.

 

Any failure on our part to comply with applicable privacy and data protection laws, regulations, policies and standards or any inability to adequately address privacy concerns associated with our solutions, even if unfounded, could subject us to liability, damage our reputation, impair our sales and harm our business. Furthermore, the costs of compliance with, and other burdens imposed by, such laws, regulations, policies and standards may result in a decrease in our profitability and/or limit adoption of and demand for our products.

 

As a direct-to-consumer marketer, we are subject to extensive regulation. If we are required to pay damages or expenses in connection with legal claims, our business, financial condition and results of operations may be harmed.

 

Historically, a substantial portion of our revenue has been derived from e-commerce product sales through direct-to-consumer online marketing. As a direct-to-consumer marketer, we are subject to various federal, state and foreign laws and regulations such as the Restore Online Shoppers Confidence Act, which we refer to as ROSCA, and the Dot Com Disclosure Guidance published by the United States Federal Trade Commission (“FTC”), which requires certain disclosures to prevent unfair, deceptive or misleading online advertisements. Our failure to comply with these regulations could, among other things, result in consumer lawsuits, federal investigations, or State Attorney General actions or inquiries. Such claims or inquiries, regardless of their merit, could divert management time and attention away from our business, result in significant costs to investigate and defend, harm our reputation and result in the cessation of certain portions of our business. If we become subject to these or similar types of claims or investigations, and are not successful in their defense, we may be forced to pay damages, some of which may be substantial.

 

We may be required to collect additional sales taxes or be subject to other tax liabilities that may increase the costs our clients would have to pay for our products and adversely affect our operating results.

 

In general, in connection with e-commerce product sales, we have not historically collected state or local sales, use or other similar taxes in any jurisdictions in which we do not have a tax nexus, in reliance on court decisions or applicable exemptions that restrict or preclude the imposition of obligations to collect such taxes with respect to online sales of products. In addition, we have not historically collected state or local sales, use or other similar taxes in certain jurisdictions in which we do not have a physical presence, in reliance on applicable exemptions. A number of states have already begun, or have positioned themselves to begin, requiring sales and use tax collection by remote vendors. The details and effective dates of these collection requirements vary from state to state. It is possible that one or more jurisdictions may assert that we have liability for periods for which we have not collected sales, use or other similar taxes, and if such an assertion or assertions were successful it could result in substantial tax liabilities, including for past sales taxes and penalties and interest, which could materially adversely affect our business, financial condition and operating results.

 

6

 

 

Our products and operations are subject to government regulation and oversight both in the United States and abroad, and our failure to comply with applicable requirements could adversely affect our business and results of operations.

 

Our ability to sell products is dependent on compliance with outside government regulations, including those issued by the Food and Drug Administration, Federal Trade Commission and other relevant federal, state, and local government laws and regulations. The laws and regulations concerning the selling of consumable products may change, which could adversely affect our business and results of operations.

 

We are affected by a wide range of governmental laws and regulations. Examples of regulatory agencies influencing our operations include the United States Department of Agriculture (the “USDA”), the Food and Drug Administration (the “FDA”), the Federal Trade Commission (the “FTC”), and the Environmental Protection Agency (the “EPA”), among others. These agencies regulate, among other things, with respect to our products and operations: design, development and manufacturing; product safety; marketing, sales and distribution; record keeping procedures; record keeping procedures; and advertising and promotion.

 

The regulations to which we are subject are complex and have tended to become more stringent over time. Regulatory changes could result in restrictions on our ability to carry on or expand our operations, or result in higher than anticipated costs or lower than anticipated sales. The failure to comply with applicable regulations could jeopardize our ability to sell our products and result in enforcement actions and third-party lawsuits such as: warning letters, fines, injunctions, product recalls, production delays, or production disruptions. Any of these sanctions could result in higher than anticipated costs or lower than anticipated sales and harm our reputation, business, financial condition and results of operations. We may also be required to take corrective actions, which could require us to make substantial expenditures. In addition, we could be required to indemnify our employees in connection with any expenses or liabilities that they may incur individually in connection with regulatory action against them. As a result, our future business prospects could deteriorate due to regulatory constraints, and our profitability could be impaired by our obligation to provide such indemnification to our employees.

 

The COVID-19 pandemic could have a material adverse impact on our business, results of operations and financial condition.

 

On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. The outbreak has resulted in the implementation of significant governmental measures, including lockdowns, closures, quarantines and travel bans, intended to control the spread of the virus. These restrictions, and future prevention and mitigation measures by governments and private entities, are likely to have an adverse impact on global economic conditions and consumer confidence and spending, which could materially adversely affect the supply of materials for our products as well as the demand for our products.

 

The extent of COVID-19’s effect on our operational and financial performance will depend on future developments, including the duration, spread and intensity of the outbreak, all of which are uncertain and difficult to predict considering the rapidly evolving landscape. As a result, it is not currently possible to ascertain the overall impact of COVID-19 on our business. However, if the pandemic continues to evolve into a severe worldwide health crisis, or in the regions from which we source our raw materials, the disease could have a material adverse effect on our supply chains, customers, business, results of operations, financial condition and cash flows.

 

In addition, a significant proportion of our products are produced at our partner contract manufacturing facilities in Michigan. If our key supply chain partners are forced to scale back hours of production or close facilities in response to the pandemic, we expect our business, financial condition and results of operations would be materially adversely affected.

 

Our intellectual property could be unenforceable or ineffective.

 

One of our most valuable assets is our intellectual property. The Company owns the trademark to our flagship brand TruBrain, and also holds a license to use three (3) pending patent applications seeking to protect certain product formulations, and we plan to explore other opportunities to patent product formulations; however, such patents may never be issued or certain claims may be rejected or may need to be narrowed, which may limit the protection we are attempting to obtain. In addition, companies, organizations, or individuals, including competitors, may hold or obtain patents, trademarks, or other proprietary rights that would prevent, limit, or interfere with our ability to make, use, develop, sell, or market our products and brands. These third parties may have applied for, been granted, or obtained patents that relate to intellectual property, which competes with our intellectual property. This may require us to develop or obtain alternative product formulations, or obtain appropriate licenses under these patents, which may not be available on acceptable terms or at all. Such a circumstance may result in us having to significantly increase development efforts and resources to redesign our technology in order to safeguard our competitive edge against competitors. There is a risk that our means of protecting our intellectual property rights may not be adequate, and weaknesses or failures in this area could adversely affect our business or reputation, financial condition, and/or operating results.

 

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From time to time, we may receive communications from holders of patents or trademarks regarding their proprietary rights. Companies holding patents or other intellectual property rights may bring suits alleging infringement of such rights or otherwise assert their rights and urge us to take licenses. In addition, if we are determined to have infringed upon a third party’s intellectual property rights, we may be required to cease marketing certain of our products, pay substantial damages, seek a license from the holder of the infringed intellectual property right, which license may not be available on reasonable terms or at all, and/or establish and maintain alternative branding for our business. We may also need to file lawsuits to protect our intellectual property rights from infringement from third parties, which could be expensive, time consuming, and distract management’s attention from our core operations.

 

We rely on third parties to provide services essential to the success of our business.

 

We rely on third parties to provide a variety of essential business functions for us, including manufacturing, shipping and fulfillment, accounting, public relations, advertising, retailing, and distribution. It is possible that some of these third parties will fail to perform their services or will perform them in an unacceptable manner. It is possible that we will experience delays, defects, errors, or other problems with their work that will materially impact our operations and we may have little or no recourse to recover damages for these losses. A disruption in these key or other suppliers’ operations could materially and adversely affect our business. As a result, your investment could be adversely impacted by our reliance on third parties and their performance.

 

Supply chain risks.

 

Fluctuations in the price, availability and quality of the key ingredients or other raw materials included in our products could have a material adverse effect on cost of sales or our ability to meet customer demands. The price and availability of the raw materials in our products may fluctuate significantly, depending on many factors. This could result in lower gross margins and could have a significant adverse effect on our business, financial condition, and operating results. Delays in availability and delivery of raw materials could result in delays of product deliveries, potentially causing decreased sales and financial performance.

 

Cybersecurity incidents could harm our business and negatively impact its financial results.

 

We store personally identifiable information, credit card information and other confidential information of our customers and consumers. We may experience successful attempts by third parties to obtain unauthorized access to such personally identifiable information. This information could also be otherwise exposed through human error or malfeasance. The unauthorized access or compromise of this personally identifiable information could have an adverse effect on our business, financial condition and results of operations.

 

Cybersecurity incidents could endanger the confidentiality, integrity and availability of our information resources and the information it collects, uses, stores and discloses. These incidents may be an intentional attack or an unintentional event and could involve gaining unauthorized access to our information systems for purposes of misappropriating assets, stealing confidential information, corrupting data or causing operational disruption. We believe that it takes reasonable steps to protect the security, integrity and confidentiality of the information we collect, use, store, and disclose, and take steps to strengthen our security protocols and infrastructure, but there is no guarantee that inadvertent or unauthorized data access will not occur despite our efforts. For example, we could be negatively impacted by software bugs or other technical malfunctions, as well as employee error or malfeasance. Any unauthorized access or use of information, virus or similar breach or disruption to our, our customers’, or our partners’ systems could result in disrupted operations, loss of information, damage to our reputation and customer relationships, early termination of our contracts and other business losses, indemnification of our customers and related parties, liability for stolen assets or information, increased cybersecurity protection and insurance costs, financial penalties, litigation, regulatory investigations and other significant liabilities, any of which could materially harm our business.

 

We may be exposed to material product liability claims, which could increase their costs and adversely affect our reputation and business.

 

As a marketer and distributor of products designed for human consumption or use, we could be subject to product liability claims if the use of products we market or distribute, is alleged to have resulted in injury or undesired results. Products marketed include food and beverage products. Previously unknown adverse reactions resulting from human consumption of our products could occur.

 

We maintain product liability insurance with an aggregate limit of $2,000,000 and a per occurrence limit of $1,000,000. We have not had any product liability claims filed against us as of the date of this Offering Circular, but in the future we may be subject to various product liability claims, including, due to product tampering by unauthorized third parties, product contamination, and claims that products had inadequate instructions for use, or inadequate warnings concerning possible side effects and interactions with other substances. The cost of defense can be substantially higher than the cost of settlement even when claims are without merit. The high cost to defend or settle product liability claims could have a material adverse effect on our business and operating results and our insurance, if any, may not be adequate.

 

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We do not own the patent applications on which we partly rely.

 

Christopher Thompson, our CEO and a director, holds three pending patent applications seeking to protect certain product formulations. We have entered into a license agreement with Mr. Thompson pursuant to which he has granted us an exclusive, royalty-free, sublicensable (through multiple tiers), comprehensive license to use such patents and trade secrets in connection with our business. In addition, any future improvements to such existing patents and trade secrets, shall be owned by Mr. Thompson.

 

We are dependent on our management team, and the loss of any key member of this team may prevent us from implementing our business plan in a timely manner, or at all.

 

Our success depends largely upon the continued services of our executive officers and other key personnel, particularly Christopher Thompson. Our executive officers or key personnel could terminate their employment with us at any time without penalty. The loss of one or more of these executive officers or key personnel could seriously harm our business and may prevent us from implementing our business plan in a timely manner, or at all.

 

We depend upon internet search engines and other providers of digital advertising to attract a significant portion of our potential customers to our website, and any change in the prominence of our website in either paid or algorithmic search result listings or an increase in purchasing digital ads could cause the number of visitors to our website and our revenue to decline.

 

We depend in significant part on various internet platforms such as Google, Facebook, Adroll, and other providers of digital advertising to direct a significant number of potential customers to our website. Search websites typically provide two types of search results, algorithmic and paid listings. Algorithmic, or organic, listings are determined and displayed solely by a set of formulas designed by search companies. Paid listings can be purchased and then are displayed if particular words are included in a user’s internet search. Placement in paid listings is generally not determined solely on the bid price, but also takes into account the search engines’ assessment of the quality of the website featured in the paid listing and other factors. We rely on both algorithmic and paid search results, as well as digital advertising on other websites and through other providers, to direct a substantial share of the visitors to our website.

 

Our ability to maintain the number of visitors to our website from internet search websites and other websites is not entirely within our control. For example, internet search websites frequently revise their algorithms in an attempt to optimize their search result listings or to implement their internal standards and strategies. Changes in the algorithms could cause our website to receive less favorable placements, which could reduce the number of users who visit our website. We have experienced and continue to experience fluctuations in the search result rankings for our website.

 

In addition, the prominence of the placement of our advertisements is in part determined by the amount we are willing to pay for the advertisement. We bid against our competitors for the display of paid search engine advertisements and some of our competitors have greater resources with which to bid and better brand recognition than we have. If competition for the display of paid advertisements in response to search terms related to our product categories increases, our online advertising expenses could rise significantly, and we may be required to reduce the number of our paid search advertisements. If we reduce our advertising with search engines, our consumer traffic may significantly decline, or we may be unable to maintain a cost-effective search engine marketing program.

 

Other factors, such as search engine technical difficulties, search engine technical changes and technical or presentation changes we make to our website, could also cause our website to be listed less prominently in algorithmic search results. Any adverse effect on the placement of our website in search engine results could reduce the number of users who visit our website and drive up the cost of customer acquisition. If visits to our website decrease, our revenue may decline, and we may need to resort to more costly sources to acquire new customers and such decreased revenue and/or increased expense could materially and adversely affect our business and profitability.

 

We may not be able to successfully implement our growth strategy for our brand on a timely basis or at all.

 

We believe that our future success depends, in part, on our ability to implement our strategy of leveraging our existing brand and products to drive increased sales. Our ability to implement this strategy depends, among other things, on our ability to:

 

successfully compete in the product categories in which we choose to operate;

 

introduce new and appealing products and successfully innovate on our existing products;

 

develop and maintain consumer interest in our brand; and

 

increase our brand recognition and loyalty.

 

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We may not be able to implement this strategy successfully. Our planned marketing expenditures may not result in increased total sales or generate sufficient levels of consumer interest or brand awareness, and our high rates of sales and income growth may not be sustainable over time. Our sales and results of operations will be negatively affected if we fail to implement our growth strategy or if we invest resources in a growth strategy that ultimately proves unsuccessful.

 

Litigation and regulatory enforcement concerning marketing and labeling of food products could adversely affect our business and reputation.

 

The marketing and labeling of any food product in recent years has brought increased risk that consumers will bring class action lawsuits and that the FTC and/or state attorneys general will bring legal action concerning the truth and accuracy of the marketing and labeling of the product. Examples of causes of action that may be asserted in a consumer class action lawsuit include fraud, unfair trade practices and breach of state consumer protection statutes. The FTC and/or state attorneys general may bring legal action that seeks removal of a product from the marketplace and impose fines and penalties. Even when unmerited, class claims, action by the FTC or state attorneys general enforcement actions can be expensive to defend and adversely affect our reputation with existing and potential customers and consumers and our corporate and brand image, which could have a material and adverse effect on our business, financial condition or results of operations.

 

We may be subject to specific FTC endorsement and/or testimonial regulations that would interfere with our advertising, marketing and labeling strategies.

 

The FTC revised its Guides Concerning the Use of Endorsements and Testimonials in Advertising (the “Guides”), which became effective on December 1, 2009. Although the Guides are not binding, they explain how the FTC interprets Section 5 of the FTC Act’s prohibition on unfair or deceptive acts or practices. Consequently, the FTC could bring a Section 5 enforcement action based on practices that are inconsistent with the Guides. Under the revised Guides, advertisements that feature a consumer and convey his or her atypical experience with a product or service are required to clearly disclose the results that consumers can generally expect. In contrast to the 1980 version of the Guides, which allowed advertisers to describe atypical results in a testimonial as long as they included a disclaimer such as “results not typical,” the revised Guides no longer contain such a safe harbor. The revised Guides also add new examples to illustrate the long-standing principle that “material connections” between advertisers and endorsers (such as payments or free products), connections that consumers might not expect, must be disclosed. While we do request that public persons who we provide samples of product disclose their relationship with us prior to sharing on social media or other endorsement, we cannot ensure all recipients comply with this request. We have continually adapted our marketing efforts to be compliant with the revised Guides. However, it is possible that our use, and that of our employees, of testimonials in the advertising and promotion of our products will be significantly impacted and therefore might negatively affect our sales.

 

Risks Related to the Offering of our Shares.

 

This Offering is being conducted on a “best efforts” basis and does not require a minimum amount to be raised. As a result, we may not be able to raise enough funds to fully implement our business plan and our investors may lose their entire investment.

 

We are offering Shares in the amount of up to $3,950,000.28 in this Offering, but may sell much less. The Offering is being conducted on a “best efforts” basis and does not require a minimum amount to be raised. If we are not able to raise sufficient funds, we may not be able to fund our operations as planned, and our growth opportunities may be materially adversely affected. This could increase the likelihood that an investor may lose their entire investment.

 

Up to 15% of the proceeds of this Offering may be used for non-company purposes.

 

With our selling securityholders, up to 15% (but no more than 15%) of the proceeds of this Offering will not be invested in our growth. See “Use of Proceeds and Selling Shareholders.”

 

If we cannot raise sufficient funds, we may not succeed.

 

Even if the maximum amount is raised in this Offering, we may need additional funds in the future in order to grow, and if we cannot raise those funds for whatever reason, including reasons outside our control, such as another significant downturn in the economy, we may not survive.

 

Terms of subsequent financings may adversely impact your investment.

 

Even if we are successful in this Offering, we may need to engage in common equity, debt or Preferred Stock financings in the future. Your rights and the value of your investment in the Shares could be reduced. Interest on debt securities could increase costs and negatively impact operating results. Preferred stock could be issued in series from time to time with such designations, rights, preferences, and limitations as needed to raise capital. The terms of Preferred Stock could be more advantageous to those investors than to the holders of Shares. In addition, if we need to raise more equity capital from the sale of equity securities, institutional or other investors may negotiate terms at least as, and possibly more, favorable than the terms of your investment.

 

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Investors may suffer immediate dilution as a result of the conversion of Convertible Promissory Notes upon the closing of this Offering.

 

We currently have three (3) outstanding Convertible Promissory Notes having aggregate principal balances of $850,000, and which are accruing interest at 10% per annum. As of June 30, 2020, the interest outstanding under the Convertible Promissory Notes was $343,973. Each of the Convertible Promissory Notes may convert into shares per the Convertible Promissory Note agreements, which may require consent of the Convertible Promissory Note holders. Upon a qualified financing, which is set to occur upon a bona fide sale of equity in minimum amount $1,500,000, which may require the consent of the Convertible Promissory Note holders, the outstanding principal and interest convert into that number of shares of the stock issued in the Qualified Financing (the "Qualified Financing Stock") and shares of Common Stock of the Company determined by dividing the Outstanding Amount by a conversion price equal to the lesser of (i) the price per share of the Qualified Financing Stock sold by the Company in the Qualified Financing, discounted by 20%, and (ii) the price determined by dividing a pre-money valuation of $4,000,000.00 by the number of outstanding shares of the Common Stock on a fully-diluted and as-converted basis immediately prior to the closing of the Qualified Financing (not including the Excluded Shares). Of those shares, the number of Qualified Financing Stock will equal (x) the Outstanding Amount, divided by (y) the price per share paid by the other investors purchasing the Qualified Financing Stock in the Qualified Financing. Any remaining shares will be Common Stock.

 

The Qualified Financing Stock delivered to the noteholder pursuant to such conversion shall have the same rights, preferences, privileges as the Qualified Financing Stock delivered to other investors in the Qualified Financing, and the noteholder shall enjoy the same contractual rights as other investors in the Qualified Financing. See “Securities Being Offered” for details.

 

Because no public trading market for our Shares currently exists, it will be difficult for you to sell your Shares and, if you are able to sell your Shares, you may have to sell them at a substantial discount to the price you paid for the Shares.

 

There is no public market for our Shares. Until our Shares are listed on an exchange, if ever, you may not sell your Shares unless the buyer meets the applicable suitability and minimum purchase standards. Therefore, it will be difficult for you to sell your Shares promptly or at all. If you are able to sell your Shares, you may have to sell them at a substantial discount to the price you paid for the Shares.

 

Using a credit card to purchase shares may impact the return on your investment as well as subject you to other risks inherent in this form of payment.

 

Investors in this Offering have the option of paying for their investment with a credit card, which is not usual in the traditional investment markets. Transaction fees charged by your credit card company (which can reach 5% of transaction value if considered a cash advance) and interest charged on unpaid card balances (which can reach almost 25% in some states) add to the effective purchase price of the shares you buy and would be in addition to the StartEngine Primary processing fee. See “Plan of Distribution and Selling Securityholders.” The cost of using a credit card may also increase if you do not make the minimum monthly card payments and incur late fees. Using a credit card is a relatively new form of payment for securities and will subject you to other risks inherent in this form of payment, including that, if you fail to make credit card payments (e.g. minimum monthly payments), you risk damaging your credit score and payment by credit card may be more susceptible to abuse than other forms of payment. Moreover, where a third-party payment processor is used, as in this Offering, your recovery options in the case of disputes may be limited. The increased costs due to transaction fees and interest may reduce the return on your investment.

 

The Commission’s Office of Investor Education and Advocacy issued an Investor Alert dated February 14, 2018 entitled: Credit Cards and Investments – A Risky Combination, which explains these and other risks you may want to consider before using a credit card to pay for your investment.

 

Investors in our Shares will have to assign their voting rights.

 

As part of this investment, each investor in this Offering will be required to agree to the terms of the Subscription Agreement included as Exhibit 4.1 to the Offering Statement of which this Offering Circular is a part. By each such investor’s execution of the Subscription Agreement and under the terms thereof, investors will grant an irrevocable proxy, giving the right to vote its Shares to our President (the “Proxy”). That will limit investors’ ability to vote their Shares until the events specified in the proxy, which include (a) the closing of a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933 covering the offer and sale of Shares or the effectiveness of a registration statement under the Securities Exchange Act of 1934 covering the Shares, (b) a transaction or series of related transactions in which Shares representing more than 50% of our outstanding voting power are acquired from our stockholders, (c) an acquisition by another entity, in which the holders of our voting securities outstanding immediately prior to such transaction, do not retain at least a majority of the total voting power represented by our outstanding voting securities or the voting securities of the other surviving or resulting entity, after such transaction, (d) a sale, exclusive license, transfer, lease or other disposition of all or substantially all of our assets, or (e) our liquidation, dissolution or winding up. While it is currently contemplated that we will allow investors to vote or have input on certain aspects of our operations, such as which players to start in a particular fantasy game and the hiring and termination of our general manager, we are not obligated to provide such rights, and, if we do, we may terminate those rights at any time. Therefore, there is no guarantee that investors will be able to influence any decisions related to us.

 

In addition, the inability of the holders of Shares issued in this Offering to vote their Shares, and the provision of a voting proxy to our President, who will essentially have control of every vote of the stockholders, could have an anti-takeover effect as a potential acquirer may wish to call a special meeting of stockholders for the purpose of considering the removal of directors or an acquisition offer, in which case the investors would not have the right to vote in favor of the same.

 

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Our subscription agreement limits the liability of the Proxy and provides the Proxy with certain indemnification rights against the investors.

 

In addition, under the Subscription Agreement, other than with respect to the gross negligence or willful misconduct of the Proxy, the Proxy will not be liable for any actions he/she takes or fails to take, in his/her capacity as the Proxy, while acting in good faith. Therefore, if the Proxy takes actions or omits to take actions which investors deem to be not in their best interests, as long as such actions do not constitute gross negligence or willful misconduct, and the Proxy is acting in good faith, the investors would not have any recourse against the Proxy. In addition, under the Subscription Agreement, each investor agrees to indemnify the Proxy from all losses, liabilities, damages, claims, penalties, fines, forfeitures, actions, fees, costs and expenses arising out of or in connection with any act done or omitted in the Proxy’s capacity as representative of such investor, in each case as such losses are suffered or incurred. While it is uncertain whether a court would enforce such provision, if it did, investors in this Offering could have indemnification obligations to the Proxy.

 

Management discretion as to use of proceeds.

 

Our success will be substantially dependent upon the discretion and judgment of our management team with respect to the application and allocation of the proceeds of this Offering. The use of proceeds described herein is an estimate based on our current business plan. We, however, may find it necessary or advisable to re-allocate portions of the net proceeds reserved for one category to another, and we will have broad discretion in doing so.

 

The Subscription Agreement includes an exclusive venue provision.

 

Pursuant to our Subscription Agreement, investors will be agreeing that the State of California will be the sole and exclusive forum for, among other things, (i) any derivative action or proceeding brought on behalf of us; (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders; (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law; (iv) any action, suit or counterclaim arising out of the Subscription Agreement; or (v) any other action arising under the Securities Act or the Securities Exchange Act. Therefore, investors may be compelled to travel to California to prosecute or defend any claims involving us. This provision may limit a holder’s ability to bring a claim against the Company and its directors, officers, or other employees, in a judicial forum that it finds favorable for disputes, and therefore, may discourage lawsuits with respect to such claims.

 

Investors in this Offering may not be entitled to a jury trial with respect to claims arising under the subscription agreement, which could result in less favorable outcomes to the plaintiff(s) in any action under these agreements.

 

Investors in this Offering will be bound by the subscription agreement, which includes a provision under which investors waive the right to a jury trial of any claim they may have against the Company arising out of or relating to the subscription agreement. By signing this agreement, the investor warrants that the investor has reviewed this waiver with his or her legal counsel, and knowingly and voluntarily waives the investor’s jury trial rights following consultation with the investor’s legal counsel.

 

If we opposed a jury trial demand based on the waiver, a court would determine whether the waiver was enforceable based on the facts and circumstances of that case in accordance with the applicable state and federal law. To our knowledge, the enforceability of a contractual pre-dispute jury trial waiver in connection with claims arising under the federal securities laws has not been finally adjudicated by a federal court. However, we believe that a contractual pre-dispute jury trial waiver provision is generally enforceable, including under the laws of the State of Delaware, which governs the subscription agreement. In determining whether to enforce a contractual pre-dispute jury trial waiver provision, courts will generally consider whether the visibility of the jury trial waiver provision within the agreement is sufficiently prominent such that a party knowingly, intelligently and voluntarily waived the right to a jury trial. We believe that this is the case with respect to the subscription agreement. You should consult legal counsel regarding the jury waiver provision before entering into the subscription agreement.

 

If you bring a claim against the Company in connection with matters arising under the subscription agreement, including claims under federal securities laws, you may not be entitled to a jury trial with respect to those claims, which may have the effect of limiting and discouraging lawsuits against the Company. If a lawsuit is brought against the Company under the subscription agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have had, including results that could be less favorable to the plaintiff(s) in such an action.

 

Nevertheless, if this jury trial waiver provision is not permitted by applicable law, an action could proceed under the terms of the subscription agreement with a jury trial. No condition, stipulation or provision of the subscription agreement serves as a waiver by any holder of Shares or by the Company of compliance with any substantive provision of the federal securities laws and the rules and regulations promulgated under those laws.

 

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The holders of Preferred Stock have preferential rights to distributions upon a voluntary liquidation, dissolution, winding up, and deemed liquidation events.

 

Upon a voluntary liquidation, dissolution or winding up of us, our sale of all or substantially all of our assets and certain acquisitions, the holders of our Series Seed Preferred Stock and Series Seed-B Preferred Stock, are entitled to receive, respectively, $0.30 and $0.60, per share, plus any declared and unpaid dividends, in distributions, before any funds are distributed to the holders of Common Stock. As of the date hereof, upon a Liquidation Event, the holders of outstanding Preferred Stock would be entitled to receive the first $45,000 in distributions, with the remaining amounts being split pro rata amongst the holders of Common Stock. See “Securities Being Offered – Certificate of Incorporation – Liquidation Rights.”

 

The holders of Preferred Stock have certain voting rights that may prevent us from taking certain corporate actions that may be in the best interests of the holders of our Common Stock.

 

As long as there are any shares of Preferred Stock outstanding, we may not, do any of the following without the vote of the holders of a majority of the outstanding shares of Preferred Stock, voting together as a single class: (1) alter or change the rights, powers or privileges of the Preferred Stock as set forth in our Certificate of Incorporation, in any way that adversely affects the Preferred Stock, (2) increase or decrease the authorized number of shares of Preferred Stock (or any series thereof), (3) authorize or create any new class or series of capital stock having rights, powers or privileges that are senior to any series of Preferred Stock, (4) redeem or repurchase any shares of Common Stock or Preferred Stock (other than pursuant to employee or consulting agreements giving us the right to repurchase such share at the original cost thereof upon termination of services, or (5) declare or pay any dividend or otherwise make a distribution to the holders of Preferred Stock or Common Stock. Therefore, the holders of our Preferred Stock, may prevent us from taking certain corporate actions, that our board of directors may be in the best interests of the holders of our Common Stock. See “Securities Being Offered – Certificate of Incorporation – Voting Rights.”

 

We are not likely to pay cash dividends in the foreseeable future.

 

We currently intend to retain any future earnings for use in the operation and expansion of our business. Accordingly, we do not expect to pay any cash dividends in the foreseeable future but will review this policy as circumstances dictate.

 

One or more of our classes of shares may be subject to registration under the Exchange Act.

 

Companies with total assets above $10 million and more than 2,000 holders of record of its equity securities, or 500 holders of record of its equity securities who are not accredited investors, at the end of their fiscal year, must register that class of equity securities with the SEC under the Exchange Act. There are currently over 2,000 holders of our Shares. If and when we are deemed to have assets above $10 million, we could be required to register our Shares with the SEC under the Exchange Act, which would be a laborious and expensive process. In addition, if such registration takes place, we will have materially higher compliance and reporting costs going forward.

 

Foreign securities laws.

 

Prior to accepting any subscriptions from residents of foreign jurisdictions, we intend to consult with local counsel to ensure we accept any such subscription in compliance with local law. If, however, we accept any subscriptions and fail to comply with local law, it may subject us to regulatory actions in such foreign jurisdictions.

 

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DILUTION

 

Dilution means a reduction in value, control or earnings of the shares an investor owns.

 

Immediate dilution

 

An early-stage company typically sells its shares (or grants options over its shares) to its founders and early employees at a very low cash cost, because they are, in effect, putting their “sweat equity” into the Company. When the Company seeks cash investments from outside investors, like you, the new investors typically pay a much larger sum for their shares than the founders or earlier investors, which means that the cash value of your stake is diluted because all the shares are worth the same amount, and you paid more than earlier investors for your shares. Collectively, we refer to early private placement investors as the “Private Placement Investors”. Later in its development, when the business seeks cash investments from new, unrelated investors, like you and the other investors in our Regulation CF Offering (the “Regulation CF Investors”), the new investors often pay a higher price for their securities than the price paid by the Founders and the Private Placement Investors.

 

The following table (as of June 30, 2020) demonstrates the price that new investors are paying for their shares with the effective cash price paid by existing shareholders. This method gives investors a better picture of what they will pay for their investment compared to the Company’s insiders than just including such transactions for the last 12 months, which is what the SEC requires. The share numbers and amounts in this table reflect the 50-to-1 Common Stock split effected in 2019 and assumes (1) conversion of all issued shares of Preferred Stock into shares of Common Stock and (2) conversion of all outstanding warrants and options into shares of Common Stock at weighted average exercise price. The tables do not include the shares underlying our currently outstanding Convertible Promissory Notes, which if converted, will result in a dilution of your investment.

 

Share Class  Years Issued   Issued
Shares
   Potential
Shares
   Total Issued
and Potential
Shares
   Effective cash price per
share at issuance or
potential conversion
 
Common   2012-2020    45,329,200         45,329,200   $0.04 
Series Seed Preferred
(share # is upon conversion into Common Stock)
   2012    3,333,300         3,333,300   $0.01 
Series Seed-B Preferred
(share # is upon conversion into Common Stock)
   2013    2,083,350         2,083,350   $0.01 
Common Warrant   Various         211,350    211,350      

Series Seed-B Warrants

   2013         104,150    104,150      
Options   2015         250,000    250,000      
Total Common Stock Equivalents        50,745,850    565,500    51,311,350   $0.04 
Investors in this Offering, assuming $3,950,000 raised        10,972,223    

1,645,833 

    12,618,056   $0.36 
Total after inclusion of this Offering         61,718,073    2,211,333    63,929,406      

 

Future dilution

 

Another important way of looking at dilution is the dilution that happens due to future actions by the Company. The investor’s stake in a Company could be diluted due to the Company issuing additional shares of Common Stock or securities convertible into shares of Common Stock. In other words, when the Company issues more securities, the percentage of the Company that you own will go down, even though the value of the Company may go up. You will own a smaller piece of a larger Company. This increase in number of shares outstanding could result from a stock offering (such as an initial public offering, another crowdfunding round, a venture capital round, or angel investment), employees exercising stock options, or by conversion of certain instruments (e.g. convertible bonds, preferred shares or warrants) into stock.

 

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In addition, if we decide to issue more shares, an investor could experience value dilution, with each share being worth less than before, and control dilution, with the total percentage an investor owns being less than before. There may also be earnings dilution, with a reduction in the amount earned per share (though this typically occurs only if the Company offers dividends, and most early stage companies are unlikely to offer dividends, preferring to invest any earnings into the Company).

 

The type of dilution that hurts early-stage investors most occurs when the Company sells more shares, or other equity securities in a “down round,” meaning at a lower valuation than in earlier offerings. An example of how this might occur is as follows (numbers are for illustrative purposes only):

 

  In June 2014, Ben invests $20,000 in shares that represent 2% of a Company valued at $1 million.

 

  In December, the Company is doing very well and sells $5 million in shares to venture capitalists on a valuation (before the new investment) of $10 million. Ben now owns only 1.3% of the Company but his stake is worth $200,000.

 

  In June 2015, the Company has run into serious problems and in order to stay afloat it raises $1 million at a valuation of only $2 million (the “down round”). Ben now owns only 0.89% of the Company and his stake is worth only $26,660.

 

This type of dilution might also happen upon conversion of Convertible Promissory Notes, stock options or warrants into shares. Typically, the terms of Convertible Promissory Notes issued by early-stage companies provide that in the event of another round of financing, the holders of the Convertible Promissory Notes get to convert their notes into equity at a “discount” to the price paid by the new investors, i.e., they get more shares than the new investors would for the same price. Additionally, Convertible Promissory Notes may have a “price cap” on the conversion price, which effectively acts as a share price ceiling. Either way, the holders of the Convertible Promissory Notes get more shares for their money than new investors. In the event that the financing is a “down round,” the holders of the Convertible Promissory Notes will dilute existing equity holders, and even more than the new investors do because they get more shares for their money.

 

We currently have three (3) outstanding Convertible Promissory Notes having aggregate principal balances of $850,000, and which are accruing interest at 10% per annum. As of June 30, 2020, the principle outstanding under the Convertible Promissory Notes was $343,973. Each of the Convertible Promissory Notes may automatically convert into shares per the Convertible Promissory Note agreements, which may require the consent of the Convertible Promissory Note holders. Upon a qualified financing, which is set to occur upon a bona fide sale of equity in minimum amount $1,500,000, which may require the consent of the Convertible Promissory Note holders, the outstanding principal and interest convert into that number of shares of the stock issued in the Qualified Financing (the "Qualified Financing Stock") and shares of Common Stock of the Company determined by dividing the Outstanding Amount by a conversion price equal to the lesser of (i) the price per share of the Qualified Financing Stock sold by the Company in the Qualified Financing, discounted by 20%, and (ii) the price determined by dividing a pre-money valuation of $4,000,000.00 by the number of outstanding shares of the Common Stock on a fully-diluted and as-converted basis immediately prior to the closing of the Qualified Financing (not including the Excluded Shares). Of those shares, the number of Qualified Financing Stock will equal (x) the Outstanding Amount, divided by (y) the price per share paid by the other investors purchasing the Qualified Financing Stock in the Qualified Financing. Any remaining shares will be Common Stock.

 

The Qualified Financing Stock delivered to the noteholder pursuant to such conversion shall have the same rights, preferences, privileges as the Qualified Financing Stock delivered to other investors in the Qualified Financing, and the noteholder shall enjoy the same contractual rights as other investors in the Qualified Financing.  

 

If you are making an investment expecting to own a certain percentage of the Company or expecting each Class A Share to hold a certain amount of value, it’s important to realize how the value of the Shares can decrease by actions taken by the Company. Dilution can make drastic changes to the value of each share, ownership percentage, voting control, and earnings per share.

 

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PLAN OF DISTRIBUTION

 

The Company is offering a maximum of 12,618,056 Shares, including up to 1,645,833 Shares to be sold by selling stockholders and up to 1,645,833 Bonus Shares, on a “best efforts” basis.

 

The Offering will terminate at the earlier of: (1) the date at which the maximum offering amount has been sold, (2) the date which is one year from this Offering being qualified by the Commission, or (3) the date at which the Offering is earlier terminated by us in our sole discretion.

 

The cash price per share of the Shares is $0.36.

 

We may undertake one or more closings on a rolling basis. After each closing, funds tendered by investors will be available to us. Following the Offering, we shall be subject to the reporting requirements pursuant to Rule 257(b).

 

We have engaged StartEngine Primary, LLC (“StartEngine Primary”) a broker-dealer registered with the SEC and a member of FINRA, to perform brokerage services in accordance with a posting agreement dated August 25, 2020 (“Posting Agreement”) on a best efforts basis. StartEngine Primary is under no obligation to purchase any securities or arrange for the sale of any specific number or dollar amount of securities. Persons who desire information about the Offering may find it at https://www.startengine.com/. This Offering Circular will be furnished to prospective investors via download 24 hours per day, 7 days per week on the startengine.com website.

 

In addition, the Company has engaged an affiliate of StartEngine Primary, StartEngine Crowdfunding, Inc. (“StartEngine CF”), to perform administrative and technology-related functions in connection with this Offering on its platform, as well as Prime Trust LLC to carry out escrow services as escrow agent (“Escrow Agent”).

 

Commissions and Discounts

 

The following table shows the total discounts and commissions payable to StartEngine Primary in connection with this Offering:

 

   Per Share 
Public Offering Price  $0.36 
Placement Agent Commissions  $0.0266 
Proceeds, before expenses, to us  $0.2794 

 

Other Terms

 

In addition to the commission described above, we will also pay an advance of $15,000 to StartEngine Primary. This fee will be used for the purposes of undertaking a due diligence and compliance review.

 

StartEngine Primary may, among other things, introduce us to potential target businesses or assist us in raising additional capital, as needs may arise in the future. If StartEngine Primary provides services to us after this Offering, we may pay StartEngine Primary fair and reasonable fees that would be determined at that time in an arm’s length negotiation.

 

StartEngine Primary will charge you a non-refundable processing fee equal to 3.5% of the amount you invest at the time you subscribe for our securities, equivalent to $0.0126 per share. This fee will be refunded in the event the Company does not raise any funds in this Offering.

 

StartEngine Primary intends to use an online platform provided by StartEngine Crowdfunding, Inc. (“StartEngine”), an affiliate of StartEngine Primary, at the domain name www.startengine.com (the “Online Platform”) to provide technology tools to allow for the sales of securities in this Offering. In addition, StartEngine will assist with the facilitation of credit and debit card payments through the Online Platform. Fees for credit and debit card payments will be passed onto investors at cost.

 

Bonus Shares; Discounted Price for Certain Investors

 

Certain investors in this Offering are eligible to receive additional shares of Common Stock (effectively a discount) for their shares purchased (“Bonus Shares”) equal to 5%, 10%, or 15% of the shares they purchase, depending upon the investment level of such investors. See “—Perks” below. Fractional shares will not be distributed and Bonus Shares will be determined by rounding down to the nearest whole share. Investors in the highest bracket of these Bonus Shares will pay an effective price of approximately $0.31 per share before the StartEngine processing fee, a discount of 13.89%. The StartEngine processing fee will be assessed on the full share price of $0.36, and not the effective, post bonus, price. The Company will absorb the cost of the issuance of the Bonus Shares; to the extent any are issued, it will reduce the proceeds that the Company and selling stockholders receive. Of the 1,645,833 Bonus Shares available in this Offering, 1,398,958 are being sold by the Company and 246,875 are being sold by the selling stockholders.

 

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Escrow Agent

 

We have entered into an Escrow Services Agreement with Prime Trust LLC (the “Escrow Agent”). Investor funds will be held by the Escrow Agent pending closing or termination of the Offering. All subscribers will be instructed by us or our agents to transfer funds by wire, credit or debit card, or ACH transfer directly to the escrow account established for this Offering. We may terminate the Offering at any time for any reason at our sole discretion. Investors should understand that acceptance of their funds into escrow does not necessarily result in their receiving shares; escrowed funds may be returned.

 

Prime Trust is not participating as an underwriter or placement agent or sales agent of this Offering and will not solicit any investment in the Company, recommend our securities or provide investment advice to any prospective investor, and no communication through any medium, including any website, should be construed as such, or distribute this Offering Circular or other Offering materials to investors. The use of Prime Trust’s technology should not be interpreted and is not intended as an endorsement or recommendation by it of the Company or this Offering. All inquiries regarding this Offering or escrow should be made directly to the Company.

 

For its services, Escrow Agent will receive an escrow cash management fee in the amount of 0.5% of the funds held in escrow prior to any closing, not to exceed $4,000.

 

No Minimum Offering Amount

 

The shares being offered will be issued in one or more closings. No minimum number of shares must be sold before a closing can occur. Potential investors should be aware that there can be no assurance that any other funds will be invested in this Offering other than their own funds.

 

Selling Securityholders

 

Christopher Thompson, the Company’s CEO, will sell up to 1,645,833 shares in the Company and sell up to 246,875 Bonus Shares. The shares exchanged and offered will not exceed 15% of the shares sold through this Offering.

 

Investors’ Tender of Funds

 

After the Offering Statement has been qualified by the Commission, we will accept tenders of funds to purchase whole shares. Prospective investors who submitted non-binding indications of interest during the “test the waters” period will receive an automated message from us indicating that the Offering is open for investment. We will conduct multiple closings on investments (so not all investors will receive their shares on the same date). Each time we accept funds transferred from the Escrow Agent is defined as a “Closing.” The funds tendered by potential investors will be held by the Escrow Agent and will be transferred to us at each Closing. The escrow agreement can be found in Exhibit 8.1 to the Offering Statement of which this Offering Circular is a part.

 

Process of Subscribing

 

You will be required to complete a subscription agreement in order to invest. The subscription agreement includes a representation by the investor to the effect that, if you are not an “accredited investor” as defined under securities law, you are investing an amount that does not exceed the greater of 10% of your annual income or 10% of your net worth (excluding your principal residence).

 

If you decide to subscribe for the Shares in this Offering, you should complete the following steps:

 

1.Go to the Company’s page on www.startengine.com/ and click on the “Invest Now” button;

2.Complete the online investment form;

3.Deliver funds directly by wire, debit card, credit card or electronic funds transfer via ACH to the specified account;

4.Once funds or documentation are received an automated AML check will be performed to verify the identity and status of the investor;

5.Once AML is verified, investor will electronically receive, review, execute and deliver to us a Subscription Agreement.

 

Any potential investor will have ample time to review the subscription agreement, along with their counsel, prior to making any final investment decision. StartEngine Primary will review all subscription agreements completed by the investor. After StartEngine Primary has completed its review of a subscription agreement for an investment in the Company, the funds may be released by the Escrow Agent.

 

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If the subscription agreement is not complete or there is other missing or incomplete information, the funds will not be released until the investor provides all required information. In the case of a debit card payment, provided the payment is approved, StartEngine will have up to three days to ensure all the documentation is complete. StartEngine will generally review all subscription agreements on the same day, but not later than the day after the submission of the subscription agreement.

 

All funds tendered (by wire, debit card, credit card or electronic funds transfer via ACH to the specified account or deliver evidence of cancellation of debt) by investors will be deposited into an escrow account at the Escrow Agent for the benefit of the Company. All funds received by wire transfer will be made available immediately while funds transferred by ACH will be restricted for a minimum of three days to clear the banking system prior to deposit into an account at the Escrow Agent.

 

We maintain the right to accept or reject subscriptions in whole or in part, for any reason or for no reason, including, but not limited to, in the event that an investor fails to provide all necessary information, even after further requests from the Company, in the event an investor fails to provide requested follow up information to complete background checks or fails background checks, and in the event the Company receives oversubscriptions in excess of the maximum Offering amount.

 

In the interest of allowing interested investors as much time as possible to complete the paperwork associated with a subscription, we have not set a maximum period of time to decide whether to accept or reject a subscription. If a subscription is rejected, funds will not be accepted by wire transfer or ACH, and payments made by credit or debit card will be returned to subscribers within 30 days of such rejection without deduction or interest. Upon acceptance of a subscription, the Company will send a confirmation of such acceptance to the subscriber.

 

Upon confirmation that an investor’s funds have cleared, the Company will instruct the Transfer Agent (defined below) to issue shares to the investor. The Transfer Agent will notify an investor when shares are ready to be issued and the Transfer Agent has set up an account for the investor.

 

Investor Perks

 

To encourage participation in the Offering, we are providing specific perks for investors who purchase a minimum of 975 Shares in this Offering. Additional perks are available for purchases of a greater number of Shares. We are of the opinion that these perks are a “thank you” to investors that help us achieve our mission and do not alter the sales price or cost basis of the securities in this Offering. However, it is recommended that investors consult a tax professional to fully understand any tax implications of receiving any perks before investing. The table below presents the investment level to receive the stated perk:

 

Investment
Amount
   Rewards
$350  

Tier 1

5% Lifetime discount on our products.*

Product Bundle (includes 4 Bars, 20 Drinks, 8 Sleep Drinks, and 1 TruBrain merchandise).

$700  

Tier 2

15% Lifetime discount on our products.*

Product Bundle (includes 4 Bars, 20 Drinks, 8 Sleep Drinks, and 1 TruBrain merchandise).

$1,500  

Tier 3

30% Lifetime discount on our products.*

Product Bundle (includes 4 Bars, 20 Drinks, 8 Sleep Drinks, and 1 TruBrain merchandise).

$3,000  

Tier 4

40% Lifetime discount on our products.*

Product Bundle (includes 4 Bars, 20 Drinks, 8 Sleep Drinks, and 1 TruBrain merchandise).

$5,000  

Tier 5

50% Lifetime discount on our products.*

5% Bonus Shares

Product Bundle (includes 4 Bars, 20 Drinks, 8 Sleep Drinks, and 1 TruBrain merchandise).

$10,000  

Tier 6

50% Lifetime discount on our products.*

10% Bonus Shares

Product Bundle (includes 4 Bars, 20 Drinks, 8 Sleep Drinks, and 1 TruBrain merchandise).

Beta test group**

$25,000  

Tier 7

50% Lifetime discount on our products.*

15% Bonus Shares

Product Bundle (includes 4 Bars, 20 Drinks, 8 Sleep Drinks, and 1 TruBrain merchandise).

Annual conference call with TruBrain’s CEO Meeting.

 

* Discount excludes promotional, sale, prepaid, bundled, and trial products. Products must be for personal use and may not be resold.

 

** Beta test group includes early access to product innovations and sample testing for feedback.

 

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Transfer Agent

 

The Company has engaged StartEngine Secure, LLC, a registered transfer agent with the SEC, who will serve as transfer agent (the “Transfer Agent”) to maintain shareholder information on a book-entry basis.

 

Provisions of Note in Our Subscription Agreement

 

Our subscription agreement includes a forum selection provision that requires any claim against the Company based on the subscription agreement not arising under the federal securities laws to be brought in a court of competent jurisdiction in the State of California. This forum selection provisions may limit investors’ ability to bring claims in judicial forums that they find favorable to such disputes and may discourage lawsuits with respect to such claims. The Company has adopted this provision to limit the time and expense incurred by its management to challenge any such claims. As a Company with a small management team, this provision allows its officers to not lose a significant amount of time travelling to any particular forum so they may continue to focus on operations of the Company.

 

Jury Trial Waiver

 

The subscription agreement provides that subscribers waive the right to a jury trial of any claim they may have against us arising out of or relating to the subscription agreement, including claims under federal securities law. By signing the subscription agreement, the investor warrants that the investor has reviewed this waiver with the investor’s legal counsel, and knowingly and voluntarily waives his or her jury trial rights following consultation with the investor’s legal counsel. If we opposed a jury trial demand based on the waiver, a court would determine whether the waiver was enforceable given the facts and circumstances of that case in accordance with applicable case law.

 

USE OF PROCEEDS

 

Because the Offering is a “best efforts” Offering, we may close the Offering without sufficient funds for all the intended purposes set out above or even to cover the costs of the Offering.

 

We estimate that, at a per share price of $0.36, the net proceeds from this Offering will be approximately $3,523,500, after deducting the estimated Offering expenses of approximately $426,500 (including, payment to StartEngine and other Offering expenses).

 

In the event that the Offering were to be fully subscribed, representing a sale of 10,972,223 shares for $3.95 million, the following describes the anticipated the use of proceeds:

 

Christopher Thompson would sell 15% of the total shares sold and thus would receive $592,500. Thus, the net proceeds to the Company from the sale of equity is anticipated to be $2.93 million. We plan to use the net Offering proceeds as follows:

 

● Approximately $1,457,000 for R&D and Production.

 

● Approximately $832,000 for Marketing.

 

● Approximately $583,000 for Working Capital.

 

● Approximately $58,000 for Patents/Trademarks.

 

If the Offering size were to be $2.96 million, representing 75% of the maximum Offering amount, then we estimate that the net proceeds will be approximately $2.16 million (after taking into account covering Offering expenses and the Thompson sale). In such an event, we will use the net Offering proceeds as follows:

 

● Approximately $1,074,000 for R&D and Production.

 

● Approximately $614,000 for Marketing.

 

● Approximately $430,000 for Working Capital.

 

● Approximately $43,000 for Patents/Trademarks.

 

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If the Offering size were to be $1.97 million, representing approximately 50% of the maximum Offering amount, then we estimate that the net proceeds will be approximately $1.39 million (after taking into account covering Offering expenses and the Thompson sale). In such an event, we will use the net Offering proceeds as follows:

 

● Approximately $691,000 for R&D and Production.

 

● Approximately $395,000 for Marketing.

 

● Approximately $276,000 for Working Capital.

 

● Approximately $28,000 for Patents/Trademarks.

 

If the Offering size were to be $0.98 million, representing 25% of the maximum Offering amount, then we estimate that the net proceeds will be approximately $0.62 million (after taking into account covering Offering expenses and the Thompson sale). In such an event, we will use the net Offering proceeds as follows:

 

● Approximately $308,000 for R&D and Production.

 

● Approximately $176,000 for Marketing.

 

● Approximately $123,000 for Working Capital.

 

● Approximately $12,000 for Patents/Trademarks.

 

The Company is not required to use the proceeds of this Offering to repay a portion of, or the balance of the interest on our existing debt, but it may prove favorable for the Company to do so. The material terms of our existing debt are set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Indebtedness.”

 

Because the Offering is a “best efforts” Offering, we may close the Offering without sufficient funds for all the intended purposes set out above or even to cover the costs of the Offering.

 

The Company reserves the right to change the above use of proceeds without notice if management believes it is in the best interests of the Company.

 

The allocation of the net proceeds of the Offering set forth above represents our estimates based upon our current plans, assumptions we have made regarding the industry, general economic conditions and our future revenues (if any) and expenditures.

 

Investors are cautioned that expenditures may vary substantially from the estimates above. Investors will be relying on the judgment of our management, who will have broad discretion regarding the application of the proceeds from this Offering. The amounts and timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations (if any), business developments and the rate of our growth. We may find it necessary or advisable to use portions of the proceeds from this Offering for other purposes such as exploring include prescription product lines and adding additional DTC brands to build a portfolio leveraging our ecommerce brand building capabilities.

 

In the event that we do not raise the entire amount we are seeking, then we may attempt to raise additional funds through private offerings of our securities or by borrowing funds. We do not have any committed sources of financing.

 

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OUR BUSINESS

 

Overview

 

TruBrain is a leading brand in high function brain food, as we believe the human brain runs best with bioactive nootropics supporting its metabolic process. Our cognitive products include our best-selling drinks, bars, capsules, powder sticks and coffee topping. The proprietary formulas in these products are part of our IP portfolio.

 

We believe that consumers consider TruBrain the most premium, trusted brand in cognitive performance for high function food, beverage, and nutrition that produce meaningful outcomes for consumers, measured by biomarkers. We have been performing years of R&D to measure biomarkers and expand our product lines and IP portfolio, including venturing into new categories. Aside from superior products, our brand reputation sets us apart, featuring our PhD neuroscientist alumni from The University of California, Los Angeles, quantitative brainwave validation, and our selective and rigorous standards for new product releases.

 

Our Products

 

At TruBrain, we put the consumer first in everything we do and invest to ensure long-term valuable relationships where consumers return again for more cognitive products and education. We have built a Company based on this understanding of our consumers' productivity and category behavior, with a focus on building long-term relationships where consumers can make à-la-carte purchases or enroll in a subscription on the TruBrain website and online through Amazon.com. We believe our trusted brand, continued investment into the consumer experience, innovative products, and relentless focus on data have resulted in strong customer relationships with significant lifetime values. Based on our own bet testing, science, customer feedback, and data, we develop a variety of leading products, including:

 

·TruBrain Drinks, a complete source of nutrients, minerals and nootropics;

 

·TruBrain Ketones, an optimal mix of electrolytes and premium ketone ester;

 

·TruBrain Bars, a complete source of healthy fats, minerals, and nootropics

 

·TruBrain Brud, a coffee pairing so you can be sharp, but not shaky;

 

·TruBrain Clockwise, a natural nudge for declining cellular NAD levels;

 

·TruBrain Powder Sticks, our flagship formula in convenient stick packs.

 

Our latest new category launch is in the ketones category. Our TruBrain Ketones product is among the leading products on the market, with the optimal mix of electrolytes combined with raw, premium ketone ester, an easily absorbed format. Our ketones product facilitates brain metabolism to shift towards a preference for ketones as an additional fuel source to glucose, measured by blood-ketone level. Our unique combination of ketone esters are patent pending, and built by our ketones subject matter expert, a published scientist in top science journals on metabolism.

 

Brand

 

Brand will play a significant role in building and improving loyalty, by strengthening the emotional connection with customers and shaping their experience with our products. By investing in building a reliable, credible brand that speaks to the early majority audience, we can position ourselves for long-term category leadership and customer loyalty. While we have been cautious with our spend on brand awareness, we plan to invest more heavily in brand storytelling across all customer touchpoints to improve the emotional piece of the customer experience. Our storytelling effort can be further amplified by cultural and social proof - we have yet to turn on this significant investment as a carrier for the story.

 

From the beginning, our brand voice and aesthetic focus have set us apart in an industry that in our view needed a fresh, transparent, science backed, premium brand. All TruBrain campaigns are led by our in-house marketing team and creative studio, ensuring consistency across the brand and business. Our brand narrative has expanded beyond emotional and functional storylines, to champion the importance and power of optimal cognition, which we see as a key long-term differentiator. We believe our messaging of “Grab More Life” reinforces our creative and joyful brand while conveying the value of our products, differentiating us from the transaction-driven campaigns of many of our competitors.

 

Our main focus is to continue to grow our product range and optimize our existing best sellers so that we can increase average order value, repeat customer purchase rate, and gross profit. One of the main ways of addressing these is to enter into new categories which have far larger market sizes than our current offerings. We have honed our operations and capabilities internally in emerging categories, which require a high degree of customer education and support. We plan to leverage these processes, skills, and overall operating capability in larger markets. We expect to take advantage of cross sell opportunities in larger markets such as cannabidiol, personalized vitamins, cellular aging, and others. We believe that a large and more efficient product matrix coupled with a manufacturing competency will help us finance our growth to lead to higher average order values, conversion from trials to subscribers, and higher repeat customer revenues.

 

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Product Development Process

 

Our business model relies on the continued growth and success of existing products, as well as the testing of new products. Our product team has been tasked with growing our product range, quality, and margin by engaging directly with customers as the heart of the innovation process. The Company's approach to new product development centers on the lean startup methodology, customer development, financial forecasting, plus other core operating principles. We believe our experience and discipline to executing by these methods is a comparative advantage. We do not believe in product development that assumes excessive upfront capital risk or customer demand from the temptation of rushing or skipping a lean and iterative process.

 

We have a track record of consistently broadening our high-performance, premium-priced product portfolio to meet our expanding customer base and their evolving pursuits. Our culture of innovation and success in identifying customer needs drives our robust product pipeline. We operate in the range that meets our core brand principles of high function, long term safety and sustainability, and customer approachability in product format.

 

We design and develop our products to provide superior performance and functionality in a variety of environments. Our products are carefully designed and rigorously tested to maximize performance while minimizing environmental impact, allowing us to deliver highly functional products with simple, clean, and distinct designs.

 

We plan to continue to offer products and services that span and work together across the entire cognitive range. We believe further expansion will attract new customer segments and partners, as well as enhance average order value, increase attachment rate opportunities, and deliver higher overall customer lifetime value. TruBrain R&D sits at the center of our ability to continue bringing innovative and enhanced performance-driven products to market with speed, sound science, and excellence. We anticipate that growth of our products and services will span entirely new categories of the cognitive range.

 

Marketing

 

In the marketing function, we plan to focus our marketing and advertising resources on growing the customer acquisition channels that performed best for us in recent quarters. These include focusing more of our team's efforts on paid social media marketing, email, partnerships, and content marketing. Customer data analytics remains a key component in how we run the marketing function which aims to result in more efficient marketing spend and improved customer loyalty, through both online and offline channels.

 

To generate ongoing organic and word-of-mouth awareness, we occasionally work with media outlets to amplify our message of innovative new products. To date, TruBrain has been featured in the top business outlets, including CNBC, Bloomberg, Entrepreneur, Forbes, BuzzFeed, Inc, Futurism, Inverse, CBS, and Wire, among others.

 

On Influencer Marketing, we maintain a stringent set of criteria for working with creators and influencers (i.e. engagement level, brand fit, audience demographic) that give us the best chance at gaining meaningful impressions. Our focus is on creating genuine and authentic relationships with influencers who are excited to tell our story. While most of our collaborations are compensated solely through product gifts, we also offer an affiliate commission of up to 20% through the influencer platforms Avantlink and Shareasale.

 

We employ a wide range of marketing tactics and outlets to cultivate our relationships with experts, serious enthusiasts, and everyday consumers, including a combination of traditional, digital, social media, and grass-roots initiatives to support our premium brand. To continue to grow our business, we intend to acquire new customers and retain our existing customers within an efficient cost structure.

 

We invest significant resources in marketing and use a variety of brand and performance marketing channels to acquire new customers. It is important to maintain reasonable costs for these marketing efforts relative to the net profit we expect to derive from customers. Failure to effectively attract customers on a cost-efficient basis would adversely impact our profitability and operating results.

 

We utilize email marketing to build awareness and drive traffic to our online platform. We maintain a database through which we track and utilize key metrics such as customer acquisition cost, customer lifetime value, cost per visitor and cost per click. This database provides us with information that we use to communicate with customers regarding key initiatives and offer promotions, as well as to introduce new product offerings.

 

We utilize a community-based approach to building awareness of the TruBrain brand. Since consumer purchase decisions are driven by both an actual need for functional products and a desire to live an optimized lifestyle, we believe the credibility of our brand and the authentic community experiences we offer expand our potential market beyond just “biohackers” to those who pursue an active, mindful, and optimized life.

 

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Customer Acquisition

 

To continue to expand our business, we must acquire new consumers as well as retain existing customers in a cost-effective manner. We continually evolve our marketing strategies and adjust our messaging, the amount we spend on advertising, and the channels in which we spend. We have made, and we expect that we will continue to make, significant investments in attracting new consumers, including through traditional, digital, social media and original TruBrain content.

 

It is critical for us to maintain reasonable costs for these marketing efforts relative to sales derived from new consumers. We expect our marketing efficiency to improve over time, as sales through new categories may require less incremental marketing investment and we continue to use optimization and automation tools to drive costs lower. We believe we will be able to drive natural leverage in our marketing efficiency as we expand our offerings, in addition to cross-selling into new categories.

 

To measure the effectiveness of our marketing spend, we manage gross profits per customer cohort, looking at customer acquisition cost (CAC) versus customer lifetime values (LTV) methodically, continually using data and internal return on advertising spend targets to optimize our acquisition strategy. We measure how profitably we acquire new customers by comparing the LTV of a particular customer cohort with the CAC attributable to such cohort. We seek to find the most efficient way to attract long term loyal customers.

 

Customer Experience

 

Customer service continues to be a main focus for the business as we seek to provide our customers with the same level of response and services as they are able to get with our peer direct-to-consumer brands in various product categories. We are continuing this focus by implementing technical enhancements meant to improve our team's efficiency and allow them to service customers better and faster.

 

TruBrain was founded with a consumer-first approach and we continue to leverage customer feedback, behavior, and insights to guide our long-term strategy and daily decision making. Behind the scenes, TruBrain connects the power of this information to create a cycle of continuous, impactful improvements throughout our business. We are genuinely interested in the feedback and support of consumers, peers, and partners, and believe our work is better for it. Our data-driven insights run throughout our business, from creative executions to product format design, and from forward thinking partnerships to our innovative product portfolio.

 

As we scale our business, we strive to ensure the best possible consumer experiences while improving our revenue and controlling our costs. We have rolled out several initiatives designed to improve the customer experience and, in turn, our customer retention rate and customer lifetime value. We shall continue to invest in these best of brand improvements.

 

E-Commerce Technology

 

Our preference is to use best in class, off-the shelf e-commerce technologies over custom-built platforms. This allows us to keep tight control over development and maintenance costs, and keep our resources focused on key areas that are strategic priorities (e.g. acquisition, marketing, product development).

 

Currently, our products are sold primarily online, through our website. Our website is built on Shopify with supplemental applications and customizations on top of the platform. Our website can be accessed via desktop, tablet or smartphone. Our preference is to use best in class, off-the shelf ecommerce technologies over custom-built platforms. This allows us to keep tight control over development and maintenance costs, and keep our resources focused on key areas that are strategic priorities for the Company (e.g. new customer acquisition, content, product development).

 

The Company retains consistent contracting relationships with affordable and effective full stack and front-end developers; we have relationships that can scale well by adding to their scope of work. The Company has vetted and cultivated relationships with external developers over the years that puts us both in a flexible and competent position to effectively scale.

 

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Operations and Distribution

 

We are committed to improving productivity and profitability through a number of operational avenues designed to grow revenue and expand margins. To date, TruBrain has had significant results improving gross margins and introducing more profitable products. We believe there is always opportunity for continued improvement in gross margins, marketing efficiencies, and operating leverage through optimized pricing, reduced returns, and further product development.

 

Our focus is on optimizing our core customer economics within the constraints of our cash position for our product lineup. Of note, this includes scaling our ketones product line and further optimizing our core nootropics business. We plan to apply our disciplined operations and lean operating process to win in product categories with larger total addressable market sizes and high growth rates, where we think we are well positioned to compete and garner market share.

 

We recently took several decisions to make important investments we feel are the right course of action for the business. Paramount above all of them was to achieve profitability. This allows us to have the strongest foundation to expand over the long haul, and we feel this is exceptionally rare in both private and public DTC brands.

 

We also set out to expand the TruBrain brand into emerging categories where we can deliver genuine outcomes for customers to improve our unit economics. Another decision we took was to improve our ability to retain customers by reformulating the cognitive lineup with more affordable formulas meant to improve the customer journey. We seek to onboard and expand to additional suppliers that can support our growth and stringent quality and operational standards. Our operations in 2018 and 2019 (and ongoing operations) were optimized to be able to afford to make these investments under the constraints of our cash position, with the goal of maintaining profitability.

 

Additionally, we plan to improve product affordability and margins, by having a more responsive and efficient supply chain. We aim to produce the highest quality food, beverage and nutrition products for the most competitive price in order to pass the savings on to our customers. With that in mind, we will spend resources on improving our relationship and deal terms with current and new manufacturers that will be able to not only produce alternative formats or our same product formulas, but also help us expand into new product formats and categories. Finally, quality control will be a continued focus for us, as we seek to build best in class quality control and production capabilities, to lower our rate of wastage during the production process, ensuring we have a higher yield of the highest quality products at our distribution centers.

 

Shipping

 

Our products are shipped from our suppliers to our third-party logistics partner (“3PL”), which handles our warehousing, fulfillment, outbound shipping and returns processing. By outsourcing our logistics operations, we are able to focus on our core business, lower our capital commitment to fixed assets, maintain a variable cost structure, and save money with lower shipping rates. Our 3PL is located in Michigan.

 

Suppliers

 

We source our products from suppliers located in the United States, Canada, Mexico, and various countries in the Asia Pacific region. We use a routine purchase order system in place with our key suppliers.

 

Intellectual Property

 

One of our most valuable assets is our intellectual property. The Company owns the trademark to our flagship brand TruBrain and we are currently working to extend this to Canada and in the other countries where our products will be either sold or distributed, and we also hold a license to use three (3) pending patent applications seeking to protect certain product formulations, and plan to explore other opportunities to patent product formulations; however, such patents may never be issued or certain claims may be rejected or may need to be narrowed, which may limit the protection we are attempting to obtain. The Company has access to filed patents held by the assignee, the CEO, for patents on several product innovations. These filings are under review by the USPTO.

 

Market

 

Our target market is discerning college-educated professionals with higher levels of discretionary income. The Company’s targeted market includes men and women 18 years and older who are comfortable with purchasing food, beverage, and nutrition products online. Our research shows that our typical customers have an average age of 30 and an average household income of US $55,000, and 80% are college educated. Many of our customers identify as being part of the Creative Class, which is a demographic segment made up of knowledge workers, intellectuals and various types of creatives.

 

Competition

 

We are in a business vertical that is fiercely competitive from a variety of sources, with many competitors in the market that are larger, more established, and possess greater resources than we do. Our future success will be largely dependent on our ability to produce quality products and services at competitive prices.

 

The high function food and beverage products industry is highly saturated, intensely competitive, and sensitive to international, national, and regional economic conditions. Numerous manufacturers and retailers compete actively for consumers. Similar products can be purchased in a wide variety of channels of distribution including conventional retail stores, club or membership retailers, specialty retail, and the internet. Additional national or international competitors could enter the market at any time and may seek to in the future.

 

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At any given time our current or potential competitors may provide products or services comparable or superior to those provided by us, or may adapt more quickly than we do to evolving industry or market trends. Increased competition may result in price reductions, reduced gross margins, and loss of market share, any of which would materially and adversely affect our business.

 

The high function food and beverage industry increasingly relies on intellectual property rights. It is more and more common for suppliers and competitors to apply for patents or develop proprietary technologies and processes. We have our own portfolio of intellectual property that we are always adding to, but we must acknowledge the potential for litigation surrounding intellectual property rights, whether that is defending our intellectual property or encountered in the avoidance of infringing on the intellectual property rights of others. If an infringement claim is asserted or litigation is pursued, we may be required to obtain a license of rights, pay royalties on a retrospective or prospective basis or terminate the manufacturing and marketing of our products that are alleged to have infringed. Litigation with respect to such matters could result in substantial costs and could have a material adverse effect on our business, financial condition and operating results

 

Litigation

 

The Company is not as of the date of this Offering Circular involved in any litigation. From time to time, the Company could be involved in a variety of legal matters that arise in the normal course of business.

 

The Company’s Property

 

The Company currently leases its premises and owns no significant plant or equipment.

 

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion of our plan of operation and results of operations should be read in conjunction with the financial statements and related notes to the financial statements included elsewhere in this Offering Circular. This discussion contains forward-looking statements that relate to future events or our future financial performance. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks and other factors include, among others, those listed under “forward-looking statements” and “risk factors” and those included elsewhere in this report.

 

Overview

 

The Company produces and sells high function food, beverage, and nutrition products to mainstream consumers that deliver meaningful and measurable outcomes. We believe that consumers consider our brand, TruBrain, as one of the most premium, trusted brands in cognitive performance - one that produces positive results for consumers and can be measured by biomarkers. Aside from superior products, we believe that our brand reputation sets us apart from the competition. Our direct-to-consumer (“DTC”) channel consists of online subscription sales of products produced by the Company.

 

We seek to reach our target customer audience through a multi-faceted marketing strategy that is designed to integrate our brand image with the lifestyles we represent. We pursue a marketing strategy which leverages our fans, ambassadors, digital marketing and social media, and a variety of grassroots initiatives. We also plan to continue to explore how we can complement and amplify our community-based initiatives with brand-building activity. We are continuously looking to partner and build meaningful relationships with social media influencers to produce high-quality achievement-focused content. We believe this approach offers an opportunity for our customers to develop a strong identity with our brands and culture.

 

Results of Operations

 

Summary of Results of Operations for the Years Ended December 31, 2019 and 2018:

 

Net Revenues

 

Our net revenue for the year ended December 31, 2019, was $1,942,633, compared to $2,835,842 for the same period during 2018, a decrease of 31%. The decrease in revenue was primarily due to our deliberate actions to prioritize our goal to achieve profitability. While revenue decreased in part due to decreased marketing spend, our profit margin increased and resulted in profitability in 2019, one of our main goals for sustainable expansion.

 

Cost of Goods Sold

 

Our cost of goods sold for the year ended December 31, 2019, was $886,539, compared to $1,784,816 for the same period during 2018, a decrease of 50%. The decrease was primarily due to executing on our goal to achieve profitability in 2019 along with our cost and cash management discipline put in place over several years. Our gross margin may in the future fluctuate from period to period based on a number of factors, including cost of purchased components, discounts and promotional activity, the mix of products, and services we sell and the mix of channels through which we sell our products. We have historically experienced that gross margin, by product, tends to increase over time as we realize cost efficiencies as a result of economies of scale and sourcing strategies. In addition, our ability to continue to reduce the cost of our products, decreasing return rates, and controlling shipping costs are critical to increasing our gross margin over the long-term.  

 

Operating Expenses

 

Total operating expenses for the year ended December 31, 2019, were $854,015, compared to $1,474,934 for the same period during 2018, a decrease of 42%. This was achieved through discipline to our capital efficiency and effective cash management.

 

Marketing and advertising costs represented $212,863 and $510,755, respectively, of total operating expenses, a decrease of 42%. Advertising costs decreased year-over-year, as we continue to become more selective and efficient in digital media spend to attract the right loyal mix of customers. 

 

Wage expenses decreased $43,115, or 11%, from $404,440 in 2018 to $361,325 in 2019. This decrease is mostly attributed to investment in our freelance team network.

 

General and administrative expenses decreased $279,329, or 50%, from $559,739 in 2018 to $279,827 in 2019, largely due to the decrease in overall operating expenses to execute on our goal to achieve profitability in 2019 along with our cost and cash management discipline put in place over several years. This was achieved while also investing in key projects behind new products for 2020-2021.

 

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Interest expense increased $37,968, or 26%, from a total interest expense of $145,500 in 2018 to a total interest expense of $183,468 in 2019, as interest continued to accrue at the default rate on outstanding notes. See “Liquidity and Capital Resources” below.

 

Net Income (Loss)

 

Our net income for the year ended December 31, 2019 was $17,811, compared to a loss of $570,208 for the same period during 2018, an increase of $588,019. The increase in net income was primarily due to our discipline in executing on our goal to achieve the milestone of profitability in 2019, as our top operational goal for the Company. We believe these investments in process and operational discipline will set us up well for sustainable expansion in future years.

 

Liquidity and Capital Resources

 

As of December 31, 2019, our current cash and cash equivalents were $783,147, compared to $185,965 as of December 31, 2018. We currently anticipate that cash flow from operations will continue to provide a significant source of our operating needs.  We expect that our liquidity needs for the next twelve months will be met by continued use of operating cash flows, funds raised in this Offering and funds raised in our Regulation CF Offering in which we raised gross proceeds of $1,066,396. Assuming we raise the full amount we are seeking in this Offering, we believe that we will be able to continue to operate our business for the foreseeable future. The Company’s independent auditors’ report includes an explanatory paragraph regarding the Company’s ability to continue as a going concern.

 

Debt

 

We currently have three outstanding three (3) convertible promissory notes in the aggregate principal amount of $850,000, which accrue interest at a rate of 5% per annum, and which were due in 2017 and are therefore, in default, and have been accruing default interest at a rate of 10% per annum. As of June 30, 2020, the total principal outstanding under the Convertible Promissory Notes was $343,973. Each of the Convertible Promissory Notes may automatically convert into shares per the Convertible Promissory Note agreements, which may require the consent of the Convertible Promissory Note holders. Upon a qualified financing, which is set to occur upon a bona fide sale of equity in minimum amount $1,500,000, which may require the consent of the Convertible Promissory Note holders, the outstanding principal and interest convert into that number of shares of the stock issued in the Qualified Financing (the "Qualified Financing Stock") and shares of Common Stock of the Company determined by dividing the Outstanding Amount by a conversion price equal to the lesser of (i) the price per share of the Qualified Financing Stock sold by the Company in the Qualified Financing, discounted by 20%, and (ii) the price determined by dividing a pre-money valuation of $4,000,000.00 by the number of outstanding shares of the Common Stock on a fully-diluted and as-converted basis immediately prior to the closing of the Qualified Financing (not including the Excluded Shares). Of those shares, the number of Qualified Financing Stock will equal (x) the Outstanding Amount, divided by (y) the price per share paid by the other investors purchasing the Qualified Financing Stock in the Qualified Financing. Any remaining shares will be Common Stock.

 

The Qualified Financing Stock delivered to the noteholder pursuant to such conversion shall have the same rights, preferences, privileges as the Qualified Financing Stock delivered to other investors in the Qualified Financing, and the noteholder shall enjoy the same contractual rights as other investors in the Qualified Financing. Therefore, if the notes are converted, the conversion will result in a dilution of your investment.

 

Loan Under the CARES Act

 

In April 2020, the Company applied for assistance via two programs being offered by the Small Business Administration in response to the COVID-19 crisis: the Paycheck Protection Program (“PPP”) Loan and the Economic Injury Disaster Loan (“EIDL”). On April 15, 2020, the Company received $20,900 from the PPP program to help cover payroll costs during a portion of the COVID-19 pandemic. As we expect to comply fully with the terms of the loan, we expect that the loan will be forgiven, however we cannot guarantee that forgiveness will be granted regardless of our full compliance with the terms of the PPP. On July 27, 2020, the Company entered into a loan under the EIDL for $150,000 in principal amount, with no payments for the first 12 months and accruing interest at a rate of 3.75% per year for a term of 30 years.

 

Trend Information

 

Our primary goal is to attract and retain loyal customers in our DTC sales channel. As we add customers we will be able to grow our brand. Sales trends for the year ended December 31, 2019 showed strong demand across all of TruBrain's Offerings. We continue to find media channels to advertise our products and acquire new customers. We’ve been able to organically increase our wholesale sales channel, led by Erewhon.

 

The cognitive nutrition industry is a sizable market in the United States. We believe TruBrain is one of the few cognitive nutrition brands that is connecting with the discerning and savvy consumers and that should lead to a significant and expanding market opportunity.

 

Although it is extremely difficult to predict what the industry will experience after the COVID-19 pandemic, we feel that there will be opportunities for companies like ours to take advantage of new consumer trends, habits, and industry needs that evolve because of this pandemic. We have developed preparedness plans to help protect the safety of our employees, while safely continuing business operations. We have worked with our manufacturing, logistics and other supply chain partners to build communication and monitoring processes for all aspects of our product and delivery supply chain.

 

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COVID-19

 

In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic, which continues to spread throughout the globe. The impacts of the outbreak are unknown and continue to evolve. A widespread health crisis has adversely affected and could continue to affect the global economy, resulting in an economic downturn that could negatively impact the value of the Company’s shares and investor demand for shares generally.

 

The continued spread of COVID-19 has also led to severe disruption and volatility in the global capital markets, which could increase our cost of capital and adversely affect our ability to access the capital markets in the future. It is possible that the continued spread of COVID-19 could cause a further economic slowdown or recession or cause other unpredictable events, each of which could adversely affect our business, results of operations or financial condition.

 

COVID-19 has been a highly disruptive economic and societal event that has affected our business and has had a significant impact on consumer shopping behavior. To serve our customers while also providing for the safety of our team members, we have adapted aspects of our logistics, transportation, supply chain and purchasing processes. We experienced a slight decline in demand for our products, which resulted in lower revenue, in March, April, and May 2020. June 2020 has since returned to nearly equal to February 2020 levels. Although revenue has recovered in the short term, we cannot predict the duration or severity of the economic impact of COVID-19 or its ultimate impact on our operations.

 

The ultimate financial impact on the Company’s future operating results and consolidated financial statements cannot be reasonably estimated at this time. However, as of the date of this Offering Circular, the Company does not expect this matter will have a material negative impact on its business, results of operations, and financial position.

 

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DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES

 

The following table sets forth information about our executive officers and directors.

 

Name   Position   Age   Term of Office   Approximate Hours per week
for part-time employees
Christopher Thompson   Founder, CEO, and Director   41   November 2012 – Present   Full Time
                 
Arif Fazal (1)   Director       46     August 2015 – Present   N/A    
                 
Josh Payne   Director   40   August 2015 – Present     N/A
                 
Seth DeGroot (2)   Director   35   August 2015 – Present   N/A
                 
Sheree Shelton   Director   38   September 2020 – Present   N/A  

 

(1)Appointed pursuant to Investor Rights Agreement dated July 2, 2015, between us, Blueberry Ventures 1, L.P., one of our Convertible Promissory Note holders, and Christopher Thompson, pursuant to which Mr. Thompson agreed to vote all of his shares to appoint a designee of Brightstone to our Board of Directors.

 

(2)Appointed pursuant to Investor Rights Agreement dated May 5, 2015, between us, Brightstone Venture Capital Fund, LP, one of our Convertible Promissory Note holders, and Christopher Thompson, pursuant to which Mr. Thompson agreed to vote all of his shares to appoint a designee of Brightstone to our Board of Directors.

 

Christopher Thompson, Founder, CEO and Director

 

Christopher founded the Company and has been CEO since 2012. Prior to this, Christopher served as a Brand Manager at Unilever, where he managed brands in the food and personal care divisions, including Hellmann's Best Foods and Suave. Christopher was one of the most successful brand managers in the history of Unilever - he held the record for the top CPM at Unilever across all investments by all brands. Before Unilever, Christopher managed consulting engagements for Fortune 500 clients, including Coca-Cola, the Wrigley Company, and Pfizer. Christopher has an MBA from Duke University and a BA in Economics from Georgetown University.

 

Arif Fazal, Director

 

Arif Fazal is Founder & Managing Director of Blueberry Ventures, an investment fund focused on food & beverage that he launched in June 2015. Arif invests in and works with emerging and innovative food & beverage companies led by inspiring entrepreneurs and management teams and collaborates closely alongside similarly focused co-investors. Prior to launching Blueberry Ventures, Arif led Arif Advisors where he rolled up his sleeves with consumer branded growth companies and investors in the space, helping companies drive growth and investors realize opportunity. Prior to that, Arif held general management, strategy & business development executive roles within Fortune 50 grocer Safeway Inc. and Fortune 500 lifestyle brand Williams-Sonoma Inc. Arif holds a MBA from Stanford University and a BA from UC Berkeley.

 

Josh Payne, Director

 

Josh leads StackCommerce on its mission to revolutionize commerce through the seamless integration of content and relevant products. The company’s network reach is currently over 500 million monthly visitors across more than 750+ publisher partners including Aol, Hearst, Scripps, Gawker Media, IAC, Penske Media, CNET, Ziff Davis, Business Insider, and others. Their leading native commerce platform provides publishers and vendors with turnkey solutions to increase user engagement, growth, and monetization. These solutions include: full-service commerce shops with editorial, email, social, and in-feed product recommendations. The company is headquartered in Venice, CA and backed by top investors including Draper Associates, 500 Startups, Amplify, and Wavemaker Partners.

 

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Seth DeGroot, Director

 

Seth is a Managing Partner at Brightstone Venture Capital. Brightstone currently manages a $100 million venture fund focused on early-growth stage investment opportunities. Brightstone leverages the deep operating experience and successful investment background of the Fund's partners, primarily focused on investing in the Technology and Biotechnology sectors. Brighstone seeks out defensible advantages: proprietary and protected technological advances, business model innovations, and unique partnerships. Most importantly, BVC invests in “A” teams and founders with a demonstrable history of development/traction. We invest more in people than in a specific plan, because plans often change.

 

Sheree Shelton, Director

 

Sheree is the Director of Accounting at Dollar Shave Club, a direct-to-consumer subscription-based men's grooming company. Prior to that, she was the SEC Reporting Manager at Quiksilver and a Director of Accounting at Beachbody, a direct response, subscription-based home exercise and dietary supplements company. Before her career in corporate accounting, Sheree worked in public accounting at Deloitte in the audit practice. Sheree is a Certified Public Accountant and has a Bachelor of Science in Business Administration.

 

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COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

 

The table below reflects the annual compensation of each of the three highest paid persons who were executive officers or directors, during the year ended December 31, 2019:

 

Name  Capacities in which
compensation received
  Cash Compensation   Other
Compensation
   Total
Compensation
 

Christopher Thompson
3103 Neilson Way, Suite D

Santa Monica, CA 90405

  Chief Executive Officer, Director  $250,000   $0   $250,000 

 

The Board of Directors do not receive any compensation for their service.

 

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SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS

 

Set forth below is information regarding the beneficial ownership of our outstanding shares of securities as of June 30, 2020, by (i) all executive officers and directors as a group, individually naming each director or executive officer who beneficially owns more than 10% of any class of the Company’s voting securities, and (ii) any other securityholder who beneficially owns more than 10% of any class of the Company’s voting securities. We believe that, except as noted below, each named beneficial owner has sole voting and investment power with respect to the shares listed. Unless otherwise indicated herein, beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and includes voting or investment power with respect to shares beneficially owned.

 

Title of class   Name and address of
beneficial owner
  Amount and
nature of
Beneficial
ownership
    Amount and nature
of beneficial
ownership
acquirable
    Percent of class  
Common Stock  

Christopher Thompson
3103 Neilson Way, Suite D

Santa Monica, CA 90405

    30,000,000       0       54.94%  
Common Stock   Officers and Directors as a group     30,000,000       0       54.94%  
Series Seed Preferred Stock  

StartEngine Fund I, L.P.

750 N San Vicente Boulevard, Suite 800
West Hollywood, CA 90069

    66,666       0       100.00%  
Series Seed-B Preferred Stock  

Hugh Evans

9 West 57th Street, 32nd Floor
New York, NY 10019

    41,667       0       100.00%  

 

Percent of class in the table above means the beneficial ownership divided by the total number of “fully diluted” shares of Common Stock. The “fully diluted” shares of Common Stock includes the Series Seed Preferred Shares and Series Seed-B Preferred on an as-converted basis, issued Options, Warrants, and Convertible Promissory Notes.

 

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INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS

 

Christopher Thompson, our CEO and a Director, holds three pending patent applications seeking to protect certain novel compositions and methods. TriplePulse, Inc dba TruBrain, desires to acquire or license rights in and to the Patent Application and the patent (and any reissues or extensions) that may be granted. Therefore, for valuable consideration, Christopher Thompson has entered into a license agreement with the Company for the rights, title, and interest in the invention and Patent Application (as well as such rights in any divisions, continuations in whole or part, or substitute applications) to the Company upon completion of the patent filing process for each patent.

 

SECURITIES BEING OFFERED

 

In this Offering, we are offering to investors shares of our Common Stock.

 

Following a 50-to-1 Common Stock split, effected in 2019, our authorized capital stock consists of 100,000,000 shares of Common Stock, $0.0001 par value per share (the “Common Stock”), and 110,416 shares of Preferred Stock, par value $0.0001 per share, of which 66,666 shares are designated as “Series Seed Preferred Stock,” (the “Series Seed Preferred”) and 43,750 shares are designated "Series Seed-B Preferred Stock" (the “Series Seed-B Preferred,” and sometimes together with the Series Seed Preferred Stock, the “Preferred Stock”). As of June 30, 2020, we had 45,329,200 shares of Common Stock outstanding, 66,666 shares of Series Seed Preferred Outstanding and 41,667 shares of Series B Preferred outstanding, which are convertible into an aggregate of 5,416,650 shares of Common Stock. Upon conversion to Common Stock, the holders of the Preferred Stock will receive an adjustment to effect the 50-to-1 Common Stock split, resulting in an aggregate of 5,416,650 shares of Common Stock, subject to any other adjustments prior to conversion.

 

The Company has outstanding options to purchase 250,000 shares of Common Stock having an exercise price of $0.019, which expire October 5, 2025, and warrants to purchase 211,350 shares of Common Stock and 2,083 warrants to purchase Series Seed-B Preferred Stock, which is convertible into 104,150 shares of Common Stock, all of which have expiration dates ranging from April 2014 to February 2027. The warrants are as follows:

 

Warrants to purchase 98,450 shares of Common Stock having an exercise price of $0.025 per share

 

Warrants to purchase 21,050 shares of Common Stock having an exercise price of $0.095 per share

 

Warrants to purchase 74,850 shares of Common Stock having an exercise price of $0.033 per share

 

Warrants to purchase 17,000 shares of Common Stock having an exercise price of $0.034 per share

 

Warrants to purchase 2,083 shares of Series Seed-B Preferred Stock or 104,150 shares of Common Stock on an as converted basis having an effective exercise price of $0.012 per share 

 

Warrants to purchase 33,250 shares of Common Stock having an exercise price of $0.033 per share

 

We also have outstanding Convertible Promissory Notes, the principal and accrued interest of $1,193,973 as of June 30, 2020, are automatically convertible into shares per the terms of the Convertible Promissory Note agreements. 

 

The rights of the holders of our Common Stock and Preferred Stock (collectively, the “Capital Stock”) are governed by our Certificate of Incorporation, which is described below and certain Investors’ Rights Agreements entered into between the Company and the holders of our Series Seed Preferred and Series Seed-B Preferred.

 

The rights of the holders of Capital Stock are governed by our Second Amended and Restated Certificate of Incorporation, as amended from time to time, which can be amended as to certain matters from time to time via an action of the Board of Directors and/or Chief Executive.

 

The number of authorized shares can be increased with no limit on the number of shares that may be authorized and issued per the terms on our Certificate of Incorporation. The Certificate of Incorporation may also be amended per the bylaws to create one or more series of Preferred Stock that have rights, preferences and privileges senior to the rights, preferences and privileges of the Common Stock.

 

Voting

  

The holders of our Common Stock are entitled to one vote per share, however, the holders of Common Stock issued in this Offering shall grant a voting proxy to our Chief Executive, that will limit investors’ ability to vote their Common Stock until the occurrence of events specified in the proxy, which include an initial public offering, our acquisition by another entity or a liquidation event, none of which may never happen. See “Risk Factors - Investors in our Shares will have to assign their voting rights.” The holders of our Preferred Stock are entitled to one vote for each share of Common Stock into which such Preferred Stock is convertible as of the record date of any vote. Except as otherwise provided by law or the provisions of our Certificate of Incorporation, the holders of Preferred Stock shall vote together with the holders of Common Stock as a single class on an as-converted basis and shall have full voting rights and powers of the holders of Common Stock.

 

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As long as there are any shares of Preferred Stock outstanding, we may not, do any of the following without the vote of the holders of a majority of the outstanding shares of Preferred Stock, voting together as a single class: (1) alter or change the rights, powers or privileges of the Preferred Stock as set forth in our Certificate of Incorporation, in any way that adversely affects the Preferred Stock, (2) increase or decrease the authorized number of shares of Preferred Stock (or any series thereof), (3) authorize or create any new class or series of capital stock having rights, powers or privileges that are senior to any series of Preferred Stock, (4) redeem or repurchase any shares of Common Stock or Preferred Stock (other than pursuant to employee or consulting agreements giving us the right to repurchase such share at the original cost thereof upon termination of services, or (5) declare or pay any dividend or otherwise make a distribution to the holders of Preferred Stock or Common Stock.

 

Liquidation Rights

 

In the event of any voluntary liquidation, dissolution or winding up, or Deemed Liquidation Event (as defined below), prior and in preference to any distribution of any of our assets to the holders of Common Stock by reason of their ownership of such stock, (i) the holders of Preferred Stock shall be entitled to receive on a pro rata basis an amount equal to the original issue price for each such share of Preferred Stock, as appropriately adjusted for stock splits, stock dividends, recapitalizations and the like ($0.30 per share of Series Seed Preferred Stock, and $0.60 per share of Series Seed-B Preferred Stock), plus any dividends declared and unpaid thereon, or (b) such amount that would have been payable had all shares of Preferred Stock been converted into Common Stock immediately prior to such voluntary liquidation, dissolution or winding up, or Deemed Liquidation Event. If, upon the occurrence of a Liquidation Event, our assets legally available for distribution to stockholders by reason of their ownership of stock, shall be insufficient to permit the payment to the holders of Preferred Stock of the full aforementioned preferential amount, then, all of our assets legally available for distribution to stockholders by reason of their ownership of stock, shall be distributed ratably among the holders of Preferred Stock in proportion to the preferential amount each such holder is otherwise entitled to receive.

 

Upon a Liquidation Event, and after payment to the holders of Preferred Stock of the amounts to which they are entitled pursuant to the prior paragraph, all of our assets that remain legally available for distribution to stockholders by reason of their ownership of stock, shall be distributed ratably among the holders of Common Stock in proportion to the number of shares of Common Stock held by them.

 

A “Liquidation Event” includes, unless the holders of at least a majority of the outstanding shares of Preferred Stock (voting as a single class on an as-converted basis) determine otherwise, (a) merger or consolidation, upon the consummation of which, the shares of our capital stock outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for equity securities that represent immediately following such merger of consolidation, at least a majority, by voting power, of the equity securities of the surviving entity, or if the surviving entity is a wholly owned subsidiary of another party, the parent of such surviving entity, (b) a sale, lease, transfer or other disposition, of all or substantially all of our assets.

 

Conversion of Preferred Stock

 

The holders of Preferred Stock have the following conversion rights:

 

Each share of Preferred Stock is convertible, at any time, at the option of the holder thereof, into such number of fully paid and non-assessable shares of Common Stock as is determined by dividing the Initial Issue Price of the Preferred Stock (as appropriately adjusted for stock splits, stock dividends, recapitalizations and the like) by the then applicable Conversion Price for a share of Preferred Stock. The Initial Issue Price per share of Series Seed Preferred Stock is $0.30 per share, and of Series Seed-B Preferred Stock $0.60 per share, however, subject to adjustment from time to time as provided below. Due to the stock-split noted above, each share of preferred stock is convertible into 50 shares of common stock.

 

Each share of Preferred Stock shall automatically be converted into Common Stock immediately upon the earlier of (a) the closing of a firm commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, or (ii) the date, time, or occurrence of an event specified by written consent or agreement of the holders of at least a majority of the then outstanding shares of Preferred Stock, voting together as a single class.

 

Anti-Dilution Rights

 

The number of shares into which Preferred Stock is convertible and/or the conversion price of Preferred Stock is subject to adjustment in the case of stock splits, combinations of Common Stock, stock dividends, exchanges, substitutions and certain other distributions, and in connection with certain reorganizations, reclassifications and similar events. In addition, the Conversion Price of the Preferred Stock is subject to adjustment in the case of certain issuances of securities at less than the then applicable Conversion Price for the Preferred Stock, i.e. a down round, based on a weighted average anti-dilution formula.

 

34

 

 

Dividend Rights

 

All dividends shall be declared pro rata on the shares of Common Stock and Preferred Stock, on a pari passu basis according to the number of shares of Common Stock held by such holders, or, in the case of Preferred Stock, the number of shares of Common Stock, into which such shares of Preferred Stock are convertible as of the record date for the payment of such dividends.

 

Other Rights of Holders of Preferred Stock

 

We are party to an Investors’ Rights Agreement with StartEngine Fund I, L.P., the holder of our Series Seed Preferred Stock, pursuant to which, in addition to holding certain information rights, StartEngine has a right of first refusal to purchase a specified portion of any new securities we may sell in the future.

 

Absence of Other Rights of Common Stock

 

Holders of Common Stock have no preferential, preemptive, conversion or exchange rights. There are no redemption or sinking fund provisions applicable to the Common Stock. When issued in accordance with our certificate of incorporation and Delaware General Corporation Law, shares of our Common Stock and Preferred Stock will be fully paid and not liable to further calls or assessments by us.

 

Exclusive Jurisdiction

 

Pursuant to our Subscription Agreement, investors will be agreeing that the state and federal courts located within the State of Delaware will be the sole and exclusive forum for all actions or proceedings relating to the Subscription Agreement. Therefore, investors may be compelled to travel to Delaware to prosecute or defend any claims involving us. This provision applies to actions brought under the Securities Act and the Exchange Act and may limit a shareholder’s ability to bring a claim in a forum that it finds favorable for disputes with the Company and its directors, officers and other employees and may discourage lawsuits with respect to such claims.

 

Investors’ Rights Agreements

 

We are a party to an Investors’ Rights Agreement with Brightstone Venture Capital Fund, LP, one of our Convertible Promissory Note holders, and Christopher Thompson, pursuant to which, in addition to holding certain information rights, Brightstone has a right of first refusal to purchase a specified portion of any new securities we may sell in the future, and Mr. Thompson has agreed to vote all of his shares to appoint to our Board a director nominated by Brightstone, which designation right shall terminate upon the closing of the next sale of our Preferred Stock to investors with aggregate gross proceeds of a minimum of $3,000,000, or if any individual investor investing $1,000,000 or more in any qualified financing requires that the board designation right be terminated.

 

We are a party to an Investors’ Rights Agreement dated July 2, 2015, between Blueberry Ventures 1, L.P., one of our Convertible Promissory Note holders, and Christopher Thompson, pursuant to which, in addition to holding certain information rights, Blueberry has a right of first refusal to purchase a specified portion of any new securities we may sell in the future, and Mr. Thompson has agreed to vote all of his shares to appoint to our Board a director nominated by Blueberry, which designation right shall terminate upon the closing of the next sale of our Preferred Stock to investors with aggregate gross proceeds of a minimum of $3,000,000, or if any individual investor investing $1,000,000 or more in any qualified financing requires that the board designation right be terminated.

 

We are a party to a letter agreement dated July 2, 2015, with 500 Startups III, L.P., one of our Convertible Promissory Note holders, pursuant to which in addition to holding certain information rights, 500 Startups has a right of first offer to purchase $250,000 of any equity securities we may sell or issue to investors, until such time as we have engaged in an offering in the minimum amount of $1,500,000.

 

35

 

 

ONGOING REPORTING AND SUPPLEMENTS TO THIS OFFERING CIRCULAR

 

We will be required to make annual and semi-annual filings with the Commission. We will make annual filings on Form 1-K, which will be due by the end of April each year and will include audited financial statements for the previous fiscal year. We will make semi-annual filings on Form 1-SA, which will be due in September of each year, which will include unaudited financial statements for the six months to June 30. We will also file a Form 1-U to announce important events such as the loss of a senior officer, a change in auditors or certain types of capital-raising. We will be required to keep making these reports unless we file a Form 1-Z to exit the reporting system, which we will only be able to do if we have less than 300 shareholders of record and have filed at least one Form 1-K.

 

We may supplement the information in this Offering Circular by filing a Supplement with the Commission.

 

All these filings will be available on the Commission’s EDGAR filing system. You should read all the available information before investing.

 

36

 

 

TRIPLEPULSE, INC.

FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS ENDED

DECEMBER 31, 2019 AND 2018

 

INDEX TO FINANCIAL STATEMENTS

 

  Pages
   
Independent Auditors’ Report F-2
   
Balance Sheets as of December 31, 2019 and 2018 F-4
   
Statements of Operations for the years ended December 31, 2019 and 2018 F-5
   
Statements of Stockholders’ Deficit the for years ended December 31, 2019 and 2018 F-6
   
Statements of Cash Flows for the years ended December 31, 2019 and 2018 F-7
   
Notes to the Financial Statements F-8

 

F-1 

 

 

INDEPENDENT AUDITORS’ REPORT

 

To Board of Directors and Stockholders

TriplePulse, Inc. dba TruBrain

 

Report on the Financial Statements

We have audited the accompanying financial statements of TriplePulse, Inc.dba TruBrain (the “Company”) which comprise the balance sheets as of December 31, 2019 and 2018, and the related statements of operations, stockholders’ deficit, and cash flows for the years then ended, and the related notes to the financial statements.

 

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

 

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement.

 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

 

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of TriplePulse, Inc. as of December 31, 2019 and 2018, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

 

F-2 

 

 

Emphasis of Matter Regarding Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, certain conditions, including historical losses from operations and negative cash flows, raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.

 

/s/ dbbmckennon

Newport Beach, CA

September 25, 2020

 

F-3 

 

 

TriplePulse, Inc.
dba TruBrain

Balance Sheets

December 31, 2019 and 2018

 

   December 31, 2019   December 31, 2018 
Assets          
Current assets:          
Cash and cash equivalents  $783,147   $185,965 
Inventory   292,858    141,290 
Other current assets   66,515    10,404 
Total current assets   1,142,520    337,659 
Total assets  $1,142,520   $337,659 
           
Liabilities and stockholders’ deficit          
Current liabilities:          
Accounts payable and accrued expenses  $181,759   $80,825 
Accrued interest   65,652    43,774 
Accrued interest, related party   257,597    172,815 
Deferred revenue   29,333    29,859 
Related party convertible notes payable   675,000    675,000 
Convertible notes payable   175,000    175,000 
Total current liabilities   1,384,341    1,177,273 
Convertible notes payable, noncurrent   -    768,088 
Total liabilities   1,384,341    1,945,361 
           
Commitments and contingent liabilities (Note 4)   -    - 
           
Stockholders’ deficit:          
Preferred stock Series A, 66,667 authorized, par value $0.0001, and 66,667 shares issued and outstanding at December 31, 2019 and 2018 (liquidation preference $20,000)   7    7 
Preferred stock Series B, 43,750 authorized, par value $0.0001, and 41,667 shares issued and outstanding at December 31, 2019 and 2018 (liquidation preference $25,000)   4    4 
Common stock, 100,000,000 authorized, par value $0.0001, and 45,032,956 and 39,916,550 shares issued and outstanding at December 31, 2019 and 2018, respectively   4,503    3,992 
Additional paid-in capital   1,626,439    142,102 
Subscription receivable   (136,778)   - 
Accumulated deficit   (1,735,996)   (1,753,807)
Total stockholders’ deficit   (241,821)   (1,607,702)
Total liabilities and stockholders’ deficit  $1,142,520   $337,659 

 

The accompanying notes are an integral part of these financial statements

 

F-4 

 

 

TriplePulse, Inc.
dba TruBrain

Statements of Operations

For the years ended December 31, 2019 and 2018

 

   For the years ended 
   December 31, 2019   December 31, 2018 
Sales, net  $1,942,633   $2,835,842 
Cost of goods sold   886,539    1,784,816 
Gross profit   1,056,094    1,051,026 
           
Other operating expenses          
Selling, general, & administrative expenses          
Marketing and advertising   212,863    510,755 
Wages   361,325    404,440 
General and administrative   279,827    559,739 
Total operating expenses   854,015    1,474,934 
           
Income (loss) from operations   202,079    (423,908)
           
Non-operating expenses          
Interest expense   183,468    145,500 
Total non-operating expenses   183,468    145,500 
           
           
Income (loss) before income tax   18,611    (569,408)
Income tax expense   800    800 
Net income (loss)  $17,811   $(570,208)
           
Weighted average common shares outstanding, basic   40,199,960    39,916,550 
Weighted average common shares outstanding, diluted   48,505,053    39,916,550 
           
Earnings per share:          
Basic  $0.00   $(0.01)
Diluted  $0.00   $(0.01)

 

The accompanying notes are an integral part of these financial statements

 

F-5 

 

 

TriplePulse, Inc.
dba TruBrain

Statements of stockholders' deficit

For the years ended December 31, 2019 and 2018

 

   Preferred Stock   Common Stock               Total 
   Series A   Series B           Additional   Subscription   Accumulated   Stockholders' 
   Shares   Amount   Shares   Amount   Shares   Amount   Paid-in Capital   Receivable   Deficit   Deficit 
Balance on December 31, 2017   66,667   $7    41,667   $4    39,916,550   $3,992   $142,102   $-   $(1,183,599)  $(1,037,494)
                                                   
Net loss   -    -    -    -    -    -    -    -    (570,208)   (570,208)
                                                   
Balance on December 31, 2018   66,667    7    41,667    4    39,916,550    3,992    142,102    -    (1,753,807)   (1,607,702)
                                                   
Common stock issued for cash   -    -    -    -    2,822,801    282    966,562    (136,778)   -    830,066 
                                                   
Offering costs   -    -    -    -    -    -    (326,892)   -    -    (326,892)
                                                   
Conversion of convertible debt   -    -    -    -    2,293,605    229    844,667    -    -    844,896 
                                                   
Net income   -    -    -    -    -    -    -    -    17,811    17,811 
                                                   
Balance on December 31, 2019   66,667   $7    41,667   $4    45,032,956   $4,503   $1,626,439   $(136,778)  $(1,735,996)  $(241,821)

 

The accompanying notes are an integral part of these financial statements

 

F-6 

 

 

TriplePulse, Inc.
dba TruBrain

Statements of Cash Flows

For the Years ended December 31, 2019 and 2018

 

   For the years ended 
   December 31, 2019   December 31, 2018 
Cash flows from operating activities:          
Net Income (loss)  $17,811   $(570,208)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:          
Inventory obsolescence impairment   6,651    (1,784)
Changes in operating assets and liabilities:          
Inventory   (158,219)   314,161 
Other current assets   (56,111)   (10,404)
Accounts payable and accrued expenses   100,934    (7,320)
Deferred revenue   (526)   (5,847)
Accrued interest   98,686    78,000 
Accrued interest, related party   84,782    67,500 
Net cash provided (used in) operating activities   94,008    (135,902)
           
Cash flows from financing activities:          
Proceeds from issuance of common stock   830,066    - 
Payments of offering costs   (326,892)   - 
Net cash provided by financing activities   503,174    - 
           
Cash and cash equivalents and restricted cash:          
Net change during the year   597,182    (135,902)
Balance, beginning of year   185,965    321,867 
Cash and cash equivalents, ending  $783,147   $185,965 
           
Supplemental cash flow information:          
Income taxes paid  $800   $800 
           
Non-cash financing activities          
Common stock issued for convertible debt and accrued interest  $844,896   $- 

 

The accompanying notes are an integral part of these financial statements

 

F-7 

 

 

TriplePulse, Inc.
dba TruBrain

Notes to the Financial Statements

 

NOTE 1 – NATURE OF BUSINESS

 

TriplePulse, Inc. dba TruBrain (the “Company”) was incorporated on November 14, 2012 under the laws of the State of Delaware and is headquartered in Santa Monica, CA. The Company develops and produces special formulated brands of food and beverage to enhance brain function. The Company has marketed their products to consumers through an online platform.

 

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company’s year-end is December 31.

 

Use of Estimates

 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Fair Value of Financial Instruments

 

Financial Accounting Standards Board (“FASB”) guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:

 

Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.

 

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active).

 

Level 3 - Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.

 

The carrying amounts reported in the balance sheets approximate their fair value.

 

F-8

 

 

TriplePulse, Inc.
dba TruBrain

Notes to the Financial Statements

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments with an original maturity of 90 days or less to be cash equivalents. At December 31, 2019 and 2018, the Company had no items, other than bank deposits, that would be considered cash equivalents. The Company maintains its cash in bank deposit accounts, that may at times, exceed federal insured limits of $250,000. No losses have been recognized as a result of these excess amounts.

 

Inventory

 

Inventory is stated at the lower of cost or market value and is accounted for using the first-in-first-out method (“FIFO”). The Company analyzes inventory per any potential obsolescence, and records impairment and obsolescence reserve against inventory as deemed necessary and based on historical experience. During the periods ended December 31, 2019 and 2018, the Company recognized impairment allowance of $11,222 and $4,571, respectively.

 

Revenue Recognition

 

During the year ended December 31, 2019, the Company adopted Accounting Standards Update (ASU) 2014-01, “Revenue from Contracts with Customers” which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers (Accounting Standards Codification “ASC” Topic 606) and supersedes most current revenue recognition guidance (ASC Topic 605). ASC Topic 606 outlines the following five-step process for revenue recognition:

 

·      Identification of the contract with a customer;

·      Identification of the performance obligations in the contract;

·      Determination of the transaction price;

·      Allocation of the transaction price to the performance obligations in the contract; and

·      Recognition of revenue when, or as, the Company satisfies the performance obligations.

 

The Company recognizes revenue when the performance obligations have been met, which is typically at the time of shipment. Return reserves are estimated based on historical experiences.

 

Deferred revenue consists of cash received from customers for purchase commitments that are monthly, quarterly, bi-annual and annual of the product sold on the Company’s website. Revenue from these purchases are deferred and recognized as the performance obligation is met. As of December 31, 2019 and 2018, the Company had $29,333 and $29,859 in deferred revenue, respectively.

 

The adoption of ASU 606 did not have a material impact on our financial statements.

 

Advertising costs

 

The Company’s advertising costs are expensed as incurred. During the years ended December 31, 2019 and 2018, the Company recognized $212,863 and $510,755 in advertising, respectively.

 

F-9

 

 

TriplePulse, Inc.
dba TruBrain

Notes to the Financial Statements 

 

Stock-Based Compensation

 

During the year ended December 31, 2019, the Company adopted ASU 2018-07, Compensation – Stock Compensation (Topic 718) that accounts for non-employee awards in the same manner as employee awards. Under the fair value recognition provisions of ASC 718, stock-based compensation cost is measured at the grant date based on the fair value of the award, and is recognized as expense ratably over the requisite service period, which is generally the option vesting period. The adoption of ASU 2018-07 did not have a material impact on our financial statements.

 

Stock Split

 

On September 11, 2019, the Board of Directors approved a 50:1 common stock split. Share and per share amounts for all periods presented in the accompanying financial statements and notes herein have been adjusted retroactively, where applicable, to reflect the stock split.

 

Convertible Debt

 

The Company evaluated the convertible debt under the guidelines established by ASC 470-20, Debt with Conversion and Other Options. ASC 470-20 governs the calculation of an embedded beneficial conversion and/or debt issued with warrants, which is treated as a discount to the instruments where derivative accounting does not apply.

 

Offering Costs

 

The Company accounts for offering costs in accordance with Accounting Standards Codification (“ASC”) 340, Other Assets and Deferred Costs. Prior to the completion of an offering, offering costs are capitalized as deferred offering costs on the balance sheet. The deferred offering costs are netted against the proceeds of the offering in stockholders’ deficit. If the offering is unsuccessful, such costs are expensed.

 

Preferred Stock

 

ASC 480, Distinguishing Liabilities from Equity, includes standards for how an issuer of equity classifies and measures on its balance sheet certain financial instruments with characteristics of both liabilities and equity. Management is required to determine the presentation for the preferred stock as a result of the redemption and conversion provisions in the agreement. Specifically, management is required to determine whether the embedded conversion feature in the preferred stock is clearly and closely related to the host instrument, and whether the bifurcation of the conversion feature is required, and the conversion feature should be accounted for as a derivative instrument. If the host instrument and conversion feature are determined to be clearly and closely related (both more akin to equity), derivative liability accounting under ASC 815, Derivatives and Hedging, is not required. Management determined that the host contract of the preferred stock is more akin to equity, and accordingly, liability accounting is not required by the Company. The Company has presented preferred stock within stockholders' deficit in the accompanying balance sheet.

 

Earnings per Common Share

 

Basic earnings per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income (loss) by the weighted average number of common shares and dilutive potential common shares outstanding during the period. Diluted earnings per common shares includes the dilutive effect of the additional potential common shares issuable under convertible debt, stock options, warrants, and preferred shares as fully converted. During 2019, dilutive shares include 461,350 common stock options and warrants, 2,083 Series Seed-B warrants which are convertible into 104,150 shares of common stock and preferred stock that is convertible into 5,416,700 shares of common stock, and 2,361,111 shares of common stock on an if-converted basis for outstanding convertible debt. In 2018, such dilutive securities were excluded as such were antidilutive. Earnings and dividends per share are restated for all stock splits through the date of issuance of the financial statements.

 

F-10

 

 

TriplePulse, Inc.
dba TruBrain

Notes to the Financial Statements 

 

Research and Development Costs

 

Research and development costs are expensed as incurred. We incur research and development costs to improve and expand our product offerings, introduce new technologies to customers, and support our sales channels to generate consumer interest and engagement. These costs typically include components such as formulation, personnel related expenses, consulting expenses, prototype materials, market research, analytical laboratory testing, and user testing. During the years ended December 31, 2019 and 2018, the Company recognized $12,926 and $14,980 in research and development costs, respectively, which have been in included in general and administrative costs in the accompanying statements of operations.

 

Shipping and Handling Costs

 

Shipping and handling costs are included in cost of goods sold and expensed as incurred. During the years ended December 31, 2019 and 2018, the Company incurred $261,838 and $383,274 in shipping and handling costs, respectively, recorded within cost of goods sold in the accompanying statements of operations.

 

Income Taxes

 

The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon its evaluation of the facts, circumstances and information available at the reporting date. In accordance with ASC 740-10, for those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, our policy is to record the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit will be recognized in the financial statements. The Company has determined that there are no material uncertain tax positions.

 

The Company accounts for income taxes based on the provisions promulgated by the Internal Revenue Service (“IRS”) As such, tax years since 2015 are open are subject to Federal, state, and local examinations by applicable authorities. The Company currently is not under examination by any tax authority.

 

The Company had net operating loss carryforwards of $1,509,542 and $1,478,102 as of December 31, 2019 and 2018, respectively. The Company pays Federal and California income taxes at rates of approximately 21% and 8.8%, respectively, and has used an effective blended rate of 28% to derive net deferred tax assets of $522,426 and $527,466 as of December 31, 2019 and 2018, respectively, resulting from its net operating loss carryforwards and other temporary book to tax differences. However, as of December 31, 2019, no such benefit is expected to be recognized in the near term, and therefore, a full valuation allowance has been assessed on any potential income tax benefit.

 

   2019   2018 
Deferred Tax Asset  $522,426   $527,466 
Valuation Allowance   (522,426)   (527,466)
Deferred Tax Asset, Net  $-   $- 

 

F-11

 

 

TriplePulse, Inc.
dba TruBrain

Notes to the Financial Statements

 

Recent Accounting Pronouncements

 

In February 2016, the Financial Accounting Board (FASB) issued Accounting Standard Update (ASU) 2016-02, a new standard on the accounting for leases, which requires a lessee to record a right-of-use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than twelve months. The standard also expands the required quantitative and qualitative disclosures surrounding leasing arrangements. The standard is effective for nonpublic companies for annual reporting periods beginning after December 15, 2021. The Company is in the process of evaluating the impact of ASU 2016-02 on the Company’s financial statements and disclosures.

 

In June 2016, the Financial Accounting Board (FASB) issued Accounting Standard Update (ASU) 2016-13, Financial Instruments – Credit Losses (Topic 326) which replaces incurred losses methodology with expected losses. The standard will require the Company to estimate any expected credit loss as it applies to financial assets and recognize an allowance for an expected credit loss. The standard will be effective in January 2023. The Company is currently in the process of evaluating the impact of ASU 2016-13 on the Company’s financial statements and disclosures.

 

In August 2020, the Financial Accounting Board (FASB) issued Accounting Standard Update (ASU) 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40); Accounting for Convertible Instruments and Contracts in an Entity’s own Equity. The standard will simplify the accounting for convertible debt with derivatives and hedging. The standard will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company is in the process of evaluating the impact of ASU 2020-06 on the Company’s financial statements and disclosures.

 

The FASB issues ASUs to amend the authoritative literature in ASC. There have been several ASUs to date, including those above, that amend the original text of ASC. Management believes that those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to us, or (iv) are not expected to have a significant impact on our financial statements.

 

NOTE 3 – GOING CONCERN

 

The Company has incurred losses from inception of approximately $1.7 million, has historically suffered negative cash flows and has limited working capital, which raise substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon management's plans to raise additional capital from the issuance of debt or the sale of stock, its ability to maintain profitable operations and cash flows. There are no assurances that management’s plans will be successful. The accompanying financial statements do not include any adjustments that might be required should the Company be unable to continue as a going concern.

 

F-12

 

 

TriplePulse, Inc.
dba TruBrain

Notes to the Financial Statements

 

NOTE 4 – COMMITMENTS AND CONTINGENCIES

 

Except as may be set forth below, we are not a party to any legal proceedings, and we are not aware of any claims or actions pending or threatened against us. In the future, we might from time to time become involved in litigation relating to claims arising from our ordinary course of business, the resolution of which we do not anticipate would have a material adverse impact on our financial position, results of operations or cash flows.

 

During 2018, the Company had two previous customers file a joint claim against them, which was settled out of court. In 2018, the Company settled this claim for a one-time payment of $2,000. As of December 31, 2018, the Company has made the required payment and there are no ongoing disputes as it relates to this matter.

 

Concentration

 

The Company uses one primary contract manufacturer and fulfillment center for its top revenue producing drink products. This represents concentrated risks for the main source of revenue for the Company. An adverse impact to one or both of these facilities and/or vendors would cause a material impact on the Company’s operations.

 

Lease

 

Subsequent to December 31, 2019, the Company entered into a lease with a term of five (5) years commencing June 1, 2020. The Company has the option to extend the lease for one additional period of five (5) years upon the same terms and conditions of the Lease. Monthly base rent will range from $4,750 to $5,346 per month.

 

NOTE 5 – CONVERTIBLE DEBT

 

The Company issued convertible debt for cash proceeds of $1,455,000 in 2014 and 2015, of which $675,000 was with related parties. These securities are convertible into common stock of the Company, matured 24 months from the date of issuance, and contain a 5% stated rate of interest prior to maturity with 10% default interest after maturity. The convertible debt may be converted upon the following:

 

1.             Automatic conversion - Upon a qualified financing, which is set to occur upon a bona fide sale of equity in minimum amount ranging from $500,000 to $1,500,000, which may require the consent of the Convertible Promissory Note holders, the outstanding principal and interest convert into that number of shares of the stock issued in the Qualified Financing (the "Qualified Financing Stock") and shares of Common Stock of the Company determined by dividing the Outstanding Amount by a conversion price equal to the lesser of (i) the price per share of the Qualified Financing Stock sold by the Company in the Qualified Financing, discounted by 20%, and (ii) the price determined by dividing a pre-money valuation of $4,000,000.00 by the number of outstanding shares of the Common Stock on a fully-diluted and as-converted basis immediately prior to the closing of the Qualified Financing (not including the Excluded Shares). Of those shares, the number of Qualified Financing Stock will equal (x) the Outstanding Amount, divided by (y) the price per share paid by the other investors purchasing the Qualified Financing Stock in the Qualified Financing. Any remaining shares will be Common Stock. 

 

The Qualified Financing Stock delivered to Holder pursuant to such conversion shall have the same rights, preferences, privileges as the Qualified Financing Stock delivered to other investors in the Qualified Financing, and Holder shall enjoy the same contractual rights as other investors in the Qualified Financing.

 

2.            Optional conversion - Upon no qualified financing or change of control transaction and outside maturity date, the holder may provide written notice to be delivered to the Company to convert the security into the number of shares of common stock by dividing the outstanding amount by a pre-money valuation of $4,000,000 by the number of outstanding shares of common stock on a fully-diluted and as converted basis.

 

F-13

 

 

TriplePulse, Inc.
dba TruBrain

Notes to the Financial Statements

 

3.            Change of Control - Upon a change in control transaction, the Company shall redeem the Notes at the election of the purchaser for an amount equal to a) 100-200% of the outstanding amount (depending on the terms of the individual note), or b) the consideration which the holder would have received in the change in control transaction (to be paid in the same form of consideration) had the holder converted outstanding principal and interest into shares of common stock of the Company at a conversion price per share determined by dividing a pre-money valuation of $4,000,000 by the number of outstanding shares of common stock on a fully-dilutive basis.

 

In 2019, the qualified financing thresholds of $500,000 and $750,000 were triggered, and therefore, convertible notes including interest thereon totaling $844,896, converted into 2,293,605 shares of common stock. Debt and related interest thereon totaling $768,088 as of December 31, 2018 represents the amount of debt and interest ultimately converted into equity during 2019, and accordingly, were presented as a long-term liability.

 

During 2019 and 2018, the Company recognized interest expense on the convertible notes of $183,468 and $145,500, respectively.

 

NOTE 6 – STOCKHOLDERS’ DEFICIT

 

Common Stock

 

The Company is authorized to issue 100,000,000 shares of common stock, $0.0001 par value per share.

 

During the year that ended December 31, 2019, the Company sold 2,822,801 shares of Common Stock for gross proceeds of $966,844, of which $136,778 is receivable as of December 31, 2019. Net proceeds received through December 31, 2019 totaled $830,066. The Company also incurred $326,892 in offerings costs for this offering.

 

During 2019, the Company had convertible notes which automatically converted into common stock; see Note 5 for further discussion.

 

On September 11, 2019 the Board of Directors approved a 50:1 stock split by filing a certificate of amendment to its amended and restated certificate of incorporation with the Secretary of State of the State of Delaware. The Company did not timely file an Amendment to the Certificate of Incorporation of the Company to affect the stock split and specify the number of shares of common stock of the Company that the Company was authorized to issue. To correct these defective corporate acts pursuant to Delaware General Corporation Law Section 204, the Board filed a Certificate of Designation with the Delaware Secretary of State dated January 29, 2020, pursuant to which the Company ratified the stock split and the number of authorized shares of common stock of the Company, with an effective date of September 11, 2019. Accordingly, all share and per share amounts for all periods presented in the accompanying financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the stock split.

 

F-14

 

 

TriplePulse, Inc.
dba TruBrain

Notes to the Financial Statements

 

Preferred Stock

 

The Company is authorized to issue 66,667 shares of Series A Preferred Stock, $0.0001 par value and 43,750 shares of Series B Preferred stock, $0.0001 par value; collectively referred to as the “Preferred Stock”.

 

Conversion rights – The holders of Preferred Stock have the following conversion rights:

 

Each share of Preferred Stock is convertible, at any time, at the option of the holder thereof, into such number of fully paid and non-assessable shares of Common Stock as is determined by dividing the Initial Issue Price of the Preferred Stock (as appropriately adjusted for stock splits, stock dividends, recapitalizations and the like) by the then applicable Conversion Price for a share of Preferred Stock. The Initial Issue Price per share of Series Seed Preferred Stock is $0.30 per share, and of Series Seed-B Preferred Stock $0.60 per share. Due to the stock-split noted above, each share of preferred stock is convertible into 50 shares of common stock.

 

Each share of Preferred Stock shall automatically be converted into Common Stock immediately upon the earlier of (a) the closing of a firm commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, or (ii) the date, time, or occurrence of an event specified by written consent or agreement of the holders of at least a majority of the then outstanding shares of Preferred Stock, voting together as a single class.

 

Additional Financing Rights: In the event the Company issues securities in its subsequent equity financings which have (a) rights, preferences or privileges that are more favorable than the terms of Investor, such as price based anti-dilution protection, or (b) provides all such future investors other contractual terms such as preemptive rights or registration rights, the Company shall provide substantially equivalent rights to Investor.

 

Liquidation rights – Upon a liquidation, dissolution or winding up of the corporation, or deemed liquidation event, the holders of our Series Seed Preferred Stock and Series Seed-B Preferred Stock, are entitled to receive the greater of the a) Initial Issue price plus any declared and unpaid dividends, or b) such amount per share as would have been payable had preferred stock been converted into common stock immediately before such event, in distributions, before any funds are distributed to the holders of common stock. As of the date hereof, upon a Liquidation Event, the holders of outstanding preferred stock would be entitled to receive the first $45,000 in distributions as stated in agreements, with the remaining amounts being split pro rata amongst the holders of common stock.

 

Voting rights – The holders of preferred stock shall have the right to one vote for each share of common stock into which such preferred stock could then be converted with the same voting rights and powers of common shareholders, except with respect to the election of directors. As long as there are any shares of preferred stock outstanding, we may not, do any of the following without the vote of the holders of a majority of the outstanding shares of preferred stock, voting together as a single class: (1) alter or change the rights, powers or privileges of the preferred stock as set forth in our Certificate of Incorporation, in any way that adversely affects the preferred stock, (2) increase or decrease the authorized number of shares of preferred stock (or any series thereof), (3) authorize or create any new class or series of capital stock having rights, powers or privileges that are senior to any series of preferred stock, (4) redeem or repurchase any shares of common stock or preferred stock (other than pursuant to employee or consulting agreements giving us the right to repurchase such share at the original cost thereof upon termination of services, or (5) declare or pay any dividend or otherwise make a distribution to the holders of preferred stock or common stock. Therefore, the holders of our preferred stock, may prevent us from taking certain corporate actions, that our board of directors may be in the best interests of the holders of our common stock. See “Securities Being Offered – Certificate of Incorporation – Voting Rights.”

 

F-15

 

 

TriplePulse, Inc.

dba TruBrain

Notes to the Financial Statements

 

Dividend Rights – All dividends shall be declared pro rata on the shares of Common Stock and Preferred Stock, on a pari passu basis according to the number of shares of Common Stock held by such holders, or, in the case of Preferred Stock, the number of shares of Common Stock, into which such shares of Preferred Stock are convertible as of the record date for the payment of such dividends.

 

Other Rights of Holders of Preferred Stock – We are party to an Investors’ Rights Agreement with StartEngine Fund I, L.P., the holder of our Series Seed Preferred Stock, pursuant to which, in addition to holding certain information rights, StartEngine has a right of first refusal to purchase a specified portion of any new securities we may sell in the future.

 

Stock Options

  

In 2014, the Board of Directors adopted the TriplePulse, Inc. 2014 Incentive Plan (the “2014 Plan”). The 2014 Plan provides for the grant of equity awards to purchase shares of common stock. Up to 14,250,000 shares of common stock may be issued pursuant to awards granted under the 2014 Plan. The 2014 Plan is administered by the Board of Directors, and expires ten years after adoption, unless terminated earlier by the Board.

 

The Company has 7,908,197 shares issued and 6,341,803 shares remaining for issuance under the 2014 stock plan.

 

Stock Options award under the 2014 stock plan are as follows:

 

   Stock Options 

Weighted

Average

Exercise

Price

 

Weighted

Average

Contractual

Life (years)

 
Outstanding at December 31, 2017   250,000  $0.02   7.6 
Granted   -   -   - 
Exercised   -   -   - 
Forfeited   -   -   - 
Outstanding at December 31, 2018   250,000  $0.02   6.6 
Granted   -   -   - 
Exercised   -   -   - 
Forfeited   -   -   - 
Outstanding at December 31, 2019   250,000  $0.02   5.6 

 

All options outstanding are fully vested and there was no stock option expense recognized during the years presented.

 

F-16

 

 

TriplePulse, Inc.
dba TruBrain

Notes to the Financial Statements

 

Warrants

 

The Company had outstanding warrants for the purchase of 2,083 and 211,350 shares of Series Seed-B preferred and common stock, respectively, which are vested and exercisable as follows:

 

   Number
outstanding
  Weighted
Average
Exercise
Price
  Weighted
Average
Remaining
Life
 
Balance on December 31, 2017   213,433  $0.04   7.13 
Granted   -   -     
Vested   -   -     
Forfeited   -   -     
Balance on December 31, 2018   213,433  $0.04   6.13 
Granted   -   -     
Vested   -   -     
Forfeited   -   -     
Balance on December 31, 2019   213,433  $0.04   5.13 

 

Warrants outstanding are fully vested. The Series Seed-B warrants can convert into 104,150 shares of common stock.

 

NOTE 7 – SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events through September 25, 2020, the issuance date of these financial statements.

 

See Note 4 for facility lease entered into during 2020.

 

During 2020, the Company issued 296,244 shares of common stock for $98,552 cash in a StartEngine fundraise.

 

COVID-19 / SBA Loans

 

The impact of the COVID-19 could continue to affect our supply chain and/or consumer behavior. While the full impact of the coronavirus outbreak on our business is unknown at this time, we experienced some moderate impacts on the purchasing behavior of our consumer base. Subsequent to December 31, 2019, the Company applied for assistance via two programs being offered by the Small Business Administration in response to the COVID-19 crisis: The Paycheck Protection Program (“PPP”) Loan and the Economic Injury Disaster Loan (“EIDL”). On April 15, 2020, the company received $20,900 from the PPP program to help cover payroll costs during a portion of the COVID-19 pandemic. As we expect to comply fully with the situations and terms of the loan, we expect that the loan will be forgiven, however we cannot guarantee that forgiveness will be granted regardless of our full compliance with the terms and spirit of the PPP. On July 14, 2020, the Company entered into an EIDL Loan agreement with the SBA totaling $150,000 which has a 3.75% annual interest rate with no payments for the first 12 months. The EIDL Loan has not been funded as of August 25, 2020.

 

F-17

 

 

EXHIBITS

 

1.1 Posting Agreement with StartEngine Crowdfunding, Inc
 
2.1 Certificate of Incorporation
 
2.2 Amended and Restated Certificate of Incorporation
 
2.3 Second Amended and Restated Certificate of Incorporation
 
2.4 Amendment to Second Amended and Restated Certificate of Incorporation
 
2.5 Bylaws
 
3.1 Investors’ Rights Agreement between TriplePulse, Inc., Christopher Thompson and Brightstone Venture Capital Fund, L.P.
 
3.2 Investors’ Rights Agreement between TriplePulse, Inc., Christopher Thompson and Blueberry Ventures 1, L.P.
 
3.3 Investors’ Rights Agreement between TriplePulse, Inc., and StartEngine Fund I, L.P.
 
3.4 Investors’ Rights Agreement between TriplePulse, Inc., Christopher Thompson and Hugh Evans
 
4.1 Form of Subscription Agreement
 
6.1 Convertible Promissory Note Purchase Agreement between TriplePulse, Inc., and Brightstone Venture Capital Fund, L.P.
 
6.2 Convertible Promissory Note issued to Brightstone Venture Capital Fund, L.P.
 
6.3 Convertible Promissory Note Purchase Agreement between TriplePulse, Inc., and Blueberry Ventures 1, L.P.
 
6.4 Convertible Promissory Note issued to Blueberry Ventures 1, L.P.
 
6.5 Convertible Promissory Note Purchase Agreement between TriplePulse, Inc., and 500 Startups III, L.P.
 
6.6 Convertible Promissory Note issued to 500 Startups III, L.P.
 
6.7 PPP Loan from Coastal Community Bank
 
6.8 EIDL Loan from the United States Small Business Association
 
6.9 Warrant W-1 for StartEngine Fund I, L.P.
 
6.10 Warrant W-2 for StartEngine Fund I, L.P.
 
6.11 Warrant W-3 for StartEngine Fund I, L.P.
 
6.12 Warrant W-4 for StartEngine Fund I, L.P.
 
6.13 Warrant W-5 for StartEngine Fund I, L.P.
 
6.14 Warrant W-6 for StartEngine Fund I, L.P.
 
6.15 TriplePulse, Inc. Stock Plan
 
6.16 Ratification of Defective Corporate Acts
 
6.17 Lease Agreement
 
6.18 First Amendment to Lease Agreement
 
6.19 Patent License Agreement

 

 

 

 

8.1 Escrow Services Agreement
 
11.1 Consent of dbbmckennon
 
12.1 Opinion of Legal

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this Offering Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Los Angeles, State of California, on September 29, 2020.

 

TRIPLEPULSE, INC.

 

By:   /s/ Christopher Thompson  
  Christopher Thompson  
  Chief Executive Officer, Director  
     
By: /s/ Arif Fazal  
  Arif Fazal, Director  
     
By: /s/ Josh Payne  
  Josh Payne, Director  
     
By: /s/ Seth DeGroot  
  Seth DeGroot, Director  

 

By:   /s/ Sheree Shelton  
  Sheree Shelton, Director  

 

 

 

EX1A-1 UNDR AGMT 3 tm2031356d1_ex1-1.htm EXHIBIT 1.1

 

Exhibit 1.1

 

POSTING AGREEMENT

 

9/3/2020

 

StartEngine Primary LLC 

8687 Melrose Ave 7th Floor - Green 

Los Angeles, CA 90069 

 

Dear Ladies and Gentlemen:

 

TriplePulse, Inc, a Delaware Corporation located at 3103 Neilson Way, Ste D, Santa Monica, CA 90405 (the “Company”), proposes, subject to the terms and conditions contained in this Posting Agreement (this “Agreement”), to issue and sell shares of its Common Stock, $0.36 value per share (the “Shares”) to investors (collectively, the “Investors”) in a public offering (the “Offering”) on the online website provided by StartEngine Crowdfunding, Inc. (the “Platform”) pursuant to Regulation A through StartEngine Primary LLC ( “StartEngine”), acting on a best efforts basis only, in connection with such sales. The Shares are more fully described in the Offering Statement (as hereinafter defined).

 

The Company hereby confirms its agreement with StartEngine concerning the purchase and sale of the Shares, as follows:

 

1.ENGAGEMENT. Company hereby engages StartEngine to provide the services set out herein upon the subject to the terms and conditions set out in this Agreement, Terms of Use (“Platform Terms”), and Privacy Policy; each of which is hereby incorporated into this Agreement. Company has read and agreed to the Terms of Use and Company understands that this Posting Agreement governs Company’s use of the Site and the Services. Terms not defined herein are as defined in Platform Terms.

 

2.SERVICES AND FEES.

 

OFFERING SERVICE: Company agrees that StartEngine shall provide the services below for a fee of $15,000 for out of pocket accountable expenses paid prior to StartEngine commencing.

 

Any portion of this amount not expended and accounted for shall be returned to the Company at the end of the engagement.

 

OTHER FEES:

 

Company will pay, or reimburse if paid by StartEngine, out of pocket expenses for (i) the preparation and delivery of certificates representing the Shares (if any), (ii) FINRA filing fees, (iii) notice filing requirements under the securities or Blue Sky laws, (iv) all transfer taxes, if any, with respect to the sale and delivery of the Shares by the Company to the Investors. These expenses are not considered an item of value per FINRA Rule 5110(c)(3).

 

 

 

 

OTHER SERVICES:

 

Campaign Page Design: design, build, and create Company’s campaign page.

 

Support: provide Company with dedicated account manager and marketing consulting services.

 

Standard Subscription Agreement: provision of a standard purchase agreement to execute between Company and Investors, which may be used at Company’s option.

 

Multiple Withdrawals (Disbursements): money transfers to Company

 

DISTRIBUTION: As compensation for the services provided hereunder by StartEngine Primary, Company shall pay to StartEngine at each closing of the Offering a fee consisting of the following:

 

7% commission based on the dollar amount received from investors.

 

In addition 2% commission paid in the same securities as this offering and at the same terms.

 

Lock-up Covenant. Notwithstanding the foregoing provision, StartEngine hereby agrees that the securities issued pursuant to this 2% commission shall not be sold during the offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days immediately following the date of qualification or commencement of sales of the public offering pursuant to which the securities were issued, except as provided in FINRA Rule 5110(g)(2).

 

[x✔] Check this box for selecting the split fee option (see below)

 

If the “split fee” option is selected then the following provision shall apply: In each case StartEngine Capital may charge investors a fee of 3.5%, in which case the commission set forth above shall be reduced commensurately. In the event an investor invests in excess of $20,000, such investor fee shall be limited to $700 and Company shall pay the 3.5% additional commission with respect to any amount in excess of $20,000, in accordance with the commission schedule set forth above.

 

The fee shall be paid in cash upon disbursement of funds from escrow at the time of each closing. Payment will be made to StartEngine directly from the escrow account maintained for the Offering. The Company acknowledges that StartEngine is responsible for providing instructions to the escrow agent for distribution of funds held pending completion or termination of the Offering.

 

2

 

 

The fee does not include the escrow fees, transaction fees, AML review and cash management fee to be negotiated directly with third party or EDGARization services or any services other than set out above.

 

PROMOTE SERVICE: StartEngine Primary will design with the Company’s approval the digital ads and manage the digital advertising platform accounts for Company for no additional fee.

 

The Issuer is expressly forbidden from bidding on any StartEngine branded keywords, misspellings, and similar terms in advertising campaigns on the Google, Bing, and Facebook platforms. Some of these keywords include but are not limited to:

 

StartEngine

 

Start Engine

 

StartEngine Crowdfunding

 

StartEngine Stock

 

Invest in StartEngine

 

StartEngine Shares

 

The Offering is subject to termination if the Company violates these targeting and bidding requirements.

 

3.DEPOSIT HOLD. Company agrees that 6% of the total funds committed will be held back as a deposit hold in case of any ACH refunds or credit card chargebacks. The hold will remain in effect for 180 days following the close of the Offering. 75% of this hold back will be released back to the company after 60 days and the remaining 25% shall be held for the remaining 120 days.

 

4.CREDIT CARD FEES. [OPTIONAL] Company agrees that fees payable to Vantiv, LLC with respect to the use of credit cards to purchase the Securities are for the account of the Company and to reimburse StartEngine Crowdfunding Inc. for any such fees incurred, upon each closing held with respect to the Offering detailed in the Credit Card Services Agreement.

 

5.DELIVERY AND PAYMENT.

 

(a)            On or after the date of this Agreement, the Company and selected escrow agent (the “Escrow Agent”) will enter into an Escrow Agreement (the “Escrow Agreement”), pursuant to which escrow accounts will be established, at the Company’s expense (the “Escrow Accounts”).

 

3

 

 

(b)            Prior to the initial Closing Date (as hereinafter defined) of the Offering or, as applicable, any subsequent Closing Date, (i) each Investor will execute and deliver a Subscription Agreement (each, an “Investor Subscription Agreement”) to the Company through the facilities of the Platform; (ii) each Investor will transfer to the Escrow Account funds in an amount equal to the price per Share as shown on the cover page of the Final Offering Circular (as hereinafter defined) multiplied by the number of Shares subscribed by such Investor and as adjusted by any discounts or bonuses applicable to certain Investors; (iii) subscription funds received from any Investor will be promptly transmitted to the Escrow Accounts in compliance with Rule 15c2-4 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and (iv) the Escrow Agent will notify the Company and StartEngine in writing as to the balance of the collected funds in the Escrow Accounts.

 

(c)            If the Escrow Agent shall have received written notice from StartEngine on or before 9 a.m. Pacific time on such o date(s) as may be agreed upon by the Company and StartEngine (each such date, a “Closing Date”), the Escrow Agent will release the balance of the Escrow Accounts for collection by the Company and StartEngine as provided in the Escrow Agreement and the Company shall deliver the Shares purchased on such Closing Date to the Investors, which delivery may be made via book entry with the Company’s securities registrar and transfer agent, Prime Trust (the “Transfer Agent”). The initial closing (the “Closing”) and any subsequent closing (each, a “Subsequent Closing”) shall be effected through the Platform. All actions taken at the Closing shall be deemed to have occurred simultaneously on the date of the Closing and all actions taken at any Subsequent Closing shall be deemed to have occurred simultaneously on the date of any such Subsequent Closing.

 

(d)            If the Company and StartEngine determine that the offering will not proceed, then the Escrow Agent will promptly return the funds to the investors without interest.

 

6.REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants and covenants to StartEngine that1:

 

(a)            The Company will file with the Securities and Exchange Commission (the “Commission”) an offering statement on Form 1-A (collectively, with the various parts of such offering statement, each as amended as of the Qualification Date for such part, including any Offering Circular and all exhibits to such offering statement, the “Offering Statement”) relating to the Shares pursuant to Regulation A as promulgated under the Securities Act of 1933, as amended (the “Act”), and the other applicable rules, orders and regulations (collectively referred to as the “Rules and Regulations”) of the Commission promulgated under the Act. As used in this Agreement:

 

(1)            Final Offering Circular” means the offering circular relating to the public offering of the Shares as filed with the Commission pursuant to Rule 253(g)(2) of Regulation A of the Rules and Regulations, as amended and supplemented by any further filings under Rule 253(g)(2);

 

 

 

1 To be updated upon due diligence review; additional provisions may be added.

 

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(2)            Preliminary Offering Circular” means the offering circular relating to the Shares included in the Offering Statement pursuant to Regulation A of the Rules and Regulations in the form on file with the Commission on the Qualification Date;

 

(3)            Qualification Date” means the date as of which the Offering Statement was or will be qualified with the Commission pursuant to Regulation A, the Act and the Rules and Regulations; and

 

(4)            Testing-the-Waters Communication” means any website post, broadcast or cable radio or internet communication, email, social media post, video or written communication with potential investors undertaken in reliance on Rule 255 of the Rules and Regulations.

 

(b)            The Offering Statement will be filed with the Commission in accordance with the Act and Regulation A of the Rules and Regulations; no stop order of the Commission preventing or suspending the qualification or use of the Offering Statement, or any amendment thereto, has been issued, and no proceedings for such purpose have been instituted or, to the Company’s knowledge, are contemplated by the Commission.

 

(c)            The Offering Statement, at the time it becomes qualified, and as of each Closing Date, will conform in all material respects to the requirements of Regulation A, the Act and the Rules and Regulations.

 

(d)            The Offering Statement, at the time it became qualified, as of the date hereof, and as of each Closing Date, will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

 

(e)            The Preliminary Offering Circular will not, as of its date, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representation or warranty with respect to the statements contained in the Preliminary Offering Circular as provided by StartEngine in Section 10(ii).

 

(f)            The Final Offering Circular will not, as of its date and on each Closing Date, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representation or warranty with respect to the statements contained in the Final Offering Circular as provided by StartEngine in Section 10(ii).

 

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(g)            Each Testing-the-Waters Communication, if any, when considered together with the Final Offering Circular or Preliminary Offering Circular, as applicable, did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, provided, however, that the Company makes no representation or warranty with respect to the statements contained in the Preliminary Offering Circular as provided by StartEngine in Section 10(ii).

 

(h)            As of each Closing Date, the Company will be duly organized and validly existing as a Corporation in good standing under the laws of the State of Delaware The Company has full power and authority to conduct all the activities conducted by it, to own and lease all the assets owned and leased by it and to conduct its business as presently conducted and as described in the Offering Statement and the Final Offering Circular. The Company is duly licensed or qualified to do business and in good standing as a foreign organization in all jurisdictions in which the nature of the activities conducted by it or the character of the assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so qualified or in good standing or have such power or authority would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on or affecting the business, prospects, properties, management, financial position, stockholders’ equity, or results of operations of the Company (a “Material Adverse Effect”). Complete and correct copies of the [certificate of incorporation and of the bylaws] of the Company and all amendments thereto have been made available to StartEngine, and no changes therein will be made subsequent to the date hereof and prior to any Closing Date except as disclosed in the Offering Statement.

 

(i)            The Company has no subsidiaries, nor does it own a controlling interest in any entity other than those entities set forth on Schedule 2 to this Agreement (each a “Subsidiary” and collectively the “Subsidiaries”). Each Subsidiary has been duly organized and is validly existing and in good standing under the laws of its jurisdiction of formation. Each Subsidiary is duly qualified and in good standing as a foreign company in each jurisdiction in which the character or location of its properties (owned, leased or licensed) or the nature or conduct of its business makes such qualification necessary, except for those failures to be so qualified or in good standing which would not be reasonably expected to have a Material Adverse Effect. All of the shares of issued capital stock of each corporate subsidiary, and all of the share capital, membership interests and/or equity interests of each subsidiary that is not a corporation, have been duly authorized and validly issued, are fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of any lien, encumbrance, claim, security interest, restriction on transfer, shareholders’ agreement, proxy, voting trust or other defect of title whatsoever.

 

(j)The Company is organized in, and its principal place of business is in, the United States.

 

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(k)The Company is not subject to the ongoing reporting requirements of Section 13 or 15(d) of the Exchange Act and has not been subject to an order by the Commission denying, suspending, or revoking the registration of any class of securities pursuant to Section 12(j) of the Exchange Act that was entered within five years preceding the date the Offering Statement was originally filed with the Commission. The Company is not, nor upon completion of the transactions contemplated herein will it be, an “investment company” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”). The Company is not a development stage company or a “business development company” as defined in Section 2(a)(48) of the Investment Company Act. The Company is not a blank check company and is not an issuer of fractional undivided interests in oil or gas rights or similar interests in other mineral rights. The Company is not an issuer of asset-backed securities as defined in Item 1101(c) of Regulation AB.

 

(l)Neither the Company, nor any predecessor of the Company; nor any other issuer affiliated with the Company; nor any director or executive officer of the Company or other officer of the Company participating in the offering, nor any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, nor any promoter connected with the Company, is subject to the disqualification provisions of Rule 262 of the Rules and Regulations.

 

(m)The Company is not a “foreign private issuer,” as such term is defined in Rule 405 under the Act.

 

(n)The Company has full legal right, power and authority to enter into this Agreement, the Escrow Agreement and perform the transactions contemplated hereby and thereby. This Agreement and the Escrow Agreement each have been or will be authorized and validly executed and delivered by the Company and are or will be each a legal, valid and binding agreement of the Company enforceable against the Company in accordance with its terms, subject to the effect of applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally and equitable principles of general applicability.

 

(o)The issuance and sale of the Shares have been duly authorized by the Company, and, when issued and paid for in accordance with the Investor Subscription Agreement, will be duly and validly issued, fully paid and nonassessable and will not be subject to preemptive or similar rights. The holders of the Shares will not be subject to personal liability by reason of being such holders. The Shares, when issued, will conform to the description thereof set forth in the Final Offering Circular in all material respects.

 

(p)The Company has not authorized anyone other than the management of the Company and StartEngine to engage in Testing-the-Waters Communications. The Company reconfirms that StartEngine have been authorized to act on its behalf in undertaking Testing- the-Waters Communications. The Company has not distributed any Testing-the-Waters Communications other than those listed on Schedule 1 hereto.

 

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(q)            The financial statements and the related notes included in the Offering Statement and the Final Offering Circular present fairly, in all material respects, the financial condition of the Company and its Subsidiaries as of the dates thereof and the results of operations and cash flows at the dates and for the periods covered thereby in conformity with United States generally accepted accounting principles (“GAAP”), except as may be stated in the related notes thereto. No other financial statements or schedules of the Company, any Subsidiary or any other entity are required by the Act or the Rules and Regulations to be included in the Offering Statement or the Final Offering Circular. There are no off-balance sheet arrangements (as defined in Regulation S-K Item 303(a)(4)(ii)) that may have a material current or future effect on the Company’s financial condition, changes in financial condition, results of operations, liquidity, capital expenditures or capital resources.

 

(r)            dbbmckennon (the “Accountants”), will report on the financial statements and schedules described in Section 6(r), are registered independent public accountants with respect to the Company as required by the Act and the Rules and Regulations. The financial statements of the Company and the related notes and schedules included in the Offering Statement and the Final Offering Circular comply as to form in all material respects with the requirements of the Act and the Rules and Regulations and present fairly the information shown therein.

 

(s)            Since the date of the most recent financial statements of the Company included or incorporated by reference in the Offering Statement and the most recent Preliminary Offering Circular and prior to the Closing and any Subsequent Closing, other than as described in the Final Offering Circular (A) there has not been and will not have been any change in the capital stock of the Company or long-term debt of the Company or any Subsidiary or any dividend or distribution of any kind declared, set aside for payment, paid or made by the Company on any class of capital stock or equity interests, or any Material Adverse Effect, or any development that would reasonably be expected to result in a Material Adverse Effect; and (B) neither the Company nor any Subsidiary has sustained or will sustain any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority, except in each case as otherwise disclosed in the Offering Statement and the Final Offering Circular.

 

(t)            Since the date as of which information is given in the most recent Preliminary Offering Circular, neither the Company nor any Subsidiary has entered or will before the Closing or any Subsequent Closing enter into any transaction or agreement, not in the ordinary course of business, that is material to the Company and its Subsidiaries taken as a whole or incurred or will incur any liability or obligation, direct or contingent, not in the ordinary course of business, that is material to the Company and its Subsidiaries taken as a whole, and neither the Company nor any Subsidiary has any plans to do any of the foregoing.

 

(u)            The Company and each Subsidiary has good and valid title in fee simple to all items of real property and good and valid title to all personal property described in the Offering Statement or the Final Offering Circular as being owned by them, in each case free and clear of all liens, encumbrances and claims except those that (1) do not materially interfere with the use made and proposed to be made of such property by the Company and its Subsidiaries or (2) would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. Any real property described in the Offering Statement or the Final Offering Circular as being leased by the Company or any Subsidiary that is material to the business of the Company and its Subsidiaries taken as a whole is held by them under valid, existing and enforceable leases, except those that (A) do not materially interfere with the use made or proposed to be made of such property by the Company and its Subsidiaries or (B) would not be reasonably expected, individually or in the aggregate, to have a Material Adverse Effect.

 

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(v)            There are no legal, governmental or regulatory actions, suits or proceedings pending, either domestic or foreign, to which the Company is a party or to which any property of the Company is the subject, nor are there, to the Company’s knowledge, any threatened legal, governmental or regulatory investigations, either domestic or foreign, involving the Company or any property of the Company that, individually or in the aggregate, if determined adversely to the Company, would reasonably be expected to have a Material Adverse Effect or materially and adversely affect the ability of the Company to perform its obligations under this Agreement; to the Company’s knowledge, no such actions, suits or proceedings are threatened or contemplated by any governmental or regulatory authority or threatened by others.

 

(w)            The Company and each Subsidiary has, and at each Closing Date will have, (1) all governmental licenses, permits, consents, orders, approvals and other authorizations necessary to carry on its business as presently conducted except where the failure to have such governmental licenses, permits, consents, orders, approvals and other authorizations would not be reasonably expected to have a Material Adverse Effect, and (2) performed all its obligations required to be performed, and is not, and at each Closing Date will not be, in default, under any indenture, mortgage, deed of trust, voting trust agreement, loan agreement, bond, debenture, note agreement, lease, contract or other agreement or instrument (collectively, a “contract or other agreement”) to which it is a party or by which its property is bound or affected and, to the Company’s knowledge, no other party under any material contract or other agreement to which it is a party is in default in any respect thereunder. The Company and its Subsidiaries are not in violation of any provision of their organizational or governing documents.

 

(x)            The Company has obtained all authorization, approval, consent, license, order, registration, exemption, qualification or decree of any court or governmental authority or agency or any sub-division thereof that is required for the performance by the Company of its obligations hereunder, in connection with the offering, issuance or sale of the Shares under this Agreement or the consummation of the transactions contemplated by this Agreement as may be required under federal, state, local and foreign laws, the Act or the rules and regulations of the Commission thereunder, state securities or Blue Sky laws, and the rules and regulations of FINRA.

 

(y)            There is no actual or, to the knowledge of the Company, threatened, enforcement action or investigation by any governmental authority that has jurisdiction over the Company, and the Company has received no notice of any pending or threatened claim or investigation against the Company that would provide a legal basis for any enforcement action, and the Company has no reason to believe that any governmental authority is considering such action.

 

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(z)            Neither the execution of this Agreement, nor the issuance, offering or sale of the Shares, nor the consummation of any of the transactions contemplated herein, nor the compliance by the Company with the terms and provisions hereof or thereof will conflict with, or will result in a breach of, any of the terms and provisions of, or has constituted or will constitute a default under, or has resulted in or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any Subsidiary pursuant to the terms of any contract or other agreement to which the Company or any Subsidiary may be bound or to which any of the property or assets of the Company or any Subsidiary is subject, except such conflicts, breaches or defaults as may have been waived or would not, in the aggregate, be reasonably expected to have a Material Adverse Effect; nor will such action result in any violation, except such violations that would not be reasonably expected to have a Material Adverse Effect, of (1) the provisions of the organizational or governing documents of the Company or any Subsidiary, or (2) any statute or any order, rule or regulation applicable to the Company or any Subsidiary or of any court or of any federal, state or other regulatory authority or other government body having jurisdiction over the Company or any Subsidiary.

 

(aa) There is no document or contract of a character required to be described in the Offering Statement or the Final Offering Circular or to be filed as an exhibit to the Offering Statement which is not described or filed as required. All such contracts to which the Company or any Subsidiary is a party have been authorized, executed and delivered by the Company or any Subsidiary, and constitute valid and binding agreements of the Company or any Subsidiary, and are enforceable against the Company in accordance with the terms thereof, subject to the effect of applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally and equitable principles of general applicability. None of these contracts have been suspended or terminated for convenience or default by the Company or any of the other parties thereto, and the Company has not received notice of any such pending or threatened suspension or termination.

 

(bb) The Company and its directors, officers or controlling persons have not taken, directly or indirectly, any action intended, or which might reasonably be expected, to cause or result, under the Act or otherwise, in, or which has constituted, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Company’s Common Stock.

 

(cc) Other than as previously disclosed to StartEngine in writing, the Company, or any person acting on behalf of the Company, has not and, except in consultation with StartEngine, will not publish, advertise or otherwise make any announcements concerning the distribution of the Shares, and has not and will not conduct road shows, seminars or similar activities relating to the distribution of the Shares nor has it taken or will it take any other action for the purpose of, or that could reasonably be expected to have the effect of, preparing the market, or creating demand, for the Shares.

 

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(dd) No holder of securities of the Company has rights to the registration of any securities of the Company as a result of the filing of the Offering Statement or the transactions contemplated by this Agreement, except for such rights as have been waived or as are described in the Offering Statement.

 

(ee) No labor dispute with the employees of the Company or any Subsidiary exists or, to the knowledge of the Company, is threatened, and the Company is not aware of any existing or threatened labor disturbance by the employees of any of its or any Subsidiary’s principal suppliers, manufacturers, customers or contractors.

 

(ff) The Company and each of its Subsidiaries: (i) are and have been in material compliance with all laws, to the extent applicable, and the regulations promulgated pursuant to such laws, and comparable state laws, and all other local, state, federal, national, supranational and foreign laws, manual provisions, policies and administrative guidance relating to the regulation of the Company and its subsidiaries except for such non-compliance as would not be reasonably expected, individually or in the aggregate, to have a Material Adverse Effect; (ii) have not received notice of any ongoing claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any Regulatory Agency or third party alleging that any product operation or activity is in material violation of any laws and has no knowledge that any such Regulatory Agency or third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding; and (iii) are not a party to any corporate integrity agreement, deferred prosecution agreement, monitoring agreement, consent decree, settlement order, or similar agreements, or has any reporting obligations pursuant to any such agreement, plan or correction or other remedial measure entered into with any Governmental Authority.

 

(gg) The business and operations of the Company, and each of its Subsidiaries, have been and are being conducted in compliance with all applicable laws, ordinances, rules, regulations, licenses, permits, approvals, plans, authorizations or requirements relating to occupational safety and health, or pollution, or protection of health or the environment (including, without limitation, those relating to emissions, discharges, releases or threatened releases of pollutants, contaminants or hazardous or toxic substances, materials or wastes into ambient air, surface water, groundwater or land, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of chemical substances, pollutants, contaminants or hazardous or toxic substances, materials or wastes, whether solid, gaseous or liquid in nature) of any governmental department, commission, board, bureau, agency or instrumentality of the United States, any state or political subdivision thereof, or any foreign jurisdiction (“Environmental Laws”), and all applicable judicial or administrative agency or regulatory decrees, awards, judgments and orders relating thereto, except where the failure to be in such compliance would not be reasonably expected, individually or in the aggregate, to have a Material Adverse Effect; and neither the Company nor any of its Subsidiaries has received any notice from any governmental instrumentality or any third party alleging any material violation thereof or liability thereunder (including, without limitation, liability for costs of investigating or remediating sites containing hazardous substances and/or damages to natural resources).

 

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(hh) There has been no storage, generation, transportation, use, handling, treatment, Release or threat of Release of Hazardous Materials (as defined below) by or caused by the Company or any of its Subsidiaries (or, to the knowledge of the Company, any other entity (including any predecessor) for whose acts or omissions the Company or any of its Subsidiaries is or could reasonably be expected to be liable) at, on, under or from any property or facility now or previously owned, operated or leased by the Company or any of its Subsidiaries, or at, on, under or from any other property or facility, in violation of any Environmental Laws or in a manner or amount or to a location that could reasonably be expected to result in any liability under any Environmental Law, except for any violation or liability which would not, individually or in the aggregate, have a Material Adverse Effect. “Hazardous Materials” means any material, chemical, substance, waste, pollutant, contaminant, compound, mixture, or constituent thereof, in any form or amount, including petroleum (including crude oil or any fraction thereof) and petroleum products, natural gas liquids, asbestos and asbestos containing materials, naturally occurring radioactive materials, brine, and drilling mud, regulated or which can give rise to liability under any Environmental Law. “Release” means any spilling, leaking, seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing, or migrating in, into or through the environment, or in, into from or through any building or structure.

 

(ii) The Company and its Subsidiaries own, possess, license or have other adequate rights to use, on reasonable terms, all material patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets, technology, know-how and other intellectual property necessary for the conduct of the Company’s and each of its Subsidiary’s business as now conducted (collectively, the “Intellectual Property”), except to the extent such failure to own, possess or have other rights to use such Intellectual Property would not result in a Material Adverse Effect. Except as set forth in the Final Offering Circular: (a) no party has been granted an exclusive license to use any portion of such Intellectual Property owned by the Company or its Subsidiaries; (b) to the knowledge of the Company, there is no infringement by third parties of any such Intellectual Property owned by or exclusively licensed to the Company or its Subsidiaries; (c) the Company is not aware of any defects in the preparation and filing of any of patent applications within the Intellectual Property; (d) to the knowledge of the Company, the patents within the Intellectual Property are being maintained and the required maintenance fees (if any) are being paid; (e) there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others challenging the Company’s or any of its Subsidiaries’ rights in or to any Intellectual Property, and the Company and its Subsidiaries are unaware of any facts which would form a reasonable basis for any such claim; (f) there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others challenging the validity or scope or enforceability of any such Intellectual Property, and the Company and its Subsidiaries are unaware of any facts which would form a reasonable basis for any such claim; and (g) there is no pending, or to the knowledge of the Company, threatened action, suit, proceeding or claim by others that the Company’s or any of its Subsidiaries’ business as now conducted infringes or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of others, and the Company and its Subsidiaries are unaware of any other fact which would form a reasonable basis for any such claim. To the knowledge of the Company, no opposition filings or invalidation filings have been submitted which have not been finally resolved in connection with any of the Company’s patents and patent applications in any jurisdiction where the Company has applied for, or received, a patent.

 

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(jj) Except as would not have, individually or in the aggregate, a Material Adverse Effect, the Company and each Subsidiary (1) has timely filed all federal, state, provincial, local and foreign tax returns that are required to be filed by such entity through the date hereof, which returns are true and correct, or has received timely extensions for the filing thereof, and (2) has paid all taxes, assessments, penalties, interest, fees and other charges due or claimed to be due from the Company, other than (A) any such amounts being contested in good faith and by appropriate proceedings and for which adequate reserves have been provided in accordance with GAAP or (B) any such amounts currently payable without penalty or interest. There are no tax audits or investigations pending, which if adversely determined could have a Material Adverse Effect; nor to the knowledge of the Company is there any proposed additional tax assessments against the Company or any Subsidiary which could have, individually or in the aggregate, a Material Adverse Effect. No transaction, stamp, capital or other issuance, registration, transaction, transfer or withholding tax or duty is payable by or on behalf of StartEngine to any foreign government outside the United States or any political subdivision thereof or any authority or agency thereof or therein having the power to tax in connection with (i) the issuance, sale and delivery of the Shares by the Company; (ii) the purchase from the Company, and the initial sale and delivery of the Shares to purchasers thereof; or (iii) the execution and delivery of this Agreement or any other document to be furnished hereunder.

 

(kk) On each Closing Date, all stock transfer or other taxes (other than income taxes) which are required to be paid in connection with the sale and transfer of the Shares to be issued and sold on such Closing Date will be, or will have been, fully paid or provided for by the Company and all laws imposing such taxes will be or will have been fully complied with.

 

(ll) The Company and its Subsidiaries are insured with insurers with appropriately rated claims paying abilities against such losses and risks and in such amounts as are prudent and customary for the businesses in which they are engaged; all policies of insurance and fidelity or surety bonds insuring the Company, each Subsidiary or their respective businesses, assets, employees, officers and directors are in full force and effect; and there are no claims by the Company or its Subsidiary under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause; neither the Company nor any Subsidiary has been refused any insurance coverage sought or applied for; and neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that is not materially greater than the current cost.

 

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(mm) Neither the Company nor its Subsidiaries, nor any director, officer, agent or employee of either the Company or any Subsidiary has directly or indirectly, (1) made any unlawful contribution to any federal, state, local and foreign candidate for public office, or failed to disclose fully any contribution in violation of law, (2) made any payment to any federal, state, local and foreign governmental officer or official, or other person charged with similar public or quasi-public duties, other than payments required or permitted by the laws of the United States or any jurisdiction thereof, (3) violated or is in violation of any provisions of the U.S. Foreign Corrupt Practices Act of 1977, or (4) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

 

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

 

(oo) Neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company, any director, officer, agent or employee of the Company or any of its Subsidiaries is currently subject to any U.S. sanctions (the “Sanctions Regulations”) administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC or listed on the OFAC Specially Designated Nationals and Blocked Persons List. Neither the Company nor, to the knowledge of the Company, any director, officer, agent or employee of the Company, is named on any denied party or entity list administered by the Bureau of Industry and Security of the U.S. Department of Commerce pursuant to the Export Administration Regulations (“EAR”); and the Company will not, directly or indirectly, use the proceeds of the offering of the Shares hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any Sanctions Regulations or to support activities in or with countries sanctioned by said authorities, or for engaging in transactions that violate the EAR.

 

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(pp) The Company has not distributed and, prior to the later to occur of the last Closing Date and completion of the distribution of the Shares, will not distribute any offering material in connection with the offering and sale of the Shares other than each Preliminary Offering Circular and the Final Offering Circular, or such other materials as to which StartEngine shall have consented in writing.

 

(rr) Each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and all stock purchase, stock option, stock-based severance, employment, change-in-control, medical, disability, fringe benefit, bonus, incentive, deferred compensation, employee loan and all other employee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA, that is maintained, administered or contributed to by the Company or any of its affiliates for employees or former employees, directors or independent contractors of the Company or its Subsidiaries, or under which the Company or any of its Subsidiaries has had or has any present or future obligation or liability, has been maintained in material compliance with its terms and the requirements of any applicable federal, state, local and foreign laws, statutes, orders, rules and regulations, including but not limited to ERISA and the Code; no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred which would result in a material liability to the Company with respect to any such plan excluding transactions effected pursuant to a statutory or administrative exemption; no event has occurred (including a “reportable event” as such term is defined in Section 4043 of ERISA) and no condition exists that would subject the Company to any material tax, fine, lien, penalty, or liability imposed by ERISA, the Code or other applicable law; and for each such plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no “accumulated funding deficiency” as defined in Section 412 of the Code has been incurred, whether or not waived, and the fair market value of the assets of each such plan (excluding for these purposes accrued but unpaid contributions) exceeds the present value of all benefits accrued under such plan determined using reasonable actuarial assumptions.

 

(ss) No relationship, direct or indirect, exists between or among the Company or any Subsidiary, on the one hand, and the directors, officers, stockholders, customers or suppliers of the Company or any Subsidiary, on the other, which would be required to be disclosed in the Offering Statement, the Preliminary Offering Circular and the Final Offering Circular and is not so disclosed.

 

(tt) The Company has not sold or issued any securities that would be integrated with the offering of the Shares contemplated by this Agreement pursuant to the Act, the Rules and Regulations or the interpretations thereof by the Commission or that would fail to come within the safe harbor for integration under Regulation A.

 

(uu) Except as set forth in this Agreement, there are no contracts, agreements or understandings between the Company and any person that would give rise to a valid claim against the Company or StartEngine for a brokerage commission, finder’s fee or other like payment in connection with the offering of the Shares.

 

 15 

 

 

(vv) To the knowledge of the Company, there are no affiliations with FINRA among the Company’s directors, officers or any five percent or greater stockholder of the Company or any beneficial owner of the Company’s unregistered equity securities that were acquired during the 180-day period immediately preceding the initial filing date of the Offering Statement.

 

(ww) There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of any of the officers or directors of the Company or any of their respective family members. The Company has not directly or indirectly, including through its Subsidiaries, extended or maintained credit, arranged for the extension of credit, or renewed any extension of credit, in the form of a personal loan to or for any director or executive officer of the Company or any of their respective related interests, other than any extensions of credit that ceased to be outstanding prior to the initial filing of the Offering Statement. No transaction has occurred between or among the Company and any of its officers or directors, stockholders, customers, suppliers or any affiliate or affiliates of the foregoing that is required to be described or filed as an exhibit to in the Offering Statement, the Preliminary Offering Circular or the Final Offering Circular and is not so described.

 

7.AGREEMENTS OF THE COMPANY.

 

(a)            The [Offering Statement has become qualified, and] the Company will file the Final Offering Circular, subject to the prior approval of StartEngine, pursuant to Rule 253 and Regulation A, within the prescribed time period.

 

(b)            Upon effectiveness of this agreement, the Company will not, during such period as the Final Offering Circular would be required by law to be delivered in connection with sales of the Shares in connection with the offering contemplated by this Agreement (whether physically or through compliance with Rules 251 and 254 under the Act or any similar rule(s)), file any amendment or supplement to the Offering Statement or the Final Offering Circular unless a copy thereof shall first have been submitted to StartEngine within a reasonable period of time prior to the filing thereof and StartEngine shall not have reasonably objected thereto in good faith.

 

(c)            The Company will notify StartEngine promptly, and will, if requested, confirm such notification in writing: (1) when any amendment or supplement to the Offering Statement is filed; (2) of any request by the Commission for any amendments to the Offering Statement or any amendment or supplements to the Final Offering Circular or for additional information; (3) of the issuance by the Commission of any stop order preventing or suspending the qualification of the Offering Statement or the Final Offering Circular, or the initiation of any proceedings for that purpose or the threat thereof; and (4) of becoming aware of the occurrence of any event that in the judgment of the Company makes any statement made in the Offering Statement, the Preliminary Offering Circular or the Final Offering Circular untrue in any material respect or that requires the making of any changes in the Offering Statement, the Preliminary Offering Circular or the Final Offering Circular in order to make the statements therein, in light of the circumstances in which they are made, not misleading. If the Company has omitted any information from the Offering Statement, it will use its best efforts to comply with the provisions of and make all requisite filings with the Commission pursuant to Regulation A, the Act and the Rules and Regulations and to notify StartEngine promptly of all such filings.

 

 16 

 

 

(d)            If, at any time when the Final Offering Circular relating to the Shares is required to be delivered under the Act, the Company becomes aware of the occurrence of any event as a result of which the Final Offering Circular, as then amended or supplemented, would, in the reasonable judgment of counsel to the Company or counsel to StartEngine, include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or the Offering Statement, as then amended or supplemented, would, in the reasonable judgment of counsel to the Company or counsel to StartEngine, include any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading, or if for any other reason it is necessary, in the reasonable judgment of counsel to the Company or counsel to StartEngine, at any time to amend or supplement the Final Offering Circular or the Offering Statement to comply with the Act or the Rules and Regulations, the Company will promptly notify StartEngine and will promptly prepare and file with the Commission, at the Company’s expense, an amendment to the Offering Statement and/or an amendment or supplement to the Final Offering Circular that corrects such statement and/or omission or effects such compliance. The Company consents to the use of the Final Offering Circular or any amendment or supplement thereto by StartEngine, and StartEngine agrees to provide to each Investor, prior to the Closing and, as applicable, any Subsequent Closing, a copy of the Final Offering Circular and any amendments or supplements thereto.

 

(e)            If at any time following the distribution of any Testing-the-Waters Communication there occurred or occurs an event or development as a result of which such Testing-the-Waters Communication included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company has or will promptly notify StartEngine in writing and has or will promptly amend or supplement and recirculate, at its own expense, such Testing-the-Waters Communication to eliminate or correct such untrue statement or omission.

 

(j) The Company will apply the net proceeds from the offering and sale of the Shares in the manner set forth in the Final Offering Circular under the caption “Use of Proceeds.”

 

8.[LEFT BLANK]

 

 17 

 

 

9.CONDITIONS OF THE OBLIGATIONS OF STARTENGINE. The obligations of StartEngine hereunder are subject to the following
conditions:

 

(i)            No stop order suspending the qualification of the Offering Statement shall have been issued, and no proceedings for that purpose shall be pending or threatened by any securities or other governmental authority (including, without limitation, the Commission), (b) no order suspending the effectiveness of the Offering Statement shall be in effect and no proceeding for such purpose shall be pending before, or threatened or contemplated by, any securities or other governmental authority (including, without limitation, the Commission), (c) any request for additional information on the part of the staff of any securities or other governmental authority (including, without limitation, the Commission) shall have been complied with to the satisfaction of the staff of the Commission or such authorities and (d) after the date hereof no amendment or supplement to the Offering Statement or the Final Offering Circular shall have been filed unless a copy thereof was first submitted to StartEngine and StartEngine did not object thereto in good faith, and StartEngine shall have received certificates of the Company, dated as of the Closing Date (and at the option of StartEngine, any Subsequent Closing Date) and signed by the Chief Executive Officer of the Company, and the Chief Financial Officer of the Company, to the effect of clauses (a), (b) and (c).

 

(ii)            Since the respective dates as of which information is given in the Offering Statement and the Final Offering Circular, (a) there shall not have been a Material Adverse Effect, whether or not arising from transactions in the ordinary course of business, in each case other than as set forth in or contemplated by the Offering Statement and the Final Offering Circular and (b) the Company shall not have sustained any material loss or interference with its business or properties from fire, explosion, flood or other casualty, whether or not covered by insurance, or from any labor dispute or any court or legislative or other governmental action, order or decree, which is not set forth in the Offering Statement and the Final Offering Circular, if in the reasonable judgment of StartEngine any such development makes it impracticable or inadvisable to consummate the sale and delivery of the Shares to Investors as contemplated hereby.

 

(iii)           Since the respective dates as of which information is given in the Offering Statement and the Final Offering Circular, there shall have been no litigation or other proceeding instituted against the Company or any of its officers or directors in their capacities as such, before or by any federal, state or local or foreign court, commission, regulatory body, administrative agency or other governmental body, domestic or foreign, which litigation or proceeding, in the reasonable judgment of StartEngine, would reasonably be expected to have a Material Adverse Effect.

 

(iv)           Each of the representations and warranties of the Company contained herein shall be true and correct as of each Closing Date in all respects for those representations and warranties qualified by materiality and in all material respects for those representations and warranties that are not qualified by materiality, as if made on such date, and all covenants and agreements herein contained to be performed on the part of the Company and all conditions herein contained to be fulfilled or complied with by the Company at or prior to such Closing Date shall have been duly performed, fulfilled or complied with in all material respects.

 

 18 

 

 

(v)            At the Closing, and at any Subsequent Closing at the option of StartEngine, there shall be furnished to StartEngine a certificate, dated the date of its delivery, signed by each of the Chief Executive Officer and the Chief Financial Officer of the Company, in form and substance satisfactory to StartEngine to the effect that each signer has carefully examined the Offering Statement, the Final Offering Circular, and that to each of such person’s knowledge:

 

(a)            As of the date of each such certificate, (x) the Offering Statement does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading and (y) the Final Offering Circular does not contain any untrue statement of a material fact or omit 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 and (2) no event has occurred as a result of which it is necessary to amend or supplement the Final Offering Circular in order to make the statements therein not untrue or misleading in any material respect.

 

(b)            Each of the representations and warranties of the Company contained in this Agreement were, when originally made, and are, at the time such certificate is delivered, true and correct in all respects for those representations and warranties qualified by materiality and in all material respects for those representations and warranties that are not qualified by materiality.

 

(c)            Each of the covenants required herein to be performed by the Company on or prior to the date of such certificate has been duly, timely and fully performed and each condition herein required to be complied with by the Company on or prior to the delivery of such certificate has been duly, timely and fully complied with.

 

(d)            No stop order suspending the qualification of the Offering Statement or of any part thereof has been issued and no proceedings for that purpose have been instituted or are contemplated by the Commission.

 

(e)            Subsequent to the date of the most recent financial statements in the Offering Statement and in the Final Offering Circular, there has been no Material Adverse Effect.

 

(vi)           FINRA shall not have raised any objection with respect to the fairness or reasonableness of the plan of distribution, or other arrangements of the transactions, contemplated hereby.

 

 19 

 

 

10.INDEMNIFICATION.

 

(i)            The Company shall indemnify and hold harmless StartEngine, each selling group participant, and each of their directors, officers, employees and agents and each person, if any, who controls StartEngine or such selling group participant within the meaning of Section 15 of the Act or Section 20 of the Exchange Act (each an “Indemnified Party”), from and against any and all losses, claims, liabilities, expenses and damages, joint or several (including any and all investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted (whether or not such Indemnified Party is a party thereto)), to which it, or any of them, may become subject under the Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, liabilities, expenses or damages arise out of or are based on (a) any untrue statement or alleged untrue statement made by the Company in Section 6 of this Agreement, (b) any untrue statement or alleged untrue statement of any material fact contained in (1) any Preliminary Offering Circular, the Offering Statement or the Final Offering Circular or any amendment or supplement thereto, (3) any Testing-the-Waters Communication or (4) any application or other document, or any amendment or supplement thereto, executed by the Company based upon written information furnished by or on behalf of the Company filed with the Commission or any securities association or securities exchange (each, an “Application”), or (c) the omission or alleged omission to state in any Preliminary Offering Circular, the Offering Statement, the Final Offering Circular, or any Testing-the-Waters Communication, or any amendment or supplement thereto, or in any Application a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; provided, however, that the Company will not be liable to the extent that such loss, claim, liability, expense or damage arises from the sale of the Shares in the offering to any person and is based solely on an untrue statement or omission or alleged untrue statement or omission made in reliance on and in conformity with written information furnished to the Company by any Indemnified Party through StartEngine expressly for inclusion in the Offering Statement, any Preliminary Offering Circular, the Final Offering Circular, or Testing-the-Waters Communication, or in any amendment or supplement thereto or in any Application, it being understood and agreed that the only such information furnished by any Indemnified Party consists of the information described as such in subsection  (ii) below. This indemnity agreement will be in addition to any liability which the Company may otherwise have.

 

 20 

 

 

(ii)            StartEngine will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) that arise out of or are based solely upon an untrue statement or alleged untrue statement of a material fact contained in the Offering Statement, any Preliminary Offering Circular or the Final Offering Circular, or any amendment or supplement thereto, or any Testing-the-Waters Communication, or arise out of or are based solely upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Offering Statement, any Preliminary Offering Circular or the Final Offering Circular, or any amendment or supplement thereto, or any Written Testing-the-Waters Communication, in reliance upon and in conformity with written information furnished to the Company by StartEngine expressly for use therein; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred.

 

(iii)           Promptly after receipt by an Indemnified Party under subsection (i) or (ii) above of notice of the commencement of any action, such Indemnified Party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any Indemnified Party otherwise than under such subsection. In case any such action shall be brought against any Indemnified Party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such Indemnified Party (who shall not, except with the consent of the Indemnified Party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such Indemnified Party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such Indemnified Party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such Indemnified Party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the Indemnified Party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the Indemnified Party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (a) includes an unconditional release of the Indemnified Party from all liability arising out of such action or claim and (b) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any Indemnified Party.

 

 21 

 

 

(iv)           If the indemnification provided for in this Section 10 is unavailable or insufficient to hold harmless an Indemnified Party under subsection (i) or (ii) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and StartEngine on the other from the offering of the Shares. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the Indemnified Party failed to give the notice required under subsection (iii) above, then each indemnifying party shall contribute to such amount paid or payable by such Indemnified Party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and StartEngine on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and StartEngine on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bears to the Fee received by StartEngine. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or StartEngine on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and StartEngine agree that it would not be just and equitable if contribution pursuant to this subsection (iv) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (iv). The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (iv) shall be deemed to include any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (iv), each StartEngine will not be required to contribute any amount in excess of the Fee received by such StartEngine. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

 

11.TERMINATIONS.

 

(i)             Either party may terminate this Agreement at any time by written notice to the other party. The Services and Fees are non-refundable. Any unpaid fees due to StartEngine are due immediately upon termination.

 

(ii)            The obligations of StartEngine under this Agreement may be terminated at any time prior to the initial Closing Date, by notice to the Company from such StartEngine, without liability on the part of StartEngine to the Company if, prior to delivery and payment for the Shares, in the sole judgment of StartEngine: (a) there has occurred any material adverse change in the securities markets or any event, act or occurrence that has materially disrupted, or in the opinion of StartEngine, will in the future materially disrupt, the securities markets or there shall be such a material adverse change in general financial, political or economic conditions or the effect of international conditions on the financial markets in the United States is such as to make it, in the judgment of StartEngine, inadvisable or impracticable to market the Shares or enforce contracts for the sale of the Shares; (b) there has occurred any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, including without limitation as a result of terrorist activities, such as to make it, in the judgment of StartEngine, inadvisable or impracticable to market the Shares or enforce contracts for the sale of the Shares; (c) trading on the New York Stock Exchange, Inc., NYSE American or NASDAQ Stock Market has been suspended or materially limited, or minimum or maximum ranges for prices for securities shall have been fixed, or maximum ranges for prices for securities have been required, by any of said exchanges or by such system or by order of the Commission, FINRA, or any other governmental or regulatory authority; (d) a banking moratorium has been declared by any state or Federal authority; or (e) in the judgment of StartEngine, there has been, since the time of execution of this Agreement or since the respective dates as of which information is given in the Final Offering Circular, any Material Adverse Effect of the Company and its Subsidiaries considered as a whole, whether or not arising in the ordinary course of business;

 

 22 

 

 

(iii)           If this Agreement is terminated pursuant to this Section 11, such termination shall be without liability of any party to any other party except as provided in Section 10(ii) hereof.

 

12.  NOTICES. Notice given pursuant to any of the provisions of this Agreement shall be in writing and, unless otherwise specified, shall be mailed or delivered (i) if to the Company, at 3103 Neilson Way, Ste D, Santa Monica, CA 90405, Attention: Chris Thompson, or (ii) if to StartEngine to 8687 Melrose Ave 7th Floor - Green, Los Angeles, CA 90069, Attention: CEO, with copies to [counsel]. Any such notice shall be effective only upon receipt. Any notice under Section 12 may be made by facsimile or telephone, but if so made shall be subsequently confirmed in writing.

 

13.   SURVIVAL. The respective representations, warranties, agreements, covenants, indemnities and other statements of the Company and StartEngine set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement shall remain in full force and effect, regardless of (i) any investigation made by or on behalf of the Company, any of its officers or directors, StartEngine or any controlling person referred to in Section 10 hereof and (ii) delivery of and payment for the Shares. The respective agreements, covenants, indemnities and other statements set forth in Sections 6, 7 and 10 hereof shall remain in full force and effect, regardless of any termination or cancellation of this Agreement.

 

14.   SUCCESSORS. This Agreement shall inure to the benefit of and shall be binding upon StartEngine, the Company and their respective successors, and nothing expressed or mentioned in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement, or any provisions herein contained, this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of such persons and for the benefit of no other person except that (i) the indemnification and contribution contained in Sections 10(i) and (iv) of this Agreement shall also be for the benefit of the directors, officers, employees and agents of StartEngine and any person or persons who control such StartEngine within the meaning of Section 15 of the Act or Section 20 of the Exchange Act and (ii) the indemnification and contribution contained in Sections 10(ii) and (iv) of this Agreement shall also be for the benefit of the directors of the Company, the officers of the Company who have signed the Offering Statement and any person or persons who control the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act. No purchaser of Shares shall be deemed a successor because of such purchase.

 

 23 

 

 

15.    GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the internal laws of the State of California applicable to agreements made and to be performed in such state. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted in the California Courts, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Service of any process, summons, notice or document by mail to such party’s address set forth above shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or other proceeding in the California Courts and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit, action or other proceeding brought in any such court has been brought in an inconvenient forum.

 

16.   ACKNOWLEDGEMENT. The Company acknowledges and agrees that StartEngine is acting solely in the capacity of an arm’s length contractual counterparty to the Company with respect to the offering of Shares contemplated hereby. Additionally, StartEngine is not advising the Company or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether StartEngine has advised or is advising the Company on other matters). The Company has conferred with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated hereby, and StartEngine shall have no responsibility or liability to the Company or any other person with respect thereto. The StartEngine advises that it and its affiliates are engaged in a broad range of securities and financial services and that it or its affiliates may have business relationships or enter into contractual relationships with purchasers or potential purchasers of the Company’s securities. Any review by StartEngine of the Company, the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of StartEngine and shall not be on behalf of, or for the benefit of, the Company.

 

17.    COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

18.    ENTIRE AGREEMENT. This Agreement constitutes the entire understanding between the parties hereto as to the matters covered hereby and supersedes all prior understandings, written or oral, relating to such subject matter.

 

[signature page follows]

 

 24 

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the date set forth below.

 

  [COMPANY]
   
   
  By: /s/ Christopher Thompson
   

 

Christopher Thompson
CEO

     
     
  Accepted as of the date hereof:
   
   
  STARTENGINE PRIMARY, LLC
   
   
  By:  
  Name:  
  Title:  

 

 25 

 

 

SCHEDULE 1

 

Testing the Waters

 

[TBD]

 

SCHEDULE 2

 

SUBSIDIARIES

 

[TBD]

 

 26 

 

 

EX1A-2A CHARTER 4 tm2031356d1_ex2-1.htm EXHIBIT 2.1

 

Exhibit 2.1

 

DelawarePAGE      1

 

The First State

 

I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF INCORPORATION OF "TRIPLEPULSE, INC.", FILED IN THIS OFFICE ON THE FOURTEENTH DAY OF NOVEMBER, A. D. 2012, AT 4:48 O'CLOCK P.M.

 

A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDER OF DEEDS.

 

 

 

 

 

  State of Delaware
  Secretary of State
  Division of Corporations
  Delivered 04:50 PM 11/14/2012
  FILED 04:48 PM 11/14/2012
CERTIFICATE OF INCORPORATION SRV 121229244 - 5242196 FILE

 

OF

 

TRIPLEPULSE, INC.

 

FIRST:                 The name of this corporation is TriplePulse, Inc.

 

SECOND:            Its Registered Office in the State of Delaware is to be located at 1811 Silverside Road, in the City of Wilmington Delaware, County of Newcastle, 19810. The Registered Agent in charge thereof is Vcorp Services, LLC.

 

THIRD:               The purpose of this corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware.

 

FOURTH:           The amount of the total authorized capital stock of this corporation is One Million (1,000,000) shares with a par value of $0.0001 per share.

 

FIFTH:The name and mailing address of the incorporator is as follows:

 

Donald S. Lee
  LKP Global Law, LLP
  1901 Avenue of the Stars, Suite 480
  Los Angeles, CA 90067

 

SIXTH:This corporation is to have perpetual existence.

 

SEVENTH:         In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to adopt, amend or repeal the bylaws of this corporation.

 

EIGHTH:             Election of directors need not be by written ballot unless the bylaws of this corporation shall so provide.

 

NINTH:             To the fullest extent permitted by the General Corporation Law of the State of Delaware, as the same may be amended and supplemented, no director shall be personally liable to the corporation or its stockholders for monetary damages for any breach of fiduciary duty by such director as a director. No amendment to or repeal of this Article NINTH shall apply to or have any effect on the liability or alleged liability of any director of the corporation for or with respect to any acts or omissions of such director occurring prior to such amendment.

 

TENTH:              The corporation shall, to the fullest extent permitted by applicable law, indemnify any persons made or threatened to be made a party to an action or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he, his testator or intestate was a director or officer of the corporation or any predecessor of the corporation, or services or served in any other enterprise as a director or officer at the request of the corporation or any predecessor to the corporation. No amendment to or repeal of this Article TENTH shall apply to or have any effect on the liability or alleged liability of any director of the corporation for or with respect to any acts or omissions of such director occurring prior to such amendment.

 

TriplePulse, Inc. Certificate of Incorporation

 

 

 

 

The undersigned, for purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, hereby affirms and acknowledges under penalty of perjury that this Certificate of Incorporation is his act and deed and that the facts herein stated are true.

 

 
Dated: November 14, 2012  
  /s/ Donald S. Lee
  Donald S. Lee
  Incorporator

 

TriplePulse, Inc. Certificate of Incorporation

 

2 

 

EX1A-2A CHARTER 5 tm2031356d1_ex2-2.htm EXHIBIT 2.2

 

Exhibit 2.2

 

State of Delaware

Secretary of State

Division of Corporations

Delivered 05:46 PM 11/30/2012

FILED 05:46 PM 11/30/2012

SRV 121282319 - 5242196 FILE   

  

 

TRIPLEPULSE, INC.

 

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

 

(Pursuant to Sections 242 and 245 of the
General Corporation Law of the State of Delaware)

 

TriplePulse, Inc., a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the "General Corporation Law"), does hereby certify as follows.

 

1.            The name of this corporation is TriplePulse, Inc. and that this corporation was originally incorporated pursuant to the General Corporation Law on November 14, 2012 under the name TriplePulse, Inc.

 

2.            The Board of Directors of this corporation duly adopted resolutions proposing to amend and restate the Certificate of Incorporation of this corporation, declaring said amendment and restatement to be advisable and in the best interests of this corporation and its stockholders, and authorizing the appropriate officers of this corporation to solicit the consent of the stockholders therefor, which resolution setting forth the proposed amendment and restatement is as follows.

 

RESOLVED, that the Certificate of Incorporation of this corporation be amended and restated in its entirety to read as set forth on Exhibit A attached hereto and incorporated herein by this reference.

 

3.            Exhibit A referred to above is attached hereto as Exhibit A and is hereby incorporated herein by this reference. This Restated Certificate of Incorporation was approved by the holders of the requisite number of shares of this corporation in accordance with Section 228 of the General Corporation Law.

 

4.            This Restated Certificate of Incorporation, which restates and integrates and further amends the provisions of this corporation's Certificate of Incorporation, has been duly adopted in accordance with Sections 242 and 245 of the General Corporation Law.

 

IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been executed by a duly authorized officer of this corporation on this 30th of November, 2012.

 

  By: /s/ Chris Thompson
    Chris Thompson, President

 

 

 

 

Exhibit A

 

TRIPLEPULSE, INC.

 

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

 

ARTICLE  I: NAME.

 

The name of this corporation is TriplePulse, Inc. (the "Corporation")

 

ARTICLE II: REGISTERED OFFICE.

 

The address of the corporation's registered office in the State of Delaware is 1811 Silverside Road, in the City of Wilmington, County of Newcastle, State of Delaware 19810. The name of its registered agent at such address is Vcorp Services, Inc.

 

ARTICLE III: PURPOSE.

 

The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law.

 

ARTICLE IV: AUTHORIZED SHARES.

 

The total number of shares of all classes of stock which the Corporation shall have authority to issue is (a) 1,000,000 shares of Common Stock, $0.0001 par value per share ("Common Stock"), and (b) 66,666 shares of Preferred Stock, $0.0001 par value per share ("Preferred Stock"). The Preferred Stock may be issued from time to time in one or more series, each of such series to consist of such number of shares and to have such terms, rights, powers and preferences, and the qualifications and limitations with respect thereto, as stated or expressed herein. As of the effective date of this Restated Certificate of Incorporation (this "Restated Certificate"), all 66,666 shares of the authorized Preferred Stock of the Corporation are hereby designated "Series Seed Preferred Stock". The following is a statement of the designations and the rights, powers and privileges, and the qualifications, limitations or restrictions thereof, in respect of each class of capital stock of the Corporation.

 

A.COMMON STOCK

 

1.            General. The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights, powers and privileges of the holders of the Preferred Stock set forth herein.

 

2.            Voting. The holders of the Common Stock are entitled to one vote for each share of Common Stock held at all meetings of stockholders (and written actions in lieu of meetings). Unless required by law, there shall be no cumulative voting. The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by (in addition to any vote of the holders of one or more series of Preferred Stock that may be required by the terms of the Certificate of Incorporation) the affirmative vote of the holders of shares of capital stock of the Corporation representing a majority of the votes represented by all outstanding shares of capital stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law.

 

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B.PREFERRED STOCK

 

The following rights, powers and privileges, and restriction, qualifications and limitations, shall apply to the Preferred Stock. Unless otherwise indicated, references to "Sections" in this Part B of this Article IV refer to sections of this Part B.

 

1.            Liquidation, Dissolution or Winding Up; Certain Mergers, Consolidations and Asset Sales.

 

1.1            Payments to Holders of Preferred Stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or any Deemed Liquidation Event (as defined below), before any payment shall be made to the holders of Common Stock by reason of their ownership thereof, the holders of shares of Preferred Stock then outstanding shall be entitled to be paid out of the funds and assets available for distribution to its stockholders, an amount per share equal to the greater of (a) the Original Issue Price (as defined below) for such share of Preferred Stock, plus any dividends declared but unpaid thereon, or (b) such amount per share as would have been payable had all shares of Preferred Stock been converted into Common Stock pursuant to Section 3 immediately prior to such liquidation, dissolution or winding up or Deemed Liquidation Event. If upon any such liquidation, dissolution or winding up or Deemed Liquidation Event of the Corporation, the funds and assets available for distribution to the stockholders of the Corporation shall be insufficient to pay the holders of shares of Preferred Stock the full amount to which they are entitled under this Section 1.1, the holders of shares of Preferred Stock shall share ratably in any distribution of the funds and assets available for distribution in proportion to the respective amounts that would otherwise be payable in respect of the shares of Preferred Stock held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full. The "Original Issue Price" shall mean $0.30 per share for the Series Seed Preferred Stock.

 

1.2            Payments to Holders of Common Stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up or Deemed Liquidation Event of the Corporation, after the payment of all preferential amounts required to be paid to the holders of shares of Preferred Stock as provided in Section 1.1, the remaining funds and assets available for distribution to the stockholders of the Corporation shall be distributed among the holders of shares of Common Stock, pro rata based on the number of shares of Common Stock held by each such holder.

 

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1.3Deemed Liquidation Events.

 

1.3.1            Definition. Each of the following events shall be considered a "Deemed Liquidation Event" unless the holders of at least a majority of the outstanding shares of Preferred Stock (voting as a single class on an as-converted basis), the "Requisite Holders", elect otherwise by written notice sent to the Corporation at least five (5) days prior to the effective date of any such event:

 

(a)            a merger or consolidation in which (i) the Corporation is a constituent party or (ii) a subsidiary of the Corporation is a constituent party and the Corporation issues shares of its capital stock pursuant to such merger or consolidation, except any such merger or consolidation involving the Corporation or a subsidiary in which the shares of capital stock of the Corporation outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for equity securities that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the equity securities of (1) the surviving or resulting party or (2) if the surviving or resulting party is a wholly owned subsidiary of another party immediately following such merger or consolidation, the parent of such surviving or resulting party; provided that, for the purpose of this Section 1.3.1, all shares of Common Stock issuable upon exercise of Options (as defined below) outstanding immediately prior to such merger or consolidation or upon conversion of Convertible Securities (as defined below) outstanding immediately prior to such merger or consolidation shall be deemed to be outstanding immediately prior to such merger or consolidation and, if applicable, deemed to be converted or exchanged in such merger or consolidation on the same terms as the actual outstanding shares of Common Stock are converted or exchanged;or

 

(b)            the sale, lease, transfer or other disposition, in a single transaction or series of related transactions, by the Corporation or any subsidiary of the Corporation of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole, or, if substantially all of the assets of the Corporation and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Corporation, except where such sale, lease, transfer or other disposition is to the Corporation or one or more wholly owned subsidiaries of the Corporation.

 

1.3.2            Allocation of Escrow. In the event of a Deemed Liquidation Event pursuant to Section 1.3.1(a)(i), if any portion of the consideration payable to the stockholders of the Corporation is placed into escrow, the definitive agreement for such transaction shall provide that the portion of such consideration that is placed in escrow shall be allocated among the holders of capital stock of the Corporation pro rata based on the amount of such consideration otherwise payable to each stockholder (such that each stockholder has placed in escrow the same percentage of the total consideration payable to such stockholder as every other stockholder).

 

1.3.3            Amount Deemed Paid or Distributed. The funds and assets deemed paid or distributed to the holders of capital stock of the Corporation upon any such merger, consolidation, sale, transfer or other disposition described in this Section 1.3 shall be the cash or the value of the property, rights or securities paid or distributed to such holders by the Corporation or the acquiring person, firm or other entity. The value of such property, rights or securities shall be determined in good faith by the Board.

 

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2.Voting.

 

2.1            General. On any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Fractional votes shall not be permitted and any fractional voting rights available on an as-converted basis (after aggregating all shares into which shares of Preferred stock held by each holder could be converted) shall be rounded to the nearest whole number (with one-half being rounded upward). Except as provided by law or by the other provisions of this Restated Certificate, holders of Preferred Stock shall vote together with the holders of Common Stock as a single class on an as converted basis, shall have full voting rights and powers equal to the voting rights and powers of the holders of Common Stock, and shall be entitled, notwithstanding any provision hereof, to notice of any stockholders' meeting in accordance with the Bylaws of the Corporation.

 

2.2            Preferred Stock Protective Provisions. So long as any shares of Preferred Stock remain outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Certificate of Incorporation) the written consent or affirmative vote of the Requisite Holders, given in writing or by vote at a meeting, consenting, or voting (as the case may be) separately as a single class:

 

(a)            alter or change the rights, powers or privileges of the Preferred Stock set forth in the certificate of incorporation of the Corporation, as then in effect, in a way that adversely affects the Preferred Stock;

 

(b)            increase or decrease the authorized number of shares of Preferred Stock (or any series thereof);

 

(c)            authorize or create (by reclassification or otherwise) any new class or series of capital stock having rights, powers, or privileges set forth in the certificate of incorporation of the Corporation, as then in effect, that are senior to any series of Preferred Stock;

 

(d)            redeem or repurchase any shares of Common Stock or Preferred Stock (other than pursuant to employee or consultant agreements giving the Corporation the right to repurchase shares at the original cost thereof upon the termination of services); or

 

(e)            declare or pay any dividend or otherwise make a distribution to holders of Preferred Stock or Common Stock.

 

3.      Conversion. The holders of the Preferred Stock shall have conversion rights as follows (the "Conversion Rights"):

 

3.1Right to Convert.

 

3.1.1            Conversion Ratio. Each share of Preferred Stock shall be convertible, at the option of the holder thereof, at any time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing the Original Issue Price for such series of Preferred Stock by the Conversion Price (as defined below) for such series of Preferred Stock in effect at the time of conversion. The "Conversion Price" for each series of Preferred Stock shall initially mean the Original Issue Price for such series of Preferred Stock. Such initial Conversion Price, and the rate at which shares of Preferred Stock may be converted into shares of Common Stock, shall be subject to adjustment as provided below.

 

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3.1.2            Termination of Conversion Rights. Subject to Section 3.3.1 in the case of a Contingency Event (as defined therein), in the event of a liquidation, dissolution or winding up of the Corporation or a Deemed Liquidation Event, the Conversion Rights shall terminate at the close of business on the last full day preceding the date fixed for the first payment of any funds and assets distributable on such event to the holders of Preferred Stock.

 

3.2            Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of the Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the fair market value of a share of Common Stock as determined in good faith by the Board. Whether or not fractional shares would be issuable upon such conversion shall be determined on the basis of the total number of shares of Preferred Stock the holder is at the time converting into Common Stock and the aggregate number of shares of Common Stock issuable upon such conversion.

 

3.3   Mechanics of Conversion.

 

3.3.1            Notice of Conversion. In order for a holder of Preferred Stock to voluntarily convert shares of Preferred Stock into shares of Common Stock, such holder shall surrender the certificate or certificates for such shares of Preferred Stock (or, if such registered holder alleges that any such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate), at the office of the transfer agent for the Preferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent), together with written notice that such holder elects to convert all or any number of the shares of the Preferred Stock represented by such certificate or certificates and, if applicable, any event on which such conversion is contingent (a "Contingency Event"). Such notice shall state such holder's name or the names of the nominees in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. If required by the Corporation, certificates surrendered for conversion shall be endorsed or accompanied by a written instrument or instruments of transfer, in form reasonably satisfactory to the Corporation, duly executed by the registered holder or such holder's attorney duly authorized in writing. The close of business on the date of receipt by the transfer agent (or by the Corporation if the Corporation serves as its own transfer agent) of such certificates (or lost certificate affidavit and agreement) and notice (or, if later, the date on which all Contingency Events have occurred) shall be the time of conversion (the "Conversion Time"), and the shares of Common Stock issuable upon conversion of the shares represented by such certificate shall be deemed to be outstanding of record as of such time. The Corporation shall, as soon as practicable after the Conversion Time, (a) issue and deliver to such holder of Preferred Stock, or to such holder's nominees, a certificate or certificates for the number of full shares of Common Stock issuable upon such conversion in accordance with the provisions hereof and a certificate for the number (if any) of the shares of Preferred Stock represented by the surrendered certificate that were not converted into Common Stock, (b) pay in cash such amount as provided in Section 3.2 in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and (c) pay all declared but unpaid dividends on the shares of Preferred Stock converted.

 

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3.3.2            Reservation of Shares. The Corporation shall at all times while any share of Preferred Stock shall be outstanding, reserve and keep available out of its authorized but unissued capital stock, for the purpose of effecting the conversion of the Preferred Stock, such number of its duly authorized shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then-outstanding shares of the Preferred Stock, the Corporation shall use its best efforts to cause such corporate action to be taken as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to this Restated Certificate. Before taking any action that would cause an adjustment reducing the Conversion Price of a series of Preferred Stock below the then par value of the shares of Common Stock issuable upon conversion of such series of Preferred Stock, the Corporation will take any corporate action that may, in the opinion of its counsel, be necessary so that the Corporation may validly and legally issue fully paid and nonassessable shares of Common Stock at such adjusted Conversion Price.

 

3.3.3            Effect of Conversion. All shares of Preferred Stock that shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares shall immediately cease and terminate at the Conversion Time, except only the right of the holders thereof to receive shares of Common Stock in exchange therefor, to receive payment in lieu of any fraction of a share otherwise issuable upon such conversion as provided in Section 3.2 and to receive payment of any dividends declared but unpaid thereon. Any shares of Preferred Stock so converted shall be retired and cancelled and may not be reissued.

 

3.3.4            No Further Adjustment. Upon any conversion of shares of Preferred Stock, no adjustment to the Conversion Price of the applicable series of Preferred Stock shall be made with respect to the converted shares for any declared but unpaid dividends on such series of Preferred Stock or on the Common Stock delivered upon conversion.

 

3.4            Adjustment for Stock Splits and Combinations. If the Corporation shall at any time or from time to time after the date on which the first share of a series of Preferred Stock is issued by the Corporation (such date referred to herein as the "Original Issue Date" for such series of Preferred Stock) effect a subdivision of the outstanding Common Stock, the Conversion Price for such series of Preferred Stock in effect immediately before that subdivision shall be proportionately decreased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be increased in proportion to such increase in the aggregate number of shares of Common Stock outstanding. If the Corporation shall at any time or from time to time after the Original Issue Date for a series of Preferred Stock combine the outstanding shares of Common Stock, the Conversion Price for such series of Preferred Stock in effect immediately before the combination shall be proportionately increased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this Section 3.4 shall become effective at the close of business on the date the subdivision or combination becomes effective.

 

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3.5            Adjustment for Certain Dividends and Distributions. In the event the Corporation at any time or from time to time after the Original Issue Date for a series of Preferred Stock shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable on the Common Stock in additional shares of Common Stock, then and in each such event the Conversion Price for such series of Preferred Stock in effect immediately before such event shall be decreased as of the time of such issuance or, in the event such a record date shall have been fixed, as of the close of business on such record date, by multiplying such Conversion Price then in effect by a fraction:

 

(a)            the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and

 

(b)            the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution.

 

Notwithstanding the foregoing, (i) if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, such Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter such Conversion Price shall be adjusted pursuant to this Section 3.5 as of the time of actual payment of such dividends or distributions; and (ii) no such adjustment shall be made if the holders of such series of Preferred Stock simultaneously receive a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock that they would have received if all outstanding shares of such series of Preferred Stock had been converted into Common Stock on the date of such event.

 

3.6            Adjustments for Other Dividends and Distributions. In the event the Corporation at any time or from time to time after the Original Issue Date for a series of Preferred Stock shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation (other than a distribution of shares of Common Stock in respect of outstanding shares of Common Stock), then and in each such event the holders of such series of Preferred Stock shall receive, simultaneously with the distribution to the holders of Common Stock, a dividend or other distribution of such securities in an amount equal to the amount of such securities as they would have received if all outstanding shares of such series of Preferred Stock had been converted into Common Stock on the date of such event.

 

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3.7            Adjustment for Reclassification, Exchange and Substitution. If at any time or from time to time after the Original Issue Date for a series of Preferred Stock the Common Stock issuable upon the conversion of such series of Preferred Stock is changed into the same or a different number of shares of any class or classes of stock of the Corporation, whether by recapitalization, reclassification, or otherwise (other than by a stock split or combination, dividend, distribution, merger or consolidation covered by Sections 3.4, 3.5, 3.6 or 3.8 or by Section 1 .3 regarding a Deemed Liquidation Event), then in any such event each holder of such series of Preferred Stock shall have the right thereafter to convert such stock into the kind and amount of stock and other securities and property receivable upon such recapitalization, reclassification or other change by holders of the number of shares of Common Stock into which such shares of Preferred Stock could have been converted immediately prior to such recapitalization, reclassification or change.

 

3.8            Adjustment for Merger or Consolidation. Subject to the provisions of Section 1.3, if there shall occur any consolidation or merger involving the Corporation in which the Common Stock (but not a series of Preferred Stock) is converted into or exchanged for securities, cash, or other property (other than a transaction covered by Sections 3.5, 3.6 or 3.7), then, following any such consolidation or merger, provision shall be made that each share of such series of Preferred Stock shall thereafter be convertible, in lieu of the Common Stock into which it was convertible prior to such event, into the kind and amount of securities, cash or other property which a holder of the number of shares of Common Stock of the Corporation issuable upon conversion of one share of such series of Preferred Stock immediately prior to such consolidation or merger would have been entitled to receive pursuant to such transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board) shall be made in the application of the provisions in this Section 3 with respect to the rights and interests thereafter of the holders of such series of Preferred Stock, to the end that the provisions set forth in this Section 3 (including provisions with respect to changes in and other adjustments of the Conversion Price of such series of Preferred Stock) shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of such series of Preferred Stock.

 

3.9            Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price of a series of Preferred Stock pursuant to this Section 3, the Corporation at its expense shall, as promptly as reasonably practicable but in any event not later than 15 days thereafter, compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of such series of Preferred Stock a certificate setting forth such adjustment or readjustment (including the kind and amount of securities, cash or other property into which such series of Preferred Stock is convertible) and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, as promptly as reasonably practicable after the written request at any time of any holder of any series of Preferred Stock (but in any event not later than 10 days thereafter), furnish or cause to be furnished to such holder a certificate setting forth (a) the Conversion Price of such series of Preferred Stock then in effect and (b) the number of shares of Common Stock and the amount, if any, of other securities, cash or property which then would be received upon the conversion of such series of Preferred Stock.

 

3.10            Mandatory Conversion. Upon either (a) the closing of the sale of shares of Common Stock to the public in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended or (b) the date and time, or the occurrence of an event, specified by vote or written consent of the Requisite Holders at the time of such vote or consent, voting as a single class on an as-converted basis (the time of such closing or the date and time specified or the time of the event specified in such vote or written consent is referred to herein as the "Mandatory Conversion Time"), (i) all outstanding shares of Preferred Stock shall automatically be converted into shares of Common Stock, at the applicable ratio described in Section 3.1.1 as the same may be adjusted from time to time in accordance with Section 3 and (ii) such shares may not be reissued by the Corporation.

 

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3.11            Procedural Requirements. All holders of record of shares of Preferred Stock shall be sent written notice of the Mandatory Conversion Time and the place designated for mandatory conversion of all such shares of Preferred Stock pursuant to Section 3.10. Unless otherwise provided in this Certificate of Incorporation, such notice need not be sent in advance of the occurrence of the Mandatory Conversion Time. Upon receipt of such notice, each holder of shares of Preferred Stock shall surrender such holder's certificate or certificates for all such shares (or, if such holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate) to the Corporation at the place designated in such notice, and shall thereafter receive certificates for the number of shares of Common Stock to which such holder is entitled pursuant to this Section 3. If so required by the Corporation, certificates surrendered for conversion shall be endorsed or accompanied by written instrument or instruments of transfer, in form reasonably satisfactory to the Corporation, duly executed by the registered holder or such holder's attorney duly authorized in writing. All rights with respect to the Preferred Stock converted pursuant to Section 3.10, including the rights, if any, to receive notices and vote (other than as a holder of Common Stock), will terminate at the Mandatory Conversion Time (notwithstanding the failure of the holder or holders thereof to surrender the certificates at or prior to such time), except only the rights of the holders thereof, upon surrender of their certificate or certificates (or lost certificate affidavit and agreement) therefor, to receive the items provided for in the next sentence of this Section 3.11. As soon as practicable after the Mandatory Conversion Time and the surrender of the certificate or certificates (or lost certificate affidavit and agreement) for Preferred Stock, the Corporation shall issue and deliver to such holder, or to such holder's nominee(s), a certificate or certificates for the number of full shares of Common Stock issuable on such conversion in accordance with the provisions hereof, together with cash as provided in Section 3.2 in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and the payment of any declared but unpaid dividends on the shares of Preferred Stock converted. Such converted Preferred Stock shall be retired and cancelled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Preferred Stock (and the applicable series thereof) accordingly.

 

4.            Dividends. All dividends shall be declared pro rata on the Common Stock and the Preferred Stock on a pari passu basis according to the number of shares of Common Stock held by such holders. For this purpose each holder of shares of Preferred Stock is to be treated as holding the greatest whole number of shares of Common Stock then issuable upon conversion of all shares of Preferred Stock held by such holder pursuant to Section 3.

 

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5.            Redeemed or Otherwise Acquired Shares. Any shares of Preferred Stock that are redeemed or otherwise acquired by the Corporation or any of its subsidiaries shall be automatically and immediately cancelled and retired and shall not be reissued, sold or transferred. Neither the Corporation nor any of its subsidiaries may exercise any voting or other rights granted to the holders of Preferred Stock following redemption.

 

6.            Waiver. Any of the rights, powers, privileges and other terms of the Preferred Stock set forth herein may be waived on behalf of all holders of Preferred Stock by the affirmative written consent or vote of the holders of the Requisite Holders.

 

7.  Notice of Record Date. In the event:

 

(a)            the Corporation shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon conversion of the Preferred Stock) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or

 

(b)            of any capital reorganization of the Corporation, any reclassification of the Common Stock of the Corporation, or any Deemed Liquidation Event; or

 

(c)            of the voluntary or involuntary dissolution, liquidation or winding-up of the Corporation,

 

then, and in each such case, the Corporation will send or cause to be sent to the holders of the Preferred Stock a notice specifying, as the case may be, (i) the record date for such dividend, distribution or right, and the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up is proposed to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other capital stock or securities at the time issuable upon the conversion of the Preferred Stock) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up, and the amount per share and character of such exchange applicable to the Preferred Stock and the Common Stock. Such notice shall be sent at least 20 days prior to the earlier of the record date or effective date for the event specified in such notice.

 

8.            Notices. Except as otherwise provided herein, any notice required or permitted by the provisions of this Article IV to be given to a holder of shares of Preferred Stock shall be mailed, postage prepaid, to the post office address last shown on the records of the Corporation, or given by electronic communication in compliance with the provisions of the General Corporation Law, and shall be deemed sent upon such mailing or electronic transmission.

 

ARTICLE V: PREEMPTIVE RIGHTS.

 

No stockholder of the Corporation shall have a right to purchase shares of capital stock of the Corporation sold or issued by the Corporation except to the extent that such a right may from time to time be set forth in a written agreement between the Corporation and any stockholder.

 

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ARTICLE VI: STOCK REPURCHASES.

 

In connection with repurchases by the Corporation of its Common Stock from employees, officers, directors, advisors, consultants or other persons performing services for the Corporation or any subsidiary pursuant to agreements under which the Corporation has the option to repurchase such shares at cost upon the occurrence of certain events, such as the termination of employment, Sections 502 and 503 of the Corporations Code of the State of California shall not apply in all or in part with respect to such repurchases.

 

ARTICLE VII: BYLAW PROVISIONS.

 

A.            AMENDMENT OF BYLAWS. Subject to any additional vote required by the Certificate of Incorporation or Bylaws, in furtherance and not in limitation of the powers conferred by statute, the Board is expressly authorized to make, repeal, alter, amend and rescind any or all of the Bylaws of the Corporation.

 

B.            NUMBER OF DIRECTORS. Subject to any additional vote required by the Certificate of Incorporation, the number of directors of the Corporation shall be determined in the manner set forth in the Bylaws of the Corporation.

 

C.            BALLOT. Elections of directors need not be by written ballot unless the Bylaws of the Corporation shall so provide.

 

D.            MEETINGS AND BOOKS. Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws of the Corporation may provide. The books of the Corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the Board or in the Bylaws of the Corporation.

 

ARTICLE VIII: DIRECTOR LIABILITY.

 

A.            LIMITATION. To the fullest extent permitted by law, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the General Corporation Law or any other law of the State of Delaware is amended after approval by the stockholders of this Article VIII to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the General Corporation Law as so amended. Any repeal or modification of the foregoing provisions of this Article VIII by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of, or increase the liability of any director of the Corporation with respect to any acts or omissions of such director occurring prior to, such repeal or modification.

 

B.            INDEMNIFICATION. To the fullest extent permitted by applicable law, the Corporation is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Corporation (and any other persons to which General Corporation Law permits the Corporation to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise, in excess of the indemnification and advancement otherwise permitted by Section 145 of the General Corporation Law.

 

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C.            MODIFICATION. Any amendment, repeal or modification of the foregoing provisions of this Article VIII shall not adversely affect any right or protection of any director, officer or other agent of the Corporation existing at the time of such amendment, repeal or modification.

 

ARTICLE IX: CORPORATE OPPORTUNITIES.

 

The Corporation renounces any interest or expectancy of the Corporation in, or in being offered an opportunity to participate in, or in being informed about, an Excluded Opportunity. An "Excluded Opportunity" is any matter, transaction or interest that is presented to, or acquired, created or developed by, or which otherwise comes into the possession of, (i) any director of the Corporation who is not an employee of the Corporation or any of its subsidiaries, or (ii) any holder of Preferred Stock or any affiliate, partner, member, director, stockholder, employee, agent or other related person of any such holder, other than someone who is an employee of the Corporation or any of its subsidiaries (collectively, "Covered Persons"), unless such matter, transaction or interest is presented to, or acquired, created or developed by, or otherwise comes into the possession of, a Covered Person expressly and solely in such Covered Person's capacity as a director of the Corporation.

 

*     *     *     *     *

 

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EX1A-2A CHARTER 6 tm2031356d1_ex2-3.htm EXHIBIT 2.3

 

Exhibit 2.3

 

  State of Delaware
  Secretary of State
  Division of Corporations
  Delivered 06:05 PM 03/07/2014
  FILED 06:05 PM 03/07/2014
  SRV 140313341 – 5242196 FILE

 

TRIPLEPULSE, INC.

 

SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

 

(Pursuant to Sections 242 and 245 of the

General Corporation Law of the State of Delaware)

 

TriplePulse, Inc., a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the “General Corporation Law”), does hereby certify as follows.

 

1.             The name of this corporation is TriplePulse, Inc. and that this corporation was originally incorporated pursuant to the General Corporation Law on November 14, 2012 under the name TriplePulse, Inc.

 

2.             The Board of Directors of this corporation duly adopted resolutions proposing to amend and restate the Certificate of Incorporation of this corporation, declaring said amendment and restatement to be advisable and in the best interests of this corporation and its stockholders, and authorizing the appropriate officers of this corporation to solicit the consent of the stockholders therefor, which resolution setting forth the proposed amendment and restatement is as follows.

 

RESOLVED, that the Certificate of Incorporation of this corporation be amended and restated in its entirety to read as set forth on Exhibit A attached hereto and incorporated herein by this reference.

 

3.             Exhibit A referred to above is attached hereto as Exhibit A and is hereby incorporated herein by this reference. This Restated Certificate of Incorporation was approved by the holders of the requisite number of shares of this corporation in accordance with Section 228 of the General Corporation Law.

 

4.             This Restated Certificate of Incorporation, which restates and integrates and further amends the provisions of this corporation’s Certificate of Incorporation, has been duly adopted in accordance with Sections 242 and 245 of the General Corporation Law.

 

IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been executed by a duly authorized officer of this corporation on this 6th day of March 2014.

 

  By:   /s/ Chris Thompson
      Chris Thompson, President

 

 

 

 

Exhibit A

 

TRIPLEPULSE, INC.

 

SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

 

ARTICLE I:    NAME

 

The name of this corporation is TriplePulse, Inc. (the “Corporation”)

 

ARTICLE II:    REGISTERED OFFICE.

 

The address of the corporation’s registered office in the State of Delaware is 1811 Silverside Road, in the City of Wilmington, County of Newcastle, State of Delaware 19810. The name of its registered agent at such address is Vcorp Services, Inc.

 

ARTICLE III:    PURPOSE.

 

The nature of the business or purposes to he conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law.

 

ARTICLE IV:    AUTHORIZED SHARES.

 

The total number of shares of all classes of stock which the Corporation shall have authority to issue is (a) 1,000,000 shares of Common Stock, $0.0001 par value per share (“Common Stock”), and (b) 110,416 shares of Preferred Stock, $0.0001 par value per share (“Preferred Stock”). The Preferred Stock may be issued from time to time in one or more series, each of such series to consist of such number of shares and to have such terms, rights, powers and preferences, and the qualifications and limitations with respect thereto, as stated or expressed herein. As of the effective date of this Restated Certificate of Incorporation (this “Restated Certificate”), 66,666 shares of the authorized Preferred Stock of the Corporation are hereby designated “Series Seed Preferred Stock” and 43,750 shares of the authorized Preferred Stock of the Corporation are hereby designated “Series Seed-B Preferred Stock. The following is a statement of the designations and the rights, powers and privileges, and the qualifications, limitations or restrictions thereof, in respect of each class of capital stock of the Corporation.

 

A.            COMMON STOCK

 

1.       General. The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights, powers and privileges of the holders of the Preferred Stock set forth herein.

 

2.       Voting. The holders of the Common Stock are entitled to one vote for each share of Common Stock held at all meetings of stockholders (and written actions in lieu of meetings). Unless required by law, there shall be no cumulative voting. The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by (in addition to any vote of the holders of one or more series of Preferred Stock that may be required by the terms of the Certificate of Incorporation) the affirmative vote of the holders of shares of capital stock of the Corporation representing a majority of the votes represented by all outstanding shares of capital stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law.

 

B.            PREFERRED STOCK

 

The following rights, powers and privileges, and restrictions, qualifications and limitations, shall apply to the Preferred Stock. Unless otherwise indicated, references to “Sections” in this Part B of this Article IV refer to sections of this Part B.

 

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1.             Liquidation, Dissolution or Winding UP; Certain Mergers, Consolidations and Asset Sales.

 

1.1            Payments to Holders of Preferred Stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or any Deemed Liquidation Event (as defined below), before any payment shall be made to the holders of Common Stock by reason of their ownership thereof, the holders of shares of Preferred Stock then outstanding shall be entitled to be paid out of the funds and assets available for distribution to its stockholders, an amount per share equal to the greater of (a) the Original Issue Price (as defined below) for such share of Preferred Stock, plus any dividends declared but unpaid thereon, or (b) such amount per share as would have been payable had all shares of Preferred Stock been converted into Common Stock pursuant to Section 3 immediately prior to such liquidation, dissolution or winding up or Deemed Liquidation Event. If upon any such liquidation, dissolution or winding up or Deemed Liquidation Event of the Corporation, the funds and assets available for distribution to the stockholders of the Corporation shall be insufficient to pay the holders of shares of Preferred Stock the full amount to which they are entitled under this Section 1.1, the holders of shares of Preferred Stock shall share ratably in any distribution of the funds and assets available for distribution in proportion to the respective amounts that would otherwise be payable in respect of the shares of Preferred Stock held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full. The “Original Issue Price” shall mean $0.30 per share for the Series Seed Preferred Stock and $0.60 per share for the Series Seed-B Preferred Stock.

 

1.2            Payments to Holders of Common Stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up or Deemed Liquidation Event of the Corporation, after the payment of all preferential amounts required to be paid to the holders of shares of Preferred Stock as provided in Section 1.1, the remaining funds and assets available for distribution to the stockholders of the Corporation shall he distributed among the holders of shares of Common Stock, pro rata based on the number of shares of Common Stock held by each such holder.

 

1.3           Deemed Liquidation Events.

 

1.3.1        Definition. Each of the following events shall be considered a “Deemed Liquidation Event” unless the holders of at least a majority of the outstanding shares of Preferred Stock (voting as a single class on an as-converted basis), the “Requisite Holders”, elect otherwise by written notice sent to the Corporation at least five (5) days prior to the effective date of any such event:

 

(a)       a merger or consolidation in which (i) the Corporation is a constituent party or (ii) a subsidiary of the Corporation is a constituent party and the Corporation issues shares of its capital stock pursuant to such merger or consolidation, except any such merger or consolidation involving the Corporation or a subsidiary in which the shares of capital stock of the Corporation outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for equity securities that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the equity securities of (1) the surviving or resulting party or (2) if the surviving or resulting party is a wholly owned subsidiary of another party immediately following such merger or consolidation, the parent of such surviving or resulting party; provided that, for the purpose of this Section 1.3.1, all shares of Common Stock issuable upon exercise of Options (as defined below) outstanding immediately prior to such merger or consolidation or upon conversion of Convertible Securities (as defined below) outstanding immediately prior to such merger or consolidation shall be deemed to be outstanding immediately prior to such merger or consolidation and, if applicable, deemed to be converted or exchanged in such merger or consolidation on the same terms as the actual outstanding shares of Common Stock are converted or exchanged; or

 

(b)       the sale, lease, transfer or other disposition, in a single transaction or series of related transactions, by the Corporation or any subsidiary of the Corporation of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole, or, if substantially all of the assets of the Corporation and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Corporation, except where such sale, lease, transfer or other disposition is to the Corporation or one or more wholly owned subsidiaries of the Corporation.

 

 - 2 - 

 

 

1.3.2       Allocation of Escrow. In the event of a Deemed Liquidation Event pursuant to Section 1.3.1(a)(i), if any portion of the consideration payable to the stockholders of the Corporation is placed into escrow, the definitive agreement for such transaction shall provide that the portion of such consideration that is placed in escrow shall be allocated among the holders of capital stock of the Corporation pro rata based on the amount of such consideration otherwise payable to each stockholder (such that each stockholder has placed in escrow the same percentage of the total consideration payable to such stockholder as every other stockholder).

 

1.3.3       Amount Deemed Paid or Distributed. The funds and assets deemed paid or distributed to the holders of capital stock of the Corporation upon any such merger, consolidation, sale, transfer or other disposition described in this Section 1.3 shall be the cash or the value of the property, rights or securities paid or distributed to such holders by the Corporation or the acquiring person, firm or other entity. The value of such property, rights or securities shall be determined in good faith by the Board.

 

2.             Voting.

 

2.1            General. On any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Fractional votes shall not be permitted and any fractional voting rights available on an as-converted basis (after aggregating all shares into which shares of Preferred stock held by each holder could be converted) shall be rounded to the nearest whole number (with one-half being rounded upward). Except as provided by law or by the other provisions of this Restated Certificate, holders of Preferred Stock shall vote together with the holders of Common Stock as a single class on an as-converted basis, shall have full voting rights and powers equal to the voting rights and powers of the holders of Common Stock, and shall be entitled, notwithstanding any provision hereof, to notice of any stockholders’ meeting in accordance with the Bylaws of the Corporation.

 

2.2            Preferred Stock Protective Provisions. So long as any shares of Preferred Stock remain outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Certificate of Incorporation) the written consent or affirmative vote of the Requisite Holders, given in writing or by vote at a meeting, consenting, or voting (as the case may be) separately as a single class:

 

(a)       alter or change the rights, powers or privileges of the Preferred Stock set forth in the certificate of incorporation of the Corporation, as then in effect, in a way that adversely affects the Preferred Stock;

 

(b)       increase or decrease the authorized number of shares of Preferred Stock (or any series thereof);

 

(c)       authorize or create (by reclassification or otherwise) any new class or series of capital stock having rights, powers, or privileges set forth in the certificate of incorporation of the Corporation, as then in effect, that are senior to any series of Preferred Stock;

 

 - 3 - 

 

 

(d)       redeem or repurchase any shares of Common Stock or Preferred Stock (other than pursuant to employee or consultant agreements giving the Corporation the right to repurchase shares at the original cost thereof upon the termination of services); or

 

(e)       declare or pay any dividend or otherwise make a distribution to holders of Preferred Stock or Common Stock.

 

3.             Conversion. The holders of the Preferred Stock shall have conversion rights as follows (the “Conversion Rights”):

 

3.1           Right to Convert.

 

3.1.1        Conversion Ratio. Each share of Preferred Stock shall be convertible, at the option of the holder thereof, at any time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing the Original Issue Price for such series of Preferred Stock by the Conversion Price (as defined below) for such series of Preferred Stock in effect at the time of conversion. The “Conversion Price” for each series of Preferred Stock shall initially mean the Original Issue Price for such series of Preferred Stock. Such initial Conversion Price, and the rate at which shares of Preferred Stock may be converted into shares of Common Stock, shall be subject to adjustment as provided below.

 

3.1.2        Termination of Conversion Rights. Subject to Section 3.3.1 in the case of a Contingency Event (as defined therein), in the event of a liquidation, dissolution or winding up of the Corporation or a Deemed Liquidation Event, the Conversion Rights shall terminate at the close of business on the last full day preceding the date fixed for the first payment of any funds and assets distributable on such event to the holders of Preferred Stock.

 

3.2            Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of the Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the fair market value of a share of Common Stock as determined in good faith by the Board. Whether or not fractional shares would be issuable upon such conversion shall be determined on the basis of the total number of shares of Preferred Stock the holder is at the time converting into Common Stock and the aggregate number of shares of Common Stock issuable upon such conversion.

 

3.3           Mechanics of Conversion

 

3.3.1        Notice of Conversion. In order for a holder of Preferred Stock to voluntarily convert shares of Preferred Stock into shares of Common Stock, such holder shall surrender the certificate or certificates for such shares of Preferred Stock (or, if such registered holder alleges that any such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate), at the office of the transfer agent for the Preferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent), together with written notice that such holder elects to convert all or any number of the shares of the Preferred Stock represented by such certificate or certificates and, if applicable, any event on which such conversion is contingent (a “Contingency Event”). Such notice shall state such holder’s name or the names of the nominees in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. If required by the Corporation, certificates surrendered for conversion shall be endorsed or accompanied by a written instrument or instruments of transfer, in form reasonably satisfactory to the Corporation, duly executed by the registered holder or such holder’s attorney duly authorized in writing. The close of business on the date of receipt by the transfer agent (or by the Corporation if the Corporation serves as its own transfer agent) of such certificates (or lost certificate affidavit and agreement) and notice (or, if later, the date on which all Contingency Events have occurred) shall be the time of conversion (the “Conversion Time”), and the shares of Common Stock issuable upon conversion of the shares represented by such certificate shall be deemed to be outstanding of record as of such time. The Corporation shall, as soon as practicable after the Conversion Time, (a) issue and deliver to such holder of Preferred Stock, or to such holder’s nominees, a certificate or certificates for the number of full shares of Common Stock issuable upon such conversion in accordance with the provisions hereof and a certificate for the number (if any) of the shares of Preferred Stock represented by the surrendered certificate that were not converted into Common Stock, (b) pay in cash such amount as provided in Section 3.2 in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and (c) pay all declared but unpaid dividends on the shares of Preferred Stock converted.

 

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3.3.2        Reservation of Shares. The Corporation shall at all times while any share of Preferred Stock shall be outstanding, reserve and keep available out of its authorized but unissued capital stock, for the purpose of effecting the conversion of the Preferred Stock, such number of its duly authorized shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then-outstanding shares of the Preferred Stock, the Corporation shall use its best efforts to cause such corporate action to be taken as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to this Restated Certificate. Before taking any action that would cause an adjustment reducing the Conversion Price of a series of Preferred Stock below the then par value of the shares of Common Stock issuable upon conversion of such series of Preferred Stock, the Corporation will take any corporate action that may, in the opinion of its counsel, be necessary so that the Corporation may validly and legally issue fully paid and nonassessable shares of Common Stock at such adjusted Conversion Price.

 

3.3.3        Effect of Conversion. All shares of Preferred Stock that shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares shall immediately cease and terminate at the Conversion Time, except only the right of the holders thereof to receive shares of Common Stock in exchange therefor, to receive payment in lieu of any fraction of a share otherwise issuable upon such conversion as provided in Section 3.2 and to receive payment of any dividends declared but unpaid thereon. Any shares of Preferred Stock so converted shall be retired and cancelled and may not be reissued.

 

3.3.4        No Further Adjustment. Upon any conversion of shares of Preferred Stock, no adjustment to the Conversion Price of the applicable series of Preferred Stock shall be made with respect to the converted shares for any declared but unpaid dividends on such series of Preferred Stock or on the Common Stock delivered upon conversion.

 

3.4           Adjustment for Stock Splits and Combinations. If the Corporation shall at any time or from time to time after the date on which the first share of a series of Preferred Stock is issued by the Corporation (such date referred to herein as the “Original Issue Date” for such series of Preferred Stock) effect a subdivision of the outstanding Common Stock, the Conversion Price for such series of Preferred Stock in effect immediately before that subdivision shall be proportionately decreased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be increased in proportion to such increase in the aggregate number of shares of Common Stock outstanding If the Corporation shall at any time or from time to time after the Original Issue Date for a series of Preferred Stock combine the outstanding shares of Common Stock, the Conversion Price for such series of Preferred Stock in effect immediately before the combination shall be proportionately increased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this Section 3.4 shall become effective at the close of business on the date the subdivision or combination becomes effective.

 

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3.5           Adjustment for Certain Dividends and Distributions. In the event the Corporation, at any time or from time to time after the Original Issue Date for a series of Preferred Stock shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable on the Common Stock in additional shares of Common Stock, then and in each such event the Conversion Price for such series of Preferred Stock in effect immediately before such event shall be decreased as of the time of such issuance or, in the event such a record date shall have been fixed, as of the close of business on such record date, by multiplying such Conversion Price then in effect by a fraction:

 

(a)       the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and

 

(b)       the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution.

 

Notwithstanding the foregoing, (i) if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, such Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter such Conversion Price shall be adjusted pursuant to this Section 3.5 as of the time of actual payment of such dividends or distributions; and (ii) no such adjustment shall be made if the holders of such series of Preferred Stock simultaneously receive a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock that they would have received if all outstanding shares of such series of Preferred Stock had been converted into Common Stock on the date of such event.

 

3.6           Adjustments for Other Dividends and Distributions. In the event the Corporation at any time or from time to time after the Original Issue Date for a series of Preferred Stock shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation (other than a distribution of shares of Common Stock in respect of outstanding shares of Common Stock), then and in each such event the holders of such series of Preferred Stock shall receive, simultaneously with the distribution to the holders of Common Stock, a dividend or other distribution of such securities in an amount equal to the amount of such securities as they would have received if all outstanding shares of such series of Preferred Stock had been converted into Common Stock on the date of such event.

 

3.7           Adjustment for Reclassification, Exchange and Substitution. If at any time or from time to time after the Original Issue Date for a series of Preferred Stock the Common Stock issuable upon the conversion of such series of Preferred Stock is changed into the same or a different number of shares of any class or classes of stock of the Corporation, whether by recapitalization, reclassification, or otherwise (other than by a stock split or combination, dividend, distribution, merger or consolidation covered by Sections 3.4, 3.5, 3.6 or 3.8 or by Section 1.3 regarding a Deemed Liquidation Event), then in any such event each holder of such series of Preferred Stock shall have the right thereafter to convert such stock into the kind and amount of stock and other securities and property receivable upon such recapitalization, reclassification or other change by holders of the number of shares of Common Stock into which such shares of Preferred Stock could have been converted immediately prior to such recapitalization, reclassification or change.

 

3.8           Adjustment for Merger or Consolidation. Subject to the provisions of Section 1.3, if there shall occur any consolidation or merger involving the Corporation in which the Common Stock (but not a series of Preferred Stock) is converted into or exchanged for securities, cash, or other property (other than a transaction covered by Sections 3.5, 3.6 or 3.7), then, following any such consolidation or merger, provision shall be made that each share of such series of Preferred Stock shall thereafter be convertible, in lieu of the Common Stock into which it was convertible prior to such event, into the kind and amount of securities, cash or other property which a holder of the number of shares of Common Stock of the Corporation issuable upon conversion of one share of such series of Preferred Stock immediately prior to such consolidation or merger would have been entitled to receive pursuant to such transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board) shall be made in the application of the provisions in this Section 3 with respect to the rights and interests thereafter of the holders of such series of Preferred Stock, to the end that the provisions set forth in this Section 3 (including provisions with respect to changes in and other adjustments of the Conversion Price of such series of Preferred Stock) shall thereafter he applicable, as nearly as reasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of such series of Preferred Stock.

 

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3.9            Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price of a series of Preferred Stock pursuant to this Section 3, the Corporation at its expense shall, as promptly as reasonably practicable but in any event not later than 15 days thereafter, compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of such series of Preferred Stock a certificate setting forth such adjustment or readjustment (including the kind and amount of securities, cash or other property into which such series of Preferred Stock is convertible) and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, as promptly as reasonably practicable after the written request at any time of any holder of any series of Preferred Stock (but in any event not later than 10 days thereafter), furnish or cause to be furnished to such holder a certificate setting forth (a) the Conversion Price of such series of Preferred Stock then in effect and (b) the number of shares of Common Stock and the amount if any, of other securities, cash or property which then would he received upon the conversion of such series of Preferred Stock.

 

3.10          Mandatory Conversion. Upon either (a) the closing of the sale of shares of Common Stock to the public in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended or (b) the date and time, or the occurrence of an event, specified by vote or written consent of the Requisite Holders at the time of such vote or consent, voting as a single class on an as-converted basis (the time of such closing or the date and time specified or the time of the event specified in such vote or written consent is referred to herein as the “Mandatory Conversion Time”), (i) all outstanding shares of Preferred Stock shall automatically be converted into shares of Common Stock, at the applicable ratio described in Section 3.1.1 as the same may be adjusted from time to time in accordance with Section 3 and (ii) such shares may not be reissued by the Corporation.

 

3.11          Procedural Requirements. All holders of record of shares of Preferred Stock shall be sent written notice of the Mandatory Conversion Time and the place designated for mandatory conversion of all such shares of Preferred Stock pursuant to Section 3.10. Unless otherwise provided in this Certificate of Incorporation, such notice need not be sent in advance of the occurrence of the Mandatory Conversion Time. Upon receipt of such notice, each holder of shares of Preferred Stock shall surrender such holder’s certificate or certificates for all such share’s (or, if such holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate) to the Corporation at the place designated in such notice, and shall thereafter receive certificates for the number of shares of Common Stock to which such holder is entitled pursuant to this Section 3. If so required by the Corporation, certificates surrendered for conversion shall be endorsed or accompanied by written instrument or instruments of transfer, in form reasonably satisfactory to the Corporation, duly executed by the registered holder or such holder’s attorney duly authorized in writing. All rights with respect to the Preferred Stock converted pursuant to Section 3.10, including the rights, if any, to receive notices and vote (other than as a holder of Common Stock), will terminate at the Mandatory Conversion Time (notwithstanding the failure of the holder or holders thereof to surrender the certificates at or prior to such time), except only the rights of the holders thereof, upon surrender of their certificate or certificates (or lost certificate affidavit and agreement) therefor, to receive the items provided for in the next sentence of this Section 3.11.  As soon as practicable after the Mandatory Conversion Time and the surrender of the certificate or certificates (or lost certificate affidavit and agreement) for Preferred Stock, the Corporation shall issue and deliver to such holder, or to such holder’s nominee(s), a certificate or certificates for the number of full shares of Common Stock issuable on such conversion in accordance with the provisions hereof, together with cash as provided in Section 3.2 in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and the payment of any declared but unpaid dividends on the shares of Preferred Stock converted. Such converted Preferred Stock shall be retired and cancelled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Preferred Stock (and the applicable series thereof) accordingly.

 

 - 7 - 

 

 

 

4.             Dividends. All dividends shall be declared pro rata on the Common Stock and the Preferred Stock on a pari passu basis according to the number of shares of Common Stock held by such holders. For this purpose each holder of shares of Preferred Stock is to be treated as holding the greatest whole number of shares of Common Stock then issuable upon conversion of all shares of Preferred Stock held by such holder pursuant to Section 3.

 

5.             Redeemed or Otherwise Acquired Shares. Any shares of Preferred Stock that are redeemed or otherwise acquired by the Corporation or any of its subsidiaries shall be automatically and immediately cancelled and retired and shah not be reissued, sold or transferred. Neither the Corporation nor any of its subsidiaries may exercise any voting or other rights granted to the holders of Preferred Stock following redemption.

 

6.             Waiver. Any of the rights, powers, privileges and other terms of the Preferred Stock set forth herein may be waived on behalf of all holders of Preferred Stock by the affirmative written consent or vote of the holders of the Requisite Holders.

 

7.             Notice of Record Date. In the event:

 

(a)            the Corporation shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon conversion of the Preferred Stock) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or

 

(b)           of any capital reorganization of the Corporation, any reclassification of the Common Stock of the Corporation, or any Deemed Liquidation Event; or

 

(c)            of the voluntary or involuntary dissolution, liquidation or winding-up of the Corporation,

 

then, and in each such case, the Corporation will send or cause to be sent to the holders of the Preferred Stock a notice specifying, as the case may be, (i) the record date for such dividend, distribution or right, and the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up is proposed to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other capital stock or securities at the time issuable upon the conversion of the Preferred Stock) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up, and the amount per share and character of such exchange applicable to the Preferred Stock and the Common Stock. Such notice shall be sent at least 20 days prior to the earlier of the record date or effective date for the event specified in such notice.

 

 - 8 - 

 

 

8.             Notices. Except as otherwise provided herein, any notice required or permitted by the provisions of this Article IV to be given to a holder of shares of Preferred Stock shall be mailed, postage prepaid, to the post office address last shown on the records of the Corporation, or given by electronic communication in compliance with the provisions of the General Corporation Law, and shall be deemed sent upon such mailing or electronic transmission.

 

ARTICLE V:    PREEMPTIVE RIGHTS.

 

No stockholder of the Corporation shall have a right to purchase shares of capital stock of the Corporation sold or issued by the Corporation except to the extent that such a right may from time to time be set forth in a written agreement between the Corporation and any stockholder.

 

ARTICLE VI:    RESERVED

 

ARTICLE VII:    BYLAW PROVISIONS.

 

A.            AMENDMENT OF BYLAWS. Subject to any additional vote required by the Certificate of Incorporation or Bylaws, in furtherance and not in limitation of the powers conferred by statute, the Board is expressly authorized to make, repeal, alter, amend and rescind any or all of the Bylaws of the Corporation.

 

B.            NUMBER OF DIRECTORS. Subject to any additional vote required by the Certificate of Incorporation, the number of directors of the Corporation shall be determined in the manner set forth in the Bylaws of the Corporation.

 

C.            BALLOT. Elections of directors need not be by written ballot unless the Bylaws of the Corporation shall so provide.

 

D.            MEETINGS AND BOOKS. Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws of the Corporation may provide. The books of the Corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the Board or in the Bylaws of the Corporation.

 

ARTICLE VIII:    DIRECTOR LIABILITY.

 

A.            LIMITATION. To the fullest extent permitted by law, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the General Corporation Law or any other law of the State of Delaware is amended after approval by the stockholders of this Article VIII to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the General Corporation Law as so amended. Any repeal or modification of the foregoing provisions of this Article VIII by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of, or increase the liability of any director of the Corporation with respect to any acts or omissions of such director occurring prior to, such repeal or modification.

 

B.            INDEMNIFICATION. To the fullest extent permitted by applicable law, the Corporation is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Corporation (and any other persons to which General Corporation Law permits the Corporation to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise, in excess of the indemnification and advancement otherwise permitted by Section 145 of the General Corporation Law.

 

 - 9 - 

 

 

C.            MODIFICATION. Any amendment, repeal or modification of the foregoing provisions of this Article VIII shall not adversely affect any right or protection of any director, officer or other agent of the Corporation existing at the time of such amendment, repeal or modification.

 

ARTICLE IX:    CORPORATE OPPORTUNITIES.

 

The Corporation renounces any interest or expectancy of the Corporation in, or in being offered an opportunity to participate in, or in being informed about, an Excluded Opportunity. An “Excluded Opportunity” is any matter, transaction or interest that is presented to, or acquired, created or developed by, or which otherwise comes into the possession of, (i) any director of the Corporation who is not an employee of the Corporation or any of its subsidiaries, or (ii) any holder of Preferred Stock or any affiliate, partner, member, director, stockholder, employee, agent or other related person of any such holder, other than someone who is an employee of the Corporation or any of its subsidiaries (collectively, “Covered Persons”), unless such matter, transaction or interest is presented to, or acquired, created or developed by, or otherwise comes into the possession of, a Covered Person expressly and solely in such Covered Person’s capacity as a director of the Corporation.

 

* * * * *

 

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EX1A-2A CHARTER 7 tm2031356d1_ex2-4.htm EXHIBIT 2.4

 

Exhibit 2.4

 

  ' ... ....... Stat:e of Delaware seczeeary of state Division of corporations Delivered 11:25 .PM 09/08/2014 FILED 11:25 PH 09/08/2014 SRV 141160770 - 5242196 FILE CERTIFICATE OF AMENDMENT TO THE SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF TRIPLEPl."LSE, INC. TriplePulse, Tnc. (the "Corporation"), a corporation organized and existing under and hy virtue of the provisions of the General Corporation Law of the State of Delaware (the "General Corporation Law"), dot:s hc::rc::by cc::rtify as follows: 1. The Corporation was originally incorporated pwsuant to the General Corporation Law on November 14, 2012 under the name TriplePulse, Inc. 2. This Certificate of Amendment to the Second Amended and Restated Certificate oflncorporation of the Corporation was duly adopted by the Board of Directors of the Corporation and by the stockholders of the Corporation in accordance with Sections 228 and 242 of the General Corporation Law. 3. The first paragraph of .tuticle IV of Second Amended and Restated Certificate of Incorporation of the Corporation is hereby deleted in its entirety and replaced with the following: "The:: total numbt:r of shan:s of all classc::s of stock which the:: Corporation shall havt: authority to issue IS (a) 2,000,000 shares of Common Stock, $0.0001 par value per share ("Common Stock"), and (b) 110,416 shares of Preferred Stock, $0.0001 par value per share ("Preferred Stock"). The Preferred ::ltock may be 1ssued from time to time in one or more series, each of such series to consist of such number of shares and to have such terms, rights, powers and preferences, and the qualifications and limitations with respect thereto, as stated or expressed herein. As of the effective date of this Restated Certificate of Incorporation (this "Restated Certiftcate"), 66,666 shares of the authorized Preferred Stock of the Corporation are hereby designated "Series Seed Preferred Stock" and 43,750 shares of the authorized Preferred Stock of the Corporation are hereby designated "Series Seed-B Preferred Stock". The following is a statement of the designations and the rights, powers and privileges, and the qualifications, limitations or restrictions thereo!in respect of each class of capital stock of the Corporation." 4. Tht: aforc::said amtlndmt:nt was duly adoplt:d in accordance:: with the:: provisions of St:clion 242 uf the Uelaware General Corporation Law. IN WITNESS WHEREOF , the undersigned has caused this Amended Certificate of Incorporation to be signed as of the 24th day of July, 2014. TRIPLEPULSE, INC. c......... ----.::::::'":.......-: ,.-,-.-.-;.;. By: - Christopher Thompson President

 

 

 

  state c¢ De.laMire Seczetary o:E Sta.t:e Div.idon of Co.tpOrations Deliwu:ad 06:0EM 03/07/2024 FILED 06:05 PH 03/07/2014 SRV 140313341 - 5242196 FILE TRIPLEPLLSE, INC. SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATJON (Pursuant to Sections 242 and 245 of the Geoneral Corporation law of the State ofDelnware) TriplcPul:sc, Inc., a rorpontion organized Md c:tisting w1dcr ltlld by virtue of the provisions of the General Corporation Law of the State of Delaware (the "Gemmtl Corporation Ltrw"), docs l:crcby oortiy os follows. 1. The nnme of thifl corporotion ia TriplePulse, Inc. ond that thi3 COf!'Omtion was originally umk:r th name i.ncorpmato.l pursuanL lO Lh Gt:na-dl CoJporalion Law on Nonmhei 14. 2111 TriplePul!2, In.z. 2. The Board of Director!l of this corporation duly adopted resolutions proposing to amend and restate the Certificate of Incorporation of this corporation. declaring said amendment and restatement to be advisable and in the best inter;sts of this COQOration and its stockholders, and authorizing the appropriate officers of this corporation to solicit thi:: consent of the stockholders therefor, wl:ich resolution sening forrh the proposed am ndment and restateDlent is as follows. RESOLVTID, that the Certifica:e of Incorpon:tion of th.ls corporation lx: amended and re.stated in its entir ty to read as set forth on Exhibit A attached hereto and incorporated herein by this reference. 3. Exhrbrt A referred to above is attached hereto as Exh!btl A and rs hereby incorporated l1erein by this reference. This Restated Cenificate of Incorporaticm wapproved by the :10lders of the requisite number of shares of this corpcration in accordance with Section 22ll of the General Corporation Law. 4. This Hestated eertific:lte of Incorporation, which. restats and int gratcs and funhcr amends the provmion:of t!us C•)tporetion's Certificate of Inoorporation,. ha:; lx:.::n duly adopted in accordance with Sections 242 and 245 of the Genl:ral CorporatiOn Law. IN WIT ESS WliEREOF, 1his Resta£ed Certificate of lncorporatum has been execute-d by a duly authorized otlicer ofthis corporati::>n o:t this 6th day of 1arch 2014. By: c & c._:__:_: ·-; - · C:hriThompson, President

 

 

 

  Exhibit A TRIPLEPULSE, Il\C. SECOND AMENDED AND RESTATED CERTIFICATE OF Il'CORPORATION ARTICLE 1: NAME. The name of this coiporation is TriplePulse, Inc. (the "Corporation") ARTICLE II: REGISTERED OFFICE. TI1e address of the corporation's Jegistered office in the State of Delaware is 1811 Silverside Road, in the City of Wilmington, County of Newcastle, State of Delaware 19810. The name of its registered agent at such address is Vcorp Services, Inc. ARTICLE ID: PURPOSE. The nature of the husiness or purposes to he conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law. ARTICLE IV: AUTHORIZED SHARES. The total nwnber of shares of all classes of stock which the Corporation shall have authority to issue is (a) 1,000,000 shares of Common Stock, $0.0001 par value per share ("Common Stock"), and (b) 110.416 shares of Preferred Stock, $0.0001 par value per share (""Preferred Stock"). The Preferred Stock may be issued from time to time in one or more series, each of such series to consist of such number of shares and to have such terms, rights, powers and preferences, and the qualifications and limitations with respect thereto, as stated or expressed herein. _4s of the effective date of this Restated Certificate of Incorporation (this "Restated Certifu:ate"), 66,666 shares of the authorized Preferred Stock of the Corporation are hereby designated "Serie.'i Seed Preferred Stock" and 43,750 shares of the authorized Preferred Stock of the Corporation are hereby designated "Series Seed-B Preferred Stock". The following is a statement of the designations and the right<>, powers and privileges, and the qualifications, limitations or restrictions thereof, in respect of each class of capital stock of the Corpomtion. A. COMMON STOCK 1. General. The voting, uividt:nd and liquiilalion right:; of the holders of the Common Stock are subject to and qualified by the rights, powers and privileges of the holders of the Preferred Stock set forth herein. 2. Voting. The holders of the Common Stock are entitled to one vote for each share of Common Stock held at all meetings of stockholders (and written actions in lieu of meetings). Unless required by law, there shall be no cumulative voting. The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by (in addition to any vote of the holders of one or more series of Preferred Stock that may be required by the terms of the C-ertificate of Incorporation) the af:finnative vote of the holders of shares of capital stock of the Corporation representing a majority of the votes represented by all outstanding shares of capital stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law. R PREFERRED STOCK The following righl.s, powers aml privilt:ge:;, ami re::;Lrictiuns, lJUaliliGaliuns and limitations, :;hall apply to the Preferred Stock. Cnless otherwise indicated, references to "Sections" in this Part B of this ArliclIV refer lo sections of this Part B. -1-

 

 

 

  1. Liquidation, Dissolution or Winding Up; Ccrtnin Mergers, Consolidgtions nod Asset 1.1 Payments to Holders of Preferred Stock. In the event of any voluntary or involuntal)' liquidation, dissolution or winding up of the Corporation or any Deemed Liquidation Event (as defined below), before any payment shall be made to the holders of Common Stock by reason of their ownership thereotthe holders of shares of Preferred Stock then outstanding shall be entitled to be paid out of the funds and assets available for distribution to its stockholders. an amount per share equal to the greater of (a) the Original Issue Price (as defined below) for such share of Preferred Stock, plus any dividends declared but unpaid thereon, or (b) such amount per share as would have been payable had all shares of Preferred Stock heen converted into Common Stock pursuant to ection 3 immediately prior to such liquidation, dissolution or winding up or Deemed Liquidation Event If upon any such liquidation, dissolution or winding up or neemed T.iquidation Rvent of the Corporation, the funds and asset" available for distribution to the stockholders of the Corporation shall be insuflicient to pay the holders of shares of Preferred Stock the full amount to which they are entitled under this Section 1.1. the holders of shares of Preferred Stock shall shanratably in any distribution of the funds and assets available for distribution in proportion to the respective amounts that would otherwise be payable in respect of the shares of Preferred Stock held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full. The "Original Issue Price"" shall mean $0.30 per share for the Series Seed Preferred Stock and $0.60 per share for the Series Seed-B Preferred Stock. Payments to Holders of Common Stock. In the event of any voluntary or 1.2 involuntary liquidation, dissolution or winding up or Deemed Liquidation Event of tbc Corporation, after the payment of all preferential amounts required to he paid tO the holders of shares of Preferred :)tock a.'> provided in Section 1.1, the remaining funds and IISSets available for distribution to the stockholders of the Corporation shall he distributed among the holders of share.<> of Common Stock, pm rata hased on the number of shares of Common Stock held by each such holder. 1.3 Deemed Liquidation Events. 1.3.1 Definition. Each of the following events shall be considered a "Deemed Liquidation Event' unless the holders of at least a m jority of the outstanding shares of Preferred Stock (voting as a single cla;;s on an as-converted ha'>is), the " Requisite Holder.'<", el ect otherwise hy written notice sent to the Corporation at least five (5) days prior to the effective date of any such event: (a) a merger or consolidation in which (i) the Corporation is a constituent party or (ii) a subsidiary of the Corporation is a constituent party and the Corporation issues shares of its capital stock pursuant to such merger or consolidation, except any such merger or consolidation involving the Corporation or a subsidiary in which the shares of capital stock of the Corporation outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for .equity securities that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the equity securities of (1) the surviving or resulting party or (2) if the surviving or resulting party is a wholly owned subsidiary of another party immediately following such merger or consolidation, the parent of such surviving or resulting party; provided that, for the purpose ofthis Section 1.3.1, all shares of C:ommon Stock issuable upon exercise of Options (a.<> defined below) outstAnding immediately prior to such merger or consolidation or upon conversion of Convertible Securities (as defined below) outstAnding immediately prior to such merger or consolidation shall he deemed to be outstanding immediately prior to such merger or consolidation and, 1f applicable, deemed to be convened or exchanged in such merger or consolidation on the same terms as the actual outstanding shares of Common Stock are converted or exchangedor (b) the sale, lease, transfer or other disposition, in a single transaction or series of related transactions, by the Corporation or any subsidiar-Y of the -2-

 

 

 

  .,"»..,uuu-. "'''»":::f. t-ran"'': &..oe•zeo .._up:an Corporation of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole, or, if .substantially all of the assets ofthe Corporation and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Corporation. except where such sale. lease, transfer or other disposition is to the Corporation or one or more wholly owned subsidiaries of the Corporation. In the event of a Deemed Liquidation Event 1.3.2 Allocation of Escrow. pun;uant to St:elion 1.3.1(aXi), if cmy portion of the coru;ic.lt:ration payable to the slockhuklt::rs of the Corporation is placed into escrow, the definitive agreement tor such transaction shall provide that the portion of such consic.leration thal is placet! in escrow shall be allocated among Lhe holder:; of capital stock of the Corporation pro rata based on the amount of such consideration otherwise payable to each stockholder (such that each stockholder ltas placed .in escrow the same percentage of the total consideration payable to such stockholder as every other stockholder). 1.3.3 Amount Deemed Paid or Distributed. The funds and assets deemed paid or distributed to the holders of capital stock of the Corporation upon any such merger, consolidation, sale, transfer or other disposition descrihed in this Section 1.3 shall he the cash or the value of the property, rights or securities paid or distributed to such holders by the Corporation oc the acquiring person, fum or other entity. The value of uch property, right<; or securities shall he determined in good faith hy the Board. 2. Voting. 2.1 General. On any matter presented to the stocl<holders of the Corporation for their action or consideration at any meeting of stockholders of the C01p0ration (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Preferred Stock shall be entitled to cost the number of votes equal to the number of whole shares of Common Stock into wruch the shares of Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Fractional votes shall not be permitted and any fractional voting rights availablt: on em a:;-cunvt:rlt:d ba:>is (after aggrt:g11ting all shart:s into which :;hares of Prt:ft:rred stock. ht:ld by each holder could be converted) shall be rounded to the ne.arest whole number (with one-half being rolUltlt:d upward). Except a:> provided by law or by lht: olht:r provision:; of lhis Rt:statt:d Ct:rtillcal.t:, holders of .Preferred Stock shall vote together with the holders of Common Stock as a single class on an as-converted basis, shall have full voting rights and powers equal to the voting rights and powers of the holders of Common Stock, and shall bt: entitled, noW..ithstanding any provision hereof, to notice of any stockholders' meeting in accordance with the Bylaws of the Corporation. 2.2 Preferred Stock Protective Provisions. So long as any shares of Preferred Stock remain outstanding, the Corporation shall not, either directly or indirectly by amendme.nt, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Certificate of Incorporation) the written consent or affirmative vote of the Requisite Holders, given in writing or by vote at a meeting, consenting, or voting (as the case may be) separately as a single class: (a) alter or change the rights, powers or privileges of the Preferred Stock set forth in the certificate of incorporation of the Corporation, as then in effect,. in a way that adversely affects the Preferred Stock; (h) Stock (or any series thareoi); (c) increa.<;e nr decrease the authori7.ed number of shares of Preferred authorize or create (by reclassification or otherwise) any new class or series of capital stock having rights, powers, or privileges set forth in the certificate of incorporation of the Corporation, as then in effect, that are senior to any series of Preferred Stock; -3-

 

 

 

(d) redeem or repurchase any shares of Common Stock or Preferred Stock (other than pursuant to employee or consultant agreements giving the Corporation the right to repurchase shares at the original cost thereof upon the termination of services); or (e) declare or pay any dividend or otherwise make a distribution to holders of Preferred Stock or Common Stock. 3. Conversion. The holders of the Preferred Stock shall have conversion rights as follows (the "Conversion Rights"): 3.1 Right to Conye ·l 3.1.1 Conversion Ratio. Each share of Preferred Stock shall be convertible, at the option of the holder thereof, at any time, and without the payment of additional consideration by the holder thereof, into such nwnber of fully paid and nonassessable shares of Common Stock as is determined by dividing the Original Issue Price for such series of Preferred Stock by the Conversion Price (os defmed below) for such series of Preferred Stock in effect at the time of conversion. The "Cnnl'ersion Price" for each series of Preferred Stock shall initially mean the Original Tssue Price for such series of Preferred Stock Such initial Conversion Price, 3Ild the rate at which shares of Preferred Slock may be convert.:d into shares of Common Stock, shall be subjecllo aJjustmenl as provided bdow. 3.1.2 Termination of Conversion Rights. Subject to Section 3.3.1 in the case of a Contingency Event (as de1med therein), in the event of a liquidation, dissolution or winding up of the Corporation or a Deemed Liquidation Event, the Conversion Rights shall terminate at the close of business on the last full day preceding the date fiXed for the first payment of any funds and assets distributable on such event to the holders of Preferred Stock. 3.2 Fractional Shares. No :fractional shares of Common Stock shall be issued upon conversion of the Preferred Stock. In lieu of any fractional shares to which the holder would othemise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the fair market value of a share of Common Stock as determined in good faith by the Board Whether or not fractional shares would be issuable upon such conversion shall be determined on the basis of the total number of shares of Preferred Stock the holder is at the time converting into Common Stock and the aggregate number of shares of Common Stock issuable upon such conversion. 3.3 Mechanics of Conversion 3.3.1 :-lolice of Conversion.In order for a holder of Prefem:<.l Stock to voluntarily convert shares of Preferred Stock into shares of Common Stock, such holder shall surrender thct:rtifil:ate or certillcals for sw.:h shares of Preferred Stock. (or, if su.:h regislert:d holJt:r alleges that any such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasona bly acceptable to the Corporation to indemnifY the Corpomtion against any claim that may be made against the Cm.poration on account of the alleged loss, theft or destruction of such certificate), at the office of the transfer agent fur the Preferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent), together with written notice that such holder elects to convert all or any number of the shares of the Preferred Stock represented by such certificate or certificates and. if applicable, any event on which such conversion is contingent (a "Contingency Event"). Such notice shall state such holder's name or the names of the nominees in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. If required by the Corporation, certificates surrendered for conversion shall be endorsed or accompanied by a written instrwnent or instruments of transfer, in form reasonably aiisfactory to the Corporation, duly executed hy the registered holder nr such holder's attorney duly authorized in writing. The close of business on the date of receipt by the tnmsfer agent (or hy the Corporation if the f'A>rporation serves a.<; its ovm transfer agent) of such certificate(or lost certificate affidavit and agreement) and notice (or, if later, the date on which all Contingency Events have occurred) shall be the time of conversion (the uconversion Time"), and the shares of Common -4-

 

 

 

Stock issuable upon conversion of the shares represented by such certificate shall be deemed to be outstanding of record as of such time. The Corporation shall, as soon as practicable after the Conversion Time, (a) issue and deliver to such holder of Preferred Stock, or to such holder's nominees, a certificate or certificates for the number of full shares of Common Stock issuable upon such conversion in accordance with the provisions hereof and a certificate for the number (if any) of the shares of Preferred Stock represented by the surrendered certificate that were not converted into Common Stock, (b) pay in cash such amount as prm.rided in Section 3.2 in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and (c) pay all declared but unpaid dividends on the shares of Preferred· Stock converted. 3.3.2 Rest::rvalion of Shan:s. The Corporation shall al all Lim:s whilt: any share of Preferred Stock shaU be outstanding, reserve and keep available out of its authorized but unissued capital stock, for the purpose of effecting the conversion of the Preferred Stock. such nwnbe.r of its duly authorized shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding Preferred Stock; and if at any time the nun1ber of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then-outstanding shares of the Preferred Stock, the Corporation shall use its best eftorts to cause such corporate action to be taken as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to this Restated Certificate. Before taking nny action that would cause an adjustment reducing the Conve Sion Price of a series of Preferred Stock below the then par value of the shares of Common Stock issuable upon conversion of such series of Preferred Stock, the Corporation will take any corporate action that may, in the opinion of its counsel, be necessary :;o that the Corporntion may validly and legally issue fully paid and nonas.c. ;essable shares of Common Stock at such adjusted Conversion Price. 3.3..3 Effect of Conversion. All shares of Preferred Stock that shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares shall immediately cease and terminate at the Conversion Time, except only the right of the holders thereof to receive shares of Common Stock in excllange therefor, to receive payment in lieu of any fraction of a share otherwise issuable upon such conversion as provided in Section 3.2 and to receive payment of any dividends declared but unpaid thereon. Any shares of Preferred Stock so converted shall be retired and cancelled and may not be reissued. 3.3..4 )lu Furtht:r Adju;;!ment. Upun any conversion of shares uf Preft:rred Stock, no adjustment to the Conversion Price of the applicable series of Preferred Stock shall be made with r p cl to the cunve::rled shan::> for any declart::d but unpaid ilividen<ls on such series of Preft:rred Stock or on the Common Stock delivered upon conversion. 3.4 Adjustment for Stock Splits and Combinations. If the Corporation shall at any time or from time to time after the date on which the flrst share of a series of Preferred Stock is issued by the Corporation (such date referred to herein as the "Original Issue Date'' for such series of Preferred Stock) effect a subdivision of the outstanding Common Stock, the Conversion Price for such series of Preferred Stock in effect immediately hefore that suhdivi:;ion shall be proportionately decrea!>ed so that the number of shares of Common Stock issuable on conversion of each share of such series shall be increased in proportion to such increase in the aggregate number of shares of Common tock outstanding. If the Corporation shall at any time or from time to time after the Original Issue Date fix a series of Prefem:d Stuck combine the outstanding shares of Conunon St()(;k, the Conversion Price for such series of Preferred Stock in effect immediately before the combination shall be proportionately increased so that the nwnber of shares of Common Stock issuable on conversion of each share of such series shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this Section 3.4 shall become effective at the close of business on the date the subdivision or combination becomes effective. -5-

 

 

 

3.5 Adjustment for Certain Dividends and Distributions. In the event the Corporation at any time or from time to time after the Original Issue Date for a series of Preferred Stock shall make or issue, or fix a record date ior the determination of holders of Common Stock entitled to n:<Xi.vt:, a dividend or olhr distribution payable on the Common Stuck in additional shares of Common Stock, then and in each such event the Conversion Price for such series of .Preferred Stock in effect inunediatcly before such event shall be decreased as of the time of such issuance or, in the event such a record date shall have been fixed, as of the clooe of business on such record date, by multiplying such Conversion Price then in effect by a fraction: (a) the numerator of which shall be the total number of shares of Common Sluck. issut:d aml ouls!.amling immeiliaLely prior lo the time of such issuance or the close of business on such record date, and the denominator of which shall he the total num her of shares of Common (h) Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such reconl dale plus the number of shares of Common Stock issuable in paymtlnt of such dividend or distribution. Notwithstanding the foregoing, (i) if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date flxed therefor, such Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter such Conversion Price shall be adjusted pursuant to this Section 3.5 as of the time of actual payment of such dividends or distributionsand (ii) no such adjuslrn nt shall re made if Lhe holdcrs of su<.:h series of Preferred Stock simultaneously receive a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock that they would have received if all outstanding shares of such series of Preferred Stock had been converted into Common Stock on the date of such event. 3.6 Adjustments for Other Dividends and Distributions. In the event the Corporation at any time or from time to time after the Original Issue Date for a series of Preferred Stock shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a di'vi.dend or other distribution payable in securities ofthe Corporation (other than a distribution of shares of Common Stock in respect of outc;tanding shares of Common Stock), then and in each such event the holders of such series of Preferred Stock shall receive, simultaneously with the distribution to the holders of Common Stock. a dividend or other distribution of such securities in an amount equal to the amount of such securities as they would have received if all outstanding shares of such series of Preferred Stock had bt:en converted into Common Stock on thualof such vent. 3.7 Adjustment for Reclassification, Exchange and Substitution. If at any time or from time to time after the Original Issue Date for a series of Preferred Stock the Common Stock issuable upon the conversion of such series of Preferred Stock is changed into the same or a different number of shares of any class or classes of stock of the Corporation, whether by recapitalization, reclassification, or otherwise (other than by a stock split or combination, dividend, distribution, merger or consolidation covered by Sections 3.4, 3.5. 3.6 or 3.8 or by Section 1.3 regarding a Deemed Liquidation Event), then in any such .,vent each holder of such series of Preferred Stock shall have the right thereafter to convert such stock into the kind and amount of stock and other securitie.<> and property receivable upon such recapitalization, reclassification or other change by holders of the number of shares of Common Stock into which such shares of Preferred Stock could have been converted immediately prior to such recapitalization, reclassification or change. 3.8 Adjustment for Merger or Consolidation. Subject to the provisions of Section 1.3. if there shall occur any consolidation or merger involving the Corporation in which the Conunon Stock (but not a series of Preferred Stock) is converted into or exchanged for securities, cash, or other property (other than a transaction covered by Sections 3.5, 3.6 or 3.7), then, following any such consolidation or merger, provision shall be made that each share of such series of Preferred Stock shall -6-

 

 

 

  ther after be convertible, in lieu of the Common Stock into which it was convertible prior to such event, into the kind and antount of securities. cash or other property which a holder of the nW11ber of shares of Common Stock of the Corporation issuable upon conversion of one share of such series of Preferred Stock immediately prior to such consolidation or merger would have been entitled to receive pursuant to such transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board) shall be made in the application of thprovisions in this Section 3 with respect to the rights and interests thereafter of the holders of such series of Preferred Stock, to the end that the provisions set forth in this Section 3 (including provisions with respect to changes in and other adjustments of the Conversion Price of such .series of Preferred Stock) shall thereafter he applicahle, as nearly as reasonably may he, in relation to any securities or other property thereafter deliverable upon the conversion of such series of Preferred Stock. 3.9 Certificate as to Adjustments. "Cpon the occWience of each adjustment or readjustment of the Conversion Price of a series of Preferred Stock pursuant to this Section 3, the Corporation at its expense shall, as promptly as re.asonably practicable but in any event not later than 15 days thereafter, compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of such series of Preferred Stock a certificate setting forth such adjustment or readjustment (including the kind and amount of securities, cash or other property into which such series of Preferred Stock is convertible) and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, as promptly as reasonably practicable afte.r the written request at any time of any holder of nny series of Preferred Stock (but in any event not loter than 10 days thereafter), furnish or cause to be furnished to such holder a certificate setting forth (a) the Conversion Price of such series of Preferred Stock then in effect and (b) the number of shares of Common Stock and the amount, if y, of other securities, ca.h or property which then would he received upon the conversion of such serie!; of Preferred Stock. 3.10 Mandatorv Conversion. Upon either (a) the closing of the sale of shares of Common Stock to the public in a finn-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended or (b) the date and time, or the occurrence of an event. specified by vote or written consent of the Requisite Holders at the time of such vote or consent, voting as a single class on an as-converted basis (the time of such closing or the date and time specified or the time of the event specified in such vote or written consent is referred to herein as the "Mandatory Conv"sion Time"), (i) all outstanding shares of Preferred Stock shall automatically be converted into shares of Common Stock, at the applicable ratio described in Section 3.1.1 as the same may he adjm;ted from time to time in accordance with Section 3 and (ii) such share:; may not he reissued by the Corporation. 3.11 Procedural Requirements_ All holders of record of shares of Preferred Stock shall be sent written notice of the :\fandatory Conversion Time and the place designated for mandatory conversion of all such shares of Preferred Stock pursuant to Section 3. 10. Unless otherwise provided in this Certificate of Incorporation, such notice need not be sent in advance of the occurrence of the Mandatory Conversion Time. Upon receipt of such nd:ice, each holder of shares of Preferred Stock shall surrender such holder's certificate or certificates for all such shares (or, if such holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate afticlavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against 8.I1Y claim that may be made against the Corporation on account of the alleged loss, theft or destmction of such certificate) to the Corporation at the place designated in such notice, and shall thereafter receive certificates tor the number of .shares of Common Stock to which such holder is entitled pursuant to this Section 3. lf so required hy the CorponJtion, certificates surrendered tor conversion shall be endorsed or accompanied by written instrument or instruments of transfer, in form reasonably satisfactory to the Corporation, duly executed by the registered holder or such holder's attorney duly authorized in writing. All rights with respect to the Preferred Stock converted pursuant to Section 3.10, including the rights, if any. to receive notices and vote (other than as a holder of Common Stock), will terminate at the Mandatory Conversion Time -7-

 

 

 

(notwithstanding the failure of the holder or holders thereof to surrender the certificates at or prior to such time), except only the rights of the holders thereof, upon surrender of their certificate or certificates (or lost certificate affidavit and agreement) therefor, to receive the items provided for in the next sentence of this Section 3.11. As soon as practicable after the Mandatory Conversion Time and the surrender of the certificate or certificates (or lost certificate affidavit and agreement) for Preferred Stock, the Corporation shaH issue and deliver to such holder, or to such holder's nominee(sj, a certificate or certificates for the number of full shares of Common Stock issuable on such conversion in accordance with the provisions hereof, together with cash 83 provided in Section 3.2 in lieu of any fraction of a share of Comnl.on Stock otherwise issuahle upon such conversion and the payment of any declared hut unpaid dividendo; on the shares of Preferred Stock converted. Such converted Preferred Stock shall be retired and cancelled and may not he reissued a<.; shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized nwnber of shares of Preferred Stock (and the applicable series thereof) accordingly. 4. Dividends. All dividends shall be declared pro rata on the Common Stock and the Preferred Stock on a pari passu basis according to the number of shares of Common Stock held by such holders. l'or this purpose each holder of shares of Preferred Stock is to be treated as holding the greatest whole nwnber of shares of Common Stock then issuable upon conversion of all shares of Preferred Stock held by such holder pursuant to Section 3. 5. Redeemed or Otherwise Acquired Shares. !\ny shares of Preferred Stock that are n:d crn i.l or olheiWiacquired by lht: Corporation or any of its subsi<.liarie> shall bt: automatically and immediately cancelled and retired and shall not be reissued, sold or transferred. Neither the Corporation nor any of its sub:ii<.liaris may exercise any voting or other right:; granted lO the holdt=rs of Prefmed Stock following redemption. 6. Waiver. Any of the rights, powers, privileges and other terms of the Preferred Stock set forth herein may be waived on behalf of all holders of Preferred Stock by the affirmative written consent or vote of the holders of the Requisite Holders. 7. Notke of Record Date. In the event: (n) the Corporation shall take a record of the holders of its Common Stock (or other capitAl stock or securities at the time issuable upon conversion of the Preferred Stock) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security, or of any capital reorganization of the Corporation, any reclassification of the (b) Common Stock of the Corporation, or any Deemed Liquidation Event; or (c) Corporation, of the voluntary or involuntacy dissolution, liquidation or winding-up of the then, and in each such case, the Corporation will send or cause to be sent to the holders of the Preferred Stock a notice specifying, as the case may be, (i) the record date for such dividend, distribution or right, and the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation. merger, transfer, dissolution, liquidation or. winding up is proposed to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other capital stock or securities at the time issuable upon the conversion of the Preferred Stock) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up, and the amount per share and character of such exchange applicable to the Preferred Stock and the Common Stock. Such notice shall -8-

 

 

 

,"::f.,(..)ot:flf:;J"'l-t:S--. ..s· .-rom: &...•c.:.tc.> ..._up•n - .. '. be sent at least 20 days prior to the earlier of the record date or effective date for the event specified in such notice. 8. Notices. .Except as othenvise provided herein, any notice required or permitted by the provisions of Lhi:> Article 1V lo bt: given tu a holder of shares of Prcferrt:d Slock. shall ffi: mailed, postage prepaid, to the post office address last shown on the records of the Corporation, or given by electronic conununication in compliance with the provisions of the General Corporation Law, and shall be deemed sent upon such mailing or electronic transmission. ARTICLE Y: PREEMfTIVE RIGHfS. l\o stockholder of the Co poration shall have a right to purchase shares of capital stock of the Corporation sold or issued hy the Corporation except to the extent that such a right may from time to time be set forth in a written agreement between the Corporation and any stockholder. ARTICLE VI: RESERVED ARTICLE VU: BYIAW PROVISIONS. AMENDMENT OF BYLAWS. Subject to any additional vote required by the Certificate of A. 1ncorporation or Bylaws, in furtheram:e and not in limitation of lht: powt:rs conferrt:d by statute, the Board is expressly authorized to make, repeal, alter, amend and rescind any or all of the Bylaws of the Corporation. B. :\"UMBER OF DIRECTORS. Subject to any additional vote required by the Certificate of Incorporation, the number of directors of the Corporation shall be determined in the manner set forth in the Bylaws of the Corporation. C. 'RALT.OT. F.lecticm.<; of directors need not he hy written hallot unless the Bylaws of the Corporation shnll so pro·vide. D. ).IEETINGS AND BOOKS. Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws of the Corporation may provide. The books of the Corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the Board or in the Bylaws of the Corporation. ARTICLE VIII: DIRECTOR LIABILITY. LIMITATION. To the fullest extent permitted by law, a director of the Corporation shall not be A. personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the General Corporation Law or any other law of the State of Delaware is amended after approval by the stockholders of this Article VIII to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Genera] Corporation Law as so amended. Any repeal or modification of the foregoing provisions of this Article V1II by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time o:tor increase the liability of any director of the Corporation with respect to any acts or omissions of such director occurring prior to, such repeal or modification. B. INDEMNIFICATION. To the fullest extent pem1itted by applicable law, the Corporation is authorized to provide indenmification of (and advancement of expenses to) directors, officers and agents of the Corporation (and any other persons to which General Corporation Law permits the Corporation to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise, in excess of the indemnification and advancement otherwise permitted by Section 145 of the General Corporation Law. -9-

 

 

 

C. 10DIFICATIO. Any amendment, repeal or modification of the foregoing provisions of this Article VIII shall not adversely affect any right or protection of any director, officer or other agent of the Corporation existing at the time of such amendment, repeal or modification. ARTICLE lXi CORPORo\TE OPPORI'WQTIES. The Corporation renounces any interest or expectancy of the Corporation in, or in being offered an opportunity to participate in, or in being informed about, an Excluded Opportunity.An "Excluded Opportunity" is any matter, transaction or interest that is presented to, or acquired, created or developed by, or which otherwise comes into the possession of, (i) any director of the Corporation who is not an employee of the Corporation or any of its subsidiaries, or (ii) any holder of Preferred Stock or any affiliate, pat1ner. member. director, stockholder, employee, agent or other related person of any such holder, other than someone who is an employee of the Corporation or any of its subsidiaries (collectively, "Covered Persons"). wt.less such matter, transaction or interest is presented to, or acquired, created or developed by, or othetwise comes into the possession of, a Covered Person expressly and solely in such Covered Person,s capacity as a director of the Corporation. - 10-

 

 

EX1A-2B BYLAWS 8 tm2031356d1_ex2-5.htm EXHIBIT 2.5

 

Exhibit 2.5

 

BYLAWS OF

 

TRIPLEPULSE, INC.

 

(A Delaware Corporation)

 

ARTICLE I

 

OFFICES

 

SECTION 1. Registered Office. The registered office of the Corporation within the State of Delaware shall be in the City of Dover, County of Kent. The name of the registered agent of the Corporation at such location is A Registered Agent, Inc., and may, from time-to-time, be changed as the Corporation may require.

 

SECTION 2. Other Offices. The Corporation may also have an office or offices other than said registered office at such place or places, either within or without the State of Delaware, as the Board of Directors shall from time to time determine or the business of the Corporation may require.

 

ARTICLE II

 

MEETINGS OF STOCKHOLDERS

 

SECTION 1. Place of Meetings. All meetings of stockholders shall be held at any place, either within or without the State of Delaware, as shall be designated from time to time by the (a) President, (b) CEO, or (c) Board of Directors as a whole. In the event that a virtual meeting is preferable, in lieu of a physical meeting, these meetings may also be attended, participated, and voted in by telephone conference calls or other electronic means.

 

SECTION 2. Annual Meeting. The annual meetings of the stockholders shall be held at such time as shall be designated from time to time by the Board of Directors. At the meeting, directors may be elected and any other proper business may be transacted.

 

SECTION 3. Special Meetings. Special meetings of stockholders, unless otherwise prescribed by statute, may only be called, at any time, by the President, the CEO, the Chairman of the Board, or by stockholders holding shares in the aggregate entitled to cast not less than a majority percent of votes at the meeting.

 

SECTION 4. Notice of Meetings. Except as otherwise expressly required by statute, written notice of each annual and special meeting of stockholders stating the date, place and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder of record entitled to vote at such meeting not less than ten (10) nor more than thirty (30) days before the date of the meeting. Notice shall be given personally or by mail and, if by mail, shall be sent in a postage prepaid envelope, addressed to the stockholder at his address as it appears on the records of the Corporation. Notice by mail shall be deemed given at the time when the same shall be deposited in the United States mail, postage prepaid. Notice of any meeting shall not be required to be given to any person who attends such meeting, except when such person attends the meeting in person or by proxy for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened, or who, either before or after the meeting, shall submit a signed written waiver of notice, in person or by proxy. Neither the business to be transacted at, nor the purpose of, an annual or special meeting of stockholders need be specified in any written waiver of notice.

 

TriplePulse, Inc. Bylaws

 

 

 

SECTION 5. Quorum, Adjournments. The holders of a majority of the voting power of the issued and outstanding stock of the Corporation entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of stockholders, except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented by proxy at any meeting of stockholders, then either (a) the President, (b) the CEO, or (c) the stockholders holding shares in the aggregate entitled to cast not less than a majority percent of votes at the meeting, shall have the power to adjourn the meeting to another place, date, or time.

 

SECTION 6. Organization. At each meeting of stockholders, the President or CEO shall act as chairman of the meetings. The Secretary or, in his absence or inability to act, the person whom the chairman of the meeting shall appoint secretary of the meeting shall act as secretary of the meeting and keep the minutes thereof.

 

SECTION 7. Order of Business. The order of business at all meetings of the stockholders shall be as determined by the chairman of the meeting.

 

SECTION 9. Voting. Except as otherwise provided by statute or the Certificate of Incorporation, each stockholder of the Corporation entitled to vote at any such meetings, shall be entitled to one vote for each share of capital stock of the Corporation standing in his name on the record of stockholders of the Corporation:

 

(a)            on the date fixed pursuant to the provisions of Section 7 of Article V of these bylaws as the record date for the determination of the stockholders who shall be entitled to notice of and to vote at such meeting; or

 

(b)            if no such record date shall have been so fixed, then at the close of business on the day next preceding the day on which notice thereof shall be given, or, if notice is waived, at the close of business on the date next preceding the day on which the meeting is held.

 

TriplePulse, Inc. Bylaws

 

2

 

 

Each stockholder entitled to vote at any meeting of stockholders may authorize another person or persons to act for him by a proxy signed by such stockholder or his attorney in fact, but no proxy shall be voted after three years from its date, unless the proxy provides for a longer period. Any such proxy shall be delivered to the secretary of the meeting at or prior to the time designated in order of business for so delivering such proxies. When a quorum is present at any meeting, the vote of the holders of a majority of the voting power of the issued and outstanding stock of the Corporation entitled to vote thereon, present in person or represented by proxy, shall decide any question brought before such meeting, unless the question is one upon which by express provision of statute or of the Certificate of Incorporation or of these bylaws, a different vote is required, in which case such express provision shall govern and control the decision of such question. Unless required by statute, or determined by the chairman of the meeting to be advisable, the vote on any question need not be by ballot. On a vote by ballot, each ballot shall be signed by the stockholder voting, or by his proxy, if there by such proxy, and shall state the number of shares voted.

 

SECTION 10. Inspectors. The Board of Directors may, in advance of any meeting of stockholders, appoint one or more inspectors to act at such meeting or any adjournment thereof. If any of the inspectors so appointed shall fail to appear or act, the chairman of the meeting shall, or if inspectors shall not have been appointed, the chairman of the meeting may, appoint one or more inspectors. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his ability. The inspectors shall determine the number of shares of capital stock of the Corporation outstanding and the voting power of each, the number of shares represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots or consents, determine the results, and do such acts as are proper to conduct the election or vote with fairness to all stockholders. On request of the chairman of the meeting, the inspectors shall make a report in writing of any challenge, request or matter determined by them and shall execute a certificate of any fact found by them. No director or candidate for the office of director shall act as an inspector of an election of directors. Inspectors need not be stockholders.

 

SECTION 11. Action Without a Meeting. Unless otherwise provided in the Certificate of Incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

 

TriplePulse, Inc. Bylaws

 

3

 

 

SECTION 12 Telephonic Meeting. Unless restricted by the Certificate of Incorporation, any one or more stockholder may participate in a meeting of the stockholders by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation by such means shall constitute presence in person at a meeting.

 

ARTICLE III

 

BOARD OF DIRECTORS

 

SECTION 1. General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. The Board of Directors may exercise all such authority and powers of the Corporation and do all such lawful acts and things as are not by statute or the Certificate of Incorporation directed or required to be exercised or done by the stockholders.

 

SECTION 2. Number, Election and Term of Office. The number of directors constituting the initial Board of Directors shall be two (2). Thereafter, the number of directors may be fixed, from time to time, by the appointment of the President, or an affirmative vote of a majority of the entire Board of Directors. Any decrease in the number of directors shall be effective at the time of the next succeeding annual meeting of stockholders unless there shall be vacancies in the Board of Directors, in which case such decrease may become effective at any time prior to the next succeeding annual meeting to the extent of the number of such vacancies. Directors need not be stockholders. Each director shall hold office until his successor has been qualified, or until his death, or until he shall have resigned, or have been removed.

 

SECTION 3. Place of Meetings. Meetings of the Board of Directors shall be held at such place or places, within or without the State of Delaware, as the Board of Directors may from time to time determine or as shall be specified in the notice of any such meeting.

 

SECTION 4. Annual Meeting. The Board of Directors shall meet for the purpose of organization, the election of officers and the transaction of other business, as soon as practicable after each annual meeting of stockholders, on the same day and at the same place where such annual meeting shall be held. Notice of such meeting need not be given. In the event such annual meeting is not so held, the annual meeting of the Board of Directors may be held at such other time or place (within or without the State of Delaware) as shall be specified in a notice thereof given as hereinafter provided in Section 7 of this Article III.

 

SECTION 5. Regular Meetings. Regular meetings of the Board of Directors shall be held at such time and place as the Board of Directors may fix. If any day fixed for the regular meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting which would otherwise be held on that day shall be held at the same hour on the next succeeding business day. Notice of regular meetings of the Board of Directors need not be given except as otherwise required by statute or these bylaws.

 

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SECTION 6. Special Meetings. Special meetings of the Board of Directors may only be called, at any time, by the President, the CEO, the Chairman of the Board, or by stockholders holding shares in the aggregate entitled to cast not less than a majority percent of votes at the meeting.

 

SECTION 7. Notice of Meetings. Notice of each special meeting of the Board of Directors (and of each regular meeting for which notice shall be required) shall be given by the Secretary as hereinafter provided in this Section 7, in which notice shall be stated the time and place of the meeting. Except as otherwise required by these bylaws, such notice need not state the purposes of such meeting. Notice of each such meeting shall be mailed, postage prepaid, to each director, addressed to him at his residence or usual place of business, by first class mail, at least two days before the day on which such meeting is to be held, or shall be sent addressed to him at such place by telegraph, cable, telex, telecopier or other similar means, or be delivered to him personally or be given to him by telephone or other similar means, at least twenty four hours before the time at which such meeting is to be held. Notice of any such meeting need not be given to any director who shall, either before or after the meeting, submit a signed waiver of notice or who shall attend such meeting, except when he shall attend for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

 

SECTION 8. Quorum and Manner of Acting. A majority of the entire Board of Directors shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, and, except as otherwise expressly required by statute or the Certificate of Incorporation or these bylaws, the act of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. In the absence of a quorum at any meeting of the Board of Directors, a majority of the directors present thereat may adjourn such meeting to another time and place. Notice of the time and place of any such adjourned meeting shall be given to all of the directors unless such time and place were announced at the meeting at which the adjournment was taken, in which case such notice shall only be given to the directors who were not present thereat. At any adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally called.

 

SECTION 9. Organization. At each meeting of the Board of Directors, the Chairman of the Board, if one shall have been elected, or, in the absence of the Chairman of the Board or if one shall not have been elected, the President (or, in his absence, another director chosen by a majority of the directors present) shall act as chairman of the meeting and preside thereat. The Secretary or, in his absence, any person appointed by the chairman shall act as secretary of the meeting and keep the minutes thereof.

 

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SECTION 10. Resignations. Any director of the Corporation may resign at any time by giving written notice of his resignation to the Corporation. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

 

SECTION 11. Vacancies. Any vacancy in the Board of Directors, whether arising from death, resignation, removal, an increase in the number of directors or any other cause, may be filled only by the appointment of the President, or an affirmative vote of a majority of the directors then in office, though less than a quorum, or, in the event of no majority vote of the remaining directors, at the direction of the President. Each director so chosen shall hold office for a term expiring at the next annual meeting of stockholders and until such director's successor shall have been elected and qualified.

 

SECTION 12. Compensation. The Board of Directors shall not be compensated in cash or cash equivalents for their services as members of the Board of Directors. This shall not preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.

 

SECTION 13. Committees. The Board of Directors may, by resolution passed by a majority of the entire Board of Directors, or the President or CEO may, by executive action, designate one or more committees, including an executive committee and a stock plan committee, where each committee is to consist of one or more of the directors of the Corporation, with the default selection of that director for each committee shall be the President or CEO, unless otherwise noted. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In addition, in the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Except to the extent restricted by statute or the Certificate of Incorporation, each such committee, to the extent provided in the resolution creating it, shall have and may exercise all the powers and authority of the Board of Directors and may authorize the seal of the Corporation to be affixed to all papers which require it. Each such committee shall serve at the pleasure of the Board of Directors and have such name as may be determined from time to time by resolution adopted by the Board of Directors. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors.

 

SECTION 14. Action by Written Consent Without a Meeting. Unless restricted by the Certificate of Incorporation, any action required or permitted to be taken by the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of the Board of Directors or such committee, as the case may be.

 

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SECTION 15. Telephonic Meeting. Unless restricted by the Certificate of Incorporation, any one or more members of the Board of Directors or any committee thereof may participate in a meeting of the Board of Directors or such committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation by such means shall constitute presence in person at a meeting.

 

ARTICLE IV

 

STOCK CERTIFICATES AND THEIR TRANSFER

 

SECTION 1. Stock Certificates. The shares of the Corporation shall be represented by certificates, whether physical or digital representations, and every holder of stock in the Corporation shall be entitled to have a certificate in the name of the Corporation. If the Corporation shall be authorized to issue more than one class of stock or more than one series of any class, the designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restriction of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the Corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in Section 202 of the General Corporation Law of the State of Delaware, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the Corporation shall issue to represent such class or series of stock, a statement that the Corporation will furnish without charge to each stockholder who so requests the designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

 

SECTION 2. Facsimile Signatures. Any or all of the signatures on a certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.

 

SECTION 3. Lost Certificates. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen, or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate or certificates, or his legal representative, to give the Corporation a bond in such sum as it may direct sufficient to indemnify it against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.

 

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SECTION 4. Transfers of Stock. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its records; provided, however, that the Corporation shall be entitled to recognize and enforce any lawful restriction on transfer. Whenever any transfer of stock shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of transfer if, when the certificates are presented to the Corporation for transfer, both the transferor and the transferee request the corporation to do so.

 

SECTION 5. Transfer Agents and Registrars. The Board of Directors may appoint, or authorize any officer or officers to appoint, one or more transfer agents and one or more registrars.

 

SECTION 6. Fixing the Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any right in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

 

SECTION 7. Registered Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its records as the owner of shares of stock to receive dividends and to vote as such owner, shall be entitled to hold liable for calls and assessments a person registered on its records as the owner of shares of stock, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares of stock on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

 

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ARTICLE V

 

INDEMNIFICATION OF DIRECTORS AND OFFICERS

 

SECTION 1. General. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

 

SECTION 2. Derivative Actions. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, provided that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

 

SECTION 3. Indemnification in Certain Cases. To the extent that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections 1 and 2 of this Article VI, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith.

 

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SECTION 4. Procedure. Any indemnification under Sections 1 and 2 of this Article VI (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in such Sections 1 and 2. Such determination shall be made (a) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (b) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (c) by the stockholders.

 

SECTION 5. Advances for Expenses. Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount if it shall be ultimately determined that he is not entitled to be indemnified by the Corporation as authorized in this Article VI.

 

SECTION 6. Right Not Exclusive. The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this Article VI shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any law, bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office.

 

SECTION 7. Insurance. The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article VI.

 

SECTION 8. Definition of Corporation. For the purposes of this Article VI, references to "the Corporation" include all constituent corporations absorbed in a consolidation or merger as well as the resulting or surviving corporation so that any person who is or was a director, officer, employee or agent of such a constituent corporation or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise shall stand in the same position under the provisions of this Article VI with respect to the resulting or surviving corporation as he would if he had served the resulting or surviving corporation in the same capacity.

 

SECTION 9. Survival of Rights. The indemnification and advancement of expenses provided by, or granted pursuant to this Article VI shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

 

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ARTICLE VI

 

GENERAL PROVISIONS

 

SECTION 1. Dividends. Subject to the provisions of statute and the Certificate of Incorporation, dividends upon the shares of capital stock of the Corporation may be declared by the Board of Directors at any regular or special meeting. Dividends may be paid in cash, in property or in shares of stock of the Corporation, unless otherwise provided by statute or the Certificate of Incorporation.

 

SECTION 2. Reserves. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors may, from time to time, in its absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors may think conducive to the interest of the Corporation. The Board of Directors may modify or abolish any such reserves in the manner in which they were created.

 

SECTION 3. Seal. The seal of the Corporation shall be in such form as shall be approved by the Board of Directors.

 

SECTION 4. Fiscal Year. The fiscal year of the Corporation shall be fixed, and once fixed, may thereafter be changed, by resolution of the Board of Directors.

 

SECTION 5. Check, Notes, Drafts, Etc. All checks, notes, drafts or other orders for the payment of money of the Corporation shall be signed, endorsed or accepted in the name of the Corporation by such officer, officers, person or persons as from time to time may be designated by the Board of Directors or by an officer or officers authorized by the Board of Directors to make such designation.

 

SECTION 6. Execution of Contracts, Deeds, Etc. The Board of Directors may authorize any officer or officers, agent or agents, in the name and on behalf of the Corporation to enter into or execute and deliver any and all deeds, bonds, mortgages, contracts and other obligations or instruments, and such authority may be general or confined to specific instances.

 

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SECTION 7. Voting of Stock in Other Corporations. Unless otherwise provided by resolution of the Board of Directors, the Chairman of the Board or the President, from time to time, may (or may appoint one or more attorneys or agents to) cast the votes which the Corporation may be entitled to cast as a shareholder or otherwise in any other corporation, any of whose shares or securities may be held by the Corporation, at meetings of the holders of the shares or other securities of such other corporation. In the event one or more attorneys or agents are appointed, the Chairman of the Board or the President may instruct the person or persons so appointed as to the manner of casting such votes or giving such consent. The Chairman of the Board or the President may, or may instruct the attorneys or agents appointed to, execute or cause to be executed in the name and on behalf of the Corporation and under its seal or otherwise, such written proxies, consents, waivers or other instruments as may be necessary or proper in the circumstances.

 

ARTICLE VII

 

AMENDMENTS

 

These bylaws may be amended or repealed or new bylaws adopted (a) by the stockholders holding at least a majority of the then outstanding voting capital stock of the Corporation, or (b) if the Certificate of Incorporation so provides, by action of the President or the Board of Directors at any time they see fit, as the Corporation may require. Any bylaw made by the Board of Directors may be amended or repealed by action of the President or stockholders holding shares in the aggregate entitled to cast not less than a majority percent of votes of the Corporation.

 

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EX1A-3 HLDRS RTS 9 tm2031356d1_ex3-1.htm EXHIBIT 3.1

 

Exhibit 3.1

 

INVESTOR RIGHTS AGREEMENT

 

This Investor Rights Agreement (this “Agreement”) is made and entered into as of 5/5, 2015, by and among TriplePulse, Inc., a Delaware corporation (the “Company”), Brightstone Venture Capital Fund, LP (“Investor”) and Christopher Thompson (the “Key Holder”).

 

RECITALS

 

A.            Investor has agreed to purchase from the Company, and the Company has agreed to sell to Investor, a Convertible Promissory Note in the amount of $250,000 (the “Note”) on the terms and conditions set forth in that certain Convertible Note Purchase Agreement dated of even date herewith by and among the Company, Investor and certain other investors, as amended from time to time (the “Note Agreement”). As used herein, the term “Shares” shall mean the shares of Preferred Stock and/or Common Stock issuable upon conversion of the Note.

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the parties hereto agree as follows:

 

1.            Effectiveness and Termination. This Agreement shall become effective upon closing of the sale of the Note to Investor. The rights, duties and obligations under Sections 2, 4 and 5 of this Agreement shall terminate upon the earlier to occur of: (a) the closing of the Company’s initial public offering of Common Stock pursuant to an effective registration statement filed under the Securities Act; (b) the closing of a Deemed Liquidation Event as defined in the Company’s Second Amended and Restated Certificate of Incorporation, as amended from time to time; or (c) the sale, assignment or transfer of the Note or the Shares, as applicable, by Investor to any party other than an affiliate of Investor (including, without limitation, any affiliated investment fund of Investor). Section 2.1(b) shall survive any such termination of the Agreement.

 

2.COVENANTS OF THE COMPANY.

 

2.1Information Rights.

 

(a)            Basic Financial Information. The Company will furnish to Investor when available (1) annual unaudited financial statements for each fiscal year of the Company, including an unaudited balance sheet as of the end of such fiscal year, an unaudited statement of operations and an unaudited statement of cash flows of the Company for such year, all prepared in accordance with generally accepted accounting principles and practices; and (2) quarterly unaudited financial statements for each fiscal quarter of the Company (except the last quarter of the Company’s fiscal year), including an unaudited balance sheet as of the end of such fiscal year, an unaudited statement of operations and an unaudited statement of cash flows of the Company for such quarter, all prepared in accordance with generally accepted accounting principles and practices, subject to changes resulting from normal year-end audit adjustments. If the Company has audited records of any of the foregoing, it shall provide those in lieu of the unaudited versions.

 

(b)            Confidentiality. The Company shall not be required to comply with any information rights in respect of Investor if the Company reasonably determines Investor to be a competitor or a holder of ten percent (10%) or more of a competitor. Investor agrees that it will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement other than to any of Investor’s attorneys, accountants, consultants, and other professionals, to the extent necessary to obtain their services in connection with monitoring Investor’s investment in the Company.

 

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3.RESTRICTIONS ON TRANSFER.

 

3.1            Limitations on Disposition. Each person owning of record the Note, the Shares or any shares of the Company issued as a dividend or other distribution with respect thereto or in exchange therefor or in replacement thereof (collectively, the “Securities”) or any assignee of record of Securities (each such person, a “Holder”) hereby agrees not to make any disposition of all or any portion of any Securities unless and until:

 

(a)            there is then in effect a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), covering such proposed disposition and such disposition is made in accordance with such registration statement; or

 

(b)            such Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a statement of the circumstances surrounding the proposed disposition, and, at the expense of such Holder or its transferee, with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of such securities under the Securities Act.

 

Notwithstanding the provisions of Sections 3.1(a) and (b) above, no such registration statement or opinion of counsel shall be required: (i) for any transfer of any Securities in compliance with SEC Rule 144 or Rule 144A, or (ii) for any transfer of any Securities by a Holder that is a partnership, limited liability company, a corporation or a venture capital fund to (A) a partner of such partnership, a member of such limited liability company or stockholder of such corporation, (B) an affiliate of such partnership, limited liability company or corporation (including, without limitation, any affiliated investment fund of such Holder), (C) a retired partner of such partnership or a retired member of such limited liability company, (D) the estate of any such partner, member or stockholder, or (iii) for the transfer by gift, will or intestate succession by any Holder to his or her spouse or lineal descendants or ancestors or any trust for any of the foregoing; provided that in the case of clauses (ii) and (iii) the transferee agrees in writing to be subject to the terms of this Agreement to the same extent as if the transferee were an original Investor hereunder and in the case of clause (iii) the transfer was without additional consideration or at no greater than cost.

 

3.2            “Market Stand-Off” Agreement. Each Holder hereby agrees that it shall not, to the extent requested by the Company or an underwriter of securities of the Company, sell or otherwise transfer or dispose of any Securities or other shares of stock of the Company then owned by such Holder (other than to donees or partners of the Holder who agree to be similarly bound) for up to one hundred eighty (180) days following the effective date of any registration statement of the Company filed under the Securities Act; provided however that, if during the last seventeen (17) days of the restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to the expiration of the restricted period the Company announces that it will release earnings results during the 16-day period beginning on the last day of the restricted period, and if the Company’s securities are listed on the Nasdaq Stock Market and Rule 2711 thereof applies, then the restrictions imposed by this Section 3.2 shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. In no event will the restricted period extend beyond two hundred fifteen (215) days after the effective date of the registration statement.

 

For purposes of this Section 3.2, the term “Company” shall include any wholly-owned subsidiary of the Company into which the Company merges or consolidates. To enforce the foregoing covenant, the Company shall have the right to place restrictive legends on the certificates representing the Shares subject to this Section 3.2 and to impose stop transfer instructions with respect to the Securities and such other Shares of stock of each Holder (and the Shares or securities of every other person subject to the foregoing restriction) until the end of such period. Each Holder further agrees to enter into any agreement reasonably required by the underwriters to implement the foregoing within any reasonable timeframe so requested.

 

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4.PARTICIPATION RIGHT.

 

4.1            General. Investor has the right of first refusal to purchase up to three times (3x) of Investor's Pro Rata Share (as defined below) of all (or any part) of any New Securities (as defined below) that the Company may from time to time issue after the date of this Agreement, provided, however, Investor shall have no right to purchase any such New Securities if Investor cannot demonstrate to the Company's reasonable satisfaction that Investor is at the time of the proposed issuance of such New Securities an "accredited investor" as such term is defined in Regulation D under the Securities Act. Investor's "Pro Rata Share" for purposes of this right of first refusal is the ratio of (a) the number of shares of the Company's Common Stock issued or issuable upon conversion of the Note or Shares, to (b) a number of shares of Common Stock of the Company equal to the sum of (1) the total number of shares of Common Stock of the Company then outstanding plus (2) the total number of shares of Common Stock of the Company into which all then outstanding shares of Preferred Stock of the Company are then convertible plus (3) the number of shares of Common Stock of the Company reserved for issuance under any stock purchase and stock option plans of the Company and outstanding warrants.

 

4.2            New Securities. "New Securities" shall mean any Common Stock or Preferred Stock of the Company, whether now authorized or not, and rights, options or warrants to purchase such Common Stock or Preferred Stock, and securities of any type whatsoever that are, or may become, convertible or exchangeable into such Common Stock or Preferred Stock; provided, however, that the term "New Securities" does not include: (a) shares of Common Stock issued or issuable upon conversion of the outstanding shares of all the series of the Preferred Stock; (b) shares of Common Stock or Preferred Stock issuable upon exercise of any options, warrants or rights to purchase any securities of the Company outstanding as of the date of this Agreement and any securities issuable upon the conversion thereof; (c) shares of Common Stock or Preferred Stock issued in connection with any stock split or stock dividend or recapitalization; (d) shares of Common Stock (or options, warrants or rights therefor) granted or issued hereafter to employees, officers, directors, contractors, consultants or advisers to, the Company or any subsidiary of the Company pursuant to incentive agreements, stock purchase or stock option plans, stock bonuses or awards, warrants, contracts or other arrangements that are approved by the Company's Board of Directors (the "Board'); (e) shares of Common Stock or Preferred Stock issuable upon conversion of the convertible notes outstanding as of the date of this Agreement and any securities issuable upon conversion thereof; (f) any other shares of Common Stock or Preferred Stock (and/or options or warrants therefor) issued or issuable primarily for other than equity financing purposes and approved by the Board; and (g) shares of Common Stock issued or issuable by the Company to the public pursuant to a registration statement filed under the Securities Act.

 

4.3            Procedures. In the event that the Company proposes to undertake an issuance of New Securities, it shall give to Investor a written notice of its intention to issue New Securities (the "Notice"), describing the type of New Securities and the price and the general terms upon which the Company proposes to issue such New Securities given in accordance with Section 6.2. Investor shall have ten (10) days from the date such Notice is effective, as determined pursuant to Section 6.2 based upon the manner or method of notice, to agree in writing to purchase Investor's Pro Rata Share of such New Securities for the price and upon the general terms specified in the Notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased (not to exceed such Investor's Pro Rata Share).

 

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4.4            Failure to Exercise. In the event that Investor fails to exercise in full the right of first refusal within such ten (10) day period, then the Company shall have one hundred twenty (120) days thereafter to sell the New Securities with respect to which Investor's rights of first refusal hereunder were not exercised, at a price and upon general terms not materially more favorable to the purchasers thereof than specified in the Company's Notice to Investor. In the event that the Company has not issued and sold the New Securities within such one hundred twenty (120) day period, then the Company shall not thereafter issue or sell any New Securities without again first offering such New Securities to Investor pursuant to this Section 4.

 

5.ELECTION OF BOARD OF DIRECTORS.

 

5.1Board Size. The Company shall establish a Board consisting of at least three (3) members.

 

5.2          Voting; Board Composition. Subject to the rights of the stockholders of the Company to remove a director for cause in accordance with applicable law, during the term of this Agreement, Key Holder agrees to vote (or consent pursuant to an action by written consent of the stockholders of the Company) all shares of capital stock of the Company now or hereafter directly or indirectly owned of record or beneficially by Key Holder (the “Key Holder Shares”), or to cause such shares of shares of capital stock of the Company to be voted to elect (and maintain in office) as a member of the Board one (1) individual (the “Board Designee”) designated from time to time by Investor (the "Designation Right"). Subject to the rights of the stockholders of the Company to remove a director for cause in accordance with applicable law, during the term of this Agreement, Key Holder will not take any action to remove an incumbent Board Designee or to designate a new Board Designee unless such removal and/or designation of a Board Designee is approved in a writing signed by Investor. Key Holder hereby appoints the then current Chief Executive Officer of the Company, as such Stockholder’s true and lawful proxy and attorney, with the power to act alone and with full power of substitution, to vote all of such Key Holder Shares as set forth in this Agreement and to execute all appropriate instruments consistent with this Agreement on behalf of Key Holder if, and only if, Key Holder (a) fails to vote or (b) attempts to vote (whether by proxy, in person or by written consent), in a manner which is inconsistent with the terms of this Agreement, all of the Key Holder Shares or execute such other instruments in accordance with the provisions of this Agreement within five (5) days of the Company’s or any other party’s written request for Key Holder's written consent or signature. The Designation Right shall terminate upon the closing of the next bona fide next sale of Preferred Stock of the Company to investors with aggregate gross cash proceeds to the Company of at least $3,000,000 (excluding through the conversion of any outstanding convertible notes) (a "Qualified Financing") if an individual investor and its affiliates require that the Designation Right terminate as a condition to such investor investing $1,000,000 or more in the Qualified Financing.

 

6.GENERAL PROVISIONS.

 

6.1            Amendment and Waiver of Rights. Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company, Key Holder and Investor (and/or any of their permitted successors or assigns).

 

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6.2            Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by email during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on the signature page, or to such address or facsimile number as subsequently modified by written notice given in accordance with this Section 6.2. If notice is given to the Company, a copy (which shall not constitute notice) shall also be sent to Laszlo Kupan, 11114 McDonald Street, Culver City, CA 90230, lkupan@gmail.com.

 

6.3            Entire Agreement. This Agreement and the documents referred to herein, together with all the Exhibits hereto, constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede any and all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.

 

6.4            Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law.

 

6.5            Severability The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

 

6.6            Third Parties. Nothing in this Agreement, express or implied, is intended to confer upon any person, other than the parties hereto and their successors and assigns, any rights or remedies under or by reason of this Agreement.

 

6.7            Successors and Assigns. This Agreement, and any and all rights, duties and obligations hereunder, shall not be assigned, transferred, delegated or sublicensed by Investor without the prior written consent of the Company. Any attempt by Investor without such permission to assign, transfer, delegate or sublicense any rights, duties or obligations that arise under this Agreement shall be void. Subject to the foregoing, and except as otherwise provided herein, this Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives.

 

6.8            Titles and Headings. The titles, captions and headings of this Agreement are included for ease of reference only and will be disregarded in interpreting or construing this Agreement. Unless otherwise specifically stated, all references herein to “sections” and “exhibits” will mean “sections” and “exhibits” to this Agreement.

 

6.9            Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.

 

6.10          Costs and Attorneys’ Fees. In the event that any action, suit or other proceeding is instituted concerning or arising out of this Agreement or any transaction contemplated hereunder, the prevailing party shall recover all of such party’s costs and attorneys’ fees incurred in each such action, suit or other proceeding, including any and all appeals or petitions therefrom.

 

6.11          Further Assurances. The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement.

 

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6.12            Facsimile Signatures. This Agreement may be executed and delivered by facsimile and upon such delivery the facsimile signature will be deemed to have the same effect as if the original signature had been delivered to the other party.

 

6.13            Dispute Resolution. Each party (a) hereby irrevocably and unconditionally submits to the jurisdiction of the federal or state courts located in the Central District of California for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement or the Transaction Documents except in the federal or state courts located in the Central District of California, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement, the Transaction Documents or the subject matter hereof and thereof may not be enforced in or by such court.

 

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

 

THE COMPANY:

 

TRIPLEPULSE, INC.

 

Signature: /s/ Chris Thompson (May 5, 2015)  
     
Email: chrisdthompson@gmail.com  
Christopher Thompson  
Chief Executive Officer  

 

1316 Third Street

Suite B5

Santa Monica, CA 90401

 

chrisdthompson@gmail.com

 

 

 

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

 

KEY HOLDER:

 

/s/ Chris Thompson (May 5, 2015)  
   
1316 Third Street
Suite B5
 

Santa Monica, CA 90401

 

chrisdthompson@gmail.com

 

 

 

 

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

 

INVESTOR:

 

Brightstone Venture Capital Fund, LP  
   
/s/ Seth DeGroot  
Seth DeGroot  
Managing Partner  
   
510 First Ave N  
#200  
Minneapolis, MN 55403  
   
Seth@brightstonevc.com  

 

 

EX1A-3 HLDRS RTS 10 tm2031356d1_ex3-2.htm EXHIBIT 3.2

 

Exhibit 3.2

 

INVESTOR RIGHTS AGREEMENT

 

This Investor Rights Agreement (this “Agreement”) is made and entered into as of July 2, 2015, by and among TriplePulse, Inc., a Delaware corporation (the “Company”), Blueberry Ventures 1, L.P., a Delaware limited partnership (“Investor”), and Christopher Thompson (the “Key Holder”).

 

RECITALS

 

A.            Investor has agreed to purchase from the Company, and the Company has agreed to sell to Investor, a Convertible Promissory Note in the amount of $425,000 (the “Note”) on the terms and conditions set forth in that certain Convertible Note Purchase Agreement dated of even date herewith by and between the Company and Investor, as amended from time to time (the “Note Agreement”). As used herein, the term “Shares” shall mean the shares of Preferred Stock and/or Common Stock issuable upon conversion of the Note.

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the parties hereto agree as follows:

 

1.            Effectiveness and Termination. This Agreement shall become effective upon closing of the sale of the Note to Investor as provided in the Note Agreement. The rights, duties and obligations under Sections 2, 4 and 5 of this Agreement shall terminate upon the earlier to occur of: (a) the closing of the Company’s initial public offering of Common Stock pursuant to an effective registration statement filed under the Securities Act; (b) the closing of a Deemed Liquidation Event as defined in the Company’s Second Amended and Restated Certificate of Incorporation, as amended from time to time; or (c) the sale, assignment or transfer of the Note or the Shares, as applicable, by Investor to any party other than an affiliate of Investor (including, without limitation, any affiliated investment fund of Investor). Section 2.1(b) shall survive any such termination of the Agreement.

 

2.COVENANTS OF THE COMPANY.

 

2.1Information Rights.

 

(a)            Basic Financial Information. The Company will furnish to Investor when available (1) annual unaudited financial statements for each fiscal year of the Company, including an unaudited balance sheet as of the end of such fiscal year, an unaudited statement of operations and an unaudited statement of cash flows of the Company for such year, all prepared in accordance with generally accepted accounting principles and practices; and (2) quarterly unaudited financial statements for each fiscal quarter of the Company (except the last quarter of the Company’s fiscal year), including an unaudited balance sheet as of the end of such fiscal year, an unaudited statement of operations and an unaudited statement of cash flows of the Company for such quarter, all prepared in accordance with generally accepted accounting principles and practices, subject to changes resulting from normal year-end audit adjustments. If the Company has audited records of any of the foregoing, it shall provide those in lieu of the unaudited versions.

 

(b)            Confidentiality. The Company shall not be required to comply with any information rights in respect of Investor if the Company reasonably determines Investor to be a competitor or a holder of ten percent (10%) or more of a competitor. Investor agrees that it will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement other than to any of Investor’s attorneys, accountants, consultants, and other professionals, to the extent necessary to obtain their services in connection with monitoring Investor’s investment in the Company.

 

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3.RESTRICTIONS ON TRANSFER.

 

3.1            Limitations on Disposition. Each person owning of record the Note, the Shares or any shares of the Company issued as a dividend or other distribution with respect thereto or in exchange therefor or in replacement thereof (collectively, the “Securities”) or any assignee of record of Securities (each such person, a “Holder”) hereby agrees not to make any disposition of all or any portion of any Securities unless and until:

 

(a)            there is then in effect a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), covering such proposed disposition and such disposition is made in accordance with such registration statement; or

 

(b)            such Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a statement of the circumstances surrounding the proposed disposition, and, at the expense of such Holder or its transferee, with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of such securities under the Securities Act.

 

Notwithstanding the provisions of Sections 3.1(a) and (b) above, no such registration statement or opinion of counsel shall be required: (i) for any transfer of any Securities in compliance with SEC Rule 144 or Rule 144A, or (ii) for any transfer of any Securities by a Holder that is a partnership, limited liability company, a corporation or a venture capital fund to (A) a partner of such partnership, a member of such limited liability company or stockholder of such corporation, (B) an affiliate of such partnership, limited liability company or corporation (including, without limitation, any affiliated investment fund of such Holder), (C) a retired partner of such partnership or a retired member of such limited liability company, (D) the estate of any such partner, member or stockholder, or (iii) for the transfer by gift, will or intestate succession by any Holder to his or her spouse or lineal descendants or ancestors or any trust for any of the foregoing; provided that in the case of clauses (ii) and (iii) the transferee agrees in writing to be subject to the terms of this Agreement to the same extent as if the transferee were an original Investor hereunder and in the case of clause (iii) the transfer was without additional consideration or at no greater than cost.

 

3.2            “Market Stand-Off” Agreement. Each Holder hereby agrees that it shall not, to the extent requested by the Company or an underwriter of securities of the Company, sell or otherwise transfer or dispose of any Securities or other shares of stock of the Company then owned by such Holder (other than to donees or partners of the Holder who agree to be similarly bound) for up to one hundred eighty (180) days following the effective date of any registration statement of the Company filed under the Securities Act; provided however that, if during the last seventeen (17) days of the restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to the expiration of the restricted period the Company announces that it will release earnings results during the 16-day period beginning on the last day of the restricted period, and if the Company’s securities are listed on the Nasdaq Stock Market and Rule 2711 thereof applies, then the restrictions imposed by this Section 3.2 shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. In no event will the restricted period extend beyond two hundred fifteen (215) days after the effective date of the registration statement.

 

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For purposes of this Section 3.2, the term “Company” shall include any wholly- owned subsidiary of the Company into which the Company merges or consolidates. To enforce the foregoing covenant, the Company shall have the right to place restrictive legends on the certificates representing the Shares subject to this Section 3.2 and to impose stop transfer instructions with respect to the Securities and such other Shares of stock of each Holder (and the Shares or securities of every other person subject to the foregoing restriction) until the end of such period. Each Holder further agrees to enter into any agreement reasonably required by the underwriters to implement the foregoing within any reasonable timeframe so requested.

 

4.PARTICIPATION RIGHT.

 

4.1            General. Investor has the right of first refusal to purchase up to three times (3x) of Investor's Pro Rata Share (as defined below) of all (or any part) of any New Securities (as defined below) that the Company may from time to time issue after the date of this Agreement, provided, however, Investor shall have no right to purchase any such New Securities if Investor cannot demonstrate to the Company's reasonable satisfaction that Investor is at the time of the proposed issuance of such New Securities an "accredited investor" as such term is defined in Regulation D under the Securities Act. Investor's "Pro Rata Share" for purposes of this right of first refusal is the ratio of (a) the number of shares of the Company's Common Stock issued or issuable upon conversion of the Note or Shares, to (b) a number of shares of Common Stock of the Company equal to the sum of (1) the total number of shares of Common Stock of the Company then outstanding plus (2) the total number of shares of Common Stock of the Company into which all then outstanding shares of Preferred Stock of the Company are then convertible plus (3) the number of shares of Common Stock of the Company reserved for issuance under any stock purchase and stock option plans of the Company and outstanding warrants.

 

4.2            New Securities. "New Securities" shall mean any Common Stock or Preferred Stock of the Company, whether now authorized or not, and rights, options or warrants to purchase such Common Stock or Preferred Stock, and securities of any type whatsoever that are, or may become, convertible or exchangeable into such Common Stock or Preferred Stock; provided, however, that the term "New Securities" does not include: (a) shares of Common Stock issued or issuable upon conversion of the outstanding shares of all the series of the Preferred Stock; (b) shares of Common Stock or Preferred Stock issuable upon exercise of any options, warrants or rights to purchase any securities of the Company outstanding as of the date of this Agreement and any securities issuable upon the conversion thereof; (c) shares of Common Stock or Preferred Stock issued in connection with any stock split or stock dividend or recapitalization; (d) shares of Common Stock (or options, warrants or rights therefor) granted or issued hereafter to employees, officers, directors, contractors, consultants or advisers to, the Company or any subsidiary of the Company pursuant to incentive agreements, stock purchase or stock option plans, stock bonuses or awards, warrants, contracts or other arrangements that are approved by the Company's Board of Directors (the "Board'); (e) shares of Common Stock or Preferred Stock issuable upon conversion of the convertible notes outstanding as of the date of this Agreement and any securities issuable upon conversion thereof; (f) any other shares of Common Stock or Preferred Stock (and/or options or warrants therefor) issued or issuable primarily for other than equity financing purposes and approved by the Board; and (g) shares of Common Stock issued or issuable by the Company to the public pursuant to a registration statement filed under the Securities Act.

 

4.3            Procedures. In the event that the Company proposes to undertake an issuance of New Securities, it shall give to Investor a written notice of its intention to issue New Securities (the "Notice"), describing the type of New Securities and the price and the general terms upon which the Company proposes to issue such New Securities given in accordance with Section 7.2. Investor shall have ten (10) days from the date such Notice is effective, as determined pursuant to Section 7.2 based upon the manner or method of notice, to agree in writing to purchase Investor's Pro Rata Share of such New Securities for the price and upon the general terms specified in the Notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased (not to exceed such Investor's Pro Rata Share).

 

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4.4            Failure to Exercise. In the event that Investor fails to exercise in full the right of first refusal within such ten (10) day period, then the Company shall have one hundred twenty (120) days thereafter to sell the New Securities with respect to which Investor's rights of first refusal hereunder were not exercised, at a price and upon general terms not materially more favorable to the purchasers thereof than specified in the Company's Notice to Investor. In the event that the Company has not issued and sold the New Securities within such one hundred twenty (120) day period, then the Company shall not thereafter issue or sell any New Securities without again first offering such New Securities to Investor pursuant to this Section 4.

 

5.ELECTION OF BOARD OF DIRECTORS.

 

5.1  Board Size. The Company shall establish a Board consisting of at least five (5) members.

 

5.2           Voting; Board Composition. Subject to the rights of the stockholders of the Company to remove a director for cause in accordance with applicable law, during the term of this Agreement, Key Holder agrees to vote (or consent pursuant to an action by written consent of the stockholders of the Company) all shares of capital stock of the Company now or hereafter directly or indirectly owned of record or beneficially by Key Holder (the “Key Holder Shares”), or to cause such shares of shares of capital stock of the Company to be voted to elect (and maintain in office) as a member of the Board one (1) individual (the “Board Designee”) designated from time to time by Investor (the "Designation Right"). Subject to the rights of the stockholders of the Company to remove a director for cause in accordance with applicable law, during the term of this Agreement, Key Holder will not take any action to remove an incumbent Board Designee or to designate a new Board Designee unless such removal and/or designation of a Board Designee is approved in a writing signed by Investor. Key Holder hereby appoints the then current Chief Executive Officer of the Company, as such Stockholder’s true and lawful proxy and attorney, with the power to act alone and with full power of substitution, to vote all of such Key Holder Shares as set forth in this Agreement and to execute all appropriate instruments consistent with this Agreement on behalf of Key Holder if, and only if, Key Holder (a) fails to vote or (b) attempts to vote (whether by proxy, in person or by written consent), in a manner which is inconsistent with the terms of this Agreement, all of the Key Holder Shares or execute such other instruments in accordance with the provisions of this Agreement within five (5) days of the Company’s or any other party’s written request for Key Holder's written consent or signature. The Designation Right shall terminate upon the closing of the next bona fide next sale of Preferred Stock of the Company to investors with aggregate gross cash proceeds to the Company of at least $3,000,000 (excluding through the conversion of any outstanding convertible notes) (a "Qualified Financing") if an individual investor and its affiliates require that the Designation Right terminate as a condition to such investor investing $1,000,000 or more in the Qualified Financing.

 

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6.            ISSUANCE OF ADDITIONAL NOTES. Company shall not sell any additional convertible promissory notes pursuant to the Convertible Note Purchase Agreement dated May 5, 2015 by and between Company and Brightstone Venture Capital Fund, LP (the "Brightstone Note"). Company represents and warrants that the Brightstone Note is the Company's only open convertible promissory purchase agreement.

 

7.GENERAL PROVISIONS.

 

7.1            Amendment and Waiver of Rights. Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company, Key Holder and Investor (and/or any of their permitted successors or assigns).

 

7.2            Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by email during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on the signature page, or to such address or facsimile number as subsequently modified by written notice given in accordance with this Section 7.2. If notice is given to the Company, a copy (which shall not constitute notice) shall also be sent to Laszlo Kupan, 11114 McDonald Street, Culver City, CA 90230, laszlo@kupan.co.

 

7.3            Entire Agreement. This Agreement and the documents referred to herein, together with all the Exhibits hereto, constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede any and all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.

 

7.4            Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law.

 

7.5            Severability The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

 

7.6            Third Parties. Nothing in this Agreement, express or implied, is intended to confer upon any person, other than the parties hereto and their successors and assigns, any rights or remedies under or by reason of this Agreement.

 

7.7            Successors and Assigns. This Agreement, and any and all rights, duties and obligations hereunder, shall not be assigned, transferred, delegated or sublicensed by Investor without the prior written consent of the Company. Any attempt by Investor without such permission to assign, transfer, delegate or sublicense any rights, duties or obligations that arise under this Agreement shall be void. Subject to the foregoing, and except as otherwise provided herein, this Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives.

 

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7.8            Titles and Headings. The titles, captions and headings of this Agreement are included for ease of reference only and will be disregarded in interpreting or construing this Agreement. Unless otherwise specifically stated, all references herein to “sections” and “exhibits” will mean “sections” and “exhibits” to this Agreement.

 

7.9            Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.

 

7.10          Costs and Attorneys’ Fees. In the event that any action, suit or other proceeding is instituted concerning or arising out of this Agreement or any transaction contemplated hereunder, the prevailing party shall recover all of such party’s costs and attorneys’ fees incurred in each such action, suit or other proceeding, including any and all appeals or petitions therefrom.

 

7.11          Further Assurances. The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement.

 

7.12          Facsimile Signatures. This Agreement may be executed and delivered by facsimile and upon such delivery the facsimile signature will be deemed to have the same effect as if the original signature had been delivered to the other party.

 

7.13          Dispute Resolution. Each party (a) hereby irrevocably and unconditionally submits to the jurisdiction of the federal or state courts located in the Central District of California for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement or the Transaction Documents except in the federal or state courts located in the Central District of California, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above- named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement, the Transaction Documents or the subject matter hereof and thereof may not be enforced in or by such court.

 

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

 

THE COMPANY:

 

TRIPLEPULSE, INC.

 

DocuSigned by:  
/s/ Christopher Thompson  
Christopher Thompson  
Chief Executive Officer  
   
3110 Main Street, Suite D  
Santa Monica, CA 90405  
   
chrisdthompson@gmail.com  

 

 

 

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

 

KEY HOLDER:

 

DocuSigned by:  
/s/ Christopher Thompson  
Christopher Thompson  
   
3110 Main Street, Suite D  
Santa Monica, CA 90405  
   
chrisdthompson@gmail.com  

 

 

 

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

 

INVESTOR:

 

Blueberry Ventures 1, L.P.,  
a Delaware limited partnership  
   
DocuSigned by:  
By: /s/ Arif Fazal  
Name: Arif Fazal  
Title: Managing Director  
Email: arif@blueberryventures.vc  

 

 

EX1A-3 HLDRS RTS 11 tm2031356d1_ex3-3.htm EXHIBIT 3.3

Exhibit 3.3

 

INVESTORS' RIGHTS AGREEMENT

 

This Investors' Rights Agreement (this "Agreement") is made and entered into as of December 5, 2012, by and among TriplePulse, Inc., a Delaware corporation (the "Company"), the parties listed on Exhibit A attached hereto (the "Investors") and the parties listed on Exhibit B attached hereto (the "Key Holders").

 

RECITALS

 

A.            The Investors have agreed to purchase from the Company, and the Company has agreed to sell to the Investors, shares of the Company's Series Seed Preferred Stock (the "Shares") on the terms and conditions set forth in that certain Series Seed Preferred Stock Purchase Agreement dated of even date herewith by and among the Company and the Investors, as amended from time to time (the "Series Seed Agreement").

 

B.            It is a condition to the closing of the sale of the Shares that the parties hereto execute and deliver this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the parties hereto agree as follows:

 

1.COVENANTS OF THE COMPANY.

 

1.1Information Rights.

 

(a)            Basic Financial Information. The Company will furnish to each Investor holding more than 10,000 shares of Preferred Stock (a "Major Investor") and any entity which requires such information pursuant to its organizational documents when available (1) annual unaudited financial statements for each fiscal year of the Company, including an unaudited balance sheet as of the end of such fiscal year, an unaudited statement of operations and an unaudited statement of cash flows of the Company for such year, all prepared in accordance with generally accepted accounting principles and practices; and (2) quarterly unaudited financial statements for each fiscal quarter of the Company (except the last quarter of the Company's fiscal year), including an unaudited balance sheet as of the end of such fiscal year, an unaudited statement of operations and an unaudited statement of cash flows of the Company for such quarter, all prepared in accordance with generally accepted accounting principles and practices, subject to changes resulting from normal year-end audit adjustments. If the Company has audited records of any of the foregoing, it shall provide those in lieu of the unaudited versions.

 

(b)            Confidentiality. Anything in this Agreement to the contrary notwithstanding, no Investor by reason of this Agreement shall have access to any trade secrets or confidential information of the Company. The Company shall not be required to comply with any information rights in respect of any Investor whom the Company reasonably determines to be a competitor or an officer, employee, director or holder of ten percent (10%) or more of a competitor. Each Investor agrees that such Investor will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement other than to any of the Investor's attorneys, accountants, consultants, and other professionals, to the extent necessary to obtain their services in connection with monitoring the Investor's investment in the Company.

 

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(c)            Inspection Rights. The Company shall permit each Major Investor to visit and inspect the Company's properties, to examine its books of account and records and to discuss the Company's affairs, finances and accounts with its officers, all at such reasonable times as may be requested by such Investor.

 

1.2Additional Rights; Warrant.

 

(a)            In the event that the Company issues securities in its next equity financing after the date hereof (the "Next Financing") which have (a) rights, preferences or privileges that are more favorable than the terms of the Shares, such as price based anti-dilution protection or (b) provides all such future investors other contractual terms such as preemptive rights or registration rights, the Company shall provide substantially equivalent rights to the Investors with respect to the Shares (with appropriate adjustment for economic terms or other contractual rights, subject to such Investor's execution of any documents, including, if applicable, investors' rights, co-sale, voting and other agreements, executed by the investors purchasing securities in the Next Financing (such documents referred to herein as the "Next Financing Documents"). Any Major Investor will remain a Major Investor for all purposes in the Next Financing Documents to the extent such concept exists. Notwithstanding anything herein to the contrary, upon the execution and delivery of the Next Financing Documents by Investors holding a majority of the then outstanding Shares held by all Investors, this Agreement (excluding any then-existing obligations) shall be amended and restated by and into such Next Financing Documents.

 

(b)            Upon the Closing of the Next Financing, the Company shall issue to Start Engine, LLC a warrant to purchase five percent (5%) of the number of shares issued in the Next Financing (the "Warrant") at the price per share of the shares issued in the Next Financing. The Warrant shall have a term of 10 years and shall contain a standard 'cashless exercise' provision.

 

1.3           Assignment of Company's Preemptive Rights. Pursuant to the right of first refusal set forth in the Company's Bylaws or Stock Purchase Agreement, the Company has a right of first refusal with respect to certain proposed transfers of the Company's outstanding securities by the Key Holders. In the event the Company elects not to exercise its right of first refusal pursuant to the Company's Bylaws, by contract or otherwise with respect to a proposed transfer of the Company's outstanding securities, the Company shall assign such right of first refusal to each Major Investor. In the event of such assignment, each Major Investor shall have a right to purchase that portion of the securities proposed to be transferred equal to the ratio of (a) the number of shares of the Company's Common Stock issued or issuable upon conversion of the Shares owned by such Major Investor, to (b) the number of shares of the Company's Common Stock issued or issuable upon conversion of the Shares owned by all Major Investors.

 

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2.RESTRICTIONS ON TRANSFER.

 

2.1          Limitations on Disposition. Each person owning of record shares of Common Stock of the Company issued or issuable pursuant to the conversion of the Shares and any shares of Common Stock of the Company issued as a dividend or other distribution with respect thereto or in exchange therefor or in replacement thereof (collectively, the "Securities") or any assignee of record of Securities (each such person, a "Holder") hereby agrees not to make any disposition of all or any portion of any Securities unless and until:

 

(a)            there is then in effect a registration statement under the Securities Act of 1933, as amended (the "Securities Act"), covering such proposed disposition and such disposition is made in accordance with such registration statement; or

 

(b)            such Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a statement of the circumstances surrounding the proposed disposition, and, at the expense of such Holder or its transferee, with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of such securities under the Securities Act.

 

Notwithstanding the provisions of Sections 2.1(a) and (b) above, no such registration statement or opinion of counsel shall be required: (i) for any transfer of any Securities in compliance with SEC Rule 144 or Rule 144A, or (ii) for any transfer of any Securities by a Holder that is a partnership, limited liability company, a corporation or a venture capital fund to (A) a partner of such partnership, a member of such limited liability company or stockholder of such corporation, (B) an affiliate of such partnership, limited liability company or corporation (including, without limitation, any affiliated investment fund of such Holder), (C) a retired partner of such partnership or a retired member of such limited liability company, (D) the estate of any such partner, member or stockholder, or (iii) for the transfer by gift, will or intestate succession by any Holder to his or her spouse or lineal descendants or ancestors or any trust for any of the foregoing; provided that in the case of clauses (ii) and (iii) the transferee agrees in writing to be subject to the terms of this Agreement to the same extent as if the transferee were an original Investor hereunder and in the case of clause (iii) the transfer was without additional consideration or at no greater than cost.

 

2.2            "Market Stand-Off" Agreement. Each Holder hereby agrees that it shall not, to the extent requested by the Company or an underwriter of securities of the Company, sell or otherwise transfer or dispose of any Securities or other shares of stock of the Company then owned by such Holder (other than to donees or partners of the Holder who agree to be similarly bound) for up to one hundred eighty (180) days following the effective date of any registration statement of the Company filed under the Securities Act; provided however that , if during the last seventeen (17) days of the restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to the expiration of the restricted period the Company announces that it will release earnings results during the 16-day period beginning on the last day of the restricted period, and if the Company's securities are listed on the Nasdaq Stock Market and Rule 2711 thereof applies, then the restrictions imposed by this Section 2.2 shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. In no event will the restricted period extend beyond two hundred fifteen (215) days after the effective date of the registration statement.

 

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For purposes of this Section 2.2, the term "Company" shall include any wholly-owned subsidiary of the Company into which the Company merges or consolidates. To enforce the foregoing covenant, the Company shall have the right to place restrictive legends on the certificates representing the shares subject to this Section 2.2 and to impose stop transfer instructions with respect to the Securities and such other shares of stock of each Holder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period. Each Holder further agrees to enter into any agreement reasonably required by the underwriters to implement the foregoing within any reasonable timeframe so requested.

 

3.PARTICIPATION RIGHT.

 

3.1           General. Each Major Investor has the right of first refusal to purchase up to three times (3x) of such Major Investor's Pro Rata Share (as defined below) of all (or any part) of any New Securities (as defined in Section 3.2 below) that the Company may from time to time issue after the date of this Agreement, provided, however, such Major Investor shall have no right to purchase any such New Securities if such Major Investor cannot demonstrate to the Company's reasonable satisfaction that such Major Investor is at the time of the proposed issuance of such New Securities an "accredited investor" as such term is defined in Regulation D under the Securities Act. A Major Investor's "Pro Rata Share" for purposes of this right of first refusal is the ratio of (a) the number of shares of the Company's Common Stock issued or issuable upon conversion of the Shares owned by such Major Investor, to (b) a number of shares of Common Stock of the Company equal to the sum of (1) the total number of shares of Common Stock of the Company then outstanding plus (2) the total number of shares of Common Stock of the Company into which all then outstanding shares of Preferred Stock of the Company are then convertible plus (3) the number of shares of Common Stock of the Company reserved for issuance under any stock purchase and stock option plans of the Company and outstanding warrants.

 

3.2          New Securities. "New Securities" shall mean any Common Stock or Preferred Stock of the Company, whether now authorized or not, and rights, options or warrants to purchase such Common Stock or Preferred Stock, and securities of any type whatsoever that are, or may become, convertible or exchangeable into such Common Stock or Preferred Stock; provided, however, that the term "New Securities" does not include: (a) shares of Common Stock issued or issuable upon conversion of the outstanding shares of all the series of the Preferred Stock; (b) shares of Common Stock or Preferred Stock issuable upon exercise of any options, warrants or rights to purchase any securities of the Company outstanding as of the date of this Agreement and any securities issuable upon the conversion thereof; (c) shares of Common Stock or Preferred Stock issued in connection with any stock split or stock dividend or recapitalization; (d) shares of Common Stock (or options, warrants or rights therefor) granted or issued hereafter to employees, officers, directors, contractors, consultants or advisers to, the Company or any subsidiary of the Company pursuant to incentive agreements, stock purchase or stock option plans, stock bonuses or awards, warrants, contracts or other arrangements that are approved by the Company's Board of Directors (the "Board"); (e) shares of the Company's Series Seed Preferred Stock issued pursuant to the Series Seed Agreement; (f) any other shares of Common Stock or Preferred Stock (and/or options or warrants therefor) issued or issuable primarily for other than equity financing purposes and approved by the Board; and (g) shares of Common Stock issued or issuable by the Company to the public pursuant to a registration statement filed under the Securities Act.

 

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3.3           Procedures. In the event that the Company proposes to undertake an issuance of New Securities, it shall give to each Major Investor a written notice of its intention to issue New Securities (the "Notice"), describing the type of New Securities and the price and the general terms upon which the Company proposes to issue such New Securities given in accordance with Section 5.2. Each Major Investor shall have ten (10) days from the date such Notice is effective, as determined pursuant to Section 5.2 based upon the manner or method of notice, to agree in writing to purchase such Major Investor's Pro Rata Share of such New Securities for the price and upon the general terms specified in the Notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased (not to exceed such Major Investor's Pro Rata Share).

 

3.4           Failure to Exercise. In the event that the Major Investors fail to exercise in full the right of first refusal within such ten (10) day period, then the Company shall have one hundred twenty (120) days thereafter to sell the New Securities with respect to which the Major Investors' rights of first refusal hereunder were not exercised, at a price and upon general terms not materially more favorable to the purchasers thereof than specified in the Company's Notice to the Major Investors. In the event that the Company has not issued and sold the New Securities within such one hundred twenty (120) day period, then the Company shall not thereafter issue or sell any New Securities without again first offering such New Securities to the Major Investors pursuant to this Section 3.

 

4.GENERAL PROVISIONS.

 

4.1           Amendment and Waiver of Rights. Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Investors (and/or any of their permitted successors or assigns) holding Shares representing and/or convertible into a majority of all the Investors' Shares (as defined below). As used herein, the term "Investors' Shares" shall mean the shares of Common Stock then issuable upon conversion of all then outstanding Shares issued under the Series Seed Agreement plus all then outstanding shares issued upon the conversion of any Shares issued under the Series Seed Agreement. Any amendment or waiver effected in accordance with this Section 5.1 shall be binding upon each Investor, each Holder, each permitted successor or assignee of such Investor or Holder and the Company.

 

4.2           Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient's next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on the signature page or Exhibit A or Exhibit B hereto, or to such address or facsimile number as subsequently modified by written notice given in accordance with this Section 4.2. If notice is given to the Company, it shall be sent to TriplePulse, Inc., 10960 Wilshire Blvd., Suite 1050, Los Angeles, CA Attn: President; and a copy (which shall not constitute notice) shall also be sent to LKP Global Law, LLP, 1901 Avenue of the Stars, Suite 480, Los Angeles, CA 90067 Attn:Donald Lee.

 

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4.3          Entire Agreement. This Agreement and the documents referred to herein, together with all the Exhibits hereto, constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede any and all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.

 

4.4          Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law.

 

4.5          Severability The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

 

4.6          Third Parties. Nothing in this Agreement, express or implied, is intended to confer upon any person, other than the parties hereto and their successors and assigns, any rights or remedies under or by reason of this Agreement.

 

4.7          Successors and Assigns. This Agreement, and any and all rights, duties and obligations hereunder, shall not be assigned, transferred, delegated or sublicensed by an Investors without the prior written consent of the Company. Any attempt by an Investor without such permission to assign, transfer, delegate or sublicense any rights, duties or obligations that arise under this Agreement shall be void. Subject to the foregoing, and except as otherwise provided herein, this Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives.

 

4.8          Titles and Headings. The titles, captions and headings of this Agreement are included for ease of reference only and will be disregarded in interpreting or construing this Agreement. Unless otherwise specifically stated, all references herein to "sections" and "exhibits" will mean "sections" and "exhibits" to this Agreement.

 

4.9          Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.

 

4.10        Costs and Attorneys' Fees. In the event that any action, suit or other proceeding is instituted concerning or arising out of this Agreement or any transaction contemplated hereunder, the prevailing party shall recover all of such party's costs and attorneys' fees incurred in each such action, suit or other proceeding, including any and all appeals or petitions therefrom.

 

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4.11        Adjustments for Stock Splits, Etc. Wherever in this Agreement there is a reference to a specific number of shares of Common Stock or Preferred Stock of the Company of any class or series, then, upon the occurrence of any subdivision, combination or stock dividend of such class or series of stock, the specific number of shares so referenced in this Agreement shall automatically be proportionally adjusted to reflect the effect on the outstanding shares of such class or series of stock by such subdivision, combination or stock dividend.

 

4.12        Further Assurances. The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement.

 

4.13        Facsimile Signatures. This Agreement may be executed and delivered by facsimile and upon such delivery the facsimile signature will be deemed to have the same effect as if the original signature had been delivered to the other party.

 

4.14        Termination. The rights, duties and obligations under Sections 1 and 3 this Agreement shall terminate immediately prior to the closing of the Company's initial public offering of Common Stock pursuant to an effective registration statement filed under the Securities Act. Notwithstanding anything to the contrary herein, this Agreement (excluding any then-existing obligations) shall terminate upon the closing of a Deemed Liquidation Event as defined in the Company's Restated Certificate of Incorporation, as amended from time to time. Section 1.1(b) shall survive any such termination of the Agreement.

 

4.15        Dispute Resolution. Each party (a) hereby irrevocably and unconditionally submits to the jurisdiction of the federal or state courts located in the Central District of California for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement or the Transaction Documents (as defined in the Series Seed Preferred Stock Purchase Agreement dated of even date herewith), (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement or the Transaction Documents except in the federal or state courts located in the Central District of California, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement, the Transaction Documents or the subject matter hereof and thereof may not be enforced in or by such court.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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

 

THE COMPANY:

 

TRIPLEPULSE, INC.

 

Name: Christopher D. Thompson  
     
By: /s/ Christopher D. Thompson  
     
Title: President  

 

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

 

KEY HOLDERS:

 

Name:   Chris Thompson    Name: Constantine Anastasakis  
   /s/ Chris Thompson      /s/ Constantine Anastasakis  
         
Name  Joshua Ripley     
   /s/ Joshua Ripley       

 

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IN WITNESS WHEREOF, the panics hereto have executed this Agreement as of the date and year first written above.

 

INVESTORS:

 

StartEngine Fund I, L.P.

 

Name: Howard Marks 
By: /s/ Howard Marks   
Title: Managing Member 

 

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EXHIBIT A

 

List of Investors

 

Name, Address and E-Mail  Number of Shares 
StartEngine Fund I, L.P.   66,667 

 

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EXHIBITB

 

List of Key Holders

 

Name, Address and E-Mail  Number of Shares
of Common Stock Held
 
Christopher D. Thompson
2635 5th Street,
   360,606 
Santa Monica, CA 90405     
Email: ct@triplepulse.com     
      

Constantine Anastasakis

1345 South Beverly Glen, Apt 304
Los Angeles, CA 90024

Email: ca@triplepulse.com

   206,060 
      

Joshua Ripley

   33,334 
13559 Kitty Hawk St.     
Victorville, CA 92392     
Email: joshua @triplepulse.com      

 

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EX1A-3 HLDRS RTS 12 tm2031356d1_ex3-4.htm EXHIBIT 3.4

 

Exhibit 3.4 

 

SERIES SEED-B INVESTORS’ RIGHTS AGREEMENT

 

This Series Seed-B Investors’ Rights Agreement (this “Agreement”) is made and entered into as of April 27, 2013, by and among TriplePulse, Inc., a Delaware corporation (the “Company”), the parties listed on Exhibit A attached hereto (the “Investors”) and the parties listed on Exhibit B attached hereto (the “Key Holders”).

 

RECITALS

 

A.            The Investors have agreed to purchase from the Company, and the Company has agreed to sell to the Investors, shares of the Company’s Series Seed-B Preferred Stock (the “Shares”) on the terms and conditions set forth in that certain Series Seed-B Preferred Stock Purchase Agreement dated of even date herewith by and among the Company and the Investors, as amended from time to time (the “Series Seed-B Agreement”).

 

B.            It is a condition to the closing of the sale of the Shares that the parties hereto execute and deliver this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the parties hereto agree as follows:

 

1.COVENANTS OF THE COMPANY.

 

1.1Information Rights.

 

(a)            Basic Financial Information. The Company will furnish to each Investor holding more than 10,000 shares of Preferred Stock (a “Major Investor”) and any entity which requires such information pursuant to its organizational documents when available (1) annual unaudited financial statements for each fiscal year of the Company, including an unaudited balance sheet as of the end of such fiscal year, an unaudited statement of operations and an unaudited statement of cash flows of the Company for such year, all prepared in accordance with generally accepted accounting principles and practices; and (2) quarterly unaudited financial statements for each fiscal quarter of the Company (except the last quarter of the Company’s fiscal year), including an unaudited balance sheet as of the end of such fiscal year, an unaudited statement of operations and an unaudited statement of cash flows of the Company for such quarter, all prepared in accordance with generally accepted accounting principles and practices, subject to changes resulting from normal year-end audit adjustments. If the Company has audited records of any of the foregoing, it shall provide those in lieu of the unaudited versions.

 

(b)            Confidentiality. Anything in this Agreement to the contrary notwithstanding, no Investor by reason of this Agreement shall have access to any trade secrets or confidential information of the Company. The Company shall not be required to comply with any information rights in respect of any Investor whom the Company reasonably determines to be a competitor or an officer, employee, director or holder of ten percent (10%) or more of a competitor. Each Investor agrees that such Investor will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement other than to any of the Investor’s attorneys, accountants, consultants, and other professionals, to the extent necessary to obtain their services in connection with monitoring the Investor’s investment in the Company.

 

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(c)            Inspection Rights. The Company shall permit each Major Investor to visit and inspect the Company’s properties, to examine its books of account and records and to discuss the Company’s affairs, finances and accounts with its officers, all at such reasonable times as may be requested by such Investor.

 

2.RESTRICTIONS ON TRANSFER.

 

2.1          Limitations on Disposition. Each person owning of record shares of Common Stock of the Company issued or issuable pursuant to the conversion of the Shares and any shares of Common Stock of the Company issued as a dividend or other distribution with respect thereto or in exchange therefor or in replacement thereof (collectively, the “Securities”) or any assignee of record of Securities (each such person, a “Holder”) hereby agrees not to make any disposition of all or any portion of any Securities unless and until:

 

(a)            there is then in effect a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), covering such proposed disposition and such disposition is made in accordance with such registration statement; or

 

(b)            such Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a statement of the circumstances surrounding the proposed disposition, and, at the expense of such Holder or its transferee, with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of such securities under the Securities Act.

 

Notwithstanding the provisions of Sections 2.1(a) and (b) above, no such registration statement or opinion of counsel shall be required: (i) for any transfer of any Securities in compliance with SEC Rule 144 or Rule 144A, or (ii) for any transfer of any Securities by a Holder that is a partnership, limited liability company, a corporation or a venture capital fund to (A) a partner of such partnership, a member of such limited liability company or stockholder of such corporation, (B) an affiliate of such partnership, limited liability company or corporation (including, without limitation, any affiliated investment fund of such Holder), (C) a retired partner of such partnership or a retired member of such limited liability company, (D) the estate of any such partner, member or stockholder, or (iii) for the transfer by gift, will or intestate succession by any Holder to his or her spouse or lineal descendants or ancestors or any trust for any of the foregoing; provided that in the case of clauses (ii) and (iii) the transferee agrees in writing to be subject to the terms of this Agreement to the same extent as if the transferee were an original Investor hereunder and in the case of clause (iii) the transfer was without additional consideration or at no greater than cost.

 

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2.2            “Market Stand-Off” Agreement. Each Holder hereby agrees that it shall not, to the extent requested by the Company or an underwriter of securities of the Company, sell or otherwise transfer or dispose of any Securities or other shares of stock of the Company then owned by such Holder (other than to donees or partners of the Holder who agree to be similarly bound) for up to one hundred eighty (180) days following the effective date of any registration statement of the Company filed under the Securities Act; provided however that, if during the last seventeen (17) days of the restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to the expiration of the restricted period the Company announces that it will release earnings results during the 16-day period beginning on the last day of the restricted period, and if the Company’s securities are listed on the Nasdaq Stock Market and Rule 2711 thereof applies, then the restrictions imposed by this Section 2.2 shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. In no event will the restricted period extend beyond two hundred fifteen (215) days after the effective date of the registration statement.

 

For purposes of this Section 2.2, the term “Company” shall include any wholly-owned subsidiary of the Company into which the Company merges or consolidates. To enforce the foregoing covenant, the Company shall have the right to place restrictive legends on the certificates representing the shares subject to this Section 2.2 and to impose stop transfer instructions with respect to the Securities and such other shares of stock of each Holder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period. Each Holder further agrees to enter into any agreement reasonably required by the underwriters to implement the foregoing within any reasonable timeframe so requested.

 

3.GENERAL PROVISIONS.

 

3.1            Amendment and Waiver of Rights. Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Investors (and/or any of their permitted successors or assigns) holding Shares representing and/or convertible into a majority of all the Investors’ Shares (as defined below). As used herein, the term “Investors’ Shares” shall mean the shares of Common Stock then issuable upon conversion of all then outstanding Shares issued under the Series Seed-B Agreement plus all then outstanding shares issued upon the conversion of any Shares issued under the Series Seed-B Agreement. Any amendment or waiver effected in accordance with this Section 4.1 shall be binding upon each Investor, each Holder, each permitted successor or assignee of such Investor or Holder and the Company.

 

3.2            Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on the signature page or Exhibit A or Exhibit B hereto, or to such address or facsimile number as subsequently modified by written notice given in accordance with this Section 3.2. If notice is given to the Company, it shall be sent to TriplePulse, Inc., 10960 Wilshire Blvd., Suite 1050, Los Angeles, CA Attn: President.

 

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3.3            Entire Agreement. This Agreement and the documents referred to herein, together with all the Exhibits hereto, constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede any and all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.

 

3.4            Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law.

 

3.5            Severability The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

 

3.6            Third Parties. Nothing in this Agreement, express or implied, is intended to confer upon any person, other than the parties hereto and their successors and assigns, any rights or remedies under or by reason of this Agreement.

 

3.7            Successors and Assigns. This Agreement, and any and all rights, duties and obligations hereunder, shall not be assigned, transferred, delegated or sublicensed by an Investors without the prior written consent of the Company. Any attempt by an Investor without such permission to assign, transfer, delegate or sublicense any rights, duties or obligations that arise under this Agreement shall be void. Subject to the foregoing, and except as otherwise provided herein, this Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives.

 

3.8            Titles and Headings. The titles, captions and headings of this Agreement are included for ease of reference only and will be disregarded in interpreting or construing this Agreement. Unless otherwise specifically stated, all references herein to “sections” and “exhibits” will mean “sections” and “exhibits” to this Agreement.

 

3.9            Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.

 

3.10          Costs and Attorneys’ Fees. In the event that any action, suit or other proceeding is instituted concerning or arising out of this Agreement or any transaction contemplated hereunder, the prevailing party shall recover all of such party’s costs and attorneys’ fees incurred in each such action, suit or other proceeding, including any and all appeals or petitions therefrom.

 

3.11          Adjustments for Stock Splits, Etc. Wherever in this Agreement there is a reference to a specific number of shares of Common Stock or Preferred Stock of the Company of any class or series, then, upon the occurrence of any subdivision, combination or stock dividend of such class or series of stock, the specific number of shares so referenced in this Agreement shall automatically be proportionally adjusted to reflect the effect on the outstanding shares of such class or series of stock by such subdivision, combination or stock dividend.

 

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3.12            Further Assurances. The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement.

 

3.13            Facsimile Signatures. This Agreement may be executed and delivered by facsimile and upon such delivery the facsimile signature will be deemed to have the same effect as if the original signature had been delivered to the other party.

 

3.14            Termination. The rights, duties and obligations under Section 1 of this Agreement shall terminate immediately prior to the closing of the Company’s initial public offering of Common Stock pursuant to an effective registration statement filed under the Securities Act. Notwithstanding anything to the contrary herein, this Agreement (excluding any then-existing obligations) shall terminate upon the closing of a Deemed Liquidation Event as defined in the Company’s Restated Certificate of Incorporation, as amended from time to time. Section 1.1(b) shall survive any such termination of the Agreement.

 

3.15            Dispute Resolution. Each party (a) hereby irrevocably and unconditionally submits to the jurisdiction of the federal or state courts located in the Central District of California for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement or the Transaction Documents (as defined in the Series Seed-B Preferred Stock Purchase Agreement dated of even date herewith), (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement or the Transaction Documents except in the federal or state courts located in the Central District of California, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement, the Transaction Documents or the subject matter hereof and thereof may not be enforced in or by such court.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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

 

THE COMPANY:

 

TRIPLEPULSE, INC.

 

Name: Christopher Thompson  
By: /s/ Christopher Thompson  
Title: President  

 

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

 

KEY HOLDERS:

 

Name: Chris Thompson  
  /s/ Chris Thompson  

 

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

 

INVESTORS:

 

Hugh Evans  
   
/s/ Hugh Evans  

 

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EXHIBIT A

 

List of Investors

 

Name, Address and E-Mail  Number of Shares
Hugh Evans  41,667

 

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EXHIBIT B

 

List of Key Holders

 

Name, Address and E-Mail  
Christopher D. Thompson  
2635 5th Street,  
Santa Monica, CA 90405  
Email: ct@triplepulse.com  

 

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EX1A-4 SUBS AGMT 13 tm2031356d1_ex4-1.htm EXHIBIT 4.1

 

Exhibit 4.1

 

SUBSCRIPTION AGREEMENT

 

THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. THIS INVESTMENT IS SUITABLE ONLY FOR PERSONS WHO CAN BEAR THE ECONOMIC RISK FOR AN INDEFINITE PERIOD OF TIME AND WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. FURTHERMORE, INVESTORS MUST UNDERSTAND THAT SUCH INVESTMENT IS ILLIQUID AND IS EXPECTED TO CONTINUE TO BE ILLIQUID FOR AN INDEFINITE PERIOD OF TIME. NO PUBLIC MARKET EXISTS FOR THE SECURITIES, AND NO PUBLIC MARKET IS EXPECTED TO DEVELOP FOLLOWING THIS OFFERING.

 

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES OR BLUE SKY LAWS AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND STATE SECURITIES OR BLUE SKY LAWS. ALTHOUGH AN OFFERING STATEMENT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”), THAT OFFERING STATEMENT DOES NOT INCLUDE THE SAME INFORMATION THAT WOULD BE INCLUDED IN A REGISTRATION STATEMENT UNDER THE ACT. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON THE MERITS OF THIS OFFERING OR THE ADEQUACY OR ACCURACY OF THE SUBSCRIPTION AGREEMENT OR ANY OTHER MATERIALS OR INFORMATION MADE AVAILABLE TO SUBSCRIBER IN CONNECTION WITH THIS OFFERING, OVER THE WEB-BASED PLATFORM MAINTAINED BY STARTENGINE CROWDFUNDING, INC. (THE “PLATFORM”). ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

 

THE SECURITIES CANNOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT. IN ADDITION, THE SECURITIES CANNOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS.

 

INVESTORS WHO ARE NOT “ACCREDITED INVESTORS” (AS THAT TERM IS DEFINED IN SECTION 501 OF REGULATION D PROMULGATED UNDER THE ACT) ARE SUBJECT TO LIMITATIONS ON THE AMOUNT THEY MAY INVEST, AS SET OUT IN SECTION 4. THE COMPANY IS RELYING ON THE REPRESENTATIONS AND WARRANTIES SET FORTH BY EACH SUBSCRIBER IN THIS SUBSCRIPTION AGREEMENT AND THE OTHER INFORMATION PROVIDED BY SUBSCRIBER IN CONNECTION WITH THIS OFFERING TO DETERMINE THE APPLICABILITY TO THIS OFFERING OF EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT.

 

PROSPECTIVE INVESTORS MAY NOT TREAT THE CONTENTS OF THE SUBSCRIPTION AGREEMENT, THE OFFERING CIRCULAR OR ANY OF THE OTHER MATERIALS AVAILABLE ON THE PLATFORM OR PROVIDED BY THE COMPANY (COLLECTIVELY, THE “OFFERING MATERIALS”), OR ANY PRIOR OR SUBSEQUENT COMMUNICATIONS FROM THE COMPANY OR ANY OF ITS OFFICERS, EMPLOYEES OR AGENTS (INCLUDING “TESTING THE WATERS” MATERIALS) AS INVESTMENT, LEGAL OR TAX ADVICE. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THIS OFFERING, INCLUDING THE MERITS AND THE RISKS INVOLVED. EACH PROSPECTIVE INVESTOR SHOULD CONSULT THE INVESTOR’S OWN COUNSEL, ACCOUNTANTS AND OTHER PROFESSIONAL ADVISORS AS TO INVESTMENT, LEGAL, TAX AND OTHER RELATED MATTERS CONCERNING THE INVESTOR’S PROPOSED INVESTMENT.

 

 

 

THE OFFERING MATERIALS MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY’S MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS “ESTIMATE,” “PROJECT,” “BELIEVE,” “ANTICIPATE,” “INTEND,” “EXPECT” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, WHICH CONSTITUTE FORWARD LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO REVISE OR UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.

 

THE COMPANY MAY NOT BE OFFERING THE SECURITIES IN EVERY STATE. THE OFFERING MATERIALS DO NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY STATE OR JURISDICTION IN WHICH THE SECURITIES ARE NOT BEING OFFERED.

 

THE COMPANY RESERVES THE RIGHT IN ITS SOLE DISCRETION AND FOR ANY REASON WHATSOEVER TO MODIFY, AMEND AND/OR WITHDRAW ALL OR A PORTION OF THE OFFERING AND/OR ACCEPT OR REJECT IN WHOLE OR IN PART ANY PROSPECTIVE INVESTMENT IN THE SECURITIES OR TO ALLOT TO ANY PROSPECTIVE INVESTOR LESS THAN THE AMOUNT OF SECURITIES SUCH INVESTOR DESIRES TO PURCHASE. EXCEPT AS OTHERWISE INDICATED, THE OFFERING MATERIALS SPEAK AS OF THEIR DATE. NEITHER THE DELIVERY NOR THE PURCHASE OF THE SECURITIES SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THAT DATE.

 

 

 

  TO: TriplePulse, Inc.
     
    3103 Neilson Way
     
    Santa Monica, CA 90405

 

Ladies and Gentlemen:

 

1. Subscription.

 

(a)  The undersigned (“Subscriber”) hereby irrevocably subscribes for and agrees to purchase Common Stock (the “Securities”), of TriplePulse Inc., a Delaware corporation (the “Company”), at a purchase price of $0.36 per share of Common Stock (the “Per Security Price”), upon the terms and conditions set forth herein. The rights of the Common Stock are as set forth in the Second Amended and Restated Certificate of Incorporation of the Company as amended from time to time (the “Restated Certificate”), filed as Exhibit 2.3 to the Offering Statement of the Company filed with the SEC (the “Offering Statement”).

 

(b)  Subscriber understands that the Securities are being offered pursuant to an offering circular dated September 29, 2020 (the “Offering Circular”) filed with the SEC as part of the Offering Statement. By executing this Subscription Agreement, Subscriber acknowledges that Subscriber has received this Subscription Agreement, copies of the Offering Circular and Offering Statement, including exhibits thereto, and any other information required by the Subscriber to make an investment decision.

 

(c)  The Subscriber’s subscription may be accepted or rejected in whole or in part, at any time prior to a Closing Date (as hereinafter defined), by the Company at its sole discretion. In addition, the Company, at its sole discretion, may allocate to Subscriber only a portion of the number of Securities Subscriber has subscribed for. The Company will notify Subscriber whether this subscription is accepted (whether in whole or in part) or rejected. If Subscriber’s subscription is rejected, Subscriber’s payment (or portion thereof if partially rejected) will be returned to Subscriber without interest and all of Subscriber’s obligations hereunder shall terminate.

 

(d)  The aggregate number of Securities sold shall not exceed 10,972,223 (the “Maximum Offering”). The Company may accept subscriptions until the termination of the Offering, unless otherwise extended by the Company in its sole discretion in accordance with applicable SEC regulations for such other period required to sell the Maximum Offering (the “Termination Date”). The Company may elect at any time to close all or any portion of this offering, on various dates at or prior to the Termination Date (each a “Closing Date”).

 

(e)  In the event of rejection of this subscription in its entirety, or in the event the sale of the Securities (or any portion thereof) is not consummated for any reason, this Subscription Agreement shall have no force or effect, except for Section 5 hereof, which shall remain in force and effect.

 

2. Purchase Procedure.

 

(a)  Payment. The purchase price for the Securities shall be paid simultaneously with the execution and delivery to the Company of the signature page of this Subscription Agreement. Subscriber shall deliver a signed copy of this Subscription Agreement (which may be executed and delivered electronically), along with payment for the aggregate purchase price of the Securities by ACH electronic transfer or wire transfer to an account designated by the Company, by credit or debit card, or by any combination of such methods.

 

 

 

(b)  Escrow arrangements. Payment for the Securities shall be received by Prime Trust, LLC (the “Escrow Agent”) from the undersigned by transfer of immediately available funds or other means approved by the Company at least two days prior to the applicable Closing Date, in the amount as set forth on the signature page hereto. Upon such Closing Date, the Escrow Agent shall release such funds to the Company. The undersigned shall receive notice and evidence of the digital entry of the number of the Securities owned by undersigned reflected on the books and records of the Company and verified by West Coast Stock Transfer, Inc., (the “Transfer Agent”), which books and records shall bear a notation that the Securities were sold in reliance upon Regulation A.

 

3. Representations and Warranties of the Company.

 

The Company represents and warrants to Subscriber that the following representations and warranties are true and complete in all material respects as of the date of each Closing Date, except as otherwise indicated. For purposes of this Agreement, an individual shall be deemed to have “knowledge” of a particular fact or other matter if such individual is actually aware of such fact. The Company will be deemed to have “knowledge” of a particular fact or other matter if one of the Company’s current officers has, or at any time had, actual knowledge of such fact or other matter.

 

(a)  Organization and Standing. The Company is a corporation duly formed, validly existing and in good standing under the laws of the State of Delaware. The Company has all requisite power and authority to own and operate its properties and assets, to execute and deliver this Subscription Agreement and any other agreements or instruments required hereunder. The Company is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so would not have a material adverse effect on the Company or its business.

 

(b)  Issuance of the Securities. The issuance, sale and delivery of the Securities in accordance with this Subscription Agreement have been duly authorized by all necessary corporate action on the part of the Company. The Securities, when so issued, sold and delivered against payment therefore in accordance with the provisions of this Subscription Agreement, will be duly and validly issued, fully paid and non-assessable.

 

(c)  Authority for Agreement. The execution and delivery by the Company of this Subscription Agreement and the consummation of the transactions contemplated hereby (including the issuance, sale and delivery of the Securities) are within the Company’s powers and have been duly authorized by all necessary corporate action on the part of the Company. Upon full execution hereof, this Subscription Agreement shall constitute a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except (i) as limited by 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) with respect to provisions relating to indemnification and contribution, as limited by considerations of public policy and by federal or state securities laws.

 

(d)  No filings. Assuming the accuracy of the Subscriber’s representations and warranties set forth in Section 4 hereof, no order, license, consent, authorization or approval of, or exemption by, or action by or in respect of, or notice to, or filing or registration with, any governmental body, agency or official is required by or with respect to the Company in connection with the execution, delivery and performance by the Company of this Subscription Agreement except (i) for such filings as may be required under Regulation A or under any applicable state securities laws, (ii) for such other filings and approvals as have been made or obtained, or (iii) where the failure to obtain any such order, license, consent, authorization, approval or exemption or give any such notice or make any filing or registration would not have a material adverse effect on the ability of the Company to perform its obligations hereunder.

 

 

 

(e)  Capitalization. The authorized and outstanding securities of the Company immediately prior to the initial investment in the Securities is as set forth in “Securities Being Offered” in the Offering Circular. Except as set forth in the Offering Circular, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), or agreements of any kind (oral or written) for the purchase or acquisition from the Company of any of its securities.

 

(f)  Financial statements. Complete copies of the Company’s financial statements consisting of the balance sheets of the Company as at December 31, 2018 and 2019 and the related statements of income, stockholders’ equity and cash flows for the years ended December 31, 2018 and 2019 (the “Financial Statements”) have been made available to the Subscriber and appear in the Offering Circular. The Financial Statements are based on the books and records of the Company and fairly present in all material respects the financial condition of the Company as of the respective dates they were prepared and the results of the operations and cash flows of the Company for the periods indicated. dbbmckennon, which has audited the Financial Statements, is an independent accounting firm within the rules and regulations adopted by the SEC.

 

(g) Proceeds. The Company shall use the proceeds from the issuance and sale of the Securities as set forth in “Use of Proceeds” in the Offering Circular.

 

(h)  Litigation. Except as disclosed in the Offering Circular, there is no pending action, suit, proceeding, arbitration, mediation, complaint, claim, charge or investigation before any court, arbitrator, mediator or governmental body, or to the Company’s knowledge, currently threatened in writing (a) against the Company or (b) against any consultant, officer, manager, director or key employee of the Company arising out of his or her consulting, employment or board relationship with the Company or that could otherwise materially impact the Company.

 

4. Representations and Warranties of Subscriber. By executing this Subscription Agreement, Subscriber (and, if Subscriber is purchasing the Securities subscribed for hereby in a fiduciary capacity, the person or persons for whom Subscriber is so purchasing) represents and warrants, which representations and warranties are true and complete in all material respects as of such Subscriber’s respective Closing Date(s):

 

(a)  Requisite Power and Authority. Such Subscriber has all necessary power and authority under all applicable provisions of law to execute and deliver this Subscription Agreement and other agreements required hereunder and to carry out their provisions. All action on Subscriber’s part required for the lawful execution and delivery of this Subscription Agreement and other agreements required hereunder have been or will be effectively taken prior to the Closing Date. Upon their execution and delivery, this Subscription Agreement and other agreements required hereunder will be valid and binding obligations of Subscriber, enforceable in accordance with their terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights and (b) as limited by general principles of equity that restrict the availability of equitable remedies.

 

(b)  Investment Representations. Subscriber understands that the Securities have not been registered under the Securities Act of 1933, as amended (the “Securities Act”). Subscriber also understands that the Securities are being offered and sold pursuant to an exemption from registration contained in the Securities Act based in part upon Subscriber’s representations contained in this Subscription Agreement.

 

 

 

(c)  Illiquidity and Continued Economic Risk. Subscriber acknowledges and agrees that there is no ready public market for the Securities and that there is no guarantee that a market for their resale will ever exist. Subscriber must bear the economic risk of this investment indefinitely and the Company has no obligation to list the Securities on any market or take any steps (including registration under the Securities Act or the Securities Exchange Act of 1934, as amended) with respect to facilitating trading or resale of the Securities. Subscriber acknowledges that Subscriber is able to bear the economic risk of losing Subscriber’s entire investment in the Securities. Subscriber also understands that an investment in the Company involves significant risks and has taken full cognizance of and understands all of the risk factors relating to the purchase of Securities.

 

(d) Accredited Investor Status or Investment Limits. Subscriber represents that either:

 

(i)  Subscriber is an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act. Subscriber represents and warrants that the information set forth in response to question (c) on the signature page hereto concerning Subscriber is true and correct; or

 

(ii)  The purchase price set out in paragraph (b) of the signature page to this Subscription Agreement, together with any other amounts previously used to purchase Securities in this offering, does not exceed 10% of the greater of the Subscriber’s annual income or net worth.

 

Subscriber represents that to the extent it has any questions with respect to its status as an accredited investor, or the application of the investment limits, it has sought professional advice.

 

(e)  Stockholder information. Within five days after receipt of a request from the Company, the Subscriber hereby agrees to provide such information with respect to its status as a stockholder (or potential stockholder) and to execute and deliver such documents as may reasonably be necessary to comply with any and all laws and regulations to which the Company is or may become subject. Subscriber further agrees that in the event it transfers any Securities, it will require the transferee of such Securities to agree to provide such information to the Company as a condition of such transfer.

 

(f)  Company Information. Subscriber understands that the Company is subject to all the risks that apply to early-stage companies, whether or not those risks are explicitly set out in the Offering Circular. Subscriber has had such opportunity as it deems necessary (which opportunity may have presented through online chat or commentary functions) to discuss the Company’s business, management and financial affairs with managers, officers and management of the Company and has had the opportunity to review the Company’s operations and facilities. Subscriber has also had the opportunity to ask questions of and receive answers from the Company and its management regarding the terms and conditions of this investment. Subscriber acknowledges that except as set forth herein, no representations or warranties have been made to Subscriber, or to Subscriber’s advisors or representative, by the Company or others with respect to the business or prospects of the Company or its financial condition.

 

(g)  Valuation. The Subscriber acknowledges that the price of the Securities was set by the Company on the basis of the Company’s internal valuation and no warranties are made as to value. The Subscriber further acknowledges that future offerings of Securities may be made at lower valuations, with the result that the Subscriber’s investment will bear a lower valuation.

 

(h)  Domicile. Subscriber maintains Subscriber’s domicile (and is not a transient or temporary resident) at the address shown on the signature page.

 

 

 

(i)  Foreign Investors. If Subscriber is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended), Subscriber hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Securities or any use of this Subscription Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Securities, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Securities. Subscriber’s subscription and payment for and continued beneficial ownership of the Securities will not violate any applicable securities or other laws of the Subscriber’s jurisdiction.

 

5. Survival of Representations. The representations, warranties and covenants made by the Subscriber herein shall survive the Termination Date of this Agreement.

 

6. Irrevocable Proxy. Subscriber, as shareholder, hereby appoints, and shall appoint, the then-current Chief Executive Officer of the Company, as the Subscriber’s true and lawful proxy and attorney, with the power to act alone and with full power of substitution, to vote all shares of the Company’s shares of Common Stock held by the Subscriber as set forth in this Agreement and to execute all appropriate instruments consistent with this Agreement on behalf of the Subscriber until the occurrence of certain events, none which may ever occur. Such events include without limitation (i) the closing of a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933 covering the offer and sale of the Securities or the effectiveness of a registration statement under the Securities Exchange Act of 1934 covering the Securities, (ii)  a transaction or series of related transactions in which the Securities representing more than 50% of the Company’s outstanding voting power are acquired from the Company’s stockholders, (iii) an acquisition by another entity, in which the holders of the Company’s voting securities outstanding immediately prior to such transaction, do not retain at least a majority of the total voting power represented by the Company’s outstanding voting securities or the voting securities of the other surviving or resulting entity, after such transaction, (iv) a sale, exclusive license, transfer, lease or other disposition of all or substantially all of the Company’s assets, or (v) the liquidation, dissolution or winding up of the Company.  The voting rights granted via the proxy are not limited, and include, among other things, the right to vote on the election of the Company’s directors, amendments to the Company’s organizational documents, and major corporate transactions. The Chief Executive Officer, in his sole discretion, may assign the voting proxy to any of the Company’s future officers. The proxy and power granted by each Subscriber pursuant to this section are coupled with an interest. Each such proxy and power will be irrevocable. The proxy and power, so long as any Subscriber is an individual, will survive the death, incompetency and disability of such Subscriber and, so long as any Subscriber is an entity, will survive the merger or reorganization of the Subscriber or any other entity holding the Securities.

 

7. Drag Along. If a Liquidating Event (as defined in the Restated Certificate) is approved by the Board of Directors of the Company and the requisite vote of the outstanding classes of stock entitled to vote on such matter, then, Subscriber agrees, as a holder of Common Stock, to vote (in person, by proxy or by action by written consent, as applicable) all shares of capital stock of the Company now or hereafter directly or indirectly owned of record or beneficially by Subscriber (whether Common Stock, or any shares of the Company’s Preferred Stock) in favor of, and adopt, such Liquidating Event and to execute and deliver all related documentation and take such other action in support of the Liquidating Event as may reasonably be requested by the Company to carry out the terms and provision of this Section 6, including executing and delivering instruments of conveyance and transfer, and any purchase agreement, merger agreement, indemnity agreement, escrow agreement, consent, waiver, governmental filing, share certificates duly endorsed for transfer (free and clear of impermissible liens, claims and encumbrances) and any similar or related documents. The obligation of any party to take the actions required by this section will not apply to a Liquidating Event if the other party involved in such Liquidating Event is an affiliate or stockholder of the Company holding more than 10% of the voting power of the Company.

 

8. Governing Law; Jurisdiction. This Subscription Agreement shall be governed and construed in accordance with the laws of the State of Delaware.

 

EACH OF THE SUBSCRIBER AND THE COMPANY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION LOCATED WITHIN THE STATE OF CALIFORNIA AND NO OTHER PLACE AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS RELATING TO THIS SUBSCRIPTION AGREEMENT NOT ARISING UNDER THE FEDERAL SECURITIES LAWS MAY BE LITIGATED IN SUCH COURTS. EACH OF SUBSCRIBER AND THE COMPANY ACCEPTS FOR ITSELF AND HIMSELF AND IN CONNECTION WITH ITS AND HIS RESPECTIVE PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS SUBSCRIPTION AGREEMENT NOT ARISING UNDER THE FEDERAL SECURITIES LAWS. EACH OF SUBSCRIBER AND THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN THE MANNER AND IN THE ADDRESS SPECIFIED IN SECTION 8 AND THE SIGNATURE PAGE OF THIS SUBSCRIPTION AGREEMENT.

 

 

 

9. Notices. Notice, requests, demands and other communications relating to this Subscription Agreement and the transactions contemplated herein shall be in writing and shall be deemed to have been duly given if and when (a) delivered personally, on the date of such delivery; or (b) mailed by registered or certified mail, postage prepaid, return receipt requested, in the third day after the posting thereof; or (c) emailed, telecopied or cabled, on the date of such delivery to the address of the respective parties as follows:

 

If to the Company, to:

 

TriplePulse Inc.

3103 Neilson Way

Santa Monica, CA 90405

Attn: Christopher Thompson

 

If to a Subscriber, to Subscriber’s address as shown on the signature page hereto or to such other address as may be specified by written notice from time to time by the party entitled to receive such notice. Any notices, requests, demands or other communications by telecopy or cable shall be confirmed by letter given in accordance with (a) or (b) above.

 

10. Miscellaneous.

 

(a)  All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons or entity or entities may require.

 

(b) This Subscription Agreement is not transferable or assignable by Subscriber.

 

(c)  The representations, warranties and agreements contained herein shall be deemed to be made by and be binding upon Subscriber and its heirs, executors, administrators and successors and shall inure to the benefit of the Company and its successors and assigns.

 

(d)  None of the provisions of this Subscription Agreement may be waived, changed or terminated orally or otherwise, except as specifically set forth herein or except by a writing signed by the Company and Subscriber.

 

(e)  In the event any part of this Subscription Agreement is found to be void or unenforceable, the remaining provisions are intended to be separable and binding with the same effect as if the void or unenforceable part were never the subject of agreement.

 

(f)  The invalidity, illegality or unenforceability of one or more of the provisions of this Subscription Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Subscription Agreement in such jurisdiction or the validity, legality or enforceability of this Subscription Agreement, including any such provision, in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.

 

(g)  This Subscription Agreement supersedes all prior discussions and agreements between the parties with respect to the subject matter hereof and contains the sole and entire agreement between the parties hereto with respect to the subject matter hereof.

 

(h)  The terms and provisions of this Subscription Agreement are intended solely for the benefit of each party hereto and their respective successors and assigns, and it is not the intention of the parties to confer, and no provision hereof shall confer, third-party beneficiary rights upon any other person.

 

(i) The headings used in this Subscription Agreement have been inserted for convenience of reference only and do not define or limit the provisions hereof.

 

 

 

(j)  This Subscription Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

 

(k)  If any recapitalization or other transaction affecting the stock of the Company is effected, then any new, substituted or additional securities or other property which is distributed with respect to the Securities shall be immediately subject to this Subscription Agreement, to the same extent that the Securities, immediately prior thereto, shall have been covered by this Subscription Agreement.

 

(l)  No failure or delay by any party in exercising any right, power or privilege under this Subscription Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

 

[SIGNATURE PAGE FOLLOWS]

 

TRIPLEPULSE INC.

 

SUBSCRIPTION AGREEMENT SIGNATURE PAGE

 

The undersigned, desiring to purchase Common Stock of TriplePulse Inc., by executing this signature page, hereby executes, adopts and agrees to all terms, conditions and representations of the Subscription Agreement.

 

 

 

(a) The number of shares of Common Stock the undersigned hereby irrevocably subscribes for is:   _____________________
    (print number of Securities)
     
(b) The aggregate purchase price (based on a purchase price of $0.36 per Security) for the Common Stock the undersigned hereby irrevocably subscribes for is:   $____________________ (print aggregate purchase price)
     
(c) EITHER (i) The undersigned is an accredited investor (as that term is defined in Regulation D under the Securities Act because the undersigned meets the criteria set forth in the following paragraph(s) of Appendix A attached hereto:   _____________________ (print applicable number from Appendix A)
     
OR (ii) The amount set forth in paragraph (b) above (together with any previous investments in the Securities pursuant to this offering) does not exceed 10% of the greater of the undersigned’s net worth or annual income.    
     
(d) The Securities being subscribed for will be owned by, and should be recorded on the Company’s books as held in the name of   _____________________

 

 

 

    If the Securities are to be purchased in joint names, both Subscribers must sign:
     
     
Signature   Signature
     
     
Name (Please Print)   Name (Please Print)
     
     
Entity Name (if applicable)    
     
     
Signatory title (if applicable)    
     
     
Email address   Email address
     
     
Address   Address
     
     
     
     
Telephone Number   Telephone Number
     
     
Social Security Number/EIN   Social Security Number
     
     
Date   Date
     
* * * * *    
    TRIPLEPULSE INC.
     
     
This Subscription is accepted   By:               
     
    Name:
     
on _________________, 2020   Title:

 

 

 

APPENDIX A

 

An accredited investor includes the following categories of investor:

 

(1)  Any bank as defined in section 3(a)(2) of the Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; any insurance company as defined in section 2(a)(13) of the Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in section 2(a)(48) of that Act; any Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

 

(2) Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940;

 

(3)  Any organization described in section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

 

(4)  Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer;

 

(5) Any natural person whose individual net worth, or joint net worth with that person's spouse, exceeds $1,000,000.

 

(i) Except as provided in paragraph (a)(5)(ii) of this section, for purposes of calculating net worth under this paragraph (a)(5):

 

(A) The person's primary residence shall not be included as an asset;

 

(B)  Indebtedness that is secured by the person's primary residence, up to the estimated fair market value of the primary residence at the time of the sale of securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of sale of securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and

 

 

 

(C)  Indebtedness that is secured by the person's primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of securities shall be included as a liability;

 

(ii)  Paragraph (a)(5)(i) of this section will not apply to any calculation of a person's net worth made in connection with a purchase of securities in accordance with a right to purchase such securities, provided that:

 

(A) Such right was held by the person on July 20, 2010;

 

(B) The person qualified as an accredited investor on the basis of net worth at the time the person acquired such right; and

 

(C) The person held securities of the same issuer, other than such right, on July 20, 2010.

 

(6) Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of$ 300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;

 

(7)  Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in §230.506(b)(2)(ii); and

 

(8) Any entity in which all of the equity owners are accredited investors.

 

 

EX1A-6 MAT CTRCT 14 tm2031356d1_ex6-1.htm EXHIBIT 6.1

Exhibit 6.1

 

CONVERTIBLE NOTE PURCHASE AGREEMENT

 

This CONVERTIBLE NOTE PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of 5/5/15, by and between TRIPLEPULSE, INC., a Delaware corporation (the “Company”), and the persons who are signatories hereto (each, a “Purchaser” and, collectively, the “Purchasers”).

 

RECITALS

 

A.            The Company desires to issue and sell to Purchasers, and Purchasers desire to purchase and acquire from the Company up to Five Hundred Thousand US Dollars (US$500,000.00) in aggregate principal amount of promissory notes, on the terms and subject to the conditions of this Agreement.

 

AGREEMENT

 

In consideration of the foregoing recitals and the mutual promises and covenants contained herein, the parties, intending to be legally bound, hereby agree as follows:

 

Purchase and Sale of Notes.

 

Authorization and Issuance of the Notes. The Company has authorized the issuance and sale of the Company’s Convertible Promissory Notes, in the form attached hereto as Exhibit A (each, a “Note”, and collectively, the “Notes”).

 

Issuance of the Notes.

 

Purchase and Sale. At each Closing (as defined in Section 0), the Company shall issue and sell to each Purchaser, and each Purchaser shall purchase and acquire from the Company, the Notes in the principal amounts set forth in such Purchaser’s Note (the “Purchase Price”). The aggregate Purchase Price of the Notes shall not exceed $500,000.00 (the “Maximum Offering”). The names of the Purchasers and the principal amount of the Notes issued to each such Purchaser shall be set forth on Schedule 1, which schedule shall be updated from time to time by the Company following each Closing.

 

The Initial Closing. The initial closing of the purchase and sale of the Notes (the “Initial Closing”) shall occur concurrently with the execution of this Agreement, or such later date as the Company and Purchasers shall agree to in writing (the “Initial Closing Date”), in each case at the offices of the Company, located at 1316 3rd Street, Suite B5, Santa Monica, CA 90401. At the Initial Closing, the Company shall deliver to the Purchasers the duly executed Notes. Delivery shall be made against receipt by the Company of the Purchase Price by check or wire transfer of immediately available funds.

 

Additional Closings. For a period of sixty (60) from the Initial Closing Date, the Company may sell Notes pursuant to this Agreement to purchasers (each an “Additional Purchaser”) at additional closings (each, an “Additional Closing”) until the Company has issued that amount of Notes representing the Maximum Offering. Each Additional Purchaser shall be treated as a Purchaser herein. Each Additional Closing, collectively, with the Initial Closing, shall be referred to as a “Closing” and each Additional Closing date, collectively with the Initial Closing Date, shall be referred to as “Closing Date”).

 

TriplePulse Note Purchase Agreement

 

 

 

Representations and Warranties of the Company. As of the Initial Closing Date, the Company represents and warrants to each Purchaser that:

 

Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation and has all requisite corporate power and corporate authority to carry on its business as presently conducted. The Company has no subsidiaries. The Company is duly qualified to transact business and is in good standing as a foreign corporation in each jurisdiction in which the conduct of its business or the ownership or leasing of its properties makes such qualification necessary.

 

Authorization. The execution, delivery and performance of this Agreement and each of the Notes, and the consummation of the transactions contemplated hereby and thereby has been duly authorized by all required corporate actions of the Company.

 

Due Execution and Delivery; Binding Obligations. This Agreement and the Notes have been duly executed and delivered by the Company, and this Agreement and the Notes constitute the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or conveyance or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability and except as rights of indemnity or contribution may be limited by federal or state securities or other laws or the public policy underlying such laws.

 

No Conflict or Violation. Neither the execution and delivery of this Agreement and the Notes by the Company, nor its consummation of the transactions contemplated hereby or thereby, will result in: (i) a violation of, or a conflict with, the Company’s Certificate of Incorporation, Bylaws or any subscription, stockholders’ or similar types of agreements or understandings; (ii) a material breach of, or a material default (or an event which, with notice or lapse of time or both would constitute a material default) under or result in the termination of, or accelerate the performance required by, or create a right of termination or acceleration under, any material contract, agreement, instrument, license, encumbrance or permit to which such the Company is a party or by which the Company or its business is bound or affected; (iii) to the knowledge of the Company, a violation by the Company of any law applicable to the Company or any judgment, court order or the like to which the Company is a party or by which it is bound; or (iv) an imposition of any material lien on the Company or its assets.

 

Consents and Approvals. The execution and delivery of this Agreement and the Notes by the Company, the issuance, sale and delivery of the Notes by the Company, and the consummation of the transactions contemplated hereby and thereby, do not and will not require any authorization, registration or filing with, or consent or approval of, any person, other than the Company and its stockholders, including, without limitation, any governmental authority or regulatory body, except for filings required under applicable securities laws.

 

TriplePulse Note Purchase Agreement

 

2

 

 

Litigation. There is no action, suit, proceeding or investigation pending or, to the best of the Company’s knowledge, currently threatened against the Company (or, to the best of the Company’s knowledge, threatened against or affecting any of the officers, directors or employees of the Company with respect to their duties and activities with respect to the Company) that questions the validity of this Agreement or the right of the Company to enter into such Agreement or to consummate the transactions contemplated hereby, or that might result, either individually or in the aggregate, in any material adverse changes in the business, assets or condition of the Company, financially or otherwise.

 

Representations and Warranties of Purchasers. Each Purchaser represents and warrants to the Company, as of the applicable Closing Date on which such Purchaser purchased Notes, as follows:

 

This Agreement and the Note issued to Purchaser constitute the legal, valid and binding obligation of Purchaser, enforceable against it in accordance with its respective terms.

 

Purchaser, to the extent applicable, has acquired the Note for Purchaser’s own account, with the intention of holding the same for investment and not with a view to the distribution thereof in violation of federal and state securities laws.

 

Purchaser understands, to the extent applicable, that the Note has not been registered under the Securities Act of 1933 (the “Securities Act”) or any applicable state securities laws in reliance upon exemptions contained in the Securities Act and such applicable state securities laws, and that the Company’s reliance upon such exemptions is based in part on the representations of Purchaser contained in this Agreement. Purchaser further understands and acknowledges that the Note must be held indefinitely unless a subsequent disposition thereof is registered under the Securities Act and applicable state securities laws or unless such disposition is exempt from registration thereunder.

 

Purchaser is an “accredited investor” as such term is defined in Rule 501 promulgated under the Securities Act.

 

Purchaser (i) has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of making the investment contemplated hereby, and (ii) understands that an investment in the Company involves significant risks and is suitable only for persons of adequate financial means who have no need for liquidity in this investment. Purchaser represents that no assurances or guarantees have been made to Purchaser by anyone, including the Company’s management, regarding whether the Company will be profitable. Purchaser acknowledges that Purchaser may lose all or a portion of Purchaser’s investment in the Company. It is specifically understood and agreed by Purchaser that no person in the Company’s management, and no employee, agent or representative of the Company, has made, nor by this Agreement shall be construed to make, directly or indirectly, explicitly or by implication, any representation, warranty, projection, assumption, promise, covenant, opinion, recommendation or other statement of any kind or nature with respect to the anticipated profits or losses of the Company. The Company has made available to Purchaser and Purchaser’s accountants, attorneys and other advisors full and complete information concerning the financial structure of the Company and any other available data requested by Purchaser as a basis for estimating the potential profits and losses of the Company, and Purchaser acknowledges that Purchaser has either reviewed such information or has waived review of such information.

 

TriplePulse Note Purchase Agreement

 

3

 

 

If Purchaser is not a U.S. Person as that term is defined in Rule 902(o) of Regulation S promulgated under the Securities Act (“Regulation S”), then such Purchaser shall not offer and sell the Notes (or the securities issuable upon conversion of the Notes) to any U.S. Person except in accordance with Regulation S and any other applicable law of the United States.

 

Purchaser acknowledges that, in addition to any legend required under applicable securities laws, the certificates and instruments evidencing the Notes, acquired by Purchaser will bear the following legends:

 

(i)            “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT.”

 

(ii)            Any legend required by the Blue Sky laws of any state to the extent such laws are applicable to the shares represented by the certificate so legended.

 

Conditions to Purchase.

 

Conditions to Obligations of Purchaser on the Closing Date. The obligations of each Purchaser to purchase the Notes on the Closing Date is subject to the satisfaction of the following conditions:

 

Notes. Purchaser shall have received a Note, duly executed by the Company in accordance with the provisions of Section 0.

 

No Defaults. The Company shall be in compliance with the terms and provisions set forth in this Agreement and the Notes and no default or event of default under this Agreement or the Notes shall have occurred and be continuing or shall occur upon consummation of this Agreement.

 

Requisite Approvals. The Company shall have obtained all governmental required consents, licenses, permits and approvals relating to the transactions contemplated by this Agreement and the Notes, which, consents, licenses, permits and approvals shall be in full force and effect and be reasonably acceptable to Purchaser and Purchaser’s counsel.

 

Representations and Warranties. The representations and warranties of the Company contained herein and in the Notes and in any certificate or other instrument delivered pursuant to any of the foregoing shall be correct in all material respects as though made on and as of the Closing Date, except to the extent that such representations and warranties speak as of a certain date, in which case such representations and warranties shall have been true and correct as of such date.

 

TriplePulse Note Purchase Agreement

 

4

 

 

Conditions to Obligations of Company on the Closing Date. The obligations of the Company to issue and sell the Notes on the Closing Date is subject to the satisfaction of the following conditions:

 

Purchase Price. Purchasers shall have delivered the Purchase Price for the Notes in accordance with the provisions of Section 0.

 

No Defaults. The Purchasers shall be in compliance with the terms and provisions set forth in this Agreement and the Notes and no default or event of default under this Agreement or the Notes shall have occurred and be continuing or shall occur upon consummation of this Agreement.

 

Requisite Approvals. The Purchasers shall have obtained all governmental required consents, licenses, permits and approvals relating to the transactions contemplated by this Agreement and the Notes, which, consents, licenses, permits and approvals shall be in full force and effect and be reasonably acceptable to Purchaser and Purchaser’s counsel.

 

Representations and Warranties. The representations and warranties of the Purchasers contained herein and in the Notes and in any certificate or other instrument delivered pursuant to any of the foregoing shall be correct in all material respects as though made on and as of the Closing Date, except to the extent that such representations and warranties speak as of a certain date, in which case such representations and warranties shall have been true and correct as of such date.

 

Covenants. The Company agrees that, so long as the Notes are outstanding and unpaid, the Company shall, directly or indirectly:

 

Compliance with Laws. Comply with all applicable laws and judgments and maintain all required clearances, consents, permits and approvals of governmental authorities, except for such noncompliance which, either individually or in the aggregate, could not reasonably be expected to result in a material adverse effect upon the financial condition, operating results, assets, customer or supplier relations, employee relations or business prospects of the Company.

 

Further Assurances. Duly execute and deliver, or cause to be duly executed and delivered, at its own cost and expense, such further instruments and documents and to take all such action, in each case as may be necessary or proper in the reasonable judgment of Purchaser to carry out the provisions and purposes of this Agreement and the Notes.

 

Use of Proceeds. The aggregate proceeds of the Notes shall be used by the Company for general operating purposes.

 

Notice of Change of Control Transaction. Provide thirty (30) days prior written notice of any Change of Control Transaction (as defined below). “Change of Control Transaction” means any of the following: (i) the merger or consolidation of the Company with or into any other corporation or business entity (except one in which the holders of capital stock of the Company immediately prior to such merger or consolidation continue to hold at least a majority of the outstanding securities having the right to vote in an election of the board of directors of the surviving corporation (the “Voting Stock”)); (ii) the sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all assets of the Company; or (iii) the acquisition by any person or any group of persons (other than the Company, any of its direct or indirect subsidiaries, or any trustee, fiduciary or other person or entity holding securities under any employee benefit plan or trust of the Company or any of its direct or indirect subsidiaries) acting together in any transaction or related series of transactions, of such number of shares of the Company’s Voting Stock as causes such person or group of persons to own beneficially, directly or indirectly, as of the time immediately after such transaction or series of transactions, 50% or more of the combined voting power of the Voting Stock of the Company.

 

TriplePulse Note Purchase Agreement

 

5

 

 

Other Provisions.

 

Amendments and Waivers. This Agreement may be amended and any provision hereof waived only with the written consent of the Company and the Purchasers holding more than fifty percent (50%) of then outstanding aggregate principal balance of all of the Notes issued hereunder (the “Purchaser Majority Interest”); provided, that no amendment or waiver which would alter or change the principal amount owing upon the Notes or the rate of interest payable thereon may be effective without the consent of all of the Purchasers. For avoidance of doubt, notwithstanding the proviso in the prior sentence, the prepayment provisions in Section 3 of the Note and the Note conversion provisions set forth in the Note may be amended or waived by a Purchaser Majority Interest. Any amendment or waiver of any term or condition hereof that is approved by the Purchaser Majority Interest shall be binding upon all Purchasers.

 

Notices. All notices, requests and demands under this Agreement must be in writing and, unless otherwise expressly provided therein, shall be delivered by hand, sent by email, or sent by United States mail, first-class postage prepaid, addressed as follows:

 

The Company:       TriplePulse, Inc.

 1316 3rd Street, Suite B5
 Santa Monica, CA 90401
 Attention: Chris Thompson

 

 Email: chrisdthompson@gmail.com

 

with a copy to:      Laszlo Kupan

 11114 McDonald Street
 Culver City, CA 90230
 Email: lkupan@gmail.com

 

The Purchasers:    to the contact information set forth below each Purchaser’s signature block to this Agreement

 

Notices, requests or demands hereunder shall be deemed given (i) three (3) business days after being deposited in the U.S. mail, postage prepaid, if sent by U.S. mail, (ii) upon confirmation of transmission, if sent by facsimile, (iii) when delivered, if delivered in person, (iv) when delivered, if sent by overnight courier service, and (v) when sent if by e-mail. Any party to this Agreement or the Notes may rely on signatures of the parties thereto that are transmitted by fax, emailed “pdf” file or other electronic means as fully as if originally signed.

 

TriplePulse Note Purchase Agreement

 

6

 

 

Expenses. Each of the Company and the Purchasers shall bear their own expenses, including attorneys’ fees, in connection with the preparation and negotiation of this Agreement and the Notes.

 

No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising any right, remedy, power or privilege under this Agreement or any of the Notes shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege under this Agreement or any of the Notes preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges under this Agreement and the Notes are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

Survival of Representations and Warranties. All representations and warranties made under this Agreement, each Note and in any document, certificate or statement delivered pursuant thereto or in connection therewith shall survive their execution and delivery.

 

Headings Descriptive. Section headings have been inserted in this Agreement and each of the Notes for convenience only and shall not be construed to be a part thereof.

 

Severability. Every provision of this Agreement and each of the Notes is intended to be severable, and if any term or provision thereof shall be invalid, illegal or unenforceable for any reason, the validity, legality and enforceability of the remaining provisions thereof shall not be affected or impaired thereby, and any invalidity, illegality or unenforceability in any jurisdiction shall not affect the validity, legality or enforceability of any such term or provision in any other jurisdiction.

 

Integration. All exhibits to this Agreement or the Notes shall be deemed to be a part thereof. This Agreement and each Note embody the entire agreement and understanding between the Company and each of the Purchasers, with respect to the subject matter thereof and supersede all prior agreements and understandings between them with respect to the subject matter hereof and thereof.

 

Consent to Jurisdiction. The parties hereby irrevocably submit to the jurisdiction of any state or federal court located in Los Angeles County, California with respect to any suit, action or proceeding arising out of or relating to this Agreement or any Note. Each party hereby irrevocably waives, to the fullest extent permitted or not prohibited by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in such a court and any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum. Each party hereby agrees that a final judgment in any such suit, action or proceeding brought in such a court, after all appropriate appeals, shall be conclusive and binding upon it.

 

Governing Law. This Agreement, the Notes and the rights and obligations of the parties hereunder and thereunder shall be governed by, and construed and interpreted in accordance with, the internal laws of the State of Delaware, without regard to principles of conflict of laws.

 

Assignment. This Agreement, the Notes and the rights and obligations of the parties hereunder and thereunder shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. Neither the Company nor any Purchaser may assign this Agreement or any of the Notes, or assign the rights or delegate the duties hereunder or thereunder, without, in the case of an assignment by any Purchaser, the prior written consent of the Company or, in the case of an assignment by the Company, the prior written consent of the Purchaser Majority Interest.

 

TriplePulse Note Purchase Agreement

 

7

 

 

Attorneys’ Fees. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement or any of the Notes, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

 

Counterparts. This Agreement may be executed by one or more of the parties thereto on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same document.

 

Facsimile or pdf Signatures. This Agreement may be executed by any party by delivery of a facsimile or pdf signature, which signature shall have the same force and effect as an original signature. Any party which delivers a facsimile or pdf signature shall promptly thereafter deliver an originally executed signature to the Company; provided, however, that the failure to deliver an original signature page shall not affect the validity of any signature delivered by facsimile or pdf.

 

Pronouns. References to any form of third person pronouns herein (he, she or it) shall be deemed to include all other forms, as appropriate, and all such references shall be deemed to include both plural and singular.

 

Escrow Agent. U.S. Bank National Association is acting only as the Escrow Agent in connection with the offering described herein, and has not endorsed, recommended or guaranteed the purchase, value or repayment of the securities described herein.

 

[Rest of page intentionally left blank]

 

TriplePulse Note Purchase Agreement

 

8

 

 

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

 

  COMPANY
   
  TRIPLEPULSE, INC.,
  a Delaware corporation
   
  Signature: /s/ Chris Thompson
    Chris Thompson (May 5, 2015)
     
  Email: chrisdthompson@gmail.com

 

TriplePulse Note Purchase Agreement

 

 

 

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

 

  PURCHASER
   
  If an entity:
   
  Brightstone Venture Capital Fund, LP
   
  By: /s/ Seth DeGroot  
  Name: Seth DeGroot
  Title: Managing Partner
   
  Address: 510 First Ave N, #200
    Minneapolis, MN 55403
   
  Facsimile: n/a
  Email: seth@brightstonevc.com     

 

 

  If an individual:
   
   
   
  Name:     
   
  Address:  
   
  Facsimile:  
  Email:  

 

TriplePulse Note Purchase Agreement

 

 

 

SCHEDULE 1

 

SCHEDULE OF PURCHASERS

 

Purchaser Name Principal Amount of Promissory Notes
Brightstone Venture Capital Fund, LP $250,000.00
   
   
   
   
   
   
   
Totals: $[                              ]

 

TriplePulse Note Purchase Agreement

 

 

 

EXHIBIT A

 

FORM OF CONVERTIBLE PROMISSORY NOTE

 

TriplePulse Note Purchase Agreement

 

 

 

 

EX1A-6 MAT CTRCT 15 tm2031356d1_ex6-2.htm EXHIBIT 6.2

Exhibit 6.2

 

CONVERTIBLE PROMISSORY NOTE

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT

 

May 5, 2015   250,000.00

 

FOR VALUE RECEIVED, TRIPLEPULSE, INC., a Delaware corporation (the "Company"), hereby promises to pay to the order of Brightstone Venture Capital Fund, LP ("Holder"), the principal sum of $250,000.00 (the "Principal Amount"), together with interest accruing on the unpaid portion of the Principal Amount from the date hereof until maturity at the rate of interest set forth in Section 2(a) on the terms and subject to the conditions of this Convertible Promissory Note (including all renewals, extensions or modifications hereof, this "Note").

 

1.            Terms. This Note is being issued and delivered pursuant to Section 1(b) of that certain Convertible Note Purchase Agreement dated 5/5/15 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the "Note Purchase Agreement") by and among the Company, the Holder and purchasers of other notes similar to this Note, if any. Unless otherwise set forth herein, all capitalized terms used herein without definition shall have the meanings given to such terms in the Note Purchase Agreement.

 

2.Payments.

 

(a)            The unpaid portion of the Principal Amount shall bear simple interest at the rate of five percent (5%) per annum, payable on the Maturity Date (as defined in Section 2(b)). Upon and during the occurrence of an Event of Default, the outstanding principal on this Note shall bear interest at a default rate of interest of ten percent (10%) per annum (the "Default Rate") unless waived in writing by Holder. Interest shall never exceed the maximum lawful rate of interest applicable to this Note.

 

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(b)            The unpaid portion of the Principal Amount, and all accrued and unpaid interest thereon, shall be due and payable upon the date of the first to occur of the following (each, the "Maturity Date"): (i) the Outside Maturity Date (as defined below), (ii) a Qualified Financing (as defined below), and (iii) a Change of Control Transaction (as defined below); provided, that upon a Change of Control Transaction, the Company shall redeem the Note at the election of Holder for an amount equal to (A) one hundred percent (100%) of the Outstanding Amount or (B) the consideration which Holder would have received in the Change of Control Transaction (to be paid in the same form of consideration (e.g., a mix of cash and stock) received by other equity holders in the Change of Control Transaction) had Holder converted the Outstanding Amount into shares of common stock of the Company at a conversion price per share determined by dividing a pre-money valuation of $4,000,000.00 by the number of outstanding shares of the common stock of the Company (the "Common Stock") on a fully- diluted and as-converted basis immediately prior to the closing of the Change of Control Transaction (not including (A) shares issuable upon conversion of (x) the Note, (y) convertible notes outstanding as of the date hereof or (z) any convertible notes purchased by Draper Fisher Jurvetson, Crosscut Venues or their affiliates within ninety (90) days of the date hereof or (B) unallocated shares under the Company’s equity incentive plans (collectively, the "Excluded Shares"). As used herein:

 

(i)            "Change of Control Transaction" shall have the same meaning as set forth in the Note Purchase Agreement.

 

(ii)           "Issuance Date" means the date of issuance of this Note.

 

(iii)          "Outside Maturity Date" means the date which is twenty-four (24) months from the date of the Note Purchase Agreement.

 

(iv)         "Qualified Financing" means the bona fide next sale of equity securities of the Company to investors with aggregate gross cash proceeds to the Company of at least $1,500,000.00 (excluding through the conversion of convertible notes).

 

(v)          "Purchase Price" shall have the same meaning as set forth in the Note Purchase Agreement.

 

(vi)         "Purchasers" shall have the same meaning as set forth in the Note Purchase Agreement.

 

(c)            Except as otherwise provided in Section 2(b), All payments due and payable from the Company to Holder under this Note shall be made in lawful currency of the United States of America at the Holder’s address listed following Holder’s signature block at the end of this Note or such other place as Holder shall designate in writing, and, at Holder’s option, shall be payable by check or wire transfer.

 

3.Prepayment. This Note may not be prepaid without the consent of Holder.

 

4.Events of Default.

 

(a)            An "Event of Default" under this Note shall mean the occurrence of any of the following:

 

(i)            Failure to Pay. The Company shall fail to pay (A) when due any principal or interest payment on the due date hereunder or (B) any other payment required under the terms of this Note on the date due;

 

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(ii)            Involuntary Bankruptcy, Etc. (A) A court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company in an involuntary case under Title 11 of the United States Code entitled "Bankruptcy" (as now and hereinafter in effect, or any successor thereto, the "Bankruptcy Code") or any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, which decree or order is not stayed; or any other similar relief shall be granted under any applicable federal or state law; or (B) an involuntary case shall be commenced against the Company under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect; or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over the Company or over all or a substantial part of its property shall have been entered; or the involuntary appointment of an interim receiver, trustee or other custodian of the Company for all or a substantial part of its property shall have occurred; or a warrant of attachment, execution or similar process shall have been issued against any substantial part of the property of the Company, and, in the case of any event described in this clause (ii), such event shall have continued for ninety (90) days unless dismissed, bonded or discharged;

 

(iii)            Voluntary Bankruptcy, Etc. An order for relief shall be entered with respect to the Company or the Company shall commence a voluntary case under the Bankruptcy Code or any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law, or shall consent to the appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of its property, or the Company shall make an assignment for the benefit of creditors; or the Company shall admit in writing its inability to pay its debts as such debts become due; or the board of directors of the Company (the "Board of Directors") shall adopt any resolution or otherwise authorize action to approve any of the foregoing; or

 

(iv)            Dissolution, Etc. The Company engages in any liquidation, dissolution, or winding up of the Company, expressly excluding a Change of Control Transaction.

 

(b)            Upon the occurrence of an Event of Default, the entire unpaid portion of the Principal Amount, all accrued but unpaid interest and all other amounts due Holder hereunder shall become due and payable at the option of Holder upon notice to the Company of such acceleration. Further, in the case of any Event of Default under this Note by the Company which is continuing and has not been waived in writing by Holder, this Note will bear interest at the Default Rate.

 

(c)            The Company hereby agrees that it will, upon demand, pay to Holder the amount of any and all reasonable advances, charges, costs and expenses, including the fees and expenses of its counsel and of any experts or agents, that Holder may incur in connection with the failure by the Company to perform or observe any of the provisions of this Note.

 

5.            Conversion Rights. This Note is convertible into certain capital stock of the Company in accordance with the conversion rights specified in Schedule 1 attached hereto and incorporated herein by this reference.

 

6.            Replacement of Lost Note. Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of this Note and, in the case of any such loss, theft or destruction, upon receipt of indemnity reasonably satisfactory to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Note, the Company will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Note, a new debenture of like tenor dated as of the date from which unpaid interest has then accrued on the lost, stolen, destroyed or mutilated Note.

 

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7.Miscellaneous.

 

7.1            Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Delaware.

 

7.2            Entire Agreement. This Note, together with the Note Purchase Agreement and any other documents executed in connection herewith, constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof.

 

7.3            Amendments. No term of this Note may be amended, waived, discharged or terminated except in accordance with Section 6(a) of the Note Purchase Agreement.

 

7.4            Notices, etc. All notices, requests, demands and other communications made under this Note shall be made in accordance with Section 6(b) of the Note Purchase Agreement.

 

7.5            Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to Holder upon any breach or default of the Company under this Note shall impair any such right, power or remedy of Holder nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of Holder of any breach or default under this Note, or any waiver on the part of Holder of any provision or condition of this Note must be made in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Note or by law or otherwise afforded to Holder, shall be cumulative and not alternative.

 

7.6            Severability. In case any provision of this Note shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

7.7            Titles. The titles of the Sections and subsections of this Note are for convenience or reference only and are not to be considered in construing this Note.

 

[Rest of page intentionally left blank]

 

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IN WITNESS WHEREOF, this Note is executed as of the date first above written.

 

  COMPANY
   
  TRIPLEPULSE, INC.,
  a Delaware corporation
   
  Signature: /s/ Chris Thompson
    Chris Thompson (May 5, 2015)
  Email: chrisdthompson@gmail.com

 

ACCEPTED AND AGREED TO:  
   
If an entity:  
   
Brightstone Venture Capital Fund. LP  
   
By: /s/ Seth DeGroot  
Name: Seth DeGroot  
Title: Managing Partner  
   
If an individual:  
   
   
Name:    
Title:    
   
Holder’s Address, facsimile and email address:  
   
Address: 510 First Ave N, #200  
  Minneapolis, MN 55403  
   
Facsimile: n/a  
Email: seth@brightstonevc.com  

 

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SCHEDULE 1

CONVERSION RIGHTS

 

1.Conversion.

 

a.            Automatic Conversion Upon a Qualified Financing. If the Note is not repaid in full prior to the closing date of a Qualified Financing (the "QF Closing Date"), then effective automatically upon the QF Closing Date, the entire unpaid portion of the Principal Amount and all accrued and unpaid interest due Holder hereunder (the "Outstanding Amount") as of the QF Closing Date shall be converted into that number of shares of the stock issued in the Qualified Financing (the "Qualified Financing Stock") and shares of common stock of the Company (the "Common Stock") determined by dividing the Outstanding Amount by a conversion price equal to the lesser of (i) the price per share of the Qualified Financing Stock sold by the Company in the Qualified Financing, discounted by 20%, and (ii) the price determined by dividing a pre-money valuation of $4,000,000.00 by the number of outstanding shares of the Common Stock on a fully-diluted and as-converted basis immediately prior to the closing of the Qualified Financing (not including the Excluded Shares). Of those shares, the number of Qualified Financing Stock will equal (x) the Outstanding Amount, divided by (y) the price per share paid by the other investors purchasing the Qualified Financing Stock in the Qualified Financing. Any remaining shares will be Common Stock.

 

The Qualified Financing Stock delivered to Holder pursuant to such conversion shall have the same rights, preferences, privileges as the Qualified Financing Stock delivered to other investors in the Qualified Financing, and Holder shall enjoy the same contractual rights as other investors in the Qualified Financing.

 

2.            Optional Conversion Prior to and at the Outside Maturity Date. Holder shall have the right to convert the Note into share of Common Stock at a price per share obtained by dividing a pre-money valuation of $4,000,000.00 by the number of outstanding shares of Common Stock on a fully-diluted and as-converted basis as of the conversion date (not including the Excluded Shares). If the Note remains outstanding as of the Outside Maturity Date, and no Qualified Financing or Change of Control Transaction has occurred, then the Holder may elect, by written notice delivered to the Company at least two (2) business days prior to the Outside Maturity Date, to convert the Outstanding Amount into that number of shares of Common Stock determined by dividing the Outstanding Amount by the Maturity Conversion Price. The "Maturity Conversion Price" means the price per share obtained by dividing a pre-money valuation of $4,000,000.00 by the number of outstanding shares of Common Stock on a fully-diluted and as-converted basis as of the Outside Maturity Date (not including the Excluded Shares). The Common Stock delivered to Holder pursuant to such conversion shall have the same rights, preferences, privileges as the Common Stock held by other holders of Common Stock.

 

3.            No Other Conversion. Except as set forth in Sections 1 and 2 of this Schedule 1, the Note shall not otherwise be convertible into the Qualified Financing Stock, Common Stock or any other capital stock of the Company.

 

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4.            No Fractional Shares. The Company shall not be required to issue fractional shares of the Qualified Financing Stock or Common Stock upon the conversion of the Note. If any fraction of a share of the Qualified Financing Stock or Common Stock would, except for the provisions of this paragraph, be issuable on the conversion of the Note (or specified portion thereof), the Company shall pay an amount in cash calculated by it to be equal to the then fair market value per share of the Qualified Financing Stock or the Common Stock, as reasonably determined by the Board of Directors, multiplied by such fraction computed to the nearest whole cent.

 

5.            Adjustments Upon Capitalization and Corporate Changes. If at any time prior to the Maturity Date, any of the outstanding shares of the capital stock of the Company are changed into, or exchanged for, a different number or kind of shares or securities of the Company through reorganization, merger, recapitalization or reclassification, or if the number of such outstanding shares is changed through a stock split, stock dividend, stock consolidation or similar capital adjustment, or if the Company makes a distribution in partial liquidation or any other comparable extraordinary distribution with respect to any of its shares of capital stock, an appropriate adjustment shall be made by the Board of Directors, if necessary, in the number, kind or conversion price of shares into which the Note is convertible.

 

6.Miscellaneous.

 

a.            No Voting Rights. Except as expressly set forth in the Note, nothing contained in the Note shall be construed as conferring upon the Holder, prior to conversion of this Note into shares of capital stock of the Company, (i) the right to vote or to consent as a stockholder in respect of meetings of stockholders for the election of directors of the Company or any other matter, (ii) the right to receive dividends, or (iii) any other rights as a stockholder of the Company.

 

b.            Descriptive Headings. The descriptive headings of the several paragraphs of Schedule 1 are for convenience of reference only and do not constitute a part of Schedule 1 and are not to be considered in construing or interpreting the Note.

 

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EX1A-6 MAT CTRCT 16 tm2031356d1_ex6-3.htm EXHIBIT 6.3

Exhibit 6.3

 

CONVERTIBLE NOTE PURCHASE AGREEMENT

 

This CONVERTIBLE NOTE PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of July 2, 2015, by and between TRIPLEPULSE, INC., a Delaware corporation (the “Company”), and Blueberry Ventures 1, L.P., a Delaware limited partnership (“Purchaser”).

 

RECITALS

 

A.        The Company desires to issue and sell to Purchaser, and Purchaser desire to purchase and acquire from the Company a promissory note in aggregate principal amount of Four Hundred Twenty Five Thousand US Dollars (US $425,000.00), on the terms and subject to the conditions of this Agreement.

 

AGREEMENT

 

In consideration of the foregoing recitals and the mutual promises and covenants contained herein, the parties, intending to be legally bound, hereby agree as follows:

 

1.Purchase and Sale of Note.

 

(a)           Authorization and Issuance of the Note. The Company has authorized the issuance and sale of a Convertible Promissory Note, in the form attached hereto as Exhibit A (the “Note”).

 

(b)          Issuance of the Note.

 

(i)            Purchase and Sale. At the Closing (as defined in Section (ii)), the Company shall issue and sell to Purchaser, and Purchaser shall purchase and acquire from the Company, the Note in the principal amount of $425,000.00 (the “Purchase Price”).

 

(ii)            The Closing. The closing of the purchase and sale of the Note (the “Closing”) shall occur on such date as the Company and Purchasers shall agree to in writing, but no later than July 2, 2015 (the “Closing Date”), in each case at the offices of the Company, located at 3110 Main Street, Suite D, Santa Monica, CA 90405. At the Closing, the Company shall deliver to the Purchasers the duly executed Note. Delivery shall be made against receipt by the Company of the Purchase Price by check or wire transfer of immediately available funds.

 

2.            Representations and Warranties of the Company. As of the Closing Date, the Company represents and warrants to Purchaser that:

 

(a)            Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation and has all requisite corporate power and corporate authority to carry on its business as presently conducted. The Company has no subsidiaries. The Company is duly qualified to transact business and is in good standing as a foreign corporation in each jurisdiction in which the conduct of its business or the ownership or leasing of its properties makes such qualification necessary.

 

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(b)            Authorization. The execution, delivery and performance of this Agreement and the Note, and the consummation of the transactions contemplated hereby and thereby has been duly authorized by all required corporate actions of the Company.

 

(c)            Due Execution and Delivery; Binding Obligations. This Agreement and the Note have been duly executed and delivered by the Company, and this Agreement and the Note constitute the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or conveyance or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability and except as rights of indemnity or contribution may be limited by federal or state securities or other laws or the public policy underlying such laws.

 

(d)           No Conflict or Violation. Neither the execution and delivery of this Agreement and the Note by the Company, nor its consummation of the transactions contemplated hereby or thereby, will result in: (i) a violation of, or a conflict with, the Company’s Certificate of Incorporation, Bylaws or any subscription, stockholders’ or similar types of agreements or understandings; (ii) a material breach of, or a material default (or an event which, with notice or lapse of time or both would constitute a material default) under or result in the termination of, or accelerate the performance required by, or create a right of termination or acceleration under, any material contract, agreement, instrument, license, encumbrance or permit to which such the Company is a party or by which the Company or its business is bound or affected; (iii) to the knowledge of the Company, a violation by the Company of any law applicable to the Company or any judgment, court order or the like to which the Company is a party or by which it is bound; or (iv) an imposition of any material lien on the Company or its assets.

 

(e)            Consents and Approvals. The execution and delivery of this Agreement and the Note by the Company, the issuance, sale and delivery of the Note by the Company, and the consummation of the transactions contemplated hereby and thereby, do not and will not require any authorization, registration or filing with, or consent or approval of, any person, other than the Company and its stockholders, including, without limitation, any governmental authority or regulatory body, except for filings required under applicable securities laws.

 

(f)            Litigation. There is no action, suit, proceeding or investigation pending or, to the best of the Company’s knowledge, currently threatened against the Company (or, to the best of the Company’s knowledge, threatened against or affecting any of the officers, directors or employees of the Company with respect to their duties and activities with respect to the Company) that questions the validity of this Agreement or the right of the Company to enter into such Agreement or to consummate the transactions contemplated hereby, or that might result, either individually or in the aggregate, in any material adverse changes in the business, assets or condition of the Company, financially or otherwise.

 

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3.            Representations and Warranties of Purchasers. Purchaser represents and warrants to the Company, as of the Closing Date, as follows:

 

(a)           This Agreement and the Note issued to Purchaser constitute the legal, valid and binding obligation of Purchaser, enforceable against it in accordance with its respective terms.

 

(b)          Purchaser, to the extent applicable, has acquired the Note for Purchaser’s own account, with the intention of holding the same for investment and not with a view to the distribution thereof in violation of federal and state securities laws.

 

(c)           Purchaser understands, to the extent applicable, that the Note has not been registered under the Securities Act of 1933 (the “Securities Act”) or any applicable state securities laws in reliance upon exemptions contained in the Securities Act and such applicable state securities laws, and that the Company’s reliance upon such exemptions is based in part on the representations of Purchaser contained in this Agreement. Purchaser further understands and acknowledges that the Note must be held indefinitely unless a subsequent disposition thereof is registered under the Securities Act and applicable state securities laws or unless such disposition is exempt from registration thereunder.

 

(d)          Purchaser is an “accredited investor” as such term is defined in Rule 501 promulgated under the Securities Act.

 

(e)           Purchaser (i) has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of making the investment contemplated hereby, and (ii) understands that an investment in the Company involves significant risks and is suitable only for persons of adequate financial means who have no need for liquidity in this investment. Purchaser represents that no assurances or guarantees have been made to Purchaser by anyone, including the Company’s management, regarding whether the Company will be profitable. Purchaser acknowledges that Purchaser may lose all or a portion of Purchaser’s investment in the Company. It is specifically understood and agreed by Purchaser that no person in the Company’s management, and no employee, agent or representative of the Company, has made, nor by this Agreement shall be construed to make, directly or indirectly, explicitly or by implication, any representation, warranty, projection, assumption, promise, covenant, opinion, recommendation or other statement of any kind or nature with respect to the anticipated profits or losses of the Company. The Company has made available to Purchaser and Purchaser’s accountants, attorneys and other advisors full and complete information concerning the financial structure of the Company and any other available data requested by Purchaser as a basis for estimating the potential profits and losses of the Company, and Purchaser acknowledges that Purchaser has either reviewed such information or has waived review of such information.

 

(f)           If Purchaser is not a U.S. Person as that term is defined in Rule 902(o) of Regulation S promulgated under the Securities Act (“Regulation S”), then such Purchaser shall not offer and sell the Note (or the securities issuable upon conversion of the Note) to any U.S. Person except in accordance with Regulation S and any other applicable law of the United States.

 

(g)          Purchaser acknowledges that, in addition to any legend required under applicable securities laws, the certificates and instruments evidencing the Note, acquired by Purchaser will bear the following legends:

 

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(i)            “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT.”

 

(ii)           Any legend required by the Blue Sky laws of any state to the extent such laws are applicable to the shares represented by the certificate so legended.

 

4.Conditions to Purchase.

 

(a)           Conditions to Obligations of Purchaser on the Closing Date. The obligations of Purchaser to purchase the Note on the Closing Date is subject to the satisfaction of the following conditions:

 

(i)            Note. Purchaser shall have received a Note, duly executed by the Company in accordance with the provisions of Section 1(b).

 

(ii)           Investor Rights Agreement. Purchaser shall have received an Investor Rights Agreement, duly executed by Christopher Thompson and the Company in the form attached hereto as Exhibit B.

 

(iii)          No Defaults. The Company shall be in compliance with the terms and provisions set forth in this Agreement and the Note and no default or event of default under this Agreement or the Note shall have occurred and be continuing or shall occur upon consummation of this Agreement.

 

(iv)          Requisite Approvals. The Company shall have obtained all governmental required consents, licenses, permits and approvals relating to the transactions contemplated by this Agreement and the Note, which, consents, licenses, permits and approvals shall be in full force and effect and be reasonably acceptable to Purchaser and Purchaser’s counsel.

 

(v)           Representations and Warranties. The representations and warranties of the Company contained herein and in the Note and in any certificate or other instrument delivered pursuant to any of the foregoing shall be correct in all material respects as though made on and as of the Closing Date, except to the extent that such representations and warranties speak as of a certain date, in which case such representations and warranties shall have been true and correct as of such date.

 

(b)          Conditions to Obligations of Company on the Closing Date. The obligations of the Company to issue and sell the Note on the Closing Date is subject to the satisfaction of the following conditions:

 

(i)            Purchase Price. Purchasers shall have delivered the Purchase Price for the Note in accordance with the provisions of Section 1(b).

 

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(ii)           No Defaults. The Purchasers shall be in compliance with the terms and provisions set forth in this Agreement and the Note and no default or event of default under this Agreement or the Note shall have occurred and be continuing or shall occur upon consummation of this Agreement.

 

(iii)           Requisite Approvals. The Purchasers shall have obtained all governmental required consents, licenses, permits and approvals relating to the transactions contemplated by this Agreement and the Note, which, consents, licenses, permits and approvals shall be in full force and effect and be reasonably acceptable to Purchaser and Purchaser’s counsel.

 

(iv)          Representations and Warranties. The representations and warranties of the Purchasers contained herein and in the Note and in any certificate or other instrument delivered pursuant to any of the foregoing shall be correct in all material respects as though made on and as of the Closing Date, except to the extent that such representations and warranties speak as of a certain date, in which case such representations and warranties shall have been true and correct as of such date.

 

5.            Covenants. The Company agrees that, so long as the Note is outstanding and unpaid, the Company shall, directly or indirectly:

 

(a)           Compliance with Laws. Comply with all applicable laws and judgments and maintain all required clearances, consents, permits and approvals of governmental authorities, except for such noncompliance which, either individually or in the aggregate, could not reasonably be expected to result in a material adverse effect upon the financial condition, operating results, assets, customer or supplier relations, employee relations or business prospects of the Company.

 

(b)           Further Assurances. Duly execute and deliver, or cause to be duly executed and delivered, at its own cost and expense, such further instruments and documents and to take all such action, in each case as may be necessary or proper in the reasonable judgment of Purchaser to carry out the provisions and purposes of this Agreement and the Note.

 

(c)           Use of Proceeds. The aggregate proceeds of the Note shall be used by the Company for general operating purposes.

 

(d)           Notice of Change of Control Transaction. Provide thirty (30) days prior written notice of any Change of Control Transaction (as defined below). “Change of Control Transaction” means any of the following: (i) the merger or consolidation of the Company with or into any other corporation or business entity (except one in which the holders of capital stock of the Company immediately prior to such merger or consolidation continue to hold at least a majority of the outstanding securities having the right to vote in an election of the board of directors of the surviving corporation (the “Voting Stock”)); (ii) the sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all assets of the Company; or (iii) the acquisition by any person or any group of persons (other than the Company, any of its direct or indirect subsidiaries, or any trustee, fiduciary or other person or entity holding securities under any employee benefit plan or trust of the Company or any of its direct or indirect subsidiaries) acting together in any transaction or related series of transactions, of such number of shares of the Company’s Voting Stock as causes such person or group of persons to own beneficially, directly or indirectly, as of the time immediately after such transaction or series of transactions, 50% or more of the combined voting power of the Voting Stock of the Company.

 

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6.Other Provisions.

 

(a)           Amendments and Waivers. This Agreement may be amended and any provision hereof waived only with the written consent of the Company and the Purchaser.

 

(b)           Notices. All notices, requests and demands under this Agreement must be in writing and, unless otherwise expressly provided therein, shall be delivered by hand, sent by email, or sent by United States mail, first-class postage prepaid, addressed as follows:

 

The Company:     TriplePulse, Inc.

3110 Main Street, Suite D

Santa Monica, CA 90405

Attention: Chris Thompson

Email: chrisdthompson@gmail.com

 

with a copy to:     Laszlo Kupan

11114 McDonald Street

Culver City, CA 90230

Email: laszlo@kupan.co

 

The Purchaser:     to the contact information set forth below Purchaser’s signature block to this Agreement

 

Notices, requests or demands hereunder shall be deemed given (i) three (3) business days after being deposited in the U.S. mail, postage prepaid, if sent by U.S. mail, (ii) when delivered, if delivered in person, (iii) when delivered, if sent by overnight courier service, and (iv) when sent if by e-mail. Any party to this Agreement or the Note may rely on signatures of the parties thereto that are transmitted by fax, emailed “pdf” file or other electronic means as fully as if originally signed.

 

(c)           Expenses. Each of the Company and the Purchasers shall bear their own expenses, including attorneys’ fees, in connection with the preparation and negotiation of this Agreement and the Note.

 

(d)           No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising any right, remedy, power or privilege under this Agreement or the Note shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege under this Agreement or the Note preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges under this Agreement and the Note are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

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(e)           Survival of Representations and Warranties. All representations and warranties made under this Agreement, each Note and in any document, certificate or statement delivered pursuant thereto or in connection therewith shall survive their execution and delivery.

 

(f)           Headings Descriptive. Section headings have been inserted in this Agreement and the Note for convenience only and shall not be construed to be a part thereof.

 

(g)          Severability. Every provision of this Agreement and the Note is intended to be severable, and if any term or provision thereof shall be invalid, illegal or unenforceable for any reason, the validity, legality and enforceability of the remaining provisions thereof shall not be affected or impaired thereby, and any invalidity, illegality or unenforceability in any jurisdiction shall not affect the validity, legality or enforceability of any such term or provision in any other jurisdiction.

 

(h)          Integration. All exhibits to this Agreement or the Note shall be deemed to be a part thereof. This Agreement and each Note embody the entire agreement and understanding between the Company and each of the Purchasers, with respect to the subject matter thereof and supersede all prior agreements and understandings between them with respect to the subject matter hereof and thereof.

 

(i)            Consent to Jurisdiction. The parties hereby irrevocably submit to the jurisdiction of any state or federal court located in Los Angeles County, California with respect to any suit, action or proceeding arising out of or relating to this Agreement or any Note. Each party hereby irrevocably waives, to the fullest extent permitted or not prohibited by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in such a court and any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum. Each party hereby agrees that a final judgment in any such suit, action or proceeding brought in such a court, after all appropriate appeals, shall be conclusive and binding upon it.

 

(j)            Governing Law. This Agreement, the Note and the rights and obligations of the parties hereunder and thereunder shall be governed by, and construed and interpreted in accordance with, the internal laws of the State of Delaware, without regard to principles of conflict of laws.

 

(k)           Assignment. This Agreement, the Note and the rights and obligations of the parties hereunder and thereunder shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. Neither the Company nor Purchaser may assign this Agreement or the Note, or assign the rights or delegate the duties hereunder or thereunder, without, in the case of an assignment by Purchaser, the prior written consent of the Company or, in the case of an assignment by the Company, the prior written consent of the Purchaser.

 

(l)            Attorneys’ Fees. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement or the Note, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

 

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(m)          Counterparts. This Agreement may be executed by one or more of the parties thereto on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same document.

 

(n)          Facsimile or pdf Signatures. This Agreement may be executed by any party by delivery of a facsimile or pdf signature, which signature shall have the same force and effect as an original signature. Any party which delivers a facsimile or pdf signature shall promptly thereafter deliver an originally executed signature to the Company; provided, however, that the failure to deliver an original signature page shall not affect the validity of any signature delivered by facsimile or pdf.

 

(o)           Pronouns. References to any form of third person pronouns herein (he, she or it) shall be deemed to include all other forms, as appropriate, and all such references shall be deemed to include both plural and singular.

 

(p)          Escrow Agent. U.S. Bank National Association is acting only as the Escrow Agent in connection with the offering described herein, and has not endorsed, recommended or guaranteed the purchase, value or repayment of the securities described herein.

 

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

 

  COMPANY
   
  TRIPLEPULSE, INC.,
  a Delaware corporation
   
  /s/ Christopher Thompson
  Christopher Thompson
  CEO

 

TriplePulse Note Purchase Agreement

 

 

 

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

 

  PURCHASER
   
  Blueberry Ventures 1, L.P.,
  a Delaware limited partnership
   
  By: /s/ Arif Fazal
  Name: Arif Fazal
  Title: Managing Director
     
  Email: arif@blueberryventures.vc

 

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EXHIBIT A

 

FORM OF CONVERTIBLE PROMISSORY NOTE

 

TriplePulse Note Purchase Agreement

 

 

 

EXHIBIT B

 

FORM OF INVESTOR RIGHTS AGREEMENT

 

TriplePulse Note Purchase Agreement

 

EX1A-6 MAT CTRCT 17 tm2031356d1_ex6-4.htm EXHIBIT 6.4

 

Exhibit 6.4

 

CONVERTIBLE PROMISSORY NOTE

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT

 

$425,000.00 July 2, 2015

 

FOR VALUE RECEIVED, TRIPLEPULSE, INC., a Delaware corporation (the "Company"), hereby promises to pay to the order of Blueberry Ventures I, L.P., a Delaware limited partnership ("Holder"), the principal sum of Four Hundred Twenty Five Thousand Dollars (US $425,000.00) (the "Principal Amount"), together with interest accruing on the unpaid portion of the Principal Amount from the date hereof until maturity at the rate of interest set forth in Section 2(a) on the terms and subject to the conditions of this Convertible Promissory Note (including all renewals, extensions or modifications hereof, this "Note").

 

1.            Terms. This Note is being issued and delivered pursuant to Section 1(b) of that certain Convertible Note Purchase Agreement dated July 2, 2015 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the "Note Purchase Agreement") by and among the Company, the Holder and purchasers of other notes similar to this Note, if any. Unless otherwise set forth herein, all capitalized terms used herein without definition shall have the meanings given to such terms in the Note Purchase Agreement.

 

2.Payments.

 

(a)            The unpaid portion of the Principal Amount shall bear simple interest at the rate of five percent (5%) per annum, payable on the Maturity Date (as defined in Section 2(b)). Upon and during the occurrence of an Event of Default, the outstanding principal on this Note shall bear interest at a default rate of interest of ten percent (10%) per annum (the "Default Rate") unless waived in writing by Holder. Interest shall never exceed the maximum lawful rate of interest applicable to this Note.

 

(b)            The unpaid portion of the Principal Amount, and all accrued and unpaid interest thereon, shall be due and payable upon the date of the first to occur of the following (each, the "Maturity Date"): (i) the Outside Maturity Date (as defined below), (ii) a Qualified Financing (as defined below), and (iii) a Change of Control Transaction (as defined below); provided, that upon a Change of Control Transaction, the Company shall redeem the Note at the election of Holder for an amount equal to (A) two hundred percent (200%) of the Outstanding Amount or (B) the consideration which Holder would have received in the Change of Control Transaction (to be paid in the same form of consideration (e.g., a mix of cash and stock) received by other equity holders in the Change of Control Transaction) had Holder converted the Outstanding Amount into shares of common stock of the Company at a conversion price per share determined by dividing a pre-money valuation of $4,000,000.00 by the number of outstanding shares of the common stock of the Company (the "Common Stock") on a fully- diluted and as-converted basis immediately prior to the closing of the Change of Control Transaction (not including shares issuable upon conversion of (x) the Note or (y) convertible notes outstanding as of the date hereof (collectively, the "Excluded Shares")). As used herein:

 

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(i)"Change of Control Transaction" shall have the same meaning as set forth in the Note Purchase Agreement.

 

(ii)"Issuance Date" means the date of issuance of this Note.

 

(iii)"Outside Maturity Date" means the date which is twenty-four (24) months from the date of the Note Purchase Agreement.

 

(iv)         "Qualified Financing" means the bona fide next sale of equity securities of the Company to investors with aggregate gross cash proceeds to the Company of at least $1,500,000.00 (excluding through the conversion of convertible notes).

 

(v)"Purchase Price" shall have the same meaning as set forth in the Note Purchase Agreement.

 

(vi)"Purchasers" shall have the same meaning as set forth in the Note Purchase Agreement.

 

(c)            Except as otherwise provided in Section 2(b), All payments due and payable from the Company to Holder under this Note shall be made in lawful currency of the United States of America at the Holder’s address listed following Holder’s signature block at the end of this Note or such other place as Holder shall designate in writing, and, at Holder’s option, shall be payable by check or wire transfer.

 

3.Prepayment. This Note may not be prepaid without the consent of Holder.

 

4.Events of Default.

 

(a)            An "Event of Default" under this Note shall mean the occurrence of any of the following:

 

(i)            Failure to Pay. The Company shall fail to pay (A) when due any principal or interest payment on the due date hereunder or (B) any other payment required under the terms of this Note on the date due;

 

(ii)            Involuntary Bankruptcy, Etc. (A) A court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company in an involuntary case under Title 11 of the United States Code entitled "Bankruptcy" (as now and hereinafter in effect, or any successor thereto, the "Bankruptcy Code") or any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, which decree or order is not stayed; or any other similar relief shall be granted under any applicable federal or state law; or (B) an involuntary case shall be commenced against the Company under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect; or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over the Company or over all or a substantial part of its property shall have been entered; or the involuntary appointment of an interim receiver, trustee or other custodian of the Company for all or a substantial part of its property shall have occurred; or a warrant of attachment, execution or similar process shall have been issued against any substantial part of the property of the Company, and, in the case of any event described in this clause (ii), such event shall have continued for ninety (90) days unless dismissed, bonded or discharged;

 

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(iii)          Voluntary Bankruptcy, Etc. An order for relief shall be entered with respect to the Company or the Company shall commence a voluntary case under the Bankruptcy Code or any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law, or shall consent to the appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of its property, or the Company shall make an assignment for the benefit of creditors; or the Company shall admit in writing its inability to pay its debts as such debts become due; or the board of directors of the Company (the "Board of Directors") shall adopt any resolution or otherwise authorize action to approve any of the foregoing; or

 

(iv)         Dissolution, Etc. The Company engages in any liquidation, dissolution, or winding up of the Company, expressly excluding a Change of Control Transaction.

 

(b)           Upon the occurrence of an Event of Default, the entire unpaid portion of the Principal Amount, all accrued but unpaid interest and all other amounts due Holder hereunder shall become due and payable at the option of Holder upon notice to the Company of such acceleration. Further, in the case of any Event of Default under this Note by the Company which is continuing and has not been waived in writing by Holder, this Note will bear interest at the Default Rate.

 

(c)           The Company hereby agrees that it will, upon demand, pay to Holder the amount of any and all reasonable advances, charges, costs and expenses, including the fees and expenses of its counsel and of any experts or agents, that Holder may incur in connection with the failure by the Company to perform or observe any of the provisions of this Note.

 

5.             Conversion Rights. This Note is convertible into certain capital stock of the Company in accordance with the conversion rights specified in Schedule 1 attached hereto and incorporated herein by this reference.

 

6.             Replacement of Lost Note. Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of this Note and, in the case of any such loss, theft or destruction, upon receipt of indemnity reasonably satisfactory to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Note, the Company will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Note, a new debenture of like tenor dated as of the date from which unpaid interest has then accrued on the lost, stolen, destroyed or mutilated Note.

 

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7.Miscellaneous.

 

7.1            Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Delaware.

 

7.2            Entire Agreement. This Note, together with the Note Purchase Agreement and any other documents executed in connection herewith, constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof.

 

7.3            Amendments. No term of this Note may be amended, waived, discharged or terminated except in accordance with Section 6(a) of the Note Purchase Agreement.

 

7.4            Notices, etc. All notices, requests, demands and other communications made under this Note shall be made in accordance with Section 6(b) of the Note Purchase Agreement.

 

7.5            Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to Holder upon any breach or default of the Company under this Note shall impair any such right, power or remedy of Holder nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of Holder of any breach or default under this Note, or any waiver on the part of Holder of any provision or condition of this Note must be made in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Note or by law or otherwise afforded to Holder, shall be cumulative and not alternative.

 

7.6            Severability. In case any provision of this Note shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

7.7            Titles. The titles of the Sections and subsections of this Note are for convenience or reference only and are not to be considered in construing this Note.

 

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IN WITNESS WHEREOF, this Note is executed as of the date first above written.

 

  COMPANY
   
  TRIPLEPULSE, INC.,
  a Delaware corporation
   
  By: /s/ Christopher Thompson
  Name: Christopher Thompson
  Title: CEO

 

ACCEPTED AND AGREED TO:  
   
Blueberry Ventures 1, L.P.,  
a Delaware limited partnership  
   
By: /s/ Arif Fazal  
Name: Arif Fazal  
Title: Managing Director  

 

Email: arif@blueberryventures.vc

 

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SCHEDULE 1

CONVERSION RIGHTS

 

1.Conversion.

 

a.              Automatic Conversion Upon a Qualified Financing. If the Note is not repaid in full prior to the closing date of a Qualified Financing (the "QF Closing Date"), then effective automatically upon the QF Closing Date, the entire unpaid portion of the Principal Amount and all accrued and unpaid interest due Holder hereunder (the "Outstanding Amount") as of the QF Closing Date shall be converted into that number of shares of the stock issued in the Qualified Financing (the "Qualified Financing Stock") and shares of common stock of the Company (the "Common Stock") determined by dividing the Outstanding Amount by a conversion price equal to the lesser of (i) the price per share of the Qualified Financing Stock sold by the Company in the Qualified Financing, discounted by 20%, and (ii) the price determined by dividing a pre-money valuation of $4,000,000.00 by the number of outstanding shares of the Common Stock on a fully-diluted and as-converted basis immediately prior to the closing of the Qualified Financing (not including the Excluded Shares). Of those shares, the number of Qualified Financing Stock will equal (x) the Outstanding Amount, divided by (y) the price per share paid by the other investors purchasing the Qualified Financing Stock in the Qualified Financing. Any remaining shares will be Common Stock.

 

The Qualified Financing Stock delivered to Holder pursuant to such conversion shall have the same rights, preferences, privileges as the Qualified Financing Stock delivered to other investors in the Qualified Financing, and Holder shall enjoy the same contractual rights as other investors in the Qualified Financing.

 

2.            Optional Conversion Prior to and at the Outside Maturity Date. Holder shall have the right to convert the Note into share of Common Stock at a price per share obtained by dividing a pre-money valuation of $4,000,000.00 by the number of outstanding shares of Common Stock on a fully-diluted and as-converted basis as of the conversion date (not including the Excluded Shares). If the Note remains outstanding as of the Outside Maturity Date, and no Qualified Financing or Change of Control Transaction has occurred, then the Holder may elect, by written notice delivered to the Company at least two (2) business days prior to the Outside Maturity Date, to convert the Outstanding Amount into that number of shares of Common Stock determined by dividing the Outstanding Amount by the Maturity Conversion Price. The "Maturity Conversion Price" means the price per share obtained by dividing a pre-money valuation of $4,000,000.00 by the number of outstanding shares of Common Stock on a fully- diluted and as-converted basis as of the Outside Maturity Date (not including the Excluded Shares). The Common Stock delivered to Holder pursuant to such conversion shall have the same rights, preferences, privileges as the Common Stock held by other holders of Common Stock.

 

3.            No Other Conversion. Except as set forth in Sections 1 and 2 of this Schedule 1, the Note shall not otherwise be convertible into the Qualified Financing Stock, Common Stock or any other capital stock of the Company.

 

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4.            No Fractional Shares. The Company shall not be required to issue fractional shares of the Qualified Financing Stock or Common Stock upon the conversion of the Note. If any fraction of a share of the Qualified Financing Stock or Common Stock would, except for the provisions of this paragraph, be issuable on the conversion of the Note (or specified portion thereof), the Company shall pay an amount in cash calculated by it to be equal to the then fair market value per share of the Qualified Financing Stock or the Common Stock, as reasonably determined by the Board of Directors, multiplied by such fraction computed to the nearest whole cent.

 

5.            Adjustments Upon Capitalization and Corporate Changes. If at any time prior to the Maturity Date, any of the outstanding shares of the capital stock of the Company are changed into, or exchanged for, a different number or kind of shares or securities of the Company through reorganization, merger, recapitalization or reclassification, or if the number of such outstanding shares is changed through a stock split, stock dividend, stock consolidation or similar capital adjustment, or if the Company makes a distribution in partial liquidation or any other comparable extraordinary distribution with respect to any of its shares of capital stock, an appropriate adjustment shall be made by the Board of Directors, if necessary, in the number, kind or conversion price of shares into which the Note is convertible.

 

6.Miscellaneous.

 

a.              No Voting Rights. Except as expressly set forth in the Note, nothing contained in the Note shall be construed as conferring upon the Holder, prior to conversion of this Note into shares of capital stock of the Company, (i) the right to vote or to consent as a stockholder in respect of meetings of stockholders for the election of directors of the Company or any other matter, (ii) the right to receive dividends, or (iii) any other rights as a stockholder of the Company.

 

b.              Descriptive Headings. The descriptive headings of the several paragraphs of Schedule 1 are for convenience of reference only and do not constitute a part of Schedule 1 and are not to be considered in construing or interpreting the Note.

 

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EX1A-6 MAT CTRCT 18 tm2031356d1_ex6-5.htm EXHIBIT 6.5
 
Exhibit 6.5
 
CONVERTIBLE NOTE PURCHASE AGREEMENT

 

This CONVERTIBLE NOTE PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of July 2, 2015, by and between TRIPLEPULSE, INC., a Delaware corporation (the “Company”), and the persons who are signatories hereto (each, a “Purchaser” and, collectively, the “Purchasers”).

 

RECITALS

 

A.            The Company desires to issue and sell to Purchasers, and Purchasers desire to purchase and acquire from the Company up to Five Hundred Thousand US Dollars (US $500,000.00) in aggregate principal amount of promissory notes, on the terms and subject to the conditions of this Agreement.

 

AGREEMENT

 

In consideration of the foregoing recitals and the mutual promises and covenants contained herein, the parties, intending to be legally bound, hereby agree as follows:

 

1.Purchase and Sale of Notes.

 

(a)            Authorization and Issuance of the Notes. The Company has authorized the issuance and sale of the Company’s Convertible Promissory Notes, in the form attached hereto as Exhibit A (each, a “Note”, and collectively, the “Notes”).

 

(b)Issuance of the Notes.

 

(i)            Purchase and Sale. At each Closing (as defined in Section 1(b)(iii)), the Company shall issue and sell to each Purchaser, and each Purchaser shall purchase and acquire from the Company, the Notes in the principal amounts set forth in such Purchaser’s Note (the “Purchase Price”). The aggregate Purchase Price of the Notes shall not exceed $500,000.00 (the “Maximum Offering”). The names of the Purchasers and the principal amount of the Notes issued to each such Purchaser shall be set forth on Schedule 1, which schedule shall be updated from time to time by the Company following each Closing.

 

(ii)            The Initial Closing. The initial closing of the purchase and sale of the Notes (the “Initial Closing”) shall occur concurrently with the execution of this Agreement, or such later date as the Company and Purchasers shall agree to in writing (the “Initial Closing Date”), in each case at the offices of the Company, located at 1316 3rd Street, Suite B5, Santa Monica, CA 90401. At the Initial Closing, the Company shall deliver to the Purchasers the duly executed Notes. Delivery shall be made against receipt by the Company of the Purchase Price by check or wire transfer of immediately available funds.

 

(iii)            Additional Closings. For a period of sixty (60) from the Initial Closing Date, the Company may sell Notes pursuant to this Agreement to purchasers (each an “Additional Purchaser”) at additional closings (each, an “Additional Closing”) until the Company has issued that amount of Notes representing the Maximum Offering. Each Additional Purchaser shall be treated as a Purchaser herein. Each Additional Closing, collectively, with the Initial Closing, shall be referred to as a “Closing” and each Additional Closing date, collectively with the Initial Closing Date, shall be referred to as “Closing Date”).

 

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2.            Representations and Warranties of the Company. As of the Initial Closing Date, the Company represents and warrants to each Purchaser that:

 

(a)            Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation and has all requisite corporate power and corporate authority to carry on its business as presently conducted. The Company has no subsidiaries. The Company is duly qualified to transact business and is in good standing as a foreign corporation in each jurisdiction in which the conduct of its business or the ownership or leasing of its properties makes such qualification necessary.

 

(b)            Authorization. The execution, delivery and performance of this Agreement and each of the Notes, and the consummation of the transactions contemplated hereby and thereby has been duly authorized by all required corporate actions of the Company.

 

(c)            Due Execution and Delivery; Binding Obligations. This Agreement and the Notes have been duly executed and delivered by the Company, and this Agreement and the Notes constitute the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or conveyance or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability and except as rights of indemnity or contribution may be limited by federal or state securities or other laws or the public policy underlying such laws.

 

(d)            No Conflict or Violation. Neither the execution and delivery of this Agreement and the Notes by the Company, nor its consummation of the transactions contemplated hereby or thereby, will result in: (i) a violation of, or a conflict with, the Company’s Certificate of Incorporation, Bylaws or any subscription, stockholders’ or similar types of agreements or understandings; (ii) a material breach of, or a material default (or an event which, with notice or lapse of time or both would constitute a material default) under or result in the termination of, or accelerate the performance required by, or create a right of termination or acceleration under, any material contract, agreement, instrument, license, encumbrance or permit to which such the Company is a party or by which the Company or its business is bound or affected; (iii) to the knowledge of the Company, a violation by the Company of any law applicable to the Company or any judgment, court order or the like to which the Company is a party or by which it is bound; or (iv) an imposition of any material lien on the Company or its assets.

 

(e)            Consents and Approvals. The execution and delivery of this Agreement and the Notes by the Company, the issuance, sale and delivery of the Notes by the Company, and the consummation of the transactions contemplated hereby and thereby, do not and will not require any authorization, registration or filing with, or consent or approval of, any person, other than the Company and its stockholders, including, without limitation, any governmental authority or regulatory body, except for filings required under applicable securities laws.

 

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(f)            Litigation. There is no action, suit, proceeding or investigation pending or, to the best of the Company’s knowledge, currently threatened against the Company (or, to the best of the Company’s knowledge, threatened against or affecting any of the officers, directors or employees of the Company with respect to their duties and activities with respect to the Company) that questions the validity of this Agreement or the right of the Company to enter into such Agreement or to consummate the transactions contemplated hereby, or that might result, either individually or in the aggregate, in any material adverse changes in the business, assets or condition of the Company, financially or otherwise.

 

3.            Representations and Warranties of Purchasers. Each Purchaser represents and warrants to the Company, as of the applicable Closing Date on which such Purchaser purchased Notes, as follows:

 

(a)            This Agreement and the Note issued to Purchaser constitute the legal, valid and binding obligation of Purchaser, enforceable against it in accordance with its respective terms.

 

(b)            Purchaser, to the extent applicable, has acquired the Note for Purchaser’s own account, with the intention of holding the same for investment and not with a view to the distribution thereof in violation of federal and state securities laws.

 

(c)            Purchaser understands, to the extent applicable, that the Note has not been registered under the Securities Act of 1933 (the “Securities Act”) or any applicable state securities laws in reliance upon exemptions contained in the Securities Act and such applicable state securities laws, and that the Company’s reliance upon such exemptions is based in part on the representations of Purchaser contained in this Agreement. Purchaser further understands and acknowledges that the Note must be held indefinitely unless a subsequent disposition thereof is registered under the Securities Act and applicable state securities laws or unless such disposition is exempt from registration thereunder.

 

(d)            Purchaser is an “accredited investor” as such term is defined in Rule 501 promulgated under the Securities Act.

 

(e)            Purchaser (i) has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of making the investment contemplated hereby, and (ii) understands that an investment in the Company involves significant risks and is suitable only for persons of adequate financial means who have no need for liquidity in this investment. Purchaser represents that no assurances or guarantees have been made to Purchaser by anyone, including the Company’s management, regarding whether the Company will be profitable. Purchaser acknowledges that Purchaser may lose all or a portion of Purchaser’s investment in the Company. It is specifically understood and agreed by Purchaser that no person in the Company’s management, and no employee, agent or representative of the Company, has made, nor by this Agreement shall be construed to make, directly or indirectly, explicitly or by implication, any representation, warranty, projection, assumption, promise, covenant, opinion, recommendation or other statement of any kind or nature with respect to the anticipated profits or losses of the Company. The Company has made available to Purchaser and Purchaser’s accountants, attorneys and other advisors full and complete information concerning the financial structure of the Company and any other available data requested by Purchaser as a basis for estimating the potential profits and losses of the Company, and Purchaser acknowledges that Purchaser has either reviewed such information or has waived review of such information.

 

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(f)            If Purchaser is not a U.S. Person as that term is defined in Rule 902(o) of Regulation S promulgated under the Securities Act (“Regulation S”), then such Purchaser shall not offer and sell the Notes (or the securities issuable upon conversion of the Notes) to any U.S. Person except in accordance with Regulation S and any other applicable law of the United States.

 

(g)            Purchaser acknowledges that, in addition to any legend required under applicable securities laws, the certificates and instruments evidencing the Notes, acquired by Purchaser will bear the following legends:

 

(i)            “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT.”

 

(ii)            Any legend required by the Blue Sky laws of any state to the extent such laws are applicable to the shares represented by the certificate so legended.

 

4.Conditions to Purchase.

 

(a)            Conditions to Obligations of Purchaser on the Closing Date. The obligations of each Purchaser to purchase the Notes on the Closing Date is subject to the satisfaction of the following conditions:

 

(i)            Notes. Purchaser shall have received a Note, duly executed by the Company in accordance with the provisions of Section 1(b).

 

(ii)            No Defaults. The Company shall be in compliance with the terms and provisions set forth in this Agreement and the Notes and no default or event of default under this Agreement or the Notes shall have occurred and be continuing or shall occur upon consummation of this Agreement.

 

(iii)            Requisite Approvals. The Company shall have obtained all governmental required consents, licenses, permits and approvals relating to the transactions contemplated by this Agreement and the Notes, which, consents, licenses, permits and approvals shall be in full force and effect and be reasonably acceptable to Purchaser and Purchaser’s counsel.

 

(iv)            Representations and Warranties. The representations and warranties of the Company contained herein and in the Notes and in any certificate or other instrument delivered pursuant to any of the foregoing shall be correct in all material respects as though made on and as of the Closing Date, except to the extent that such representations and warranties speak as of a certain date, in which case such representations and warranties shall have been true and correct as of such date.

 

TriplePulse Note Purchase Agreement

 

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(b)            Conditions to Obligations of Company on the Closing Date. The obligations of the Company to issue and sell the Notes on the Closing Date is subject to the satisfaction of the following conditions:

 

(i)            Purchase Price. Purchasers shall have delivered the Purchase Price for the Notes in accordance with the provisions of Section 1(b).

 

(ii)            No Defaults. The Purchasers shall be in compliance with the terms and provisions set forth in this Agreement and the Notes and no default or event of default under this Agreement or the Notes shall have occurred and be continuing or shall occur upon consummation of this Agreement.

 

(iii)            Requisite Approvals. The Purchasers shall have obtained all governmental required consents, licenses, permits and approvals relating to the transactions contemplated by this Agreement and the Notes, which, consents, licenses, permits and approvals shall be in full force and effect and be reasonably acceptable to Purchaser and Purchaser’s counsel.

 

(iv)            Representations and Warranties. The representations and warranties of the Purchasers contained herein and in the Notes and in any certificate or other instrument delivered pursuant to any of the foregoing shall be correct in all material respects as though made on and as of the Closing Date, except to the extent that such representations and warranties speak as of a certain date, in which case such representations and warranties shall have been true and correct as of such date.

 

5.            Covenants. The Company agrees that, so long as the Notes are outstanding and unpaid, the Company shall, directly or indirectly:

 

(a)            Compliance with Laws. Comply with all applicable laws and judgments and maintain all required clearances, consents, permits and approvals of governmental authorities, except for such noncompliance which, either individually or in the aggregate, could not reasonably be expected to result in a material adverse effect upon the financial condition, operating results, assets, customer or supplier relations, employee relations or business prospects of the Company.

 

(b)            Further Assurances. Duly execute and deliver, or cause to be duly executed and delivered, at its own cost and expense, such further instruments and documents and to take all such action, in each case as may be necessary or proper in the reasonable judgment of Purchaser to carry out the provisions and purposes of this Agreement and the Notes.

 

(c)            Use of Proceeds. The aggregate proceeds of the Notes shall be used by the Company for general operating purposes.

 

TriplePulse Note Purchase Agreement

 

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(d)            Notice of Change of Control Transaction. Provide thirty (30) days prior written notice of any Change of Control Transaction (as defined below). “Change of Control Transaction” means any of the following: (i) the merger or consolidation of the Company with or into any other corporation or business entity (except one in which the holders of capital stock of the Company immediately prior to such merger or consolidation continue to hold at least a majority of the outstanding securities having the right to vote in an election of the board of directors of the surviving corporation (the “Voting Stock”)); (ii) the sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all assets of the Company; or (iii) the acquisition by any person or any group of persons (other than the Company, any of its direct or indirect subsidiaries, or any trustee, fiduciary or other person or entity holding securities under any employee benefit plan or trust of the Company or any of its direct or indirect subsidiaries) acting together in any transaction or related series of transactions, of such number of shares of the Company’s Voting Stock as causes such person or group of persons to own beneficially, directly or indirectly, as of the time immediately after such transaction or series of transactions, 50% or more of the combined voting power of the Voting Stock of the Company.

 

6.Other Provisions.

 

(a)            Amendments and Waivers. This Agreement may be amended and any provision hereof waived only with the written consent of the Company and the Purchasers holding more than fifty percent (50%) of then outstanding aggregate principal balance of all of the Notes issued hereunder (the “Purchaser Majority Interest”); provided, that no amendment or waiver which would alter or change the principal amount owing upon the Notes or the rate of interest payable thereon may be effective without the consent of all of the Purchasers. For avoidance of doubt, notwithstanding the proviso in the prior sentence, the prepayment provisions in Section 3 of the Note and the Note conversion provisions set forth in the Note may be amended or waived by a Purchaser Majority Interest. Any amendment or waiver of any term or condition hereof that is approved by the Purchaser Majority Interest shall be binding upon all Purchasers.

 

(b)            Notices. All notices, requests and demands under this Agreement must be in writing and, unless otherwise expressly provided therein, shall be delivered by hand, sent by email, or sent by United States mail, first-class postage prepaid, addressed as follows:

 

The Company:       TriplePulse, Inc.

  3110 Main Street, Suite D
  Santa Monica, CA 90405
  Attention: Chris Thompson
  Email: chrisdthompson@gmail.com

 

with a copy to:       Laszlo Kupan

  11114 McDonald Street

  Culver City, CA 90230

  Email: lkupan@gmail.com

 

The Purchasers:     to the contact information set forth below each Purchaser’s signature block to this Agreement

 

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Notices, requests or demands hereunder shall be deemed given (i) three (3) business days after being deposited in the U.S. mail, postage prepaid, if sent by U.S. mail, (ii) upon confirmation of transmission, if sent by facsimile, (iii) when delivered, if delivered in person, (iv) when delivered, if sent by overnight courier service, and (v) when sent if by e-mail. Any party to this Agreement or the Notes may rely on signatures of the parties thereto that are transmitted by fax, emailed “pdf” file or other electronic means as fully as if originally signed.

 

(c)            Expenses. Each of the Company and the Purchasers shall bear their own expenses, including attorneys’ fees, in connection with the preparation and negotiation of this Agreement and the Notes.

 

(d)            No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising any right, remedy, power or privilege under this Agreement or any of the Notes shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege under this Agreement or any of the Notes preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges under this Agreement and the Notes are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

(e)            Survival of Representations and Warranties. All representations and warranties made under this Agreement, each Note and in any document, certificate or statement delivered pursuant thereto or in connection therewith shall survive their execution and delivery.

 

(f)            Headings Descriptive. Section headings have been inserted in this Agreement and each of the Notes for convenience only and shall not be construed to be a part thereof.

 

(g)            Severability. Every provision of this Agreement and each of the Notes is intended to be severable, and if any term or provision thereof shall be invalid, illegal or unenforceable for any reason, the validity, legality and enforceability of the remaining provisions thereof shall not be affected or impaired thereby, and any invalidity, illegality or unenforceability in any jurisdiction shall not affect the validity, legality or enforceability of any such term or provision in any other jurisdiction.

 

(h)            Integration. All exhibits to this Agreement or the Notes shall be deemed to be a part thereof. This Agreement and each Note embody the entire agreement and understanding between the Company and each of the Purchasers, with respect to the subject matter thereof and supersede all prior agreements and understandings between them with respect to the subject matter hereof and thereof.

 

(i)            Consent to Jurisdiction. The parties hereby irrevocably submit to the jurisdiction of any state or federal court located in Los Angeles County, California with respect to any suit, action or proceeding arising out of or relating to this Agreement or any Note. Each party hereby irrevocably waives, to the fullest extent permitted or not prohibited by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in such a court and any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum. Each party hereby agrees that a final judgment in any such suit, action or proceeding brought in such a court, after all appropriate appeals, shall be conclusive and binding upon it.

 

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(j)            Governing Law. This Agreement, the Notes and the rights and obligations of the parties hereunder and thereunder shall be governed by, and construed and interpreted in accordance with, the internal laws of the State of Delaware, without regard to principles of conflict of laws.

 

(k)            Assignment. This Agreement, the Notes and the rights and obligations of the parties hereunder and thereunder shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. Neither the Company nor any Purchaser may assign this Agreement or any of the Notes, or assign the rights or delegate the duties hereunder or thereunder, without, in the case of an assignment by any Purchaser, the prior written consent of the Company or, in the case of an assignment by the Company, the prior written consent of the Purchaser Majority Interest.

 

(l)            Attorneys’ Fees. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement or any of the Notes, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

 

(m)            Counterparts. This Agreement may be executed by one or more of the parties thereto on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same document.

 

(n)            Facsimile or pdf Signatures. This Agreement may be executed by any party by delivery of a facsimile or pdf signature, which signature shall have the same force and effect as an original signature. Any party which delivers a facsimile or pdf signature shall promptly thereafter deliver an originally executed signature to the Company; provided, however, that the failure to deliver an original signature page shall not affect the validity of any signature delivered by facsimile or pdf.

 

(o)            Pronouns. References to any form of third person pronouns herein (he, she or it) shall be deemed to include all other forms, as appropriate, and all such references shall be deemed to include both plural and singular.

 

(p)            Escrow Agent. U.S. Bank National Association is acting only as the Escrow Agent in connection with the offering described herein, and has not endorsed, recommended or guaranteed the purchase, value or repayment of the securities described herein.

 

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TriplePulse Note Purchase Agreement

 

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

 

 

  COMPANY 
   
  TRIPLEPULSE, INC., 
  a Delaware corporation
   
  By:    /s/ Christopher Thompson
  Name: Christopher Thompson
  Title: CEO 

 

TriplePulse Note Purchase Agreement

 

  

 

 

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

 

 

  500 STARTUPS III, L.P., 
  for itself and as nominee for 
  certain other individuals and entities 
    
  By: 500 STARTUPS III, L.L.C., 
   its general partner
    
  By: /s/ Christine Tsai (Jul 2, 2015)
  Name: Christine Tsai
   Title: Managing Member 
      
Address:  444 Castro Street, #1200
  Mountain View, CA 94041 

 

TriplePulse Note Purchase Agreement

 

  

 

 

SCHEDULE 1
 
SCHEDULE OF PURCHASERS

 

Purchaser Name Principal Amount of Promissory Notes
BRIGHTSTONE VENTURE CAPITAL FUND, LP $250,000
500 STARTUPS III, L.P. $175,000
   
   
   
   
   
   
Totals: $425,000

 

TriplePulse Note Purchase Agreement

 

  

 

 

EXHIBIT A

 

FORM OF CONVERTIBLE PROMISSORY NOTE

 

TriplePulse Note Purchase Agreement

 

  

 

 

TRIPLEPULSE, INC.

 

July 2 , 2015

 

500 Startups III, L.P.
444 Castro St., # 1200

Mountain View, CA 94041

 

Re:     Additional Rights

 

To Whom It May Concern:

 

In consideration for your purchase of a Convertible Promissory Note in the aggregate principal amount of $175,000 (the “Note”) of TRIPLEPULSE, INC. (the “Company”), pursuant to that certain Note Purchase Agreement dated as of July 2, 2015, the Company hereby agrees:

 

1.The Company shall deliver to you, in each case to the extent that the Company has such financial statements:

 

a.as soon as practicable, but in any event within ninety (90) days after the end of each fiscal year of the Company, an income statement for such fiscal year, a balance sheet of the Company and statement of stockholders’ equity as of the end of such year, and a statement of cash flows for such year, such year-end financial reports to be in reasonable detail and prepared on a consistent basis;

 

b.as soon as practicable, but in any event within thirty (30) days after the end of each of the first three (3) quarters of each fiscal year of the Company, an unaudited income statement, statement of cash flows for such fiscal quarter and an unaudited balance sheet as of the end of such fiscal quarter, all prepared on a consistent basis;

 

c.such other information relating to the financial condition, business or corporate affairs of the Company as the you may from time to time reasonably request, provided, however, that the Company shall not be obligated under this Subsection (c) or any other subsection of Section 1 to provide information that (i) it deems in good faith to be a trade secret or highly confidential information or (ii) the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.

 

2.You agree to maintain the confidentiality of all of the information provided to you under Section 1, and agree not to use such information other than for a purpose reasonably related to your investment in the Company or as requested by the Company.

 

  

 

 

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3.You shall have a right of first offer to purchase up to $250,000 of any equity securities the Company may sell or issue in any of the Company’s subsequent sale(s) (or series of related sales) of its equity securities to investors following the date hereof (the “Effective Date”) until a Qualified Financing (as defined in the Note) has occurred.

 

Each time the Company proposes to offer any equity securities to investors, the Company shall also make an offering of such equity securities to you by providing you with a notice stating the number of equity securities to be offered and the price and terms upon which it proposes to offer such shares (an “Offering Notice”). You shall have 10 days from your receipt of the Offering Notice to elect to participate in such financing. In the event the Company issues equity securities in such subsequent sale that are common stock or preferred stock, you may elect to purchase such shares at the lowest price and on at least pari passu terms sold to any purchaser in such subsequent sale. In the event the Company issues equity securities in such subsequent sale that constitute convertible indebtedness, you may elect to purchase such indebtedness on at least pari passu terms sold to any purchaser in such subsequent sale.

 

Your right of first offer set forth in this letter agreement shall be subject to compliance with applicable federal and state securities laws. You will forfeit your right of first offer with respect to any sale or issuance of equity securities unless you are able to represent and warrant that you meet the qualifications and standards reasonably requested by the Company so that such sale and issuance shall be exempt from registration or qualification under applicable federal and state securities laws; provided, that each purchaser of equity securities in such sale or issuance shall be required to make the same such representations and warranties, and no other exemption shall be reasonably available to the Company that would allow you and all other such purchasers to participate in such sale or issuance of equity securities.

 

Your right of first offer set forth in this letter agreement shall terminate (a) immediately following the consummation of the Qualified Financing, (b) immediately prior to the closing of (i) the Company’s initial public offering; (ii) the sale of the Company (through a merger, consolidation, sale of all or substantially all of its assets or stock or similar transaction); or (iii) the acquisition by a single purchaser of all of the issued and outstanding shares of capital stock of the Company; (c) at any time indicated in a written agreement between you and the Company; or (d) the effective time of any liquidation, winding up or dissolution of the Company.

 

4.You shall be deemed to be a “Major Investor” (or such similar term) for all purposes, including, without limitation, right of first offer and information rights, in all financing documents related to all such subsequent sales of equity securities to investors, to the extent such concept exists.

 

5.Notwithstanding anything contained in the Note, the Note Purchase Agreement or this letter (together, the “Transaction Documents”) to the contrary, you shall be entitled to transfer your rights and obligations under the Transaction Documents to any partnership, limited liability company, corporation or venture capital venture fund with which you are affiliated (“Affiliate”) as of the date hereof or at any time in the future, irrespective of whether such Affiliate has been formed on the date hereof; provided that such Affiliate agrees in writing to be subject to the terms of the Transaction Documents to the same extent as if the Affiliate were an original investor thereunder.

 

  

 

 

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Except as specifically provided in this letter agreement, all terms and conditions of the Note and Note Purchase Agreement remain in full force and effect, without modification or limitation.

 

[Signature Page Follows]

 

  

 

 

  Very truly yours, 
   
  TRIPLEPULSE, INC. 
   
  By: /s/ Christopher Thompson  
  (Signature)
   
  Name: Christopher Thompson
   
  Title: CEO 

 

AGREED AND ACCEPTED:  
   
500 STARTUPS III, L.P.,  
for itself and as nominee for  
certain other individuals and entities  
   
By: 500 STARTUPS III, L.L.C.,  
its general partner  
   
By: /s/ Christine Tsai (Jul 2, 2015)  
Name: Christine Tsai  
Title: Managing Member  
   
Address: 444 Castro Street, #1200  
Mountain View, CA 94041  

 

Signature page to Side Letter for 500 Startups III, L.P.

 

  

 

EX1A-6 MAT CTRCT 19 tm2031356d1_ex6-6.htm EXHIBIT 6.6

Exhibit 6.6

 

CONVERTIBLE PROMISSORY NOTE

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT

 

$175,000.00   __________________

 

FOR VALUE RECEIVED, TRIPLEPULSE, INC., a Delaware corporation (the "Company"), hereby promises to pay to the order of 500 STARTUPS III, L.P. ("Holder"), the principal sum of One Hundred Seventy Five Thousand Dollars (US $175,000.00) (the "Principal Amount"), together with interest accruing on the unpaid portion of the Principal Amount from the date hereof until maturity at the rate of interest set forth in Section 2(a) on the terms and subject to the conditions of this Convertible Promissory Note (including all renewals, extensions or modifications hereof, this "Note").

 

1.            Terms. This Note is being issued and delivered pursuant to Section 1(b) of that certain Convertible Note Purchase Agreement dated May 5, 2015 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the "Note Purchase Agreement") by and among the Company, the Holder and purchasers of other notes similar to this Note, if any. Unless otherwise set forth herein, all capitalized terms used herein without definition shall have the meanings given to such terms in the Note Purchase Agreement.

 

2.Payments.

 

(a)            The unpaid portion of the Principal Amount shall bear simple interest at the rate of five percent (5%) per annum, payable on the Maturity Date (as defined in Section 2(b)). Upon and during the occurrence of an Event of Default, the outstanding principal on this Note shall bear interest at a default rate of interest of ten percent (10%) per annum (the "Default Rate") unless waived in writing by Holder. Interest shall never exceed the maximum lawful rate of interest applicable to this Note.

 

(b)            The unpaid portion of the Principal Amount, and all accrued and unpaid interest thereon, shall be due and payable upon the date of the first to occur of the following (each, the "Maturity Date"): (i) the Outside Maturity Date (as defined below), (ii) a Qualified Financing (as defined below), and (iii) a Change of Control Transaction (as defined below); provided, that upon a Change of Control Transaction, the Company shall redeem the Note at the election of Holder for an amount equal to (A) two hundred percent (200%) of the Outstanding Amount or (B) the consideration which Holder would have received in the Change of Control Transaction (to be paid in the same form of consideration (e.g., a mix of cash and stock) received by other equity holders in the Change of Control Transaction) had Holder converted the Outstanding Amount into shares of common stock of the Company at a conversion price per share determined by dividing a pre-money valuation of $4,000,000.00 by the number of outstanding shares of the common stock of the Company (the "Common Stock") on a fully- diluted and as-converted basis immediately prior to the closing of the Change of Control Transaction (not including shares issuable upon conversion of (x) the Notes or (y) convertible notes outstanding as of the date hereof (collectively, the "Excluded Shares")). As used herein:

 

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(i)"Change of Control Transaction" shall have the same meaning as set forth in the Note Purchase Agreement.

 

(ii)"Issuance Date" means the date of issuance of this Note.

 

(iii)"Outside Maturity Date" means the date which is twenty-four (24) months from the date of the Note Purchase Agreement.

 

(iv)"Qualified Financing" means the bona fide next sale of equity securities of the Company to investors with aggregate gross cash proceeds to the Company of at least $1,500,000.00 (excluding through the conversion of convertible notes).

 

(v)"Purchase Price" shall have the same meaning as set forth in the Note Purchase Agreement.

 

(vi)"Purchasers" shall have the same meaning as set forth in the Note Purchase Agreement.

 

(c)            Except as otherwise provided in Section 2(b), All payments due and payable from the Company to Holder under this Note shall be made in lawful currency of the United States of America at the Holder’s address listed following Holder’s signature block at the end of this Note or such other place as Holder shall designate in writing, and, at Holder’s option, shall be payable by check or wire transfer.

 

3.Prepayment. This Note may not be prepaid without the consent of Holder.

 

4.Events of Default.

 

(a)            An "Event of Default" under this Note shall mean the occurrence of any of the following:

 

(i)            Failure to Pay. The Company shall fail to pay (A) when due any principal or interest payment on the due date hereunder or (B) any other payment required under the terms of this Note on the date due;

 

(ii)            Involuntary Bankruptcy, Etc. (A) A court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company in an involuntary case under Title 11 of the United States Code entitled "Bankruptcy" (as now and hereinafter in effect, or any successor thereto, the "Bankruptcy Code") or any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, which decree or order is not stayed; or any other similar relief shall be granted under any applicable federal or state law; or (B) an involuntary case shall be commenced against the Company under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect; or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over the Company or over all or a substantial part of its property shall have been entered; or the involuntary appointment of an interim receiver, trustee or other custodian of the Company for all or a substantial part of its property shall have occurred; or a warrant of attachment, execution or similar process shall have been issued against any substantial part of the property of the Company, and, in the case of any event described in this clause (ii), such event shall have continued for ninety (90) days unless dismissed, bonded or discharged;

 

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(iii)            Voluntary Bankruptcy, Etc. An order for relief shall be entered with respect to the Company or the Company shall commence a voluntary case under the Bankruptcy Code or any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law, or shall consent to the appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of its property, or the Company shall make an assignment for the benefit of creditors; or the Company shall admit in writing its inability to pay its debts as such debts become due; or the board of directors of the Company (the "Board of Directors") shall adopt any resolution or otherwise authorize action to approve any of the foregoing; or

 

(iv)            Dissolution, Etc. The Company engages in any liquidation, dissolution, or winding up of the Company, expressly excluding a Change of Control Transaction.

 

(b)            Upon the occurrence of an Event of Default, the entire unpaid portion of the Principal Amount, all accrued but unpaid interest and all other amounts due Holder hereunder shall become due and payable at the option of Holder upon notice to the Company of such acceleration. Further, in the case of any Event of Default under this Note by the Company which is continuing and has not been waived in writing by Holder, this Note will bear interest at the Default Rate.

 

(c)            The Company hereby agrees that it will, upon demand, pay to Holder the amount of any and all reasonable advances, charges, costs and expenses, including the fees and expenses of its counsel and of any experts or agents, that Holder may incur in connection with the failure by the Company to perform or observe any of the provisions of this Note.

 

5.            Conversion Rights. This Note is convertible into certain capital stock of the Company in accordance with the conversion rights specified in Schedule 1 attached hereto and incorporated herein by this reference.

 

6.            Replacement of Lost Note. Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of this Note and, in the case of any such loss, theft or destruction, upon receipt of indemnity reasonably satisfactory to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Note, the Company will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Note, a new debenture of like tenor dated as of the date from which unpaid interest has then accrued on the lost, stolen, destroyed or mutilated Note.

 

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7.Miscellaneous.

 

7.1            Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Delaware.

 

7.2            Entire Agreement. This Note, together with the Note Purchase Agreement and any other documents executed in connection herewith, constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof.

 

7.3            Amendments. No term of this Note may be amended, waived, discharged or terminated except in accordance with Section 6(a) of the Note Purchase Agreement.

 

7.4            Notices, etc. All notices, requests, demands and other communications made under this Note shall be made in accordance with Section 6(b) of the Note Purchase Agreement.

 

7.5            Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to Holder upon any breach or default of the Company under this Note shall impair any such right, power or remedy of Holder nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of Holder of any breach or default under this Note, or any waiver on the part of Holder of any provision or condition of this Note must be made in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Note or by law or otherwise afforded to Holder, shall be cumulative and not alternative.

 

7.6            Severability. In case any provision of this Note shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

7.7            Titles. The titles of the Sections and subsections of this Note are for convenience or reference only and are not to be considered in construing this Note.

 

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TriplePulse Convertible Note

 

4

 

 

IN WITNESS WHEREOF, this Note is executed as of the date first above written.

 

  COMPANY
   
  TRIPLEPULSE, INC.,
  a Delaware corporation
   
  By: /s/ Christopher Thompson
  Name: Christopher Thompson
  Title: CEO

 

ACCEPTED AND AGREED TO:

 

500 STARTUPS III, L.P.,

for itself and as nominee for

certain other individuals and entities

 

By: 500 STARTUPS III, L.L.C.,

its general partner

 

By: /s/ Christine Tsai Jul 2, 2015  
Name: Christine Tsai  
Title: Managing Member  

 

Address: 444 Castro Street, #1200

Mountain View, CA 94041

 

 

 

SCHEDULE 1

CONVERSION RIGHTS

 

1.Conversion.

 

a.            Automatic Conversion Upon a Qualified Financing. If the Note is not repaid in full prior to the closing date of a Qualified Financing (the "QF Closing Date"), then effective automatically upon the QF Closing Date, the entire unpaid portion of the Principal Amount and all accrued and unpaid interest due Holder hereunder (the "Outstanding Amount") as of the QF Closing Date shall be converted into that number of shares of the stock issued in the Qualified Financing (the "Qualified Financing Stock") and shares of common stock of the Company (the "Common Stock") determined by dividing the Outstanding Amount by a conversion price equal to the lesser of (i) the price per share of the Qualified Financing Stock sold by the Company in the Qualified Financing, discounted by 20%, and (ii) the price determined by dividing a pre-money valuation of $4,000,000.00 by the number of outstanding shares of the Common Stock on a fully-diluted and as-converted basis immediately prior to the closing of the Qualified Financing (not including the Excluded Shares). Of those shares, the number of Qualified Financing Stock will equal (x) the Outstanding Amount, divided by (y) the price per share paid by the other investors purchasing the Qualified Financing Stock in the Qualified Financing. Any remaining shares will be Common Stock.

 

The Qualified Financing Stock delivered to Holder pursuant to such conversion shall have the same rights, preferences, privileges as the Qualified Financing Stock delivered to other investors in the Qualified Financing, and Holder shall enjoy the same contractual rights as other investors in the Qualified Financing.

 

2.            Optional Conversion Prior to and at the Outside Maturity Date. Holder shall have the right to convert the Note into share of Common Stock at a price per share obtained by dividing a pre-money valuation of $4,000,000.00 by the number of outstanding shares of Common Stock on a fully-diluted and as-converted basis as of the conversion date (not including the Excluded Shares). If the Note remains outstanding as of the Outside Maturity Date, and no Qualified Financing or Change of Control Transaction has occurred, then the Holder may elect, by written notice delivered to the Company at least two (2) business days prior to the Outside Maturity Date, to convert the Outstanding Amount into that number of shares of Common Stock determined by dividing the Outstanding Amount by the Maturity Conversion Price. The "Maturity Conversion Price" means the price per share obtained by dividing a pre-money valuation of $4,000,000.00 by the number of outstanding shares of Common Stock on a fully- diluted and as-converted basis as of the Outside Maturity Date (not including the Excluded Shares). The Common Stock delivered to Holder pursuant to such conversion shall have the same rights, preferences, privileges as the Common Stock held by other holders of Common Stock.

 

3.            No Other Conversion. Except as set forth in Sections 1 and 2 of this Schedule 1, the Note shall not otherwise be convertible into the Qualified Financing Stock, Common Stock or any other capital stock of the Company.

 

S-1

 

 

4.            No Fractional Shares. The Company shall not be required to issue fractional shares of the Qualified Financing Stock or Common Stock upon the conversion of the Note. If any fraction of a share of the Qualified Financing Stock or Common Stock would, except for the provisions of this paragraph, be issuable on the conversion of the Note (or specified portion thereof), the Company shall pay an amount in cash calculated by it to be equal to the then fair market value per share of the Qualified Financing Stock or the Common Stock, as reasonably determined by the Board of Directors, multiplied by such fraction computed to the nearest whole cent.

 

5.            Adjustments Upon Capitalization and Corporate Changes. If at any time prior to the Maturity Date, any of the outstanding shares of the capital stock of the Company are changed into, or exchanged for, a different number or kind of shares or securities of the Company through reorganization, merger, recapitalization or reclassification, or if the number of such outstanding shares is changed through a stock split, stock dividend, stock consolidation or similar capital adjustment, or if the Company makes a distribution in partial liquidation or any other comparable extraordinary distribution with respect to any of its shares of capital stock, an appropriate adjustment shall be made by the Board of Directors, if necessary, in the number, kind or conversion price of shares into which the Note is convertible.

 

6.Miscellaneous.

 

a.            No Voting Rights. Except as expressly set forth in the Note, nothing contained in the Note shall be construed as conferring upon the Holder, prior to conversion of this Note into shares of capital stock of the Company, (i) the right to vote or to consent as a stockholder in respect of meetings of stockholders for the election of directors of the Company or any other matter, (ii) the right to receive dividends, or (iii) any other rights as a stockholder of the Company.

 

b.            Descriptive Headings. The descriptive headings of the several paragraphs of Schedule 1 are for convenience of reference only and do not constitute a part of Schedule 1 and are not to be considered in construing or interpreting the Note.

 

S-2

EX1A-6 MAT CTRCT 20 tm2031356d1_ex6-7.htm EXHIBIT 6.7

 

Exhibit 6.7
 
Copy of the Electronic Original® document managed by the eCore® On Demand (EOD™) Service.
 
E-SIGNATURE AUTHORIZATION
ACKNOWLEDGMENT AND CONSENT
Coastal Community Bank
5415 Evergreen Way
  Everett, Washington 98203
  (425)257-9000
  NMLS Company Identifier: 462289

 

LOAN NUMBER DATE  
1904635200 April 15, 2020  

 

This E-Signatures Authorization Acknowledgment And Consent will also be referred to in this document as the "Agreement" and constitutes the full agreement by and between Coastal Community Bank ("Financial Institution") and TriplePulse, Inc. (each a "Consenting Party"), with respect to the use of electronic signature.

 

Financial Institution and Consenting Party agree to the following:

 

1.Each Consenting Party authorizes Financial Institution to use an electronic signature of the Consenting Party for all documents, agreements, attachments, addendums including, without limitation, all deposit and lending related documents such as account agreements, loan agreements, security agreements, mortgages, deeds of trust, guaranties and hypothecations (collectively, the "Documents") in any way connected to the transaction ("Transaction") being entered into between the Consenting Party and the Financial Institution. This consent is specifically to permit an electronic signature (as of the nature then in use by the Financial Institution) in lieu of hand-written signatures on any one or more of the Documents.

2.Financial Institution consents to accept such signatures as true, correct and binding signatures of the Consenting Party and to enter into the Transaction in reliance thereon.

3.Each Consenting Party agrees that its electronic signature will be enforceable as and to the full extent of a hand-written signature as an original for enforcement/enforceability of the Documents containing the electronic signature(s), whether in court (state or federal), arbitration or otherwise. Consenting Party will not raise any defenses or invoke regulatory or statutory claim attempting to invalidate the enforceability of the Documents to which the electronic signature is affixed.

 

NOTICES. Any notice from Financial Institution to Consenting Party shall be deemed given when mailed, postage paid, and addressed to any Consenting Party at the last address furnished by any Consenting Party to the Financial Institution. Any notice from Consenting Party to Financial Institution shall be deemed given when mailed, postage paid, and addressed to the Financial Institution at its principal place of business.

 

ENTIRE AGREEMENT. This Agreement contains and constitutes the entire understanding between Financial Institution and each Consenting Party regarding the subject matter hereof and may not be modified, amended, or terminated except by written agreement signed by Financial Institution and each Consenting Party that such modification, amendment or termination affects. All prior or subsequent oral agreements and/or discussions relating to this Agreement are superseded by this Agreement. Further, in the event of any conflict between the terms and provisions contained in this Agreement and any other document(s) relating to use of electronic signatures, the terms and provisions of this Agreement shall control.

 

BINDING EFFECT. The obligations hereof shall bind the heirs, executors, administrators, successors, and assigns of each Consenting Party, and all rights, benefits and privileges hereby conferred on Financial Institution shall be and hereby are extended to and conferred upon and may be enforced by its successors and assigns. Further, if any Consenting Party is a partnership, the obligations hereof shall continue in force, and apply, notwithstanding any change in the membership of such partnership, whether arising from the death or retirement of one or more partners or the accession of one or more new partners.

 

ENFORCEABILITY. Whenever possible each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law. If any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

 

HEADINGS. Section headings/titles are for convenience only and are not to be used in construing or interpreting this Agreement.

 

GOVERNING LAW. This Agreement shall be governed by the laws of the state of Washington except to the extent that federal law is controlling.

 

By signing this Agreement, Financial Institution and each Consenting Party acknowledge reading, understanding and agreeing to all of its provisions.

 

CONSENTING PARTIES:

 

TriplePulse, Inc.

 

By: /s/ Christopher Thompson Apr 15, 2020 11:13:50 AM PDT  
By: Christopher Thompson Date
Its: CEO  

 

© Lending-2019 Compliance Systems, Inc. 4b8a2c44-8aaa32a7 - 2019.112.0.3
E-Signatures Authorization Acknowledgment And Consent - DG9006
Page 1 of 2 www.compliancesystems.com
     

 

The original document is owned by Coastal Community Bank and this copy was created on Apr 15, 2020 11:17:43 AM.

 

 

 

 

Copy of the Electronic Original® document managed by the eCore® On Demand (EOD™) Service.

 

FINANCIAL INSTITUTION:

 

Coastal Community Bank   
    
By: /s/ Tyler Ferguson Apr 15, 2020 11:09:54 AM PDT   
By: Tyler Ferguson  Date 
Its: Executive Vice President   

 

© Lending-2019 Compliance Systems, Inc. 4b8a2c44-8aaa32a7 - 2019.112.0.3
E-Signatures Authorization Acknowledgment And Consent - DG9006
Page 2 of 2 www.compliancesystems.com
       

 

 

The original document is owned by Coastal Community Bank and this copy was created on Apr 15, 2020 11:17:43 AM.

 

 

 

EX1A-6 MAT CTRCT 21 tm2031356d1_ex6-8.htm EXHIBIT 6.8

Exhibit 6.8

 

SBA Loan #9978508005 Application #3306451794

 

LOAN AUTHORIZATION AND AGREEMENT (LA&A)

 

A PROPERLY SIGNED DOCUMENT IS

REQUIRED PRIOR TO ANY

DISBURSEMENT

 

CAREFULLY READ THE LA&A:
This document describes the terms and conditions of your loan. It is your responsibility to comply with ALL the terms and conditions of your loan.
 

 

SIGNING THE LA&A:
All borrowers must sign the LA&A.
. Sign your name exactly as it appears on the LA&A. If typed incorrectly, you should sign with the correct spelling.
  . If your middle initial appears on the signature line, sign with your middle initial.
  . If a suffix appears on the signature line, such as Sr. or Jr., sign with your suffix.
  . Corporate Signatories: Authorized representatives should sign the signature page.
     
   

Your signature represents your agreement to comply

    with the terms and conditions of the loan.
     

 

Ref 50 30 

 

 

 

SBA Loan #9978508005 Application #3306451794

 

U.S. Small Business Administration

 

Economic Injury Disaster Loan

 

LOAN AUTHORIZATION AND AGREEMENT

 

Date: 07.08.2020 (Effective Date)

 

On the above date, this Administration (SBA) authorized (under Section 7(b) of the Small Business Act, as amended) a Loan (SBA Loan #9978508005) to TriplePulse Inc (Borrower) of 3103 Nielson Way Suite D Santa Monica California 90405 in the amount of one hundred and fifty thousand and 00/100 Dollars ($150,000.00), upon the following conditions:

 

PAYMENT

 

·Installment payments, including principal and interest, of $731.00 Monthly, will begin Twelve (12) months from the date of the promissory Note. The balance of principal and interest will be payable Thirty (30) years from the date of the promissory Note.

 

INTEREST

 

·Interest will accrue at the rate of 3.75% per annum and will accrue only on funds actually advanced from the date(s) of each advance.

 

PAYMENT TERMS

 

·Each payment will be applied first to interest accrued to the date of receipt of each payment, and the balance, if any, will be applied to principal.

 

·Each payment will be made when due even if at that time the full amount of the Loan has not yet been advanced or the authorized amount of the Loan has been reduced.

 

COLLATERAL

 

·For loan amounts of greater than $25,000, Borrower hereby grants to SBA, the secured party hereunder, a continuing security interest in and to any and all “Collateral” as described herein to secure payment and performance of all debts, liabilities and obligations of Borrower to SBA hereunder without limitation, including but not limited to all interest, other fees and expenses (all hereinafter called “Obligations”). The Collateral includes the following property that Borrower now owns or shall acquire or create immediately upon the acquisition or creation thereof: all tangible and intangible personal property, including, but not limited to: (a) inventory, (b) equipment, (c) instruments, including promissory notes (d) chattel paper, including tangible chattel paper and electronic chattel paper, (e) documents, (f) letter of credit rights, (g) accounts, including health-care insurance receivables and credit card receivables, (h) deposit accounts, (i) commercial tort claims, (j) general intangibles, including payment intangibles and software and (k) as-extracted collateral as such terms may from time to time be defined in the Uniform Commercial Code. The security interest Borrower grants includes all accessions, attachments, accessories, parts, supplies and replacements for the Collateral, all products, proceeds and collections thereof and all records and data relating thereto.

 

·For loan amounts of $25,000 or less, SBA is not taking a security interest in any collateral.

 

SBA Form 1391 (5-00)  Ref 50 30 

 

Page 2 of 11

 

 

SBA Loan #9978508005 Application #3306451794

 

REQUIREMENTS RELATIVE TO COLLATERAL

 

·Borrower will not sell or transfer any collateral (except normal inventory turnover in the ordinary course of business) described in the "Collateral" paragraph hereof without the prior written consent of SBA.

 

USE OF LOAN PROCEEDS

 

·Borrower will use all the proceeds of this Loan solely as working capital to alleviate economic injury caused by disaster occurring in the month of January 31, 2020 and continuing thereafter and to pay Uniform Commercial Code (UCC) lien filing fees and a third-party UCC handling charge of $100 which will be deducted from the Loan amount stated above.

 

REQUIREMENTS FOR USE OF LOAN PROCEEDS AND RECEIPTS

 

·Borrower will obtain and itemize receipts (paid receipts, paid invoices or cancelled checks) and contracts for all Loan funds spent and retain these receipts for 3 years from the date of the final disbursement. Prior to each subsequent disbursement (if any) and whenever requested by SBA, Borrower will submit to SBA such itemization together with copies of the receipts.

 

·Borrower will not use, directly or indirectly, any portion of the proceeds of this Loan to relocate without the prior written permission of SBA. The law prohibits the use of any portion of the proceeds of this Loan for voluntary relocation from the business area in which the disaster occurred. To request SBA's prior written permission to relocate, Borrower will present to SBA the reasons therefore and a description or address of the relocation site. Determinations of (1) whether a relocation is voluntary or otherwise, and (2) whether any site other than the disaster-affected location is within the business area in which the disaster occurred, will be made solely by SBA.

 

·Borrower will, to the extent feasible, purchase only American-made equipment and products with the proceeds of this Loan.

 

·Borrower will make any request for a loan increase for additional disaster-related damages as soon as possible after the need for a loan increase is discovered. The SBA will not consider a request for a loan increase received more than two (2) years from the date of loan approval unless, in the sole discretion of the SBA, there are extraordinary and unforeseeable circumstances beyond the control of the borrower.

 

DEADLINE FOR RETURN OF LOAN CLOSING DOCUMENTS

 

·Borrower will sign and return the loan closing documents to SBA within 2 months of the date of this Loan Authorization and Agreement. By notifying the Borrower in writing, SBA may cancel this Loan if the Borrower fails to meet this requirement. The Borrower may submit and the SBA may, in its sole discretion, accept documents after 2 months of the date of this Loan Authorization and Agreement.

 

COMPENSATION FROM OTHER SOURCES

 

·Eligibility for this disaster Loan is limited to disaster losses that are not compensated by other sources. Other sources include but are not limited to: (1) proceeds of policies of insurance or other indemnifications, (2) grants or other reimbursement (including loans) from government agencies or private organizations, (3) claims for civil liability against other individuals, organizations or governmental entities, and (4) salvage (including any sale or re-use) of items of damaged property.

 

SBA Form 1391 (5-00)  Ref 50 30 

 

Page 3 of 11

 

 

SBA Loan #9978508005 Application #3306451794

 

·Borrower will promptly notify SBA of the existence and status of any claim or application for such other compensation, and of the receipt of any such compensation, and Borrower will promptly submit the proceeds of same (not exceeding the outstanding balance of this Loan) to SBA.

 

·Borrower hereby assigns to SBA the proceeds of any such compensation from other sources and authorizes the payor of same to deliver said proceeds to SBA at such time and place as SBA shall designate.

 

·SBA will in its sole discretion determine whether any such compensation from other sources is a duplication of benefits. SBA will use the proceeds of any such duplication to reduce the outstanding balance of this Loan, and Borrower agrees that such proceeds will not be applied in lieu of scheduled payments.

 

DUTY TO MAINTAIN HAZARD INSURANCE

 

·Within 12 months from the date of this Loan Authorization and Agreement the Borrower will provide proof of an active and in effect hazard insurance policy including fire, lightning, and extended coverage on all items used to secure this loan to at least 80% of the insurable value. Borrower will not cancel such coverage and will maintain such coverage throughout the entire term of this Loan. BORROWER MAY NOT BE ELIGIBLE FOR EITHER ANY FUTURE DISASTER ASSISTANCE OR SBA FINANCIAL ASSISTANCE IF THIS INSURANCE IS NOT MAINTAINED AS STIPULATED HEREIN THROUGHOUT THE ENTIRE TERM OF THIS LOAN. Please submit proof of insurance to: U.S. Small Business Administration, Office of Disaster Assistance, 14925 Kingsport Rd, Fort Worth, TX. 76155.

 

BOOKS AND RECORDS

 

·Borrower will maintain current and proper books of account in a manner satisfactory to SBA for the most recent 5 years until 3 years after the date of maturity, including extensions, or the date this Loan is paid in full, whichever occurs first. Such books will include Borrower's financial and operating statements, insurance policies, tax returns and related filings, records of earnings distributed and dividends paid and records of compensation to officers, directors, holders of 10% or more of Borrower's capital stock, members, partners and proprietors.

 

·Borrower authorizes SBA to make or cause to be made, at Borrower's expense and in such a manner and at such times as SBA may require: (1) inspections and audits of any books, records and paper in the custody or control of Borrower or others relating to Borrower's financial or business conditions, including the making of copies thereof and extracts therefrom, and (2) inspections and appraisals of any of Borrower's assets.

 

·Borrower will furnish to SBA, not later than 3 months following the expiration of Borrower's fiscal year and in such form as SBA may require, Borrower's financial statements.

 

·Upon written request of SBA, Borrower will accompany such statements with an 'Accountant's Review Report' prepared by an independent public accountant at Borrower's expense.

 

·Borrower authorizes all Federal, State and municipal authorities to furnish reports of examination, records and other information relating to the conditions and affairs of Borrower and any desired information from such reports, returns, files, and records of such authorities upon request of SBA.

 

SBA Form 1391 (5-00)  Ref 50 30 

 

Page 4 of 11

 

 

SBA Loan #9978508005 Application #3306451794

 

LIMITS ON DISTRIBUTION OF ASSETS

 

·Borrower will not, without the prior written consent of SBA, make any distribution of Borrower’s assets, or give any preferential treatment, make any advance, directly or indirectly, by way of loan, gift, bonus, or otherwise, to any owner or partner or any of its employees, or to any company directly or indirectly controlling or affiliated with or controlled by Borrower, or any other company.

 

EQUAL OPPORTUNITY REQUIREMENT

 

·If Borrower has or intends to have employees, Borrower will post SBA Form 722, Equal Opportunity Poster (copy attached), in Borrower's place of business where it will be clearly visible to employees, applicants for employment, and the general public.

 

DISCLOSURE OF LOBBYING ACTIVITIES

 

·Borrower agrees to the attached Certification Regarding Lobbying Activities BORROWER’S CERTIFICATIONS

 

Borrower certifies that:

 

·There has been no substantial adverse change in Borrower's financial condition (and organization, in case of a business borrower) since the date of the application for this Loan. (Adverse changes include, but are not limited to: judgment liens, tax liens, mechanic's liens, bankruptcy, financial reverses, arrest or conviction of felony, etc.)

 

·No fees have been paid, directly or indirectly, to any representative (attorney, accountant, etc.) for services provided or to be provided in connection with applying for or closing this Loan, other than those reported on SBA Form 5 Business Disaster Loan Application'; SBA Form 3501 COVID-19 Economic Injury Disaster Loan Application; or SBA Form 159, 'Compensation Agreement'. All fees not approved by SBA are prohibited.

 

·All representations in the Borrower's Loan application (including all supplementary submissions) are true, correct and complete and are offered to induce SBA to make this Loan.

 

·No claim or application for any other compensation for disaster losses has been submitted to or requested of any source, and no such other compensation has been received, other than that which Borrower has fully disclosed to SBA.

 

·Neither the Borrower nor, if the Borrower is a business, any principal who owns at least 50% of the Borrower, is delinquent more than 60 days under the terms of any: (a) administrative order; (b) court order; or (c) repayment agreement that requires payment of child support.

 

·Borrower certifies that no fees have been paid, directly or indirectly, to any representative (attorney, accountant, etc.) for services provided or to be provided in connection with applying for or closing this Loan, other than those reported on the Loan Application. All fees not approved by SBA are prohibited.
   
  If an Applicant chooses to employ an Agent, the compensation an Agent charges to and that is paid by the Applicant must bear a necessary and reasonable relationship to the services actually performed and must be comparable to those charged by other Agents in the geographical area. Compensation cannot be contingent on loan approval. In addition, compensation must not include any expenses which are deemed by SBA to be unreasonable for services actually performed or expenses actually incurred. Compensation must not include charges prohibited in 13 CFR 103 or SOP 50-30, Appendix 1. If the compensation exceeds $500 for a disaster home loan or $2,500 for a disaster business loan, Borrower must fill out the Compensation Agreement Form 159D which will be provided for Borrower upon request or can be found on the SBA website.

 

SBA Form 1391 (5-00)  Ref 50 30 

 

Page 5 of 11

 

 

SBA Loan #9978508005 Application #3306451794

 

·Borrower certifies, to the best of its, his or her knowledge and belief, that the certifications and representations in the attached Certification Regarding Lobbying are true, correct and complete and are offered to induce SBA to make this Loan.

 

CIVIL AND CRIMINAL PENALTIES

 

·Whoever wrongfully misapplies the proceeds of an SBA disaster loan shall be civilly liable to the Administrator in an amount equal to one-and-one half times the original principal amount of the loan under 15 U.S.C. 636(b). In addition, any false statement or misrepresentation to SBA may result in criminal, civil or administrative sanctions including, but not limited to: 1) fines, imprisonment or both, under 15 U.S.C. 645, 18 U.S.C. 1001, 18 U.S.C. 1014, 18 U.S.C. 1040, 18 U.S.C. 3571, and any other applicable laws; 2) treble damages and civil penalties under the False Claims Act, 31 U.S.C. 3729; 3) double damages and civil penalties under the Program Fraud Civil Remedies Act, 31 U.S.C. 3802; and 4) suspension and/or debarment from all Federal procurement and non-procurement transactions. Statutory fines may increase if amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.

 

RESULT OF VIOLATION OF THIS LOAN AUTHORIZATION AND AGREEMENT

 

·If Borrower violates any of the terms or conditions of this Loan Authorization and Agreement, the Loan will be in default and SBA may declare all or any part of the indebtedness immediately due and payable. SBA's failure to exercise its rights under this paragraph will not constitute a waiver.

 

·A default (or any violation of any of the terms and conditions) of any SBA Loan(s) to Borrower and/or its affiliates will be considered a default of all such Loan(s).

 

DISBURSEMENT OF THE LOAN

 

·Disbursements will be made by and at the discretion of SBA Counsel, in accordance with this Loan Authorization and Agreement and the general requirements of SBA.

 

·Disbursements may be made in increments as needed.

 

·Other conditions may be imposed by SBA pursuant to general requirements of SBA.

 

·Disbursement may be withheld if, in SBA's sole discretion, there has been an adverse change in Borrower's financial condition or in any other material fact represented in the Loan application, or if Borrower fails to meet any of the terms or conditions of this Loan Authorization and Agreement.

 

·NO DISBURSEMENT WILL BE MADE LATER THAN 6 MONTHS FROM THE DATE OF THIS LOAN AUTHORIZATION AND AGREEMENT UNLESS SBA, IN ITS SOLE DISCRETION, EXTENDS THIS DISBURSEMENT PERIOD.

 

SBA Form 1391 (5-00)  Ref 50 30 

 

Page 6 of 11

 

 

SBA Loan #9978508005 Application #3306451794

 

PARTIES AFFECTED

 

·This Loan Authorization and Agreement will be binding upon Borrower and Borrower's successors and assigns and will inure to the benefit of SBA and its successors and assigns.

 

RESOLUTION OF BOARD OF DIRECTORS

 

·Borrower shall, within 180 days of receiving any disbursement of this Loan, submit the appropriate SBA Certificate and/or Resolution to the U.S. Small Business Administration, Office of Disaster Assistance, 14925 Kingsport Rd, Fort Worth, TX. 76155.

 

ENFORCEABILITY

 

·This Loan Authorization and Agreement is legally binding, enforceable and approved upon Borrower’s signature, the SBA’s approval and the Loan Proceeds being issued to Borrower by a government issued check or by electronic debit of the Loan Proceeds to Borrower’ banking account provided by Borrower in application for this Loan.

 

  /s/ James E. Rivera
  James E. Rivera
  Associate Administrator
  U.S. Small Business Administration

 

The undersigned agree(s) to be bound by the terms and conditions herein during the term of this Loan, and further agree(s) that no provision stated herein will be waived without prior written consent of SBA. Under penalty of perjury of the United States of America, I hereby certify that I am authorized to apply for and obtain a disaster loan on behalf of Borrower, in connection with the effects of the COVID-19 emergency.

 

  TriplePulse Inc   
      
  /s/ Christopher Thompson  Date: 07.08.2020
  Christopher Thompson, Owner/Officer   

 

Note: Corporate Borrowers must execute Loan Authorization and Agreement in corporate name, by a duly authorized officer. Partnership Borrowers must execute in firm name, together with signature of a general partner. Limited Liability entities must execute in the entity name by the signature of the authorized managing person.

 

SBA Form 1391 (5-00)  Ref 50 30 

 

Page 7 of 11

 

 

SBA Loan #9978508005 Application #3306451794

 

CERTIFICATION REGARDING LOBBYING

 

For loans over $150,000, Congress requires recipients to agree to the following:

 

1.Appropriated funds may NOT be used for lobbying.

 

2.Payment of non-federal funds for lobbying must be reported on Form SF-LLL.

 

3.Language of this certification must be incorporated into all contracts and subcontracts exceeding $100,000.

 

4.All contractors and subcontractors with contracts exceeding $100,000 are required to certify and disclose accordingly.

 

SBA Form 1391 (5-00)   

 

Page 8 of 11

 

 

SBA Loan #9978508005 Application #3306451794

 

CERTIFICATION REGARDING
LOBBYING

 

Certification for Contracts, Grants, Loans, and Cooperative
Agreements

 

Borrower and all Guarantors (if any) certify, to the best of its, his or her knowledge and belief, that:

 

(1)            No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, or modification of any Federal contract, grant, loan, or cooperative agreement.

 

(2)            If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal loan, the undersigned shall complete and submit Standard Form LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions.

 

(3)            The undersigned shall require that the language of this certification be included in the award documents for all sub-awards at all tiers (including subcontracts, sub-grants, and contracts under grants, loans, and co-operative agreements) and that all sub-recipients shall certify and disclose accordingly.

 

This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000.00 and not more than $100,000.00 for each such failure.

 

SBA Form 1391 (5-00)   

 

Page 9 of 11

 

 

 
 

This Statement of Policy is Posted

 

In Accordance with Regulations of the

 

Small Business Administration

 

This Organization Practices

 

Equal Employment Opportunity

 

 

We do not discriminate on the ground of race, color, religion, sex, age, disability or national origin in the hiring, retention, or promotion of employees; nor in determining their rank, or the compensation or fringe benefits paid them.

 

This Organization Practices

 

Equal Treatment of Clients

 

We do not discriminate on the basis of race, color, religion, sex, marital status, disability, age or national origin in services or accommodations offered or provided to our employees, clients or guests.

 

These policies and this notice comply with regulations of the

United States Government.

 

   Please report violations of this policy to:

 

Administrator

Small Business Administration

   Washington, D.C. 20416

 

In order for the public and your employees to know their rights under 13 C.F.R Parts 112, 113, and 117, Small Business Administration Regulations, and to conform with the directions of the Administrator of SBA, this poster must be displayed where it is clearly visible to employees, applicants for employment, and the public.

 

Failure to display the poster as required in accordance with SBA Regulations may be considered evidence of noncompliance and subject you to the penalties contained in those Regulations.

 

SBA FORM 722 (10-02) REF: SOP 9030 PREVIOUS EDITIONS ARE OBSOLETE U.S. GOVERNMENT PRINTING OFFICE: 1994 0- 153-346
This form was electronically produced by Elite Federal Inc.  

 

 

Page 10 of 11

 

 

 
 
 

Esta Declaración De Principios Se Publica

 

De Acuerdo Con Los Reglamentos De La

 

Agencia Federal Para el Desarrollo de la Pequeña Empresa

 

Esta Organización Practica

 

Igual Oportunidad De Empleo

 

 

No discriminamos por razón de raza, color, religión, sexo, edad, discapacidad o nacionalidad en el empleo, retención o ascenso de personal ni en la determinación de sus posiciones, salarios o beneficios marginales.

 

Esta Organización Practica

 

Igualdad En El Trato A Su Clientela

 

No discriminamos por razón de raza, color, religión, sexo, estado civil, edad, discapacidad o nacionalidad en los servicios o facilidades provistos para nuestros empleados, clientes o visitantes.

 

Estos principios y este aviso cumplen con los reglamentos del Gobierno de los Estados Unidos de América.

 

Favor de informar violaciones a lo aquí indicado a:

 

Administrador

Agencia Federal Para el Desarrollo de la

Pequeña Empresa

Washington, D.C. 20416

 

A fin de que el público y sus empleados conozcan sus derechos según lo expresado en las Secciones 112, 113 y 117 del Código de Regulaciaones Federales No. 13, de los Reglamentos de la Agencja Federal Para el Desarrollo de la Pequeña Empresa y de acuerdo con las instrucciones del Administrador de dicha agencia, esta notificación debe fijarse en un lugar claramente visible para los empleados, solicitantes de empleo y público en general. No fijar esta notificación según lo requerido por los reglamentos de la Agencia Federal Para el Desarrollo de la Pequeña Empresa, puede ser interpretado como evidencia de falta de cumplimiento de los mismos y conllevará la ejecución de los castigos impuestos en estos reglamentos.

 

SBA FORM 722 (10-02) REF: SOP 9030 PREVIOUS EDITIONS ARE OBSOLETE U.S. GOVERNMENT PRINTING OFFICE: 1994 0- 153-346
This form was electronically produced by Elite Federal Inc.  

 

 

Page 11 of 11

 

 

SBA Loan #9978508005 Application #3306451794

 

NOTE

 

A PROPERLY SIGNED NOTE IS

REQUIRED PRIOR TO ANY

DISBURSEMENT

 

CAREFULLY READ THE NOTE: It is your promise to repay the loan.
     
  The Note is pre-dated. DO NOT CHANGE THE DATE OF THE NOTE.
  LOAN PAYMENTS will be due as stated in the Note.
  ANY CORRECTIONS OR UNAUTHORIZED MARKS MAY VOID THIS DOCUMENT.

 

SIGNING THE NOTE: All borrowers must sign the Note.
  •  Sign your name exactly as it appears on the Note. If typed incorrectly, you should sign with the correct spelling.
  If your middle initial appears on the signature line, sign with your middle initial.
  •  If a suffix appears on the signature line, such as Sr. or Jr., sign with your suffix.
  Corporate Signatories: Authorized representatives should sign the signature page.

 

 

 

SBA Loan #9978508005 Application #3306451794

 

 

U.S. Small Business Administration

 

NOTE

 

(SECURED DISASTER LOANS)

Date: 07.08.2020
Loan Amount: $150,000.00
Annual Interest Rate: 3.75%

 

SBA Loan # 9978508005 Application #3306451794

 

1.PROMISE TO PAY: In return for a loan, Borrower promises to pay to the order of SBA the amount of one hundred and fifty thousand and 00/100 Dollars ($150,000.00), interest on the unpaid principal balance, and all other amounts required by this Note.

 

2.DEFINITIONS: A) “Collateral” means any property taken as security for payment of this Note or any guarantee of this Note. B) “Guarantor” means each person or entity that signs a guarantee of payment of this Note. C) “Loan Documents” means the documents related to this loan signed by Borrower, any Guarantor, or anyone who pledges collateral.

 

3.PAYMENT TERMS: Borrower must make all payments at the place SBA designates. Borrower may prepay this Note in part or in full at any time, without notice or penalty. Borrower must pay principal and interest payments of $731.00 every month beginning Twelve (12) months from the date of the Note. SBA will apply each installment payment first to pay interest accrued to the day SBA receives the payment and will then apply any remaining balance to reduce principal. All remaining principal and accrued interest is due and payable Thirty (30) years from the date of the Note.

 

4.DEFAULT: Borrower is in default under this Note if Borrower does not make a payment when due under this Note, or if Borrower: A) Fails to comply with any provision of this Note, the Loan Authorization and Agreement, or other Loan Documents; B) Defaults on any other SBA loan; C) Sells or otherwise transfers, or does not preserve or account to SBA’s satisfaction for, any of the Collateral or its proceeds; D) Does not disclose, or anyone acting on their behalf does not disclose, any material fact to SBA; E) Makes, or anyone acting on their behalf makes, a materially false or misleading representation to SBA; F) Defaults on any loan or agreement with another creditor, if SBA believes the default may materially affect Borrower’s ability to pay this Note; G) Fails to pay any taxes when due; H) Becomes the subject of a proceeding under any bankruptcy or insolvency law; I) Has a receiver or liquidator appointed for any part of their business or property; J) Makes an assignment for the benefit of creditors; K) Has any adverse change in financial condition or business operation that SBA believes may materially affect Borrower’s ability to pay this Note; L) Dies; M) Reorganizes, merges, consolidates, or otherwise changes ownership or business structure without SBA’s prior written consent; or, N) Becomes the subject of a civil or criminal action that SBA believes may materially affect Borrower’s ability to pay this Note.

 

5.SBA’S RIGHTS IF THERE IS A DEFAULT: Without notice or demand and without giving up any of its rights, SBA may: A) Require immediate payment of all amounts owing under this Note; B) Have recourse to collect all amounts owing from any Borrower or Guarantor (if any); C) File suit and obtain judgment; D) Take possession of any Collateral; or E) Sell, lease, or otherwise dispose of, any Collateral at public or private sale, with or without advertisement.

 

6.SBA’S GENERAL POWERS: Without notice and without Borrower’s consent, SBA may: A) Bid on or buy the Collateral at its sale or the sale of another lienholder, at any price it chooses; B) Collect amounts due under this Note, enforce the terms of this Note or any other Loan Document, and preserve or dispose of the Collateral. Among other things, the expenses may include payments for property taxes, prior liens, insurance, appraisals, environmental remediation costs, and reasonable attorney’s fees and costs. If SBA incurs such expenses, it may demand immediate reimbursement from Borrower or add the expenses to the principal balance; C) Release anyone obligated to pay this Note; D) Compromise, release, renew, extend or substitute any of the Collateral; and E) Take any action necessary to protect the Collateral or collect amounts owing on this Note.

 

SBA Form 1391 (5-00)   

 

Page 2 of 3

 

 

SBA Loan #9978508005 Application #3306451794

 

7.FEDERAL LAW APPLIES: When SBA is the holder, this Note will be interpreted and enforced under federal law, including SBA regulations. SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and other purposes. By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability. As to this Note, Borrower may not claim or assert against SBA any local or state law to deny any obligation, defeat any claim of SBA, or preempt federal law.

 

8.GENERAL PROVISIONS: A) All individuals and entities signing this Note are jointly and severally liable. B) Borrower waives all suretyship defenses. C) Borrower must sign all documents required at any time to comply with the Loan Documents and to enable SBA to acquire, perfect, or maintain SBA’s liens on Collateral. D) SBA may exercise any of its rights separately or together, as many times and in any order it chooses. SBA may delay or forgo enforcing any of its rights without giving up any of them. E) Borrower may not use an oral statement of SBA to contradict or alter the written terms of this Note. F) If any part of this Note is unenforceable, all other parts remain in effect. G) To the extent allowed by law, Borrower waives all demands and notices in connection with this Note, including presentment, demand, protest, and notice of dishonor. Borrower also waives any defenses based upon any claim that SBA did not obtain any guarantee; did not obtain, perfect, or maintain a lien upon Collateral; impaired Collateral; or did not obtain the fair market value of Collateral at a sale. H) SBA may sell or otherwise transfer this Note.

 

9.MISUSE OF LOAN FUNDS: Anyone who wrongfully misapplies any proceeds of the loan will be civilly liable to SBA for one and one- half times the proceeds disbursed, in addition to other remedies allowed by law.

 

10.BORROWER’S NAME(S) AND SIGNATURE(S): By signing below, each individual or entity acknowledges and accepts personal obligation and full liability under the Note as Borrower.

 

  TriplePulse Inc
   
  /s/ Christopher Thompson
  Christopher Thompson, Owner/Officer

 

SBA Form 1391 (5-00)   

 

Page 3 of 3

 

  

SBA Loan #9978508005 Application #3306451794

 

SECURITY AGREEMENT

 

Read this document carefully. It grants the SBA a security interest (lien) in all the property described in paragraph 4.

 

This document is predated. DO NOT CHANGE THE DATE ON THIS DOCUMENT.

 

 

 

SBA Loan #9978508005 Application #3306451794

 

 

 

U.S. Small Business Administration

 SECURITY AGREEMENT

 

 

SBA Loan #: 9978508005
Borrower: TriplePulse Inc
Secured Party: The Small Business Administration, an Agency of the U.S. Government
Date: 07.08.2020
Note Amount: $150,000.00

 

1.DEFINITIONS.

 

Unless otherwise specified, all terms used in this Agreement will have the meanings ascribed to them under the Official Text of the Uniform Commercial Code, as it may be amended from time to time, (“UCC”). “SBA” means the Small Business Administration, an Agency of the U.S. Government.

 

2.GRANT OF SECURITY INTEREST.

 

For value received, the Borrower grants to the Secured Party a security interest in the property described below in paragraph 4 (the “Collateral”).

 

3.OBLIGATIONS SECURED.

 

This Agreement secures the payment and performance of: (a) all obligations under a Note dated 07.08.2020, made by TriplePulse Inc , made payable to Secured Lender, in the amount of $150,000.00 (“Note”), including all costs and expenses (including reasonable attorney’s fees), incurred by Secured Party in the disbursement, administration and collection of the loan evidenced by the Note; (b) all costs and expenses (including reasonable attorney’s fees), incurred by Secured Party in the protection, maintenance and enforcement of the security interest hereby granted; (c) all obligations of the Borrower in any other agreement relating to the Note; and (d) any modifications, renewals, refinancings, or extensions of the foregoing obligations.

 

SBA Form 1059 (09-19) Previous Editions are obsolete. 

 

Page 2 of 5

 

 

SBA Loan #9978508005 Application #3306451794

 

4.COLLATERAL DESCRIPTION.

 

The Collateral in which this security interest is granted includes the following property that Borrower now owns or shall acquire or create immediately upon the acquisition or creation thereof: all tangible and intangible personal property, including, but not limited to: (a) inventory, (b) equipment, (c) instruments, including promissory notes (d) chattel paper, including tangible chattel paper and electronic chattel paper, (e) documents, (f) letter of credit rights, (g) accounts, including health-care insurance receivables and credit card receivables, (h) deposit accounts, (i) commercial tort claims, (j) general intangibles, including payment intangibles and software and (k) as-extracted collateral as such terms may from time to time be defined in the Uniform Commercial Code. The security interest Borrower grants includes all accessions, attachments, accessories, parts, supplies and replacements for the Collateral, all products, proceeds and collections thereof and all records and data relating thereto.

 

5.RESTRICTIONS ON COLLATERAL TRANSFER.

 

Borrower will not sell, lease, license or otherwise transfer (including by granting security interests, liens, or other encumbrances in) all or any part of the Collateral or Borrower’s interest in the Collateral without Secured Party’s written or electronically communicated approval, except that Borrower may sell inventory in the ordinary course of business on customary terms. Borrower may collect and use amounts due on accounts and other rights to payment arising or created in the ordinary course of business, until notified otherwise by Secured Party in writing or by electronic communication.

 

6.MAINTENANCE AND LOCATION OF COLLATERAL; INSPECTION; INSURANCE.

 

Borrower must promptly notify Secured Party by written or electronic communication of any change in location of the Collateral, specifying the new location. Borrower hereby grants to Secured Party the right to inspect the Collateral at all reasonable times and upon reasonable notice. Borrower must: (a) maintain the Collateral in good condition; (b) pay promptly all taxes, judgments, or charges of any kind levied or assessed thereon; (c) keep current all rent or mortgage payments due, if any, on premises where the Collateral is located; and (d) maintain hazard insurance on the Collateral, with an insurance company and in an amount approved by Secured Party (but in no event less than the replacement cost of that Collateral), and including such terms as Secured Party may require including a Lender’s Loss Payable Clause in favor of Secured Party. Borrower hereby assigns to Secured Party any proceeds of such policies and all unearned premiums thereon and authorizes and empowers Secured Party to collect such sums and to execute and endorse in Borrower’s name all proofs of loss, drafts, checks and any other documents necessary for Secured Party to obtain such payments.

 

7.CHANGES TO BORROWER’S LEGAL STRUCTURE, PLACE OF BUSINESS, JURISDICTION OF ORGANIZATION, OR NAME.

 

Borrower must notify Secured Party by written or electronic communication not less than 30 days before taking any of the following actions: (a) changing or reorganizing the type of organization or form under which it does business; (b) moving, changing its place of business or adding a place of business; (c) changing its jurisdiction of organization; or (d) changing its name. Borrower will pay for the preparation and filing of all documents Secured Party deems necessary to maintain, perfect and continue the perfection of Secured Party’s security interest in the event of any such change.

 

8.PERFECTION OF SECURITY INTEREST.

 

Borrower consents, without further notice, to Secured Party’s filing or recording of any documents necessary to perfect, continue, amend or terminate its security interest. Upon request of Secured Party, Borrower must sign or otherwise authenticate all documents that Secured Party deems necessary at any time to allow Secured Party to acquire, perfect, continue or amend its security interest in the Collateral. Borrower will pay the filing and recording costs of any documents relating to Secured Party’s security interest. Borrower ratifies all previous filings and recordings, including financing statements and notations on certificates of title. Borrower will cooperate with Secured Party in obtaining a Control Agreement satisfactory to Secured Party with respect to any Deposit Accounts or Investment Property, or in otherwise obtaining control or possession of that or any other Collateral.

 

SBA Form 1059 (09-19) Previous Editions are obsolete. 

 

Page 3 of 5

 

 

SBA Loan #9978508005 Application #3306451794

 

9.DEFAULT.

 

Borrower is in default under this Agreement if: (a) Borrower fails to pay, perform or otherwise comply with any provision of this Agreement; (b) Borrower makes any materially false representation, warranty or certification in, or in connection with, this Agreement, the Note, or any other agreement related to the Note or this Agreement; (c) another secured party or judgment creditor exercises its rights against the Collateral; or (d) an event defined as a “default” under the Obligations occurs. In the event of default and if Secured Party requests, Borrower must assemble and make available all Collateral at a place and time designated by Secured Party. Upon default and at any time thereafter, Secured Party may declare all Obligations secured hereby immediately due and payable, and, in its sole discretion, may proceed to enforce payment of same and exercise any of the rights and remedies available to a secured party by law including those available to it under Article 9 of the UCC that is in effect in the jurisdiction where Borrower or the Collateral is located. Unless otherwise required under applicable law, Secured Party has no obligation to clean or otherwise prepare the Collateral for sale or other disposition and Borrower waives any right it may have to require Secured Party to enforce the security interest or payment or performance of the Obligations against any other person.

 

10.FEDERAL RIGHTS.

 

When SBA is the holder of the Note, this Agreement will be construed and enforced under federal law, including SBA regulations. Secured Party or SBA may use state or local procedures for filing papers, recording documents, giving notice, enforcing security interests or liens, and for any other purposes. By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax or liability. As to this Agreement, Borrower may not claim or assert any local or state law against SBA to deny any obligation, defeat any claim of SBA, or preempt federal law.

 

11.GOVERNING LAW.

 

Unless SBA is the holder of the Note, in which case federal law will govern, Borrower and Secured Party agree that this Agreement will be governed by the laws of the jurisdiction where the Borrower is located, including the UCC as in effect in such jurisdiction and without reference to its conflicts of laws principles.

 

12.SECURED PARTY RIGHTS.

 

All rights conferred in this Agreement on Secured Party are in addition to those granted to it by law, and all rights are cumulative and may be exercised simultaneously. Failure of Secured Party to enforce any rights or remedies will not constitute an estoppel or waiver of Secured Party’s ability to exercise such rights or remedies. Unless otherwise required under applicable law, Secured Party is not liable for any loss or damage to Collateral in its possession or under its control, nor will such loss or damage reduce or discharge the Obligations that are due, even if Secured Party’s actions or inactions caused or in any way contributed to such loss or damage.

 

13.SEVERABILITY.

 

If any provision of this Agreement is unenforceable, all other provisions remain in effect.

 

SBA Form 1059 (09-19) Previous Editions are obsolete. 

 

Page 4 of 5

 

 

SBA Loan #9978508005 Application #3306451794

 

14.BORROWER CERTIFICATIONS.

 

Borrower certifies that: (a) its Name (or Names) as stated above is correct; (b) all Collateral is owned or titled in the Borrower’s name and not in the name of any other organization or individual; (c) Borrower has the legal authority to grant the security interest in the Collateral; (d) Borrower’s ownership in or title to the Collateral is free of all adverse claims, liens, or security interests (unless expressly permitted by Secured Party); (e) none of the Obligations are or will be primarily for personal, family or household purposes; (f) none of the Collateral is or will be used, or has been or will be bought primarily for personal, family or household purposes; (g) Borrower has read and understands the meaning and effect of all terms of this Agreement.

 

15.BORROWER NAME(S) AND SIGNATURE(S).

 

By signing or otherwise authenticating below, each individual and each organization becomes jointly and severally obligated as a Borrower under this Agreement.

 

TriplePulse Inc    
     
/s/ Christopher Thompson   Date: 07.08.2020
Christopher Thompson, Owner/Officer    

 

SBA Form 1059 (09-19) Previous Editions are obsolete. 

 

Page 5 of 5

 

EX1A-6 MAT CTRCT 22 tm2031356d1_ex6-9.htm EXHIBIT 6.9

Exhibit 6.9

 

HThis warrant is not held at Carta and is represented on a paper warrant. This warrant was created from a 50-for-1 forward stock split on August 7, 2019.

 

Warrant holder

  

Name StartEngine Fund I, L.P.
Email howard@startengine.com
Status Outstanding

 

Quantities

  

Original quantity 2,083 warrants
Exercised quantity 0 warrants
Remaining quantity 2,083 warrants
Purchase price No purchase price entered
Exercise price $0.60 (USD)
Exercises into Series Seed-B Preferred

 

Issuer

  

Issued by TriplePulse, Inc, DBA TruBrain
Issue date April 27, 2013
Expires April 27, 2023

 

Exercise history

  

This warrant has not yet been exercised.

Compliance

  

Federal exemption Section 4(a)(2)
State exemption None entered
State of residency None entered

 

Learn about exemptions ›

   

 

 

 

Exercise legend

  

No legend has been included.

Approvals

  

K Initiated by Laszlo Kupan
Approved March 15, 2017 L df851208bd964f3bb68b9c4193db39be
   
Signed by Chris Thompson
Approved May 8, 2017 L edae5664dee04272b69099565eee5aeb
   
Received by StartEngine Fund I, L.P. (pending)
Waiting for approval

  

Documents and notes

  

Form of warrant P IRA - Series Seed - Start Engine .pdf
   
Notes Stock split for on August , 2
Stock split 2 for on August , 2

 

 

 

 

INVESTORS’ RIGHTS AGREEMENT

 

This Investors’ Rights Agreement (this “Agreement”) is made and entered into as of December 5, 2012, by and among TriplePulse, Inc., a Delaware corporation (the “Company”), the parties listed on Exhibit A attached hereto (the “Investors”) and the parties listed on Exhibit B attached hereto (the “Key Holders”).

 

RECITALS

 

A.          The Investors have agreed to purchase from the Company, and the Company has agreed to sell to the Investors, shares of the Company’s Series Seed Preferred Stock (the “Shares”) on the terms and conditions set forth in that certain Series Seed Preferred Stock Purchase Agreement dated of even date herewith by and among the Company and the Investors, as amended from time to time (the “Series Seed Agreement”).

 

B.           It is a condition to the closing of the sale of the Shares that the parties hereto execute and deliver this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the parties hereto agree as follows:

 

1.           COVENANTS OF THE COMPANY.

 

1.1            Information Rights.

 

(a)       Basic Financial Information. The Company will furnish to each Investor holding more than 10,000 shares of Preferred Stock (a “Major Investor”) and any entity which requires such information pursuant to its organizational documents when available (1) annual unaudited financial statements for each fiscal year of the Company, including an unaudited balance sheet as of the end of such fiscal year, an unaudited statement of operations and an unaudited statement of cash flows of the Company for such year, all prepared in accordance with generally accepted accounting principles and practices; and (2) quarterly unaudited financial statements for each fiscal quarter of the Company (except the last quarter of the Company’s fiscal year), including an unaudited balance sheet as of the end of such fiscal year, an unaudited statement of operations and an unaudited statement of cash flows of the Company for such quarter, all prepared in accordance with generally accepted accounting principles and practices, subject to changes resulting from normal year-end audit adjustments. If the Company has audited records of any of the foregoing, it shall provide those in lieu of the unaudited versions.

 

(b)       Confidentiality. Anything in this Agreement to the contrary notwithstanding, no Investor by reason of this Agreement shall have access to any trade secrets or confidential information of the Company. The Company shall not be required to comply with any information rights in respect of any Investor whom the Company reasonably determines to be a competitor or an officer, employee, director or holder of ten percent (10%) or more of a competitor. Each Investor agrees that such investor will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement other than to any of the Investor’s attorneys, accountants, consultants, and other professionals, to the extent necessary to obtain their services in connection with monitoring the Investor’s investment in the Company.

  

-1-

 

 

(c)           Inspection Rights. The Company shall permit each Major Investor to visit and inspect the Company’s properties, to examine its books of account and records and to discuss the Company’s affairs, finances and accounts with its officers, all at such reasonable times as may be requested by such Investor.

 

1.2            Additional Rights; Warrant.

 

(a)       In the event that the Company issues securities in its next equity financing after the date hereof (the “Next Financing”) which have (a) rights, preferences or privileges that are more favorable than the terms of the Shares, such as price based anti-dilution protection or (b) provides all such future investors other contractual terms such as preemptive rights or registration rights, the Company shall provide substantially equivalent rights to the Investors with respect to the Shares (with appropriate adjustment for economic terms or other contractual rights, subject to such Investor’s execution of any documents, including, if applicable, investors’ rights, co-sale, voting and other agreements, executed by the investors purchasing securities in the Next Financing (such documents referred to herein as the “Next Financing Documents”). Any Major Investor will remain a Major Investor for all purposes in the Next Financing Documents to the extent such concept exists. Notwithstanding anything herein to the contrary, upon the execution and delivery of the Next Financing Documents by Investors holding a majority of (the then outstanding Shares held by all Investors, this Agreement (excluding any then-existing obligations) shall be amended and restated by and into such Next Financing Documents.

 

(b)       Upon the Closing of the Next Financing, the Company shall issue to Start Engine, LLC a warrant to purchase five percent (5%) of the number of shares issued in the Next Financing (the “Warrant”) at the price per share of the shares issued in the Next Financing. The Warrant shall have a term of 10 years and shall contain a standard ‘cashless exercise’ provision.

 

1.3            Assignment of Company’s Preemptive Rights. Pursuant to the right of first refusal set forth in the Company’s Bylaws or Stock Purchase Agreement, the Company has a right of first refusal with respect to certain proposed transfers of the Company’s outstanding securities by the Key Holders. In the event the Company elects not to exercise its right of first refusal pursuant to the Company’s Bylaws, by contract or otherwise with respect to a proposed transfer of the Company’s outstanding securities, the Company shall assign such right of first refusal to each Major Investor. In the event of such assignment, each Major Investor shall have a right to purchase that portion of the securities proposed to be transferred equal to the ratio of (a) the number of shares of the Company’s Common Stock issued or issuable upon conversion of the Shares owned by such Major Investor, to (b) the number of shares of the Company’s Common Stock issued or issuable upon conversion of the Shares owned by all Major Investors.

 

-2-

 

 

2.           RESTRICTIONS ON TRANSFER.

 

2.1            Limitations on Disposition. Each person owning of record shares of Common Stock of the Company issued or issuable pursuant to the conversion of the Shares and any shares of Common Stock of the Company issued as a dividend or other distribution with respect thereto or in exchange therefor or in replacement thereof (collectively, the “Securities”) or any assignee of record of Securities (each such person, a “Holder”) hereby agrees not to make any disposition of all or any portion of any Securities unless and until:

 

(a)       there is then in effect a registration statement under the Securities Act of 1933. as amended (the “Securities Act”), covering such proposed disposition and such disposition is made in accordance with such registration statement; or

 

(b)       such Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a statement of the circumstances surrounding the proposed disposition, and, at the expense of such Holder or its transferee, with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of such securities under the Securities Act.

 

Notwithstanding the provisions of Sections 2.1(a) and (b) above, no such registration statement or opinion of counsel shall be required: (i) for any transfer of any Securities in compliance with SEC Rule 144 or Rule 144A, or (ii) for any transfer of any Securities by a Holder that is a partnership, limited liability company, a corporation or a venture capital fund to (A) a partner of such partnership, a member of such limited liability company or stockholder of such corporation, (B) an affiliate of such partnership, limited liability company or corporation (including, without limitation, any affiliated investment fund of such Holder), (C) a retired partner of such partnership or a retired member of such limited liability company, (D) the estate of any such partner, member or stockholder, or (iii) for the transfer by gift, will or intestate succession by any Holder to his or her spouse or lineal descendants or ancestors or any trust for any of the foregoing; provided that in the case of clauses (ii) and (iii) the transferee agrees in writing to be subject to the terms of this Agreement to the same extent as if the transferee were an original Investor hereunder and in the case of clause (iii) the transfer was without additional consideration or at no greater than cost.

 

2.2            “Market Stand-Off” Agreement. Each Holder hereby agrees that it shall not, to the extent requested by the Company or an underwriter of securities of the Company, sell or otherwise transfer or dispose of any Securities or other shares of stock of the Company then owned by such Holder (other than to donees or partners of the Holder who agree to be similarly bound) for up to one hundred eighty (180) days following the effective date of any registration statement of the Company filed under the Securities Act; provided however that, if during the last seventeen (17) days of the restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to the expiration of the restricted period the Company announces that it will release earnings results during the 16-day period beginning on the last day of the restricted period, and if the Company’s securities are listed on the Nasdaq Stock Market and Rule 2711 thereof applies, then the restrictions imposed by this Section 2.2 shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. In no event will the restricted period extend beyond two hundred fifteen (215) days after the effective date of the registration statement.

 

-3-

 

 

For purposes of this Section 2.2, the term “Company” shall include any wholly-owned subsidiary of the Company into which the Company merges or consolidates. To enforce the foregoing covenant, the Company shall have the right to place restrictive legends on the certificates representing the shares subject to this Section 2.2 and to impose stop transfer instructions with respect to the Securities and such other shares of stock of each Holder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period. Each Holder further agrees to enter into any agreement reasonably required by the underwriters to implement the foregoing within any reasonable timeframe so requested.

 

3.           PARTICIPATION RIGHT.

 

3.1            General. Each Major Investor has the right of first refusal to purchase up to three times (3x) of such Major Investor’s Pro Rata Share (as defined below) of all (or any part) of any New Securities (as defined in Section 3.2 below) that the Company may from time to time issue after the date of this Agreement, provided, however, such Major Investor shall have no right to purchase any such New Securities if such Major Investor cannot demonstrate to the Company’s reasonable satisfaction that such Major Investor is at the time of the proposed issuance of such New Securities an “accredited investor” as such term is defined in Regulation D under the Securities Act. A Major Investor’s “Pro Rata Share” for purposes of this right of first refusal is the ratio of (a) the number of shares of the Company’s Common Stock issued or issuable upon conversion of the Shares owned by such Major Investor, to (b) a number of shares of Common Stock of the Company equal to the sum of (1) the total number of shares of Common Stock of the Company then outstanding plus (2) the total number of shares of Common Stock of the Company into which all then outstanding shares of Preferred Stock of the Company are then convertible plus (3) the number of shares of Common Stock of the Company reserved for issuance under any stock purchase and stock option plans of the Company and outstanding warrants.

 

3.2            New Securities.New Securities” shall mean any Common Stock or Preferred Stock of the Company, whether now authorized or not, and rights, options or warrants to purchase such Common Stock or Preferred Stock, and securities of any type whatsoever that are, or may become, convertible or exchangeable into such Common Stock or Preferred Stock; provided, however, that the term “New Securities” does not include: (a) shares of Common Stock issued or issuable upon conversion of the outstanding shares of all the series of the Preferred Stock; (b) shares of Common Stock or Preferred Stock issuable upon exercise of any options, warrants or rights to purchase any securities of the Company outstanding as of the date of this Agreement and any securities issuable upon the conversion thereof; (c) shares of Common Stock or Preferred Stock issued in connection with any stock split or stock dividend or recapitalization; (d) shares of Common Stock (or options, warrants or rights therefor) granted or issued hereafter to employees, officers, directors, contractors, consultants or advisers to, the Company or any subsidiary of the Company pursuant to incentive agreements, stock purchase or stock option plans, stock bonuses or awards, warrants, contracts or other arrangements that are approved by the Company’s Board of Directors (the “Board”); (e) shares of the Company’s Series Seed Preferred Stock issued pursuant to the Series Seed Agreement; (f) any other shares of Common Stock or Preferred Stock (and/or options or warrants therefor) issued or issuable primarily for other than equity financing purposes and approved by the Board; and (g) shares of Common Stock issued or issuable by the Company to the public pursuant to a registration statement filed under the Securities Act.

 

-4-

 

 

3.3            Procedures. In the event that the Company proposes to undertake an issuance of New Securities, it shall give to each Major Investor a written notice of its intention to issue New Securities (the “Notice”), describing the type of New Securities and the price and the general terms upon which the Company proposes to issue such New Securities given in accordance with Section 5.2. Each Major Investor shall have ten (10) days from the date such Notice is effective, as determined pursuant to Section 5.2 based upon the manner or method of notice, to agree in writing to purchase such Major Investor’s Pro Rata Share of such New Securities for the price and upon the general terms specified in the Notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased (not to exceed such Major Investor’s Pro Rata Share).

 

3.4            Failure to Exercise. In the event that the Major Investors fail to exercise in full the right of first refusal within such ten (10) day period, then the Company shall have one hundred twenty (120) days thereafter to sell the New Securities with respect to which the Major Investors’ rights of first refusal hereunder were not exercised, at a price and upon general terms not materially more favorable to the purchasers thereof than specified in the Company’s Notice to the Major Investors. In the event that the Company has not issued and sold the New Securities within such one hundred twenty (120) day period, then the Company shall not thereafter issue or sell any New Securities without again first offering such New Securities to the Major Investors pursuant to this Section 3.

 

4.           GENERAL PROVISIONS.

 

4.1            Amendment and Waiver of Rights. Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Investors (and/or any of their permitted successors or assigns) holding Shares representing and/or convertible into a majority of all the Investors’ Shares (as defined below). As used herein, the term “Investors’ Shares” shall mean the shares of Common Stock then issuable upon conversion of all then outstanding Shares issued under the Series Seed Agreement plus all then outstanding shares issued upon the conversion of any Shares issued under the Series Seed Agreement. Any amendment or waiver effected in accordance with this Section 5.1 shall be binding upon each Investor, each Holder, each permitted successor or assignee of such Investor or Holder and the Company.

 

4.2            Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on the signature page or Exhibit A or Exhibit B hereto, or to such address or facsimile number as subsequently modified by written notice given in accordance with this Section 4.2. If notice is given to the Company, it shall be sent to TriplePulse, Inc., 10960 Wilshire Blvd., Suite 1050, Los Angeles, CA Attn: President; and a copy (which shall not constitute notice) shall also be sent to LKP Global Law, LLP, 1901 Avenue of the Stars, Suite 480, Los Angeles, CA 90067 Attn:Donald Lee.

 

-5-

 

 

4.3          Entire Agreement. This Agreement and the documents referred to herein, together with all the Exhibits hereto, constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede any and all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.

 

4.4          Governing Law. This Agreement shall be governed by. and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law.

 

4.5          Severability The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

 

4.6          Third Parties. Nothing in this Agreement, express or implied, is intended to confer upon any person, other than the parties hereto and their successors and assigns, any rights or remedies under or by reason of this Agreement.

 

4.7          Successors and Assigns. This Agreement, and any and all rights, duties and obligations hereunder, shall not be assigned, transferred, delegated or sublicensed by an Investors without the prior written consent of the Company. Any attempt by an Investor without such permission to assign, transfer, delegate or sublicense any rights, duties or obligations that arise under this Agreement shall be void. Subject to the foregoing, and except as otherwise provided herein, this Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives.

 

4.8          Titles and Headings. The titles, captions and headings of this Agreement are included for ease of reference only and will be disregarded in interpreting or construing this Agreement. Unless otherwise specifically stated, all references herein to “sections” and “exhibits” will mean “sections” and “exhibits” to this Agreement.

 

4.9          Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.

 

4.10        Costs and Attorneys’ Fees. In the event that any action, suit or other proceeding is instituted concerning or arising out of this Agreement or any transaction contemplated hereunder, the prevailing party shall recover all of such party’s costs and attorneys’ fees incurred in each such action, suit or other proceeding, including any and all appeals or petitions therefrom.

 

-6-

 

 

4.11        Adjustments for Stock Splits, Etc. Wherever in this Agreement there is a reference to a specific number of shares of Common Stock or Preferred Stock of the Company of any class or series, then, upon the occurrence of any subdivision, combination or stock dividend of such class or series of stock, the specific number of shares so referenced in this Agreement shall automatically be proportionally adjusted to reflect the effect on the outstanding shares of such class or series of stock by such subdivision, combination or stock dividend.

 

4.12        Further Assurances. The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement.

 

4.13        Facsimile Signatures. This Agreement may be executed and delivered by facsimile and upon such delivery the facsimile signature will be deemed to have the same effect as if the original signature had been delivered to the other party.

 

4.14        Termination. The rights, duties and obligations under Sections 1 and 3 this Agreement shall terminate immediately prior to the closing of the Company’s initial public offering of Common Stock pursuant to an effective registration statement filed under the Securities Act. Notwithstanding anything to the contrary herein, this Agreement (excluding any then-existing obligations) shall terminate upon the closing of a Deemed Liquidation Event as defined in the Company’s Restated Certificate of Incorporation, as amended from time to time. Section 1.1(b) shall survive any such termination of the Agreement.

 

4.15        Dispute Resolution. Each party (a) hereby irrevocably and unconditionally submits to the jurisdiction of the federal or state courts located in the Central District of California for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement or the Transaction Documents (as defined in the Series Seed Preferred Stock Purchase Agreement dated of even date herewith), (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement or the Transaction Documents except in the federal or state courts located in the Central District of California, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement, the Transaction Documents or the subject matter hereof and thereof may not be enforced in or by such court.

 

[Remainder of Page Intentionally Left Blank]

 

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

 

THE COMPANY:
 
TRIPLEPULSE, INC.
     
Name: /s/ Christopher D. Thompson  
     
By: Christopher D. Thompson  
     
Title: President  

 

-8-

 

 

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

 

KEY HOLDERS:      
       
Name: Chris Thompson   Name: Constantine Anastasakis  
           
  /s/ Chris Thompson     /s/ Constantine Anastasakis
         
Nil Jll Joshua Ripley        
           
  /s/ Joshua Ripley        

 

-9-

 

 

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

 

INVESTORS:
 
StartEngine Fund I, L.P.
 
Name: Howard Marks  
By: /s/ Howard Marks  
Title: Managing Member  

 

 

 

EXHIBIT A

 

List of Investors

 

Name, Address and E-Mail   Number of Shares
StartEngine Fund I, L.P.   66,667

 

-11-

 

 

EXHIBIT B

 

List of Key Holders

 

    Number of Shares
Name, Address and E-Mail   of Common Stock Held
Christopher D. Thompson   360,606
2635 5th Street,    
Santa Monica, CA 90405    
Email: ct@triplepulse.com    
     
Constantine Anastasakis   206,060
1345 South Beverly Glen, Apt 304    
Los Angeles, CA 90024    
Email: ca@triplepulse.com    
     
Joshua Ripley   33,334
13559 Kitty Hawk St.    
Victorville, CA 92392    
Email: joshua@triplepulse.com    

 

-1-

EX1A-6 MAT CTRCT 23 tm2031356d1_ex6-10.htm EXHIBIT 6.10

Exhibit 6.10

  

HThis warrant was created from a 50-for-1 forward stock split on August 7, 2019.

 

Warrant holder

 

Name StartEngine Fund I, L.P.
Email howard@startengine.com
Status Outstanding

 

Quantities

   

Original quantity 98,450 warrants
Exercised quantity 0 warrants
Remaining quantity 98,450 warrants
Purchase price No purchase price entered
Exercise price $0.0254 (USD)
Exercises into Common

 

Issuer

 

Issued by TriplePulse, Inc, DBA TruBrain
Issue date April 9, 2014
Expires April 9, 2024

 

Acceptance agreement

 

When accepting this warrant on Carta, the warrant holder agreed to the following:

 

This warrant is subject to the terms and conditions set forth in the Warrant Notice and the agreements (the “Agreements”) attached hereto in their entirety.

 

By entering your full name below, your signature will be applied to the Agreements, as applicable, and you acknowledge receipt of and agree to this Warrant Notice and all attached Agreements. You further acknowledge that as of the date of the warrant, the Warrant Notice and the Agreements set forth, are the entire understanding between you and the Company regarding the Warrant and supersedes all prior agreements, promises and/or representations on that subject with the exception of warrants previously issued to you.

 

Attachments:

Form of warrant: IRA - Series Seed - 1 (Start Engine).pdf

 

 

Howard Marks  
Howard Marks  
12/30/2019    L e52b1438-0e48-4332-9963-efe7e027d20e  

  

 

 

  

Exercise history

 

This warrant has not yet been exercised.

 

Compliance

 

Federal exemption Section 4(a)(2)
State exemption None entered
State of residency None entered

 

Learn about exemptions ›

 

Exercise legend

 

No legend has been included.

 

Approvals

 

K Initiated by Laszlo Kupan
Approved March 15, 2017 df851208bd964f3bb68b9c4193db39be
   
Signed by Chris Thompson
Approved May 8, 2017 1987bb03fed547a993c4453c489133fa
   
K Received by Howard Marks
Approved Dec. 30, 2019 e52b14380e4843329963efe7e027d20e

  

Documents and notes

  

Form of warrantP IRA - Series Seed - Start Engine .pdf
NotesStock split (50.00 for 1) on August 07, 2019

  

 

 

 

INVESTORS’ RIGHTS AGREEMENT

 

This Investors’ Rights Agreement (this “Agreement”) is made and entered into as of December 5, 2012, by and among TriplePulse, Inc., a Delaware corporation (the “Company”), the parties listed on Exhibit A attached hereto (the “Investors”) and the parties listed on Exhibit B attached hereto (the “Key Holders”).

 

RECITALS

 

A.          The Investors have agreed to purchase from the Company, and the Company has agreed to sell to the Investors, shares of the Company’s Series Seed Preferred Stock (the “Shares”) on the terms and conditions set forth in that certain Series Seed Preferred Stock Purchase Agreement dated of even date herewith by and among the Company and the Investors, as amended from time to time (the “Series Seed Agreement”).

 

B.           It is a condition to the closing of the sale of the Shares that the parties hereto execute and deliver this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the parties hereto agree as follows:

 

1.           COVENANTS OF THE COMPANY.

 

1.1            Information Rights.

 

(a)       Basic Financial Information. The Company will furnish to each Investor holding more than 10,000 shares of Preferred Stock (a “Major Investor”) and any entity which requires such information pursuant to its organizational documents when available (1) annual unaudited financial statements for each fiscal year of the Company, including an unaudited balance sheet as of the end of such fiscal year, an unaudited statement of operations and an unaudited statement of cash flows of the Company for such year, all prepared in accordance with generally accepted accounting principles and practices; and (2) quarterly unaudited financial statements for each fiscal quarter of the Company (except the last quarter of the Company’s fiscal year), including an unaudited balance sheet as of the end of such fiscal year, an unaudited statement of operations and an unaudited statement of cash flows of the Company for such quarter, all prepared in accordance with generally accepted accounting principles and practices, subject to changes resulting from normal year-end audit adjustments. If the Company has audited records of any of the foregoing, it shall provide those in lieu of the unaudited versions.

 

(b)       Confidentiality. Anything in this Agreement to the contrary notwithstanding, no Investor by reason of this Agreement shall have access to any trade secrets or confidential information of the Company. The Company shall not be required to comply with any information rights in respect of any Investor whom the Company reasonably determines to be a competitor or an officer, employee, director or holder of ten percent (10%) or more of a competitor. Each Investor agrees that such investor will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement other than to any of the Investor’s attorneys, accountants, consultants, and other professionals, to the extent necessary to obtain their services in connection with monitoring the Investor’s investment in the Company.

  

-1-

 

 

(c)           Inspection Rights. The Company shall permit each Major Investor to visit and inspect the Company’s properties, to examine its books of account and records and to discuss the Company’s affairs, finances and accounts with its officers, all at such reasonable times as may be requested by such Investor.

 

1.2            Additional Rights; Warrant.

 

(a)       In the event that the Company issues securities in its next equity financing after the date hereof (the “Next Financing”) which have (a) rights, preferences or privileges that are more favorable than the terms of the Shares, such as price based anti-dilution protection or (b) provides all such future investors other contractual terms such as preemptive rights or registration rights, the Company shall provide substantially equivalent rights to the Investors with respect to the Shares (with appropriate adjustment for economic terms or other contractual rights, subject to such Investor’s execution of any documents, including, if applicable, investors’ rights, co-sale, voting and other agreements, executed by the investors purchasing securities in the Next Financing (such documents referred to herein as the “Next Financing Documents”). Any Major Investor will remain a Major Investor for all purposes in the Next Financing Documents to the extent such concept exists. Notwithstanding anything herein to the contrary, upon the execution and delivery of the Next Financing Documents by Investors holding a majority of (the then outstanding Shares held by all Investors, this Agreement (excluding any then-existing obligations) shall be amended and restated by and into such Next Financing Documents.

 

(b)       Upon the Closing of the Next Financing, the Company shall issue to Start Engine, LLC a warrant to purchase five percent (5%) of the number of shares issued in the Next Financing (the “Warrant”) at the price per share of the shares issued in the Next Financing. The Warrant shall have a term of 10 years and shall contain a standard ‘cashless exercise’ provision.

 

1.3            Assignment of Company’s Preemptive Rights. Pursuant to the right of first refusal set forth in the Company’s Bylaws or Stock Purchase Agreement, the Company has a right of first refusal with respect to certain proposed transfers of the Company’s outstanding securities by the Key Holders. In the event the Company elects not to exercise its right of first refusal pursuant to the Company’s Bylaws, by contract or otherwise with respect to a proposed transfer of the Company’s outstanding securities, the Company shall assign such right of first refusal to each Major Investor. In the event of such assignment, each Major Investor shall have a right to purchase that portion of the securities proposed to be transferred equal to the ratio of (a) the number of shares of the Company’s Common Stock issued or issuable upon conversion of the Shares owned by such Major Investor, to (b) the number of shares of the Company’s Common Stock issued or issuable upon conversion of the Shares owned by all Major Investors.

 

-2-

 

 

2.           RESTRICTIONS ON TRANSFER.

 

2.1            Limitations on Disposition. Each person owning of record shares of Common Stock of the Company issued or issuable pursuant to the conversion of the Shares and any shares of Common Stock of the Company issued as a dividend or other distribution with respect thereto or in exchange therefor or in replacement thereof (collectively, the “Securities”) or any assignee of record of Securities (each such person, a “Holder”) hereby agrees not to make any disposition of all or any portion of any Securities unless and until:

 

(a)       there is then in effect a registration statement under the Securities Act of 1933. as amended (the “Securities Act”), covering such proposed disposition and such disposition is made in accordance with such registration statement; or

 

(b)       such Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a statement of the circumstances surrounding the proposed disposition, and, at the expense of such Holder or its transferee, with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of such securities under the Securities Act.

 

Notwithstanding the provisions of Sections 2.1(a) and (b) above, no such registration statement or opinion of counsel shall be required: (i) for any transfer of any Securities in compliance with SEC Rule 144 or Rule 144A, or (ii) for any transfer of any Securities by a Holder that is a partnership, limited liability company, a corporation or a venture capital fund to (A) a partner of such partnership, a member of such limited liability company or stockholder of such corporation, (B) an affiliate of such partnership, limited liability company or corporation (including, without limitation, any affiliated investment fund of such Holder), (C) a retired partner of such partnership or a retired member of such limited liability company, (D) the estate of any such partner, member or stockholder, or (iii) for the transfer by gift, will or intestate succession by any Holder to his or her spouse or lineal descendants or ancestors or any trust for any of the foregoing; provided that in the case of clauses (ii) and (iii) the transferee agrees in writing to be subject to the terms of this Agreement to the same extent as if the transferee were an original Investor hereunder and in the case of clause (iii) the transfer was without additional consideration or at no greater than cost.

 

2.2            “Market Stand-Off” Agreement. Each Holder hereby agrees that it shall not, to the extent requested by the Company or an underwriter of securities of the Company, sell or otherwise transfer or dispose of any Securities or other shares of stock of the Company then owned by such Holder (other than to donees or partners of the Holder who agree to be similarly bound) for up to one hundred eighty (180) days following the effective date of any registration statement of the Company filed under the Securities Act; provided however that, if during the last seventeen (17) days of the restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to the expiration of the restricted period the Company announces that it will release earnings results during the 16-day period beginning on the last day of the restricted period, and if the Company’s securities are listed on the Nasdaq Stock Market and Rule 2711 thereof applies, then the restrictions imposed by this Section 2.2 shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. In no event will the restricted period extend beyond two hundred fifteen (215) days after the effective date of the registration statement.

 

-3-

 

 

For purposes of this Section 2.2, the term “Company” shall include any wholly-owned subsidiary of the Company into which the Company merges or consolidates. To enforce the foregoing covenant, the Company shall have the right to place restrictive legends on the certificates representing the shares subject to this Section 2.2 and to impose stop transfer instructions with respect to the Securities and such other shares of stock of each Holder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period. Each Holder further agrees to enter into any agreement reasonably required by the underwriters to implement the foregoing within any reasonable timeframe so requested.

 

3.           PARTICIPATION RIGHT.

 

3.1            General. Each Major Investor has the right of first refusal to purchase up to three times (3x) of such Major Investor’s Pro Rata Share (as defined below) of all (or any part) of any New Securities (as defined in Section 3.2 below) that the Company may from time to time issue after the date of this Agreement, provided, however, such Major Investor shall have no right to purchase any such New Securities if such Major Investor cannot demonstrate to the Company’s reasonable satisfaction that such Major Investor is at the time of the proposed issuance of such New Securities an “accredited investor” as such term is defined in Regulation D under the Securities Act. A Major Investor’s “Pro Rata Share” for purposes of this right of first refusal is the ratio of (a) the number of shares of the Company’s Common Stock issued or issuable upon conversion of the Shares owned by such Major Investor, to (b) a number of shares of Common Stock of the Company equal to the sum of (1) the total number of shares of Common Stock of the Company then outstanding plus (2) the total number of shares of Common Stock of the Company into which all then outstanding shares of Preferred Stock of the Company are then convertible plus (3) the number of shares of Common Stock of the Company reserved for issuance under any stock purchase and stock option plans of the Company and outstanding warrants.

 

3.2            New Securities.New Securities” shall mean any Common Stock or Preferred Stock of the Company, whether now authorized or not, and rights, options or warrants to purchase such Common Stock or Preferred Stock, and securities of any type whatsoever that are, or may become, convertible or exchangeable into such Common Stock or Preferred Stock; provided, however, that the term “New Securities” does not include: (a) shares of Common Stock issued or issuable upon conversion of the outstanding shares of all the series of the Preferred Stock; (b) shares of Common Stock or Preferred Stock issuable upon exercise of any options, warrants or rights to purchase any securities of the Company outstanding as of the date of this Agreement and any securities issuable upon the conversion thereof; (c) shares of Common Stock or Preferred Stock issued in connection with any stock split or stock dividend or recapitalization; (d) shares of Common Stock (or options, warrants or rights therefor) granted or issued hereafter to employees, officers, directors, contractors, consultants or advisers to, the Company or any subsidiary of the Company pursuant to incentive agreements, stock purchase or stock option plans, stock bonuses or awards, warrants, contracts or other arrangements that are approved by the Company’s Board of Directors (the “Board”); (e) shares of the Company’s Series Seed Preferred Stock issued pursuant to the Series Seed Agreement; (f) any other shares of Common Stock or Preferred Stock (and/or options or warrants therefor) issued or issuable primarily for other than equity financing purposes and approved by the Board; and (g) shares of Common Stock issued or issuable by the Company to the public pursuant to a registration statement filed under the Securities Act.

 

-4-

 

 

3.3            Procedures. In the event that the Company proposes to undertake an issuance of New Securities, it shall give to each Major Investor a written notice of its intention to issue New Securities (the “Notice”), describing the type of New Securities and the price and the general terms upon which the Company proposes to issue such New Securities given in accordance with Section 5.2. Each Major Investor shall have ten (10) days from the date such Notice is effective, as determined pursuant to Section 5.2 based upon the manner or method of notice, to agree in writing to purchase such Major Investor’s Pro Rata Share of such New Securities for the price and upon the general terms specified in the Notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased (not to exceed such Major Investor’s Pro Rata Share).

 

3.4            Failure to Exercise. In the event that the Major Investors fail to exercise in full the right of first refusal within such ten (10) day period, then the Company shall have one hundred twenty (120) days thereafter to sell the New Securities with respect to which the Major Investors’ rights of first refusal hereunder were not exercised, at a price and upon general terms not materially more favorable to the purchasers thereof than specified in the Company’s Notice to the Major Investors. In the event that the Company has not issued and sold the New Securities within such one hundred twenty (120) day period, then the Company shall not thereafter issue or sell any New Securities without again first offering such New Securities to the Major Investors pursuant to this Section 3.

 

4.           GENERAL PROVISIONS.

 

4.1            Amendment and Waiver of Rights. Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Investors (and/or any of their permitted successors or assigns) holding Shares representing and/or convertible into a majority of all the Investors’ Shares (as defined below). As used herein, the term “Investors’ Shares” shall mean the shares of Common Stock then issuable upon conversion of all then outstanding Shares issued under the Series Seed Agreement plus all then outstanding shares issued upon the conversion of any Shares issued under the Series Seed Agreement. Any amendment or waiver effected in accordance with this Section 5.1 shall be binding upon each Investor, each Holder, each permitted successor or assignee of such Investor or Holder and the Company.

 

4.2            Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on the signature page or Exhibit A or Exhibit B hereto, or to such address or facsimile number as subsequently modified by written notice given in accordance with this Section 4.2. If notice is given to the Company, it shall be sent to TriplePulse, Inc., 10960 Wilshire Blvd., Suite 1050, Los Angeles, CA Attn: President; and a copy (which shall not constitute notice) shall also be sent to LKP Global Law, LLP, 1901 Avenue of the Stars, Suite 480, Los Angeles, CA 90067 Attn:Donald Lee.

 

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4.3          Entire Agreement. This Agreement and the documents referred to herein, together with all the Exhibits hereto, constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede any and all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.

 

4.4          Governing Law. This Agreement shall be governed by. and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law.

 

4.5          Severability The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

 

4.6          Third Parties. Nothing in this Agreement, express or implied, is intended to confer upon any person, other than the parties hereto and their successors and assigns, any rights or remedies under or by reason of this Agreement.

 

4.7          Successors and Assigns. This Agreement, and any and all rights, duties and obligations hereunder, shall not be assigned, transferred, delegated or sublicensed by an Investors without the prior written consent of the Company. Any attempt by an Investor without such permission to assign, transfer, delegate or sublicense any rights, duties or obligations that arise under this Agreement shall be void. Subject to the foregoing, and except as otherwise provided herein, this Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives.

 

4.8          Titles and Headings. The titles, captions and headings of this Agreement are included for ease of reference only and will be disregarded in interpreting or construing this Agreement. Unless otherwise specifically stated, all references herein to “sections” and “exhibits” will mean “sections” and “exhibits” to this Agreement.

 

4.9          Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.

 

4.10        Costs and Attorneys’ Fees. In the event that any action, suit or other proceeding is instituted concerning or arising out of this Agreement or any transaction contemplated hereunder, the prevailing party shall recover all of such party’s costs and attorneys’ fees incurred in each such action, suit or other proceeding, including any and all appeals or petitions therefrom.

 

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4.11        Adjustments for Stock Splits, Etc. Wherever in this Agreement there is a reference to a specific number of shares of Common Stock or Preferred Stock of the Company of any class or series, then, upon the occurrence of any subdivision, combination or stock dividend of such class or series of stock, the specific number of shares so referenced in this Agreement shall automatically be proportionally adjusted to reflect the effect on the outstanding shares of such class or series of stock by such subdivision, combination or stock dividend.

 

4.12        Further Assurances. The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement.

 

4.13        Facsimile Signatures. This Agreement may be executed and delivered by facsimile and upon such delivery the facsimile signature will be deemed to have the same effect as if the original signature had been delivered to the other party.

 

4.14        Termination. The rights, duties and obligations under Sections 1 and 3 this Agreement shall terminate immediately prior to the closing of the Company’s initial public offering of Common Stock pursuant to an effective registration statement filed under the Securities Act. Notwithstanding anything to the contrary herein, this Agreement (excluding any then-existing obligations) shall terminate upon the closing of a Deemed Liquidation Event as defined in the Company’s Restated Certificate of Incorporation, as amended from time to time. Section 1.1(b) shall survive any such termination of the Agreement.

 

4.15        Dispute Resolution. Each party (a) hereby irrevocably and unconditionally submits to the jurisdiction of the federal or state courts located in the Central District of California for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement or the Transaction Documents (as defined in the Series Seed Preferred Stock Purchase Agreement dated of even date herewith), (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement or the Transaction Documents except in the federal or state courts located in the Central District of California, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement, the Transaction Documents or the subject matter hereof and thereof may not be enforced in or by such court.

 

[Remainder of Page Intentionally Left Blank]

 

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

 

THE COMPANY:
 
TRIPLEPULSE, INC.
     
Name: /s/ Christopher D. Thompson  
     
By: Christopher D. Thompson  
     
Title: President  

 

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

 

KEY HOLDERS:      
       
Name: Chris Thompson   Name: Constantine Anastasakis  
           
  /s/ Chris Thompson     /s/ Constantine Anastasakis
         
Nil Jll Joshua Ripley        
           
  /s/ Joshua Ripley        

 

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

 

INVESTORS:
 
StartEngine Fund I, L.P.
 
Name: Howard Marks  
By: /s/ Howard Marks  
Title: Managing Member  

 

 

 

EXHIBIT A

 

List of Investors

 

Name, Address and E-Mail   Number of Shares
StartEngine Fund I, L.P.   66,667

 

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EXHIBIT B

 

List of Key Holders

 

    Number of Shares
Name, Address and E-Mail   of Common Stock Held
Christopher D. Thompson   360,606
2635 5th Street,    
Santa Monica, CA 90405    
Email: ct@triplepulse.com    
     
Constantine Anastasakis   206,060
1345 South Beverly Glen, Apt 304    
Los Angeles, CA 90024    
Email: ca@triplepulse.com    
     
Joshua Ripley   33,334
     
13559 Kitty Hawk St.    
Victorville, CA 92392    
Email: joshua@triplepulse.com    

 

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EX1A-6 MAT CTRCT 24 tm2031356d1_ex6-11.htm EXHIBIT 6.11

Exhibit 6.11

  

HThis warrant is not held at Carta and is represented on a paper warrant. This warrant was created from a 50-for-1 forward stock split on August 7, 2019.

  

Warrant holder

    

Name StartEngine Fund I, L.P.
Email howard@startengine.com
Status Outstanding

 

Quantities

 

Original quantity 21,050 warrants
Exercised quantity 0 warrants
Remaining quantity 21,050 warrants
Purchase price No purchase price entered
Exercise price $0,095 (USD)
Exercises into Common

   

Issuer

 

Issued by TriplePulse, Inc, DBA TruBrain
Issue date Aug. 28, 2015
Expires Aug. 28, 2025

   

Exercise history

   

This warrant has not yet been exercised.  

   

Compliance

  

Federal exemption Section 4(a)(2)
State exemption None entered
State of residency None entered

 

Learn about exemptions ›

 

 

 

  

Exercise legend

 

No legend has been included.

 

Approvals

 

K Initiated by Laszlo Kupan
Approved March 15, 2017 L df851208bd964f3bb68b9c4193db39be
   
Signed by Chris Thompson
Approved May 8, 2017 L e8f686efed4d48549748079f4ce4a2de
   
Received by StartEngine Fund I, L.P. (pending)
Waiting for approval

 

Documents and notes

 

Form of warrant P IRA - Series Seed - Start Engine .pdf
Notes Stock split (50.00 for 1) on August 07, 2019

  

 

 

 

INVESTORS’ RIGHTS AGREEMENT

 

This Investors’ Rights Agreement (this “Agreement”) is made and entered into as of December 5, 2012, by and among TriplePulse, Inc., a Delaware corporation (the “Company”), the parties listed on Exhibit A attached hereto (the “Investors”) and the parties listed on Exhibit B attached hereto (the “Key Holders”).

 

RECITALS

 

A.          The Investors have agreed to purchase from the Company, and the Company has agreed to sell to the Investors, shares of the Company’s Series Seed Preferred Stock (the “Shares”) on the terms and conditions set forth in that certain Series Seed Preferred Stock Purchase Agreement dated of even date herewith by and among the Company and the Investors, as amended from time to time (the “Series Seed Agreement”).

 

B.           It is a condition to the closing of the sale of the Shares that the parties hereto execute and deliver this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the parties hereto agree as follows:

 

1.           COVENANTS OF THE COMPANY.

 

1.1            Information Rights.

 

(a)       Basic Financial Information. The Company will furnish to each Investor holding more than 10,000 shares of Preferred Stock (a “Major Investor”) and any entity which requires such information pursuant to its organizational documents when available (1) annual unaudited financial statements for each fiscal year of the Company, including an unaudited balance sheet as of the end of such fiscal year, an unaudited statement of operations and an unaudited statement of cash flows of the Company for such year, all prepared in accordance with generally accepted accounting principles and practices; and (2) quarterly unaudited financial statements for each fiscal quarter of the Company (except the last quarter of the Company’s fiscal year), including an unaudited balance sheet as of the end of such fiscal year, an unaudited statement of operations and an unaudited statement of cash flows of the Company for such quarter, all prepared in accordance with generally accepted accounting principles and practices, subject to changes resulting from normal year-end audit adjustments. If the Company has audited records of any of the foregoing, it shall provide those in lieu of the unaudited versions.

 

(b)       Confidentiality. Anything in this Agreement to the contrary notwithstanding, no Investor by reason of this Agreement shall have access to any trade secrets or confidential information of the Company. The Company shall not be required to comply with any information rights in respect of any Investor whom the Company reasonably determines to be a competitor or an officer, employee, director or holder of ten percent (10%) or more of a competitor. Each Investor agrees that such investor will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement other than to any of the Investor’s attorneys, accountants, consultants, and other professionals, to the extent necessary to obtain their services in connection with monitoring the Investor’s investment in the Company.

  

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(c)           Inspection Rights. The Company shall permit each Major Investor to visit and inspect the Company’s properties, to examine its books of account and records and to discuss the Company’s affairs, finances and accounts with its officers, all at such reasonable times as may be requested by such Investor.

 

1.2            Additional Rights; Warrant.

 

(a)       In the event that the Company issues securities in its next equity financing after the date hereof (the “Next Financing”) which have (a) rights, preferences or privileges that are more favorable than the terms of the Shares, such as price based anti-dilution protection or (b) provides all such future investors other contractual terms such as preemptive rights or registration rights, the Company shall provide substantially equivalent rights to the Investors with respect to the Shares (with appropriate adjustment for economic terms or other contractual rights, subject to such Investor’s execution of any documents, including, if applicable, investors’ rights, co-sale, voting and other agreements, executed by the investors purchasing securities in the Next Financing (such documents referred to herein as the “Next Financing Documents”). Any Major Investor will remain a Major Investor for all purposes in the Next Financing Documents to the extent such concept exists. Notwithstanding anything herein to the contrary, upon the execution and delivery of the Next Financing Documents by Investors holding a majority of (the then outstanding Shares held by all Investors, this Agreement (excluding any then-existing obligations) shall be amended and restated by and into such Next Financing Documents.

 

(b)       Upon the Closing of the Next Financing, the Company shall issue to Start Engine, LLC a warrant to purchase five percent (5%) of the number of shares issued in the Next Financing (the “Warrant”) at the price per share of the shares issued in the Next Financing. The Warrant shall have a term of 10 years and shall contain a standard ‘cashless exercise’ provision.

 

1.3            Assignment of Company’s Preemptive Rights. Pursuant to the right of first refusal set forth in the Company’s Bylaws or Stock Purchase Agreement, the Company has a right of first refusal with respect to certain proposed transfers of the Company’s outstanding securities by the Key Holders. In the event the Company elects not to exercise its right of first refusal pursuant to the Company’s Bylaws, by contract or otherwise with respect to a proposed transfer of the Company’s outstanding securities, the Company shall assign such right of first refusal to each Major Investor. In the event of such assignment, each Major Investor shall have a right to purchase that portion of the securities proposed to be transferred equal to the ratio of (a) the number of shares of the Company’s Common Stock issued or issuable upon conversion of the Shares owned by such Major Investor, to (b) the number of shares of the Company’s Common Stock issued or issuable upon conversion of the Shares owned by all Major Investors.

 

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2.           RESTRICTIONS ON TRANSFER.

 

2.1            Limitations on Disposition. Each person owning of record shares of Common Stock of the Company issued or issuable pursuant to the conversion of the Shares and any shares of Common Stock of the Company issued as a dividend or other distribution with respect thereto or in exchange therefor or in replacement thereof (collectively, the “Securities”) or any assignee of record of Securities (each such person, a “Holder”) hereby agrees not to make any disposition of all or any portion of any Securities unless and until:

 

(a)       there is then in effect a registration statement under the Securities Act of 1933. as amended (the “Securities Act”), covering such proposed disposition and such disposition is made in accordance with such registration statement; or

 

(b)       such Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a statement of the circumstances surrounding the proposed disposition, and, at the expense of such Holder or its transferee, with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of such securities under the Securities Act.

 

Notwithstanding the provisions of Sections 2.1(a) and (b) above, no such registration statement or opinion of counsel shall be required: (i) for any transfer of any Securities in compliance with SEC Rule 144 or Rule 144A, or (ii) for any transfer of any Securities by a Holder that is a partnership, limited liability company, a corporation or a venture capital fund to (A) a partner of such partnership, a member of such limited liability company or stockholder of such corporation, (B) an affiliate of such partnership, limited liability company or corporation (including, without limitation, any affiliated investment fund of such Holder), (C) a retired partner of such partnership or a retired member of such limited liability company, (D) the estate of any such partner, member or stockholder, or (iii) for the transfer by gift, will or intestate succession by any Holder to his or her spouse or lineal descendants or ancestors or any trust for any of the foregoing; provided that in the case of clauses (ii) and (iii) the transferee agrees in writing to be subject to the terms of this Agreement to the same extent as if the transferee were an original Investor hereunder and in the case of clause (iii) the transfer was without additional consideration or at no greater than cost.

 

2.2            “Market Stand-Off” Agreement. Each Holder hereby agrees that it shall not, to the extent requested by the Company or an underwriter of securities of the Company, sell or otherwise transfer or dispose of any Securities or other shares of stock of the Company then owned by such Holder (other than to donees or partners of the Holder who agree to be similarly bound) for up to one hundred eighty (180) days following the effective date of any registration statement of the Company filed under the Securities Act; provided however that, if during the last seventeen (17) days of the restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to the expiration of the restricted period the Company announces that it will release earnings results during the 16-day period beginning on the last day of the restricted period, and if the Company’s securities are listed on the Nasdaq Stock Market and Rule 2711 thereof applies, then the restrictions imposed by this Section 2.2 shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. In no event will the restricted period extend beyond two hundred fifteen (215) days after the effective date of the registration statement.

 

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For purposes of this Section 2.2, the term “Company” shall include any wholly-owned subsidiary of the Company into which the Company merges or consolidates. To enforce the foregoing covenant, the Company shall have the right to place restrictive legends on the certificates representing the shares subject to this Section 2.2 and to impose stop transfer instructions with respect to the Securities and such other shares of stock of each Holder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period. Each Holder further agrees to enter into any agreement reasonably required by the underwriters to implement the foregoing within any reasonable timeframe so requested.

 

3.           PARTICIPATION RIGHT.

 

3.1            General. Each Major Investor has the right of first refusal to purchase up to three times (3x) of such Major Investor’s Pro Rata Share (as defined below) of all (or any part) of any New Securities (as defined in Section 3.2 below) that the Company may from time to time issue after the date of this Agreement, provided, however, such Major Investor shall have no right to purchase any such New Securities if such Major Investor cannot demonstrate to the Company’s reasonable satisfaction that such Major Investor is at the time of the proposed issuance of such New Securities an “accredited investor” as such term is defined in Regulation D under the Securities Act. A Major Investor’s “Pro Rata Share” for purposes of this right of first refusal is the ratio of (a) the number of shares of the Company’s Common Stock issued or issuable upon conversion of the Shares owned by such Major Investor, to (b) a number of shares of Common Stock of the Company equal to the sum of (1) the total number of shares of Common Stock of the Company then outstanding plus (2) the total number of shares of Common Stock of the Company into which all then outstanding shares of Preferred Stock of the Company are then convertible plus (3) the number of shares of Common Stock of the Company reserved for issuance under any stock purchase and stock option plans of the Company and outstanding warrants.

 

3.2            New Securities.New Securities” shall mean any Common Stock or Preferred Stock of the Company, whether now authorized or not, and rights, options or warrants to purchase such Common Stock or Preferred Stock, and securities of any type whatsoever that are, or may become, convertible or exchangeable into such Common Stock or Preferred Stock; provided, however, that the term “New Securities” does not include: (a) shares of Common Stock issued or issuable upon conversion of the outstanding shares of all the series of the Preferred Stock; (b) shares of Common Stock or Preferred Stock issuable upon exercise of any options, warrants or rights to purchase any securities of the Company outstanding as of the date of this Agreement and any securities issuable upon the conversion thereof; (c) shares of Common Stock or Preferred Stock issued in connection with any stock split or stock dividend or recapitalization; (d) shares of Common Stock (or options, warrants or rights therefor) granted or issued hereafter to employees, officers, directors, contractors, consultants or advisers to, the Company or any subsidiary of the Company pursuant to incentive agreements, stock purchase or stock option plans, stock bonuses or awards, warrants, contracts or other arrangements that are approved by the Company’s Board of Directors (the “Board”); (e) shares of the Company’s Series Seed Preferred Stock issued pursuant to the Series Seed Agreement; (f) any other shares of Common Stock or Preferred Stock (and/or options or warrants therefor) issued or issuable primarily for other than equity financing purposes and approved by the Board; and (g) shares of Common Stock issued or issuable by the Company to the public pursuant to a registration statement filed under the Securities Act.

 

-4-

 

 

3.3            Procedures. In the event that the Company proposes to undertake an issuance of New Securities, it shall give to each Major Investor a written notice of its intention to issue New Securities (the “Notice”), describing the type of New Securities and the price and the general terms upon which the Company proposes to issue such New Securities given in accordance with Section 5.2. Each Major Investor shall have ten (10) days from the date such Notice is effective, as determined pursuant to Section 5.2 based upon the manner or method of notice, to agree in writing to purchase such Major Investor’s Pro Rata Share of such New Securities for the price and upon the general terms specified in the Notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased (not to exceed such Major Investor’s Pro Rata Share).

 

3.4            Failure to Exercise. In the event that the Major Investors fail to exercise in full the right of first refusal within such ten (10) day period, then the Company shall have one hundred twenty (120) days thereafter to sell the New Securities with respect to which the Major Investors’ rights of first refusal hereunder were not exercised, at a price and upon general terms not materially more favorable to the purchasers thereof than specified in the Company’s Notice to the Major Investors. In the event that the Company has not issued and sold the New Securities within such one hundred twenty (120) day period, then the Company shall not thereafter issue or sell any New Securities without again first offering such New Securities to the Major Investors pursuant to this Section 3.

 

4.           GENERAL PROVISIONS.

 

4.1            Amendment and Waiver of Rights. Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Investors (and/or any of their permitted successors or assigns) holding Shares representing and/or convertible into a majority of all the Investors’ Shares (as defined below). As used herein, the term “Investors’ Shares” shall mean the shares of Common Stock then issuable upon conversion of all then outstanding Shares issued under the Series Seed Agreement plus all then outstanding shares issued upon the conversion of any Shares issued under the Series Seed Agreement. Any amendment or waiver effected in accordance with this Section 5.1 shall be binding upon each Investor, each Holder, each permitted successor or assignee of such Investor or Holder and the Company.

 

4.2            Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on the signature page or Exhibit A or Exhibit B hereto, or to such address or facsimile number as subsequently modified by written notice given in accordance with this Section 4.2. If notice is given to the Company, it shall be sent to TriplePulse, Inc., 10960 Wilshire Blvd., Suite 1050, Los Angeles, CA Attn: President; and a copy (which shall not constitute notice) shall also be sent to LKP Global Law, LLP, 1901 Avenue of the Stars, Suite 480, Los Angeles, CA 90067 Attn:Donald Lee.

 

-5-

 

 

4.3          Entire Agreement. This Agreement and the documents referred to herein, together with all the Exhibits hereto, constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede any and all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.

 

4.4          Governing Law. This Agreement shall be governed by. and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law.

 

4.5          Severability The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

 

4.6          Third Parties. Nothing in this Agreement, express or implied, is intended to confer upon any person, other than the parties hereto and their successors and assigns, any rights or remedies under or by reason of this Agreement.

 

4.7          Successors and Assigns. This Agreement, and any and all rights, duties and obligations hereunder, shall not be assigned, transferred, delegated or sublicensed by an Investors without the prior written consent of the Company. Any attempt by an Investor without such permission to assign, transfer, delegate or sublicense any rights, duties or obligations that arise under this Agreement shall be void. Subject to the foregoing, and except as otherwise provided herein, this Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives.

 

4.8          Titles and Headings. The titles, captions and headings of this Agreement are included for ease of reference only and will be disregarded in interpreting or construing this Agreement. Unless otherwise specifically stated, all references herein to “sections” and “exhibits” will mean “sections” and “exhibits” to this Agreement.

 

4.9          Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.

 

4.10        Costs and Attorneys’ Fees. In the event that any action, suit or other proceeding is instituted concerning or arising out of this Agreement or any transaction contemplated hereunder, the prevailing party shall recover all of such party’s costs and attorneys’ fees incurred in each such action, suit or other proceeding, including any and all appeals or petitions therefrom.

 

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4.11        Adjustments for Stock Splits, Etc. Wherever in this Agreement there is a reference to a specific number of shares of Common Stock or Preferred Stock of the Company of any class or series, then, upon the occurrence of any subdivision, combination or stock dividend of such class or series of stock, the specific number of shares so referenced in this Agreement shall automatically be proportionally adjusted to reflect the effect on the outstanding shares of such class or series of stock by such subdivision, combination or stock dividend.

 

4.12        Further Assurances. The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement.

 

4.13        Facsimile Signatures. This Agreement may be executed and delivered by facsimile and upon such delivery the facsimile signature will be deemed to have the same effect as if the original signature had been delivered to the other party.

 

4.14        Termination. The rights, duties and obligations under Sections 1 and 3 this Agreement shall terminate immediately prior to the closing of the Company’s initial public offering of Common Stock pursuant to an effective registration statement filed under the Securities Act. Notwithstanding anything to the contrary herein, this Agreement (excluding any then-existing obligations) shall terminate upon the closing of a Deemed Liquidation Event as defined in the Company’s Restated Certificate of Incorporation, as amended from time to time. Section 1.1(b) shall survive any such termination of the Agreement.

 

4.15        Dispute Resolution. Each party (a) hereby irrevocably and unconditionally submits to the jurisdiction of the federal or state courts located in the Central District of California for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement or the Transaction Documents (as defined in the Series Seed Preferred Stock Purchase Agreement dated of even date herewith), (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement or the Transaction Documents except in the federal or state courts located in the Central District of California, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement, the Transaction Documents or the subject matter hereof and thereof may not be enforced in or by such court.

 

[Remainder of Page Intentionally Left Blank]

 

-7-

 

 

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

 

THE COMPANY:
 
TRIPLEPULSE, INC.
     
Name: /s/ Christopher D. Thompson  
     
By: Christopher D. Thompson  
     
Title: President  

 

-8-

 

 

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

 

KEY HOLDERS:      
       
Name: Chris Thompson   Name: Constantine Anastasakis  
           
  /s/ Chris Thompson     /s/ Constantine Anastasakis
         
Nil Jll Joshua Ripley        
           
  /s/ Joshua Ripley        

 

-9-

 

 

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

 

INVESTORS:
 
StartEngine Fund I, L.P.
 
Name: Howard Marks  
By: /s/ Howard Marks  
Title: Managing Member  

 

 

 

EXHIBIT A

 

List of Investors

 

Name, Address and E-Mail   Number of Shares
StartEngine Fund I, L.P.   66,667

 

-11-

 

 

EXHIBIT B

 

List of Key Holders

 

    Number of Shares
Name, Address and E-Mail   of Common Stock Held
Christopher D. Thompson   360,606
2635 5th Street,    
Santa Monica, CA 90405    
Email: ct@triplepulse.com    
     
Constantine Anastasakis   206,060
1345 South Beverly Glen, Apt 304    
Los Angeles, CA 90024    
Email: ca@triplepulse.com    
     
Joshua Ripley   33,334
     
13559 Kitty Hawk St.    
Victorville, CA 92392    
Email: joshua@triplepulse.com    

 

-1-

 

EX1A-6 MAT CTRCT 25 tm2031356d1_ex6-12.htm EXHIBIT 6.12

Exhibit 6.12 

 

HThis warrant is not held at Carta and is represented on a paper warrant. This warrant was created from a 50-for-1 forward stock split on August 7, 2019.

  

Warrant holder

 

Name StartEngine Fund I, L.P.
Email howard@startengine.com
Status Outstanding

   

Quantities

 

Original quantity 33,250 warrants
Exercised quantity 0 warrants
Remaining quantity 33,250 warrants
Purchase price No purchase price entered
Exercise price $0.03306 (USD)
Exercises into Common

   

Issuer

   

Issued by TriplePulse, Inc, DBA TruBrain
Issue date Sept. 2, 2015
Expires Sept. 2, 2025

   

Exercise history

   

This warrant has not yet been exercised.  

   

Compliance

   

Federal exemption Section 4(a)(2)
State exemption None entered
State of residency None entered

 

Learn about exemptions ›

 

 

 

  

Exercise legend

 

No legend has been included.

 

Approvals

 

K Initiated by Laszlo Kupan
Approved March 15, 2017 L df851208bd964f3bb68b9c4193db39be
   
Signed by Chris Thompson
Approved May 8, 2017 L daf8532a80134c63b32fe51f887bc04c
   
Received by StartEngine Fund I, L.P. (pending)
Waiting for approval

   

Documents and notes

 

Form of warrant P IRA - Series Seed - Start Engine.pdf
Notes Stock split (50.00 for 1) on August 07, 2019

 

 

 

 

INVESTORS’ RIGHTS AGREEMENT

 

This Investors’ Rights Agreement (this “Agreement”) is made and entered into as of December 5, 2012, by and among TriplePulse, Inc., a Delaware corporation (the “Company”), the parties listed on Exhibit A attached hereto (the “Investors”) and the parties listed on Exhibit B attached hereto (the “Key Holders”).

 

RECITALS

 

A.          The Investors have agreed to purchase from the Company, and the Company has agreed to sell to the Investors, shares of the Company’s Series Seed Preferred Stock (the “Shares”) on the terms and conditions set forth in that certain Series Seed Preferred Stock Purchase Agreement dated of even date herewith by and among the Company and the Investors, as amended from time to time (the “Series Seed Agreement”).

 

B.           It is a condition to the closing of the sale of the Shares that the parties hereto execute and deliver this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the parties hereto agree as follows:

 

1.           COVENANTS OF THE COMPANY.

 

1.1            Information Rights.

 

(a)       Basic Financial Information. The Company will furnish to each Investor holding more than 10,000 shares of Preferred Stock (a “Major Investor”) and any entity which requires such information pursuant to its organizational documents when available (1) annual unaudited financial statements for each fiscal year of the Company, including an unaudited balance sheet as of the end of such fiscal year, an unaudited statement of operations and an unaudited statement of cash flows of the Company for such year, all prepared in accordance with generally accepted accounting principles and practices; and (2) quarterly unaudited financial statements for each fiscal quarter of the Company (except the last quarter of the Company’s fiscal year), including an unaudited balance sheet as of the end of such fiscal year, an unaudited statement of operations and an unaudited statement of cash flows of the Company for such quarter, all prepared in accordance with generally accepted accounting principles and practices, subject to changes resulting from normal year-end audit adjustments. If the Company has audited records of any of the foregoing, it shall provide those in lieu of the unaudited versions.

 

(b)       Confidentiality. Anything in this Agreement to the contrary notwithstanding, no Investor by reason of this Agreement shall have access to any trade secrets or confidential information of the Company. The Company shall not be required to comply with any information rights in respect of any Investor whom the Company reasonably determines to be a competitor or an officer, employee, director or holder of ten percent (10%) or more of a competitor. Each Investor agrees that such investor will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement other than to any of the Investor’s attorneys, accountants, consultants, and other professionals, to the extent necessary to obtain their services in connection with monitoring the Investor’s investment in the Company.

  

-1-

 

 

(c)           Inspection Rights. The Company shall permit each Major Investor to visit and inspect the Company’s properties, to examine its books of account and records and to discuss the Company’s affairs, finances and accounts with its officers, all at such reasonable times as may be requested by such Investor.

 

1.2            Additional Rights; Warrant.

 

(a)       In the event that the Company issues securities in its next equity financing after the date hereof (the “Next Financing”) which have (a) rights, preferences or privileges that are more favorable than the terms of the Shares, such as price based anti-dilution protection or (b) provides all such future investors other contractual terms such as preemptive rights or registration rights, the Company shall provide substantially equivalent rights to the Investors with respect to the Shares (with appropriate adjustment for economic terms or other contractual rights, subject to such Investor’s execution of any documents, including, if applicable, investors’ rights, co-sale, voting and other agreements, executed by the investors purchasing securities in the Next Financing (such documents referred to herein as the “Next Financing Documents”). Any Major Investor will remain a Major Investor for all purposes in the Next Financing Documents to the extent such concept exists. Notwithstanding anything herein to the contrary, upon the execution and delivery of the Next Financing Documents by Investors holding a majority of (the then outstanding Shares held by all Investors, this Agreement (excluding any then-existing obligations) shall be amended and restated by and into such Next Financing Documents.

 

(b)       Upon the Closing of the Next Financing, the Company shall issue to Start Engine, LLC a warrant to purchase five percent (5%) of the number of shares issued in the Next Financing (the “Warrant”) at the price per share of the shares issued in the Next Financing. The Warrant shall have a term of 10 years and shall contain a standard ‘cashless exercise’ provision.

 

1.3            Assignment of Company’s Preemptive Rights. Pursuant to the right of first refusal set forth in the Company’s Bylaws or Stock Purchase Agreement, the Company has a right of first refusal with respect to certain proposed transfers of the Company’s outstanding securities by the Key Holders. In the event the Company elects not to exercise its right of first refusal pursuant to the Company’s Bylaws, by contract or otherwise with respect to a proposed transfer of the Company’s outstanding securities, the Company shall assign such right of first refusal to each Major Investor. In the event of such assignment, each Major Investor shall have a right to purchase that portion of the securities proposed to be transferred equal to the ratio of (a) the number of shares of the Company’s Common Stock issued or issuable upon conversion of the Shares owned by such Major Investor, to (b) the number of shares of the Company’s Common Stock issued or issuable upon conversion of the Shares owned by all Major Investors.

 

-2-

 

 

2.           RESTRICTIONS ON TRANSFER.

 

2.1            Limitations on Disposition. Each person owning of record shares of Common Stock of the Company issued or issuable pursuant to the conversion of the Shares and any shares of Common Stock of the Company issued as a dividend or other distribution with respect thereto or in exchange therefor or in replacement thereof (collectively, the “Securities”) or any assignee of record of Securities (each such person, a “Holder”) hereby agrees not to make any disposition of all or any portion of any Securities unless and until:

 

(a)       there is then in effect a registration statement under the Securities Act of 1933. as amended (the “Securities Act”), covering such proposed disposition and such disposition is made in accordance with such registration statement; or

 

(b)       such Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a statement of the circumstances surrounding the proposed disposition, and, at the expense of such Holder or its transferee, with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of such securities under the Securities Act.

 

Notwithstanding the provisions of Sections 2.1(a) and (b) above, no such registration statement or opinion of counsel shall be required: (i) for any transfer of any Securities in compliance with SEC Rule 144 or Rule 144A, or (ii) for any transfer of any Securities by a Holder that is a partnership, limited liability company, a corporation or a venture capital fund to (A) a partner of such partnership, a member of such limited liability company or stockholder of such corporation, (B) an affiliate of such partnership, limited liability company or corporation (including, without limitation, any affiliated investment fund of such Holder), (C) a retired partner of such partnership or a retired member of such limited liability company, (D) the estate of any such partner, member or stockholder, or (iii) for the transfer by gift, will or intestate succession by any Holder to his or her spouse or lineal descendants or ancestors or any trust for any of the foregoing; provided that in the case of clauses (ii) and (iii) the transferee agrees in writing to be subject to the terms of this Agreement to the same extent as if the transferee were an original Investor hereunder and in the case of clause (iii) the transfer was without additional consideration or at no greater than cost.

 

2.2            “Market Stand-Off” Agreement. Each Holder hereby agrees that it shall not, to the extent requested by the Company or an underwriter of securities of the Company, sell or otherwise transfer or dispose of any Securities or other shares of stock of the Company then owned by such Holder (other than to donees or partners of the Holder who agree to be similarly bound) for up to one hundred eighty (180) days following the effective date of any registration statement of the Company filed under the Securities Act; provided however that, if during the last seventeen (17) days of the restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to the expiration of the restricted period the Company announces that it will release earnings results during the 16-day period beginning on the last day of the restricted period, and if the Company’s securities are listed on the Nasdaq Stock Market and Rule 2711 thereof applies, then the restrictions imposed by this Section 2.2 shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. In no event will the restricted period extend beyond two hundred fifteen (215) days after the effective date of the registration statement.

 

-3-

 

 

For purposes of this Section 2.2, the term “Company” shall include any wholly-owned subsidiary of the Company into which the Company merges or consolidates. To enforce the foregoing covenant, the Company shall have the right to place restrictive legends on the certificates representing the shares subject to this Section 2.2 and to impose stop transfer instructions with respect to the Securities and such other shares of stock of each Holder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period. Each Holder further agrees to enter into any agreement reasonably required by the underwriters to implement the foregoing within any reasonable timeframe so requested.

 

3.           PARTICIPATION RIGHT.

 

3.1            General. Each Major Investor has the right of first refusal to purchase up to three times (3x) of such Major Investor’s Pro Rata Share (as defined below) of all (or any part) of any New Securities (as defined in Section 3.2 below) that the Company may from time to time issue after the date of this Agreement, provided, however, such Major Investor shall have no right to purchase any such New Securities if such Major Investor cannot demonstrate to the Company’s reasonable satisfaction that such Major Investor is at the time of the proposed issuance of such New Securities an “accredited investor” as such term is defined in Regulation D under the Securities Act. A Major Investor’s “Pro Rata Share” for purposes of this right of first refusal is the ratio of (a) the number of shares of the Company’s Common Stock issued or issuable upon conversion of the Shares owned by such Major Investor, to (b) a number of shares of Common Stock of the Company equal to the sum of (1) the total number of shares of Common Stock of the Company then outstanding plus (2) the total number of shares of Common Stock of the Company into which all then outstanding shares of Preferred Stock of the Company are then convertible plus (3) the number of shares of Common Stock of the Company reserved for issuance under any stock purchase and stock option plans of the Company and outstanding warrants.

 

3.2            New Securities.New Securities” shall mean any Common Stock or Preferred Stock of the Company, whether now authorized or not, and rights, options or warrants to purchase such Common Stock or Preferred Stock, and securities of any type whatsoever that are, or may become, convertible or exchangeable into such Common Stock or Preferred Stock; provided, however, that the term “New Securities” does not include: (a) shares of Common Stock issued or issuable upon conversion of the outstanding shares of all the series of the Preferred Stock; (b) shares of Common Stock or Preferred Stock issuable upon exercise of any options, warrants or rights to purchase any securities of the Company outstanding as of the date of this Agreement and any securities issuable upon the conversion thereof; (c) shares of Common Stock or Preferred Stock issued in connection with any stock split or stock dividend or recapitalization; (d) shares of Common Stock (or options, warrants or rights therefor) granted or issued hereafter to employees, officers, directors, contractors, consultants or advisers to, the Company or any subsidiary of the Company pursuant to incentive agreements, stock purchase or stock option plans, stock bonuses or awards, warrants, contracts or other arrangements that are approved by the Company’s Board of Directors (the “Board”); (e) shares of the Company’s Series Seed Preferred Stock issued pursuant to the Series Seed Agreement; (f) any other shares of Common Stock or Preferred Stock (and/or options or warrants therefor) issued or issuable primarily for other than equity financing purposes and approved by the Board; and (g) shares of Common Stock issued or issuable by the Company to the public pursuant to a registration statement filed under the Securities Act.

 

-4-

 

 

3.3            Procedures. In the event that the Company proposes to undertake an issuance of New Securities, it shall give to each Major Investor a written notice of its intention to issue New Securities (the “Notice”), describing the type of New Securities and the price and the general terms upon which the Company proposes to issue such New Securities given in accordance with Section 5.2. Each Major Investor shall have ten (10) days from the date such Notice is effective, as determined pursuant to Section 5.2 based upon the manner or method of notice, to agree in writing to purchase such Major Investor’s Pro Rata Share of such New Securities for the price and upon the general terms specified in the Notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased (not to exceed such Major Investor’s Pro Rata Share).

 

3.4            Failure to Exercise. In the event that the Major Investors fail to exercise in full the right of first refusal within such ten (10) day period, then the Company shall have one hundred twenty (120) days thereafter to sell the New Securities with respect to which the Major Investors’ rights of first refusal hereunder were not exercised, at a price and upon general terms not materially more favorable to the purchasers thereof than specified in the Company’s Notice to the Major Investors. In the event that the Company has not issued and sold the New Securities within such one hundred twenty (120) day period, then the Company shall not thereafter issue or sell any New Securities without again first offering such New Securities to the Major Investors pursuant to this Section 3.

 

4.           GENERAL PROVISIONS.

 

4.1            Amendment and Waiver of Rights. Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Investors (and/or any of their permitted successors or assigns) holding Shares representing and/or convertible into a majority of all the Investors’ Shares (as defined below). As used herein, the term “Investors’ Shares” shall mean the shares of Common Stock then issuable upon conversion of all then outstanding Shares issued under the Series Seed Agreement plus all then outstanding shares issued upon the conversion of any Shares issued under the Series Seed Agreement. Any amendment or waiver effected in accordance with this Section 5.1 shall be binding upon each Investor, each Holder, each permitted successor or assignee of such Investor or Holder and the Company.

 

4.2            Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on the signature page or Exhibit A or Exhibit B hereto, or to such address or facsimile number as subsequently modified by written notice given in accordance with this Section 4.2. If notice is given to the Company, it shall be sent to TriplePulse, Inc., 10960 Wilshire Blvd., Suite 1050, Los Angeles, CA Attn: President; and a copy (which shall not constitute notice) shall also be sent to LKP Global Law, LLP, 1901 Avenue of the Stars, Suite 480, Los Angeles, CA 90067 Attn:Donald Lee.

 

-5-

 

 

4.3          Entire Agreement. This Agreement and the documents referred to herein, together with all the Exhibits hereto, constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede any and all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.

 

4.4          Governing Law. This Agreement shall be governed by. and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law.

 

4.5          Severability The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

 

4.6          Third Parties. Nothing in this Agreement, express or implied, is intended to confer upon any person, other than the parties hereto and their successors and assigns, any rights or remedies under or by reason of this Agreement.

 

4.7          Successors and Assigns. This Agreement, and any and all rights, duties and obligations hereunder, shall not be assigned, transferred, delegated or sublicensed by an Investors without the prior written consent of the Company. Any attempt by an Investor without such permission to assign, transfer, delegate or sublicense any rights, duties or obligations that arise under this Agreement shall be void. Subject to the foregoing, and except as otherwise provided herein, this Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives.

 

4.8          Titles and Headings. The titles, captions and headings of this Agreement are included for ease of reference only and will be disregarded in interpreting or construing this Agreement. Unless otherwise specifically stated, all references herein to “sections” and “exhibits” will mean “sections” and “exhibits” to this Agreement.

 

4.9          Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.

 

4.10        Costs and Attorneys’ Fees. In the event that any action, suit or other proceeding is instituted concerning or arising out of this Agreement or any transaction contemplated hereunder, the prevailing party shall recover all of such party’s costs and attorneys’ fees incurred in each such action, suit or other proceeding, including any and all appeals or petitions therefrom.

 

-6-

 

 

4.11        Adjustments for Stock Splits, Etc. Wherever in this Agreement there is a reference to a specific number of shares of Common Stock or Preferred Stock of the Company of any class or series, then, upon the occurrence of any subdivision, combination or stock dividend of such class or series of stock, the specific number of shares so referenced in this Agreement shall automatically be proportionally adjusted to reflect the effect on the outstanding shares of such class or series of stock by such subdivision, combination or stock dividend.

 

4.12        Further Assurances. The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement.

 

4.13        Facsimile Signatures. This Agreement may be executed and delivered by facsimile and upon such delivery the facsimile signature will be deemed to have the same effect as if the original signature had been delivered to the other party.

 

4.14        Termination. The rights, duties and obligations under Sections 1 and 3 this Agreement shall terminate immediately prior to the closing of the Company’s initial public offering of Common Stock pursuant to an effective registration statement filed under the Securities Act. Notwithstanding anything to the contrary herein, this Agreement (excluding any then-existing obligations) shall terminate upon the closing of a Deemed Liquidation Event as defined in the Company’s Restated Certificate of Incorporation, as amended from time to time. Section 1.1(b) shall survive any such termination of the Agreement.

 

4.15        Dispute Resolution. Each party (a) hereby irrevocably and unconditionally submits to the jurisdiction of the federal or state courts located in the Central District of California for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement or the Transaction Documents (as defined in the Series Seed Preferred Stock Purchase Agreement dated of even date herewith), (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement or the Transaction Documents except in the federal or state courts located in the Central District of California, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement, the Transaction Documents or the subject matter hereof and thereof may not be enforced in or by such court.

 

[Remainder of Page Intentionally Left Blank]

 

-7-

 

 

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

 

THE COMPANY:
 
TRIPLEPULSE, INC.
     
Name: /s/ Christopher D. Thompson  
     
By: Christopher D. Thompson  
     
Title: President  

 

-8-

 

 

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

 

KEY HOLDERS:      
       
Name: Chris Thompson   Name: Constantine Anastasakis  
           
  /s/ Chris Thompson     /s/ Constantine Anastasakis
         
Nil Jll Joshua Ripley        
           
  /s/ Joshua Ripley        

 

-9-

 

 

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

 

INVESTORS:
 
StartEngine Fund I, L.P.
 
Name: Howard Marks  
By: /s/ Howard Marks  
Title: Managing Member  

 

 

 

EXHIBIT A

 

List of Investors

 

Name, Address and E-Mail   Number of Shares
StartEngine Fund I, L.P.   66,667

 

-11-

 

 

EXHIBIT B

 

List of Key Holders

 

    Number of Shares
Name, Address and E-Mail   of Common Stock Held
Christopher D. Thompson   360,606
2635 5th Street,    
Santa Monica, CA 90405    
Email: ct@triplepulse.com    
     
Constantine Anastasakis   206,060
1345 South Beverly Glen, Apt 304    
Los Angeles, CA 90024    
Email: ca@triplepulse.com    
     
Joshua Ripley   33,334
     
13559 Kitty Hawk St.    
Victorville, CA 92392    
Email: joshua@triplepulse.com    

 

-1-

EX1A-6 MAT CTRCT 26 tm2031356d1_ex6-13.htm EXHIBIT 6.13

Exhibit 6.13 

 

HThis warrant is not held at Carta and is represented on a paper warrant. This warrant was created from a 50-for-1 forward stock split on August 7, 2019.

 

Warrant holder

 

Name StartEngine Fund I, L.P.
Email howard@startengine.com
Status Outstanding

 

Quantities

 

Original quantity 41,600 warrants
Exercised quantity 0 warrants
Remaining quantity 41,600 warrants
Purchase price No purchase price entered
Exercise price $0.03306 (USD)
Exercises into Common

 

   Issuer

 

Issued by TriplePulse, Inc, DBA TruBrain
Issue date Sept. 5, 2015
Expires Sept. 5, 2025

 

   

Exercise history

   

This warrant has not yet been exercised.  

   

Compliance

 

Federal exemption Section 4(a)(2)
State exemption None entered
State of residency None entered
   
Learn about exemptions ›  

 

 

 

   

Exercise legend

  

No legend has been included.

 

Approvals

 

K Initiated by Laszlo Kupan
Approved March 15, 2017 L df851208bd964f3bb68b9c4193db39be
   
Signed by Chris Thompson
Approved May 8, 2017 L f3375eeb187340128c292ddef16de7bb
   
Received by StartEngine Fund I, L.P. (pending)
Waiting for approval

   

Documents and notes

 

Form of warrant P IRA - Series Seed - Start Engine.pdf
Notes Stock split (50.00 for 1) on August 07, 2019

 

 

 

 

INVESTORS’ RIGHTS AGREEMENT

 

This Investors’ Rights Agreement (this “Agreement”) is made and entered into as of December 5, 2012, by and among TriplePulse, Inc., a Delaware corporation (the “Company”), the parties listed on Exhibit A attached hereto (the “Investors”) and the parties listed on Exhibit B attached hereto (the “Key Holders”).

 

RECITALS

 

A.          The Investors have agreed to purchase from the Company, and the Company has agreed to sell to the Investors, shares of the Company’s Series Seed Preferred Stock (the “Shares”) on the terms and conditions set forth in that certain Series Seed Preferred Stock Purchase Agreement dated of even date herewith by and among the Company and the Investors, as amended from time to time (the “Series Seed Agreement”).

 

B.           It is a condition to the closing of the sale of the Shares that the parties hereto execute and deliver this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the parties hereto agree as follows:

 

1.           COVENANTS OF THE COMPANY.

 

1.1            Information Rights.

 

(a)       Basic Financial Information. The Company will furnish to each Investor holding more than 10,000 shares of Preferred Stock (a “Major Investor”) and any entity which requires such information pursuant to its organizational documents when available (1) annual unaudited financial statements for each fiscal year of the Company, including an unaudited balance sheet as of the end of such fiscal year, an unaudited statement of operations and an unaudited statement of cash flows of the Company for such year, all prepared in accordance with generally accepted accounting principles and practices; and (2) quarterly unaudited financial statements for each fiscal quarter of the Company (except the last quarter of the Company’s fiscal year), including an unaudited balance sheet as of the end of such fiscal year, an unaudited statement of operations and an unaudited statement of cash flows of the Company for such quarter, all prepared in accordance with generally accepted accounting principles and practices, subject to changes resulting from normal year-end audit adjustments. If the Company has audited records of any of the foregoing, it shall provide those in lieu of the unaudited versions.

 

(b)       Confidentiality. Anything in this Agreement to the contrary notwithstanding, no Investor by reason of this Agreement shall have access to any trade secrets or confidential information of the Company. The Company shall not be required to comply with any information rights in respect of any Investor whom the Company reasonably determines to be a competitor or an officer, employee, director or holder of ten percent (10%) or more of a competitor. Each Investor agrees that such investor will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement other than to any of the Investor’s attorneys, accountants, consultants, and other professionals, to the extent necessary to obtain their services in connection with monitoring the Investor’s investment in the Company.

  

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(c)           Inspection Rights. The Company shall permit each Major Investor to visit and inspect the Company’s properties, to examine its books of account and records and to discuss the Company’s affairs, finances and accounts with its officers, all at such reasonable times as may be requested by such Investor.

 

1.2            Additional Rights; Warrant.

 

(a)       In the event that the Company issues securities in its next equity financing after the date hereof (the “Next Financing”) which have (a) rights, preferences or privileges that are more favorable than the terms of the Shares, such as price based anti-dilution protection or (b) provides all such future investors other contractual terms such as preemptive rights or registration rights, the Company shall provide substantially equivalent rights to the Investors with respect to the Shares (with appropriate adjustment for economic terms or other contractual rights, subject to such Investor’s execution of any documents, including, if applicable, investors’ rights, co-sale, voting and other agreements, executed by the investors purchasing securities in the Next Financing (such documents referred to herein as the “Next Financing Documents”). Any Major Investor will remain a Major Investor for all purposes in the Next Financing Documents to the extent such concept exists. Notwithstanding anything herein to the contrary, upon the execution and delivery of the Next Financing Documents by Investors holding a majority of (the then outstanding Shares held by all Investors, this Agreement (excluding any then-existing obligations) shall be amended and restated by and into such Next Financing Documents.

 

(b)       Upon the Closing of the Next Financing, the Company shall issue to Start Engine, LLC a warrant to purchase five percent (5%) of the number of shares issued in the Next Financing (the “Warrant”) at the price per share of the shares issued in the Next Financing. The Warrant shall have a term of 10 years and shall contain a standard ‘cashless exercise’ provision.

 

1.3            Assignment of Company’s Preemptive Rights. Pursuant to the right of first refusal set forth in the Company’s Bylaws or Stock Purchase Agreement, the Company has a right of first refusal with respect to certain proposed transfers of the Company’s outstanding securities by the Key Holders. In the event the Company elects not to exercise its right of first refusal pursuant to the Company’s Bylaws, by contract or otherwise with respect to a proposed transfer of the Company’s outstanding securities, the Company shall assign such right of first refusal to each Major Investor. In the event of such assignment, each Major Investor shall have a right to purchase that portion of the securities proposed to be transferred equal to the ratio of (a) the number of shares of the Company’s Common Stock issued or issuable upon conversion of the Shares owned by such Major Investor, to (b) the number of shares of the Company’s Common Stock issued or issuable upon conversion of the Shares owned by all Major Investors.

 

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2.           RESTRICTIONS ON TRANSFER.

 

2.1            Limitations on Disposition. Each person owning of record shares of Common Stock of the Company issued or issuable pursuant to the conversion of the Shares and any shares of Common Stock of the Company issued as a dividend or other distribution with respect thereto or in exchange therefor or in replacement thereof (collectively, the “Securities”) or any assignee of record of Securities (each such person, a “Holder”) hereby agrees not to make any disposition of all or any portion of any Securities unless and until:

 

(a)       there is then in effect a registration statement under the Securities Act of 1933. as amended (the “Securities Act”), covering such proposed disposition and such disposition is made in accordance with such registration statement; or

 

(b)       such Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a statement of the circumstances surrounding the proposed disposition, and, at the expense of such Holder or its transferee, with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of such securities under the Securities Act.

 

Notwithstanding the provisions of Sections 2.1(a) and (b) above, no such registration statement or opinion of counsel shall be required: (i) for any transfer of any Securities in compliance with SEC Rule 144 or Rule 144A, or (ii) for any transfer of any Securities by a Holder that is a partnership, limited liability company, a corporation or a venture capital fund to (A) a partner of such partnership, a member of such limited liability company or stockholder of such corporation, (B) an affiliate of such partnership, limited liability company or corporation (including, without limitation, any affiliated investment fund of such Holder), (C) a retired partner of such partnership or a retired member of such limited liability company, (D) the estate of any such partner, member or stockholder, or (iii) for the transfer by gift, will or intestate succession by any Holder to his or her spouse or lineal descendants or ancestors or any trust for any of the foregoing; provided that in the case of clauses (ii) and (iii) the transferee agrees in writing to be subject to the terms of this Agreement to the same extent as if the transferee were an original Investor hereunder and in the case of clause (iii) the transfer was without additional consideration or at no greater than cost.

 

2.2            “Market Stand-Off” Agreement. Each Holder hereby agrees that it shall not, to the extent requested by the Company or an underwriter of securities of the Company, sell or otherwise transfer or dispose of any Securities or other shares of stock of the Company then owned by such Holder (other than to donees or partners of the Holder who agree to be similarly bound) for up to one hundred eighty (180) days following the effective date of any registration statement of the Company filed under the Securities Act; provided however that, if during the last seventeen (17) days of the restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to the expiration of the restricted period the Company announces that it will release earnings results during the 16-day period beginning on the last day of the restricted period, and if the Company’s securities are listed on the Nasdaq Stock Market and Rule 2711 thereof applies, then the restrictions imposed by this Section 2.2 shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. In no event will the restricted period extend beyond two hundred fifteen (215) days after the effective date of the registration statement.

 

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For purposes of this Section 2.2, the term “Company” shall include any wholly-owned subsidiary of the Company into which the Company merges or consolidates. To enforce the foregoing covenant, the Company shall have the right to place restrictive legends on the certificates representing the shares subject to this Section 2.2 and to impose stop transfer instructions with respect to the Securities and such other shares of stock of each Holder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period. Each Holder further agrees to enter into any agreement reasonably required by the underwriters to implement the foregoing within any reasonable timeframe so requested.

 

3.           PARTICIPATION RIGHT.

 

3.1            General. Each Major Investor has the right of first refusal to purchase up to three times (3x) of such Major Investor’s Pro Rata Share (as defined below) of all (or any part) of any New Securities (as defined in Section 3.2 below) that the Company may from time to time issue after the date of this Agreement, provided, however, such Major Investor shall have no right to purchase any such New Securities if such Major Investor cannot demonstrate to the Company’s reasonable satisfaction that such Major Investor is at the time of the proposed issuance of such New Securities an “accredited investor” as such term is defined in Regulation D under the Securities Act. A Major Investor’s “Pro Rata Share” for purposes of this right of first refusal is the ratio of (a) the number of shares of the Company’s Common Stock issued or issuable upon conversion of the Shares owned by such Major Investor, to (b) a number of shares of Common Stock of the Company equal to the sum of (1) the total number of shares of Common Stock of the Company then outstanding plus (2) the total number of shares of Common Stock of the Company into which all then outstanding shares of Preferred Stock of the Company are then convertible plus (3) the number of shares of Common Stock of the Company reserved for issuance under any stock purchase and stock option plans of the Company and outstanding warrants.

 

3.2            New Securities.New Securities” shall mean any Common Stock or Preferred Stock of the Company, whether now authorized or not, and rights, options or warrants to purchase such Common Stock or Preferred Stock, and securities of any type whatsoever that are, or may become, convertible or exchangeable into such Common Stock or Preferred Stock; provided, however, that the term “New Securities” does not include: (a) shares of Common Stock issued or issuable upon conversion of the outstanding shares of all the series of the Preferred Stock; (b) shares of Common Stock or Preferred Stock issuable upon exercise of any options, warrants or rights to purchase any securities of the Company outstanding as of the date of this Agreement and any securities issuable upon the conversion thereof; (c) shares of Common Stock or Preferred Stock issued in connection with any stock split or stock dividend or recapitalization; (d) shares of Common Stock (or options, warrants or rights therefor) granted or issued hereafter to employees, officers, directors, contractors, consultants or advisers to, the Company or any subsidiary of the Company pursuant to incentive agreements, stock purchase or stock option plans, stock bonuses or awards, warrants, contracts or other arrangements that are approved by the Company’s Board of Directors (the “Board”); (e) shares of the Company’s Series Seed Preferred Stock issued pursuant to the Series Seed Agreement; (f) any other shares of Common Stock or Preferred Stock (and/or options or warrants therefor) issued or issuable primarily for other than equity financing purposes and approved by the Board; and (g) shares of Common Stock issued or issuable by the Company to the public pursuant to a registration statement filed under the Securities Act.

 

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3.3            Procedures. In the event that the Company proposes to undertake an issuance of New Securities, it shall give to each Major Investor a written notice of its intention to issue New Securities (the “Notice”), describing the type of New Securities and the price and the general terms upon which the Company proposes to issue such New Securities given in accordance with Section 5.2. Each Major Investor shall have ten (10) days from the date such Notice is effective, as determined pursuant to Section 5.2 based upon the manner or method of notice, to agree in writing to purchase such Major Investor’s Pro Rata Share of such New Securities for the price and upon the general terms specified in the Notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased (not to exceed such Major Investor’s Pro Rata Share).

 

3.4            Failure to Exercise. In the event that the Major Investors fail to exercise in full the right of first refusal within such ten (10) day period, then the Company shall have one hundred twenty (120) days thereafter to sell the New Securities with respect to which the Major Investors’ rights of first refusal hereunder were not exercised, at a price and upon general terms not materially more favorable to the purchasers thereof than specified in the Company’s Notice to the Major Investors. In the event that the Company has not issued and sold the New Securities within such one hundred twenty (120) day period, then the Company shall not thereafter issue or sell any New Securities without again first offering such New Securities to the Major Investors pursuant to this Section 3.

 

4.           GENERAL PROVISIONS.

 

4.1            Amendment and Waiver of Rights. Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Investors (and/or any of their permitted successors or assigns) holding Shares representing and/or convertible into a majority of all the Investors’ Shares (as defined below). As used herein, the term “Investors’ Shares” shall mean the shares of Common Stock then issuable upon conversion of all then outstanding Shares issued under the Series Seed Agreement plus all then outstanding shares issued upon the conversion of any Shares issued under the Series Seed Agreement. Any amendment or waiver effected in accordance with this Section 5.1 shall be binding upon each Investor, each Holder, each permitted successor or assignee of such Investor or Holder and the Company.

 

4.2            Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on the signature page or Exhibit A or Exhibit B hereto, or to such address or facsimile number as subsequently modified by written notice given in accordance with this Section 4.2. If notice is given to the Company, it shall be sent to TriplePulse, Inc., 10960 Wilshire Blvd., Suite 1050, Los Angeles, CA Attn: President; and a copy (which shall not constitute notice) shall also be sent to LKP Global Law, LLP, 1901 Avenue of the Stars, Suite 480, Los Angeles, CA 90067 Attn:Donald Lee.

 

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4.3          Entire Agreement. This Agreement and the documents referred to herein, together with all the Exhibits hereto, constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede any and all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.

 

4.4          Governing Law. This Agreement shall be governed by. and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law.

 

4.5          Severability The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

 

4.6          Third Parties. Nothing in this Agreement, express or implied, is intended to confer upon any person, other than the parties hereto and their successors and assigns, any rights or remedies under or by reason of this Agreement.

 

4.7          Successors and Assigns. This Agreement, and any and all rights, duties and obligations hereunder, shall not be assigned, transferred, delegated or sublicensed by an Investors without the prior written consent of the Company. Any attempt by an Investor without such permission to assign, transfer, delegate or sublicense any rights, duties or obligations that arise under this Agreement shall be void. Subject to the foregoing, and except as otherwise provided herein, this Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives.

 

4.8          Titles and Headings. The titles, captions and headings of this Agreement are included for ease of reference only and will be disregarded in interpreting or construing this Agreement. Unless otherwise specifically stated, all references herein to “sections” and “exhibits” will mean “sections” and “exhibits” to this Agreement.

 

4.9          Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.

 

4.10        Costs and Attorneys’ Fees. In the event that any action, suit or other proceeding is instituted concerning or arising out of this Agreement or any transaction contemplated hereunder, the prevailing party shall recover all of such party’s costs and attorneys’ fees incurred in each such action, suit or other proceeding, including any and all appeals or petitions therefrom.

 

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4.11        Adjustments for Stock Splits, Etc. Wherever in this Agreement there is a reference to a specific number of shares of Common Stock or Preferred Stock of the Company of any class or series, then, upon the occurrence of any subdivision, combination or stock dividend of such class or series of stock, the specific number of shares so referenced in this Agreement shall automatically be proportionally adjusted to reflect the effect on the outstanding shares of such class or series of stock by such subdivision, combination or stock dividend.

 

4.12        Further Assurances. The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement.

 

4.13        Facsimile Signatures. This Agreement may be executed and delivered by facsimile and upon such delivery the facsimile signature will be deemed to have the same effect as if the original signature had been delivered to the other party.

 

4.14        Termination. The rights, duties and obligations under Sections 1 and 3 this Agreement shall terminate immediately prior to the closing of the Company’s initial public offering of Common Stock pursuant to an effective registration statement filed under the Securities Act. Notwithstanding anything to the contrary herein, this Agreement (excluding any then-existing obligations) shall terminate upon the closing of a Deemed Liquidation Event as defined in the Company’s Restated Certificate of Incorporation, as amended from time to time. Section 1.1(b) shall survive any such termination of the Agreement.

 

4.15        Dispute Resolution. Each party (a) hereby irrevocably and unconditionally submits to the jurisdiction of the federal or state courts located in the Central District of California for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement or the Transaction Documents (as defined in the Series Seed Preferred Stock Purchase Agreement dated of even date herewith), (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement or the Transaction Documents except in the federal or state courts located in the Central District of California, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement, the Transaction Documents or the subject matter hereof and thereof may not be enforced in or by such court.

 

[Remainder of Page Intentionally Left Blank]

 

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

 

THE COMPANY:
 
TRIPLEPULSE, INC.
     
Name: /s/ Christopher D. Thompson  
     
By: Christopher D. Thompson  
     
Title: President  

 

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

 

KEY HOLDERS:      
       
Name: Chris Thompson   Name: Constantine Anastasakis  
           
  /s/ Chris Thompson     /s/ Constantine Anastasakis
         
Nil Jll Joshua Ripley        
           
  /s/ Joshua Ripley        

 

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

 

INVESTORS:
 
StartEngine Fund I, L.P.
 
Name: Howard Marks  
By: /s/ Howard Marks  
Title: Managing Member  

 

 

 

EXHIBIT A

 

List of Investors

 

Name, Address and E-Mail   Number of Shares
StartEngine Fund I, L.P.   66,667

 

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EXHIBIT B

 

List of Key Holders

 

    Number of Shares
Name, Address and E-Mail   of Common Stock Held
Christopher D. Thompson   360,606
2635 5th Street,    
Santa Monica, CA 90405    
Email: ct@triplepulse.com    
     
Constantine Anastasakis   206,060
1345 South Beverly Glen, Apt 304    
Los Angeles, CA 90024    
Email: ca@triplepulse.com    
     
Joshua Ripley   33,334
     
13559 Kitty Hawk St.    
Victorville, CA 92392    
Email: joshua@triplepulse.com    

 

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EX1A-6 MAT CTRCT 27 tm2031356d1_ex6-14.htm EXHIBIT 6.14

Exhibit 6.14

 

HThis warrant is not held at Carta and is represented on a paper warrant. This warrant was created from a 50-for-1 forward stock split on August 7, 2019.

 

Warrant holder

 

Name StartEngine Fund I, L.P.
Email howard@startengine.com
Status Outstanding

   

Quantities

 

Original quantity 17,000 warrants
Exercised quantity 0 warrants
Remaining quantity 17,000 warrants
Purchase price No purchase price entered
Exercise price $0.03412 (USD)
Exercises into Common

   

Issuer

   

Issued by TriplePulse, Inc, DBA TruBrain
Issue date Feb. 27, 2017
Expires Feb. 27, 2027

 

Exercise history

   

This warrant has not yet been exercised.  

   

Compliance

   

Federal exemption Section 4(a)(2)
State exemption None entered
State of residency None entered
Learn about exemptions ›  

 

 

 

 

Exercise legend

 

No legend has been included.

 

Approvals

 

K Initiated by Laszlo Kupan
Approved March 15, 2017 L df851208bd964f3bb68b9c4193db39be
   
Signed by Chris Thompson
Approved May 8, 2017 L fa6a0780b8c04c21a07259f7bc7be928
   
Received by StartEngine Fund I, L.P. (pending)
Waiting for approval

 

Documents and notes

 

Form of warrant P IRA - Series Seed - Start Engine.pdf
Notes Stock split (50.00 for 1) on August 07, 2019

  

 

 

 

INVESTORS’ RIGHTS AGREEMENT

 

This Investors’ Rights Agreement (this “Agreement”) is made and entered into as of December 5, 2012, by and among TriplePulse, Inc., a Delaware corporation (the “Company”), the parties listed on Exhibit A attached hereto (the “Investors”) and the parties listed on Exhibit B attached hereto (the “Key Holders”).

 

RECITALS

 

A.          The Investors have agreed to purchase from the Company, and the Company has agreed to sell to the Investors, shares of the Company’s Series Seed Preferred Stock (the “Shares”) on the terms and conditions set forth in that certain Series Seed Preferred Stock Purchase Agreement dated of even date herewith by and among the Company and the Investors, as amended from time to time (the “Series Seed Agreement”).

 

B.           It is a condition to the closing of the sale of the Shares that the parties hereto execute and deliver this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the parties hereto agree as follows:

 

1.           COVENANTS OF THE COMPANY.

 

1.1            Information Rights.

 

(a)       Basic Financial Information. The Company will furnish to each Investor holding more than 10,000 shares of Preferred Stock (a “Major Investor”) and any entity which requires such information pursuant to its organizational documents when available (1) annual unaudited financial statements for each fiscal year of the Company, including an unaudited balance sheet as of the end of such fiscal year, an unaudited statement of operations and an unaudited statement of cash flows of the Company for such year, all prepared in accordance with generally accepted accounting principles and practices; and (2) quarterly unaudited financial statements for each fiscal quarter of the Company (except the last quarter of the Company’s fiscal year), including an unaudited balance sheet as of the end of such fiscal year, an unaudited statement of operations and an unaudited statement of cash flows of the Company for such quarter, all prepared in accordance with generally accepted accounting principles and practices, subject to changes resulting from normal year-end audit adjustments. If the Company has audited records of any of the foregoing, it shall provide those in lieu of the unaudited versions.

 

(b)       Confidentiality. Anything in this Agreement to the contrary notwithstanding, no Investor by reason of this Agreement shall have access to any trade secrets or confidential information of the Company. The Company shall not be required to comply with any information rights in respect of any Investor whom the Company reasonably determines to be a competitor or an officer, employee, director or holder of ten percent (10%) or more of a competitor. Each Investor agrees that such investor will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement other than to any of the Investor’s attorneys, accountants, consultants, and other professionals, to the extent necessary to obtain their services in connection with monitoring the Investor’s investment in the Company.

  

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(c)           Inspection Rights. The Company shall permit each Major Investor to visit and inspect the Company’s properties, to examine its books of account and records and to discuss the Company’s affairs, finances and accounts with its officers, all at such reasonable times as may be requested by such Investor.

 

1.2            Additional Rights; Warrant.

 

(a)       In the event that the Company issues securities in its next equity financing after the date hereof (the “Next Financing”) which have (a) rights, preferences or privileges that are more favorable than the terms of the Shares, such as price based anti-dilution protection or (b) provides all such future investors other contractual terms such as preemptive rights or registration rights, the Company shall provide substantially equivalent rights to the Investors with respect to the Shares (with appropriate adjustment for economic terms or other contractual rights, subject to such Investor’s execution of any documents, including, if applicable, investors’ rights, co-sale, voting and other agreements, executed by the investors purchasing securities in the Next Financing (such documents referred to herein as the “Next Financing Documents”). Any Major Investor will remain a Major Investor for all purposes in the Next Financing Documents to the extent such concept exists. Notwithstanding anything herein to the contrary, upon the execution and delivery of the Next Financing Documents by Investors holding a majority of (the then outstanding Shares held by all Investors, this Agreement (excluding any then-existing obligations) shall be amended and restated by and into such Next Financing Documents.

 

(b)       Upon the Closing of the Next Financing, the Company shall issue to Start Engine, LLC a warrant to purchase five percent (5%) of the number of shares issued in the Next Financing (the “Warrant”) at the price per share of the shares issued in the Next Financing. The Warrant shall have a term of 10 years and shall contain a standard ‘cashless exercise’ provision.

 

1.3            Assignment of Company’s Preemptive Rights. Pursuant to the right of first refusal set forth in the Company’s Bylaws or Stock Purchase Agreement, the Company has a right of first refusal with respect to certain proposed transfers of the Company’s outstanding securities by the Key Holders. In the event the Company elects not to exercise its right of first refusal pursuant to the Company’s Bylaws, by contract or otherwise with respect to a proposed transfer of the Company’s outstanding securities, the Company shall assign such right of first refusal to each Major Investor. In the event of such assignment, each Major Investor shall have a right to purchase that portion of the securities proposed to be transferred equal to the ratio of (a) the number of shares of the Company’s Common Stock issued or issuable upon conversion of the Shares owned by such Major Investor, to (b) the number of shares of the Company’s Common Stock issued or issuable upon conversion of the Shares owned by all Major Investors.

 

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2.           RESTRICTIONS ON TRANSFER.

 

2.1            Limitations on Disposition. Each person owning of record shares of Common Stock of the Company issued or issuable pursuant to the conversion of the Shares and any shares of Common Stock of the Company issued as a dividend or other distribution with respect thereto or in exchange therefor or in replacement thereof (collectively, the “Securities”) or any assignee of record of Securities (each such person, a “Holder”) hereby agrees not to make any disposition of all or any portion of any Securities unless and until:

 

(a)       there is then in effect a registration statement under the Securities Act of 1933. as amended (the “Securities Act”), covering such proposed disposition and such disposition is made in accordance with such registration statement; or

 

(b)       such Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a statement of the circumstances surrounding the proposed disposition, and, at the expense of such Holder or its transferee, with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of such securities under the Securities Act.

 

Notwithstanding the provisions of Sections 2.1(a) and (b) above, no such registration statement or opinion of counsel shall be required: (i) for any transfer of any Securities in compliance with SEC Rule 144 or Rule 144A, or (ii) for any transfer of any Securities by a Holder that is a partnership, limited liability company, a corporation or a venture capital fund to (A) a partner of such partnership, a member of such limited liability company or stockholder of such corporation, (B) an affiliate of such partnership, limited liability company or corporation (including, without limitation, any affiliated investment fund of such Holder), (C) a retired partner of such partnership or a retired member of such limited liability company, (D) the estate of any such partner, member or stockholder, or (iii) for the transfer by gift, will or intestate succession by any Holder to his or her spouse or lineal descendants or ancestors or any trust for any of the foregoing; provided that in the case of clauses (ii) and (iii) the transferee agrees in writing to be subject to the terms of this Agreement to the same extent as if the transferee were an original Investor hereunder and in the case of clause (iii) the transfer was without additional consideration or at no greater than cost.

 

2.2            “Market Stand-Off” Agreement. Each Holder hereby agrees that it shall not, to the extent requested by the Company or an underwriter of securities of the Company, sell or otherwise transfer or dispose of any Securities or other shares of stock of the Company then owned by such Holder (other than to donees or partners of the Holder who agree to be similarly bound) for up to one hundred eighty (180) days following the effective date of any registration statement of the Company filed under the Securities Act; provided however that, if during the last seventeen (17) days of the restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to the expiration of the restricted period the Company announces that it will release earnings results during the 16-day period beginning on the last day of the restricted period, and if the Company’s securities are listed on the Nasdaq Stock Market and Rule 2711 thereof applies, then the restrictions imposed by this Section 2.2 shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. In no event will the restricted period extend beyond two hundred fifteen (215) days after the effective date of the registration statement.

 

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For purposes of this Section 2.2, the term “Company” shall include any wholly-owned subsidiary of the Company into which the Company merges or consolidates. To enforce the foregoing covenant, the Company shall have the right to place restrictive legends on the certificates representing the shares subject to this Section 2.2 and to impose stop transfer instructions with respect to the Securities and such other shares of stock of each Holder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period. Each Holder further agrees to enter into any agreement reasonably required by the underwriters to implement the foregoing within any reasonable timeframe so requested.

 

3.           PARTICIPATION RIGHT.

 

3.1            General. Each Major Investor has the right of first refusal to purchase up to three times (3x) of such Major Investor’s Pro Rata Share (as defined below) of all (or any part) of any New Securities (as defined in Section 3.2 below) that the Company may from time to time issue after the date of this Agreement, provided, however, such Major Investor shall have no right to purchase any such New Securities if such Major Investor cannot demonstrate to the Company’s reasonable satisfaction that such Major Investor is at the time of the proposed issuance of such New Securities an “accredited investor” as such term is defined in Regulation D under the Securities Act. A Major Investor’s “Pro Rata Share” for purposes of this right of first refusal is the ratio of (a) the number of shares of the Company’s Common Stock issued or issuable upon conversion of the Shares owned by such Major Investor, to (b) a number of shares of Common Stock of the Company equal to the sum of (1) the total number of shares of Common Stock of the Company then outstanding plus (2) the total number of shares of Common Stock of the Company into which all then outstanding shares of Preferred Stock of the Company are then convertible plus (3) the number of shares of Common Stock of the Company reserved for issuance under any stock purchase and stock option plans of the Company and outstanding warrants.

 

3.2            New Securities.New Securities” shall mean any Common Stock or Preferred Stock of the Company, whether now authorized or not, and rights, options or warrants to purchase such Common Stock or Preferred Stock, and securities of any type whatsoever that are, or may become, convertible or exchangeable into such Common Stock or Preferred Stock; provided, however, that the term “New Securities” does not include: (a) shares of Common Stock issued or issuable upon conversion of the outstanding shares of all the series of the Preferred Stock; (b) shares of Common Stock or Preferred Stock issuable upon exercise of any options, warrants or rights to purchase any securities of the Company outstanding as of the date of this Agreement and any securities issuable upon the conversion thereof; (c) shares of Common Stock or Preferred Stock issued in connection with any stock split or stock dividend or recapitalization; (d) shares of Common Stock (or options, warrants or rights therefor) granted or issued hereafter to employees, officers, directors, contractors, consultants or advisers to, the Company or any subsidiary of the Company pursuant to incentive agreements, stock purchase or stock option plans, stock bonuses or awards, warrants, contracts or other arrangements that are approved by the Company’s Board of Directors (the “Board”); (e) shares of the Company’s Series Seed Preferred Stock issued pursuant to the Series Seed Agreement; (f) any other shares of Common Stock or Preferred Stock (and/or options or warrants therefor) issued or issuable primarily for other than equity financing purposes and approved by the Board; and (g) shares of Common Stock issued or issuable by the Company to the public pursuant to a registration statement filed under the Securities Act.

 

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3.3            Procedures. In the event that the Company proposes to undertake an issuance of New Securities, it shall give to each Major Investor a written notice of its intention to issue New Securities (the “Notice”), describing the type of New Securities and the price and the general terms upon which the Company proposes to issue such New Securities given in accordance with Section 5.2. Each Major Investor shall have ten (10) days from the date such Notice is effective, as determined pursuant to Section 5.2 based upon the manner or method of notice, to agree in writing to purchase such Major Investor’s Pro Rata Share of such New Securities for the price and upon the general terms specified in the Notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased (not to exceed such Major Investor’s Pro Rata Share).

 

3.4            Failure to Exercise. In the event that the Major Investors fail to exercise in full the right of first refusal within such ten (10) day period, then the Company shall have one hundred twenty (120) days thereafter to sell the New Securities with respect to which the Major Investors’ rights of first refusal hereunder were not exercised, at a price and upon general terms not materially more favorable to the purchasers thereof than specified in the Company’s Notice to the Major Investors. In the event that the Company has not issued and sold the New Securities within such one hundred twenty (120) day period, then the Company shall not thereafter issue or sell any New Securities without again first offering such New Securities to the Major Investors pursuant to this Section 3.

 

4.           GENERAL PROVISIONS.

 

4.1            Amendment and Waiver of Rights. Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Investors (and/or any of their permitted successors or assigns) holding Shares representing and/or convertible into a majority of all the Investors’ Shares (as defined below). As used herein, the term “Investors’ Shares” shall mean the shares of Common Stock then issuable upon conversion of all then outstanding Shares issued under the Series Seed Agreement plus all then outstanding shares issued upon the conversion of any Shares issued under the Series Seed Agreement. Any amendment or waiver effected in accordance with this Section 5.1 shall be binding upon each Investor, each Holder, each permitted successor or assignee of such Investor or Holder and the Company.

 

4.2            Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on the signature page or Exhibit A or Exhibit B hereto, or to such address or facsimile number as subsequently modified by written notice given in accordance with this Section 4.2. If notice is given to the Company, it shall be sent to TriplePulse, Inc., 10960 Wilshire Blvd., Suite 1050, Los Angeles, CA Attn: President; and a copy (which shall not constitute notice) shall also be sent to LKP Global Law, LLP, 1901 Avenue of the Stars, Suite 480, Los Angeles, CA 90067 Attn:Donald Lee.

 

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4.3          Entire Agreement. This Agreement and the documents referred to herein, together with all the Exhibits hereto, constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede any and all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.

 

4.4          Governing Law. This Agreement shall be governed by. and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law.

 

4.5          Severability The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

 

4.6          Third Parties. Nothing in this Agreement, express or implied, is intended to confer upon any person, other than the parties hereto and their successors and assigns, any rights or remedies under or by reason of this Agreement.

 

4.7          Successors and Assigns. This Agreement, and any and all rights, duties and obligations hereunder, shall not be assigned, transferred, delegated or sublicensed by an Investors without the prior written consent of the Company. Any attempt by an Investor without such permission to assign, transfer, delegate or sublicense any rights, duties or obligations that arise under this Agreement shall be void. Subject to the foregoing, and except as otherwise provided herein, this Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives.

 

4.8          Titles and Headings. The titles, captions and headings of this Agreement are included for ease of reference only and will be disregarded in interpreting or construing this Agreement. Unless otherwise specifically stated, all references herein to “sections” and “exhibits” will mean “sections” and “exhibits” to this Agreement.

 

4.9          Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.

 

4.10        Costs and Attorneys’ Fees. In the event that any action, suit or other proceeding is instituted concerning or arising out of this Agreement or any transaction contemplated hereunder, the prevailing party shall recover all of such party’s costs and attorneys’ fees incurred in each such action, suit or other proceeding, including any and all appeals or petitions therefrom.

 

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4.11        Adjustments for Stock Splits, Etc. Wherever in this Agreement there is a reference to a specific number of shares of Common Stock or Preferred Stock of the Company of any class or series, then, upon the occurrence of any subdivision, combination or stock dividend of such class or series of stock, the specific number of shares so referenced in this Agreement shall automatically be proportionally adjusted to reflect the effect on the outstanding shares of such class or series of stock by such subdivision, combination or stock dividend.

 

4.12        Further Assurances. The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement.

 

4.13        Facsimile Signatures. This Agreement may be executed and delivered by facsimile and upon such delivery the facsimile signature will be deemed to have the same effect as if the original signature had been delivered to the other party.

 

4.14        Termination. The rights, duties and obligations under Sections 1 and 3 this Agreement shall terminate immediately prior to the closing of the Company’s initial public offering of Common Stock pursuant to an effective registration statement filed under the Securities Act. Notwithstanding anything to the contrary herein, this Agreement (excluding any then-existing obligations) shall terminate upon the closing of a Deemed Liquidation Event as defined in the Company’s Restated Certificate of Incorporation, as amended from time to time. Section 1.1(b) shall survive any such termination of the Agreement.

 

4.15        Dispute Resolution. Each party (a) hereby irrevocably and unconditionally submits to the jurisdiction of the federal or state courts located in the Central District of California for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement or the Transaction Documents (as defined in the Series Seed Preferred Stock Purchase Agreement dated of even date herewith), (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement or the Transaction Documents except in the federal or state courts located in the Central District of California, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement, the Transaction Documents or the subject matter hereof and thereof may not be enforced in or by such court.

 

[Remainder of Page Intentionally Left Blank]

 

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

 

THE COMPANY:
 
TRIPLEPULSE, INC.
     
Name: /s/ Christopher D. Thompson  
     
By: Christopher D. Thompson  
     
Title: President  

 

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

 

KEY HOLDERS:      
       
Name: Chris Thompson   Name: Constantine Anastasakis  
           
  /s/ Chris Thompson     /s/ Constantine Anastasakis
         
Nil Jll Joshua Ripley        
           
  /s/ Joshua Ripley        

 

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

 

INVESTORS:
 
StartEngine Fund I, L.P.
 
Name: Howard Marks  
By: /s/ Howard Marks  
Title: Managing Member  

 

 

 

EXHIBIT A

 

List of Investors

 

Name, Address and E-Mail   Number of Shares
StartEngine Fund I, L.P.   66,667

 

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EXHIBIT B

 

List of Key Holders

 

    Number of Shares
Name, Address and E-Mail   of Common Stock Held
Christopher D. Thompson   360,606
2635 5th Street,    
Santa Monica, CA 90405    
Email: ct@triplepulse.com    
     
Constantine Anastasakis   206,060
1345 South Beverly Glen, Apt 304    
Los Angeles, CA 90024    
Email: ca@triplepulse.com    
     
Joshua Ripley   33,334
     
13559 Kitty Hawk St.    
Victorville, CA 92392    
Email: joshua@triplepulse.com    

 

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EX1A-6 MAT CTRCT 28 tm2031356d1_ex6-15.htm EXHIBIT 6.15
Exhibit 6.15

 

TRIPLEPULSE, INC
2014 STOCK PLAN

 

ARTICLE I

GENERAL PROVISIONS

 

I.1PURPOSE OF THE PLAN

 

This 2014 Stock Plan (the Plan) is intended to promote the interests of TriplePulse, Inc, a Delaware corporation, by providing eligible persons in the Corporation’s employ or service with the opportunity to acquire a proprietary interest, or otherwise increase their proprietary interest, in the Corporation as an incentive for them to continue in such employ or service.

 

Capitalized terms herein shall have the meanings assigned to such terms in the attached Appendix.

 

I.2STRUCTURE OF THE PLAN

 

(a)The Plan shall be divided into two (2) separate equity programs:

 

(i)            the Option Grant Program, as set forth in Article II hereof, under which eligible persons may, at the discretion of the Plan Administrator, be granted options to purchase shares of Common Stock; and

 

(ii)            the Stock Issuance Program, as set forth in Article III hereof, under which eligible persons may, at the discretion of the Plan Administrator, be issued shares of Common Stock directly, either through the immediate purchase of such shares or as a bonus for services rendered the Corporation (or any Parent or Subsidiary).

 

(b)            The provisions of Articles I and IV shall apply to both equity programs under the Plan and shall accordingly govern the interests of all persons under the Plan.

 

I.3ADMINISTRATION OF THE PLAN

 

(a)            Plan Administrator. The Plan shall be administered by the Board. However, any or all administrative functions otherwise exercisable by the Board may be delegated to the Committee. Members of the Committee shall serve for such period of time as the Board may determine and shall be subject to removal by the Board at any time. The Board may also at any time terminate the functions of the Committee and reassume all powers and authority previously delegated to the Committee.

 

(b)            Powers of the Plan Administrator. Subject to the provisions of the Plan and, in the case of the Committee, the specific duties delegated by the Board to such Committee, and subject to the approval of any relevant authorities, including the approval, if required, of any Stock Exchange upon which the Common Stock is listed, the Plan Administrator shall have the authority in its discretion:

 

(i)            to determine the Fair Market Value of the Common Stock;

 

(ii)           to select which eligible persons, pursuant to Section 1.4(a), below, are to be granted options under the Option Grant Program;

 

(iii)          to determine whether, when and to what extent options are granted hereunder;

 

(iv)          to determine the vesting schedule, if any, applicable to the option shares and the maximum term for which the option is to remain outstanding, subject to Section 2.1 hereof;

 

(v)           to determine whether the option granted is an Incentive Option or Non-Statutory Option;

 

(vi)          to select which eligible persons, pursuant to Section 1.4(a), below, are to receive stock issuances under the Stock Issuance Program;

 

TriplePulse 2014 Stock Plan

 

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(vii)         to determine whether and when stock issuances shall be made under the Stock Issuance Program;

 

(viii)        to determine the number of shares to be covered by each such award granted under the Stock Issuance Program;

 

(ix)           to determine the vesting schedule, if any, applicable to the shares issued under the Stock Issuance Program and the consideration to be paid by the Participant for such shares;

 

(x)            to approve forms of agreement for use under the Plan;

 

(xi)           to establish such rules and regulations as the Plan Administrator may deem appropriate for the proper administration of the Plan; and

 

(xii)          to construe and interpret the terms of the Plan, including the rules and regulations, if any, established in connection with the Plan, and any outstanding options or stock issuances thereunder as the Plan Administrator may deem necessary or advisable.

 

(c)            Effect of Plan Administrator's Decision. All decisions, determinations and interpretations of the Plan Administrator shall be final and binding on all Optionees, all Participants and all holders of shares of Common Stock issued upon exercise of options.

 

I.4ELIGIBILITY

 

(a)The persons eligible to participate in the Plan are as follows:

 

(i)             Employees;

 

(ii)            nonemployee members of the Board or the nonemployee members of the board of directors of any Parent or Subsidiary; and

 

(iii)           consultants and other independent advisors who provide services to the Corporation (or any Parent or Subsidiary).

 

(b)            Neither the Plan nor any grant hereunder confer upon any Optionee or Participant any right with respect to continuation of his or her employment or consulting relationship with the Corporation, or any Parent or Subsidiary employing or retaining such person, nor shall it interfere in any way with his or her right or right of the Corporation (or Parent or Subsidiary, if applicable) to terminate his or her employment or consulting relationship at any time, with or without cause, which rights are hereby expressly reserved by each.

 

I.5STOCK SUBJECT TO THE PLAN

 

(a)            The stock issuable under the Plan shall be shares of authorized but unissued or reacquired Common Stock. The maximum number of shares of Common Stock which may be issued over the term of the Plan shall not exceed 166,666 shares (subject to Section 1.5(c) below) (“Maximum Number”).

 

(b)            Shares of Common Stock subject to outstanding options shall be available for subsequent issuance under the Plan to the extent (i) the options expire or terminate for any reason prior to exercise in full, or (ii) the options are cancelled in accordance with the cancellationregrant provisions of Article II. Unvested shares issued under the Plan and subsequently repurchased by the Corporation, at the option exercise or direct issue price paid per share, pursuant to the Corporation’s repurchase rights under the Plan shall be added back to the number of shares of Common Stock reserved for issuance under the Plan and shall accordingly be available for reissuance through one or more subsequent option grants or direct stock issuances under the Plan.

 

(c)            Should any change be made to the Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration, appropriate adjustments shall be made by the Plan Administrator to (i) the maximum number and/or class of securities issuable under the Plan, and (ii) the number and/or class of securities and the exercise price per share in effect under each outstanding option in order to prevent the dilution or enlargement of benefits thereunder. The adjustments determined by the Plan Administrator shall be final, binding and conclusive. In no event shall any such adjustments be made in connection with the conversion of one or more outstanding shares of the Corporation’s preferred stock into shares of Common Stock.

 

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ARTICLE II

OPTION GRANT PROGRAM

 

II.1TERMS FOR ALL OPTIONS

 

Each option shall be evidenced by one or more documents in the form approved by the Plan Administrator; provided, however, that each such document shall comply with the terms specified below. Each document evidencing an Incentive Option shall, in addition, be subject to the provisions of the Plan applicable to such options.

 

(a)Exercise Price.

 

(i)The exercise price per share shall be fixed by the Plan Administrator in accordance with the following provisions:

 

(1)            The exercise price per share shall not be less than one-hundred percent (100%) of the Fair Market Value per share of Common Stock on the option grant date.

 

(2)            If the person to whom the option is granted is a 10% Stockholder, then the exercise price per share shall not be less than one hundred ten percent (110%) of the Fair Market Value per share of Common Stock on the option grant date.

 

(ii)            The exercise price shall become immediately due upon exercise of the option and shall, subject to the provisions of Section 4.1 of Article IV and the documents evidencing the option, be payable in cash or check made payable to the Corporation. Should the Common Stock be registered under Section 12 of the 1934 Act at the time the option is exercised, then the exercise price may also be paid as follows:

 

(1)            in shares of Common Stock held by the Optionee for the requisite period necessary to avoid a charge to the Corporation’s earnings for financial reporting purposes, duly endorsed for transfer to the Corporation and valued at Fair Market Value on the Exercise Date; or

 

(2)            to the extent the option is exercised for vested shares, through a special sale and remittance procedure pursuant to which the Optionee shall concurrently provide irrevocable instructions (A) to a Corporation-designated brokerage firm to effect the immediate sale of the purchased shares and remit to the Corporation, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased shares plus all applicable Federal, state and local income and employment taxes required to be withheld by the Corporation by reason of such exercise, and (B) to the Corporation to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale.

 

Except to the extent such sale and remittance procedure is utilized, payment of the exercise price for the purchased shares must be made on the Exercise Date.

 

(b)            Exercise and Term of Options. Each option shall be exercisable at such time or times, during such period and for such number of shares as shall be determined by the Plan Administrator and set forth in the documents evidencing the option grant. However, no option shall have a term in excess of ten (10) years measured from the option grant date.

 

(c)Effect of Termination of Continuous Service.

 

(i)            The following provisions shall govern the exercise of any vested options held by the Optionee at the time of cessation of Continuous Service or death:

 

(1)            Should the Optionee cease to remain in Continuous Service for any reason other than death, Disability or Misconduct, then the Optionee shall have a period of three (3) months following the date of such cessation of Continuous Service during which to exercise each outstanding vested option held by such Optionee.

 

TriplePulse 2014 Stock Plan

 

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(2)            Should Optionee’s Continuous Service terminate by reason of Disability, then the Optionee shall have a period of twelve (12) months following the date of such cessation of Continuous Service during which to exercise each outstanding vested option held by such Optionee.

 

(3)            If the Optionee dies while holding any outstanding vested options, then the personal representative of his or her estate or the person or persons to whom the option is transferred pursuant to the Optionee’s will or the laws of inheritance shall have a twelve (12) month period following the date of the Optionee’s death to exercise such vested options.

 

(4)            Under no circumstances, however, shall any vested option be exercisable after the specified expiration of the option term.

 

(5)            During the applicable postContinuous Service exercise period, the Optionee may exercise any vested options as of the date of the Optionee’s cessation of Continuous Service. Upon the expiration of the applicable exercise period or (if earlier) upon the expiration of the option term, vested but unexercised options shall terminate and cease to be outstanding. All unvested options held by Optionee, however, shall, immediately upon the Optionee’s cessation of Continuous Service, terminate and cease to be outstanding.

 

(6)            Notwithstanding the foregoing, should Optionee’s Continuous Service be terminated for Misconduct, then all outstanding options, whether vested or unvested, held by the Optionee shall terminate immediately and cease to remain outstanding.

 

(ii)            The Plan Administrator shall have the discretion, exercisable either at the time an option is granted or at any time while the option remains outstanding, to:

 

(1)            extend the period of time for which the option is to remain exercisable following Optionee’s cessation of Continuous Service or death from the limited period otherwise in effect for that option to such greater period of time as the Plan Administrator shall deem appropriate, but in no event beyond the expiration of the option term; and/or

 

(2)            permit the option to be exercised, during the applicable postContinuous Service exercise period, not only with respect to the number of vested shares of Common Stock for which such option is exercisable at the time of the Optionee’s cessation of Continuous Service but also with respect to one or more additional installments in which the Optionee would have vested under the option had the Optionee continued in Continuous Service.

 

(d)            Rule 16b-3. Options granted to a person subject to Section 16(b) of the 1934 Act must comply with Rule 16b-3 and shall contain such additional conditions or restrictions as may be required thereunder to qualify for the maximum exemption from Section 16 of the 1934 Act with respect to Plan transactions.

 

(e)            Stockholder Rights. The holder of an option shall have no stockholder rights with respect to the shares subject to the option until such person shall have exercised the option, paid the exercise price, become the recordholder of the purchased shares and executed and delivered any necessary documentation to effectuate the foregoing.

 

(f)            Early Exercise of Unvested Shares. The Plan Administrator shall have the discretion to grant options which are exercisable for unvested shares of Common Stock. Should the Optionee cease Continuous Service while holding such unvested shares, the Corporation shall have the right to repurchase, at the exercise price paid per share, any or all of those unvested shares. The terms upon which such repurchase right shall be exercisable (including the period and procedure for exercise and the appropriate vesting schedule for the purchased shares) shall be established by the Plan Administrator and set forth in the document evidencing such repurchase right.

 

(g)            Vesting Schedule. The Plan Administrator may impose a vesting schedule upon any option grant or the shares of Common Stock. Unless otherwise determined by the Plan Administrator or set forth in an Award agreement, the vesting schedule shall be as follows: (i) one-fourth (1/4) of the options on the first anniversary of the date of grant of the option, and (ii) the remaining three-fourths (3/4) of the shares in equal monthly installments over a thirty-six (36) month period commencing with such anniversary.

 

(h)            First Refusal Rights. Until such time as the Common Stock is first registered under Section 12 of the 1934 Act, the Corporation shall have the right of first refusal with respect to any proposed disposition by the Optionee (or any successor in interest) of any shares of Common Stock issued under the Plan. Such right of first refusal shall be exercisable in accordance with the terms established by the Plan Administrator and set forth in the document evidencing such right. To the extent any options granted hereunder permit early exercise, such options shall provide for a repurchase option so that upon termination of the employment or services of the Optionee, the Company (or its assignee) retains the option to repurchase any unvested shares at the lower of (i) cost or (ii) fair market value of such unvested shares.

 

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(i)            Limited Transferability of Options. During the lifetime of the Optionee, the option shall be exercisable only by the Optionee and shall not be assignable or transferable other than by will or by the laws of descent and distribution following the Optionee’s death.

 

(j)            Withholding. The Corporation’s obligation to deliver shares of Common Stock upon the exercise of any options granted under the Plan shall be subject to the satisfaction of all applicable Federal, state and local income and employment tax withholding requirements.

 

II.2INCENTIVE OPTIONS

 

The terms specified below shall be applicable to all Incentive Options. Except as modified by the provisions of this Section 2.2, all provisions of Articles I, II and IV shall be applicable to Incentive Options. Options which are specifically designated as NonStatutory Options shall be subject to all provisions or Articles I, II and IV, but not subject to the terms of this Section 2.2. The number of shares subject to Incentive Options shall not exceed the Maximum Number.

 

(a)            Eligibility. Incentive Options may only be granted to Employees.

 

(b)            Exercise Price. The exercise price per share shall not be less than one hundred percent (100%) of the Fair Market Value per share of Common Stock on the option grant date.

 

(c)            Dollar Limitation. The aggregate Fair Market Value of the shares of Common Stock (determined as of the respective date or dates of grant) for which one or more options granted to any Employee under the Plan (or any other option plan of the Corporation or any Parent or Subsidiary) may for the first time become exercisable as Incentive Options during any one (1) calendar year shall not exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the Employee holds two (2) or more such options which become exercisable for the first time in the same calendar year, the foregoing limitation on the exercisability of such options as Incentive Options shall be applied on the basis of the order in which such options are granted.

 

(d)            10% Stockholder. If any Employee to whom an Incentive Option is granted is a 10% Stockholder, then the option term shall not exceed five (5) years measured from the option grant date.

 

II.3CORPORATE TRANSACTION

 

(a)            The Plan Administrator shall have full power and authority, exercisable either at the time an option is granted or at any time while the option remains outstanding, to structure such option so that the shares subject to that option will automatically vest on an accelerated basis should the Optionee’s Continuous Service terminate by reason of an Involuntary Termination within a designated period (not to exceed eighteen (18) months) following the effective date of any Corporate Transaction in which the option is assumed and the repurchase rights applicable to those shares do not otherwise terminate. The Plan Administrator also has the authority to modify the acceleration of options described herein such that the shares subject to each option outstanding under the Plan at the time of a Corporate Transaction would automatically vest in full so that each such option shall, immediately prior to the effective date of the Corporate Transaction, become fully exercisable for all of the shares of Common Stock at the time subject to that option and may be exercised for any or all of those shares as fullyvested shares of Common Stock. Notwithstanding the foregoing, the shares subject to an outstanding option shall not vest on such an accelerated basis if and to the extent: (i) such option is assumed by the successor corporation (or parent thereof) in the Corporate Transaction and any repurchase rights of the Corporation with respect to the unvested option shares are concurrently assigned to such successor corporation (or parent thereof), or (ii) such option is to be replaced with a cash incentive program of the successor corporation which preserves the spread existing on the unvested option shares at the time of the Corporate Transaction and provides for subsequent payout in accordance with the same vesting schedule applicable to those unvested option shares, or (iii)   the acceleration of such option is subject to other limitations imposed by the Plan Administrator at the time of the option grant.

 

(b)            Each option which is assumed in connection with a Corporate Transaction shall be appropriately adjusted, immediately after such Corporate Transaction, to apply to the number and class of securities which would have been issuable to the Optionee in consummation of such Corporate Transaction, had the option been exercised immediately prior to such Corporate Transaction. Appropriate adjustments shall also be made to (i) the number and class of securities available for issuance under the Plan following the consummation of such Corporate Transaction and (ii) the exercise price payable per share under each outstanding option, provided the aggregate exercise price payable for such securities shall remain the same.

 

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(c)            The portion of any Incentive Option accelerated in connection with a Corporate Transaction shall remain exercisable as an Incentive Option only to the extent the applicable One Hundred Thousand Dollar ($100,000.00) limitation is not exceeded. To the extent such dollar limitation is exceeded, the accelerated portion of such option shall be exercisable as a NonStatutory Option under the Federal tax laws.

 

(d)            The grant of options under the Plan shall in no way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

 

II.4CANCELLATION AND REGRANT OF OPTIONS

 

The Plan Administrator shall have the authority to effect, at any time and from time to time, with the consent of the affected option holders, the cancellation of any or all outstanding options under the Plan and to grant in substitution therefor new options covering the same or different number of shares of Common Stock but with an exercise price per share based on the Fair Market Value per share of Common Stock on the new option grant date.

 

ARTICLE III

STOCK ISSUANCE PROGRAM

 

III.1STOCK ISSUANCE TERMS

 

Shares of Common Stock may be issued under the Stock Issuance Program through direct and immediate issuances without any intervening option grants. Each such stock issuance shall be evidenced by a Stock Issuance Agreement which complies with the terms specified below.

 

(a)Purchase Price.

 

(i)             The purchase price per share of the Common Stock issued under the Stock Issuance Plan shall be fixed by the Plan Administrator.

 

(ii)            Subject to the provisions of Section 4.1 of Article IV, shares of Common Stock may be issued under the Stock Issuance Program for any of the following items of consideration which the Plan Administrator may deem appropriate in each individual instance:

 

(1)cash or check made payable to the Corporation; or

 

(2)past services rendered to the Corporation (or any Parent or Subsidiary).

 

(b)Vesting Provisions.

 

(i)            Vesting Schedule. Shares of Common Stock issued under the Stock Issuance Program may, in the discretion of the Plan Administrator, vest in one or more installments over the Participant’s period of Continuous Service or upon attainment of specified performance objectives. Unless otherwise determined by the Plan Administrator or as otherwise set forth in an Award agreement, the Plan Administrator may shall impose a vesting schedule upon any shares of Common Stock issued hereunder of (i) twenty-five percent (25%) of the options on the first anniversary of the issuance of the Common Stock, and (ii) the remaining seventy-five percent (75%) of the shares in equal monthly installments over a thirty-six (36) month period commencing with such anniversary.

 

(ii)            Additional Securities. Any new, substituted or additional securities or other property (including money paid other than as a regular cash dividend) which the Participant may have the right to receive with respect to the Participant’s unvested shares of Common Stock by reason of any stock dividend, stock split, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration shall be issued subject to (i) the same vesting requirements applicable to the Participant’s unvested shares of Common Stock and (ii) such escrow arrangements as the Plan Administrator shall deem appropriate.

 

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(iii)            Stockholder Rights. The Participant shall have full stockholder rights with respect to any shares of Common Stock issued to the Participant under the Stock Issuance Program, whether or not the Participant’s interest in those shares is vested. Accordingly, the Participant shall have the right to vote such shares and to receive any regular cash dividends paid on such shares.

 

(iv)            Repurchase of Unvested Shares on Cessation of Continuous Service. Should the Participant cease to remain in Continuous Service while holding one or more unvested shares of Common Stock issued under the Stock Issuance Program or should the performance objectives not be attained with respect to one or more such unvested shares of Common Stock, then those shares shall be immediately surrendered to the Corporation for cancellation, and the Participant shall have no further stockholder rights with respect to those shares. To the extent the surrendered shares were previously issued to the Participant for consideration paid in cash or cash equivalent (including the Participant’s purchasemoney indebtedness), the Corporation shall repurchase such shares from the Participant for the amount of cash consideration originally paid by the Participant for such shares and shall cancel the unpaid principal balance of any outstanding purchase money note of the Participant attributable to such shares.

 

(v)            Waiver. The Plan Administrator may in its discretion waive the surrender and cancellation of one or more unvested shares of Common Stock (or other assets attributable thereto) which would otherwise occur upon the noncompletion of the vesting schedule applicable to those shares. Such waiver shall result in the immediate vesting of the Participant’s interest in the shares of Common Stock as to which the waiver applies. Such waiver may be effected at any time, whether before or after the Participant’s cessation of Continuous Service or the attainment or nonattainment of the applicable performance objectives.

 

(c)            First Refusal Rights. Until such time as the Common Stock is first registered under Section 12 of the 1934 Act, the Corporation shall have the right of first refusal with respect to any proposed disposition by the Participant (or any successor in interest) of any shares of Common Stock issued under the Stock Issuance Program. Such right of first refusal shall be exercisable in accordance with the terms established by the Plan Administrator and set forth in the document evidencing such right.

 

III.2CORPORATE TRANSACTION

 

(a)            The Plan Administrator shall have full power and authority, exercisable either at the time the unvested shares are issued or any time while the Corporation’s repurchase rights with respect to those shares remain outstanding, to determine any acceleration of vesting of any unvested shares in any manner as determined by the Plan Administrator and as may be set forth in an Award Agreement. The Plan Administrator may determine to provide that those rights shall automatically terminate on an accelerated basis, and the shares of Common Stock subject to those terminated rights shall immediately vest, in the event the Participant’s Continuous Service should subsequently terminate by reason of an Involuntary Termination within a designated period (not to exceed eighteen (18) months) following the effective date of any Corporate Transaction in which those repurchase rights are assigned to the successor corporation (or parent thereof).

 

(b)            Subject to 3.2(a) above, the Plan Administrator has the authority to determine that all outstanding repurchase rights under the Stock Issuance Program shall terminate automatically, and the shares of Common Stock subject to those terminated rights shall immediately vest in full, except to the extent: (i) those repurchase rights are assigned to the successor corporation (or parent thereof) in connection with such Corporate Transaction, or (ii) such shares of Common Stock are to be replaced with a cash incentive program of the successor corporation which preserves the spread between the repurchase price and the fair market value existing on the unvested shares of Common Stock at the time of the Corporate Transaction and provides for subsequent payout in accordance with the same vesting schedule applicable to those unvested shares of Common Stock, or (iii) such accelerated vesting is precluded by other limitations imposed by the Plan Administrator at the time the repurchase right is issued.

 

III.3SHARE ESCROW/LEGENDS

 

Unvested shares may, in the Plan Administrator’s discretion, be held in escrow by the Corporation until the Participant’s interest in such shares vests or may be issued directly to the Participant with appropriate restrictive legends on the certificates evidencing those unvested shares.

 

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ARTICLE IV
MISCELLANEOUS
 
IV.1FINANCING

 

The Plan Administrator may permit any Optionee or Participant to pay the option exercise price under the Option Grant Program or the purchase price for shares issued under the Stock Issuance Program by delivering a fullrecourse, interest bearing promissory note payable in one or more installments and secured by the purchased shares. The terms of any such promissory note (including the interest rate and the terms of repayment) shall be established by the Plan Administrator in its sole discretion. In no event may the maximum credit available to the Optionee or Participant exceed the sum of (i) the aggregate option exercise price or purchase price payable for the purchased shares (less the par value of those shares), plus (ii) any Federal, state and local income and employment tax liability incurred by the Optionee or the Participant in connection with the option exercise or share purchase.

 

IV.2EFFECTIVE DATE AND TERM OF PLAN

 

(a)            The Plan shall become effective when adopted by the Board, but no option granted under the Plan may be exercised, and no shares shall be issued under the Plan, until the Plan is approved by the Corporation’s stockholders. If such stockholder approval is not obtained within twelve (12) months after the date of the Board’s adoption of the Plan, then all options previously granted under the Plan shall terminate and cease to be outstanding, and no further options shall be granted and no shares shall be issued under the Plan. Subject to such limitation, the Plan Administrator may grant options and issue shares under the Plan at any time after the effective date of the Plan and before the date fixed herein for termination of the Plan.

 

(b)            The Plan shall terminate upon the earliest of (i) the expiration of the ten (10)year period measured from the date the Plan is adopted by the Board, (ii) the date on which all shares available for issuance under the Plan shall have been issued as vested shares, or (iii) the termination of all outstanding options in connection with a Corporate Transaction. All options and unvested stock issuances outstanding at the time of a clause (i) termination event shall continue to have full force and effect in accordance with the provisions of the documents evidencing those options or issuances.

 

IV.3AMENDMENT OF THE PLAN

 

(a)            The Board shall have complete and exclusive power and authority to amend or modify the Plan in any or all respects. However, no such amendment or modification shall adversely affect the rights and obligations with respect to options or unvested stock issuances at the time outstanding under the Plan unless the Optionee or the Participant consents to such amendment or modification. In addition, certain amendments may require stockholder approval pursuant to applicable laws and regulations.

 

(b)            Options may be granted under the Option Grant Program and shares may be issued under the Stock Issuance Program which are in each instance in excess of the number of shares of Common Stock then available for issuance under the Plan, provided any excess shares actually issued under those programs shall be held in escrow until there is obtained stockholder approval of an amendment sufficiently increasing the number of shares of Common Stock available for issuance under the Plan. If such stockholder approval is not obtained within twelve (12) months after the date the first such excess grants or issuances are made, then (i) any unexercised options granted on the basis of such excess shares shall terminate and cease to be outstanding, and (ii) the Corporation shall promptly refund to the Optionees and the Participants the exercise or purchase price paid for any excess shares issued under the Plan and held in escrow, together with interest (at the applicable Short Term Federal Rate) for the period the shares were held in escrow, and such shares shall thereupon be automatically cancelled and cease to be outstanding.

 

IV.4WITHHOLDING

 

The Corporation’s obligation to deliver shares of Common Stock upon the exercise of any options or upon the issuance or vesting of any shares issued under the Plan shall be subject to the satisfaction of all applicable Federal, state and local income and employment tax withholding requirements.

 

IV.5REGULATORY APPROVALS

 

The implementation of the Plan, the granting of any options under the Plan and the issuance of any shares of Common Stock (i) upon the exercise of any option, or (ii) under the Stock Issuance Program shall be subject to the Corporation’s procurement of all approvals and permits required by regulatory authorities having jurisdiction over the Plan, the options granted under it and the shares of Common Stock issued pursuant to it.

 

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IV.6FINANCIAL REPORTS

 

The Corporation shall deliver a balance sheet and an income statement at least annually to each individual holding an outstanding option under the Plan, unless such individual is a key Employee whose duties in connection with the Corporation (or any Parent or Subsidiary) assure such individual access to equivalent information.

 

IV.7MARKET STAND-OFF

 

Optionees and Participants hereunder shall not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any Common Stock or other securities of the Company held by such Optionees or Participants (the “Restricted Securities”), for a period of time specified by the managing underwriter (not to exceed one hundred eighty (180) days) following the effective date of a registration statement of the Company filed under the Act. Optionees and Participants shall execute and deliver such other agreements as may be reasonably requested by the Corporation and/or the managing underwriter which are consistent with the foregoing or which are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Corporation may impose stop-transfer instructions with respect to Optionees’ or Participants’ Restricted Securities until the end of such period.

 

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APPENDIX

 

The following definitions shall be in effect under the Plan:

 

(a)           “Affiliate” shall mean any parent corporation or subsidiary corporation of the Corporation, whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986, as amended.

 

(b)“Board” shall mean the Corporation’s Board of Directors.

 

(c)“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

 

(d)           “Committee” shall mean a committee of two (2) or more Board members appointed by the Board to exercise one or more administrative functions under the Plan.

 

(e)“Common Stock” shall mean the Corporation’s common stock.

 

(f)           “Consultant” means any person, including an advisor, (i) engaged by the Corporation or an Affiliate to render consulting or advisory services and who is compensated for such services, or (ii) who is a member of the Board of Directors of an Affiliate. The term “Consultant”, however, shall not include either Directors who are not compensated by the Corporation for their services as Directors or Directors who are merely paid a director’s fee by the Corporation for their services as Directors.

 

(g)           “Continuous Service” means that an Optionee’s or Participant’s service with the Corporation or an Affiliate, whether as an Employee, Director or Consultant not interrupted or terminated (except for the expiration of an employment or engagement agreement by the terms of such agreement). Purchaser’s Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which Purchaser renders service to the Corporation or an Affiliate as an Employee, Consultant or Director or a change in the entity for which Purchaser renders such service, provided that there is no interruption or termination of Purchaser’s Continuous Service. For example, a change in status from an Employee of the Corporation to a Consultant of an Affiliate or a Director will not constitute an interruption of Continuous Service. The Board or the chief executive officer (or president if there is no chief executive officer) of the Corporation, in that party’s sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal leave

 

(h)           “Corporate Transaction” shall mean either of the following stockholder-approved transactions to which the Corporation is a party:

 

(i)            a merger, consolidation, sale, transfer or other disposition in which securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation’s outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction; or

 

(ii)            the sale, transfer or other disposition of all or substantially all of the Corporation’s assets to a third party or parties and/or in complete liquidation or dissolution of the Corporation.

 

(i)            “Corporation” shall mean TriplePulse, Inc, a Delaware corporation, and any successor corporation to all or substantially all of the assets or voting stock of TriplePulse, Inc, which shall by appropriate action adopt the Plan.

 

(j)“Director” means a member of the Board.

 

(k)            “Disability” shall mean the inability of the Optionee or the Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment and shall be determined by the Plan Administrator on the basis of such medical evidence as the Plan Administrator deems warranted under the circumstances.

 

(l)            “Employee” shall mean an individual who is in the employ of the Corporation (or any Parent or Subsidiary), subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance. Mere service as a Director or payment of a director’s fee by the Corporation or an Affiliate shall not be sufficient to constitute “employment” by the Corporation or an Affiliate.

 

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(m)“Exercise Date” shall mean the date on which the Corporation shall have received written notice of the option exercise.

 

(n)           “Fair Market Value” per share of Common Stock on any relevant date shall be determined in accordance with the following provisions:

 

(i)            If the Common Stock is at the time traded on the Nasdaq National Market, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question, as such price is reported by the National Association of Securities Dealers on the Nasdaq National Market. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists;

 

(ii)            If the Common Stock is at the time listed on any Stock Exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question on the Stock Exchange determined by the Plan Administrator to be the primary market for the Common Stock, as such price is officially quoted in the composite tape of transactions on such exchange. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists; or

 

(iii)            If the Common Stock is at the time neither listed on any Stock Exchange nor traded on the Nasdaq National Market, then the Fair Market Value shall be determined by the Plan Administrator in accordance with the requirements of Section 409 of the Code and proposed regulations Section 1.409A-1(b)(5)(iv) and any other successor provisions, after taking into account such factors as the Plan Administrator shall deem appropriate.

 

(o)“Incentive Option” shall mean an incentive stock option, which satisfies the requirements of Code Section 422.

 

(p)           “Involuntary Termination” shall mean the termination of the Service of any individual which occurs by reason of:

 

(i)such individual’s involuntary dismissal or discharge by the Corporation for reasons other than Misconduct; or

 

(ii)           such individual’s voluntary resignation following (A) a material change in his or her position with the Corporation which materially reduces his or her duties and responsibilities or the level of management to which he or she reports, (B) a material reduction in his or her level of compensation (including base salary, fringe benefits and target bonuses under any corporateperformance based bonus or incentive programs), or (C) a relocation of such individual’s place of employment by more than fifty (50) miles, provided and only if such change, reduction or relocation is effected without the individual’s consent.

 

(q)           “Misconduct” shall mean (i) the commission of any act of fraud, embezzlement or dishonesty by the Optionee or Participant, (ii) any unauthorized use or disclosure by such person of confidential information or trade secrets of the Corporation (or any Parent or Subsidiary), (iii) any other intentional misconduct by such person adversely affecting the business or affairs of the Corporation (or any Parent or Subsidiary) in a material manner, or (iv) any material violation of any written Company policy.

 

(r)“1934 Act” shall mean the Securities Exchange Act of 1934, as amended.

 

(s)“NonStatutory Option” shall mean an option not intended to satisfy the requirements of Code Section 422.

 

(t)“Option Grant Program” shall mean the option grant program in effect under the Plan.

 

(u)“Optionee” shall mean any person to whom an option is granted under the Plan.

 

(v)           “Parent” shall mean any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

 

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(w)“Participant” shall mean any person who is issued shares of Common Stock under the Stock Issuance Program.

 

(x)“Plan” shall mean the Corporation’s 2014 Stock Plan, as set forth in this document.

 

(y)           “Plan Administrator” shall mean either the Board or the Committee acting in its capacity as administrator of the Plan.

 

(z)“Stock Exchange” shall mean either the American Stock Exchange or the New York Stock Exchange.

 

(aa) “Stock Issuance Agreement” shall mean the agreement entered into by the Corporation and the Participant at the time of issuance of shares of Common Stock under the Stock Issuance Program.

 

(bb) “Stock Issuance Program” shall mean the stock issuance program in effect under the Plan.

 

(cc) “Subsidiary” shall mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

 

(dd) “10% Stockholder” shall mean the owner of stock (as determined under Code Section 424(d)) possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Corporation (or any Parent or Subsidiary).

 

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EX1A-6 MAT CTRCT 29 tm2031356d1_ex6-16.htm EXHIBIT 6.16

 

Exhibit 6.16

TriplePulse, Inc.

 

WRITTEN CONSENT IN LIEU OF

MEETING OF THE STOCKHOLDERS

 

 

 

The undersigned, being the majority of the stockholders of TriplePulse, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), pursuant to Section 228 of The General Corporation Law of Delaware, agrees to the adoption of the following resolutions with the same force and effect as if such resolutions had been adopted at a duly convened annual meeting of the Stockholder of the Corporation.

 

Ratification of Defective Corporate Acts

 

RESOLVED, that the undersigned hereby consents to the ratification of the defective acts set forth in the Unanimous Written Consent in Lieu of Meeting of the Board of Directors effective January 24, 2020, attached hereto as Exhibit A, to effect the Stock Split (as defined in the foregoing resolution), which shall be deemed to be effective as of September 11, 2019 at 5:00 pm Pacific Standard Time.

 

FURTHER RESOLVED, that the undersigned approves an amendment to the Certificate of Incorporation such that the total number of shares of all classes of stock which the Corporation shall have authority to issue is (a) 100,000,000 shares of Common Stock,$0.0001 par value per share (“Common Stock”), and (b) 110,416 shares of Preferred Stock,$0.0001 par value per share (“Preferred Stock”).

 

FURTHER RESOLVED, that this Written Consent may be executed and may be transmitted to the Corporation electronically, in which event the electronic signature shall have the same effect as an original signature; and

 

FURTHER RESOLVED, that the Secretary of the Corporation is hereby authorized and empowered to certify to the passage of the foregoing resolutions under the seal of this Corporation or otherwise.

 

Shareholder Notification

 

The undersigned is hereby notified that any claim that the defective corporate act or putative stock ratified hereunder is void or voidable due to the failure of authorization, or that the Court of Chancery should declare in its discretion that a ratification in accordance with Section 204 of the Delaware General Corporation Law not be effective or be effective only on certain conditions must be brought within 120 days from the applicable validation effective time.

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Written Consent effective as of the date set forth opposite their signature.

 

    INDIVIDUAL SHAREHOLDER:
     
Date:        /s/ Christopher Thompson
    Name: Christopher Thompson
     
     
      ENTITY SHAREHOLDER:
       
      TriplePulse, Inc.
       
Date:     By:   /s/ Christopher Thompson
    Name: Christopher Thompson
    Title: CEO

 

Signature Page to Written Consent of Shareholders

 

 

 

EXHIBIT A TO SHAREHOLDER CONSENT

 

UNANIMOUS WRITTEN CONSENT

IN LIEU OF MEETING OF THE BOARD OF DIRECTORS

 

Signature Page to Written Consent of Shareholders

 

 

EX1A-6 MAT CTRCT 30 tm2031356d1_ex6-17.htm EXHIBIT 6.17

Exhibit 6.17

 

111_6 17_page_01.gif  STANDARD MULTI-TENANT OFFICE LEASE-GROS AIR COMMERCIAL REAL ESTATE ASSOCIATION sic Provisions ("Basic Provisions"). 1Parties: This Lease ("Lease"), dated for reference purposes only ::.:M:::a"'Yc_::.1..:4_,_,_:2:..0:..::.1.o:5_' nd between SMCA Main Street Plaza, LLC ePulse Inc., a Delaware Corporation he "Parties", or individually a "Party"). 2(a)Premises: That certain portion of the Project (as defined below), known as Suite Numbers(s) .::D:... ftoor(s), consisting of approximately 1,2 7 5 rentable square feet and approximately are feet("Premises"). The Premises are located at: :::.3..:1:.:0:.:3:..._N=e:.:i:.:l::.:s::.o=n'-'W.:..:a::.y.. f Santa Monica , County of Los Angeles lifornia , with zip code 904 05 . In addition to Lessee's rights t hereinafter specified, Lessee shall have non-exclusive rights to the Common Areas (as defined in Paragraph 2.7 t shall not have any rights to the roof, the exterior walls, the area above the dropped ceilings, or the utility rac e Premises ("Building") or to any other buildings in the Project. The Premises, the Building, the Common Areas, ted, along with all other buildings and improvements thereon, are herein collectively referred to as the "Project." T y 4 7 , 6 6 5 rentable square feet. (See also Paragraph 2) (b)Parking: Three ( 3) unreserved aRG-f9SeF\I9G vehicle parking spaces at a monthly c per unreserved space aaA.EI $=========-' ""''"''ree>SseePF\'<ee<IEI-es'l' aaeese. (See Paragraph 2.6) Term: Five ( 5) years and Zero ( 0) mont June 1, 2 015 ("Commencement Date") and ending ::.:M:::a:...y<-3=1_,_, Date"). (See also Paragraph 3) :2::.0:..::.2..:0:... Early Possession: If the Premises are available Lessee may have non-exclusive possession of the Pr ("Early Possession Date"). (See also Paragra Base Rent: $3 , 9 5 0 • 0 0 per month ("Base Rent)", payable on the First ( 1 s t ) June 1, 2015. (See also Paragraph 4) x is checked, there are provisions in this Lease for the Base Rent to be adjusted. See Paragraph .::5..:0:... -.,.. Lessee's Share of Operating Expense Increase: Two pt, Six Eightpercent ( the event that that size of the Premises and/or the Project are modified during the term of this Lease, Lessor shall ct such modification. Base Rent and Other Monies Paid Upon Execution: (a)Base Rent: $3,950.00for the period 6/1/2015 - 6/30/2015 (b)Security Deposit: $4 0 ,0 11. 9 3 ("Security Deposit"). (See (c)Parking: $405.00for the period 6/1/2015 - 6/30/2015 (d)Other: $105.00 for::.:K:.::e-"'y--=C:..:a:.:r:.:d::.._:D:..;e::Jp"-o"'s"-J.=-·t.:: (e)Total Due Upon Execution of this Lease: $_4-'4_,,_4"-7--'1"-"-.::.:9:::.3 Agreed Use: .::G:.:e:.:n:.:e::.:r:..a::..::l_..:O..:f:.:f:.:i:..c:..e=---------------. (S Base Year; Insuring Party. The Base Year is 2 015Lessor is the "Insuring Party''. (See also Pa 0RealEstate Brokers: (See also Paragraph 15 and 25) (a) Representation: The following real estate brokers (the "Brokers") and brokerage relationships exist in thi xes): ommercial Brokerage, Inc. represents Lessor exclusively ( dvisors represents Lessee exclusively ("L ----------- ----------------------represents both Lessor and Less (b) Payment to Brokers: Upon execution and delivery of this Lease by both Parties, Lessor shall pay to the Br in a separate written agreement (or if there is no such agreement, the sum of or 4 • 0 0 brokerage services rendered by the Brokers. 1Guarantor. The obligations of the Lessee under this Lease shall be guaranteed by---------("Guarantor"). (Se 2Business Hours for the Building: §_;_Q.Q a.m. to 6:0 0 p.m., Mondays through Fridays (except Bu a.m. to 1:0 0 p.m. on Saturdays (except Building Holidays). "Building Holidays" shall mean the dates o resident's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day, and National 3Lessor Supplied Services. Notwithstanding the provisions of Paragraph 11.1, Lessor is NOT obligated to p mises: services

 

 

 

111_6 17_page_02.gif pecify): =----o-----,--,-,:----,----;-;---:----::----:--::---:---;;-::---:c:-c------,-::-c---,---=,---14Attachments. Attached hereto are the following, all of which constitute a part of this Lease: ndum consisting of Paragraphs 52 through .::5c::3:.._ n depicting the Premises; set of the Rules and Regulations; etter; al schedule; pecify): Rent Adjustments (4150); Option to Extend (#51) emises. 1Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises, for the ter e terms, covenants and conditions set forth in this Lease. While the approximate square footage of the Premises m g of the Premises for purposes of comparison, the Base Rent stated herein is NOT tied to square footage and is not ctual size be determined to be different. Note: Lessee is advised to verify the actual size prior to executing this L 2Condition. As is/Where Is. bessar sRall aeli"er IRe P mises Ia bessee iA a sleaA saAailieA eA IRe Gamme ssiaA 9ale, "'Rishe"er first essHrs ("StaF! Qate"), aAa "'arFaAis !hal IRe exisliAg eleslrisal, IHmbiRg, fire s riAI< El air saAEliliaAiRg systems ("M1 'AG"), aAEl all ather items "'Rish IRe besser is ebligalea le seAslruGI HrsHaAt Ia the y, ether IRaA these seRsiFHGiea by bessee, shall be iA gees e eFaliAg seAailieA aA saia sate, that the slrHsiHral e s aRe feHRElaliaR af tRe URtt sRall be ffee ef material aefests, aAa that tRe Premises aa Rat seRiaiR Raar<le<s levels axis HREler a lisabla stale ar feeeFal law. bessar alsa "NarraRts, tRalHRiess a!Renvisa s esifiee iR "'FiliR§, bessar tises af QefaHIIaffesliRg the Premise; (ii) aRy eeliR HeAIamaHRts dHe HREler aAy leaR sesHree by IRe P mises; aRe ( ffestiR§ IRe Premises. Compliance. Lessor warrants that to the best of its knowledge the improvements on the Premises and the Co ding codes applicable laws, covenants or restrictions of record, regulations, and ordinances ("Applicable Require time that each improvement, or portion thereof, was constructed. Said warranty does not apply to the use to which odifications which may be required by the Americans with Disabilities Act or any similar laws as a result of Lessee's y Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made or to be made by Lessee. NOTE: Lesse whether or not the zoning and other Applicable Requirements are appropriate for Lessee's intended use, and f the Premises may no longer be allowed. If the Premises do not comply with said warranty, Lessor shall, except as r receipt of written notice from Lessee setting forth with specificity the nature and extent of such non-compliance, rec equirements are hereafter changed so as to require during the term of this Lease the construction of an addition to o e remediation of any Hazardous Substance, or the reinforcement or other physical modification of the Premises ("Ca essee shall allocate the cost of such work as follows: (a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures are required as a result of the specific an Lessee as compared with uses by tenants in general, Lessee shall be fully responsible for the cost thereof, provided, nditure is required during the last 2 years of this Lease and the cost thereof exceeds 6 months' Base Rent, Lessee m nless Lessor notifies Lessee, in writing, within 10 days after receipt of Lessee's termination notice that Lessor ha tween the actual cost thereof and the amount equal to 6 months' Base Rent. If Lessee elects termination, Lessee sha e Premises which requires such Capital Expenditure and deliver to Lessor written notice specifying a termination d Such termination date shall, however, in no event be earlier than the last day that Lessee could legally utilize t such Capital Expenditure. (b) If such Capital Expenditure is not the result of the specific and unique use of the Premises by Lessee (suc ismic modifications), then Lessor shall pay for such Capital Expenditure and Lessee shall only be obligated to pay, ea the term of this Lease or any extension thereof, on the date that on which the Base Rent is due, an amount equal to 1 reasonably attributable to the Premises. Lessee shall pay Interest on the balance but may prepay its obligation at a Expenditure is required during the last 2 years of this Lease or if Lessor reasonably determines that it is not econom reof, Lessor shall have the option to terminate this Lease upon 90 days prior written notice to Lessee unless Lesse n 10 days after receipt of Lessor's termination notice that Lessee will pay for such Capital Expenditure. If Less d fails to tender its share of any such Capital Expenditure, Lessee may advance such funds and deduct same, with share of such costs have been fully paid. If Lessee is unable to finance Lessor's share, or if the balance of the Rent r of this Lease is not sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the right to terminate notice to Lessor. (c) Notwithstanding the above, the provisions concerning Capital Expenditures are intended to apply on and new Applicable Requirements. If the Capital Expenditures are instead triggered by Lessee as a result of an e, change in intensity of use, or modification to the Premises then, and in that event, Lessee shall either: (i) imm or intensity of use and/or take such other steps as may be necessary to eliminate the requirement for such Capita h Capital Expenditure at its own expense. Lessee shall not have any right to terminate this Lease. Acknowledgements. Lessee acknowledges that: (a) it has been given an opportunity to inspect and measu been advised by Lessor and/or Brokers to satisfy itself with respect to the size and condition of the Premises (includi HVAC and fire sprinkler systems, security, environmental aspects, and compliance with Applicable Requirements), ntended use, (c) Lessee has made such investigation as it deems necessary with reference to such matters and assu e same relate to its occupancy of the Premises, (d) it is not relying on any representation as to the size of the Premis the square footage of the Premises was not material to Lessee's decision to lease the Premises and pay the Rent s r, Lessor's agents, nor Brokers have made any oral or written representations or warranties with respect to said matte ease. In addition, Lessor acknowledges that: (i) Brokers have made no representations, promises or warranties or the Lease or suitability to occupy the Premises, and (ii) it is Lessor's sole responsibility to investigate the financ ll proposed tenants. Lessee as Prior Owner/Occupant. The warranties made by Lessor in Paragraph 2 shall be of no force or e tart Date, Lessee was the owner or occupant of the Premises. In such event, Lessee shall be responsible for any n Vehicle Parking. So long as Lessee is not in default, and subject to the Rules and Regulations attac y Lessor from time to time, Lessee shall be entitled to rent and use the number of parking spaces specified in Par plicable from time to time for monthly parking as set by Lessor and/or its licensee. (a) If Lessee commits, permits or allows any of the prohibited activities described in the Lease or the rules have the right, without notice, in addition to such other rights and remedies that it may have, to remove or tow away e cost to Lessee, which cost shall be immediately payable upon demand by Lessor. (b) The monthly rent per parking space specified in Paragraph 1.2(b) is subject to change upon 30 days pr rent for the parking is payable one month in advance prior to the first day of each calendar month. Common Areas - Definition. The term "Common Areas" is defined as all areas and facilities outside the Prem dary line of the Project and interior utility raceways and installations within the Premises that are provided and desig time for the general nonexclusive use of Lessor, Lessee and other tenants of the Project and their respective e tomers, contractors and invitees, including, but not limited to, common entrances, lobbies, corridors, stairwells king areas, loading and unloading areas, trash areas, roadways, walkways, driveways and landscaped areas. Common Areas - Lessee's Rights. Lessor grants to Lessee, for the benefit of Lessee and its employees, ustomers and invitees, during the term of this Lease, the nonexclusive right to use, in common with others entitle as as they exist from time to time, subject to any rights, powers, and privileges reserved by Lessor under the terms rules and regulations or restrictions governing the use of the Project. Under no circumstances shall the right herein as be deemed to include the right to store any property, temporarily or permanently, in the Common Areas. Any su y by the prior written consent of Lessor or Lessor's designated agent, which consent may be revoked at any time. I PAGE20F14

 

 

 

111_6 17_page_03.gif property and charge the cost to Lessee, which cost shall be immediately payable upon demand by Lessor. 9Common Areas·Rules and Regulations. Lessor or such other person{s) as Lessor may appoint shall have ment of the Common Areas and shall have the right, from time to time, to adopt, modify, amend and enforce r "Rules and Regulations") for the management, safety, care, and cleanliness of the grounds, the parking and unloadin of good order, as well as for the convenience of other occupants or tenants of the Building and the Project and their i ide by and conform to all such Rules and Regulations, and shall use its best efforts to cause its employees, suppliers, s nd invitees to so abide and conform. Lessor shall not be responsible to Lessee for the noncompliance with said Rule of the Project. 10Common Areas • Changes. Lessor shall have the right, in Lessos sole discretion, from time to time: (a) To make changes to the Common Areas, including, without limitation, changes in the location, size, s windows, stairways, air shafts, elevators, escalators, restrooms, driveways, entrances, parking spaces, parking eas, ingress, egress, direction of traffic, landscaped areas, walkways and utility raceways; (b)To close temporarily any of the Common Areas for maintenance purposes so long as reasonable acc lable; (c) (d) (e) To designate other land outside the boundaries of the Project to be a part of the Common Areas; To add additional buildings and improvements to the Common Areas; To use the Common Areas while engaged in making additional improvements, repairs or alterations t of; and (f)To do and perform such other acts and make such other changes in, to or with respect to the Commo ay, in the exercise of sound business judgment, deem to be appropriate. rm. 1 Term. The Commencement Date, Expiration Date and Original Term of this Lease are as specified in Paragrap Early Possession. Any provision herein granting Lessee Early Possession of the Premises is subject to and ing available for such possession prior to the Commencement Date. Any grant of Early Possession only conveys a n remises. If Lessee totally or partially occupies the Premises prior to the Commencement Date, the obligation to pay e period of such Early Possession. All other terms of this Lease {including but not limited to the obligations to pay L pense Increase) shall be in effect during such period. Any such Early Possession shall not affect the Expiration Date. Delay In Possession. Lessor agrees to use its best commercially reasonable efforts to deliver possession e Commencement Date. If, despite said efforts, Lessor is unable to deliver possession by such date, Lessor shall n for, nor shall such failure affect thvalidity of this Lease or change the Expiration Date. Lessee shall not, however, be ob s other obligations until Lessor delivers possession of the Premises and any period of rent abatement that Lessee w l run from the date of delivery of possession and continue for a period equal to what Lessee would otherwise have enjo inus any days of delay caused by the acts or omissions of Lessee. If possession is not delivered within 60 days after same may be extended under the terms of any Work Letter executed by Parties, Lessee may, at its option, by notice e end of such 60 day period, cancel this Lease, in which event the Parties shall be discharged from all obligations e is not received by Lessor within said 10 day period, Lessee's right to cancel shall terminate. If possession of hin 120 days after the Commencement Date, this Lease shall terminate unless other agreements are reached between Lessee Compliance. Lessor shall not be required to deliver possession of the Premises to Lessee until Less provide evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee shall be required t nder this Lease from and after the Start Date, including the payment of Rent, notwithstanding Lessor's election to ipt of such evidence of insurance. Further, if Lessee is required to perform any other conditions prior to or concurren e shall occur but Lessor may elect to withhold possession until such conditions are satisfied. nt. .Rent Defined. All monetary obligations of Lessee to Lessor under the terms of this Lease {except for the S e rent {"Rent"). Operating Expense Increase. Lessee shall pay to Lessor during the term hereof, in addition to the Base Rent y which all Operating Expenses for each Comparison Year exceeds the amount of all Operating Expenses for the Bas after referred to as the "Operating Expense Increase", in accordance with the following provisions: (a)"Base Year" is as specified in Paragraph 1.9. {b)"Comparison Year" is defined as each calendar year during the term of this Lease subsequent wever, Lessee shall have no obligation to pay a share of the Operating Expense Increase applicable to the first 12 m han such as are mandated by a governmental authority, as to which government mandated expenses Lessee shall p ng they occur during the first twelve {12) months). Lessee's Share of the Operating Expense Increase for the first a Lease Term shall be prorated according to that portion of such Comparison Year as to which Lessee is responsible (c)The following costs relating to the ownership and operation of the Project, calculated as if the Projec defined as "Operating Expenses.. : (i)Costs relating to the operation, repair, and maintenance in neat, clean, safe, good order an ent {see subparagraph (g)), of the following: {aa)The Common Areas, including their surfaces, coverings, decorative items, c rings, and including parking areas, loading and unloading areas, trash areas, roadways, sidewalks, walkways, s ndscaped areas, striping, bumpers, irrigation systems, Common Area lighting facilities, building exteriors and roofs, fenc {bb) All heating, air conditioning, plumbing, electrical systems, life safety equipm other equipment used in common by, or for the benefit of, tenants or occupants of the Project, including elevators an e detection systems including sprinkler system maintenance and repair. (cc) All other areas and improvements that are within the exterior boundaries of the Pr and/or any other space occupied by a tenant. {ii)The cost of trash disposal, janitorial and security services, pest control services, an l inspections; (iii)The cost of any other service to be provided by Lessor that is elsewhere in this Lea xpense"; (iv)The cost of the premiums for the insurance policies maintained by Lessor pursuant to pa rtion of an insured loss concerning the Building or the Common Areas; (v)The amount of the Real Property Taxes payable by Lessor pursuant to paragraph 10; {vi)The cost of water, sewer, gas, electricity, and other publicly mandated services not separate {vii)Labor, salaries, and applicable fringe benefits and costs, materials, supplies and tools, ng the Project and accounting and management fees attributable to the operation of the Project; (viii)The cost of any capital improvement to the Building or the Project not covered unde 3 provided; however, that Lessor shall allocate the cost of any such capital improvement over a 12 year period and y more than Lessee's Share of 1/144th of the cost of such Capital Expenditure in any given month; {ix)The cost to replace equipment or improvements that have a useful life for accounting purp (x)Reserves set aside for maintenance, repair and/or replacement of Common Area {d)Any item of Operating Expense that is specifically attributable to the Premises, the Building or to any he operation, repair and maintenance thereof, shall be allocated entirely to such Premises, Building, or other building. ot specifically attributable to the Building or to any other building or to the operation, repair and maintenance thereof essor to all buildings in the Project. {e) The inclusion of the improvements, facilities and services set forth in Subparagraph 4.2{c) shall not be upon Lessor to either have said improvements or facilities or to provide those services unless the Project already ha es the services, or Lessor has agreed elsewhere in this Lease to provide the same or some of them. (f) Lessee's Share of Operating Expense Increase is payable monthly on the same day as the Base Ren

 

 

 

111_6 17_page_04.gif nce each year) Lessor shall deliver to Lessee a reasonably detailed statement showing Lessee's Share of the a xpenses for the preceding year. If Lessee's payments during such Year exceed Lessee's Share, Lessee shall credit t against Lessee's future payments. If Lessee's payments during such Year were less than Lessee's Share, Lessee sh e deficiency within 10 days after delivery by Lessor to Lessee of said statement. Lessor and Lessee shall forthwith ad nt any balance determined to exist with respect to that portion of the last Comparison Year for which Lessee is respon reases, notwithstanding that the Lease term may have terminated before the end of such Comparison Year. (g)Operating Expenses shall not include the costs of replacement for equipment or capital compone exterior walls or a Common Area capital improvement, such as the parking lot paving, elevators, fences that h urposes of 5 years or more. (h)Operating Expenses shall not include any expenses paid by any tenant directly to third parties, or a mbursed by any third party, other tenant, or by insurance proceeds. Payment. Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States s due, without offset or deduction (except as specifically permitted in this Lease). All monetary amounts shall be rou In the event that any invoice prepared by Lessor is inaccurate such inaccuracy shall not constitute a waiver and Less mount set forth in this Lease. Rent for any period during the term hereof which is for less than one full calendar mo he actual number of days of said month. Payment of Rent shall be made to Lessor at its address stated herein or to sor may from time to time designate in writing. Acceptance of a payment which is less than the amount then due sh ts to the balance of such Rent, regardless of Lessor's endorsement of any check so stating. In the event that any f payment given by Lessee to Lessor is dishonored for any reason, Lessee agrees to pay to Lessor the sum of $25 in Lessor, at its option, may require all future Rent be paid by cashier's check. Payments will be applied first to accru es, second to accrued interest, then to Base Rent and Common Area Operating Expenses, and any remaining charges or costs. curity Deposit. Lessee shall deposit with Lessor upon execution hereof the Security Deposit as security for Lessee's ons under this Lease. If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or re rity Deposit for the payment of any amount already due Lessor, for Rents which will be due in the future, and Lessor for any liability, expense, loss or damage which Lessor may suffer or incur by reason thereof. If Lessor use e Security Deposit, Lessee shall within 10 days after written request therefor deposit monies with Lessor sufficient to e full amount required by this Lease. If the Base Rent increases during the term of this Lease, Lessee shall, upon sit additional monies with Lessor so that the total amount of the Security Deposit shall at all times bear the sa ase Rent as the initial Security Deposit bore to the initial Base Rent. Should the Agreed Use be amended to acco e business of Lessee or to accommodate a sublessee or assignee, Lessor shall have the right to increase the Se sary, in Lessor's reasonable judgment, to account for any increased wear and tear that the Premises may suffer as ntrol of Lessee occurs during this Lease and following such change the financial condition of Lessee is, in Lessor's r reduced, Lessee shall deposit such additional monies with Lessor as shall be sufficient to cause the Security reasonable level based on such change in financial condition. Lessor shall not be required to keep the Security Dep unts. Within 90 days after the expiration or termination of this Lease, Lessor shall return that portion of the Security ssor. No part of the Security Deposit shall be considered to be held in trust, to bear interest or to be prepayment for a der this Lease. e. Use. Lessee shall use and occupy the Premises only for the Agreed Use, or any other legal use which is rea for no other purpose. Lessee shall not use or permit the use of the Premises in a manner that is unlawful, creates that disturbs occupants of or causes damage to neighboring premises or properties. Other than guide, signal and seein p or allow in the Premises any pets, animals, birds, fish, or reptiles. Lessor shall not unreasonably withhold or dela st for a modification of the Agreed Use, so long as the same will not impair the structural integrity of the improvement y affect the mechanical, electrical, HVAC, and other systems of the Building, and/or will not affect the exterior appeara cts to withhold consent, Lessor shall within 7 days after such request give written notification of same, which not f Lessor's objections to the change in the Agreed Use. Hazardous Substances. (a) Reportable Uses Require Consent. The term "Hazardous Substance" as used in this Lease shall r waste whose presence, use, manufacture, disposal, transportation, or release, either by itself or in combination be on the Premises, is either: (i) potentially injurious to the public health, safety or welfare, the environment or the Pre by any governmental authority, or (iii) a basis for potential liability of Lessor to any governmental agency or third party u mmon law theory. Hazardous Substances shall include, but not be limited to, hydrocarbons, petroleum, gasoline, an products or fractions thereof. Lessee shall not engage in any activity in or on the Premises which constitutes a ubstances without the express prior written consent of Lessor and timely compliance (at Lessee's expense) s. "Reportable Use" shall mean (i) the installation or use of any above or below ground storage tank, (ii) the gen transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, n n is required to be filed with, any governmental authority, and/or (iii) the presence at the Premises of a Hazardous Sub Applicable Requirements requires that a notice be given to persons entering or occupying the Premises or neig ing the foregoing, Lessee may use any ordinary and customary materials reasonably required to be used in the n uch as ordinary office supplies (copier toner, liquid paper, glue, etc.) and common household cleaning materials, so lo ith all Applicable Requirements, is not a Reportable Use, and does not expose the Premises or neighboring propert mination or damage or expose Lessor to any liability therefor. In addition, Lessor may condition its consent to any R h additional assurances as Lessor reasonably deems necessary to protect itself, the public, the Premises and/or the e amination, injury and/or liability, including, but not limited to, the installation (and removal on or before Lease expirati difications (such as concrete encasements) and/or increasing the Security Deposit. (b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to believe, that a Hazardous Substa , under or about the Premises, other than as previously consented to by Lessor, Lessee shall immediately give written d provide Lessor with a copy of any report, notice, claim or other documentation which it has concerning the presence (c) Lessee Remediation. Lessee shall not cause or permit any Hazardous Substance to be spilled or releas emises (including through the plumbing or sanitary sewer system) and shall promptly, at Lessee's expense, comply s and take all investigatory and/or remedial action reasonably recommended, whether or not formally ordered or requi mination of, and for the maintenance, security and/or monitoring of the Premises or neighboring properties, that was c by Lessee, or pertaining to or involving any Hazardous Substance brought onto the Premises during the term of t y third party. (d) Lessee Indemnification. Lessee shall indemnify, defend and hold Lessor, its agents, employees, lenders ss from and against any and all loss of rents and/or damages, liabilities, judgments, claims, expenses, penalties, ees arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee, or any th Lessee shall have no liability under this Lease with respect to underground migration of any Hazardous Substance tside of the Project not caused or contributed to by Lessee). Lessee's obligations shall include, but not be limited t or injury to person, property or the environment created or suffered by Lessee, and the cost of investigation, re d/or abatement, and shall survive the expiration or termination of this Lease. No termination, cancellation or release r and Lessee shall release Lessee from its obligations under this Lease with respect to Hazardous Substances, u ssor in writing at the time of such agreement. (e) Lessor Indemnification. Except as otherwise provided in paragraph 8.7, Lessor and its successors fend, reimburse arid hold Lessee, its employees and lenders, harmless from and against any and all environmental d mediation, which result from Hazardous Substances which existed on the Premises prior to Lessee's occupancy or w gligence or willful misconduct of Lessor, its agents or employees. Lessor's obligations, as and when required , shall include, but not be limited to, the cost of investigation, removal, remediation, restoration and/or abatement, a ermination of this Lease. (f) Investigations and Remediations. Lessor shall retain the responsibility and pay for any investigati quired by governmental entities having jurisdiction with respect to the existence of Hazardous Substances on th

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111_6 17_page_05.gif e Premises, in which event Lessee shall be responsible for such payment. Lessee shall cooperate fully in any such ac cluding allowing Lessor and Lessos agents to have reasonable access to the Premises at reasonable times in order t and remedial responsibilities. (g) Lessor Termination Option. If a Hazardous Substance Condition (see Paragraph 9.1(e)) occurs during th ee is legally responsible therefor (in which case Lessee shall make the investigation and remediation thereof requir ts and this Lease shall continue in full force and effect, but subject to essor's rights under Paragraph 6.2(d) and P sor's option, either (i) investigate and remediate such Hazardous Substance Condition, if required, as soon as re ense, in which event this Lease shall continue in full force and effect, or (ii) if the estimated cost to remediate such co en monthly Base Rent or $100,000, whichever is greater, give written notice to Lessee, within 30 days after receipt by ence of such Hazardous Substance Condition, of Lessos desire to terminate this Lease as of the date 60 days follow he event Lessor elects to give a termination notice, Lessee may, within 10 days thereafter, give written notice to to pay the amount by which the cost of the remediation of such Hazardous Substance Condition exceeds an amount e y Base Rent or $100,000, whichever is greater. Lessee shall provide Lessor with said funds or satisfactory assuran g such commitment. In such event, this Lease shall continue in full force and effect, and Lessor shall proceed to ma easonably possible after the required funds are available. If Lessee does not give such notice and provide the require n the time provided, this Lease shall terminate as of the date specified in Lessos notice of termination. 3Lessee's Compliance with Applicable Requirements. Except as otherwise provided in this Lease, Lesse e, fully, diligently and in a timely manner, materially comply with all Applicable Requirements, the requirements o derwriter or rating bureau, and the recommendations of Lessos engineers and/or consultants which relate in any mann rd to whether said Applicable Requirements are now in effect or become effective after the Start Date. Lessee shall, essor's written request, provide Lessor with copies of all permits and other documents, and other information with any Applicable Requirements specified by Lessor, and shall immediately upon receipt, notify Lessor in writing nvolved) of any threatened or actual claim, notice, citation, warning, complaint or report pertaining to or involving the fail comply with any Applicable Requirements. Likewise, Lessee shall immediately give written notice to Lessor of: (i) any w d any suspected seepage, pooling, dampness or other condition conducive to the production of mold; or (ii) any must dicate the presence of mold in the Premises. 4Inspection; Compliance. Lessor and Lessor's "Lender" (as defined in Paragraph 30) and consultants shall ha s at any time, in the case of an emergency, and otherwise at reasonable times, after reasonable notice, for the purpo the Premises and for verifying compliance by Lessee with this Lease. The cost of any such inspections shall be paid pplicable Requirements, or a Hazardous Substance Condition (see paragraph 9.1e) is found to exist or be imminent, ordered by a governmental authority. In such case, Lessee shall upon request reimburse Lessor for the cost of such ection is reasonably related to the violation or contamination. In addition, Lessee shall provide copies of all relevant S) to Lessor within 10 days of the receipt of written request therefor. aintenance; Repairs; Utility Installations; Trade Fixtures and Alterations. 1tessee's Obligations. Notwithstanding Lessor's obligation to keep the Premises in good condition and rep for payment of the cost thereof to Lessor as additional rent for that portion of the cost of any maintenance and repair ent (wherever located) that serves only Lessee or the Premises, to the extent such cost is attributable to abuse or er than the Lessor shall be responsible for the cost of painting, repairing or replacing wall coverings, and to repair or ts within the Premises. Lessor may, at its option, upon reasonable notice, elect to have Lessee perform any particular s ost of which is otherwise Lessee's responsibility hereunder." 2Lessor's Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 4.2 (Ope essee's Obligations), 9 (Damage or Destruction) and 14 (Condemnation), Lessor, subject to reimbursement pursua good order, condition and repair the foundations, exterior walls, structural condition of interior bearing walls, exterior alarm and/or smoke detection systems, fire hydrants, and the Common Areas. Lessee expressly waives the benefit o effect to the extent it is inconsistent with the terms of this Lease. 3Utility Installations; Trade Fixtures; Alterations. (a) Definitions. The term "Utility Installations" refers to all floor and window coverings, air lines, vacuum li tribution, security and fire protection systems, communication cabling, lighting fixtures, HVAC equipment, and plu he term "Trade Fixtures" shall mean Lessee's machinery and equipment that can be removed without doing mat he term " Alterations" shall mean any modification of the improvements, other than Utility Installations or Trade eletion. "Lessee Owned Alterations and/or Utility Installations" are defined as Alterations and/or Utility Installatio et owned by Lessor pursuant to Paragraph 7.4(a). (b) Consent. Lessee shall not make any Alterations or Utility Installations to the Premises without Lessos pri however, make non-structural Alterations or Utility Installations to the interior of the Premises (excluding the roof) witho o Lessor, as long as they are not visible from the outside, do not involve puncturing, relocating or removing the roof, ce , will not affect the electrical, plumbing, HVAC, and/or life safety systems, and the cumulative cost thereof during this ceed $2000. Notwithstanding the foregoing, Lessee shall not make or permit any roof penetrations and/or install a rior written approval of Lessor. Lessor may, as a precondition to granting such approval, require Lessee to utilize ved by Lessor. Any Alterations or Utility Installations that Lessee shall desire to make and which require the consent o Lessor in written form with detailed plans. Consent shall be deemed conditioned upon Lessee's: (i) acquiring all appli urnishing Lessor with copies of both the permits and the plans and specifications prior to commencement of the work, tions of said permits and other Applicable Requirements in a prompt and expeditious manner. Any Alterations or Utili d in a workmanlike manner with good and sufficient materials. Lessee shall promptly upon completion furnish Lessor w s. For work which costs an amount in excess of one month's Base Rent, Lessor may condition its consent upon Les ion bond in an amount equal to 150% of the estimated cost of such Alteration or Utility Installation and/or upon curity Deposit with Lessor. (c) Liens; Bonds. Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have b t or for use on the Premises, which claims are or may be secured by any mechanic's or materialmen's lien against th in. Lessee shall give Lessor not less than 10 days notice prior to the commencement of any work in, on or about have the right to post notices of non-responsibility. If Lessee shall contest the validity of any such lien, claim or de ole expense defend and protect itself, Lessor and the Premises against the same and shall pay and satisfy any such ad ered thereon before the enforcement thereof. If Lessor shall require, Lessee shall furnish a surety bond in an amount e ch contested lien, claim or demand, indemnifying Lessor against liability for the same. If Lessor elects to participate pay Lessor's attorneys' tees and costs. Ownership; Removal; Surrender; and Restoration. (a) Ownership. Subject to Lessor's right to require removal or elect ownership as hereinafter provided, all Alt made by Lessee shall be the property of Lessee, but considered a part of the Premises. Lessor may, at any time, elec r any specified part of the Lessee Owned Alterations and Utility Installations. Unless otherwise instructed per paragra ed Alterations and UtiliTy Installations shall, at the expiration or termination of this Lease, become the property by Lessee with the Premises. (b) Removal. By delivery to Lessee of written notice from Lessor not earlier than 90 and not later than 30 days is Lease, Lessor may require that any or all Lessee Owned Alterations or Utility Installations be removed by the expirati Lessor may require the removal at any time of all or any part of any Lessee Owned Alterations or Utility Installation sent. (c) Surrender; Restoration. Lessee shall surrender the Premises by the Expiration Date or any earlier termina ents, parts and surfaces thereof clean and free of debris, and in good operating order, condition and state of repair, ordi Ordinary wear and tear" shall not include any damage or deterioration that would have been prevented by good mai ing the foregoing, if this Lease is for 12 months or less, then Lessee shall surrender the Premises in the same condi e Start Date with NO allowance for ordinary wear and tear. Lessee shall repair any damage occasioned by the installat ade Fixtures, Lessee owned Alterations and/or Utility Installations, furnishings, and equipment as well as the removal or for Lessee. Lessee shall also remove from the Premises any and all Hazardous Substances brought onto the ny third party (except Hazardous Substances which were deposited via underground migration from areas outside of t d in Applicable Requirments. Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee. An

 

 

 

111_6 17_page_06.gif of or retained by Lessor as lessor may desire. The failure by lessee to timely vacate the Premises pursuant to t express written consent of lessor shall constitute a holdover under the provisions of Paragraph 26 below. surance; Indemnity. 1Insurance Premiums. The cost of the premiums for the insurance policies maintained by Lessor pursuant Operating Expenses (see paragraph 4.2 (c)(iv)). Said costs shall include increases in the premiums resulting from quirements of the holder of a mortgage or deed of trust covering the Premises, Building and/or Project, increased valua /or Project, and/or a general premium rate increase. Said costs shall not, however, include any premium increas e occupancy of any other tenant of the Building. If the Project was not insured for the entirety of the Base Year, the lowest annual premium reasonably obtainable for the required insurance as of the Start Date, assuming the most nom and/or Project. In no event, however, shall lessee be responsible for any portion of the premium cost attributable excess of $2,000,000 procured under Paragraph 8.2(b). 2Liability Insurance. (a) Carried by Lessee. lessee shall obtain and keep in force a Commercial General liability policy of insuranc as an additional insured against claims for bodily injury, personal injury and property damage based upon or arising o ncy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be on an occurrence b e in an amount not less than $1,000,000 per occurrence with an annual aggregate of not less than $2,000,000. Lessee l insured by means of an endorsement at least as broad as the Insurance Service Organization's "Additional Insured-M " Endorsement and coverage shall also be extended to include damage caused by heat, smoke or fumes from a ho ntain any intra-insured exclusions as between insured persons or organizations, but shall include coverage for liability n "insured contract" for the performance of Lessee's indemnity obligations under this Lease. The limits of said it the liability of lessee nor relieve Lessee of any obligation hereunder. lessee shall provide an endorsement on i es that its insurance shall be primary to and not contributory with any similar insurance carried by lessor, whos excess insurance only. (b) Carried by Lessor. lessor shall maintain liability insurance as described in Paragraph 8.2(a), in addition t e required to be maintained by lessee. Lessee shall not be named as an additional insured therein. 3Property Insurance - Building, Improvements and Rental Value. (a) Building and Improvements. Lessor shall obtain and keep in force a policy or policies of insurance in t yable to Lessor, any ground-lessor, and to any Lender insuring loss or damage to the Building and/or Project. T all be equal to the full insurable replacement cost of the Building and/or Project, as the same shall exist from time to any lender, but in no event more than the commercially reasonable and available insurable value thereof. Lessee O ations, Trade Fixtures, and Lessee's personal property shall be insured by Lessee not by lessor. If the covera y appropriate, such policy or policies shall insure against all risks of direct physical loss or damage (except the p unless required by a Lender), including coverage for debris removal and the enforcement of any Applicable Require emolition, reconstruction or replacement of any portion of the Premises as the result of a covered loss. Said policy greed valuation provision in lieu of any coinsurance clause, waiver of subrogation, and inflation guard protection causin erty insurance coverage amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price for the city nearest to where the Premises are located. If such insurance coverage has a deductible clause, the deducti 00 per occurrence. (b) Rental Value. lessor shall also obtain and keep in force a policy or policies in the name of Lessor with los der, insuring the loss of the full Rent for one year w h an extended period of indemnity for an additional 180 d . Said insurance shall contain an agreed valuation provision in lieu of any coinsurance clause, and the amount o ually to reflect the projected Rent otherwise payable by lessee, for the next 12 month period. (c) Adjacent Premises. Lessee shall pay for any increase in the premiums for the property insurance of the eas or other buildings in the Project if said increase is caused by Lessee's acts, omissions, use or occupancy of the Pre (d) Lessee's Improvements. Since Lessor is the Insuring Party, Lessor shall not be required to insure Lesse stallations unless the item in question has become the property of Lessor under the terms of this Lease. 4Lessee's Property; Business Interruption Insurance; Worker's Compensation Insurance. (a) Property Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee's personal prop Owned Alterations and Utility Installations. Such insurance shall be full replacement cost coverage with a deductib ccurrence. The proceeds from any such insurance shall be used by Lessee for the replacement of personal property ed Alterations and Utility Installations. (b) Worker's Compensation Insurance. Lessee shall obtain and maintain Worker's Compensation Insurance ired by Applicable Requirements. Such policy shall include a 'Waiver of Subrogation' endorsement. Lessee shall p endorsement along with the certificate of insurance or copy of the policy required by paragraph 8.5. (c) Business Interruption. Lessee shall obtain and maintain loss of income and extra expense insurance essee for direct or indirect loss of earnings attributable to all perils commonly insured against by prudent lessees in the e to prevention of access to the Premises as a result of such perils. (d) No Representation of Adequate Coverage. Lessor makes no representation that the limits or forms of co ein are adequate to cover Lessee's property, business operations or obligations under this Lease. Insurance Policies. Insurance required herein shall be by companies maintaining during the policy term a "G least A-, VII, as set forth in the most current issue of "Best's Insurance Guide", or such other rating as may be req not do or permit to be done anything which invalidates the required insurance policies. Lessee shall, prior to the S ed copies of policies of such insurance or certificates with copies of the required endorsements evidencing the existe insurance. No such policy shall be cancelable or subject to modification except after 10 days prior written notice to Le ays prior to the expiration of such policies, furnish Lessor with evidence of renewals or "insurance binders" evidencing order such insurance and charge the cost thereof to Lessee, which amount shall be payable by Lessee to Lessor u l be for a term of at least one year, or the length of the remaining term of this Lease, whichever is less. If either Party the insurance required to be carried by it, the other Party may, but shall not be required to, procure and maintain the sa Waiver of Subrogation. Without affecting any other rights or remedies, Lessee and Lessor each hereby rele aive their entire right to recover damages against the other, for loss of or damage to its property arising out of or in e insured against herein. The effect of such releases and waivers is not limited by the amount of insurance carried o pplicable hereto. The Parties agree to have their respective property damage insurance carriers waive any right to su ay have against Lessor or Lessee, as the case may be, so long as the insurance is not invalidated thereby. Indemnity. Except for Lessor's gross negligence or willful misconduct, Lessee shall indemnify, protect, defend , Lessor and its agents, Lessor's master or ground lessor, partners and Lenders, from and against any and all claims, l ns, judgments, penalties, attorneys' and consultants' fees, expenses and/or liabilities arising out of, involving, or in conn ancy of the Premises by Lessee. If any action or proceeding is brought against Lessor by reason of any of the forego otice defend the same at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor shall cooperate ssor need not have first paid any such claim in order to be defended or indemnified. Exemption of Lessor and its Agents from Liability. Notwithstanding the negligence or breach of this Lea er Lessor nor its agents shall be liable under any circumstances for: (i) injury or damage to the person or goods, war y of Lessee, Lessee's employees, contractors, invitees, customers, or any other person in or about the Premises, wheth ed by or results frnm fire, steam, electric y. gas, water or rain, indoor air quality, the presence of mold or from the r other defects of pipes, fire sprirklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any other caus age results from conditions arising upon the Premises or upon other portions of the Building, or from other source sing from any act or neglect of any other tenant of Lessor or from the failure of Lessor or its agents to enforce the pro roject, or (iii) injury to Lessee's business or for any loss of income or profit therefrom. Instead, it is intended that Lesse such damages or injury be to file a claim on the insurance policy(ies) that Lessee is required to maintain pursuant Failure to Provide Insurance. Lessee acknowledges that any failure on its part to obtain or maintain the pose lessor to risks and potentially cause Lessor to incur costs not contemplated by this Lease, the extent of whic certain. Accordingly, for any month or portion thereof that Lessee does not maintain the required insurance and/or does red binders or certificates evidencing the existence of the required insurance, the Base Rent shall be automatically inc PAGE 6 OF 14

 

 

 

111_6 17_page_07.gif Base Rent represents fair and reasonable compensation for the additional risk/costs that Lessor will incur by reason required insurance. Such increase in Base Rent shall in no event constitute a waiver of Lessee's Default or Breac intain such insurance, prevent the exercise of any of the other rights and remedies granted hereunder, nor relieve Less insurance specified in this Lease. mage or Destruction. 1Definitions. (a) "Premises Partial Damage" shall mean damage or destruction to the improvements on the Premises ations and Utility Installations, which can reasonably be repaired in 3 months or less from the date of the damage or does not exceed a sum equal to 6 month's Base Rent. Lessor shall notify Lessee in writing within 30 days from the d s to whether or not the damage is Partial or Total. (b) "Premises Total Destruction" shall mean damage or destruction to the improvements on the Premises ations and Utility Installations and Trade Fixtures, which cannot reasonably be repaired in 3 months or less from the d nd/or the cost thereof exceeds a sum equal to 6 month's Base Rent. Lessor shall notify Lessee in writing within 30 or destruction as to whether or not the damage is Partial or Total. (c) "Insured Loss" shall mean damage or destruction to improvements on the Premises, other than Lessee Ow ations and Trade Fixtures, which was caused by an event required to be covered by the insurance described of any deductible amounts or coverage limits involved. · (d) "Replacement Cost" shall mean the cost to repair or rebuild the improvements owned by Lessor at the tim dition existing immediately prior thereto, including demolition, debris removal and upgrading required by the op s, and without deduction for depreciation. (e) "Hazardous Substance Condition" shall mean the occurrence or discovery of a condition involving th n by, a Hazardous Substance, in, on, or under the Premises which requires restoration. Partial Damage - Insured Loss. If a Premises Partial Damage that is an Insured Loss occurs, then Less air such damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon as se shall continue in full force and effect; provided, however, that Lessee shall, at Lessos election, make the repair he total cost to repair of which is $5,000 or less, and, in such event, Lessor shall make any applicable insurance pr reasonable basis for that purpose. Notwithstanding the foregoing, if the required insurance was not in force or the ins to effect such repair, the Insuring Party shall promptly contribute the shortage in proceeds as and when required to co however, such shortage was due to the fact that, by reason of the unique nature of the improvements, full replace s not commercially reasonable and available, Lessor shall have no obligation to pay for the shortage in insurance nique aspects of the Premises unless Lessee provides Lessor with the funds to cover same, or adequate assurance th eipt of written notice of such shortage and request therefor. If Lessor receives said funds or adequate assurance there arty responsible for making the repairs shall complete them as soon as reasonably possible and this Lease shall re ch funds or assurance are not received, Lessor may nevertheless elect by written notice to Lessee within 10 days th ion and repair as is commercially reasonable with Lessor paying any shortage in proceeds, in which case this Leas ect, or (ii) have this Lease terminate 30 days thereafter. Lessee shall not be entitled to reimbursement of any funds c such damage or destruction. Premises Partial Damage due to flood or earthquake shall be subject to Paragraph 9.3, some insurance coverage, but the net proceeds of any such insurance shall be made available for the repairs if made Partial Damage - Uninsured Loss. If a Premises Partial Damage that is not an Insured Loss occurs, willful act of Lessee (in which event Lessee shall make the repairs at Lessee's expense), Lessor may either: (i) rep onably possible at Lessos expense (subject to reimbursement pursuant to Paragraph 4.2), in which event this Lease ect, or (ii) terminate this Lease by giving written notice to Lessee within 30 days after receipt by Lessor of knowledge . Such termination shall be effective 60 days following the date of such notice. In the event Lessor elects to terminat e right within 10 days after receipt of the termination notice to give written notice to Lessor of Lessee's commitment to without reimbursement from Lessor. Lessee shall provide Lessor with said funds or satisfactory assurance thereof commitment. In such event this Lease shall continue in full force and effect, and Lessor shall proceed to make suc ossible after the required funds are available. If Lessee does not make the required commitment, this Lease shall ter e termination notice. Total Destruction. Notwithstanding any other provision hereof, if a Premises Total Destruction occurs, this Le wing such Destruction. If the damage or destruction was caused by the gross negligence or willful misconduct of L t to recover Lessos damages from Lessee, except as provided in Paragraph 8.6. Damage Near End of Term. If at any time during the last 6 months of this Lease there is damage for whi month's Base Rent, whether or not an Insured Loss, Lessor may terminate this Lease effective 60 days following the d e by giving a written termination notice to Lessee within 30 days after the date of occurrence of such damage. essee at that time has an exercisable option to extend this Lease or to purchase the Premises, then Lessee may pre g such option and (b) providing Lessor with any shortage in insurance proceeds (or adequate assurance thereof) n before the earlier of (i) the date which is 10 days after Lessee's receipt of Lessor's written notice purporting to termin to the date upon which such option expires. If Lessee duly exercises such option during such period and provides L urance thereof) to cover any shortage in insurance proceeds, Lessor shall, at Lessos commercially reasonable ex oon as reasonably possible and this Lease shall continue in full force and effect. If Lessee fails to exercise such opti urance during such period, then this Lease shall terminate on the date specified in the termination notice and Less Abatement of Rent; Lessee's Remedies. (a) Abatement. In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Sub is not responsible under this Lease, the Rent payable by Lessee for the period required for the repair, remediation o be abated in proportion to the degree to which Lessee's use of the Premises is impaired, but not to exceed the pro lue insurance. All other obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall have no l ruction, remediation, repair or restoration except as provided herein. (b) Remedies. If Lessor is obligated to repair or restore the Premises and does not commence, in a substan air or restoration within 90 days after such obligation shall accrue, Lessee may, at any time prior to the commenceme ive written notice to Lessor and to any Lenders of which Lessee has actual notice, of Lessee's election to terminate t 60 days following the giving of such notice. If Lessee gives such notice and such repair or restoration is not comme s Lease shall terminate as of the date specified in said notice. If the repair or restoration is commenced within such in full force and effect. "Commence" shall mean either the unconditional authorization of the preparation of the re he actual work on the Premises, whichever first occurs. Termination; Advance Payments. Upon termination of this Lease pursuant to Paragraph 6.2(g) or Paragr all be made concerning advance Base Rent and any other advance payments made by Lessee to Lessor. Lessor sha much of Lessee's Security Deposit as has not been, or is not then required to be, used by Lessor. al Property Taxes. 1Definitions. As used herein, the term "Real Property Taxes" shall include any form of assessment; real estat traordinary, or rental levy or tax (other than inheritance, personal income or estate taxes); improvement bond; and/or li d against any legal or equitable interest of Lessor in the Project, Lessor's right to other income therefrom, and/or L y authority having the direct or indirect power to tax and where the funds are generated with reference to the Project so generated are to be applied by the city, county or other local taxing authority of a jurisdiction within which the Proje es" shall also include any tax, fee, levy, assessment or charge, or any increase therein: (i) imposed by reason of even s Lease, including but not limited to, a change in the ownership of the Project, (ii) a change in the improvements thereo n machinery or equipment provided by Lessor to Lessee pursuant to this Lease. 2 Payment of Taxes. Except as otherwise provided in Paragraph 10.3, Lessor shall pay the Real Property Tax aid payments shall be included in the calculation of Operating Expenses in accordance with the provisions of Paragrap 3Additional Improvements. Operating Expenses shall not include Real Property Taxes specified in the tax ass s being caused by additional improvements placed upon the Project by other lessees or by Lessor for the exclusive . Notwithstanding Paragraph 10.2 hereof, Lessee shall, however, pay to Lessor at the time Operating Expenses 2, the entirety of any increase in Real Property Taxes if assessed solely by reason of Alterations, Trade Fixtures o PAGE70F14

 

 

 

111_6 17_page_08.gif o the execution of this Lease by the Parties. .4Joint Assessment. If the Building is not separately assessed, Real Property Taxes allocated to the Building s the Real Property Taxes for all of the land and improvements included within the tax parcel assessed, such proportion the respective valuations assigned in the assessor's work sheets or such other information as may be reasonably etermination thereof, in good faith, shall be conclusive. .5Personal Property Taxes. Lessee shall pay prior to delinquency all taxes assessed against and levied u nd Utility Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee contained in th ssee shall cause its Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment an e assessed and billed separately from the real property of Lessor. If any of Lessee's said property shall be assess see shall pay Lessor the taxes attributable to Lessee's property within 10 days after receipt of a written statement s Lessee's property. tilities and Services. .1Services Provided by Lessor. Lessor shall provide heating, ventilation, air conditioning, reasonable amou ng and office machines, water for reasonable and normal drinking and lavatory use in connection with an office, aAa FB seRt t ees aRe eallasls far staAaare a•Jarhaaalilrt res. lesser shall alse re"i<ia jaRitarial sarvisas lathe Premises a el<, exsl <iiR!l B ilaiA!J J.laliaays, ar p!!rsl!aAt le the attashea jaAilarial sshe<i le, if aAy. lesser shall Rei, A9'"e"er, ee ises lal<itsheRs er starage areas iRsl se<i "•ithiA the P-remises. .2 Services Exclusive to Lessee. Notwithstanding the provisions of paragraph 11.1, Lessee shall pay for all wate d other utilities and services specially or exclusively supplied and/or metered exclusively to the Premises or to Lesse n. If a service is deleted by Paragraph 1.13 and such service is not separately metered to the Premises, Lessee Lessee's Share or a reasonable proportion to be determined by Lessor of all charges for such jointly metered service. .3 Hours of Service. Said services and utilities shall be provided during times set forth in Paragraph 1.12. Utilities a s shall be subject to advance request and reimbursement by Lessee to Lessor of the cost thereof. .4 Excess Usage by Lessee. Lessee shall not make connection to the utilities except by or through existing outlets a ry or equipment in or about the Premises that uses excess water, lighting or power, or suffer or permit any act that c ities or services, including but not limited to security and trash services, over standard office usage for the Project. imburse Lessor for any excess expenses or costs that may arise out of a breach of this subparagraph by Lessee. Le stall at Lessee's expense supplemental equipment and/or separate metering applicable to Lessee's excess usage or lo .5 Interruptions. There shall be no abatement of rent and Lessor shall not be liable in any respect whatsoever erruption or discontinuance of any utility or service due to riot, strike, labor dispute, breakdown, accident, repair or o sonable control or in cooperation with governmental request or directions. ssignment and Subletting. .1Lessor's Consent Required. (a) Lessee shall not voluntarily or by operation of Jaw assign, transfer, mortgage or encumber (colle ) or sublet all or any part of Lessee's interest in this Lease or in the Premises without Lessor's prior written consent. (b) Unless Lessee is a corporation and its stock is publicly traded on a national stock exchange, a change in th te an assignment requiring consent. The transfer, on a cumulative basis, of 25% or more of the voting control of Less ntrol for this purpose. (c) The involvement of Lessee or its assets in any transaction, or series of transactions (by way of merge nsfer, leveraged buyout or otherwise), whether or not a formal assignment or hypothecation of this Lease or Lessee's a l result in a reduction of the Net Worth of Lessee by an amount greater than 25% of such Net Worth as it was repres n of this Lease or at the time of the most recent assignment to which Lessor has consented, or as it exists imme r transactions constituting such reduction, whichever was or is greater, shall be considered an assignment of this Lea its consent. "Net Worth of Lessee" shall mean the net worth of Lessee (excluding any guarantors) established unde rinciples. (d) An assignment or subletting without consent shall, at Lessor's option, be a Default curable after notice per P Breach without the necessity of any notice and grace period. If Lessor elects to treat such unapproved assignme reach, Lessor may either: (i) terminate this Lease, or (ii) upon 30 days written notice, increase the monthly Base Rent t effect. Further, in the event of such Breach and rental adjustment, (i) the purchase price of any option to purchase th be subject to similar adjustment to 110% of the price previously in effect, and (ii) all fixed and non-fixed rental adj mainder of the Lease term shall be increased to 110% of the scheduled adjusted rent. (e) Lessee's remedy for any breach of Paragraph 12.1 by Lessor shall be limited to compensatory damages an (f) Lessor may reasonably withhold consent to a proposed assignment or subletting if Lessee is in Default at (g) Notwithstanding the foregoing, allowing a de minimis portion of the Premises, i e. 20 square feet or less, to in connection with the installation of a vending machine or payphone shall not constitute a subletting. 2Terms and Conditions Applicable to Assignment and Subletting. (a) Regardless of Lessor's consent, no assignment or subletting shall: (i) be effective without the express wr e or sublessee of the obligations of Lessee under this Lease, (ii) release Lessee of any obligations hereunder, or ( see for the payment of Rent or for the performance of any other obligations to be performed by Lessee. (b) Lessor may accept Rent or performance of Lessee's obligations from any person other than Lessee p f an assignment. Neither a delay in the approval or disapproval of such assignment nor the acceptance of Rent o aiver or estoppel of Lessor's right to exercise its remedies for Lessee's Default or Breach. (c) Lessor's consent to any assignment or subletting shall not constitute a consent to any subsequent assignme (d) In the event of any Default or Breach by Lessee, Lessor may proceed directly against Lessee, any Guaran or the performance of Lessee's obligations under this Lease, including any assignee or sublessee, without first inst any other person or entity responsible therefore to Lessor, or any security held by Lessor. (e) Each request for consent to an assignment or subletting shall be in writing, accompanied by information r as to the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, includin use and/or required modificatioP of the Premises, if any, together with a fee of $2,500 as consideration for Lesso aid request. Lessee agrees to provide Lessor with such other or additional information and/or documentation as ee also Paragraph 36) (f) Any assignee of, or sublessee under, this Lease shall, by reason of accepting such assignment, entering into possession of the Premises or any portion thereof, be deemed to have assumed and agreed to conform and comply nt, condition and obligation herein to be observed or performed by Lessee during the term of said assignment or sublea are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has specifically consente (g) Lessor's consent to any assignment or subletting shall not transfer to the assignee or sublessee any Op e by this Lease unless such transfer is specifically consented to by Lessor in writing. (See Paragraph 39.2) 3Additional Terms and Conditions Applicable to Subletting. The following terms and conditions shall apply or any part of the Premises and shall be deemed included in all subleases under this Lease whether or not expressly in (a) Lessee hereby assigns and transfers to Lessor all of Lessee's interest in all Rent payable on any subleas Rent and apply same toward Lessee's obligations under this Lease; provided, however, that until a Breach shall occur bligations, Lessee may collect said Rent. In the event that the amount collected by Lessor exceeds Lessee's then out ess shall be refunded to Lessee. Lessor shall not, by reason of the foregoing or any assignment of such sublease, n Rent, be deemed liable to the sublessee for any failure of Lessee to perform and comply with any of Lessee's essee hereby irrevocably authorizes and directs any such sublessee, upon receipt of a written notice from Lessor st performance of Lessee's obligations under this Lease, to pay to Lessor all Rent due and to become due under the su n any such notice from Lessor and shall pay all Rents to Lessor without any obligation or right to inquire as to whether ng any claim from Lessee to the contrary. (b) In the event of a Breach by Lessee, Lessor may, at its option, require sublessee to attorn to Lessor, in which obligations of the sublessor under such sublease from the time of the exercise of said option to the expiration of such sor shall not be liable for any prepaid rents or security deposit paid by such sublessee to such sublessor or for a uch sublessor.

 

 

 

111_6 17_page_09.gif (d) No sublessee shall further assign or sublet all or any part of the Premises without Lessor's prior written con (e) Lessor shall deliver a copy of any notice of Default or Breach by Lessee to the sublessee, who shall have essee within the grace period, if any, specified in such notice. The sublessee shall have a right of reimbursement ee for any such Defaults cured by the sublessee. efault; Breach; Remedies. .1 Default; Breach. A "Default" is defined as a failure by the Lessee to comply with or perform any of t r Rules and Regulations under this Lease. A "Breach" is defined as the occurrence of one or more of the following De cure such Default within any applicable grace period: (a) The abandonment of the Premises; or the vacating of the Premises without providing a commercially where the coverage of the property insurance described in Paragraph 8.3 is jeopardized as a result thereof, or without to minimize potential vandalism. (b) The failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Lesse to a third party, when due, to provide reasonable evidence of insurance or surety bond, or to fulfill any obligation un or threatens life or property, where such failure continues for a period of 3 business days following written no CE BY LESSOR OF A PARTIAL PAYMENT OF RENT OR SECURITY DEPOSIT SHALL NOT CONSTITUTE A W RIGHTS, INCLUDING LESSOR'S RIGHT TO RECOVER POSSESSION OF THE PREMISES. (c) The failure of Lessee to allow Lessor and/or its agents access to the Premises or the commission o public or private nuisance, and/or an illegal activity on the Premises by Lessee, where such actions continue for a perio tten notice to Lessee. In the event that Lessee commits waste, a nuisance or an illegal activity a second time then, th nduct as a non-curable Breach rather than a Default. (d) The failure by Lessee to provide (i) reasonable written evidence of compliance with Applicable Requirem ii) the rescission of an unauthorized assignment or subletting, (iv) an Estoppel Certificate or financial stateme n, (vi) evidence concerning any guaranty and/or Guarantor, (vii) any document requested under Paragraph 41, (viii DS), or (ix) any other documentation or information which Lessor may reasonably require of Lessee under the terms ure continues for a period of 10 days following written notice to Lessee. (e) A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or of the rules adopt ther than those described in subparagraphs 13.1(a), (b) or (c), above, where such Default continues for a period of ded, however, that if the nature of Lessee's Default is such that more than 30 days are reasonably required for its cur e a Breach if Lessee commences such cure within said 30 day period and thereafter diligently prosecutes such cure to (f) The occurrence of any of the following events: (i) the making of any general arrangement or assignme becoming a "debtor" as defined in 11 U.S.C. § 101 or any successor statute thereto (unless, in the case of a petition dismissed within 60 days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lesse s or of Lessee's interest in this Lease, where possession is not restored to Lessee within 30 days; or (iv) the attachme re of substantially all of Lessee's assets located at the Premises or of Lessee's interest in this Lease, where such seiz ys; provided, however, in the event that any provision of this subparagraph is contrary to any applicable law, such pro ct, and not affect the validity of the remaining provisions. (g) The discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially fal (h) If the performance of Lessee's obligations under this Lease is guaranteed: (i) the death of a Guarantor, (ii) liability with respect to this Lease other than in accordance with the terms of such guaranty, (iii) a Guarantor's beco bankruptcy filing, (iv) a Guarantor's refusal to honor the guaranty, or (v) a Guarantor's breach of its guaranty obligatio essee's failure, within 60 days following written notice of any such event, to provide written alternative assurance or s the then existing resources of Lessee, equals or exceeds the combined financial resources of Lessee and the Guara xecution of this Lease. .2Remedies. If Lessee fails to perform any of its affirmative duties or obligations, within 10 days after written no without notice), Lessor may, at its option, perform such duty or obligation on Lessee's behalf, including but not limite equired bonds, insurance policies, or governmental licenses, permits or approvals. Lessee shall pay to Lessor an amou d expenses incurred by Lessor in such performance upon receipt of an invoice therefor. In the event of a Breach, er notice or demand, and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reas (a) Terminate Lessee's right to possession of the Premises by any lawful means, in which case this Lease immediately surrender possession to Lessor. In such event Lessor shall be entitled to recover from Lessee: (i) the u at the time of termination; (ii) the worth at the time of award of the amount by which the unpaid rent which would hav ntil the time of award exceeds the amount of such rental loss that the Lessee proves could have been reasonably avo ward of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of roves could be reasonably avoided; and (iv) any other amount necessary to compensate Lessor for all the detriment pr failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result the the cost of recovering possession of the Premises, expenses of reletting, including necessary renovation and altera ttorneys' fees, and that portion of any leasing commission paid by Lessor in connection with this Lease applicable to t The worth at the time of award of the amount referred to in provision (iii) of the immediately preceding sentence s uch amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located rcent. Efforts by Lessor to mitig2te damages caused by Lessee's Breach of this Lease shall not waive Lessor's which Lessor is otherwise entitled. If termination of this Lease is obtained through the provisional remedy of unlawful d t to recover in such proceeding any unpaid Rent and damages as are recoverable therein, or Lessor may reserve the eof in a separate suit. If a notice and grace period required under Paragraph 13.1 was not previously given, a notice t quit given to Lessee under the unlawful detainer statute shall also constitute the notice required by Paragraph 13.1 ace period required by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and the failure of n the greater of the two such grace periods shall constitute both an unlawful detainer and a Breach of this Lease e vided for in this Lease and/or by said statute. (b) Continue the Lease and Lessee's right to possession and recover the Rent as it becomes due, in whic ign, subject only to reasonable limitations. Acts of maintenance, efforts to relet, and/or the appointment of a re rests, shall not constitute a termination of the Lessee's right to possession. (c) Pursue any other remedy now or hereafter available under the laws or judicial decisions of the state where expiration or termination of this Lease and/or the termination of Lessee's right to possession shall not relieve Lesse y provisions of this Lease as to matters occurring or accruing during the term hereof or by reason of Lessee's occupan .3 Inducement Recapture. Any agreement for free or abated rent or other charges, the cost of tenant improveme ed by Lessor, or for the giving or paying by Lessor to or for Lessee of any cash or other bonus, inducement or consid this Lease, all of which concessions are hereinafter referred to as "Inducement Provisions", shall be deemed conditi ul performance of all of the terms, covenants and conditions of this Lease. Upon Breach of this Lease by Lessee, a all automatically be deemed deleted from this Lease and of no further force or effect, and any rent, other charge, bo theretofore abated, given or paid by Lessor under such an Inducement Provision shall be immediately due and p thstanding any subsequent cure of said Breach by Lessee. The acceptance by Lessor of rent or the cure of the Brea his paragraph shall not be deemed a waiver by Lessor of the provisions of this paragraph unless specifically so stated such acceptance. 4 Late Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limite harges, and late charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent shall not be after such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall immediately pay to qual to 10% of each such overdue amount or $100, whichever is greater. The parties hereby agree that such late cha ble estimate of the costs Lessor will incur by reason of such late payment. Acceptance of such late charge by Less aiver of Lessee's Default or Breach with respect to such overdue amount, nor prevent the exercise of any of the other under. In the event that a late charge is payable hereunder, whether or not collected, for 3 consecutive installments ng any provision of this Lease to the contrary, Base Rent shall, at Lessor's option, become due and payable quarterly i 5 Interest. Any monetary payment due Lessor hereunder, other than late charges, not received by Lessor, w the 31st day after it was due. The interest ("Interest") charged shall be computed at the rate of 10% per annum but sh

 

 

 

111_6 17_page_10.gif .6Breach by Lessor. (a) Notice of Breach. Lessor shall not be deemed in breach of this Lease unless Lessor fails within a reason required to be performed by Lessor. For purposes of this Paragraph, a reasonable time shall in no event be les essor, and any Lender whose name and address shall have been furnished Lessee in writing for such purpose, of writt h obligation of Lesser has not been performed; provided, however, that if the nature of Lessor's obligation is such tha bly required for its performance, tren Lessor shall not be in breach if performance is commenced within such 30 day sued to completion. (b) Performance by Lessee on Behalf of Lessor. In the event that neither Lessor nor Lender cures said br of said notice, or if having commenced said cure they do not diligently pursue it to completion, then Lessee may elec expense and offset from Rent the actual and reasonable cost to perform such cure, provided however, that such offset al to the greater of one month's Base Rent or the Security Deposit, reserving Lessee's right to seek reimbursement e in excess of such offset. Lessee shall document the cost of said cure and supply said documentation to Lessor. ondemnation. If the Premises or any portion thereof are taken under the power of eminent domain or sold under the t r (collectively "Condemnation"), this Lease shall terminate as to the part taken as of the date the condemning au whichever first occurs. If more than 10% of the rentable floor area of the Premises, or more than 25% of Lessee ny, are taken by Condemnation, Lessee may, at Lessee's option, to be exercised in writing within 10 days after Less en notice of such taking (or in the absence of such notice, within 10 days after the condemning authority shall hav s Lease as of the date the condemning authority takes such possession. If Lessee does not terminate this Lease in s Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the Base Rent the reduction in utiltty of the Premises caused by such Condemnation. Condemnation awards and/or payments sh ther such award shall be made as compensation for diminution in value of the leasehold, the value of the part take ovided, however, that Lessee shall be entitled to any compensation paid by the condemnor for Lessee's relocatio odwill and/or Trade Fixtures, without regard to whether or not this Lease is terminated pursuant to the provisions of nd Utility Installations made to the Premises by Lessee, for purposes of Condemnation only, shall be considered the pr shall be entitled to any and all compensation which is payable therefor. In the event that this Lease is not termina on, Lessor shall repair any damage to the Premises caused by such Condemnation. rokerage Fees. .1Additional Commission. In addition to the payments owed pursuant to Paragraph 1.10 above, and unless Le ree in writing, Lessor agrees that: (a) if Lessee exercises any Option, (b) if Lessee or anyone affiliated with Lessee a the Premises or other premises owned by Lessor and located within the Project, (c) if Lessee remains in possession o of Lessor, after the expiration of this Lease, or (d) if Base Rent is increased, whether by agreement or operation of a Lessor shall pay Brokers a fee in accordance with the fee schedule of the Brokers in effect at the time the Lease was e .2Assumption of Obligations. Any buyer or transferee of Lessor's interest in this Lease shall be deemed to hav reunder. Brokers shall be third party beneficiaries of the provisions of Paragraphs 1.10, 15, 22 and 31. If Lessor fa due as and for brokerage fees pertaining to this Lease when due, then such amounts shall accrue Interest. In addit unts to Lessee's Broker when due, Lessee's Broker may send written notice to Lessor and Lessee of such failure and s within 10 days after said notice, Lessee shall pay said monies to its Broker and offset such amounts against Rent. be deemed to be a third party beneficiary of any commission agreement entered into by and/or between Lessor and Le se of collecting any brokerage fee owed. .3Representations and Indemnities of Broker Relationships. Lessee and Lessor each represent and warran ealings with any person, firm, broker or finder (other than the Brokers, if any) in connection with this Lease, and that no ers is entitled to any commission or finder's fee in connection herewith. Lessee and Lessor do each hereby agree t old the other harmless from and against liability for compensation or charges which may be claimed by any such unn ar party by reason of any dealing" or actions of the indemnifying Party, including any costs, expenses, attorneys' fees hereto. toppel Certificates. (a) Each Party (as "Responding Party'') shall within 10 days after written notice from the other Party (the " nowledge and deliver to the Requesting Party a statement in writing in form similar to the then most current "Estopp the AIRCommercial Real Estate Association, plus such additional information, confirmation and/or statements as the Requesting Party. (b) If the Responding Party shall fail to execute or deliver the Estoppel Certificate within such 10 day period, th an Estoppel Certificate stating that: (i) the Lease is in full force and effect without modification except as may be arty, (ii) there are no uncured defaults in the Requesting Party's performance, and (iii) if Lessor is the Requesting Part has been paid in advance. Prospective purchasers and encumbrancers may rely upon the Requesting Party's Estoppe Party shall be estopped from denying the truth of the facts contained in said Certificate. In addition, Lessee acknowle provide such an Estoppel Certificate will expose Lessor to risks and potentially cause Lessor to incur costs not c xtent of which will be extremely difficult to ascertain. Accordingly, should the Lessee fail to execute and/or deliver a a timely fashion the monthly Base Rent shall be automatically increased, without any requirement for notice to Les of the then existing Base Rent or $100, whichever Is greater for remainder of the Lease. The Parties agree that su nts fair and reasonable compensation for the additional risk/costs that Lessor will incur by reason of Lessee's fa tificate. Such increase in Base Rent shall in no event constitute a waiver of Lessee's Default or Breach with resp stoppel Certificate nor prevent the exercise of any of the other rights and remedies granted hereunder. (c) If Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee and all Guarantors notice from Lessor deliver to any potential lender or purchaser designated by Lessor such financial statements as uch lender or purchaser, including but not limited to Lessee's financial statements for the past 3 years. All such financ y Lessor and such lender or purchaser in confidence and shall be used only for the purposes herein set forth. efinition of Lessor. The term "Lessor" as used herein shall mean the owner or owners at the time in question of if this is a sublease, of the Lessee's interest in the prior lease. In the event of a transfer of Lessor's title or interest in r shall deliver to the transferee or assignee (in cash or by credit) any unused Security Deposit held by Lessor. Up nd delivery of the Security Deposit, as aforesaid, the prior Lessor shall be relieved of all liability with respect to the der this Lease thereafter to be performed by the Lessor. Subject to the foregoing, the obligations and/or covenants the Lessor shall be binding only upon the Lessor as hereinabove defined. verability. The invalidity of any provision of this Lease, as determined by a court of competent jurisdiction, shall in other provision hereof. ys. Unless otherwise specifically indicated to the contrary, the word "days" as used in this Lease shall mean and refer itation on Liability. The obligations of Lessor under this Lease shall not constitute personal obligations of Les ectors, officers or shareholders, and Lessee shall look to the Project, and to no other assets of Lessor, for the satisfacti espect to this Lease, and shall not seek recourse against Lessor's partners, members, directors, officers or sharehold ts for such satisfaction. e of Essence. Time is of the essence with respect to the performance of all obligations to be performed or observed Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the Parties with res erein, and no other prior or contemporaneous agreement or understanding shall be effective. Lessor and Lessee e e Brokers that it has made, and is relying solely upon, its own investigation as to the nature, quality, character and fin arty to this Lease and as to the use, nature, quality and character of the Premises. Brokers have no responsibility wi o any default or breach hereof by either Party. tices. 1 Notice Requirements. All notices required or permitted by this Lease or applicable law shall be in writing and m and or by courier) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with pos smission, or by email, and shall be deemed sufficiently given if served in a manner specified in this Paragraph 23. T Party's signature on this Lease shall be that Party's address for delivery or mailing of notices. Either Party may by a different address for notice, except that upon Lessee's taking possession of the Premises, the Premises shall otice. A copy of all notices to Lessor shall be concurrently transmitted to such party or parties at such addresses as Le

 

 

 

111_6 17_page_11.gif 3.2 Date of Notice. Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on receipt card, or if no delivery date is shown, the postmark thereon. If sent by regular mail the notice shall be deemed addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mail or ext day delivery shall be deemed given 24 hours after delivery of the same to the Postal Service or courier. Notices y facsimile transmission or by email shall be deemed delivered upon actual receipt. If notice is received on a Satur all be deemed received on the next business day. aivers. (a)No waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by Lessee y other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the same or of any oth reof. Lessor's consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Le any subsequent or similar act by Lessee, or be construed as the basis of an estoppel to enforce the provision or prov h consent. (b)The acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee. Any pted by Lessor on account of moneys or damages due Lessor, notwithstanding any qualifying statements or condition herewith, which such statements and/or conditions shall be of no force or effect whatsoever unless specifically agr before the time of deposit of such payment. (c) THE PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD HERETO AND HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO THE EX INCONSISTENT WITH THIS LEASE. sclosures Regarding The Nature of a Real Estate Agency Relationship. (a)When entering into a discussion with a real estate agent regarding a real estate transaction, a Lesso set understand what type of agency relationship or representation it has with the agent or agents in the transaction. being advised by the Brokers in this transaction, as follows: (i) Lessor's Agent. A Lessor's agent under a listing agreement with the Lessor acts as the sor's agent or subagent has the following affirmative obligations: To the Lessor: A fiduciary duty of utmost care, int alings with the Lessor. To the Lessee and the Lessor: a. Diligent exercise of reasonable skills and care in perform duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecting the ty that are not known to, or withir. the diligent attention and observation of, the Parties. An agent is not obligated to r tial information obtained from the other Party which does not involve the affirmative duties set forth above. (ii) Lessee's Agent. An agent can agree to act as agent for the Lessee only. In these situati agent, even if by agreement the agent may receive compensation for services rendered, either in full or in part from th or a Lessee has the following affirmative obligations. To the Lessee: A fiduciary duty of utmost care, integrity, ho the Lessee. To the Lessee and the Lessor: a. Diligent exercise of reasonable skills and care in performance of the st and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecting the value are not known to, or within the diligent attention and observation of, the Parties. An agent is not obligated to revea nformation obtained from the other Party which does not involve the affirmative duties set forth above. (iii) Agent Representing Both Lessor and Lessee. A real estate agent, either acting direcUy or t enses, can legally be the agent of both the Lessor and the Lessee in a transaction, but only with the knowledge and he Lessee. In a dual agency situation, the agent has the following affirmative obligations to both the Lessor and the Le st care, integrity, honesty and loyalty in the dealings with either Lesser or the Lessee. b. Other duties to the Lessor in subparagraphs (i) or (ii). In representing both Lessor and Lessee, the agent may not without the express permissi e to the other Party that the Lessor will accept rent in an amount less than that indicated in the listing or that the Less han that offered. The above duties of the agent in a real estate transaction do not relieve a Lessor or Lessee from own interests. Lessor and Lessee should carefully read all agreements to assure that they adequately express their A real estate agent is a person qualified to advise about real estate. If legal or tax advise is desired, consult a compete (b) Brokers have no responsibility with respect to any default or breach hereof by either Party. The P her legal proceeding involving any breach of duty, error or omission relating to this Lease may be brought against Br e Start Date and that the liability (including court costs and attorneys' fees), of any Broker with respect to any such hall not exceed the fee received by such Broker pursuant to this Lease; provided, however, that the foregoing limitati not be applicable to any gross negligence or willful misconduct of such Broker. (c) Lessor and Lessee agree to identify to Brokers as "Confidential" any communication or information g y such Party to be confidential. Right To Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expirat n the event that Lessee holds over, then the Base Rent shall be increased to 150% of the Base Rent applicable immed termination. Holdover Base Rent shall be calculated on a monthly bases. Nothing contained herein shall be cons y holding over by Lessee. mulative Remedies. No remedy or election hereunder shall be deemed exclusive· but shall, wherever possible, be es at law or in equity. venants and Conditions; Construction of Agreement. All provisions of this Lease to be observed or performed d conditions. In construing this Lease, all headings and titles are for the convenience of the Parties only and shall ease. Whenever required by the context, the singular shall include the plural and vice versa. This Lease shall no one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it. nding Effect; Choice of Law. This Lease shall be binding upon the Parties, their personal representatives, successo by the laws of the State in which the Premises are located. Any litigation between the Parties hereto concerning e county in which the Premises are located. bordination; Attornment; Non-Disturbance. 1Subordination. This Lease and any Option granted hereby shall be subject and subordinate to any ground lea her hypothecation or security device (collectively, "Security Device"), now or hereafter placed upon the Premises, to a security thereof, and to all renewals, modifications, and extensions thereof. Lessee agrees that the holders of any su e together referred to as "Lender") shall have no liability or obligation to perform any of the obligations of Lessor und elect to have this Lease and/or any Option granted hereby superior to the lien of its Security Device by giving writt reupon this Lease and such Options shall be deemed prior to such Security Device, notwithstanding the re n or recordation thereof. 2 Attornment. In the event that Lessor transfers title to the Premises, or the Premises are acquired by another u n of a Security Device to which this Lease is subordinated (i) Lessee shall, subject to the non-disturbance provisions h new owner, and upon request, enter into a new lease, containing all of the terms and provisions of this Lease, with s r of the term hereof, or, at the election of the new owner, this Lease will automatically become a new lease between Le i) Lessor shall thereafter be relieved of any further obligations hereunder and such new owner shall assume all of L uch new owner shall not: (a) be liable for any act or omission of any prior lessor or with respect to events occurring p ) be subject to any offsets or defenses wl)ich Lessee might have against any prior lessor, (c) be bound by prepayme or (d) be liable for the return of any security deposit paid to any prior lessor which was not paid or credited to such new 3Non-Disturbance. With respect to Security Devices entered into by Lessor after the execution of thi of this Lease shall be subject to receiving a commercially reasonable non-disturbance agreement (a "Non-Disturb er which Non-Disturbance Agreement provides that Lessee's possession of the Premises, and this Lease, including a of, will not be disturbed so long as Lessee is not in Breach hereof and attorns to the record owner of the Premises e execution of this Lease, Lessor shall, if requested by Lessee, use its commercially reasonable efforts to obtain om the holder of any pre-existing Security Device which is secured by the Premises. In the event that Lessor is u nce Agreement within said 60 days, then Lessee may, at Lessee's option, directly contact Lender and attempt t d delivery of a Non-Disturbance Agreement. 4Self-Executing. The agreements contained in this Paragraph 30 shall be effective without the execution of any ever, that, upon written request from Lessor or a Lender in connection with a sale, financing or refinancing of the Pre execute such further writings as may be reasonably required to separately document any subordination, nce Agreement provided for herein.

 

 

 

111_6 17_page_12.gif hts hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be e es. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proc udgment. The term, "Prevailing Party" shall include, without limitation, a Party or Broker who substantially obtains e case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of s' fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimbur ncurred. In addition, Lessor shall be entitled to attorneys' fees, costs and expenses incurred in the preparation and consultations in connection therewith, whether or not a legal action is subsequently commenced in connection with suc 0 is a reasonable minimum per occurrence for such services and consultation). ssor's Access; Showing Premises; Repairs. Lessor and Lessos agents shall have the right to enter the Premise mergency, and otherwise at reasonable times after reasonable prior notice for the purpose of showing the same to pr nants, and making such alteratio s. repairs, improvements or additions to the Premises as Lessor may deem neces using and maintaining of utilities, services, pipes and conduits through the Premises and/or other premises as long a ct on Lessee's use of the Premises. All such activities shall be without abatement of rent or liability to Lessee. ctions. Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises without Lessos pr not be obligated to exercise any standard of reasonableness in determining whether to permit an auction. gns. Lessor may place on the Premises ordinary "For Sale" signs at any time and ordinary "For Lease" signs during eof. Lessor may not place any sign on the exterior of the Building that covers any of the windows of the Premises. Ex gns which may be placed only on the Premises, Lessee shall not place any sign upon the Project without Lessor's pri omply with all Applicable Requirements. rmination; Merger. Unless specifically stated otherwise in writing by Lessor,the voluntary or other surrender of this L nation or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee, shall automatically terminate an Premises; provided, however, that Lessor may elect to continue any one or all existing subtenancies. Lessor's such event to elect to• the contrary by written notice to the holder of any such lesser interest, shall constitute Less onstitute the termination of such interest. nsents. Except as otherwise provided herein, wherever in this Lease the consent of a Party is required to an act by t shall not be unreasonably withheld or delayed. Lessor's actual reasonable costs and expenses (including but not ngineers' and other consultants' fees) incurred in the consideration of, or response to, a request by Lessee for not limited to consents to an assignment, a subletting or the presence or use of a Hazardous Substance, shall be n invoice and supporting documentation therefor. Lessor's consent to any act, assignment or subletting sh ment that no Default or Breach by Lessee of this Lease exists, nor shall such consent be deemed a waiver of any th pt as may be otherwise specifically stated in writing by Lessor at the time of such consent. The failure to specify Lesso s consent shall not preclude the imposition by Lessor at the time of consent of such further or other co with reference to the particular matter for which consent is being given. In the event that either Party disagrees w other hereunder and reasonably requests the reasons for such determination, the determining party shall furnish its r e detail within 10 business days following such request. arantor. .1Execution. The Guarantors, if any, shall each execute a guaranty in the form most recently published by the ciation. .2Default. It shall constitute a Default of the Lessee if any Guarantor fails or refuses, upon request to provide: the guaranty, including the authority of the party signing on Guarantor's behalf to obligate Guarantor, and in the certified copy of a resolution of its board of directors authorizing the making of such guaranty, (b) current financi tificate, or (d) written confirmation that the guaranty is still in effect. iet Possession. Subject to payment by Lessee of the Rent and performance of all of the covenants, condition t to be observed and performed under this Lease, Lessee shall have quiet possession and quiet enjoyment of the Pre tions. If Lessee is granted any Option, as defined below, then the following provisions shall apply. 1 Definition. "Option" shall mean: (a) the right to extend or reduce the term of or renew this Lease or to exten ny lease that Lessee has on other property of Lessor; (b) the right of first refusal or first offer to lease either the Premi the right to purchase, the right of first offer to purchase or the right of first refusal to purchase the Premises or other p 2Options Personal To Original Lessee. Any Option granted to Lessee in this Lease is personal to the original or exercised by anyone other than said original Lessee and only while the original Lessee is in full possession of Lessor, with Lessee certifying that Lessee has no intention of thereafter assigning or subletting. 3Multiple Options. In the event that Lessee has any multiple Options to extend or renew this Lease, a lat less the prior Options have been validly exercised. 4Effect of Default on Options. (a) Lessee shall have no right to exercise an Option: (i) during the period commencing with the giving of any til said Default is cured, (ii) during the period of time any Rent is unpaid (without regard to whether notice thereof i e Lessee is in Breach of this Lease, or (iv) in the event that Lessee has been given 3 or more notices of separate D are cured, during the 12 month period immediately preceding the exercise of the Option. (b) The period of time within which an Option may be exercised shall not be extended or enlarged by reason of ption because of the provisions of Paragraph 39.4(a). (c) An Option shall terminate and be of no further force or effect, notwithstanding Lessee's due and timely exerc ercise and prior to the commencement of the extended term or completion of the purchase, (i) Lessee fails to pay Re ch Rent becomes due (without any necessity of Lessor to give notice thereof), or (ii) if Lessee commits a Breach of th curity Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does not include the cos measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility , Lessee, its agents and invitees and their property from the acts of third parties. In the event, however, that Lessor sh ces, then the cost thereof shall be an Operating Expense. servations. (a) Lessor reserves the right: (i) to grant, without the consent or joinder of Lessee, such easements, rights a s necessary, (ii) to cause the recordation of parcel maps and restrictions, (iii) to create and/or install new utility racew ights, dedications, maps, restrictions, and utility raceways do not unreasonably interfere with the use of the Premises ange the name, address or title of the Building or Project upon at least 90 days prior written notice; provide an ilding standard graphics on the door of the Premises and such portions of the Common Areas as Lessor sha rant to any lessee the exclusive right to conduct any business as long as such exclusive right does not conflict with and to place such signs, notices or displays as Lessor reasonably deems necessary or advisable upon the roof, exter r on signs in the Common Areas. Lessee agrees to sign any documents reasonably requested by Lessor to effectu f Lessee's view, air, or light by any structure erected in the vicinity of the Building, whether by Lessor or third parties, s impose any liability upon Lessor. (b) Lessor also reserves the right to move Lessee to other space of comparable size in the Building or Pr st 45 days prior written notice of such move, and the new space must contain improvements of comparable qualit mises. Lessor shall pay the reasonable out of pocket costs that Lessee incurs with regard to such relocation, includ ecessary stationary revision costs. In no event, however, shall Lessor be required to pay an amount in excess of two not be relocated more than once during the term of this Lease. (c) Lessee shall not: (i) use a representation (photographic or otherwise) of the Building or Project or their na business; or (ii) suffer or permit anyone, except in emergency, to go upon the roof of the Building. rformance Under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by on visions hereof, the Party against whom the obligation to pay the money is asserted shall have the right to make pay ment shall not be regarded as a voluntary payment and there shall survive the right on the part of said Party to institut it shall be adjudged that there was no legal obligation on the part of said Party to pay such sum or any part thereof over such sum or so much thereof as it was not legally required to pay. A Party who does not initiate suit for the re t" within 6 months shall be deemed to have waived its right to protest such payment. hority; Multiple Parties; Execution

 

 

 

111_6 17_page_13.gif n behalf of such entity represents and warrants that he or she is duly authorized to execute and deliver this Lease on i 0 days after request, deliver to the other Party satisfactory evidence of such authority. (b)If this Lease is executed by more than one person or entity as "Lessee", each such person or entit le hereunder. It is agreed that any one of the named Lessees shall be empowered to execute any amendment to cillary thereto and bind all of the named Lessees, and Lessor may rely on the same as if all of the named Lessees (c) This Lease may be executed by the Parties in counterparts, each of which shall be deemed an orig l constitute one and the same instrument. nflict. Any conflict between the printed provisions of this Lease and the typewritten or handwritten provisions shall r handwritten provisions. er. Preparation of this Lease by either party or their agent and submission of same to the other Party shall not be ther Party. This Lease is not intended to be binding until executed and delivered by all Parties hereto. endments. This Lease may be modified only in writing, signed by the Parties in interest at the time of the modificati ally change Lessee's obligations hereunder, Lessee agrees to make such reasonable nonmonetary modifications to t equired by a Lender in connection with the obtaining of normal financing or refinancing of the Premises. iver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN G INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT. bitration of Disputes. An Addendum requiring the Arbitration of all disputes between the Parties and/or Brokers arisi ot attached to this Lease. cessibility; Americans with Disabilities Act. (a)The Premises: 0 have not undergone an inspection by a Certified Access Specialist (CASp). D a Certified Access Specialist (CASp) and it was determined that the Premises met all applicable construction rsuant to California Civil Code §55.51 et seq. D have undergone an inspection by a Certified Access Specialist hat the Premises did not meet all applicable construction-related accessibility standards pursuant to California Civil Co (b)Since compliance with the Americans with Disabilities Act (ADA) is dependent upon Lessee's ssor makes no warranty or representation as to whether or not the Premises comply with ADA or any similar legislatio of the Premises requires modifications or additions to the Premises in order to be in ADA compliance, Lessee agree odifications and/or additions at Lessee's expense. D LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAI ECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIE E TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND E PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES. NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE ASSOCI TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSA . THE PARTIES ARE URGED TO: EK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. TAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE P ION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTAN F THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEM MERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF THE PREMISES FOR LESSEE'S INTENDED USE F THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE LEA TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES ARE LOCATED. ereto have executed this Le at the place a A the dates specified above their respective signatures. 5A.lf}"21: '/ON'£A V$-Executed at: ---._. ,.1-.-"0.,...-1-J-......,...-"7>,. 5..,ftf-J.'i 1 On: By LESSEE: '5/ / Q / Z<iJ f I I ==-====-"===--==:.._ --=--TriplePulse Inc., a Delaware Cor Title:.=C_EO By: inted:--------------------Name Printed:-----------Title:---------------. Box 3160 Address:-------------CA 91508 ( .) .::;5 4cc7_--=2c::0-=2c::O _ _)------------------- Telephone:( ) Facsimile:( s@CDMNGT.com Email:---------------vestments@S BCGlobal.net Emai: ----------------No.--------------------FederaiiD No.-------------

 

 

 

111_6 17_page_14.gif BROKER: LESSEE'S BROKER: mercial Brokerage, Inc. BRC Advisors el Padilla 50 6th Street, Suite 303 onica, CA 90401 Attn: Shane Murphy Address: 9744 Wilshire Boulevard, S Beverly Hills, CA 90212 !_Q_) -=.3-=.9-=.5_-.::;2..:::6..:::6.::.3 Telephone:(.§2§.) .=2.=3.=3_--=.0-=.0_:_7.::.1 _Q_) =3..::.9-=.5c_-_.::2:..::6:..::B:..::3:: Facsimile:(310) =B..::_Oc.:7_--=9:..::3:..::8:_7:: el@parcommercial. comEmail: shane@brcadvisors. com t BRE License #: ---------------Broker/Agent BRE License #: --------hese forms are often modified to meet changing requirements of law and industry needs. Always write or call ilizing the most current form: AIR Commercial Real Estate Association, 500 N Brand Blvd, Suite 900, Glendale Telephone No.(213) 687-8777. Fax No.: (213) 687-8616. ©Copyright 1999-By AIR Commercial Real Estate Association. All rights reserved. No part of these works may be reproduced in any form without permission in writing.

 

 

 

111_6 17_page_15.gif  ADDENDUM ay 14, 2015 Between {lessor) SMCA Main street Plaza, LLC (lessee)TriplePulse Inc., a Delaware Corporation s of Premises: 3103 Neilson Way, suite D Santa Monica, CA 90405 52 - 53 nt of any conflict between the provisions of this Addendum and the printed provisions of the Lease, thi SSQK'fr_w_QKJ<:. hall deliver the Premises in broom clean condition with all plumbing, electrical and HV . CUKL1YJ2El"QSLT Lessee is not in default of the lease, Lessor will credit, from the Security Deposi to the following months of the lease: 68.50 in month 13 0.56 in month 25 6.28 in month 27 edits are achieved, then the remaining Security Deposit will be $27,436.59

 

 

 

111_6 17_page_16.gif  RENT ADJUSTMENT(S) STANDARD LEASE ADDENDUM Dated M a y l 4L, 2 01 5 ------------By and Between (Lessor) SMCA Main street Plaza, LLC (Lessee)TriplePulse Inc., a Delaware Corporat Address of Premises: 3103 Neilson Way Suite D Santa Monica, CA 90405 50 NT ADJUSTMENTS: e monthly rent for each month of the adjustment period(s) specified below shall be increased using the method(s) indic od(s) to be Used and Fill in Appropriately) st ef bi"ing ll.<ljustment(s) (COLO.) nt sRall ee adjusted ey tfle sflange, if any, ffem tfle Base ManiA spesified eelew, in !fie Censumer Prise Index ef he IJ.a. gepartment ef baser fer (selest ene):a CPI'N (IJreaA Wage tsamers ana Clerisal "'erl<ers) era CPI IJ (All :laA Area): 100), flereiA referred Ia as "CPI". Tfle mentflly Base Rent payaele in asserdanse witfl paragrapfl • ..l.a ef this l\adendum shall ee salsulatea as fellew raph 1.5 ef the attasfled lease, shall be multiplied by a fraGiieA the numerater ef whish sflall be lfle CPI ef IRe salen enlh(s) spesified in paragrape AI.a. abe"e during whish the a8justment is te tal<e effest, and the deneminater ef wAisR maRIA "'A ish is 2 menths prier le (selest ene): the a first menth ef the term ef this bease aS set feriA iR paragraph 1 Aer "Base Mentfl"): . Tfle su B RBI" menthly Base Rent flereunder, eut in AS 8"8111, sflall any SUSA new mentflly Base Rent ee less than tfle Base diately preseding tfle Base Rent a In !fie e•1ent tfle sempilatien and/er pul31isatien ef tfle CPI sflall be transferred Ia any etfler ge\•emmental depa all Be disseR!inuea, then IRe iA<I"" FRest Rearly the SarRa as the CPI sl<aiiBe use<! Ia FRake susl< salsulatiaA. lA Ike E en susfl alternati"e index, tflen tfle FRailer shall Be SUBFRitte<l fer desisien te tfle •merisan /\Fili!Fatien l'ssesiatian in said /\ssesiatien and tfle deeisien ef tfle arllitraters sflaiiBe llinding upen IRe parties. TAe sest ef said Nllitratien sfla rket Rental 'lalue Adjustment(s) (MR'/) On (l"ill in MRV /\8justFReRIgate(s): t sflall e a8justed te tfle "Marl<et Rental '<alue" ef tfle preperty as fsllews: 1) l"euF meRtfls prier te easfl Marl<elRental "alue ,•8justment Qate dessriBeEI aBe"e, tfle Parties sflall atteFRpt te a l e en tfle a8justFReRIdate.If agreement sannet 13e reasfled "'ilflin tflirty days, tflen: (a) lesser aREI lessee sRall immeaialely appainla mutually asseptaele appraiser ar erel<er le estaelisfl I lays. •.ny assesiated sests "'ill e split e ually Bel"'een tfle Parties, er (B) Betfl lesser and lessee sflall easfl imFRediately make a reasenaele eelerFRinatien ef IRe MR , in writing, te arl3itratieR in assardanse "qiR tfle fellewing pre"isiens: (i) IMilfliR 1§ days lflereafter, lesser and bessee SRall easfl sales! an a apjlraiseF era rel f !Flair sflaise ta as!as an arl3itrater. Tfle "B ar itraters sa apjleinted sflall immediately sales! a tfliFd mutually asseJ)Ia itrater (ii) TAe a aFI3ilraleFS sF!all uqtfliR ao days ef tfle appeintment ef the tflir<l arlli!Fater Feasfl a des sr !fie PreFRises is, and \'.<Aetfler lesses eF lessee's SUBmitted MRV is tl1e slasest tflerele. Tfle desisien ef a majeFi ng en tfle Parties. Tfle suBFRitted MR" wflisfl is deteFFRined Ia Be tfle slesest te tfle astual MR\1 sflall tfleFeafter lle used

 

 

 

111_6 17_page_17.gif sllall reasll a aeeisieR eR llis er ller e'IIA, aRe saie aesisieR sllall ee aiA<liRg eA tile Parties. (i") Tile eRiire sest ef s sll ar8itratieR sllall ee pais ey tile party wllese s emittea '41'1'' is Ret s tile slesest te tRe ast al MR'I. 2) '!VIleR eetermiRiR!J MR", IRe lesser, lessee aRe CeRs llaRts sl<all sensieer IRe terms ef sempara91e marl<et tra e limited te, reRI, reRtal allj s!meR!s, aaatee reRt, lease term aRe fiRaRsial seRai!ieR ef teRaRis.-3) NetwitRstaneing IRe feregehg, IRe Rew li!ase ReRIsRall Ret ee less IRaR tile reAlpayeale fer tile meRIIl immeei nl. blpeR tile estaalisllmen!ef eaell le"' Marl<et Rental Val e: 1) tile ne"' MR\ 1"'ill sesame tile ne·v "li!ase Rent" fer tile rpese ef eals lating any fur!Rer A llj slmeRIS, ana - 2) tile fiFSImeRtll ef eaell MaFkel ReRial "ale term sRallsesame tile Re'l' 'li!ase MeRIIl' fer tile p rpese ef sa xed Rental Adjustment(s) (FRA) On (Fill in FRA Adjustment Date(s)): The New Base Rent shall be: June 1, 2016 $4,068.50 June 1, 2017 $4,190.56 June 1, 2018 $4,316.28 June 1, 2019 $4,445.77 lial Term •djuslmenls. usee te sals lale aej slmeRIS te IRe li!ase Rate El riRg tile erlgiRal Term efllle bease sllallseRiiRe Ia Be sea e riR§ TICE: less specified otherwise herein, notice of any such adjustments, other than Fixed Rental Adjustments, shall be m of the Lease. OKER'S FEE: e Brokers shall be paid a Brokerage Fee for each adjustment specified above in accordance with paragraph 15 aragraph 9 of the Sublease. hese forms are often modifiedo meet changing requirements of law and industry needs. Always write or call ilizing the most current form: AIR Commercial Real Estate Association, SOD N Brand Blvd, Suite 900, Glendale Telephone No. (213) 687·8777. Fax No.:(213) 687·8616.

 

 

 

111_6 17_page_18.gif  OPTION(S) TO EXTEND STANDARD LEASE ADDENDUM Dated M aLy_l 4 , 2 0 15 -------By and Between {lessor) SMCA Main Street Plaza, LLC By and Between (lessee) TriplePulse Inc.' a Delaware Cor Address of Premises: 3103 Neilson way, suite D Santa Monica, CA 90405 1-.._ (S) TO EXTEND: y grants to Lessee the option to extend the term of this Lease for one ( 1)additional six (s) commencing when the prior term expires upon each and all of the following terms and conditions: In order to exercise an option to extend, Lessee must give written notice of such election to Lessor and Lessor must but not more than9 months prior to the date that the option period would commence, time being of the the exercise of an option is not given and/or received, such option shall automatically expire. Options (if there are ised consecutively. The provisions of paragraph 39, including those relating to Lessee's Default set forth in paragraph 39.4 of this Leas Except for the provisions of this Lease granting an option or options to extend the term, all of the terms and cond specifically modified by this option shall apply. This Option is personal to the original Lessee, and cannot be assigned or exercised by anyone other than said origi nal Lessee is in full possession of the Premises and without the intention of thereafter assigning or subletting. The monthly rent for each month of the option period shall be calculated as follows, using the method(s) indicated be d(s) to be Used and Fill in Appropriately) ls all ae aelj sted ay lAB s aA e. if aAy, fFSm te !lase !!eAts esified eels"', iA te CeAs mer PFise IAdex ef IRe !l e IJ.S. l:le artmeRIef baser fer {selest eRe): &CPI 1M {IJrl>aA IMa§e eamers BAG Clerisal WeFI<ers) era CPI IJ ·II IJ aR A Fea): . 2 1984 - 1QQ), eFeiA referFSd teas "CPI". meAt ly Base ReAlayaale iA assemaAse wit aFS§FS.'\.I.a. ef t is /\ddeAdm s all be sals lated as fellm•m: te !lase .9 ef te atlasad lease, s all ae m lti lied ay a fFSstieR te R meFa!BF ef w isl1 . all ae te CPI ef te saleAdaF meAt2 esified iR a•a§FSA I.a. aae"e d FiA§ whish te adj stmeRt is te tal<e effest, aRd the deRemiAate• ef w iss all as R "oRisR is 2 meRIs Fier Ia {sales! eRe): B te first meAlef te leFm ef this lease as set fertiR aFS§FSJ31.3 {"!lase Base MeAl "): - als lated shall seRstit te te Aew meRihly Base ReAlheFS Rder, bt iR Re e"eAI, shall aRy s sh Raw meRihly !lase ReAl aele feF te meAlimmediately FesediRthe reAlaelj stmeAI. e eveRt the sem ilatieR aRdler alisatieA ef the CPI s all as IFSAsferred te aRy etheF §S"emmeRial de artmeRIer a AtiR ed, theA te iR<lex mast AeaFiy the same as the CPI shall ee sed te mal<e s sh sals latieR. lA the eveRt t a h alteFRalive iAdex, theA !he !Flatter s all ee s b!Flilted fer desisieA te the l'o!FleFisaR AFaitFalieA AssesiatieR iR asser ssesiatieR aRd the desisieR ef the aF9itFSieFS shall ee biRdiR§ eR tl>e arties. The sest ef said AFeitFStieA shall lle ket Rental Value Adjustment(s) (MRV) (Fill in MRV Adjustment Date(s))"J-"u:on;;,;eo_l=..,-=2:..:0:.::2:.:0"-----------------shall be adjusted to the "Market Rental Value" of the property as follows: Four months prior to each Market Rental Value Adjustment Date described above, the Parties shall attempt to agree n the adjustment date. If agreement cannot be reached, within thirty days, then: (a) Lessor and Lessee shall immediately appoint a mutually acceptable appraiser or broker to establish the new MR ociated costs will be split equally between the Parties, or (b) Both Lessor and Lessee shall each immediately make a reasonable determination of the MRV and submit suc

 

 

 

111_6 17_page_19.gif (i) Within 15 days thereafter, Lessor and Lessee shall each select anD appraiser or 0 broker ("Consultant" t as an arbitrator. The two arbitrators so appointed shall immediately select a third mutually acceptable Consul (ii) The 3 arbitrators shall within 30 days of the appointment of the third arbitrator reach a decision as to wha s is, and whether Lessos or Lessee's submitted MRV is the closest thereto. The decision of a majority of the arbitr s. The submitted MRV which is determined to be the closest to the actual MRV shall thereafter be used by the Partie (iii) If either of the Parties fails to appoint an arbitrator within the specified 15 days, the arbitrator timely appo decision on his or her own, and said decision shall be binding on the Parties. (iv) The entire cost of such arbitration shall be paid by the party whose submitted MRV is not selected, ie. the e actual MRV. 2) When detenmining MRV, the Lessor, Lessee and Consultants shall consider the tenms of comparable market tra no limited to, rent, rental adjustments, abated rent, lease term and financial condition of tenants. 3) Notwithstanding the foregoing, the new Base Rent shall not be less than the rent payable for the month imme ent. on the establishment of each New Market Rental Value: the new MRV will become the new "Base Rent" for the purpose of calculating any further Adjustments, and the first month of each Market Rental Value term shall become the new "Base Month" for the purpose of ca . lell Rental 1\djustment(s) (liRA) eAls all ee iAsreasete te falle"'iAg ameuAIS 9A te dates set fer!eelew:-OR (!"ill iA lOR• •ejustmeAt Oate(s)):Te lew Base ReAls all be: tial Term Adjustments. sed to salsulate aEijustmeRts to te Base Rate 8uriR§ te ori§iRal Tei'IR of te bease s all soRtiAue te be usee duriR§ te : less specified otherwise herein, notice of any rental adjustments, other than Fixed Rental Adjustments, shall be m of the Lease. R'S FEE: e Brokers shall be paid a Brokerage Fee for each adjustment specified above in accordance with paragraph 15 aragraph 9 of the Sublease. hese forms are often modified to meet changing requirements of law and industry needs. Always write or call ilizing the most current form: AIR Commercial Real Estate Association, 500 N Brand Blvd, Suite 900, Glendale Telephone No. (213) 687-8777. Fax No.: (213) 687-8616.

 

 

EX1A-6 MAT CTRCT 31 tm2031356d1_ex6-18.htm EXHIBIT 6.18

 

Exhibit 6.18

 

FIRST AMENDMENT TO LEASE

 

STANDARD MULTI -TENANT OFFICE LEASE - GROSS

3103 NEILSON WAY, SUITED 

SANTA MONICA, CA 90405

 

THIS FIRST AMENDMENT TO LEASE ("First Amendment") is made by and between SMCA MAIN STREET PLAZA, LLC, a California limited liability Company {"Lessor") and TRIPLEPULSE INC., a Delaware corporation ("Lessee") with reference to the following:

 

A.Lessor and Lessee entered into that certain Standard Multi - Office Lease - Gross, dated May 14, 2015 ("the Lease"), demising the premises located at 3103 Neilson Way, Santa Monica, CA.

 

B.By this First Amendment, Lessor and Lessee desire to modify the Original Term and Base Rent as set forth herein.

 

FOR VALUE RECEIVED, Lessor and Lessee amend the Lease as set forth below. All capitalized terms shall have the meanings used in the Lease unless otherwise provided.

 

1.Term. Lessor and Lessee agree to extend the initial Lease term for a period of Five (5) years commencing June 1, 2020 through May 31, 2025 ("Extension").

 

2.Base Rent. Commencing June 1, 2020 Lessee's Base Rent shall be adjusted in accordance to the below.

 

June 1, 2020 through May 31, 2021 - $4,750.00 per month

 

June 1, 2021 through May 31, 2022 - $4,892.50 per month

 

June 1, 2022 through May 31, 2023 - $5,039.28 per month

 

June 1, 2023 through May 31, 2024 - $5,190.45 per month

 

June 1, 2024 through May 31, 2025 - $5,346.17 per month

 

3.Option to Extend. Lessee has the option to extend the Lease for one (1) additional period of Five (5) years (the "Option Period") upon the same terms and conditions of the Lease, except as expressly modified in this Amendment. If exercised, the Option Period commences June 1, 2025 and extends through and includes May 31, 2030. To exercise the Renewal Option, Lessee shall provide Lessor written notice not less than One Hundred Eighty (180) days prior to the expiration of the then current term. Base rent during the Option Period shall be as defined in Paragraph (a) below.

 

(a)   Subject to the terms and conditions hereinafter set forth, if Lessee exercises the option as herein provided, the term of this Lease shall be automatically extended for the Option Term without the execution of an extension or renewal of the lease, and during the Option Term, Lessor and Lessee shall be bound by all of the terms, covenants and conditions of this Lease except that (A) the Base Rent for the first year of the Option Term shall be one hundred percent (100%) of the Fair Market Rental Value determined as hereinafter provided.

 

 

 

(i)The 'Fair Market Rental Value" shall be determined as follows:

 

"Fair Market Rental Value shall mean the fair market rental for the entire Premises as of the commencement of the Option Term, taking into account the value of all leasehold improvements in the Premises for a tenant proposing to sign a lease for a similar term and having financial qualifications similar to Lessee and using as a guide equivalent space of similar age, construction, quality, use and location. In determining the "Fair Market Rental Value", the parties shall negotiate in good faith in order to reach agreement; and in the event the parties are unable to reach agreement during the period that is not more than nine (9) months and not less than six (6) months prior to the commencement of the Option Term, Lessee's right to exercise the option granted herein shall be null and void and the Lease shall expire upon the expiration of the Original Tenn according to the terms and conditions set forth in the Lease.

 

(ii)          In no event, and notwithstanding anything to the contrary, shall the Base Rent payable during the Option Term be less than the monthly Base Rent payable during the last year of the then current Term.

 

(b)   Upon the first and each successive anniversary of the commencement date of the Option Tenn, the monthly Base Rent shall be increased 3% annually.

 

(c)   Lessee's option to extend the term of this Lease must be exercised as to the entirety of the Premises.

 

(d)   If and/or when Lessee exercises the option granted herein Lessee is in default under this Lease, Lessor (without prejudice to any of its other rights and remedies) may, at Lessors option, nullify the option herein granted by written notice within twenty (20) days of receipt of Lessee's notice and this Lease shall terminate at the expiration of the Original Tenn, unless earlier terminated.

 

4.No Further Amendments. Except as modified herein, the Lease shall not be amended and shall continue in accordance with its terms. Master Lease shall be in full force and effect at all times. The terms of the Amendment control over any other inconsistent terms of the Master Lease.

 

5.Brokers. Each party will indemnify and hold the other harmless from any cost, expense, or liability (including costs of suit and reasonable attorneys' fees) for any compensation, commission or fees claimed by any real estate broker or agent in connection with this Amendment or its negotiation by reason of any act or statement of the indemnifying party.

 

6.Counterparts. This Amendment may be executed in several counterparts, each of which are deemed an original, but all of which together constitute one and the same Amendment.

 

[Signature page follows]

 

 

 

IN WITNESS WHEREOF this First Amendment is executed effective as of the above date.

 

LESSOR:   LESSEE:
     
SMCA MAIN STREET PLAZA, LLC   TriplePulse Inc
a California limited liability company   a Delaware corporation
     
     
By: /s/ James Demircift   By: /s/ Christopher Thompson
Date: 9/23/2019   Date: 9/23/2019

 

 

 

EX1A-6 MAT CTRCT 32 tm2031356d1_ex6-19.htm EXHIBIT 6.19

 

Exhibit 6.19

 

THIS PATENT AND KNOW-HOW LICENSE AGREEMENT (this "Agreement") is made and entered into this January 15, 2020 (the “Effective Date”) by and between Christopher Thompson, an individual with a principal place of business at 3103 Neilson Way, #D, Santa Monica, CA 90405 ("Licensor") and TriplePulse, Inc., a Delaware corporation with a principal place of business at 1811 Silverside Road, Wilmington, DE, 19810 ("Licensee").

 

RECITALS

 

WHEREAS, as of the Effective Date, the Licensor is the Chief Executive Officer of the Licensee;

 

WHEREAS, as of the Effective Date, the Licensor is the owner, inventor, and principal applicant of certain Patents, Patent Applications, and Know-How related to consumer products described in Exhibit “A” attached and incorporated by this reference (the “Technology”);

 

WHEREAS, following the Effective Date, the Licensor intends to grant to Licensee a license under certain Technology owned by Licensor;

 

AGREEMENT

 

NOW, THEREFORE, for good and valuable consideration, which the parties hereby acknowledge to be sufficient consideration, the parties agree as follows:

 

1. LICENSE GRANTS. Licensor hereby grants to Licensee a royalty-free, exclusive, sublicensable (through multiple tiers), license in the Technology to develop, make, have made, use, sell, offer for sale, import and export products in the licensee field.

 

2. REPRESENTATIONS AND WARRANTIES. 2.1 TITLE. Licensor hereby represents and warrants that (i) it has good title to the Technology and (ii) it is authorized to make the assignment, now or upon the Technology being awarded, provided for herein. 2.2 NO INFRINGEMENT. Licensor warrants that, to the best of its knowledge, the Technology does not violate or infringe any patent, copyright, trademark, trade secret or other proprietary rights of any third party and that Licensor is not aware of any facts upon which such a claim for infringement could be based. Licensor will promptly notify Licensee if it becomes aware of any claim or any facts upon which such a claim could reasonably or legitimately be based. 2.3 FUTURE IMPROVEMENTS. Licensor shall own any future improvements to such existing Technology, which can then be licensed by Licensee for valuable consideration.

 

3. GENERAL. 3.1 LAW AND VENUE. This Agreement shall be construed and enforced in accordance with the laws of the State of Delaware. 3.2 EQUITABLE RELIEF. The parties acknowledge and agree that remedies at law may be inadequate to protect against breaches of this Agreement and expressly consent to the granting of equitable relief, whether temporary, preliminary or final, without proof of actual damages, to prevent any actual or threatened breach. 3.3 ENTIRE AGREEMENT. This Agreement and the documents referenced herein constitute the entire understanding and agreement of the parties with respect to the subject matter of this Agreement and supersede all prior agreements or understandings, written or oral, between the parties with respect to the subject matter of this Agreement.

 

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

 

 

 

Christopher Thompson   TriplePulse, Inc.
     
By: /s/ Christopher Thompson   By: /s/ Christopher Thompson
         
Name: Christopher Thompson   Name: Christopher Thompson
         
Title: an Individual   Title: CEO

 

 

 

EXHIBIT A

 

DESCRIPTION OF TECHNOLOGY The technology being transferred is commonly referred to as "Patents" and “Patent Applications” technology. This includes the following:

 

-Phenylacetyl-L-prolylglycine ethyl ester compositions and methods for using the same, USPTO Application Number 16242982

 

-

 

 

 

EX1A-8 ESCW AGMT 33 tm2031356d1_ex8-1.htm EXHIBIT 8.1

 

Exhibit 8.1

 

 

Escrow Services Agreement

 

This Escrow Services Agreement (this “Agreement”) is made and entered into as of 9/3/2020 by and between Prime Trust, LLC (“Prime Trust” or “Escrow Agent”), TriplePulse, Inc. the “Issuer”) and StartEngine Primary LLC (the “Broker”).

 

Recitals

 

WHEREAS, the Issuer proposes to offer for sale and sell securities to prospective investors (“Subscribers”), as disclosed in its offering materials, in a registered offering pursuant to the Securities Act of 1933, as amended, or exemption from registration (i.e. Regulation A+, D or S) (the “Offering”), the equity, debt or other securities of the Issuer (the “Securities”) up to the maximum amount of $3,950,000 (the “Maximum Amount of the Offering”). There is no minimum contingency or minimum offering amount in this Offering.

 

WHEREAS, Issuer has engaged Broker, a registered broker-dealer with the Securities Exchange Commission and member of the Financial Industry Regulatory Authority, to serve as placement agent or underwriter, as applicable, for the Offering.

 

WHEREAS, Issuer and Broker desire to establish an Escrow Account in which funds received from Subscribers will be held during the Offering, subject to the terms and conditions of this Agreement.

 

WHEREAS, Prime Trust agrees to serve as third-party escrow agent for the Subscribers with respect to such Escrow Account (as defined below) in accordance with the terms and conditions set forth herein.

 

Agreement

 

NOW THEREFORE, in consideration for the mutual covenants, promises, agreements, representations, and warranties contained in this Agreement and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties herby agree as follows:

 

1.Establishment of Escrow Account. Prior to the Issuer initiating the Offering, and prior to the receipt of the first Subscriber funds, Escrow Agent shall establish an account for the Issuer (the “Escrow Account”). All parties agree to maintain the Escrow Account and Escrow Amount (as defined below) in a manner that is compliant with applicable banking and securities regulations. Escrow Agent shall be the sole administrator of the Escrow Account.

 

2.Escrow Period. The escrow period (“Escrow Period”) shall begin with the commencement of the Offering and shall terminate, in whole or in part, as applicable, upon the earlier to occur of the following:

 

a.The date upon which Escrow Agent has received the Escrow Amount cleared in the Escrow Account and the Issuer and/or Broker instructed a partial or full closing on those funds, provided, however, that the Escrow Amount does not exceed the Maximum Amount of the Offering.; or

 

b.The date which is one year from the date of qualification of the Offering by the Securities and Exchange Commission; or

 

 

 

 

c.The date upon which a determination is made by Issuer and/or their authorized representatives to terminate the Offering; or

 

d.Escrow Agent’s exercise of the termination rights specified in Section 8.

 

During the Escrow Period, the parties agree that (i) the Escrow Account and escrowed funds will be held for the benefit of the Subscribers, and that (ii) neither Issuer nor the Broker are entitled to any funds received into the Escrow Account, and that no amounts deposited into the Escrow Account shall become the property of Issuer, Broker or any third-party, or be subject to any debts, liens or encumbrances of any kind, until the contingency has been satisfied.

 

3.Deposits into the Escrow Account. All Subscribers will be directed by the Issuer and its agents to transmit their data and subscription amounts via Escrow Agent’s technology systems (“Issuer Dashboard”), directly to the Escrow Account to be held for the benefit of Subscribers in accordance with the terms of this Agreement and applicable regulations. All Subscribers will transfer funds directly to the Escrow Agent for deposit into the Escrow Account. Escrow Agent shall process all subscription amounts for collection through the banking system, shall hold Escrow Amounts, and shall maintain an accounting of each such subscription amount posted to its ledger, which also sets forth, among other things, each Subscriber’s name and address, the quantity of Securities purchased, and the amount paid. All subscription amounts which have cleared the banking system, are hereinafter referred to as the “Escrow Amount”. No interest shall be paid to Issuer or Subscribers on balances in the Escrow Account. Issuer shall promptly, concurrent with any new or modified subscription agreement (each a “Subscription Agreement”) and/or Offering materials, provide Escrow Agent with a copy of such revised documents and other information as may be reasonably requested by Escrow Agent which is necessary for the performance of its duties under this Agreement. Escrow Agent is under no duty or responsibility to enforce collection of any subscription amounts whether delivered to it or not hereunder. Issuer shall cooperate with Escrow Agent with clearing any and all AML and funds processing exceptions.

 

Funds Hold; Clearing, Settlement and Risk Management Policy: All parties agree that Subscriber funds are considered “cleared” as follows:

 

* Wires — 24 hours (one business day) following receipt of funds;

*ACH — 10 days following receipt of funds;

*Credit and Debit Cards – 24 hours (one business day) following receipt of funds.

 

For subscription amounts received through ACH transfers, Federal regulations provide Subscribers with the right to recall, cancel or otherwise dispute the transaction for a period of up to 60 days following the transactions. Similarly, subscription amounts processed by credit or debit card transactions are subject to recall, chargeback, cancellation or other dispute for a period of up to 180 days following the transaction. As an accommodation to the Issuer and Broker, subject to the terms of this Agreement, Escrow Agent shall make subscription amounts received through ACH fund transfers available starting 10 calendar days following receipt by Escrow Agent of the subscription amounts and 24 hours following receipt of funds for credit and debit card transactions. Notwithstanding the foregoing, all cleared subscription amounts remain subject to internal compliance review in accordance with internal procedures and applicable rules and regulations. Escrow Agent reserves the right to deny, suspend or terminate participation in the Escrow Account any Subscriber to the extent Escrow Agent, in its sole and absolute discretion, deems it advisable or necessary to comply with applicable laws or to eliminate practices that are not consistent with laws, rules, regulations or best practices. Prime Trust reserves the right to limit, suspend, restrict (including increasing clearing periods) or terminate the use of ACH, credit card and/or debit card transactions at its sole discretion. Without limiting the indemnification obligations under Section 11 of this Agreement, Issuer agrees that it will immediately indemnify, hold harmless and reimburse the Escrow Agent for any fees, costs or liability whatsoever resulting or arising from funds processing failures, including without limitation chargebacks, recalls or other disputes. Issuer acknowledges and agrees that the Escrow Agent shall not be responsible for or obligated to pursue collection of any funds from Subscribers.

 

 

 

 

4.Disbursements from the Escrow Account. Upon written instruction from Issuer and/or Broker (generally via notification on the Issuer Dashboard), Escrow Agent shall, pursuant to those instructions, make a disbursement to the Issuer from the Escrow Account which are available for disbursement. Issuer acknowledges that there is a 24-hour (one business day) processing time once a request has been received to disburse funds from the Escrow Account. Furthermore, Issuer directs Escrow Agent to accept instructions regarding fees from Broker, including other registered securities brokers in the syndicate, if any, or from the API integrated platform or portal through which this Offering is being conducted, if any.

 

5.Collection Procedure. Escrow Agent is hereby authorized, upon receipt of Subscriber funds, to promptly deposit them in the Escrow Account. Any Subscriber funds which fail to clear or are subsequently reversed, including but not limited to chargebacks, recalls or otherwise disputed, shall be debited to the Escrow Account, with such debits reflected on the Escrow Account ledger accessible via Escrow Agent’s API or Issuer Dashboard as a non-exclusive remedy. Any and all escrow fees paid by Issuer, including those for funds processing are non-refundable, regardless of whether ultimately cleared, failed, rescinded, returned or recalled. In the event of any Subscriber refunds, returns or recalls after funds have already been remitted to Issuer, Issuer and/or Broker hereby irrevocably agree to immediately and without delay or dispute send equivalent funds to Escrow Agent to cover such refunds, returns or recalls. If Issuer has any dispute or disagreement with its Subscriber then that is separate and apart from this Agreement and Issuer and/or Broker will address such matters directly with such Subscriber, including taking whatever actions Issuer and/or Broker determines appropriate, but Issuer and/or Broker shall regardless remit funds to Escrow Agent and not involve Escrow Agent in any such disputes.

 

6.Escrow Administration Fees, Compensation of Prime Trust. Escrow Agent is entitled to escrow administration fees from Issuer and/or Broker as set forth in Schedule A attached hereto and as displayed on the Issuer Dashboard. Escrow Agent fees are not contingent in any way on the success or failure of the Offering, receipt of Subscriber funds, or transactions contemplated by this Agreement. No fees, charges or expense reimbursements of Escrow Agent are reimbursable, and are not subject to pro-rata analysis. All fees and charges, if not paid by a representative of Issuer (e.g. funding platform, lead syndicate broker, etc.), may be made via either Issuers credit/debit card or ACH information on file with Escrow Agent. Issuer shall at all times maintain appropriate funds in their account for the payment of escrow administration fees. Escrow Agent may also collect its fee(s), at its option, from any other account held by the Issuer at Prime Trust. It is acknowledged and agreed that no fees, reimbursement for costs and expenses, indemnification for any damages incurred by Issuer or Escrow Agent shall be paid out of or chargeable to the Escrow Amount.

 

 

 

 

 

7.Representations and Warranties. The Issuer and Broker each covenant and make the following representations and warranties to Escrow Agent:

 

a.It is duly organized, validly existing, and in good standing under the laws of the state of its incorporation or organization and has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder.

 

b.This Agreement and the transactions contemplated thereby have been duly approved by all necessary actions, including any necessary shareholder or membership approval, has been executed by its duly authorized officers, and constitutes a valid and binding agreement enforceable in accordance with its terms.

 

c.The execution, delivery, and performance of this Agreement is in accordance with the agreements related to the Offering and will not violate, conflict with, or cause a default under its articles of incorporation, bylaws, management agreement or other organizational document, as applicable, any applicable law, rule or regulation, any court order or administrative ruling or decree to which it is a party or any of its property is subject, or any agreement, contract, indenture, or other binding arrangement, including the agreements related to the Offering, to which it is a party or any of its property is subject.

 

d.The Offering shall contain a statement that Escrow Agent has not investigated the desirability or advisability of investment in the Securities nor approved, endorsed or passed upon the merits of purchasing the Securities; and the name of Escrow Agent has not and shall not be used in any manner in connection with the Offering of the Securities other than to state that Escrow Agent has agreed to serve as escrow agent for the limited purposes set forth in this Agreement.

 

e.No party other than the parties hereto has, or shall have, any lien, claim or security interest in the Escrow Amounts or any part thereof. No financing statement under the Uniform Commercial Code is on file in any jurisdiction claiming a security interest in or describing (whether specifically or generally) the Escrow Amounts or any part thereof.

 

f.It possesses such valid and current licenses, certificates, authorizations or permits issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct its respective businesses, and it has not received any notice of proceedings relating to the revocation or modification of, or non-compliance with, any such license, certificate, authorization or permit.

 

g.Its business activities are in no way related to Cannabis, gambling, pornography, or firearms.

 

h.The Offering complies in all material respects with the Act and all applicable laws, rules and regulations.

 

i.All of its representations and warranties contained herein are true and complete as of the date hereof and will be true and complete at the time of any disbursement of Escrow Amounts.

 

8.Term and Termination. This Agreement will remain in full force during the Escrow Period and shall terminate upon the following:

 

a.As set forth in Section 2.

 

b.Termination for Convenience. Any party may terminate this Agreement at any time for any reason by giving at least thirty (30) days’ written notice.

 

 

 

 

c.Escrow Agent’s Resignation. Escrow Agent may unilaterally resign at any time without prior notice by giving written notice to Issuer, whereupon Issuer will immediately appoint a successor escrow agent.

 

9.Binding Arbitration, Applicable Law, Venue, and Attorney’s Fees. This Agreement is governed by, and will be interpreted and enforced in accordance with, the laws of the State of Nevada, as applicable, without regard to principles of conflict of laws. Any claim or dispute arising under this Agreement may only be brought in arbitration, pursuant to the rules of the American Arbitration Association, with venue in Clark County, Nevada. The parties consent to this method of dispute resolution, as well as jurisdiction, and consent to this being a convenient forum for any such claim or dispute and waives any right it may have to object to either the method or jurisdiction for such claim or dispute. Furthermore, the prevailing party shall be entitled to recover damages plus reasonable attorney’s fees and costs and the decision of the arbitrator shall be final, binding and enforceable in any court.

 

10.Limited Capacity of Escrow Agent. This Agreement expressly and exclusively sets forth the duties of Escrow Agent with respect to any and all matters pertinent hereto, and no implied duties or obligations shall be read into this Agreement against Escrow Agent. Escrow Agent acts hereunder as an escrow agent only and is not associated, affiliated, or involved in the business decisions or business activities of Issuer, portal, or Subscriber. Escrow Agent is not responsible or liable in any manner whatsoever for the sufficiency, correctness, genuineness, or validity of the subject matter of this Agreement or any part thereof, or for the form of execution thereof, or for the identity or authority of any person executing or depositing such subject matter. Escrow Agent shall be under no duty to investigate or inquire as to the validity or accuracy of any document, agreement, instruction, or request furnished to it hereunder, including, without limitation, the authority or the identity of any signer thereof, believed by it to be genuine, and Escrow Agent may rely and act upon, and shall not be liable for acting or not acting upon, any such document, agreement, instruction, or request. Escrow Agent shall in no way be responsible for notifying, nor shall it be responsible to notify, any party thereto or any other party interested in this Agreement of any payment required or maturity occurring under this Agreement or under the terms of any instrument deposited herewith. Escrow Agent’s entire liability, and Broker and Issuer’s exclusive remedy, in any cause of action based on contract, tort, or otherwise in connection with any services furnished pursuant to this Agreement shall be limited to the total fees paid to Escrow Agent by Issuer. The Escrow Agent shall not be called upon to advise any party as to the wisdom in selling or retaining or taking or refraining from any action with respect to any securities or other property deposited hereunder. Escrow Agent may consult legal counsel selected by it in the event of any dispute or question as to the construction of any of the provisions hereof or of any other agreement or of its duties hereunder, or relating to any dispute involving any party hereto, and shall incur no liability and shall be fully indemnified from any reasonable liability whatsoever in acting in accordance with the opinion or instruction of such counsel. Issuer shall promptly pay, upon demand, the reasonable fees and expenses of any such counsel.

 

11.Indemnity. Issuer agrees to defend, indemnify and hold Escrow Agent and its related entities, directors, employees, service providers, advertisers, affiliates, officers, agents, and partners and third- party service providers (collectively, “Escrow Agent Indemnified Parties”) harmless from and against any loss, liability, claim, or demand, including attorney’s fees (collectively “Expenses”), made by any third party due to or arising out of (i) this Agreement or a breach of any provision in this Agreement, or (ii) any change in regulation or law, state or federal, and the enforcement or prosecution of such as such authorities may apply to or against Issuer. This indemnity shall include, but is not limited to, all Expenses incurred in conjunction with any interpleader that Escrow Agent may enter into regarding this Agreement and/or third-party subpoena or discovery process that may be directed to Escrow Agent Indemnified Parties. It shall also include any action(s) by a governmental or trade association authority seeking to impose criminal or civil sanctions on any Escrow Agent Indemnified Parties based on a connection or alleged connection between this Agreement and Issuers business and/or associated persons. The defense, indemnification and hold harmless obligations will survive termination of this Agreement. Escrow Agent reserves the right to control the defense of any such claim or action and all negotiations for settlement or compromise, and to select or approve defense counsel, and Issuer agrees to fully cooperate with Escrow Agent in the defense of any such claim, action, settlement, or compromise negotiations.

 

 

 

 

12.Entire Agreement, Severability and Force Majeure. This Agreement contains the entire agreement between Issuer and Escrow Agent regarding the Escrow Account. If any provision of this Agreement is held invalid, the remainder of this Agreement shall continue in full force and effect. Furthermore, no party shall be responsible for any failure to perform due to acts beyond its reasonable control, including acts of God, terrorism, shortage of supply, labor difficulties (including strikes), war, civil unrest, fire, floods, electrical outages, equipment or transmission failures, internet interruptions, vendor failures (including information technology providers), or other similar causes.

 

13.Escrow Agent Compliance. Escrow Agent may, at its sole discretion, comply with any new, changed, or reinterpreted regulatory or legal rules, laws or regulations, law enforcement or prosecution policies, and any interpretations of any of the foregoing, and without necessity of notice, Escrow Agent may (i) modify either this Agreement or the Escrow Account, or both, to comply with or conform to such changes or interpretations or (ii) terminate this Agreement or the Escrow Account or both if, in the sole and absolute discretion of Escrow Agent, changes in law enforcement or prosecution policies (or enactment or issuance of new laws or regulations) applicable to the Issuer might expose Escrow Agent to a risk of criminal or civil prosecution, and/or of governmental or regulatory sanctions or forfeitures if Escrow Agent were to continue its performance under this Agreement. Furthermore, all parties agree that this Agreement shall continue in full force and be valid, unchanged and binding upon any successors of Escrow Agent. Changes to this Agreement will be sent to Issuer via email. Escrow Agent may act or refrain from acting in respect of any matter referred to in this Escrow Agreement in full reliance upon and by and with the advice of its legal counsel and shall be fully protected in so acting or in refraining from acting upon advice of counsel. In the event that the Escrow Agent shall be uncertain as to its duties or rights hereunder, the Escrow Agent shall be entitled to (i) refrain from taking any action other than to keep safe the Escrow Amounts until directed otherwise by a court of competent jurisdiction or, (ii) interplead the Escrow Amount to a court of competent jurisdiction.

 

14.Waivers. No waiver by any party to this Agreement of any condition or breach of any provision of this Agreement will be effective unless in writing. No waiver by any party of any such condition or breach, in any one instance, will be deemed to be a further or continuing waiver of any such condition or breach or a waiver of any other condition or breach of any other provision contained in this Agreement.

 

15.Notices. Any notice to Escrow Agent is to be sent to escrow@primetrust.com. Any notices to Issuer will be to investors@trubrain.com and any notices to the Broker will be sent to Contact@startengine.com.

 

Any party may change their notice or email address giving notice thereof in accordance with this Paragraph. All notices hereunder shall be deemed given: (1) if served in person, when served; (2) if sent by facsimile or email, on the date of transmission if before 6:00 p.m. Eastern time, provided that a hard copy of such notice is also sent by either a nationally recognized overnight courier or by U.S. Mail, first class; (3) if by overnight courier, by a nationally recognized courier which has a system of providing evidence of delivery, on the first business day after delivery to the courier; or (4) if by U.S. Mail, on the third day after deposit in the mail, postage prepaid, certified mail, return receipt requested. Furthermore, all parties hereby agree that all current and future notices, confirmations and other communications regarding this Agreement specifically, and future communications in general between the parties, may be made by email, sent to the email address of record as set forth above or as otherwise from time to time changed or updated in Issuer Dashboard, directly by the party changing such information, without necessity of confirmation of receipt, delivery or reading, and such form of electronic communication is sufficient for all matters regarding the relationship between the parties. If any such electronically-sent communication fails to be received for any reason, including but not limited to such communications being diverted to the recipients’ spam filters by the recipients email service provider or technology, or due to a recipients’ change of address, or due to technology issues by the recipients’ service provider, the parties agree that the burden of such failure to receive is on the recipient and not the sender, and that the sender is under no obligation to resend communications via any other means, including but not limited to postal service or overnight courier, and that such communications shall for all purposes, including legal and regulatory, be deemed to have been delivered and received. No physical, paper documents will be sent to Issuer, including statements, and if such documents are desired then that party agrees to directly and personally print, at their own expense, the electronically-sent communication(s) or dashboard reports and maintaining such physical records in any manner or form that they desire.

 

 

 

 

16.Counterparts; Facsimile; Email; Signatures; Electronic Signatures. This Agreement may be executed in counterparts, each of which will be deemed an original and all of which, taken together, will constitute one and the same instrument, binding on each signatory thereto. This Agreement may be executed by signatures, electronically or otherwise, and delivered by email in .pdf format, which shall be binding upon each signing party to the same extent as an original executed version hereof.

 

17.Substitute Form W–9: Section 6109 of the Internal Revenue Code requires Issuer to provide the correct Taxpayer Identification Number (TIN). Under penalties of Perjury, Issuer certifies that: (1) the tax identification number provided to Escrow Agent is the correct taxpayer identification number and (2) Issuer is not subject to backup withholding because: (a) Issuer is exempt from backup withholding, or, (b) Issuer has not been notified by the Internal Revenue Service that it is subject to backup withholding. Issuer agrees to immediately inform Escrow Agent in writing if it has been, or at any time in the future is, notified by the IRS that Issuer is subject to backup withholding.

 

18.Survival. Even after this Agreement is terminated, certain provisions will remain in effect, including but not limited to Sections 3, 4, 5, 9, 10, 11, 12 and 14 of this Agreement. Upon any termination, Escrow Agent shall be compensated for the services as of the date of the termination or removal.

 

[Signature Page Follows]

 

 

 

 

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

 

ISSUER:  
   
TriplePulse, Inc  
   
By /s/ Christopher Thompson  
   
Name: Christopher Thompson  
Title: CEO  
   
BROKER:  
   
StartEngine Primary LLC  
   
By:    
   
Name:    
Title:    
   
ESCROW AGENT:  
   
Prime Trust, LLC  
   
By:    
   
Name:    
Title:    

 

 

 

 

SCHEDULE A

 

ESCROW AGENT FEES

 

[As Agreed with StartEngine]

 

 

EX1A-11 CONSENT 34 tm2031356d1_ex11-1.htm EXHIBIT 11.1

 

Exhibit 11.1

 

CONSENT OF INDEPENDENT AUDITOR

 

We consent to the use, in this Offering Statement on Form 1-A of our independent auditors’ report dated September 25 2020, which includes an explanatory paragraph as to the Company’s ability to continue as a going concern, with respect to our audits of the financial statements of TriplePulse, Inc. which comprise the balance sheets as of December 31, 2019 and 2018, and the related statements of operations, stockholders’ deficit, and cash flows for the years then ended, and the related notes to the financial statements.

 

Very truly yours,

 

/s/ dbbmckennon

Newport Beach, California

September 29, 2020

 

 

 

EX1A-12 OPN CNSL 35 tm2031356d1_ex12-1.htm EXHIBIT 12.1

 

Exhibit 12.1

 

 

 

September 29, 2020

 

TriplePulse, Inc.

3103 Neilson Way, Suite D

Santa Monica, California 90405

 

Re: TriplePulse, Inc. (the “Company”) Offering Statement on Form 1-A (the “Offering Statement”)

 

Ladies and Gentlemen:

 

We have acted as special counsel to the Company, a corporation incorporated under the laws of the State of Delaware, in connection with the filing of the Offering Statement under Regulation A of the Securities Act of 1933, as amended (the “Securities Act”), with the Securities and Exchange Commission relating to the proposed offering by the Company (the “Offering”) of up to 12,618,056 shares (the “Shares”) of common stock, $0.0001 par value, of the Company, including up to 1,645,833 Shares to be sold by selling stockholders and up to 1,645,833 Shares eligible to be issued as bonus shares as defined in the offering circular relating to the Offering.

 

For purposes of rendering this opinion, we have examined originals or copies (certified or otherwise identified to our satisfaction) of:

 

1.Second Amended and Restated Certificate of Incorporation, as filed with the Secretary of State of the State of Delaware on March 7, 2014;

 

2.Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation, as filed with the Secretary of State of the State of Delaware on September 8, 2014;

 

3.Certificate of Validation, as filed with the Secretary of State of the State of Delaware on February 10, 2020;

 

4.Bylaws of the Company in the form filed with the Securities and Exchange Commission; and

 

5.Resolutions of the Board of Directors of the Company adopted by unanimous written consent on September 17, 2020.

 

We have also examined such other certificates of public officials, such certificates of executive officers of the Company and such other records, agreements, documents and instruments as we have deemed relevant and necessary as a basis for the opinion hereafter set forth.

 

 

 

 

 

 

In such examination, we have assumed: (i) the genuineness of all signatures, (ii) the legal capacity of all natural persons, (iii) the authenticity of all documents submitted to us as originals, (iv) the conformity to original documents of all documents submitted to us as certified, conformed or other copies and the authenticity of the originals of such documents and (v) that all records and other information made available to us by the Company on which we have relied are complete in all material respects. As to all questions of fact material to this opinion, we have relied solely upon the above-referenced certificates or comparable documents and other documents delivered pursuant thereto, have not performed or had performed any independent research of public records and have assumed that certificates of or other comparable documents from public officials dated prior to the date hereof remain accurate as of the date hereof.

 

Based on the foregoing and on such legal considerations as we deem relevant, we are of the opinion that the Shares, when issued and delivered against payment therefor as described in the Offering Statement, will be validly issued, fully paid and non-assessable.

 

The foregoing opinion is limited to the Delaware General Corporation Law, as currently in effect, and we do not express any opinion herein concerning any other law.

 

The opinion expressed herein is rendered as of the date hereof and is based on existing law, which is subject to change. Where our opinion expressed herein refers to events to occur at a future date, we have assumed that there will have been no changes in the relevant law or facts between the date hereof and such future date. We do not undertake to advise you of any changes in the opinion expressed herein from matters that may hereafter arise or be brought to our attention or to revise or supplement such opinion should the present laws of any jurisdiction be changed by legislative action, judicial decision or otherwise.

 

Our opinion expressed herein is limited to the matters expressly stated herein, and no opinion is implied or may be inferred beyond the matters expressly stated.

 

We hereby consent to the use of this letter as an exhibit to the Offering Statement and to any and all references to our firm in the offering circular that is a part of the Offering Statement. In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act, or the rules and regulations of the Securities and Exchange Commission.

 

Very truly yours, 

 

/s/Inspire Business Law Group, PC 

 

Inspire Business Law Group, PC

 

 

 

 

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