UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 22, 2021
FOMO CORP.
(Exact name of Registrant as specified in its Charter)
| CALIFORNIA | 001-13126 | 83-3889101 | ||
(State or other jurisdiction of incorporation) |
(Commission File No.) |
(IRS Employer Identification No.) |
1 E Erie St, Ste 525 Unit #2250, Chicago, IL 60611
(Address of principal executive offices)
(630) 286-9560
(Registrant’s Telephone Number)
(Former name or address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||
| Common | ETFM | OTC Pink |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2) [X]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act [X]
FOMO CORP. is referred to herein as “we”, “us”, or “us”
ITEM 3.02 Unregistered Sale of Securities
FOMO CORP. (“FOMO”) has closed a private placement of $200,000.00 in Series A Preferred Stock at $0.10 per share with accredited investors. Placement documents including a term sheet, securities purchase agreement (“SPA”) and associated warrant agreement are attached herewith.
Item 9.01. Exhibits
(a) Exhibits. The following exhibit is filed by reference with this Current Report on Form 8-K:
| Exhibit No. | Description | |
| 10.1 | FOMO CORP. Series A PIPE Term Sheet | |
| 10.2 | FOMO CORP. Series A PIPE Securities Purchase Agreement (SPA) | |
| 10.3 | FOMO CORP. Series A PIPE Warrant |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FOMO CORP. | ||
| Date: February 23, 2021 | By: | /s/ Vikram Grover |
| Vikram Grover | ||
| Chief Executive Officer | ||
Exhibit 10.1
FOMO CORP.
SERIES A PREFERRED TERM SHEET
This term sheet is confidential, and none of its provisions or terms shall be disclosed to anyone other than an officer or director of FOMO CORP. or its agent, adviser or legal counsel, unless required by law without the prior written consent of the parties. Except for the confidentiality provision, this letter is non-binding and subject to the parties entering into formal agreements setting forth their respective rights and obligations. Such agreements will contain customary representations, warranties, and indemnifications. The material terms of the offering are set forth below:
Issuer: FOMO CORP. (and together with its subsidiaries and affiliates, the “Company” or “FOMO” p/k/a “2050 Motors, Inc.”)
Investor: A Qualified Investor is being sought subject to approval by the Company (the “Investor”).
Amount: up to $250,000.00
Securities: Series A Preferred Stock convertible 1-50 into Common Stock and voting on an as converted basis (the “Offering”), as set forth in the Securities Purchase Agreement (the “Securities Purchase Agreement”).
Closing Date: The date of execution of the Securities Purchase Agreement and related Transaction Documents set forth therein.
Dividend: $0.0035 per Series A Preferred Share (paid from time to time at the direction of the Board of Directors in cash or in kind; such dividends shall accrue cumulatively irrespective of any payments authorized/effected by the Board of Directors and the Company).
Maturity Date: Not Applicable
Redemption Rights: None.
Issue Price: The Investor shall purchase the Series A Preferred Stock at $0.10 per share, which is equivalent to $0.002 per share on an as converted basis into common stock.
Warrants: Investor shall receive 100% warrant coverage (12,500,000 warrants) with a three-year maturity, $0.003 strike price, and a cashless exercise or a cash exercise subject to the underlying shares being registered with the SEC.
Optional Conversion: At the option of the Investors, the Series A Preferred Shares may be convertible into shares of the Company’s common stock (“Conversion Shares”) at any time. FOMO will irrevocably pledge xxx million common shares to buyer with its transfer agent.
Mandatory Conversion: None.
Lock-Up Condition: All officers and major shareholders with greater than 5% of the Company shall be prevented from selling any shares commencing on the initial closing date and ending 6 months after the final closing of the Offering, with any such sales subject to Rule 144.
Anti-Dilution Protection: At the class Leader’s election, the class may exercise one of the below:
| (i) | Weighted Average Ratchet: If the Company consummates an equity or equity-linked private financing (each, a “Subsequent Financing”) at any time so long as the Series A Preferred Shares are issued and outstanding, the Conversion Price of the Series A Preferred Shares will be adjusted to reflect any pricing lower than the conversion price of this Offering. | |
| (ii) | Most Favored Nations: If the Company consummates an equity or equity-linked private financing (each, a “Subsequent Financing”) at any time subsequent to the closing of this Offering, the Investors may exchange any outstanding Series A Preferred Shares, on a $1 for $1 basis based upon the principal amount of the Series A Preferred Shares being exchanged plus any accrued and unpaid dividends, for the securities in the Subsequent Financing. The Company shall notify the Investors of such Subsequent Financing and the Investor shall have five (5) business days to elect to exchange the Series A Preferred Shares into the terms of the Subsequent Equity Financing. | |
| (iii) | Right of First Refusal: In the event the Company proposes to offer equity or equity-like securities to any person (other than an underwritten public offering), the Investors shall have the right to purchase their pro rata portion of such shares. |
Change of Control: Not applicable.
Use of Proceeds: General corporate purposes including growth of operations and working capital. No convertible debt will be retired with use of funds.
Transfer Restriction: The Preferred Stock may not be sold, pledged, or otherwise transferred by the Investors without the prior written consent of the Company, which will not be unreasonably withheld.
Expenses: The Company will bear all of the expenses in connection with this transaction, including but not limited to the reasonable legal (not to exceed $3,000 in total including other participating investors), due diligence and documentation expenses of the Investors.
Due Diligence: The completion of the transaction described in this agreement shall be subject to the Lead Investor’s satisfaction with the results of its due diligence investigation in its sole discretion.
Expiration: This term sheet will expire if not executed by all parties on or before February 10, 2021.
Security Interest: Not applicable.
Information Rights: The Company will deliver to the Investors annual audited and quarterly unaudited financial statements, annual budgets and other information reasonably requested by such investors within 60 days of the first closing of this Offering.
Confidentiality: The parties hereto (including their directors, partners, officers, employees and agents) agree to retain in confidentially information contained herein and any information transmitted between the parties pursuant to it, and further agree that they will not use for their own benefit and will not use or disclose to any third party of, any information obtained from or revealed by the Company.
Severability: If any provision of this term sheet is invalid or unenforceable for any reason, such provision will be construed to have been adjusted to the minimum extent necessary to cure such invalidity or unenforceability. The invalidity or unenforceability of one or more of the provisions contained herein will not have the effect of rendering any other provisions of this term sheet invalid or unenforceable whatsoever.
Governing Law: The definitive transaction documents will be governed by the laws of the state of California, without regard to the principles of conflict of laws thereof.
If this term sheet correctly expresses our mutual intentions, please execute and return to the undersigned.
| By: | ||
| Name: |
ACCEPTED AND AGREED TO: as of _______________, 2021
[INVESTOR]
| By: | ||
| Name: | ||
| Title: |
FOMO CORP.
| By: | ||
| Name: | Vikram Grover | |
| Title: | Chief Executive Officer |
Exhibit 10.2
STOCK PURCHASE AGREEMENT
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE UPON EXEMPTION(S) FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS
STOCK PURCHASE AGREEMENT (this “Agreement”) made as of the last date set forth on the signature page hereof between FOMO CORP. (“FOMO” or the “Company”) and the undersigned (the “Investor”).
W I T N E S S E T H:
WHEREAS, the Company has agreed to sell to Investor and Investor has agreed to purchase from Company, certain shares of Company’s Series A Preferred Stock of FOMO CORP., a California Corporation (hereinafter referred to as the, “Company”) (the “Preferred Stock”) for a price of $0.10 for each Series A preferred share (the “Purchase Price”); and
WHEREAS, in return for an Investment under the terms of this Agreement in the amount of $_____________, FOMO shall sell to Investor a total of $_____________ worth of Company’s Preferred Stock (the Investment Amount) at the Purchase Price, constituting participation in part or in the whole in a Series A investment round that shall total up yo $250,000.00;
WHEREAS the Shares of Series A Preferred Stock are being sold to the Investor at $0.10 per share, which represents a share price in the Common Stock of $0.002;
WHEREAS the Investor understands and acknowledges that Series A Preferred Stock is convertible into Common Stock on a 50 for 1 basis and votes on a 50 for 1 basis (subject to adjustment for stock and splits, reorganizations, etc.) as provided for in the Company’s articles of incorporation; and,
NOW, THEREFORE, in consideration of the mutual representations and covenants hereinafter set forth, the parties hereto do hereby agree as follows:
I. CLOSING
1.1 Upon execution of this Agreement, Investor shall deliver via wire transfer, immediately available funds equal to the entire Investment within 72 hours of the business day when all of the documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Investors’ obligations to pay the Principle Amount and (ii) the Company’s obligations to deliver the securities have been satisfied or waived (the, “Closing”) the date of the Closing is the “Closing Date”.
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Upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Investor agrees to purchase, the total investment amount in principal amount of the Preferred Series A Stock. The Company and each Investor shall deliver the other items set forth in Section 1 ..3 deliverable at the Closing. Upon satisfaction of the conditions set forth in Section 1.2 and Section 1.3, the Closing shall occur at such other location as the parties shall mutually agree. The Investor may conduct multiple closings for the sale of the Preferred Stock by submitting EXHIBIT A: INVESTMENT SUBMISSION with the appropriate funds, until investor has invested an aggregate principal amount of the Total Investment Amount in cash consideration. The First Closing Date shall be no sooner than the opening of business on March 31, 2021.
1.2 Deliveries.
(a) On or prior to the Closing Date, the Company shall deliver or cause to be delivered to Investor the following:
(i) this Agreement executed by the Company;
(ii) a certificate or book entry confirmation with a principal amount equal to the Investor’s Principal Amount, registered in the name of such Investor;
(b) On the Closing Date, Investor shall deliver or cause to be delivered to the Company the following:
(i) this Agreement executed by Investor; and
(ii) such Investor’s Principle Amount by wire transfer.
1.3 Closing Conditions.
(a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i) the accuracy in all material respects on the Closing Date of the representations and warranties of the Investors contained herein;
(ii) all obligations, covenants and agreements of Investor required to be performed at or prior to the Closing Date shall have been performed; and
(iii) the delivery by Investor of the items set forth in Section 2.2(b) of this Agreement.
(b) The respective obligations of the Investors hereunder in connection with the Closing are subject to the following conditions being met:
(i) the accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Company contained herein;
(ii) all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;
(iii) the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
II. WARRANTS AND REPRESENTATIONS BY INVESTOR
2.1 Subject to the terms and conditions hereinafter set forth, the Investor hereby irrevocably agrees to purchase from the Company the Series A Preferred Stock for the aggregate amount indicated on the signature page of this Agreement (the “Principal Amount”). The Principal Amount is payable by wire transfer by the Investor to the Escrow Agent as described in that certain Escrow Agreement dated of even date herewith.
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2.2 The Investor recognizes that the purchase of the Series A Preferred Stock involves a high degree of risk and that the Investor is able to bear the economic risk of an investment in the Preferred Stock. The Investor has knowledge and experience in business and financial matters such that the Investor is a sophisticated investor capable of evaluating the merits and risks of the prospective investment.
2.3 The Investor is an “accredited investor” as such term is defined in Rule 501 of Regulation D (“Regulation D”) promulgated under the Securities Act, as indicated by the Investor’s Confidential Investor Questionnaire attached hereto. Company may rely on the accuracy of the Investor’s representations therein.
2.4 The Investor hereby acknowledges that the Offering has not been registered or otherwise reviewed by the United States Securities and Exchange Commission (the “SEC”) nor any state regulatory authority. The Offering is exempt from the registration requirements of Section 5 of the Securities Act, under 4(1) of the Securities Act and Rule 506 of Regulation D. The Investor understands that the Preferred Stock has not yet been transferred to common stock and has not been registered under the Securities Act or under any state securities or “blue sky” laws and agrees not to sell, pledge, assign or otherwise transfer or dispose of the shares of Preferred Stock unless they are converted to common stock and they are registered under applicable law or exempted from registration.
2.5 The Investor, if an entity, represents that it was not formed for the purpose of purchasing the Preferred Stock.
2.6 The Investor consents to the placement of a legend on any certificate or other document evidencing the Preferred Stock or upon conversion the common stock that such shares of Preferred Stock or upon conversion the common stock have not been registered under the Securities Act or any state securities or “blue sky” laws and setting forth or referring to the restrictions on transferability and sale thereof contained in this Agreement or by law. The Investor is aware that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such Preferred Stock or upon conversion the common stock. In addition to any legend pursuant to Article III, the legend to be placed on each certificate of Preferred Stock or upon conversion the common stock shall be in form substantially similar to the following:
“The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended and may not be sold, transferred, pledged, hypothecated or otherwise disposed of in the absence of (i) an effective registration statement for such securities under said act or (ii) an opinion of Company counsel that such registration is not required.”
2.7 The Investor hereby represents that the address of the Investor furnished by Investor on the signature page hereof is the Investor’s principal residence if Investor is an individual or its principal business address if it is a corporation or other entity.
2.8 The Investor represents that the Investor has full power and authority (corporate, statutory and otherwise) to execute and deliver this Agreement and to purchase the Preferred Stock. This Agreement constitutes the legal, valid and binding obligation of the Investor, enforceable against the Investor in accordance with its terms.
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2.9 If the Investor is a corporation, partnership, limited liability Company, trust, employee benefit plan, individual retirement account, Keogh Plan, or other tax-exempt entity, it is authorized and qualified to invest in the Company and the person signing this Agreement on behalf of such entity has been duly authorized by such entity to do so.
2.10 The Investor acknowledges that if he or she is a Registered Representative of a FINRA member firm, he or she must give such firm the notice required by the FINRA’s Rules of Fair Practice.
2.11 The Investor agrees not to issue any public statement with respect to the Investor’s investment or proposed investment in the Company or the terms of any agreement or covenant between them and the Company without the Company’s prior written consent, except such disclosures as may be required under applicable law or under any applicable order, rule or regulation.
2.12 The Investor agrees to hold the Company and its directors, officers, employees, affiliates, controlling persons and agents and their respective heirs, representatives, successors and assigns harmless and to indemnify them against all liabilities, costs and expenses incurred by them as a result of (a) any sale or distribution of the Preferred Stock or upon conversion the common stock by the Investor in violation of the Securities Act or any applicable state securities or “blue sky” laws; or (b) any false representation or warranty or any breach or failure by the Investor to comply with any covenant made by the Investor in this Agreement (including the Confidential Investor Questionnaire contained in Article V herein) or any other document furnished by the Investor to any of the foregoing in connection with this transaction.
III. WARRANTS AND REPRESENTATIONS BY COMPANY
3.1 Company hereby warrants and represents to the Investor, that the statements below are all true and complete as of the date of Closing:
(a) Company represent that it has full power and authority to sell, transfer and deliver the Preferred Stock in accordance with the terms of this Agreement, and otherwise to consummate and close the transaction provided for in this Agreement in the manner and upon the terms herein specified.
(b) Company warrants that the Preferred Stock being sold by the Company have been validly issued, fully paid, and are non-assessable.
(c) Company warrants that the Preferred Stock being sold by the Company is a valid Preferred Stock of the Company convertible into Common Stock of the Company on a 50 for 1 basis and votes on a 50 for 1 basis.
(d) Company warrants that, other than a 50% interest in Kanab Corp., which is an Internet social site targeting the cannabis market, 210 million common shares of Mobicard Inc. (OTC: PTOP), a mobile business applications provider, Purge Virus LLC a disinfection technology provider, and publicly announced letters of intent to purchase/explore purchase of Independence LED Lighting LLC, EcoLite Holdings, LCC and PPE Source International, LLC, it does not have any subsidiaries and at closing will not, directly or indirectly, own any interest in or control any corporation, partnership, joint venture, or other business entity.
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(e) Company warrants that the execution, acknowledgement, sealing, delivery, and performance of this Agreement by the Company and the consummation of the transactions contemplated by this Agreement will not:
(i) violate or require any registration, qualification, consent, approval, declaration, reporting or filing under (i) any law, statue, ordinance, rule or regulation (hereinafter collectively referred to as “Laws”) of any federal, state or local government or governmental agency (“Governmental Entities”), (ii) any judgment, injunction order, writ or decree of any court, arbitrator, or Governmental Entities applicable to the Company or any of its assets or properties; or
(ii) conflict with, require any consent, approval, authorization or filing under, result in the breach or termination of any provision of, constitute a default under, result in the acceleration of the performance of Company’s obligations under, or result in the creation of any claim, security interest, lien charge, or encumbrance upon any of Investor’s or Company’s properties, assets, or businesses pursuant to (i) Company’s Articles or By-Laws, or (ii) any indenture, mortgage, deed of trust, license, permit, approval, consent, franchise, lease, contract, or other instrument or agreement to which Investor or Company is a party or by which Company or any of Company’s assets or properties is bound.
(f) Company warrants that it is not currently conducting any business that is not in compliance with all Laws and nor is Company in (i) violation of any Laws of any Governmental Entities, or (ii) violation of any restrictive or similar covenant, agreement, commitment, understanding or arrangement.
(g) Company warrants that there is not and it is not aware of any action, suit, proceeding, claim, arbitration, or investigation by any Governmental Entities or other person (i) to which Company is or may be a party relating to the activities of the Company prior to the date of Closing, (ii) threatened against or relating to Company or any of Company’s assets or businesses, (iii) challenging Company’s right to execute, acknowledge, seal, deliver, perform under or consummate the transactions contemplated by this Agreement, or (iv) asserting any rights with respect to any of the Preferred Stock, and there is no basis for any such action, suit, proceeding, claim, arbitration or investigation.
(h) Company warrants that at Closing its primary assets include the software code, trademarks, intellectual property, and computer equipment that comprise the Kanab Club social network, 233 million common shares of Mobicard Inc. (OTC: PTOP) and Purge Virus LLC.
(i) Company warrants that at Closing it will have no outstanding leases or will be subject to any other Agreement.
(j) Company warrants that at Closing it will have no outstanding employment obligation of any kind that is in default and/or in dispute.
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(l) Company warrants that at Closing, Investor shall have no obligations whatsoever, for any compensation or other amounts payable to any employee, director, consultant or independent contractor of Company, excluding industry standard bonus, salary, compensation, accrued vacation, fringe, pension or profit sharing benefits, or severance paid or payable to any employee, director, consultant or independent contractor of Company relating to service with or for the Company at any time prior to the Closing Date.
(m) Company warrants that it has disclosed to Investor in this Agreement all material facts related to the transactions contemplated by this Agreement. No representation or warranty of the Company contained in this Agreement or other agreements and instrument referred to in this Agreement, and no statement contained in any certificate, schedule, list or other writing furnished to Investor pursuant to the provisions of this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary in order to make the statements herein or therein not misleading.
IV. NOTICES
4.1 Any notice or other communication given hereunder shall be deemed sufficient if in writing and sent by registered or certified mail, return receipt requested, or delivered by hand against written receipt therefor, addressed as follows:
if to the Company, to FOMO at:
FOMO CORP.
1 E. Erie St. Ste 525 #2250
Chicago, IL
info@fomoworldwide.com
if to the Investor, to the Investor’s address indicated on the signature page of this Agreement.
Notices shall be deemed to have been given or delivered on the date of mailing, except notices of change of address, which shall be deemed to have been given or delivered when received.
All wire transfers should be sent to the following at:
FOMO CORP. p/k/a 2050 Motors, Inc.
2810 Bristol Dr. 309
Lisle, IL 60532
Bank of America
802 Commons Dr.
Geneva, IL 60134
ABA #026009593
A/C #291028003885
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V. MISCELLANEOUS
5.1 Except as otherwise provided herein, this Agreement shall not be changed, modified or amended except by a writing signed by the parties to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged.
5.2 This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.
5.3 NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND PROVISIONS HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO SUCH STATE’S PRINCIPLES OF CONFLICTS OF LAW. IN THE EVENT THAT A JUDICIAL PROCEEDING IS NECESSARY, THE SOLE FORUM FOR RESOLVING DISPUTES ARISING OUT OF OR RELATING TO THIS AGREEMENT IS THE STATE AND FEDERAL COURTS SITTING IN DUPAGE COUNTY OF ILLINOIS AND THE PARTIES HEREBY IRREVOCABLY CONSENT TO THE JURISDICTION OF SUCH COURTS AND AGREE TO SAID VENUE.
5.4 In order to discourage frivolous claims the parties agree that unless a claimant in any proceeding arising out of this Agreement succeeds in establishing his claim and recovering a judgment against another party (regardless of whether such claimant succeeds against one of the other parties to the action), then the other party shall be entitled to recover from such claimant all of its/their reasonable legal costs and expenses relating to such proceeding and/or incurred in preparation therefor.
5.5 The holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Agreement, which shall remain in full force and effect. If any provision of this Agreement shall be declared by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced in whole or in part, such provision shall be interpreted so as to remain enforceable to the maximum extent permissible consistent with applicable law and the remaining conditions and provisions or portions thereof shall nevertheless remain in full force and effect and enforceable to the extent they are valid, legal and enforceable, and no provisions shall be deemed dependent upon any other covenant or provision unless so expressed herein.
5.6 It is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party.
5.7 The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement.
5.8 This Agreement may be executed in two or more counterparts each of which shall be deemed an original, but all of which shall together constitute one and the same instrument.
5.9 Nothing in this Agreement shall create or be deemed to create any rights in any person or entity not a party to this Agreement.
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** SIGNATURES FOLLOW **
The Investor has set their hand on the date above.
_______________________________________
INVESTOR
ACKNOWLEDGEMENT OF SUBMISSION OF PRINCIPLE AMOUNT BY FOMO
This Stock Purchase Agreement is agreed to and accepted as of ________________, 2021.
________________________________
Vikram Grover
CEO
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EXHIBIT A – INVESTMENT SUBMISSION
Subsequent investment under this INVESTMENT SUBMISSION constitutes a reaffirmation of the Investment Agreement and is made under the terms of that Agreement.
PRINCIPAL AMOUNT = $____________
Dated: ____________
| Signature | Signature (if purchasing jointly) | |
| Name Typed or Printed | Name Typed or Printed | |
| Title (if Investor is an Entity) | Title (if Investor is an Entity) | |
| Entity Name (if applicable) | Entity Name (if applicable) | |
| Address | Address | |
| City, State and Zip Code | City, State and Zip Code | |
| Telephone | Telephone | |
| Facsimile | Facsimile | |
| Tax ID # or Social Security # | Tax ID # or Social Security # | |
| Name in which securities should be issued: |
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Manner in which title is to be held: (check only one)
[ ] Individual Ownership
| Joint Purchase: | Entity |
[ ] Community Property [ ] Joint Tenant with Right of Survivorship (JTWRS) [ ] Tenants in Common (TIC) [ ] Tenants by Entirety (TBE) (If Securities are being purchased for as a joint purchase, both parties must sign.) |
[ ] Partnership [ ] Company [ ] Self-Directed Retirement Account [ ] Trust [ ] Other_________________________ (Entities must complete Cert. of Signatory – p. 12 |
CONFIDENTIAL INVESTOR QUESTIONNAIRE
The Investor represents and warrants that he, she or it comes within one category marked below, and that for any category marked, he, she or it has truthfully set forth, where applicable, the factual basis or reason the Investor comes within that category. ALL INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY CONFIDENTIAL. The undersigned agrees to furnish any additional information which the Company deems necessary in order to verify the answers set forth below.
| Category A ___ | The Investor is (a) an individual (not a partnership, corporation, etc.) whose individual net worth, or joint net worth with his or her spouse, presently exceeds $1,000,000, or (b) a self-directed retirement account (“Retirement Account”) whose participant’s net worth (or joint net worth with his or her spouse) presently exceeds $1,000,000. |
| In calculating net worth, (a) the Investor’s or his or her spouse’s primary residence shall not be included as an asset, (b) indebtedness that is secured by such person’s primary residence, up to the estimated fair market value of the primary residence at the time of the sale of Preferred Stock, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of the sale of the Preferred Stock 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 such person’s primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of the Preferred Stock shall be included as a liability. | |
| Category B ___ | The Investor is (a) an individual (not a partnership, corporation, etc.) who had an income in excess of $200,000 in each of the two most recent years, or joint income with his or her spouse in excess of $300,000 in each of those years (in each case including foreign income, tax exempt income and full amount of capital gains and losses but excluding any income of other family members and any unrealized capital appreciation) and has a reasonable expectation of reaching the same income level in the current year or (b) a Retirement Account and the Retirement Account participant meets the tests in clause (a). |
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| Category C ___ | The Investor is a director or executive officer of the Company which is issuing and selling the Shares. |
| Category D ___ | The Investor is a bank; a savings and loan association; insurance Company; registered investment Company; registered business development Company; licensed small business investment Company (“SBIC”); or employee benefit plan within the meaning of Title 1 of ERISA and (a) the investment decision is made by a plan fiduciary which is either a bank, savings and loan association, insurance Company or registered investment advisor, or (b) the plan has total assets in excess of $5,000,000 or (c) is a self directed plan with investment decisions made solely by persons that are accredited investors. (describe entity) |
| ______________________________________________________ | |
| ______________________________________________________ | |
| Category E ___ | The Investor is a private business development Company as defined in section 202(a)(22) of the Investment Advisors Act of 1940. (describe entity) |
| ______________________________________________________ | |
| ______________________________________________________ | |
| Category F ___ | The Investor is either a corporation, partnership, Massachusetts business trust, or non-profit organization within the meaning of Section 501(c)(3) of the Internal Revenue Code, in each case not formed for the specific purpose of acquiring the Shares and with total assets in excess of $5,000,000. (describe entity) |
| ______________________________________________________ | |
| ______________________________________________________ | |
| Category G ___ | The Investor is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Shares, where the purchase is directed by a “sophisticated investor” as defined in Regulation 506(b)(2)(ii) under the Act. |
| Category H ___ | The Investor is a revocable trust and the grantor is an accredited investor pursuant to the following category: _____________________ |
| Category I ___ | The Investor is an entity (other than a trust) in which all of the equity owners are “accredited investors” within one or more of the above categories. If relying upon this Category alone, each equity owner must complete a separate copy of this Agreement. (describe entity) |
| ______________________________________________________ | |
| ______________________________________________________ | |
| Category J ___ | The Investor is not within any of the categories above and is therefore not an accredited investor. |
| The Investor agrees that the undersigned will notify the Company at any time on or prior to the closing in the event that the representations and warranties in this Agreement shall cease to be true, accurate and complete. |
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The Investor is informed of the significance to the Company of the foregoing representations and answers contained in the Confidential Investor Questionnaire contained in this Article and such answers have been provided under the assumption that the Company will rely on them.
** SIGNATURES FOLLOW **
The Investor has set their hand on the date above.
_______________________________________
INVESTOR
ACKNOWLEDGEMENT OF SUBMISSION
OF PRINCIPLE AMOUNT BY FOMO
This Stock Purchase Agreement is agreed to and
accepted as of ________________, 2021.
________________________________
[ Signature]
Vikram Grover
CEO
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CERTIFICATE OF SIGNATORY
(To be completed if the Preferred Stock
being subscribed for by an entity)
I,_________________________________, am the ______________________________ of
_________________________________________ (the “Entity”).
I certify that I am empowered and duly authorized by the Entity to execute and carry out the terms of the Stock Purchase Agreement and to purchase and hold the Preferred Stock, and certify further that the Stock Purchase Agreement has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity.
IN WITNESS WHEREOF, I have set my hand this ________ day of _________________, 2021
| _______________________________________ | |
| (Signature) |
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Exhibit 10.3
NEITHER THIS SECURITY NOR THE SECURITIES AS TO WHICH THIS SECURITY MAY BE EXERCISED HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE WARRANT
FOMO CORP. p/k/a 2050 Motors, Inc.
Warrant Shares: 12,500,000
Date of Issuance: February 10, 2021 (“Issuance Date”)
This COMMON STOCK PURCHASE WARRANT (WARRANT A) (the “Warrant”) certifies that, for value received (in connection with the purchase of up to $25,000.00 Series A Convertible Preferred Shares by the Holder (as defined below) of even date) (the “Note”), ____________________, a _________________ (including any permitted and registered assigns, the “Holder”), is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the issuance hereof, to purchase from FOMO CORP., a California corporation which was previously known as 2050 Motors, Inc (the “Company”), up to ___________ shares of Common Stock (as defined below) (the “Warrant Shares”) (whereby such number may be adjusted from time to time pursuant to the terms and conditions of this Warrant) at the Exercise Price per share then in effect. This Warrant is issued by the Company as of the date hereof in connection with that certain securities purchase agreement dated February 10, 2021, by and among the Company and the Holder (the “Purchase Agreement”).
Capitalized terms used in this Warrant shall have the meanings set forth in the Purchase Agreement unless otherwise defined in the body of this Warrant or in Section 12 below. For purposes of this Warrant, the term “Exercise Price” shall mean $0.003, subject to adjustment as provided herein (including but not limited to cashless exercise), and the term “Exercise Period” shall mean the period commencing at any time on or after the date hereof and ending on 5:00 p.m. eastern standard time on the five-year anniversary thereof.
1. EXERCISE OF WARRANT.
(a) Mechanics of Exercise. Subject to the terms and conditions hereof, the rights represented by this Warrant may be exercised in whole or in part at any time or times during the Exercise Period by delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. On or before the second Trading Day (the “Warrant Share Delivery Date”) following the date on which the Holder sent the Exercise Notice to the Company or the Company’s transfer agent, and upon receipt by the Company of payment to the Company of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which all or a portion of this Warrant is being exercised (the “Aggregate Exercise Price” and together with the Exercise Notice, the “Exercise Delivery Documents”) in cash or by wire transfer of immediately available funds (or by cashless exercise, in which case there shall be no Aggregate Exercise Price provided), the Company shall (or direct its transfer agent to) issue and dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise (or deliver such shares of Common Stock in electronic format if requested by the Holder). Upon delivery of the Exercise Delivery Documents, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the certificates evidencing such Warrant Shares. If this Warrant is submitted in connection with any exercise and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three Business Days after any exercise and at its own expense, issue a new Warrant (in accordance with Section 6) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised.
If the Company fails to cause its transfer agent to transmit to the Holder the respective shares of Common Stock by the respective Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise in Holder’s sole discretion, and such failure shall be deemed an event of default under the Note.
If the Market Price of one share of Common Stock is greater than the Exercise Price and the full number of shares issuable upon exercise of this warrant have NOT been registered pursuant to an S1 or S3 registration statement which has been declared effective by the Securities and Exchange Commission, then the Holder may elect to receive Warrant Shares pursuant to a cashless exercise, in lieu of a cash exercise, equal to the value of this Warrant determined in the manner described below (or of any portion thereof remaining unexercised) by surrender of this Warrant and a Notice of Exercise, in which event the Company shall issue to Holder a number of Common Stock computed using the following formula:
X = Y (A-B)
A
| Where | X = | the number of Shares to be issued to Holder. |
| Y = | the number of Warrant Shares that the Holder elects to purchase under this Warrant (at the date of such calculation). |
| A = | the Market Price (at the date of such calculation). |
| B = | Exercise Price (as adjusted to the date of such calculation). |
(b) No Fractional Shares. No fractional shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment pursuant hereto. All Warrant Shares (including fractions) issuable upon exercise of this Warrant may be aggregated for purposes of determining whether the exercise would result in the issuance of any fractional share. If, after aggregation, the exercise would result in the issuance of a fractional share, the Company shall, in lieu of issuance of any fractional share, pay the Holder otherwise entitled to such fraction a sum in cash equal to the product resulting from multiplying the then-current fair market value of a Warrant Share by such fraction.
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(c) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, to the extent that after giving effect to issuance of Warrant Shares upon exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation, as defined below. For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, non-exercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or non-converted portion of any other securities of the Company (including without limitation any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this paragraph (d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this paragraph applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.
For purposes of this paragraph, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or its transfer agent setting forth the number of shares of Common Stock outstanding. Upon the request of a Holder, the Company shall within two Trading Days confirm to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The limitations contained in this paragraph shall apply to a successor Holder of this Warrant.
2. ADJUSTMENTS. The Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows:
(a) Distribution of Assets. If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including without limitation any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case:
(i) any Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders of shares of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such record date, to a price determined by multiplying such Exercise Price by a fraction (i) the numerator of which shall be the Closing Sale Price of the shares of Common Stock on the Trading Day immediately preceding such record date minus the value of the Distribution (as determined in good faith by the Company’s Board of Directors) applicable to one share of Common Stock, and (ii) the denominator of which shall be the Closing Sale Price of the shares of Common Stock on the Trading Day immediately preceding such record date; and
(ii) the number of Warrant Shares shall be increased to a number of shares equal to the number of shares of Common Stock obtainable immediately prior to the close of business on the record date fixed for the determination of holders of shares of Common Stock entitled to receive the Distribution multiplied by the reciprocal of the fraction set forth in the immediately preceding clause (i); provided, however, that in the event that the Distribution is of shares of common stock of a company (other than the Company) whose common stock is traded on a national securities exchange or a national automated quotation system (“Other Shares of Common Stock”), then the Holder may elect to receive a warrant to purchase Other Shares of Common Stock in lieu of an increase in the number of Warrant Shares, the terms of which shall be identical to those of this Warrant, except that such warrant shall be exercisable into the number of shares of Other Shares of Common Stock that would have been payable to the Holder pursuant to the Distribution had the Holder exercised this Warrant immediately prior to such record date and with an aggregate exercise price equal to the product of the amount by which the exercise price of this Warrant was decreased with respect to the Distribution pursuant to the terms of the immediately preceding clause (i) and the number of Warrant Shares calculated in accordance with the first part of this clause (ii).
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(b) Anti-Dilution Adjustments to Exercise Price. If the Company or any Subsidiary thereof, as applicable, at any time while this Warrant is outstanding, shall sell or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Stock or securities entitling any person or entity to acquire shares of Common Stock (upon conversion, exercise or otherwise) (including but not limited to under the Note), at an effective price per share less than the then Exercise Price (such lower price, the “Base Share Price” and such issuances collectively, a “Dilutive Issuance”) (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, elimination of an applicable floor price for any reason in the future (including but not limited to the passage of time or satisfaction of certain condition(s)), reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled or potentially entitled to receive shares of Common Stock at an effective price per share which is less than the Exercise Price at any time while such Common Stock or Common Stock Equivalents are in existence, such issuance shall be deemed to have occurred for less than the Exercise Price on such date of the Dilutive Issuance (regardless of whether the Common Stock, Common Stock Equivalents, or Note are (i) subsequently redeemed or retired by the Company after the date of the Dilutive Issuance or (ii) actually converted or exercised at such Base Share Price), then the Exercise Price shall be reduced at the option of the Holder and only reduced to equal the Base Share Price, and the number of Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise Price payable hereunder, after taking into account the decrease in the Exercise Price, shall be equal to the aggregate Exercise Price prior to such adjustment (for the avoidance of doubt, the aggregate Exercise Price prior to such adjustment is calculated as follows: the total number of Warrant Shares issuable upon exercise of this Warrant immediately prior to such adjustment (without regard to the Beneficial Ownership Limitation) multiplied by the Exercise Price in effect immediately prior to such adjustment). By way of example, if E is the total number of Warrant Shares issuable upon exercise of this Warrant immediately prior to such adjustment (without regard to the Beneficial Ownership Limitation), F is the Exercise Price in effect immediately prior to such adjustment, and G is the Base Share Price, the adjustment to the number of Warrant Shares can be expressed in the following formula: Total number of Warrant Shares after such Dilutive Issuance = the number obtained from dividing [E x F] by G. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued, regardless of whether the Common Stock, Common Stock Equivalents, or Note are (i) subsequently redeemed or retired by the Company after the date of the Dilutive Issuance or (ii) actually converted or exercised at such Base Share Price by the holder thereof (for the avoidance of doubt, the Holder may utilize the Base Share Price even if the Company did not actually issue shares of its common stock at the Base Share Price under the respective Common stock Equivalents or Note). The Company shall notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common Stock Equivalents subject to this Section 2(b), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice the “Dilutive Issuance Notice”). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 2(b), upon the occurrence of any Dilutive Issuance, after the date of such Dilutive Issuance the Holder is entitled to receive a number of Warrant Shares based upon the Base Share Price regardless of whether the Holder accurately refers to the Base Share Price in the Notice of Exercise.
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(c) Subdivision or Combination of Common Stock. If the Company at any time on or after the Issuance Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Issuance Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(c) shall become effective at the close of business on the date the subdivision or combination becomes effective. Each such adjustment of the Exercise Price shall be calculated to the nearest one-hundredth of a cent. Such adjustment shall be made successively whenever any event covered by this Section 2(c) shall occur.
3. FUNDAMENTAL TRANSACTIONS. If, at any time while this Warrant is outstanding, (i) the Company effects any merger of the Company with or into another entity and the Company is not the surviving entity (such surviving entity, the “Successor Entity”), (ii) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or by another individual or entity, and approved by the Company) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares of Common Stock for other securities, cash or property and the holders of at least 50% of the Common Stock accept such offer, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as a result of a subdivision or combination of shares of Common Stock) (in any such case, a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive the number of shares of Common Stock of the Successor Entity or of the Company and any additional consideration (the “Alternate Consideration”) receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event (disregarding any limitation on exercise contained herein solely for the purpose of such determination). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any Successor Entity in such Fundamental Transaction shall issue to the Holder a new warrant consistent with the foregoing provisions and evidencing the Holder’s right to exercise such warrant into Alternate Consideration.
4. NON-CIRCUMVENTION. The Company covenants and agrees that it will not, by amendment of its certificate of incorporation, bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, for so long as this Warrant is outstanding, have authorized and reserved, free from preemptive rights, ten times the number of shares of Common Stock that is actually issuable upon full exercise of the Warrant (based on the Exercise Price in effect from time to time, and without regard to any limitations on exercise).
5. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, this Warrant, in and of itself, shall not entitle the Holder to any voting rights or other rights as a stockholder of the Company. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.
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6. REISSUANCE.
(a) Lost, Stolen or Mutilated Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company will, on such terms as to indemnity or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.
(b) Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant shall be of like tenor with this Warrant, and shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date.
7. TRANSFER. This Warrant shall be binding upon the Company and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Notwithstanding anything to the contrary herein, the rights, interests or obligations of the Company hereunder may not be assigned, by operation of law or otherwise, in whole or in part, by the Company without the prior signed written consent of the Holder, which consent may be withheld at the sole discretion of the Holder (any such assignment or transfer shall be null and void if the Company does not obtain the prior signed written consent of the Holder). This Warrant or any of the severable rights and obligations inuring to the benefit of or to be performed by Holder hereunder may be assigned by Holder to a third party, in whole or in part, without the need to obtain the Company’s consent thereto.
8. NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with the notice provisions contained in the Purchase Agreement. The Company shall provide the Holder with prompt written notice (i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, the calculation of such adjustment and (ii) at least 20 days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any stock or other securities directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock or other property, pro rata to the holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder.
9. AMENDMENT AND WAIVER. The terms of this Warrant may be amended or waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the Holder.
10. GOVERNING LAW AND VENUE. This Warrant shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Warrant shall be brought only in the state courts located in the State of Illinois or in the federal courts located in the State of Illinois. The parties to this Warrant hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. THE ISSUER HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Warrant or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.
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11. ACCEPTANCE. Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained herein.
12. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:
(a) “Nasdaq” means www.Nasdaq.com.
(b) “Closing Sale Price” means, for any security as of any date, (i) the last closing trade price for such security on the Principal Market, as reported by Nasdaq, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing trade price, then the last trade price of such security prior to 4:00 p.m., New York time, as reported by Nasdaq, or (ii) if the foregoing does not apply, the last trade price of such security in the over-the-counter market for such security as reported by Nasdaq, or (iii) if no last trade price is reported for such security by Nasdaq, the average of the bid and ask prices of any market makers for such security as reported by the OTC Markets. If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.
(c) “Common Stock” means the Company’s common stock, and any other class of securities into which such securities may hereafter be reclassified or changed.
(d) “Common Stock Equivalents” means any securities of the Company that would entitle the holder thereof to acquire at any time Common Stock, including without limitation any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
(e) “Dilutive Issuance” is any issuance of Common Stock or Common Stock Equivalents described in Section 2(b) above; provided, however, that a Dilutive Issuance shall not include any Exempt Issuance.
(f) “Exempt Issuance” means the issuance of (i) shares of Common Stock or options to employees, officers, or directors of the Company pursuant to any stock or option plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of a committee of non-employee directors established for such purpose, and (ii) shares of Common Stock issued pursuant to real property leasing arrangement from a bank approved by the Board of Directors of the Company.
(g) “Principal Market” means the primary national securities exchange on which the Common Stock is then traded.
(h) “Market Price” means the average of the previous VWAP for the 5 trading days immediately prior to the date of the respective Exercise Notice.
(i) “Trading Day” means (i) any day on which the Common Stock is listed or quoted and traded on its Principal Market, (ii) if the Common Stock is not then listed or quoted and traded on any national securities exchange, then a day on which trading occurs on any over-the-counter markets, or (iii) if trading does not occur on the over-the-counter markets, any Business Day.
* * * * * * *
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of the Issuance Date set forth above.
| FOMO CORP | ||
| Name: | Vikram Grover | |
| Title: | Chief Executive Officer | |
EXHIBIT A
EXERCISE NOTICE
(To be executed by the registered holder to exercise this Common Stock Purchase Warrant)
The Undersigned holder hereby exercises the right to purchase _________________ of the shares of Common Stock (“Warrant Shares”) of FOMO CORP., a California corporation p/k/a 2050 Motors, Inc (the “Company”), evidenced by the attached copy of the Common Stock Purchase Warrant (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.
| 1. | Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as (check one): |
[ ] a cash exercise with respect to _________________ Warrant Shares; or
[ ] by cashless exercise pursuant to the Warrant.
| 2. | Payment of Exercise Price. If cash exercise is selected above, the holder shall pay the applicable Aggregate Exercise Price in the sum of $___________________ to the Company in accordance with the terms of the Warrant. |
| 3. | Delivery of Warrant Shares. The Company shall deliver to the holder __________________ Warrant Shares in accordance with the terms of the Warrant. |
Date: ________________________
| (Print Name of Registered Holder) | ||
| By: | ||
| Name: | ||
| Title: | ||
EXHIBIT B
ASSIGNMENT OF WARRANT
(To be signed only upon authorized transfer of the Warrant)
For Value Received, the undersigned hereby sells, assigns, and transfers unto ____________________ the right to purchase _______________ shares of common stock of FOMO CORP., to which the within Common Stock Purchase Warrant relates and appoints ____________________, as attorney-in-fact, to transfer said right on the books of FOMO CORP. with full power of substitution and re-substitution in the premises. By accepting such transfer, the transferee has agreed to be bound in all respects by the terms and conditions of the within Warrant.
Dated: ________________________
| (Signature) * | |
| (Name) | |
| (Address) | |
| (Social Security or Tax Identification No.) |
* The signature on this Assignment of Warrant must correspond to the name as written upon the face of the Common Stock Purchase Warrant in every particular without alteration or enlargement or any change whatsoever. When signing on behalf of a corporation, partnership, trust or other entity, please indicate your position(s) and title(s) with such entity.