UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
FORM 8-K
___________
CURRENT REPORT
Pursuant To Section
13 OR 15(d) Of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
March 02, 2015
INFRAX SYSTEMS, INC.
(Exact name of registrant as specified in charter)
| Nevada |
000-52488 |
20-2583185 |
|
(State or other jurisdiction of
incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
| |
|
|
|
Infrax Systems, Inc.
3637 Fourth Street North.
Suite 330
St. Petersburg, Florida |
|
33704 |
| (Address of principal executive offices) |
|
(Zip Code) |
727-498-8514
(Registrant’s
telephone number, including area code)
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:
| o |
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| o |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
FORWARD LOOKING STATEMENTS
This Form 8-K and other reports filed by Registrant from time to
time with the Securities and Exchange Commission (collectively the "Filings") contain or may contain forward looking
statements and information that are based upon beliefs of, and information currently available to, Registrant's management as well
as estimates and assumptions made by Registrant's management. When used in the filings the words "anticipate", "believe",
"estimate", "expect", "future", "intend", "plan" or the negative of these terms
and similar expressions as they relate to Registrant or Registrant's management identify forward looking statements. Such statements
reflect the current view of Registrant with respect to future events and are subject to risks, uncertainties, assumptions and other
factors relating to Registrant's industry, Registrant's operations and results of operations and any businesses that may be acquired
by Registrant. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect,
actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.
Although Registrant believes that the expectations reflected in
the forward looking statements are reasonable, Registrant cannot guarantee future results, levels of activity, performance or achievements.
Except as required by applicable law, including the securities laws of the United States, Registrant does not intend to update
any of the forward-looking statements to conform these statements to actual results.
Item 1.01. Entry into a Material Definitive Agreement.
On February 27, 2015, an ASSETS AND STOCK PURCHASE AGREEMENT was
entered (the “Agreement”), by and among FutureWorld Corporation, a Delaware Corporation (referred to by name, “FWDG”
or as “Seller”), and Infrax Systems, Inc., a Nevada corporation (referred to as “”Corporation,” “IFXY”,
or “Buyer”). FutureWorld Corp is the one hundred percent (100%) owner of HempTech Corp which is a Delaware wholly owned
subsidiary. HempTech Corp is a technology company that provides smart sensors and data analysis technology, RFID tracking systems,
communication networking and surveillance security for the cannabis and agricultural industries.
The purchase price for the ASSETS AND STOCK PURCHASE AGREEMENT (the
“Purchase Price”) shall be sixty million dollars ($60,000,000). Infrax Systems shall pay;
| 1- | Ten million dollars ($10M) in cash, payable in installments as convertible notes. The cash payment
shall be made available through operational revenue and/or registration by the Company. |
| 2- | Ten million dollars ($10M) in Common Stock, par value $0.001. |
| 3- | Forty million dollars ($40M) in Preferred Shares Series A1, or 33,000,000 shares, par value $0.001,
of Infrax Systems, Inc. Each Preferred Shares Series A1 is convertible into 88.89 shares of Common Shares. |
Material Relationship - There exist a material relationship
between the registrant and the purchaser on this transaction. Talari Industries is the majority shareholder of both the registrant
and the purchaser and its principle, Mr. Talari, is the CEO of the registrant.
Infrax Systems’ fundamental reasons to purchase HempTech are;
| 1- | HempTech’s recent substantial contracts which would contribute greatly to Infrax’s
bottom line. |
| 2- | HempTech’s Proforma revenue of $100M by 2019. |
| 3- | HempTech’s unique and disruptive technologies for agricultural sector. |
| 4- | HempTech has no direct competitors among publicly held companies in this space. |
| 5- | HempTech has moved from a development company to a start-up in 2014 and is likely to complete
early stage grow in 2015. |
| 6- | HempTech’s packaged solution is a substantial competitive advantage. |
| 7- | HempTech is in a highly fragmented industry that is experiencing explosive growth. |
| 8- | Infrax’s ability to reach agricultural sector offering disruptive technologies not present
at this point. |
With the purchase of HempTech Corp, Infrax Systems will initiate
a new division for agricultural related technologies (or Agritech). After the transaction, Infrax will continue to provide secure
communication technologies to utilities through design and manufacturing of sensors and communications products. Infrax Systems
acquisition of HempTech Corp will help expand its reach in the Cannabis and Agricultural technologies (agritech) which are the
fastest growing sectors in the market.
The aforementioned transaction ensued due to the December 23, 2014,
Infrax Systems’ announcement of an agreement with FutureWorld Corp and its subsidiaries (HempTech Corp). In consideration
for the development of the current and future Products, the FutureWorld agreed to pay Infrax Systems a one-time development fee
of $2M, all in cash or a combination of cash and shares of common stock.
After lengthy discussion with our legal and accounting on this agreement,
we came to a conclusion that the agreement, being a non-arms-length transaction, might be construed as a “conflict of interest”
and may not be financially or legally sound without an independent third party validation. And since most of the fundamental technologies
for the aforementioned transaction is derived
from Infrax Systems for FutureWorld and its subsidiary, HempTech
Corp, we were recommended by our legal and accounting to discontinue the license agreement and instead consider outright purchase
of HempTech Corp. Hence, in January 2015, FutureWorld retained an independent valuation firm on the considered business transaction.
On February 17, both Companies received the market valuation of $60,000,000 for HempTech Corp from the third party firm. The valuation
report was used as a basis for the agreed upon transaction with FutureWorld Corp with the instruction of the auditors.
Item 4.01. Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Effective March 02, 2015, Mr. Sam Talari has resigned as the acting
CEO of Infrax Systems. Concurrently, the board of directors have elected Mr. John Verghese as the new CEO of Infrax Systems, Inc.,
effective immediately. The transition was the result of the purchase agreement between FutureWorld Corp. and Infrax Systems.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
Exhibit
No. Description
| 2.1 | ASSETS AND STOCK PURCHASE AGREEMENT, dated as of February 27, 2015, by and among Mount by and among FutureWorld Corporation,
a Delaware Corporation (referred to by name, “FWDG” or as “Seller”), and Infrax Systems, Inc., a Nevada
corporation (referred to as “”Corporation,” “IFXY”, or “Buyer”). |
10.1 Securities Purchase Agreement (including Form of Note and
Security Purchase Agreement).
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.
Infrax Systems, Inc.
/s/ John Verghese
John Verghese
Principal Executive Officer
Dated: March 02, 2015
Securities
Purchase Agreement
This
Securities Purchase Agreement (this “Agreement”), dated as of February 27, 2015, is entered into by and
between INFRAX SYSTEMS, INC., a Nevada company
(“Company”), and, FutureWorld Corp., a Delaware corporation,
its successors and/or assigns (“Investor”).
A. Company and
Investor are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the
rules and regulations promulgated by the United States Securities and Exchange Commission (the “SEC”) under
the Securities Act of 1933, as amended (the “1933 Act”).
B. Investor desires
to purchase and Company desires to issue and sell, upon the terms and conditions set forth in this Agreement, a Convertible Promissory
Note, in the form attached hereto as Exhibit A, in the original principal amount of $10,000,000.00 (the “Note”),
convertible into shares of common stock, $0.0001 par value per share, of Company (the “Common Stock”), upon
the terms and subject to the limitations and conditions set forth in such Note.
C. This Agreement,
the Note, and all other certificates, documents, agreements, resolutions and instruments delivered to any party under or in connection
with this Agreement, as the same may be amended from time to time, are collectively referred to herein as the “Transaction
Documents”.
D. For purposes
of this Agreement: “Conversion Shares” means all shares of Common Stock issuable upon conversion of all or any
portion of the Note; and “Securities” means the Note and the Conversion Shares.
NOW, THEREFORE,
Company and Investor hereby agree as follows:
1.
Purchase and Sale of Securities.
1.1.
Purchase of Securities. Company shall issue and sell to Investor and Investor agrees to purchase from Company the
Note. In consideration thereof, Investor shall pay the Purchase Price to Company.
1.2.
Form of Payment. On the Closing Date, Investor shall pay the Purchase Price to Company against delivery of the Note.
1.3.
Closing Date. Subject to the satisfaction (or written waiver) of the conditions set forth in Section 5 and Section
6 below, the date and time of the issuance and sale of the Securities pursuant to this Agreement (the “Closing Date”)
shall be 1:00 p.m., Eastern Time on or about February 27, 2015, or such other mutually agreed upon time. The closing of the transactions
contemplated by this Agreement (the “Closing”) shall occur on the Closing Date by means of the exchange by express
courier and email of .pdf documents and by wire transfer of.
1.4.
Collateral for the Note. The Note shall not be secured.
1.5.
Representations and Warranties.
2.
Investor’s Representations and Warranties. Investor represents and warrants to Company that: (i) this Agreement
has been duly and validly authorized; (ii) this Agreement constitutes a valid and binding agreement of Investor enforceable in
accordance with its terms; and (iii) Investor is an “accredited investor” as that term is defined in Rule 501(a) of
Regulation D of the 1933 Act.
3.
Representations and Warranties of Company. Company represents and warrants to Investor that: (i) Company is a corporation
duly organized, validly existing and in good standing under the laws of its state of incorporation and has the requisite corporate
power to own its properties and to carry on its business as now being conducted; (ii) Company is duly qualified as a foreign corporation
to do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by it
makes such qualification necessary; (iii) Company has registered its Common Stock under Section 12(g) of the Securities Exchange
Act of 1934, as amended (the “1934 Act”), and is obligated to file reports pursuant to Section 13 or Section 15(d)
of the 1934 Act; (iv) each of the Transaction Documents and the transactions contemplated hereby and thereby, have been duly and
validly authorized by Company; (v) this Agreement, the Note, and the other Transaction Documents have been duly executed and delivered
by Company and constitute the valid and binding obligations of Company enforceable in accordance with their terms, subject as to
enforceability only to general principles of equity and to bankruptcy, insolvency, moratorium, and other similar laws affecting
the enforcement of creditors’ rights generally; (vi) the execution and delivery of the Transaction Documents by Company,
the issuance of Securities in accordance with the terms hereof, and the consummation by Company of the other transactions contemplated
by the Transaction Documents do not and will not conflict with or result in a breach by Company of any of the terms or provisions
of, or constitute a default under (a) Company’s formation documents or bylaws, each as currently in effect, (b) any indenture,
mortgage, deed of trust, or other material agreement or instrument to which Company is a party or by which it or any of its properties
or assets are bound, including any listing agreement for the Common Stock, or (c) to Company’s knowledge, any existing applicable
law, rule, or regulation or any applicable decree, judgment, or order of any court, United States federal or state regulatory body,
administrative agency, or other governmental body having jurisdiction over Company or any of Company’s properties or assets;
(vii) no further authorization, approval or consent of any court, governmental body, regulatory agency, self-regulatory organization,
or stock exchange or market or the stockholders or any lender of Company is required to be obtained by Company for the issuance
of the Securities to Investor; (viii) none of Company’s filings with the SEC contained, at the time they were filed, any
untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were made, not misleading; (ix) Company has filed all reports,
schedules, forms, statements and other documents required to be filed by Company with the SEC under the 1934 Act on a timely basis
or has received a valid extension of such time of filing and has filed any such report, schedule, form, statement or other document
prior to the expiration of any such extension; (x) Company is not, nor has it ever been, a “Shell Company,” as such
type of “issuer” is described in Rule 144(i)(1) under the 1933 Act; (xi) with respect to any brokerage commissions,
placement agent or finder’s fees or similar payments that will or would become due and owing by Company to any person or
entity as a result of this Agreement or the transactions contemplated hereby (“Broker Fees”), any such Broker
Fees will be made in full compliance with all applicable laws and regulations and only to a person or that is a registered investment
adviser or registered broker-dealer; (xii) Investor shall have no obligation with respect to any Broker Fees or with respect to
any claims made by or on behalf of other persons for fees of a type contemplated in this subsection that may be due in connection
with the transactions contemplated hereby and Company shall indemnify and hold harmless each of Investor, Investor’s employees,
officers, directors, stockholders, managers, members, agents, and partners, and their respective affiliates, from and against all
claims, losses, damages, costs (including the costs of preparation and attorneys’ fees) and expenses suffered in respect
of any such claimed or existing Broker Fees; (xiii) when issued, the Conversion Shares will be duly authorized, validly issued,
fully paid for and non-assessable, free and clear of all liens, claims, charges and encumbrances.
4.
Company Covenants. Until all of Company’s obligations hereunder are paid and performed in full, or within the
timeframes otherwise specifically set forth below, Company shall comply with the following covenants: (i) so long as Investor beneficially
owns any of the Securities and for at least twenty (20) Trading Days (as defined in the Note) thereafter, Company shall file all
reports required to be filed with the SEC pursuant to Sections 13 or 15(d) of the 1934 Act, and shall take all reasonable
action under
its control to ensure that adequate
current public information with respect to Company, as required in accordance with Rule 144, is publicly available, and shall not
terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations
thereunder would permit such termination; (ii) the Common Stock shall be listed or quoted for trading on any of (a) NYSE, (b) NASDAQ,
(c) OTCQX, (d) OTCQB, or (e) OTC Pink Current; (iii) when issued, the Conversion Shares will be duly authorized, validly issued,
fully paid for and non-assessable, free and clear of all liens, claims, charges and encumbrances; and (iv) Company shall use the
net proceeds received hereunder for working capital and general corporate purposes only.
5.
Conditions to Company’s Obligation to Sell. The obligation of Company hereunder to issue and sell the Securities
to Investor at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions:
5.1.
Investor shall have executed this Agreement and delivered the same to Company.
5.2.
Investor shall have delivered the Purchase Price to Company in accordance with Section 1.2 above.
6.
Conditions to Investor’s Obligation to Purchase. The obligation of Investor hereunder to purchase the Securities
at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that
these conditions are for Investor’s sole benefit and may be waived by Investor at any time in its sole discretion:
6.1.
Company shall have executed this Agreement and delivered the same to Investor.
6.2.
Company shall have delivered to Investor the duly executed Note in accordance with Section 1.2 above.
6.3.
Company shall have delivered to Investor a fully executed Share Issuance Resolution substantially in the form attached hereto
as Exhibit B to be delivered to the Transfer Agent.
6.4.
Company shall have delivered to Investor fully executed copies of all other Transaction Documents required to be executed
by Company herein or therein.
7.
Investor’s Consent Right to New Issuances. As additional consideration for Investor’s agreement to purchase
the Note as set forth herein and as a material inducement to Investor to enter into this Agreement and the other Transaction Documents,
Company hereby covenants and agrees that if Company makes Variable Security Issuances (as defined below) to more than two (2) individuals
or entities other than Investor, then from and after the date of the Variable Security Issuance to the second (2nd)
person or entity and until all of Company’s obligations under the Note are paid and performed in full, Company shall not
enter into any additional Variable Security Issuances without first obtaining Investor’s written consent. For purposes hereof,
the term “Variable Security Issuance” means any transaction pursuant to Section 3(a)(9) or Section 3(a)(10)
of the 1933 Act, equity line of credit or financing arrangement or other transaction that involves issuing Company securities that
are convertible into Common Stock (including without limitation selling convertible debt, warrants or convertible preferred stock)
with a conversion price that varies with the price of the Common Stock.
8.
Miscellaneous. The provisions set forth in this Section 9 shall apply to this Agreement, as well as all other Transaction
Documents as if these terms were fully set forth therein.
8.1.
Original Signature Pages. Each party agrees to deliver its original signature pages to the Transaction Documents
to the other party within five (5) Trading Days of the date hereof. Notwithstanding the foregoing, the Transaction Documents shall
be fully effective upon exchange of electronic signature pages by the parties and payment of the Purchase Price by Investor. For
the avoidance of doubt, the failure by either party to deliver its original signature pages to the other party shall not affect
in any way the validity or effectiveness of any of the Transaction Documents, provided that such failure to deliver original signatures
shall be a breach of the party’s obligations hereunder.
8.2.
Arbitration of Claims. The parties shall submit all Claims (as defined in Exhibit E) arising under this Agreement
or any other Transaction Document or other agreement between the parties and their affiliates to binding arbitration pursuant to
the arbitration provisions set forth in Exhibit C attached hereto (the “Arbitration Provisions”). The
parties hereby acknowledge and agree that the Arbitration Provisions are unconditionally binding on the parties hereto and are
severable from all other provisions of this Agreement. Any capitalized term not defined in the Arbitration Provisions shall have
the meaning set forth in this Agreement. By executing this Agreement, Company represents, warrants and covenants that Company has
reviewed the Arbitration Provisions carefully, consulted with legal counsel about such provisions (or waived its right to do so),
understands that the Arbitration Provisions are intended to allow for the expeditious and efficient resolution of any dispute hereunder,
agrees to the terms and limitations set forth in the Arbitration Provisions, and that Company will not take a position contrary
to the foregoing representations. Company acknowledges and agrees that Investor may rely upon the foregoing representations and
covenants of Company regarding the Arbitration Provisions.
8.3.
Governing Law; Venue. This Agreement shall be governed by and interpreted in accordance with the laws of the State
of Florida for contracts to be wholly performed in such state and without giving effect to the principles thereof regarding the
conflict of laws. Each party consents to and expressly agrees that exclusive venue for arbitration of any dispute arising out of
or relating to any Transaction Document or the relationship of the parties or their affiliates shall be in Pinellas County, Florida).
Without modifying the parties obligations to resolve disputes hereunder pursuant to the Arbitration Provisions, for any litigation
arising in connection with any of the Transaction Documents, each party hereto hereby (a) consents to and expressly submits to
the exclusive personal jurisdiction of any state or federal court sitting in Pinellas County, Florida, (b) expressly submits to
the exclusive venue of any such court for the purposes hereof, and (c) waives any claim of improper venue and any claim or objection
that such courts are an inconvenient forum or any other claim or objection to the bringing of any such proceeding in such jurisdictions
or to any claim that such venue of the suit, action or proceeding is improper.
8.4.
Calculation Disputes. Notwithstanding the Arbitration Provisions, in the case of a dispute as to any determination
or arithmetic calculation under the Transaction Documents, including without limitation, calculating the Outstanding Balance, Lender
Conversion Price, Lender Conversion Shares (as defined in the Note), Installment Conversion Price (as defined in the Note), Installment
Conversion Shares (as defined in the Note), Market Price, Conversion Shares, or the VWAP (as defined in the Note) (collectively,
“Calculations”), Company or Investor (as the case may be) shall submit the disputed Calculation via email or
facsimile with confirmation of receipt (a) within two (2) Trading Days after receipt of the applicable notice giving rise to such
dispute to Company or Investor (as the case may be) or (b) if no notice gave rise to such dispute, at any time after Investor learned
of the circumstances giving rise to such dispute. If Investor and Company are unable to agree upon such Calculation within two
(2) Trading Days of such disputed Calculation being submitted to Company or Investor (as the case may be), then Investor shall,
within two (2) Trading Days, submit via email or facsimile the disputed Calculation to Unkar Systems Inc. (“Unkar Systems”).
Company shall cause Unkar Systems to perform the Calculation and notify Company and Investor of the results no later than ten (10)
Trading Days from the time it receives such disputed Calculation. Unkar Systems’ determination of the disputed Calculation
shall be binding upon all parties absent demonstrable error. Unkar Systems’ fee for performing such Calculation shall be
paid by
the incorrect party, or if both parties
are incorrect, by the party whose Calculation is furthest from the correct Calculation as determined by Unkar Systems. In the event
Company is the losing party, no extension of the Delivery Date shall be granted and Company shall incur all effects for failing
to deliver the applicable shares in a timely manner as set forth in the Transaction Documents. Notwithstanding the foregoing, Investor
may, in its sole discretion, designate an independent, reputable investment bank or accounting firm other than Unkar Systems to
resolve any such dispute and in such event, all references to “Unkar Systems” herein will be replaced with references
to such independent, reputable investment bank or accounting firm so designated by Investor.
8.5.
Counterparts. Each Transaction Document may be executed in any number of counterparts, each of which shall be deemed
an original, but all of which together shall constitute one instrument. The parties hereto confirm that any electronic copy of
another party’s executed counterpart of a Transaction Document (or such party’s signature page thereof) will be deemed
to be an executed original thereof.
8.6.
Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect
the interpretation of, this Agreement.
8.7.
Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall
be deemed modified to conform to such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under
any law shall not affect the validity or enforceability of any other provision hereof.
8.8.
Entire Agreement; Amendments. This Agreement, together with the other Transaction Documents, contains the entire
understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein
or therein, neither Company nor Investor makes any representation, warranty, covenant or undertaking with respect to such matters.
No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the parties hereto.
8.9.
No Reliance. Company acknowledges and agrees that neither Investor nor any of its officers, directors, representatives
or agents has made any representations or warranties to Company or any of its agents, representatives, officers, directors, managers,
members or employees except as expressly set forth in the Transaction Documents and, in making its decision to enter into the transactions
contemplated by the Transaction Documents, Company is not relying on any representation, warranty, covenant or promise of Investor
or its officers, directors, agents or representatives other than as set forth in the Transaction Documents.
8.10.
Notices. Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein)
and shall be deemed effectively given on the earliest of: (a) the date delivered, if delivered by personal delivery as against
written receipt therefor or by email to an executive officer, or by facsimile (with successful transmission confirmation), (b)
the earlier of the date delivered or the third Trading Day after deposit, postage prepaid, in the United States Postal Service
by certified mail, or (c) the earlier of the date delivered or the third Trading Day after mailing by express courier, with delivery
costs and fees prepaid, in each case, addressed to each of the other parties thereunto entitled at the following addresses (or
at such other addresses as such party may designate by five (5) calendar days’ advance written notice similarly given to
each of the other parties hereto):
If to Investor:
FutureWorld Corp.
Attn: Sam Talari
3637 4th Street North,
Suite 330
St. Petersburg, Florida 33704
If to Company:
INFRAX SYSTEMS, INC.
Attn: John Verghese
8.11.
Successors and Assigns. This Agreement or any of the severable rights and obligations inuring to the benefit of or
to be performed by Investor hereunder may be assigned by Investor to a third party, including its financing sources, in whole or
in part, without the need to obtain Company’s consent thereto. Company may not assign its rights or obligations under this
Agreement or delegate its duties hereunder without the prior written consent of Investor.
8.12.
Survival. The representations and warranties of Company and the agreements and covenants set forth in this Agreement
shall survive the Closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of Investor. Company
agrees to indemnify and hold harmless Investor and all its officers, directors, employees, attorneys, and agents for loss or damage
arising as a result of or related to any breach or alleged breach by Company of any of its representations, warranties and covenants
set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as
they are incurred.
8.13.
Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and
things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions
contemplated hereby.
8.14.
Investor’s Rights and Remedies Cumulative; Liquidated Damages. All rights, remedies, and powers conferred in
this Agreement and the Transaction Documents are cumulative and not exclusive of any other rights or remedies, and shall be in
addition to every other right, power, and remedy that Investor may have, whether specifically granted in this Agreement or any
other Transaction Document, or existing at law, in equity, or by statute, and any and all such rights and remedies may be exercised
from time to time and as often and in such order as Investor may deem expedient. The parties acknowledge and agree that upon Company’s
failure to comply with the provisions of the Transaction Documents, Investor’s damages would be uncertain and difficult (if
not impossible) to accurately estimate because of the parties’ inability to predict future interest rates and future share
prices, Investor’s increased risk, and the uncertainty of the availability of a suitable substitute investment opportunity
for Investor, among other reasons. Accordingly, any fees, charges, and default interest due under the Note and the other Transaction
Documents are intended by the parties to be, and shall be deemed, liquidated damages (under Company’s and Investor’s
expectations that any such liquidated damages will tack back to the Closing Date for purposes of determining the holding period
under Rule 144). The parties agree that such liquidated damages are a reasonable estimate of Investor’s actual damages and
not a penalty, and shall not be deemed in any way to limit any other right or remedy Investor may have hereunder, at law or in
equity. The parties acknowledge and agree that under the circumstances existing at the time this Agreement is entered into, such
liquidated damages are fair and reasonable and are not penalties. All fees, charges, and default interest provided for
in the Transaction Documents are agreed
to by the parties to be based upon the obligations and the risks assumed by the parties as of the Closing Date and are consistent
with investments of this type. The liquidated damages provisions of the Transaction Documents shall not limit or preclude a party
from pursuing any other remedy available at law or in equity; provided, however, that the liquidated damages provided for
in the Transaction Documents are intended to be in lieu of actual damages.
8.15.
Ownership Limitation. Notwithstanding anything to the contrary contained in this Agreement or the other Transaction
Documents, if at any time Investor shall or would be issued shares of Common Stock under any of the Transaction Documents, but
such issuance would cause Investor (together with its affiliates) to beneficially own a number of shares exceeding the Maximum
Percentage (as defined in the Note), then Company must not issue to Investor the shares that would cause Investor to exceed the
Maximum Percentage. The shares of Common Stock issuable to Investor that would cause the Maximum Percentage to be exceeded are
referred to herein as the “Ownership Limitation Shares”. Company will reserve the Ownership Limitation Shares
for the exclusive benefit of Investor. From time to time, Investor may notify Company in writing of the number of the Ownership
Limitation Shares that may be issued to Investor without causing Investor to exceed the Maximum Percentage. Upon receipt of such
notice, Company shall be unconditionally obligated to immediately issue such designated shares to Investor, with a corresponding
reduction in the number of the Ownership Limitation Shares. For purposes of this Section, beneficial ownership of Common Stock
will be determined under Section 13(d) of the 1934 Act.
8.16.
Attorneys’ Fees and Cost of Collection. In the event of any arbitration or action at law or in equity to enforce
or interpret the terms of this Agreement or any of the other Transaction Documents, the parties agree that the party who is awarded
the most money shall be deemed the prevailing party for all purposes and shall therefore be entitled to an additional award of
the full amount of the attorneys’ fees, deposition costs, and expenses paid by such prevailing party in connection with arbitration
or litigation without reduction or apportionment based upon the individual claims or defenses giving rise to the fees and expenses.
Nothing herein shall restrict or impair an arbitrator’s or a court’s power to award fees and expenses for frivolous
or bad faith pleading. If (a) the Note is placed in the hands of an attorney for collection or enforcement prior to commencing
arbitration or legal proceedings, or is collected or enforced through any arbitration or legal proceeding, or Investor otherwise
takes action to collect amounts due under the Note or to enforce the provisions of the Note; or (b) there occurs any bankruptcy,
reorganization, receivership of Company or other proceedings affecting Company’s creditors’ rights and involving a
claim under the Note; then Company shall pay the costs incurred by Investor for such collection, enforcement or action or in connection
with such bankruptcy, reorganization, receivership or other proceeding, including, without limitation, attorneys’ fees, expenses,
deposition costs, and disbursements.
8.17.
Waiver. No waiver of any provision of this Agreement shall be effective unless it is in the form of a writing signed
by the party granting the waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any
other provision or consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing
waiver or consent or commit a party to provide a waiver or consent in the future except to the extent specifically set forth in
writing.
8.18.
Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS
SUCH PARTY MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT
OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY
ARISING UNDER COMMON LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY
HERETO ACKNOWLEDGES THAT SUCH PARTY
IS KNOWINGLY AND VOLUNTARILY WAIVING SUCH PARTY’S RIGHT TO DEMAND TRIAL BY JURY.
8.19.
Time of the Essence. Time is expressly made of the essence with respect to each and every provision of this Agreement
and the other Transaction Documents.
[Remainder of page intentionally left blank;
signature page follows]
IN WITNESS WHEREOF,
the undersigned Investor and Company have caused this Agreement to be duly executed as of the date first above written.
SUBSCRIPTION AMOUNT:
Principal Amount of Note: $10,000,000.00
Purchase Price: $10,000,000.00
INVESTOR:
FUTUREWORLD
CORP.
By: /s/Sam Talari
Sam Talari, CEO
COMPANY:
INFRAX
SYSTEMS, INC.
By: /s/John Verghese
John Verghese, Vice President
ATTACHED EXHIBITS:
| Exhibit | B
Share Issuance Resolution substantially in the form |
| Exhibit | C
Arbitration Provisions |
Exhibit
C
ARBITRATION PROVISIONS
1. Dispute Resolution. For purposes
of this Exhibit C, the term “Claims” means any disputes, claims, demands, causes of action, liabilities,
damages, losses, or controversies whatsoever arising from related to or connected with the transactions contemplated in the Transaction
Documents and any communications between the parties related thereto, including without limitation any claims of mutual mistake,
mistake, fraud, misrepresentation, failure of formation, failure of consideration, promissory estoppel, unconscionability, failure
of condition precedent, rescission, and any statutory claims, tort claims, contract claims, or claims to void, invalidate or terminate
the Agreement or any of the other Transaction Documents. The term “Claims” specifically excludes a dispute over Calculations
(as defined in the Agreement). The parties hereby agree that the arbitration provisions set forth in this Exhibit C (“Arbitration
Provisions”) are binding on the parties hereto and are severable from all other provisions in the Transaction Documents.
As a result, any attempt to rescind the Agreement or declare the Agreement or any other Transaction Document invalid or unenforceable
for any reason is subject to these Arbitration Provisions. These Arbitration Provisions shall also survive any termination or expiration
of the Agreement.
2. Arbitration. Except as otherwise
provided herein, all Claims must be submitted to arbitration (“Arbitration”) to be conducted in Pinellas County,
Florida or Florida County, Florida and pursuant to the terms set forth in these Arbitration Provisions. The parties agree that
the award of the arbitrator shall be final and binding upon the parties; shall be the sole and exclusive remedy between them regarding
any Claims, counterclaims, issues, or accountings presented or pleaded to the arbitrator; and shall promptly be payable in United
States dollars free of any tax, deduction or offset (with respect to monetary awards). Any costs or fees, including without limitation
attorneys’ fees, incident to enforcing the arbitrator’s award shall, to the maximum extent permitted by law, be charged
against the party resisting such enforcement. The award shall include Default Interest (as defined in the Note) both before and
after the award. Judgment upon the award of the arbitrator will be entered and enforced by a state court sitting in Pinellas County,
Florida. The parties hereby incorporate herein the provisions and procedures set forth in the Florida Uniform Arbitration Act,
U.C.A. § 78B-11-101 et seq. (as amended or superseded from time to time, the “Arbitration Act”).
Pursuant to Section 105 of the Arbitration Act, in the event of conflict between the terms of these Arbitration Provisions and
the provisions of the Arbitration Act, the terms of these Arbitration Provisions shall control.
3. Arbitration Proceedings. Arbitration
between the parties will be subject to the following procedures:
3.1 Pursuant to Section
110 of the Arbitration Act, the parties agree that a party may initiate Arbitration by giving written notice to the other party
(“Arbitration Notice”) in the same manner that notice is permitted under Section 9.10 of the Agreement; provided,
however, that the Arbitration Notice may not be given by email or fax. Arbitration will be deemed initiated as of the date
that the Arbitration Notice is deemed delivered under Section 9.10 of the Agreement (the “Service Date”). After
the Service Date, information may be delivered, and notices may be given, by email or fax pursuant to Section 9.10 of the Agreement
or any other method permitted thereunder. The Arbitration Notice must describe the nature of the controversy, the remedies sought,
and the election to commence Arbitration proceedings. All Claims in the Arbitration Notice must be pleaded consistent with the
Florida Rules of Civil Procedure.
3.2 Within ten (10)
calendar days after the Service Date, Investor shall select and submit to Company the names of three arbitrators that are designated
as “neutrals” or qualified arbitrators by Florida ADR Services (such three designated persons hereunder are referred
to herein as the “Proposed Arbitrators”). For the avoidance of doubt, each Proposed Arbitrator must be qualified
as a “neutral” with Florida ADR Services. Within ten (10) calendar days after Investor has submitted to Company the
names of the Proposed Arbitrators, Company must select, by written notice to Investor, one (1) of the Proposed Arbitrators to act
as the arbitrator for the parties under these Arbitration Provisions. If Company fails to select one of the Proposed Arbitrators
in writing within such 10-day period, then Investor may select the arbitrator from the Proposed Arbitrators by providing written
notice of such selection to Company. If Investor fails to identify the Proposed Arbitrators within the time period required above,
then Company may at any time prior to Investor designating the Proposed Arbitrators, select the names of three arbitrators that
are designated as “neutrals” or qualified arbitrators by Florida ADR Service by written notice to Investor. Investor
may then, within ten (10) calendar
days after Company has submitted notice of its
selected arbitrators to Investor, select, by written notice to Company, one (1) of the selected arbitrators to act as the arbitrator
for the parties under these Arbitration Provisions. If Investor fails to select in writing and within such 10-day period one of
the three arbitrators selected by Company, then Company may select the arbitrator from its three previously selected arbitrators
by providing written notice of such selection to Investor. Subject to Paragraph 3.12 below, the cost of the arbitrator must be
paid equally by both parties; provided, however, that if one party refuses or fails to pay its portion of the arbitrator
fee, then the other party can advance such unpaid amount (subject to the accrual of Default Interest thereupon), with such amount
added to or subtracted from, as applicable, the award granted by the arbitrator. If Florida ADR Services ceases to exist or to
provide a list of neutrals, then the arbitrator shall be selected under the then prevailing rules of the American Arbitration Association.
The date that the selected arbitrator agrees in writing to serve as the arbitrator hereunder is referred to herein as the “Arbitration
Commencement Date”.
3.3 An answer and any
counterclaims to the Arbitration Notice, which must be pleaded consistent with the Florida Rules of Civil Procedure, shall be required
to be delivered to the other party within twenty (20) calendar days after the Service Date. Upon request, the arbitrator is hereby
instructed to render a default award, consistent with the relief requested in the Arbitration Notice, against a party that fails
to submit an answer within such time period.
3.4 The party that delivers
the Arbitration Notice to the other party shall have the option to also commence legal proceedings with any state court sitting
in Pinellas county, Florida (“Litigation Proceedings”), subject to the following: (i) the complaint in the Litigation
Proceedings is to be substantially similar to the claims set forth in the Arbitration Notice, provided that an additional cause
of action to compel arbitration will also be included therein, (ii) so long as the other party files an answer to the complaint
in the Litigation Proceedings and an answer to the Arbitration Notice, the Litigation Proceedings will be stayed pending an award
of the arbitrator hereunder, (iii) if the other party fails to file an answer in the Litigation Proceedings or an answer in the
Arbitration Proceedings, then the party initiating Arbitration shall be entitled to a default judgment consistent with the relief
requested, to be entered in the Litigation Proceedings, and (iv) any legal or procedural issue arising under the Arbitration Act
that requires a decision of a court of competent jurisdiction may be determined in the Litigation Proceedings. Any award of the
arbitrator may be entered in such Litigation Proceedings pursuant to the Arbitration Act.
3.5 Pursuant to Section
118(8) of the Arbitration Act, the parties agree that discovery shall be conducted in accordance with the Florida Rules of Civil
Procedure; provided, however, that incorporation of such rules will in no event supersede the Arbitration Provisions set
forth herein, including without limitation the time limitation set forth in Paragraph 3.9 below, and the following:
(a) Discovery will only
be allowed if the likely benefits of the proposed discovery outweigh the burden or expense, and the discovery sought is likely
to reveal information that will satisfy a specific element of a claim or defense already pleaded in the Arbitration. The party
seeking discovery shall always have the burden of showing that all of the standards and limitations set forth in these Arbitration
Provisions are satisfied. The scope of discovery in the Arbitration proceedings shall also be limited as follows:
(i) To facts directly
connected with the transactions contemplated by the Agreement.
(ii) To facts and
information that cannot be obtained from another source that is more convenient, less burdensome or less expensive.
(c) No party shall be
allowed (a) more than fifteen (15) interrogatories (including discrete subparts), (b) more than fifteen (15) requests for admission
(including discrete subparts), (c) more than ten (10) document requests (including discrete subparts), or (d) more than three depositions
(excluding expert depositions) for a maximum of seven (7) hours per deposition.
3.6 Any party submitting
any written discovery requests, including interrogatories, requests for production, subpoenas to a party or a third party, or requests
for admissions, must prepay the estimated attorneys’ fees and costs, as determined by the arbitrator, before the responding
party has any obligation to produce or respond.
(a) All discovery requests
must be submitted in writing to the arbitrator and the other party before issuing or serving such discovery requests. The party
issuing the written discovery requests must include with such discovery requests a detailed explanation of how the proposed discovery
requests satisfy the
requirements of these Arbitration Provisions
and the Florida Rules of Civil Procedure. Any party will then be allowed, within ten (10) calendar days of receiving the proposed
discovery requests, to submit to the arbitrator an estimate of the attorneys’ fees and costs associated with responding to
such written discovery requests and a written challenge to each applicable discovery request. After receipt of an estimate of attorneys’
fees and costs and/or challenge(s) to one or more discovery requests, the arbitrator will make a finding as to the likely attorneys’
fees and costs associated with responding to the discovery requests and issue an order that (A) requires the requesting party to
prepay the attorneys’ fees and costs associated with responding to the discovery requests, and (B) requires the responding
party to respond to the discovery requests as limited by the arbitrator within a certain period of time after receiving payment
from the requesting party. If a party entitled to submit an estimate of attorneys’ fees and costs and/or a challenge to discovery
requests fails to do so within such 10-day period, the arbitrator will make a finding that (A) there are no attorneys’ fees
or costs associated with responding to such discovery requests, and (B) the responding party must respond to such discovery requests
(as may be limited by the arbitrator) within a certain period of time as determined by the arbitrator.
(b) In order to allow
a written discovery request, the arbitrator must find that the discovery request satisfies the standards set forth in these Arbitration
Provisions and the Florida Rules of Civil Procedure. The arbitrator must strictly enforce these standards. If a discovery request
does not satisfy any of the standards set forth in these Arbitration Provisions or the Florida Rules of Civil Procedure, the arbitrator
may modify such discovery request to satisfy the applicable standards, or strike such discovery request in whole or in part.
(c) Discovery deadlines
will be set forth in a scheduling order issued by the arbitrator. The parties hereby authorize and direct the arbitrator to take
such actions and make such rulings as may be necessary to carry out the parties’ intent for the arbitration proceedings to
be efficient and expeditious.
3.7 Each party may submit
expert reports (and rebuttals thereto), provided that such reports must be submitted by the deadlines established by the arbitrator.
Expert reports must contain the following: (a) a complete statement of all opinions the expert will offer at trial and the basis
and reasons for them; (b) the expert’s name and qualifications, including a list of all publications within the preceding
10 years, and a list of any other cases in which the expert has testified at trial or in a deposition or prepared a report within
the preceding 10 years; and (c) the compensation to be paid for the expert’s report and testimony. The parties are entitled
to depose any other party’s expert witness one time for no more than 4 hours. An expert may not testify in a party’s
case-in-chief concerning any matter not fairly disclosed in the expert report.
3.8 All information disclosed
by either party during the Arbitration process (including without limitation information disclosed during the discovery process)
shall be considered confidential in nature. Each party agrees not to disclose any confidential information received from the other
party during the discovery process unless (i) prior to or after the time of disclosure such information becomes public knowledge
or part of the public domain, not as a result of any inaction or action of the receiving party, (ii) such information is required
by a court order, subpoena or similar legal duress to be disclosed if such receiving party has notified the other party thereof
in writing and given it a reasonable opportunity to obtain a protective order from a court of competent jurisdiction prior to disclosure;
or (iii) disclosed to the receiving party’s agents, representatives and legal counsel on a need to know basis who each agree
in writing not to disclose such information to any third party. Pursuant to Section 118(5) of the Arbitration Act, the arbitrator
is hereby authorized and directed to issue a protective order to prevent the disclosure of privileged information and confidential
information upon the written request of either party.
3.9 The parties hereby
authorize and direct the arbitrator to take such actions and make such rulings as may be necessary to carry out the parties’
intent for the arbitration proceedings to be efficient and expeditious. Pursuant to Section 120 of the Arbitration Act, the parties
hereby agree that an award of the arbitrator must be made within 150 days after the Arbitration Commencement Date. The arbitrator
is hereby authorized and directed to hold a scheduling conference within ten (10) calendar days after the Arbitration Commencement
Date in order to establish a scheduling order with various binding deadlines for discovery, expert testimony, and the submission
of documents by the parties to enable the arbitrator to render a decision prior to the end of such 150-day period. The Florida
Rules of Evidence will apply to any final hearing before the arbitrator.
3.10 The arbitrator shall
have the right to award or include in the arbitrator’s award any relief which the arbitrator deems proper under the circumstances,
including, without limitation, specific performance and injunctive relief, provided that the arbitrator may not award exemplary
or punitive damages.
3.11 If any part of these
Arbitration Provisions is found to violate applicable law or to be illegal, then such provision shall be modified to the minimum
extent necessary to make such provision enforceable under applicable law.
3.12 The arbitrator is
hereby directed to require the losing party to (i) pay the full amount of the costs and fees of the arbitrator, and (ii) reimburse
the prevailing party the reasonable attorneys’ fees, arbitrator costs, deposition costs, and other discovery costs incurred
by the prevailing party.
[Remainder of page intentionally left blank]
CONVERTIBLE
PROMISSORY NOTE
Effective Date: February 27, 2015 U.S. $10,000,000.00
FOR VALUE RECEIVED,
INFRAX SYSTEMS INC., a Nevada corporation (“Borrower”), promises
to pay to FUTUREWORLD CORP., a Delaware corporation, or its successors or assigns
(“Lender”), $10,000,000.00 and any interest, fees, charges, and late fees on the date that is eighteen (18)
months after the Purchase Price Date (as defined below) (the “Maturity Date”) in accordance with the terms set
forth herein and to pay interest on the Outstanding Balance at the rate of ten percent (10%) per annum from the Purchase Price
Date until the same is paid in full. This Convertible Promissory Note (this “Note”) is issued and made effective
as of February 27, 2015 (the “Effective Date”). This Note is issued pursuant to that certain Securities Purchase
Agreement dated February 27, 2015, as the same may be amended from time to time, by and between Borrower and Lender (the “Purchase
Agreement”). All interest calculations hereunder shall be computed on the basis of a 360-day year comprised of twelve
(12) thirty (30) day months, shall compound daily and shall be payable in accordance with the terms of this Note. Certain
capitalized terms used herein are defined in Attachment 1 attached hereto and incorporated herein by this reference.
9.
Payment; Prepayment. Provided there is an Outstanding Balance, on each Installment Date (as defined below), Borrower
shall pay to Lender an amount equal to the Installment Amount (as defined below) due on such Installment Date in accordance with
Section 8. All payments owing hereunder shall be in lawful money of the United States of America or Conversion Shares (as
defined below), as provided for herein, and delivered to Lender at the address furnished to Borrower for that purpose. All payments
shall be applied first to (a) costs of collection, if any, then to (b) fees and charges, if any, then to (c) accrued and unpaid
interest, and thereafter, to (d) principal. Notwithstanding the foregoing, so long as Borrower has not received a Lender Conversion
Notice (as defined below) or an Installment Notice (as defined below) from Lender where the applicable Conversion Shares have not
yet been delivered and so long as no Event of Default has occurred since the Effective Date (whether declared by Lender or undeclared),
then Borrower shall have the right, exercisable on not less than five (5) Trading Days prior written notice to Lender to prepay
the Outstanding Balance of this Note, in full, in accordance with this Section 1. Any notice of prepayment hereunder (an “Optional
Prepayment Notice”) shall be delivered to Lender at its registered address and shall state: (y) that Borrower is exercising
its right to prepay this Note, and (z) the date of prepayment, which shall be not less than five (5) Trading Days from the date
of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”), Borrower
shall make payment of the Optional Prepayment Amount (as defined below) to or upon the order of Lender as may be specified by Lender
in writing to Borrower. If Borrower exercises its right to prepay this Note, Borrower shall make payment to Lender of an amount
in cash (the “Optional Prepayment Amount”) equal to 110% multiplied by the then Outstanding Balance of this
Note. In the event Borrower delivers the Optional Prepayment Amount to Lender prior to the Optional Prepayment Date or without
delivering an Optional Prepayment Notice to Lender as set forth herein without Lender’s prior written consent, the Optional
Prepayment Amount shall not be deemed to have been paid to Lender until the Optional Prepayment Date. Moreover, in such event the
Optional Prepayment Liquidated Damages Amount will automatically be added to the Outstanding Balance of this Note on the day Borrower
delivers the Optional Prepayment Amount to Lender. In the event Borrower delivers the Optional Prepayment Amount without an Optional
Prepayment Notice, then the Optional Prepayment Date will be deemed to be the date that is five (5) Trading Days from the date
that the Optional Prepayment Amount was delivered to Lender. In addition, if Borrower delivers an Optional Prepayment Notice and
fails to pay the Optional Prepayment Amount due to Lender within two (2) Trading Days following the Optional Prepayment Date, Borrower
shall forever forfeit its right to prepay this Note.
10.
Security. This Note is unsecured.
11.
Lender Optional Conversion.
11.1.
Lender Conversion Price. Subject to adjustment as set forth in this Note, the conversion price for each Lender Conversion
(as defined below) shall be $0.0137 (the “Lender Conversion Price”). However, in the event the Market Capitalization
falls below $2,000,000.00 at any time, then in such event (i) the Lender Conversion Price for all Lender Conversions occurring
after the date of such occurrence shall equal the lower of the Lender Conversion Price and the Market Price as of any applicable
date of Conversion, and (ii) the true-up provisions of Section 11 below shall apply to all Lender Conversions that occur after
the date the Market Capitalization falls below $2,000,000.00, provided that all references to the “Installment Notice”
in Section 11 shall be replaced with references to a “Lender Conversion Notice” for purposes of this Section 3.1, all
references to “Installment Conversion Shares” in Section 11 shall be replaced with references to “Lender Conversion
Shares” for purposes of this Section 3.1, and all references to the “Installment Conversion Price” in Section
11 shall be replaced with references to the “Lender Conversion Price” for purposes of this Section 3.1.
11.2.
Lender Conversions. Lender has the right at any time after the Purchase Price Date until the Outstanding Balance
has been paid in full, including without limitation (i) until any Optional Prepayment Date (even if Lender has received an Optional
Prepayment Notice) or at any time thereafter with respect to any amount that is not prepaid, and (ii) during or after any Fundamental
Default Measuring Period, at its election, to convert (each instance of conversion is referred to herein as a “Lender
Conversion”) all or any part of the Outstanding Balance into shares (“Lender Conversion Shares”) of
fully paid and non-assessable common stock, $0.0001 par value per share (“Common Stock”), of Borrower as per
the following conversion formula: the number of Lender Conversion Shares equals the amount being converted (the “Conversion
Amount”) divided by the Lender Conversion Price. Conversion notices in the form attached hereto as Exhibit A (each,
a “Lender Conversion Notice”) may be effectively delivered to Borrower by any method of Lender’s choice
(including but not limited to facsimile, email, mail, overnight courier, or personal delivery), and all Lender Conversions shall
be cashless and not require further payment from Lender. Borrower shall deliver the Lender Conversion Shares from any Lender Conversion
to Lender in accordance with Section 9 below.
11.3.
Application to Installments. Notwithstanding anything to the contrary herein, including without limitation Section
8 hereof, Lender may, in its sole discretion, apply all or any portion of any Lender Conversion toward any Installment Conversion
(as defined below), even if such Installment Conversion is pending, as determined in Lender’s sole discretion, by delivering
written notice of such election (which notice may be included as part of the applicable Lender Conversion Notice) to Borrower at
any date on or prior to the applicable Installment Date. In such event, Borrower may not elect to allocate such portion of the
Installment Amount being paid pursuant to this Section 3.3 in the manner prescribed in Section 8.3; rather, Borrower must reduce
the applicable Installment Amount by the Conversion Amount described in this Section 3.3.
12.
Defaults and Remedies.
12.1.
Defaults. The following are events of default under this Note (each, an “Event of Default”): (a)
Borrower shall fail to pay any principal, interest, fees, charges, or any other amount when due and payable hereunder; or (b) Borrower
shall fail to deliver any Lender Conversion Shares in accordance with the terms hereof; or (c) Borrower shall fail to deliver any
Installment Conversion Shares (as defined below) or True-Up Shares (as defined below) in accordance with the terms hereof; or (d)
a receiver, trustee or other similar official shall be appointed over Borrower or a material part of its assets and such appointment
shall remain uncontested for twenty (20) days or shall not be dismissed or discharged
within sixty (60) days; or (e) Borrower
shall become insolvent or generally fails to pay, or admits in writing its inability to pay, its debts as they become due, subject
to applicable grace periods, if any; or (f) Borrower shall make a general assignment for the benefit of creditors; or (g) Borrower
shall file a petition for relief under any bankruptcy, insolvency or similar law (domestic or foreign); or (h) an involuntary proceeding
shall be commenced or filed against Borrower; or (i) Borrower shall default or otherwise fail to observe or perform any covenant,
obligation, condition or agreement of Borrower contained herein or in any other Transaction Document (as defined in the Purchase
Agreement), other than those specifically set forth in this Section 4.1; or (j) any representation, warranty or other statement
made or furnished by or on behalf of Borrower to Lender herein, in any Transaction Document, or otherwise in connection with the
issuance of this Note shall be false, incorrect, incomplete or misleading in any material respect when made or furnished; or (k)
Borrower shall (i) terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules
and regulations thereunder would permit such termination, or (ii) become delinquent in its filing requirements as a fully-reporting
issuer registered with the SEC or shall fail to timely file all required quarterly and annual reports and any other filings that
are necessary to enable Lender to sell Conversion Shares or True-Up Shares pursuant to Rule 144; or (l) the occurrence of a Fundamental
Transaction without Lender’s prior written consent; or (m) Borrower shall fail to maintain the Share Reserve as required
under the Purchase Agreement; or (n) Borrower effectuates a reverse split of its Common Stock without twenty (20) Trading Days
prior written notice to Lender; or (o) any money judgment, writ or similar process shall be entered or filed against Borrower or
any subsidiary of Borrower or any of its property or other assets for more than $1,000,000, and shall remain unvacated, unbonded
or unstayed for a period of twenty (20) calendar days unless otherwise consented to by Lender; or (p) Borrower shall fail to deliver
to Lender original signature pages to all Transaction Documents within five (5) Trading Days of the Purchase Price Date; or (q)
Borrower’s Common Stock shall fail to be DTC Eligible.
12.2.
Remedies. Upon the occurrence of any Event of Default, Borrower shall within one (10) Trading Day deliver written
notice thereof via facsimile, email or reputable overnight courier (with next day delivery specified) (an “Event of Default
Notice”) to Lender. At any time and from time to time after the earlier of Lender’s receipt of an Event of Default
Notice and Lender becoming aware of the occurrence of any Event of Default, Lender may accelerate this Note by written notice to
Borrower, with the Outstanding Balance becoming immediately due and payable in cash at the Mandatory Default Amount. Notwithstanding
the foregoing, at any time following the occurrence of any Event of Default, Lender may, at its option, elect to increase the Outstanding
Balance by applying the Default Effect (subject to the limitation set forth below) via written notice to Borrower without accelerating
the Outstanding Balance, in which event the Outstanding Balance shall be increased as of the date of the occurrence of the applicable
Event of Default pursuant to the Default Effect, but the Outstanding Balance shall not be immediately due and payable unless so
declared by Lender (for the avoidance of doubt, if Lender elects to apply the Default Effect pursuant to this sentence, it shall
reserve the right to declare the Outstanding Balance immediately due and payable at any time and no such election by Lender shall
be deemed to be a waiver of its right to declare the Outstanding Balance immediately due and payable as set forth herein unless
otherwise agreed to by Lender in writing). Notwithstanding the foregoing, upon the occurrence of any Event of Default described
in clauses (d), (e), (f), (g) or (h) of Section 4.1, the Outstanding Balance as of the date of acceleration shall become immediately
and automatically due and payable in cash at the Mandatory Default Amount, without any written notice required by Lender. At any
time following the occurrence of any Event of Default, upon written notice given by Lender to Borrower, interest shall accrue on
the Outstanding Balance beginning on the date the applicable Event of Default occurred at an interest rate equal to the lesser
of 22% per annum or the maximum rate permitted under applicable law (“Default Interest”); provided, however,
that no Default Interest shall accrue during the Fundamental Default Measuring Period. Additionally, following the occurrence of
any Event of Default, Borrower may, at its option, pay any Lender Conversion in cash instead of Lender Conversion Shares by paying
to Lender on or before the applicable Delivery Date (as defined below) a cash amount equal to the number of Lender Conversion Shares
set forth in the applicable Lender Conversion Notice multiplied by the highest intra-day trading price of the Common
Stock that occurs during the period
beginning on the date the applicable Event of Default occurred and ending on the date of the applicable Lender Conversion Notice.
In connection with acceleration described herein, Lender need not provide, and Borrower hereby waives, any presentment, demand,
protest or other notice of any kind, and Lender may immediately and without expiration of any grace period enforce any and all
of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded
and annulled by Lender at any time prior to payment hereunder and Lender shall have all rights as a holder of the Note until such
time, if any, as Lender receives full payment pursuant to this Section 4.2. No such rescission or annulment shall affect any subsequent
Event of Default or impair any right consequent thereon. Nothing herein shall limit Lender’s right to pursue any other remedies
available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with
respect to Borrower’s failure to timely deliver Conversion Shares upon Conversion of the Notes as required pursuant to the
terms hereof.
12.3.
Fundamental Default Remedies. Notwithstanding anything to the contrary herein, in addition to all other remedies
set forth herein, the Fundamental Liquidated Damages Amount shall be added to the Outstanding Balance upon Lender’s delivery
to Borrower of a notice (which notice Lender may deliver to Borrower at any time following the occurrence of a Fundamental Default)
setting forth its election to declare a Fundamental Default and the Fundamental Liquidated Damages Amount that will be added to
the Outstanding Balance.
12.4.
Certain Additional Rights. Notwithstanding anything to the contrary herein, in the event Borrower fails to make any
payment or otherwise to deliver any Conversion Shares as and when required under this Note, then (i) the Lender Conversion Price
for all Lender Conversions occurring after the date of such failure to pay shall equal the lower of the Lender Conversion Price
and the Market Price as of any applicable date of Conversion, and (ii) the true-up provisions of Section 11 below shall apply to
all Lender Conversions that occur after the date of such failure to pay, provided that all references to the “Installment
Notice” in Section 11 shall be replaced with references to a “Lender Conversion Notice” for purposes of this
Section 4.4, all references to “Installment Conversion Shares” in Section 11 shall be replaced with references to “Lender
Conversion Shares” for purposes of this Section 4.4, and all references to the “Installment Conversion Price”
in Section 11 shall be replaced with references to the “Lender Conversion Price” for purposes of this Section 4.4.
12.5.
Cross Default. A breach or default by Borrower of any covenant or other term or condition contained in any Other
Agreements (as defined below) shall, at the option of Lender, be considered an Event of Default under this Note, in which event
Lender shall be entitled (but in no event required) to apply all rights and remedies of Lender under the terms of this Note. “Other
Agreements” means, collectively, (a) all existing and future agreements and instruments between, among or by Borrower
(or an affiliate), on the one hand, and Lender (or an affiliate), on the other hand, and (b) any financing agreement or a material
agreement that affects Borrower’s ongoing business operations. For the avoidance of doubt, all existing and future loan transactions
between Borrower and Lender and their respective affiliates will be cross-defaulted with each other loan transaction and with all
other existing and future debt of Borrower to Lender.
13.
Unconditional Obligation; No Offset. Borrower acknowledges that this Note is an unconditional, valid, binding and
enforceable obligation of Borrower not subject to offset, deduction or counterclaim of any kind. Borrower hereby waives any rights
of offset it now has or may have hereafter against Lender, its successors and assigns, and agrees to make the payments or Conversions
called for herein in accordance with the terms of this Note.
14.
Waiver. No waiver of any provision of this Note shall be effective unless it is in the form of a writing signed by
the party granting the waiver. No waiver of any provision or consent to any prohibited
action shall constitute a waiver of
any other provision or consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a
continuing waiver or consent or commit a party to provide a waiver or consent in the future except to the extent specifically set
forth in writing.
15.
Rights Upon Issuance of Securities.
15.1.
Subsequent Equity Sales. Except with respect to Excluded Securities, if Borrower or any subsidiary thereof, as applicable,
at any time this Note is outstanding, shall sell, issue or grant any Common Stock, option to purchase Common Stock, right to reprice,
preferred shares convertible into Common Stock, or debt, warrants, options or other instruments or securities to Lender or any
third party which are convertible into or exercisable for shares of Common Stock (collectively, the “Equity Securities”),
including without limitation any Deemed Issuance, at an effective price per share less than the then effective Lender Conversion
Price (such issuance is referred to herein as a “Dilutive Issuance”), then, the Lender Conversion Price shall
be automatically reduced and only reduced to equal such lower effective price per share. If the holder of any Equity Securities
so issued shall at any time, whether by operation of purchase price adjustments, 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 Dilutive
Issuance, be entitled to receive shares of Common Stock at an effective price per share that is less than the Lender Conversion
Price, such issuance shall be deemed to have occurred for less than the Lender Conversion Price on the date of such Dilutive Issuance,
and the then effective Lender Conversion Price shall be reduced and only reduced to equal such lower effective price per share.
Such adjustments described above to the Lender Conversion Price shall be permanent (subject to additional adjustments under this
section), and shall be made whenever such Equity Securities are issued. Borrower shall notify Lender, in writing, no later than
the Trading Day following the issuance of any Equity Securities subject to this Section 7.1, indicating therein the applicable
issuance price, or applicable reset price, exchange price, conversion price, or other pricing terms (such notice, the “Dilutive
Issuance Notice”). For purposes of clarification, whether or not Borrower provides a Dilutive Issuance Notice pursuant
to this Section 7.1, upon the occurrence of any Dilutive Issuance, on the date of such Dilutive Issuance the Lender Conversion
Price shall be lowered to equal the applicable effective price per share regardless of whether Borrower or Lender accurately refers
to such lower effective price per share in any Installment Notice or Lender Conversion Notice.
15.2.
Adjustment of Lender Conversion Price upon Subdivision or Combination of Common Stock. Without limiting any provision
hereof, if Borrower at any time on or after the Effective 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 Lender Conversion
Price in effect immediately prior to such subdivision will be proportionately reduced. Without limiting any provision hereof, if
Borrower at any time on or after the Effective 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 Lender Conversion Price in effect immediately prior
to such combination will be proportionately increased. Any adjustment pursuant to this Section 7.2 shall become effective immediately
after the effective date of such subdivision or combination. If any event requiring an adjustment under this Section 7.2 occurs
during the period that a Lender Conversion Price is calculated hereunder, then the calculation of such Lender Conversion Price
shall be adjusted appropriately to reflect such event.
15.3.
Other Events. In the event that Borrower (or any subsidiary) shall take any action to which the provisions hereof
are not strictly applicable, or, if applicable, would not operate to protect Lender from dilution or if any event occurs of the
type contemplated by the provisions of this Section 7 but not expressly provided for by such provisions (including, without
limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then Borrower’s
board of directors shall in good faith determine and implement an appropriate adjustment in the Lender Conversion
Price so as to protect the rights of
Lender, provided that no such adjustment pursuant to this Section 7.3 will increase the Lender Conversion Price as otherwise determined
pursuant to this Section 7, provided further that if Lender does not accept such adjustments as appropriately protecting its
interests hereunder against such dilution, then Borrower’s board of directors and Lender shall agree, in good faith, upon
an independent investment bank of nationally recognized standing to make such appropriate adjustments, whose determination shall
be final and binding and whose fees and expenses shall be borne by Borrower.
16.
Borrower Installments.
16.1.
Installment Conversion Price. Subject to the adjustments set forth herein, the conversion price for each Installment
Conversion (the “Installment Conversion Price”) shall be the lesser of (i) the Lender Conversion Price, and
(ii) the Market Price.
16.2.
Installment Conversions. Beginning on the date that is six (6) months after the Purchase Price Date and on the same
day of each month thereafter until the Maturity Date (each, an “Installment Date”), if paying in cash, Borrower
shall pay to Lender the applicable Installment Amount due on such date subject to the provisions of this Section 8, and if paying
in Installment Conversion Shares (as defined below), Borrower shall deliver such Installment Conversion Shares on or before the
Delivery Date. Payments of each Installment Amount may be made (a) in cash, or (b) by converting such Installment Amount into shares
of Common Stock (“Installment Conversion Shares”, and together with the Lender Conversion Shares, the “Conversion
Shares”) in accordance with this Section 8 (each, an “Installment Conversion”) per the following formula:
the number of Installment Conversion Shares equals the portion of the applicable Installment Amount being converted divided by
the Installment Conversion Price, or (c) by any combination of the foregoing, so long as the cash is delivered to Lender on the
applicable Installment Date and the Installment Conversion Shares are delivered to Lender on or before the applicable Delivery
Date. Notwithstanding the foregoing, Borrower will not be entitled to elect an Installment Conversion with respect to any portion
of any applicable Installment Amount and shall be required to pay the entire amount of such Installment Amount in cash if on the
applicable Installment Date there is an Equity Conditions Failure, and such failure is not waived in writing by Lender. Moreover,
in the event Borrower desires to pay all or any portion of any Installment Amount in cash, it must notify Lender in writing of
such election and the portion of the applicable Installment Amount it elects to pay in cash not more than twenty-five (25) or less
than fifteen (15) Trading Days prior to the applicable Installment Date. If Borrower fails to so notify Lender, it shall not be
permitted to elect to pay any portion of such Installment Amount in cash unless otherwise agreed to by Lender in writing or proposed
by Lender in an Installment Notice delivered by Lender to Borrower. Notwithstanding that failure to repay this Note in full by
the Maturity Date is an Event of Default, the Installment Dates shall continue after the Maturity Date pursuant to this Section 8
until the Outstanding Balance is repaid in full, provided that Lender shall, in Lender’s sole discretion, determine the Installment
Amount for each Installment Date after the Maturity Date.
16.3.
Allocation of Installment Amounts. Subject to Section 8.2 regarding an Equity Conditions Failure, for each Installment
Date, Borrower may elect to allocate the amount of the applicable Installment Amount between cash and via an Installment Conversion,
by email or fax delivery of a notice to Lender substantially in the form attached hereto as Exhibit B (each, an “Installment
Notice”), provided, that to be effective, each applicable Installment Notice must be received by Lender not more than
twenty-five (25) or less than fifteen (15) Trading Days prior to the applicable Installment Date. If Lender has not received an
Installment Notice within such time period, then Lender may prepare the Installment Notice and deliver the same to Borrower by
fax or email. Following its receipt of such Installment Notice, Borrower may either ratify Lender’s proposed allocation in
the applicable Installment Notice or elect to change the allocation by written notice to Lender by email or fax on or before 12:00
p.m. New York time on the applicable Installment Date, so long as the sum of the cash payments and the amount of Installment Conversions
equal the applicable Installment Amount, provided that Lender must approve any increase to
the portion of the Installment Amount
payable in cash. If Borrower fails to notify Lender of its election to change the allocation prior to the deadline set forth in
the previous sentence (and seek approval to increase the amount payable in cash), it shall be deemed to have ratified and accepted
the allocation set forth in the applicable Installment Notice prepared by Lender. If neither Borrower nor Lender prepare and deliver
to the other party an Installment Notice as outlined above, then Borrower shall be deemed to have elected that the entire Installment
Amount be converted via an Installment Conversion. Borrower acknowledges and agrees that regardless of which party prepares the
applicable Installment Notice, the amounts and calculations set forth thereon are subject to correction or adjustment because of
error, mistake, or any adjustment resulting from an Event of Default or other adjustment permitted under the Transaction Documents
(an “Adjustment”). Furthermore, no error or mistake in the preparation of such notices, or failure to apply
any Adjustment that could have been applied prior to the preparation of an Installment Notice may be deemed a waiver of Lender’s
right to enforce the terms of any Note, even if such error, mistake, or failure to include an Adjustment arises from Lender’s
own calculation. Borrower shall deliver the Installment Conversion Shares from any Installment Conversion to Lender in accordance
with Section 9 below on or before each applicable Delivery Date.
17.
Method of Conversion Share Delivery. On or before the close of business on the third (3rd) Trading
Day following the Installment Date or the third (3rd) Trading Day following the date of delivery of a Lender Conversion
Notice, as applicable (the “Delivery Date”), Borrower shall deliver or cause to be delivered to Lender or its
broker (as designated in the Lender Conversion Notice), via reputable overnight courier, a certificate or certificates representing
the aggregate number of Conversion Shares to which Lender shall be entitled, registered in the name of Lender or its designee.
For the avoidance of doubt, Borrower has not met its obligation to deliver Conversion Shares by the Delivery Date unless Lender
or its broker, as applicable, has actually received the certificate representing the applicable Conversion Shares no later than
the close of business on the relevant Delivery Date pursuant to the terms set forth above.
18.
Payment of Collection Costs. If this Note is placed in the hands of an attorney for collection or enforcement prior
to commencing arbitration or legal proceedings, or is collected or enforced through any arbitration or legal proceeding, or Lender
otherwise takes action to collect amounts due under this Note or to enforce the provisions of this Note, then Borrower shall pay
the costs incurred by Lender for such collection, enforcement or action including, without limitation, attorneys’ fees and
disbursements. Borrower also agrees to pay for any costs, fees or charges of its transfer agent that are charged to Lender pursuant
to any Conversion or issuance of shares pursuant to this Note.
19.
Opinion of Counsel. In the event that an opinion of counsel is needed for any matter related to this Note, Lender
has the right to have any such opinion provided by its counsel. Lender also has the right to have any such opinion provided by
Borrower’s counsel.
20.
Governing Law. This Note shall be construed and enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of Florida, without
giving effect to any choice of law or conflict of law provision or rule (whether of the State of Florida or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the State of Florida. The provisions set forth in
the Purchase Agreement to determine the proper venue for any disputes are incorporated herein by this reference.
21.
Resolution of Disputes.
21.1.
Arbitration of Disputes. By its acceptance of this Note, each party agrees to be bound by the Arbitration Provisions
(as defined in the Purchase Agreement) set forth as an exhibit to the Purchase Agreement.
21.2.
Calculation Disputes. Notwithstanding the Arbitration Provisions, in the case of a dispute as to any Calculation
(as defined in the Purchase Agreement), such dispute will be resolved in the manner set forth in the Purchase Agreement.
22.
Cancellation. After repayment or conversion of the entire Outstanding, this Note shall be deemed paid in full, shall
automatically be deemed canceled, and shall not be reissued.
23.
Amendments. The prior written consent of both parties hereto shall be required for any change or amendment to this
Note.
24.
Assignments. Borrower may not assign this Note without the prior written consent of Lender. This Note and any shares
of Common Stock issued upon conversion of this Note may be offered, sold, assigned or transferred by Lender without the consent
of Borrower.
25.
Time of the Essence. Time is expressly made of the essence with respect to each and every provision of this Note
and the documents and instruments entered into in connection herewith.
26.
Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall
be given in accordance with the subsection of the Purchase Agreement titled “Notices.”
27.
Liquidated Damages. Lender and Borrower agree that in the event Borrower fails to comply with any of the terms or
provisions of this Note, Lender’s damages would be uncertain and difficult (if not impossible) to accurately estimate because
of the parties’ inability to predict future interest rates, future share prices, future trading volumes and other relevant
factors. Accordingly, Lender and Borrower agree that any fees, balance adjustments, Default Interest or other charges assessed
under this Note are not penalties but instead are intended by the parties to be, and shall be deemed, liquidated damages (under
Lender’s and Borrower’s expectations that any such liquidated damages will tack back to the Closing Date for purposes
of determining the holding period under Rule 144).
28.
Waiver of Jury Trial. EACH OF COMPANY AND INVESTOR IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND
THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE RELATIONSHIPS OF THE
PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR
ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY
WAIVING SUCH PARTY’S RIGHT TO DEMAND TRIAL BY JURY.
29.
Par Value Adjustment. If at any time Lender delivers a Conversion Notice to Borrower and as of such date the Installment
Conversion Price or Lender Conversion Price, as applicable, is less than the Par Value, then the Conversion Amount or Installment
Amount, as applicable, and the Outstanding Balance will each be deemed to have increased immediately prior to the delivery of the
Conversion Notice in an amount equal to the Par Value Adjustment Amount (the “Par Value Adjustment”). The number
of Conversion Shares deliverable pursuant to any relevant Conversion Notice following a Par Value Adjustment shall be equal to
(a) the Adjusted Conversion Amount, divided by (b) the Par Value. Lender and Borrower also agree that the Par Value Adjustment
shall occur automatically and without further action by Lender. In the event of a Par Value Adjustment, Lender will use a Conversion
Notice in substantially the form attached hereto as Exhibit D.
[Remainder of page intentionally left blank;
signature page follows]
IN WITNESS WHEREOF,
Borrower has caused this Note to be duly executed as of the Effective Date.
BORROWER:
INFRAX SYSTEMS,
INC.
By: /s/ John Verghese
John Verghese, Vice President
ACKNOWLEDGED, ACCEPTED AND AGREED:
LENDER:
FUTUREWORLD CORP.
By: /s/ Sam Talari
Sam Talari, CEO
EXHIBIT A
FutureWorld Corp.
3637 4th Street North, Suite 330
Saint Petersburg, FL 33704.
Infrax Systems Date:
Attn: John Verghese
LENDER CONVERSION NOTICE
The above-captioned Lender hereby gives notice
to Infrax Systems, a Nevada corporation (the “Borrower”), pursuant to that certain Convertible Promissory Note
made by Borrower in favor of Lender on February 27, 2015 (the “Note”), that Lender elects to convert the portion
of the Note balance set forth below into fully paid and non-assessable shares of Common Stock of Borrower as of the date of conversion
specified below. Said conversion shall be based on the Lender Conversion Price set forth below. In the event of a conflict between
this Lender Conversion Notice and the Note, the Note shall govern, or, in the alternative, at the election of Lender in its sole
discretion, Lender may provide a new form of Lender Conversion Notice to conform to the Note. Capitalized terms used in this notice
without definition shall have the meanings given to them in the Note.
A. Date of Conversion: ____________
B. Lender Conversion #: ____________
C. Conversion Amount: ____________
| D. | Lender Conversion Price: _______________ |
| E. | Lender Conversion Shares: _______________ (C divided by D) |
| F. | Remaining Outstanding Balance of Note: ____________* |
* Subject to adjustments for corrections, defaults, interest
and other adjustments permitted by the Transaction Documents (as defined in the Purchase Agreement), the terms of which shall control
in the event of any dispute between the terms of this Lender Conversion Notice and such Transaction Documents.
$_________________ of the Conversion Amount converted hereunder
shall be deducted from the Installment Amount(s) relating to the following Installment Date(s): __________________________________________.
So that DTC processing can begin, please deliver, via reputable
overnight courier, a certificate representing DTC Eligible Lender Conversion Shares to:
Name: _____________________________________
Address: _____________________________________
_____________________________________
To the extent the Lender Conversion Shares are not DTC Eligible,
please deliver, via reputable overnight courier, a certificate representing the non-DTC Eligible Lender Conversion Shares to the
party at the address set forth above.
Sincerely,
Lender:
FutureWorld corp
By:
Sam Talari, CEO
EXHIBIT B
Infrax Systems, Inc.
FutureWorld Corp. Date: _____________
Attn: Sam Talari
3637 4th Street North, Suite 330
Saint Petersburg, FL 33704
INSTALLMENT NOTICE
The above-captioned Borrower hereby gives notice to FutureWorld
Corp, a Delaware company (the “Lender”), pursuant to that certain Convertible Promissory Note made by Borrower
in favor of Lender on February 27, 2015 (the “Note”), of certain Borrower elections and certifications related
to payment of the Installment Amount of $_________________ due on ___________, 201_ (the “Installment Date”).
In the event of a conflict between this Installment Notice and the Note, the Note shall govern, or, in the alternative, at the
election of Lender in its sole discretion, Lender may provide a new form of Installment Notice to conform to the Note. Capitalized
terms used in this notice without definition shall have the meanings given to them in the Note.
INSTALLMENT CONVERSION AND CERTIFICATIONS
AS OF THE INSTALLMENT DATE
| A. | Installment Date: ____________, 201_ |
B. Installment Amount: ____________
| C. | Portion of Installment Amount to be Paid in Cash: ____________ |
| D. | Portion of Installment Amount to be Converted into Common Stock: ____________ (B minus C) |
| E. | Installment Conversion Price: _______________ (lower of (i) Lender Conversion Price in effect and (ii) Market Price as of Installment
Date) |
| F. | Installment Conversion Shares: _______________ (D divided by E) |
| G. | Remaining Outstanding Balance of Note: ____________ * |
* Subject to adjustments for corrections, defaults, interest
and other adjustments permitted by the Transaction Documents (as defined in the Purchase Agreement), the terms of which shall control
in the event of any dispute between the terms of this Installment Notice and such Transaction Documents.
| B. | EQUITY CONDITIONS CERTIFICATION |
| 1. | Market Capitalization:________________ |
(Check One)
| 2. | _________ Borrower herby certifies that no Equity Conditions Failure exists as of the Installment
Date. |
| 3. | _________ Borrower hereby gives notice that an Equity Conditions Failure has occurred and requests
a waiver from Lender with respect thereto. The Equity Conditions Failure is as follows: |
____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Sincerely,
Borrower:
infrax systems,
inc.
By:
Name:
Title:
|
ASSET AND STOCK PURCHASE AGREEMENT
By and Among
Infrax Systems, Inc.,
And
FutureWorld Corp.
Dated: February 27 2015
|
Table
of Contents
Page
| ARTICLE I PURCHASE AND SALE OF ASSETS AND STOCK |
3 |
| 1.1 Sale of Assets |
4 |
| 1.3 Excluded Assets |
6 |
| 1.4 Closing Date. |
6 |
| 1.5 Buyer’s Purchase Price/Additional Consideration Tendered by Seller. |
6 |
| 1.6 Seller’s Deliveries. |
7 |
| 1.7 Buyer Other Deliveries |
8 |
| Article II REPRESENTATIONS AND WARRANTIES |
9 |
| 2.1 Representations of Seller. |
9 |
| 2.2 Representations of Buyer. |
12 |
| Article III CONDITIONS PRECEDENT TO BUYER’S PERFORMANCE |
12 |
| 3.1 Conditions. |
12 |
| 3.2 No Misrepresentation or Breach of Covenants and Warranties. |
12 |
| 3.3 No Changes or Destruction of Property. |
13 |
| 3.4 No Restraint or Litigation. |
13 |
| Article IV TERMINATION, FURTHER ASSURANCES AND INDEMNITY |
13 |
| 4.2 Methods of Termination. |
13 |
| 4.3 Procedure Upon Termination. |
14 |
| 4.4 Further Assurances. |
14 |
| 4.5 Indemnity. |
14 |
| 4.6 Sales Tax. |
15 |
| Article V MISCELLANEOUS |
15 |
| 5.1 Expenses. |
15 |
| 5.2 Headings. |
15 |
| 5.4 Modification and Waiver. |
15 |
| 5.5 Counterparts. |
16 |
| 5.6 Rights of Parties. |
16 |
| 5.7 Notices. |
16 |
| 5.9 Governing Law. |
16 |
| 5.10 Successors and Assigns. |
16 |
| 5.11 Construction. |
17 |
| 5.12 Survival |
17 |
ASSETS
AND STOCK PURCHASE AGREEMENT
THIS ASSETS AND
STOCK PURCHASE AGREEMENT is entered into as of February 27, 2015, (the “Agreement”), by and among FutureWorld
Corporation, a Delaware Corporation (referred to by name, “FWDG” or as “Seller”), and Infrax Systems,
Inc., a Nevada corporation (referred to as “”Corporation,” “IFXY”, or “Buyer”
and jointly referred to as the “Parties”).
R
E C I T A L S:
A. Seller, FutureWorld
Corp. is the one hundred percent (100%) owner of HempTech Corp. which is a Delaware wholly owned subsidiary corporation of FutureWorld
Corp. HempTech is a technology company that provides smart sensors and data analysis technology, RFID tracking systems, communication
networking and surveillance security. HempTech holds certain intellectual property rights, hardware technology designs and materials,
ongoing work product, software, contracts, leases, marketing materials, copyrights, trademarks, branding, business plan, accounts
and other tangible and intangible items of value under it. (The “Business”).
B. Buyer desires
to purchase from Seller and Seller desires to sell to Buyer all controlling and existing shares of HempTech Corp., and with such
Control the purchase by Infrax Systems, Inc. of HempTech Corporation to become a wholly owned subsidiary of Infrax Systems, Inc.
(as defined herein) on the terms and subject to the conditions set forth herein.
C. The Parties
hereby agree that such Purchase of the controlling interest of HempTech shall cause HempTech to become a wholly owned subsidiary
of Infrax, by operation of law. Such purchase shall be made through the share exchange described herein.
D. Closing of
this Agreement and the intent of the Parties, is that there shall be a share exchange of Preferred Series A1 Shares by Infrax as
purchaser to Seller FutureWorld, in exchange for all assets and shares of HempTech, which shall result in change of control and
ownership of HempTech.
NOW, THEREFORE,
in consideration of the mutual covenants and agreements set forth herein, the Buyer and Seller hereby agree as follows:
Article
I
PURCHASE AND SALE OF
SHARES AND ASSETS OF HEMPTECH CORP.
The Purchase of all issued and outstanding
shares, share rights in whatever form held, or contingent, and all such assets as designated in this agreement is being accomplished
for consideration by Infrax to be paid to FutureWorld in the form of Cash and Preferred Series A1 Shares. As such the following
disclaimers apply as this Agreement is not an offer to buy or sell securities under all related laws, but instead is an exchange
of shares between the two Companies.
THE PREFERRED SHARES OF THE BUYER BEING OFFERED TO THE SELLER, AND
THE COMMON SHARES OF THE PURCHASED COMPANY, HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
IN MAKING AN SALES DECISION OF SUCH SHARES
AND ASSETS BOTH THE SELLER MUST RELY ON ITS OWN EXAMINATION OF THE BUYER AND THE TERMS OF THIS AGREEMENT, INCLUDING THE MERITS
AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY.
FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE PREFERRED SHARES BEING OFFERED TO THE SELLER
FROM THE BUYER AND THE COMMON AND CONTROL SHARES BEING PURCHASED BY THE BUYER AND BEING SOLD BY THE SELLER AS CONSIDERATION PURSUANT
TO THE TERMS OF THIS AGREEMENT ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM AS WELL AS ADDITIONAL RESTRICTIONS BETWEEN THE PARTIES. THE SELLER AND BUYER SHOULD BE AWARE THAT THEY MIGHT
BE REQUIRED TO BEAR THE FINANCIAL RISKS OF SUCH EXCHANGE BY THE HOLDING OF THE BUYER’S PREFERRED SHARES AND THE SELLER’S
COMMON SHARES OF THE PURCHASED COMPANY FOR AN INDEFINITE PERIOD OF TIME.
1.1
Sale of Assets. Upon the terms and subject to the conditions set forth herein, on the Closing Date (as defined herein),
Seller shall sell, convey, transfer, assign, and deliver to Buyer, and Buyer shall purchase from Seller, free and clear of all
liens, mortgages, pledges, easements, conditional sale or other title retention agreements, defects in title, covenants or other
restrictions of any kind (“Encumbrances”), the following:
(a)
All mailing lists, e-mail addresses, customer lists, supplier lists, trade names, trademarks, service marks and copyrights
regardless of whether such trademarks, service marks and copyrights are registered or unregistered and including all goodwill associated
with such intellectual property, business procedures, trade secrets, designs, know-how and other proprietary or confidential information
of Seller, in each case only to the extent that such items relates to the Business, including but not limited to the trademark,
“HempTech”, if available (the “Registered Mark”);
(b)
All websites (and content contained therein), domain names, and URL’s relating to the Business, including but not
limited to the domain name of http://www.hemptechcorp.com (the “Domain Names”) to include all content, servers or server
contracts, formatting or other related matters;
(c)
All of Seller’s rights, claims or causes of action against third parties, if any, relating to the Purchased Assets
and arising out of transactions occurring prior to the Closing Date; and
(d)
All subscriber data for subscribers to Seller through the Closing Date and all associated email addresses and opt-in agreements
for subscribers to Seller or its services through the Closing Date;
(e)
All website and email content including third party email service provider accounts, deal rights and deal photos; all merchant
databases including merchant contact information, merchant leads and information in the database of the Seller; sales related materials
including Google analytics information, Facebook, Twitter and any other social media accounts owned or controlled for or for the
benefit of the business; and
(f)
All branded marketing materials, business plans, brochures, executive summaries, including signs, banners, prize wheels,
and other printed marketing materials or funding materials of any kind.
(g)
All “Intellectual Property”. Intellectual Property” means all present and future trade secrets, know-how
and other proprietary information; trademarks, trademark applications, internet domain names, service marks, trade dress, trade
names, business names, designs, logos, slogans (and all translations, adaptations, derivations and combinations of the foregoing)
indicia and other source and/or business identifiers, and all registrations or applications for registrations which have heretofore
been or may hereafter be issued thereon throughout the world; copyrights and copyright applications (including copyrights for computer
programs) and all tangible and intangible property embodying the copyrights; unpatented inventions (whether or not patentable);
patents and patent applications; industrial design applications and registered industrial designs; license agreements related to
any of the foregoing and income therefrom; books, records, writings, computer tapes or disks, flow diagrams, specification sheets,
computer software, source codes, object codes, executable code, data, databases and other physical manifestations, embodiments
or incorporations of any of the foregoing; all other intellectual property; and all common law and other rights throughout the
world in and to all of the foregoing.
(h)
All corporate books and records in whatever form, to include the original corporate books and records as necessary for standing
with any governmental entity, including but not limited to corporate book, corporate seal, banking records, checkbooks, savings
books, bonds, collateral assignments, mortgages, deeds, certificates of title to all vehicles, property and chattel, accounting
records, accounting work product, accounting information as held in any form including digital or data, or any other necessary
matter for operation of the Seller’s business when acquired.
(i)
All other property to include all Goods, Inventory, Equipment, Fixtures, Instruments, Documents, Accounts, Contracts and
Contract Rights, Chattel Paper, Deposit Accounts, Money, Letters of Credit and Letter-of-Credit Rights, Accounts Receivable, Commercial
Tort Claims, Securities and all other Investment Property, General Intangibles, Farm Products, all books and records and information
relating to any of the foregoing, all
supporting obligations, and any and all Proceeds and products
of any and all of the foregoing, and as more particularly described on Exhibit A attached hereto.
1.2 Sale of Share Interests. Upon
the terms and subject to the conditions set forth herein, on the Closing Date (as defined herein), Seller shall sell, convey, transfer,
assign, and deliver to Buyer, and Buyer shall purchase from Seller, free and clear of all liens, restrictions (other than those
imposed by securities laws or regulations), pledges, easements, conditional sale or other title retention agreements, defects in
title, covenants or other restrictions of any kind (“Encumbrances”), the following:
(a) All issued and outstanding
shares of HempTech consisting of one hundred
percent (100%) of all such shares, of all classes
and designations, whether issued or held in or under any conditions, by any party. All such issued, outstanding or conditional
share rights shall be listed as exhibit A to this Agreement. If such shares have not been issued, then all rights to all treasury
and unissued shares shall be held within HempTech as a Corporation, owned by Infrax.
(b) All warrants, options, grants
of shares or share rights of whatever form
held or conditional right to such to be held by
any person or entity, shall be surrendered as a matter of obligation by this Agreement as being purchased by Buyer. All such warrants,
options, grant rights, and share rights shall be listed on exhibit A to this Agreement and written waivers by such holders of such
rights shall be attached and provided before closing, if any exist.
(c) The Seller will provide to
the Buyer, ten days before such closing date, a
complete share register HempTech Corp. Such share
register may take the form of a single amount of such shares shall provide all information of such shares issued and outstanding,
the type of shares or share rights, all rights to warrants, options or share rights held, the number of shares, the holder by full
name or entity, how held (Jointly, Tenants in Common, JTWROS, etc.), the address of such holder and any other pertinent information
to identify such shares or holders of rights or shares being either delivered or cancelled. Such share register shall be provided
as part of Exhibit B to this Agreement.
1.3 Excluded Assets.
There are no contemplated excluded assets involved in this transaction.
1.4 Effective
and Closing Date. Subject to the fulfillment or waiver of the conditions set forth in Article IV, the closing (the “Closing”)
shall be consummated on such date as defined herein, occurs, but in no event shall the closing occur later than March 02, 2015.
The time and date on which the closing is actually held is sometimes referred to herein as the “Closing Date.”
For purposes of this Agreement and its closing, the term “Effective Date” as used herein shall refer to the
date of execution of the agreement by the Parties. Such effective date shall be the Closing Date that the Parties execute the matters
of purchase, change in control, management, change of ownership, and all other matters both contained in this Agreement, and in
the related Management Agreement. Such final transaction will be completely closed by or on the Closing Date, unless extended for
such purposes by the Parties.
1.5 Sellers’s
Purchase Price Tendered by Buyer.
The initial and binding purchase price
for the Purchased Shares and Assets (the “Purchase Price”) shall be initially set at sixty million dollars ($60,000,000).
The purchase price shall be paid in combination of ten million dollars ($10M) in cash, payable in a convertible note as exhibit
A (Convertible Promissory Note & Securities Purchase Agreement), ten million dollars ($10M) in Common Stock, par value $0.001,
and forty million dollars ($40M) in Preferred Shares Series A1 of Infrax Systems, Inc. Such shares shall be considered and termed
the “Purchase Shares.” Such shares shall be reserved for issuance to such entity or holding Party as designated by
the Seller or unto itself as a corporate holding.
| (a) | Purchase Share Amount. Such amount of Purchase Shares to be issued |
from Infrax will be in the form of Common Stock
and Preferred Series A1 shares, which shall have an equivalent value based upon a third party appraisal for the assets being purchased
by the buyer. Such share amounts in Common and Preferred Shares shall be and is agreed to be;
| 1- | 746,268,657 shares in Common Stock, par value $0.001. |
| 2- | 33,000,000 shares in Preferred Series A1, par value $0.001. |
| (b) | Terminable Event as to Shares and Purchase. The Purchase Shares shall be |
subject to cancellation if there is a an interceding
event which is either agreed to or occurs to such transaction. All purchased shares and events, and any Purchase Shares shall be
subject to and be cancellable by the Seller. See termination clause below.
| (c) | Share Restrictions. All such Purchase Shares shall carry with them all |
rights, restrictions and other material terms
as designated by the Buyer as set forth below:
| · | Each Preferred Shares Series A1 is convertible to 88.89 shares of Common Shares. |
| · | Per share value of each Preferred Shares Series A1, par value $0.001, is $1.20 per share. |
| · | Preferred Shares have registration rights. |
| · | Preferred Shares, by the order of the Company, may have dividend rights. |
Any such further restrictions are not creations
of this Agreement, but by operation of law under the Securities Act.
| (d) | Seller, in addition to tendering the Purchased Assets to Buyer, will assist |
in the routing of funds from all sales, bank accounts,
accounts receivable, or other receivables, if any, after the Closing Date to the Buyer’s direction, to include transfer of
all such rights into the Buyers control as directed.
| (e) | Creditor Payments, Release and Indemnification. All creditors to which |
Seller is indebted in any fashion shall be listed
and made known the Buyer in writing at least five (5) days before Execution Date of this Agreement. Buyer shall not be responsible
for any such creditors or payments, and in no way shall any amounts be assumed by the Buyer unless agreed to by the Buyer. If any
claims or damages occur then Seller shall indemnify Buyer for all costs, fees, damages, attorney’s fees and other matters
involved in settling, defending, or otherwise involved with such claims if Buyer does not accede to such liabilities.
1.6 Seller’s Deliveries.
At the Execution Date, Seller shall deliver to Buyer all the following:
(a) All matters contained and listed
in Items 1.1 and 1.2 above, and as set
forth on all related Exhibits referenced in those
paragraphs, to include, and not limited to, complete ownership interest in all such shares, share rights, assets, property, both
real and personal, and such other matters set forth herein or on exhibit A attached hereto.
(b) An iinstrument of assignment
in proper form as a Bill of Sale, as necessary, if requested by the Buyer shall be supplied by the Seller as necessary for formal
transfer of such Assets and Shares being purchased;
(c) A separate form of assignment
duly executed and in recordable form with: the registrar for the Domain Names to duly reflect change of ownership of the Domain
Names to Buyer as necessary will be provided;
(d) Such other bills of sale,
assignments and other instruments of transfer or conveyance as Buyer may reasonably request or as may be otherwise necessary to
evidence and effect the sale, assignment, transfer, conveyance and delivery of the Purchased Assets to Buyer;
(e) Duly executed copies of
resolutions by the Board of Directors of Seller approving this Agreement and the transactions contemplated herein, together with
a certificate from the Chief Executive Officer of Seller that such resolutions remain in full force and effect and have not been
modified as of the Closing Date.
(f) The corporate books of such
corporation, including any State filings, all articles of incorporation, all bylaws, all amendments to such, all liens, filings
against such, any claims, billings, vendor billings disputed, vendor or employee matters including all tax filings for State and
Federal filings for such operational period, and any other items designated in this Agreement and all prior due diligence materials.
All shares of the Seller shall be delivered and executed to the Buyer in corporate order, along with any and all physical share
certificates which are unissued shares in the Seller Corporation. Such delivery of such shares shall occur after payment of said
purchase amount under 1.2 (a) above or waiver of such.
(g) All current accounts payable,
accounts receivable shall be provided in electronic format through the last closed business month; any threatened or pending lawsuits,
or any other material matter with a value over $1,000 to the Corporation upon purchase of such assets shall be disclosed to Buyer
at the time of purchase.
In addition to the above deliveries,
after Execution Date, Seller shall take all steps and actions as Buyer may reasonably request or as may otherwise be necessary
to deliver actual possession or control of the Purchased Assets to Buyer.
1.7 Buyer Other
Deliveries. At the time of the Execution Date, Buyer shall deliver to Seller all the following:
| (a) | The Purchase Price as described above in Section 1.2 in the form of such |
preferred shares for issuance of the Purchase
Shares shall be designated with the Corporation’s transfer agent for immediate issuance upon the Closing Date. Such shares
shall be considered as a matter of contract and law to have been immediately be issued upon execution and closing of the transaction;
| (b) | Duly executed copy of the resolutions of the Board of Directors of Buyer |
approving this Agreement and the transactions
contemplated herein, together with a certificate of the CEO of Buyer that such resolutions remain in full force and effect and
have not been modified as of the Closing Date;
Article
II
REPRESENTATIONS AND WARRANTIES
2.1
Representations of Seller. Seller and Member hereby jointly and severally represent and warrant to Buyer as follows:
(a)
Seller has full authority and capacity to execute, deliver and perform this
Agreement and all of the
other documents contemplated hereby to be executed by Seller. The execution, delivery and performance of this Agreement by Seller
does not require the consent or authorization of any other person. This Agreement has been duly executed and delivered by Seller
and this Agreement is, and each of the other documents upon execution and delivery will be, legal, valid and binding obligations
of Seller enforceable in accordance with its terms.
(b) Seller’s Assets and
Shares being purchased are in good standing and not subject to any lien, claim or entitlement by any party or by any local, state
and Federal authorities, or any governmental or non-governmental agencies, including any registration for all business activities.
Such standing includes corporate standing and governance.
(c) There are no known or unknown
governmental investigations or enquiries of any kind.
(d) Neither the execution and
delivery of this Agreement nor the consummation of any of the transactions contemplated hereby nor compliance with or fulfillment
of the terms, conditions and provisions hereof will conflict with, result in a breach of the terms, conditions or provisions of,
or constitute a default, or result in the creation or imposition of any Encumbrance upon any of the Purchased Assets under (i)
any agreement, instrument, right, restriction, license or obligation to which Seller is a party or any of the Purchased Shares
or Assets is subject or by which Seller is bound, (ii) any judgment, order or decree of any state, federal or local court or tribunal
to which Seller is a party or any of the Purchased Assets is subject or by which Seller is bound, or (iii) any federal or state
law affecting Seller or the Purchased Assets.
(e) Seller has good and marketable
title to all of the Purchased Shares and Assets, free and clear of all Encumbrances. Upon delivery to Seller on the Execution Date
of the
Purchase Price, Seller will hereby transfer to Buyer good
and marketable title to the Purchased Assets, subject to no Encumbrances.
(f) As of the Execution Date,
the Purchased Assets are in free title, useable form, good operating condition, usable in the ordinary course of business and in
a normal state of repair.
(g) Seller does not have any
unpaid and past due debts, claims or liabilities relating to the Shares or Purchased Assets, except for payments due merchants
for past deals that have been conducted in the ordinary course of business which would affect the purchase of such assets and shares.
(h) Seller has, in respect of
the Business which may be of effect on such assets being sold, filed all tax returns which are required to be filed and has paid
all taxes (including sales taxes) which have become due. None of the assets or shares being sold are subject to any matters related
to requirements of withholding, social security and other payroll taxes have been collected or withheld, and either paid to the
proper governmental entity or set aside in accounts for such purpose. Seller shall take all steps necessary to file any further
tax returns it is now or hereafter obligated to file before such closing which may have an effect on such sale before such time
of closing. The Seller shall be responsible for all such tax liabilities, including liens against such shares issued for consideration
under this Agreement for a period of one year from the date of closing.
(i) There are no lawsuits, claims,
proceedings or investigations pending or, to the best knowledge of Seller, threatened against or affecting Seller in respect of
the Purchased Assets or Shares nor, to the best knowledge of Seller, is there any basis for any of the same, and there is no lawsuit,
claim or proceeding pending in which Seller is the plaintiff or claimant which relates to the Purchased Assets or Shares. Seller
shall disclose within five (5) days prior to closing, all threatened, pending, appealed, claims, litigation, threats, demands of
any kind over $1,000.00 in value, by identification of such parties, agreements involved, debts, full circumstances of such claims,
defenses, counter-claims, third party liabilities for such claims or litigation, or any other material matter which would be an
impediment to operations or finances of the purchased assets or shares after such acquisition of such shares and assets occurs
resulting in such merger.
(j) The Seller make the following
additional representations and warranties and acknowledgements to the Buyer: (i) the Seller is receiving the Securities in the
form of the Preferred Series A1 Shares being used for such purpose not with a view towards the public sale or distribution thereof,
except pursuant to sales that are exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities
Act”) and/or sales registered under the Securities Act; (ii) the Seller understands that it must bear the economic risk of
this transaction, and by receipt of such shares indefinitely, unless the Securities are converted and registered pursuant to the
Securities Act and any applicable state securities or Blue Sky Laws or an exemption from such registration is available; (iii)
the Seller understands that the Securities in the form of the Preferred Series A1 Shares have not been registered under the Securities
Act and the Buyer is relying upon an exemption from registration under the provisions of the Securities Act that depends, in part,
upon their investment intention and the Seller
understands that it is the position of the Securities and
Exchange Commission (“SEC”) that the statutory basis for such exemption would not be present if the representation
merely meant that its present intention was to hold the Securities for a short period, such as the capital gains period of tax
statutes, for a deferred sale, for a market rise, assuming that a market develops, or for any other fixed period and that, in the
view of the SEC, such seller who receives the Securities in the form of the Preferred Series A1 Shares with a present intent to
resell the interest would not be purchasing for investment as required by SEC rules; (iv) the Seller understands that the Securities
in the form of the Preferred Series A1 Shares are being offered and provided as consideration pursuant to the terms of this Agreement
in reliance upon specific exemptions from the registration requirements of the United States securities laws, and the Buyer is
relying upon the truth and accuracy of, and the Seller’s compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Seller set forth herein without limitation in order to determine the availability of such exemptions
and the eligibility of the Seller to accept the Securities in the form of the Preferred Series A1 as consideration pursuant to
the terms of this Agreement; (v) the Seller recognizes the highly speculative nature of an of the Securities in the form of the
Preferred Series A1 Shares, and represents that it is familiar with the Buyer’s business operations and financial affairs
and has been provided with all information pertaining to the Buyer it has requested; (vi) the Seller understands that it may be
unable to liquidate the Securities represented by the Preferred Series A1 Shares and that its ability to transfer such Securities
is limited; (vii) the Seller understands that the offer and sale of the Preferred Series A1 Securities has not been and is not
being registered under the Securities Act or any state securities laws, and such Securities may not be transferred in their present
form for sale unless certain transactions with such Preferred Shares occurs, of which the following may be applicable: (1) the
transfer is made pursuant to and as set forth in an effective registration statement under the Securities Act covering the Securities
or (2) the Seller shall have delivered to the Buyer at the Seller’s expense an opinion of counsel (which opinion shall be
in form, substance, scope and law firm acceptable to the Buyer) to the effect that Securities to be sold or transferred may be
sold or transferred pursuant to an exemption from such registration; or (3) sold under and in compliance with Rule 144 promulgated
under the Securities Act (or a successor rule) (“Rule 144”); or (4) sold or transferred in accordance with applicable
securities laws to an affiliate of the Seller who agrees to sell or otherwise transfer the Securities only in accordance with the
provisions of Rule 144 and who is an Accredited Investor; (viii) the Buyer is under no obligation to register the Securities under
the Securities Act or any state securities laws; (ix) the Preferred Shares Series A1 Securities may not be pledged as collateral
in connection with a bona fide margin account or other lending arrangement, unless such pledge is consistent with applicable laws,
rules and regulations and at the Seller’s option, the pledgor provides Seller with a legal opinion (which opinion shall be
in form, substance, scope and law firm acceptable to the Buyer) that the pledge or other lending agreement is in compliance with
applicable state and federal securities laws; (x) the Seller understands that the certificate or other document representing the
Preferred Series A1 Share Securities shall bear a restrictive legend, until such time as the securities are converted or changed
by action of the issuing entity or at the discretion under rights of the Seller as hold, and that there many need to be an effective
registration statement or otherwise may be sold by the Seller and/or any person or entities that the Seller transfers the Securities
to under Rule 144(k), in substantially the following form:
“The Preferred Shares represented by
this certificate have not been registered under the Securities Act of 1933, as amended, or the securities laws of any state of
the United States or in any other
jurisdiction. The Preferred Shares represented
hereby may not be offered, sold or transferred in the absence of an effective registration statement or other applicable securities
laws unless offered, sold or transferred pursuant to an available exemption from the registration requirements of those laws, specifically
and including that the transfer of the Preferred Shares is prohibited, other than in compliance with registration under the Securities
Act of 1933 or pursuant to an available exemption from registration”
(k) None of the representations
or warranties of Seller contained herein, and none of the information referred to in Article III, and none of the other
information or documents furnished or to be furnished to Buyer by Seller pursuant to the terms of this Agreement, is false or misleading
in any material respect or omits to state a fact necessary to make the statements herein or therein not misleading in any material
respect. To the best of Seller’s knowledge, there is no fact that adversely affects or in the future is likely to adversely
affect the Purchased Assets in any material respect, which has not been set forth or referred to in this Agreement.
2.2
Representations of Buyer. Buyer hereby represents and warrants to Seller as follows:
(a)
Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada, and
registered to do business in the State of Florida. Buyer has full corporate power and authority to execute, deliver and perform
this Agreement. The execution, delivery and performance of this Agreement by Buyer has been duly authorized and approved by Buyer
and does not require any further authorization or consent of Buyer. This Agreement has been duly authorized, executed and delivered
by Buyer and is the legal, valid and binding obligation of Buyer enforceable in accordance with its terms.
(b)
Neither the execution and delivery of this Agreement nor the consummation of any of the transactions contemplated hereby
nor compliance with or fulfillment of the terms, conditions and provisions hereof will conflict with, result in a breach of the
terms, conditions or provisions of, or constitute a default, or result in the creation or imposition of any Encumbrance upon any
of its assets under (i) the charter or operating agreement of Buyer, (ii) any agreement, instrument, right, restriction, license
or obligation to which Buyer is a party or any of its assets is subject or by which Buyer is bound, (iii) any judgment, order or
decree of any state, federal or local court or tribunal to which Buyer is a party or any of its assets is subject or by which Buyer
is bound, or (iv) any federal or state law affecting Buyer or its assets.
Article
III
CONDITIONS PRECEDENT TO BUYER’S PERFORMANCE
3.1
Conditions. The obligations of Buyer to purchase the Purchased Assets and Shares under this Agreement are subject
to the satisfaction, at or before the Closing Date, of all the conditions set out herein and below in this Article IV, unless
waived by Buyer in writing on or prior to either the Execution Date or the Closing Date as applicable to such documentation in
the Buyers.
3.2
No Misrepresentation or Breach of Covenants and Warranties. There shall have been no breach by Seller in the performance
of any of its covenants and agreements herein. Each of the representations and warranties of Seller contained in this Agreement
shall be true and correct on both the Execution Date and the Closing Date as through made on the each date as applicable.
3.3
No Changes or Destruction of Property. Between the Execution Date and the Closing Date, there shall have been (a)
no material adverse change in the Purchased Assets, and (b) no material damage to the Purchased Assets by fire, flood, casualty,
act of God or the public enemy or other cause, regardless of insurance coverage for such damage.
3.4
No Restraint or Litigation. No action, suit, investigation or proceeding shall have been instituted or threatened
to restrain or prohibit or otherwise challenge the legality or validity of the transactions contemplated hereby.
Article
IV
TERMINATION, FURTHER ASSURANCES AND INDEMNITY
4.1
Termination. This Agreement shall terminate, unless waived in writing by the Buyer, upon the following events:
(a)
Court Order or order of a governmental entity for the Seller business to cease operations.
(b)
By entry or filing of a bankruptcy action, receivership, or claim in any form from another party in the Bankruptcy Courts
of the United States, or in any similar state bankruptcy action, whether first or third party.
(c)
By material misrepresentation or omission of the standing, condition, and situation of HempTech or any of its assets which
would materially devalue the purchase by the Company.
(d)
Any undisclosed material matter of litigation, accounting, former account status, audited status or attempts, condition
of assets and business or any other matter which would materially devalue the purchase being made by the Buyer, in its sole discretion.
4.2
4.2 Methods
of Termination. This Agreement may be terminated in writing, certified delivery to the other parties, which may include email
delivery which is acknowledged, in the following manners:
(a)
By mutual consent of Buyer and Seller in writing; and
(b)
By written notice of Buyer to Seller if any condition to the obligations due to Buyer as set forth in Article II
is not satisfied or likely to be satisfied on or before Closing by Seller. As such reasonable effort at matters required by the
Buyer for all reasonable due diligence shall be satisfied, or materially attempted in the sole discretion of the Buyer.
(c)
Such period of time shall be extended upon mutual agreement, in writing of the Parties including such period beyond the
closing period as necessary.
(d)
Post-Execution Date, such termination or terminable event to include the
rise any condition of termination of any kind
must be notified to the Buyer in writing by certified delivery within five (5) business days.
4.3
Procedure upon Termination. In the event of termination pursuant to Section 4.1 hereof, this Agreement shall
terminate without further action by either of Buyer and Seller hereto. If this Agreement is terminated as provided herein:
(a)
Each party will return all documents and other material relating to the transactions contemplated hereby, whether so obtained
before or after the execution hereof, to the party furnishing the same; This shall include the cancellation of all such preferred
shares being issued as the Purchase Shares.
(b)
All such assets and matters subject to the Agreement shall be returned to the other party, by right title and interest,
and both Parties returned to their former condition.
(c)
Neither Buyer nor Seller shall be under any liability to the other party hereto by reason of this Agreement, its negotiation
or its said termination, whether for costs, expenses, damages or otherwise; provided, however, nothing herein shall
relieve any party from liability for its intentional misrepresentations or omissions or intentional breach of its obligations hereunder,
in which case, the non-defaulting party shall have the right to recover any and all damages it has sustained. In the event of the
execution of the purchase of some or all of the Purchased Assets, then the remaining obligations of the parties shall survive the
execution of such transactions.
4.4
Further Assurances. Seller shall, from time to time after the Execution Date when so requested by Buyer, perform,
execute, acknowledge or deliver or cause to be performed, executed, acknowledged or delivered, all such further acts, deeds, assignments,
transfers, conveyances and assurances as may be required for assigning, transferring, granting, conveying, selling, assuring and
confirming to Buyer and its successors and assigns, and for aiding and assisting in reducing to possession, the Purchased Assets
transferred to Buyer as herein contemplated.
4.5
Indemnity.
(a)
Seller shall jointly and severally (subject to the limitations set forth herein) indemnify, save and keep harmless Buyer
and its successors and permitted assigns against and from all Losses and Expenses sustained or incurred by Buyer resulting from
or arising out of or by virtue of: (a) any inaccuracy in or breach
of any representation and warranty made by Seller in this Agreement; and (b)
any breach by Seller of, or failure by Seller to comply with, any of its covenants or obligations under this Agreement.
Buyer shall save and keep harmless Seller and their successors and permitted assigns against and from all Losses and Expenses sustained
or incurred by any of them resulting from or arising out of or by virtue of: (a)
any inaccuracy in or breach of any representation and warranty made by Buyer in this Agreement; and (b)
any breach
by Buyer of, or failure by Buyer to comply with, any of its
covenants or obligations under this Agreement. Any indemnification obligation provided for in this Section 4.5 shall terminate
one (1) year after the Closing Date. Such indemnification shall include immediate representation through provision of reasonable
attorney’s fees and costs to be incurred in defense of such claims as necessary, even without the filing or existence of
actual litigation. The Company may, if such fees are not paid within ten (10) days of such demand, lien such shares which exist
for such persons of the Company’s stock which was issued for such consideration which would reasonably cover such fees based
upon a market rate for such stock at the time of the calculation.
(b)
“Losses” as used herein means any and all losses, costs, obligations, liabilities, settlement payments,
awards, judgments, fines, penalties, damages, expenses, deficiencies or other charges. “Expenses” as used herein
shall include all expenses incurred by Buyer for court costs, legal fees, filing fees and other professional fees. Seller shall
conduct and control, through counsel of its choosing, the defense, compromise or settlement of any third person claim, action or
suit against Buyer for which Buyer is entitled to indemnification hereunder, provided that Seller shall not pay, compromise or
settle any such claim, action or suit without the written consent of Buyer (which consent shall not be unreasonably withheld).
However, Buyer shall be entitled to participation of its own counsel designated for overseeing and participation of such defense,
compromise or settlement, with such legal fees and costs to be incurred for such Buyer’s counsel’s participation which
is to be paid by the Seller.
4.6
Sales Tax. Any sales, use, or transfer tax directly attributable to the sale or transfer of the Purchased Assets
shall be paid by Seller.
Article
V
MISCELLANEOUS
5.1
Expenses. Each of the parties shall pay all of their respective costs and expenses incurred or to be incurred by it in negotiating
and preparing this Agreement and related documents and in Execution and Closing and carrying out the transactions contemplated
by this Agreement.
5.2
Headings. The subject headings of the sections and subsections of this Agreement are included for purposes of convenience
only, and shall not affect the construction or interpretation of any of its provisions.
5.3 Press Releases and Publication.
Any publication or press releases of this transaction or any earlier agreement of such transaction shall be under joint approval
of the Parties, with submission and final execution under the control of Infrax Systems.
5.4 Modification
and Waiver. This Agreement, and the Exhibits attached hereto, constitute the entire agreement between the parties pertaining to
the subject matter contained in it and supersedes all prior and contemporaneous agreements, representations, and understandings
of the parties. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by all
the parties. No waiver of any of the provisions of this Agreement shall be deemed, or shall constitute, a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing
by the party making the waiver. Such
writings must be delivered via certified delivery, which may include email delivery, if such email is acknowledged by the other
Party.
5.5 Counterparts.
This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument and such counterparts may be exchanged by facsimile or electronic delivery,
with the original to be exchanged by overnight mail or other delivery. Non-receipt of the original is not grounds for cancellation
or termination.
5.6 Rights of Parties.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and permitted assigns.
Nothing in this Agreement, whether express or implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any person other than the parties to it and their respective successors and assigns, nor is anything in this Agreement
intended to relieve or discharge the obligation or liability of any third person to any party to this Agreement, nor shall any
provision give any third person any right of subrogation or action over against any party to this Agreement.
5.7 Notices. All
notices or other communications required or permitted hereunder shall be in writing and shall be deemed given, delivered and received
(a) when delivered, if delivered personally by a commercial messenger delivery service with verification of delivery, (b) one business
day after delivery to a private courier service, when delivered to a private courier service providing documented overnight service,
(c) on the date of delivery if delivered by email and electronically confirmed before 5:00 p.m. (local time) on any business day,
or (e) on the next business day if delivered by email and electronically confirmed either after 5:00 p.m. (local time) or on a
non-business day, in each case addressed as follows:
| To Seller at: |
|
FutureWorld, Corp.
Attn: Sam Talari
3637 4th Street North
Saint Petersburg, FL 33704 |
| |
|
|
| |
|
|
| To Buyer at: |
|
Infrax Systems, Inc.
Attn: John Verghese
Saint Petersburg, FL
|
| |
|
|
Any party may change its address for
purposes of this paragraph by giving the other party written notice of the new address in the manner set forth above.
5.9 Governing Law.
This Agreement shall be construed in accordance with, and governed by, the laws of the State of Florida. Any dispute with respect
to the subject matter of this Agreement shall be litigated in the Sixth Circuit Court in and for Pinellas County,
Florida. The prevailing party in any
such action shall be entitled to reimbursement of its reasonable legal fees and costs associated with such action.
5.10 Successors
and Assigns. The rights of Seller and Buyer under this Agreement shall not be assignable without the written consent of the other
Party. This shall include no right to assignment of such shares to any other party without the consent of the Buyer during the
first year of after closing.
5.11 Construction.
This Agreement shall be construed without regard to the identity of the persons who drafted its various provisions; each and every
provision of this Agreement shall be construed as though all of the parties participated equally in the drafting of the same, and
any rule of construction that a document is to be construed against the drafting party shall not be applicable to this Agreement.
5.12 Survival.
All representations, warranties, covenants and obligations, contained in this Agreement shall survive the consummation of the transactions
contemplated by this Agreement and shall terminate on the first anniversary of the Closing Date, unless otherwise specified.
IN WITNESS WHEREOF, the parties to this
Agreement have duly executed it on the day and year first above written.
SELLER: FutureWorld Corp.
By: /s/ Sam Talari
Sam Talari, CEO
Date: 02/27/2015
BUYER: Infrax Systems, Inc.
By: /s/ John Verghese
John Verghese, Vice President
Date: 02/27/2015
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