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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): February 12, 2024
Creatd, Inc.
(Exact
name of registrant as specified in its charter)
Nevada |
|
001-39500 |
|
87-0645394 |
(State
or other jurisdiction of
incorporation or organization) |
|
(Commission
File Number) |
|
(IRS
Employer
Identification No.) |
419 Lafayette Street, 6th Floor
New York, NY 10003
(Address
of principal executive offices)
(201)
258-3770
(Registrant’s
telephone number, including area code)
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
| ☐ | Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
N/A |
|
N/A |
|
N/A |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01. Entry into a Material Definitive Agreement.
Beginning on February 12, 2024, Creatd, Inc., a Nevada
corporation (the “Company”) entered into an exchange agreement (the “Exchange Agreement”) with holders of certain
of the Company’s previously issued securities (the “Investors”), pursuant to which the Investors agreed to exchange
such previously issued securities for shares of the Company’s newly created class of Series F Preferred Stock (the Series F Preferred)
on the following terms: (i) each two hundred (200) shares of the Company’s common stock (“Common Stock”) will be exchanged
for one (1) share of Series F Preferred; (ii) amounts owed under the convertible notes issued by the Company will be exchanged for shares
of Series F Preferred on a dollar-for-dollar basis; and (iii) each four hundred (400) warrants will be exchanged for one (1) share of
Series F Preferred (the “Exchange”). The Exchange Agreement contains customary representations, warranties, terms and conditions.
In total, $3.9 million of amounts owed under convertible notes and
1.5 million warrants are being exchanged for 7,713 shares of Series F Preferred.
Pursuant to the Certificate of Designation of
Preferences, Rights and Limitations of the Series F Preferred (the “Certificate of Designation”), the shares of Series F Preferred
have a stated value of $1,000 per share (the “Stated Value”) and are convertible into Common Stock at the election of the
holder, at any time following issuance at a price of $5.00 per share, subject to adjustment (the “Conversion Price”). Each
holder of Series F Preferred Stock shall be entitled to receive, with respect to each share of Series F Preferred Stock then outstanding
and held by such holder, dividends on an as-converted basis in the same form as dividends actually paid on shares of the Common Stock
when, as and if such dividends are paid on shares of the Common Stock. Holders of the Series F Preferred shall be entitled to vote on
an as-converted basis (subject to the ownership limitations), together with the holders of Common Stock. The holders of Series F Preferred
Stock shall be paid pari passu with the holders of Common Stock with respect to payment of dividends and rights upon liquidation. In addition,
as further described in the Series F Designation, as long as any of the shares of Series F Preferred Stock are outstanding, the Company
shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of Series F Preferred Stock, (a) alter
or change adversely the powers, preferences or rights given to the Series F Preferred Stock or alter or amend this Series F Designation,
(b) amend its certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders of
the Series F Preferred Stock, (c) increase the number of authorized shares of Series F Preferred Stock, or (d) enter into any agreement
with respect to any of the foregoing.
Each share of Series F Preferred Stock shall be
convertible, at any time and from time to time at the option of the holder of such shares, into that number of shares of Common Stock
determined by dividing the Stated Value by the Conversion Price.
The foregoing descriptions of the Exchange Agreement
and the Series F Designation do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the
Exchange Agreement and the Series F Designation, copies of which are attached, respectively, as Exhibit 10.1 and Exhibit 3.1 to this Current
Report on Form 8-K and incorporated herein by reference.
Item
3.03 Material Modification to Rights of Security Holders.
The information set forth in Item 1.01 of this
Current Report on Form 8-K is incorporated by reference into this Item 5.03.
Item
5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
The information set forth in Item 1.01 of this
Current Report on Form 8-K is incorporated by reference into this Item 5.03.
On February 15, 2024, the Company submitted for
filing with the Secretary of State of the State of Nevada the Certificate of Designation (the “Series F Designation”).
Forward-Looking
Statements
This
Current Report on Form 8-K includes information that may constitute forward-looking statements. These forward-looking statements are
based on the Company’s current beliefs, assumptions and expectations regarding future events, which in turn are based on information
currently available to the Company. By their nature, forward-looking statements address matters that are subject to risks and uncertainties.
Forward looking statements include, without limitation, statements relating to projected industry growth rates, the Company’s current
growth rates and the Company’s present and future cash flow position. A variety of factors could cause actual events and results,
as well as the Company’s expectations, to differ materially from those expressed in or contemplated by the forward-looking statements.
Risk factors affecting the Company are discussed in detail in the Company’s filings with the Securities and Exchange Commission.
The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information,
future events or otherwise, except to the extent required by applicable securities laws.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
|
CREATD, INC. |
|
|
Date: February 16, 2024 |
By: |
/s/ Jeremy
Frommer |
|
Name: |
Jeremy Frommer |
|
Title: |
Chief Executive Officer, Chief Financial Officer |
3
Exhibit 3.1
![](https://www.sec.gov/Archives/edgar/data/1357671/000121390024014748/ex3-1_001.jpg)
CREATD,
INC.
CERTIFICATE OF DESIGNATION OF PREFERENCES,
RIGHTS AND LIMITATIONS
OF
SERIES F CONVERTIBLE PREFERRED STOCK
PURSUANT
TO NRS 78.1955
The undersigned, Jeremy Frommer,
does hereby certify that:
| 1. | He is the Chief Executive Officer and Chief Financial Officer of Creatd, Inc., a Nevada corporation (the
“Corporation”). |
| 2. | The Corporation is authorized to issue 20,000,000 shares of preferred stock, 450 of which have been issued. |
| 3. | The following resolutions were duly adopted by the board of directors of the Corporation (the “Board
of Directors”): |
WHEREAS, the certificate of
incorporation of the Corporation provides for a class of its authorized stock known as preferred stock, consisting of 20,000,000 shares,
$0.001 par value per share, issuable from time to time in one or more series;
WHEREAS, the Board of Directors
is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms of redemption and liquidation
preferences of any wholly unissued series of preferred stock and the number of shares constituting any series and the designation thereof,
of any of them; and
WHEREAS, it is the desire of
the Board of Directors, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and other matters relating
to a series of the preferred stock, which shall consist of, except as otherwise set forth in the Exchange Agreement, up to 5,500,000 shares
of the preferred stock which the Corporation has the authority to issue, as follows:
NOW, THEREFORE, BE IT RESOLVED,
that the Board of Directors does hereby provide for the issuance of a series of preferred stock for cash or exchange of other securities,
rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters relating to such series of
preferred stock as follows:
TERMS OF PREFERRED STOCK
Section 1. Definitions.
For the purposes hereof, the following terms shall have the following meanings:
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 of the Securities Act.
“Alternate
Consideration” shall have the meaning set forth in Section 7(e).
“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 6(d).
“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day
on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.
“Buy-In”
shall have the meaning set forth in Section 6(c)(iv).
“Closing”
means the closing of the exchange of the Securities pursuant to the Exchange Agreement.
“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties
thereto and all conditions precedent to (i) each Holder’s obligations to provide the Exchange Deliverables and (ii) the Corporation’s
obligations to deliver the Preferred Stock have been satisfied or waived.
“Commission”
means the United States Securities and Exchange Commission.
“Common Stock”
means the Corporation’s common stock, par value $0.001 per share, and stock of any other class of securities into which such securities
may hereafter be reclassified or changed.
“Common Stock
Equivalents” means any securities of the Corporation or the Subsidiaries which would entitle the holder thereof to acquire at
any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Conversion
Amount” means the sum of the Stated Value at issue.
“Conversion
Date” shall have the meaning set forth in Section 6(a).
“Conversion
Price” shall have the meaning set forth in Section 6(b). “Conversion Shares” means, collectively, the shares
of Common Stock issuable upon conversion of the shares of Preferred Stock in accordance with the terms hereof.
“Convertible
Notes” means the convertible notes issued by the Corporation returned to the Corporation for cancellation pursuant to the Exchange
Agreement.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exchange
Agreement” means the Securities Exchange Agreement, dated as of February 12, 2024, among the Corporation and the original Holders,
as amended, modified or supplemented from time to time in accordance with its terms.
“Fundamental
Transaction” shall have the meaning set forth in Section 7(e).
“GAAP”
means United States generally accepted accounting principles.
“Holder”
shall have the meaning given such term in Section 2.
“Liquidation”
shall have the meaning set forth in Section 5.
“New York
Courts” shall have the meaning set forth in Section 11(d).
“Notice of
Conversion” shall have the meaning set forth in Section 6(a).
“Original
Issue Date” means the date of the first issuance of any shares of the Preferred Stock regardless of the number of transfers
of any particular shares of Preferred Stock and regardless of the number of certificates which may be issued to evidence such Preferred
Stock.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Preferred
Stock” shall have the meaning set forth in Section 2.
“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
“Rule 424”
means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Securities”
means the Convertible Notes, the Preferred Stock, the Warrants, the Warrant Shares and the Underlying Shares.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Share Delivery
Date” shall have the meaning set forth in Section 6(c).
“Stated Value”
shall have the meaning set forth in Section 2, as the same may be increased pursuant to Section 3.
“Exchange
Deliverables” shall mean, as to each Holder, all Securities to be delivered to the Corporation for cancellation pursuant to
the Exchange Agreement, in exchange for the Preferred Stock issued pursuant to the Exchange Agreement as specified below such Holder’s
name on the signature page of the Exchange Agreement and next to the heading “Exchange Deliverables.”
“Subsidiary”
means any subsidiary of the Corporation and shall, where applicable, also include any direct or indirect subsidiary of the Corporation
formed or acquired after the date of the Exchange Agreement.
“Successor
Entity” shall have the meaning set forth in Section 7(e).
“Trading
Day” means a day on which the principal Trading Market is open for business.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange, the OTCQB or the OTCQX (or any successors to any of the foregoing).
“Transaction
Documents” means this Certificate of Designation and the Exchange Agreement, all exhibits and schedules thereto and hereto and
any other documents or agreements executed in connection with the transactions contemplated pursuant to the Exchange Agreement.
“Transfer
Agent” means Pacific Stock Transfer Company, a Securitize company and any successor transfer agent of the Corporation.
“Underlying
Shares” means the shares of Common Stock issued and issuable upon conversion of the Preferred Stock and/or the Convertible Notes
and upon exercise of the Warrants.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets”
published by OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent
bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined
by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Preferred Stock then outstanding
and reasonably acceptable to the Corporation, the fees and expenses of which shall be paid by the Corporation.
“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.
“Warrants”
means the warrants to purchase common stock returned to the Corporation for cancellation pursuant to the Exchange Agreement.
Section 2. Designation,
Amount and Par Value. The series of preferred stock shall be designated as its Series F Convertible Preferred Stock (the “Preferred
Stock”) and the number of shares so designated shall be up to 5,500,000 (which shall not be subject to increase without the
written consent of all of the holders of the Preferred Stock (each, a “Holder” and collectively, the “Holders”)).
Each share of Preferred Stock shall have a par value of $0.001 per share and a stated value equal to $1,000, subject to increase set forth
in Section 3 below (the “Stated Value”).
Section 3. Dividends.
Except for stock dividends or distributions for which adjustments are to be made pursuant to Section 7, Holders shall be entitled to receive,
and the Corporation shall pay, dividends on shares of Preferred Stock equal (on an as-if-converted-to-Common-Stock basis) to and in the
same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock.
No other dividends shall be paid on shares of Preferred Stock.
Section 4. Voting
Rights. The Holder shall be entitled to vote on an as-converted basis (subject to the Beneficial Ownership Limitation), together with
the holders of Common Stock, with respect to any question upon which the holders of Common Stock have the right to vote, except as may
be otherwise provided by applicable law. Except as otherwise expressly provided herein or as required by law, the Holders and the holders
of Common Stock shall vote together and not as separate classes. Moreover, as long as any shares of Preferred Stock are outstanding, the
Corporation shall not, without the affirmative vote of the Holders of a majority of the then outstanding shares of the Preferred Stock,
(a) alter or change adversely the powers, preferences or rights given to the Preferred Stock or alter or amend this Certificate of Designation,
(b) amend its certificate of incorporation or other charter documents in any manner that adversely affects any rights of the Holders,
(c) increase the number of authorized shares of Preferred Stock, or (d) enter into any agreement with respect to any of the foregoing.
Section 5. Liquidation.
Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”),
the Holders shall be entitled to receive out of the assets, whether capital or surplus, of the Corporation the same amount that a holder
of Common Stock would receive if the Preferred Stock were fully converted (disregarding for such purposes any conversion limitations hereunder)
to Common Stock which amounts shall be paid pari passu with all holders of Common Stock. The Corporation shall mail written
notice of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each Holder.
Section 6. Conversion.
a) Conversions
at Option of Holder. Each share of Preferred Stock shall be convertible, at any time and from time to time from and after the Original
Issue Date at the option of the Holder thereof, into that number of shares of Common Stock (subject to the limitations set forth in Section
6(d) and Section 6(e)) determined by dividing the Stated Value of such share of Preferred Stock by the Conversion Price. Holders shall
effect conversions by providing the Corporation with the form of conversion notice attached hereto as Annex A (a “Notice
of Conversion”). Each Notice of Conversion shall specify the number of shares of Preferred Stock to be converted, the number
of shares of Preferred Stock owned prior to the conversion at issue, the number of shares of Preferred Stock owned subsequent to the conversion
at issue and the date on which such conversion is to be effected, which date may not be prior to the date the applicable Holder delivers
by facsimile such Notice of Conversion to the Corporation (such date, the “Conversion Date”). If no Conversion Date
is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion to the Corporation is deemed
delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee
or notarization) of any Notice of Conversion form be required. The calculations and entries set forth in the Notice of Conversion shall
control in the absence of manifest or mathematical error. To effect conversions of shares of Preferred Stock, a Holder shall not be required
to surrender the certificate(s) representing the shares of Preferred Stock to the Corporation unless all of the shares of Preferred Stock
represented thereby are so converted, in which case such Holder shall deliver the certificate representing such shares of Preferred Stock
promptly following the Conversion Date at issue. Shares of Preferred Stock converted into Common Stock or redeemed in accordance with
the terms hereof shall be canceled and shall not be reissued.
b) Conversion Price.
The conversion price for the Preferred Stock shall equal $5.00, subject to adjustment herein (the “Conversion Price”).
c) Mechanics of Conversion
i. Delivery of
Conversion Shares Upon Conversion. Not later than the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising
the Standard Settlement Period (as defined below) after each Conversion Date (the “Share Delivery Date”), the Corporation
shall deliver, or cause to be delivered, to the converting Holder (A) Conversion Shares representing the number of Conversion Shares being
acquired upon the conversion of the Preferred Stock, and (B) a bank check in the amount of accrued and unpaid dividends, if any. As used
herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on
the Corporation’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of
Conversion.
ii. Failure to
Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered to or as directed
by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Corporation at any
time on or before its receipt of such Conversion Shares, to rescind such Conversion, in which event the Corporation shall promptly return
to the Holder any original Preferred Stock certificate delivered to the Corporation and the Holder shall promptly return to the Corporation
the Conversion Shares issued to such Holder pursuant to the rescinded Notice of Conversion.
iii. Obligation
Absolute; Partial Liquidated Damages. The Corporation’s obligation to issue and deliver the Conversion Shares upon conversion
of Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by a Holder
to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by such
Holder or any other Person of any obligation to the Corporation or any violation or alleged violation of law by such Holder or any other
person, and irrespective of any other circumstance which might otherwise limit such obligation of the Corporation to such Holder in connection
with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the
Corporation of any such action that the Corporation may have against such Holder. In the event a Holder shall elect to convert any or
all of the Stated Value of its Preferred Stock, the Corporation may not refuse conversion based on any claim that such Holder or any one
associated or affiliated with such Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction
from a court, on notice to Holder, restraining and/or enjoining conversion of all or part of the Preferred Stock of such Holder shall
have been sought and obtained, and the Corporation posts a surety bond for the benefit of such Holder in the amount of 150% of the Stated
Value of Preferred Stock which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation
of the underlying dispute and the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the absence
of such injunction, the Corporation shall issue Conversion Shares and, if applicable, cash, upon a properly noticed conversion. If the
Corporation fails to deliver to a Holder such Conversion Shares pursuant to Section 6(c)(i) by the Share Delivery Date applicable to such
conversion, the Corporation shall pay to such Holder, in cash, as liquidated damages and not as a penalty, for each $5,000 of Stated Value
of Preferred Stock being converted, $50 per Trading Day (increasing to $100 per Trading Day on the third Trading Day and increasing to
$200 per Trading Day on the sixth Trading Day after such damages begin to accrue) for each Trading Day after the Share Delivery Date until
such Conversion Shares are delivered or Holder rescinds such conversion. Nothing herein shall limit a Holder’s right to pursue actual
damages for the Corporation’s failure to deliver Conversion Shares within the period specified herein and such Holder shall have
the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief. The exercise of any such rights shall not prohibit a Holder from seeking to enforce damages pursuant to any
other Section hereof or under applicable law.
iv. Compensation
for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion. In addition to any other rights available to the Holder,
if the Corporation fails for any reason to deliver to a Holder the applicable Conversion Shares by the Share Delivery Date pursuant to
Section 6(c)(i), and if after such Share Delivery Date such Holder is required by its brokerage firm to purchase (in an open market transaction
or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by
such Holder of the Conversion Shares which such Holder was entitled to receive upon the conversion relating to such Share Delivery Date
(a “Buy-In”), then the Corporation shall (A) pay in cash to such Holder (in addition to any other remedies available
to or elected by such Holder) the amount, if any, by which (x) such Holder’s total purchase price (including any brokerage commissions)
for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that such Holder was entitled
to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation
was executed (including any brokerage commissions) and (B) at the option of such Holder, either reissue (if surrendered) the shares of
Preferred Stock equal to the number of shares of Preferred Stock submitted for conversion (in which case, such conversion shall be deemed
rescinded) or deliver to such Holder the number of shares of Common Stock that would have been issued if the Corporation had timely complied
with its delivery requirements under Section 6(c)(i). For example, if a Holder purchases shares of Common Stock having a total purchase
price of $11,000 to cover a Buy-In with respect to an attempted conversion of shares of Preferred Stock with respect to which the actual
sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000
under clause (A) of the immediately preceding sentence, the Corporation shall be required to pay such Holder $1,000. The Holder shall
provide the Corporation written notice indicating the amounts payable to such Holder in respect of the Buy-In and, upon request of the
Corporation, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available
to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect
to the Corporation’s failure to timely deliver Conversion Shares upon conversion of the shares of Preferred Stock as required pursuant
to the terms hereof.
v. Reservation
of Shares Issuable Upon Conversion. The Corporation covenants that it will at all times reserve and keep available out of its authorized
and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Preferred Stock as herein provided, free from
preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Preferred
Stock), not less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the
Exchange Agreement) be issuable (taking into account the adjustments and restrictions of Section 7) upon the conversion of the then outstanding
shares of Preferred Stock. The Corporation covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly
authorized, validly issued, fully paid and nonassessable.
vi. Fractional
Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of the Preferred Stock. As
to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Corporation shall at its
election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion
Price or round up to the next whole share. Notwithstanding anything to the contrary contained herein, but consistent with the provisions
of this subsection with respect to fractional Conversion Shares, nothing shall prevent any Holder from converting fractional shares of
Preferred Stock.
vii. Transfer Taxes
and Expenses. The issuance of Conversion Shares on conversion of this Preferred Stock shall be made without charge to any Holder for
any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares, provided that
the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery
of any such Conversion Shares upon conversion in a name other than that of the Holders of such shares of Preferred Stock and the Corporation
shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons requesting the issuance thereof
shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax
has been paid. The Corporation shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion and all
fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day
electronic delivery of the Conversion Shares.
d) Beneficial Ownership
Limitation. The Corporation shall not effect any conversion of the Preferred Stock, and a Holder shall not have the right to convert
any portion of the Preferred Stock, to the extent that, after giving effect to the conversion set forth on the applicable Notice of Conversion,
such Holder (together with such Holder’s Affiliates, and any Persons acting as a group together with such Holder or any of such
Holder’s Affiliates (such Persons, “Attribution Parties”)) would beneficially own in excess of the Beneficial
Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned
by such Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon conversion
of the Preferred Stock with respect to which such determination is being made, but shall exclude the number of shares of Common Stock
which are issuable upon (i) conversion of the remaining, unconverted Stated Value of Preferred Stock beneficially owned by such Holder
or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted portion of any other
securities of the Corporation subject to a limitation on conversion or exercise analogous to the limitation contained herein (including,
without limitation, the Preferred Stock or the Warrants) beneficially owned by such Holder or any of its Affiliates or Attribution Parties.
Except as set forth in the preceding sentence, for purposes of this Section 6(d), beneficial ownership shall be calculated in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained
in this Section 6(d) applies, the determination of whether the Preferred Stock is convertible (in relation to other securities owned by
such Holder together with any Affiliates and Attribution Parties) and of how many shares of Preferred Stock are convertible shall be in
the sole discretion of such Holder, and the submission of a Notice of Conversion shall be deemed to be such Holder’s determination
of whether the shares of Preferred Stock may be converted (in relation to other securities owned by such Holder together with any Affiliates
and Attribution Parties) and how many shares of the Preferred Stock are convertible, in each case subject to the Beneficial Ownership
Limitation. To ensure compliance with this restriction, each Holder will be deemed to represent to the Corporation each time it delivers
a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Corporation
shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status
as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. For purposes of this Section 6(d), in determining the number of outstanding shares of Common Stock, a Holder may rely on the
number of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Corporation’s most recent periodic
or annual report filed with the Commission, as the case may be, (ii) a more recent public announcement by the Corporation or (iii) a more
recent written notice by the Corporation or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the
written or oral request (which may be via email) of a Holder, the Corporation shall within one Trading Day confirm orally and in writing
to such Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the conversion or exercise of securities of the Corporation, including the Preferred Stock, by such
Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported.
The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder prior to the issuance of any shares
of Preferred Stock, 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of
shares of Common Stock issuable upon conversion of Preferred Stock held by the applicable Holder. A Holder, upon notice to the Corporation,
may increase or decrease the Beneficial Ownership Limitation provisions of this Section 6(d) applicable to its Preferred Stock provided
that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock upon conversion of this Preferred Stock held by the Holder and the provisions
of this Section 6(d) shall continue to apply. Any such increase in the Beneficial Ownership Limitation will not be effective until the
61st day after such notice is delivered to the Corporation and shall only apply to such
Holder and no other Holder. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity
with the terms of this Section 6(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the
intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect
to such limitation. The limitations contained in this paragraph shall apply to a successor holder of Preferred Stock.
e) Leakout Limitation.
Notwithstanding anything to the contrary set forth herein, through and including May 13, 2024, (i) if the average closing price on the
Trading Market of the Common Stock on the three (3) most recent Trading Days is less than $7.50, the Holder cannot convert the Preferred
Stock into Common Stock and (ii) if the average closing price on the Trading Market of the Common Stock on the three (3) most recent Trading
Days is $7.50 or greater, there shall be no limitations under this Section 6(e) as to the amount of the Preferred Stock that may be converted
into Common Stock.
Section 7. Certain
Adjustments.
a) Stock Dividends
and Stock Splits. If the Corporation, at any time while this Preferred Stock is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common Stock Equivalents
(which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation upon conversion of, or payment
of a dividend on, this Preferred Stock), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines
(including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues, in the
event of a reclassification of shares of the Common Stock, any shares of capital stock of the Corporation, then the Conversion Price shall
be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the
Corporation) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment made pursuant to this Section 7(a) shall become effective immediately after the record date
for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or re-classification.
b) RESERVED.
c) Subsequent Rights
Offerings. In addition to any adjustments pursuant to Section 7(a) above, if at any time the Corporation grants, issues or sells any
Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class
of shares of Common Stock (the “Purchase Rights”), then the Holder of will be entitled to acquire, upon the terms applicable
to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares
of Common Stock acquirable upon complete conversion of such Holder’s Preferred Stock (without regard to any limitations on exercise
hereof, including without limitation, the limitations set forth in Section 6(d) and Section 6(e)) immediately before the date on which
a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record
holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the
extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the limitations set
forth in Section 6(d) and Section 6(e), then the Holder shall not be entitled to participate in such Purchase Right to such extent (or
beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such
extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding
the limitations set forth in Section 6(d) and Section 6(e)).
d) Pro Rata
Distributions. During such time as this Preferred Stock is outstanding, if the Corporation declares or makes any dividend or other
distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise
(including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Preferred Stock, then, in each such case, the Holder shall be entitled to participate in such
Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common
Stock acquirable upon complete conversion of this Preferred Stock (without regard to any limitations on conversion hereof, including
without limitation, the limitations set forth in Section 6(d) and Section 6(e)) immediately before the date of which a record is taken
for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined
for the participation in such Distribution (provided, however, to the extent that the Holder’s right to participate
in any such Distribution would result in the Holder exceeding the limitations set forth in Section 6(d) and Section 6(e), then the Holder
shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock
as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the
Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the limitations set forth in Section 6(d)
and Section 6(e)).
e) Fundamental
Transaction. If, at any time while this Preferred Stock is outstanding, (i) the Corporation, directly or indirectly, in one or more
related transactions effects any merger or consolidation of the Corporation with or into another Person, (ii) the Corporation, directly
or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of
its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether
by the Corporation or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock,
(iv) the Corporation, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization
of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for
other securities, cash or property, or (v) the Corporation, directly or indirectly, in one or more related transactions consummates a
stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off
or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock
(not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with
the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental
Transaction”), then, upon any subsequent conversion of this Preferred Stock, the Holder shall have the right to receive, for
each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction
(without regard to any limitation in Section 6(d) or Section 6(e) on the conversion of this Preferred Stock), the number of shares of
Common Stock of the successor or acquiring corporation or of the Corporation, if it is the surviving corporation, and any additional consideration
(the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of
shares of Common Stock for which this Preferred Stock is convertible immediately prior to such Fundamental Transaction (without regard
to any limitation in Section 6(d) or Section 6(e) on the conversion of this Preferred Stock). For purposes of any such conversion, the
determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Corporation shall apportion
the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components
of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion
of this Preferred Stock following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor
to the Corporation or surviving entity in such Fundamental Transaction shall file a new Certificate of Designation with the same terms
and conditions and issue to the Holders new preferred stock consistent with the foregoing provisions and evidencing the Holders’
right to convert such preferred stock into Alternate Consideration. The Corporation shall cause any successor entity in a Fundamental
Transaction in which the Corporation is not the survivor (the “Successor Entity”) to assume in writing all of the obligations
of the Corporation under this Certificate of Designation and the other Transaction Documents (as defined in the Exchange Agreement) in
accordance with the provisions of this Section 7(e) pursuant to written agreements in form and substance reasonably satisfactory to the
Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder
of this Preferred Stock, deliver to the Holder in exchange for this Preferred Stock a security of the Successor Entity evidenced by a
written instrument substantially similar in form and substance to this Preferred Stock which is convertible for a corresponding number
of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable
upon conversion of this Preferred Stock (without regard to any limitations on the conversion of this Preferred Stock) prior to such Fundamental
Transaction, and with a conversion price which applies the conversion price hereunder to such shares of capital stock (but taking into
account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital
stock, such number of shares of capital stock and such conversion price being for the purpose of protecting the economic value of this
Preferred Stock immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and
substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted
for (so that from and after the date of such Fundamental Transaction, the provisions of this Certificate of Designation and the other
Transaction Documents referring to the “Corporation” shall refer instead to the Successor Entity), and may exercise every
right and power of the Corporation and shall assume all of the obligations of the Corporation under this Certificate of Designation and
the other Transaction Documents with the same effect as if such Successor Entity had been named as the Corporation herein.
f) Calculations.
All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding any treasury shares of the Corporation) issued and outstanding.
g) Notice to the
Holders.
i. Adjustment to
Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 7, the Corporation shall promptly
deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts
requiring such adjustment.
ii. Notice to Allow
Conversion by Holder. If (A) the Corporation shall declare a dividend (or any other distribution in whatever form) on the Common Stock,
(B) the Corporation shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Corporation shall
authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock
of any class or of any rights, (D) the approval of any stockholders of the Corporation shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the Corporation is a party, any sale or transfer of all or substantially all
of the assets of the Corporation, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or
property or (E) the Corporation shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of
the Corporation, then, in each case, the Corporation shall cause to be filed at each office or agency maintained for the purpose of conversion
of this Preferred Stock, and shall cause to be delivered to each Holder at its last address as it shall appear upon the stock books of
the Corporation, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating
(x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a
record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer
or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of
record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in
the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that
any notice provided hereunder constitutes, or contains, material, non-public information regarding the Corporation or any of the Subsidiaries,
the Corporation shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain
entitled to convert the Conversion Amount of this Preferred Stock (or any part hereof) during the 20-day period commencing on the date
of such notice through the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
Section 8. Miscellaneous.
a) Notices.
Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice
of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service,
addressed to the Corporation, at the address set forth above Attention: Jeremy Frommer,, e-mail address jeremy@creatd.com or such other
e-mail address or address as the Corporation may specify for such purposes by notice to the Holders delivered in accordance with this
Section 11. Any and all notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing
and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile
number or address of such Holder appearing on the books of the Corporation, or if no such facsimile number or address appears on the books
of the Corporation, at the principal place of business of such Holder, as set forth in the Exchange Agreement. Any notice or other communication
or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii)
the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number
set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the
second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual
receipt by the party to whom such notice is required to be given.
b) Absolute Obligation.
Except as expressly provided herein, no provision of this Certificate of Designation shall alter or impair the obligation of the Corporation,
which is absolute and unconditional, to pay liquidated damages and accrued dividends, as applicable, on the shares of Preferred Stock
at the time, place, and rate, and in the coin or currency, herein prescribed.
c) Lost or Mutilated
Preferred Stock Certificate. If a Holder’s Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation
shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution
for a lost, stolen or destroyed certificate, a new certificate for the shares of Preferred Stock so mutilated, lost, stolen or destroyed,
but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership hereof reasonably satisfactory
to the Corporation.
d) Governing Law.
All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation shall be governed
by and construed and enforced in accordance with the internal laws of the State of Nevada, without regard to the principles of conflict
of laws thereof. All legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any
of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders,
employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New
York Courts”). The Corporation and each Holder hereby irrevocably submits to the exclusive jurisdiction of the New York Courts
for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New
York Courts are improper or inconvenient venue for such proceeding. The Corporation and each Holder hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this
Certificate of Designation and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. The Corporation
and each Holder hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Certificate of Designation or the transactions contemplated hereby. If the Corporation
or any Holder shall commence an action or proceeding to enforce any provisions of this Certificate of Designation, then the prevailing
party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred
in the investigation, preparation and prosecution of such action or proceeding.
e) Waiver.
Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall not operate as or be construed
to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designation or a waiver
by any other Holders. The failure of the Corporation or a Holder to insist upon strict adherence to any term of this Certificate of Designation
on one or more occasions shall not be considered a waiver or deprive that party (or any other Holder) of the right thereafter to insist
upon strict adherence to that term or any other term of this Certificate of Designation on any other occasion. Any waiver by the Corporation
or a Holder must be in writing.
f) Severability.
If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate of Designation
shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to
all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the
applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate
of interest permitted under applicable law.
g) Next Business
Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day.
h) Headings.
The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation and shall not be deemed
to limit or affect any of the provisions hereof.
i) Status of Converted
or Redeemed Preferred Stock. Shares of Preferred Stock may only be issued pursuant to the Exchange Agreement. If any shares of Preferred
Stock shall be converted, redeemed or reacquired by the Corporation, such shares shall resume the status of authorized but unissued shares
of preferred stock and shall no longer be designated as Series F Convertible Preferred Stock.
*********************
RESOLVED, FURTHER, that the Chairman, the president
or any vice-president, and the secretary or any assistant secretary, of the Corporation be and they hereby are authorized and directed
to prepare and file this Certificate of Designation of Preferences, Rights and Limitations in accordance with the foregoing resolution
and the provisions of Nevada law.
IN WITNESS WHEREOF, the undersigned
have executed this Certificate this 12th day of February 2024.
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Name: |
Jeremy Frommer |
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Title: |
Chief Executive Officer |
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ANNEX A
NOTICE OF CONVERSION
(To be
Executed by the Registered Holder in order to Convert Shares of Preferred Stock)
The undersigned hereby elects to convert the number
of shares of Series F Convertible Preferred Stock indicated below into shares of common stock, par value $0.001 per share (the “Common
Stock”), of Creatd, Inc., a Nevada corporation (the “Corporation”), according to the conditions hereof, as
of the date written below. If shares of Common Stock are to be issued in the name of a Person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as may be required
by the Corporation in accordance with the Exchange Agreement. No fee will be charged to the Holders for any conversion, except for any
such transfer taxes.
Conversion calculations:
Date to Effect Conversion: _______________________________________________ |
Number of shares of Preferred Stock owned prior to Conversion: __________________ |
Number of shares of Preferred Stock to be Converted: ___________________________ |
Stated Value of shares of Preferred Stock to be Converted: _______________________ |
Number of shares of Common Stock to be Issued: _____________________________ |
Applicable Conversion Price:_____________________________________________ |
Number of shares of Preferred Stock subsequent to Conversion: __________________ |
Address for Delivery: ______________________
or
DWAC Instructions:
Broker no: _________
Account no: ___________
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[HOLDER] |
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By: |
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Name: |
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Title: |
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14
Exhibit 10.1
EXCHANGE
AGREEMENT
This
Exchange Agreement (this “Agreement”) is entered into as of February 12, 2024 by and between Creatd, Inc.,
a Nevada corporation (the “Company”) and the undersigned investor (the “Investor”
and together with the Company, the “Parties”).
WHEREAS, the Investor currently holds (i) certain
shares of common stock, par value $0.001 per share (the “Common Stock”); (ii) promissory notes (the “Notes”),
and/or (iii) common stock purchase warrants (the “Warrants”) issued to the Investor by the Company, as described
on Schedule I attached hereto (the “Investor Securities”);
WHEREAS, the Company will authorize a new
series of convertible preferred stock of the Company designated as Series F Convertible Preferred Stock, par value $0.001 per share,
having a stated value of $1,000 (the “Series F Preferred Stock”), the terms of which are set forth in the
Certificate of Designation of Series F Convertible Preferred Stock (the “Certificate of Designation”) in
the form attached hereto as Exhibit A; and
WHEREAS, subject to the terms and conditions set
forth herein, the Company and the Investor desire to enter into a transaction wherein the Company will issue to the Investor shares of
Series F Preferred Stock in exchange for the Investor Securities.
NOW,
THEREFORE, in consideration of the rights and benefits that they will each receive in connection with this Agreement, the parties, intending
to be legally bound, agree as follows:
1. Exchange. The Company and Investor agree to exchange the Investor Securities for the shares of Series F Preferred
Stock such that (i) each two hundred (200) shares of Common Stock will be exchanged for one (1) share of Series F Preferred Stock; (ii) amounts
owed under the Notes will be exchanged for shares of Series F Preferred Stock on a dollar-for-dollar basis; and (iii) each four hundred
(400) Warrants will be exchanged for one (1) share of Series F Preferred Stock (the “Exchange”). The shares of Series
F Preferred Stock issued pursuant to the Exchange (the “Exchange Shares”) shall be issued pursuant to an exemption
from registration under Section 3(a)(9) of the Securities Act (as defined herein). For the avoidance of doubt, it is agreed that upon
the consummation of the transactions contemplated by the Exchange, the Investor Securities will be null, void and of no further force
and effect.
2.
Holding Period. For the purposes of Rule 144, the Company represents, warrants and agrees that for the purposes of
Rule 144, the holding period of the Exchange Shares will include the Investor’s respective prior holding period of the various Investor
Securities. The Company agrees not to take a position contrary to this Section 2 in any document, statement, setting, or situation.
3.
Deliverables. The Company shall issue to the Investor the Exchange Shares.
4.
Representations and Warranties of the Company. The Company hereby represents and warrants to the Investor as of the
date hereof as follows:
(a)
Organization and Standing. The Company is a corporation duly organized, validly existing
under, and by virtue of, the laws of Nevada, and is in good standing under such laws. The Company has all requisite corporate power and
authority to own and operate its properties and assets and to carry on its business as presently conducted. The Company is duly qualified
and authorized to transact business and is in good standing as a foreign corporation in each jurisdiction in which the failure to so
qualify would have a material adverse effect on its business, properties or financial condition.
(b)
Corporate Power. The Company has all requisite legal and corporate power and authority to
execute and deliver this Agreement, to issue the Exchange Shares hereunder, and to carry out and perform its obligations under the terms
of this Agreement and the transactions contemplated hereby.
(c)
Authorization. All corporate action on the part of the Company, its officers, directors and
stockholders necessary for the authorization, execution, delivery and performance of this Agreement, the authorization, sale, issuance
and delivery of the Exchange Shares and the performance of all of the Company’s obligations hereunder have been taken or will be
taken prior to the Exchange. This Agreement has been duly executed by the Company and constitutes valid and legally binding obligations
of the Company, enforceable against the Company in accordance with their respective terms, subject to the laws of general application
relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other
equitable remedies.
(d)
Offering. Subject in part on the accuracy of the Investor’s representations herein,
the offer, sale and issuance of the Exchange Shares in conformity with the terms of this Agreement constitute transactions exempt from
registration of under the Securities Act of 1933, as amended (the “Securities Act”) and from all applicable
state securities laws. The sole consideration for the issuance of the Exchange Shares is the Investor’s surrender of the Warrant.
5.
Representations and Warranties of the Investor. Investor hereby represents and warrants as of the date hereof to
the Company as follows:
(a)
Organization and Standing. If an entity, the Investor is an entity duly organized, validly
existing under, and by virtue of, the laws of the jurisdiction of its incorporation or formation, and is in good standing under such laws.
(b)
Corporate Power. The Investor has all right, corporate, partnership, limited liability company
or similar power and authority to execute and deliver this Agreement and to carry out and perform its obligations under the terms of this
Agreement and the transactions contemplated hereby.
(c)
Authorization. All corporate, partnership, limited liability company or similar action, as
applicable on the part of such Investor, necessary for the authorization, execution, delivery and performance of this Agreement and the
performance of all of such Investor’s obligations hereunder have been taken or will be taken prior to the Exchange. This Agreement
has been duly executed by the Investor and constitutes valid and legally binding obligations of such Investor, enforceable against such
Investor in accordance with their respective terms, subject to the laws of general application relating to bankruptcy, insolvency and
the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies.
(d)
Own Account. Investor is acquiring the Exchange Shares for its own account.
(e)
Investor Status. The Investor is either: (i) an “accredited investor” as defined
in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as
defined in Rule 144A under the Securities Act. Such Investor is not required to be registered as a broker- dealer under Section 15 of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
6.
No Short Sales. Investor, its successors, assigns and affiliates, agrees that so long the Exchange Shares are not
sold, Investor and its affiliates shall not, directly or indirectly, enter into or effect “short sales” of the common stock
of the Company or hedging transaction which establishes a short position with respect to the common stock of the Company. The Company
acknowledges and agrees that upon delivery of a conversion notice by the Investor, the Investor immediately owns the shares of common
stock described in the conversion notice and any sale of those shares issuable under such conversion notice would not be considered short
sales.
7.
Miscellaneous.
(a)
Entire Agreement. This Agreement, together with the schedules attached hereto, contain the
entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral
or written with respect to such matters.
(b)
Notices. All notices, demands requests, consents, approvals, and other communications required
or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the
mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, e-mail or facsimile, addressed as set forth below or to such other address as such party
shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall
be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours
where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall occur first.
(c)
Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented
or amended except in a written instrument signed, in the case of an amendment, by the Company and the Investor, in the case of a waiver,
by the party against whom enforcement of any such waived provision is sought. No waiver with respect to any provision, condition or requirement
of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any other provision, condition or requirement
hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.
(d)
Headings. The headings herein are for convenience only, do not constitute a part of this Agreement
and shall not be deemed to limit or affect any of the provisions hereof.
(e)
Successors and Assigns This Agreement shall be binding upon and inure to the benefit of the
parties and their successors and permitted assigns.
(f)
No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto
and their respective successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
(g)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without
regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement
and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough
of Manhattan (the "New York Courts"). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New
York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each
party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted
by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If any party
shall commence an action or proceeding to enforce any provisions of this Agreement, then the prevailing party in such action or proceeding
shall be reimbursed by the other party for its attorneys' fees and other costs and expenses incurred in the investigation, preparation
and prosecution of such action or proceeding.
(h)
Survival. The representations and warranties contained herein shall survive the Exchange for
the applicable statute of limitations.
(i)
Execution. This Agreement may be executed in two (2) or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile,
electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com)
or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and
effective for all purposes.
(j)
Severability. If any term, provision, covenant or restriction of this Agreement is held by
a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their commercially reasonable efforts to find and employ, an alternative means to achieve the same or substantially
the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any
of such that may be hereafter declared invalid, illegal, void or unenforceable.
(k)
Construction. The parties hereto agree that each of them and/or their respective counsel have
reviewed and have had an opportunity to revise this Agreement and the schedules attached hereto. This Agreement shall be construed according
to its fair meaning and not strictly for or against any party. The word “including” shall be construed to include the words
“without limitation.” In this Agreement, unless the context otherwise requires, references to the singular shall include the
plural and vice versa.
(l)
WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT OR PROCEEDING IN ANY JURISDICTION BROUGHT
BY ANY PARTY AGAINST ANY OTHER PARTY, THEPARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW,
HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the Parties have
caused this Exchange Agreement to be duly executed and delivered as of the date and year first written above.
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