Zerify Inc.

07/26/2024 | Press release | Distributed by Public on 07/26/2024 07:26

Material Agreement Form 8 K

Item 1.01 Entry into Material Agreement.

On July 1, 2024, Zerify, Inc., a Wyoming corporation (the "Company"), entered into a Binding Memorandum of Understanding (the "Sovereign Agreement"), with Sovereign Assets, LLC ("Sovereign"), which contains the following provisions:

(a)

Sovereign will make its manager, Abraham Poznanski, available for 20 hours per week to serve as the Company's fractional President and Chief Strategic Officer;

(b)

On or before July 2, 2024, Sovereign shall purchase $75,000 of units of the Company's securities in the Company's current Regulation A offering, with the intention to purchase an additional $100,000 of such units;

(c)

Sovereign shall have the option of providing the Company a Senior secured convertible loan (the "Senior Secured Loan"), which shall be in the minimum amount of $825,000 and maximum amount of $10 million, with monthly interest payable at the rate of 5% plus the prime rate per annum, and shall be convertible into shares of Company common stock immediately after the effective date of the Company's previously announced reverse stock split at a price based on the average opening and closing price of the Company's comon stock on the date that the reverse stock split goes into effect;

(d)

Should ZAM have purchased not less than $175,000 of units in the Company's Regulation A offering, Sovereign shall have the right to appoint four (4) new directors (the "New Directors") to the Board of Directors of the Company;

(e)

Upon their appointment, the New Directors shall be issued one (1) share each of the Company's Series A Preferred Stock (collectively, the "New Director Shares");

(f)

Until such time as Sovereign shall have purchased $175,000 of units in the Company's Regulation A offering, the current Board of Directors of the Company shall not voluntarily seek any reorganization through bankruptcy, liquidation or other similar action, without the prior written consent of Sovereign, shall not authorize any agreement or take any action outside the ordinary course of business of the Company without the prior written consent of Sovereign, which consent shall not be unreasonably withheld, and shall consult with Sovereign with respect to potential actions and transaction presented to the Board of Directors of the Company;

(g)

Following the appointments of the New Directors, the Board of Directors of the Company would seek to have the Company enter into new employment agreements with Mark L. Kay, Ramarao Pemmaraju and George Waller on such terms and conditions as are fair and equitable to such persons and to the Company and its shareholders;

(h)

Should Sovereign fail to deliver a minimum of $825,000 under the Senior Secured Loan on or before June 30, 2025, then (1) each of the New Directors shall, effective at the close of business on June 30, 2025, resign as Directors of the Company, (2) each of the New Directors shall, effective at the close of business on June 30, 2025, tender for cancellation their respective New Director Shares and (3) Abraham Poznanski shall, effective at the close of business on June 30, 2025, resign from all positions with the Company.

As of the date of this Current Report, Sovereign has purchased $75,000 of units in the Company's Regulation A offering.

The foregoing description of the Sovereign Agreement is qualified in its entirety by the full text of the Sovereign Agreement, which is filed as Exhibit 10.1 to, and incorporated by reference in, this Current Report.