TERAWULF INC. WARRANT

Exhibit 4.1

WARRANT

This warrant and the securities issuable upon exercise of this warrant have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state or other jurisdiction. This warrant and the securities issuable upon exercise of this warrant may not be sold or offered for sale, pledged or hypothecated except pursuant to an effective registration statement under the Securities Act or pursuant to an exemption from registration thereunder, in each case in accordance with all applicable securities laws of the states or other jurisdictions, and in the case of a transaction exempt from registration, such warrant and the securities issuable upon exercise of such warrant may only be transferred if the issuer and, if applicable, the transfer agent for such warrant and the securities issuable upon exercise of such warrant has receive documentation reasonably satisfactory to it that such transaction does not require registration under the Securities Act.

THIS WARRANT AGREEMENT, dated as of July 1, 2022 (this “Warrant”), is by and between (a) TeraWulf Inc., a Delaware corporation (the “Corporation”), and (b) each Person listed on Schedule I (each a “Holder” and, collectively, the “Holders”). The Corporation and the Holders are sometimes referred to herein collectively as the “Parties” or individually as a “Party.”

R E C I T A L S

WHEREAS, the Parties have entered into that certain Loan, Guaranty and Security Agreement, dated December 1, 2021, by and among the Corporation, the Guarantors (as defined therein), the Lenders (as defined therein) and Wilmington Trust, National Association, as administrative agent and collateral agent (the “Original Loan Agreement”);

WHEREAS, substantially concurrently with the execution and delivery of this Warrant Agreement, the Parties, or Affiliates thereof, will enter into an amendment to the Original Loan Agreement pursuant to which the Corporation will borrow up to $15,000,000 in principal amount of a senior secured term loan (the “First Amendment Term Loan”) structured as a new term loan tranche from the Holders or Affiliates thereof on the terms set forth therein (the “Loan Agreement Amendment” and the Original Loan Agreement, as amended by the Loan Agreement Amendment, the “Loan Agreement”);

WHEREAS, subject to the terms and conditions of the Loan Agreement, the Corporation may borrow up to $35,000,000 in principal amount of senior secured delayed draw term loan commitments (the “DDTL Commitments”) structured as a new delayed draw term loan tranche under the Loan Agreement;

WHEREAS, in connection with the closing of the transactions contemplated by the Loan Agreement Amendment, on the First Amendment Effective Date, the Corporation has agreed to issue to the Holders (ratably, based on their respective funding of the First Amendment Term Loan) warrants to purchase an aggregate number of Common Shares equal to 3.0% of the Fully Diluted Equity of the Corporation determined as of the First Amendment Effective Date (the “First Amendment Warrants”);

WHEREAS, for each funding of DDTL Commitments, the Corporation has agreed to issue to the Holders (ratably, based on their respective funding of DDTL Commitments) additional warrants to purchase an aggregate number of Common Shares equal to (x) for the funding of the first tranche of $15,000,000 in aggregate principal amount of DDTL Commitments, an incremental 3.75% of the Fully Diluted Equity of the Corporation determined as of the date of such funding (the “First DDTL Warrants”) and (y) for the funding of the second tranche of $20,000,000 in aggregate principal amount of DDTL Commitments, an incremental 4.25% of the Fully Diluted Equity of the Corporation determined as of the date of such funding (the “Second DDTL Warrants” and, together with the First DDTL Warrants, the “DDTL Warrants”);

WHEREAS, as partial consideration for the DDTL Commitments, the Corporation has agreed to issue to the Holders (ratably, based on their respective funding of DDTL Commitments) additional warrants to purchase an aggregate number of Common Shares equal to 2.0% of the Fully Diluted Equity of the Corporation determined as of the First Amendment Effective Date (the “Commitment Warrants”); and

WHEREAS, this Warrant is intended to set forth the terms and conditions of the right to purchase such shares.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and the covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

Article 1

Definitions and References

Section 1.01 Definitions. As used herein, the following terms have the respective meanings:

“50% Warrant Cancellation Event” has the meaning assigned to such term in Section 2.01.

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”) with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“Aggregate Exercise Price” means an amount equal to the product of (a) the number of Warrant Shares in respect of which this Warrant is then being exercised pursuant to Section 2.02, multiplied by (b) the then-current Exercise Price.

“Board” means the board of directors of the Corporation.

“Business Day” means any day other than a Saturday, a Sunday or a day on which banks are authorized or required to close in the City of New York, New York.

“Commitment Warrants” has the meaning set forth in the recitals.

“Common Shares” means the shares of common stock, par value $0.001 per share, of the Corporation.

“Corporation” has the meaning set forth in the preamble.

“DDTL Commitments” has the meaning set forth in the recitals.

“DDTL Warrants” has the meaning set forth in the recitals.

“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such Equity Interests.

“Exercise Certificate” has the meaning assigned to such term in Section 3.01(a).

“Exercise Date” means, for any given exercise of a Warrant, the earliest date that is a Business Day on which the conditions to such exercise as set forth in Section 3.01 shall have been satisfied at or prior to 5:00 p.m., New York City time.

“Exercise Period” means the period beginning on the Issue Date and ending at the Expiration Time.

“Exercise Price” means $0.01 per Common Share, as may be adjusted pursuant to Article 4 hereof.

“Expiration Time” means 5:00 p.m., New York City time, on December 31, 2025.

“Fair Market Value” means, as of any particular date: (a) if the Common Shares are listed on a domestic securities exchange as of such date, the VWAP Price for such date on all domestic securities exchanges on which the Common Shares may at the time be listed; (b) if the Common Shares are not listed on a domestic securities exchange but are quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association as of such date, (i) the VWAP Price for such date on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association or (ii) if there have been no sales of the Common Shares on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association on such day, the average of the highest bid and lowest asked prices for Common Shares quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association at the end of the day; or (c) if the Common Shares are not listed on a domestic securities exchange or quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association as of such date, the fair market value of one Common Share as determined in good faith by the Board.

“First Amendment Effective Date” means the closing date of the Loan Agreement Amendment.

“First Amendment Term Loan” has the meaning set forth in the recitals.

“First Amendment Warrants” has the meaning set forth in the recitals.

“First Exercise Trigger Date” has the meaning assigned to such term in Section 2.03.

“First Junior Capital Raise” has the meaning assigned to such term in the Loan Agreement Amendment.

“Fully Diluted Equity” means, as of the relevant measurement time, the sum, without duplication, of (a) Common Shares that are issued and outstanding immediately prior to such measurement time, plus (b) Common Shares issuable upon exercise of vested options (and options that will vest within 120 days of such measurement time) to purchase Common Shares as of immediately prior to such measurement time, plus (c) Common Shares issuable upon exercise of any warrants (including the Warrants issued and outstanding under this Warrant Agreement) to purchase Common Shares as of immediately prior to such measurement time (provided that, for purposes of this clause (c), (i) the First Amendment Warrants and the Commitment Warrants shall be deemed to be to be issued and outstanding for purposes of measurement in connection with the First Amendment Effective Date and (ii) the First DDTL Warrants and the Second DDTL Warrants, as applicable, shall be deemed to be issued and outstanding for purposes of measurement in connection with the funding of the applicable DDTL Commitments), plus (d) shares of convertible preferred stock (on an as-converted to Common Shares basis) issued and outstanding as of immediately prior to such measurement time, plus (e) any convertible indebtedness (on an as-converted to Common Shares basis) outstanding as of immediately prior to such measurement time, plus (f) Common Shares issued and outstanding immediately prior to such measurement time or issuable as of such measurement time as or in respect of Junior Capital.

“Fundamental Transaction” means, whether through one transaction or a series of related transactions, any (a) recapitalization of the Corporation, (b) reclassification of the stock of the Corporation (other than (i) a change in par value, from par value to no par value, from no par value to par value or (ii) as a result of a stock dividend or subdivision, split up or combination of shares to which ‎Section 4.01 applies), (c) consolidation or merger of the Corporation with and into another Person or of another Person with and into the Corporation (whether or not the Corporation is the surviving corporation of such consolidation or merger), (d) sale or lease of all or substantially all of the Corporation’s assets (on a consolidated basis) or capital stock to another Person or (e) other similar transaction, in each case, that entitles the holders of Common Shares to receive (either directly or upon subsequent liquidation) stock, securities or assets (including cash) with respect to or in exchange for Common Shares.

“Holders” has the meaning set forth in the preamble.

“Holder Parties” means (i) the Holders, (ii) each Holder’s respective Affiliates, (ii) employee benefit plans sponsored by any Holder or any of its Affiliates (or a master trust holding the assets of such benefit plans), and/or (iii) any other Person that invests money for or on behalf of any of the foregoing.

“Issue Date” means July 1, 2022.

“Junior Capital” has the meaning assigned to such term in the Loan Agreement Amendment.

“Loan Agreement” has the meaning set forth in the recitals.

“Loan Agreement Amendment” has the meaning set forth in the recitals.

“NASDAQ” means The Nasdaq Stock Market LLC.

“OTC Bulletin Board” means the Financial Industry Regulatory Authority OTC Bulletin Board electronic inter-dealer quotation system.

“Parties” has the meaning set forth in the preamble.

“Person” means any individual, sole proprietorship, partnership, limited liability company, corporation, joint venture, trust, incorporated organization or government or department or agency thereof.

“Pink OTC Markets” means the OTC Markets Group Inc. electronic inter-dealer quotation system, including OTCQX, OTCQB and OTC Pink.

“Restriction Lapse” has the meaning assigned to such term in Section 6.02.

“Second Exercise Trigger Date” has the meaning assigned to such term in Section 2.03.

“Second Junior Capital Raise” has the meaning assigned to such term in the Loan Agreement Amendment.

“Securities” has the meaning assigned to such term in Section 5.01.

“Securities Act” means the Securities Act of 1933, as amended.

“Successor Affiliate” has the meaning assigned to such term in Section 6.02.

“Transfer” has the meaning assigned to such term in Section 6.02.

“Transfer Agent” means the entity designated by the Corporation to act as transfer agent for the Common Shares.

“VWAP Price” means, as of a particular date, the volume-weighted average trading price, as adjusted for splits, combinations and other similar transactions, of a Common Share for the consecutive period of ten Business Days ending two Business Days prior to such date, except that if the Common Shares are listed on any domestic securities exchange, the term “Business Day” as used in this sentence means Business Days on which such exchange is open for trading.

“Warrant” has the meaning set forth in the preamble.

“Warrant Register” has the meaning assigned to such term in Section 6.05.

“Warrant Shares” has the meaning assigned to such term in ‎Section 2.01.

Section 1.02 Rules of Construction. Unless the context otherwise requires or except as otherwise expressly provided:

(a) “herein,” “hereto” or “hereof” and other words of similar import refer to this Warrant as a whole and not to any particular Section, Article or other subdivision;

(b) the word “including” is not limiting and means “including without limitation”;

(d) all references to Sections or Articles or Exhibits refer to Sections or Articles or Exhibits of or to this Warrant unless otherwise indicated;

(e) all exhibits annexed hereto or referred to herein are hereby incorporated in and made a part of this Warrant as if set forth in full herein, and any capitalized terms used in any exhibit but not otherwise defined therein will have the meaning as defined in this Warrant;

(f) all references to a Party include such Party’s successors and permitted assigns;

(g) any reference to “$” or “dollars” means United States dollars; and

(h) references to agreements or instruments, or to statutes or regulations, are to such agreements or instruments, or statutes or regulations, as amended from time to time (or to successor statutes and regulations).

Article 2

Issuance, Exercise and Expiration of Warrant

Section 2.01 Issuance of Warrant; 50% Warrant Cancellation Event.

(a) Subject to the terms and conditions hereof, this Warrant shall represent the right to purchase from the Corporation up to (i) an aggregate number of Common Shares equal to 3.0% of the Fully Diluted Equity of the Corporation determined as of the First Amendment Effective Date, plus (ii) up to an aggregate number of additional Common Shares equal to (x) for the funding of the first tranche of $15,000,000 aggregate principal amount of DDTL Commitments, an incremental 3.75% of the Fully Diluted Equity of the Corporation determined as of the date of such funding and (y) for the funding of the second tranche of $20,000,000 aggregate principal amount of DDTL Commitments, an incremental 4.25% of the Fully Diluted Equity of the Corporation determined as of the date of such funding , plus (iii) an aggregate number of Common Shares equal to 2.0% of the Fully Diluted Equity of the Corporation determined as of the First Amendment Effective Date. The Common Shares issuable upon exercise of the warrants described in the immediately preceding sentence, as may be adjusted from time to time pursuant to Article 4 hereof (the “Warrant Shares”).

(b) 50% of the First Amendment Warrants issued at the First Amendment Effective Date and 50% of the DDTL Warrants issued in respect of any funding of DDTL Commitments shall be deemed cancelled, if the Corporation (i) indefeasibly repays to the Holders (or their Affiliates) an amount equal to the sum of (x) the outstanding obligations under the First Amendment Term Loan and (y) the outstanding obligations under any funded DDTL Commitments and (ii) permanently cancels all undrawn DDTL Commitments on or prior to the 120th day following the First Amendment Effective Date (a “50% Warrant Cancellation Event”).

Section 2.02 Exercise of Warrant. Subject to the terms and conditions hereof, and pursuant to the procedures set forth in Section 3.01, each Holder may exercise such right to purchase with respect to all or any part of this Warrant Shares at any time or from time to time on any Business Day during the Exercise Period.

Section 2.03 Vesting.

(a) Unless a 50% Warrant Cancellation Event has occurred, in which case all Warrants held by each Holder after giving effect to such cancellation shall be immediately exercisable, no Warrant (including Commitment Warrants, First Amendment Warrants and DDTL Warrants) may be exercised until the 91st day after the First Amendment Effective Date (the “First Exercise Trigger Date”). Upon the occurrence of the First Exercise Trigger Date, the following Warrants will become immediately exercisable: (x) all Commitment Warrants, (y) 50% of the First Amendment Warrants, and (z) 50% of any DDTL Warrants, whether issued before or after the First Exercise Trigger Date. Unless a 50% Warrant Cancellation Event has occurred, on the 121^st day after the First Amendment Effective Date (the “Second Exercise Trigger Date”), all Warrants held by each Holder that have not previously become exercisable pursuant to the immediately preceding sentence shall become immediately exercisable. For the avoidance of doubt, any Warrant issued after the Second Exercise Trigger Date shall be immediately exercisable in the full amount of such Warrant.

(b) Upon the exercise of any Warrant, each Holder shall be entitled to receive freely tradeable Common Shares.

(c) For the avoidance of doubt, no Warrants that have become exercisable shall be subject to cancellation or deemed cancellation.

(d) Warrants shall have no voting rights until exercised.

Section 2.04 Expiration of Warrant. The right to purchase the Warrant Shares pursuant to this Warrant shall terminate and become void as of the Expiration Time.

Article 3

Exercise Procedure

Section 3.01 Conditions to Exercise. Each Holder may exercise this Warrant during the Exercise Period upon (and only upon):

(a) execution and delivery of an Exercise Certificate in the form attached hereto as Exhibit A (each, an “Exercise Certificate”), duly completed (including specifying the number of Warrant Shares to be purchased in connection with such exercise);

(b) payment to the Corporation of the Aggregate Exercise Price for such exercise in accordance with Section 3.02; and

(c) to the extent any withholding tax on the exercise of a Warrant is required, each Holder shall (i) make a wire transfer in immediately available funds to the Corporation in an amount sufficient to satisfy any such withholding tax or (ii) establish to the satisfaction of the Corporation that such withholding tax has been paid.

Section 3.02 Payment of the Aggregate Exercise Price. Payment of the Aggregate Exercise Price shall be made to the Corporation by wire transfer of immediately available funds to an account designated in writing by the Corporation, in the amount of such Aggregate Exercise Price.

Section 3.03 Delivery of Warrant Shares. As promptly as reasonably practicable on or after the Exercise Date, and in any event within three Business Days thereafter, the Corporation shall cause the Transfer Agent to issue book-entry interests representing the number of freely tradable Warrant Shares exercised on such Exercise Date to the account designated by the applicable Holder in the applicable Exercise Certificate.

Section 3.04 Fractional Shares. The Corporation shall not be required to issue a fractional Warrant Share upon exercise of any Warrant. As to any fraction of a Warrant Share that any Holder would otherwise be entitled to receive upon such exercise, the Corporation shall pay to such Holder an amount in cash (by delivery of a certified or official bank check or by wire transfer of immediately available funds) equal to the product of (i) such fraction of a Warrant Share multiplied by (ii) the Fair Market Value of one Warrant Share on the Exercise Date.

Section 3.05 Warrant Register. Unless this Warrant shall have been fully exercised, the Corporation shall, at the time of delivery of the Warrant Shares being issued in accordance with this Article 3, provide by notation in the Warrant Register the number, if any, of Warrant Shares that remain subject to purchase by the Holders upon exercise.

Section 3.06 Valid Issuance of Warrant and Warrant Shares. With respect to the execution and delivery of this Warrant and each exercise of this Warrant, the Corporation hereby represents, warrants, covenants and agrees:

(a) The Corporation is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization;

(b) The Corporation has the corporate power and authority to execute and deliver this Warrant and to perform its obligations hereunder. The Corporation has taken all corporate actions or proceedings required to be taken by or on the part of the Corporation to authorize and permit the execution and delivery by the Corporation of this Warrant and the performance by the Corporation of its obligations hereunder and the consummation by the Corporation of the transactions contemplated hereby. This Warrant has been duly executed and delivered by the Corporation, and assuming the due authorization, execution and delivery by the Holders, constitutes the legal, valid and binding obligation of the Corporation, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and other laws relating to or affecting creditors’ rights generally and by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).

(c) The execution and delivery by the Corporation of this Warrant, the performance by the Corporation of its obligations hereunder and the consummation by the Corporation of the transactions contemplated hereby will not violate (i) any provision of law, statute, rule or regulation applicable to the Corporation, (ii) the certificate of incorporation or bylaws of the Corporation, (iii) any applicable order of any court or any rule, regulation or order of any governmental authority applicable to the Corporation or (iv) any provision of any indenture, certificate of designation for preferred stock, agreement or other instrument to which the Corporation is a party or by which its property is or may be bound, except, in each case, for any such violation that would not impair in any material way the Corporation's ability to perform its obligations under this Warrant.

(d) Assuming the accuracy of the Holders’ several representations and warranties set forth in Article 5, the issuance of this Warrant (and the issuance of the Warrant Shares upon exercise of this Warrant) is exempt from the registration requirements of the Securities Act and all other applicable state blue sky or other securities laws, statutes, rules or regulations.

(e) None of the Corporation, its Affiliates or any Person acting on any of their behalf (other than the Holders and their Affiliates), directly or indirectly, has offered, sold or solicited any offer to buy and will not, directly or indirectly, offer, sell or solicit any offer to buy, any security of a type or in a manner which would be integrated with the issuance of this Warrant. None of the Corporation, its Affiliates or any Person acting on any of their behalf (other than the Holders and their Affiliates) has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Rule 502(c) promulgated under the Securities Act) in connection with the issuance of this Warrant.

(f) This Warrant has been duly authorized and is validly issued.

(g) Each Warrant Share issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, validly issued, fully paid and non-assessable, and free from preemptive or similar rights and free from all taxes, liens and charges with respect thereto (other than liens and charges arising solely from the actions and circumstances of any Holder).

(h) The Corporation will at all times during the Exercise Period maintain authorized and reserved for issuance solely for the purpose of effecting the exercise of this Warrant, such number of Common Shares as are then and from time to time subject to issuance upon the exercise in whole of this Warrant, which shares have not been subscribed for or otherwise committed or issued.

(i) The Corporation shall take all such action as many be necessary to ensure the par value per Warrant Share will at all times during the Exercise Period be less than or equal to the applicable Exercise Price.

(j) The Corporation shall take all such actions as may be necessary to ensure that all Warrant Shares are issued without violation by the Corporation of its certificate of incorporation, bylaws or any other constituent document and of any applicable law, statute, rule or regulation or any requirements of any securities exchange upon which the Common Shares or other securities constituting Warrant Shares may be listed at the time of such exercise (except for official notice of issuance which will be promptly delivered by the Corporation upon each such issuance).

(k) The Corporation shall use commercially reasonable efforts to cause the Warrant Shares, promptly upon such exercise, to be listed on the NASDAQ or any domestic securities exchange upon which Common Shares are listed at the time of such exercise.

(l) The Corporation shall pay all expenses in connection with, and all taxes (other than United States federal, state or local income taxes) and other governmental charges that may be imposed with respect to, the issuance or delivery of Warrant Shares upon exercise of this Warrant.

Article 4
Adjustment to Number of Warrant Shares

Section 4.01 Adjustment to Number of Warrant Shares. If the Corporation, at any time after the Issue Date but prior to the Expiration Time (or, if earlier, the exercise in full of this Warrant), (a) makes or declares a dividend or other distribution (in part or in full) on its outstanding Common Shares payable in Equity Interests of the Corporation, (b) subdivides (by any split, recapitalization or otherwise) its outstanding Common Shares into a greater number of Common Shares, or (c) combines (by combination, reverse split or otherwise) its outstanding Common Shares into a smaller number of Common Shares, then the remaining number of Warrant Shares issuable upon the exercise of this Warrant immediately prior to any such dividend, distribution, subdivision or combination shall be proportionately adjusted so each Holder will thereafter receive upon exercise in full of this Warrant the aggregate number and kind of shares of Equity Interests of the Corporation that such Holder would have owned immediately following such action if this Warrant had been exercised in full immediately before the record date for such action. Any adjustment under this Section 4.01 shall become effective at the close of business on the record date of the dividend, distribution, subdivision or combination (or, if no record date is set (whether by action of the Corporation, through statute or otherwise), the date the dividend, distribution, subdivision or combination becomes effective). If any such event is announced or declared and the Warrant Shares are adjusted pursuant to this Section 4.01 but such event does not occur, the Warrant Shares shall be readjusted, effective as of the date the Board announces that such event shall not occur, to the number of Warrant Shares that would then be in effect if such event had not been declared. Whenever the number of Warrant Shares subject to this Warrant is adjusted pursuant to this Section 4.01, the Corporation shall provide the notice required by Section 6.01.

Section 4.02 Dissolution, Liquidation or Winding Up. If the Corporation, at any time after the Issue Date but prior to the Expiration Time (or, if earlier, the exercise in full of this Warrant), commences a voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Corporation, then (a) each Holder of this Warrant shall receive the kind and number of other securities or assets which such Holder would have been entitled to receive if such Holder had exercised in full this Warrant and acquired the applicable number of Warrant Shares then issuable hereunder as a result of such exercise immediately prior to the time of such dissolution, liquidation or winding up, and (b) the right to exercise this Warrant shall terminate on the date on which the holders of record of Common Shares shall be entitled to exchange their Common Shares for securities or assets deliverable upon such dissolution, liquidation or winding up.

Section 4.03 Fundamental Transactions. If the Corporation, at any time after the Issue Date but prior to the Expiration Time (or, if earlier, the exercise in full of this Warrant), effects any Fundamental Transaction, then upon consummation of such Fundamental Transaction, this Warrant shall automatically become exercisable for the kind and amount of securities, cash or other assets which each Holder of this Warrant would have owned immediately after such Fundamental Transaction if such Holder had exercised in full this Warrant immediately before the effective date of such Fundamental Transaction, assuming that such Holder failed to exercise its rights of election, if any, as to the kind or amount of securities, cash or other assets receivable upon the consummation of such Fundamental Transaction. With respect to any Fundamental Transaction that the Corporation has not publicly announced at least 15 days prior to the consummation of such Fundamental Transaction, (a) the Corporation will deliver to the Holders written notice of such Fundamental Transaction at least 15 days prior to the consummation of such Fundamental Transaction (which written notice will be treated as confidential by the Holders), and (b) each Holder agrees not to exercise this Warrant (or any portion thereof) during the two Business Days immediately preceding the consummation of such Fundamental Transaction. Concurrently with the consummation of any Fundamental Transaction, the Person formed by or surviving the Fundamental Transaction (if other than the Corporation), or if such Fundamental Transaction is a transfer of lease, the Person to which such transfer or lease shall have been made, shall, and the Corporation shall direct such Person to, enter into a supplemental agreement so providing and further providing for adjustments that shall be as nearly equivalent as may be practical to the adjustments provided for in this Article 4. If this ‎Section 4.03 applies to a transaction, Section 4.01 shall not apply.

Section 4.04 Exercise Price in the Event of an Adjustment in Number of Warrant Shares. Upon any adjustment of the number of Warrant Shares subject to this Warrant pursuant to this Article 4, the Exercise Price per Warrant Share subject to issuance upon exercise of this Warrant shall be adjusted concurrently thereto to equal the product of (a) $0.01 (or if the Exercise Price has been previously adjusted, then as such adjusted Exercise Price) times (b) a fraction, of which the numerator is the total number of Warrant Shares subject to issuance upon the exercise of this Warrant before giving effect to the adjustment, and the denominator is the total number of Warrant Shares subject to issuance upon the exercise of this Warrants as so adjusted.

Article 5
Representations of Holders

Section 5.01 Investment Intent. Each Holder represents and warrants that it is acquiring this Warrant and the Common Shares underlying this Warrant (collectively, the “Securities”), solely for its beneficial account, for investment purposes, and not with a view to, or for resale in connection with, any distribution of the Securities in violation of applicable securities laws.

Section 5.02 Unregistered Securities. Each Holder represents and warrants that it understands that the Securities have not been registered under the Securities Act or any state securities laws by reason of specific exemptions under the provisions thereof, the availability of which depend in part upon the bona fide nature of its investment intent and upon the accuracy of its representations made herein.

Section 5.03 Reliance. Each Holder represents and warrants that it understands that the Corporation is relying in part upon the representations and agreements of the Holders contained herein for the purpose of determining whether the offer, sale and issuance of the Securities meet the requirements for such exemptions described in Section 5.02.

Section 5.04 Accredited Investor. Each Holder represents and warrants that it is an “accredited investor” as defined in Rule 501(a) under the Securities Act.

Section 5.05 Sophisticated Investor. Each Holder represents and warrants that it has such knowledge, skill and experience in business, financial and investment matters that it is capable of evaluating the merits and risks of an investment in the Securities, including experience in and knowledge of the industry in which the Corporation operates.

Section 5.06 Restricted Securities. Each Holder represents and warrants that it understands that the Securities will be “restricted securities” under applicable federal securities laws and that the Securities Act and the rules of the U.S. Securities and Exchange Commission provide in substance that it may dispose of the Securities only pursuant to an effective registration statement under the Securities Act or an exemption therefrom.

Section 5.07 Information. Each Holder represents and warrants that it has been furnished by the Corporation all information (or provided access to all information) regarding the business and financial condition of the Corporation, its expected plans for future business activities, the attributes of the Securities, and the merits and risks of an investment in such Securities which it has requested or otherwise needs to evaluate the investment in such Securities; that in making the proposed investment decision, such Holder is relying solely on such information, the representations, warranties and agreements of the Corporation contained herein and on investigations made by it and its representatives; that the offer to sell the Securities hereunder was communicated to such Holder in such a manner that it was able to ask questions of and receive answers from the management of the Corporation concerning the terms and conditions of the proposed transaction and that at no time was it presented with or solicited by or through any leaflet, public promotional meeting, television advertisement or any other form of general or public advertising or solicitation; and such Holder recognizes that an investment in the Securities involves risks and can result in a total loss of all funds invested.

Section 5.08 Non-Reliance. Notwithstanding anything in this Warrant to the contrary, each Holder hereby acknowledges, with respect to itself, that the Corporation may possess material non-public information with respect to the Corporation and/or its securities not known to each Holder as of the date hereof or at a time when each Holder exercises its right to purchase Warrant Shares pursuant to this Warrant and that any such information may impact the value of the Warrant and the Warrant Shares. Each Holder with respect to itself irrevocably waives any claim, or potential claim, that it may have based on the failure of the Corporation or its Affiliates, officers, directors, employees, agents or other representatives to disclose such information in connection with the execution and delivery of this Warrant or the purchase of Warrant Shares hereunder; provided, however, notwithstanding anything in this Section 5.08 or otherwise to the contrary, each Holder does not and shall not be deemed to have waived or otherwise compromised any rights or claims based upon or arising out of (i) the Corporation’s disclosure obligations under the federal securities laws with respect to any untrue statement of a material fact or omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading in any public statement or filing made by the Corporation pursuant to the Securities Exchange Act of 1934, as amended, or (ii) any breach or inaccuracy of any representation or warranty of the Corporation in this Warrant, the Loan Agreement or the Loan Agreement Amendment. Each Holder with respect to itself acknowledges that the Corporation would not enter into this Warrant in the absence of the agreements set forth in this Section 5.08.

Article 6
OTHER AGREEMENTS

Section 6.01 Notice of Adjustment. Upon any adjustment of the number of Warrant Shares subject to a Warrant and the Exercise Price pursuant to Article 4 hereof, the Corporation shall promptly thereafter cause to be given to the Holders written notice of such adjustments. Where appropriate, such notice may be given in advance. Such notice shall be delivered in accordance with Section 6.07 and shall state (a) the event giving rise to the adjustment, (b) the effective date of the adjustment and (c) the adjustment to the number of Warrant Shares subject to this Warrant and the adjusted Exercise Price pursuant to Article 4 hereof.

Section 6.02 Transfer of Warrant and Warrant Shares. Until the earlier of (i) the date a 50% Warrant Cancellation Event has occurred and (ii) the 121^st day after the First Amendment Effective Date (the earlier of such times, the “Restriction Lapse”), no Holder may sell, transfer, assign, pledge, hypothecate, mortgage, dispose of or in any way encumber (“Transfer”) this Warrant (or any portion thereof) to another Person; provided that, each Holder may Transfer this Warrant (in whole but not in part) to any such Holder’s Affiliates (the “Successor Affiliate”) if such Successor Affiliate expressly assumes and agrees to succeed to, in writing reasonably satisfactory to the Corporation, all the rights and obligations of such Holder, including the restrictions in this Section 6.02, under this Warrant. Except as permitted pursuant to the immediately foregoing sentence, any Transfer of this Warrant prior to the Restriction Lapse shall be void ab initio. From and after the Restriction Lapse, no Transfer restrictions shall apply hereunder.

Section 6.03 Holders Not Deemed Stockholders; Limitations on Liability. This Warrant does not confer upon any Holder any right to vote or receive dividends or confer upon the Holders any of the rights of stockholders of the Corporation. Each Holder acknowledges that the Corporation’s certificate of incorporation stipulates that, subject to the exceptions and the constructive ownership rules described therein, no person may own, or be deemed to own, in excess of (i) 9.99% in value of the outstanding shares of all classes or series of the Corporation’s capital stock or (ii) 9.99% in value or number (whichever is more restrictive) of the outstanding shares of any class of the Corporation’s Common Shares, or such other percentage determined by the Corporation’s Board in accordance with the Corporation’s certificate of incorporation.

Section 6.04 Agreement to Comply with the Securities Act; Legend. Each Holder, by acceptance of this Warrant, agrees to comply in all respects with the provisions of this Section 6.04 and the restrictive legend requirements set forth on the face of this Warrant and further agrees that such Holder shall not offer, sell, assign, transfer, pledge or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except, in the case of any Warrant Shares, under circumstances that will not result in a violation of the Securities Act. All Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:

“These securities have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state or other jurisdiction. These securities may not be sold or offered for sale, pledged or hypothecated except pursuant to an effective registration statement under the Securities Act or pursuant to an exemption from registration thereunder, in each case in accordance with all applicable securities laws of the states or other jurisdictions, and in the case of a transaction exempt from registration, such securities may only be transferred if the transfer agent for such securities has received documentation reasonably satisfactory to it that such transaction does not require registration under the Securities Act.”

Section 6.05 Warrant Register. The Corporation shall keep and properly maintain at its principal executive offices books for the registration of this Warrant and any exercises thereof (the “Warrant Register”).

Section 6.06 Other Cooperation. If required, the Corporation will, in consultation and cooperation with the Holders, file or submit, and assist the Holders with any filing, submission or notification it makes, in connection with the exercise of this Warrant with or to any governmental entity any filing, report or notification necessary or advisable in connection with any antitrust, competition or merger control law applicable to such exercise and cooperate with the Holders, to obtain as promptly as practicable all approvals, authorizations, terminations or expiration of applicable periods and clearances in connection therewith. If any such approval, authorization, termination or clearance is required to permit the Holders to purchase any Warrant Shares for which an Exercise Certificate has been delivered to the Corporation but has not been obtained by the Expiration Time, the Expiration Time shall be deemed to be extended until such approval, authorization or clearance has been obtained, or termination or expiration of any applicable waiting period has occurred.

Section 6.07 Notices. Any notices or other communications required or permitted hereunder will be deemed to have been properly given and delivered if in writing by such Party or its legal representative and delivered personally or sent by email or nationally recognized overnight courier service guaranteeing overnight delivery, addressed as follows:

If to the Corporation:

TeraWulf Inc.

0 Xxxxxxx Xxxxxx

Xxxxxx, XX 00000

Attention: Xxxx Xxxxxx, Chief Executive Officer
Email: xxxxxx@xxxxxxxx.xxx

with a copy to (which shall not constitute notice):

TeraWulf Inc.

0 Xxxxxxx Xxxxxx

Xxxxxx, XX 00000

Attention: Office of the General Counsel

Facsimile: (000) 000-0000

Email: xxxxx@xxxxxxxx.xxx

Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP

0000 Xxxxxx xx xxx Xxxxxxxx

Xxx Xxxx, XX 00000-0000

Attention: Xxxxx X. Xxxxxxxxxx

Email: xxxxxxxxxxx@xxxxxxxxx.xxx

If to a Holder:

To its address set forth on its signature page to this Warrant

with a copy to (which shall not constitute notice):

White & Case LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx, Xxxxxxx Xxxxxxx-Xxxxx, X.X. Xxxxxxxx
Email: xxxxxxxx@xxxxxxxxx.xxx; xxxxxx@xxxxxxxxx.xxx; xx.xxxxxxxx@xxxxxxxxx.xxx

Unless otherwise specified herein, such notices or other communications will be deemed given: (a) on the date delivered, if delivered personally; (b) one Business Day after being sent by a nationally recognized overnight courier guaranteeing overnight delivery; and (c) on the date delivered, if delivered by email during business hours (or one Business Day after the date of delivery if delivered after 5:00 p.m. in the place of receipt). Each of the Parties will be entitled to specify a different address by delivering notice as aforesaid to the other Party hereto.

Section 6.08 Entire Agreement. This Warrant is intended by the Parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Warrant supersedes all prior agreements and understandings between the Parties with respect to such subject matter hereof.

Section 6.09 Assignment by the Corporation. The Corporation may not, without the prior written consent of the Holders, sell, transfer (by operation of law or otherwise, except in connection with a Fundamental Transaction in compliance herewith) or assign this Warrant or any of its rights or obligations hereunder.

Section 6.10 No Third-Party Beneficiaries. This Warrant is for the sole benefit of the Corporation and the Holders and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Warrant.

Section 6.11 Headings. The headings in this Warrant are for reference only and shall not affect the interpretation of this Warrant.

Section 6.12 Amendment and Modification; Waiver. This Warrant may only be amended, modified or supplemented by an agreement in writing signed by each Party hereto. No waiver by the Corporation or the Holders of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the Party so waiving. No waiver by any Party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

Section 6.13 Severability. If any term or provision of this Warrant is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Warrant or invalidate or render unenforceable such term or provision in any other jurisdiction.

Section 6.14 Governing Law. This Warrant shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of Delaware.

Section 6.15 Submission to Jurisdiction. To the fullest extent permitted by law, each Party hereby consents irrevocably to personal jurisdiction, service and venue in connection with any claim arising out of this Warrant or the transactions contemplated hereby, in the courts of the State of New York located in New York County, New York and in the federal courts in the Southern District of New York. Service of process, summons, notice or other document by certified or registered mail to such Party’s address for receipt of notices pursuant to Section 6.07 shall be effective service of process for any suit, action or other proceeding brought in any such court. To the fullest extent permitted by law, each Party hereto hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue or any such suit, legal action or proceeding in such courts and hereby further waives any claim that any suit, legal action or proceeding brought in such courts has been brought in an inconvenient forum.

Section 6.16 Waiver of Jury Trial. Each Party acknowledges and agrees that any controversy which may arise under this Warrant is likely to involve complicated and difficult issues and, therefore, each such Party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Warrant or the transactions contemplated hereby.

Section 6.17 Remedies. The Parties agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Warrant and that each Party, in its sole discretion, may apply to any court of law or equity of competent jurisdiction for specific performance and for other injunctive relief in order to enforce or prevent violation of the provisions of this Warrant.

Section 6.18 Counterparts. This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Warrant delivered by facsimile, email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant.

Section 6.19 No Strict Construction. This Warrant shall be construed without regard to any presumption or rule requiring construction or interpretation against the Party drafting an instrument or causing any instrument to be drafted.

[Signature pages follow]

Accepted and agreed by:

NOVAWULF DIGITAL MASTER FUND, L.P.

By: NOVAWULF DIGITAL GENPAR, L.P.,
its General Partner

By: NOVAWULF DIGITAL MGP LTD.,
its General Partner

By:	/s/ Xxxxxxx Xxxxxx
	Name:	Xxxxxxx Xxxxxx
	Title:	Director

Address for Notices:

0 Xxxxxxx Xxxxxx

Xxxxxx, Xxxxxxxx 00000

[Signature Page to Warrant Agreement]

SUNRISE PARTNERS LIMITED PARTNERSHIP

By: Paloma Partners Management Company,
its general partner


By:	/s/ Xxxxxxx X. Xxxxxxx
	Name:	Xxxxxxx X. Xxxxxxx
	Title:	Managing Director

Address for Notices:

c/o Paloma Partners Management Company

Xxx Xxxxxxxx Xxxx

Xxxxxxxxx, XX 00000

Attn: Xxxxxx Xxxxx

[Signature Page to Warrant Agreement]

MARINER ATLANTIC MULTI-STRATEGY MASTER FUND, LTD.

By: Mariner Investment Group, LLC, its Investment Manager

By:	/s/ Xxxxx X’Xxxxxx
	Name:	Xxxxx X’Xxxxxx
	Title:	General Counsel

Address for Notices:

000 Xxxxxxxxxx Xxxxxx

Xxxxx 000

Xxxxxxxx, Xxx Xxxx 00000

[Signature Page to Warrant Agreement]

THRACIA, LLC


By:	/s/ Xxxx Xxxxxxx
	Name:	Xxxx Xxxxxxx
	Title:	Authorized Signatory

Address for Notices:

PSAM

1350 Avenue of the Xxxxxxxx

00^xx Xxxxx

Xxx Xxxx, Xxx Xxxx 00000

Attn: Xxxx Xxxxx

[Signature Page to Warrant Agreement]

LUMYNA SPECIALIST FUNDS — EVENT ALTERNATIVE FUND


By:	/s/ Xxxx Xxxxxxx
	Name:	Xxxx Xxxxxxx
	Title:	Authorized Signatory

Address for Notices:

PSAM

1350 Avenue of the Xxxxxxxx

00^xx Xxxxx

Xxx Xxxx, Xxx Xxxx 00000

Attn: Xxxx Xxxxx

[Signature Page to Warrant Agreement]

LIVELLO CAPITAL SPECIAL OPPORTUNITIES MASTER FUND LP


By:	/s/ Xxxxxx Xxxxxxx
	Name:	Xxxxxx Xxxxxxx
	Title:	Chief Financial Officer

Address for Notices:

c/o Livello Capital Management LP

1 World Trade Xxxxxx

00^xx Xxxxx

Xxx Xxxx, Xxx Xxxx 00000

Email: xxxxxxxx@xxxxxxxxxx.xxx

[Signature Page to Warrant Agreement]

HN SUMMIT HOUSE CREDIT OPPORTUNITIES FUND I, LP

By: HN Summit House Capital Management, LLC


By:	/s/ Xxx Xxxxx
	Name:	Xxx Xxxxx
	Title:	Chief Investment Officer

Address for Notices:

0000 Xxxx Xxxxxx

Xxxxx 000

Xxxxxx, XX 00000

[Signature Page to Warrant Agreement]

OWL CREEK CREDIT OPPORTUNITIES MASTER FUND, L.P.


By:	/s/ Xxxxx Xxxxxx
	Name:	Xxxxx Xxxxxx
	Title:	General Counsel

Address for Notices:

000 Xxxxx Xxxxxx

00^xx Xxxxx

Xxx Xxxx, Xxx Xxxx 00000

Email: xxxxxxxxxx@xxxxxxxxxx.xxx

[Signature Page to Warrant Agreement]

JEFFERIES LEVERAGED CREDIT PRODUCTS, LLC


By:	/s/ Xxxxxxx XxXxxxxxxx
	Name:	Xxxxxxx XxXxxxxxxx
	Title:	SVP

Address for Notices:

000 Xxxxxxx Xxxxxx

Xxx Xxxx, Xxx Xxxx 00000

[Signature Page to Warrant Agreement]

EXHIBIT A

TERAWULF INC.
WARRANT EXERCISE CERTIFICATE

TO TERAWULF INC.:

As of the date hereof, the undersigned Holder has the right under the Warrant Agreement, dated as of July 1, 2022, by TeraWulf Inc., a Delaware corporation, and the holders named therein (the “Warrant”) to purchase up to ______________________ Warrant Shares.

Upon payment of the applicable Aggregate Exercise Price and any applicable withholding tax, the undersigned Holder hereby irrevocably elects to exercise its right represented by the Warrant to purchase _____________________________Warrant Shares, and requests that the Warrant Shares be issued in the following name:

Name

Address

Federal Tax Identification or Social Security No.

and, if the number of Warrant Shares shall not be all the Warrant Shares purchasable by the undersigned Holders upon exercise of the Warrant, that the Corporation make appropriate notation in the Warrant Register to reflect the Warrant Shares that remain subject to purchase upon exercise of the Warrant after giving effect to this Warrant Exercise Certificate.

Capitalized terms used herein and not otherwise defined herein have the meaning given to such terms in the Warrant.

* * * * * * *


	Sincerely,
	[ ]

	By:
	Name:
	Title:

Schedule I

Holders	First Amendment Term Loan Funding		DDTL Commitment
SUNRISE PARTNERS LIMITED PARTNERSHIP	$	3,643,725.00	$	8,502,025.00
OWL CREEK CREDIT OPPORTUNITIES MASTER FUND, L.P.	$	3,279,345.00	$	7,651,805.00
THRACIA, LLC	$	2,477,730.00	$	5,781,370.00
NOVAWULF DIGITAL MASTER FUND, L.P.	$	1,821,855.00	$	4,250,995.00
MARINER ATLANTIC MULTI-STRATEGY MASTER FUND, LTD.	$	1,518,225.00	$	3,542,525.00
LUMYNA SPECIALIST FUNDS – EVENT ALTERNATIVE FUND	$	558,705.00	$	1,303,645.00
HN SUMMIT HOUSE CREDIT OPPORTUNITIES FUND I, LP	$	607,290.00	$	1,417,010.00
LIVELLO CAPITAL SPECIAL OPPORTUNITIES MASTER FUND LP	$	485,835.00	$	1,133,615.00
JEFFERIES LEVERAGED CREDIT PRODUCTS, LLC	$	607,290.00	$	1,417,010.00
	$	15,000,000.00	$	35,000,000.00

Document Metadata

Table of Contents

TERAWULF INC. WARRANT

Document Metadata