EXHIBIT 10.1

 

EQUITY LINE PURCHASE AGREEMENT

 

THIS EQUITY LINE PURCHASE AGREEMENT (the “Agreement”), is entered into as of May
18, 2020 (the “Execution Date”), by and between Endonovo Therapeutics, Inc., a
Delaware corporation (the “Company”), and Cavalry Fund I LP, a Delaware limited
partnership (the “Investor”).

 

RECITALS

 

WHEREAS, the parties desire that, upon the terms and subject to the conditions
contained herein, the Company shall issue and sell to the Investor, from time to
time as provided herein, and the Investor shall purchase from the Company up to
Ten Million Dollars ($10,000,000) (the “Aggregate Put Amount”) of the Company’s
Common Stock (as defined below);

 

NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Investor hereby
agree as follows:

 

AGREEMENT

 

1. PURCHASE AND SALE OF COMMON STOCK.

 

(a) Commitment Period and Obligation to Purchase. Upon the satisfaction of the
conditions set forth in Sections 6 and 7 (the date such conditions are first
satisfied, the “Effective Date”), the Company shall have the right, but not the
obligation, from time to time for a period of up to Twenty-Four (24) months from
the Effective Date (the “Commitment Period”), to direct the Investor to purchase
shares (“Put Shares”) of the Company’s common stock $0.0001 par value, (“Common
Stock”) up to the Aggregate Put Amount pursuant to the terms set forth herein.
The purchase process shall be initiated by the Company’s delivery to the
Investor of a written notice, substantially in the form of Exhibit A hereto (a
“Put Notice”), setting forth the amount of Put Shares (as defined below) which
the Company intends to require the Investor to purchase pursuant to the terms of
this Agreement.

 

(b) Standard Puts.

 

(i) Standard Put Volume. Subject only to the limitations in this Section 1 and
Section 7, the Company may, in its sole discretion on any Trading Day that the
Closing Price is not below $0.01, deliver a Put Notice to direct the Investor to
purchase up to Three Hundred Thousand (300,000) Put Shares per Put Notice (each
such purchase a “Standard Put”), at the Standard Purchase Price; provided that
the amount of Put Shares in any Standard Put may be increased as follows: (A) up
to Four Hundred Thousand (400,000) Put Shares if the Closing Price of the Common
Stock is not below $0.25 on the applicable Put Date, (B) up to Five Hundred
Thousand (500,000) Put Shares if the Closing Price of the Common Stock is not
below $0.40 on the applicable Put Date (as defined below).

 

(ii) Standard Put Timing. On any Trading Day during the Commitment Period, and
in any case subject to the satisfaction of the conditions set forth in Sections
6 and 7, the Company may make a Standard Put at any time after the close of
trading on the Principal Market on such Trading Day (the “Put Period”) (each
such date, a “Put Date”) to direct the Investor to purchase Put Shares as set
forth in Subsection 1(b)(i).

 

   

 

 

(iii) Standard Put Frequency. The Company may make multiple Standard Puts on a
Put Date, provided that the Put Shares, and the Pro-Rata Commitment Shares as
applicable, for each Standard Put previously made by the Company have been
successfully delivered to the Investor as DWAC Shares. The Company many not make
any Standard Puts until 24 hours after the effective time of the S-1 or within
five (5) Trading Days of each Effectiveness Commitment Share Date.

 

(c) Accelerated Puts.

 

(i) Accelerated Put Defined. Subject to the limitations of this Subsection 1(c),
the Company may deliver additional Put Notices pursuant to this Subsection 1(c)
to the Investor on the same Put Date as the Company delivers a Standard Put
pursuant to Subsection 1(b) (each such purchase an “Accelerated Put”).

 

(ii) Accelerated Put Volume. Subject to the limitations in this Section 1, and
if the Closing Price of the Common Stock on the applicable Put Date is not below
$0.05, the Company may, in its sole discretion, deliver a Put Notice for an
Accelerated Put to direct the Investor to purchase up to the lesser of (X) 300%
of the Put Shares purchased in Standard Put(s) on the applicable Put Date or (Y)
30% of the trading volume of the Common Stock as reported on the Principal
Market on such Put Date, in each case at the Accelerated Purchase Price.

 

(iii) Accelerated Put Timing. The Company may deliver a Put Notice for an
Accelerated Put during the Put Period on each Put Date when the Company has made
Standard Put(s) for the maximum number of Put Shares as allowed under Subsection
1(b); provided that the Put Shares, and the Pro-Rata Commitment Shares as
applicable, for each Standard Put previously made by the Company have been
successfully delivered to the Investor as DWAC Shares.

 

(iv) Accelerated Put Frequency. The Company may make multiple Accelerated Puts
on a Put Date, provided that the Put Shares, and the Pro-Rata Commitment Shares
as applicable, for each Accelerated Put previously made by the Company have been
delivered to the Investor as DWAC Shares. The Company many not make any
Accelerated Puts until 24 hours of the effective time of the S-1 or within five
(5) Trading Days of each Effectiveness Commitment Share Date.

 

(d) Beneficial Ownership Limitation. Notwithstanding anything to the contrary
contained in this Agreement, the Company shall not issue or sell, and the
Investor shall not purchase or acquire, any shares of Common Stock under this
Agreement which, when aggregated with all other shares of Common Stock then
beneficially owned by the Investor and its affiliates (as calculated pursuant to
Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would
result in the beneficial ownership by the Investor and its affiliates of more
than 4.99% of the then issued and outstanding shares of Common Stock (the
“Beneficial Ownership Limitation”). Upon the written or oral request of the
Investor, the Company shall promptly confirm in writing to the Investor the
number of shares of Common Stock then outstanding. The Investor’s written
certification to the Company of the applicability of the Beneficial Ownership
Limitation, and the resulting effect thereof hereunder at any time, shall be
conclusive with respect to the applicability thereof and such result absent
manifest error.

 

(e) Excess Shares. If the Company delivers a Put Notice for an amount of Put
Shares exceeding the limitations set forth in this Section 1, the Investor shall
have no obligation to purchase any Put Shares in excess of such limitations
(“Excess Shares”), and the Investor shall return to the Company the Excess
Shares. Additionally, the Investor shall have the right to deduct the portion of
Purchase Price in any Put Notice related to any Excess Shares and any Clearing
Costs related to the return of such Excess Shares at each Closing.

 

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(f) Commitment Shares.

 

(i) Execution Commitment Shares. In consideration for the Investor’s execution
and delivery of this Agreement, the Company shall cause the Transfer Agent to
issue 385,963 shares of Common Stock (the “Execution Commitment Shares”)
directly to the Investor on the Execution Date, which shall be fully earned as
of the Execution Date, whether or not the Effective Date shall occur or any Put
Shares are purchased by the Investor under this Agreement and irrespective of
any termination of this Agreement.

 

(ii) Initial Effectiveness Commitment Shares. In consideration for the
Investor’s execution and delivery of this Agreement, on the earlier of (A) the
Thirtieth (30th) day (or the Trading Day following such date if such date is not
a Trading Day) following the effectiveness of the Registration Statement filed
pursuant to Section 4(b) or (B) Two Hundred Tenth (210th) day (or the Trading
Day following such date if such date is not a Trading Day) following the
Execution Date (the “Initial Effectiveness Commitment Share Date”), the Company
shall cause the Transfer Agent to issue 385,963 shares of Common Stock (the
“Initial Effectiveness Commitment Shares”), which shall be fully earned as of
the Execution Date, whether or not the Effective Date shall occur or any Put
Shares are purchased by the Investor under this Agreement and irrespective of
any termination of this Agreement.

 

(iii) Subsequent Effectiveness Commitment Shares. In consideration for the
Investor’s execution and delivery of this Agreement, on the earlier of (A) the
Ninetieth (90th) day (or the Trading Day following such date if such date is not
a Trading Day) following the effectiveness of the Registration Statement filed
pursuant to Section 4(b) or (B) Two Hundred Tenth (270th) day (or the Trading
Day following such date if such date is not a Trading Day) following the
Execution Date (the “Subsequent Effectiveness Commitment Share Date” and,
together with the Initial Effectiveness Commitment Share Date, the
“Effectiveness Commitment Share Dates”), the Company shall cause the Transfer
Agent to issue 385,963 shares of Common Stock (the “Subesequent Effectiveness
Commitment Shares” and, together with the Initial Effectiveness Commitment
Shares, the “Effectiveness Commitment Shares”), which shall be fully earned as
of the Execution Date, whether or not the Effective Date shall occur or any Put
Shares are purchased by the Investor under this Agreement and irrespective of
any termination of this Agreement. The Effectiveness Commitment Shares shall be
adjusted for any stock split, reverse stock split, reorganization,
recapitalization, non-cash dividend, or other similar transaction that occurs on
or after the date of this Agreement.

 

(iv) Pro-Rata Commitment Shares. In connection with each Put following the
Effective Date and until the Company directs the Investor to purchase Put Shares
equal to the Pro-Rata Put Amount, the Company shall issue to the Investor a
number of shares of Common Stock (the “Pro-Rata Commitment Shares”, together
with the Execution Commitment Shares and the Effectiveness Commitment Shares,
the “Commitment Shares” and together with the Execution Commitment Shares, the
Effectiveness Commitment Shares and the Put Shares, the “Shares”) equal to the
product of (x) the Pro-Rata Commitment Share Amount and (y) the Pro-Rata
Commitment Share Multiplier. The Pro-Rata Commitment Shares shall be issued to
the Investor on the same Business Day as Put Shares are issued to the Investor
in connection with the applicable Put as DWAC Shares. In no event shall the
amount of the Pro-Rata Commitment Shares to be issued under this Agreement
exceed Pro-Rata Commitment Share Amount, provided that the Pro-Rata Commitment
Share Amount shall be adjusted for any stock split, reverse stock split,
reorganization, recapitalization, non-cash dividend, or other similar
transaction that occurs on or after the date of this Agreement.

 

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(g) Closings. The Closing of a Put shall occur within one (1) Trading Day
following the Put Date of each Standard Put or within one (1) Trading Day
following the Accelerated Put Date for each Accelerated Put, whereby, provided
that all Put Shares have been delivered to the Investor as DWAC Shares, the
Investor shall deliver the Purchase Price by wire transfer of immediately
available funds to an account designated by the Company (each, a “Closing”). In
addition, on or prior to such Closing, each of the Company and the Investor
shall deliver to each other all documents, instruments and writings required to
be delivered or reasonably requested by either of them pursuant to this
Agreement in order to implement and effect the transactions contemplated herein.

 

(h) Stock Splits and Similar Transactions. All share and dollar amounts
contained in this Section 1 shall be adjusted for any stock split, reverse stock
split, reorganization, recapitalization, non-cash dividend, or other similar
transaction that occurs on or after the date of this Agreement.

 

2. INVESTOR’S REPRESENTATIONS AND WARRANTIES.

 

The Investor represents and warrants as of the Execution Date that:

 

(a) Organization; Authority. The Investor is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with the requisite power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents to which
it is a party and otherwise to carry out its obligations hereunder and
thereunder.

 

(b) No Public Sale or Distribution. The Investor is (i) acquiring the Shares for
its own account and not with a view towards, or for resale in connection with,
the public sale or distribution thereof, except pursuant to sales registered or
exempted under the 1933 Act; provided, however, that by making the
representations herein, the Investor does not agree to hold any of the Shares
for any minimum or other specific term and reserves the right to dispose of the
Shares at any time in accordance with or pursuant to a registration statement or
an exemption under the 1933 Act. The Investor is acquiring the Shares hereunder
in the ordinary course of its business. The Investor does not presently have any
agreement or understanding, directly or indirectly, with any Person to
distribute any of the Shares.

 

(c) Accredited Investor Status. The Investor is an “accredited investor” as that
term is defined in Rule 501(a) of Regulation D promulgated by the SEC under the
1933 Act (“Regulation D”).

 

(d) Reliance on Exemptions. The Investor understands that the Shares are being
offered and sold to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the
Company is relying in part upon the truth and accuracy of, and the Investor’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Investor set forth herein in order to determine the
availability of such exemptions and the eligibility of the Investor to acquire
the Shares.

 

(e) Information. the Investor and its advisors, if any, have been furnished with
all materials relating to the business, finances and operations of the Company
and materials relating to the offer and sale of the Shares that have been
requested by the Investor in writing. The Investor and its advisors, if any,
have been afforded the opportunity to ask questions of the Company. Neither such
inquiries nor any other due diligence investigations conducted by the Investor
or its advisors, if any, or its representatives shall modify, amend or affect
the Investor’s right to rely on the Company’s representations and warranties
contained herein. The Investor understands that its investment in the Shares
involves a high degree of risk. The Investor has sought such accounting, legal
and tax advice as it has considered necessary to make an informed investment
decision with respect to its acquisition of the Shares.

 

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(f) No Governmental Review. The Investor understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Shares or the
fairness or suitability of the investment in the Shares nor have such
authorities passed upon or endorsed the merits of the offering of the Shares.

 

(g) Transfer or Resale. The Investor understands that: and the Shares may not be
offered for sale, sold, assigned or transferred unless (A) subsequently
registered under, or (B) sold, assigned or transferred pursuant to an exemption
therefrom.

 

(h) Legends.

 

(i) The Investor understands that the certificates or other instruments
representing the Shares, until such time as the resale of the Shares has been
registered under the 1933 Act, the stock certificates Shares, except as set
forth below, shall bear a restrictive legend in substantially the following form
(and a stop-transfer order may be placed against transfer of such stock
certificates):

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.

 

At any time after the Execution Date, the legend set forth above shall be
removed and the Company shall issue a certificate without such legend to the
holder of the Shares upon which it is stamped or, if available, issue to such
holder by electronic delivery at the applicable balance account at The
Depository Trust Company (“DTC”), if (i) such Shares are registered for resale
under the 1933 Act, (ii) in connection with a sale, assignment or other transfer
(other than pursuant to Rule 144), such holder provides the Company with an
opinion of counsel, in a generally acceptable form, to the effect that such
sale, assignment or transfer of the Shares may be made without registration
under the applicable requirements of the 1933 Act, or (iii) the Shares can be
sold, assigned or transferred pursuant to Rule 144 or Rule 144A. The Company
shall be responsible for the issuance fees of its Transfer Agent, its legal
counsel (with respect to legal opinions from its counsel covering the Investor
in any such opinion upon any sale pursuant to Rule 144) and all DTC fees
associated with such issuance.

 

(i) Validity; Enforcement. This Agreement and the other Transaction Documents to
which the Investor is a party have been duly and validly authorized, executed
and delivered on behalf of the Investor and shall constitute the legal, valid
and binding obligations of the Investor enforceable against the Investor in
accordance with their respective terms, except as such enforceability may be
limited by general principles of equity or to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies.

 

(j) No Conflicts. The execution, delivery and performance by the Investor of the
Transaction Documents and the consummation by the Investor of the transactions
contemplated thereby will not (i) result in a violation of the organizational
documents of the Investor or (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Investor is
a party, or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws) applicable to
the Investor, except in the case of clauses (ii) and (iii) above, for such
conflicts, defaults, rights or violations which would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on the
ability of the Investor to perform its obligations hereunder.

 

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(k) No Bad Actor Disqualification Event. The Investor represents, after
reasonable inquiry, that none of the “Bad Actor” disqualifying events described
in Rule 506(d)(l)(i) to (viii) under the 1933 Act (a “Disqualification Event”)
is applicable to the Investor or any of its Rule 506(d) Related Parties (if
any), except a Disqualification Event as to which Rule 506(d)(2)(ii) or (iii) or
(d)(3) applies.

 

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

The Company represents and warrants to the Investor that, as of the Execution
Date and as of the Effective Date:

 

(a) Organization and Qualification. Each of the Company and its “Subsidiaries”
(which for purposes of this Agreement means any joint venture or any entity in
which the Company, directly or indirectly, owns more than 10% of the capital
stock or holds an equivalent equity or similar interest) are entities duly
organized and validly existing and in good standing under the laws of the
jurisdiction in which they are formed, and have the requisite power and
authorization to own their properties and to carry on their business as now
being conducted. Each of the Company and its Subsidiaries is duly qualified as a
foreign entity to do business and is in good standing in every jurisdiction in
which its ownership of property or the nature of the business conducted by it
makes such qualification necessary, except to the extent that the failure to be
so qualified or be in good standing would not reasonably be expected to have a
Material Adverse Effect. The Company has no Subsidiaries, except as set forth on
Schedule 3(a).

 

(b) Authorization; Enforcement; Validity. The Company has the requisite
corporate power and authority to enter into and perform its obligations under
the Transaction Documents and to issue the Shares in accordance with the terms
hereof and thereof. The execution and delivery of the Transaction Documents by
the Company and the consummation by the Company of the transactions contemplated
hereby and thereby, including, without limitation, the reservation for issuance
and issuance of the Shares, have been duly authorized by the Company’s Board of
Directors, and any other filings as may be required by any state securities
agencies have been made. No further filing, consent, or authorization is
required by the Company, its board of directors or its stockholders. The
Transaction Documents have been duly executed and delivered by the Company, and
constitute the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of applicable creditors’
rights and remedies.

 

(c) Issuance of Securities. The issuance of the Shares has been duly authorized
and upon issuance in accordance with the terms of this Agreement shall be
validly issued and free from all taxes and Liens with respect to the issue
thereof. Upon issuance, the Shares will be validly issued, fully paid and
nonassessable and free from all preemptive or similar rights, taxes and Liens
with respect to the issue thereof, with the holders being entitled to all rights
accorded to a holder of Common Stock. Assuming the accuracy of each of the
representations and warranties set forth in Section 2 of this Agreement, the
offer and issuance by the Company of the Shares is exempt from registration
under the 1933 Act.

 

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(d) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance of
the Shares) will not (i) result in a violation of any certificate or articles of
incorporation, any certificate of formation, any certificate of designations or
other constituent documents of the Company or any of its Subsidiaries, any
capital stock of the Company or any of its Subsidiaries or the bylaws of the
Company or any of its Subsidiaries or (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) in any respect under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company or any of its Subsidiaries is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment or decree
(including foreign, federal and state laws and regulations) applicable to the
Company or any of its Subsidiaries or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected.

 

(e) Consents. Neither the Company nor any of its Subsidiaries is required to
obtain any consent, authorization or order of, or make any filing or
registration with, any government, court, regulatory, self-regulatory,
administrative agency or commission or other governmental agency, authority or
instrumentality, domestic or foreign, of competent jurisdiction (a “Governmental
Authority”) or any other Person in order for it to execute, deliver or perform
any of its obligations under or contemplated by the Transaction Documents, in
each case in accordance with the terms hereof or thereof,. The Company and its
Subsidiaries are unaware of any facts or circumstances that might prevent the
Company from obtaining or effecting any of the registration, application or
filings pursuant to the preceding sentence.

 

(f) Acknowledgment Regarding Investor’s Purchase of Securities. The Company
acknowledges and agrees that the Investor is acting solely in the capacity of an
arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby and that the Investor is not (i) an
officer or director of the Company or any of its Subsidiaries, or (ii) an
“affiliate” (as defined in Rule 144) of the Company or any of its Subsidiaries.
The Company further acknowledges that the Investor is not acting as a financial
advisor or fiduciary of the Company or any of its Subsidiaries (or in any
similar capacity) with respect to the Transaction Documents and the transactions
contemplated hereby and thereby, and any advice given by the Investor or any of
its representatives or agents in connection with the Transaction Documents and
the transactions contemplated hereby and thereby is merely incidental to the
Investor’s purchase of the Shares. The Company further represents to the
Investor that the Company’s decision to enter into the Transaction Documents has
been based solely on the independent evaluation by the Company and its
representatives.

 

(g) No General Solicitation; Placement Agent. Neither the Company, nor any of
its Subsidiaries or affiliates, nor any Person acting on its or their behalf,
has engaged in any form of general solicitation or general advertising (within
the meaning of Regulation D under the 1933 Act) in connection with the offer or
sale of the Shares. Neither the Company nor any of its Subsidiaries has engaged
any placement agent or other agent in connection with the sale of the Shares. In
the event that a broker-dealer or other agent or advisory is engaged by the
Company, the Company shall be responsible for the payment of any placement
agent’s fees, financial advisory fees, or brokers’ commissions (other than for
persons engaged by the Investor) relating to or arising out of the transactions
contemplated hereby in connection with the sale of the Shares. The Company shall
pay, and hold the Investor harmless against, any liability, loss or expense
(including, without limitation, attorney’s fees and out-of-pocket expenses)
arising in connection with any such claim.

 

(h) No Integrated Offering. None of the Company, its Subsidiaries, any of their
affiliates, and any Person acting on their behalf has, directly or indirectly,
made any offers or sales of any security or solicited any offers to buy any
security, under circumstances that would require registration of any of the
Shares under the 1933 Act, whether through integration with prior offerings or
otherwise, or caused this offering of the Shares to require approval of
stockholders of the Company for purposes of any applicable stockholder approval
provisions, including, without limitation, under the rules and regulations of
any exchange or automated quotation system on which any of the securities of the
Company are listed or designated, but excluding stockholder consents required to
authorize and issue the Shares or waive any anti-dilution provisions in
connection therewith. None of the Company, its Subsidiaries, their affiliates
and any Person acting on their behalf will take any action or steps referred to
in the preceding sentence that would require registration of any of the Shares
under the 1933 Act or cause the offering of the Shares to be integrated with
other offerings for purposes of any such applicable stockholder approval
provisions.

 

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(i) SEC Documents; Disclosure. Except as set forth on Schedule 3(i), the Company
has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the 1933 Act and the 1934 Act, including
pursuant to Section 13(a) or 15(d) thereof, for the one (1) year preceding the
Execution Date (or such shorter period as the Company was required by law or
regulation to file such material) (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC Documents”) on a timely basis or has
received a valid extension of such time of filing and has filed any such SEC
Documents prior to the expiration of any such extension. As of their respective
dates, the SEC Documents complied in all material respects with the requirements
of the 1933 Act and the 1934 Act, as applicable, and other federal laws, rules
and regulations applicable to such SEC Documents, and none of the SEC Documents
when filed contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The financial statements of the Company included in the SEC
Documents comply as to form and substance in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC or other applicable rules and regulations with respect thereto. Such
financial statements have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved (except (a) as may be otherwise
indicated in such financial statements or the notes thereto or (b) in the case
of unaudited interim statements, to the extent they may not include footnotes or
may be condensed or summary statements) and fairly present in all material
respects the financial position of the Company as of the dates thereof and the
results of operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal, immaterial, year-end audit
adjustments). There is no transaction, arrangement, or other relationship
between the Company and an unconsolidated or other off balance sheet entity that
is not disclosed by the Company in its financial statements or otherwise that
would be reasonably likely to have a Material Adverse Effect. Except with
respect to the material terms and conditions of the transactions contemplated by
the Transaction Documents, the Company confirms that neither it nor any other
Person acting on its behalf has provided the Investor or its agents or counsel
with any information that it believes constitutes or might constitute material,
non-public information. The Company understands and confirms that the Investor
will rely on the foregoing representation in effecting transactions in
securities of the Company.

 

(j) Application of Takeover Protections; Registration Rights. The Company and
its board of directors have taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Certificate of Incorporation, (as defined in
Section 3(r)) any certificates of designations or the laws of the jurisdiction
of its formation or incorporation which is or could become applicable to the
Investor as a result of the transactions contemplated by this Agreement,
including, without limitation, the Company’s issuance of the Shares and athe
Investor’s ownership of the Shares. The Company and its board of directors have
taken all necessary actions, if any, in order to render inapplicable any
stockholder rights plan or similar arrangement if any relating to accumulations
of beneficial ownership of Common Stock or a change in control of the Company.
Except as set forth on Schedule 3(j), no Person (other than the Investor) has
any right to cause the Company to effect the registration under the 1933 Act of
any securities of the Company or any Subsidiary. Notwithstanding the foregoing,
the Company has authorized Super Voting Series AA Preferred Stock which has
effective voting control over all Company affairs and the Company may avail
itself of certain SEC announcements to delay the due date of its QuarterlyReport
on Form 10-Q for the period March 31, 2021 to June 29, 2020.

 

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(k) Material Liabilities; Financial Statements. Except as set forth in the SEC
Documents or on Schedule 3(k), the Company has no liabilities or obligations,
absolute or contingent (individually or in the aggregate), except (i)
liabilities and obligations incurred after December 31, 2019 in the ordinary
course of business that are not material and (ii) obligations under contracts
made in the ordinary course of business that would not be required to be
reflected in financial statements prepared in accordance with generally accepted
accounting principles as applied in the United States, consistently applied for
the periods covered thereby (“GAAP”). The financial statements of the Company
delivered to the Investor on or prior to the Execution Date are a correct and
complete copy of the audited financial statements (including, in each case, any
related notes thereto) of the Company and its Subsidiaries, on a consolidated
basis, for the fiscal years ended December 31, 2019 and 2018, which have been
filed with the SEC (the “Financial Statements”), and such statements fairly
present in all material respects the financial position of the Company and its
Subsidiaries, on a consolidated basis, at the respective dates thereof and the
results of its operations and cash flows for the periods indicated. The
Financial Statements do not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.

 

(l) Absence of Certain Changes. Except as set forth in the SEC Documents or on
Schedule 3(l), since December 31, 2019, there has been no material adverse
change and no material adverse development in the business, assets, properties,
operations, condition (financial or otherwise), results of operations or
prospects of the Company or its Subsidiaries. Without limiting the generality of
the foregoing, neither the Company nor any of its Subsidiaries has:

 

(i) declared, set aside or paid any dividend or other distribution with respect
to any shares of capital stock of the Company or any of its Subsidiaries or any
direct or indirect redemption, purchase or other acquisition of any such shares;

 

(ii) sold, assigned, pledged, encumbered, transferred or other disposed of any
tangible asset of the Company or any of its Subsidiaries (other than sales or
the licensing of its products to customers in the ordinary course of business
consistent with past practice), or sold, assigned, pledged, encumbered,
transferred or other disposed of any Intellectual Property (other than licensing
of products of the Company or its Subsidiaries in the ordinary course of
business and on a non-exclusive basis);

 

(iii) entered into any licensing or other agreement with regard to the
acquisition or disposition of any Intellectual Property (as hereinafter defined)
other than licenses in the ordinary course of business consistent with past
practice or any amendment or consent with respect to any licensing agreement
filed or required to be filed with respect to any Governmental Authority;

 

(iv) made capital expenditures, individually or in the aggregate, in excess of
$100,000;

 

(v) incurred any Lien on any property of the Company or any of its Subsidiaries
except for Liens in existence on the Execution Date that are described on
Schedules 3(m) or 3(s) or in the SEC Documents;

 

 9 

 

 

(vi) made any payment, discharge, satisfaction or settlement of any suit,
action, claim, arbitration, proceeding or obligation of the Company or any of
its Subsidiaries, except in the ordinary course of business and consistent with
past practice;

 

(vii) effected any split, combination or reclassification of any equity
securities;

 

(viii) incurred any material loss, destruction or damage to any property of the
Company or any Subsidiary, whether or not insured;

 

(ix) suffered any acceleration or prepayment of any Indebtedness (as defined
below) for borrowed money or the refunding of any such Indebtedness;

 

(x) incurred any labor trouble involving the Company or any Subsidiary or any
material change in their personnel or the terms and conditions of employment;

 

(xi) granted any waiver of any valuable right, whether by contract or otherwise;

 

(xii) made any loan or extension of credit to any officer or employee of the
Company;

 

(xiii) incurred any change in the independent public accountants of the Company
or its Subsidiaries or any material change in the accounting methods or
accounting practices followed by the Company or its Subsidiaries, as applicable,
or any material change in depreciation or amortization policies or rates;

 

(xiv) suffered any resignation or termination of any officer, key employee or
group of employees of the Company or any of its Subsidiaries;

 

(xv) made any change in any compensation arrangement or agreement with any
employee, officer, director or stockholder that would result in the aggregate
compensation to such Person in such year to exceed $150,000, except as disclosed
on Schedule 3(l)(xv);

 

(xvi) made any material increase in the compensation of employees of the Company
or its Subsidiaries (including any increase pursuant to any written bonus,
pension, profit sharing or other benefit or compensation plan, policy or
arrangement or commitment), or any increase in any such compensation or bonus
payable to any officer, stockholder, director, consultant or agent of the
Company or any of its Subsidiaries having an annual salary or remuneration in
excess of $100,000;

 

(xvii) sustained any revaluation of any of their respective assets, including,
without limitation, writing down the value of capitalized inventory or writing
off notes or accounts receivable or any sale of assets other than in the
ordinary course of business;

 

(xviii) made any acquisition or disposition of any material assets (or any
contract or arrangement therefor), or any other material transaction by the
Company or any Subsidiary otherwise than for fair value in the ordinary course
of business;

 

(xix) written-down the value of any asset of the Company or its Subsidiaries or
written-off as uncollectible of any accounts or notes receivable or any portion
thereof except in the ordinary course of business and in a magnitude consistent
with historical practice;

 

 10 

 

 

(xx) cancelled any debts or claims or any material amendment, termination or
waiver of any rights of the Company or its Subsidiaries; or

 

(xxi) any agreement, whether in writing or otherwise, to take any of the actions
specified in the foregoing items (i) through (xxi).

 

Neither the Company nor any of its Subsidiaries has taken any steps to seek
protection pursuant to any bankruptcy law nor does the Company have any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy proceedings or any actual knowledge of any fact that would reasonably
lead a creditor to do so.

 

(m) No Undisclosed Events, Liabilities, Developments or Circumstances. Except as
set forth in Schedule 3(m) hereto, the Company and its Subsidiaries have no
liabilities or obligations of any nature (whether accrued, absolute, contingent,
unasserted or otherwise and whether due or to become due) other than those
liabilities or obligations that are disclosed in the SEC Documents and Financial
Statements or which do not exceed, individually in excess of $50,000 and in the
aggregate in excess of $100,000. The reserves, if any, established by the
Company or the lack of reserves, if applicable, are reasonable based upon facts
and circumstances known by the Company on the Execution Date and there are no
loss contingencies that are required to be accrued by the Statement of Financial
Accounting Standard No. 5 of the Financial Accounting Standards Board which are
not provided for in the Financial Statements.

 

(n) Conduct of Business; Regulatory Permits. Neither the Company nor any of its
Subsidiaries is in violation of any term of or in default under the Certificate
of Incorporation, the Certificate of Designations, any other certificate of
designation, preferences or rights of any other outstanding series of preferred
stock of the Company or the Bylaws (as defined in Section 3(r)) or any
subsidiary’s organizational charter, certificate or articles of incorporation or
bylaws, respectively. Neither the Company nor any of its Subsidiaries is in
violation of any judgment, decree or order or any statute, ordinance, rule or
regulation (each a “Legal Requirement”) applicable to the Company or any of its
Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct
its business in violation of any of the foregoing, except for possible
violations which could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The Company and its Subsidiaries
possess all certificates, authorizations and permits issued by the appropriate
regulatory authorities necessary to conduct their respective businesses, except
where the failure to possess such certificates, authorizations or permits would
not have, individually or in the aggregate, a Material Adverse Effect, and
neither the Company nor any such Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit. There is no agreement, commitment, judgment,
injunction, order or decree binding upon the Company or any of its Subsidiaries
or to which the Company or any of its Subsidiaries is a party which has or could
reasonably be expected to have the effect of prohibiting or materially impairing
any business practice of the Company or any of its Subsidiaries, any acquisition
of property by the Company or any of its Subsidiaries or the conduct of business
by the Company or any of its Subsidiaries as currently conducted other than such
effects, individually or in the aggregate, which have not had and could not
reasonably be expected to have a Material Adverse Effect on the Company or any
of its Subsidiaries.

 

(o) Foreign Corrupt Practices. Neither the Company nor any of its Subsidiaries
nor any director, officer, agent, employee or other Person acting on behalf of
the Company or any of its Subsidiaries has, in the course of its actions for, or
on behalf of, the Company or any of its Subsidiaries (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expenses relating to political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic government official or employee.

 

 11 

 

 

(p) Management. During the past five year period, no current or former officer
or director or, to the knowledge of the Company, stockholder of the Company or
any of its Subsidiaries has been the subject of:

 

(i) a petition under bankruptcy laws or any other insolvency or moratorium law
or has a receiver, fiscal agent or similar officer been appointed by a court for
such Person, or any partnership in which such person was a general partner at or
within two years before the time of such filing, or any corporation or business
association of which such person was an executive officer at or within two years
before the time of such filing;

 

(ii) a conviction in a criminal proceeding or a named subject of a pending
criminal proceeding (excluding traffic violations that do not relate to driving
while intoxicated or driving under the influence);

 

(iii) any order, judgment or decree, not subsequently reversed, suspended or
vacated, of any court of competent jurisdiction, permanently or temporarily
enjoining any such person from, or otherwise limiting, the following activities:

 

(1) Acting as a futures commission merchant, introducing broker, commodity
trading advisor, commodity pool operator, floor broker, leverage transaction
merchant, any other person regulated by the United States Commodity Futures
Trading Commission or an associated person of any of the foregoing, or as an
investment adviser, underwriter, broker or dealer in securities, or as an
affiliated person, director or employee of any investment company, bank, savings
and loan association or insurance company, or engaging in or continuing any
conduct or practice in connection with such activity;

 

(2) Engaging in any type of business practice; or

 

(3) Engaging in any activity in connection with the purchase or sale of any
security or commodity or in connection with any violation of securities laws or
commodities laws;

 

(iv) any order, judgment or decree, not subsequently reversed, suspended or
vacated, of any authority barring, suspending or otherwise limiting for more
than 60 days the right of any such person to engage in any activity described in
the preceding sub paragraph, or to be associated with persons engaged in any
such activity;

 

(v) a finding by a court of competent jurisdiction in a civil action or by the
SEC or other authority to have violated any securities law, regulation or decree
and the judgment in such civil action or finding by the SEC or any other
authority has not been subsequently reversed, suspended or vacated; or

 

(vi) a finding by a court of competent jurisdiction in a civil action or by the
Commodity Futures Trading Commission to have violated any federal commodities
law, and the judgment in such civil action or finding has not been subsequently
reversed, suspended or vacated.

 

 12 

 

 

(q) Transactions With Affiliates. Except as set forth in the SEC Filings or on
Schedule 3(q), no current employee, director, officer or, to the knowledge of
the Company, any former employee, director or officer, any stockholder of the
Company or its Subsidiaries, affiliate of any thereof who occupied such role
during the past 12 months, (i) a party to any transaction with the Company or
its Subsidiaries (including any contract, agreement or other arrangement
providing for the furnishing of services by, or rental of real or personal
property from, or otherwise requiring payments to, any such director, officer or
stockholder or such associate or affiliate or relative) or (ii) the direct or
indirect owner of an interest in any corporation, firm, association or business
organization which is a competitor, supplier or customer of the Company or its
Subsidiaries (except for a passive investment (direct or indirect) in less than
5% of the common stock of a company whose securities are publicly traded on or
quoted), nor does any such Person receive income from any source other than the
Company or its Subsidiaries which relates to the business of the Company or its
Subsidiaries or should properly accrue to the Company or its Subsidiaries.
Except as set forth on Schedule 3(q) and as disclosed in the Company’s SEC
filings, no employee, officer, stockholder or director of the Company or any of
its Subsidiaries or member of his or her immediate family is indebted to the
Company or its Subsidiaries, as the case may be, nor is the Company or any of
its Subsidiaries indebted (or committed to make loans or extend or guarantee
credit) to any of them, other than (i) for payment of salary for services
rendered, (ii) reimbursement for reasonable expenses incurred on behalf of the
Company, and (iii) for other standard employee benefits made generally available
to all employees or executives (including stock option agreements outstanding
under any stock option plan approved by the board of directors of the Company).

 

(r) Equity Capitalization. As of the Execution Date, the authorized capital
stock of the Company consists of 8,601,848 shares of Common Stock.All of such
outstanding shares have been, or upon issuance will be, validly issued and are
fully paid and nonassessable. Except as disclosed in Schedule 3(r): (i) none of
the Company’s capital stock is subject to preemptive rights or any other similar
rights or any Liens suffered or permitted by the Company; (ii) there are no
outstanding options, scrip, rights to subscribe to, or calls, exercisable or
exchangeable for, any capital stock of the Company or any of its Subsidiaries;
(iii) there are no outstanding, credit agreements, credit facilities evidencing
Indebtedness of the Company or any of its Subsidiaries or by which the Company
or any of its Subsidiaries is or may become bound; (iv) there are no financing
statements securing obligations in any material amounts, either singly or in the
aggregate, filed in connection with the Company or any of its Subsidiaries; (v)
there are no agreements or arrangements under which the Company or any of its
Subsidiaries is obligated to register the sale of any of their securities under
the 1933 Act; (vi) there are no outstanding securities or instruments of the
Company or any of its Subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem a security of the Company or any of its Subsidiaries; (vii)
there are no securities or instruments containing anti-dilution or similar
provisions that will be triggered by the issuance of the Shares; (viii) the
Company has not issued any stock appreciation rights or “phantom stock” or any
similar rights; and (ix) the Company and its Subsidiaries have no liabilities or
obligations required to be disclosed in the Financial Statements in accordance
with GAAP but not so disclosed in the Financial Statements. The Company has
furnished to the Investor true, correct and complete copies of the Company’s
Certificate of Incorporation, as amended and as in effect on the date hereof
(the “Certificate of Incorporation”), and the Company’s Bylaws, as amended and
as in effect on the date hereof (the “Bylaws”), and the terms of all securities
convertible into, or exercisable or exchangeable for, shares of Common Stock and
the material rights of the holders thereof in respect thereto.

 

(s) Indebtedness and Other Contracts. Except as disclosed in the Company’s
Financial Statements and SEC filings or on Schedule 3(s), neither the Company
nor any of its Subsidiaries (i) has any outstanding Indebtedness, (ii) is a
party to any contract, agreement or instrument, the violation of which, or
default under which, by the other party(ies) to such contract, agreement or
instrument could reasonably be expected to result in a Material Adverse Effect,
(iii) is in violation of any term of or in default under any contract, agreement
or instrument relating to any Indebtedness, except where such violations and
defaults would not result, individually or in the aggregate, in a Material
Adverse Effect, or (iv) is a party to any contract, agreement or instrument
relating to any Indebtedness, the performance of which, in the judgment of the
Company’s officers, has or is expected to have a Material Adverse Effect.
Schedule 3(s) provides a description of the material terms of any such
outstanding Indebtedness.

 

 13 

 

 

(t) Absence of Litigation. Except as set forth on Schedule 3(t), there is no
action, suit, arbitration or other legal, administrative or other governmental
investigation, inquiry or proceeding (whether federal, state, local or foreign)
pending or, to the best of the Company’s knowledge, threatened against or
affecting the Company or any of its Subsidiaries or any of their respective
properties, assets, capital stock or businesses or any of the Company’s or any
of its Subsidiaries’ officers or directors. After reasonable inquiry of its
employees, the Company is not aware of any fact which might result in or form
the basis for any such action, suit, arbitration, investigation, inquiry or
other proceeding. Neither the Company nor any of its Subsidiaries is subject to
any order, writ, judgment, injunction, decree, determination or award of any
Governmental Authority.

 

(u) Employee Matters; Benefit Plans.

 

(i) The employment of each officer and employee of the Company is terminable at
the will of the Company, except as disclosed on Schedule 3(u). The Company and
its Subsidiaries have complied in all material respects with all applicable laws
relating to wages, hours, equal opportunity, collective bargaining, workers’
compensation insurance and the payment of social security and other taxes.
Except as provided on Schedule 3(u), the Company is not aware that any officer,
key employee or group of employees intends to terminate his, her or their
employment with the Company or its Subsidiaries, as the case may be, nor does
the Company have a present intention, or know of a present intention of its
Subsidiaries, to terminate the employment of any officer, key employee or group
of employees. There are no pending or, to the knowledge of the Company,
threatened employment discrimination charges or complaints against or involving
the Company or its Subsidiaries before any federal, state, or local board,
department, commission or agency, or unfair labor practice charges or
complaints, disputes or grievances affecting the Company or its Subsidiaries.

 

(ii) Since the Company’s inception, to the knowledge of the Company neither the
Company nor its Subsidiaries has experienced any labor disputes, union
organization attempts or work stoppage due to labor disagreements. There are no
unfair labor practice charges or complaints against the Company or its
Subsidiaries pending, or to the knowledge of the Company, threatened before the
National Labor Relations Board or any comparable state agency or authority.
There are no written or oral contracts, commitments, agreements, understandings
or other arrangements with any labor organization, nor work rules or practices
agreed to with any labor organization or employee association, applicable to
employees of the Company or any of its Subsidiaries, nor is the Company or its
Subsidiaries a party to, or bound by, any collective bargaining or similar
agreement; there is not, and since the Company’s inception there has not been,
any representation of the employees of the Company or its Subsidiaries by any
labor organization and, to the knowledge of the Company, there are no union
organizing activities among the employees of the Company or its Subsidiaries,
and to the knowledge of the Company, no question concerning representation has
been raised or is threatened respecting the employees of the Company or its
Subsidiaries.

 

 14 

 

 

(iii) Schedule 3(u)(iii) contains a true, correct and complete list of each
pension, retirement, savings, deferred compensation and profit-sharing plan and
each stock option, stock appreciation, stock purchase, performance share, bonus
or other incentive plan, severance plan, health, group insurance or other
welfare plan, or other similar plan (whether written or otherwise) and any
“employee benefit plan” within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), under which the
Company has any current or future obligation or liability (including any
potential, contingent or secondary liability under Title IV of ERISA) or under
which any employee or former employee (or beneficiary of any employee or former
employee) of the Company has or may have any current or future right to benefits
(the term “plan” shall include any contract, agreement (including an employment
or independent contractor agreement), policy or understanding, each such plan
being hereinafter referred to in this Agreement individually as a “Benefit
Plan”). The Company has delivered to the Investor true, correct and complete
copies of (i) each material Benefit Plan, including any amendments thereto, (ii)
the summary plan description, if any, for each Benefit Plan, including any
summaries of material modifications made since the most recent summary plan
description, (iii) the latest annual report which has been filed with the
Internal Revenue Service (the “IRS”) for each Benefit Plan required to file an
annual report, and (iv) the most recent IRS determination letter for each
Benefit Plan that is a pension plan (as defined in ERISA) intended to be
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(the “Code”). Each Benefit Plan intended to be tax qualified under Sections
401(a) and 501(a) of the Code is and has been determined by the IRS to be tax
qualified under Sections 401(a) and 501(a) of the Code and, since such
determination, no amendment to or failure to amend any such Benefit Plan and no
other event or circumstance has occurred that could reasonably be expected to
adversely affect its tax qualified status.

 

(iv) There are no actions, claims, audits, lawsuits or arbitrations pending, or,
to the knowledge of the Company, threatened, with respect to any Benefit Plan or
the assets of any Benefit Plan. Each Benefit Plan has been administered in all
material respects in accordance with its terms and with all applicable Legal
Requirements (including, without limitation, the Code and ERISA).

 

(v) Except as set forth on Schedule 3(v), the consummation of the transactions
contemplated by this Agreement will not (1) entitle any employee or independent
contractor of the Company or its Subsidiaries to severance pay or termination
benefits, (2) accelerate the time of payment or vesting, or increase the amount
of compensation due to any current or former employee or independent contractor
of the Company or its Subsidiaries, (3) obligate the Company or any of its
affiliates to pay or otherwise be liable for any compensation, vacation days,
pension contribution or other benefits to any current or former employee,
consultant, agent or independent contractor of the Company or its Subsidiaries
for periods before each Closing, (4) require assets to be set aside or other
forms of security to be provided with respect to any liability under a Benefit
Plan, or (5) result in any “parachute payment” (within the meaning of Section
280G of the Code) under any Benefit Plan.

 

(vi) No Benefit Plan is subject to the provisions of Section 412 of the Code or
Part 3 of Subtitle B of Title I of ERISA. No Benefit Plan is subject to Title IV
of ERISA and no Benefit Plan is a “multiemployer plan” (within the meaning of
Section 3(37) of ERISA). Since inception, neither the Company, its Subsidiaries,
nor any business or entity treated as a single employer with the Company or its
Subsidiaries for purposes of Title IV of ERISA contributed to or was obliged to
contribute to a pension plan that was at any time subject to Title IV of ERISA.

 

(vii) No Benefit Plan has provided, been required to provide, provides or is
required to provide, at any time in the past, present, or future, health,
medical, dental, accident, disability, death or survivor benefits to or in
respect of any Person beyond one year following termination of employment,
except to the extent required under any state insurance law or under Part 6 of
Subtitle B of Title I of ERISA and under Section 4980B of the Code. No Benefit
Plan covers any individual that is not an employee or advisor of the Company or
its Subsidiaries, other than spouses and dependents of employees under health
and child care policies listed in Schedule 3(u)(vii), true and complete copies
of which have been made available to the Investor.

 

 15 

 

 

(viii) Except as otherwise permitted pursuant to employment agreements with the
Company disclosed to the Investor, each officer of the Company is currently
devoting all of such officer’s business time to the conduct of the business of
the Company. Except as otherwise permitted pursuant to employment agreements
with the Company disclosed to the Investor, the Company is not aware of any
officer or key employee of the Company or any of its Subsidiaries planning to
work less than full time at the Company or its Subsidiaries in the future.

 

(v) Reserved.

 

(w) Intellectual Property. Except as listed on Schedule 3(w) the Company does
not own any Intellectual Property. “Intellectual Property” shall mean all of the
following: (A) trademarks and service marks, trade dress, product
configurations, trade names and other indications of origin, applications or
registrations in any jurisdiction pertaining to the foregoing and all goodwill
associated therewith; (B) inventions, discoveries, improvements, ideas,
know-how, formula methodology, processes, technology, software (including
password unprotected interpretive code or source code, object code, development
documentation, programming tools, drawings, specifications and data) and
applications and patents in any jurisdiction pertaining to the foregoing,
including re-issues, continuations, divisions, continuations-in-part, renewals
or extensions; (C) trade secrets, including confidential information and the
right in any jurisdiction to limit the use or disclosure thereof; (D) copyrights
in writings, designs software, mask works or other works, applications or
registrations in any jurisdiction for the foregoing and all moral rights related
thereto; (E) database rights; (F) Internet Web sites, domain names and
applications and registrations pertaining thereto and all intellectual property
used in connection with or contained in all versions of the Company’s Web sites
(except for as related to “endonovo.com”); (G) rights under all agreements
relating to the foregoing; (H) books and records pertaining to the foregoing;
and (I) claims or causes of action arising out of or related to past, present or
future infringement or misappropriation of the foregoing.

 

(x) Environmental Laws. To its knowledge, the Company and its Subsidiaries (i)
are in compliance with any and all Environmental Laws, (ii) have received all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or approval
where, in each of the foregoing clauses (i), (ii) and (iii), the failure to so
comply could be reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect.

 

(y) Subsidiary Rights. The Company or one of its Subsidiaries has the
unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive dividends and distributions on, all capital securities of its
Subsidiaries as owned by the Company or such Subsidiary.

 

(z) Tax Status.

 

(i) Except as disclosed on Schedule 3(zi), the Company and its Subsidiaries have
filed in the appropriate jurisdictions all material returns, reports,
information statements and other documentation required to be filed or
maintained, in connection with the calculation, determination, assessment or
collection of any and all federal, state, local, foreign and other taxes,
levies, fees, imposts, duties, governmental fees and charges of whatever kind
(including any interest, penalties or additions to the tax imposed in connection
therewith or with respect thereto), including, without limitation, taxes imposed
on, or measured by, income, franchise, profits, gross income or gross receipts,
and also ad valorem, value added, sales, use, service, real or personal
property, capital stock, stock transfer, license, payroll, withholding,
employment, social security, workers’ compensation, unemployment compensation,
utility, severance, production, excise, stamp, occupation, premium, windfall
profits, environmental, transfer and gains taxes and customs duties (each a
“Tax”).

 

 16 

 

 

(ii) Each of the Company and its Subsidiaries has paid all material Taxes and
other assessments due from and payable by the Company and its Subsidiaries on or
prior to the date hereof on a timely basis except as to those set forth in
Schedule 3(z)(ii). The charges, accruals, and reserves for Taxes with respect to
the Company and its Subsidiaries are adequate to cover Tax liabilities of the
Company and its Subsidiaries accruing throughout the Execution Date. Except as
set forth in Schedule 3(z)(ii), each of the Company and its Subsidiaries has
complied in all material respects with all applicable Legal Requirements
relating to the payment and withholding of Taxes (including withholding and
reporting requirements under Sections 1441 through 1464, 3401 through 3406, and
6041 and 6049 of the Code and similar provisions under any other applicable
Legal Requirements) and, within the time and in the manner prescribed by law,
has withheld from wages, fees and other payments and paid over to the proper
governmental or regulatory authorities all amounts required. Except as set forth
in Schedule 3(z)(ii), neither the Company nor any of its Subsidiaries has
received notice of assessment or proposed assessment of any Taxes claimed to be
owed by it or any other Person on its behalf. Except as set forth in Schedule
3(z)(ii), no returns filed by or on behalf of the Company or any of its
Subsidiaries with respect to Taxes are currently being audited or examined.
Except as set forth in Schedule 3(z)(ii), neither the Company nor any of its
Subsidiaries has received notice of any such audit or examination. Except as set
forth in Schedule 3(z)(ii), no issue has been raised by any taxing authority
with respect to the Company or any of its Subsidiaries in any audit or
examination which, by application of similar principles, could reasonably be
expected to result in a proposed material adjustment to the liability for Taxes
for any period not so examined.

 

(iii)

 

(iv) Except as disclosed on Schedule 3(z)(iii), no known Liens have been filed
against the Company or any of its Subsidiaries with respect to any Taxes (other
than Liens for Taxes not yet due and payable). Neither the Company nor any of
its Subsidiaries has elected pursuant to the Code to be treated as an S
corporation or any comparable provision of local, state or foreign law, or has
made any other elections pursuant to the Code (other than elections that relate
solely to entity classification, methods of accounting, depreciation, or
amortization) that would have a material effect on the business, properties,
prospects, or financial condition of the Company and its Subsidiaries,
individually or in the aggregate.

 

(v) Except as disclosed herein, the Company has received no notices or requests
for information from the IRS and certain states regarding its failure to file
its Taxes. Neither the Company nor any of its Subsidiaries has been a member of
an affiliated group (as defined in Section 1504(a) of the Code) or filed or been
included in a combined, consolidated or unitary income tax return other than the
affiliated group of which the Company is currently the common parent. Neither
the Company nor any of its Subsidiaries is required to include in income any
adjustment pursuant to Section 481(a) of the Code by reason of a voluntary
change in accounting methods initiated by the Company or any of its
Subsidiaries, and no Governmental Authority has proposed an adjustment or change
in accounting method. Neither the Company nor any of its Subsidiaries is a party
to any Tax sharing or Tax indemnity agreement or any other agreement of a
similar nature that remains in effect. Neither the Company nor any of its
Subsidiaries has consented to any waiver of the statute of limitations for the
assessment of any Taxes or has requested any extension of time for the payment
of any Taxes. Neither the Company nor any of its Subsidiaries has ever held a
material beneficial interest in any other Person, other than those listed in
Schedule 3(z)(iv). Neither the Company nor any of its Subsidiaries is obligated
to make, nor as a result of any event connected with the transactions
contemplated by this Agreement will become obligated to make, any payment that
would not be deductible under Section 280G of the Code. Neither the Company nor
any Subsidiary of the Company is a “passive foreign investment company” within
the meaning of Section 1296 of the Code (a “PFIC”), and the Company does not
anticipate that the Company or any additional foreign Subsidiary will become a
PFIC in the foreseeable future.

 

 17 

 

 

(aa) Internal Accounting and Disclosure Controls. Except as disclosed in the
Company’s SEC filings, the Company and each of its Subsidiaries maintain a
system of internal accounting controls appropriate for its size.

 

(bb) Off Balance Sheet Arrangements. There is no transaction, arrangement, or
other relationship between the Company and an unconsolidated or other off
balance sheet entity that is not disclosed by the Company in its Financial
Statements or that otherwise would be reasonably likely to have a Material
Adverse Effect.

 

(cc) Investment Company Status. The Company is not, and upon consummation of the
sale of the Shares will not be, an “investment company,” a company controlled by
an “investment company” or an “affiliated person” of, or “promoter” or
“principal underwriter” for, an “investment company” as such terms are defined
in the Investment Company Act of 1940, as amended.

 

(dd) Illegal or Unauthorized Payments; Political Contributions Neither the
Company or any of its Subsidiaries nor, to the best of the Company’s knowledge
(after reasonable inquiry of its officers and directors), any of the officers,
directors, employees, agents or other representatives of the Company or any of
its Subsidiaries or any other business entity or enterprise with which the
Company or any Subsidiary is or has been affiliated or associated, has, directly
or indirectly, made or authorized any payment, contribution or gift of money,
property, or services, whether or not in contravention of applicable law, (a) as
a kickback or bribe to any Person or (b) to any political organization, or the
holder of or any aspirant to any elective or appointive public office except for
personal political contributions not involving the direct or indirect use of
funds of the Company or any of its Subsidiaries.

 

(ee) Transfer Taxes. As of each Closing, all stock transfer or other taxes
(other than income or similar taxes) which are required to be paid in connection
with the sale and transfer of the Shares to be sold to the Investor hereunder
will be, or will have been, fully paid or provided for by the Company, and all
laws imposing such taxes will be or will have been complied with.

 

(ff) Books and Records. To the Company’s knowledge, the books of account,
ledgers, order books, records and documents of the Company and its Subsidiaries
accurately and completely reflect all information relating to the respective
businesses of the Company and its Subsidiaries, the nature, acquisition,
maintenance, location and collection of each of their respective assets, and the
nature of all transactions giving rise to material obligations or accounts
receivable of the Company or its Subsidiaries, as the case may be, except where
the failure to so reflect such information would not have a Material Adverse
Effect. To the Company’s knowledge, the minute books of the Company and its
Subsidiaries contain accurate records of all meetings and accurately reflect all
other actions taken by the stockholders, boards of directors and all committees
of the boards of directors, and other governing Persons of the Company and its
Subsidiaries, respectively.

 

 18 

 

 

(gg) Money Laundering. The Company and its Subsidiaries are in compliance with,
and have not previously violated, the USA PATRIOT ACT of 2001 (the “PATRIOT
Act”) and all other applicable U.S. and non-U.S. anti-money laundering laws and
regulations, including, but not limited to, the laws, regulations and Executive
Orders and sanctions programs administered by the U.S. Office of Foreign Assets
Control (“OFAC”), including, but not limited, to (i) Executive Order 13224 of
September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg.
49079 (2001)); and (ii) any regulations contained in 31 CFR, Subtitle B, Chapter
V (collectively, the “Anti-Money Laundering/OFAC Laws”).

 

(hh) U.S. Real Property Holding Corporation. The Company is not, has never been,
and so long as any Shares remain outstanding, shall not become, a U.S. real
property holding corporation within the meaning of Section 897 of the Internal
Revenue Code of 1986, as amended, and the Company shall so certify upon the
Investor’s request.

 

(ii) Bank Holding Company Act. Neither the Company nor any of its Subsidiaries
is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and
to regulation by the Board of Governors of the Federal Reserve System (the
“Federal Reserve”). Neither the Company nor any of its Subsidiaries or
affiliates owns or controls, directly or indirectly, five percent (5%) or more
of the outstanding shares of any class of voting securities or twenty-five
percent (25%) or more of the total equity of a bank or any entity that is
subject to the BHCA and to regulation by the Federal Reserve. Neither the
Company nor any of its Subsidiaries or affiliates exercises a controlling
influence over the management or policies of a bank or any entity that is
subject to the BHCA and to regulation by the Federal Reserve.

 

(jj) Shell Company Status. The Company is not currently, and has never been, an
issuer identified in Rule 144(i)(1) under the Securities Act.

 

(kk) No Disqualification Events. With respect to Shares to be offered and sold
hereunder in reliance on Rule 506 under the 1933 Act (“Regulation D
Securities”), none of the Company, any of its predecessors, any affiliated
issuer, any director, executive officer, other officer of the Company
participating in the offering hereunder, any beneficial owner of 20% or more of
the Company’s outstanding voting equity securities, calculated on the basis of
voting power, nor any promoter (as that term is defined in Rule 405 under the
1933 Act) connected with the Company in any capacity at the time of sale (each,
an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is subject
to any Disqualification Event, except for a Disqualification Event covered by
Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine
whether any Issuer Covered Person is subject to a Disqualification Event. The
Company has complied, to the extent applicable, with its disclosure obligations
under Rule 506(e), and has furnished to the Investor a copy of any disclosures
provided thereunder.

 

(ll) Other Covered Persons. The Company is not aware of any Person (other than
any Issuer Covered Person) that has been or will be paid (directly or
indirectly) remuneration for solicitation of the Investor in connection with the
sale of any Regulation D Securities.

 

(mm) Listing and Maintenance Requirements. The Common Stock is registered
pursuant to Section 12(g) of the Exchange Act, and the Company has taken no
action designed to, or which to its knowledge is likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act, nor has
the Company received any notification that the SEC is contemplating terminating
such registration. The Company has not, in the twelve (12) months preceding the
Execution Date, received notice from the Principal Market on which the Common
Stock is or has been listed or quoted to the effect that the Company is not in
compliance with the listing or maintenance requirements of such Principal
Market. The Company is, and has no reason to believe that it will not in the
foreseeable future continue to be, in compliance with all such listing and
maintenance requirements.

 

 19 

 

 

(nn) No Market Manipulation. Neither the Company, nor any Subsidiary has, and to
its knowledge no Person acting on either of their behalf has, (i) taken,
directly or indirectly, any action designed to cause or to result in the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Put Shares, (ii) sold, bid for,
purchased, or, paid any compensation for soliciting purchases of, any of the Put
Shares, or (iii) paid or agreed to pay to any Person any compensation for
soliciting another to purchase any other securities of the Company.

 

(oo) Convertible Debt. All Indebtedness of the Company outstanding as of the
Execution Date that is convertible pursuant to its terms into equity, whether at
fixed or variable prices and regardless of any conditions precedent or other
conditions to such conversion, is set forth on Schedule 3(oo) (the “Notes”),
including all amounts payable under such indebtedness (which for the avoidance
of confusion, shall include both the principal due under any such indebtedness
and any interest due and payable as of the Execution Date). The Company does not
have any arrangements or contractual obligations to issue any debt securities or
otherwise as of the Execution Date other than as set forth on Schedule 3(oo).

 

(pp) Disclosure. The Company understands and confirms that the Investor will
rely on the foregoing representations in effecting transactions in securities of
the Company. No statement made by the Company in this Agreement, any other
Transaction Document or the Exhibits and Schedules attached hereto or in any
certificate or schedule furnished or to be furnished by or on behalf of the
Company to the Investors or any of their representatives in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading. The due diligence materials
previously provided by or on behalf of the Company to the Investor (the “Due
Diligence Materials”), have been prepared in a good faith effort by the Company
to describe the Company’s present and proposed products, and projected growth
and the Company and do not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein not
misleading, except that with respect to assumptions, projections and expressions
of opinion or predictions contained in the Due Diligence Materials, the Company
represents only that such assumptions, projections, expressions of opinion and
predictions were made in good faith and that the Company believes there is a
reasonable basis therefor. The Due Diligence Materials contain all material
agreements of the Company and its Subsidiaries and no material agreements of the
Company or its Subsidiaries exist other than those provided in the Due Diligence
Materials. The Company acknowledges and agrees that the Investor has not
participated in the preparation of, or has any responsibility for, the content
of any Due Diligence Materials. The Investor acknowledges that: (i) any matter
disclosed to it on any disclosure schedule hereunder that may also be delivered
under another disclosure schedule hereunder shall also be deemed to be disclosed
to it on such other disclosure schedule and (ii) any matter disclosed in an SEC
Filing shall be deemed to be disclosed on an applicable disclosure schedule.

 

(qq) Absence of Schedules. In the event that the Company does not deliver any
disclosure schedule contemplated by this Agreement, the Company hereby
acknowledges and agrees that (i) to the extent the Company has (x) previously
delivered to the Investor such disclosure schedule, the information therein has
not changed as of such date, and (y) not previously delivered to the Investor
such disclosure schedule, each such undelivered disclosure schedule shall be
deemed to read as follows: “Nothing to Disclose”, and (ii) the Investor has not
otherwise waived delivery of such disclosure schedule.

 

 20 

 

 

4. COVENANTS.

 

(a) Issuance of Commitment Shares. On the Execution Date, the Company shall
cause the Transfer Agent to issue to issue the Execution Commitment Shares
directly to the Investor as restricted book entry shares. On the Initial
Effectiveness Commitment Share Date and the Subsequent Effeciveness Commitment
Share Date, the Company shall cause the Transfer Agent to issue to issue the
Initial Effectiveness Commitment Shares and the Subsequent Effectiveness
Commitment Shares, respectively, directly to the Investor. In connection with
any Put, the Company shall cause the Transfer Agent to issue the Pro-Rata
Commitment Shares (as applicable in accordance with Section 1(f)(iv)).

 

(b) Filing of Registration Statement. No later than twenty-one (21) days
following the filing of the Company’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2019, the Company shall file the Registration Statement
in accordance with the terms of the Registration Rights Agreement.

 

(c) Use of Proceeds. Until such time as the Company has paid all principal and
interest due under the Notes issued by the Company prior to the Execution Date
and set forth on Schedule 3(oo), the Company shall, within ten (10) Trading days
of each Closing, make payments not less than 50% of the proceeds from the sale
of the Put Shares in each Put in satisfaction of principal and interest due on
the Notes set forth on Schedule 3(oo) (each, a “Debt Payment”). Other than the
foregoing, the Company shall use the proceeds of the sale of the Put shares as
set forth in the Registration Statement.

 

(d) Reporting Status. During the Commitment Period and until such time as the
Investor has resold all Shares issued hereunder (the “Reporting Period”), the
Company shall timely file all reports required to be filed with the SEC pursuant
to the 1934 Act, and the Company shall not terminate its status as an issuer
required to file reports under the 1934 Act even if the 1934 Act or the rules
and regulations thereunder would no longer require or otherwise permit such
termination.

 

(e) Purchase Records. The Company shall maintain records showing the amount
Aggregate Put Amount remaining at any given time and the date, Purchase Price
and Put Shares for each Put, contained in the applicable Put Notice.

 

(f) Listing. During the Reporting Period, the Company shall maintain the listing
or quotation of the Common Stock on the Principal Market, and neither the
Company nor any of its Subsidiaries shall take any action which would be
reasonably expected to result in the delisting or suspension of the Common Stock
on the Principal Market. The Company shall pay all fees and expenses in
connection with satisfying its obligations under this Section 4(f).

 

(g) Fees. Within 7 (seven) days of the Effective Date, the Company shall
reimburse the Investor or its designee(s) for all costs and expenses incurred in
connection with the transactions contemplated by the Transaction Documents
(including all legal fees and disbursements in connection therewith,
documentation and implementation of the transactions contemplated by the
Transaction Documents and due diligence in connection therewith).
Notwithstanding the foregoing, in no event will the costs and expenses of the
Investor reimbursed by the Company pursuant to this Section 4(g) exceed
Twenty-Five Thousand Dollars ($25,000) without the prior approval of the
Company. The Company shall be responsible for the payment of any placement
agent’s fees, financial advisory fees, or broker’s commissions relating to or
arising out of the transactions contemplated hereby. The Company shall pay, and
hold the Investor harmless against, any liability, loss or expense (including,
without limitation, reasonable attorney’s fees and out-of-pocket expenses)
arising in connection with any claim relating to any such payment. Except as
otherwise set forth in the Transaction Documents, each party to this Agreement
shall bear its own expenses in connection with the transactions contemplated
thereby.

 

(h) Blue Sky. The Company shall take all such action, if any, as is reasonably
necessary in order to obtain an exemption for or to register or qualify (i) the
issuance of the Commitment Shares and the sale of the Put Shares to the Investor
under this Agreement and (ii) any subsequent resale of all Commitment Shares and
all Put Shares by the Investor, in each case, under applicable securities or
“Blue Sky” laws of the states of the United States in such states as is
reasonably requested by the Investor from time to time, and shall provide
evidence of any such action so taken to the Investor.

 

 21 

 

 

(i) Disclosure of Transactions and Other Material Information. On or before 9:30
a.m., New York time, on the second (2nd) Trading Day after the Execution Date,
the Company shall file a Current Report on Form 8-K describing all the material
terms of the transactions contemplated by the Transaction Documents in the form
required by the 1934 Act and attaching all the material Transaction Documents
(including, without limitation, this Agreement and the Registration Rights
Agreement (together, the “8-K Filing”)). From and after the filing of the 8-K
Filing, the Company shall have disclosed all material, non-public information
(if any) provided to the Investor by the Company or any of its Subsidiaries or
any of their respective officers, directors, employees or agents in connection
with the transactions contemplated by the Transaction Documents.

 

(j) Variable Securities. For thirty-six (36) months following the Effective
Date, (or thirty-six (36) months following the Execution Date if the Effective
Date does not occur), the Company shall be prohibited from effecting or entering
into an agreement to effect any issuance by the Company or any of its
subsidiaries of Common Stock or any securities of the Company or its
Subsidiaries that is a Variable Rate Issuance without the prior written consent
of the Investor. The Investor shall be entitled to obtain injunctive relief
against the Company to preclude any such issuance in violation of this Section
4(j), which remedy shall be in addition to any right to collect damages.

 

(k) Integration. In any case subject to the terms of the Registration Rights
Agreement, from and after the Execution Date, neither the Company, nor or any of
its Subsidiaries or affiliates will, and the Company shall use its reasonable
best efforts to ensure that no Person acting on their behalf will, directly or
indirectly, make any offers or sales of any security or solicit any offers to
buy any security, under circumstances that would require registration of the
offer and sale of any of the Put Shares under the 1933 Act.

 

(l) Conduct of Business. The business of the Company and its Subsidiaries shall
not be conducted in violation of any law, ordinance or regulation of any
governmental entity, except where such violations would not result, either
individually or in the aggregate, in a Material Adverse Effect. The Company and
its Subsidiaries shall at all times be in compliance with the Foreign Corrupt
Practices Act; the PATRIOT Act, and all other applicable U.S. and non-U.S.
anti-money laundering laws and regulations; and the laws, regulations and
Executive Orders and sanctions programs administered by the OFAC, including,
without limitation, the “Anti-Money Laundering/OFAC Laws”.

 

(m) Due Diligence; Non-Public Information. The Investor shall have the right,
from time to time as the Investor may reasonably deem appropriate, to perform
reasonable due diligence on the Company during normal business hours. The
Company and its officers and employees shall provide information and reasonably
cooperate with the Investor in connection with any reasonable request by the
Investor related to the Investor’s due diligence of the Company. Each party
hereto agrees not to disclose any Confidential Information of the other party to
any third party and shall not use the Confidential Information for any purpose
other than in connection with, or in furtherance of, the transactions
contemplated hereby. Each party hereto acknowledges that the Confidential
Information shall remain the property of the disclosing party and agrees that it
shall take all reasonable measures to protect the secrecy of any Confidential
Information disclosed by the other party. The Company confirms that neither it
nor any other Person acting on its behalf shall provide the Investor or its
agents or counsel with any information that constitutes or might constitute
material, non-public information, unless a simultaneous public announcement
thereof is made by the Company in the manner contemplated by Regulation FD. In
the event of a breach of the foregoing covenant by the Company or any Person
acting on its behalf (as determined in the reasonable good faith judgment of the
Investor), in addition to any other remedy provided herein or in the other
Transaction Documents, the Investor shall have the right to make a public
disclosure, in the form of a press release, public advertisement or otherwise,
of such material, non-public information without the prior approval by the
Company; provided the Investor shall have first provided notice to the Company
that it believes it has received information that constitutes material,
non-public information, the Company shall have at least 24 hours to publicly
disclose such material, non-public information prior to any such disclosure by
the Investor, and the Company shall have failed to publicly disclose such
material, non-public information within such time period. The Investor shall not
have any liability to the Company, any of its Subsidiaries, or any of their
respective directors, officers, employees, stockholders or agents, for any such
disclosure. The Company understands and confirms that the Investor shall be
relying on the foregoing covenants in effecting transactions in securities of
the Company.

 

 22 

 

 

(n) Taxes. The Company will pay, and save and hold the Investor harmless from
any and all liabilities (including interest and penalties) with respect to, or
resulting from any delay or failure in paying, stamp and other taxes (other than
income taxes), if any, which may be payable or determined to be payable on the
execution and delivery or acquisition of the Shares.

 

(o) Books and Records. The Company will keep proper books of record and account,
in which full and correct entries shall be made of all financial transactions
and the assets and business of the Company and its Subsidiaries in accordance
with GAAP.

 

(p) Notice of Disqualification Events. The Company will notify the Investor in
writing, prior to the Effective Date of (i) any Disqualification Event relating
to any Issuer Covered Person and (ii) any event that would, with the passage of
time, become a Disqualification Event relating to any Issuer Covered Person.

 

(q) New Debt. For a period of one year from the Execution Date, neither the
Company nor any Subsidiary shall enter into any agreement creating indebtedness
for the Company or any Subsidiary, including but not limited to entering into
(i) any mortgage, credit agreement or other facility, indenture agreement,
factoring agreement or other instrument, under which there may be issued, or by
which there may be secured or evidenced, any indebtedness for borrowed money or
money due that involves,individually obligations greater than $250,000, or in
aggregate with such other agreements obligations greater than $500,000 and (ii)
any equipment lease, agreement evidencing purchase money security interests, or
other similar transaction in the ordinary course of business that involves,
either individually obligations greater than $250,000.00 or in aggregate with
other such agreements, obligations greater than $500,000, in either case without
the prior written consent of the Investor.

 

(r) DTC Eligibility. During the Reporting Period, the Company will employ as the
Transfer Agent for the Common Stock a participant in the DTC Automated
Securities Transfer Program and cause the Common Stock to be transferable
pursuant to such program.

 

(s) Taxes. The Company shall pay any and all transfer, stamp or similar taxes
that may be payable with respect to the issuance and delivery of any shares of
Common Stock to the Investor made under this Agreement.

 

5. COVENANTS OF THE INVESTOR.

 

(a) Prohibition of Short Sales and Hedging Transactions. During the Reporting
Period, the Investor and its agents, representatives and affiliates shall not in
any manner whatsoever enter into or effect, directly or indirectly, any “short
sale” (as defined in Rule 200 of Regulation SHO promulgated under the 1944 Act)
with respect to the Common Stock; provided that the sale after delivery of a Put
Notice of such number of shares of Common Stock reasonably expected to be
purchased under a Put Notice shall not be prohibited by this Section 5(a).

 

(b) Compliance with Law. During the Reporting Period, the Investor shall comply
with all applicable state and federal securities laws and regulations and the
rules and regulations of FINRA and the Principal Market in connection with the
resale of the Shares issued pursuant to the Transaction Documents.

 

6. CONDITIONS TO THE COMPANY’S RIGHT TO DELIVER PUT NOTICES.

 

The right of the Company hereunder to issue and sell the Put Shares to the
Investor is subject to the satisfaction, at or before the Effective Date, of
each of the following conditions:

 

(a) Delivery of Transaction Documents. The Investor shall have executed each of
the Transaction Documents and delivered the same to the Company.

 

 23 

 

 

(b) Notice of Effectiveness. The Registration Statement shall have been filed in
compliance with the Registration Rights Agreement and shall have been declared
effective under the 1933 Act by the SEC, and no stop order with respect to the
Registration Statement shall be pending or threatened by the SEC. The Company
shall have delivered a “Notice of Effectiveness” in a form acceptable to the
Investor and the Transfer Agent.

 

(c) Transfer Agent Instruction Letter. The Company shall have executed and
delivered to the Transfer Agent an instruction letter in substantially the form
attached hereto as Exhibit B (the “Transfer Agent Instruction Letter”), and
acknowledged and the Investor and the Transfer Agent shall have countersigned
the Transfer Agent Instruction Letter. The Company shall have provided evidence
sufficient to the Investor that it has reserved 81,052,290 shares of Common
Stock for issuance as Shares pursuant to this Agreement (the “Reserve”). The
Company shall have no knowledge of any fact or circumstance that would prevent
the Transfer Agent from complying with the terms of the Transfer Agent
Instruction Letter.

 

(d) DWAC Shares. The Company shall have issued the Execution Commitment Shares
to the Investor as DWAC Shares, or shall have caused the restrictive legend to
have been removed from the certificate representing the Execution Commitment
Shares, such that the Execution Commitment Shares are DWAC Eligible.

 

(e) Good Standing. The Company shall have delivered to the Investor a
certificate evidencing the formation and good standing of the Company and each
of its Subsidiaries in each such entity’s jurisdiction of formation issued by
the Secretary of State (or equivalent) of such jurisdiction of formation as of a
date within ten (10) days of the Effective Date.

 

(f) Secretary’s Certificate. The Company shall have delivered to the Investor a
certificate, executed by the Secretary of the Company and dated as of the
Closing, as to (i) the resolutions adopted by the Company’s board of directors
in a form reasonably acceptable to the Investor, (ii) the Certificate of
Incorporation and (iii) the Bylaws, each as in effect at the Effective Date, in
the form attached hereto as Exhibit C.

 

(g) Regulatory Approvals. The Company shall have obtained all governmental,
regulatory or third party consents and approvals, if any, necessary for the
issuance and sale of the Shares.

 

 24 

 

 

(h) Representations and Warranties at Effective Date. The representations and
warranties of the Investor shall be true and correct as of the date when made
and as of the Effective Date, as though made at that time (except for
representations and warranties that speak as of a specific date, which shall be
true and correct as of such specified date), and the Investor shall have
performed, satisfied and complied with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Investor at or prior to the Effective Date, and the Company shall have provided
to the Investor a certificate, executed by the CEO, President or CFO of the
Company, dated as of the Effective Date, to the foregoing effect in the form
attached hereto as Exhibit D.

 

7. CONDITIONS TO THE INVESTOR’S OBLIGATION TO PURCHASE PUT SHARES.

 

The obligation of the Investor hereunder to purchase the Put Shares and is
subject to the satisfaction, at or before the Effective Date and each Put Date,
of each of the following conditions:

 

(a) No Judgments. No statute, rule, regulation, executive order, decree, ruling
or injunction shall have been enacted, entered, promulgated or adopted by any
court or governmental authority of competent jurisdiction that prohibits or
directly and materially adversely affects any of the transactions contemplated
by the Transaction Documents, and no proceeding shall have been commenced that
may have the effect of prohibiting or materially adversely affecting any of the
transactions contemplated by the Transaction Documents.

 

(b) Representations and Warranties at Each Put Date. The representations and
warranties of the Company shall be true and correct as of each Put Date (except
for representations and warranties that speak as of a specific date, which shall
be true and correct as of such specified date) and the Company shall have
performed, satisfied and complied in all respects with the covenants, agreements
and conditions required by the Transaction Documents to be performed, satisfied
or complied with by the Company at or prior to each Put Date. The Investor shall
have received a certificate to the foregoing effect with each Put Notice.

 

(c) Registration Statement. The Registration Statement, and any amendment or
supplement thereto, shall be and remain effective for the resale by the Investor
of the Shares in the manner required by the Registration Rights Agreement and
(i) neither the Company nor the Investor shall have received notice that the SEC
has issued or intends to issue a stop order with respect to such Registration
Statement or that the SEC otherwise has suspended or withdrawn the effectiveness
of such Registration Statement, either temporarily or permanently, or intends or
has threatened to do so and (ii) no other suspension of the use of, or
withdrawal of the effectiveness of, such Registration Statement or related
prospectus shall exist. The Company shall have prepared and filed with the SEC a
final and complete prospectus (the preliminary form of which shall be included
in the Registration Statement) and shall have electronically delivered to the
Investor a true and complete copy thereof. Such final prospectus shall be
current and available for the resale by the Investor of all of the Shares
covered thereby. The Company shall have no knowledge of any untrue statement (or
alleged untrue statement) of a material fact or omission (or alleged omission)
of a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, in the Registration Statement, any effective registration
statement filed pursuant to the Registration Rights Agreement or any
post-effective amendment or prospectus which is a part of the foregoing, unless
the Company has filed an amendment with the SEC.

 

(d) DWAC Eligible. The Common Stock must be DWAC Eligible, and the Company must
be able to deliver any Shares associated with a Put Notice as DWAC Shares.

 

 25 

 

 

(e) SEC Documents. The SEC Documents and other documents required to have been
filed by the Company with the SEC pursuant to the reporting requirements of the
1934 Act shall have been filed with the SEC within the applicable time periods
prescribed for such filings under the 1934 Act.

 

(f) Reserve. The Company shall have caused the Transfer Agent to maintain the
Reserve and have added any additional sufficient shares to the Reserve as
reasonably requested by the Investor in the event that the Reserve does not
contain sufficient shares for the Company to make Puts pursuant to this
Agreement.

 

(g) Adverse Changes. Since the date of filing of the Company’s most recent SEC
Document, no event that had or is reasonably likely to have a Material Adverse
Effect has occurred.

 

(h) No Events of Default. No Event of Default (as defined below) has occurred,
or any event which, after notice and/or lapse of time, would become an Event of
Default has occurred.

 

(i) Other Documents. The Company shall have delivered to the Investor such other
documents relating to the transactions contemplated by this Agreement as the
Investor or its counsel may reasonably request.

 

8. TERMINATION. The Company may terminate this Agreement at any time by (20)
days written notice to the Investor; provided that the provisions of Sections 4,
5, and 9 shall survive the termination of this Agreement for the period of time
specified therein or otherwise for maximum length of time allowed under
applicable law. In addition, this Agreement shall automatically terminate on the
earlier of (i) the end of the Commitment Period; (ii) the date that the Company
sells and the Investor purchases the Aggregate Put Amount; (iii) the date of any
of the occurrence of any the Events of Default realated to Bankruptcy law
specified in Subsections 10(l)(vi)-10(l)(viii).

 

9. MISCELLANEOUS.

 

(a) Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in The City of New York, Borough of Manhattan, 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 any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. 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 to such
party at the address for such 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 manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

 26 

 

 

(b) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party; provided that an e-mail signature shall be
considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not an e-mail
signature.

 

(c) Headings. The headings of this Agreement are for convenience of reference
and shall not form part of, or affect the interpretation of, this Agreement.

 

(d) Severability. If any provision of this Agreement is prohibited by law or
otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or
unenforceable shall be deemed amended to apply to the broadest extent that it
would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this
Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter
hereof and the prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the parties.
The parties will endeavor in good faith negotiations to replace the prohibited,
invalid or unenforceable provision(s) with a valid provision(s), the effect of
which comes as close as possible to that of the prohibited, invalid or
unenforceable provision(s).

 

(e) Entire Agreement; Amendments. This Agreement and the other Transaction
Document supersede all other prior oral or written agreements between the
Investor, the Company, their affiliates and Persons acting on their behalf with
respect to the matters discussed herein, and this Agreement, the other
Transaction Document and the instruments referenced herein and therein contain
the entire understanding of the parties with respect to the matters covered
herein and therein and, except as specifically set forth herein or therein,
neither the Company nor the Investor makes any representation, warranty,
covenant or undertaking with respect to such matters. Provisions of this
Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Investor.
The Company has not, directly or indirectly, made any agreements with the
Investor relating to the terms or conditions of the transactions contemplated by
the Transaction Documents except as set forth in the Transaction Documents.
Without limiting the foregoing, the Company confirms that, except as set forth
in this Agreement, the Investor has not made any commitment or promise or has
any other obligation to provide any financing to the Company or otherwise.

 

(f) Notices. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by e-mail (provided confirmation of
transmission is electronically generated and kept on file by the sending party);
or (iii) one (1) Trading Day after deposit with an overnight courier service, in
each case properly addressed to the party to receive the same. The addresses and
email addresses for such communications shall be:

 

If to the Company:

 

Endonovo Therapeutics, Inc.

6320 Canoga Avenue, 15th Floor

Woodland Hills, CA 91367

Telephone: 800.701.1223

Email: acollier@endonovo.com

Attention: Alan Collier

 

 27 

 

 

With a copy (for informational purposes only) to:

 

1065 Dobbs Ferry Road

White Plains, NY 10607Telephone: (914) 674-4373

Email: hariton@sprynet.com

Attention: Frank J. Hariton, Esq.

 

If to the Investor:

 

Cavalry Fund I LP

61 Kinderkamack Rd.

Woodcliff Lake, NJ 07677

Telephone: 201.391.1839

Email: thomas@cavalryfund.com

Attention: Thomas Walsh

 

With a copy (for informational purposes only) to:

 

K&L Gates LLP

200 S. Biscayne Boulevard, Suite 3900

Miami, FL 33131

Telephone: 305.539.3300

E-mail: clayton.parker@klgates.com

Attention: Clayton E. Parker, Esq.

 

or to such other address and/or email address and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender’s email containing the time, date, recipient e-mail and
an image of the first page of such transmission or (C) provided by an overnight
courier service shall be rebuttable evidence of personal service, receipt by
e-mail or receipt from an overnight courier service in accordance with clause
(i), (ii) or (iii) above, respectively.

 

(g) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns. The
Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Investor, except by operation of law.

 

(h) No Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except that each Indemnitee shall have the right to enforce the
obligations of the Company with respect to Section 9(j).

 

(i) Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as any other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

 

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(j) Indemnification.

 

(i) In consideration of the Investor’s execution and delivery of this Agreement
and in addition to all of the Company’s other obligations under the Transaction
Documents, the Company shall defend, protect, indemnify and hold harmless the
Investor and all of its stockholders, partners, members, officers, directors,
employees and direct or indirect investors and any of the foregoing Persons’
agents or other representatives (including, without limitation, those retained
in connection with the transactions contemplated by this Agreement)
(collectively, the “Indemnitees”) from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys’ fees and disbursements (the
“Indemnified Liabilities”), incurred by any Indemnitee as a result of, or
arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
(b) any breach of any covenant, agreement or obligation of the Company contained
in the Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby or (c) any cause of action, suit or claim brought
or made against such Indemnitee by a third party (including for these purposes a
derivative action brought on behalf of the Company) and arising out of or
resulting from (i) the execution, delivery, performance or enforcement of the
Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, (ii) any transaction financed or to be financed
in whole or in part, directly or indirectly, with the proceeds of the issuance
of the Shares, (iii) any disclosure made by the Investor pursuant to Section
4(m), or (iv) the status of the Investor or holder of the Shares as an investor
in the Company pursuant to the transactions contemplated by the Transaction
Documents. To the extent that the foregoing undertaking by the Company may be
unenforceable for any reason, the Company shall make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities that is
permissible under applicable law.

 

(ii) Promptly after receipt by an Indemnitee under this Section 9(j) of notice
of the commencement of any action or proceeding (including any governmental
action or proceeding) involving an Indemnified Liability, such Indemnitee shall,
if a claim for indemnification in respect thereof is to be made against any
indemnifying party under this Section 9(j), deliver to the indemnifying party a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnitee; provided, however, that an Indemnitee
shall have the right to retain its own counsel with the fees and expenses of not
more than one counsel for such Indemnitee to be paid by the indemnifying party,
if, in the reasonable opinion of counsel selected to defend the Indemnitee, the
representation by such counsel of the Indemnitee and the indemnifying party
would be inappropriate due to actual or potential differing interests between
such Indemnitee and any other party represented by such counsel in such
proceeding. Legal counsel referred to in the immediately preceding sentence
shall be selected by the Investor. The Indemnitee shall cooperate fully with the
indemnifying party in connection with any negotiation or defense of any such
action or Indemnified Liabilities by the indemnifying party and shall furnish to
the indemnifying party all information reasonably available to the Indemnitee
that relates to such action or Indemnified Liabilities. The indemnifying party
shall keep the Indemnitee fully apprised at all times as to the status of the
defense or any settlement negotiations with respect thereto. No indemnifying
party shall be liable for any settlement of any action, claim or proceeding
effected without its prior written consent, provided, however, that the
indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the
Indemnitee, which consent shall not be unreasonably withheld conditioned or
delayed, consent to entry of any judgment or enter into any settlement or other
compromise which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnitee of a release from all liability in
respect to such Indemnified Liabilities or litigation. Following indemnification
as provided for hereunder, the indemnifying party shall be subrogated to all
rights of the Indemnitee with respect to all third parties, firms or
corporations relating to the matter for which indemnification has been made. No
Indemnitee shall enter into any settlement of any action or proceeding subject
to this Section 9(j) without the prior written consent of the indemnifying
party. The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnitee under this Section 9(j),
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action.

 

 29 

 

 

(iii) The indemnification required by this Section 9(j) shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Liabilities are
incurred.

 

(iv) The indemnity agreements contained herein shall be in addition to (x) any
cause of action or similar right of the Indemnitee against the indemnifying
party or others, and (y) any liabilities the indemnifying party may be subject
to pursuant to the law.

 

(k) No Strict Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

 

(l) Remedies. The Investor shall have all rights and remedies set forth in the
Transaction Documents and all rights and remedies which such holders have been
granted at any time under any other agreement or contract and all of the rights
which such holders have under any law. Any Person having any rights under any
provision of this Agreement shall be entitled to enforce such rights
specifically to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law. Furthermore, the
Company recognizes that in the event that it fails to perform, observe, or
discharge any or all of its obligations under the Transaction Documents, any
remedy at law may prove to be inadequate relief to the Investor. The Company
therefore agrees that the Investor shall be entitled to seek temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages.

 

10. CERTAIN DEFINITIONS

 

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

 

(b) “1934 Act”the Securities Exchange Act of 1934, as amended.

 

(c) “Accelerated Purchase Price” means, with respect to any Accelerated Put made
pursuant to Subsection 1(c), 75% of the VWAP of the Common Stock on the
applicable Accelerated Put Date.

 

(d) “Accelerated Put Date” means, with respect to any Accelerated Put made
pursuant to Subsection 1(c), the Trading Day following the applicable Put Date
on which the Company properly delivers a Put Notice for such Accelerated Put.

 

(e) “Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state
law for the relief of debtors.

 

 30 

 

 

(f) “Clearing Costs” shall mean all of the Investor’s broker and Transfer Agent
fees with respect to a Put.

 

(g) “Closing Price” means, for the Common Stock as of any Put Date, the last
closing Sale Price the Common Stock on the Principal Market as reported by the
Principal Market.

 

(h) “Confidential Information” means any information disclosed by either party
to this Agreement, or their affiliates, agents or representatives, to the other
party to this Agreement, either directly or indirectly, in writing, orally or by
inspection of tangible objects (including, without limitation, documents,
formulae, business information, trade secrets, technology, strategies.
prototypes, samples, plant and equipment), which may or may not be designated as
“Confidential,” “Proprietary” or some similar designation. Confidential
Information may also include information disclosed by third parties.
Confidential Information shall not, however, include any information which (i)
was publicly known and made generally available in the public domain prior to
the time of disclosure by the disclosing party; (ii) becomes publicly known and
made generally available after disclosure by the disclosing party to the
receiving party through no fault, action or inaction of the receiving party;
(iii) is already in the possession of the receiving party at the time of
disclosure by the disclosing party as shown by the receiving party’s files and
records immediately prior to the time of disclosure; (iv) is obtained by the
receiving party from a third party without a breach of such third party’s
obligations of confidentiality; (v) is independently developed by the receiving
party without use of or reference to the disclosing party’s Confidential
Information, as shown by documents and other competent evidence in the receiving
party’s possession; or (vi) is required by law to be disclosed by the receiving
party, provided that the receiving party gives the disclosing party prompt
written notice of such requirement prior to such disclosure and assistance in
obtaining an order protecting the information from public disclosure.

 

(i) “Contingent Obligation” means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto.

 

(j) “DWAC Eligible” shall mean that (a) the Common Stock is eligible at DTC for
full services pursuant to DTC’s operational arrangements, including, without
limitation, transfer through DTC’s DWAC system, (b) the Company has been
approved (without revocation) by the DTC’s underwriting department, (c) the
Transfer Agent is approved as an agent in the DTC/FAST Program, (d) the Put
Shares, as applicable, are otherwise eligible for delivery via DWAC, (e) the
Transfer Agent does not have a policy prohibiting or limiting delivery of the
Put Shares, as applicable, via DWAC and (f) the Common Stock is not subject to a
“DTC chill.”.

 

(k) “DWAC Shares” means shares of Common Stock that are (i) issued in electronic
form, (ii) freely tradable and transferable and without restriction on resale
and (iii) timely credited by the Company to the Investor’s or its designee’s
specified DWAC account with DTC under the DTC/FAST Program, or any similar
program hereafter adopted by DTC performing substantially the same function.

 

(l) “Environmental Laws” means all federal, state, local or foreign laws
relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata), including, without limitation, laws relating to
emissions, discharges, releases or threatened releases of chemicals, pollutants,
contaminants, or toxic or hazardous substances or wastes (collectively,
“Hazardous Materials”) into the environment, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials, as well as all authorizations,
codes, decrees, demands or demand letters, injunctions, judgments, licenses,
notices or notice letters, orders, permits, plans or regulations issued,
entered, promulgated or approved thereunder.

 

 31 

 

 

(m) An “Event of Default” means any of the following events:

 

(i) the effectiveness of the Registration Statement registering the resale of
the Shares pursuant to the Registration Rights Agreement lapses for any reason
or such Registration Statement is unavailable to the Investor for resale of all
of the Commitment Shares or any of the Put Shares to be issued to the Investor
under the Transaction Documents, and such lapse or unavailability continues for
a period of ten (10) consecutive Trading Days or for more than an aggregate of
thirty (30) Trading Days in any 365-day period;

 

(ii) the suspension of the Common Stock from trading on the Principal Market for
a period of one Trading Day, provided that the Company may not direct the
Investor to purchase any shares of Common Stock during any such suspension;

 

(iii) the delisting of the Common Stock from the Principal Market unless the
Common Stock is not immediately thereafter trading on the New York Stock
Exchange, The NASDAQ Capital Market, The NASDAQ Global Market, The NASDAQ Global
Select Market, the NYSE American, the NYSE Arca, the OTC Pink or the OTCQX
operated by the OTC Markets Group, Inc. (or nationally recognized successor to
any of the foregoing);

 

(iv) the failure for any reason to issue the Effectiveness Commitment Shares on
each Effectiveness Commitment Share Date.

 

(v) the failure for any reason by the Transfer Agent to issue (A) the Pro-Rata
Commitment Shares to the Investor within three (3) Trading Days after the date
on which the Investor is entitled ot receive such Pro-Rata Commitment Shares
pursuant to Section 1(f)(iv) hereof and (B) Put Shares to the Investor within
three (3) Trading Days after the applicable Put Date on which the Investor is
entitled to receive such Put Shares;

 

(vi) the Failure of the Company to make any Debt Payment with respect to any Put
within ten (10) Trading Days from the Closing for such Put;

 

(vii) the Company breaches any representation, warranty, covenant or other term
or condition under any Agreement to which each of the Investor and the Company
is a party if such breach could have a Material Adverse Effect and except, in
the case of a breach of a covenant which is reasonably curable, only if such
breach continues for a period of at least five (5) Trading Days;

 

(viii) if any Person commences a proceeding against the Company pursuant to or
within the meaning of any Bankruptcy Law;

 

(ix) if the Company, pursuant to or within the meaning of any Bankruptcy Law,
(A) commences a voluntary case, (B) consents to the entry of an order for relief
against it in an involuntary case, (C) consents to the appointment of a
custodian of it or for all or substantially all of its property, or (D) makes a
general assignment for the benefit of its creditors or is generally unable to
pay its debts as the same become due;

 

(x) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that (A) is for relief against the Company in an involuntary
case, (B) appoints a custodian of the Company or for all or substantially all of
its property, or (C) orders the liquidation of the Company or any Subsidiary;

 

 32 

 

 

(xi) if at any time the Common Stock is no longer DWAC Eligible; or

 

(xii) if the Company fails to make such payments required by Section 4(g).

 

(n) “Indebtedness” of any Person means, without duplication (A) all indebtedness
for borrowed money, (B) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (including, without limitation,
“capital leases” in accordance with GAAP) (other than trade payables entered
into in the ordinary course of business consistent with past practice), (C) all
reimbursement or payment obligations with respect to letters of credit, surety
bonds and other similar instruments, (D) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of property, assets or businesses,
(E) all indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case with respect
to any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property), (F) all
monetary obligations under any leasing or similar arrangement which, in GAAP,
consistently applied for the periods covered thereby, is classified as a capital
lease, (G) all indebtedness referred to in clauses (A) through (F) above secured
by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) Lien owned by any Person, even though
the Person which owns such assets or property has not assumed or become liable
for the payment of such indebtedness, and (H) all Contingent Obligations in
respect of indebtedness or obligations of others of the kinds referred to in
clauses (A) through (G) above.

 

(o) “Lien” means any mortgage, deed of trust, lien, pledge, charge, security
interest, easement, covenant, right of way, restriction, equity or encumbrance
of any nature whatsoever in or upon any property or assets (including accounts
and contract rights) with respect to any asset.

 

(p) “Material Adverse Effect” means any material adverse effect on the business,
properties, assets, operations, results of operations, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries, individually or
taken as a whole, or on the transactions contemplated hereby or in the other
Transaction Documents or by the agreements and instruments to be entered into in
connection herewith or therewith, or on the authority or ability of the Company
to perform its obligations under the Transaction Documents.

 

(q) “Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.

 

(r) “Principal Market” means any of the national exchanges (i.e. NYSE, NYSE
AMEX, NASDAQ), or principal quotation systems (i.e. OTCQX, OTCQB, OTC Pink, the
OTC Bulletin Board), or other principal exchange or recognized quotation system
which is at the time the principal trading platform or market for the Common
Stock.

 

(s) “Pro-Rata Put Amount” means the first Three Million Dollars ($3,000,000) of
the Aggregate Put Amount paid as the Purchase Price by the Investor for Puts
pursuant to Section 1.

 

(t) “Pro-Rata Commitment Share Amount” means 2,701,743 shares of Common Stock.

 

 33 

 

 

(u) “Pro-Rata Commitment Share Multiplier” means a fraction, the numerator of
which is the aggregate Purchase Price paid by the Investor with respect to any
Put and the denominator of which is the Pro-Rata Put Amount.

 

(v) “Purchase Price” means, with respect to a Standard Put, the Standard
Purchase Price, and with respect to an Accelerated Put, the Accelerated Purchase
Price.

 

(w) “Put” means any Standard Put or Accelerated Put under this Agreement.

 

(x) “Registration Statement” has the meaning set forth in the Registration
Rights Agreement.

 

(y) “Rule 506(d) Related Party” means a person or entity that is a beneficial
owner of the Investor’s securities for purposes of Rule 506(d).

 

(z) “Sale Price” means any trade price for the shares of Common Stock on the
Principal Market as reported by the Principal Market.

 

(aa) “SEC” means the United States Securities and Exchange Commission.

 

(bb) “Standard Purchase Price” means, with respect to any Standard Put made
pursuant to Section 1(b), the lower of: (i) the lowest Sale Price on the
applicable Put Date and (ii) 85% of the arithmetic average of the 3 lowest
Closing Prices for the Common Stock during the 10 consecutive Trading Days
ending on the Trading Day immediately preceding such Put Date (in each case, to
be appropriately adjusted for any stock split, reverse stock split,
reorganization, recapitalization, non-cash dividend, or other similar
transaction that occurs on or after the date of this Agreement).

 

(cc) “Trading Day” means a calendar day on which the Principal Market shall be
open for business.

 

(dd) “Transaction Documents” means this Agreement and the Registration Rights
Agreement.

 

(ee) “Transfer Agent” means Equity Stock Transfer, L.P. or any successor
transfer agent of the Company.

 

(ff) “Variable Rate Issuance” means a transaction in which the Company (i)
issues or sells any debt or equity securities (including warrants) that are
convertible into, exchangeable or exercisable for, or include the right to
receive, additional shares of Common Stock either (A) at a conversion price,
exercise price or exchange rate or other price that is based upon, and/or varies
with, the trading prices of or quotations for the shares of Common Stock at any
time after the initial issuance of such debt or equity securities, (B) with a
conversion, exercise or exchange price that is subject to being reset at some
future date after the initial issuance of such debt or equity security or upon
the occurrence of specified or contingent events directly or indirectly related
to the business of the Company or the market for the Common Stock or (C) with
shares of Common Stock (or any other additional consideration) being issued to
the holder of such debt or equity security after the initial issuance pursuant
to the terms of such securities upon the occurrence of specified or contingent
events directly or indirectly related to the business of the Company or the
market for the Common Stock or (ii) enters into, or effects a transaction under,
any agreement, including, but not limited to, an equity line, whereby the
Company may issue securities at a future determined price.

 

(gg) “VWAP” shall mean 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 national exchange as included in the term Principal Market, the daily
volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on such national exchange on which the Common Stock is then
listed or quoted for trading as reported by Bloomberg L.P. or Quotestream, a
product of QuoteMedia, Inc. (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 the Common Stock is not
then traded on a national exchange, the volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on the OTCQX, OTCQB,
OTC Pink or OTC Bulletin Board (as applicable); (c) if the Common Stock is not
then quoted for trading on the OTCQX, OTCQB, OTC Pink or OTC Bulletin Board and
if prices for the Common Stock are then reported in the OTC markets or a similar
organization or agency, the most recent bid price per share of the Common Stock
so reported that reflects the equivalent of a trading market for the Common
Stock; 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
Investor and reasonably acceptable to the Company.

 

** Signature Page Follows **

 

 34 

 

 

IN WITNESS WHEREOF, the Investor and the Company have caused their respective
signature page to this Equity Line Purchase Agreement to be duly executed as of
the Execution Date.

 

  COMPANY:       Endonovo Therapeutics, INC.       By: /s/   Name: Alan Collier
  Title: Chief Executive Officer         INVESTOR:       Cavalry Fund I LP      
By: Cavalry Fund I Management LLC   Its: General Partner         By: /s/   Name:
Thomas P. Walsh   Title: Managing Partner

 

 35 

 

 

EXHIBITS

 

Exhibit A Form of Put Notice Exhibit B Transfer Agent Instruction Letter Exhibit
C Form of Secretary’s Certificate Exhibit D Form of Officer’s Certificate

 

 36 

 

 

EXHIBIT A

 

FORM OF PUT NOTICE

 

Endonovo Therapeutics, Inc. Put [date], Put #

 

To whom it may concern,

 

Below are instructions for a put to Cavalry Fund I LP. I confirm that all prior
instructions for puts to Cavalry Fund I LP have been acknowledged by you.
Cavalry Fund I LP is included on these instructions as a required notification
of its obligations to purchase the shares of common stock as set forth below.
Please reply to all parties on this email acknowledging receipt.

 

Put Type (Standard or Accelerated):

Put Date:

Put Price per Share $:

(Check box for method used to calculate Put Price Per Share):

___ the lowest Sale Price on the Trading Day prior to the Put Date (Standard
Put)

___ 85% of the arithmetic average of the 3 lowest Closing Prices for the Common
Stock during the 10 consecutive Trading Days ending on the Trading Day
immediately preceding the Put Date(Standard Put)

___ 75% of the VWAP on the Accelerated Put Date (Accelerated Put)

Number of Put Shares to be Issued:

Purchase Amount $:

Pro-Rata Commitment Shares to be Issued:

([________]*(Purchase Amount/$[__________])):

Total Shares to be Issued to Investor:

 

After this purchase:

Aggregate Put Shares purchased to date:

Remaining Registered Put Shares:

Aggregate Pro-Rata Commitment Shares issued to date:

Remaining Registered Pro-Rata Commitment Shares:

Aggregate Purchase Amount $ for all purchases to date:

Remaining Available Amount $:

 

The above referenced shares shall not bear any legend restricting transfer and
should be immediately sent to the Investor via DWAC:

 

Broker DTC Participant Code:

Investor’s Account Number:

 

These put instructions are made in reference to those Irrevocable Transfer Agent
the Equity Line Purchase Agreement (the “Purchase Agreement”), dated as of
[____________], 2020 (the “Execution Date”), by and between Endonovo
Therapeutics, Inc., a Delaware corporation (the “Company”), and Cavalry Fund I
LP, a Delaware limited partnership (the “Investor”). In accordance with and
pursuant to the Purchase Agreement, the Company hereby directs you to issue
shares of common stock, $0.0001 par value per share, of the Company for the
Purchase Amount indicated above as of the date specified above, this email
serves as your authorization to issue the shares with no further action from the
Company. As mentioned above please reply to all parties on this email and
acknowledge receipt.

 

I hereby certify to Cavalry Fund I LP that the information on the Put Notice,
dated of the Put Date first set forth above is true and correct in all respects,
and the conditions of the Cavalry Fund I LP’s obligation to purchase Put Shares
set forth in Section 7 of the Purchase Agreement have been satisfied in all
respects for which I have no knowledge that such condition has not been
satisfied. I confirm that neither the Company, nor anyone acting on its behalf
has provided Cavalry Fund I LP with any information that constitutes or could
reasonably be expected to constitute material, nonpublic information.

 

Best,

 

[___________]

 

 37 

 

 

EXHIBIT B

 

IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

 

[_______________], 2020

 

[_______________]

[_______________]

[_______________]

[_______________]

 

  Re: Endonovo Therapeutics, Inc.

 

Ladies and Gentlemen:

 

Reference is made to that certain Equity Line Purchase Agreement (the “Purchase
Agreement”), dated as of May 18, 2020 (the “Execution Date”), by and between
Endonovo Therapeutics, Inc., a Delaware corporation (the “Company”), and Cavalry
Fund I LP, a Delaware limited partnership (the “Investor”), pursuant to which
the Company may sell to the Investor up to Ten Million Dollars ($10,000,000) of
the Company’s common stock, $0.0001 par value (the “Common Stock”). Pursuant to
the Purchase Agreement, the Company has also entered into a registration rights
agreement, dated as of the Execution Date with the Investor (the “Registration
Rights Agreement”), pursuant to which the Company agreed, among other things, to
register an aggregate of [____________] shares of Common Stock, including (i)
[_____________] shares for purchase by the Investor (“Put Shares”), (ii) 349,296
“Execution Commitment Shares” which have been previously issued as of the
Execution Date, (iii) 349,296 “Effectiveness Commitment Shares” which the
Company shall issue pursuant to the Purchase Agreement and (iv) [___________]
“Pro-Rata Commitment Shares” for issuance in connection with the purchase of Put
Shares by the investor (together, the “Shares”) under a registration statement
on Form S-1 (File No. 333-[__________]) (the “Registration Statement”).

 

We have delivered to you as Exhibit A hereto a true and correct copy of the
consent of the Board of Directors authorizing the issuance of the Shares. No
further consent or authorization is required by the Company, its Board of
Directors or its shareholders in connection with the transactions contemplated
by the Purchase Agreement.

 

Promptly after the SEC declares effective the Registration Statement, the
Company’s counsel shall deliver to you its opinion that the Registration
Statement has been declared effective by the (the “Notice of Effectiveness”).
Provided that the Company’s counsel has delivered to you the Notice of
Effectiveness, this letter shall serve as our irrevocable authorization and
direction:

 

  (1) Reserve [___________] Shares of Common Stock for issuance to the Investor
pursuant to these irrevocable instructions (the “Equity Line Reserve”).        
(2) remove any restricted stock transfer legend on the Execution Commitment
Shares and credit via the Depository Trust Company (“DTC”) Fast Automated
Securities Transfer Program, [___________] shares of Common Stock as Commitment
Shares to the Buyer’s balance account with DTC through its Deposit Withdrawal At
Custodian (“DWAC”)

 

 38 

 

 

The information that shall be used for the transfer of shares is as follows:

 

  ● Broker Name: [_____________]   ● Broker DTC Participant Code: [____]   ●
Account Number: [_____________]   ● Account Name: [_____________]

 

  (3) issue Put Shares and Pro-Rata Commitment Shares without any restricted
stock transfer legend, to the Buyer from time to time upon surrender to you of a
properly completed and duly executed Put Notice, in the form attached hereto as
Exhibit B.

 

For the avoidance of confusion, the Effectiveness Commitment Shares shall be
issued pursuant to separate instructions to be delivered by the Company and
deducted from the Equity Line Reserve.

 

Specifically, upon of a Put Notice duly executed by the Company, which shall
constitute an instruction to you to process such Put Notice in accordance with
the terms of these instructions and the Put Notice, you shall as soon as
practicable, but in no event later than one (1) Business Day (as defined below)
after receipt of such Put Notice, send, via e-mail, an copy of the Purchase
Confirmation acknowledged by you to the Company and the Investor. Upon your
receipt of a copy of the executed Purchase Confirmation, you shall use your best
efforts to, within one (1) Business Day following the date of your receipt of
the Purchase Confirmation issue Put shares and Pro-Rata Commitment Shares from
the Equity Line Reserve, and credit via The DTC Fast Automated Securities
Transfer Program, upon the request of the Investor, such aggregate number of
shares of Common Stock to which the Investor shall be entitled to the Investor’s
balance account with DTC through its DWAC system for the number of shares of
Common Stock to which the Investor shall be entitled as set forth in the Put
Notice, provided the Investor causes its broker to initiate the DWAC
transaction. (“Business Day” shall mean any day on which the Company’s principle
trading market is open for customary trading).

 

Provided that the Company has delivered to you the Notice of Effectiveness, the
Company hereby confirms to you and the Investor that certificates representing
the Shares shall not bear any legend restricting transfer of the Shares thereby
and should not be subject to any stop-transfer restrictions and shall otherwise
be freely transferable on the books and records of the Company; provided
however, that if for any reason the Company is required to issue Shares which
have not been registered under the Securities Act of 1933, as amended, then the
certificates for such Purchase Shares shall bear the following legend and no
other legend whatsoever:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, UNLESS SOLD PURSUANT TO: (1) RULE 144 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (2) AN OPINION OF HOLDER’S COUNSEL,
IN A CUSTOMARY FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS.

 

Notwithstanding anything to the contrary in these instructions, the Investor
agrees that, if the Company gives the Investor notice (or the Investor otherwise
becomes aware) that the Registration Statement, is not current and/or the
prospectus does not meet the requirements of Section 5(b) of the Securities Act
of 1933 or has been withdrawn, that it will return any unsold Shares to the
Transfer Agent in order to permit a restrictive legend to be placed on such
Shares.

 

The Company hereby confirms to you and the Investor that no instructions other
than as contemplated herein will be given to you by the Company with respect to
the Purchase Shares.

 

Please be advised that the Investor is relying upon this letter as an inducement
to purchase shares of Common Stock under the Purchase Agreement and,
accordingly, the Investor is a party to the agreements set forth in this letter.

 

**Signature Page Follows**

 

 39 

 

 

Very truly yours,

 

ENDONOVO THERAPEUTICS, INC.         By:                                Name:    
Title:           ACKNOWLEDGED AND AGREED:       [____________________]        
By:     Name:     Title:           CAVALRY FUND I LP         By:     Name:    
Title:    

 

**Signature Page to the Transfer Agent Instructions**

 

   

 

 

EXHIBIT A

 

UNANIMOUS WRITTEN CONSENT OF THE BOARD OF DIRECTORS

OF ENDONOVO THERAPEUTICS, INC.

 

   

 

 

EXHIBIT B

 

FORM OF PUT NOTICE

 

   

 

 

EXHIBIT C

 

FORM OF SECRETARY’S CERTIFICATE

 

This Secretary’s Certificate (“Certificate”) is being delivered pursuant to
Section 6(f) of that certain Equity Line Purchase Agreement dated as of May 18,
2020, (“Purchase Agreement”), by and between Endonovo Therapeutics, Inc., a
Delaware corporation (the “Company”), and Cavalry Fund I LP, a Delaware limited
partnership (the “Investor”). Terms used herein and not otherwise defined shall
have the meanings ascribed to them in the Purchase Agreement.

 

The undersigned, ____________, Secretary of the Company, hereby certifies as
follows:

 

1. I am the Secretary of the Company and make the statements contained in this
Secretary’s Certificate.

 

2. Attached hereto as Exhibit A are true, correct and complete copies of the
Company’s Certificate of Incorporation and Bylaws, as amended through the date
hereof, and no action has been taken by the Company, its directors, officers or
stockholders, in contemplation of the filing of any further amendment relating
to or affecting such documents.

 

3. Attached hereto as Exhibit B are true, correct and complete copies of the
resolutions either duly adopted by the Board of Directors on _____________, at
which a quorum was present and acting throughout, or executed by all directors
in accordance with the Nevada Revised Statutes. Such resolutions have not been
amended, modified or rescinded and remain in full force and effect and such
resolutions are the only resolutions adopted by the Board of Directors or the
stockholders of the Company relating to or affecting (i) the entering into and
performance of the Purchase Agreement, or the issuance, offering and sale of the
Purchase Shares and the Commitment Shares and (ii) and the performance of the
Company of its obligation under the Transaction Documents as contemplated
therein.

 

IN WITNESS WHEREOF, I have hereunder signed my name on this ___ day of
_________________ 2020.

 

      Secretary        

 

   

 

 

EXHIBIT D

 

FORM OF OFFICER’S CERTIFICATE

 

This Officer’s Certificate (“Certificate”) is being delivered pursuant to
Section 6(h) of that certain Equity Line Purchase Agreement dated as of May 18,
2020, (“Purchase Agreement”), by and between Endonovo Therapeutics, Inc., a
Delaware corporation (the “Company”), and Cavalry Fund I LP, a Delaware limited
partnership (the “Investor”). Terms used herein and not otherwise defined shall
have the meanings ascribed to them in the Purchase Agreement.

 

The undersigned, ___________, ______________ of the Company, hereby certifies as
follows:

 

1. I am the _____________ of the Company and make the statements contained in
this Certificate;

 

2. The representations and warranties of the Company contained in the Purchase
Agreement are true and correct true and correct as of the date when made and as
of the Effective Date, as though made at that time (except for representations
and warranties that speak as of a specific date, which shall be true and correct
as of such specified date);

 

3. The Company has performed, satisfied and complied with the covenants,
agreements and conditions required by the Purchase Agreement to be performed,
satisfied or complied with by the Company at or prior to the Effective Date.

 

4. The Company has not taken any steps, and does not currently expect to take
any steps, to seek protection pursuant to any Bankruptcy Law nor does the
Company or any of its Subsidiaries have any knowledge or reason to believe that
its creditors intend to initiate involuntary bankruptcy or insolvency
proceedings. The Company is financially solvent and is generally able to pay its
debts as they become due.

 

IN WITNESS WHEREOF, I have hereunder signed my name on this ___ day of
_________________ 2020.

 

        Name:     Title: