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Exhibit 10.1

SECURITIES PURCHASE AGREEMENT
 
This Securities Purchase Agreement (this "Agreement") is dated as of October 1,
2020, between Better Choice Company Inc., a Delaware corporation (the
"Company"), and each purchaser identified on the signature pages hereto (each,
including its successors and assigns, a "Purchaser" and collectively, the
"Purchasers").
 
WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the
"Securities Act"), and Rule 506 promulgated thereunder, the Company desires to
issue and sell to each Purchaser, and each Purchaser, severally and not jointly,
desires to purchase from the Company, securities of the Company as more fully
described in this Agreement.
 
WHEREAS, the Company has authorized a new series of convertible preferred stock
of the Company designated as Series F Convertible Preferred Stock (referred to
herein as the “Preferred Stock”), the terms of which are set forth in the
Certificate of Designations (defined below), which Preferred Shares shall be
convertible into the Company’s Common Stock (defined below) in accordance with
the terms of the Certificate of Designations.
 
WHEREAS, each Purchaser wishes to purchase, and the Company wishes to sell to
such Purchaser, upon the terms and conditions stated in this Agreement, that
aggregate number of shares of Preferred Stock and Warrants (defined below) set
forth on such Purchaser’s signature page to this Agreement.
 
WHEREAS, contemporaneously with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration Rights Agreement
(defined below), pursuant to which the Company has agreed to provide certain
registration rights with respect to the Securities under the Securities Act and
the rules and regulations promulgated thereunder, and applicable state
securities laws.
 
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 each Purchaser agree
as follows:
 
ARTICLE I.
DEFINITIONS
 
1.1          Definitions. In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms have the
meanings set forth in this Section 1.1:
 
"Acquiring Person" shall have the meaning ascribed to such term in Section 4.5.
 
"Action" shall have the meaning ascribed to such term in Section 3.1(j).
 
"Affiliate" means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 405 under the
Securities Act.
 

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"Board of Directors" means the board of directors of the Company.
 
"Business Day" means any day except any Saturday, any Sunday, any day which is a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.
 
"Certificate of Designations" means the certificate of designations establishing
the terms of the Preferred Stock in the form of Exhibit A hereto.
 
"Closing" means the closing of the purchase and sale of the Securities pursuant
to Section 2.1.
 
"Closing Date" means the Trading Day on which all of the Transaction Documents
have been executed and delivered by the applicable parties thereto, and all
conditions precedent to (i) the obligations of the Purchasers to pay their
respective Purchase Amount to the Company and (ii) the Company's obligations to
deliver the Securities, in each case, have been satisfied or waived.
 
 "Commission" means the United States Securities and Exchange Commission.
 
"Common Stock" means the common stock of the Company, par value $0.001 per
share, and any other class of securities into which such securities may
hereafter be reclassified or changed.
 
"Common Stock Equivalents" means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including, without limitation, any debt, preferred stock, right,
option, warrant or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.
 
"Company Counsel" means Meister Seelig & Fein LLP.
 
"Conversion Shares" means shares of Common Stock issuable upon conversion of the
Preferred Stock.
 
"Disclosure Schedules" shall have the meaning ascribed to such term in Section
3.1.
 
"Effective Date" means the earliest of the date that (a) the initial
Registration Statement registering all Conversion Shares and Warrant Shares has
been declared effective by the Commission, (b) all of the Shares and Warrant
Shares have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144
without the requirement for the Company to be in compliance with the current
public information required under Rule 144 and without volume or manner-of-sale
restrictions or (c) following the one year anniversary of the Closing Date
provided that a holder of Shares or Warrant Shares is not an Affiliate of the
Company, all of the Shares and Warrant Shares may be sold pursuant to an
exemption from registration under Section 4(a)(1) of the Securities Act without
volume or manner-of-sale restrictions and Company Counsel has delivered to the
Transfer Agent for the benefit of such holders (and/or, if required by a holder,
to such holder or such holder's custodian or prime broker) a standing written
unqualified opinion that resales may then be made by such holders of the Shares
and Warrant Shares pursuant to such exemption which opinion shall be in form and
substance reasonably acceptable to such holders.
 
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"Evaluation Date" shall have the meaning ascribed to such term in Section
3.1(s).
 
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

"Exempt Issuance" means the issuance of (a) shares of Common Stock or options to
employees, officers or directors of the Company pursuant to any stock or option
plan duly adopted for such purpose, by a majority of the non-employee members of
the Board of Directors or a majority of the members of a committee of
non-employee directors established for such purpose for services rendered to the
Company, (b) securities upon the exercise or exchange of or conversion of any
Securities issued hereunder and/or other securities exercisable or exchangeable
for or convertible into shares of Common Stock issued and outstanding on the
Closing Date, provided that such securities have not been amended since the
Closing Date to increase the number of such securities or to decrease the
exercise price, exchange price or conversion price of such securities (other
than as provided for pursuant to the terms thereof on the Closing Date) or to
extend the term of such securities, (c) securities issued as "restricted
securities" in a Strategic Transaction or (d) up to 1,000,000 shares of Common
Stock to consultants, provided that such shares are issued as “restricted
securities,” are not entitled to registration rights more favorable than as
contained in the Registration Rights Agreement and were not issued primarily for
the purposes of raising capital.
 
"FCPA" means the Foreign Corrupt Practices Act of 1977, as amended.
 
"GAAP" shall have the meaning ascribed to such term in Section 3.1(h).
 
"Indebtedness" shall have the meaning ascribed to such term in Section 3.1(bb).
 
"Intellectual Property Rights" shall have the meaning ascribed to such term in
Section 3.1(p).
 
"Lead Investors " means John M. Word, III, The Edward J. Brown, Jr. Trust and
their respective Affiliates.
 
"Legend Removal Date" shall have the meaning ascribed to such term in Section
4.1(c).
 
"Liens" means a lien, charge, pledge, security interest, encumbrance, right of
first refusal, preemptive right or other restriction.
 
"Material Adverse Effect" shall have the meaning assigned to such term in
Section 3.1(b).
 
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"Material Permits" shall have the meaning ascribed to such term in Section
3.1(n).
 
"National Exchange" means any of the Nasdaq Global Select Market, the Nasdaq
Global Market, the Nasdaq Capital Market, the New York Stock Exchange or the
NYSE American.
 
"Participation Maximum" shall have the meaning ascribed to such term in Section
4.11(a).
 
"Per Unit Purchase Price" equals $1,000, subject to adjustment for reverse and
forward stock splits, stock dividends, stock combinations and other similar
transactions of the Common Stock that occur after the date of this Agreement and
prior to the Closing Date.
 
"Person" means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.
 
“Preferred Stock” means the Series F Convertible Preferred Stock.
 
"Pro Rata Portion" shall have the meaning ascribed to such term in Section
4.11(e).
 
"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
 
"Public Information Failure" shall have the meaning ascribed to such term in
Section 4.2(b).
 
"Public Information Failure Payments" shall have the meaning ascribed to such
term in Section 4.2(b).
 
"Purchase Amount" means, as to each Purchaser, the aggregate amount to be paid
for the Units purchased hereunder by such Purchaser as specified below such
Purchaser's name on the signature page of this Agreement and next to the heading
"Purchase Amount," in United States dollars and in immediately available funds.
 
"Purchaser Party" shall have the meaning ascribed to such term in Section 4.8.
 
"Registration Rights Agreement" means the Registration Rights Agreement, dated
the date hereof, among the Company and the Purchasers, in the form of Exhibit B
attached hereto.
 
"Registration Statement" means a registration statement meeting the requirements
set forth in the Registration Rights Agreement and covering the resale by the
Purchasers of the Conversion Shares and the Warrant Shares.
 
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"Required Approvals" shall have the meaning ascribed to such term in Section
3.1(e).
 
"Rule 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.
 
"Rule 424" means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

"SEC Reports" shall have the meaning ascribed to such term in Section 3.1(h).
 
"Securities" means the Shares, the Conversion Shares, the Warrants and the
Warrant Shares.
 
"Securities Act" means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
 
"Series E Amendment " shall have the meaning assigned to such term in Section
4.19.
 
"Shares" means the shares of Preferred Stock issued or issuable to each
Purchaser pursuant to this Agreement.
 
"Short Sales" means all "short sales" as defined in Rule 200 of Regulation SHO
under the Exchange Act.
 
“Strategic Transaction” means (a) cash investments by entities related to the
Company’s business (e.g., manufacturers, suppliers or distributors), or (b)
securities issued pursuant to acquisitions or strategic transactions or
partnerships (approved by a majority of the disinterested directors of the
Company and in any event representing not more than 30%, in the aggregate, of
the Company’s issued and outstanding Common Stock), provided in any such case
that no such transaction shall involve the issuance of securities registered
under the Securities Act or entitled to registration rights more favorable than
as contained in the Registration Rights Agreement and provided further, that in
any such case that any such issuance shall only be to a Person (or to the equity
holders of a Person) which is, itself or through its subsidiaries, an operating
company or an owner of an asset in a business synergistic with the business of
the Company and shall provide to the Company additional benefits in addition to
the investment of funds, but shall not include a transaction in which the
Company is issuing securities primarily for the purpose of raising capital or to
an entity whose primary business is investing in securities.
 
"Subsequent Financing" shall have the meaning ascribed to such term in Section
4.11(a).
 
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"Subsequent Financing Notice" shall have the meaning ascribed to such term in
Section 4.11(b).
 
"Subsidiary" means any subsidiary of the Company as set forth on Schedule 3.1(a)
and shall, where applicable, also include any direct or indirect subsidiary of
the Company formed or acquired after the date hereof.
 
"Trading Day" means a day on which the principal Trading Market is open for
trading.
 
"Trading Market" means any of the following markets or exchanges on which the
Common Stock is listed or quoted for trading on the date in question: the NYSE
American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global
Select Market, the New York Stock Exchange, OTCQB or OTCQX (or any successors to
any of the foregoing).
 
"Transaction Documents" means this Agreement, the Certificate of Designations,
the Warrants, the Registration Rights Agreement, all exhibits and schedules
thereto and hereto and any other documents or agreements executed in connection
with the transactions contemplated hereunder.
 
"Transfer Agent" means Equity Stock Transfer, LLC, the current transfer agent of
the Company, with a mailing address of 237 W 37th St. Suite 602, New York, NY
10018, and a facsimile number of (347) 584-3644, and any successor transfer
agent of the Company.
 
"Units" "means units of the Company comprising one (1) share of Preferred Stock
and a Warrant to purchase that number of Conversion Shares into which such share
of Preferred Stock is convertible.
 
"Variable Rate Transaction" shall have the meaning ascribed to such term in
Section 4.12.
 
"VWAP" means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the Trading Market on which the
Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date)
on OTCQB or OTCQX, as applicable, (c) if the Common Stock is not then listed or
quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then
reported on the Pink Open Market (or a similar organization or agency succeeding
to its functions of reporting prices), the most recent bid price per share of
the Common Stock so reported, or (d) in all other cases, the fair market value
of a share of Common Stock as determined by an independent appraiser selected in
good faith by the Purchasers of a majority in interest of the Securities then
outstanding and reasonably acceptable to the Company, the fees and expenses of
which shall be paid by the Company.
 
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"Warrants" means, collectively, the Common Stock purchase warrants delivered to
the Purchasers at the Closing in accordance with Section 2.2(a) hereof, which
Warrants shall be exercisable immediately upon issuance and have a term of
exercise equal to seventy two (72) months, in the form of Exhibit C attached
hereto.
 
"Warrant Shares" means the shares of Common Stock issuable upon exercise of the
Warrants.
 
ARTICLE II.
PURCHASE AND SALE
 
2.1        Closing.  Subject to the terms and conditions set forth in this
Agreement, at the Closing the Company shall sell, and the Purchasers, severally
and not jointly, shall purchase, up to an aggregate of $14,263,550 million of
Units.  Each Purchaser (including each Lead Investor) shall deliver to the
Company, via wire transfer, immediately available funds equal to such
Purchaser's Purchase Amount as set forth on the signature page hereto executed
by such Purchaser, and the Company shall deliver to each Purchaser its
respective Shares and a Warrant, as determined pursuant to Section 2.2(a), and
the Company and each Purchaser shall deliver the other items set forth in
Section 2.2 deliverable at the Closing.  Upon satisfaction of the covenants and
conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the
offices of Company Counsel or such other location as the parties shall mutually
agree.  All Share prices and exercise prices set forth herein are subject to
automatic adjustment for any stock split or reverse stock split occurring prior
to Closing.
 
2.2          Deliveries.
 
(a)          On or prior to the Closing Date, the Company shall deliver or cause
to be delivered to each Purchaser the following:
 
(i)          this Agreement duly executed by the Company;
 
(ii)         a legal opinion of Company Counsel, substantially in the form of
Exhibit D attached hereto;
 
(iii)        a copy of the irrevocable instructions to the Transfer Agent
instructing the Transfer Agent to deliver, on an expedited basis, a certificate
evidencing a number of Shares equal to such Purchaser's Purchase Amount divided
by the Per Unit Purchase Price, registered in the name of such Purchaser;
 
(iv)       a Warrant registered in the name of such Purchaser to purchase up to
a number of shares of Common Stock equal to 100% of the number of Conversion
Shares into which the Shares purchased hereunder by such Purchaser are
convertible, with an exercise price equal to $0.75, subject to adjustment as
provided for in the Warrant; and
 
(v)         the Registration Rights Agreement duly executed by the Company.
 
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(b)          On or prior to the Closing Date, each Purchaser shall deliver or
cause to be delivered to the Company, the following:
 
(i)          this Agreement duly executed by such Purchaser;
 
(ii)         such Purchaser's Purchase Amount by wire transfer to the account
specified in writing by the Company, such wire instructions to be on Company
letterhead and executed by the Chief Executive Officer of Chief Financial
Officer of the Company; and
 
(iii)        the Registration Rights Agreement duly executed by such Purchaser.
 
2.3          Closing Conditions.
 
(a)          The obligations of the Company hereunder in connection with the
Closing are subject to the following conditions being met:
 
(i)        the accuracy in all material respects (or, to the extent
representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) when made and on the Closing Date of the
representations and warranties of the Purchasers contained herein (unless as of
a specific date therein in which case they shall be accurate as of such date);
 
(ii)         all obligations, covenants and agreements of each Purchaser
required to be performed at or prior to the Closing Date shall have been
performed; and
 
(iii)        the delivery by each Purchaser of the items set forth in Section
2.2(b) of this Agreement.
 
(b)          The respective obligations of the Purchasers hereunder in
connection with the Closing are subject to the following conditions being met:
 
(i)         the accuracy in all material respects (or, to the extent
representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) when made and on the Closing Date of the
representations and warranties of the Company contained herein (unless as of a
specific date therein in which case they shall be accurate as of such date);
 
(ii)         all obligations, covenants and agreements of the Company required
to be performed at or prior to the Closing Date shall have been performed;
 
(iii)        the delivery by the Company of the items set forth in Section
2.2(a) of this Agreement;
 
(iv)        there shall have been no Material Adverse Effect with respect to the
Company since the date hereof; and
 
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(v)         from the date hereof to the Closing Date, trading in the Common
Stock shall not have been suspended by the Commission or the Company's principal
Trading Market, and, at any time prior to the Closing Date, trading in
securities generally as reported by Bloomberg L.P. shall not have been suspended
or limited, or minimum prices shall not have been established on securities
whose trades are reported by such service, or on any Trading Market, nor shall a
banking moratorium have been declared either by the United States or New York
State authorities nor shall there have occurred any material outbreak or
escalation of hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any financial
market which, in each case, in the reasonable judgment of such Purchaser, makes
it impracticable or inadvisable to purchase the Securities at the Closing.
 
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
 
3.1        Representations and Warranties of the Company. Except as set forth in
the Disclosure Schedules, which Disclosure Schedules shall be deemed a part
hereof and shall qualify any representation or otherwise made herein to the
extent of the disclosure contained in the corresponding section of the
Disclosure Schedules, the Company hereby makes the following representations and
warranties to each Purchaser as of the date hereof and as of the Closing Date
(unless as of a specific date, in which case they shall be accurate as of such
date):
 
(a)         Subsidiaries.  All of the direct and indirect subsidiaries of the
Company are set forth on Schedule 3.1(a).  The Company owns, directly or
indirectly, all of the capital stock or other equity interests of each
Subsidiary free and clear of any Liens, and all of the issued and outstanding
shares of capital stock of each Subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights to subscribe for
or purchase securities.  If the Company has no subsidiaries, all other
references to the Subsidiaries or any of them in the Transaction Documents shall
be disregarded.
 
(b)         Organization and Qualification.  The Company and each of the
Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, with the requisite power and authority to own and
use its properties and assets and to carry on its business as currently
conducted.  Neither the Company nor any Subsidiary is in violation nor default
of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents.  Each of the
Company and the Subsidiaries is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not have or reasonably be expected to result
in: (i) a material adverse effect on the legality, validity or enforceability of
any Transaction Document, (ii) a material adverse effect on the results of
operations, assets, business, prospects or condition (financial or otherwise) of
the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company's ability to perform in any material respect on a timely
basis its obligations under any Transaction Document (any of (i), (ii) or (iii),
a "Material Adverse Effect") and no Proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.
 
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(c)         Authorization; Enforcement.  The Company has the requisite corporate
power and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction Documents and
otherwise to carry out its obligations hereunder and thereunder.  The execution
and delivery of each of this Agreement and the other Transaction Documents by
the Company and the consummation by it of the transactions contemplated hereby
and thereby have been duly authorized by all necessary action on the part of the
Company and no further action is required by the Company, the Board of Directors
or the Company's stockholders in connection herewith or therewith other than in
connection with the Required Approvals.  This Agreement and each other
Transaction Document to which the Company is a party has been (or upon delivery
will have been) duly executed by the Company and, when delivered in accordance
with the terms hereof and thereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.
 
(d)         No Conflicts.  The execution, delivery and performance by the
Company of this Agreement and the other Transaction Documents to which it is a
party, the issuance and sale of the Securities and the consummation by it of the
transactions contemplated hereby and thereby do not and will not: (i) conflict
with or violate any provision of the Company's or any Subsidiary's certificate
or articles of incorporation, bylaws or other organizational or charter
documents, or (ii) conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, result in the
creation of any Lien upon any of the properties or assets of the Company or any
Subsidiary, or give to others any rights of termination, amendment,
anti-dilution or similar adjustments, acceleration or cancellation (with or
without notice, lapse of time or both) of, any agreement, credit facility, debt
or other instrument (evidencing a Company or Subsidiary debt or otherwise) or
other understanding to which the Company or any Subsidiary is a party or by
which any property or asset of the Company or any Subsidiary is bound or
affected, or (iii) subject to the Required Approvals, conflict with or result in
a violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Company or
a Subsidiary is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or a Subsidiary
is bound or affected; except in the case of each of clauses (ii) and (iii), such
as could not have or reasonably be expected to result in a Material Adverse
Effect.
 
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(e)         Filings, Consents and Approvals.  The Company is not required to
obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local
or other governmental authority or other Person in connection with the
execution, delivery and performance by the Company of the Transaction Documents,
other than: (i) the filings required pursuant to Section 4.4 of this Agreement,
(ii) the filing with the Commission pursuant to the Registration Rights 
Agreement, (iii) the notice and/or application(s), if any, to each applicable
Trading Market for the issuance and sale of the Securities and the listing of
the Conversion Shares and Warrant Shares for trading thereon in the time and
manner required thereby, and (iv) the filing of Form D with the Commission and
such filings as are required to be made under applicable state securities laws
(collectively, the "Required Approvals").
 
(f)         Issuance of the Securities.  The Securities are duly authorized and,
when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens imposed by the Company other than restrictions on
transfer provided for in the Transaction Documents.  The Conversion Shares and
the Warrant Shares, when issued in accordance with the terms of the Transaction
Documents, will be validly issued, fully paid and nonassessable, free and clear
of all Liens imposed by the Company other than restrictions on transfer provided
for in the Transaction Documents.  The Company has reserved from its duly
authorized capital stock the maximum number of shares of Common Stock issuable
upon conversion of the Shares and exercise of the Warrants.
 
(g)         Capitalization.  The capitalization of the Company is as set forth
on Schedule 3.1(g), which Schedule 3.1(g) shall also include the number of
shares of Common Stock owned beneficially, and of record, by Affiliates of the
Company as of the date hereof. Except as set forth on Schedule 3.1(g), the
Company has not issued any capital stock since its most recently filed periodic
report under the Exchange Act, other than pursuant to the exercise of employee
stock options under the Company's stock incentive plans, the issuance of shares
of Common Stock to employees pursuant to the Company's employee stock purchase
plans and pursuant to the conversion and/or exercise of Common Stock Equivalents
outstanding as of the date of the most recently filed periodic report under the
Exchange Act.  No Person has any right of first refusal, preemptive right, right
of participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents.  Except as a result of the purchase
and sale of the Securities or as set forth in Schedule 3.1(g), there are no
outstanding options, warrants, scrip rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire any shares of Common Stock or the
capital stock of any Subsidiary, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to
issue additional shares of Common Stock or Common Stock Equivalents or capital
stock of any Subsidiary.  Except as set forth in Schedule 3.1(g), the issuance
and sale of the Securities will not obligate the Company or any Subsidiary to
issue shares of Common Stock or other securities to any Person (other than the
Purchasers) and will not result in a right of any holder of Company securities
to adjust the exercise, conversion, exchange or reset price under any of such
securities. There are no outstanding securities or instruments of the Company or
any Subsidiary that contain any redemption or similar provisions, and there are
no contracts, commitments, understandings or arrangements by which the Company
or any Subsidiary is or may become bound to redeem a security of the Company or
such Subsidiary. The Company does not have any stock appreciation rights or
"phantom stock" plans or agreements or any similar plan or agreement. All of the
outstanding shares of capital stock of the Company are duly authorized, validly
issued, fully paid and nonassessable, have been issued in compliance with all
federal and state securities laws, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to subscribe for
or purchase securities.  No further approval or authorization of any
stockholder, the Board of Directors or others is required for the issuance and
sale of the Securities.  There are no stockholders agreements, voting agreements
or other similar agreements with respect to the Company's capital stock to which
the Company is a party or, to the knowledge of the Company, between or among any
of the Company's stockholders.
 
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(h)        SEC Reports; Financial Statements.  Except as set forth on Schedule
3.1(h), the Company has filed all reports, schedules, forms, statements and
other documents required to be filed by the Company under the Securities Act and
the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the
two years preceding the date hereof (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 Reports") on a timely basis or
has received a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension.  As of their respective
dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act, as applicable, and none of the SEC
Reports, 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 the light of the circumstances under
which they were made, not misleading.  The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the Commission with
respect thereto as in effect at the time of filing.  Such financial statements
have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved
("GAAP"), except as may be otherwise specified in such financial statements or
the notes thereto and except that unaudited financial statements may not contain
all footnotes required by GAAP, and fairly present in all material respects the
financial position of the Company and its consolidated Subsidiaries as of and
for 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.
 
(i)          Material Changes; Undisclosed Events, Liabilities or Developments. 
Since the date of the latest audited financial statements included within the
SEC Reports, except as set forth on Schedule 3.1(i): (i) there has been no
event, occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company's
financial statements pursuant to GAAP or required to be disclosed in filings
made with the Commission, (iii) the Company has not altered in any material
respect its method of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock and (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing Company stock
incentive plans.  The Company does not have pending before the Commission any
request for confidential treatment of information.  Except for the issuance of
the Securities contemplated by this Agreement or as set forth on Schedule
3.1(i), no event, liability, fact, circumstance, occurrence or development has
occurred or exists, or is reasonably expected to occur or exist, with respect to
the Company or its Subsidiaries or their respective businesses, properties,
operations, assets or financial condition, that would be required to be
disclosed by the Company under applicable securities laws at the time this
representation is made or deemed made that has not been publicly disclosed at
least 1 Trading Day prior to the date that this representation is made.
 
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(j)          Litigation.  Except as set forth on Schedule 3.1(j), there is no
action, suit, inquiry, notice of violation, proceeding or investigation pending
or, to the knowledge of the Company, threatened against or affecting the
Company, any Subsidiary or any of their respective properties before or by any
court, arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an "Action"). None of
the Actions set forth on Schedule 3.1(j) (i) adversely affects or challenges the
legality, validity or enforceability of any of the Transaction Documents or the
Securities or (ii) could, if there were an unfavorable decision, have or
reasonably be expected to result in a Material Adverse Effect.  Neither the
Company nor any Subsidiary, nor any director or officer thereof, is or has in
the last five (5) years been the subject of any Action involving a claim of
violation of or liability under federal or state securities laws or a claim of
breach of fiduciary duty.  There has not in the last five (5) years been, and to
the knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or former
director or officer of the Company.  The Commission has not issued any stop
order or other order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the Exchange Act or the Securities
Act.
 
(k)          Labor Relations.  No labor dispute exists or, to the knowledge of
the Company, is imminent with respect to any of the employees of the Company,
which could reasonably be expected to result in a Material Adverse Effect.  None
of the Company's or its Subsidiaries' employees is a member of a union that
relates to such employee's relationship with the Company or such Subsidiary, and
neither the Company nor any of its Subsidiaries is a party to a collective
bargaining agreement, and the Company and its Subsidiaries believe that their
relationships with their employees are good.  To the knowledge of the Company,
no executive officer of the Company or any Subsidiary is, or is now expected to
be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement or
non-competition agreement, or any other contract or agreement or any restrictive
covenant in favor of any third party, and the continued employment of each such
executive officer does not subject the Company or any of its Subsidiaries to any
liability with respect to any of the foregoing matters.  The Company and its
Subsidiaries are in compliance with all U.S. federal, state, local and foreign
laws and regulations relating to employment and employment practices, terms and
conditions of employment and wages and hours, except where the failure to be in
compliance could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
 
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(l)          Compliance.  Neither the Company nor any Subsidiary: (i) is in
default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by
the Company or any Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in
violation of any judgment, decree, or order of any court, arbitrator or other
governmental authority or (iii) is or has been in violation of any statute,
rule, ordinance or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws relating to taxes,
environmental protection, occupational health and safety, product quality and
safety and employment and labor matters, except in each case as could not have
or reasonably be expected to result in a Material Adverse Effect.
 
(m)       Environmental Laws.  The Company and its Subsidiaries (i) are in
compliance with all federal, state, local and foreign laws relating to pollution
or protection of human health or the environment (including ambient air, surface
water, groundwater, land surface or subsurface strata), including 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 ("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 clause (i), (ii) and (iii), the failure to so
comply could be reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect.
 
(n)        Regulatory Permits.  The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the failure
to possess such permits could not reasonably be expected to result in a Material
Adverse Effect ("Material Permits"), and neither the Company nor any Subsidiary
has received any notice of proceedings relating to the revocation or
modification of any Material Permit.
 
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(o)         Title to Assets.  The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them and good and
marketable title in all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and clear of all
Liens, except for (i) Liens as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be
made of such property by the Company and the Subsidiaries and (ii) Liens for the
payment of federal, state or other taxes, for which appropriate reserves have
been made therefor in accordance with GAAP and the payment of which is neither
delinquent nor subject to penalties.  Any real property and facilities held
under lease by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with which the Company and the Subsidiaries
are in compliance.
 
(p)          Intellectual Property.  The Company and the Subsidiaries have, or
have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights,
licenses and other intellectual property rights and similar rights necessary or
required for use in connection with their respective businesses as described in
the SEC Reports and which the failure to so have could have a Material Adverse
Effect (collectively, the "Intellectual Property Rights").  None of, and neither
the Company nor any Subsidiary has received a notice (written or otherwise) that
any of, the Intellectual Property Rights has expired, terminated or been
abandoned, or is expected to expire or terminate or be abandoned, within two (2)
years from the date of this Agreement.  Neither the Company nor any Subsidiary
has received, since the date of the latest audited financial statements included
within the SEC Reports, a written notice of a claim or otherwise has any
knowledge that the Intellectual Property Rights violate or infringe upon the
rights of any Person, except as could not have or reasonably be expected to not
have a Material Adverse Effect.  To the knowledge of the Company, all such
Intellectual Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property Rights.  The
Company and its Subsidiaries have taken reasonable security measures to protect
the secrecy, confidentiality and value of all of their intellectual properties,
except where failure to do so could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
 
(q)        Insurance.  The Company and the Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and
the Subsidiaries are engaged, including, but not limited to, directors and
officers insurance coverage at least equal to the aggregate Purchase Amount. 
Neither the Company nor any Subsidiary has any reason to believe that it will
not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business without a significant increase in cost.
 
(r)          Transactions With Affiliates and Employees.  Except as set forth on
Schedule 3.1(r), none of the officers or directors of the Company or any
Subsidiary and, to the knowledge of the Company, none of the employees of the
Company or any Subsidiary is presently a party to any transaction with the
Company or any Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, providing for the borrowing of money from or lending of
money to or otherwise requiring payments to or from any officer, director or
such employee or, to the knowledge of the Company, any entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee, stockholder, member or partner, in each case in
excess of $120,000 other than for: (i) payment of salary or consulting fees for
services rendered, (ii) reimbursement for expenses incurred on behalf of the
Company and (iii) other employee benefits, including stock option agreements
under any stock incentive plan of the Company.
 
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(s)          Sarbanes-Oxley; Internal Accounting Controls.  The Company and the
Subsidiaries are in compliance with any and all applicable requirements of the
Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, except
where the failure to be in compliance could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, and any and
all applicable rules and regulations promulgated by the Commission thereunder
that are effective as of the date hereof and as of the Closing Date.  Except as
set forth on Schedule 3.1(s), the Company and the Subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable assurance that:
(i) transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company and the Subsidiaries have established disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and
the Subsidiaries and designed such disclosure controls and procedures to ensure
that information required to be disclosed by the Company in the reports it files
or submits under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Commission's rules and
forms.  The Company's certifying officers have evaluated the effectiveness of
the disclosure controls and procedures of the Company and the Subsidiaries as of
the end of the period covered by the most recently filed periodic report under
the Exchange Act (such date, the "Evaluation Date").  The Company presented in
its most recently filed periodic report under the Exchange Act the conclusions
of the certifying officers about the effectiveness of the disclosure controls
and procedures based on their evaluations as of the Evaluation Date.  Since the
Evaluation Date, there have been no changes in the internal control over
financial reporting (as such term is defined in the Exchange Act) of the Company
and its Subsidiaries that have materially affected, or is reasonably likely to
materially affect, the internal control over financial reporting of the Company
or its Subsidiaries.
 
(t)          Certain Fees.  No brokerage or finder's fees or commissions are or
will be payable by the Company or  any Subsidiary to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or other
Person with respect to the transactions contemplated by the Transaction
Documents.  The Purchasers shall have no obligation with respect to any fees or
with respect to any claims made by or on behalf of other Persons for fees of a
type contemplated in this Section that may be due in connection with the
transactions contemplated by the Transaction Documents.
 
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(u)        Private Placement. Assuming the accuracy of the Purchasers'
representations and warranties set forth in Section 3.2, no registration under
the Securities Act is required for the offer and sale of the Securities by the
Company to the Purchasers as contemplated hereby. The issuance and sale of the
Securities hereunder does not contravene the rules and regulations of the
Trading Market.
 
(v)        Investment Company. Neither the Company nor any Subsidiary is, and
immediately after receipt of payment for the Securities, will be, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended. 
The Company shall conduct its business in a manner so that it will not become an
"investment company" subject to registration under the Investment Company Act of
1940, as amended.
 
(w)        Registration Rights.  Other than each of the Purchasers and as
otherwise disclosed in the SEC Reports, no Person has any right to cause the
Company or any Subsidiary to effect a registration under the Securities Act of
any securities of the Company or any Subsidiary.
 
(x)        Listing and Maintenance Requirements.  The Common Stock will be
registered pursuant to Section 12(b) or 12(g) of the Exchange Act within 60 days
of the date hereof, and the Company has taken no action designed to terminate,
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 Commission is contemplating terminating such
registration.  The Company has not, in the 12 months preceding the date hereof,
received notice from any Trading 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 Trading 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. The Common
Stock is currently eligible for electronic transfer through the Depository Trust
Company or another established clearing corporation and the Company is current
in payment of the fees to the Depository Trust Company (or such other
established clearing corporation) in connection with such electronic transfer.
 
(y)        Application of Takeover Protections.  The Company and the 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 Company's certificate of incorporation (or
similar charter documents) or the laws of its state of incorporation that is or
could become applicable to the Purchasers as a result of the Purchasers and the
Company fulfilling their obligations or exercising their rights under the
Transaction Documents, including without limitation as a result of the Company's
issuance of the Securities and the Purchasers' ownership of the Securities.
 
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(z)         Disclosure.  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 any of the Purchasers or their agents or counsel with any information
that it believes constitutes or might constitute material, non-public
information (other than knowledge of the transactions contemplated hereby, which
will be publicly disclosed in a press release pursuant to Section 4.4. below). 
The Company understands and confirms that the Purchasers will rely on the
foregoing representation in effecting transactions in securities of the
Company.  All of the disclosure furnished by or on behalf of the Company to the
Purchasers regarding the Company and its Subsidiaries, their respective
businesses and the transactions contemplated hereby, including the Disclosure
Schedules to this Agreement, is true and correct and does not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. The press releases disseminated by the
Company during the twelve months preceding the date of this Agreement taken as a
whole 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 and
when made, not misleading.  The Company acknowledges and agrees that no
Purchaser makes or has made any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set forth in
Section 3.2 hereof.
 
(aa)        No Integrated Offering. Assuming the accuracy of the Purchasers'
representations and warranties set forth in Section 3.2, neither the Company,
nor any of its Affiliates, nor any Person acting on its or 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 cause this
offering of the Securities to be integrated with prior offerings by the Company
for purposes of (i) the Securities Act which would require the registration of
any such securities under the Securities Act, or (ii) any applicable shareholder
approval provisions of any Trading Market on which any of the securities of the
Company are listed or designated.
 
(bb)       Solvency.  Based on the consolidated financial condition of the
Company as of the Closing Date, after giving effect to the receipt by the
Company of the proceeds from the sale of the Securities hereunder: (i) the fair
saleable value of the Company's assets exceeds the amount that will be required
to be paid on or in respect of the Company's existing debts and other
liabilities (including known contingent liabilities) as they mature, (ii) the
Company's assets do not constitute unreasonably small capital to carry on its
business as now conducted and as proposed to be conducted including its capital
needs taking into account the particular capital requirements of the business
conducted by the Company, consolidated and projected capital requirements and
capital availability thereof, and (iii) the current cash flow of the Company,
together with the proceeds the Company would receive, were it to liquidate all
of its assets, after taking into account all anticipated uses of the cash, would
be sufficient to pay all amounts on or in respect of its liabilities when such
amounts are required to be paid.  The Company does not intend to incur debts
beyond its ability to pay such debts as they mature (taking into account the
timing and amounts of cash to be payable on or in respect of its debt).  The
Company has no knowledge of any facts or circumstances which lead it to believe
that it will file for reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the Closing Date. 
Schedule 3.1(bb) sets forth as of the date hereof all outstanding secured and
unsecured Indebtedness of the Company or any Subsidiary, or for which the
Company or any Subsidiary has commitments. Neither the Company nor any
Subsidiary is in default with respect to any Indebtedness.  For the purposes of
this Agreement, "Indebtedness" means (x) any liabilities for borrowed money or
amounts owed in excess of $50,000 (other than trade accounts payable incurred in
the ordinary course of business), (y) all guaranties, endorsements and other
contingent obligations in respect of indebtedness of others, whether or not the
same are or should be reflected in the Company's consolidated balance sheet (or
the notes thereto), except guaranties by endorsement of negotiable instruments
for deposit or collection or similar transactions in the ordinary course of
business; and (z) the present value of any lease payments in excess of $50,000
due under leases required to be capitalized in accordance with GAAP.
 
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(cc)        Tax Status.  Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and its Subsidiaries each (i) has made or filed all United
States federal, state and local income and all foreign income and franchise tax
returns, reports and declarations required by any jurisdiction to which it is
subject, (ii) has paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such returns,
reports and declarations and (iii) has set aside on its books provision
reasonably adequate for the payment of all material taxes for periods subsequent
to the periods to which such returns, reports or declarations apply.  There are
no unpaid taxes in any material amount claimed to be due by the taxing authority
of any jurisdiction, and the officers of the Company or of any Subsidiary know
of no basis for any such claim that have not been adequately reserved for on the
books of the Company or such Subsidiary.
 
(dd)       No General Solicitation.  Neither the Company nor any Person acting
on behalf of the Company has offered or sold any of the Securities by any form
of general solicitation or general advertising.  Assuming the accuracy of the
Purchasers' representations and warranties under this Agreement, the Company has
offered the Securities for sale only to the Purchasers and certain other
"accredited investors" within the meaning of Rule 501 under the Securities Act.
 
(ee)       Foreign Corrupt Practices.  Neither the Company nor any Subsidiary,
to the knowledge of the Company or any Subsidiary, any agent or other person
acting on behalf of the Company or any Subsidiary, has: (i) directly or
indirectly, used any funds for unlawful contributions, gifts, entertainment or
other unlawful expenses related to foreign or domestic political activity, (ii)
made any unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or campaigns from
corporate funds, (iii) failed to disclose fully any contribution made by the
Company or any Subsidiary (or made by any person acting on its behalf of which
the Company is aware) which is in violation of law or (iv) violated in any
material respect any provision of FCPA.
 
(ff)        Accountants.  The Company's accounting firm is set forth on Schedule
3.1(ff) of the Disclosure Schedules.  To the knowledge and belief of the
Company, such accounting firm: (i) is a registered public accounting firm as
required by the Exchange Act and (ii) shall express its opinion with respect to
the financial statements to be included in the Company's Annual Report for the
fiscal year ending December 31, 2019.
 
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(gg)       No Disagreements with Accountants and Lawyers.  There are no
disagreements of any kind presently existing, or reasonably anticipated by the
Company to arise, between the Company and the accountants and lawyers formerly
or presently employed by the Company and the Company is current with respect to
any fees owed to its accountants and lawyers which could affect the Company's
ability to perform any of its obligations under any of the Transaction
Documents.
 
(hh)      Acknowledgment Regarding Purchasers' Purchase of Securities.  The
Company acknowledges and agrees that each of the Purchasers is acting solely in
the capacity of an arm's length purchaser with respect to the Transaction
Documents and the transactions contemplated thereby. The Company further
acknowledges that no Purchaser is acting as a financial advisor or fiduciary of
the Company (or in any similar capacity) with respect to the Transaction
Documents and the transactions contemplated thereby and any advice given by any
Purchaser or any of their respective representatives or agents in connection
with the Transaction Documents and the transactions contemplated thereby is
merely incidental to the Purchasers' purchase of the Securities.  The Company
further represents to each Purchaser that the Company's decision to enter into
this Agreement and the other Transaction Documents has been based solely on the
independent evaluation of the transactions contemplated hereby by the Company
and its representatives.
 
(ii)        Acknowledgment Regarding Purchaser's Trading Activity.  Anything in
this Agreement or elsewhere herein to the contrary notwithstanding (except for
Sections 3.2(g) and 4.14 herein), it is understood and acknowledged by the
Company that: (i) none of the Purchasers has been asked by the Company to agree,
nor has any Purchaser agreed, to desist from purchasing or selling, long and/or
short, securities of the Company, or "derivative" securities based on securities
issued by the Company or to hold the Securities for any specified term, (ii)
past or future open market or other transactions by any Purchaser, specifically
including, without limitation, Short Sales or "derivative" transactions, before
or after the closing of this or future private placement transactions, may
negatively impact the market price of the Company's publicly-traded securities,
(iii) any Purchaser, and counter-parties in "derivative" transactions to which
any such Purchaser is a party, directly or indirectly, may presently have a
"short" position in the Common Stock and (iv) each Purchaser shall not be deemed
to have any affiliation with or control over any arm's length counter-party in
any "derivative" transaction.  The Company further understands and acknowledges
that (y) one or more Purchasers may engage in hedging activities at various
times during the period that the Securities are outstanding, including, without
limitation, during the periods that the value of the Warrant Shares deliverable
with respect to Securities are being determined, and (z) such hedging activities
(if any) could reduce the value of the existing stockholders' equity interests
in the Company at and after the time that the hedging activities are being
conducted.  The Company acknowledges that such aforementioned hedging activities
do not constitute a breach of any of the Transaction Documents.
 
(jj)        Regulation M Compliance.  The Company has not, and to its knowledge
no one acting on its 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
Securities, (ii) sold, bid for, purchased, or paid any compensation for
soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay
to any Person any compensation for soliciting another to purchase any other
securities of the Company.
 
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(kk)       Stock Incentive Plan. Any stock option granted by the Company under a
stock incentive plan was granted (i) in accordance therewith and (ii) with an
exercise price at least equal to the fair market value of the Common Stock on
the date such stock option would be considered granted under GAAP and applicable
law. No stock option granted under any stock incentive plan has been backdated. 
The Company has not knowingly granted, and there is no and has been no Company
policy or practice to knowingly grant, stock options prior to, or otherwise
knowingly coordinate the grant of stock options with, the release or other
public announcement of material information regarding the Company or its
Subsidiaries or their financial results or prospects.
 
(ll)        Office of Foreign Assets Control.  Neither the Company nor any
Subsidiary  nor, to the Company's knowledge, any director, officer, agent,
employee or affiliate of the Company or any Subsidiary is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets Control of the
U.S. Treasury Department ("OFAC").
 
(mm)     U.S. Real Property Holding Corporation.  The Company is not and has
never been 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 Purchaser's request.
 
(nn)       Bank Holding Company Act.  Neither the Company nor any of its
Subsidiaries or Affiliates 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 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.
 
(oo)      Money Laundering.  The operations of the Company and its Subsidiaries
are and have been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, applicable money laundering
statutes and applicable rules and regulations thereunder (collectively, the
"Money Laundering Laws"), and no Action or Proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any Subsidiary with respect to the Money Laundering Laws is pending or, to
the knowledge of the Company or any Subsidiary, threatened.
 
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(pp)       No Disqualification Events.  With respect to the Securities to be
offered and sold hereunder in reliance on Rule 506 under the Securities Act,
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 Securities 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 of
the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) under
the Securities Act (a "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
Purchasers a copy of any disclosures provided thereunder.
 
(qq)       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 purchasers in connection with the
sale of any Securities.
 
(rr)        Notice of Disqualification Events. The Company will notify the
Purchasers in writing, prior to the Closing Date of (i) any Disqualification
Event relating to any Issuer Covered Person and (ii) any event that would, with
the passage of time, reasonably be expected to become a Disqualification Event
relating to any Issuer Covered Person.
 
3.2        Representations and Warranties of the Purchasers.  Each Purchaser,
for itself and for no other Purchaser, hereby represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows (unless as of a
specific date therein, in which case they shall be accurate as of such date):
 
(a)        Organization; Authority.  Such Purchaser is either an individual or
an entity duly incorporated or formed, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation with full
right, corporate, partnership, limited liability company or similar power and
authority to enter into and to consummate the transactions contemplated by the
Transaction Documents and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of the Transaction Documents and
performance by such Purchaser of the transactions contemplated by the
Transaction Documents have been duly authorized by all necessary corporate,
partnership, limited liability company or similar action, as applicable, on the
part of such Purchaser.  Each Transaction Document to which it is a party has
been duly executed by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof, will constitute the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance with its
terms, except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.
 
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(b)         Own Account.  Such Purchaser understands that the Securities are
"restricted securities" and have not been registered under the Securities Act or
any applicable state securities law and is acquiring the Securities as principal
for its own account and not with a view to or for distributing or reselling such
Securities or any part thereof in violation of the Securities Act or any
applicable state securities law, has no present intention of distributing any of
such Securities in violation of the Securities Act or any applicable state
securities law and has no direct or indirect arrangement or understandings with
any other persons to distribute or regarding the distribution of such Securities
in violation of the Securities Act or any applicable state securities law (this
representation and warranty not limiting such Purchaser's right to sell the
Securities pursuant to the Registration Statement or otherwise in compliance
with applicable federal and state securities laws).  Such Purchaser is acquiring
the Securities hereunder in the ordinary course of its business.
 
(c)         Purchaser Status.  At the time such Purchaser was offered the
Securities, it was, and as of the date hereof it is, and on each date on which
it exercises any Warrants, it will be either: (i) an "accredited investor" as
defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities
Act or (ii) a "qualified institutional buyer" as defined in Rule 144A(a) under
the Securities Act.
 
(d)        Experience of Such Purchaser.  Such Purchaser, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment.  Such Purchaser is able to
bear the economic risk of an investment in the Securities and, at the present
time, is able to afford a complete loss of such investment.
 
(e)         General Solicitation.  Such Purchaser is not purchasing the
Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or, to such Purchaser's knowledge, any other general solicitation or general
advertisement.
 
(f)          Access to Information. Such Purchaser acknowledges that it has had
the opportunity to review the Transaction Documents (including all exhibits and
schedules thereto) and the SEC Reports and has been afforded (i) the opportunity
to ask such questions as it has deemed necessary of, and to receive answers
from, representatives of the Company concerning the terms and conditions of the
offering of the Shares and the merits and risks of investing in the Shares; (ii)
access to information about the Company and its financial condition, results of
operations, business, properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity to obtain such
additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment.
 
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(g)         Certain Transactions and Confidentiality.  Other than consummating
the transactions contemplated hereunder, such Purchaser has not directly or
indirectly, nor has any Person acting on behalf of or pursuant to any
understanding with such Purchaser, executed any purchases or sales, including
Short Sales, of the securities of the Company during the period commencing as of
the time that such Purchaser first received a term sheet (written or oral) from
the Company or any other Person representing the Company setting forth the
material terms of the transactions contemplated hereunder and ending immediately
prior to the execution hereof.  Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser's assets and the portfolio
managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser's assets, the
representation set forth above shall only apply with respect to the portion of
assets managed by the portfolio manager that made the investment decision to
purchase the Securities covered by this Agreement.  Other than to other Persons
party to this Agreement or to such Purchaser's representatives, including,
without limitation, its officers, directors, employees, partners, legal and
other advisors, agents and Affiliates, such Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this transaction).
Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein
shall constitute a representation or warranty, or preclude any actions, with
respect to the identification of the availability of, or securing of, available
shares to borrow in order to effect Short Sales or similar transactions in the
future.
 
(h)         Brokers and Finders. No Person will have, as a result of the
transactions contemplated by this Agreement, any valid right, interest or claim
against or upon the Company or any Purchaser for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of such Purchaser.
 
(i)          Independent Investment Decision. Each Purchaser has independently
evaluated the merits of its decision to purchase the Securities pursuant to the
Transaction Documents, and such Purchaser confirms that it has not relied on the
advice of any other Purchaser and/or legal counsel to any of them in making such
decision. Such Purchaser understands that nothing in this Agreement or any other
materials presented by or on behalf of the Company to such Purchaser in
connection with the purchase of the Shares constitutes legal, tax or investment
advice.  Such Purchaser has consulted such legal, tax and investment advisors as
it, in its sole discretion, has deemed necessary or appropriate in connection
with its purchase of the Shares.
 
(j)          Reliance on Exemptions. Each Purchaser understands that the
Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of U.S. federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and such
Purchaser's compliance with, the representations, warranties, agreements,
acknowledgements and understandings of such Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of such
Purchaser to acquire the Shares.
 
(k)          Consents. Assuming the accuracy of the representations and
warranties of the Company and the other parties to the Transaction Documents, no
approval, consent, exemption, authorization, or other action by, or notice to,
or filing with, any governmental entity or authority or any other person or
entity in respect of any law or regulation is necessary or required, and no
lapse of a waiting period under law applicable to such Purchaser is necessary or
required, in each case in connection with the execution, delivery or performance
by such Purchaser or the purchase of the Securities contemplated hereby.
 
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(l)          Residency. The residence (if an individual) or office in which
investment decision of a Purchaser with respect to the Shares was made (if an
entity) are located at the address immediately below such Purchaser's name on
its signature page hereto.
 
(m)       No Outside Discussion of Offering. No Purchaser has discussed the
offering of the Shares with any other party or potential investors (other than
the Company, any other such Purchaser and such Purchaser's authorized
representatives, advisors and counsel), except as expressly permitted under the
terms of this Agreement.
 
(n)         Financial Capability. At the Closing, each Purchaser expects to have
available funds necessary to consummate the Closing on the terms and conditions
contemplated by this Agreement.
 
The Company acknowledges and agrees that the representations contained in this
Section 3.2 shall not modify, amend or affect such Purchaser's right to rely on
the Company's representations and warranties contained in this Agreement or any
representations and warranties contained in any other Transaction Document or
any other document or instrument executed and/or delivered in connection with
this Agreement or the consummation of the transaction contemplated hereby.
 
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
 
4.1          Transfer Restrictions.
 
(a)          The Securities may only be disposed of in compliance with state and
federal securities laws.  In connection with any transfer of Securities other
than pursuant to an effective registration statement or Rule 144, to the Company
or to an Affiliate of a Purchaser or in connection with a pledge as contemplated
in Section 4.1(b), the Company may require the transferor thereof to provide to
the Company an opinion of counsel selected by the transferor and reasonably
acceptable to the Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such transfer does
not require registration of such transferred Securities under the Securities
Act.  As a condition of transfer, any such transferee shall agree in writing to
be bound by the terms of this Agreement and the Registration Rights Agreement
and shall have the rights and obligations of a Purchaser under this Agreement
and the Registration Rights Agreement.
 
(b)         The Purchasers agree to the imprinting, so long as is required by
this Section 4.1, of a legend on any of the Securities in the following form:
 
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NEITHER THIS SECURITY NOR ANY SECURITY ISSUABLE UPON THE CONVERSION OR EXERCISE
HEREOF HAS BEEN  REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.  THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a) UNDER THE
SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
 
The Company acknowledges and agrees that a Purchaser may from time to time
pledge pursuant to a bona fide margin agreement with a registered broker-dealer
or grant a security interest in some or all of the Securities to a financial
institution that is an "accredited investor" as defined in Rule 501(a) under the
Securities Act and, if required under the terms of such arrangement, such
Purchaser may transfer pledged or secured Securities to the pledgees or secured
parties.  Such a pledge or transfer would not be subject to approval of the
Company and no legal opinion of legal counsel of the pledgee, secured party or
pledgor shall be required in connection therewith.  Further, no notice shall be
required of such pledge.  At the applicable Purchaser's expense, the Company
will execute and deliver such reasonable documentation as a pledgee or secured
party of Securities may reasonably request in connection with a pledge or
transfer of the Securities, including, if the Securities are subject to
registration pursuant to the Registration Rights Agreement, the preparation and
filing of any required prospectus supplement under Rule 424(b)(3) under the
Securities Act or other applicable provision of the Securities Act to
appropriately amend the list of Selling Stockholders (as defined in the
Registration Rights Agreement) thereunder.
 
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(c)          Certificates evidencing the Shares, the Conversion Shares and the
Warrant Shares shall not contain any legend (including the legend set forth in
Section 4.1(b) hereof), (i) while a registration statement (including the
Registration Statement) covering the resale of such security is effective under
the Securities Act, (ii) following any sale of such Shares, Conversion Shares or
Warrant Shares pursuant to Rule 144 (assuming cashless exercise of the
Warrants), (iii) if such Shares, Conversion Shares or Warrant Shares are
eligible for sale under Rule 144 (assuming cashless exercise of the Warrants)
without volume or manner-of-sale restrictions, or (iv) if such legend is not
required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission).  The
Company shall, at its expense, cause its counsel to issue a legal opinion to the
Transfer Agent and/or the Purchasers promptly after the Effective Date if
required by the Transfer Agent to effect the removal of the legend hereunder or
if requested by a Purchaser, and shall instruct its transfer agent to remove the
legend without requiring a medallion guarantee and provide such indemnity to its
transfer agent as the transfer agent may require to waive any medallion
guarantee requirement. If all or any portion of a Share is converted or a
Warrant is exercised, as the case may be, at a time when there is an effective
registration statement to cover the resale of such Conversion Shares or Warrant
Shares, or if such Conversion Shares or Warrant Shares may be sold under Rule
144 (assuming cashless exercise of the Warrants) or if such legend is not
otherwise required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the staff of
the Commission) then such Conversion Shares or Warrant Shares, as the case may
be, shall be issued free of all legends. The Company agrees that following the
Effective Date or at such time as such legend is no longer required under this
Section 4.1(c), it will, no later than the earlier of (i) two (2) Trading Days
and (ii) the number of Trading Days comprising the Standard Settlement Period
(as defined below), in each case following the delivery by a Purchaser to the
Company or the Transfer Agent of a certificate representing Shares, Conversion
Shares or Warrant Shares, as the case may be, issued with a restrictive legend
(such earlier date, the "Legend Removal Date"), deliver or cause to be delivered
to such Purchaser the Conversion Shares or Warrant Shares free from all
restrictive and other legends.  The Company may not make any notation on its
records or give instructions to the Transfer Agent that enlarge the restrictions
on transfer set forth in this Section 4.  The Company shall cause the Securities
subject to legend removal hereunder to be transmitted by the Transfer Agent to
the Purchaser by crediting the account of the Purchaser's prime broker with the
Depository Trust Company System as directed by such Purchaser.  As used herein,
"Standard Settlement Period" means the standard settlement period, expressed in
a number of Trading Days, on the Company's primary Trading Market with respect
to the Common Stock as in effect on the date of delivery of a stock certificate
for removal of legends.

(d)         In addition to such Purchaser's other available remedies, the
Company shall pay to a Purchaser in cash, or, at the discretion of the Company,
in shares of Common Stock (with the number of shares of Common Stock determined
based on a price of $0.50 per share) the greater of (i) as partial liquidated
damages and not as a penalty, for each $1,000 of Shares, Conversion Shares and
Warrant Shares (based on the VWAP of the Common Stock on the date such
Securities are submitted to the Transfer Agent) delivered for removal of the
restrictive legend and subject to Section 4.1(c), $10 per Trading Day
(increasing to $20 per Trading Day five (5) Trading Days after such damages have
begun to accrue) for each Trading Day after the Legend Removal Date until such
certificate is delivered without a legend and (ii) if the Company fails to (i)
issue and deliver (or cause to be delivered) to a Purchaser by the Legend
Removal Date a certificate representing the Securities so delivered to the
Company by such Purchaser that is free from all restrictive and other legends or
(ii) if after the Legend Removal Date such Purchaser purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by such Purchaser of all or any portion of the number of
shares of Common Stock, or a sale of a number of shares of Common Stock equal to
all or any portion of the number of shares of Common Stock that such Purchaser
anticipated receiving from the Company without any restrictive legend, then, an
amount equal to the excess of such Purchaser's total purchase price (including
brokerage commissions and other out-of-pocket expenses, if any) for the shares
of Common Stock so purchased (including brokerage commissions and other
out-of-pocket expenses, if any) (the "Buy-In Price") over the product of (A)
such number of Shares, Conversion Shares and Warrant Shares that the Company was
required to deliver to such Purchaser by the Legend Removal Date multiplied by
(B) the lowest closing sale price of the Common Stock on any Trading Day during
the period commencing on the date of the delivery by such Purchaser to the
Company of the applicable Shares, Conversion Shares and Warrant Shares (as the
case may be) and ending on the date of such delivery and payment under this
clause (ii).
 
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(e)         Each Purchaser, severally and not jointly with the other Purchasers,
agrees that such Purchaser may only sell any Securities pursuant to either the
registration requirements of the Securities Act, including any applicable
prospectus delivery requirements, or an exemption therefrom, and that if
Securities are sold pursuant to a Registration Statement, they will be sold in
compliance with the plan of distribution set forth therein, and acknowledges
that the removal of the restrictive legend from certificates representing
Securities as set forth in this Section 4.1 is predicated upon the Company's
reliance upon this understanding.
 
4.2         Furnishing of Information; Public Information.
 
(a)         If the Common Stock is not registered under Section 12(b) or 12(g)
of the Exchange Act on the date hereof, the Company shall cause the Common Stock
to be registered under Section 12(g) of the Exchange Act on or before the 60th
calendar day following the date hereof. Until the earliest of the time that (i)
no Purchaser owns Securities or (ii) the Warrants have expired, the Company
covenants to maintain the registration of the Common Stock under Section 12(b)
or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect
thereof and file within the applicable grace period) all reports required to be
filed by the Company after the date hereof pursuant to the Exchange Act even if
the Company is not then subject to the reporting requirements of the Exchange
Act.
 
(b)        At any time during the period commencing from the six (6) month
anniversary of the date hereof and ending at such time that all of the
Securities may be sold without the requirement for the Company to be in
compliance with Rule 144(c)(1) and otherwise without restriction or limitation
pursuant to Rule 144, then if the Company (i) shall fail for any reason to
satisfy the current public information requirement under Rule 144(c) or (ii) has
ever been an issuer described in Rule 144(i)(1)(i) or becomes an issuer in the
future, and the Company shall fail to satisfy any condition set forth in Rule
144(i)(2) unless, at the time of any of the events set forth in clauses (i) or
(ii) above, the Company has an effective Registration Statement registering for
resale all of the Registrable Securities (as defined in the Registration Rights
Agreement) (a "Public Information Failure") then, in addition to such
Purchaser's other available remedies, the Company shall pay to a Purchaser as
partial liquidated damages and not as a penalty, by reason of any such delay in
or reduction of its ability to sell the Securities, an amount equal to one
percent (1.0%) of the aggregate Purchase Amount of such Purchaser's Securities
remaining to be sold on the day of a Public Information Failure and on every
thirtieth (30th) day (pro-rated for periods totaling less than thirty days)
thereafter until the earlier of (a) the date such Public Information Failure is
cured, and (b) such time that such public information is no longer required  for
the Purchasers to transfer the Shares, Conversion Shares and Warrant Shares
pursuant to Rule 144; up to a maximum of 6.0%.  The payments to which a
Purchaser shall be entitled pursuant to this Section 4.2(b) are referred to
herein as "Public Information Failure Payments."  Public Information
Failure Payments shall be paid in cash or, at the discretion of the Company, in
shares of Common Stock (with the number of shares of Common Stock determined
based on a price of $0.50 per share) on the earlier of (i) the last day of the
calendar month during which such Public Information Failure Payments are
incurred and (ii) the third (3rd) Business Day after the event or failure giving
rise to the Public Information Failure Payments is cured.  In the event the
Company fails to make Public Information Failure Payments in a timely manner,
such Public Information Failure Payments shall bear interest at the rate of 1.0%
per month (prorated for partial months) until paid in full. Nothing herein shall
limit such Purchaser's right to pursue actual damages for the Public Information
Failure, and such Purchaser shall have the right to pursue all remedies
available to it at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief.
 
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4.3         [Reserved].
 
4.4         Securities Laws Disclosure; Publicity.  The Company shall (a) by
8:30 a.m. (New York City time) on the Trading Day immediately following the date
hereof, issue a press release disclosing the material terms of the transactions
contemplated hereby, and (b) file a Current Report on Form 8-K disclosing the
material terms of the transactions contemplated hereby, including the
Transaction Documents as exhibits thereto, with the Commission within the time
required by the Exchange Act.  From and after the issuance of such press
release, the Company represents to the Purchasers that it shall have publicly
disclosed all material, non-public information delivered to any of the
Purchasers (other than Purchasers who are directors or officers of the Company)
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. In addition, effective upon the issuance of such
press release, the Company acknowledges and agrees that any and all
confidentiality or similar obligations under any agreement, whether written or
oral, between the Company, any of its Subsidiaries or any of their respective
officers, directors, agents, employees or Affiliates on the one hand, and any of
the Purchasers (other than with Purchasers who are directors or officers of the
Company) or any of their Affiliates on the other hand, shall terminate. The
Company and the Lead Investor shall consult with each other in issuing any other
press releases with respect to the transactions contemplated hereby, and neither
the Company nor any Purchaser shall issue any such press release nor otherwise
make any such public statement without the prior consent of the Company, with
respect to any press release of any Purchaser, or without the prior consent of
the Lead Investor, with respect to any press release of the Company, which
consent shall not unreasonably be withheld or delayed, except if such disclosure
is required by law, in which case the disclosing party shall promptly provide
the other party with prior notice of such public statement or communication. 
Notwithstanding the foregoing, the Company shall not publicly disclose the name
of any Purchaser, or include the name of any Purchaser in any filing with the
Commission or any regulatory agency or Trading Market, without the prior written
consent of such Purchaser, except: (a) as required by federal securities law in
connection with (i) any registration statement contemplated by the Registration
Rights Agreement and (ii) the filing of final Transaction Documents with the
Commission and (b) to the extent such disclosure is required by law or Trading
Market regulations, in which case the Company shall provide the Purchasers with
prior notice of such disclosure permitted under this clause (b).
 
4.5        Shareholder Rights Plan.  No claim will be made or enforced by the
Company or, with the consent of the Company, any other Person, that any
Purchaser is an "Acquiring Person" under any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or similar anti-takeover plan or arrangement in effect or hereafter adopted by
the Company, or that any Purchaser could be deemed to trigger the provisions of
any such plan or arrangement, by virtue of receiving Securities under the
Transaction Documents or under any other agreement between the Company and the
Purchasers.
 
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4.6        Non-Public Information.  Except with respect to the material terms
and conditions of the transactions contemplated by the Transaction Documents,
which shall be disclosed pursuant to Section 4.4, the Company covenants and
agrees that neither it, nor any other Person acting on its behalf will provide
any Purchaser (other than Purchasers who are then directors or officers of the
Company) or its agents or counsel with any information that constitutes, or the
Company reasonably believes constitutes, material non-public information, unless
prior thereto such Purchaser shall have consented to the receipt of such
information and agreed with the Company to keep such information confidential. 
The Company understands and confirms that each Purchaser shall be relying on the
foregoing covenant in effecting transactions in securities of the Company.  To
the extent that the Company delivers any material, non-public information to
such a Purchaser without such Purchaser's consent, the Company hereby covenants
and agrees that such Purchaser shall not have any duty of confidentiality to
Company, any of its Subsidiaries, or any of their respective officers,
directors, agents, employees or Affiliates, or a duty to the Company, any of its
Subsidiaries or any of their respective officers, directors, agents, employees
or Affiliates not to trade on the basis of, such material, non-public
information, provided that the Purchaser shall remain subject to applicable law.
To the extent that any notice provided pursuant to any Transaction Document
constitutes, or contains, material, non-public information regarding the Company
or any Subsidiaries, the Company shall simultaneously file such notice with the
Commission pursuant to a Current Report on Form 8-K.  The Company understands
and confirms that each Purchaser shall be relying on the foregoing covenant in
effecting transactions in securities of the Company.
 
4.7        Use of Proceeds.  The Company shall use the net proceeds from the
sale of the Securities hereunder for repayment of a portion of its indebtedness
outstanding on the date of this Agreement and for working capital purposes and
shall not use such proceeds: (a) for the redemption of any Common Stock or
Common Stock Equivalents, or (b) in violation of FCPA or OFAC regulations.
 
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4.8         Indemnification of Purchasers.   Subject to the provisions of this
Section 4.8, the Company will indemnify and hold each Purchaser and its
directors, officers, shareholders, members, partners, employees and agents (and
any other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling persons (each, a
"Purchaser Party") harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys' fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents or (b) any action instituted against the
Purchaser Parties in any capacity, or any of them or their respective
Affiliates, by any stockholder of the Company who is not an Affiliate of such
Purchaser Parties, with respect to any of the transactions contemplated by the
Transaction Documents (unless such action is based upon a breach of such
Purchaser Party's representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Parties may have
with any such stockholder or any violations by such Purchaser Parties of state
or federal securities laws or any conduct by such Purchaser Parties which is
finally judicially determined to constitute fraud, gross negligence, willful
misconduct or malfeasance).  If any action shall be brought against any
Purchaser Party in respect of which indemnity may be sought pursuant to this
Agreement, such Purchaser Party shall promptly notify the Company in writing,
and the Company shall have the right to assume the defense thereof with counsel
of its own choosing reasonably acceptable to the Purchaser Party.  Any Purchaser
Party shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Purchaser Party except to the extent that (i)
the employment thereof has been specifically authorized by the Company in
writing, (ii) the Company has failed after a reasonable period of time to assume
such defense and to employ counsel or (iii) in such action there is, in the
reasonable opinion of counsel, a material conflict on any material issue between
the position of the Company and the position of such Purchaser Party, in which
case the Company shall be responsible for the reasonable fees and expenses of no
more than one such separate counsel.  The Company will not be liable to any
Purchaser Party under this Agreement (y) for any settlement by such Purchaser
Party effected without the Company's prior written consent, which shall not be
unreasonably withheld or delayed; or (z) to the extent, but only to the extent
that a loss, claim, damage or liability is attributable to such Purchaser
Party's breach of any of the representations, warranties, covenants or
agreements made by such Purchaser Party in this Agreement or in the other
Transaction Documents.  The indemnification required by this Section 4.8 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 are incurred. The
indemnity agreements contained herein shall be in addition to any cause of
action or similar right of any Purchaser Party against the Company or others and
any liabilities the Company may be subject to pursuant to law.
 
4.9        Reservation of Common Stock. As of the date hereof, the Company has
reserved and the Company shall continue to reserve and keep available at all
times, free of preemptive rights, a sufficient number of shares of Common Stock
for the purpose of enabling the Company to issue Shares pursuant to this
Agreement, the Certificate of Designations (pursuant to any conversion of the
Preferred Stock) and Warrant Shares (pursuant to any exercise of the Warrants).
 
4.10       Listing of Common Stock. The Company hereby agrees to use best
efforts to maintain the listing or quotation of the Common Stock on the Trading
Market on which it is currently listed, and concurrently with the Closing, to
the extent required the Company shall apply to list or quote all of the
Conversion Shares and Warrant Shares on such Trading Market and promptly secure
the listing of all of the Conversion Shares and Warrant Shares on such Trading
Market. The Company further agrees, if the Company applies to have the Common
Stock traded on any other Trading Market, it will then include in such
application all of the Conversion Shares and Warrant Shares and will take such
other action as is necessary to cause all of the Conversion Shares and Warrant
Shares to be listed or quoted on such other Trading Market as promptly as
possible.  The Company will then take all action reasonably necessary to
continue the listing or quotation and trading of its Common Stock on a Trading
Market and will comply in all respects with the Company's reporting, filing and
other obligations under the bylaws or rules of the Trading Market. The Company
shall maintain the eligibility of the Common Stock for electronic transfer
through the Depository Trust Company or another established clearing
corporation, including, without limitation, by timely payment of fees to the
Depository Trust Company or such other established clearing corporation in
connection with such electronic transfer.
 
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4.11       Participation in Future Financing.
 
(a)          From the date hereof until the date that is the twelve (12) month
anniversary of the Closing Date, upon any issuance by the Company or any of its
Subsidiaries of Common Stock, Common Stock Equivalents for cash consideration,
Indebtedness or a combination of units hereof (a "Subsequent Financing"), the
Purchasers, together, shall have the right to participate in up to an amount of
the Subsequent Financing equal to an aggregate of 35% of the Subsequent
Financing (the "Participation Maximum") on the same terms, conditions and price
provided for in the Subsequent Financing.
 
(b)         At least three (3) Trading Days prior to the closing of the
Subsequent Financing, the Company shall deliver to each Purchaser a written
notice of its intention to effect a Subsequent Financing (a "Subsequent
Financing Notice"), which notice shall describe in reasonable detail the
proposed terms of such Subsequent Financing, the amount of proceeds intended to
be raised thereunder and the Person or Persons (if known) through or with whom
such Subsequent Financing is proposed to be effected and shall include a term
sheet or similar document relating thereto as an attachment.  Notwithstanding
the foregoing, a Purchaser by so indicating on its signature page hereto (for
purposes of this Section 4.11, an “Abbreviated Notice Purchaser”) may elect to
an abbreviated time frame for receiving and responding to a Subsequent Financing
Notice, whereby any such Abbreviated Notice Purchaser will receive its
Subsequent Financing Notice between the time period of 4:00 pm (New York City
time) and 6:00 pm (New York City time) on the Trading Day immediately prior to
the Trading Day of the expected announcement of the Subsequent Financing (or, if
the Trading Day of the expected announcement of the Subsequent Financing is the
first Trading Day following a holiday or a weekend (including a holiday
weekend), between the time period of 4:00 pm (New York City time) on the Trading
Day immediately prior to such holiday or weekend and 2:00 pm (New York City
time) on the day immediately prior to the Trading Day of the expected
announcement of the Subsequent Financing).
 
(c)         Any Purchaser desiring to participate in such Subsequent Financing
must provide written notice to the Company by not later than 5:30 p.m. (New York
City time) on the second (2nd) Trading Day after all of the Purchasers (other
than the Abbreviated Notice Purchasers) have received a Subsequent Financing
Notice (or 6:30 am (New York City time) on the Trading Day following the date on
which a Subsequent Financing Notice is delivered to an Abbreviated Notice
Purchaser) that such Purchaser is willing to participate in the Subsequent
Financing, the amount of such Purchaser's participation, and representing and
warranting that such Purchaser has such funds ready, willing, and available for
investment on the terms set forth in the Subsequent Financing Notice.  If the
Company receives no such notice from a Purchaser as of such second (2nd) Trading
Day (or by 6:30 am (New York City time) on the Trading Day following the date on
which a Subsequent Financing Notice is delivered to an Abbreviated Notice
Purchaser), such Purchaser shall be deemed to have notified the Company that it
does not elect to participate.
 
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(d)          If by 5:30 p.m. (New York City time) on the second (2nd) Trading
Day after all of the Purchasers (other than the Abbreviated Notice Purchasers)
have received a Subsequent Financing Notice (or 6:30 am (New York City time) on
the Trading Day following the date on which a Subsequent Financing Notice is
delivered to an Abbreviated Notice Purchaser), notifications by the Purchasers
of their willingness to participate in the Subsequent Financing (or to cause
their designees to participate) is, in the aggregate, less than the
Participation Maximum, then the Company may effect the remaining portion of such
Subsequent Financing on the terms and with the Persons set forth in the
Subsequent Financing Notice.
 
(e)         If by 5:30 p.m. (New York City time) on the second (2nd) Trading Day
after all of the Purchasers (other than the Abbreviated Notice Purchasers) have
received a Subsequent Financing Notice (or 6:30 am (New York City time) on the
Trading Day following the date on which a Subsequent Financing Notice is
delivered to an Abbreviated Notice Purchaser), the Company receives responses to
a Subsequent Financing Notice from Purchasers seeking to purchase more than the
aggregate amount of the Participation Maximum, each such Purchaser shall have
the right to purchase its Pro Rata Portion (as defined below) of the
Participation Maximum and the Company may effect the remaining portion of such
Subsequent Financing on the terms and with the Persons set forth in the
Subsequent Financing Notice.  "Pro Rata Portion" means the ratio of (x) the
Purchase Amount of Securities purchased on the Closing Date by a Purchaser
participating under this Section 4.11 and (y) the sum of the aggregate Purchase
Amounts of Securities purchased on the Closing Date by all Purchasers
participating under this Section 4.11.
 
(f)         The Company must provide the Purchasers with a second Subsequent
Financing Notice, and the Purchasers will again have the right of participation
set forth above in this Section 4.11, if the Subsequent Financing subject to the
initial Subsequent Financing Notice is not consummated for any reason on the
terms set forth in such Subsequent Financing Notice within five (5) Trading Days
after the date of the initial Subsequent Financing Notice.
 
(g)         The Company and each Purchaser agree that if any Purchaser elects to
participate in the Subsequent Financing, the transaction documents related to
the Subsequent Financing shall not include any term or provision whereby such
Purchaser shall be required to agree to any restrictions on trading as to any of
the Securities purchased hereunder or be required to consent to any amendment to
or termination of, or grant any waiver, release or the like under or in
connection with, this Agreement, without the prior written consent of such
Purchaser.
 
(h)         Notwithstanding anything to the contrary in this Section 4.11 and
unless otherwise agreed to by such Purchaser, the Company shall either confirm
in writing to such Purchaser that the transaction with respect to the Subsequent
Financing has been abandoned or shall publicly disclose its intention to issue
the securities in the Subsequent Financing, in either case in such a manner such
that such Purchaser will not be in possession of any material, non-public
information, by the fifth (5th) Business Day following delivery of the
Subsequent Financing Notice.  If by such fifth (5th) Business Day, no public
disclosure regarding a transaction with respect to the Subsequent Financing has
been made, and no notice regarding the abandonment of such transaction has been
received by such Purchaser, such transaction shall be deemed to have been
abandoned and such Purchaser shall not be deemed to be in possession of any
material, non-public information with respect to the Company or any of its
Subsidiaries.
 
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(i)          Notwithstanding the foregoing, this Section 4.11 shall not apply in
respect of an Exempt Issuance.
 
4.12      Variable Rate Transaction.  From the date hereof until the earlier of
the sixth anniversary of the Closing Date and the date on which all Warrants
have been exercised in full, 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 Common Stock Equivalents (or a combination of
units thereof) involving a Variable Rate Transaction.  "Variable Rate
Transaction" means a transaction in which the Company (i) issues or sells any
debt or equity securities 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 or (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 (ii) enters into, or effects a transaction under, any
agreement, including, but not limited to, an equity line of credit, an
"at-the-market" offering or similar agreement, whereby the Company may issue
securities at a future determined price.  Any Purchaser shall be entitled to
obtain injunctive relief against the Company to preclude any such issuance,
which remedy shall be in addition to any right to collect damages.
 
4.13       Equal Treatment of Purchasers.  No consideration (including any
modification of this Agreement) shall be offered or paid to any Person to amend
or consent to a waiver or modification of any provision of this Agreement unless
the same consideration is also offered to all of the parties to this Agreement. 
For clarification purposes, this provision constitutes a separate right granted
to each Purchaser by the Company and negotiated separately by each Purchaser,
and is intended for the Company to treat the Purchasers as a class and shall not
in any way be construed as the Purchasers acting in concert or as a group with
respect to the purchase, disposition or voting of Securities or otherwise.
 
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4.14      Certain Transactions and Confidentiality. Each Purchaser, severally
and not jointly with the other Purchasers, covenants that neither it, nor any
Affiliate acting on its behalf or pursuant to any understanding with it will
execute any purchases or sales, including Short Sales, of any of the Company's
securities during the period commencing with the execution of this Agreement and
ending at such time that the transactions contemplated by this Agreement are
first publicly announced pursuant to the initial press release as described in
Section 4.4.  Each Purchaser, severally and not jointly with the other
Purchasers, covenants that until such time as the transactions contemplated by
this Agreement are publicly disclosed by the Company pursuant to the initial
press release as described in Section 4.4, such Purchaser will maintain the
confidentiality of the existence and terms of this transaction and the
information included in the Transaction Documents and the Disclosure Schedules. 
Notwithstanding the foregoing, and notwithstanding anything contained in this
Agreement to the contrary, the Company expressly acknowledges and agrees that
(i) no Purchaser makes any representation, warranty or covenant hereby that it
will not engage in effecting transactions in any securities of the Company after
the time that the transactions contemplated by this Agreement are first publicly
announced pursuant to the initial press release as described in Section 4.4,
(ii) no Purchaser shall be restricted or prohibited from effecting any
transactions in any securities of the Company in accordance with applicable
securities laws from and after the time that the transactions contemplated by
this Agreement are first publicly announced pursuant to the initial press
release as described in Section 4.4 and (iii) no Purchaser that is not a
director, officer or employee of the Company shall have any duty of
confidentiality or duty not to trade in the securities of the Company to the
Company or its Subsidiaries after the issuance of the initial press release as
described in Section 4.4.  Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser's assets and the portfolio
managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser's assets, the
covenant set forth above shall only apply with respect to the portion of assets
managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement.
 
4.15      Form D; Blue Sky Filings.  The Company shall timely file a Form D with
respect to the Securities as required under Regulation D and to provide a copy
thereof, promptly upon request of any Purchaser. The Company shall take such
action as the Company shall reasonably determine is necessary in order to obtain
an exemption for, or to qualify the Securities for, sale to the Purchasers at
the Closing under applicable securities or "Blue Sky" laws of the states of the
United States, and shall provide evidence of such actions promptly upon request
of any Purchaser.
 
4.16      Capital Changes.  Until the one year anniversary of the Effective
Date, the Company shall not undertake a reverse or forward stock split or
reclassification of the Common Stock without the prior written consent of the
Purchasers holding a majority in interest of the Shares, except for any reverse
stock split as may be required or advisable in connection with the listing of
the Common Stock on a National Exchange pursuant to Section 4.18 below.
 
4.17      Acknowledgment of Dilution.  The Company acknowledges that the
issuance of the Securities may result in dilution of the outstanding shares of
Common Stock, which dilution may be substantial under certain market
conditions.  The Company further acknowledges that its obligations under the
Transaction Documents, including, without limitation, its obligation to issue
the Shares, the Conversion Shares and Warrant Shares pursuant to the Transaction
Documents, are unconditional and absolute and not subject to any right of set
off, counterclaim, delay or reduction, regardless of the effect of any such
dilution or any claim the Company may have against any Purchaser and regardless
of the dilutive effect that such issuance may have on the ownership of the other
stockholders of the Company.
 
4.18       [Reserved].
 
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4.19       Approval of Series E Amendment.  Each Purchaser acknowledges and
understands that the Company will undertake to amend the terms of its
outstanding Series E Convertible Preferred Stock to provide that the conversion
price applicable thereto shall be equal to the conversion price of the Preferred
Stock (the “Series E Amendment”).  It is understood and agreed that the Company
may seek stockholder approval to effect the Series E Amendment, and each
Purchaser that is an officer or director of the Company hereby agrees that in
connection with such stockholder approval, such Purchaser shall (i) cause all
shares owned by such Purchaser, including shares owned by such Purchaser’s
Affiliates, to be voted in favor of the Series E Amendment, and (ii) take such
other action as shall be reasonably necessary to cause the Series E Amendment to
become effective.
 
ARTICLE V.
MISCELLANEOUS
 
5.1        Termination.  This Agreement may be terminated by any Purchaser, as
to such Purchaser's obligations hereunder only and without any effect whatsoever
on the obligations between the Company and the other Purchasers, by written
notice to the other parties, if the Closing has not been consummated on or
before five (5) Trading Days following the date hereof; provided, however, that
such termination will not affect the right of any party to sue for any breach by
any other party (or parties).
 
5.2        Fees and Expenses.  Except as expressly set forth in the Transaction
Documents to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement.  The Company shall pay all Transfer
Agent fees (including, without limitation, any fees required for same-day
processing of any instruction letter delivered by the Company and any exercise
notice delivered by a Purchaser), stamp taxes and other taxes and duties levied
in connection with the delivery of any Securities to the Purchasers.
 
5.3        Entire Agreement.  The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, exhibits and
schedules.
 
5.4         Notices.  Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of: (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
or email attachment as set forth on the signature pages attached hereto at or
prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading
Day after the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number or email attachment as set forth on the
signature pages attached hereto on a day that is not a Trading Day or later than
5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading
Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service or (d) upon actual receipt by the party to whom such
notice is required to be given.  The address for such notices and communications
shall be as set forth on the signature pages attached hereto. To the extent that
any notice provided pursuant to any Transaction Document constitutes, or
contains material, non-public information regarding the Company or any of the
Subsidiaries, the Company shall simultaneously file such notice with the
Commission pursuant to a Current Report on Form 8-K.
 
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5.5         Amendments; Waivers.  No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the
case of an amendment, by the Company and the Purchasers holding at least a
majority in interest of the Shares then outstanding or, in the case of a waiver,
by the party against whom enforcement of any such waived provision is sought;
provided, that if any amendment, modification or waiver disproportionately and
adversely impacts a Purchaser (or group of Purchasers), the consent of such
disproportionately impacted Purchaser (or group of Purchasers) shall also be
required.  No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of any such
right.
 
5.6         Headings.  The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
 
5.7        Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns. 
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each Purchaser (other than by merger).  Any
Purchaser may assign any or all of its rights under this Agreement to any Person
to whom such Purchaser assigns or transfers any Securities, provided that such
transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions of the Transaction Documents that apply to the
"Purchasers."
 
5.8        No Third-Party Beneficiaries.  This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.8.
 
5.9        Governing Law.  All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof.  Each
party agrees that all legal Proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, partners, members,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City 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 (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any Action or Proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such Action or Proceeding is improper or is
an inconvenient venue for such Proceeding.  Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
Action or Proceeding by mailing a copy thereof via registered or certified mail
or overnight delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof. 
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any other manner permitted by law.   If any party hereto shall
commence an Action or Proceeding to enforce any provisions of the Transaction
Documents, then, in addition to the obligations of the Company under Section
4.8, the prevailing party in such Action or Proceeding shall be reimbursed by
the non-prevailing party for its reasonable attorneys' fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
Action or Proceeding.
 
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5.10       Survival.  The representations and warranties contained herein shall
survive the Closing and the delivery of the Securities.
 
5.11       Execution.  This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to each other party, it being understood that the
parties need not sign the same counterpart.  In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a ".pdf" format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or ".pdf" signature page were an original
thereof.
 
5.12       Severability.  If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
 
5.13       Rescission and Withdrawal Right.  Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) any of
the other Transaction Documents, whenever any Purchaser exercises a right,
election, demand or option under a Transaction Document and the Company does not
timely perform its related obligations within the periods therein provided, then
such Purchaser may rescind or withdraw, in its sole discretion from time to time
upon written notice to the Company, any relevant notice, demand or election in
whole or in part without prejudice to its future actions and rights; provided,
however, that in the case of a rescission of a conversion of the Preferred Stock
or an exercise of a Warrant, the applicable Purchaser shall be required to
return any shares of Common Stock subject to any such rescinded conversion or
exercise notice concurrently with the return to such Purchaser of the aggregate
exercise price paid to the Company for such shares and the restoration of such
Purchaser's right to acquire such shares pursuant to the applicable Certificate
of Designations or such Purchaser's Warrant (including, issuance of a
replacement shares of Preferred Stock or warrant certificate evidencing such
restored right).
 
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5.14       Replacement of Securities.  If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof (in the case of mutilation), or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction.  The
applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity)
associated with the issuance of such replacement Securities.
 
5.15      Remedies.  In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents.  The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations contained in the Transaction Documents and hereby agree to waive and
not to assert in any Action for specific performance of any such obligation the
defense that a remedy at law would be adequate.
 
5.16       Payment Set Aside.  To the extent that the Company makes a payment or
payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other Person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
 
5.17       Independent Nature of Purchasers' Obligations and Rights.  The
obligations of each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance or non-performance of the obligations
of any other Purchaser under any Transaction Document.  Nothing contained herein
or in any other Transaction Document, and no action taken by any Purchaser
pursuant hereof or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction Documents.  Each Purchaser shall be entitled to independently
protect and enforce its rights, including, without limitation, the rights
arising out of this Agreement or out of the other Transaction Documents, and it
shall not be necessary for any other Purchaser to be joined as an additional
party in any proceeding for such purpose.  Each Purchaser has been represented
by its own separate legal counsel in its review and negotiation of the
Transaction Documents.  The Company has elected to provide all Purchasers with
the same terms and Transaction Documents for the convenience of the Company and
not because it was required or requested to do so by any of the Purchasers.  It
is expressly understood and agreed that each provision contained in this
Agreement and in each other Transaction Document is between the Company and a
Purchaser, solely, and not between the Company and the Purchasers collectively
and not between and among the Purchasers.
 
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5.18      Liquidated Damages.  The Company's obligations to pay any partial
liquidated damages or other amounts owing under the Transaction Documents is a
continuing obligation of the Company and shall not terminate until all unpaid
partial liquidated damages and other amounts have been paid notwithstanding the
fact that the instrument or security pursuant to which such partial liquidated
damages or other amounts are due and payable shall have been canceled.
 
5.19       Saturdays, Sundays, Holidays, etc.  If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such right
may be exercised on the next succeeding Business Day.
 
5.20       Construction. The parties agree that each of them and/or their
respective counsel have reviewed and had an opportunity to revise the
Transaction Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any
amendments thereto. In addition, each and every reference to share prices and
shares of Common Stock in any Transaction Document shall be subject to
adjustment for reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.
 
5.21     WAIVER OF JURY TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW,
HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER
TRIAL BY JURY.
 
(Signature Pages Follow)
 
-40-

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
BETTER CHOICE COMPANY INC.
 
Address for Notice:

166 Douglas Road E
Oldsmar, FL 34677
Attn: Chief Executive Officer
By:
     

Name:
   
Title:    

With a copy to (which shall not constitute notice):
Meister Seelig & Fein LLP
125 Park Avenue, 7th Floor
New York, NY 10017
Attn: Louis Lombardo

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASERS FOLLOWS]

-41-

--------------------------------------------------------------------------------

[PURCHASER SIGNATURE PAGES TO BETTER CHOICE COMPANY INC.
SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 

Name of Purchaser:
 
 

Signature of Authorized Signatory of Purchaser:
 
 

Name of Authorized Signatory:
 

Title of Authorized Signatory:
 

Email Address of Authorized Signatory:
 

Address for Notice to Purchaser:
 

Social Security/EIN Number(s):
 

Election for book-entry shares: ___ [check for book-entry shares]

Election for physical delivery of a stock certificate: ___ [check for physical
stock certificate]

Address for Delivery of Securities to Purchaser (if not same as address for
notice):

--------------------------------------------------------------------------------

In accordance with Section 4(d) of the Certificate of Designations, the
applicable Beneficial Ownership Limitation of the Purchaser shall be: _____
4.99% _____9.99%  ___N/A [check one]

In accordance with Section 2(e) of the Warrant, the applicable Beneficial
Ownership Limitation of the Purchaser shall be: _____ 4.99% _____9.99%  ___N/A
[check one]

Purchase Amount: $
 
 

Units:

 
Preferred Stock:
 
 

 
Warrant Shares:
 
 

If Purchaser elects to be an “Abbreviated Notice Purchaser” under Section 4.11
check here:

-42-

--------------------------------------------------------------------------------

SCHEDULE 3.1(a)
SUBSIDIARIES OF THE COMPANY

Name
State of Incorporation
   
Halo, Purely for Pets, Inc.
Delaware
   
Bona Vida, Inc.
Delaware
   
TruPet LLC
Delaware
   
Wamore Corporation S.A.
Uruguay

-43-

--------------------------------------------------------------------------------

SCHEDULE 3.1(g)
CAPITALIZATION OF THE COMPANY
 
Common Stock outstanding: 48,939,708*
 
* Excludes (i) shares of common stock issuable upon the conversion of the
Convertible Notes disclosed on Schedule 3.1(bb), and (ii) shares of common stock
issuable upon the conversion of the outstanding Series E Preferred Stock (which
will be exchanged for Series F Preferred Stock and then be convertible into
common stock at $0.50 per share (8,000,000 shares of common stock)).
 
Warrants to Purchase Common Stock outstanding:
 
Warrants Issued
   
Exercise Price
 
Expiration Date
712,823
(1) 
 
$
0.65
 
December 19, 2020
4,820,531
   
$
4.25
 
24 months from date of underwritten public offering or other uplist transaction
1,041,666
   
$
0.10
 
September 17, 2029
11,000
   
$
4.25
 
24 months from date of underwritten public offering or other uplist transaction
937,500
   
$
4.25
 
24 months from date of underwritten public offering or other uplist transaction
6,500,000
   
$
1.82
 
24 months from date of underwritten public offering or other uplist transaction
61,224
   
$
4.25
 
24 months from date of underwritten public offering or other uplist transaction
1,003,232
(1) 
 
$
0.65
 
December 19, 2020
2,000,000
   
$
1.25
 
84 months from date of underwritten public offering or other uplist transaction
1,990,624
(1) 
 
$
0.65
 
December 19, 2020
500,000
   
$
1.05
 
84 months from date of underwritten public offering or other uplist transaction
570,259
(1) 
 
$
0.65
 
December 19, 2020
20,148,860
(2) 
          

(1)
The Company issued 712,823 warrants in December 2018 which include an option to
settle in cash in the event of a change of control of the Company, and a reset
feature if the Company issues shares of common stock with a strike price lower
than the exercise price of the warrants. There have been three triggering events
(including the dilutive impact of the Securities) subsequent to the December
2018 issuance resulting in the issuance or pending issuance of additional
warrants and adjustment to the exercise price.

On September 18, 2020, the Company amended, with the requisite approval of the
holders thereof, all of the Common Stock Purchase Warrants originally issued in
December 2018.  The amendment amends the December 2018 Warrants to eliminate
certain anti dilution rights, fix the number of shares of common stock
purchasable under each of the outstanding December 2018 Warrants and sets the
exercise price thereof at $0.65 per share.

(2)
If the December 2018 warrants are further amended to a revised strike price of
$0.50/sh, this would result in the issuance of 1,283,082 additional warrants.

-44-

--------------------------------------------------------------------------------

SCHEDULE 3.1(g)
CAPITALIZATION OF THE COMPANY
(Continued)

Grant Date
 
Current
Employee/Director
 
Exercise
Price(1)
   
Options
 
 Expiration
 Date
 
Grant Date
 
Former
Employee/Director
 
Exercise
Price
   
Options
 
 Expiration
 Date
12/21/2018
 
Director
 
$
1.82
     
19,231
 
12/21/2028
 
12/21/2018
 
Former Director
 
$
1.82
     
19,231
 
12/21/2028
5/2/2019
 
Director
 
$
1.82
     
1,150,000
 
5/2/2029
 
5/2/2019
 
Former Director
 
$
1.82
     
500,000
 
5/2/2029
5/2/2019
 
Employee/Director
 
$
1.82
     
1,200,000
 
5/2/2029
 
5/21/2019
 
Fomer Advisor
 
$
1.82
     
30,000
 
5/21/2029
5/2/2019
 
Employee
 
$
1.82
     
1,000,000
 
5/2/2029
 
5/21/2019
 
Fomer Advisor
 
$
1.82
     
30,000
 
5/21/2029
5/2/2019
 
Director
 
$
1.82
     
500,000
 
5/2/2029
 
5/21/2019
 
Former Employee
 
$
1.82
     
500
 
5/21/2029
5/2/2019
 
Director
 
$
1.82
     
500,000
 
5/2/2029
 
5/21/2019
 
Former Employee
 
$
1.82
     
500
 
5/21/2029
5/21/2019
 
Employee
 
$
1.82
     
500
 
5/21/2029
 
5/21/2019
 
Former Employee
 
$
1.82
     
500
 
5/21/2029
5/21/2019
 
Employee
 
$
1.82
     
500
 
5/21/2029
 
5/21/2019
 
Former Employee
 
$
1.82
     
500
 
5/21/2029
5/21/2019
 
Employee
 
$
1.82
     
500
 
5/21/2029
 
5/21/2019
 
Former Employee
 
$
1.82
     
500
 
9/26/2020
5/21/2019
 
Employee
 
$
1.82
     
500
 
5/21/2029
 
5/21/2019
 
Former Employee
 
$
1.82
     
500
 
5/21/2029
5/21/2019
 
Employee
 
$
1.82
     
500
 
5/21/2029
 
5/21/2019
 
Former Employee
 
$
1.82
     
500
 
5/21/2029
5/21/2019
 
Employee
 
$
1.82
     
500
 
5/21/2029
 
5/21/2019
 
Former Employee
 
$
1.82
     
500
 
5/21/2029
5/21/2019
 
Employee
 
$
1.82
     
500
 
5/21/2029
 
5/21/2019
 
Former Employee
 
$
1.82
     
500
 
5/21/2029
5/21/2019
 
Employee
 
$
1.82
     
500
 
5/21/2029
 
5/21/2019
 
Former Employee
 
$
1.82
     
500
 
5/21/2029
5/21/2019
 
Employee
 
$
1.82
     
500
 
5/21/2029
 
5/21/2019
 
Former Employee
 
$
1.82
     
500
 
5/21/2029
5/21/2019
 
Employee
 
$
1.82
     
500
 
5/21/2029
 
5/21/2019
 
Former Employee
 
$
1.82
     
500
 
5/21/2029
5/21/2019
 
Employee
 
$
1.82
     
500
 
5/21/2029
 
5/21/2019
 
Former Employee
 
$
1.82
     
500
 
5/21/2029
5/21/2019
 
Employee
 
$
1.82
     
500
 
5/21/2029
 
5/21/2019
 
Former Employee
 
$
1.82

   
500
 
5/21/2029
5/21/2019
 
Employee
 
$
1.82
     
500
 
5/21/2029
 
5/21/2019
 
Former Employee
 
$
1.82

   
500
 
5/21/2029
6/29/2019
 
Employee
 
$
1.82
     
500
 
6/29/2029
 
5/21/2019
 
Former Employee
 
$
1.82

   
500
 
5/21/2029
6/29/2019
 
Employee
 
$
1.82
     
500
 
6/29/2029
 
5/21/2019
 
Former Employee
 
$
1.82

   
500
 
5/21/2029
6/29/2019
 
Employee
 
$
1.82
     
500
 
6/29/2029
 
5/21/2019
 
Former Employee
 
$
1.82

   
500
 
5/21/2029
12/19/2019
 
Employee
 
$
1.82
     
600,000
 
12/19/2029
 
5/21/2019
 
Former Employee
 
$
1.82

   
500
 
5/21/2029
12/19/2019
 
Employee
 
$
1.82
     
400,000
 
12/19/2029
 
5/21/2019
 
Former Employee
 
$
1.82
     
500
 
5/21/2029
12/19/2019
 
Employee
 
$
1.82
     
150,000
 
12/19/2029
 
5/21/2019
 
Former Employee
 
$
1.82
     
500
 
5/21/2029
12/19/2019
 
Employee
 
$
1.82
     
50,000
 
12/19/2029
 
5/21/2019
 
Former Employee
 
$
1.82
     
500
 
5/21/2029
12/19/2019
 
Employee
 
$
1.82
     
50,000
 
12/19/2029
 
5/21/2019
 
Former Employee
 
$
1.82
     
500
 
5/21/2029
12/19/2019
 
Employee
 
$
1.82
     
100,000
 
12/19/2029
 
5/21/2019
 
Former Employee
 
$
1.82
     
500
 
5/21/2029
12/19/2019
 
Employee
 
$
1.82
     
50,000
 
12/19/2029
 
5/21/2019
 
Former Employee
 
$
1.82
     
500
 
5/21/2029
2/28/2020
 
Employee
 
$
1.00
     
50,000
 
2/28/2030
 
5/21/2019
 
Former Employee
 
$
1.82
     
500
 
5/21/2029
2/28/2020
 
Employee
 
$
1.00
     
50,000
 
2/28/2030
 
5/21/2019
 
Former Employee
 
$
1.82
     
500
 
5/21/2029
4/13/2020
 
Employee
 
$
0.70
     
200,000
 
4/13/2030
 
5/21/2019
 
Former Employee
 
$
1.82
     
500
 
5/21/2029
                 
6,077,231
     
5/21/2019
 
Former Employee
 
$
1.82
     
500
 
5/21/2029
                         
6/29/2019
 
Former Employee
 
$
1.82
     
500
 
6/29/2029
                         
6/29/2019
 
Former Employee
 
$
1.82
     
354,166
 
6/29/2029
                         
8/30/2019
 
Former Employee
 
$
1.82
     
66,667
 
8/30/2029
                         
12/11/2019
 
Former Employee
 
$
1.82
     
151,042
 
12/11/2029
                         
12/19/2019
 
Former Employee
 
$
1.82
     
8,333
 
9/24/2020
                         
12/31/2019
 
Former Employee
 
$
2.70
     
11,883
 
12/31/2029
                                           
1,186,322
   

(1)
Currently active employees, Directors and Officers will have outstanding awards
under the Better Choice Management Incentive Plan (MIP) re-priced concurrent
with the closing of the Series F financing. This totals 6,077,231 units. The
strike price will be set at a 20% premium to the Series F conversion price. At a
Series F conversion price of $0.50 per share, the strike price would equal $0.60
per share.

 

-45-

--------------------------------------------------------------------------------

SCHEDULE 3.1(g)
CAPITALIZATION OF THE COMPANY
(Continued)

Affiliate Ownership

   
Amount and Nature of Beneficial Ownership
     
Common Stock
 
Name of Beneficial Owner
 
Shares
   
%
 
Holders of More than 5%
           
Navy Capital Green Fund LP
   
2,544,415
     
5.2
%
Thriving Paws LLC
   
3,572,560
     
7.1
%
HH-Halo LP
   
3,659,257
     
7.0
%
Edward J Brown JR TTEE
   
2,594,591
     
5.1
%
Directors and Executive Officers
               
Werner Von Pein
   
16,425
     
0.0
%
Anthony Santarsiero
   
1,657,209
     
3.3
%
Michael Young
   
2,363,971
     
4.7
%
Michael Close
   
650,000
     
1.3
%
Damian Dalla-Longa
   
2,559,891
     
5.1
%
Jeff D. Davis
   
333,333
     
0.7
%
Clinton Gee
   
650,000
     
1.3
%
Lori Taylor
   
8,082,027
     
15.7
%
John M. Word III
   
11,676,416
     
21.0
%
All directors and executive officers as a group (9 persons)
   
27,989,271
     
53.2
%

-46-

--------------------------------------------------------------------------------

SCHEDULE 3.1(h)
LATE FILINGS
 
None.
 
-47-

--------------------------------------------------------------------------------

SCHEDULE 3.1(i)
MATERIAL CHANGES; UNDISCLOSED EVENTS, LIABILITIES OR DEVELOPMENTS
 
None.
 
-48-

--------------------------------------------------------------------------------

SCHEDULE 3.1(j)
LITIGATION

The Company is currently in the process of negotiating a settlement to resolve a
dispute with a former employee. The Company has adequately reserved for this
matter on its books.

The Company received a letter on September 4, 2020 from a former customer
regarding a dispute over a refund for remaining inventory held by such customer
following the Company’s decision to wind down its business with such customer.
The Company has adequately reserved for this matter on its books.

The Company received a letter from a law firm in California claiming that the
Halo website is not compliant with the Americans with Disabilities Act and
expressed an intent to file suit in the near future. The Company is in the
process of investigating this matter.

-49-

--------------------------------------------------------------------------------

SCHEDULE 3.1(r)
TRANSACTIONS WITH AFFILIATES AND EMPLOYEES
 
The Company has convertible notes outstanding to John Word (for $2,209,095.62 in
the aggregate) and Rob Sauermann (for $121,699.14 in the aggregate).
 
In connection with the Company’s $20,500,000 term loan facility, the following
Directors have been issued the respective amount of warrants and have provided
personal guarantees with a liability of up to the amount shown below:

•
John Word - 4,875,000 warrants, liability of up to $15M

•
Lori Taylor - 1,300,000 warrants, liability of up to $4M

•
Michael Young - 325,000 warrants, liability of up to $1M

In connection with the Company’s $7,500,000 revolving demand loan facility, John
Word was issued 300,000 warrants and provided a personal guaranty with a
liability of up to $7.5M.
 
-50-

--------------------------------------------------------------------------------

SCHEDULE 3.1(s)
SARBANES-OXLEY; INTERNAL ACCOUNTING CONTROLS
 
As of the date hereof, the Company has material weaknesses in its internal
control over financial reporting as disclosed in the Company's Annual Report for
the fiscal year ending December 31, 2019. The Company has implemented internal
accounting controls in an effort to remediate these material weaknesses but will
be required to formally document these controls and have such controls
successfully tested by the Company's external auditors in order to receive an
opinion that the material weaknesses have been remediated.
 
-51-

--------------------------------------------------------------------------------

SCHEDULE 3.1(bb)
INDEBTEDNESS
 

   
Amount ($)
   
Rate
 
Maturity Date
Convertible notes (1)
   
20,863,660
     
10.0 %

 June 30, 2023
Short term loan
   
20,500,000
   
Bank of Montreal Prime plus 8.05 %

 December 19, 2020
Revolving credit facility
   
5,069,929
   
Libor plus 2.50 %

 July 5, 2022
Paycheck Protection Program loans
   
851,869
     
.98% - 1.00 %

 April 6, 2020;
May 3, 2022

(1)
Of the Convertible Notes:

a.
Tranche A ($18.35mm original face value): Mature on June 30, 2023 and accrue
interest at 10.00% per annum, 100% PIK. Automatically convert into Common Stock
upon an Uplist/IPO at a conversion price equal to the lower of $3.75 per share
or the price at which the Common Stock was sold in an IPO. $2.75mm of Tranche A
is held by the Lead Investors.

 

b.
Tranche B ($1.50mm original face value):  Mature on June 30, 2023 and accrue
interest at 10.00% per annum, 100% PIK. Automatically convert into Common Stock
upon an Uplist/IPO at a conversion price equal to $0.75 per share. 100% of
Tranche B is held by the Lead Investors.

 
-52-

--------------------------------------------------------------------------------

SCHEDULE 3.1(ff)
ACCOUNTANTS
 
Ernst & Young LLP
 
-53-

--------------------------------------------------------------------------------

EXHIBIT A
CERTIFICATE OF DESIGNATIONS
 
-54-

--------------------------------------------------------------------------------

EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
 
-55-

--------------------------------------------------------------------------------

EXHIBIT C
FORM OF WARRANT
 
-56-

--------------------------------------------------------------------------------

EXHIBIT D
OPINION OF COMPANY COUNSEL
 

1.
The Company is validly existing and in good standing under the laws of the
jurisdiction of its incorporation, and has requisite corporate power and
authority to own, lease and operate its properties and conduct its business as
described in the [Disclosure Package].

2.
The Company has the requisite corporate power to execute and deliver the
Transaction Agreements and to perform its obligations thereunder, including,
without limitation, the issuance of the Shares, the Conversion Shares, the
Warrants and the Warrant Shares.

3.
The Transaction Agreements have been duly authorized, executed and delivered by
the Company and represent are legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with the respective terms
thereof, [subject to customary carve-outs].

4.
Based solely on the Company’s certificate of incorporation, the authorized
capital stock of the Company on the date hereof consists of (i) ______________
shares of Common Stock, $[____] par value per share, (ii) [__________] shares of
Series E Preferred Stock, $[____] par value per share, and (iii) [__________]
shares of Series F Preferred Stock, $[____] par value per share.

5.
The Shares, the Conversion Shares and Warrant Shares have been duly and validly
authorized and reserved for issuance by all proper corporate action. When so
issued in accordance with the Transaction Agreements, the Shares, the Conversion
Shares and the Warrant Shares will be duly authorized and validly issued, fully
paid and nonassessable, and free of any all liens and charges or preemptive
rights contained in any agreement or contract set forth in Exhibit A to this
Opinion (the “Material Contracts”).

6.
The execution and delivery by the Company of the Transaction Agreements and the
performance of the obligations of the Company thereunder, including the issuance
and sale of the Shares, the Conversion Shares upon conversion of the Shares, the
Warrants and the Warrant Shares upon exercise of the Warrants, do not and will
not:  (i) violate any of the terms, conditions or provisions of the Company's
Certificate of Incorporation or Bylaws; (ii) violate any federal or New York law
applicable to the Company or the Delaware General Corporations Law; or (iii)
result in a breach of or constitute a default or ground for acceleration of the
maturity under any Material Contract, except where the breach or violation would
not have a Material adverse Effect on the Company or its ability to perform its
obligations under the Transaction Agreements.

7.
No authorization, approval, license, permit or other action by, and no notice to
or filing with, any federal governmental authority or judicial or regulatory
body is required (or, if required, such authorization, approval, license,
permit, action, notice or filing has been duly made or obtained) for the due
execution, delivery and performance of the obligations of the Company under the
Transaction Agreements, except for post-sale filings pursuant to state
securities and federal securities laws and filings that may be required under
the Registration Rights Agreement.

8.
Assuming that (i) the offer and sale of the Securities in the Offering is made
pursuant to, and in accordance with, the Offering Documents, and (ii) the
Securities were sold only to “accredited investors” (as defined in Rule 501 of
Regulation D promulgated under the 1933 Act), such sales were made in conformity
in all material respects with the requirements of Section 4(a)(2) of the 1933
Act and Rule 506 of Regulation D and do not require registration under the
Securities Act of 1933, as amended.

--------------------------------------------------------------------------------