Exhibit 10.1 


 


EXECUTION VERSION


 


SECURITIES PURCHASE AGREEMENT


 


THIS SECURITIES PURCHASE
AGREEMENT (this “Agreement”), dated as of June 7, 2021, by and among SAMSARA LUGGAGE, INC., a Nevada corporation
(the “Company”), and YA II PN, LTD., a Cayman Islands exempt company (“Investor”).


 


WITNESSETH


 


WHEREAS, the Company
and the Investor are executing and delivering this Agreement in reliance upon an exemption from securities registration pursuant to Section
4(2) and/or Rule 506 of Regulation D (“Regulation D”) as promulgated by the U.S. Securities and Exchange Commission
(the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”);


 


WHEREAS, the parties
desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to the Investor, as provided
herein, and the Investor shall purchase convertible debentures substantially in the form attached hereto as “Exhibit A” in
the aggregate principal amount of USD$1,250,000 (individually a “Convertible Debenture” and collectively the “Convertible
Debentures”), which shall be convertible into shares of the Company’s common stock, par value $0.0001 (the “Common
Stock”) (as converted, the “Conversion Shares”), of which a Convertible Debenture (the “First Convertible
Debenture”) in the principal amount of $500,000 (the “First Convertible Debenture Purchase Price”) shall
be issued within 1 business day following the date hereof, subject to notification of satisfaction of the conditions to the First Closing
set forth herein and in Sections 7(a) and 8(a) herein (the “First Closing” or “First Closing Date”),
a Convertible Debenture (the “Second Convertible Debenture”) in the principal amount of $500,000 (the “Second
Convertible Debenture Purchase Price”) shall be issued within 1 business day following notification of satisfaction of the conditions
to the Second Closing set forth herein and in Sections 7(b) and 8(b) herein (the “Second Closing” or “Second
Closing Date”) and a Convertible Debenture (the “Third Convertible Debenture”) in the principal amount of
$250,000 (the “Third Convertible Debenture Purchase Price”) shall be issued within 1 business day following notification
of satisfaction of the conditions to the Third Closing set forth herein and in Sections 7(c) and 8(c) herein (the “Third Closing”
or “Third Closing Date”), and a (the First Closing, First Closing Date, Second Closing, Second Closing Date, and the
Third Closing, Third Closing Date can each be referred to as a “Closing” or a “Closing Date” or
collectively as the “Closings” or “Closing Dates”) and (collectively the First Convertible Debenture
Purchase Price, the Second Convertible Debenture Purchase Price the Third Convertible Debenture Purchase Price shall collectively be referred
to as the “Purchase Price”);


 


WHEREAS, contemporaneously
with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement (the
“Registration Rights Agreement”) pursuant to which the Company has agreed to provide certain registration rights under
the Securities Act and the rules and regulations promulgated there under, and applicable state securities laws;


 






     


     


    

 


WHEREAS, contemporaneously
with the execution and delivery of this Agreement, the parties hereto are executing and delivering Irrevocable Transfer Agent Instructions
(the “Irrevocable Transfer Agent Instructions”); and


 


WHEREAS, the Convertible
Debentures and the Conversion Shares are collectively referred to herein as the “Securities”).


 


NOW, THEREFORE, in
consideration of the mutual covenants and other agreements contained in this Agreement the Company and the Investor hereby agree as follows:


 


1. CERTAIN
DEFINITIONS.


 


(a) “Anti-Bribery
Laws” shall mean of any provision of any applicable law or regulation implementing the OECD Convention on Combating Bribery
of Foreign Public Officials in International Business Transactions or any applicable provision of the U.S. Foreign Corrupt Practices Act
of 1977, as amended (the “FCPA”), the U.K. Bribery Act 2010, or any other similar law of any other jurisdiction in
which the Company operates its business, including, in each case, the rules and regulations thereunder.


 


(b) “Applicable
Laws” shall mean applicable laws, statutes, rules, regulations, orders, executive orders, directives, policies, guidelines,
ordinance or regulation of any governmental entity and codes having the force of law, whether local, national, or international, as amended
from time to time, including without limitation (i) all applicable laws that relate to money laundering, terrorist financing, financial
record keeping and reporting, (ii) all applicable laws that relate to anti-bribery, anti-corruption, books and records and internal controls,
including the Anti-Bribery Laws, (iii) OFAC and any Sanctions Laws or Sanctions Programs, and (iv) CAATSA and any CAATSA Sanctions Programs,
Anti-Money Laundering Laws.


 


(c) “BHCA”
shall mean the Bank Holding Company Act of 1956, as amended.


 


(d) “CAATSA”
shall mean Public Law No. 115-44 The Countering America’s Adversaries Through Sanctions Act.


 


(e) “CAATSA
Sanctions Programs” shall mean a country or territory that is, or whose government is, the subject of sanctions imposed by CAATSA.


 


(f)
“Anti-Money Laundering Laws” shall mean applicable financial recordkeeping and reporting requirements and all other
applicable U.S. and non-U.S. anti-money laundering laws, rules and regulations, including, but not limited to, those of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the United States Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001,
and the United States Money Laundering Control Act of 1986 (18 U.S.C. §§1956 and 1957), as amended, as well as the implementing
rules and regulations promulgated thereunder, and the applicable money laundering statutes of all applicable jurisdictions, the rules
and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental
agency or self-regulatory.


 






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(g) “OFAC”
shall mean the U.S. Department of Treasury’s Office of Foreign Asset Control.


 


(h) “Sanctioned
Country” shall mean a country or territory that is the subject or target of a comprehensive embargo or Sanctions Laws prohibiting
trade with the country or territory, including, without limitation, Crimea, Cuba, Iran, North Korea, Sudan and Syria.


 


(i) “Sanctions
Laws” shall mean any sanctions administered or enforced by OFAC or the U.S. Departments of State or Commerce and including,
without limitation, the designation as a “Specially Designated National” or on the “Sectoral Sanctions Identifications
List”, collectively “Blocked Persons”), the United Nations Security Council (“UNSC”), the European
Union, Her Majesty's Treasury (“HMT”) or any other relevant sanctions authority.


 


(j) “Sanctions
Programs” shall mean any OFAC, HMT or UNSC economic sanction program including, without limitation, programs related to a Sanctioned
Country.


 


(k) “Sarbanes-Oxley
Act” means the Sarbanes-Oxley Act of 2002, as amended.


 


2. PURCHASE
AND SALE OF THE CONVERTIBLE DEBENTURES.


 


(a) Purchase
of the Convertible Debentures. Subject to the satisfaction (or waiver) of the terms and conditions of this Agreement, the Investor
agrees, to purchase at each Closing and the Company agrees to sell and issue to Investor, at each Closing a Convertible Debenture.


 


(b) Closing
Dates. The purchase and sale of the Convertible Debentures shall take place at 10:00 a.m. Eastern Standard Time on Closing Dates,
subject to notification of satisfaction of the conditions to the Closing set forth herein and in Sections 7 and 8 below (or such later
date as is mutually agreed to by the Company and the Investor.


 


(c) Form
of Payment. Subject to the satisfaction of the terms and conditions of this Agreement, on each Closing Date, (i) the Investor shall
deliver to the Company such aggregate proceeds for the Convertible Debentures to be issued and sold to the Investor at each Closing, minus
the fees to be paid directly from the proceeds of such Closing as set forth herein, and (ii) the Company shall deliver to the Investor
a Convertible Debenture which the Investor is purchasing at each Closing duly executed on behalf of the Company.


 


3. INVESTOR’S
REPRESENTATIONS AND WARRANTIES.


 


The Investor represents and
warrants, that:


 


(a) Investment
Purpose. The Investor is acquiring the Securities for its own account for investment only and not with a view towards, or for resale
in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities Act;
provided, however, that by making the representations herein, the Investor reserves the right to dispose of the Securities at any time
in accordance with or pursuant to an effective registration statement covering such Securities or an available exemption under the Securities
Act. The Investor does not presently have any agreement or understanding, directly or indirectly, with any corporation, association, partnership,
organization, business, individual, government or political subdivision thereof or governmental agency (“Person”) to
distribute any of the Securities.


 






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(b) Accredited
Investor Status. The Investor is an “Accredited Investor” as that term is defined in Rule 501(a)(3) of Regulation
D.


 


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


 


(d) Information.
The Investor and its advisors (and his or, its counsel), if any, have been furnished with all materials relating to the business, finances
and operations of the Company and information he deemed material to making an informed investment decision regarding his purchase of the
Securities, which have been requested by the Investor. The Investor and its advisors, if any, have been afforded the opportunity to ask
questions of the Company and its management. Neither such inquiries nor any other due diligence investigations conducted by the Investor
or its advisors, if any, or its representatives shall modify, amend or affect the Investor’s right to rely on the Company’s
representations and warranties contained in Section 4 below. The Investor understands that its investment in the Securities involves a
high degree of risk. The Investor is in a position regarding the Company, which, based upon employment, family relationship or economic
bargaining power, enabled and enables the Investor to obtain information from the Company in order to evaluate the merits and risks of
this investment. The Investor has sought such accounting, legal and tax advice, as it has considered necessary to make an informed investment
decision with respect to its acquisition of the Securities.


 


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


 


(f) Transfer
or Resale. The Investor understands that except as provided for in the Registration Rights Agreement: (i) the Securities have not
been and are not being registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned
or transferred unless (A) subsequently registered thereunder, (B) the Investor shall have delivered to the Company an opinion of counsel,
in a generally acceptable form, to the effect that such Securities to be sold, assigned or transferred may be sold, assigned or transferred
pursuant to an exemption from such registration requirements, or (C) the Investor provides the Company with reasonable assurances (in
the form of seller and broker representation letters) that such Securities can be sold, assigned or transferred pursuant to Rule 144 or
Rule 144A promulgated under the Securities Act, as amended (or a successor rule thereto) (collectively, “Rule 144”),
in each case following the applicable holding period set forth therein; (ii) any sale of the Securities made in reliance on Rule 144 may
be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities under circumstances
in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in
the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC
thereunder; and (iii) neither the Company nor any other person is under any obligation to register the Securities under the Securities
Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.


 






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(g) Legends.
The Investor agrees to the imprinting, so long as is required by this Section 3(g), of a restrictive legend in substantially the following
form:


 


THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED
SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS, OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES
LAWS.


 


Certificates evidencing the Conversion Shares
shall not contain any legend (including the legend set forth above), (i) while a registration statement covering the resale of such security
is effective under the Securities Act, (ii) following any sale of such Conversion Shares pursuant to Rule 144, (iii) if such Conversion
Shares are eligible for sale under Rule 144, 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 SEC). The Company shall cause its counsel to issue a
legal opinion to the Company’s transfer agent promptly after the effective date (the “Effective Date”) of a registration
statement if required by the Company’s transfer agent to effect the removal of the legend hereunder. If all or any portion of a
Convertible Debenture is converted by the Investor that is not an Affiliate of the Company (a “Non-Affiliated Investor”)
at a time when there is an effective registration statement to cover the resale of the Conversion Shares such Conversion Shares 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 3(g), it will, no later than 5 Trading Days following the delivery by a Non-Affiliated Investor to the Company or the
Company’s transfer agent of a certificate representing Conversion Shares, issued with a restrictive legend (such 3rd
Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to such Non-Affiliated Investor a certificate
representing such shares that is free from all restrictive and other legends. The Company may not make any notation on its records or
give instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth in this Section. The Investor
acknowledges that the Company’s agreement hereunder to remove all legends from Conversion Shares is not an affirmative statement
or representation that such Conversion Shares are freely tradable. The Investor, agrees that the removal of the restrictive legend from
certificates representing Securities as set forth in this Section 3(g) is predicated upon the Company’s reliance that the Investor
will 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.


 






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(h) Authorization,
Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Investor and is a valid
and binding agreement of the Investor enforceable in accordance with its terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to,
or affecting generally, the enforcement of applicable creditors’ rights and remedies.


 


(i) Receipt
of Documents. The Investor and his or its counsel has received and read in their entirety: (i) this Agreement and each representation,
warranty and covenant set forth herein and the Transaction Documents (as defined herein); (ii) all due diligence and other information
necessary to verify the accuracy and completeness of such representations, warranties and covenants; (iii) the Company’s Form 10-K
for the fiscal year ended December 31, 2020; (iv) the Company’s Form 10-Q for the fiscal quarter ended March 31, 2021 and (v) answers
to all questions the Investor submitted to the Company regarding an investment in the Company; and the Investor has relied on the information
contained therein and has not been furnished any other documents, literature, memorandum or prospectus.


 


(j) Due
Formation of Corporate and Other Investors. If the Investor is a corporation, trust, partnership or other entity that is not an individual
person, it has been formed and validly exists and has not been organized for the specific purpose of purchasing the Securities and is
not prohibited from doing so.


 


(k) No
Legal Advice From the Company. The Investor acknowledges, that it had the opportunity to review this Agreement and the transactions
contemplated by this Agreement with his or its own legal counsel and investment and tax advisors. The Investor is relying solely on such
counsel and advisors and not on any statements or representations of the Company or any of its representatives or agents for legal, tax
or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of any jurisdiction.


 






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4. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY AND SUBSIDIARIES.


 


Except as set forth under
the corresponding section of the Disclosure Schedules which Disclosure Schedules shall be deemed a part hereof and to qualify any representation
or warranty otherwise made herein to the extent of such disclosure, the Company hereby makes the representations and warranties set forth
below to the Investor:


 


(a) Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth on Schedule 4(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 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.


 


(b) Security
Interests Granted. Except as set forth on Disclosure Schedule 4(b). There are no security interests granted, issued or
allowed to exist in any assets of the Company or subsidiary.


 


(c) Organization
and Qualification. The Company and its subsidiaries are corporations duly organized and validly existing in good standing under the
laws of the jurisdiction in which they are incorporated, and have the requisite corporate power to own their properties and to carry on
their business as now being conducted. Each of the Company and its subsidiaries is duly qualified as a foreign corporation to do business
and is in good standing in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary,
except to the extent that the failure to be so qualified or be in good standing would not 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 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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(d) Authorization,
Enforcement, Compliance with Other Instruments. (i) The Company has the requisite corporate power and authority to enter into
and perform its obligations under this Agreement, the Convertible Debentures, the Registration Rights Agreement, the Irrevocable Transfer
Agent Instructions and each of the other agreements entered into by the parties hereto in connection with the transactions contemplated
by this Agreement (collectively the “Transaction Documents”) and to issue the Securities in accordance with the terms
hereof and thereof, (ii) the execution and delivery of the Transaction Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby, including, without limitation, the issuance of the Securities, the reservation for issuance and the issuance
of the Conversion Shares have been duly authorized by the Company’s Board of Directors and no further consent or authorization is
required by the Company, its Board of Directors or its stockholders, (iii) the Transaction Documents have been duly executed and delivered
by the Company, (iv) the Transaction Documents constitute the valid and binding obligations of the Company enforceable against the Company
in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’
rights and remedies. The authorized officer of the Company executing the Transaction Documents knows of no reason why the Company cannot
file the Registration Statement as required under the Registration Rights Agreement or if otherwise required by the Transaction Documents
or perform any of the Company’s other obligations under the Transaction Documents.


 


(e) Capitalization.
The authorized capital stock of the Company consists of 7,500,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock,
par value $0.0001 (“Preferred Stock”) of which 1,346,606 shares of Common Stock and -0- shares of Preferred Stock and
are issued and outstanding as of June 3, 2021. All of the outstanding shares of capital stock of the Company are 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. Except as disclosed in Schedule
4(e): (i) none of the Company's capital stock is subject to preemptive rights or any other similar rights or any liens or encumbrances
suffered or permitted by the Company; (ii) other than those disclosed in the SEC filings, there are no outstanding options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into,
or exercisable or exchangeable for, any capital stock of the Company or any of its subsidiaries, or contracts, commitments, understandings
or arrangements by which the Company or any of its subsidiaries is or may become bound to issue additional capital stock of the Company
or any of its subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities or rights convertible into, or exercisable or exchangeable for, any capital stock of the Company or any of its subsidiaries,
except as those listed in Schedule 4(e) attached hereto; (iii) there are no outstanding debt securities, notes, credit agreements, credit
facilities or other agreements, documents or instruments evidencing indebtedness of the Company or any of its subsidiaries or by which
the Company or any of its subsidiaries is or may become bound; (iv) there are no financing statements securing obligations in any material
amounts, either singly or in the aggregate, filed in connection with the Company or any of its subsidiaries; (v) there are no outstanding
securities or instruments of the Company or any of its subsidiaries which contain any redemption or similar provisions, and there are
no contracts, commitments, understandings or arrangements by which the Company or any of its subsidiaries is or may become bound to redeem
a security of the Company or any of its subsidiaries; (vi) there are no securities or instruments containing anti-dilution or similar
provisions that will be triggered by the issuance of the Securities; (vii) the Company does not have any stock appreciation rights or
"phantom stock" plans or agreements or any similar plan or agreement; and (viii) the Company and its subsidiaries have no liabilities
or obligations required to be disclosed in the SEC Documents but not so disclosed in the SEC Documents, other than those incurred in the
ordinary course of the Company's or its subsidiaries' respective businesses and which, individually or in the aggregate, do not or would
not have a Material Adverse Effect. The Company has furnished to the Investor true, correct and complete copies of the Company's Certificate
of Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and the Company's
Bylaws, as amended and as in effect on the date hereof (the “Bylaws”), and the terms of all securities convertible
into, or exercisable or exchangeable for, shares of Common Stock and the material rights of the holders thereof in respect thereto. No
further approval or authorization of any stockholder, the Board of Directors of the Company 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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(f) Issuance
of Securities. The issuance of the Convertible Debentures is duly authorized and free from all taxes, liens and charges with respect
to the issue thereof. Upon conversion in accordance with the terms of a Convertible Debenture the Conversion Shares, when issued will
be validly issued, fully paid and nonassessable, free from all taxes, liens and charges with respect to the issue thereof. The Company
has reserved from its duly authorized capital stock the appropriate number of shares of Common Stock as set forth in this Agreement.


 


(g) No
Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Convertible Debentures, and reservation
for issuance and issuance of the Conversion Shares will not (i) result in a violation of any certificate of incorporation, certificate
of formation, any certificate of designations or other constituent documents of the Company or any of its subsidiaries, any capital stock
of the Company or any of its subsidiaries or bylaws of the Company or any of its subsidiaries or (ii) conflict with, or constitute a default
(or an event which with notice or lapse of time or both would become a default) in any respect under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its subsidiaries
is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including foreign, federal and state
securities laws and regulations and the rules and regulations of the OTC Markets’ OTCQB® Market (the “Primary
Market”) applicable to the Company or any of its subsidiaries or by which any property or asset of the Company or any of its
subsidiaries is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect. The business of the Company and its subsidiaries is not being conducted,
and shall not be conducted in violation of any material law, ordinance, or regulation of any governmental entity. Except as specifically
contemplated by this Agreement and as required under the Securities Act and any applicable state securities laws, the Company is not required
to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for
it to execute, deliver or perform any of its obligations under or contemplated by this Agreement or the Transaction Documents in accordance
with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the Company is required to obtain
pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof. The Company and its subsidiaries are
unaware of any facts or circumstance, which might give rise to any of the foregoing.


 






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(h) SEC
Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be
filed by it with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) during
the 2 years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material)
(all of the foregoing filed within the 2 years preceding the date hereof as amended after the date hereof and all exhibits included therein
and financial statements and schedules thereto and documents incorporated by reference therein, being hereinafter referred to as the “SEC
Documents”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Document prior
to the expiration of any such extension (including pursuant to SEC from 12b-25). The Company has delivered to the Investor or its representatives,
or made available through the SEC’s website at http://www.sec.gov, true and complete copies of the SEC Documents. As of their respective
dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act and the rules and regulations of
the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC,
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. As of their respective dates,
the financial statements of the Company and its subsidiaries included in the SEC Documents complied as to form in all material respects
with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements
have been prepared in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except
(i) as may be otherwise indicated in such financial statements or the Debenture thereto, or (ii) in the case of unaudited interim statements,
to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments). No other information provided by or on behalf of the Company
to the Investor which is not included in the SEC Documents contains any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements therein, in the light of the circumstance under which they are or were made, not misleading.


 


(i) 10(b)-5.
The SEC Documents do not include any untrue statements of material fact, nor do they omit to state any material fact required to be stated
therein necessary to make the statements made, in light of the circumstances under which they were made, not misleading.


 


(j) Absence
of Litigation. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency,
self-regulatory organization or body pending against or affecting the Company, the Common Stock or any of the Company’s subsidiaries,
wherein an unfavorable decision, ruling or finding would have a Material Adverse Effect.


 


(k) CAATSA.
Neither the Company or its subsidiaries, nor, to Company’s knowledge, any director, officer, agent, employee or affiliate of the
Company or subsidiaries, is a Person that is, or is owned or controlled by a Person that has a place of business in, or is operating,
organized, resident or doing business in a country or territory that is, or whose government is, the subject of the CAATSA Sanctions Programs.


 






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(l) Sarbanes-Oxley
Act. The Company and its subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley Act, that are
effective as of the date hereof, and any and all applicable rules and regulations promulgated by the SEC thereunder that are applicable
to the Company and its subsidiaries and effective as of the date hereof.


 


(m) BHCA.
Neither the Company nor any of its subsidiaries or affiliates is subject to 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, 5% or more of the outstanding shares of any class of voting securities or 25% or more of the total equity of a bank or
any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its subsidiaries or affiliates
exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation
by the Federal Reserve.


 


(n) No
Disagreements with Accountants and Lawyers. There are no material 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.


 


(o) Compliance
with Applicable Laws. The operations of the Company and its subsidiaries are and have been conducted at all times in compliance Applicable
Laws and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the
Company or any of its Subsidiaries with respect to Applicable Laws is pending or, to the knowledge of the Company, threatened.


 






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(p) No
Conflicts with Sanctions Laws. Neither the Company nor any of its subsidiaries, nor any director, officer, employee, agent, affiliate
or other person associated with or acting on behalf of the Company or any of its subsidiaries or affiliates is, or is directly or indirectly
owned or controlled by, a Person that is currently the subject or the target of any Sanctions Laws or is a Blocked Person; neither the
Company, any of its subsidiaries, nor any director, officer, employee, agent, affiliate or other person associated with or acting on behalf
of the Company or any of its subsidiaries or affiliates, is located, organized or resident in a country or territory that is the subject
or target of a comprehensive embargo, Sanctions Laws or Sanctions Programs prohibiting trade with a Sanctioned Country; the Company maintains
in effect and enforces policies and procedures designed to ensure compliance by the Company and its Subsidiaries with applicable Sanctions
Laws and Sanctions Programs; neither the Company, any of its subsidiaries, nor any director, officer, employee, agent, affiliate or other
person associated with or acting on behalf of the Company or any of its subsidiaries or affiliates, acting in any capacity in connection
with the operations of the Company, conducts any business with or for the benefit of any Blocked Person or engages in making or receiving
any contribution of funds, goods or services to, from or for the benefit of any Blocked Person, or deals in, or otherwise engages in any
transaction relating to, any property or interests in property blocked or subject to blocking pursuant to any applicable Sanctions Laws
or Sanctions Programs; no action of the Company or any of its subsidiaries in connection with (i) the execution, delivery and performance
of this Agreement and the other Transaction Documents, (ii) the issuance and sale of the Securities, or (iii) the direct or indirect use
of proceeds from the Securities or the consummation of any other transaction contemplated hereby or by the other Transaction Documents
or the fulfillment of the terms hereof or thereof, will result in the proceeds of the transactions contemplated hereby and by the other
Transaction Documents being used, or loaned, contributed or otherwise made available, directly or indirectly, to any subsidiary, joint
venture partner or other person or entity, for the purpose of (i) unlawfully funding or facilitating any activities of or business with
any person that, at the time of such funding or facilitation, is the subject or target of Sanctions Laws or Sanctions Programs, (ii) unlawfully
funding or facilitating any activities of or business in any Sanctioned Country or (iii) in any other manner that will result in a violation
by any Person (including any Person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions
Laws or Sanctions Programs. For the past 5 years, the Company and its subsidiaries have not knowingly engaged in and are not now knowingly
engaged in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target
of Sanctions Laws, Sanctions Programs or with any Sanctioned Country.


 


(q) No
Conflicts with Anti-Bribery Laws. Neither the Company nor any of the subsidiaries has made any contribution or other payment to any
official of, or candidate for, any federal, state or foreign office in violation of any law. Neither the Company, nor any of its subsidiaries
or affiliates, nor any director, officer, agent, employee or other person associated with or acting on behalf of the Company, or any of
its subsidiaries or affiliates, has (i) used any funds for any unlawful contribution, gift, entertainment or other unlawful expense relating
to political activity, (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee, to
any employee or agent of a private entity with which the Company does or seeks to do business (a “Private Sector Counterparty”)
or to foreign or domestic political parties or campaigns, (iii) violated or is in violation of any provision of any Anti-Bribery Laws,
(iv) taken, is currently taking or will take any action in furtherance of an offer, payment, gift or anything else of value, directly
or indirectly, to any person while knowing that all or some portion of the money or value will be offered, given or promised to anyone
to improperly influence official action, to obtain or retain business or otherwise to secure any improper advantage or (v) otherwise made
any offer, bribe, rebate, payoff, influence payment, unlawful kickback or other unlawful payment; the Company and each of its respective
subsidiaries has instituted and has maintained, and will continue to maintain, policies and procedures reasonably designed to promote
and achieve compliance with the laws referred to in (iii) above and with this representation and warranty; none of the Company, nor any
of its subsidiaries or affiliates will directly or indirectly use the proceeds of the Securities or lend, contribute or otherwise make
available such proceeds to any subsidiary, affiliate, joint venture partner or other person or entity for the purpose of financing or
facilitating any activity that would violate the laws and regulations referred to in (iii) above; to the knowledge of the Company, there
are, and have been, no allegations, investigations or inquiries with regard to a potential violation of any Anti-Bribery Laws by the Company,
its subsidiaries or affiliates, or any of their respective current or former directors, officers, employees, stockholders, representatives
or agents, or other persons acting or purporting to act on their behalf.


 






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(r) No
Disqualification Events. With respect to Securities to be offered and sold hereunder in reliance on Rule 506(b) under the 1933 Act
(“Regulation D Securities”), none of the Company, any of its predecessors, any affiliated issuer, any director, executive
officer, other officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company's outstanding
voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the 1933
Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person” and, together,
“Issuer Covered Persons”) is subject to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i)
to (viii) under the 1933 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 Investor
a copy of any disclosures provided thereunder.


 


(s) Acknowledgment
Regarding Investor’s Purchase of the Convertible Debentures. The Company acknowledges and agrees that the Investor is acting
solely in the capacity of an arm’s length purchaser with respect to this Agreement and the transactions contemplated hereby. The
Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to this Agreement and the transactions contemplated hereby and any advice given by the Investor or any of their respective
representatives or agents in connection with this Agreement and the transactions contemplated hereby is merely incidental to the Investor’s
purchase of the Securities. The Company further represents to the Investor that the Company’s decision to enter into this Agreement
has been based solely on the independent evaluation by the Company and its representatives.


 


(t) No
General Solicitation. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has engaged in
any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with
the offer or sale of the Securities.


 


(u) No
Integrated Offering. 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 require
registration of the Securities under the Securities Act or cause this offering of the Securities to be integrated with prior offerings
by the Company for purposes of the Securities Act.


 


(v) Employee
Relations. Neither the Company nor any of its subsidiaries is involved in any labor dispute or, to the knowledge of the Company or
any of its subsidiaries, is any such dispute threatened. None of the Company’s or its subsidiaries’ employees is a member
of a union and the Company and its subsidiaries believe that their relations with their employees are good.


 






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(w) Intellectual
Property Rights. The Company and its subsidiaries own or possess adequate rights or licenses to use all trademarks, trade names, service
marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations,
trade secrets and rights necessary to conduct their respective businesses as now conducted. The Company and its subsidiaries do not have
any knowledge of any infringement by the Company or its subsidiaries of trademark, trade name rights, patents, patent rights, copyrights,
inventions, licenses, service names, service marks, service mark registrations, trade secret or other similar rights of others, and, to
the knowledge of the Company there is no claim, action or proceeding being made or brought against, or to the Company’s knowledge,
being threatened against, the Company or its subsidiaries regarding trademark, trade name, patents, patent rights, invention, copyright,
license, service names, service marks, service mark registrations, trade secret or other infringement; and the Company and its subsidiaries
are unaware of any facts or circumstances which might give rise to any of the foregoing.


 


(x) Environmental
Laws. The Company and its subsidiaries are (i) in compliance with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants (“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.


 


(y) Title.
All real property and facilities held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings
by the Company and its subsidiaries.


 


(z) Insurance.
The Company and each of its subsidiaries is insured by insurers of recognized financial responsibility against such losses and risks and
in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its subsidiaries
are engaged. Neither the Company nor any such subsidiary has been refused any insurance coverage sought or applied for and neither the
Company nor any such 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 at a cost that
would not materially and adversely affect the condition, financial or otherwise, or the earnings, business or operations of the Company
and its subsidiaries, taken as a whole.


 


(aa) Regulatory Permits.
The Company and its subsidiaries possess all material certificates, authorizations and permits issued by the appropriate federal, state
or foreign regulatory authorities necessary to conduct their respective businesses, and neither the Company nor any such subsidiary has
received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit.


 


(bb) Internal Accounting
Controls. The Company and each of its subsidiaries maintains 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 generally accepted accounting principles and
to maintain asset accountability, and (iii) the recorded amounts for assets are compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.


 






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(cc) No Material Adverse
Breaches, etc. Neither the Company nor any of its subsidiaries is subject to any charter, corporate or other legal restriction, or
any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers has or is expected in the future
to have a Material Adverse Effect on the business, properties, operations, financial condition, results of operations or prospects of
the Company or its subsidiaries. Neither the Company nor any of its subsidiaries is in breach of any contract or agreement which breach,
in the judgment of the Company’s officers, has or is expected to have a Material Adverse Effect on the business, properties, operations,
financial condition, results of operations or prospects of the Company or its subsidiaries.


 


(dd) Tax Status.
The Company and each of its subsidiaries has made and filed all federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject and (unless and only to the extent that the Company and each of its subsidiaries has
set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) 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,
except those being contested in good faith and has set aside on its books provision reasonably adequate for the payment of all 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 know of no basis for any such claim.


 


(ee) Certain Transactions.
Except for arm’s length transactions pursuant to which the Company makes payments in the ordinary course of business upon terms
no less favorable than the Company could obtain from third parties and other than the grant of stock options disclosed in the SEC Documents,
none of the officers, directors, or employees of the Company is presently a party to any transaction with the Company (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, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer,
director, or any such employee has a substantial interest or is an officer, director, trustee or partner.


 


(ff) Except with respect
to the material terms and conditions of the transactions contemplated by this Agreement, all of which shall be publicly disclosed by the
Company as soon as possible after the date hereof, the Company covenants and agrees that neither the Company, nor any other person acting
on its behalf, will provide the Investor or its agents or counsel with any information that the Company believes constitutes material
non-public information, unless prior thereto the Investor shall have entered into a written agreement with the Company regarding the confidentiality
and use of such information. The Company understands and confirms that the Investor shall be relying on the foregoing covenant in effecting
transactions in securities of the Company.


 






    15


     


    

 


(gg) Fees and Rights
of First Refusal. The Company is not obligated to offer the securities offered hereunder on a right of first refusal basis or otherwise
to any third parties including, but not limited to, current or former shareholders of the Company, underwriters, brokers, agents or other
third parties.


 


(hh) Investment Company.
The Company is not, and is not an affiliate of, and immediately after receipt of payment for the Securities, will not be or be an affiliate
of, 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 subject to the Investment Company Act.


 


(ii) Registration
Rights. No Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the
Company. There are no outstanding registration statements not yet declared effective and there are no outstanding comment letters from
the SEC or any other regulatory agency.


 


(jj) Private Placement.
Assuming the accuracy of the Investor’s representations and warranties set forth in Section 3, no registration under the Securities
Act is required for the offer and sale of the Securities by the Company to the Investor as contemplated hereby. The issuance and sale
of the Securities hereunder does not contravene the rules and regulations of the Primary Market.


 


(kk) Listing and Maintenance
Requirements. The Company’s Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, 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 SEC is contemplating terminating such registration.
The Company has not, in the 12 months preceding the date hereof, received notice from the Primary 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
Primary 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.


 


(ll) Reporting Status. 
With a view to making available to the Investor the benefits of Rule 144 or any similar rule or regulation of the SEC that may at any
time permit the Investor to sell securities of the Company to the public without registration, and as a material inducement to the Investor’s
purchase of the Securities, the Company represents and warrants to the following: (i) the Company is, and has been for a period of at
least 90 days immediately preceding the date hereof, subject to the reporting requirements of section 13 or 15(d) of the Exchange Act
(ii) the Company has filed all required reports under section 13 or 15(d) of the Exchange, as applicable, during the 12 months preceding
the date hereof (or for such shorter period that the Company was required to file such reports), and (iii) the Company is not currently
an issuer defined as a “Shell Company”. For the purposes hereof, the term “Shell Company” shall mean an issuer
that meets the description defined in paragraph (i)(1)(i) of Rule 144.


 






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(mm) Disclosure. 
The Company has made available to the Investor and its counsel all the information reasonably available to the Company that the Investor
or its counsel have requested for deciding whether to acquire the Securities.  No representation or warranty of the Company contained
in this Agreement (as qualified by the Disclosure Schedule) or any of the other Transaction Documents, and no certificate furnished or
to be furnished to the Investor at the Closing, or any due diligence evaluation materials furnished by the Company or on behalf of the
Company, including without limitation, due diligence questionnaires, or any other documents, presentations, correspondence, or information
contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained
herein or therein not misleading in light of the circumstances under which they were made.


 


(nn) Manipulation of
Price.  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,
other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement agent in connection with the placement
of the Securities.


 


(oo) Dilutive
Effect. The Company understands and acknowledges that the number of Conversion Shares issuable upon conversion of the Convertible
Debentures will increase in certain circumstances. The Company further acknowledges that its obligation to issue Conversion Shares upon
conversion of the Convertible Debentures in accordance with this Agreement and the Convertible Debentures is absolute and unconditional
regardless of the dilutive effect that such issuance may have on the ownership interests of other stockholders of the Company.


 


(pp) Relationship of
the Parties. Neither the Company, nor any of its subsidiaries, affiliates, nor any person acting on its or their behalf is a client
or customer of the Investor or any of its affiliates and neither the Investor nor any of its affiliates has provided, or will provide,
any services to the Company or any of its affiliates, its subsidiaries, or any person acting on its or their behalf. The Investor’s
relationship to Company is solely as investor as provided for in the Transaction Documents. 


 


5. COVENANTS.


 


(a) Best
Efforts. Each party shall use its best efforts to timely satisfy each of the conditions to be satisfied by it as provided in Sections
7 and 8 of this Agreement.


 


(b) Compliance
with Applicable Laws. While the Investor owns any Securities the Company shall comply with all Applicable Laws and will not take any
action which will cause the Investor to be in violation of any such Applicable Laws.


 


(c) Conduct
of Business. While the Investor owns any Securities, the business of the Company shall not be conducted in violation of Applicable
Laws and will not take any action which will cause the Investor to be in violation of any such Applicable Laws.


 






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(d) While
the Investor owns any Securities, neither the Company, nor any of its Subsidiaries or affiliates, directors, officers, employees, representatives
or agents shall:


 


(i) conduct
any business or engage in any transaction or dealing with or for the benefit of any Blocked Person, including the making or receiving
of any contribution of funds, goods or services to, from or for the benefit of any Blocked Person;


 


(ii) deal
in, or otherwise engage in any transaction relating to, any property or interests in property blocked or subject to blocking pursuant
to the applicable Sanctions Laws, Sanctions Programs, located in a Sanctioned Country, or CAATSA or CAATSA Sanctions Programs;


 


(iii) use
any of the proceeds of the transactions contemplated by this Agreement to finance, promote or otherwise support in any manner any illegal
activity, including, without limitation, in contravention of any Anti-Money Laundering Laws, Sanctions Laws, Sanctioned Program, Anti-Bribery
Laws or in any Sanctioned Country.


 


(iv) violate,
attempt to violate, or engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding,
any of the Anti-Money Laundering Laws, Sanctions Laws, Sanctions Program, Anti-Bribery Laws, CAATSA or CAATSA Sanctions Programs.


 


(v) While
the Investor owns any Securities, the Company shall maintain in effect and enforce policies and procedures designed to ensure compliance
by the Company and its Subsidiaries and their directors, officers, employees, agents representatives and affiliates with Applicable Laws.


 


(vi) While
any Investor owns any Securities, the Company will promptly notify the Investor in writing if any of the Company, or any of its Subsidiaries
or affiliates, directors, officers, employees, representatives or agents, shall become a Blocked Person, or become directly or indirectly
owned or controlled by a Blocked Person.


 


(vii) The
Company shall provide such information and documentation it may have as the Investor or any of their affiliates may reasonably request
to satisfy compliance with Applicable Laws.


 


(viii) The
covenants set forth above shall be ongoing while the Investor owns any Securities. The Company shall promptly notify the Investor in writing
should it become aware during such period (a) of any changes to these covenants, or (b) if it cannot comply with the covenants set forth
herein. The Company shall also promptly notify the Investor in writing during such period should it become aware of an investigation,
litigation or regulatory action relating to an alleged or potential violation of Applicable Laws.


 


(e) Form
D. If required, the Company agrees to file a Form D with respect to the Securities as required under Regulation D and to provide a
copy thereof to the Investor promptly after such filing. The Company shall, on or before each Closing Date, take such action as the Company
shall reasonably determine is necessary to qualify the Securities, or obtain an exemption for the Securities for sale to the Investor
at each Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States,
and shall provide evidence of any such action so taken to the Investor on or prior to each Closing Date.


 






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(f) Reporting
Status. With a view to making available to the Investor the benefits of Rule 144 or any similar rule or regulation of the SEC that
may at any time permit the Investor to sell securities of the Company to the public without registration, and as a material inducement
to the Investor’s purchase of the Securities, the Company represents, warrants, and covenants to the following:


 


(i) The
Company is subject to the reporting requirements of section 13 or 15(d) of the Exchange Act and has filed all required reports under section
13 or 15(d) of the Exchange Act during the 12 months prior to the date hereof (or for such shorter period that the issuer was required
to file such reports), other than Form 8-K reports;


 


(ii) From
the date hereof until all the Securities either have been sold by the Investor, or may permanently be sold by the Investor without any
restrictions pursuant to Rule 144, (the “Registration Period”) the Company shall file with the SEC in a timely manner
all required reports under section 13 or 15(d) of the Exchange Act and such reports shall conform to the requirement of the Exchange Act
and the SEC for filing thereunder;


 


(iii) The
Company shall furnish to the Investor so long as the Investor owns Securities, promptly upon request, (i) a written statement by the Company
that it has complied with the reporting requirements of Rule 144, (ii) a copy of the most recent annual or quarterly report of the Company
and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit
the Investor to sell such securities pursuant to Rule 144 without registration; and


 


(iv) During
the Registration Period the Company shall not terminate its status as an issuer required to file reports under the Exchange Act even if
the Exchange Act or the rules and regulations thereunder would otherwise permit such termination.


 


(g) Use of
Proceeds. The Company shall use the proceeds from the issuance of the Convertible Debentures hereunder as set forth in the Use
of Proceeds schedule attached here to in Schedule 5(g), and for working capital and other general corporate purposes. So long as any
amounts are outstanding under the Convertible Debentures, the Company shall not pay any related party obligations all of which
related party obligations shall be subordinated to the obligations owed to the Investor. Neither the Company nor any subsidiary
shall, directly or indirectly, use any portion of the proceeds of the transactions contemplated herein, or lend, contribute,
facilitate or otherwise make available such proceeds to any person (i) to make any payment towards any indebtedness or other
obligations of the Company or subsidiary; (ii) to pay any obligations of any nature or kind due or owing to any officers, directors,
employees, or shareholders of the Company or subsidiary, other than salaries payable in the ordinary course of business of the
Company; (iii) to fund, either directly or indirectly, any activities or business of or with any Blocked Person, in any Sanctioned
Country, (iv) or in any manner or in a country or territory, that, at the time of such funding, is, or whose government is, the
subject of CAATSA Sanctions Programs or (iv) in any other manner that will result in a violation of Anti-Money Laundering Laws,
Sanctions Laws, Sanctioned Program, Anti-Bribery Laws or CAATSA Sanctions Programs.


 






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(h) Reservation
of Shares. On the date hereof, the Company shall reserve for issuance to the Investor 1,144,895 shares for issuance upon conversions
of the Convertible Dentures (the “Share Reserve”). The Company represents that it has sufficient authorized and unissued
shares of Common Stock available to create the Share Reserve after considering all other commitments that may require the issuance of
Common Stock. The Company shall take all action reasonably necessary to at all times have authorized, and reserved for the purpose of
issuance, such number of shares of Common Stock as shall be necessary to effect the full conversion of the Convertible Debentures. If
at any time the Share Reserve is insufficient to effect the full conversion of the Convertible Debenture the Company shall increase the
Share Reserve accordingly. If the Company does not have sufficient authorized and unissued shares of Common Stock available to increase
the Share Reserve, the Company shall call and hold a special meeting of the shareholders within 60 days of such occurrence, for the sole
purpose of increasing the number of shares authorized. The Company’s management shall recommend to the shareholders to vote in favor
of increasing the number of shares of Common Stock authorized. Management shall also vote all of its shares in favor of increasing the
number of authorized shares of Common Stock.


 


(i) Listings
or Quotation. The Company’s Common Stock shall be listed or quoted for trading on the Primary Market. The Company shall promptly
secure the listing of all of the Registrable Securities (as defined in the Registration Rights Agreement) upon each national securities
exchange and automated quotation system, if any, upon which the Common Stock is then listed (subject to official notice of issuance) and
shall maintain such listing of all Registrable Securities from time to time issuable under the terms of the Transaction Documents.


 


(j) Fees
and Expenses.


 


(i) The
Company shall pay all of its costs and expenses incurred by it connection with the negotiation, investigation, preparation, execution
and delivery of the Transaction Documents.


 


(k) Corporate
Existence. So long as the Convertible Debentures remain outstanding, the Company shall not directly or indirectly consummate any merger,
reorganization, restructuring, reverse stock split consolidation, sale of all or substantially all of the Company’s assets or any
similar transaction or related transactions (each such transaction, an “Organizational Change”) unless, prior to the
consummation an Organizational Change, the Company obtains the written consent of the Investor. In any such case, the Company will make
appropriate provision with respect to such holders’ rights and interests to insure that the provisions of this Section 5(j) will
thereafter be applicable to the Convertible Debentures.


 






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(l) Transactions
With Affiliates. So long as the Convertible Debentures are outstanding, the Company shall not, and shall cause each of its subsidiaries
not to, enter into, amend, modify or supplement, or permit any subsidiary to enter into, amend, modify or supplement any agreement, transaction,
commitment, or arrangement with any of its or any subsidiary’s officers, directors, person who were officers or directors at any
time during the previous 2 years, stockholders who beneficially own 5% or more of the Common Stock, or Affiliates (as defined below) or
with any individual related by blood, marriage, or adoption to any such individual or with any entity in which any such entity or individual
owns a 5% or more beneficial interest (each a “Related Party”), except for (a) customary employment arrangements and
benefit programs on reasonable terms, (b) any investment in an Affiliate of the Company, (c) any agreement, transaction, commitment, or
arrangement on an arms-length basis on terms no less favorable than terms which would have been obtainable from a person other than such
Related Party, (d) any agreement, transaction, commitment, or arrangement which is approved by a majority of the disinterested directors
of the Company. “Affiliate” for purposes hereof means, with respect to any person or entity, another person or entity
that, directly or indirectly, (i) has a 10% or more equity interest in that person or entity, (ii) has 10% or more common ownership with
that person or entity, (iii) controls that person or entity, or (iv) shares common control with that person or entity. “Control”
or “controls” for purposes hereof means that a person or entity has the power, direct or indirect, to conduct or govern
the policies of another person or entity.


 


(m) Transfer
Agent. The Company covenants and agrees that, in the event that the Company’s agency relationship with the transfer agent should
be terminated for any reason prior to a date which is 2 years after the Third Closing Date, the Company shall immediately appoint a new
transfer agent and shall require that the new transfer agent execute and agree to be bound by the terms of the Irrevocable Transfer Agent
Instructions (as defined herein).


 


(n) Restriction
on Issuance of the Capital Stock and Prohibition on Variable Rate Transactions. So long as the Convertible Debentures are outstanding,
the Company shall not, without the prior written consent of the Investor, (i) issue or sell shares of Common Stock or Preferred Stock
without consideration or for a consideration per share less than the bid price of the Common Stock determined immediately prior to its
issuance, (ii) issue any preferred stock, warrant, option, right, contract, call, or other security or instrument granting the holder
thereof the right to acquire Common Stock without consideration or for a consideration less than such Common Stock’s Bid Price,
as quoted by Bloomberg, LP and determined immediately prior to its issuance, (iii) enter into any agreement to issue or sell, any Common
Stock, Preferred Stock, options, warrants or convertible securities that are issuable pursuant to such agreement or convertible into or
exchangeable or exercisable for shares of Common Stock at a price which varies or may vary with the bid price or volume weighted average
price of the shares of Common Stock, as quoted by Bloomberg, LP, (iv) enter into any security instrument granting the holder a security
interest in any and all assets of the Company, or (v) file any registration statement on Form S-8.


 


(o) Neither
the Investor nor any of its affiliates have an open short position in the Common Stock of the Company, and the Investor agrees that it
shall not, and that it will cause its affiliates not to, engage in any short sales of or hedging transactions with respect to the Common
Stock as long as any Convertible Debenture shall remains outstanding.


 






    21


     


    

 


(p) Additional
Registration Statements. So long as the Convertible Debentures are outstanding and/or the Investor holds Conversion Shares and such
Conversion Shares are either not registered for resale pursuant to an effective registration statement or eligible for resale pursuant
to an exemption of the registration requirements of the Securities Act, the Company will not file a registration statement under the Securities
Act relating to securities that are not the Securities without including the Conversion Shares issuable upon conversion of the Convertible
Debentures and/or such Conversion Shares issued and held by the Investor.


 


(q) Registration Rights. So
long as the Convertible Debentures are outstanding and/or the Investor holds Conversion Shares and such Conversion Shares issuable upon
conversion of the Convertible Debentures and/or issued and held by the Investor are either not registered for resale pursuant to an effective
registration statement or eligible for resale pursuant to an exemption of the registration requirements of the Securities Act the Company
shall file a registration statement or an amendment to the then existing Registration Statement (as this term is defined in the Registration
Rights Agreement) under the Securities Act registering the Conversion Shares issuable upon conversion of the Convertible Debentures and/or
issued and held by the Investor.


 


(r) Review
of Public Disclosures. All SEC filings (including, without limitation, all filings required under the Exchange Act, which include
Forms 10-Q, 10-K, 8-K, etc) and other public disclosures made by the Company, including, without limitation, all press releases, investor
relations materials, and scripts of analysts meetings and calls, shall be reviewed and approved for release by the Company’s attorneys
and, if containing financial information, the Company’s independent certified public accountants.


 


(s) Disclosure
of Transaction. Within 4 Business Day following the date of this Agreement, the Company shall file a Current Report on Form 8-K describing
the terms of the transactions contemplated by the Transaction Documents in the form required by the Exchange Act and attaching the material
Transaction Documents (including, without limitation, this Agreement, the form of the Convertible Debenture and the form of the Registration
Rights Agreement) as exhibits to such filing.


 


(t) Granting
of Security. So long as any portion of Convertible Debentures are outstanding neither the Company nor any subsidiary may grant, issue
or allow to exist any security interest in any or all of the assets of the Company and or subsidiary.


 


6. TRANSFER
AGENT INSTRUCTIONS.


 


The Company shall issue
the Irrevocable Transfer Agent Instructions to its transfer agent in a form acceptable to the Investor.


 






    22


     


    

 


7. CONDITIONS
TO THE COMPANY’S OBLIGATION TO SELL.


 


(a) The
obligation of the Company hereunder to issue and sell the First Convertible Debenture to the Investor at the First Closing is subject
to the satisfaction, at or before the First Closing Date, of each of the following conditions, provided that these conditions are for
the Company’s sole benefit and may be waived by the Company at any time in its sole discretion:


 


(i) The
Investor shall have executed the Transaction Documents and delivered them to the Company.


 


(ii) The
Investor shall have delivered to the Company the First Convertible Debenture Purchase Price by wire transfer of immediately available
U.S. funds pursuant to the wire instructions provided by the Company.


 


(iii) The
representations and warranties of the Investor shall be true and correct in all material respects as of the date when made and as of the
First Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and the Investor
shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement
to be performed, satisfied or complied with by the Investor at or prior to the First Closing Date.


 


(b) The
obligation of the Company hereunder to issue and sell the Second Convertible Debenture to the Investor at the Second Closing is subject
to the satisfaction, at or before the Second Closing Date, of each of the following conditions, provided that these conditions are for
the Company’s sole benefit and may be waived by the Company at any time in its sole discretion:


 


(i) The
Investor shall have executed the Transaction Documents and delivered them to the Company.


 


(ii)
The Investor shall have delivered to the Company the Second Convertible Debenture Purchase Price by wire transfer of immediately available
U.S. funds pursuant to the wire instructions provided by the Company.


 


(iii) The
representations and warranties of the Investor shall be true and correct in all material respects as of the date when made and as of the
Second Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and the
Investor shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required
by this Agreement to be performed, satisfied or complied with by the Investor at or prior to the Second Closing Date.


 


(c)  The obligation
of the Company hereunder to issue and sell the Third Convertible Debenture to the Investor at the Third Closing is subject to the satisfaction,
at or before the Third Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole
benefit and may be waived by the Company at any time in its sole discretion:


 


(i)
The Investor shall have executed the Transaction Documents and delivered them to the Company.


 






    23


     


    

 


(ii)
The Investor shall have delivered to the Company the Third Convertible Debenture Purchase Price by wire transfer of immediately available
U.S. funds pursuant to the wire instructions provided by the Company.


 


(iii) The
representations and warranties of the Investor shall be true and correct in all material respects as of the date when made and as of the
Third Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and the Investor
shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement
to be performed, satisfied or complied with by the Investor at or prior to the Third Closing Date.


 


8. CONDITIONS
TO THE INVESTOR’S OBLIGATION TO PURCHASE.


 


(a) The
obligation of the Investor hereunder to purchase the First Convertible Debenture at the First Closing is subject to the satisfaction,
at or before the First Closing Date, of each of the following conditions, provided that these conditions are for the Investor’s
sole benefit and may be waived by the Investor at any time in its sole discretion:


 


(i) The
Company, and the Company’s Transfer Agent, as applicable, shall have executed the Transaction Documents and delivered the same to
the Investor.


 


(ii) The
Common Stock shall be authorized for quotation or trading on the Primary Market and trading in the Common Stock shall not have been suspended
for any reason.


 


(iii) The
representations and warranties of the Company shall be true and correct in all material respects (except to the extent that any of such
representations and warranties is already qualified as to materiality in Section 5 above, in which case, such representations and warranties
shall be true and correct without further qualification) as of the date when made and as of the First Closing Date as though made at that
time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the First Closing Date.


 


(iv) The
Company shall have executed and delivered to the Investor the First Convertible Debenture.


 


(v) The
Investor shall have received an opinion of counsel from counsel to the Company in a form satisfactory to the Investor which shall include
but not be limited to whether the Company is an issuer defined as a “Shell Company,” as defined in paragraph (i)(1)(i) of
Rule 144 or has been at any time previously an issuer defined as a “Shell Company.”


 


(vi) The
Company shall have delivered to the Investor a certificate, executed by an officer of the Company in a form satisfactory to the Investor
and dated as of the First Closing Date, as to (i) the Company’s Article of Incorporation, (ii) the Bylaws of the Company, (iii)
the resolutions as adopted by the Company's Board of Directors in a form reasonably acceptable to the Investor, (iv) the Company’s
Certificate of Good, each as in effect at the First Closing.


 






    24


     


    

 


(vii) The
Company shall have provided Investor a true copy of a certificate of good standing evidencing the formation and good standing of the Company
from the secretary of state (or comparable office) from the jurisdiction in which the Company is incorporated, as of a date within 10
days of the First Closing Date.


 


(viii) The
Company and its transfer agent shall have created the Share Reserve.


 


(b) The
obligation of the Investor hereunder to purchase the Second Convertible Debenture at the Second Closing is subject to the satisfaction,
at or before the Second Closing Date, of each of the following conditions, provided that these conditions are for the Investor’s
sole benefit and may be waived by the Investor at any time in its sole discretion:


 


(i) The
Registration Statement shall have been filed with the SEC as required by the Registration Rights Agreement.


 


(ii) The
Common Stock shall be authorized for quotation or trading on the Primary Market and trading in the Common Stock shall not have been suspended
for any reason.


 


(iii) The
representations and warranties of the Company shall be true and correct in all material respects (except to the extent that any of such
representations and warranties is already qualified as to materiality in Section 5 above, in which case, such representations and warranties
shall be true and correct without further qualification) as of the date when made and as of the Second Closing Date as though made at
that time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied
and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Second Closing Date.


 


(iv) The
Company shall have executed and delivered to the Investor the Second Convertible Debenture.


 


(v) The
Company shall have provided to the Investor an executed Officer’s Certificate in a form satisfactory to the Investor.


 


(c) The
obligation of the Investor hereunder to purchase the Third Convertible Debenture at the Third Closing is subject to the satisfaction,
at or before the Third Closing Date, of each of the following conditions, provided that these conditions are for the Investor’s
sole benefit and may be waived by the Investor at any time in its sole discretion:


 


(i) The
Registration Statement shall have been declared effective by the SEC as required by the Registration Rights Agreement.


 






    25


     


    

 


(ii) The
Common Stock shall be authorized for quotation or trading on the Primary Market and trading in the Common Stock shall not have been suspended
for any reason.


 


(iii) The
representations and warranties of the Company shall be true and correct in all material respects (except to the extent that any of such
representations and warranties is already qualified as to materiality in Section 5 above, in which case, such representations and warranties
shall be true and correct without further qualification) as of the date when made and as of the Third Closing Date as though made at that
time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Third Closing Date.


 


(iv) The
Company shall have executed and delivered to the Investor the Third Convertible Debenture.


 


(v) The
Company shall have provided to the Investor an executed Officer’s Certificate in a form satisfactory to the Investor.


 


9. INDEMNIFICATION.


 


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


 






    26


     


    

 


(b) In
consideration of the Company’s execution and delivery of this Agreement, and in addition to all of the Investor’s other obligations
under this Agreement, the Investor shall defend, protect, indemnify and hold harmless the Company and all of its officers, directors,
employees and agents (including, without limitation, those retained in connection with the transactions contemplated by this Agreement)
(collectively, the “Company Indemnitees”) from and against any and all Indemnified Liabilities incurred by the Indemnitees
or any of them as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty
made by the Investor(s) in this Agreement, instrument or document contemplated hereby or thereby executed by the Investor, (b) any breach
of any covenant, agreement or obligation of the Investor(s) contained in this Agreement, the Transaction Documents or any other certificate,
instrument or document contemplated hereby or thereby executed by the Investor, or (c) any cause of action, suit or claim brought or made
against such Company Indemnitee based on material misrepresentations or due to a material breach and arising out of or resulting from
the execution, delivery, performance or enforcement of this Agreement, the Transaction Documents or any other instrument, document or
agreement executed pursuant hereto by any of the parties hereto. To the extent that the foregoing undertaking by the Investor may be unenforceable
for any reason, the Investor shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities,
which is permissible under applicable law.


 


10. COMPANY
LIABILITY.


 


(a) The
Company shall be liable for all debt, principal, interest, and other amounts owed to the Investor by Company pursuant to this Agreement,
the Transaction Documents, or any other agreement, whether absolute or contingent, due or to become due, now existing or hereafter arising
(the “Obligations”) and the Investor may proceed against the Company to enforce the Obligations without waiving its
right to proceed against any other party. This Agreement and the Debenture are a primary and original obligation of the Company and shall
remain in effect notwithstanding future changes in conditions, including any change of law or any invalidity or irregularity in the creation
or acquisition of any Obligations or in the execution or delivery of any agreement between the Investor and the Company. The Company shall
be liable for existing and future Obligations as fully as if all of the funds advanced by the Investor hereunder were advanced to the
Company.


 


(b) Notwithstanding
any other provision of this Agreement or any other Transaction Documents the Company irrevocably waives, until all obligations are paid
in full, all rights that it may have at law or in equity (including, without limitation, any law subrogating the Company to the rights
of Investor under the Transaction Documents) to seek contribution, indemnification, or any other form of reimbursement from the Company,
or any other person now or hereafter primarily or secondarily liable for any of the Obligations, for any payment made by the Company with
respect to the Obligations in connection with the Transaction Documents or otherwise and all rights that it might have to benefit from,
or to participate in, any security for the Obligations as a result of any payment made by the Company with respect to the Obligations
in connection with the Transaction Documents or otherwise. Any agreement providing for indemnification, reimbursement or any other arrangement
prohibited under this Section shall be null and void. If any payment is made to the Company in contravention of this Section, the Company
shall hold such payment in trust for the Investor and such payment shall be promptly delivered to the Investor for application to the
Obligations, whether matured or unmatured.


 






    27


     


    

 


11. GOVERNING
LAW: MISCELLANEOUS.


 


(a) Governing
Law; Mandatory Jurisdiction. TO INDUCE INVESTOR TO PURCHASE THE CONVERTIBLE DEBENTURES, THE COMPANY IRREVOCABLY AGREES THAT ANY DISPUTE
ARISING UNDER, RELATING TO, OR IN CONNECTION WITH, DIRECTLY OR INDIRECTLY, THIS AGREEMENT OR RELATED TO ANY MATTER WHICH IS THE SUBJECT
OF OR INCIDENTAL TO THIS AGREEMENT ANY OTHER TRANSACTION DOCUMENT (WHETHER OR NOT SUCH CLAIM IS BASED UPON BREACH OF CONTRACT OR TORT)
SHALL BE SUBJECT TO THE EXCLUSIVE JURISDICTION AND VENUE OF THE STATE COURTS SITTING IN UNION COUNTY, NEW JERSEY AND THE FEDERAL COURTS
SITTING IN NEWARK, NEW JERSEY; PROVIDED, HOWEVER, INVESTOR MAY, AT ITS SOLE OPTION, ELECT TO BRING ANY ACTION IN ANY OTHER JURISDICTION.
THIS PROVISION IS INTENDED TO BE A “MANDATORY” FORUM SELECTION CLAUSE AND GOVERNED BY AND INTERPRETED CONSISTENT WITH NEW
JERSEY LAW. THE COMPANY HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT HAVING ITS SITUS IN SAID
COUNTY, AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS. THE COMPANY HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND
CONSENT THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO THE COMPANY AS SET FORTH
HEREIN IN THE MANNER PROVIDED BY APPLICABLE STATUTE, LAW, RULE OF COURT OR OTHERWISE


 


(b) Counterparts.
This Agreement may be executed in 2 or more identical counterparts, all of which shall be considered one and the same agreement and shall
become effective when counterparts have been signed by each party and physically or electronically delivered to the other party.


 


(c) Usury.
To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will
resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter
in force, in connection with any claim, action or proceeding that may be brought by the Investor in order to enforce any right or remedy
under any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly agreed
and provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not
exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without limiting the foregoing,
in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest
that the Company may be obligated to pay under the Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum contract
rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental
action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to
the Transaction Documents from the effective date thereof forward, unless such application is precluded by applicable law. If under any
circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to the Investor with respect to indebtedness evidenced
by the Transaction Documents, such excess shall be applied by the Investor to the unpaid principal balance of any such indebtedness or
be refunded to the Company, the manner of handling such excess to be at the Investor’s election.


 






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


 


(e) Severability.
If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any
provision of this Agreement in any other jurisdiction.


 


(f) Entire
Agreement, Amendments. This Agreement supersedes all other prior oral or written agreements between the Investor, the Company, their
affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the instruments referenced
herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically
set forth herein or therein, neither the Company nor any Investor makes any representation, warranty, covenant or undertaking with respect
to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the party to
be charged with enforcement.


 


12. Notices.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered upon: (i) receipt, when delivered personally, (ii) 1 Business Day after deposit with
an overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive the same, or (iii)
receipt, when sent by electronic mail (provided that the electronic mail transmission is not returned in error or the sender is not otherwise
notified of any error in transmission. The addresses and e-mail addresses for such communications shall be:


 


	If to the Company, to:	Samsara Luggage, Inc.
	 	One University Plaza – Suite 505
	 	Hackensack, NJ 07601
	 	Attention:   Atara Dzikowski
	 	Telephone: (855) 256-7477
	 	Email:  atara@samsaraluggage.com



 






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	With a copy to:	Foley Shechter Ablovatskiy LLP
	 	1001 Avenue of the Americas, 12th Floor
	 	New York, NY 10018
	 	Attention:    Jonathan Shechter
	 	Telephone:   (212)335-0465
	 	Email: js@foleyshechter.com


 


	If to the Investor:	YA II PN, Ltd.
	 	c/o Yorkville Advisors Global, LP
	 	1012 Springfield Avenue
	 	Mountainside, NJ 07092
	 	Attention:      Mark Angelo
	 	Telephone:    (201) 536-5114
	 	Email:      mangelo@yorkvilleadvisors.com
	 	 
	With a copy to:	David Gonzalez, Esq.
	 	1012 Springfield Avenue
	 	Mountainside, NJ  07092
	 	Telephone:      (201) 536-5109
	 	Email:  dgonzalez@yorkvilleadvisors.com


 


or at such other address and/or electronic email
address and/or to the attention of such other person as the recipient party has specified by written notice given to each other party
3 Business Days prior to the effectiveness of such change. Written confirmation of receipt (i) given by the recipient of such notice,
consent, waiver or other communication, (ii) mechanically or electronically generated by the sender’s computer containing the time,
date, recipient’s electronic mail address and the text of such electronic mail or (iii) provided by a nationally recognized overnight
delivery service, shall be rebuttable evidence of personal service, receipt by electronic mail or receipt from a nationally recognized
overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.


 


(a) Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.
Neither the Company nor any Investor shall assign this Agreement or any rights or obligations hereunder without the prior written consent
of the other party hereto.


 


(b) No
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.


 


(c) Survival.
Unless this Agreement is terminated under Section 11(f), all agreements, representations and warranties contained in this Agreement or
made in writing by or on behalf of any party in connection with the transactions contemplated by this Agreement shall survive the execution
and delivery of this Agreement and the Closing.


 


(d) Publicity.
The Company and the Investor shall have the right to approve, before issuance any press release or any other public statement with respect
to the transactions contemplated hereby made by any party; provided, however, that the Company shall be entitled, without the prior approval
of the Investor, to issue any press release or other public disclosure with respect to such transactions required under applicable securities
or other laws or regulations (the Company shall use its best efforts to consult the Investor in connection with any such press release
or other public disclosure prior to its release and Investor shall be provided with a copy thereof upon release thereof).


 






    30


     


    

 


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


 


(f) Termination.
In the event that the Closing shall not have occurred on or before 5th business days from the date hereof due to the Company’s
or the Investor’s failure to satisfy the conditions set forth in Sections 7 and 8 above (and the non-breaching party’s failure
to waive such unsatisfied condition(s)), the non-breaching party shall have the option to terminate this Agreement with respect to such
breaching party at the close of business on such date without liability of any party to any other party.


 


(g) Brokerage.
The Company represents that no broker, agent, finder or other party has been retained by it in connection with the transactions contemplated
hereby and that no other fee or commission has been agreed by the Company to be paid for or on account of the transactions contemplated
hereby.


 


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


 


[REMAINDER PAGE
INTENTIONALLY LEFT BLANK]


 




    31


     


    

 


IN WITNESS WHEREOF,
each of the Investor and the Company has affixed their respective signatures to this Securities Purchase Agreement as of the date first
written above.


 


	 	COMPANY:
	 	 	 
	 	SAMSARA LUGGAGE, INC.
	 	 	 
	 	By:	 
	 	Name: 	Atara Dzikowski
	 	Title:	  Chief Executive Officer
	 	 	 
	 	INVESTOR: 
	 	 	 
	 	YA II PN, LTD.
	 	By:	Yorkville Advisors Global, LP
	 	Its:	Investment Manager
	 	 	 
	 	By:	Yorkville Advisors Global II, LLC
	 	Its:	General Partner
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 


 




    32


     


    

 


LIST OF EXHIBITS:


 


Disclosure Schedule


 


Exhibit A – Form of Convertible Debenture


 




     


     


    

 


DISCLOSURE SCHEDULE


 


Schedule 4(a)
– Subsidiaries 


 


		●	None.



 


Schedule 4(b)
– Security Interests Granted 


 


		●	None.



 


Schedule 4(c)–
Capitalization


 


		1.	On June 5, 2019, the Company entered into a Securities Purchase Agreement (“YAII SPA”) with
YAII PN, Ltd. (“YAII”), pursuant to which YAII agreed to provide the Company with a convertible loan in the aggregate amount
of $1,100,000 in three tranches, and the Company agreed to issue convertible debentures and a warrant to the YAII. The first tranche of
the convertible debentures in the amount of $210,000 was provided upon execution of the YAII SPA. The second tranche in the amount of
$300,000 was provided on October 23, 2019 upon the Company filing of a Registration Statement on Form S-4 in connection with the merger
with Samsara Delaware. The third tranche in the amount of $600,000 was provided on November 18, 2019 upon consummation of the merger with
Samsara Delaware and the fulfillment of all conditions required for the merger. Each tranche of the loan will bear interest at an annual
rate of ten percent (10%). The principal amount together with the accrued and unpaid interest will be repayable after two years. Each
tranche of the loan together with the accrued and unpaid interest (or any portion at the discretion of the Investor) will be convertible
at any time six months following the issuance date, into shares of Company’s common stock at a conversion price equal to the lower
of $0.003 per share or 80% of the lowest volume-weighted average price (VWAP) of Company’s share during the period of 10 days preceding
the conversion date. In addition, the Company issued to YAII a warrant to purchase 91,666,666 shares of common stock, at an exercise price
equal to $0.003. The warrants may be exercised within 5 years from the issuance date by cash payment or through cashless exercise by the
surrender of warrants shares having a value equal to the exercise price of the portion of the warrant being exercised.



 


On December 9, 2019 and pursuant to
the YAII SPA, YAII exercised its option to convert the first convertible promissory note in the amount of $210,000 into 69,917,807 shares
of Common Stock of the Company. On July 23, 2020 and pursuant to the YAII SPA, YAII exercised its option to convert $72,684.93 of its
second convertible note into 90,856,163 shares of Common Stock of the Company. On August 3, 2020 and pursuant to the YAII SPA, YAII exercised
its option to convert $75,753.42 of its second convertible note into 151,506,840 shares of Common Stock of the Company. On August 13 and
pursuant to the YAII SPA, YAII exercised its option to convert $75,431.51 of its second convertible note into 150,863,020 shares of Common
Stock of the Company. On October 12 and pursuant to the YAII SPA, YAII exercised its option to convert $51,671.23 of its second convertible
note into 129,178,075 shares of Common Stock of the Company. On November 2 and pursuant to the YAII SPA, YAII exercised its option to
convert $50,287.67 of its second convertible note into 167,625,567 shares of Common Stock of the Company.


 


On November 16 and pursuant to the
YAII SPA, YAII exercised its option to convert $40,000 of its third convertible note into 200,000,000 shares of Common Stock of the Company.
On November 18 and pursuant to the YAII SPA, YAII exercised its option to convert $40,323.29 of its third convertible note into 201,616,450
shares of Common Stock of the Company. On November 19 and pursuant to the YAII SPA, YAII exercised its option to convert $45,158.90 of
its third convertible note into 225,794,500 shares of Common Stock of the Company. On December 17 and pursuant to the YAII SPA, YAII exercised
its option to convert $49,104.11 of its third convertible note into 245,520,550 shares of Common Stock of the Company. On January 13 and
pursuant to the YAII SPA, YAII exercised its option to convert $53,624.66 of its third convertible note into 268,123,300 shares of Common
Stock of the Company.


 






     


     


    

 


		2.	On September 3, 2020, the Company entered into a second Securities Purchase Agreement (“YAII SPA
2”) with YAII, pursuant to which YAII agreed to invest in convertible debentures issued by the Company in the aggregate amount of
$220,000 in two tranches, and the Company agreed to issue the convertible debentures and warrants to the YAII. The first tranche of the
convertible debentures in the amount of $150,000 was provided upon execution of the YAII SPA 2. The second tranche in the amount of $70,000
was provided 30 days later following the Company having increased in authorized share capital. Each convertible debenture will bear interest
at an annual rate of ten percent (10%). The principal amount together with the accrued and unpaid interest will be repayable after two
years. The principal amount of each convertible debenture together with the accrued and unpaid interest (or any portion at the discretion
of YAII) will be convertible at any time at the discretion of the YAII following the issuance date, into shares of Company’s common
stock at a conversion price equal to the lower of $0.003 per share or 80% of the lowest volume-weighted average price (VWAP) of Company’s
share during the period of 10 days preceding the conversion date. In addition, the Company issued to YAII two warrants to purchase an
aggregate of 18,333,333 shares of common stock, at an exercise price equal to $0.003. The warrants may be exercised within 5 years from
the issuance date by cash payment or through cashless exercise by the surrender of warrants shares having a value equal to the exercise
price of the portion of the warrant being exercised.



 


		3.	On April 6, 2021, the Company entered into a third Securities Purchase Agreement (“YAII SPA 3”)
with YAII, pursuant to which YAII agreed to invest in a convertible debenture issued by the Company in the aggregate amount of $150,000
in one tranche, and the Company agreed to issue the convertible debenture and warrants to the YAII. The convertible debenture in the amount
of $150,000 was provided upon execution of the YAII SPA 3. The convertible debenture will bear interest at an annual rate of ten percent
(10%). The principal amount together with the accrued and unpaid interest will be repayable after two years. The principal amount of the
convertible debenture together with the accrued and unpaid interest (or any portion at the discretion of YAII) will be convertible at
any time at the discretion of the YAII following the issuance date, into shares of Company’s common stock at a conversion price
equal to the lower of $3.46 per share or 80% of the lowest volume-weighted average price (VWAP) of Company’s share during the period
of 10 days preceding the conversion date. In addition, the Company issued to YAII a warrant to purchase an aggregate of 10,838 shares
of common stock, at an exercise price equal to $3.46. The warrants may be exercised within 5 years from the issuance date by cash payment
or through cashless exercise by the surrender of warrants shares having a value equal to the exercise price of the portion of the warrant
being exercised.



 


Schedule 5(g)
– Use of Proceeds


 


Implementation
of the company’s business plan including launching the Next Gen line of business and other general working capital purposes. The
Company shall also pay its transfer agent, Worldwide Stock Transfer, the current balance due in the amount of $6,050.00. 


 




     


     


    

 


EXHIBIT A