Exhibit
10.1


 


SECURITIES
PURCHASE AGREEMENT


 


This
Securities Purchase Agreement (this “Agreement”) is dated as of October 13, 2021, between MusclePharm Corporation,
a Nevada corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including
its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).


 


WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act (as defined below),
and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly,
desires to purchase from the Company, securities of the Company as more fully described in this Agreement.


 


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


 


ARTICLE
I. DEFINITIONS


 


1.1
Definitions. In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise defined
herein have the meanings given to such terms in the Notes (as defined herein), and (b) the following terms have the meanings set forth
in this Section 1.1:


 


“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.7.


 


“Action”
shall have the meaning ascribed to such term in Section 3.1(j).


 


“Affiliate” means any Person that, directly or
indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms
are used in and construed under Rule 405 under the Securities Act.


 


“Board
of Directors” means the board of directors of the Company.


 


“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York or Las Vegas,
Nevada are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall
not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the
direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial
banks in The City of New York and Las Vegas, Nevada are generally open for use by customers on such day.


 




    	 



     


    

 


“CARES
Act” means (x), with respect to any provision governing or related to the PPP Loans, Title I of the Coronavirus Aid, Relief
and Economic Security Act, as amended (including any successor thereto), and (y) with respect to all obligations to pay any taxes or
other amounts to any governmental or regulatory authority that were deferred, Title II of the Coronavirus Aid, Relief and Economic Security
Act, as amended (including any successor thereto), and, in each case, all requests, rules, guidelines, requirements and directives thereunder
or issued in connection therewith or in implementation thereof, regardless of the date enacted, adopted, issued or implemented.


 


“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.


 


“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties
thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s
obligations to deliver the Securities, in each case, have been satisfied or waived.


“Collateral
Agent” shall have the meaning ascribed to such term in Section 4.18(a). “Collateral Agent Indemnitees” shall
have the meaning ascribed to such term in


Section
4.18(a).


“Commission”
means the United States Securities and Exchange Commission. “Common Stock” means the common stock of the Company,
par value $0.001 per


share,
and any other class of securities into which such securities may hereafter be reclassified or changed.


 


“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.


 


“Company
Counsel” means Ropes & Gray LLP, with offices located at 1211 Avenue of the Americas, New York, NY 10036-8704.


 


“Disclosure
Schedules” means those disclosure schedules being delivered by the Company to the Purchasers concurrently with the execution
of this Agreement.


 


“Disclosure
Time” means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time) and
before midnight (New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the
date hereof, and (ii) if this Agreement is signed between midnight (New York City time) and 9:00 a.m. (New York City time) on any Trading
Day, no later than 9:01 a.m. (New York City time) on the date hereof.


 


“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(s).


 




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“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.


 


“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers, directors or independent contractors
of the Company for services rendered to the Company pursuant to the approval of a majority of the non-employee members of the Board of
Directors or a majority of the members of a committee of non- employee directors established for such purpose, (b) securities upon the
exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible
into shares of Common Stock issued and outstanding on the date of this Agreement, provided that the terms of such securities have not
been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price
or conversion price of such securities (other than in connection with stock splits or combinations) or to extend the term of such securities,
(c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the
Company, provided that such securities are issued as “restricted securities” (as defined in Rule 144), and provided that
any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating
company (including a vendor, service provider or other commercial counterparty) or an owner of an asset in a business synergistic with
the business of the Company, or a Person (which may include an individual) acting as a product endorser, brand ambassador, influencer
or other capacity intended to build brand awareness, product interest or generate sales and that, in each case under this clause (c),
shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which
the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in
securities (for the avoidance of doubt, the foregoing shall not limit the issuance of securities to a placement agent or investor relations
firm acting in such capacity or a substantially similar capacity) and (d) securities to be issued that are described in the Disclosure
Schedules, and any other securities issued or issuable upon exercise or conversion of any such securities.


 


“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.


 


“FDA” shall have the meaning ascribed to such term in
Section 3.1(ll).


 


“FDCA” shall have the meaning ascribed to such term in Section 3.1(ll).


 


“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).


 


“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(bb).


 


“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).


 


“Lead
Investor” shall have the meaning ascribed to such term in Section 2.1.


 




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“Legend
Removal Date” shall have the meaning ascribed to such term in Section 4.1(c).


 


“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other
restriction.


 


“Lock-Up
Agreements” means the Lock-Up Agreements, dated as of the date hereof, by and among the Company and each of the directors and
officers of the Company, in the form of Exhibit C attached hereto.


 


“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).


 


“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(n).


 


“Maximum Rate” shall have the
meaning ascribed to such term in Section 5.17.


 


“Notes” means the Original Issue Discount Senior Notes due,
subject to the terms therein, April 13, 2022, issued by the Company to the Purchasers hereunder, in the form of Exhibit A
attached hereto.


 


“Participation
Maximum” shall have the meaning ascribed to such term in Section 4.12(a).


 


“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.


 


“Pharmaceutical
Product” shall have the meaning ascribed to such term in Section 3.1(ll).


 


“Placement
Agent” means ROTH Capital Partners, LLC.


 


“PPP
Loan Agreement” means that certain Note, dated 4/27/2020 by the Company in favor of Harvest Small Business Finance, LLC
(the “PPP Lender”).


 


“PPP
Loans” means the Indebtedness incurred under the PPP Loan Agreement in in aggregate principal amount equal to $964,910.


 


“Principal
Amount” means, as to each Purchaser, the amounts set forth below such Purchaser’s signature block on the signature pages
hereto next to the heading “Principal Amount,” in United States Dollars, which shall equal 116.28% of such Purchaser’s
Subscription Amount.


 


“Pro
Rata Portion” shall have the meaning ascribed to such term in Section 4.12(e).


 




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“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.


 


“Public
Information Failure” shall have the meaning ascribed to such term in Section 4.3(b).


 


“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.3(b).


 


“Public
Offering” means a firm commitment underwritten public offering of Common Stock and/or Common Stock Equivalents in connection
with the listing or quotation of the Common Stock on a “national securities exchange” as defined in Rule 600(b) of Regulation
NMS.


 


“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.10.


 


“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).


 


“Required
Holders” means (I) prior to the Closing Date, each of the Purchasers and (II) on or after the Closing Date, holders of at
least a majority of the aggregate Principal Amount of Notes issued and shall include the Lead Investor so long as the Lead Investor
or any of its affiliates holds any Securities issued hereunder.


 


“Required
Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then potentially issuable in the future
pursuant to the Transaction Documents, including any Warrant Shares issuable upon exercise in full of all Warrants assuming any adjustment
as of such date to the Exercise Price (which shall be equal to no less than the par value of the Common Stock), and a corresponding adjustment
to the number of Warrant Shares, in each case, in accordance with the terms of the Warrants, but ignoring any exercise limits set forth
therein.


 


“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to
time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.


 


“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(h).


 


“Securities” means the Notes, the
Warrants, and the Warrant Shares.


 


“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.


 




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“Security
Documents” means (i) the Subsidiary Guarantee, (ii) the pledge and security agreement, in the form attached hereto as Exhibit
D (as amended or modified from time to time in accordance with its terms, the “Security Agreement”), (iii) the
intercreditor agreement with Prestige Capital Corporation, in the form attached hereto as Exhibit E (as amended or modified from
time to time in accordance with its terms, the “Prestige Intercreditor Agreement”), (iv) the intercreditor agreement
with Ryan Drexler, in the form attached hereto as Exhibit F (as amended or modified from time to time in accordance with its terms,
the “CEO Intercreditor Agreement”), (v) any account control agreement, (vi) a perfection certificate in the form attached
hereto as Exhibit G and (vii) all financing statements, fixture filings, security agreements, pledges, assignments, mortgages,
landlord waivers, collateral access agreements, deeds of trust, opinions of counsel, and all other documents requested by the Collateral
Agent to create, perfect, and continue perfected or to better perfect the Collateral Agent’s security interest in and liens on
all of the assets of the Company and each of its Subsidiaries (whether now owned or hereafter arising or acquired, tangible or intangible,
real or personal), and in order to fully consummate all of the transactions contemplated hereby and under the other Transaction Documents.


 


“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be
deemed to include locating and/or borrowing shares of Common Stock).


 


“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for Notes and Warrants purchased hereunder as specified
below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.


 


“Subsequent
Financing” shall have the meaning ascribed to such term in Section 4.12(a).


 


“Subsequent
Financing Notice” shall have the meaning ascribed to such term in Section 4.12(b).


 


“Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1(a) and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.


 


“Subsidiary
Guarantee” means the Subsidiary Guarantee, dated the date hereof, by each Subsidiary in favor of the Purchasers, in the form
of Exhibit H attached hereto, as amended or modified from time to time in accordance with its terms.


 


“Trading
Day” means a day on which the principal Trading Market is open for trading.


 


“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange, OTCQB, OTCQX, OTC Pink Open Market (or any successors to any of the foregoing).


 




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“Transaction
Documents” means this Agreement, the Notes, the Warrants, Lock- Up Agreements, the Security Documents and all exhibits and
schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.


 


“Transfer
Agent” means Equiniti, the current transfer agent of the Company, with a mailing address of 3200 Cherry Creek Drive South,
Suite 430, Denver, CO 80209 and a phone number of 303-282-4800, and any successor transfer agent of the Company.


 


“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.13.


 


“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or
a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common
Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Required Holders then outstanding and reasonably acceptable to the Company, the fees and expenses of which
shall be paid by the Company.


 


“Warrants”
means, collectively, the Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a)
hereof, which Warrants shall be exercisable immediately and have a term of exercise equal to five years, in the form of Exhibit B
attached hereto.


 


“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.


 


ARTICLE
II. PURCHASE AND SALE


 


2.1
Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the
execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly,
agree to purchase, up to an aggregate of $8,200,000 in principal amount of the Notes. Each Purchaser shall deliver to the Company, via
wire transfer or a certified check, immediately available funds equal to such Purchaser’s Subscription Amount, as set forth on
the signature page hereto executed by such Purchaser (less, in the case of Empery Tax Efficient, LP (the “Lead Investor”),
the amounts withheld pursuant to Section 5.2), and the Company shall deliver to each Purchaser its respective Note and a Warrant, as
determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable
at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall take place remotely
by electronic transfer of the Closing documentation.


 




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2.2
Deliveries.



 


(a)
On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:


 


(i)
this Agreement duly executed by the Company;



 


(ii)
a legal opinion of Company Counsel and of Nevada counsel, each in form and substance reasonably acceptable to the Purchasers;


 


(iii)
a Note with a principal amount equal to such Purchaser’s Principal Amount, registered in the name of such Purchaser;


 


(iv)
a Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to 150% of the Principal
amount of such Purchaser’s Note divided by $0.7085, with an exercise price equal to $0.7794, subject to adjustment therein;


 


(v)
the Company shall have provided each Purchaser with the Company’s wire instructions, on Company letterhead and executed by the
Chief Executive Officer or Chief Financial Officer;


 


(vi)
the Lock-Up Agreements;



 


(vii)
the Collateral Agent shall have received the Security Documents, duly executed by the parties thereto;


 


(viii)
the Collateral Agent shall have received all documents, instruments, filings and recordations and searches reasonably necessary in connection
with the perfection of a valid security interest in the Collateral of Company and each of its Subsidiaries and, in the case of the filings
with the United States Patent and Trademark Office and the United States Copyright Office, protection of such security interests shall
have been executed and delivered or made, or, in the case of UCC filings, shall be in proper form for filing, registration or recordation,
as applicable;


 


(ix)
the Collateral Agent shall have received the results of searches (including comparable searches in any jurisdiction outside the United
States) for any effective UCC financing statements, tax liens or judgment liens filed against the Company or any of its Subsidiaries
or any property of any of the foregoing, which results shall not show any such liens;


 


(x)
the Collateral Agent shall have received the Security Agreement, duly executed by the Company and each of its Subsidiaries, together
with (A) the original stock certificates representing all of the equity interests and all promissory notes required to be pledged thereunder,
accompanied by undated stock powers and allonges executed in blank and other proper instruments of transfer and (B) any copyright, patent
and trademark agreements required by the terms of the Security Agreement; and


 




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(xi)
the Company shall have delivered to such Purchaser such other documents relating to the transactions contemplated by this Agreement as
such Purchaser or its counsel may reasonably request.


 


(b)
On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following:


 


 (i) this Agreement duly executed by such Purchaser; and



 


(ii)
such Purchaser’s Subscription Amount by wire transfer to the account specified in writing by the Company;


 


2.3
Closing Conditions.



 


(a)
The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:


 


(i)
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality, in all respects)
on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific date therein in
which case they shall be accurate in all material respects (or, to the extent representations or warranties are qualified by materiality,
in all respects) as of such date);


 


(ii)
all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been
performed; and


 


(iii)
the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.


 


(b)
The respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met:


 


(i)
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless
as of a specific date therein in which case they shall be accurate in all material respects or, to the extent representations or warranties
are qualified by materiality or Material Adverse Effect, in all respects) as of such date);


 




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(ii)
all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;


 


(iii)
the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;


 


(iv)
there shall have been no Material Adverse Effect with respect to the Company since the date hereof; and


 


(v)
from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s
principal Trading Market and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall
not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such
service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities
nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of
such Purchaser, makes it impracticable or inadvisable to purchase the Securities at the Closing.


 


2.4
Conditions Subsequent to Closing. As an accommodation to the Company, the Collateral Agent and the Purchasers have agreed to execute
this Agreement and to consummate the transactions contemplated herein on the Closing Date notwithstanding the failure by the Company
to satisfy the conditions set forth below on or before the Closing Date. In consideration of such accommodation, the Company agrees that,
in addition to all other terms, conditions and provisions set forth in this Agreement and the other Transaction Documents, the Company
shall satisfy each of the conditions subsequent set forth below on or before the date applicable thereto (it being understood that the
failure by the Company to perform or cause to be performed any such condition subsequent on or before the date applicable thereto shall
constitute an Event of Default (as defined under the Notes)):


 


(a)
Pursuant to Section 6(j) of the Security Agreement, within 30 days after the Closing Date (or such later date as may be permitted by
the Collateral Agent in its sole discretion), the Collateral Agent shall have received a control agreement in form and substance reasonably
satisfactory to is with respect to the deposit accounts maintained at Wells Fargo Bank, N.A., account numbers 4241874361, 4241874320,
4241874338 and 4241874353.


 


(b)
Pursuant to Section 6(e) of the Security Agreement, within 30 days after the Closing Date (or such later date as may be permitted by
the Collateral Agent in its sole discretion), the Collateral Agent shall have received insurance certificates and endorsements in form
and substance reasonably satisfactory to it.


 




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ARTICLE
III. REPRESENTATIONS AND WARRANTIES


 


3.1
Representations and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall
be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the
corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each Purchaser:


 


(a)
Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a). The Company
owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and
all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and
free of preemptive and similar rights to subscribe for or purchase securities.


 


(b)
Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power
and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any
Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good
standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned
by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, 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, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken
as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding
has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority
or qualification.


 


	 	(c)	Authorization;
    Enforcement.


 


(i)
The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement
and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery
of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated
hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by
the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection
with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will
have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid
and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies or (iii) insofar as indemnification and contribution provisions may be limited by applicable law.


 




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(ii)
With respect to each Security Document to which any Subsidiary is a party, such Subsidiary has the requisite corporate power and authority
to enter into and to consummate the transactions contemplated by such agreement and otherwise to carry out its obligations thereunder.
The execution and delivery of such Security Document and the consummation by the Company of the transactions contemplated thereby have
been duly authorized by all necessary action on the part of the Company, and no further action is required by the respective Subsidiary,
its managers or its members in connection therewith. Each Security Document to which any Subsidiary is a party has been (or upon delivery
will have been) duly executed by such Subsidiary(ies) and, when delivered in accordance with the terms thereof, will constitute the valid
and binding obligation of the respective Subsidiary enforceable against such Subsidiary in accordance with its terms, except (A) as listed
by general equitable principals and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (B) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies or (C) insofar as indemnification and contribution provisions may be limited by applicable
law.


 


(d)
No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby
do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles
of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that
with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or
assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments,
acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by
which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict
with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations),
or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and
(iii), such as would not have or reasonably be expected to result in a Material Adverse Effect.


 




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(e)
Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings
required pursuant to Section 4.6 of this Agreement, (ii) the notice and/or application(s) to each applicable Trading Market for the issuance
and sale of the Securities and the listing of the Warrant Shares for trading thereon in the time and manner required thereby, and (iii)
the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws (collectively,
the “Required Approvals”).


 


(f)
Issuance of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company
other than restrictions on transfer provided for in the Transaction Documents or under federal or state securities laws. The Warrant
Shares, when issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable,
free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents or under
federal or state securities laws. The Company has reserved from its duly authorized capital stock a number of shares of Common Stock
for issuance of the Warrant Shares at least equal to the Required Minimum on the date hereof.


 


(g)
Capitalization. The capitalization of the Company as of the date hereof is as set forth on Schedule 3.1(g), which Schedule
3.1(g) shall also include the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as
of the date hereof. The Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act,
other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of
Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise
of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. Except as set
forth on Schedule 3.1(g), no Person has any right of first refusal, preemptive right, right of participation, or any similar right
to participate in the transactions contemplated by the Transaction Documents. Except as a result of the purchase and sale of the Securities
or as set forth on Schedule 3.1(g), there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments
of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or
giving any Person any right to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or contracts,
commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares
of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary. The issuance and sale of the Securities will not obligate
the Company or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the Purchasers). There are
no outstanding securities or instruments of the Company or any Subsidiary with any provision that adjusts the exercise, conversion, exchange
or reset price of such security or instrument upon an issuance of securities by the Company or any Subsidiary. There are no outstanding
securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the
Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements
or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued,
fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding
shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval
or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. There
are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which
the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.


 




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(h)
SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the
two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the
foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein
as the “SEC Reports”). As of their respective dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of
a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the
SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with
respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally
accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain
all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated
Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the
case of unaudited statements, to normal, immaterial, year-end audit adjustments.


 


(i)
Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports, except as set forth on Schedule 3.1(i), (i) there has been no event, occurrence or development that has
had or that would reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent
or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice
and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings
made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend
or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any
shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant
to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment
of information. Except for the issuance of the Securities contemplated by this Agreement or as set forth on Schedule 3.1(i), no
event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with
respect to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition,
that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed
made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made.


 




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(j)
Litigation. Except as set forth on Schedule 3.1(j), there is no action, suit, inquiry, notice of violation, proceeding
or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their
respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an “Action”), except with respect to any inquiry as would not, individually
or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. None of the Actions set forth on Schedule
3.1(j), (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities
or (ii) would, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither
the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation
of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge
of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current director
or officer of the Company, except as would not, individually or in the aggregate, have or reasonably be expected to result in a Material
Adverse Effect. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.


 


(k)
Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither
the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary,
is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary
information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third
party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local
and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours,
except where the failure to be in compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.


 




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(l)
Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that
has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor
has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound
(whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator
or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental
authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational
health and safety, product quality and safety and employment and labor matters, except in each case as would not have or reasonably be
expected to result in a Material Adverse Effect.


 


(m)
Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating
to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface
strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or
toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well
as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders,
permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have
received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses;
and (iii) are in compliance with all terms and conditions of any such permit, license or approval where, in each of clauses (i), (ii)
and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.


 


(n)
Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports,
except where the failure to possess such permits would not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or
modification of any Material Permit.


 


(o)
Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them
and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries,
in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and


(ii)
Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP
and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company
and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are
in compliance.


 




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(p)
Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights
and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which
the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None
of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights
has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date
of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included
within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe
upon the rights of any Person, except as would not have or reasonably be expected to not have a Material Adverse Effect. To the knowledge
of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any
of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties, except where failure to do so would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.


 


(q)
Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including,
but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount. Neither the Company
nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase
in cost.


 


(r)
Transactions with Affiliates and Employees. Except as set forth on Schedule 3.1(r), none of the officers or directors of
the Company or any Subsidiary and, to the knowledge of the Company, none of the other employees of the Company or any Subsidiary, is
presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real
or personal property to or from providing for the borrowing of money from or lending of money to, or otherwise requiring payments to
or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any
such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess
of $120,000 other than for


(i)
payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii)
other employee benefits, including stock option agreements under any stock option plan of the Company.


 




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(s)
Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable requirements
of the Sarbanes- Oxley Act of 2002, as amended, that are effective as of the date hereof, and any and all applicable rules and regulations
promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with
management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d- 15(e)) for the Company and the Subsidiaries and
designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it
files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s
rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of
the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act
(such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange
Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations
as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as
such term is defined in the Exchange Act) that have materially affected, or is reasonably likely to materially affect, the internal control
over financial reporting of the Company and its Subsidiaries. This representation and warranty is expressly qualified and limited by
the material weaknesses and significant deficiencies described in the SEC Reports.


 


(t)
Certain Fees. Except for fees payable by the Company to the Placement Agent, no brokerage or finder’s fees or commissions
are or will be payable by the Company or any Subsidiaries to any broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no
obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated
in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.


 




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(u)
Private Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no
registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated
hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.


 


(v)
Investment Company. 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 an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.


 


(w)
Registration Rights. Except as set forth on Schedule 3.1(w), no Person has any right to cause the Company or any Subsidiary
to effect the registration under the Securities Act of any securities of the Company or any Subsidiaries.


 


(x)
Listing and Maintenance Requirements. The 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, or which to its knowledge is likely to have the effect of, terminating the registration
of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is currently contemplating
terminating such registration. The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market
on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue
to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer
through the Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees to
the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer.


 


(y)
Application of Takeover Protections. Assuming the accuracy of the representation and warranty of each Purchaser set forth in Section
3.2(h), the Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control
share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover
provision under the Company’s articles of incorporation (or similar charter documents) or the laws of its state of incorporation
that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising
their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Securities
and the Purchasers’ ownership of the Securities.


 




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(z)
Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or
counsel with any information that it believes constitutes or is reasonably likely to constitute material, non-public information for
purposes of U.S. federal securities laws. The Company understands and confirms that the Purchasers will rely on the foregoing representation
in effecting transactions in securities of the Company. All of the disclosure furnished by or on behalf of the Company to the Purchasers
regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including the Disclosure
Schedules to this Agreement, is true and correct in all material respects and does not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which
they were made, not misleading. The press releases disseminated by the Company during the twelve months preceding the date of this Agreement
taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the circumstances under which they were made and when made, not
misleading. The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.


 


(aa)
No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2,
neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers
or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities
to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of any
such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of
the securities of the Company are listed or designated.


 


(bb)
Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt
by the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds
the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known
contingent liabilities) as they mature,


(ii)
the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to
be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company,
consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together
with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of
the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company
does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash
to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe that
it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the
Closing Date. The preceding portions of this representation and warranty are expressly qualified and limited by the going concern qualification
expressed by the Company’s auditors in their opinion pertaining to the Company’s financial statements as of, and for the
years ended, December 31, 2020 and 2019. Schedule 3.1(bb) sets forth as of the date hereof all outstanding secured and unsecured
Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement,
“Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (and specifically
excluding trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent
obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated
balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases
required to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.


 




    	20



     


    

 


(cc)
Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income
and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii)
has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such
returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material
taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no
basis for any such claim.


 


(dd)
No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Securities
by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Purchasers and
certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.


 


(ee)
Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any
agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful
payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate
funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf
of which the Company is aware) which is in violation of law or (iv) violated in any material respect any provision of FCPA.


 


(ff)
Accountants. The Company’s accounting firm is set forth on Schedule 3.1(ff) of the Disclosure Schedules. To the knowledge
and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall
express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year
ending December 31, 2021.


 




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(gg)
Seniority. As of the Closing Date, no Indebtedness or other claim against the Company is senior to the Notes in right of payment
or security, whether with respect to interest or upon liquidation or dissolution, or otherwise, other than indebtedness secured by purchase
money security interests (which is senior only as to underlying assets covered thereby) and capital lease obligations (which is senior
only as to the property covered thereby), subject to the Prestige Intercreditor Agreement.


 


(hh)
No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company
is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability to perform any
of its obligations under any of the Transaction Documents (subject to the customary inclusion of the payment of Company legal expenses
in connection with the transactions as part of the flow of funds at Closing).


 


(ii)
Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers
is acting solely in the capacity of an arms’ length purchaser with respect to the Transaction Documents and the transactions contemplated
thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or
any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby
is merely incidental to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser that the Company’s
decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the
transactions contemplated hereby by the Company and its representatives.


 


(jj)
Acknowledgment Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(except for Sections 3.2(g) and 4.15 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been
asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the
Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified
term, (ii) past or future open market or other transactions by any Purchaser, specifically including, without limitation, Short Sales
or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively
impact the market price of the Company’s publicly-traded securities, (iii) any Purchaser, and counter-parties in “derivative”
transactions to which any such Purchaser is a party, directly or indirectly, may presently have a “short” position in the
Common Stock and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party
in any “derivative” transaction. The Company further understands and acknowledges that (y) one or more Purchasers may engage
in hedging activities at various times during the period that the Securities are outstanding, including, without limitation, during the
periods that the value of the Warrant Shares deliverable with respect to Warrants are being determined, and (z) such hedging activities
(if any) could reduce the value of the existing stockholders’ equity interests in the Company at and after the time that the hedging
activities are being conducted. The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any
of the Transaction Documents.


 




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(kk)
Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any
of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities
of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Placement Agent in connection with the placement
of the Securities.


 


(ll)
FDA. As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under
the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured,
packaged, labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical
Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed
by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration,
investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices,
good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the failure
to be in compliance would not have a Material Adverse Effect. There is no pending, completed or, to the Company’s knowledge, threatened,
action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation)
against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received any notice, warning letter
or other communication from the FDA or any other governmental entity, which (i) contests the premarket clearance, licensure, registration,
or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and
promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws
or orders the withdrawal of advertising or sales promotional materials relating to, any Pharmaceutical Product, (iii) imposes a clinical
hold on any clinical investigation by the Company or any of its Subsidiaries, (iv) enjoins production at any facility of the Company
or any of its Subsidiaries, (v) enters or proposes to enter into a consent decree of permanent injunction with the Company or any of
its Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company or any of its Subsidiaries,
and which, either individually or in the aggregate, would have a Material Adverse Effect. The properties, business and operations of
the Company have been and are being conducted in all material respects in accordance with all applicable laws, rules and regulations
of the FDA. The Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United
States of any product proposed to be developed, produced or marketed by the Company nor has the FDA expressed any concern as to approving
or clearing for marketing any product being developed or proposed to be developed by the Company.


 




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(mm)
Stock Option Plans. Each stock option granted by the Company under the Company’s stock option plan was granted (i) in accordance
with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value of the
Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the
Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company
policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the
release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or
prospects.


 


(nn)
Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director,
officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).


 


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


 


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


 


(qq)
Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with
applicable financial record- keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended,
applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”),
and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company
or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.


 




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(rr)
No Disqualification Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506 under the
Securities Act, none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of
the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding voting equity
securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act)
connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person” and, together, “Issuer
Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii)
under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2)
or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification
Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the
Purchasers a copy of any disclosures provided thereunder.


 


(ss)
Other Covered Persons. Other than the Placement Agent, the Company is not aware of any person (other than any Issuer Covered Person)
that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any
Securities.


 


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


 


(uu)
Shell Company Status. The Company is not currently an issuer identified in, or subject to, Rule 144(i)(1) of the Securities Act,
and has satisfied the conditions of Rule 144(i)(2) of the Securities Act at least one year prior to the date hereof.


 


(vv)
PPP Loans. At the time of submission of the application for the PPP Loans, the Company believed in good faith that it is eligible
under the CARES Act to incur the PPP Loans. The proceeds of the PPP Loans were used for purposes permitted by the CARES Act. The Company
has made application to the Small Business Administration for forgiveness of the PPP Loans. All applications, documents and other information
submitted to the PPP Lender and any governmental or regulatory authority with respect to the PPP Loans (including forgiveness thereof)
were, or will be, true and correct in all material respects, in each case, at the time of submission.


 


3.2
Representations and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and
warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case
they shall be accurate as of such date):


 


(a)
Organization; Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited
liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents
and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance
by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate,
partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document to
which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof,
will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except
(i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies or (iii) insofar as indemnification and contribution provisions may be limited
by applicable law.


 




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(b)
Own Account. Such Purchaser understands that the Securities are “restricted securities” and have not been registered
under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and
not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable
state securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable
state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the
distribution of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty
not limiting such Purchaser’s right to sell the Securities pursuant to a registration statement or otherwise in compliance with
applicable federal and state securities laws). Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business.


 


(c)
Purchaser Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each
date on which it exercises any Warrants it will be an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3),
(a)(7), (a)(8), (a)(9), (a)(12) or (a)(13) under the Securities Act.


 


(d)
Experience of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication
and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of
an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.


 


(e)
General Solicitation. Such Purchaser is not, to such Purchaser’s knowledge, purchasing the Securities as a result of any
advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media
or broadcast over television or radio or presented at any seminar or, to the knowledge of such Purchaser, any other general solicitation
or general advertisement.


 




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(f)
Access to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including
all exhibits and schedules thereto) and the SEC Reports and has been afforded (i) the opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the
Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition,
results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that
is necessary to make an informed investment decision with respect to the investment. Such Purchaser acknowledges and agrees that neither
the Placement Agent nor any Affiliate of the Placement Agent has provided such Purchaser with any information or advice with respect
to the Securities nor is such information or advice necessary or desired. Neither the Placement Agent nor any Affiliate has made or makes
any representation as to the Company or the quality of the Securities and the Placement Agent and any Affiliate may have acquired non-public
information with respect to the Company which such Purchaser agrees need not be provided to it. In connection with the issuance of the
Securities to such Purchaser, neither the Placement Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to
such Purchaser. Such Purchaser acknowledges and agrees that the Company only has made the representations and warranties expressly set
forth herein and in the other Transaction Documents.


 


(g)
Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has
not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any
purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser
first received a term sheet (written or oral) from the Company or any other Person representing the Company, or provided to the Company
any such term sheet, setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the
execution hereof. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate
portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the
investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set
forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision
to purchase the Securities covered by this Agreement. Other than to other Persons party to this Agreement or to such Purchaser’s
representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates,
such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence
and terms of this transaction). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute
a representation or warranty against, or a prohibition of, any actions with respect to the borrowing of, arrangement to borrow, identification
of the availability of, and/or securing of, securities of the Company in order for such Purchaser (or its broker or other financial representative)
to effect Short Sales or similar transactions in the future.


 


(h)
As of the date of this Agreement, such Purchaser is not a “beneficial owner” (as such term is defined in Nevada Revised Statutes
78.414) of any shares of the capital stock or other securities of the Company.


 




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The
Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s
right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties
contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement
or the consummation of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained
herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order
to effect Short Sales or similar transactions in the future.


 


ARTICLE
IV.


OTHER
AGREEMENTS OF THE PARTIES


 


4.1
Transfer Restrictions.



 


(a)
The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in connection
with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion
of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the
Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and
shall have the rights and obligations of a Purchaser under this Agreement.


 


(b)
The Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities substantially
in the following form:


 


[NEITHER]
THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY [AND THE SECURITIES ISSUABLE UPON EXERCISE
OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY
SUCH SECURITIES.


 




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The
Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered
broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor”
as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, such Purchaser may transfer
pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company
and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no
notice shall be required of such pledge. At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable
documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities.


 


(c)
Certificates evidencing the Warrant Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof): (i)
while a registration statement covering the resale of such security is effective under the Securities Act, (ii) following any sale of
such Warrant Shares pursuant to Rule 144 (assuming cashless exercise of the Warrants), (iii) if such Warrant Shares are eligible for
sale under Rule 144 without any volume or manner of sale restrictions (assuming cashless exercise of the Warrants) or (iv) if such legend
is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by
the staff of the Commission). The Company shall cause its counsel to issue a legal opinion to the Transfer Agent or the Purchaser if
required by the Transfer Agent to effect the removal of the legend hereunder, or if requested by a Purchaser, respectively. If all or
any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the resale of the Warrant
Shares, or if such Warrant Shares may be sold under Rule 144 or if such legend is not otherwise required under applicable requirements
of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission) then such Warrant
Shares shall be issued free of all legends. The Company agrees that, at such time as such legend is no longer required under this Section
4.1(c), it will, no later than the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement
Period (as defined below) following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing Warrant
Shares, as applicable, issued with a restrictive legend (such date, the “Legend Removal Date”), deliver or cause to
be delivered to such Purchaser 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 the Transfer Agent that enlarge the restrictions on transfer set forth
in this Section 4. Certificates for Warrant Shares subject to legend removal hereunder shall be transmitted by the Transfer Agent to
the Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust Company System as directed by
such Purchaser. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a
number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery
of a certificate representing Warrant Shares, as applicable, issued with a restrictive legend.




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(d)
In addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, (i) as partial liquidated
damages and not as a penalty, for each $1,000 of Warrant Shares (based on the VWAP of the Common Stock on the date such Securities are
submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $10 per Trading Day (increasing
to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after the Legend Removal Date
until such certificate is delivered without a legend to the extent required by Section 4.1(c) above, and (ii) if the Company fails to
(a) issue and deliver (or cause to be delivered) to a Purchaser by the Legend Removal Date a certificate representing the Securities
so delivered to the Company by such Purchaser that is free from all restrictive and other legends and (b) if after the Legend Removal
Date such Purchaser purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale
by such Purchaser of all or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal
to all or any portion of the number of shares of Common Stock that such Purchaser anticipated receiving from the Company without any
restrictive legend, then, an amount equal to the excess of such Purchaser’s total purchase price (including brokerage commissions
and other out-of- pocket expenses, if any) for the shares of Common Stock so purchased (including brokerage commissions and other out-of-pocket
expenses, if any) (the “Buy-In Price”) over the product of (A) such number of Warrant Shares that the Company was
required to deliver to such Purchaser by the Legend Removal Date multiplied by (B) the lowest closing sale price of the Common Stock
on any Trading Day during the period commencing on the date of the delivery by such Purchaser to the Company of the applicable Warrant
Shares (as the case may be) and ending on the date of such delivery and payment under this clause (ii).


 


(e)
Each Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser 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, and acknowledges that the removal of the restrictive legend from certificates representing Securities
as set forth in this Section 4.1 is predicated upon the Company’s reliance upon this understanding.


 


(f)
Each Purchaser, severally and not jointly with the other Purchasers, agrees that prior to selling or transferring the Note held by such
Purchaser, in whole or in part, that it will first offer Ryan Drexler (“Drexler”) a right of first offer with respect
to such Note. Prior to transferring such Note to any Person, other than to one or more Affiliates of such Purchaser, such Purchaser will
give Drexler written notice (a “ROFO Request Notice”) granting Drexler the right to make an offer to such Purchaser
for the purchase of such Note from such Purchaser. Drexler will have two Business Days to make such an offer by delivering written notice
(a “ROFO Notice”) to such Purchaser, which offer must be denominated in US Dollars payable by wire transfer of immediately
available funds. If Drexler fails to deliver a ROFO Notice within two Business Days following the date of a ROFO Request Notice or such
offer does not meet the qualifications set forth above, Drexler shall forfeit all rights under this Section 4.1(f) with respect to such
Note. If Drexler delivers a proper ROFO Notice to such Purchaser, such Purchaser shall have five Business Days to accept or decline such
offer; provided that if such Purchaser does not explicitly accept such offer within five Business Days, such Purchaser shall be deemed
to have declined such offer. If such Purchaser wishes to accept such offer, such Purchaser shall deliver a written notice of acceptance
to Drexler indicating its acceptance of Drexler’s offer and the date of closing of the sale of such Note to Drexler (which date
shall be at least five (5) Business Days following delivery of such notice). If such Purchaser declines such offer, such Purchaser shall
deliver a written notice declining such offer to Drexler. Any Purchaser declining an offer by Drexler shall have 30 days to sell such
Note to any other Person for a purchase price greater than that offered by Drexler (or to one or more of such Purchaser’s Affiliates
as set forth below). After declining a proper offer by Drexler, such Purchaser shall not be permitted to sell or transfer such Note to
any Person, other than to one or more Affiliates of such Purchaser, for an aggregate purchaser price equal to or less than the purchase
price offered by Drexler in his ROFO Notice. If such Note is not sold to another Person for a price greater than the price offered by
Drexler within such 30-day period, prior to selling or transferring such Note in the future (other than to one or more of such Purchaser’s
Affiliates), such Purchaser shall be required to grant Drexler another opportunity to purchase such Note in accordance with the provisions
set forth in this Section 4.1(f). If a Purchaser wishes to transfer or sell its Note to one or more of its Affiliates, as a condition
to such transfer or sale, such Affiliate(s) shall take such Note subject to the provisions of this Section 4.1(f) and shall be obligated
to comply with the provisions of this Section 4.1(f) as if each such Affiliate(s) were the Purchaser hereunder.


 




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4.2
Acknowledgment of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding
shares of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its
obligations under the Transaction Documents, including, without limitation, its obligation to issue the Warrant Shares pursuant to the
Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless
of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless of the dilutive effect that
such issuance may have on the ownership of the other stockholders of the Company.


 


4.3
Furnishing of Information; Public Information.



 


(a)
If the Common Stock is not registered under Section 12(b) or 12(g) of the Exchange Act on the date hereof, the Company agrees to cause
the Common Stock to be registered under Section 12(g) of the Exchange Act on or before the 60th calendar day following the date hereof.
Until the time that the Warrants have expired or are no longer outstanding, the Company covenants to maintain the registration of the
Common Stock under Section 12(b) or 12(g) of the Exchange Act and to use reasonable best efforts to timely file (or obtain extensions
in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.


 




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(b)
At any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all of the
Securities may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction
or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public information requirement
under Rule 144(c) or (ii) has ever been an issuer described in Rule 144 (i)(1)(i) or becomes an issuer in the future, and the Company
shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public Information Failure”), then, in addition
to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and
not as a penalty, by reason of any such delay in or reduction of its ability to sell the Securities, an amount in cash equal to two percent
(2.0%) of the aggregate Exercise Price of such Purchaser’s Warrants on the day of a Public Information Failure and on every thirtieth
(30th) day (pro rated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information
Failure is cured and (b) such time that such public information is no longer required for the Purchasers to transfer the Warrant Shares
pursuant to Rule 144. The payments to which a Purchaser shall be entitled pursuant to this Section 4.3(b) are referred to herein as “Public
Information Failure Payments.” Public Information Failure Payments shall be paid on the earlier of (i) the last day of the
calendar month during which such Public Information Failure Payments are incurred and (ii) the third (3rd) Business Day after the event
or failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public Information
Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per month (prorated
for partial months) until paid in full. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Public
Information Failure, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief.


 


4.4
Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security
(as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would
require the registration under the Securities Act of the sale of the Securities or that would be integrated with the offer or sale of
the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior
to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.


 


4.5
Exercise Procedures. The form of Notice of Exercise included in the Warrants sets forth the totality of the procedures required
of the Purchasers in order to exercise the Warrants. Without limiting the preceding sentences, no ink-original Notice of Exercise shall
be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required
in order to exercise the Warrants. No additional legal opinion, other information or instructions shall be required of the Purchasers
to exercise their Warrants. The Company shall honor exercises of the Warrants and shall deliver Warrant Shares in accordance with the
terms, conditions and time periods set forth in the Transaction Documents.


 




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4.6
Securities Laws Disclosure; Publicity. The Company shall (a) by the Disclosure Time, issue a press release disclosing the material
terms of the transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents as exhibits
thereto, with the Commission within the time required by the Exchange Act. From and after the issuance of such press release and the
disclosure of certain information provided to the Purchasers that will be disclosed on or prior to October 31, 2021 (the “October
Disclosure”), the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information
delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees
or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the issuance of
such press release and the October Disclosure, the Company acknowledges and agrees that any and all confidentiality or similar obligations
under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors,
agents, employees or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall terminate
and be of no further force or effect. The Company and each Purchaser shall consult with each other in issuing any other press releases
with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor
otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser,
or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably
be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other
party with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose
the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading
Market, without the prior written consent of such Purchaser, except (a) as required by federal securities law in connection with the
filing of final Transaction Documents with the Commission and (b) to the extent such disclosure is required by law or Trading Market
regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause
(b) and reasonably cooperate with such Purchaser regarding such disclosure.


 


4.7
Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person,
that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by
the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving
Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers.


 




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4.8
Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents and the October Disclosure, which shall be disclosed pursuant to Section 4.6, the Company covenants and agrees that neither
it, nor any other Person acting on its behalf, will provide any Purchaser or its agents or counsel with any information that constitutes,
or the Company reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have consented
to the receipt of such information and agreed with the Company to keep such information confidential. The Company understands and confirms
that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent
that the Company, any of its Subsidiaries, or any of their respective officers, director, agents, employees or Affiliates delivers any
material, non-public information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that
such Purchaser shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers,
directors, agents, employees or Affiliates, or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors,
agents, employees or Affiliates not to trade on the basis of, such material, non-public information, provided that the Purchaser shall
remain subject to applicable law. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains,
material, non-public information regarding the Company or any Subsidiaries and the Purchaser has not explicitly consented in writing
to the receipt of such material non-public information, the Company shall simultaneously file such notice with the Commission pursuant
to a Current Report on Form 8-K. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant
in effecting transactions in securities of the Company.


 


4.9
Use of Proceeds. Except as set forth on Schedule 4.9 attached hereto, the Company shall use the net proceeds from the sale
of the Securities hereunder for working capital purposes and shall not use such proceeds: (a) for the redemption of any Common Stock
or Common Stock Equivalents, (b) for the settlement of any outstanding litigation or (c) in violation of FCPA or OFAC regulations.


 


4.10
Indemnification of Purchasers. Subject to the provisions of this Section 4.10, the Company will indemnify and hold each Purchaser
and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser
(within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding
a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any
and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in
settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or
incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company
in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or
any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect
to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of such Purchaser Party’s
representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may
have with any such stockholder or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser
Party which constitutes fraud, gross negligence or willful misconduct). If any action shall be brought against any Purchaser Party in
respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing,
and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser
Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to
assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict
on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall be
responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser
Party under this Agreement (y) for any settlement by such Purchaser Party effected without the Company’s prior written consent,
which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability
is attributable to such Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such
Purchaser Party in this Agreement or in the other Transaction Documents or any conduct by such Purchaser Party which constitutes fraud,
gross negligence or willful misconduct. The indemnification required by this Section 4.10 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills are received or are incurred. Each Purchaser Party hereby
agrees, to the extent that it is a recipient of any such periodic payments contemplated in the prior sentence to return such amounts
to the extent it is ultimately determined by a final non- appealable judgment of a court of competent jurisdiction that such Purchaser
Party is ultimately not entitled to indemnification hereunder. The indemnity agreements contained herein shall be in addition to any
cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject
to pursuant to law.


 




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4.11
Reservation and Listing of Securities.



 


(a)
The Company shall maintain a reserve of the Required Minimum from its duly authorized shares of Common Stock for issuance pursuant to
the Transaction Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents.


 


(b)
If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required Minimum
on such date, then the Board of Directors shall use commercially reasonable efforts to amend the Company’s certificate or articles
of incorporation to increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum at such time,
as soon as possible and in any event not later than the 75th day after such date.


 


(c)
The Company shall, if applicable: (i) in the time and manner required by the principal Trading Market, prepare and file with such Trading
Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required Minimum on
the date of such application, (ii) take all steps necessary to cause such shares of Common Stock to be approved for listing or quotation
on such Trading Market as soon as possible thereafter, (iii) provide to the Purchasers evidence of such listing or quotation and (iv)
maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum on such date on such Trading
Market or another Trading Market. The Company agrees to maintain the eligibility of the Common Stock for electronic transfer through
the Depository Trust Company or another established


clearing
corporation, including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing
corporation in connection with such electronic transfer.


 


4.12
Participation in Future Financing.



 


(a)
From the date hereof until the date that is the 18-month anniversary of the Closing Date, upon any issuance by the Company or any of
its Subsidiaries of Common Stock or Common Stock Equivalents for cash consideration, Indebtedness or a combination of units thereof (a
“Subsequent Financing”), each Purchaser shall have the right to participate in up to an amount of the Subsequent Financing
equal to 20% of the Subsequent Financing (the “Participation Maximum”) on the same terms, conditions and price provided
for in the Subsequent Financing.


 


(b)
Between the time period of 4:00 pm (New York City time) and 6:00 pm (New York City time) on the Trading Day immediately prior to the
Trading Day of the expected announcement of the Subsequent Financing (or, if the Trading Day of the expected announcement of the Subsequent
Financing is the first Trading Day following a holiday or a weekend (including a holiday weekend), between the time period of 4:00 pm
(New York City time) on the Trading Day immediately prior to such holiday or weekend and 2:00 pm (New York City time) on the day immediately
prior to the Trading Day of the expected announcement of the Subsequent Financing), the Company shall deliver to each Purchaser a written
notice of the Company’s intention to effect a Subsequent Financing (a “Subsequent Financing Notice”), which
notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised
thereunder and the Person or Persons through or with whom such Subsequent Financing is proposed to be effected and shall include a term
sheet and transaction documents relating thereto as an attachment.


 


(c)
Any Purchaser desiring to participate in such Subsequent Financing must provide written notice to the Company by 6:30 am (New York City
time) on the Trading Day following the date on which the Subsequent Financing Notice is delivered to such Purchaser (the “Notice
Termination Time”) that such Purchaser is willing to participate in the Subsequent Financing, the amount of such Purchaser’s
participation, and representing and warranting that such Purchaser has such funds ready, willing, and available for investment on the
terms set forth in the Subsequent Financing Notice. If the Company receives no such notice from a Purchaser as of such Notice Termination
Time, such Purchaser shall be deemed to have notified the Company that it does not elect to participate in such Subsequent Financing.


 


(d)
If, by the Notice Termination Time, notifications by the Purchasers of their willingness to participate in the Subsequent Financing (or
to cause their designees to participate) is, in the aggregate, less than the total amount of the Subsequent Financing, then the Company
may effect the remaining portion of such Subsequent Financing on the terms and with the Persons set forth in the Subsequent Financing
Notice.


 




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(e)
If, by the Notice Termination Time, the Company receives responses to a Subsequent Financing Notice from Purchasers seeking to purchase
more than the aggregate amount of the Participation Maximum, each such Purchaser shall have the right to purchase its Pro Rata Portion
(as defined below) of the Participation Maximum. “Pro Rata Portion” means the ratio of (x) the Subscription Amount
of Securities purchased on the Closing Date by a Purchaser participating under this Section 4.12 and (y) the sum of the aggregate Subscription
Amounts of Securities purchased on the Closing Date by all Purchasers participating under this Section 4.12.


 


(f)
The Company must provide the Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right of participation
set forth above in this Section 4.12, if the definitive agreement related to the initial Subsequent Financing Notice is not entered into
for any reason on the terms set forth in such Subsequent Financing Notice within two (2) Trading Days after the date of delivery of the
initial Subsequent Financing Notice.


 


(g)
The Company and each Purchaser agree that, if any Purchaser elects to participate in the Subsequent Financing, the transaction documents
related to the Subsequent Financing shall not include any term or provision that, directly or indirectly, will, or is intended to, exclude
one or more of the Purchasers from participating in a Subsequent Financing, including, but not limited to, provisions whereby such Purchaser
shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment
to or termination of, or grant any waiver, release or the like under or in connection with, this Agreement, without the prior written
consent of such Purchaser. In addition, the Company and each Purchaser agree that, in connection with a Subsequent Financing, the transaction
documents related to the Subsequent Financing shall include a requirement for the Company to issue a widely disseminated press release
by 9:30 am (New York City time) on the Trading Day of execution of the transaction documents in such Subsequent Financing (or, if the
date of execution is not a Trading Day, on the immediately following Trading Day) that discloses the material terms of the transactions
contemplated by the transaction documents in such Subsequent Financing.


 


(h)
Notwithstanding anything to the contrary in this Section 4.12 and unless otherwise agreed to by such Purchaser, the Company shall either
confirm in writing to such Purchaser that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly
disclose its intention to issue the securities in the Subsequent Financing, in either case in such a manner such that such Purchaser
will not be in possession of any material, non-public information, by 9:30 am (New York City time) on the second (2nd) Trading Day following
date of delivery of the Subsequent Financing Notice. If by 9:30 am (New York City time) on such second (2nd) Trading Day, no public disclosure
regarding a transaction with respect to the Subsequent Financing has been made, and no notice regarding the abandonment of such transaction
has been received by such Purchaser, such transaction shall be deemed to have been abandoned and such Purchaser shall not be deemed to
be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries.


 




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(i)
Notwithstanding the foregoing, this Section 4.12 shall not apply in respect of an Exempt Issuance.


 


4.13
Variable Rate Transactions. From the date hereof until such time as no Purchaser holds any of the Warrants, the Company shall
be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common
Stock or Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate
Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible
into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion
price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for
the shares of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise
or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security (other
than customary anti-dilution events in connection with stock splits, combinations, recapitalizations, reclassifications, dilutive issuances
and similar events) or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company
or the market for the Common Stock or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to,
an equity line of credit (but excluding an “at-the-market” offering; provided that such “at-the-market”
offering does not have any securities issuances until the one year anniversary of the Closing Date), whereby the Company may issue securities
at a future determined price. Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance,
which remedy shall be in addition to any right to collect damages.


 


4.14
Equal Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid
to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration
is also offered to all of the parties to such Transaction Documents. Further, the Company shall not make any payment of principal or
interest on the Notes in amounts which are disproportionate to the respective principal amounts outstanding on the Notes at any applicable
time. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated
separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed
as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.


 




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4.15
Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that
neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including
Short Sales, of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at
such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as
described in Section 4.6. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the
transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described
in Section 4.6, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included
in the Disclosure Schedules. Notwithstanding the foregoing, and notwithstanding anything contained in this Agreement to the contrary,
the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will
not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement
are first publicly announced pursuant to the initial press release as described in Section 4.6, (ii) no Purchaser shall be restricted
or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and
after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release
as described in Section 4.6 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the
Company to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates after
the issuance of the initial press release as described in Section 4.6. Notwithstanding the foregoing, in the case of a Purchaser that
is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and
the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of
such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio
manager that made the investment decision to purchase the Securities covered by this Agreement.


 


4.16
Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation
D and to provide a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers at the Closing under
applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly
upon request of any Purchaser.


 


4.17
Lock-Up Agreements. The Company shall not amend, modify, waive or terminate any provision of any of the Lock-Up Agreements except
to extend the term of the lock-up period and shall enforce the provisions of each Lock-Up Agreement in accordance with its terms. If
any party to a Lock-Up Agreement breaches any provision of a Lock-Up Agreement, the Company shall promptly use its best efforts to seek
specific performance of the terms of such Lock-Up Agreement.


 


4.18
Collateral Agent.



 


(a)
Each Purchaser hereby (a) appoints the Lead Investor as the collateral agent hereunder and under the Security Documents (in such capacity,
the “Collateral Agent”), and (b) authorizes the Collateral Agent (and its officers, directors, employees and agents)
to take such action on such Purchaser’s behalf in accordance with the terms hereof and thereof. The Collateral Agent shall not
have, by reason hereof or pursuant to any Security Documents, a fiduciary relationship in respect of any Purchaser. Neither the Collateral
Agent nor any of its officers, directors, employees and agents shall have any liability to any Purchaser for any action taken or omitted
to be taken in connection hereof or the Security Documents except to the extent caused by its own gross negligence or willful misconduct,
and each Purchaser agrees to defend, protect, indemnify and hold harmless the Collateral Agent and all of its officers, directors, employees
and agents (collectively, the “Collateral Agent Indemnitees”) from and against any losses, damages, liabilities, obligations,
penalties, actions, judgments, suits, fees, costs and expenses (including, without limitation, reasonable attorneys’ fees, costs
and expenses) incurred by such Collateral Agent Indemnitee, whether direct, indirect or consequential, arising from or in connection
with the performance by such Collateral Agent Indemnitee of the duties and obligations of Collateral Agent pursuant hereto or any of
the Security Documents.


 




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(b)
The Collateral Agent shall be entitled to rely upon any written notices, statements, certificates, orders or other documents or any telephone
message believed by it in good faith to be genuine and correct and to have been signed, sent or made by the proper Person, and with respect
to all matters pertaining to this Agreement or any of the other Transaction Documents and its duties hereunder or thereunder, upon advice
of counsel selected by it.


 


(c)
The Collateral Agent may resign from the performance of all its functions and duties hereunder and under the Notes and the Security Documents
at any time by giving at least ten (10) Business Days prior written notice to the Company and each holder of the Notes. Such resignation
shall take effect upon the acceptance by a successor Collateral Agent of appointment as provided below. Upon any such notice of resignation,
the Required Holders shall appoint a successor Collateral Agent. Upon the acceptance of the appointment as Collateral Agent, such successor
Collateral Agent shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Collateral Agent,
and the retiring Collateral Agent shall be discharged from its duties and obligations under this Agreement, the Notes and the Security
Agreement. After any Collateral Agent’s resignation hereunder, the provisions of this Section 4.18 shall inure to its benefit.
If a successor Collateral Agent shall not have been so appointed within said ten (10) Business Day period, the retiring Collateral Agent
shall then appoint a successor Collateral Agent who shall serve until such time, if any, as the Required Holders appoints a successor
Collateral Agent as provided above.


 


(d)
The Company hereby covenants and agrees to take all actions as promptly as practicable reasonably requested by either the Required Holders
or the Collateral Agent (or its successor), from time to time pursuant to the terms of this Section 4.18, to secure a successor Collateral
Agent satisfactory to such requesting part(y)(ies), in their sole discretion, including, without limitation, by paying all fees of such
successor Collateral Agent, by having the Company agree to indemnify any successor Collateral Agent and by each of the Company executing
a collateral agency agreement or similar agreement and/or any amendment to the Security Documents reasonably requested or required by
the successor Collateral Agent.


 


4.19
PPP Loans. The Company shall, (i) from time to time, timely and properly submit to the PPP Lender (and the Small Business Administration,
if applicable) all applications and documentation required to obtain forgiveness of the PPP Loans and (ii) upon receipt of a determination
of forgivness or non-forgiveness (or partial forgivness) from the PPP Lender (or the Small Business Administration, as applicable) promptly
file a Form 8-K disclosing such determination.


 




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ARTICLE
V. MISCELLANEOUS


 


5.1
Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without
any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the
Closing has not been consummated on or before the fifth (5th) Trading Day following the date hereof, provided, however,
that no such termination will affect the right of any party to sue for any breach by any other party (or parties).


 


5.2
Fees and Expenses. The Company shall reimburse the Lead Investor or its designee(s) for all costs and expenses up to the greater
of $50,000 and any other amount approved by the Company in writing, which may be by email (in addition to any other amounts paid to any
Purchaser or its counsel prior to the date of this Agreement) incurred in connection with the transactions contemplated by the Transaction
Documents (including all legal fees and disbursements in connection therewith, documentation and implementation of the transactions contemplated
by the Transaction Documents and due diligence in connection therewith), which amount may be withheld by such Purchaser from its Subscription
Amount at the Closing. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees,
or broker’s commissions (other than for Persons engaged by any Purchaser) relating to or arising out of the transactions contemplated
hereby, including, without limitation, any fees or commissions payable to the Placement Agent. The Company shall pay, and hold each Purchaser
harmless against, any liability, loss or expense (including, without limitation, reasonable attorney’s fees and out-of-pocket expenses)
arising in connection with any claim relating to any such payment. Except as expressly set forth in the Transaction Documents to the
contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall
pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered
by the Company and any exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the
delivery of any Securities to the Purchasers.


 


5.3
Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding
of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written,
with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.


 


5.4
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in
writing and shall be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is
delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached
hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day,


(b)
the next Trading Day after the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number
or email attachment as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New
York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices
and communications shall be as set forth on the signature pages attached hereto.


 




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5.5
Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument
signed, in the case of an amendment, by the Company and the Required Holders or, in the case of a waiver, by the party against whom enforcement
of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately and adversely impacts
a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be
required. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof,
nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. Any
amendment effected in accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the Company.


 


5.6
Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.


 


5.7
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and
permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent
of each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom
such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the
transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”


 


5.8
No Third Party Beneficiaries. The Placement Agent shall be the third-party beneficiary of the representations and warranties of
the Company in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. Drexler shall be the third-party
beneficiary of the provisions of Section 4.1(f). This Agreement is intended for the benefit of the parties hereto and their respective
successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except
as otherwise set forth in Section 4.10 and this Section 5.8.


 


5.9
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto
or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively
in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of
any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any claim that
it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding is improper or is an inconvenient
venue for such Proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law. If any party shall commence an Action or Proceeding to enforce any provisions of the Transaction
Documents, then, in addition to the obligations of the Company under Section 4.10, the prevailing party in such Action or Proceeding
shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other reasonable costs and expenses incurred
with the investigation, preparation and prosecution of such Action or Proceeding.


 




    	41



     


    

 


5.10
Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.


 


5.11
Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one
and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party,
it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature
page were an original thereof.


 


5.12
Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would
have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.


 


5.13
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions
of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may
rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election
in whole or in part without prejudice to its future actions and rights; provided, however, that, in the case of a rescission
of an exercise of a Warrant, the applicable Purchaser shall be required to return any shares of Common Stock subject to any such rescinded
exercise notice concurrently with the return to such Purchaser of the aggregate exercise price paid to the Company for such shares and
the restoration of such Purchaser’s right to acquire such shares pursuant to such Purchaser’s Warrant (including, issuance
of a replacement warrant certificate evidencing such restored right).


 




    	42



     


    

 


5.14
Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation),
or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to
the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also
pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.


 


5.15
Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages,
each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that
monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction
Documents and hereby agree to waive and not to assert in any Action for specific performance of any such obligation the defense that
a remedy at law would be adequate.


 


5.16
Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document
or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise
or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by
or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including,
without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such
restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not occurred.


 


5.17
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 Action or Proceeding that may be brought by any Purchaser 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 any Purchaser
with respect to indebtedness evidenced by the Transaction Documents, such excess shall be applied by such Purchaser to the unpaid principal
balance of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at such Purchaser’s election.


 




    	43



     


    

 


5.18
Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document
are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance
or non- performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other
Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as
a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way
acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each
Purchaser shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of
this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional
party in any Proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in its review and negotiation
of the Transaction Documents. The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the
convenience of the Company and not because it was required or requested to do so by any of the Purchasers. It is expressly understood
and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser,
solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers.


 


5.19
Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction
Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts
have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts
are due and payable shall have been canceled.


 


5.20
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business
Day.


 


5.21
Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise
the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each
and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the
date of this Agreement.


 


5.22
WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE
PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.


 


(Signature
Pages Follow)


 




    	44



     


    

 


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


 


	MusclePharm
    Corporation 	Address
    for Notice:

                                                          

    

	 	3753 Howard Hughes Parkway,

                                                         Suite 200-849, Las Vegas, NV 89169

	 	 
	By:	/s/
    Sabina Rizvi	

     

	Name:	Sabina
    Rizvi	Email:
    Sabina.Rizvi@musclepharm.com
	Title:	President
and Chief Financial Officer
	 
	 	 	 
	With
    a copy to (which shall not constitute notice):

    Michael
    Littenberg

    Ropes
    & Gray LLP

    1211
    Avenue of the Americas

    New
    York, NY 10036
	 


 


[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE
PAGE FOR PURCHASER FOLLOWS]


 




    	45



     


    

 


[Signature
Page to Securities Purchase Agreement]


 




    	46



     


    

 


[PURCHASER
SIGNATURE PAGES TO MSLP


SECURITIES
PURCHASE AGREEMENT]


 


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


 


Name
of Purchaser: Empery Master Onshore,
LLC


 


By:
Empery Asset Management, LP, its authorized agent


 


Signature
of Authorized Signatory of Purchaser:/s/ Brett Director


 


Name
of Authorized Signatory: Brett Director


 


Title
of Authorized
Signatory: General Counsel of Empery Asset Management, LP


 


	Address for Notice to
Purchaser:	c/o
Empery Asset Management, LP
	 	1
Rockefeller Plaza, Suite 1205
	 	New
York, NY 10020




 


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


Fidelity
Investments


Mailzone
KClN-CM


100
Crosby
Parkway


Covington
KY 41015


Attn:
James Flanigan


859-386-7577


 


Subscription
Amount: $668,000.00


 


Principal
Amount (Subscription
Amount / 0.86):
$776,744.19


 


Warrant
Shares: 1,644,483


 


EIN
Number: 82-2733964


 


[SIGNATURE
PAGES
CONTINUE]


 




    	47



     


    

 


[PURCHASER
SIGNATURE PAGES TO MSLP 

SECURITIES PURCHASE AGREEMENT]


 


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


 


Name
of Purchaser: Empery Tax Efficient, LP


 


By:
Empery Asset Management, LP, its authorized agent


 


Signature
of Authorized Signatory of Purchaser:/s/ Brett Director


 


Name
of Authorized Signatory: Brett Director


 


Title
of Authorized Signatory: General Counsel of Empery Asset Management, LP


 


	Address for Notice to Purchaser:	c/o Empery Asset Management, LP
	 	1
Rockefeller Plaza, Suite 1205
	 	New
York, NY 10020




 


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


Fidelity Investments


Mailzone
KC1N-CM


100 Crosby Parkway


Covington
KY 41015


Attn: James Flanigan


859-386-7577


 


Subscription
Amount: $200,000.00


 


Principal
Amount (Subscription Amount / 0.86): $232,558.14


 


Warrant Shares: 492,360


 


EIN
Number: 38-3922633


 


[SIGNATURE
PAGES CONTINUE]


 




    	48



     


    

 


[PURCHASER
SIGNATURE PAGES TO MSLP 

SECURITIES PURCHASE AGREEMENT]


 


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


 


Name
of Purchaser: Empery Tax Efficient III, LP


 


By:
Empery Asset Management, LP, its authorized agent


 


Signature
of Authorized Signatory of Purchaser: /s/ Brett Director


 


Name
of Authorized Signatory: Brett Director


 


Title
of Authorized Signatory: General Counsel of Empery Asset Management, LP


 


	Address for Notice to Purchaser:	c/o Empery Asset Management, LP
	 	1
Rockefeller Plaza, Suite 1205 
	 	New
York, NY I0020




 


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


Fidelity Investments


Mailzone
KCIN-CM


I00 Crosby Parkway


Covington KY 41015


Attn: James Flanigan


859-386-7577


 


Subscription
Amount: $232,000.00


 


Principal
Amount (Subscription Amount / 0.86): $269,767.44


 


Warrant Shares: 571,138


 


EIN
Number: 84-4411277


 


[SIGNATURE
PAGES CONTINUE]


 




    	49



     


    

 


[PURCHASER
SIGNATURE PAGES TO MSLP

 SECURITIES PURCHASE AGREEMENT]


 


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


 


Name
of Purchaser: Empery Debt Opportunity Fund, LP


 


By:
Empery Asset Management, LP, its authorized agent


 


Signature
of Authorized Signatory of Purchaser:/s/ Brett Director


 


Name
of Authorized Signatory: Brett Director


 


Title
of Authorized Signatory: General Counsel ofEmpery Asset Managemen,t LP


 


	Address for Notice to Purchaser:	c/o Empery Asset Managemen,t LP
	 	1
Rockefeller Plaza, Suite 1205
	 	New
York, NY 10020




 


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


Fidelity Investments


Mailzone
KClN-CM


100 Crosby Parkway


Covington
KY 41015


Attn: James Flanigan


859-386-7577


 


SubscriptionAmount:
$900,000.00


 


Principal
Amount (Subscription Amount / 0.86): $1,046,511.63


 


Warrant Shares: 2,215,621


 


EINNumber:
83-3945137


 




    	50



     


    

 


[PURCHASER
SIGNATURE PAGES TO MSLP

SECURITIES PURCHASE AGREEMENT]


 


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


 


Name
of Purchaser: Ionic Ventures, LLC 


 


Signature
of Authorized Signatory of Purchaser: /s/ Brendan O’Neil


 


Name
of Authorized Signatory: Brendan O’Neil


 


Title
of Authorized Signatory: Authorized Signatory


 


Email
Address of Authorized Signatory: brendan@ionicventures.com


 


	Address
  for Notice to Purchaser: 	3053
                                            Fillmore St., Suite 256

                                                                          San
                                            Francisco, CA 94123





 


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


 


Subscription
Amount: $ 500,000


 


Principal
Amount ([●] x Subscription Amount): $ 581,395.35


 


Warrant
Shares: 1,230,901


 


EIN
Number: 66-0889836


 


[SIGNATURE
PAGES CONTINUE]


 




    	51



     


    

 


[PURCHASER
SIGNATURE PAGES TO MSLP 

SECURITIES PURCHASE AGREEMENT]


 


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


 


Name
of Purchaser: ANSON INVESTMENTS MASTER FUND LP


 


Signature
of Authorized Signatory of Purchaser: /s/ Amin Nathoo


 


Name
of Authorized Signatory: AMIN NATHOO


 


Title
of Authorized Signatory: Director, Anson Advisors Inc.


 


Email
Address of Authorized Signatory: notices@ansonfunds.com


 


Facsimile
Number of Authorized Signatory: 416.352.1880


 


	Address for Notice to Purchaser:	155 UNIVERSITY AVENUE, SUITE 207
	 	TORONTO,
ONTARIO, CANADA
	 	 M5H 3B7
	 	ATTN:
AMIN NATHOO










 


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


 


Subscription
Amount: $750,000.00


 


Principal
Amount ([●] x Subscription Amount): $872,093.02


 


Warrant
Shares: 1,846,351


 


EIN
Number: 98-0538788



 


[SIGNATURE
PAGES CONTINUE]


 




    	52



     


    

 


[PURCHASER
SIGNATURE PAGES TO MSLP 

SECURITIES PURCHASE AGREEMENT]


 


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


 


Name
of Purchaser: CVI Investments, Inc. By: Heights Capital Management, Inc., its authorized agent


 


Signature
of Authorized Signatory of Purchaser: /s/ Martin Kobinger


 


Name
of Authorized Signatory: Martin Kobinger


 


Title
of Authorized Signatory: Investment Manager


 


Email
Address of Authorized Signatory: kobinger@sig.com and winer@sig.com


 


Address
for Notice to Purchaser:


 


c/o
Heights Capital Management, Inc.


101 California Street, Suite 3250


San
Francisco, CA 94111


 


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


 





Subscription
Amount: $500,000


 


Principal
Amount ([●] x Subscription Amount): $581,395.35


 


Warrant
Shares: 1,230,901


 


EIN
Number: 51 0395476


 


[SIGNATURE
PAGES CONTINUE]


 




    	53



     


    

 


[PURCHASER
SIGNATURE PAGES TO MSLP 

SECURITIES PURCHASE AGREEMENT]


 


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


 


Name
of Purchaser: HB Fund LLC


 


Signature
of Authorized Signatory of Purchaser: /s/ Richard Allison


 


Name
of Authorized Signatory: Richard Allison


 


Title
of Authorized Signatory: Authorized Signatory*


 


Email
Address of Authorized Signatory: investments@hudsonbaycapital.com


 


Address
for Notice to Purchaser:


 


c/o
Hudson Bay Capital Management LP


28 Havemeyer Place, 2nd Floor


Greenwich, CT 06830


 


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


 


For
physical certificates only: Citigroup Global Markets, Inc. 399 Park Ave.


Upper
Level C


New
York, NY 10022


Attn:
Transfer/Custody Dept.


 


Subscription
Amount: $500,000


 


Principal
Amount ([●] x Subscription Amount): $581,395.35


 


Warrant
Shares: 1,230,901


 


EIN
Number: ________


 


*
Authorized Signatory


Hudson
Bay Capital Management LP not individually, but solely as Investment Advisor to HB Fund LLC.


 


[SIGNATURE
PAGES CONTINUE]


 




    	54



     


    

 


[PURCHASER
SIGNATURE PAGES TO MSLP


SECURITIES PURCHASE AGREEMENT]


 


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


 


Name
of Purchaser: Intracoastal Capital LLC


 


Signature
of Authorized Signatory of Purchaser: /s/ Keith Goodman


 


Name
of Authorized Signatory: Keith Goodman


 


Title
of Authorized Signatory: Authorized Signatory


 


Email
Address of Authorized Signatory: kg@intracc.com


Address
for Notice to Purchaser:


 


2211A
Lakeside Drive Bannockburn, IL 60015


 


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





 


Subscription
Amount: $50,000.00


 


Principal
Amount (x Subscription Amount): $ 58,139.53


 


Warrant
Shares: 123,090


 


EIN
Number: 32-0460881


 


[SIGNATURE
PAGES CONTINUE]


 




    	55



     


    

 


[PURCHASER
SIGNATURE PAGES TO MSLP 

SECURITIES PURCHASE AGREEMENT]


 


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


 


Name
of Purchaser: Bigger Capital Fund, LP


 


Signature
of Authorized Signatory of Purchaser: /s/ Michael Bigger


 


Name
of Authorized Signatory: Michael Bigger


 


Title
of Authorized Signatory:  Managing Member of the GP


 


Email
Address of Authorized Signatory: michael@district2capital.com


 


Address
for Notice to Purchaser: 11700 West Charleston Blvd, #170-659, Las Vegas, NV, 89135


 


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


 


 


Subscription
Amount: $500,000


 


Principal
Amount ([●] x Subscription Amount): $581,395.35


 


Warrant
Shares: 1,230,901


 


EIN
Number: 90-0131165


 


[SIGNATURE
PAGES CONTINUE]


 




    	56



     


    

 


[PURCHASER
SIGNATURE PAGES TO MSLP

 SECURITIES PURCHASE AGREEMENT]


 


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


 


Name
of Purchaser: District 2 Capital Fund, LP


 


Signature
of Authorized Signatory of Purchaser: /s/ Michael Bigger


 


Name
of Authorized Signatory: Michael Bigger


 


Title
of Authorized Signatory:  Managing Member of the GP


 


Email
Address of Authorized Signatory: michael@district2capital.com


 


Address
for Notice to Purchaser: 175 West Carver Street, Huntington, NY 11743


 


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


 


Subscription
Amount: $750,000


 


Principal
Amount ([●] x Subscription Amount): $872,093.02


 


Warrant
Shares: 1,846,351


 


EIN
Number: 83-1305377


 




    	57



     


    

 


[PURCHASER
SIGNATURE PAGES TO MSLP SECURITIES PURCHASE AGREEMENT]


 


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


 


Name
of Purchaser: L1 Capital Global Opportunities Master Fund


 


Signature
of Authorized Signatory of Purchaser: /s/ David Feldman


 


Name
of Authorized Signatory: David Feldman


 


Title
of Authorized Signatory: Portfolio Manager


 


Email
Address of Authorized Signatory: dfeldman@l1capitalglobal.com


 


Address
for Notice to Purchaser:


 


1688
Meridian Avenue., Level 6


Miami Beach, FL 33139


 


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


 


Subscription
Amount: $ 500,000.00


 


Principal
Amount ([●] x Subscription Amount): $ 581,395.35


 


Warrant
Shares: 1,230,901


 


EIN
Number: 981241877


 


[SIGNATURE
PAGES CONTINUE]


 




    	58



     


    

 


[PURCHASER
SIGNATURE PAGES TO MSLP SECURITIES PURCHASE AGREEMENT]


 


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


 


Name
of Purchaser: Altium Growth Fund, LP


 


Signature
of Authorized Signatory of Purchaser: /s/ Mark Gottlieb


 


Name
of Authorized Signatory: Mark Gottlieb


 


Title of Authorized Signatory: COO


 


Email
Address of Authorized Signatory: mgottlieb@altiumcap.com


 


Address
for Notice to Purchaser:


 


Altium
Capital Management, LP


152 West 57th Street, 20th Floor


New York, NY 10019


 


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


 


DWAC for Shares:





MPID
Jefferies DTC 0019





Institutional
ID # 94199


Account # 433-00372


 


Subscription
Amount: $1,000,000


 


Principal
Amount ([●] x Subscription Amount): $ 1,162,790.70


 


Warrant
Shares: 2,461,801


 


EIN
Number: 822105101


 


[SIGNATURE
PAGES CONTINUE]


 




    	59



     


    

 


MUSCLEPHARM
CORP. DISCLOSURE SCHEDULES


 


This
Disclosure Schedule is made and given pursuant to the Securities Purchase Agreement, dated as of October 13, 2021 (the “Agreement”),
by and between MusclePharm Corp. (the “Company”), Empery Tax Efficient LP and the other parties thereto. All capitalized
terms used and not otherwise defined herein shall have the respective meanings specified in the Agreement.


 


The
section numbers below correspond to the section numbers of the representations and warranties in the Agreement.


 


Nothing
in this Disclosure Schedule is intended to broaden the scope of any representation or warranty contained in the Agreement or any other
transaction document or to create any covenant. Inclusion of any item in this Disclosure Schedule (1) does not represent a determination
that such item is material or establish a standard of materiality, (2) does not represent a determination that such item did not arise
in the ordinary course of business, (3) does not represent a determination that the transactions contemplated by the Agreement require
the consent of third parties, and (4) shall not constitute, or be deemed to be, an admission to any third party concerning such item.


 


This
Disclosure Schedule includes brief descriptions or summaries of certain agreements and instruments, copies of which are available upon
reasonable request. Such descriptions do not purport to be comprehensive, and are qualified in their entirety by reference to the text
of the documents described, true and complete copies of which have been provided as requested to the Purchasers or their respective counsel.


 




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Schedule
3.1(a)


 


Subsidiaries
of the Company:


 


Canada
MusclePharm Enterprises Corp. (Ontario, Canada)


 


MusclePharm Ireland Limited (Ireland) (currently being deregistered)


 


MusclePharm
Australia PTY LTD (Australia) (currently being deregistered)


 




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Schedule
3.1(g)


 


Capitalization
of the Company:


 


Common
stock, par value of $0.001 per share; 100,000,000 shares authorized.


 


	Total Shares Outstanding	 	 	34,348,891	 
	Treasury Shares	 	 	(869,005	)
	Shares held by Affiliates:	 	 	 	 
	Ryan Drexler	 	 	(16,879,253	)
	Total Shares held by non-Affiliates	 	 	16,600,633	 



 


Ryan
Drexler (See also Schedules 3.1(i), 3.1(r) and (bb))


 


November
29, 2020: the Company entered into a refinancing agreement with Ryan Drexler, in which the Company issued to Mr. Drexler a convertible
secured promissory note in the original principal amount of $2,871,967 (the “November 2020 Convertible Note”), which amended
and restated a convertible secured promissory note dated as of August 21, 2020. The $2.9 million November 2020 Convertible Note bears
interest at the rate of 12% per annum. Unless earlier converted or repaid, all outstanding principal and any accrued but unpaid interest
under the November 2020 Convertible Note was due and payable on July 1, 2021; however, the Company and Mr. Drexler agreed to an extension
until July 14, 2022. Any interest not paid when due shall be capitalized and added to the principal amount of the November 2020 Convertible
Note and bear interest on the applicable interest payment date along with all other unpaid principal, capitalized interest, and other
capitalized obligations.


 


Mr.
Drexler may, at any time, and from time to time, upon written notice to the Company, convert the outstanding principal and accrued interest
into shares of common stock, at a conversion price of $0.23 per share. At the election of the Company, one-sixth of the interest may
be paid in kind (“PIK Interest”) by adding such amount to the principal amount of the note, or through the issuance of shares
of the Company’s common stock to Mr. Drexler. The PIK Interest is convertible to common stock at the closing price per share on
the last business day of each calendar quarter. In no event will the conversion price of such PIK Interest be less than


 


$0.10.
The Company may prepay the Note by giving Mr. Drexler between 15- and 60-days’ notice depending upon the specific circumstances,
subject to Mr. Drexler’s conversion right. In accordance with the CEO Intercreditor Agreement and notwithstanding the preceding
text in this paragraph, the Company will pay all accrued and unpaid interest due on the August 2021 Convertible Note to Mr. Drexler immediately
after the occurrence of Full Payment (as defined in the CEO Intercreditor Agreement).


 


The
November 2020 Convertible Note contains customary restrictions on the ability of the Company to, among other things, grant liens or incur
indebtedness other than certain obligations incurred in the ordinary course of business. The restrictions are also subject to certain
additional qualifications and carveouts, as set forth in the November 2020 Convertible Note. The November 2020 Convertible Note is subordinated
to the secured borrowing arrangement the Company entered into with Prestige Capital Corporation (“Prestige”).


 




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August
13, 2021: the Company and Ryan Drexler agreed to extend the November 2020 Convertible Note through July 14, 2022. The amendment did not
change any terms of the agreement other than the maturity date.


 


August
13, 2021: the Company issued to Ryan Drexler a convertible secured promissory note (the “August 2021 Convertible Note”) in
the original principal amount of $2,457,549. The August 2021 Convertible Note bears interest at the rate of 12% per annum. Interest payments
are due on the last day of each calendar quarter. At the Company’s option (as determined by its independent directors), the Company
may repay up to one sixth of any interest payment by either adding such amount to the principal amount of the August 2021 Convertible
Note or by converting such interest amount into an equivalent amount of the Company’s common stock.


 


Any
interest not paid when due shall be capitalized and added to the principal amount of the August 2021 Convertible Note and bear interest
on the applicable interest payment date along with all other unpaid principal, capitalized interest, and other capitalized obligations.
Both the principal and any accrued but unpaid interest under the August 2021 Convertible Note will be due on July 14, 2022, unless converted
or repaid earlier. In accordance with the CEO Intercreditor Agreement and notwithstanding the preceding text in this paragraph, the Company
will pay all interest accrued and unpaid interest due on the August 2021 Convertible Note to Mr. Drexler immediately after the occurrence
of Full Payment (as defined in the CEO Intercreditor Agreement).


 


The
holder may, at any time, and from time to time, upon written notice to the Company, convert the outstanding principal and accrued interest
into shares of common stock, at a conversion price equal to the closing price of the common stock on October 15, 2021. The Company may
prepay the August 2021 Convertible Note by giving the holder between 15 and 60 days’ notice depending upon the specific circumstances,
subject to the holder’s conversion right.


 


The
August 2021 Convertible Note contains customary events of default, including, among others, the failure by the Company to make a payment
of principal or interest when due.


 


Following
an event of default, at the option of the holder and upon written notice to the Company, or automatically under certain circumstances,
all outstanding principal and accrued interest will become due and payable. The August 2021 Convertible Note also contains customary
restrictions on the ability of the Company to, among other things, grant liens or incur indebtedness other than certain obligations incurred
in the ordinary course of business. The restrictions are also subject to certain additional qualifications and carveouts, as set forth
in the August 2021 Convertible Note. The August 2021 Convertible Note is subordinated to certain other indebtedness of the Company.


 


Sabina
Rizvi


 


April
5, 2021: with the appointment of the Company’s President and Chief Financial Officer, the Company granted an award where, upon
the occurrence of a sale of the Company, the President and Chief Financial Officer will receive 2% of the fully diluted equity of the
Company. The grant will vest upon the one-year anniversary and if a sale transaction has not occurred by the two-year anniversary, then
the President and Chief Financial Officer shall have the option to convert the transaction equity bonus into common shares. See also
Schedule 3.1(i).


 




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Prestige
(See also Schedules 3.1(i) and (bb))


 


In
January 2016, the Company entered into a Purchase and Sale Agreement (the “Purchase and Sale Agreement”) with Prestige, pursuant
to which the Company agreed to sell and assign and Prestige agreed to buy and accept, certain accounts receivable owed to the Company
(“Accounts”). Under the terms of the Purchase and Sale Agreement, upon the receipt and acceptance of each assignment of Accounts,
Prestige will pay the Company 80% of the net face amount of the assigned Accounts, up to a maximum total borrowing of $12.5 million subject
to sufficient amounts of accounts receivable to secure the loan. The remaining 20% will be paid to the Company upon collection of the
assigned Accounts, less any chargebacks (including chargebacks for any customer amounts that remain outstanding for over 90 days), disputes,
or other amounts due to Prestige. Prestige’s purchase of the assigned Accounts from the Company will be at a discount fee which
varies from 0.7% to 4%, based on the number of days outstanding from the assignment of Accounts to collection of the assigned Accounts.
In addition, the Company granted Prestige a continuing security interest in and first priority lien upon all accounts receivable, inventory,
fixed assets, general intangibles, and other assets. Prestige will have no recourse against the Company if payments are not made due
to the insolvency of an account debtor within 90 days of invoice date, with the exception of international and certain domestic customers.
On April 10, 2019, the Company and Prestige amended the terms of the agreement. The agreement was extended until April 1, 2020 and automatically
renews for one (1) year periods unless either party receives written notice of cancellation from the other, at minimum, thirty (30) days
prior to the expiration date thereafter.


 


June
14, 2021: Prestige advanced the Company $1 million with a six-month term, 15% interest rate and 2% accommodation fee.


 


July
26, 2021: Prestige Capital advanced the Company $1 million with a six-month term and a 15% interest rate. In addition, there was an accommodation
fee equal to 1% of the amount advanced plus 18,750 stock options.


 


Lon
Snook


 


Entitled
to receive a grant of 25,000 RSU’s, which will vest at 100% on the 2nd anniversary of his start date. After 1 year of service,
he will receive an additional grant of 25,000 RSU’s, which will also vest at 100% on the 2nd anniversary of his start date. If
a sale of the company occurs prior to the 2nd year anniversary the RSU’s will automatically vest upon sale.


 


Janice
McCarthy


 


Will
receive a grant of 25,000 stock options, which will vest at 100% on the 2nd anniversary of his start date. In addition, he will be enrolled
in the Company’s stock option plan once finalized.


 




    	64



     


    

 


TJ
Dillashaw


 


Endorsement
Agreement, dated August 12, 2021, states Athlete will be provided 50,000 stock options with the following sales conditions: 1) 25,000
stock options to vest at $2.5 million in sales; and 2) 25,000 stock options to vest at $5 million in sales.


 


Joseph
Cannata


 


May
12, 2021: the Company entered into an Agreement with Cannata, pursuant to which the Company has engaged Cannata on a non-exclusive basis
to assist with the growth of the Company’s energy beverage product line. In connection with entry into the Agreement, the Company
issued to Cannata an option to purchase 1,673,994 shares of the Company’s common stock at a price per share of $1.12. The option
has an exercise term of 10 years (subject to potential acceleration upon a sale of the Company) and will vest in two equal tranches upon
the achievement of certain net revenue milestones related to the Company’s energy beverage products. In addition, the Company agreed
to make quarterly payments to Cannata during the term of the Agreement in amounts equal to 17.5% of the gross profit attributable to
the applicable products, excluding products sold through certain excluded sales channels. The Agreement continues in effect unless terminated
by the mutual agreement of the parties, upon the sale of the Company and upon other specified termination events. See also Schedule 3.1(i).


 


Additional
Beverage Executive


 


Additional
beverage executive to be named on or before Oct 30th on a non-exclusive basis to assist with the growth of the Company’s energy
beverage product line. In connection with entry into the Agreement, the Company will issue Stock options to purchase 1,673,994 shares
of the Company’s common stock at the closing price at the date of signing the option agreement. The option has an exercise term
of 10 years (subject to potential acceleration upon a sale of the Company) and will vest in two equal tranches upon the achievement of
certain net revenue milestones related to the Company’s energy beverage products. In addition, the Company will agree to make quarterly
payments to this additional executive during the term of the Agreement in amounts equal to 17.5% of the gross profit attributable to
the applicable products, excluding products sold through certain excluded sales channels. The Agreement continues in effect unless terminated
by the mutual agreement of the parties, upon the sale of the Company and upon other specified termination events.


 




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Schedule
3.1(i)


 


Material
Change; Undisclosed Events; Liabilities or Developments since the latest audited financial statements:


 


		1.	April
                                            1, 2021: Allen Sciarillo departed from his position as MusclePharm Corporation’s Chief
                                            Financial Officer.
	 	 	 
		2.	April
                                            5, 2021: MusclePharm Corporation appointed Ms. Sabina Rizvi as the Company’s President
                                            and Chief Financial Officer.
	 	 	 
		3.	April
                                            5, 2021: with the appointment of the Company’s President and Chief Financial Officer,
                                            the Company granted an award where, upon the occurrence of a sale of the Company, the President
                                            and Chief Financial Officer will receive 2% of the fully diluted equity of the Company. The
                                            grant will vest upon the one-year anniversary and if a sale transaction has not occurred
                                            by the two-year anniversary, then the President and Chief Financial Officer shall have the
                                            option to convert the transaction equity bonus into common shares. See also Schedule 3.1(g).
	 	 	 
		4.	May
                                            12, 2021: the Company entered into an Agreement with Cannata, pursuant to which the Company
                                            has engaged Cannata on a non-exclusive basis to assist with the growth of the Company’s
                                            energy beverage product line. In connection with entry into the Agreement, the Company issued
                                            to Cannata an option to purchase 1,673,994 shares of the Company’s common stock at
                                            a price per share of $1.12. The option has an exercise term of 10 years (subject to potential
                                            acceleration upon a sale of the Company) and will vest in two equal tranches upon the achievement
                                            of certain net revenue milestones related to the Company’s energy beverage products.
                                            In addition, the Company agreed to make quarterly payments to Cannata during the term of
                                            the Agreement in amounts equal to 17.5% of the gross profit attributable to the applicable
                                            products, excluding products sold through certain excluded sales channels. The Agreement
                                            continues in effect unless terminated by the mutual agreement of the parties, upon the sale
                                            of the Company and upon other specified termination events. See also Schedule 3.1(g).
	 	 	 
		5.	June
                                            1, 2021: John Desmond, Chair of the Audit Committee, a member of the Nominating & Corporate
                                            Governance Committee, and a member of the Compensation Committee of the Board of Directors
                                            (the “Board”) of the Company notified the Board of his resignation effective
                                            immediately.
	 	 	 
		6.	June
                                            1, 2021: the Board appointed Paul Karr to serve as a director until the Company’s 2021
                                            annual meeting of stockholders or his earlier death, resignation or removal. Mr. Karr will
                                            serve as the Chair of the Audit Committee, a member of the Nominating & Corporate Governance
                                            Committee, and a member of the Compensation Committee of the Board.
	 	 	 
		7.	June
                                            4, 2021: SingerLewak LLP was dismissed as the Company’s certifying accountant. The
                                            decision to dismiss SingerLewak LLP was made by the Audit Committee of the Board of Directors
                                            of the Company.
	 	 	 
		8.	June
                                            14, 2021: Prestige advanced the Company $1 million with a six-month term, 15% interest rate
                                            and 2% accommodation fee. See also Schedule 3.1(g) and 3.1(bb).
	 	 	 
		9.	July
                                            14, 2021: the Audit Committee executed an engagement letter with Moss Adams LLP to be the
                                            Company’s new certifying accountant for the year ending December 31, 2021.



 




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		10.	July
                                            26, 2021: Prestige Capital advanced the Company $1 million with a six-month term and a 15%
                                            interest rate. In addition, there was an accommodation fee equal to 1% of the amount advanced
                                            plus 18,750 stock options. See also Schedules 3.1(g) and (bb).
	 	 	 
		11.	August
                                            13, 2021: the Company and Ryan Drexler agreed to extend the November 2020 Convertible Note
                                            through July 14, 2022. See also Schedules 3.1(g), (r) and (bb).
	 	 	 
		12.	August
                                            13, 2021: the Company issued to Ryan Drexler a convertible secured promissory note (the “August
                                            2021 Convertible Note”) in the original principal amount of $2,457,549. See also Schedules 3.1(g), (r) and (bb).
	 	 	 
		13.	Sept
                                            23, 2021: NBF Holdings (“Nutrablend”) and the Company entered into an Amendment
                                            to a Settlement agreement. Pursuant to the amended agreement the Company is no longer obligated
                                            to issue Purchase Orders to Nutrablend. See also Schedule 3.1(j).
	 	 	 
		14.	Oct
                                            11, 2021: Prestige and the Company entered into a modification agreement that, among other
                                            things, provides for (1) extending the term 3 years until June 14, 2025, with automatic renewals
                                            for one year periods thereafter unless either party terminates, (2) payment of minimum discount
                                            fees of $300,000 for the 1st and 2nd year of the extension and $200,000 for the 3rd year
                                            of the extension and (3) extending the payment term of the June 14th and July 26th over advance
                                            to repayment at the end of the term of the notes to be issued in connection with this transaction.



 




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Schedule
3.1(j)


 


Litigation:


 


Manchester
City Football Group


 


On
July 28, 2017, the Company approved a Settlement Agreement (the “CFG Settlement Agreement”) with CFG effective July 7, 2017.
The CFG Settlement Agreement represents a full and final settlement of all litigation between the parties. Under the terms of the agreement,
the Company agreed to pay CFG a sum of $3 million, which was recorded as accrued expenses in 2017. The settlement consists of a $1 million
payment that was advanced by a related party on July 7, 2017, a $1 million installment paid on July 7, 2018 and a subsequent $1 million
installment payment to be paid by July 7, 2019. Of this amount, the Company has remitted $0.3 million.


 


During
the three months ended June 30, 2021 and 2020, the Company recorded a charge of $19,000 and $19,000, respectively and during the six
months ended June 30, 2021 and 2020, the Company recorded a charge of $38,000 and $38,000, respectively. This charge, representing imputed
interest, is included in “Interest and other expense, net” in the Company’s consolidated statements of operations.


 


Nutrablend
Matter


 


On
February 27, 2020, Nutrablend, a manufacturer of MusclePharm products, filed an action against the Company in the United States District
Court for the Eastern District of California, claiming approximately $3.1 million in allegedly unpaid invoices. These invoices relate
to the third and fourth quarter of 2019, and a liability has been recorded in the books for the related periods.


 


On
September 25, 2020, the parties successfully mediated the case to a settlement (the “Nutrablend Agreement”) and the Company
agreed to (i) pay approximately $3.1 million (“Owed Amount”) in monthly payments (“Monthly Payments”) from September
1, 2020 through June 30, 2023 and (ii) issue monthly purchase orders (“Purchase Orders”) at minimum amounts accepted by Nutrablend.


 


The
Company agreed to issue Purchase Orders in a combined total amount of at least (i) $1,500,000 from September 1, 2020 through
November 30, 2020; (ii) $1,800,000 from December 1, 2020 through February 28, 2021; (iii) $2,100,000 from March 31, 2021 through May
31, 2021; (iv) $2,100,000 from June 1, 2021 through August 31, 2021; and (v) $1,400,000 from September 1, 2021 through October 30,
2021. Beginning on November 1, 2021, the Company was required to issue monthly Purchase Orders to Nutrablend in a minimum amount of
$700,000 until the Owed Amount is paid in full to Nutrablend. In the event that the Company pays the Owed Amount in full before
September 1, 2021, its entitled to a rebate on all completed Purchase Orders. Further, once the monthly payments, and any additional
payments that the Company has made on the Owed Amount, reduce the outstanding balance of the Owed Amount to below $2.0 million, the
Company is eligible for an extension of a line of credit from Nutrablend in an amount of up to $3.0 million. See Schedule 3.1(i) for
a discussion of the modification to the Company’s obligation to issue Purchase Orders.


 




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4Excelsior
Matter


 


On
March 18, 2019, Excelsior Nutrition, Inc. (“4Excelsior”), a manufacturer of MusclePharm products, filed an action against
the Company in the Superior Court of the State of California for the County of Los Angeles, claiming approximately $6.2 million in damages
relating to allegedly unpaid invoices, as well as approximately $7.8 million in consequential damages.


 


On
December 16, 2020, the Company and 4Excelsior entered into a Settlement Agreement and Mutual Release (“the Agreement”), pursuant
to which the parties resolved and settled the civil action pending in the Superior Court of the State of California for the County of
Los Angeles (the “Litigation”). The parties agreed to a mutual general release of claims and to jointly file within 10 business
days of the effective date of the Agreement a stipulation and proposed order of dismissal, dismissing with prejudice all claims and counterclaims
asserted in the Litigation. The Company agreed to pay $4.75 million (the “Settlement Amount”) in four monthly payments of
$70,000, beginning January 5, 2021, and thereafter in monthly payments of $0.1 million until the Settlement Amount is fully paid. The
Company may prepay all or any portion of the Settlement Amount at any time without penalty or premium. The Agreement provides that, in
the event of a Default (as defined in the Agreement) by the Company, the entire outstanding balance of the Settlement Amount will become
immediately due and payable, plus accrued interest at a rate of 18% per annum, commencing from the date of default.


 


ThermoLife
International


 


In
January 2016, ThermoLife International LLC (“ThermoLife”), a supplier of nitrates to the Company, filed a complaint against
the Company in Arizona state court. ThermoLife alleged that the Company failed to meet minimum purchase requirements contained in the
parties’ supply agreement. The court held a bench trial on the issue of damages in October 2019, and on December 4, 2019, the court
entered judgment in favor of ThermoLife and against the Company in the amount of $1.6 million, comprised of $0.9 million in damages,
interest in the amount of $0.3 million and attorneys’ fees and costs in the amount of $0.4 million.


 


On
April 27, 2021, the appellate court issued a decision largely affirming the trial court judgement, except vacating the judgement’s
$0.3 million prejudgment interest award and remanding for a recalculation of prejudgment interest. On May 18, 2021, ThermoLife filed
a motion asking the trial court to increase the Company’s appeal bond to the full amount of the judgment, or $1.8 million, which
the Court denied on June 2, 2021.


 


On
June 25, 2021, the Company filed a petition for review in the Arizona Supreme Court requesting that the Court accept review of the appeal
affirming the judgment against the Company. ThermoLife opposed the petition for review on July 26, 2021. The Arizona Supreme Court has
not yet ruled on the Company’s petition for review.


 


White
Winston Select Asset Fund Series MP-18, LLC et al., v. MusclePharm Corp., et al., (Nev. Dist. Ct.; Cal. Superior Court; Colorado Dist.
Ct.; Mass. Super. Ct.)


 


On
August 21, 2018, White Winston Select Asset Fund Series MP-18, LLC and White Winston Select Asset Fund, LLC (together “White Winston”)
initiated a derivative action against the Company and its directors (the “director defendants”). White Winston alleges that
the director defendants breached their fiduciary duties by improperly approving the refinancing of three promissory notes issued by the
Company to Mr. Drexler in exchange for $18.0 million in loans. White Winston alleges that this refinancing improperly diluted their economic
and voting power and constituted an improper distribution in violation of Nevada law.


 




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On
June 17, 2019, White Winston moved for the appointment of a temporary receiver over the Company, citing the Company’s auditor’s
resignation. The court granted White Winston’s request to hold an evidentiary hearing on the motion, but subsequently stayed the
action pending the parties’ attempts to resolve their dispute. Although the parties have been unable to reach a resolution, the
litigation has not yet resumed. On July 30, 2019, White Winston filed an action in the Superior Court of the State of California in and
for the County of Los Angeles, seeking access to the Company’s books and records and requesting the appointment of an independent
auditor for the company. On February 25, 2021, the court ordered the Company to produce certain documents, denied White Winston’s
request for an auditor, and ordered the Company to pay a $1,500 penalty. On July 20, 2021 the California court awarded White Winston
$92,942 in attorneys’ fees and cost relating to the books-and-records action. The Company paid the amounts due on July 30, 2021,
and on August 4, 2021 White Winston submitted a filing acknowledging that the California court’s judgment has been fully satisfied.


 


IRS
Audit


 


On
April 6, 2016, the Internal Revenue Service (“IRS”) selected our 2014 Federal Income Tax Return for audit. As a result of
the audit, the IRS proposed certain adjustments with respect to the tax reporting of our former executives’ 2014 restricted stock
grants.


 


On
June 2, 2021, the IRS confirmed to the Company that the statutes of limitations for the assessment and collection of employment tax and
corporation income tax against the Company expired on December 15, 2020, without any assessments of tax or penalties. The IRS has told
the Company that the employment tax and corporation income tax cases against the Company have been closed with finality, and that the
Company has no liability for employment tax and corporation income tax for 2014.


 


The
remaining issue involved the fair market value of restricted stock units the Company granted to certain former officers (the
“Former Officers”) of the Company under Internal Revenue Code § 83. The Company and the IRS disagreed as to the
value of the restricted stock on the date of the grants, i.e., October 1, 2014. The Company and the IRS exchanged expert valuation
reports on the fair market value of the stock and had extensive negotiations on this issue. The IRS also made parallel claims
regarding the restricted stock units against the Former Officers of the Company. The IRS asserted that the Former Officers received
ordinary income from the stock grants, and that they owe additional personal income taxes based on the fair market value of the
stock. The Former Officers’ cases, unlike the Company’s case, are pending before the United States Tax Court. In the Tax
Court litigation, the Former Officers are challenging the IRS’s determinations regarding the fair market value of the
restricted stock grants on October 1, 2014. The Former Officers have separate counsel from the Company. The same IRS Appeals Officer
and Revenue Agents assigned to the Company’s case are also involved in the cases for the Former Officers. Throughout the
proceedings, the Company has argued to the IRS that it is the Former Officers who are directly and principally liable for the amount
of any tax due, and not the Company. The Tax Court has not set a trial dates in the cases of the Former Officers.


 


On
August 22, 2018, Richard Estalella filed an action against us and two other defendants in the Colorado District Court for the County
of Denver, seeking damages arising out of the IRS’s assertion of tax liability and penalties relating to the 2014 restricted stock
grants. The Company has answered Estalella’s complaint, asserted counterclaims against Estalella for his failure to ensure that
all withholding taxes were paid in connection with the 2014 restricted stock grants, and filed cross-claims against two valuation firms
named in the action (as well as their principals) for failing to properly value the 2014 restricted stock grants for tax purposes. Trial
in the matter has been scheduled for February 7, 2022.


 




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Schedule
3.1(r)


 


Transactions
with Affiliates and Employees:


 


Related-Party
Convertible Notes (See also Schedules 3.1(g), (i) and (bb))


 


On
November 29, 2020, the Company entered into a refinancing agreement with Ryan Drexler (the “November 2020 Refinancing”),
in which the Company issued to Mr. Drexler a convertible secured promissory note (the “November 2020 Convertible Note”) in
the original principal amount of $2,871,967. The November 2020 Convertible Note bears interest at the rate of 12% per annum. Unless earlier
converted or repaid, all outstanding principal and any accrued but unpaid interest under the November 2020 Convertible Note is due and
payable on July 14, 2022. Any interest not paid when due shall be capitalized and added to the principal amount of the November 2020
Convertible Note and bear interest on the applicable interest payment date along with all other unpaid principal, capitalized interest,
and other capitalized obligations.


 


The
holder may, at any time, and from time to time, upon written notice to the Company, convert the outstanding principal and accrued interest
into shares of common stock, at a conversion price of $0.23 per share. The November 2020 Convertible Note contains customary restrictions
on the ability of the Company to, among other things, grant liens or incur indebtedness other than certain obligations incurred in the
ordinary course of business. The restrictions are also subject to certain additional qualifications and carveouts, as set forth in the
November 2020 Convertible Note.


 


On
August 13, 2021, the Company issued to the holder a convertible secured promissory note (the “August 2021 Convertible Note”)
in the original principal amount of $2,457,549. The August 2021 Convertible Note bears interest at the rate of 12% per annum. Interest
payments are due on the last day of each calendar quarter. Any interest not paid when due shall be capitalized and added to the principal
amount of the August 2021 Convertible Note and bear interest on the applicable interest payment date along with all other unpaid principal,
capitalized interest, and other capitalized obligations. Both the principal and any accrued but unpaid interest under the August 2021
Convertible Note will be due on July 14, 2022, unless converted or repaid earlier.


 


The
holder may, at any time, and from time to time, upon written notice to the Company, convert the outstanding principal and accrued interest
into shares of common stock, at a conversion price equal to the closing price of the common stock on October 15, 2021. The August 2021
Convertible Note contains customary events of default, including, among others, the failure by the Company to make a payment of principal
or interest when due. The August 2021 Convertible Note also contains customary restrictions on the ability of the Company to, among other
things, grant liens or incur indebtedness other than certain obligations incurred in the ordinary course of business. The restrictions
are also subject to certain additional qualifications and carveouts, as set forth in the August 2021 Convertible Note.


 


In
accordance with the CEO Intercreditor Agreement and notwithstanding the preceding paragraphs in this Schedule 3.1(r), the Company will
pay all interest accrued and unpaid interest due on the Convertible Notes referenced in this Schedule 3.1(r) to Mr. Drexler immediately
after the occurrence of Full Payment (as defined in the CEO Intercreditor Agreement).


 




    	71



     


    

 


Schedule
3.1(w)


 


Registration
Rights:


 


None


 




    	72



     


    

 


Schedule
3.1(bb)


 


Secured
and unsecured Indebtedness:


 


	As of July 31, 2021	 	 	 
	Unsecured Indebtedness	 	 	Amount	 
	Accounts Payable	 	$	15,595,555	 
	Accured Expenses & Payroll	 	 	982,142	 
	Accrued Interest & Taxes	 	 	752,333	 
	NutraBlend Settlement	 	 	1,978,342	 
	4Excelsior Settlement	 	 	3,253,401	 
	Thermolife Judgement	 	 	1,363,676	 
	Manchester City Football	 	 	730,161	 
	PPP Loan	 	 	964,910	 
	 	 	$	25,620,520	 
	 	 	 	 	 
	Secured Indebtness	 	 	 	 
	Prestige Capital	 	$	5,933,685	 
	Shareholder Convertible Note	 	 	2,871,967	 
	Shareholder Line of Credit	 	 	2,407,549	 
	 	 	$	11,213,200	 
	 	 	 	 	 
	Total Indebtedness	 	$	36,833,721	 
	 	 	 	 	 
	Note: does not include operating leases	 	 	 	 



 


Indebtedness
for Borrowed Money


 


Prestige
(See also Schedules 3.1(g) and 3.1(i))


 


In
January 2016, the Company entered into a Purchase and Sale Agreement (the “Purchase and Sale Agreement”) with Prestige, pursuant
to which the Company agreed to sell and assign and Prestige agreed to buy and accept, certain accounts receivable owed to the Company
(“Accounts”). Under the terms of the Purchase and Sale Agreement, upon the receipt and acceptance of each assignment of Accounts,
Prestige will pay the Company 80% of the net face amount of the assigned Accounts, up to a maximum total borrowing of $12.5 million subject
to sufficient amounts of accounts receivable to secure the loan. The remaining 20% will be paid to the Company upon collection of the
assigned Accounts, less any chargebacks (including chargebacks for any customer amounts that remain outstanding for over 90 days), disputes,
or other amounts due to Prestige. Prestige’s purchase of the assigned Accounts from the Company will be at a discount fee which
varies from 0.7% to 4%, based on the number of days outstanding from the assignment of Accounts to collection of the assigned Accounts.
In addition, the Company granted Prestige a continuing security interest in and first priority lien upon all accounts receivable, inventory,
fixed assets, general intangibles, and other assets. Prestige will have no recourse against the Company if payments are not made due
to the insolvency of an account debtor within 90 days of invoice date, with the exception of international and certain domestic customers.
On April 10, 2019, the Company and Prestige amended the terms of the agreement. The agreement was extended until April 1, 2020 and automatically
renews for one (1) year periods unless either party receives written notice of cancellation from the other, at minimum, thirty (30) days
prior to the expiration date thereafter.


 




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On
June 14, 2021, Prestige advanced the Company $1 million with a six-month term, 15% interest rate and 2% accommodation fee.


 


On
July 26, 2021, Prestige Capital advanced the Company $1 million with a six-month term and a 15% interest rate. In addition, there was
an accommodation fee equal to 1% of the amount advanced plus 18,750 stock options.


 


On
October 12, 2021: Prestige and the Company entered into a modification agreement that, among other things, provides for (1) extending
the term 3 years until June 14, 2025, with automatic renewals for one year periods thereafter unless either party terminates, (2) payment
of minimum discount fees of $300,000 for the 1st and 2nd year of the extension and $200,000 for the 3rd year of the extension and (3)
extending the payment term of the June 14th and July 26th over advance to repayment at the end of the notes to be issued in connection
with this transaction.


 


Ryan
Drexler (See also Schedules 3.1(g), 3.1(i) and 3.1(r))


 


November
29, 2020: the Company entered into a refinancing agreement with Ryan Drexler, in which the Company issued to Mr. Drexler a convertible
secured promissory note in the original principal amount of $2,871,967 (the “November 2020 Convertible Note”), which amended
and restated a convertible secured promissory note dated as of August 21, 2020. The $2.9 million November 2020 Convertible Note bears
interest at the rate of 12% per annum. Unless earlier converted or repaid, all outstanding principal and any accrued but unpaid interest
under the November 2020 Convertible Note was due and payable on July 1, 2021; however, the Company and Mr. Drexler agreed to an extension
until July 14, 2022. Any interest not paid when due shall be capitalized and added to the principal amount of the November 2020 Convertible
Note and bear interest on the applicable interest payment date along with all other unpaid principal, capitalized interest, and other
capitalized obligations.


 


Mr.
Drexler may, at any time, and from time to time, upon written notice to the Company, convert the outstanding principal and accrued interest
into shares of common stock, at a conversion price of $0.23 per share. At the election of the Company, one-sixth of the interest may
be paid in kind (“PIK Interest”) by adding such amount to the principal amount of the note, or through the issuance of shares
of the Company’s common stock to Mr. Drexler. The PIK Interest is convertible to common stock at the closing price per share on
the last business day of each calendar quarter. In no event will the conversion price of such PIK Interest be less than $0.10. The Company
may prepay the Note by giving Mr. Drexler between 15- and 60-days’ notice depending upon the specific circumstances, subject to
Mr. Drexler’s conversion right. The Company intends to pay all interest due on the Convertible Note to Mr. Drexler at the end of
each calendar quarter.


 




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The
November 2020 Convertible Note contains customary restrictions on the ability of the Company to, among other things, grant liens or incur
indebtedness other than certain obligations incurred in the ordinary course of business. The restrictions are also subject to certain
additional qualifications and carveouts, as set forth in the November 2020 Convertible Note. The November 2020 Convertible Note is subordinated
to the secured borrowing arrangement the Company entered into with Prestige Capital Corporation (“Prestige”).


 


August
13, 2021: the Company and Ryan Drexler agreed to extend the November 2020 Convertible Note through July 14, 2022. The amendment did not
change any terms of the agreement other than the maturity date.


 


August
13, 2021: the Company issued to Ryan Drexler a convertible secured promissory note (the “August 2021 Convertible Note”) in
the original principal amount of $2,457,549. The August 2021 Convertible Note bears interest at the rate of 12% per annum. Interest payments
are due on the last day of each calendar quarter. At the Company’s option (as determined by its independent directors), the Company
may repay up to one sixth of any interest payment by either adding such amount to the principal amount of the August 2021 Convertible
Note or by converting such interest amount into an equivalent amount of the Company’s common stock.


 


Any
interest not paid when due shall be capitalized and added to the principal amount of the August 2021 Convertible Note and bear interest
on the applicable interest payment date along with all other unpaid principal, capitalized interest, and other capitalized obligations.
Both the principal and any accrued but unpaid interest under the August 2021 Convertible Note will be due on July 14, 2022, unless converted
or repaid earlier.


 


The
holder may, at any time, and from time to time, upon written notice to the Company, convert the outstanding principal and accrued interest
into shares of common stock, at a conversion price equal to the closing price of the common stock on October 15, 2021. The Company may
prepay the August 2021 Convertible Note by giving the holder between 15 and 60 days’ notice depending upon the specific circumstances,
subject to the holder’s conversion right.


 


The
August 2021 Convertible Note contains customary events of default, including, among others, the failure by the Company to make a payment
of principal or interest when due.


 


Following
an event of default, at the option of the holder and upon written notice to the Company, or automatically under certain circumstances,
all outstanding principal and accrued interest will become due and payable. The August 2021 Convertible Note also contains customary
restrictions on the ability of the Company to, among other things, grant liens or incur indebtedness other than certain obligations incurred
in the ordinary course of business. The restrictions are also subject to certain additional qualifications and carveouts, as set forth
in the August 2021 Convertible Note. The August 2021 Convertible Note is subordinated to certain other indebtedness of the Company.


 




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Paycheck
Protection Program Loan


 


Due
to economic uncertainty as a result of the ongoing pandemic (COVID-19), on May 14, 2020, the Company received an aggregate principal
amount of $964,910 pursuant to the borrowing arrangement (“Note”) with Harvest Small Business Finance, LLC (“HSBF”)
and agreed to pay the principal amount plus interest at a 1% fixed interest rate per year, on the unpaid principal balance. The Note
includes forgiveness provisions in accordance with the requirements of the Paycheck Protection Program, Section 1106 of the CARES Act.


 


The
Note is expected to mature on May 16, 2025. Payments were due by November 16, 2020 (the “Deferment Period”) and interest
was accrued during the Deferment Period. However, the Flexibility Act, which was signed into law on June 5, 2020, extended the Deferment
Period to the date that the forgiven amount is remitted by the United States Small Business Administration (“SBA”) to HSBF.
On August 30, 2021, the Company filed the PPP Loan Forgiveness application.


 


Schedule
3.1(ff)


 


Company’s
Accounting Firm:


 


Moss
Adams, LLP


2040
Main Street, Suite 900


Irvine,
CA 92614


 




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Schedule
4.9


 


Use
of Proceeds:


 


The
company intends to use the funds for general working capital purposes, including sales and marketing relating to the Company’s
energy products.


 




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