ex10-1





  Exhibit
10.1








SECURITIES PURCHASE AGREEMENT


 


 


This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of March
19, 2021, is made by and among Charlie's Holdings, Inc., a
corporation organized under the laws of the State of Nevada (the
“Company”) and
each of the purchasers (individually, a “Purchaser” and collectively the
“Purchasers”)
set forth in the execution pages hereof (each, an
“Execution
Page” and collectively the “Execution Pages”).


 



RECITALS


 


WHEREAS, the Company and the Purchasers
are executing and delivering this Agreement in reliance upon the
exemption from securities registration afforded by the provisions
of Regulation D (“Regulation
D”), as promulgated by the United States Securities
and Exchange Commission (the “SEC”) under the Securities Act of
1933, as amended (the “Securities Act”);

 


WHEREAS, upon satisfaction of certain
conditions, the Purchasers, severally and not jointly, desire to
purchase, and the Company desires to issue and sell to the
Purchasers, upon the terms and subject to the conditions set forth
in this Agreement, an aggregate of 351,699,883 shares (the
“Shares”) of
the Company’s common stock, par value $0.001 per share
(“Common
Stock”).

 


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


 

1. INVESTMENTS.

 

(a) Purchase Price. Subject to the
terms and conditions hereof, upon Closing (as defined below), the
Company shall issue and sell to each Purchaser, and each Purchaser,
severally and not jointly, shall purchase from the Company, that
number of set forth on such Purchaser’s Execution Page, for a
purchase price (as to each Purchaser, the “Purchase Price”) equal to
$0.00853 per Share.

 

(b) Method of Funding. Upon
satisfaction of the conditions precedent set forth in Sections 6
and 7 below (the "Closing"), each Purchaser shall fund
the Purchase Price for the Shares to be issued and sold to such
Purchaser on or before the Closing by wire transfer of immediately
available funds to the Company using the wire instructions attached
hereto as Exhibit
A.

 

(c) Delivery of Securities. At
Closing, the Company shall deliver to each Purchaser the Shares
purchased.

 

2. PURCHASERS’ REPRESENTATIONS AND
WARRANTIES.

 


Each
Purchaser, severally, but not jointly, represents and warrants to
the Company as follows:


 

(a) Purchase for Own Account, Etc.
Such Purchaser is purchasing the Shares for such Purchaser’s
own account for investment purposes only and not with a view
towards the public sale or distribution thereof, except pursuant to
sales that are exempt from the registration requirements of the
Securities Act and/or sales registered under the Securities Act.
Such Purchaser has substantial experience in evaluating and
investing in private placement transactions of securities in
companies similar to the Company, and is capable of evaluating the
merits and risks of its investment in the Company. Such Purchaser
understands that it must bear the economic risk of this investment
indefinitely, unless the Shares are registered pursuant to the
Securities Act and any applicable state securities or blue sky laws
or an exemption from such registration is available, and that the
Company has no present intention of registering the resale of any
such Shares. Notwithstanding anything in this Section 2(a) to the
contrary, by making the representations herein, such Purchaser does
not agree to hold the Shares for any minimum or other specific term
and reserves the right to dispose of the Shares at any time in
accordance with or pursuant to a registration statement or an
exemption from the registration requirements under the Securities
Act.

 




 








 





 

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

 

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

 

(d) Information. All materials
relating to the business, finances and operations of the Company
(including the Company’s most recent Annual Report on Form
10-K and most recent Quarterly Report on Form 10-Q) and materials
relating to the offer and sale of the Shares which have been
specifically requested by such Purchaser or its counsel have been
made available to such Purchaser and its counsel, if any. Neither
such inquiries nor any other investigation conducted by such
Purchaser or its counsel or any of such Purchaser’s
representatives shall modify, amend or affect such
Purchaser’s right to rely on the Company’s
representations and warranties contained in Section 3 below. Such Purchaser
understands that its investment in the Shares involves a high
degree of risk, including the risk of loss of its entire investment
in the Shares.

 

(e) Governmental Review. Such
Purchaser understands that no United States federal or state agency
or any other government or governmental agency has passed upon or
made any recommendation or endorsement of the Shares.

 

(f) Transfer or Resale. Such
Purchaser understands that (i) the sale or resale of the Shares
have not been and are not being registered under the Securities Act
or any state securities laws, and the Shares may not be transferred
unless (A) the transfer is made pursuant to and as set forth in an
effective registration statement under the Securities Act covering
the Shares; or (B) such Purchaser shall have delivered to the
Company an opinion of counsel (which opinion shall be in form,
substance and scope customary for opinions of counsel in comparable
transactions) to the effect that the Shares to be sold or
transferred may be sold or transferred pursuant to an exemption
from such registration; or (C) sold under and in compliance with
Rule 144 promulgated under the Securities Act (including any
successor rule, “Rule
144”); or (D) sold or transferred to an affiliate of
such Purchaser that agrees to sell or otherwise transfer the Shares
only in accordance with the provisions of this Section 2(f) and
that is an Accredited Investor; and (ii) neither the Company nor
any other person is under any obligation to register such Shares
under the Securities Act or any state securities laws.
Notwithstanding the foregoing or anything else contained herein to
the contrary, the Shares may be pledged as collateral in connection
with a bona fide margin account or other lending arrangement,
provided such pledge is consistent with applicable laws, rules and
regulations.

 

(g) Legends. Such Purchaser
understands that the Shares have not been registered under the
Securities Act (including registration pursuant to Rule 416
thereunder) or otherwise may be sold by such Purchaser under Rule
144, the certificates for the Shares may bear a restrictive legend
in substantially the following form:

 


THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR IN ANY OTHER
JURISDICTION. THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED,
SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS
UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE
LAWS.


 


 








 








 






 


The
Company shall, within five business days after any registration
statement covering the Shares is declared effective, deliver to its
transfer agent an opinion letter of counsel, opining that at any
time such registration statement is effective, the transfer agent
shall issue, in connection with the issuance of the Conversion
Shares, certificates representing such Conversion Shares without
the restrictive legend above, provided such Conversion Shares are
to be sold pursuant to the prospectus contained in such
registration statement. Upon receipt of such opinion, the Company
shall cause the transfer agent to confirm, for the benefit of the
holders, that no further opinion of counsel is required at the time
of transfer in order to issue such shares without such restrictive
legend.


 


The
legend set forth above shall be removed and the Company shall issue
a certificate without such legend to the holder of any Security
upon which it is stamped, if, unless otherwise required by state
securities laws, (i) the sale of such Security is registered under
the Securities Act (including registration pursuant to Rule 416
thereunder); (ii) such holder provides the Company with an opinion
of counsel, in form, substance and scope customary for opinions of
counsel in comparable transactions, to the effect that a public
sale or transfer of such Security may be made without registration
under the Securities Act; or (iii) such holder provides the Company
with reasonable assurances that such Security can be sold under
Rule 144. In the event the above legend is removed from any
Security and thereafter the effectiveness of a registration
statement covering such Security is suspended or the Company
determines that a supplement or amendment thereto is required by
applicable securities laws, then, upon reasonable advance written
notice to such Purchaser, the Company may require that the above
legend be placed on any such Security that cannot then be sold
pursuant to an effective registration statement or under Rule 144
and such Purchaser shall cooperate in the replacement of such
legend. Such legend shall thereafter be removed when such Security
may again be sold pursuant to an effective registration statement
or under Rule 144.


 

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

 

(i) Residency. Such Purchaser is a
resident of the jurisdiction set forth under such Purchaser’s
name on the Execution Page hereto executed by such
Purchaser.

 

3. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY.

 


Except
as set forth on a Disclosure Schedule executed and delivered by the
Company to each Purchaser (the “Disclosure Schedule”), the
Company represents and warrants to each Purchaser as
follows:


 

(a) Organization and Qualification;
Subsidiaries. The Company and each of its subsidiaries
(collectively, the “Subsidiaries”) is a corporation
duly organized and existing in good standing under the laws of the
jurisdiction in which it is incorporated or organized, and has the
requisite corporate power to own its properties and to carry on its
business as now being conducted. The Company and each of its
Subsidiaries is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in which the
nature of the business conducted by it makes such qualification
necessary and where the failure so to qualify would have, or would
reasonably be expected to result in, a Material Adverse Effect. For
purposes of this Agreement, “Material Adverse Effect” means
any material adverse effect on (i) the Shares, (ii) the ability of
the Company to perform its obligations under this Agreement or the
other Transaction Documents or (iii) the business, operations,
properties, prospects, financial condition or results of operations
of the Company and its Subsidiaries, taken as a whole. Other than
the Subsidiaries set forth on the Disclosure Schedule, the Company
has no subsidiaries.

 








 








 





 

(b) Authorization; Enforcement. (i)
The Company has the requisite corporate power and authority to
enter into and perform its obligations under this Agreement, to
issue and sell the Shares in accordance with the terms hereof; (ii)
the execution, delivery and performance of this Agreement by the
Company and the consummation by it of the transactions contemplated
hereby and thereby (including, without limitation, the issuance of
the Shares, and the issuance and reservation for issuance of the
Conversion Shares) have been duly authorized by the Company’s
Board of Directors and no further consent or authorization of the
Company, its Board of Directors, or any committee of the Board of
Directors is required, and (iii) this Agreement constitutes the
valid and binding obligations of the Company enforceable against
the Company in accordance with their terms, except as such
enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally,
the enforcement of creditors’ rights and remedies. Neither
the execution, delivery or performance by the Company of its
obligations under this Agreement, nor the consummation by it of the
transactions contemplated hereby (including, without limitation,
the issuance of the Shares) requires any consent or authorization
of the Company’s stockholders.

 

(c) Issuance of Shares. The Shares
as duly authorized and, upon issuance in accordance with the terms
of this Agreement, (i) will be validly issued and free from all
taxes, liens, claims and encumbrances (other than restrictions on
transfer contained in this Agreement or the Certificate of
Designation), (ii) will not be subject to preemptive rights, rights
of first refusal or other similar rights of stockholders of the
Company or any other person and (iii) will not impose personal
liability on the holder thereof. The Shares are duly authorized and
reserved for issuance, and (x) will be validly issued, fully paid
and non-assessable, and free from all taxes, liens, claims and
encumbrances (other than restrictions on transfer contained in this
Agreement), (y) will not be subject to preemptive rights, rights of
first refusal or other similar rights of stockholders of the
Company or any other person and (z) will not impose personal
liability upon the holder thereof. Except for the filing of any
notice prior or subsequent to the Closing that may be required
under applicable state and/or federal securities laws (or
comparable laws of any other jurisdiction), no authorization,
consent, approval, license, exemption of or filing or registration
with any court or governmental department, commission, board,
bureau, agency, instrumentality or other third party, is or will be
necessary for, or in connection with, the execution and delivery by
the Company of this Agreement, for the offer, issue, sale,
execution or delivery of the Shares, or for the performance by the
Company of its obligations under this Agreement. No “bad
actor” disqualifying event described in Rule
506(d)(1)(i)-(viii) of the Securities Act (a “Disqualification Event”) is
applicable to the Company or, to the Company’s knowledge, any
Person listed in the first paragraph of Rule 506(d)(1), except for
a Disqualification Event as to which Rule 506(d)(2)(ii–iv) or
(d)(3), is applicable.

 

(d) No Conflicts. Except as set
forth in Section
3(e) of the Disclosure Schedule, the execution, delivery and
performance of this Agreement by the Company and the consummation
by the Company of the transactions contemplated hereby (including,
without limitation, the issuance of the Shares, and the issuance
and reservation for issuance of the Conversion Shares) will not (i)
result in a violation of the Articles of Incorporation or Bylaws,
(ii) conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration
or cancellation of, any agreement, indenture or instrument to which
the Company or any of its Subsidiaries is a party, (iii) result in
a violation of any law, rule, regulation, order, judgment or decree
(including United States federal and state securities laws, rules
and regulations and rules and regulations of any self-regulatory
organizations to which either the Company or its securities are
subject) applicable to the Company or any of its Subsidiaries or by
which any property or asset of the Company or any of its
Subsidiaries is bound or affected, or (iv) result in the imposition
of a mortgage, pledge, security interest, encumbrance, charge or
other lien on any asset of the Company or any Subsidiary (except,
with respect to clauses (ii) and (iii), for such conflicts,
defaults, terminations, amendments, accelerations, cancellations
and violations that would not, individually or in the aggregate,
have a Material Adverse Effect).

 








 








 





 

(e) Compliance. Neither the Company
nor any of its Subsidiaries is in violation of its Articles of
Incorporation, Bylaws or other organizational documents, and
neither the Company nor any of its Subsidiaries is in default (and
no event has occurred that with notice or lapse of time or both
would put the Company or any of its Subsidiaries in default) under,
nor has there occurred any event giving others (with notice or
lapse of time or both) any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or
instrument to which the Company or any of its Subsidiaries is a
party. The businesses of the Company and its Subsidiaries are not
being conducted, and shall not be conducted so long as the
Purchaser (or any of its respective affiliates) own any of the
Shares, in violation of any law, ordinance or regulation of any
governmental entity, except for possible violations the sanctions
for which either singly or in the aggregate have not had and would
not have a Material Adverse Effect. Neither the Company, nor any of
its Subsidiaries, nor any director, officer, agent, employee or
other person acting on behalf of the Company or any Subsidiary has,
in the course of his actions for, or on behalf of, the Company,
used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expenses relating to political
activity, made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate
funds, violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977, or made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic government official or employee. The
Company and its Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal,
state, provincial or foreign regulatory authorities that are
material to the conduct to its business, and neither the Company
nor any of its Subsidiaries has received any notice of proceeding
relating to the revocation or modification of any such certificate,
authorization or permit. The Company has complied in all material
respects with and is not in default or violation in any material
respect of, and is not, to the Company’s knowledge, under
investigation with respect to or has not been, to the knowledge of
the Company, threatened to be charged with or given notice of any
violation of, any applicable federal, state, local or foreign law,
statute, ordinance, license, rule, regulation, policy or guideline,
order, demand, writ, injunction, decree or judgment of any federal,
state, local or foreign governmental or regulatory authority.
Except for statutory or regulatory restrictions of general
application, no federal, state, local or foreign governmental or
regulatory authority has placed any material restriction on the
business or properties of the Company.

 

(f) SEC Documents, Financial
Statements. The Company has timely filed (within applicable
extension periods) all reports, schedules, forms, statements and
other documents required to be filed by it with the SEC pursuant to
the reporting requirements of the Securities Exchange Act of 1934,
as amended (the “Exchange
Act”) (all of the foregoing filed prior to the date
hereof and all exhibits included therein and financial statements
and schedules thereto and documents incorporated by reference
therein, the “SEC
Documents”). As of their respective dates, the SEC
Documents complied in all material respects with the requirements
of the Exchange Act or the Securities Act, as the case may be, and
the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at
the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading. None of the statements made in any such
SEC Documents is, or has been, required to be amended or updated
under applicable law (except for such statements as have been
amended or updated in subsequent filings made prior to the date
hereof). As of their respective dates, the financial statements of
the Company included in the SEC Documents complied as to form in
all material respects with applicable accounting requirements and
the published rules and regulations of the SEC applicable with
respect thereto. Such financial statements have been prepared in
accordance with U.S. generally accepted accounting principles
(“GAAP”),
consistently applied, during the periods involved (except as may be
otherwise indicated in such financial statements or the notes
thereto or, in the case of unaudited interim statements, to the
extent they may not include footnotes or may be condensed or
summary statements) and fairly present in all material respects the
consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to immaterial
year-end audit adjustments). Except as set forth in the financial
statements of the Company included in the Select SEC Documents (as
defined below), the Company has no liabilities, contingent or
otherwise, other than (i) liabilities incurred in the ordinary
course of business subsequent to the date of such financial
statements and (ii) obligations under contracts and commitments
incurred in the ordinary course of business and not required under
GAAP to be reflected in such financial statements, which
liabilities and obligations referred to in clauses (i) and (ii),
individually or in the aggregate, are not material to the financial
condition or operating results of the Company. For purposes of this
Agreement, “Select SEC
Documents” means the Company’s (A) Annual Report
on Form 10-K for the fiscal year ended December 31, 2019, (B)
Quarterly Reports on Form 10-Q for the fiscal quarters ended
March 31, 2020, June 30, 2020, and September 30, 2020 (C)
all Current Reports on Form 8-K filed since September 30,
2020.

 








 








 





 

(g) Listing. The Company is not in
violation of the listing requirements of the OTC:PINK Marketplace
(the “OTC:PINK”)
on which it trades, does not reasonably anticipate that the Common
Stock will be delisted by the OTC:PINK for the foreseeable future,
and has not received any notice regarding the possible delisting of
the Common Stock from the OTC:PINK.

 

(h) No General Solicitation or Integrated
Offering. Neither the Company nor any person acting for the
Company has conducted any “general solicitation” (as
such term is defined in Regulation D) with respect to any of the
Shares being offered hereby. Neither the Company nor any of its
affiliates, nor any person acting on its or their behalf, has
directly or indirectly made any offers or sales of any security or
solicited any offers to buy any security under circumstances that
would require registration of the Shares being offered hereby under
the Securities Act or cause this offering of Shares to be
integrated with any prior offering of securities of the Company for
purposes of the Securities Act, which result of such integration
would require registration under the Securities Act, or any
applicable stockholder approval provisions.

 

(i) No Brokers. The Company has
taken no action that would give rise to any claim by any person for
brokerage commissions, finder’s fees or similar payments by
any Purchaser relating to this Agreement or the transactions
contemplated hereby.

 

4. COVENANTS.

 

(a) Form D: Blue Sky Laws. The
Company shall timely file with the SEC a Form D with respect to the
Shares as required under Regulation D and provide a copy thereof to
each Purchaser promptly after such filing. The Company shall take
such action as the Company shall reasonably determine is necessary
to qualify the Shares for sale to each Purchaser pursuant to this
Agreement under applicable securities or “blue sky”
laws of the states of the United States or obtain exemption
therefrom, and shall provide evidence of any such action so taken
to each Purchaser upon such Purchaser's request. Within four
business days after the execution of this Agreement, the Company
shall file a Form 8-K with the SEC concerning this Agreement and
the transactions contemplated hereby, which Form 8-K shall attach
this Agreement and its Exhibits as exhibits to such Form 8-K, and,
within four business days after Closing, the Company shall file a
Form 8-K with the SEC concerning the issuance of the Shares to each
Purchaser on such date (the “8-K Filings”).

 

(b) Listing. The Company shall
maintain, so long as any Purchaser (or any of its affiliates)
beneficially owns any Shares on each national securities exchange,
automated quotation system or electronic bulletin board on which
shares of Common Stock are currently listed. The Company will use
its best efforts to continue the listing and trading of its Common
Stock on the OTC:PINK or the QTCQB Marketplace, and will comply in
all respects with the reporting, filing and other obligations under
the bylaws or rules of the Financial Industry Regulatory Authority
(“FINRA”), such
exchanges, or such electronic system, as applicable. The Company
shall promptly provide to each Purchaser copies of any notices it
receives regarding the continued eligibility of the Common Stock
for trading on the OTC:PINK or on any securities exchange or
automated quotation system on which securities of the same class or
series issued by the Company are then listed or quoted, if
any.

 

(c) No Integrated Offerings. The
Company shall not make any offers or sales of any security (other
than the Shares) under circumstances that would require
registration of the Shares being offered or sold hereunder under
the Securities Act or cause this offering of the Shares to be
integrated with any other offering of securities by the Company for
purposes of any stockholder approval provision applicable to the
Company or its securities.

 

(d) Legal Compliance. The Company
shall conduct its business and the business of its Subsidiaries in
compliance with all laws, ordinances or regulations of governmental
entities applicable to such businesses, except where the failure to
do so would not have a Material Adverse Effect.

 


 








 








 





 

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

 


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


 

(a) Each Purchaser
shall have executed such Purchaser’s Execution Page to this
Agreement and delivered the same to the Company.

 

(b) Each Purchaser
shall have delivered the full amount of such Purchaser’s
applicable Purchase Price.

 

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

 

(d) No statute, rule,
regulation, executive order, decree, ruling, injunction, action or
proceeding shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent
jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby which prohibits the
consummation of any of the transactions contemplated by this
Agreement.

 

6. CONDITIONS TO THE PURCHASER’S
OBLIGATION TO PURCHASE.

 


The
obligation of each Purchaser hereunder to purchase the Shares is
subject to the satisfaction of each of the following conditions,
provided that such conditions are for each Purchaser’s
individual and sole benefit and may be waived by such Purchaser at
any time in such Purchaser’s sole discretion:


 

(a) The Company shall
have executed the Execution Page to this Agreement to which the
Company is a party and delivered executed originals of the same to
such Purchaser.

 

(b) All consents,
approvals and waivers required for the consummation of the
transactions contemplated hereby shall have been
obtained.

 

(c) The Company shall
have delivered to such Purchaser duly executed certificates
representing the Shares, registered in such Purchaser’s name,
or to cause Shares purchased by each Purchaser to be issued in
book-entry form with the Company’s transfer
agent.

 

(d) The Common Stock
shall be authorized for quotation and listed on the OTC:PINK and
trading in the Common Stock (or on the OTC:PINK generally) shall
not have been suspended by the SEC or the OTC:PINK.

 

(e) The representations
and warranties of the Company shall be true and correct as of the
date when made and as of Closing as though made at that time
(except for representations and warranties that speak as of a
specific date, which representations and warranties shall be true
and correct as of such date) and the Company shall have performed,
satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Company at or prior to
Closing. In connection with the issuance of the Shares upon the
Closing, such Purchaser shall have received a certificate, executed
by the Chief Executive Officer of the Company after reasonable
investigation, dated as of the Closing to the foregoing effect and
as to such other matters as may reasonably be requested by such
Purchaser.

 








 








 





 

(f) No statute, rule,
regulation, executive order, decree, ruling, injunction, action or
proceeding shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent
jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby which questions the validity
of, challenges or prohibits the consummation of, any of the
transactions contemplated by this Agreement.

 

(g) There shall have
been no material adverse changes and no material adverse
developments in the business, properties, operations, prospects,
financial condition or results of operations of the Company and its
Subsidiaries, taken as a whole, since the date hereof, and no
information that is materially adverse to the Company and of which
such Purchaser is not currently aware shall come to the attention
of such Purchaser.

 

(h) Such Purchaser
shall have received a copy of resolutions, duly adopted by the
Board of Directors of the Company, which shall be in full force and
effect at the time of the Closing, authorizing the execution,
delivery and performance by the Company of this Agreement and the
consummation by the Company of the transactions contemplated hereby
and thereby, certified as such by the Secretary or Assistant
Secretary of the Company on or before the Closing, and such other
documents they reasonably request in connection with the issuance
of the Shares upon Closing.

 

7. GOVERNING LAW;
MISCELLANEOUS.

 

(a) Governing Law; Jurisdiction.
This Agreement shall be governed by and construed in accordance
with the laws of the State of California applicable to contracts
made and to be performed in the State of California. The Company
and each Purchaser irrevocably consent to the exclusive
jurisdiction of the United States federal courts and the state
courts located in the County of Orange, State of California, in any
suit or proceeding based on or arising under this Agreement and
irrevocably agree that all claims in respect of such suit or
proceeding may be determined in such courts. The Company and each
Purchaser irrevocably waive the defense of an inconvenient forum to
the maintenance of such suit or proceeding. The Company and each
Purchaser further agree that service of process upon each
respective party mailed by first class mail shall be deemed in
every respect effective service of process upon such party in any
such suit or proceeding. The Company and each Purchaser agree that
a final non-appealable judgment in any such suit or proceeding
shall be conclusive and may be enforced in other jurisdictions by
suit on such judgment or in any other lawful manner.

 

(b) Counterparts. This Agreement
may be executed in two or more counterparts, all of which shall be
considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to
the other party. This Agreement, once executed by a party, may be
delivered to the other parties hereto by facsimile transmission or
electronic mail of a copy of this Agreement bearing the signature
of the party so delivering this Agreement.

 

(c) Construction. Whenever the
context requires, the gender of any word used in this Agreement
includes the masculine, feminine or neuter, and the number of any
word includes the singular or plural. Unless the context otherwise
requires, all references to articles and sections refer to articles
and sections of this Agreement, and all references to schedules are
to schedules attached hereto, each of which is made a part hereof
for all purposes. The descriptive headings of the several articles
and sections of this Agreement are inserted for purposes of
reference only, and shall not affect the meaning or construction of
any of the provisions hereof.

 

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

 








 








 





 

(e) Entire Agreement; Amendments.
This Agreement and the other Transaction Documents (including any
schedules and exhibits hereto and thereto) contain the entire
understanding of the Purchasers, the Company, their affiliates and
persons acting on their behalf with respect to the matters covered
herein and therein and, except as specifically set forth herein or
therein, neither the Company nor the Purchasers make any
representation, warranty, covenant or undertaking with respect to
such matters. No provision of this Agreement may be waived other
than by an instrument in writing signed by the party to be charged
with enforcement, and no provision of this Agreement may be amended
other than by an instrument in writing signed by the Company and
each Purchaser.

 

(f) Notices. Any notices required
or permitted to be given under the terms of this Agreement shall be
sent by certified or registered mail (return receipt requested) or
delivered personally, by responsible overnight carrier or by
confirmed facsimile, and shall be effective five days after being
placed in the mail, if mailed, or upon receipt or refusal of
receipt, if delivered personally or by responsible overnight
carrier or confirmed facsimile, in each case addressed to a party.
The initial addresses for such communications shall be as follows,
and each party shall provide notice to the other parties of any
change in such party’s address:

 

(i) If to the
Company:

 


Charlie's Holdings,
Inc.


1007
Brioso Drive


Costa
Mesa, CA 92627


Telephone: (949)
531-6855


Attention: Chief
Financial Officer


 


with a
copy simultaneously transmitted by like means (which transmittal
shall not constitute notice hereunder) to:


 


Disclosure Law
Group, a Professional Corporation


655
West Broadway, Suite 870


San
Diego, CA 92101


Telephone: (619)
272-7050


Facsimile: (619)
330-2101


Attention: Jessica
R. Sudweeks, Esq.


 

(ii) If
to any Purchasers, to the address set forth under such
Purchaser’s name on the Execution Page hereto executed by
such Purchaser.

 

(g) Successors and Assigns. This
Agreement shall be binding upon and inure to the benefit of the
parties and their successors and assigns. Except as provided
herein, the Company shall not assign this Agreement or any rights
or obligations hereunder. Any Purchaser may assign or transfer the
Shares pursuant to the terms of this Agreement and of such Shares.
Any Purchaser may assign such Purchaser’s rights hereunder or
thereunder to any other person or entity, except for direct
competitors of the Company or persons or entities that have
publicly announced plans to compete directly with the Company. In
addition, and notwithstanding anything to the contrary contained in
this Agreement, the Shares may be pledged and all rights of any
Purchaser under this Agreement may be assigned, without further
consent of the Company, to a bona fide pledgee in connection with
such Purchaser’s margin or brokerage account.

 

(h) Third Party Beneficiaries. This
Agreement is intended for the benefit of the parties hereto and
their respective permitted successors and assigns, and is not for
the benefit of, nor may any provision hereof be enforced by, any
other person.

 








 








 





 

(i) Survival. The representations
and warranties of the Company and the agreements and covenants set
forth in Sections 2, 3, 4, 6 and 7 hereof shall survive each of the
Investment Dates notwithstanding any due diligence investigation
conducted by or on behalf of any Purchaser. Moreover, none of the
representations and warranties made by the Company herein shall act
as a waiver of any rights or remedies any Purchaser may have under
applicable U.S. federal or state securities laws.

 

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

 

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

 

(l) Joint Participation in
Drafting. Each party to this Agreement has participated in
the negotiation and drafting of this Agreement. As such, the
language used herein and therein shall be deemed to be the language
chosen by the parties hereto to express their mutual intent, and no
rule of strict construction will be applied against any party to
this Agreement.

 

(m) Knowledge. As used in this
Agreement, the term “knowledge” of any person or entity
shall mean and include (i) with respect to the Company, the actual
knowledge of any of the Company’s officers or directors and
(ii) that knowledge which a reasonably prudent business person
could have obtained in the management of his or her business
affairs after making due inquiry and exercising due diligence which
a prudent business person should have made or exercised, as
applicable, with respect thereto.

 








 








 





 

(n) Exculpation Among Purchasers.
The Company acknowledges that the obligations of each Purchaser
under this Agreement are several and not joint with the obligations
of any other Purchaser, and no Purchaser shall be responsible in
any way for the performance of the obligations of any other
Purchaser under this Agreement. Each Purchaser acknowledges that it
has independently evaluated the merits of the transactions
contemplated by this Agreement, that it has independently
determined to enter into the transactions contemplated hereby and
thereby, that it is not relying on any advice from or evaluation by
any other Purchaser, and that it is not acting in concert with any
other Purchaser in making its purchase of securities hereunder or
in monitoring its investment in the Company. The Purchasers and, to
its knowledge, the Company agree that the no action taken by any
Purchaser pursuant hereto, 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 would deem such Purchasers to
be members of a “group” for purposes of Section 13(d)
of the Exchange Act, and the Purchasers have not agreed to act
together for the purpose of acquiring, holding, voting or disposing
of equity securities of the Company. The Company has elected to
provide all Purchasers with the same terms documentation for the
convenience of the Company and not because it was required or
requested to do so by the Purchasers. The Company acknowledges that
such procedure with respect to this Agreement in no way creates a
presumption that the Purchasers are in any way acting in concert or
as a “group” for purposes of Section 13(d) of the
Exchange Act with respect to this Agreement or the transactions
contemplated hereby. Each Purchaser acknowledges that it has been
represented by its own separate legal counsel in their review and
negotiation of this Agreement.

 

(o) Business Days and Trading Days.
For purposes of this Agreement, the term “business day”
means any day other than a Saturday or Sunday or a day on which
banking institutions in the State of New York are authorized or
obligated by law, regulation or executive order to close, and the
term “trading day” means any day on which the OTC:PINK
or, if the Common Stock is not then traded on the OTC:PINK, the
principal national securities exchange, automated quotation system
or other trading market where the Common Stock is then listed,
quoted or traded, is open for trading.

 


 


[REMAINDER
OF PAGE LEFT BLANK INTENTIONALLY]








 








 






 


IN
WITNESS WHEREOF, the Purchaser and the Company have caused this
Agreement to be duly executed as of the date first above
written.


 


 



CHARLIE'S HOLDINGS, INC.


 



By:                                                                            






Name:


Title:


 


 



PURCHASER:


 


(Print
or Type Name of Purchaser)


 



By:                                                                            






Name:


Title:


 



ADDRESS:                      






 



Telephone:                                                      







Facsimile:                                                      







Attention:                                                      






 


AGGREGATE
SUBSCRIPTION AMOUNT:


 



Number of
Shares:                                                                                      







Purchase Price
($0.0853 per Share):