Exhibit 10.1


 


SECURITIES
PURCHASE AGREEMENT


 


This Securities Purchase Agreement
(this “Agreement”) is dated as of August 27, 2021, between Digital Brands Group, Inc. a Delaware corporation (the
 “Company”), and Oasis Capital, LLC (the “Purchaser”).


 


WHEREAS, subject to the terms
and conditions set forth in this Agreement and pursuant to an exemption from the registration requirements of Section 5 of the Securities
Act contained in Section 4(a)(2) thereof and/or Rule 506(b) thereunder, the Company desires to issue and sell to the
Purchaser, and the Purchaser 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 the Purchaser agree as follows:


 


ARTICLE I.


DEFINITIONS


 


1.1            Definitions.
For the purposes of this Agreement, the following words and phrases have the meanings set forth in this Section 1.1:


 


“Acquiring Person”
shall have the meaning ascribed to such term in Section 4.5.


 


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


 


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


 


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


 


“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 Purchaser’s obligations to pay the Subscription Amount and (ii) the Company’s
obligations to deliver the Securities to be issued and sold, in each case, have been satisfied or waived.


 


“Closing Price”
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 closing 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)) (or a similar organization or agency succeeding to its functions of reporting prices),
or (b) in all other cases, the fair market value of a share of Common Stock as determined by the Board of Directors of the Company.


 


“Common Stock”
means the shares of common stock of the Company, par value $0.0001 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 Common Stock at any time, 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.


 


“Conversion Price”
shall have the meaning ascribed to it in the Note.


 


“Disqualification Event”
shall have the meaning ascribed to such term in Section 3.1(jj).


 


“Environmental Laws”
shall have the meaning ascribed to such term in Section 3.1(m).


 


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


 


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


 


“Exempt Issuance”
means the issuance of (a) shares of Common Stock (ordinary shares) or options to employees, officers or directors of the Company,
pursuant to any stock or option plan duly adopted for such purpose by the Board of Directors, (b) securities issuable pursuant to
existing agreements, exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of
this Agreement, provided that 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 dividends,
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 directors of the Company, provided that any such issuance shall only be to a Person (or to
the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business
synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds,
but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity
whose primary business is investing in securities, or (d) securities issued for bonafide services provided to the Company not for
the purpose of raising capital or to an entity whose primary business is investing in securities.


 


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


 


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


 


“Governmental Authority”
means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government
or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority
(to the extent that the rules, regulations or orders of such organization or authority have the force of Laws), or any arbitrator, court
or tribunal of competent jurisdiction.


 


“Hazardous Materials”
shall have the meaning ascribed to such term in Section 3.1(m).


 


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


 






     


     


    

 


“Intellectual Property”
means all of the following in any jurisdiction throughout the world: (a) all inventions (whether patentable or unpatentable and whether
or not reduced to practice), all improvements thereto, and all U.S. and foreign patents, patent applications, and patent disclosures,
together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof, (b) all trademarks,
service marks, brand names, certification marks, trade dress, logos, trade names, domain names, assumed names and corporate names, together
with all colorable imitations thereof, and including all goodwill associated therewith, and all applications, registrations, and renewals
in connection therewith, (c) all copyrights, and all applications, registrations, and renewals in connection therewith, (d) all
trade secrets under applicable state laws and the common law and know-how (including formulas, techniques, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals), (e) all
computer software (including source code, object code, diagrams, data and related documentation), and (f) all copies and tangible
embodiments of the foregoing (in whatever form or medium).


 


“Issuer Covered Person”
shall have the meaning ascribed to such term in Section 3.1(jj).


 


“Laws” means any
U.S. federal, state, local, foreign or other laws, rules regulations, guidelines, orders, injunctions, building and other codes,
ordinances, permits, licenses, authorizations, judgements, decrees of federal, state, local, foreign or other authorities, and all orders,
writs, decrees and consents of any governmental or political subdivision or agency thereof, or any court of similar tribunal established
by any such governmental or political subdivision or agency thereof.


 


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


 


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


 


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


 


“Money Laundering Laws”
shall have the meaning ascribed to such term in Section 3.1(oo).


 


“Note” mean the
Senior Secured Convertible Note issued to the Purchaser, in the form of Exhibit A attached hereto, which bear interest at
the rate of 6% per annum.


 


“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.


 


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


 


“Public Information
Failure” shall have the meaning ascribed to such term in Section 4.2(b).


 


“Purchaser Party”
shall have the meaning ascribed to such term in Section 4.8.


 


“Registration Rights
Agreement” means the agreement in the form attached here to as Exhibit C.


 


“Regulation FD”
means Regulation FD promulgated by the SEC pursuant to the Exchange Act, as such Regulation may be amended or interpreted from time to
time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such Regulation.


 


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


 


“Reserve Ratio”
shall have the meaning ascribed to such term in Section 4.9.


 






     


     


    

 


“Rule 144”
means Rule 144 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended or interpreted from time to
time, or any similar rule or regulation hereafter adopted by the SEC (or similar United States law) having substantially the same
purpose and effect as such Rule.


 


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


 


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


 


“Securities” means
the Note and the Shares.


 


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


 


“Security Agreement”
means the agreement in the form attached here to as Exhibit B.


 


“Shares” means
the Common Stock issuable upon conversion of the Note.


 


“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
the location and/or reservation of borrowable shares of Common Stock).


 


“Subscription Amount”
means, as to the Purchaser, the aggregate amount to be paid for the Securities purchased hereunder as specified the Purchaser’s
name on the signature page of this Agreement and next to the heading.


 


“Subsidiary” means
with respect to any entity at any date, any direct or indirect corporation, limited or general partnership, limited liability company,
trust, estate, association, joint venture or other business entity of which (A) more than 50% of (i) the outstanding capital
stock having (in the absence of contingencies) ordinary voting power to elect a majority of the Board of Directors or other managing body
of such entity, (ii) in the case of a partnership or limited liability company, the interest in the capital or profits of such partnership
or limited liability company or (iii) in the case of a trust, estate, association, joint venture or other entity, the beneficial
interest in such trust, estate, association or other entity business is, at the time of determination, owned or controlled directly or
indirectly through one or more intermediaries, by such entity, or (B) is under the actual control of the Company.


 


“Subsidiary Guarantee”
means that certain guarantee, in a form acceptable to the Purchaser, executed by each of the Company’s Subsidiaries, Harper &
Jones, LLC and Bailey 44, LLC.


 


“Subsidiary Security
Agreement” means that certain security agreement in a form acceptable to the Purchaser, executed by each of the Company’s
Subsidiaries, Harper & Jones, LLC and Bailey 44, LLC.


 


“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
Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, and the NYSE American (or
any successors to any of the foregoing).


 






     


     


    

 


“Transaction Documents”
means this Agreement, the Note, the Registration Rights Agreement, the Security Agreement, the Subsidiary Guarantee, and the Subsidiary
Security Agreement, and any other documents or agreements executed in connection with the transactions contemplated hereunder.


 


“Transfer Agent”
means Vstock Transfer, LLC and a facsimile number of 646-536-3179, and any successor transfer agent of the Company.


 


“Variable Rate Transaction”
shall have the meaning ascribed to such term in Section 4.16(a).


 


“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)) (or a similar organization or agency succeeding to its functions
of reporting prices), (b) if no volume weighted average price of the Common Stock can be ascertained from the Trading Market, the
average closing price of the Common Stock during the 10 Trading Days preceding such date, or (c) in all other cases, the fair market
value of a share of Common Stock as determined by the Board of Directors of the Company.


 


ARTICLE II.

PURCHASE AND SALE


 


2.1            Closing.
Subject to the terms and conditions set forth herein, the Company agrees to sell, and the Purchaser agrees to purchase a Note having a
face value of $5,265,000 for a total purchase price of $5,000,000. The Purchaser shall deliver to the Company, via wire
transfer immediately available funds equal to the Purchaser’s Subscription Amount as set forth on the signature page hereto
executed by the Purchaser, and the Company shall deliver to the Purchaser the Note pursuant to Sections 2.2(a), and the Company and the
Purchaser shall deliver the other items set forth in Sections 2.2(b) deliverable at the Closing. Upon satisfaction of the covenants
and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of Purchaser’s counsel or such other location
as the parties shall mutually agree.


 


2.2            Deliveries.


 


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


 


(i)            this
Agreement duly executed by the Company;


 


(ii)           an
original Note in the principal amount of $5,265,000, convertible at the Conversion Price, registered in the name of the Purchaser;


 


(iii)          a
reservation letter executed by the Company’s Transfer Agent and the Company in the form attached as Exhibit D;


 


(iv)          the
Security Agreement duly executed by the Company;


 


(v)           the
Subsidiary Guarantee duly executed by each of Harper & Jones, LLC and Bailey 44, LLC.


 






     


     


    

 


(vi)          the
Subsidiary Security Agreement duly executed by each of Harper & Jones, LLC and Bailey 44, LLC.


 


(vii)         the
Registration Rights Agreement duly executed by the Company;


 


(viii)        a
Board Consent approving the issuance of the Note and the execution of the Transaction Documents on behalf of the Company in the form attached
as Exhibit E; and


 


(ix)          the
Company shall have provided the Purchaser with the Company’s wire instructions in writing.


 


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


 


(i)            this
Agreement duly executed by the Purchaser;


 


(ii)           the
Security Agreement duly executed by the Purchaser;


 


(iii)          the
Subsidiary Security Agreement duly executed by the Purchaser;


 


(iv)          the
Registration Rights Agreement duly executed by the Purchaser; and


 


(v)           the
Purchaser’s Subscription Amount of $5,000,000 by wire transfer to 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 or Material Adverse Effect,
in all respects) on the Closing Date of the representations and warranties of the Purchaser contained herein (unless as of a specific
date therein in which case they shall be accurate as of such date);


 


(ii)           all
obligations, covenants and agreements of the Purchaser required to be performed at or prior to the Closing Date shall have been performed
(or a waiver obtained with respect thereto); and


 


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


 


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


 


(i)            the
accuracy in all 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);


 






     


     


    

 


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


 


(iii)          the
delivery by the Company of the items set forth in Sections 2.2(a), as applicable, 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 SEC 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 the Purchaser,
makes it impracticable or inadvisable to purchase the Securities at the Closing.


 


ARTICLE III.

REPRESENTATIONS AND WARRANTIES


 


3.1            Representations
and Warranties of the Company. The Company hereby makes the following representations and warranties to the Purchaser which representations
and warranties shall be true and correct as of the date hereof:


 


(a)            Subsidiaries.
All of the direct and indirect Subsidiaries of the Company are set forth in its SEC filings and/or on Schedule 3.1(a). Except as
set forth in its SEC filings and/or 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. Except as set forth in its SEC filings and/or on Schedule 3.1(b), 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
formation document, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to
conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing,
as the case may be, could not have or reasonably be expected to result in: (i) a Material Adverse Effect on the legality, validity
or enforceability of any Transaction Document, (ii)a material adverse effect on the results of operations, assets, business, or financial
condition of the Company and the Subsidiaries, taken as a whole, or (ii) 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) or (ii), a “Material
Adverse Effect”; provided, however, that “Material Adverse Effect” shall not include any event, occurrence, fact,
condition or change, directly or indirectly, arising out of or attributable to: (A) general economic or political conditions, (B) conditions
generally affecting the industry in which the Company operates, (C) any changes in financial or securities markets in general, (D) acts
of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof, (E) any pandemic, epidemics
or human health crises (including COVID-19), (F) any changes in applicable laws or accounting rules (including GAAP), (G) the
announcement, pendency or completion of the transactions contemplated by this Agreement, or (H) any action required or permitted
by this Agreement or any action taken (or omitted to be taken) with the written consent of or at the written request of the Purchaser)
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. 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 shareholders in connection herewith or therewith other
than in connection with the Required Approvals. Subject to obtaining 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 and (iii) insofar as indemnification
and contribution provisions may be limited by applicable law.


 


(d)            No
Conflicts. Except as set forth in its SEC filings and/or in Schedule 3.1(d), 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, subject to the Required Approvals, (i) conflict
with or violate any provision of the Company’s or any Subsidiary’s formation documents, bylaws or other organizational or
charter documents, (ii) 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, 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) conflict with or result
in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority
to which the Company or a Subsidiary is subject (including federal and state securities Laws and regulations), or by which any property
or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could
not have or reasonably be expected to result in a Material Adverse Effect.


 






     


     


    

 


(e)            Filings,
Consents and Approvals. Except as set forth in its SEC filings and/or on Schedule 3.1(e), the Company is not required to obtain
any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal,
state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company
of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii) application(s) to
each applicable Trading Market for the listing of the Shares for trading thereon in the time and manner required thereby, and (iii) such
filings as are required to be made under applicable state or federal securities Laws (collectively, the “Required Approvals”).


 


(f)             Issuance
of the Securities. The Note and Shares 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. The Shares,
when issued upon conversion of the Note, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by
the Company. The Company shall reserve from its duly authorized capital stock a number of shares of Common Stock issuable pursuant to
the Note equal to the amount set forth in Section 4.9.


 


(g)            Capitalization.
The capitalization of the Company is as set forth in its SEC filings and/or on Schedule 3.1(g). The Company has not issued any
capital stock since its most recently filed periodic report under the Exchange Act, other than as set forth in its SEC filings and/or
on Schedule 3.1(g), pursuant to the exercise of employee stock awards under the Company’s equity incentive plans, the issuance
of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans, the issuance of shares of Common
Stock or Common Stock Equivalents pursuant to agreements outstanding as of the date of the most recently filed periodic report under the
Exchange Act and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently
filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any
similar right to participate in the transactions contemplated by the Transaction Documents. Except as set forth in its SEC filings and/or
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 Purchaser) and will not result in a right of any holder
of Company Securities to adjust the exercise, conversion, exchange or reset price under any of such securities. There are no outstanding
securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the
Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements
or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully
paid and nonassessable, have been issued in compliance with all federal and state securities Laws, and none of such outstanding shares
was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. Other than the Required Approvals,
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 shareholders 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 shareholders.


 






     


     


    

 


(h)            SEC
Reports; Financial Statements. To the Company’s knowledge, since May 17, 2021 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, (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 Company
believes that the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable,
and that 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 SEC 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. Other than as set forth in its SEC filings and/or on Schedule 3.1(i) since
the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent
SEC Report filed prior to the date hereof, to the best of the Company’s knowledge (i) there has been no event, occurrence or
development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred
any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business
consistent with past practice, and (B) liabilities not required to be reflected in the Company’s financial statements pursuant
to GAAP or disclosed in filings made with the SEC, (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 shareholders 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 equity incentive plans. The Company does not have pending before the
SEC any request for confidential treatment of information. To the knowledge of the Company, except for the issuance of the Securities
contemplated by this Agreement or as set forth in its SEC filings and/or 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 one Trading Day prior to the date that this representation is made.


 






     


     


    

 


(j)             Litigation.
Except as set forth in its SEC filings and/or in Schedule 3.1(j), there is no action, suit, notice of violation, Proceeding or
investigation, inquiry or other similar Proceeding of any federal or state governmental authority 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”)
which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the issuance
of the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse
Effect. Neither the Company nor any Subsidiary, nor to the Company’s knowledge any director or officer thereof, is or has been the
subject of any Action involving the Company and 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 SEC involving the Company or any current or former director or officer of the Company. To the knowledge of the Company, the SEC
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 effort is underway to unionize or organize the employees of the Company
or any Subsidiary. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is in violation of any material
term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any
other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive
officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company
and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign Laws and regulations relating to employment and
employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as set forth in its SEC filings and/or
on Schedule 3.1(k), there is no workmen’s compensation liability matter, employment-related charge, complaint, grievance,
investigation, inquiry or obligation of any kind pending, or to the Company’s knowledge, threatened, relating to an alleged violation
or breach by the Company or its Subsidiaries of any law, regulation or contract that could, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.


 


(l)             Compliance.
Except as set forth in its SEC filings and/or on Schedule 3.1(l), 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 and regulations relating to taxes, securities, environmental protection, occupational health and safety, product quality and
safety, and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse
Effect.


 






     


     


    

 


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


 


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


 


(o)            Title
to Assets. Except as set forth in its SEC filings and/or on Schedule 3.1(o), 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. To
the Company’s knowledge, 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 material compliance.


 


(p)            Intellectual
Property.


 


(i)            Except
as set forth in its SEC filings and/or in Schedule 3.1(p), the Company owns or possesses or has the right to use pursuant to a
valid and enforceable written license, sublicense, agreement, or permission all Intellectual Property necessary for the operation of the
business of the Company as presently conducted, except in each case as could not have or reasonably be expected to result in a Material
Adverse Effect.


 


(ii)           The
Company has no knowledge that the Intellectual Property interferes with, infringe upon, misappropriate, or otherwise come into conflict
with, any Intellectual Property rights of third parties, and the Company has no knowledge that facts exist which indicate a likelihood
of the foregoing. The Company has not received any charge, complaint, claim, demand, or notice alleging any such interference, infringement,
misappropriation, or conflict (including any claim that the Company must license or refrain from using any Intellectual Property rights
of any third party). To the knowledge of the Company, no third party has interfered with, infringed upon, misappropriated, or otherwise
come into conflict with, any Intellectual Property rights of the Company, except in each case as could not have or reasonably be expected
to result in 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.


 


(r)             Transactions
With Affiliates. Except as disclosed in its SEC filings, none of the current officers, directors or Affiliates 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, Affiliate 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 award agreements under any equity
incentive plan of the Company.


 


(s)            Sarbanes-Oxley;
Internal Accounting Controls. Except as disclosed in its SEC filings and/or in Schedule 3.1(s), the Company and the Subsidiaries
are in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof,
and any and all applicable rules and regulations promulgated by the SEC 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 as set forth in the SEC Reports.
The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and
the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the
 “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions
of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation
Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined
in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect,
the internal control over financial reporting of the Company and its Subsidiaries.


 


(t)             Certain
Fees. Other than as set forth in its SEC filings and/or on Schedule 3.1(t), no brokerage or finder’s fees or commissions
are or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchaser 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 3.1(t) that
may be due in connection with the transactions contemplated by the Transaction Documents.


 


(u)            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.


 






     


     


    

 


(v)            Registration
Rights. Other than as set forth in its SEC filings and/or on Schedule 3.1(v), 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 Subsidiary.


 


(w)           Listing
and Maintenance Requirements. 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 material compliance with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic
transfer through the Depository Trust Company (“DTC”) or another established clearing corporation and the Company is current
in payment of the fees to the DTC (or such other established clearing corporation) in connection with such electronic transfer. The Company
is not subject to any “chill” issued by the DTC.


 


(x)            Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s formation documents (or similar charter documents) or the Laws of its state of incorporation
that is or could become applicable to the Purchaser as a result of the Purchaser 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 Purchaser’ ownership of the Securities.


 


(y)            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 Purchaser or their agents or counsel with any information
that it believes constitutes or might constitute material, non-public information which is not otherwise disclosed in the SEC Reports.
The Company understands and confirms that the Purchaser will rely on the foregoing representation in effecting transactions in securities
of the Company. The press releases disseminated by the Company since May 17, 2021 do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made and when made, not misleading. The Company acknowledges and agrees that no Purchaser makes
or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth
in Section 3.2 hereof.


 


(z)            No
Integrated Offering. Assuming the accuracy of the Purchaser’ 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 any applicable shareholder approval provisions of any Trading Market on
which any of the securities of the Company are listed or designated.


 






     


     


    

 


(aa)          Solvency.
The Company has not filed for reorganization or liquidation under the bankruptcy or reorganization Laws of any jurisdiction. Except as
set forth in its SEC filings and/or Schedule 3.1(aa) sets forth as of the time immediately following the Closing hereof all outstanding
Indebtedness of the Company or any Subsidiary. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities
for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business),
(y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are
or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any
lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. Except as set forth in its SEC
filings and/or on Schedule 3.1(aa) or as would not have a Material Adverse Effect, neither the Company nor any Subsidiary is in
default with respect to any Indebtedness.


 


(bb)         Tax
Status. Except for matters disclosed in its SEC filings and/or 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
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.


 


(cc)          Foreign
Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company, 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 any provision of FCPA.


 


(dd)         Accountants.
The Company’s accounting firm is set forth in the SEC Reports. To the knowledge and belief of the Company, such accounting firm
is a registered public accounting firm as required by the Exchange Act.


 


(ee)          Acknowledgment
Regarding Purchaser’ Purchase of Securities. The Company acknowledges and agrees that the Purchaser is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The
Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by the 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 Purchaser’ purchase of the Securities. The Company further represents to the 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.


 






     


     


    

 


(ff)           Acknowledgement
Regarding Purchaser’s Trading Activity. Notwithstanding anything in this Agreement or elsewhere to the contrary (except for
Sections 3.2(f) and 4.13 hereof), it is understood and acknowledged by the Company that: (i) no Purchaser has been asked by
the Company to agree, nor has the 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 the 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) the Purchaser, and counter-parties in “derivative” transactions
to which the Purchaser is a party, directly or indirectly, presently may have a “short” position in the Common Stock, and
(iv) the 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 Purchaser may engage
in hedging activities at various times during the period that the Securities are outstanding, and (z) such hedging activities (if
any) could reduce the value of the existing shareholders' 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.


 


(gg)         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 the Common Stock to facilitate the sale
of the Securities, or (ii) paid or agreed to pay to any Person any compensation for soliciting another to purchase the Securities
or any other securities of the Company.


 


(hh)         Private
Placement. Assuming the accuracy of the Purchaser’ 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 Purchaser as contemplated hereby.


 


(ii)            No
General Solicitation. Neither the Company nor, to the Company’s knowledge, 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 Purchaser and certain other “accredited investors” within the meaning of Rule 501 under the Securities
Act.


 


(jj)            No
Disqualification Events.  With respect to the Securities to be offered and sold hereunder in reliance on Rule 506(b) 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, nor any Person, including a placement agent, who will receive a
commission or fees for soliciting purchasers (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 Purchaser
a copy of any disclosures provided thereunder. Notwithstanding the above, the Company has specifically advised the Purchaser of certain
prior disciplinary actions related to an officer/director of the Company which would not be designated a Disqualification Event.


 


(kk)         Notice
of Disqualification Events. The Company will notify the Purchaser in writing, prior to the Closing Date of the Company becoming aware
of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of
time, reasonably be expected to become a Disqualification Event relating to any Issuer Covered Person, in each case of which it is aware.


 






     


     


    

 


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


 


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


 


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


 


(oo)         Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in material 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 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.


 


3.2            Representations
and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Company as follows which representations and
warranties shall be true and correct as of the date hereof:


 


(a)            Organization;
Authority. The 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 this Agreement and otherwise to carry
out its obligations hereunder and thereunder. The execution and delivery of this Agreement and performance by the Purchaser of the transactions
contemplated by this Agreement have been duly authorized by all necessary corporate, partnership, limited liability company or similar
action, as applicable, on the part of the Purchaser. Each Transaction Document to which it is a party has been duly executed by the Purchaser,
and when delivered by the Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of
the Purchaser, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other Laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by Laws relating to the availability of specific performance, injunctive relief or other equitable remedies
and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.


 






     


     


    

 


(b)            Understandings
or Arrangements. The Purchaser is acquiring the Securities as principal for its own account and has no direct or indirect arrangement
or understandings with any other Persons to distribute or regarding the distribution of such Securities (this representation and warranty
not limiting the Purchaser’s right to sell the Securities in compliance with applicable federal and state securities Laws). The
Purchaser is acquiring the Securities hereunder in the ordinary course of its business. The 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 such 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 the Purchaser’s right to sell such Securities
in compliance with applicable federal and state securities Laws).


 


(c)            Risks
of Investment. Purchase recognizes that the acquisition of the Securities involves a high degree of risk in that an investor could sustain
the loss of its entire investment and the Company is and will be subject to numerous other risks and uncertainties, including, without
limitation, significant and material risks relating to the Company’s business and the industries, markets and geographic regions
in which the Company competes.


 


(d)            Accredited
Investor Status. Purchaser represents that it is an “accredited investor” as such term is defined in Rule 501 of Regulation
D promulgated under the Securities Act of 1933, as amended, and that it is able to bear the economic risk of an investment in the Securities.


 


(e)            Purchaser
Status. At the time the Purchaser was offered the Securities, it was, and as of the date hereof it is, an accredited investor within
the meaning of Rule 501 under the Securities Act. No Purchaser 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).


 


(f)             Experience
of The Purchaser. The 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. The 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.


 


(g)            Access
to Information. The 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, subject to Regulation FD, (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.  The Purchaser
acknowledges and agrees that neither the Company nor anyone else has provided the Purchaser with any information or advice with respect
to the Securities nor is such information or advice necessary or desired.


 






     


     


    

 


(h)            Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, the Purchaser has not, nor has
any Person acting on behalf of or pursuant to any understanding with the 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 the Purchaser first
received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms
of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the
case of the Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of the
Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers
managing other portions of the 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 the Purchaser’s representatives, including, without limitation, its officers,
directors, partners, legal and other advisors, employees, agents and Affiliates, the Purchaser has maintained the confidentiality of
all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding
the foregoing, for avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions,
with respect to the identification of the availability of, or securing of, available shares to borrow in order to effect Short Sales
or similar transactions in the future.


 


The Company acknowledges
and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect the Purchaser’s right
to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained
in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or
the consummation of the transaction contemplated hereby.


 


ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES


 


4.1            Removal
of Legends.


 


(a)            The
Securities may only be disposed of in compliance with state and federal securities Laws. In connection with any transfer of the Shares,
other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of the Purchaser or in
connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor to provide to the Company an
opinion of counsel selected by the transferor and reasonably acceptable to the Company at the reasonable cost of 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 Shares under the Securities Act.


 






     


     


    

 


(b)            The
Purchaser agrees to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Shares in the following
form:


 


NEITHER THIS SECURITY NOR THE SECURITIES
INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE 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.


 


The Company acknowledges and agrees
that the 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 Shares to a financial institution that is an “accredited investor” as defined in Rule 501(a) under
the Securities Act and who agrees to be bound by the provisions of this Agreement and, if required under the terms of such arrangement,
the Purchaser may transfer pledged or secured Shares 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 Shares may reasonably request in connection with a pledge
or transfer of the Shares.


 


(c)            Certificates
evidencing the Shares (or the Transfer Agent’s records if held in book entry form) 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 securities
is effective under the Securities Act (the “Effective Date”), (ii) following any sale of such Shares pursuant to Rule 144,
(iii) if such Shares are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with
the current public information required under Rule 144 as to such Shares and without volume or manner-of-sale restrictions or (iv) if
such legend is not required under applicable requirements of the Securities Act (including Sections 4(a)(1) and 4(a)(7) judicial
interpretations and pronouncements issued by the staff of the SEC). The Company shall, at its expense, cause its counsel to issue a legal
opinion to the Transfer Agent promptly after the Effective Date if required by the Transfer Agent to affect the removal of the legend
hereunder. If all or any portion of a Note is converted at a time when there is an effective registration statement to cover the resale
of the Shares or if such Shares or may be sold under Rule 144 and the Company is then in compliance with the current public information
required under Rule 144, or if the Shares may be sold under Rule 144 without the requirement for the Company to be in compliance
with the current public information required under Rule 144 as to such Shares and without volume or manner-of-sale restrictions
or if such legend is not otherwise required under applicable requirements of the Securities Act (including Sections 4(a)(1) and
4(a)(7), judicial interpretations and pronouncements issued by the staff of the SEC) then such Shares shall be issued or reissued free
of all legends. The Company agrees that following the effective date of any registration statement or at such time as such legend is
no longer required under this Section 4.1(c), it will, no later than two Trading Days following the delivery by the Purchaser to
the Company or the Transfer Agent of a certificate representing restricted Shares, issued with a restrictive legend (such second Trading
Day, the “Legend Removal Date”), deliver or cause to be delivered to the 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 4.1. Certificates for 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 the Purchaser. The Company shall be responsible for any delays caused
by its Transfer Agent.


 






     


     


    

 


(d)            In
addition to the Purchaser’s other available remedies, (i) the Company shall pay to the Purchaser, in cash, as partial liquidated
damages and not as a penalty, $3,000 per Trading Day until such certificate is delivered without a legend. Nothing herein shall limit
the Purchaser’s right to pursue actual damages for the Company’s failure to deliver certificates representing any Securities
as required by the Transaction Documents, and the 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, and (ii) if after the Legend Removal
Date the Purchaser purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale
by the 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 the Purchaser anticipated receiving from the Company without any restrictive
legend, then, the Company shall pay to the Purchaser, in cash, an amount equal to the excess of the Purchaser’s total purchase
price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including
brokerage commissions and other out-of-pocket expenses, if any) (the “Buy-In Price”) over the product of (A) such number
of Shares that the Company was required to deliver to the Purchaser by the Legend Removal Date multiplied by (B) the highest closing
sale price of the Common Stock on any Trading Day during the period commencing on the date of the delivery by the Purchaser to the Company
of the applicable Shares and ending on the date of such delivery and payment under this Section 4.1(d).


 


(e)            In
the event the Purchaser shall request delivery of unlegended shares as described in this Section 4.1 and the Company is required
to deliver such unlegended shares, it shall pay all fees and expenses associated with or required by the legend removal and/or transfer
including but not limited to reasonable legal fees, Transfer Agent fees and overnight delivery charges and taxes, if any, imposed by
any applicable government upon the issuance of Common Stock; and (ii) the Company may not refuse to deliver unlegended shares based
on any claim that the Purchaser or anyone associated or affiliated with the Purchaser has not complied with Purchaser’s obligations
under the Transaction Documents, or for any other reason, unless, an injunction or temporary restraining order from a court, on notice,
restraining and or enjoining delivery of such unlegended shares shall have been sought and obtained by the Company and the Company has
posted a surety bond for the benefit of the Purchaser in the amount of the greater of (i) 150% of the amount of the aggregate purchase
price of the Shares (based on amount of principal and/or interest of the Note which was converted) which is subject to the injunction
or temporary restraining order, or (ii) the VWAP of the Common Stock on the Trading Day before the issue date of the injunction
multiplied by the number of unlegended shares to be subject to the injunction, which bond shall remain in effect until the completion
of the litigation of the dispute and the proceeds of which shall be payable to the Purchaser to the extent Purchaser obtains judgment
in Purchaser’s favor.


 


4.2            Furnishing
of Information.


 


(a)            So
long as the Purchaser holds the Note or Shares, the Company covenants to timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act
even if the Company is not then subject to the reporting requirements of the Exchange Act.


 






     


     


    

 


(b)            At
any time while the Note or Shares are held by the Purchaser, if the Company (i) shall fail for any reason to satisfy the current
public information requirement under Rule 144(c) for a period of more than 30 consecutive days 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) for a period of more than 30 consecutive days (a “Public Information Failure”) then,
in addition to the Purchaser’s other available remedies, the Company shall pay to the 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 Shares, an amount in cash equal
to two percent of the aggregate Conversion Price of the Note on the day of a Public Information Failure and on every 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 Purchaser to transfer the Shares pursuant
to Rule 144, up to an aggregate amount of liquidated damages for all Public Information Failures equal to the Purchaser’s
Subscription Amount. 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 second Trading 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 one and one-half percent per month (prorated
for partial months) until paid in full. Nothing herein shall limit the Purchaser’s right to pursue actual damages for the Public
Information Failure, and the 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.


 


4.3            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(a)(1) of the Securities Act) 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.


 


4.4            Securities
Laws Disclosure; Publicity. The Company shall file a Current Report on Form 8-K disclosing the material terms of this Agreement,
including the Transaction Documents as exhibits thereto, with the SEC before the Trading Market opens the next Trading Day after the
Closing. From and after the filing of the Form 8-K as provided in the preceding sentence, the Company represents to the Purchaser
that it shall have publicly disclosed all material, non-public information delivered to the Purchaser 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 Form 8-K, 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 Purchaser or any of their Affiliates on the other
hand, shall terminate. The Company and the Purchaser shall consult with each other in issuing any press releases with respect to the
transactions contemplated hereby, and neither the Company nor the 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 the Purchaser, or without the prior
consent of the 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 the Purchaser,
or include the name of the Purchaser in any filing with the SEC or any regulatory agency or Trading Market, without the prior written
consent of the Purchaser, except (a) as required by the staff of the SEC in connection with the filing of final Transaction Documents
with the SEC and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall,
to the extent reasonably practicable, provide the Purchaser with prior notice of such disclosure permitted under this clause (b).


 






     


     


    

 


4.5            Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that the 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 the 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 Purchaser.


 


4.6            Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person acting
on its behalf will provide the Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably believes
constitutes, material non-public information, unless prior thereto the Purchaser shall have consented to the receipt of such information
and agreed with the Company to keep such information confidential. Prior to providing the Purchaser with any material non-public information,
the Company shall provide the Purchaser with a consent substantially in the form attached as Exhibit F (“Consent”)
which shall not include any material non-public information. The Company shall not provide the Purchaser with the material non-public
information if the Purchaser does not execute and return the Consent to the Company. The Company understands and confirms that the Purchaser
shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company delivers
any material, non-public information to the Purchaser without the Purchaser’s consent, the Company hereby covenants and agrees
that the 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, 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 or any other communications
made by the Company, or information provided, to the Purchaser constitutes, or contains, material, non-public information regarding the
Company or any Subsidiaries, the Company shall simultaneously file such notice or other material information with the SEC pursuant to
a Current Report on Form 8-K. The Company understands and confirms that the Purchaser shall be relying on the foregoing covenant
in effecting transactions in securities of the Company. In addition to any other remedies provided by this Agreement or other Transaction
Documents, if the Company provides any material, non-public information to the Purchaser without their prior written consent, and it
fails to immediately (no later than the next Trading Day) file a Form 8-K disclosing this material, non-public information, it shall
pay the Purchaser as partial liquidated damages and not as a penalty a sum equal to $5,000 per day beginning with the day the information
is disclosed to the Purchaser and ending and including the day the Form 8-K disclosing this information is filed.


 


4.7            Use
of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder to general business purposes.


 






     


     


    

 


4.8            Indemnification
of the Purchaser. Subject to the provisions of this Section 4.8, the Company will indemnify and hold the 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 the 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 (including local counsel, if retained) 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, (b) any Action instituted against the Purchaser Parties
in any capacity, or any of them or their respective Affiliates, by any shareholder 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 shareholder or any conduct by such Purchaser Party which constitutes willful misconduct or
gross negligence) or (c) any untrue or alleged untrue statement of a material fact contained in any registration statement, any
prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or
relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein
(in the case of any prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading. If any
Action shall be brought against the 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 the Purchaser Party, 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 (in addition to local counsel, if retained). The Company will not be liable to the Purchaser Party under
this Agreement (y) for any settlement by the 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 the Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser
Party in this Agreement or in the other Transaction Documents. The Purchaser Parties shall have the right to settle any Action against
any of them by the payment of money provided that they cannot agree to any equitable relief and the Company, its officers, directors
and Affiliates receive unconditional releases in customary form. The indemnification required by this Section 4.8 shall be made
by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred.
To extent that the Company has made any periodic payments pursuant to the foregoing sentence, and there is a later final and binding
determination that the Company was not liable in respect of the related indemnification obligations hereunder, the Company may offset
the amounts owing under the Note against such payments. The indemnity agreements contained herein shall be in addition to any cause of
Action or similar right of the Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant
to law.


 


4.9            Reservation
of Common Stock. Immediately upon Closing, the Company shall reserve three times the number of shares of Common Stock issuable upon
conversion of the Note (the “Reserve Ratio”). In addition to any other remedies provided by this Agreement or other Transaction
Documents, if the Company at any time fails to meet this reservation of Common Stock requirement within 60 days after written notice
from the Holder, it shall pay the Purchaser as partial liquidated damages and not as a penalty a sum equal to $500 per day for each $100,000
of the Purchaser’s Subscription Amount, up to an aggregate amount of liquidated damages equal to such Purchaser’s Subscription
Amount. The Company shall not enter into any agreement or file any amendment to its formation documents or other governing documents
which conflicts with this Section 4.9 while the Note remains outstanding. The Company shall execute and cause the Transfer Agent
to execute a reservation letter in the form attached as Exhibit D.


 






     


     


    

 


4.10          Listing
of Common Stock. The Company hereby agrees to use commercially reasonable efforts to maintain the listing or quotation of the Common
Stock on the Trading Market on which it is currently listed or quoted; provided, however, the Company shall if it qualifies, list its
Common Stock on a Trading Market which is a national securities exchange. The Company will then take all commercially reasonable action
to continue the listing and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s
reporting, filing and other obligations under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility
of the Common Stock for electronic transfer through the DTC or another established clearing corporation, including, without limitation,
by timely payment of fees to the DTC or such other established clearing corporation in connection with such electronic transfer.


 


4.11          Intentionally
Omitted.


 


4.12          Certain
Transactions and Confidentiality. The Purchaser covenants that neither it nor any Affiliate acting on its behalf or pursuant to any
understanding with it will execute any purchases or sales, including Short Sales of any of the Company’s securities during the
period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are
first publicly announced pursuant to the initial press release as described in Section 4.4.  The Purchaser covenants that until
such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release
as described in Section 4.4, the 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 4.4, (ii) no Purchaser
shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities
Laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial
press release as described in Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade
in the securities of the Company to the Company or its Subsidiaries after the issuance of the initial press release as described in Section 4.4. 
Notwithstanding the foregoing, in the case of the Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers
manage separate portions of the Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of the 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.


 


4.13          Conversion
Procedures. The form of conversion notice included in the Note (each, a “Conversion Notice”) sets forth the totality
of the procedures required of the Purchaser in order to convert the Note. No additional legal opinion, other information or instructions
shall be required of the Purchaser to convert its Note. Without limiting the preceding sentences, no ink-original Conversion Notice shall
be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Conversion Notice form be required
in order to convert the Notes. The Company shall honor conversions of the Notes and shall deliver Shares in accordance with the terms,
conditions and time periods set forth in the Transaction Documents.


 






     


     


    

 


4.14          DTC
Program. For so long as any Securities are outstanding, the Company will employ as the Transfer Agent for the Common Stock a participant
in the DTC Automated Securities Transfer Program and cause the Common Stock to be transferable pursuant to such program.


 


4.15          Preservation
of Corporate Existence. The Company shall preserve and maintain its corporate existence, rights, privileges and franchises in the
jurisdiction of its incorporation, and qualify and remain qualified, as a foreign corporation in each jurisdiction in which such qualification
is necessary in view of its business or operations and where the failure to qualify or remain qualified might reasonably have a Material
Adverse Effect upon the financial condition, business or operations of the Company taken as a whole.


 


4.16          Subsequent
Equity Sales.


 


(a)            From
the date hereof until such time as the Note is no longer outstanding, the Company will not, without the consent of the Purchaser,
enter into any Equity Line of Credit or similar agreement, nor issue nor agree to issue any floating or Variable Priced Equity Linked
Instruments nor any of the foregoing or equity with price reset rights (subject to adjustment for stock splits, distributions, dividends,
recapitalizations and the like) (collectively, the “Variable Rate Transaction”). For purposes hereof, “Equity Line
of Credit” shall include any transaction involving a written agreement between the Company and an investor or underwriter other
than the Purchaser or an affiliate of the Purchaser whereby the Company has the right to “put” its securities to the investor
or underwriter over an agreed period of time and at an agreed price or price formula, and “Variable Priced Equity Linked Instruments”
shall include: (A) any debt or equity securities which are convertible into, exercisable or exchangeable for, or carry the right
to receive additional shares of Common Stock either (1) at any conversion, exercise or exchange rate or other price that is based
upon and/or varies with the trading prices of or quotations for Common Stock at any time after the initial issuance of such debt or equity
security, or (2) with a fixed conversion, exercise or exchange price that is subject to being reset at some future date at any time
after the initial issuance of such debt or equity security due to a change in the market price of the Company’s Common Stock since
date of initial issuance, and (B) any amortizing convertible security which amortizes prior to its maturity date, where the Company
is required or has the option to (or any investor in such transaction has the option to require the Company to) make such amortization
payments in shares of Common Stock which are valued at a price that is based upon and/or varies with the trading prices of or quotations
for Common Stock at any time after the initial issuance of such debt or equity security (whether or not such payments in stock are subject
to certain equity conditions). For the avoidance of doubt, a Section 3(a)(9) exchange and a settlement under a Section 3(a)(10) settlement,
each under the Securities Act, or any other similar settlement or exchange shall be deemed a Variable Rate Transaction for the purposes
of this Agreement.


 


(b)            This
section only applies to funding activities by the Company that shall directly affect the Purchaser’s ability to get repaid on time
by the Company; from the date hereof until the Note is no longer outstanding, in the event that the Company issues or sells any Common
Stock Equivalents, if the Purchaser then holding Securities purchased under this Agreement reasonably believes that any of the terms
and conditions appurtenant to such issuance or sale are more favorable to such investors than are the terms and conditions granted to
the Purchaser hereunder, upon notice to the Company by the Purchaser within five Trading Days after disclosure of such issuance or sale,
the Company shall amend the terms of this transaction as to the Purchaser only so as to give the Purchaser the benefit of such more favorable
terms or conditions.


 


(c)            Notwithstanding
the foregoing, this Section 4.16 shall not apply in respect of an Exempt Issuance.


 








     


     


    

 



 


ARTICLE V.

MISCELLANEOUS


 


5.1            Termination.
This Agreement may be terminated by the Purchaser, as to the Purchaser’s obligations hereunder only and without any effect whatsoever
on the obligations between the Company and the other Purchaser, by written notice to the other parties, if the Closing has not been consummated
on or before August 31, 2021; 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. Except as expressly set forth below and 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 the Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchaser.


 


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


 


5.4            Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via
facsimile or email attachment at the facsimile number or 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 date of transmission, if such notice
or communication is delivered via facsimile or email attachment at the facsimile number or email address 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 Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual
receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth
on the signature pages attached hereto. To the extent that any notice provided pursuant to any Transaction Document constitutes,
or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice
with the SEC pursuant to a Current Report on Form 8-K.


 


5.5            Amendments;
Waivers. Except as provided in the last sentence of this Section 5.5, 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 Purchaser; or in the
case of a waiver, by the party against whom enforcement of any such waived provision is sought.


 


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 the Purchaser (other
than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom the 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 “Purchaser.”


 






     

     


    

 


5.8            No
Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in
Section 4.8 and this Section 5.8.


 


5.9            Governing
Law; Arbitration; Attorneys’ Fees. 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. Any disputes, claims, or controversies arising out of or relating to the Transaction
Documents, or the transactions, contemplated thereby, or the breach, termination, enforcement, interpretation or validity thereof, including
the determination of the scope or applicability of this Agreement to arbitrate, shall be referred to and resolved solely and exclusively
by binding arbitration to be conducted before the Judicial Arbitration and Mediation Service (“JAMS”), or its successor pursuant
the expedited procedures set forth in the JAMS Comprehensive Arbitration Rules and Procedures (the “Rules”), including
Rules 16.1 and 16.2 of those Rules. The arbitration shall be held in New York, New York, before a tribunal consisting of three arbitrators
each of whom will be selected in accordance with the “strike and rank” methodology set forth in Rule 15. Either party
to this Agreement may, without waiving any remedy under this Agreement, seek from any federal or state court sitting in the State of New
York any interim or provisional relief that is necessary to protect the rights or property of that party, pending the establishment of
the arbitral tribunal. The costs and expenses of such arbitration shall be paid by and be the sole responsibility of the Company, including
but not limited to the Buyer’s attorneys’ fees and each arbitrator’s fees. The arbitrators’ decision must set
forth a reasoned basis for any award of damages or finding of liability. The arbitrators’ decision and award will be made and delivered
as soon as reasonably possibly and in any case within 60 days’ following the conclusion of the arbitration hearing and shall be
final and binding on the parties and may be entered by any court having jurisdiction thereof. If any party shall commence an Action to
enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company elsewhere in this Agreement,
the prevailing party in such Action shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other
costs and expenses incurred with the investigation, preparation and prosecution of such Action.


 


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 the 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 the Purchaser may rescind or withdraw,
in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part
without prejudice to its future actions and rights; provided, however, that in the case of a rescission of a conversion of a Note, the
applicable Purchaser shall be required to return any shares of Common Stock subject to any such rescinded conversion notice concurrently
with the return to the Purchaser of the aggregate conversion price paid to the Company for such shares and the restoration of the Purchaser’s
right to acquire such shares pursuant to the Purchaser’s Note (including, issuance of a replacement note certificate evidencing
such restored right).


 


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 without requiring the posting of any bond.


 


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 Purchaser
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 the Company makes a payment or payments to the Purchaser pursuant to any Transaction Document or the 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            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.


 


5.18            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 Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading
Day.


 






     

     


    

 


5.19            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.


 


5.20            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 WAIVE FOREVER TRIAL BY JURY.


 


5.21            Non-Circumvention.
The Company hereby covenants and agrees that the Company will not, by amendment of its formation documents or other governing documents,
or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities,
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Agreement, and will at
all times in good faith carry out all of the provision of this Agreement and take all action as may be required to protect the rights
of all Holder. Without limiting the generality of the foregoing or any other provision of this Agreement or the other Transaction Documents,
the Company (a) shall not increase the par value of any shares of Common Stock receivable upon conversion of the Note above the Conversion
Price, then in effect and (b) shall take all such action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable Shares upon the conversion of the Note.


 


(Signature Pages Follow)


 






     

     


    

 


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.


 


	Digital Brands Group, Inc.	Address for Notice:  
	 	 
	 	 
	By:	/s/ Hil Davis	 
	Name:	Hil Davis	 
	Title:	Chief Executive Officer	 
	 	 
	 	 
	With a copy to (which shall not constitute notice): 	 
	Email:	 



 


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK





SIGNATURE PAGE FOR PURCHASER FOLLOWS]


 


 




     


     


    

 


PURCHASER SIGNATURE PAGES TO 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: ___Oasis Capital, LLC_________________________________





Signature of Authorized Signatory of Purchaser:
__/s/ Adam Long_______________





Name of Authorized Signatory: ______Adam Long__________________________





Title of Authorized Signatory:             Manager_______________________________





Email Address of Authorized Signatory: adam@oasis-cap.com





Facsimile Number of Authorized Signatory: _______________________________





Address for Notice to Purchaser: 411 Dorado BCH E, Dorado PR 00646


 


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


 


Subscription Amount: $5,000,000


 


EIN Number: [REDACTED]


 



     

     


    




 


EXHIBIT A





Form of Note


 


NEITHER THE ISSUANCE NOR SALE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
(I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES FILED PURSUANT TO THE SECURITIES ACT OF 1933,
AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES.


 


	Principal Amount: $5,265,000	Issue Date: August 27 2021



 


Original Issue Discount: $250,000


 


SENIOR SECURED CONVERTIBLE PROMISSORY NOTE


 


FOR VALUE RECEIVED,
Digital Brands Group, Inc., a Delaware corporation (the “Borrower”),
as of August 27, 2021 (the “Issue Date”), hereby promises to pay to the order of OASIS CAPITAL, LLC,
a Puerto Rico limited liability company, (the “Lender” and including its registered assigns, the “Holder”),
the principal sum of $5,265,000 (the “Principal Amount”), together with interest at the rate of 6% per
annum, at maturity or upon acceleration or otherwise, as set forth herein (this “Note”). This Note is being issued
by the Borrower to the Lender pursuant to that certain Securities Purchase Agreement (the “Purchase Agreement”) entered
into by the Borrower and the Lender on the Issue Date. The cash consideration to the Borrower for this Note $5,000,000 (the “Consideration”)
in United States currency, due to the prorated original issuance discount of up to $250,000 (the “OID”) and
$15,000 transaction fee. The maturity date shall be the date that is 18 months from the Issue Date (the “Maturity Date”),
and is the date upon which the applicable portion of the Principal Amount, as well as any accrued and unpaid interest and other fees,
shall be due and payable. This Note may not be repaid in whole or in part except as otherwise explicitly set forth herein. Any amount
of principal or interest on this Note that is not paid by the applicable Maturity Date shall bear interest at the rate of the lesser of
(i) 18% per annum or (ii) the maximum amount allowed by law, from the due date thereof until the same is paid (“Default
Interest”). All payments due hereunder (to the extent not converted into the Borrower’s Common
Stock, par value $0.0001 per share (the “Common Stock”)) shall be made in lawful money of the United States
of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance
with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business
day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which
is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes
of determining the amount of interest due on such date. As used in this Note, the term “business day” shall mean any day other
than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive
order to remain closed.


 






     

     


    

 


This Note is free from all
taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar
rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof. Capitalized terms used in this
Note shall have the meanings set forth in the Purchase Agreement unless otherwise defined in this Note.


 


This Note is secured by a
security interest granted pursuant to the terms of the Security Agreement.


 


The following additional terms
shall also apply to this Note:


 


ARTICLE I.


 


1.1            Conversion
Right; Company Cash Payment Option.


 


 (a)            Conversion
Right. Subject to the terms of this Section 1.1, the Holder shall have the right at any time following the Issue Date, to convert
all or any part of the entire outstanding and unpaid Principal Amount and accrued and unpaid interest of this Note into fully paid and
non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities
of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the Conversion Price determined as provided
herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert
any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common
Stock beneficially owned by the Holder and its affiliates (excluding shares of Common Stock which may be deemed beneficially owned through
the ownership of the unconverted portion of this Note or the unexercised or unconverted portion of any other security of the Borrower
subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of
Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being
made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock
(the “Maximum Share Amount”). The Holder, upon not less than 61 days’ prior written notice to the Borrower, may
increase the Maximum Share Amount, provided that the Maximum Share Amount shall never exceed 9.99% of the number of shares of Common Stock
outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Note held by the Holder
and the provisions of this Section 1.1 shall continue to apply. Any such increase will not be effective until the 61st day
after such notice is delivered to the Borrower. The Maximum Share Amount provisions of this paragraph shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this Section 1.1 to correct this paragraph (or any portion
hereof) which may be defective or inconsistent with the intended Maximum Share Amount provisions contained herein or to make changes or
supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply
to any successor holder of this Note. For purposes of this Section 1.1, beneficial ownership shall be determined in accordance
with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G
thereunder, except as otherwise provided in clause (1) of such proviso. The number of shares of Common Stock to be issued upon
each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price
then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice
of Conversion”), delivered to the Borrower by the Holder in accordance with Section 1.3 below; provided that
the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice)
to the Borrower before 6:00 p.m., New York, New York time on such conversion date (the “Conversion Date”). The term
 “Conversion Amount” means, with respect to any conversion of this Note, the sum of (A) the Principal Amount of
this Note to be converted in such conversion, plus (B) at the Holder’s option, accrued and unpaid interest, if any, on such
Principal Amount at the interest rates provided in this Note to the Conversion Date, plus (C) at the Holder’s option, Default
Interest, if any, on the amounts referred to in the immediately preceding clauses (A) and/or (B), plus (D) at the Holder’s
option, any amounts owed to the Holder pursuant to Sections 1.2, 1.3(g), 4.11, and/or 4.12 and/or Article III
hereof. Except following an Event of Default, the Holder shall not be permitted to submit Conversion Notices in any thirty day period,
having Conversion Amounts equalling in the aggregate, in excess of $500,000.


 






     

     


    

 


 (b)            Cash
Payment Option. If at any time following the Issue Date, the Conversion Price set forth in any Conversion Notice is less than $3.00
per share (the “Reference Floor Price”), at the option of the Borrower, the Borrower may choose to pay within three
(3) business days to the Holder the applicable Conversion Amount in cash rather than issue shares of Common Stock; provided however
that in no event shall the Borrower issue shares of Common Stock at less than the Reference Floor Price if such issuance would result
in Borrower issuing more than 20% of its common stock outstanding as of the date hereof.


 


1.2            Conversion
Price.


 


 (a)            Conversion
Price. The Conversion Price shall be the lesser of (i) the 130% of the Closing Price on the last Trading Day prior to the Issue
Date, and (ii) 90% of the average of the two lowest VWAPs during the five (5) consecutive Trading Day period ending and including
the Trading Day immediately preceding the delivery or deemed delivery of the applicable Notice of Conversion (the “Conversion Price”).
All such Conversion Price determinations are to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification
or similar transaction that proportionately decreases or increases the Common Stock.


 


 (b)            Authorized
Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its authorized and
unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the
full conversion of this Note, which shall be at least THREE times the number of shares that is actually issuable upon full conversion
of this Note (based on the Conversion Price of this Note in effect from time to time) (the “Reserved Amount”). The
Reserved Amount shall be increased from time to time in accordance with the Borrower’s obligations hereunder. The Borrower represents
that upon issuance, such shares of Common Stock will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower
shall issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which
this Note shall be convertible at the Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there
shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of this Note.
The Borrower acknowledges that it has irrevocably instructed its transfer agent to issue certificates (or book-entry shares) for the Common
Stock issuable upon conversion of this Note, and agrees that its issuance of this Note shall constitute full authority to its officers
and agents who are charged with the duty of executing stock certificates (or applicable instructions for the issuance of book-entry shares)
to execute and issue the necessary certificates (or book-entry shares) for shares of Common Stock in accordance with the terms and conditions
of this Note.


 


If, at any time the Borrower
does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of this Note; provided,
that notwithstanding anything to the contrary herein, the Borrower shall only be required to confirm and adjust the Reserved Amount one
time per calendar month.


 






     

     


    

 


1.3            Method
of Conversion.


 


 (a)            Mechanics
of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any time, (A) by
submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion
Date prior to 11:00 a.m., New York, New York time) and (B) subject to Section 1.3(b), surrendering this Note at the principal
office of the Borrower.


 


 (b)            Surrender
of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with
the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire unpaid Principal
Amount of this Note is so converted. The Holder and the Borrower shall maintain records showing the Principal Amount so converted and
the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to require
physical surrender of this Note upon each such conversion. In the event of any dispute or discrepancy, such records of the Borrower shall,
prima facie, be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if any portion of
this Note is converted as aforesaid, the Holder may not transfer this Note unless the Holder first physically surrenders this Note to
the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Holder a new Note of like tenor, registered
as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, representing in the aggregate the remaining unpaid
Principal Amount of this Note. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions
of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted Principal Amount of this Note represented
by this Note may be less than the amount stated on the face hereof.


 


 (c)            Payment
of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue
and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that of the Holder
(or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities or property unless
and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be held for the Holder’s
account) requesting the issuance thereof shall have paid to the Borrower the amount of any such tax or shall have established to the satisfaction
of the Borrower that such tax has been paid.


 


 (d)            Delivery
of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable
means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 1.3,
unless the Borrower shall have elected to pay to the Holder cash in lieu of the applicable Conversion Amounts in accordance with Section 1.1
hereof, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the
Common Stock issuable upon such conversion within two business days after such receipt (the “Deadline”) (and, solely
in the case of conversion of the entire unpaid Principal Amount hereof, surrender of this Note) in accordance with the terms hereof.


 


 (e)            Obligation
of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the
holder of record of the Common Stock issuable upon such conversion, the outstanding Principal Amount and the amount of accrued and unpaid
interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Article I,
all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common
Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion
as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional,
irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof,
the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other
obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach
or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit
such obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion
shall be the Conversion Date so long as the Notice of Conversion is received by the Borrower before 11:00 a.m., New York, New York time,
on such date.


 






     

     


    

 


 (f)            Delivery
of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion,
provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”)
program, upon request of the Holder and its compliance with the provisions contained in Sections 1.1 and 1.2 and in
this Section 1.3, the Borrower shall use its commercially reasonable efforts to cause its transfer agent to electronically
transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through
its Deposit Withdrawal Agent Commission (“DWAC”) system.


 


 (g)            Failure
to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue other remedies, including
actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is
not delivered by the Deadline the Borrower shall pay to the Holder $3,000 per business day for each business day beyond the Deadline that
the Borrower fails to deliver such Common Stock (unless such failure results from war, acts of terrorism, an epidemic, or natural disaster)
(“Conversion Default Payments”). Such amount shall be paid to Holder in cash by the fifth day of the month following
the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following
the month in which it has accrued), shall be added to the Principal Amount of this Note on the fifth day of the month following the month
in which it has accrued, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional Principal
Amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert
is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, and/or interference with such conversion
right are difficult if not impossible to quantify. Accordingly, the parties acknowledge that the liquidated damages provision contained
in this Section 1.3(g) are justified.


 


1.4            Concerning
the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless (i) such shares
are sold pursuant to an effective registration statement under the Securities Act of 1933 (the “Securities Act”), or
(ii) the Borrower or its transfer agent shall have been furnished with 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 (iii) such shares are sold or transferred pursuant to Rule 144
under the Securities Act (or a successor rule) (“Rule 144”) or (iv) such shares are transferred to an “affiliate”
(as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.4
and who is an “accredited investor” (as defined in Rule 501(a) of the Securities Act). Except as otherwise provided
(and subject to the removal provisions set forth below), until such time as the shares of Common Stock issuable upon conversion of this
Note have been registered under the Securities Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the
number of securities as of a particular date that can then be immediately sold, each certificate for shares of Common Stock issuable upon
conversion of this Note that has not been so included in an effective registration statement or that has not been sold pursuant to an
effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following
form, as appropriate:


 


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



 






     

     


    

 


The legend set forth above shall be removed and
the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if (i) the Borrower or its transfer
agent shall have received 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 Common Stock may be made without registration under the Securities Act, which opinion
shall be accepted by the Borrower so that the sale or transfer is effected or (ii) in the case of the Common Stock issuable upon
conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the
Securities Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular
date that can then be immediately sold.


 


1.5            Status
as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than the shares,
if any, which cannot be issued because their issuance would exceed such Holder’s allocated portion of the Reserved Amount or non-waived
Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder’s rights as a Holder of such
converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock
and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Borrower to
comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received certificates or transmission of such shares
pursuant to Section 1.3(f) for all shares of Common Stock prior to the tenth (10th) business day after the expiration
of the Deadline with respect to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain
its status as a holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with
respect to such unconverted portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to the
Holder or, if this Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted.
In all cases, the Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive Conversion
Default Payments pursuant to Section 1.3(g) to the extent required thereby for such conversion default and any subsequent
conversion default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance
with Section 1.2) for the Borrower’s failure to convert this Note.


 






     

     


    

 


ARTICLE II.





CERTAIN COVENANTS


 


2.1            Distributions
on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder’s
written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property or
other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of
Common Stock or (b) directly or indirectly or through any Subsidiary make any other payment or distribution in respect of its capital
stock except for distributions pursuant to any shareholders’ rights plan which is approved by a majority of the Borrower’s
disinterested directors.


 


2.2            Restriction
on Stock Repurchases. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder’s
written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise)
in any one transaction or series of related transactions any shares of capital stock of the Borrower or any warrants, rights or options
to purchase or acquire any such shares (other than repurchases pursuant to the Borrower’s equity incentive plans).


 


ARTICLE III.





EVENTS OF DEFAULT


 


The occurrence of any of the
following shall each constitute an “Event of Default”, with no right to notice or the right to cure except as specifically
stated:


 


3.1            Failure
to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at
the Maturity Date, upon acceleration, or otherwise.


 


3.2            Reserve/Issuance
Failures. The Borrower fails to reserve a sufficient amount of shares of Common Stock as required under the terms of the Purchase
Agreement, fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation
to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of any securities of the Borrower
held by the Holder, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) shares
of Common Stock issued to the Holder upon conversion of or otherwise pursuant to any securities of the Borrower held by the Holder as
and when required by such securities, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer
agent in transferring (or issuing) (electronically or in certificated form) shares of Common Stock to be issued to the Holder upon conversion
of or otherwise pursuant to any securities of the Borrower held by the Holder as and when required by such securities, or fails to remove
(or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend
(or to withdraw any stop transfer instructions in respect thereof) on any shares of Common Stock issued to the Holder upon conversion
of or otherwise pursuant to any securities of the Borrower held by the Holder as and when required by such securities (or makes any written
announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall
continue uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for
two business days after the Holder shall have delivered an applicable notice of conversion or exercise. It is an obligation of the Borrower
to remain current in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of any securities
held by the Holder is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of
the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process a conversion or exercise (excluding
for the avoidance of doubt, the conversion price which is the Holder’s obligation to pay), such advanced funds shall be paid by
the Borrower to the Holder within five business days, either in cash or as an addition to the balance of this Note, and such choice of
payment method is at the discretion of the Borrower.


 


3.3            Breach
of Covenants. The Borrower breaches any covenant or other term or condition contained in this Note or any other documents entered
into between the Borrower and the Holder the breach of which has (or with the passage of time will have) a material adverse effect on
the rights of the Holder with respect to this Note and such breach is not cured within 10 business days of the date of such breach.


 






     

     


    

 


3.4            Breach
of Representations and Warranties. Any representation or warranty of the Borrower made in this Note or in any agreement, statement
or certificate given in writing pursuant hereto or in connection herewith, or in connection with the Purchase Agreement or any Transaction
Document, shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will
have) a material adverse effect on the rights of the Holder with respect to this Note.


 


3.5            Receiver
or Trustee. The Borrower or any Subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or
consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or
trustee shall otherwise be appointed.


 


3.6            Judgments.
Except as set forth in the Company’s SEC filings, any money judgment, writ or similar process shall be entered or filed against
the Borrower or any Subsidiary of the Borrower or any of their respective property or other assets for more than $500,000, and shall remain
unvacated, unbonded or unstayed for a period of 10 days unless otherwise consented to by the Holder, which consent will not be unreasonably
withheld.


 


3.7            Bankruptcy.
Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any
bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any Subsidiary of the Borrower and,
in the case of involuntary proceedings, have not been dismissed within 61 days.


 


3.8            Delisting
of Common Stock on the Trading Market. The Borrower shall fail to maintain the listing or quotation of the Common Stock on the Trading
Market (as defined in the Purchase Agreement).


 


3.9            Failure
to Comply with the Exchange Act. The Borrower shall fail to file with the SEC its Annual Reports on Form 10-K or its Quarterly
Reports on Form 10-Q within the proscribed time periods allocated by the Exchange Act , and/or the Borrower shall cease to be subject
to the reporting requirements of the Exchange Act.


 


3.10          Liquidation.
The Borrower commences any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.


 


3.11          Cessation
of Operations. The Borrower materially ceases operations or Borrower admits it is otherwise generally unable to pay its debts as such
debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern”
shall not be an admission that the Borrower cannot pay its debts as they become due.


 











3.12          Financial
Statement Restatement. The Borrower restates any financial statements
filed by the Borrower with the SEC for any date or period from two years prior to the Issue Date of this Note and until this Note is
no longer outstanding, if the result of such restatement would, by comparison to the unrestated financial statements, have constituted a
material adverse effect on the business, operations or financial condition of the Borrower; provided, however, that if any restatement
of any financial statements is required to be filed by the Borrower as a result of, or in response to,
any new or modified federal or state statute, law, rule or regulation, including any rules and
regulations of the SEC, then such restatement of the Borrower’s financial statements shall not be an Event
of Default.


 






     

     


    

 


3.13          Replacement
of Transfer Agent. In the event that the Borrower replaces its transfer agent, and the Borrower fails to provide within 15 days of
such replacement, a fully executed Irrevocable Transfer Agent Instructions (including but not limited to the provision to irrevocably
reserve shares of Common Stock under Section 4.9 of the Purchase Agreement) signed by the successor transfer agent to Borrower and
the Borrower that reserves 300% of the total amount of shares previously held in reserve for the Borrower’s immediately preceding
transfer agent.


 


3.14          Inside
Information. Any actual transmittal, conveyance, or disclosure by the Borrower or its officers, directors, and/or affiliates of, material
non-public information concerning the Borrower, to the Holder or its successors and assigns, which is not immediately cured by Borrower’s
filing of a Form 8-K pursuant to Regulation FD on that same date.


 


3.15          No
bid. The lowest Trading Price on the Trading Market for the Common Stock is equal to or less than $0.01. “Trading Price”
means, for any security as of any date, the lowest VWAP price on the Trading Market as reported by a reliable reporting service designated
by the Holder (i.e., www.Nasdaq.com) or, if Nasdaq is not the principal trading market for such security, on the principal securities
exchange or trading market where such security is listed or traded or, if the lowest intraday trading price of such security is not available
in any of the foregoing manners, the lowest intraday price of any market makers for such security that are quoted on the OTC Markets.


 


3.16          Prohibition
on Debt and Variable Securities. The Borrower, without written consent of the Holder, enters into any Variable Rate Transaction or
other similar transaction prohibited under Section 4.16 of the Purchase Agreement.


 


REMEDIES UPON A DEFAULT. UPON THE OCCURRENCE
OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, UPON WRITTEN DEMAND BY THE HOLDER THIS NOTE SHALL BECOME IMMEDIATELY DUE
AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO THE DEFAULT
AMOUNT (AS DEFINED HEREIN). Upon the occurrence of any Event of Default specified in Sections 3.1, 3.3, 3.4,
3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13 and/or 3.14, solely upon
written demand by the Holder, this Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction
of its obligations hereunder, an amount equal to (i) 125% (plus an additional 5% per each additional Event of Default that occurs
hereunder) multiplied by the then outstanding entire balance of this Note (including principal and accrued and unpaid interest)
plus (ii) Default Interest from the date of the Event of Default, if any, plus (iii) any amounts owed to the Holder
pursuant to Section 1.3(g) in addition to this Remedies Upon Default section (collectively, in the aggregate of
all of the above, the “Default Amount”), and all other amounts payable hereunder shall immediately become due and payable,
all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation,
legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or
in equity.


 


ARTICLE IV.





MISCELLANEOUS


 


4.1            Failure
or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive
of, any rights or remedies otherwise available.


 






     

     


    

 


4.2            Notices.
All notices, offers, acceptance and any other acts under this Notice (except payment) shall be in writing, and shall be sufficiently given
if delivered to the addressees in person, by e-mail, by FedEx or similar receipted next day delivery, as follows:


 


If to the Borrower, to:


 


		 If to the Company:	Digital
Brands Group, Inc.
	 	 	Email: hil@dstld.la
	 	 	Attention: John
 “Hil” Davis, CEO



 


		with
a copy to:	Manatt,
Phelps & Phillips LLP
	 	 (which shall not constitute notice)	tpoletti@manatt.om
	 	 	Attention: Thomas J. Poletti



 


		If to Holder:	Oasis
Capital, LLC
	 	 	Email: adam@oasis-cap.com
	 	 	Attention: Adam
Long, Managing Partner



 


		with a copy to:	Lucosky
Brookman, LLP
	 	(which shall not constitute notice)	sbrookman@lucbro.com
	 	 	Attention: Seth Brookman



 


4.3            Amendments.
This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term “Note”
and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended
or supplemented, then as so amended or supplemented.


 


4.4            Assignability.
This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors
and assigns. Notwithstanding anything to the contrary herein, the rights, interests or obligations of the Borrower hereunder may not be
assigned, by operation of law or otherwise, in whole or in part, by the Borrower without the prior signed written consent of the Holder,
which consent may be withheld at the sole discretion of the Holder (any such assignment or transfer shall be null and void if the Borrower
does not obtain the prior signed written consent of the Holder). This Note or any of the severable rights and obligations inuring to the
benefit of or to be performed by Holder hereunder may be assigned by Holder to a third party, in whole or in part, without the need to
obtain the Borrower’s consent thereto. Each transferee of this Note must be an “accredited investor” (as defined in
Rule 501(a) of the Securities Act). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral
in connection with a bona fide margin account or other lending arrangement.


 


4.5            Cost
of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including
reasonable attorneys’ fees.


 


4.6            Governing
Law. This Note shall be governed by and interpreted in accordance with the laws of the State of New York without regard to the principles
of conflicts of law (whether New York or any other jurisdiction).


 






     

     


    

 


4.7            Arbitration.
Any disputes, claims, or controversies arising out of or relating to this Note, or the transactions, contemplated thereby, or the breach,
termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this Note to
arbitrate, shall be referred to and resolved solely and exclusively by binding arbitration as provided for in the Purchase Agreement.
Either party to this Note may, without waiving any remedy under this Note, seek from any federal or state court sitting in the State of
New York any interim or provisional relief that is necessary to protect the rights or property of that party, pending the establishment
of the arbitral tribunal. The costs and expenses of such arbitration shall be paid by and be the sole responsibility of the Borrower,
including but not limited to the Holder’s attorneys’ fees, and each arbitrator’s fees. The arbitrators’ decision
must set forth a reasoned basis for any award of damages or finding of liability. The arbitrators’ decision and award will be made
and delivered as soon as reasonably possible and in any case within sixty days’ following the conclusion of the arbitration hearing
and shall be final and binding on the parties and may be entered by any court having jurisdiction thereof. Notwithstanding the foregoing,
the choice of arbitration shall not limit the Holder’s exercise of remedies under the Uniform Commercial Code.


 


4.8            JURY
TRIAL WAIVER. THE BORROWER AND THE HOLDER HEREBY WAIVE A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER
OF THE PARTIES HERETO AGAINST THE OTHER IN RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS NOTE.


 


4.9            Certain
Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding Principal Amount (or
the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest, the Borrower
and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult to determine
and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended to compensate the Holder
in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock acquired upon conversion
of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Borrower and the Holder hereby agree that
such amount of stipulated damages is not plainly disproportionate to the possible loss to the Holder from the receipt of a cash payment
without the opportunity to convert this Note into shares of Common Stock.


 


4.10          Remedies.
The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the
intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach
of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the
provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition
to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce
specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being
required.


 


4.11          Section 3(a)(10) Transactions.
If at any time while this Note is outstanding, the Borrower enters into a transaction structured in accordance with, based upon, or related
or pursuant to, in whole or in part, Section 3(a)(10) of the Securities Act (a “3(a)(10) Transaction”),
then a liquidated damages charge of 100% of the outstanding principal balance of this Note at that time, will be assessed and will become
immediately due and payable to the Holder, either in the form of cash payment, an addition to the balance of this Note, or a combination
of both forms of payment, as determined by the Holder. The damages resulting from such a 3(a)(10) Transaction and the potential sale
of shares of the Borrower’s capital stock resulting therefrom into the capital markets are difficult if not impossible to quantify.
Accordingly, the parties acknowledge that the liquidated damages provision contained in this Section 4.11 are justified. The
liquidated damages charge in this Section 4.11 shall be in addition to, and not in substitution of, any of the other rights
of the Holder under this Note.


 






     

     


    

 


4.12          Usury.
If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the
applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable
law. The Borrower covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the
Borrower from paying all or any portion of the principal of or interest on this Note as contemplated herein, wherever enacted, now or
at any time hereafter in force, or which may affect the covenants or the performance of this Note, and the Borrower (to the extent it
may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of
every such as though no such law has been enacted.


 


4.13            Repayment.
Notwithstanding anything to the contrary contained in this Note and provided that the shares underlying this Note have been registered
on an effective registration statement with the Securities and Exchange Commission, this Note may be repaid (i) from the Issuance
Date until and through the day that falls on the sixty-day anniversary of the Issue Date (the “60 Day Anniversary”) at an
amount equal to 110% of the aggregate of the outstanding principal balance of the Note and accrued and unpaid interest, (ii) after
the 60 Day Anniversary until and through the day that falls on the ninety-day anniversary of the Issue Date (the “90 Day Anniversary”)
at an amount equal to 115% of the aggregate of the outstanding principal balance of the Note and accrued and unpaid interest and (iii) anytime
after the 90 Day Anniversary, 120% of the aggregate of the outstanding principal balance of the Note and accrued and unpaid interest.
In order to repay this Note in accordance with the preceding sentence, the Borrower shall provide notice to the Holder 5 business days
prior to such respective repayment date, and the Holder must receive such repayment no sooner than 7 business days of the Holder’s
receipt of the respective repayment notice (the “Repayment Period”). The Holder may convert the Note in whole or in
part at any time during the Repayment Period, subject to the terms and conditions of this Note.


 


4.14            Terms
of Future Financings. So long as this Note is outstanding, upon any issuance by the Borrower or any of its Subsidiaries of
any Common Stock Equivalents with any term more favorable to the holder of such security or with a term in favor of the holder of such
security that was not similarly provided to the Holder in this Note, then the Borrower shall notify the Holder of such additional or more
favorable term and such term, at Holder’s option and upon written notice to the Borrower, shall become a part of the transaction
documents with the Holder. The types of terms contained in another security that may be more favorable to the holder of such security
include, but are not limited to, terms addressing conversion discounts, prepayment rate, conversion look back periods, interest rates,
original issue discounts, stock sale price, private placement price per share, and warrant coverage.


 


** signature page to follow **


 






     

     


    

 


IN WITNESS WHEREOF, Borrower
has caused this Note to be signed in its name by its duly authorized officer on the Issue Date.


 


	DIGITAL BRANDS GROUP, INC.	 
	 	 
	By:	 	 
	Name:	 Hil Davis	 
	Title:	 Chief Executive Officer	 






 




     


     


    

 


 


EXHIBIT A


 


TO SECURED CONVERTIBLE PROMISSORY-- NOTICE OF
CONVERSION


 


The undersigned hereby elects to convert $_______
amount of this Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of this Note (“Common
Stock”) as set forth below, of Digital Brands Group, Inc. (the “Borrower”), according to the
conditions of the secured convertible promissory note of the Borrower dated as of August 27, 2021 (the “Note”),
as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.


 


Box Checked as to applicable instructions:


 


 ̈   The Borrower
shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its
nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).


 


Name of DTC Prime





Broker: Account Number:


 


 ̈   The undersigned
hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which
numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional
space is necessary, on an attachment hereto:


 


OASIS CAPITAL, LLC





e-mail: adam@oasis-cap.com


 


	Date of Conversion:	_____
	Applicable Conversion Price:	$         
	Number
of Shares of Common Stock to be Issued Pursuant to Conversion of this Note:	_____
	Amount of Principal Balance Due remaining Under this Note after this conversion: 	_____





 





OASIS CAPITAL, LLC


   


	By:	 	 






	Name:	 	 






	Title:	 	 






	Date:	 	 


 




     


     


    

 


EXHIBIT B





Form of Security Agreement


 


[OMITTED]




 






     

     


    

 


EXHIBIT C


 


FORM OF REGISTRATION RIGHTS AGREEMENT


 


[OMITTED]








 






    	 	- 3 -	 



     


    

 





EXHIBIT D


 


Form of Reserve Letter


 


[OMITTED]


 




     


     


    

 





EXHIBIT E





Form of Board Consent


 


[OMITTED]


 




     


     


    

 


EXHIBIT F





Form of Consent


 


DIGITAL BRANDS GROUP, INC. (the “Company”) has information
or notice of a proposed event (collectively, the “Information”) that it is either required to provide you pursuant to that
certain Securities Purchase Agreement dated August 27, 2021 (“Agreement”) between you and the Company or believes that
you would be interested in obtaining.


 


If the Company is required to provide
this Information to you under the Agreement, you acknowledge that receipt of this information may restrict you from trading in the Company’s
securities until this Information is made public in accordance with the Agreement.


 


If the Company is not required to
provide this Information to you under the Agreement, you acknowledge that this may restrict you from trading in the Company’s securities
until this Information is made public in accordance with the Agreement. .


 


Please respond in writing if you do or do not
want to be provided with the Information. If the Company does not receive your response within three business days, we will have the right
to assume that you have chosen not to receive the Information and, if applicable, waived your right to any rights provided for under the
Agreements that require notice, for which this Information (including notice) is being given.


 


Please sign below and check the appropriate box
below.


 


	 	Sincerely,
	 	 
	 	 	 






	 	By:	 
	 	Name:	 
	 	Title:	Chief Executive Officer




 


___ Yes. Please provide me with the Information


 


___ No.  Do not provide me with the Information


 


__________________________





__________________________