Exhibit
10.1


 


SECURITIES
PURCHASE AGREEMENT


 


This
Securities Purchase Agreement (this “Agreement”) is dated as of September 24, 2021, between Ensysce Biosciences, Inc.,
a Delaware corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including
its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).


 


WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended
(the “Securities Act”), and/or Rule 506 promulgated thereunder, the Company desires to issue and sell to each Purchaser,
and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described
in this Agreement.


 


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


 


ARTICLE
I.

DEFINITIONS


 


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


 


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


 


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


 


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


 


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


 


“Business
Day” means any day other than Saturday, Sunday or other day on which the Federal Bank of New York is closed.


 


Closings”
means each of the First Closing pursuant to Section 2.1(a) and the Second Closing pursuant
to Section 2.1(b).


 


“Closing
Dates” means each of the First Closing Date and the Second Closing.


 


“Closing
Statement” means the Closing Statement in the form on Annex A attached hereto.


 


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


 




    	 



     


    

 


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


 


“Company
Counsel” means Troutman Pepper LLP.


 


“Conversion
Price” shall have the meaning ascribed to such term in the Notes.


 


“Conversion
Shares” shall have the meaning ascribed to such term in the Notes.


 


“Disclosure
Schedules” shall have the meaning ascribed to such term in Section 3.1.


 


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


 


“Effective
Date” means the earliest of the date that (a) the initial Registration Statement has been declared effective by the Commission,
(b) all of the Underlying Shares have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for
the Company to be in compliance with the current public information required under Rule 144 and without volume or manner-of-sale restrictions,
(c) following the one (1) year anniversary of the Second Closing Date provided that a holder of the Underlying Shares is not an Affiliate
of the Company or (d) all of the Underlying Shares may be sold pursuant to an exemption from registration under Section 4(a)(1) of the
Securities Act without volume or manner-of-sale restrictions and Company Counsel has delivered to such holders a standing written unqualified
opinion that resales may then be made by such holders of the Underlying Shares pursuant to such exemption which opinion shall be in form
and substance reasonably acceptable to such holders.


 


“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.


 




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“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company pursuant
to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority
of the members of the compensation committee of the Company, (b) securities upon the exercise or exchange of or conversion of any Securities
issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding
on the date of this Agreement, provided that such securities have not been amended after the date of this Agreement to increase the number
of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection
with stock splits or combinations) or to extend the term of such securities, and (c) securities issued pursuant to acquisitions or strategic
transactions approved by a majority of the disinterested directors of the Company, provided that such securities are issued as “restricted
securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement
in connection therewith during the prohibition period in Section 4.13(a) herein, and provided that any such issuance shall only be to
a Person (or to the equityholders of a Person) which the majority of the disinterested directors of the Company believes in good-faith
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.


 


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


 


“First
Closing” shall have the meaning ascribed to such term in Section 2.1.


 


“First
Closing Date” shall have the meaning ascribed to such term in Section 2.1.


 


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


 


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


 


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


 


“Irrevocable
Transfer Agent Instructions” shall have mean the Irrevocable Transfer Agent Instructions, dated as of the date of each Closing,
among the Company and the Transfer Agent, in the form attached hereto as Exhibit H.


 


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


 


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


 


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


 




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


 


“Maximum
Rate” shall have the meaning ascribed to such term in Section 5.18.


 


“Notes”
means the Senior Secured Convertible Notes due, subject to the terms therein, twenty-one (21) months from their dates of issuance, issued
by the Company to the Purchasers hereunder, in the form of Exhibit A attached hereto.


 


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


 


“Patent
Security Agreement” means the Patent Security Agreement, dated on or about the date hereof, among the Company, its Subsidiaries,
and the Purchasers, in the form of Exhibit G attached hereto.


 


“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.


 


“Placement
Agent” means Lake Street Capital Markets, LLC.


 


“Pledged
Securities” means any and all certificates and other instruments representing or evidencing all of the capital stock and other
equity interests of the Subsidiaries.


 


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


 


“Principal
Amount” means, as to each Purchaser, the amounts set forth below such Purchaser’s signature block on the signature pages
hereto next to the heading “Principal Amount,” in United States Dollars, which shall equal such Purchaser’s Subscription
Amount multiplied by 1.06.


 


“Principal
Market” means The Nasdaq Capital Market 


 


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


 


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


 


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


 




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


 


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


 


“Registration
Rights Agreement” means the Registration Rights Agreement, dated on or about the date hereof, among the Company and the Purchasers,
in the form of Exhibit B attached hereto.


 


“Registration
Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering
the resale of the Underlying Shares by each Purchaser as provided for in the Registration Rights Agreement.


 


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


 


“Required
Minimum” means (i) on and after the date hereof until the Registration Statement is effective under the Exchange Act, the maximum
aggregate number of shares of Common Stock, then issued or potentially issuable in the future pursuant to the Transaction Documents,
including any Underlying Shares issuable upon exercise in full of all Warrants or conversion in full of all Notes (including Underlying
Shares issuable as payment of interest on the Notes), ignoring any conversion or exercise limits set forth therein, and assuming (a)
on the Maturity Date the Notes are fully converted and (b) the Notes convert into shares of Common Stock at the Monthly Conversion Price
on each Monthly Redemption Date, and (ii) on and after the date on which the Information Statement is effective under the Exchange Act,
300% of the amount set forth in subparagraph (i) of this definition of “Required Minimum” (but in no event, later than sixty
(60) calendar days after the date hereof).


 


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


 


“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.


 


“S&W”
means Sullivan & Worcester LLP, with offices located at 1633 Broadway, 32nd Floor, New York, New York 10019.


 


“Second
Closing” shall have the meaning ascribed to such term in Section 2.1.


 


“Second
Closing Date” shall have the meaning ascribed to such term in Section 2.1.


 




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“Second
Closing Notice” shall have the meaning ascribed to such term in Section 2.1.


 


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


 


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


 


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


 


“Security
Agreement” means the Security Agreement dated on the date hereof by and among the Company, the Subsidiaries, and the Purchasers,
as hereinafter amended and/or supplemented altogether with all exhibits, schedules and annexes to such Security Agreement, pursuant to
which the Obligations (as defined in the Security Agreement) of the Company and the Subsidiaries to the Purchasers under the Transaction
Documents are secured by the assets of the Company and Subsidiaries (including, without limitation, the Collateral and Intellectual Property
(each as defined in the Security Agreement)), which security interests in the Collateral shall be perfected by UCC-1 Financing Statements
(the “UCC-1 Financing Statements”), filed with the Secretary of State of the State of Delaware and the Secretary of
State of any other applicable jurisdiction, to the extent perfectible by the filing of a UCC-1 Financing Statement, or if applicable,
a UCC-3 Financing Statement Amendment and such other documents and instruments related thereto, which Security Agreement shall be in
the form of Exhibit E attached hereto.


 


“Security
Documents” shall mean the Security Agreement, the Subsidiary Guarantees, the original Pledged Securities, along with medallion
guaranteed executed blank stock powers to the Pledged Securities, and any other documents and filing required thereunder in order to
grant the Purchasers a first priority security interest in the assets of the Company and the Subsidiaries (including, without limitation,
the Collateral and Intellectual Property (each as defined in the Security Agreement)) as provided in the Security Agreement, including
all UCC-1 Financing Statements (or if applicable, a UCC-3 Financing Statement Amendment) filing receipts, and filings receipts with respect
to the documents and filings described in Section 4.21, Section 4.22, and Section 4.23 herein.


 


“Shareholder
Approval” means such approval as may be required by the applicable rules and regulations of the NYSE American/the Nasdaq Stock
Market/The New York Stock Exchange (or any successor entity) from the shareholders of the Company with respect to the transactions contemplated
by the Transaction Documents, including the issuance of all of the Underlying Shares in excess of 19.99% of the issued and outstanding
Common Stock on the First Closing Date.


 


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


 




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


 


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


 


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


 


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


 


“Subsidiary
Guarantee” means the Subsidiary Guarantee, dated the date hereof, by each Subsidiary in favor of the Purchasers, in the form
of Exhibit F attached hereto.


 


“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 will, in accordance with the terms hereof,
be listed or quoted for trading on the date in question: the NYSE American; the Nasdaq Capital Market; the Nasdaq Global Market; the
Nasdaq Global Select Market; the New York Stock Exchange; OTC Markets; the OTC Bulletin Board or the OTC Markets Group Inc. (or any successors
to any of the foregoing).


 


“Transaction
Documents” means this Agreement, the Notes, the Warrants, the Registration Rights Agreement, the Security Agreement, the Patent
Security Agreement, the Subsidiary Guarantee, the Irrevocable Transfer Agent Instructions, Voting Rights Agreement, all exhibits and
schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.


 


“Transfer
Agent” means Continental Stock Transfer & Trust, the current transfer agent of the Common Stock, with a mailing address
of 1 State Street 30th Floor, New York, NY 10004-1561, and any successor transfer agent of the Company.


 


“Underlying
Shares” means the Warrant Shares and shares of Common Stock issued and issuable pursuant to the terms of the Notes, including
without limitation, the Conversion Shares and the shares of Common Stock issued and issuable in lieu of the cash payment of interest
on the Notes in accordance with the terms of the Notes, in each case without respect to any limitation or restriction on the conversion
of the Notes or the exercise of the Warrants.


 


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


 




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


 


“Warrants”
means, collectively, the Common Stock purchase warrants delivered to the Purchasers at applicable Closing in accordance with Section
2.2(a) or Section 2.2(c), hereof, which Warrants shall be exercisable immediately and have a term of exercise equal to five (5) years,
in the form of Exhibit C attached hereto.


 


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


 


ARTICLE
II.

PURCHASE AND SALE


 


2.1
(a) First Closing. The first closing of the offer and sale of the Securities (the “First Closing”) shall occur at
10:00 am (New York City time) at the offices of Sullivan & Worcester LLP, 1633 Broadway, New York, New York 10019, on the first (1st)
Trading Day on which the conditions to the First Closing set forth in Section 2.3 hereof are satisfied or waived in writing as provided
elsewhere herein, or on such other date and time as agreed to by the Company and the Purchaser (the “First Closing Date”).


 


(b)
Second Closing.


 


(i)
Subject to the satisfaction (or express waiver) of the conditions set forth in this Section 2.1 and Section 2.3, the Company shall have
the right to require the Purchaser to purchase the Securities on the Second Closing Date (as defined herein) by delivering to the Purchasers
an irrevocable written notice (the “Second Closing Notice”) on the Effective Date (as such term is defined in the
Registration Rights Agreement) that the Company has exercised its right to require the Purchasers to purchase the Securities.


 




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(ii)
The Second Closing Notice shall state that (A) the registration statement (the “Registration Statement”), which is
the subject of the Registration Rights Agreement has been declared effective by the SEC (and with respect to which no stop order has
been issued); (B), the date and time of the a second closing (the “Second Closing”), which shall be at 10:00 a.m.
(New York City time), on a date that is no later than the second (2nd) Trading Day after the Registration Statement has been
declared effective by the SEC (the “Second Closing Date”); and (iii) all the conditions to the Second Closing set forth in
this Section 2.1. and Section 2.3 hereof are satisfied or waived in writing, Subject to compliance with the applicable federal securities
laws, the Company and the Purchaser may mutually agree on such other date and time for the Second Closing. Notwithstanding anything herein
to the contrary, if the Second Closing does not occur by January 23, 2022, the Company’s right to effect a Second Closing hereunder
shall automatically terminate. To this end, the parties hereto shall use their commercially reasonable efforts to effectuate the Second
Closing.


 


2.2
Deliveries.


 


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


 


(i)
this Agreement duly executed by the Company;


 


(ii)
a legal opinion of Company Counsel, substantially in the form of Exhibit D attached hereto;


 


(iii)
the specified Note having the respective principal amount set forth on Schedule 1, registered in the name of such Purchaser;


 


(vi)
the specified Warrant registered in the name of such Purchaser set forth on Schedule 1 to purchase up to a number of shares of Common
Stock equal to forty percent (40%) of such Purchaser’s Conversion Shares on the First Closing Date, with an exercise price equal
to 130% of the Conversion Price set forth in the specified Note, subject to adjustment therein;


 


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


 


(v)
the Security Agreement, duly executed by the Company and each Subsidiary, along with all of the Security Documents, including the Subsidiary
Guarantee, duly executed by the parties thereto, the original Pledged Securities and corresponding stock powers;


 


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


 


(vii)
the Patent Security Agreement duly executed by the Company;


 


(viii)
Irrevocable Transfer Agent Instructions duly executed by the Company and the Transfer Agent;


 




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(ix)
the Stockholder Consent (as defined in in Section 4.11(b));


 


(xiii)
a perfection certificate, duly executed by the Company, in the form reasonably acceptable to the Purchasers;


 


(x)
the UCC-1 Financing Statements (or if applicable, UCC-3 Financing Statement Amendments) with proof of filing thereof with the Secretary
of State of the State of Delaware and the Secretary of State of any other applicable jurisdiction;


 


(xi)
the Disclosure Schedules, updated as of such First Closing Date, together with any additional collateral documents necessary or appropriate,
in the Agent’s sole discretion, because of any changes in such Disclosure Schedules


 


(xii)
an officer’s certificate and compliance certificate, each in a form reasonably acceptable to the Purchaser’s counsel; and


 


(xiii)
such other opinions, certificates, statements, including, without limitation, a closing statement, and agreements as the Purchasers’
counsel may reasonably require.


 


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


 


(i)
this Agreement duly executed by such Purchaser;


 


(ii)
such Purchaser’s Subscription Amount set forth Schedule 1 by wire transfer to the account specified in writing by the Company;


 


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


 


(iv)
the Patent Security Agreement duly executed by such Purchaser; and


 


(v)
the Registration Rights Agreement duly executed by such Purchaser.


 


(c)
On or prior to the Second Closing Date (except as noted), the Company shall deliver or cause to be delivered to the specified Purchaser
the following:


 


(i)
the specified Note having the respective principal amount set forth on Schedule 1, registered in the name of such Purchaser;


 


(ii)
the specified Warrant registered in the name of such Purchaser set forth on Schedule 1 to purchase up to a number of shares of Common
Stock equal to forty percent (40%) of such Purchaser’s Conversion Shares on the Second Closing Date, with an exercise price equal
to 130% of the Conversion Price set forth in the specified Note, subject to adjustment therein;


 




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(iii)
the Disclosure Schedules, updated as of such Second Closing Date, together with any additional collateral documents necessary or appropriate,
in the Agent’s sole discretion, because of any changes in such Disclosure Schedules;


 


(iv)
the Transfer Agent Instruction Letter duly executed by the Company and the Transfer Agent;


 


(v)
an opinion from the Company’s counsel in a form reasonably acceptable to the Purchasers’ counsel;


 


(vi)
an officer’s certificate and compliance certificate, each in a form reasonably acceptable to the Purchasers’ counsel; and


 


(vii)
such other opinions, certificates, statements, including, without limitation, a closing statement, and agreements as the Purchasers’
counsel may reasonably require.


 


(d)
On or prior to the Second Closing Date, the Purchaser shall deliver the Purchaser’s Subscription Amount for the Notes set forth
on Schedule 1 at the Second Closing by wire transfer to the account specified in writing by the Company.


 


2.3
Closing Conditions.


 


(a)
The obligations of the Company hereunder in connection with each 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 for such Closing of the representations and warranties of the Purchasers contained herein
(unless as of a specific date therein in which case they shall be accurate as of such date);


 


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


 


(iii)
the delivery by each Purchaser of the items set forth in Section 2.2(b) or Section 2.2(d), as applicable, of this Agreement; and


 


(iv)
the specified Purchaser’s Subscription Amount being equal to the Purchase Price due and payable at such Closing.


 


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


 


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


 




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


 


(iii)
the delivery by the Company of the items set forth in Section 2.2(a) or Section 2.2(c), as applicable, of this Agreement;


 


(iv)
there shall have been no Material Adverse Effect with respect to the Company since the date hereof and no existing event which, with
the passage of time or the giving of notice, would constitute an Event of Default;


 


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


 


(vi)
the Company meets the current public information requirements under Rule 144 in respect of the Conversion Shares or Warrant Shares
and any other shares of Common Stock issuable under the Notes or the Warrants;


 


(vii)
any other conditions contained herein or the other Transaction Documents, including those set forth in Section 2.2; and


 


(viii)
the Company has submitted a Listing of Additional Shares Notification Form with The Nasdaq Capital Market with respect to each issuance
of Securities pursuant to this Agreement.


 


ARTICLE
III.

REPRESENTATIONS AND WARRANTIES


 


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


 


(a)
Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a). The Company
owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary except as set forth on Schedule
3.1(a), free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly
issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. If the Company
has no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.


 




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(b)
Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power
and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any
Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good
standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned
by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could
not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction
Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise)
of the Company and the Subsidiaries, taken as a whole, excluding in each case those events arising directly out of the COVID-19 pandemic
that have been publicly disclosed in the SEC Reports prior to the date hereof, or (iii) a material adverse effect on the Company’s
ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii),
a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or
curtailing or seeking to revoke, limit or curtail such power and authority or qualification.


 


(c)
Authorization; Enforcement.


 


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


 




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


 


(d)
No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby
do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles
of incorporation, bylaws or other organizational or charter documents, or (ii) except as set forth on Schedule 3.1(d), conflict
with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation
of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment,
anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the
Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii)
subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal
and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except
in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.


 




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(e)
Filings, Consents and Approvals. Except as set forth 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 4.6 of this Agreement, (ii) the filing with the Commission pursuant
to the Registration Rights Agreement, (iii) the notice and/or application(s) to each applicable Trading Market for the issuance and sale
of the Securities and the listing of the Conversion Shares and Warrant Shares for trading thereon in the time and manner required thereby,
(iv) the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws and
(v) Shareholder Approval (collectively, the “Required Approvals”).


 


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


 


(g)
Capitalization. The capitalization of the Company as of the date hereof is as set forth on Schedule 3.1(g)(i), which Schedule
3.1(g)(i) shall also include the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company
as of the date hereof. The Company has not issued any capital stock since its most recently filed Current Report on Form 8-K under the
Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance
of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or
exercise of Common Stock Equivalents outstanding as of the date of the most recently filed Current Report on Form 8-K under the Exchange
Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. Except as a result of the purchase and sale of the Securities and as set forth on Schedule
3.1(g)(ii), there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right
to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings
or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock
Equivalents or capital stock of any Subsidiary. The issuance and sale of the Securities will not obligate the Company or any Subsidiary
to issue shares of Common Stock or other securities to any Person (other than the Purchasers). There are no outstanding securities or
instruments of the Company or any Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price of such
security or instrument upon an issuance of securities by the Company or any Subsidiary. There are no outstanding securities or instruments
of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings
or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary.
The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement.
All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have
been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of
any preemptive rights or similar rights to subscribe for or purchase securities. Except for the Shareholder Approval, no further approval
or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. There
are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which
the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.


 




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(h)
SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, since
November, 2017 (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC
Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior
to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of
a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading. The Company has not been an issuer subject to Rule 144(i)
under the Securities Act since November, 2017. The financial statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at
the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles
applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial
statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof
and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.


 


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


 




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


 


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


 




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


 


(m)
Environmental Laws. The Company and its Subsidiaries (i) are material 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.


 




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


 


(o)
Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them
and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries,
in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment
of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of
which is neither delinquent nor subject to penalties, and (iii) as set forth on Schedule 3.1(o). Any real property and facilities
held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company
and the Subsidiaries are in compliance.


 


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


 


(q)
Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including,
but not limited to, directors and officers insurance coverage. Neither the Company nor any Subsidiary has any reason to believe that
it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business.


 




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(r)
Transactions with Affiliates and Employees. Except as set forth on Schedule 3.1(r), none of the officers or directors of
the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently
a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including
any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal
property to or from providing for the borrowing of money from or lending of money to, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee
has a substantial interest or is an officer, director, trustee, stockholder, member or partner (each a “Related Party”),
in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement
for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option
plan of the Company.


 


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


 




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(t)
Certain Fees. Except as set forth on Schedule 3.1(s), no brokerage or finder’s fees or commissions are or will be
payable by the Company or any Subsidiaries to any broker, financial advisor or consultant, finder, placement agent, investment banker,
bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation
with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this
Section that may be due in connection with the transactions contemplated by the Transaction Documents.


 


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


 


(v)
Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities,
will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.


 


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


 


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


 


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


 




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(z)
Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or
counsel with any information that it believes constitutes or might constitute material, non-public information. The Company understands
and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the Company. All
of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their respective
businesses and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct and does
not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company
during the twelve (12) months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made and when made, not misleading. The Company acknowledges and agrees that no Purchaser
makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically
set forth in Section 3.2 hereof.


 


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


 


(bb)
Solvency. Based on the consolidated financial condition of the Company as of each Closing Date, after giving effect to the receipt
by the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds
the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known
contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its
business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements
of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii)
the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after
taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when
such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature
(taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any
facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization
laws of any jurisdiction within one year from the Second Closing Date. Schedule 3.1(bb) sets forth as of the date hereof all outstanding
secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For
the purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess
of $100,000 (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 $100,000 due
under leases required to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to
any Indebtedness.


 




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


 


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


 


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


 




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(ff)
Accountants. The Company’s accounting firm is set forth on Schedule 3.1(ee) of the Disclosure Schedules. To the knowledge
and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall
express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year
ending December 31, 2020.


 


(gg)
Seniority. Except as set forth on Schedule 3.1(gg), as of each Closing Date, no Indebtedness or other claim against the
Company is senior to the Notes in right of payment, whether with respect to interest or upon liquidation or dissolution, or otherwise,
other than indebtedness secured by purchase money security interests (which is senior only as to underlying assets covered thereby) and
capital lease obligations (which is senior only as to the property covered thereby).


 


(hh)
No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company
is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability to perform any
of its obligations under any of the Transaction Documents.


 


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


 


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


 




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


 


(ll)
Intentionally Omitted.


 


(mm)
Intentionally Omitted.


 


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


 


(oo)
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”).


 


(pp)
(pp) 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.


 




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


 


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


 


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


 


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


 


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


 




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(vv)
Payments of Cash. Except as disclosed on the Disclosure Schedules neither the Company, its officers, or any Affiliates or agents
of the Company have withdrawn or paid cash (not including a check or other similar negotiable instrument) to any vendor in an aggregate
amount that exceeds Five Thousand Dollars ($5,000) for any purpose.


 


(ww)
Subsidiary Rights. The Company has the unrestricted right to vote, and (subject to limitations imposed by applicable law) to receive
dividends and distributions on, all capital securities of its Subsidiaries.


 


(xx)
Promotional Stock Activities. No Company Party and none of its officers, directors, managers, affiliates or agents have engaged
in any stock promotional activity that could give rise to a complaint, inquiry, or trading suspension by the Securities and Exchange
Commission alleging (i) a violation of the anti-fraud provisions of the federal securities laws, (ii) violations of the anti-touting
provisions, (iii) improper “gun-jumping; or (iv) promotion without proper disclosure of compensation.


 


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


 


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


 




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


 


(c)
Purchaser Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each
date on which it exercises its Warrant, converts its Note into Common Stock or is issued any Common Stock under the terms of its Note,
it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the
Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.


 


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


 


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


 


(f)
Intentionally Omitted.


 


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


 




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


 


ARTICLE
IV.

OTHER AGREEMENTS OF THE PARTIES


 


4.1
Transfer Restrictions.


 


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


 


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


 


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


 




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The
Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered
broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor”
as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, such Purchaser may transfer
pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company
and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no
notice shall be required of such pledge. At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable
documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities,
including, if the Securities are subject to registration pursuant to the Registration Rights Agreement, the preparation and filing of
any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act
to appropriately amend the list of Selling Stockholders (as defined in the Registration Rights Agreement) thereunder.


 


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


 




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


 




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(e)
Each Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will sell any Securities
pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or
an exemption therefrom, and that if Securities are sold pursuant to a Registration Statement, they will be sold in compliance with the
plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates representing Securities
as set forth in this Section 4.1 is predicated upon the Company’s reliance upon this understanding.


 


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


 


4.3
Furnishing of Information; Public Information.


 


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


 


(b)
At any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all of the
Securities may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction
or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public information requirement
under Rule 144(c) or (ii) has ever been an issuer described in Rule 144 (i)(1)(i) or becomes an issuer in the future, and the Company
shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public Information Failure”) then, in addition
to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and
not as a penalty, by reason of any such delay in or reduction of its ability to sell the Securities, an amount in cash equal to one percent
(1.0%) of the aggregate Subscription Amount of such Purchaser’s Securities on the day of a Public Information Failure and on every
thirtieth (30th) day (pro rated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such
Public Information Failure is cured and (b) such time that such public information is no longer required for the Purchasers to transfer
the Underlying Shares pursuant to Rule 144. The payments to which a Purchaser shall be entitled pursuant to this Section 4.3(b) are referred
to herein as “Public Information Failure Payments.” Public Information Failure Payments shall be paid on the earlier
of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third (3rd)
Business Day after the event or failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails
to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate
of 1.5% per month (prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s right to pursue
actual damages for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies available to it at
law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.


 




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


 


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


 


4.6
Securities Laws Disclosure; Publicity. The Company shall (a) by the Disclosure Time, issue a press release disclosing the material
terms of the transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents as exhibits
thereto, with the Commission within the time required by the Exchange Act. From and after the issuance of such press release, the Company
represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers
by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the
transactions contemplated by the Transaction Documents. In addition, effective upon the issuance of such press release, the Company acknowledges
and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company,
any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and any of the
Purchasers or any of their Affiliates on the other hand, shall terminate. The Company and each Purchaser shall consult with each other
in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall
issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any
press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which
consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party
shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the
Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission
or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (a) as required by federal securities
law in connection with (i) any registration statement contemplated by the Registration Rights Agreement and (ii) the filing of final
Transaction Documents with the Commission and (b) to the extent such disclosure is required by law or Trading Market regulations, in
which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b).


 




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


 


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


 




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4.9
Use of Proceeds. Except as set forth on Schedule 4.9 attached hereto, the Company shall use the net proceeds from the sale
of the Securities hereunder for working capital purposes and shall not use such proceeds: (a) for the satisfaction of any portion of
the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business and prior practices);
(b) for the redemption of any Common Stock or Common Stock Equivalents; (c) for the settlement of any outstanding litigation; or (d)
in violation of FCPA or OFAC regulations.


 


4.10
Indemnification of Purchasers. Subject to the provisions of this Section 4.10, the Company will indemnify and hold each Purchaser
and its directors, officers, shareholders, members, managers, partners, employees and agents (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such
Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, managers, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party
may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made
by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in
any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser
Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is solely based upon a material
breach of such Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any agreements or
understandings such Purchaser Party may have with any such stockholder or any violations by such Purchaser Party of state or federal
securities laws or any conduct by such Purchaser Party which is finally judicially determined to constitute fraud, gross negligence or
willful misconduct). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant
to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume
the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the
right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized
by the Company in writing, (ii) the Company has failed after a reasonable period of time (in all cases at least a minimum of 10 days
from the date that the Company is notified in writing by the Purchaser Party of such action) to assume such defense and to employ counsel
or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position
of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses
of no more than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement
by a 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 any Purchaser Party’s breach
of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction
Documents. The indemnification required by this Section 4.10 shall be made by periodic payments of the amount thereof during the course
of the investigation or defense, as and when bills are received or are incurred, subject to reimbursement by the applicable Purchaser
Party if a final judicial judgment is made (that can no longer be appealed whatsoever) that such Purchaser Party was not entitled to
an indemnity due to the reasons set forth in sub-clauses (y) and (z) in the immediately foregoing sentence. The indemnity agreements
contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and
any liabilities the Company may be subject to pursuant to law.


 




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4.11
Reservation and Listing of Securities.


 


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


 


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


 


The
Company shall, if applicable: (i) in the time and manner required by the Principal Trading Market, prepare and file with such Trading
Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required Minimum on
the date of such application; (ii) take all steps necessary to cause such shares of Common Stock to be approved for listing or quotation
on such Trading Market as soon as possible thereafter; (iii) provide to the Purchasers evidence of such listing or quotation; and (iv)
maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum on such date on such Trading
Market or another Trading Market. The Company agrees to maintain the eligibility of the Common Stock for electronic transfer through
the Depository Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to
the Depository Trust Company or such other established clearing corporation in connection with such electronic transfer. In addition,
the Company shall hold a special meeting of shareholders (which may also be at the annual meeting of shareholders) at the earliest practical
date after the date the number of shares of Common Stock issuable pursuant to this Agreement on a fully converted or exercised basis
(ignoring for such purposes any conversion or exercise limitations therein) exceeds 15% of the issued and outstanding shares of Common
Stock on each Closing Date for the purpose of obtaining Shareholder Approval, with the recommendation of the Company’s Board of
Directors that such proposal be approved, and the Company shall solicit proxies from its shareholders in connection therewith in the
same manner as all other management proposals in such proxy statement and all management-appointed proxyholders shall vote their proxies
in favor of such proposal. The Company shall use its reasonable best efforts to obtain such Shareholder Approval. If the Company does
not obtain Shareholder Approval at the first meeting, the Company shall call a meeting every four months thereafter to seek Shareholder
Approval until the earlier of the date Shareholder Approval is obtained or the Notes are no longer outstanding. Notwithstanding anything
to the contrary contained herein, the Company shall: (i) obtain the executed written consent, voting agreements, or proxies, as applicable,
of holders of at least 51 percentage of the issued and outstanding Common Stock on the First Closing Date (the “Stockholder
Consent”), approving, or agreeing to vote for, as applicable, (w) the issuance of the Notes, Warrants, and Underlying Shares,
(x) the removal of the “Issuable Maximum” (as defined in the Notes and Warrants) from any Underlying Shares issued prior
to the date of the Stockholder Consent, (y) the issuance of the Underlying Shares without the “Issuable Maximum” (as defined
in the Notes and Warrants) following the date of the Stockholder Consent, and (z) an increase in the number of authorized shares of Common
Stock sufficient to increase the Required Minimum to the amount set forth in subparagraph (ii) of the definition thereof; and (ii) file
an information statement, or proxy statement, as applicable (the “Information Statement”) with respect to the Stockholder
Consent with the Commission. The Stockholder Consent shall be obtained by the First Closing Date and the Information Statement shall
be filed with the Commission no later than ten (10) calendar days after the First Closing Date.


 




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4.12
Participation in Future Financing.


 


(a)
From the date hereof until the date that is the one (1) year anniversary that the Notes are no longer outstanding, upon any issuance
by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents for cash consideration, Indebtedness or a combination
of units thereof (a “Subsequent Financing”), the Purchasers altogether shall have the right to participate in up to
an amount of the Subsequent Financing equal to 50% of the Subsequent Financing (the “Participation Maximum”) on the
same terms, conditions and price provided for in the Subsequent Financing. This Section 4.12 shall not apply to any Subsequent Financings
pursuant to the GEM Agreement, as in effect as of the First Closing.


 


(b)
At least two (2) Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to each Purchaser a written
notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such Purchaser
if it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”). Upon
the request of a Purchaser, and only upon a request by such Purchaser, for a Subsequent Financing Notice, the Company shall promptly,
but no later than one (1) Trading Day after such request, deliver a Subsequent Financing Notice to such Purchaser. The Subsequent Financing
Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised
thereunder and the Person or Persons through or with whom such Subsequent Financing is proposed to be effected and shall include a term
sheet or similar document relating thereto as an attachment.


 


(c)
Any Purchaser desiring to participate in such Subsequent Financing must provide written notice to the Company by not later than 5:30
p.m. (New York City time) on the second (2nd) Trading Day after all of the Purchasers have received the Pre-Notice that such
Purchaser is willing to participate in the Subsequent Financing, the amount of such Purchaser’s participation, and representing
and warranting that such Purchaser has such funds ready, willing, and available for investment on the terms set forth in the Subsequent
Financing Notice. If the Company receives no such notice from a Purchaser as of such second (2nd) Trading Day, such Purchaser
shall be deemed to have notified the Company that it does not elect to participate.


 




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(d)
If by 5:30 p.m. (New York City time) on the second (2nd ) Trading Day after all of the Purchasers have received the Pre-Notice,
notifications by the Purchasers of their willingness to participate in the Subsequent Financing (or to cause their designees to participate)
is, in the aggregate, less than the total amount of the Subsequent Financing, then the Company may effect the remaining portion of such
Subsequent Financing on the terms and with the Persons set forth in the Subsequent Financing Notice.


 


e)
If by 5:30 p.m. (New York City time) on the second (2nd) Trading Day after all of the Purchasers have received the Pre-Notice,
the Company receives responses to a Subsequent Financing Notice from Purchasers seeking to purchase more than the aggregate amount of
the Participation Maximum, each such Purchaser shall have the right to purchase its Pro Rata Portion (as defined below) of the Participation
Maximum. “Pro Rata Portion” means the ratio of (x) the Subscription Amount of Securities purchased on the Closing
Dates by a Purchaser participating under this Section 4.12 and (y) the sum of the aggregate Subscription Amounts of Securities purchased
on the Closing Dates by all Purchasers participating under this Section 4.12.


 


(e)
The Company must provide the Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right of participation
set forth above in this Section 4.12, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated
for any reason on the terms set forth in such Subsequent Financing Notice within thirty (30) Trading Days after the date of the initial
Subsequent Financing Notice.


 


(f)
The Company and each Purchaser agree that if any Purchaser elects to participate in the Subsequent Financing, the transaction documents
related to the Subsequent Financing shall not include any term or provision that, directly or indirectly, will, or is intended to, exclude
one or more of the Purchasers from participating in a Subsequent Financing, including, but not limited to, provisions whereby such Purchaser
shall be required to agree to any restrictions on trading as to any of the Securities purchased hereunder or be required to consent to
any amendment to or termination of, or grant any waiver, release or the like under or in connection with, this Agreement, without the
prior written consent of such Purchaser.


 


(g)
Notwithstanding anything to the contrary in this Section 4.12 and unless otherwise agreed to by such Purchaser, the Company shall either
confirm in writing to such Purchaser that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly
disclose its intention to issue the securities in the Subsequent Financing, in either case in such a manner such that such Purchaser
will not be in possession of any material, non-public information, by the tenth (10th) Business Day following delivery of the Subsequent
Financing Notice. If by such tenth (10th) Business Day, no public disclosure regarding a transaction with respect to the Subsequent Financing
has been made, and no notice regarding the abandonment of such transaction has been received by such Purchaser, such transaction shall
be deemed to have been abandoned and such Purchaser shall not be deemed to be in possession of any material, non-public information with
respect to the Company or any of its Subsidiaries.


 




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


 


4.13
Subsequent Equity Sales.


 


(a)
Except with respect to the issuances described on Schedule 4.13 hereto, from the date hereof until ninety (90) days after the
Effective Date, neither the Company nor any Subsidiary shall (i) issue, enter into any agreement to issue or announce the issuance or
proposed issuance of any shares of Common Stock or Common Stock Equivalents or (ii) file any registration statement or any amendment
or supplement thereto, in each case other than as contemplated pursuant to the Registration Rights Agreement.


 


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


 


(c)
Unless Shareholder Approval has been obtained and deemed effective, neither the Company nor any Subsidiary shall make any issuance whatsoever
of Common Stock or Common Stock Equivalents which would cause any adjustment of the Conversion Price to the extent the holders of Notes
would not be permitted, pursuant to Section 4(e) of the Notes to convert their respective outstanding Notes and exercise their respective
Warrants in full, ignoring for such purposes the other conversion or exercise limitations therein. Any Purchaser shall be entitled to
obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect
damages.


 




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(d)
From the date hereof until such time as no Purchaser holds any of the Notes, neither the Company nor any Subsidiary shall, directly or
indirectly, effect or enter into (or publicly announce or recommend to its shareholders the approval or adoption thereof by such shareholders)
any agreement, plan, arrangement or transaction structured in accordance with, based upon, or related or pursuant to Section 3(a)(9)
or Section 3(a)(l0) of the Securities Act, without the prior written consent of the Holder (which consent may be withheld, delayed or
conditioned in the sole discretion of such Holder).


 


(e)
From the date hereof until such time as no Purchaser holds any of the Notes, the Company shall not issue equity or equity-linked securities
at a price per share below the Conversion Price of the Notes or the Exercise Price of the Warrants without the consent of the Purchasers.


 


(f)
Notwithstanding the foregoing, this Section 4.13 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction
shall be an Exempt Issuance.


 


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


 


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


 




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


 


4.17
Capital Changes. Until the one (1) year anniversary of the Effective Date, the Company shall not undertake a reverse or forward
stock split or reclassification of the Common Stock without the prior written consent of Purchasers except as may be required to meet
any exchange requirement for continued listing.


 


4.18
Subsequent Debt. Subject to Section 4.12, neither the Company nor any Subsidiary shall without the prior written consent of Purchasers
incur any Indebtedness or enter into any agreement to incur or announce to incur any Indebtedness.


 


4.19
Repayment of Notes. Subject to Section 4.12 and Section 4.13, for so long as the Notes remain outstanding, in the event that the
Company receives proceeds from any one or more Subsequent Financings with aggregate gross proceeds in excess of $5,000,000, then, at
each Purchaser’s option it may demand that twenty percent (20%) of such proceeds shall be used to repay the outstanding balance
of such Purchaser’s Note, on a pro rata basis. In such event, such repayment shall be applied in the following order: (i) first,
to Late Fees (as defined in the Notes); (ii) second, to liquidated damages; (iii) third, to accrued but unpaid interest; and (iv) fourth,
to unpaid principal amounts. This Section 4.19 shall also be subject to Section 6(a) and Section 6(c) of the Notes.


 


4.20
Related Party Transactions. So long as the Notes remain outstanding, neither the Company nor any Subsidiary shall without the
prior written consent of Purchasers (which consent shall not unreasonably be withheld or delayed) enter into any transaction with a Related
Party or an Affiliate; provided that no such consent shall be required with respect to any compensation to be issued to any employee,
executive or director of the Company or any Subsidiary (including the issuance of any Common Stock or Common Stock Equivalents in an
Exempt Issuance) and so long as such compensation is approved by majority of the members of the compensation committee of the Company.


 




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4.21
[Intentionally Omitted].


 


4.22
Additional Security Filings in the U.S. The Company shall use reasonable best efforts to cause all documents and filings required
under the Security Documents to be made within a reasonable period of time with the United Stated Patent and Trademark Office and the
U.S. Copyright Officer, in order to grant the Purchasers a first priority security interest in the intellectual property assets of the
Company and the Subsidiaries, as applicable (including, without limitation, the Intellectual Property (as defined in the Security Agreement)).


 


4.23
Additional Security Filings in General. Upon the reasonable request of the Purchasers, the Company shall use reasonable best efforts
to cause all documents and filings required under the Security Documents to be made within a reasonable period of time with any other
governmental or administrative agency or regulatory authority (federal, state, county, local or foreign), or any subdivision thereof,
in order to grant the Purchasers a first priority security interest in the assets of the Company and the Subsidiaries (including, without
limitation, the Collateral and Intellectual Property (each as defined in the Security Agreement)).


 


ARTICLE
V.

MISCELLANEOUS


 


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


 


5.2
Fees and Expenses. At the First Closing, the Company has agreed to reimburse Purchasers the sum of $59,000 for its documented
legal fees and expenses, $[20,000] of which has been paid prior to the First Closing. Accordingly, in lieu of the foregoing payments,
the aggregate amount that Purchasers are to pay for the Securities at the First Closing shall be reduced by [$39,000] in lieu thereof,
and if for any reason there is a requirement for significant work from Purchasers’ counsel prior to the Second Closing, a reasonable
deduction from the amount invested at such Second Closing. The Company shall deliver to each Purchaser, prior to each Closing, a completed
and executed copy of the Closing Statement, attached hereto as Annex A. Except as expressly set forth in the Transaction Documents
to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all
other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.
The Company shall pay all (i) Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction
letter delivered by the Company and any conversion or exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties
levied in connection with the delivery of any Securities to the Purchasers, and (ii) all fees, disbursements, and expenses in connection
with the transactions contemplated herein, including, without limitation, the Company’s legal and accounting fees and disbursements,
the costs incident to the preparation, printing and distribution of any registration statement, filing fees, UCC filing fees, United
States Patent and Trademark Officer fees, U.S. Copyright Officer fees, and costs associated with the Security Agreement.


 




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


 


5.4
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in
writing and shall be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is
delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached
hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such
notice or communication is delivered via facsimile at the facsimile number or email attachment as set forth on the signature pages attached
hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd)
Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt
by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the
signature pages attached hereto.


 


5.5
Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument
signed, in the case of an amendment, by the Company, and Purchaser/Purchasers which purchased at least 50.1% in interest of the Notes
based on the initial Subscription Amounts (including the Secord Closing) hereunder or, in the case of a waiver, by the party against
whom enforcement of any such waived provision is sought, provided that if any amendment or modification treats a Purchaser (or group
of Purchasers) in a manner that is different than other Purchasers, the consent of such disproportionately impacted Purchaser (or group
of Purchasers) shall also be required. No waiver of any default with respect to any provision, condition or requirement of this Agreement
shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise
of any such right. Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations
of any Purchaser relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of
such adversely affected Purchaser. Any amendment effected in accordance with this Section 5.5 shall be binding upon each Purchaser and
holder of Securities and the Company.


 


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


 


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


 




    	43



     


    

 


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


 


5.9
Issuance of Securities in Connection with a Subsequent Financing. The Company shall be permitted to issue Common Stock and Common
Stock Equivalent in connection with a Subsequent Financing; provided, however, that such financings are subject to the
provisions contained in this Agreement in order to permit the consummation of such financings (including, without limitation, the terms
and conditions contained in Section 4.12 and Section 4.13 herein).


 


5.10
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto
or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively
in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of
any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any claim that
it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding is improper or is an inconvenient
venue for such Proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law. If any party shall commence an Action or Proceeding to enforce any provisions of the Transaction
Documents, then, in addition to the obligations of the Company under Section 4.10, the prevailing party in such Action or Proceeding
shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Action or Proceeding.


 


5.11
Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities. For
a period of 36 months, or if later, 181 days after the Notes have been satisfied in full.


 


5.12
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.


 




    	44



     


    

 


5.13
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.


 


5.14
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions
of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may
rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election
in whole or in part without prejudice to its future actions and rights; provided, however, that, in the case of a rescission
of a conversion of a Note or exercise of a Warrant, the applicable Purchaser shall be required to return any shares of Common Stock subject
to any such rescinded conversion or exercise notice concurrently with the return to such Purchaser of the aggregate exercise price paid
to the Company for such shares and the restoration of such Purchaser’s right to acquire such shares pursuant to such Purchaser’s
Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).


 


5.15
Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation),
or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to
the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also
pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.


 


5.16
Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages,
each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that
monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction
Documents and hereby agree to waive and not to assert in any Action for specific performance of any such obligation the defense that
a remedy at law would be adequate.


 




    	45



     


    

 


5.17
Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document
or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise
or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by
or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including,
without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such
restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not occurred.


 


5.18
Usury. To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever
claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at
any time hereafter in force, in connection with any Action or Proceeding that may be brought by any Purchaser in order to enforce any
right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction Document,
it is expressly agreed and provided that the total liability of the Company under the Transaction Documents for payments in the nature
of interest shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without
limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums
in the nature of interest that the Company may be obligated to pay under the Transaction Documents exceed such Maximum Rate. It is agreed
that if the maximum contract rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by
statute or any official governmental action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will
be the Maximum Rate applicable to the Transaction Documents from the effective date thereof forward, unless such application is precluded
by applicable law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to any Purchaser
with respect to indebtedness evidenced by the Transaction Documents, such excess shall be applied by such Purchaser to the unpaid principal
balance of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at such Purchaser’s election.


 


5.19
Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document
are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance
or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other
Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as
a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way
acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each
Purchaser shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of
this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional
party in any Proceeding for such purpose. For reasons of administrative convenience only, each Purchaser has chosen to communicate with
the Company through S&W. The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the
convenience of the Company and not because it was required or requested to do so by any of the Purchasers. It is expressly understood
and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser,
solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers.


 




    	46



     


    

 


5.20
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.


 


5.21
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business
Day.


 


5.22
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.


 


5.23
Electronic Signatures. Each party agrees that the electronic signatures, whether digital or encrypted, of the parties included
in this Agreement or any other Transaction Document are intended to authenticate this writing and to have the same force and effect as
manual signatures. Electronic signature means any electronic sound, symbol, or process attached to or logically associated with a record
and executed and adopted by a party with the intent to sign such record, including facsimile or email electronic signatures. The Borrower
expressly agrees that this Agreement and all other Transaction Documents are “transferable records” as defined in applicable
Regulations relating to electronic transaction and that it may be created, authenticated, stored, transmitted and transferred in a manner
consistent with and permitted by such applicable Regulations.


 


5.24
Set-Off. In addition to any rights now or hereafter granted under applicable regulations and not by way of limitation of any such rights,
each Purchaser is hereby authorized by the Company at any time or from time to time, without notice or demand to the Company or to any
other Person, any such notice or demand being hereby expressly waived, to set off and to appropriate and to apply any and all deposits
(general or special, time or demand, provisional or final, including indebtedness evidenced by certificates of deposit, whether matured
or unmatured, but not including trust accounts) and any other indebtedness or other amounts at any time held or owing by the Company
or any Subsidiary to or for the credit or the account of the Company or any of its Affiliates against and on account of any amounts due
by the Company or any of its Affiliates to such Purchaser under any Transaction Documents (including from the purchase price to be disbursed
hereunder), irrespective of whether or not (a) such Purchaser shall have made any demand hereunder or (b) the principal of or the interest
on the Notes or any other Obligation shall have become due and payable and although such obligations and liabilities, or any of them,
may be contingent or unmatured. If, as a result of such set off, appropriate or application, such Purchaser receives more than it is
owed under any Transaction Document, it shall hold such amounts in trust for the other Purchaser Parties and transfer such amounts to
the other Purchaser Parties ratably according to the amounts they are owed on the date of receipt..


 


5.25
WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE
PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.


 


(Signature
Pages Follow)


 




    	47



     


    

 


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.


 


	ENSYSCE
    BIOSCIENCES, INC.	 	
	 	 	 	 
	By:	/s/
    Lynn Kirkpatrick	 	Address
    for Notice:
	Name:	Dr.
    Lynn Kirkpatrick	 	 
	Title:	President
    and Chief Executive Officer	 	7946 Ivanhoe Avenue, Suite 201

                                                         La Jolla, California 92037

	 	 	 	 
	 	 	 	Email: lkirkpatrick@ensysce.com and

                                                         INFO@ENSYSCE.COM

	 	 	 	 
	 	 	 	With
    a copy to (which shall not constitute notice: 
	 	 	 	 
	 	 	 	Eric
    D. Kline, Esq.

    Troutman
    Pepper Hamilton Sanders LLP

    Union
    Trust Building, 501 Grant Street,

    Suite
    300, Pittsburgh, PA 15219

     

    Email:
    Eric.Kline@Troutman.com



 


[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]


 




    	 



     


    

 


[PURCHASER
SIGNATURE PAGE 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: 3i, LP


 


Signature
of Authorized Signatory of Purchaser:


 


/s/
Maier Tarlow_______________________________________________________


 


Name
of Authorized Signatory:


 


Maier
Tarlow____________________________________________


 


Title
of Authorized Signatory:


 


_______________________________________________________


 


Email
Address of Authorized Signatory:


 





operations@3ifund.com____________________________________




 





 


Facsimile
Number of Authorized Signatory:


 


_______________________________________________________


 


Address
for Notice to Purchaser:


 


_______________________________________________________


 


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


 


_______________________________________________________


 


Subscription
Amount: $2,500,000


 


Principal
Amount (1.06 x Subscription Amount): $2,650,000


 


Warrant
Shares: _________________


 


EIN
Number: _______________________


 




    	 



     


    

 


[PURCHASER
SIGNATURE PAGE 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: Anson Investments Master Fund LP


 


Signature
of Authorized Signatory of Purchaser:


 


/s/
Amin Nathoo_______________________________________________________


 


Name
of Authorized Signatory:


 


Amin
Nathoo____________________________________________


 


Title
of Authorized Signatory:


 


_______________________________________________________


 


Email
Address of Authorized Signatory:


 


anathoo@ansonfunds.com___________________________________



 


Facsimile
Number of Authorized Signatory:


 


_______________________________________________________


 


Address
for Notice to Purchaser:


 _______________________________________________________


 


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


 


_______________________________________________________


 


Subscription
Amount: $1,875,000


 


Principal
Amount (1.06 x Subscription Amount): $1,987,500


 


Warrant
Shares: _________________


 


EIN
Number: _______________________


 




    	 



     


    

 


[PURCHASER
SIGNATURE PAGE 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: Anson East Master Fund LP


 


Signature
of Authorized Signatory of Purchaser:


 


/s/
Amin Nathoo_______________________________________________________


 


Name
of Authorized Signatory:


 


Amin
Nathoo____________________________________________


 


Title
of Authorized Signatory:


 


_______________________________________________________


 


Email
Address of Authorized Signatory:


 


anathoo@ansonfunds.com
__________________________________



 


Facsimile
Number of Authorized Signatory:


 


_______________________________________________________


 


Address
for Notice to Purchaser:


 


_______________________________________________________


 


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


 


_______________________________________________________


 


Subscription
Amount: $625,000


 


Principal
Amount (1.06 x Subscription Amount): $662,500


 


Warrant
Shares: _________________


 


EIN
Number: _______________________


 




    	 



     


    

 


SCHEDULE
1


 


First
Closing


 


	Name	 	PP/SA
    of each Note	 	 	PA
    of each Note	 	 	#
    of Warrants	 
	3i,
    LP	 	$	2,500,000	 	 	$	2,650,000	 	 	 	180,579	 
	Anson
    Investments Master Fund LP	 	$	1,875,000	 	 	$	1,987,500	 	 	 	135,586	 
	Anson
    East Master Fund LP	 	$	625,000	 	 	$	662,500	 	 	 	112,862	 




 


Second
Closing


 








	Name	 	PP/SA
    of each Note	 	 	PA
    of each Note	 	 	#
    of Warrants	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	                	 	 	 	                       	 	 	 	              	 
		 	 	 	 	 	 	 	 	 	 	 	 


 




    	 



     


    

 


EXHIBIT
A 


 


Form
of NOTE 


 


Attached


 




    	 



     


    

 


EXHIBIT
B


 


Form
of REGISTRATION RIGHTS AGREEMENT


 


Attached


 




    	 



     


    

 


EXHIBIT
C


 


Form
of WARRANT 


 


Attached


 




    	 



     


    

 


EXHIBIT
D


 


Form
of LEGAL OPINION 


 


Attached


 




    	 



     


    

 


EXHIBIT
E


 


Form
of Security Agreement 


 


Attached


 




    	 



     


    

 


EXHIBIT
F


 


Form
of Guaranty


 


Attached


 




    	 



     


    

 


EXHIBIT
G


 


FORM
OF PATENT SECURITY AGREEMENT


 


Attached


 




    	 



     


    

 


EXHIBIT
H


 


Form
of TRANSFER AGENT INSTRUCTIONS


 


Attached