Exhibit 10.1


 


EXECUTION
COPY


 


SECURITIES
PURCHASE AGREEMENT


 


This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of October 5, 2021, is by and among Akerna Corp.,
a Delaware corporation with offices located at 1550 Larimer Street, #246, Denver, Colorado 80202 (the “Company”),
and each of the investors listed on the Schedule of Buyers attached hereto (individually, a “Buyer” and collectively,
the “Buyers”).


 


RECITALS


 


A. The
Company and each Buyer is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506(b) of Regulation D (“Regulation D”)
as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the 1933 Act.


 


B. The
Company has authorized a new series of senior secured convertible notes of the Company, in the aggregate original principal amount of
$20,000,000, substantially in the form attached hereto as Exhibit A (the “Notes”), which Notes shall
be convertible into shares of Common Stock (as defined below) (the shares of Common Stock issuable pursuant to the terms of the Notes,
including, without limitation, upon conversion or otherwise, collectively, the “Conversion Shares”), in accordance
with the terms of the Notes.


 


C. Each
Buyer wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, a Note in the aggregate
original principal amount set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers attached hereto (which aggregate
principal amount of Notes for all Buyers shall be $20,000,000).


 


D. At
the Closing, the parties hereto shall execute and deliver a Registration Rights Agreement, in the form attached hereto as Exhibit
B (the “Registration Rights Agreement”), pursuant to which the Company has agreed to provide certain registration
rights with respect to the Registrable Securities (as defined in the Registration Rights Agreement), under the 1933 Act and the rules
and regulations promulgated thereunder, and applicable state securities laws.


 


E. The
Notes and the Conversion Shares are collectively referred to herein as the “Securities.”


 


F.
The Notes will rank senior to all outstanding and future indebtedness of the Company, and its Subsidiaries (as defined below) the Notes
will be secured by a first priority perfected security interest (subject to Permitted Liens under and as defined in the Notes) in all
of the existing and future assets of the Company and its direct and indirect U.S. Subsidiaries, including a pledge of all of the capital
stock of each of the Subsidiaries, as evidenced by (i) an amended and restated security agreement in the form attached hereto as Exhibit
C (the “Security Agreement”), (ii) amended and restated account control agreements with respect to certain
accounts described in the Note and the Security Agreement, in form and substance acceptable to each Buyer, duly executed by the Company
and each depositary bank (each, an “Controlled Account Bank”)
in which each such account is maintained (the “Controlled Account Agreements”,
and together with the Security Agreement, the Perfection Certificate (as defined below) and the other security documents and agreements
entered into in connection with this Agreement and each of such other documents and agreements, as each may be amended or modified from
time to time, collectively, the “Security Documents”), and (iii) amended
and restated guaranties executed by each U.S. Subsidiary of the Company, in the form attached hereto as Exhibit D
(collectively, the “Guaranties”) pursuant
to which each of them guarantees the obligations of the Company under the Transaction Documents (as defined below).


 






    


    


    

 





AGREEMENT


 


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


 


1.
PURCHASE AND SALE OF NOTES.


 


(a)
Purchase of Notes . Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the Company
shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on the Closing Date
(as defined below) a Note in the original principal amount as is set forth opposite such Buyer’s name in column (3) on the Schedule
of Buyers.


 


(b)
Closing. The closing (the “Closing”) of the purchase of the Notes by the Buyers shall occur at the offices
of Kelley Drye & Warren LLP, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007. The date and time of the Closing (the
“Closing Date”) shall be 10:00 a.m., New York time, on the first (1st) Business Day on which the conditions to the
Closing set forth in Sections 6 and 7 below are satisfied or waived (or such other date as is mutually agreed to by the Company and each
Buyer). As used herein “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks
in The City of New York are authorized or required by law to remain closed; provided, however,
for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”,
“shelter-in-place”, “non-essential employee”  or any other similar orders or restrictions or the closure
of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including
for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.


 


(c)
Purchase Price. The aggregate purchase price for the Notes to be purchased by each Buyer (the “Purchase Price”)
shall be the amount set forth opposite such Buyer’s name in column (4) on the Schedule of Buyers. Each Buyer shall pay $900 for
each $1,000 of principal amount of Notes to be purchased by such Buyer at the Closing.


 


(d)
Form of Payment. On the Closing Date, (i) each Buyer shall pay its respective Purchase Price (less, in the case of any Buyer,
the amounts withheld pursuant to Section 4(g) and as further adjusted to reflect the net funding required to affect the Company’s
concurrent repayment of the Existing Notes (as defined below)) to the Company for the Notes to be issued and sold to such Buyer at the
Closing, by wire transfer of immediately available funds in accordance
with the Flow of Funds Letter (as defined below) and (ii) the Company shall deliver to each Buyer a Note in the aggregate original
principal amount as is set forth opposite such Buyer’s name in column (3) of the Schedule of Buyers, duly executed on behalf of
the Company, allocated in the principal amounts as such Buyer shall request and registered in the name of such Buyer or its designee.


 




    2


    


    





 


2.
BUYER’S REPRESENTATIONS AND WARRANTIES.


 


Each
Buyer, severally and not jointly, represents and warrants to the Company with respect to only itself that, as of the date hereof and
as of the Closing Date:


 


(a)
Organization; Authority. Such Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the Transaction
Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder.


 


(b)
No Public Sale or Distribution. Such Buyer (i) is acquiring its Note, and (ii) upon conversion of its Note will acquire the Conversion
Shares issuable upon conversion thereof, in each case, for its own account and not with a view towards, or for resale in connection with,
the public sale or distribution thereof in violation of applicable securities laws, except pursuant to sales registered or exempted under
the 1933 Act and in accordance with any applicable securities laws of any state of the United States; provided, however, by making the
representations herein, such Buyer does not agree, or make any representation or warranty, to hold any of the Securities for any minimum
or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration
statement or an exemption from the registration requirements under the 1933 Act and in accordance with any applicable securities laws
of any state of the United States. Such Buyer does not presently have any agreement or understanding, directly or indirectly, with any
Person to distribute any of the Securities in violation of applicable securities laws. For purposes of this Agreement, “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and any Governmental Entity or any department or agency thereof.


 


(c)
Accredited Investor Status. Such Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation
D.


 




    3


    


    


 


(d)
Reliance on Exemptions. Such Buyer understands that the Securities have not been and will not be registered under the 1933 Act
or any applicable securities laws of any state of the United States and are being offered and sold to it in reliance on the exemptions
from registration under the 1933 Act provided by Section 4(a)(2) of the 1933 Act and Rule 506(b) of Regulation D under the 1933 Act and
pursuant to similar exemption from any applicable securities laws of any state of the United States and that the Company is relying in
part upon the truth and accuracy of, and such Buyer’s compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of such
Buyer to acquire the Securities.


 


(e)
 Information. Such Buyer and its advisors, if any, have had access to the SEC Documents (as defined in Section 3(k) below) filed
electronically on EDGAR and available at www.sec.gov and have been furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the Securities that have been requested by such Buyer. Such
Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the Company. Neither such inquiries nor any other
due diligence investigations conducted by such Buyer or its advisors, if any, or its representatives shall modify, amend or affect such
Buyer’s right to rely on the Company’s representations and warranties contained herein. Such Buyer understands that its investment
in the Securities involves a high degree of risk. Such Buyer has sought such accounting, legal and tax advice as it has considered necessary
to make an informed investment decision with respect to its acquisition of the Securities.


 


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


 


(g) Transfer
or Resale. Such Buyer understands that except as provided in the Registration Rights Agreement and Section 4(h) hereof: (i) the
Securities may not be offered for sale, sold, assigned, pledged or otherwise transferred, directly or indirectly, unless (A)
subsequently registered thereunder, (B) such sale, offer, assignment or transfer is to the Company, (C) the offer, sale, assignment,
pledge or transfer is made pursuant to the exemption from the registration requirements under the U.S. Securities Act provided by
Rule 144 (“Rule 144”) or Rule 144A (“Rule 144A”) thereunder, if available, and in accordance
with any applicable securities laws of any state of the United States provided that such Buyer has validly executed and furnished to
the Company a representation letter in the form attached hereto as Exhibit D (each, a “144 Rep
Letter”) that such sale, offer, assignment or transfer can be made in compliance with Rule 144 or Rule 144A, in form and
substance reasonably satisfactory to the Company and its transfer agent (which shall not include an opinion of counsel) or (D) such
offer, sale, pledge, assignment or transfer is pursuant to a transaction that does not require registration under the 1933 Act or
any applicable securities laws of any state of the United States provided that such Buyer has furnished to the Company an opinion of
counsel of recognized standing, in form and substance reasonably satisfactory to the Company and its transfer agent, that
registration is not required under the 1933 Act to affect such offer, sale, pledge, assignment or transfer; (ii) any sale of the
Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144, and further, if Rule 144 is not
applicable, any offer, sale, assignment, pledge or transfer of the Securities under circumstances in which the seller (or the Person
through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance
with some other exemption under the 1933 Act or the rules and regulations of the SEC promulgated thereunder; and (iii) neither the
Company nor any other Person is under any obligation to register the Securities under the 1933 Act or any applicable securities laws
of any state of the United States or to comply with the terms and conditions of any exemption thereunder, including, but not limited
to, Rule 144. Notwithstanding the foregoing, the Securities may be pledged in connection with a bona fide margin account or other
loan or financing arrangement secured by the Securities and such pledge of Securities shall not be deemed to be a transfer, sale or
assignment of the Securities hereunder, and no Buyer effecting a pledge of Securities shall be required to provide the Company with
any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction Document (as
defined in Section 3(b)), including, without limitation, this Section 2(g).


 






    4


    


    

 


(h)
Validity; Enforcement. This Agreement and the Registration Rights Agreement have been duly and validly authorized, executed and
delivered on behalf of such Buyer and shall constitute the legal, valid and binding obligations of such Buyer enforceable against such
Buyer in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement
of applicable creditors’ rights and remedies.


 


(i)
No Conflicts. The execution, delivery and performance by such Buyer of this Agreement and the Registration Rights Agreement and
the consummation by such Buyer of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational
documents of such Buyer, or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would
become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture
or instrument to which such Buyer is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws) applicable to such Buyer, except in the case of clauses (ii) and (iii) above, for such
conflicts, defaults, rights or violations which could not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of such Buyer to perform its obligations hereunder.


 


(j)
Residency. Such Buyer is a resident of that jurisdiction specified below its address on the Schedule of Buyers.


 


(k)
No Commission. Except for such fees as otherwise provided for in this Agreement, the purchase of the Notes by such Buyer and the
performance by such Buyer under the Notes will not result in any placement agent or other agent being entitled to, or the Company being
responsible for the payment of, any placement agent’s fees, financial advisory fees, or brokers’ commissions in connection
with any placement agent or other agents engaged by such Buyer.


 






    5


    


    

 


3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.


 


The
Company represents and warrants to each of the Buyers that, as of the date hereof and as of the Closing Date (except for representations
and warranties that speak as of a specific date which shall be true and correct as of such specified date):


 


(a) Organization
and Qualification. Each of the Company and each of its Subsidiaries are entities duly organized and validly existing and in good
standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authority to own their
properties and to carry on their business as now being conducted and as presently proposed to be conducted. Each of the Company and
each of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which
its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent
that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect (as
defined below). As used in this Agreement, “Material Adverse Effect” means any material adverse effect on (i) the
business, properties, assets, liabilities, operations (including results thereof), condition (financial or otherwise) or prospects
of the Company or any Subsidiary, individually or taken as a whole, (ii) the transactions contemplated hereby or in any of the other
Transaction Documents or any other agreements or instruments to be entered into in connection herewith or therewith or (iii) the
authority or ability of the Company or any of its Subsidiaries to perform any of their respective obligations under any of the
Transaction Documents (as defined below). Other than the Persons (as defined below) set forth on Schedule 3(a), the Company has
no Subsidiaries. “Subsidiaries” means any Person (other than an Excluded Subsidiary (as defined below)) in which
the Company, directly or indirectly, (I) owns more than 50% of the outstanding capital stock, any equity or similar interest of such
Person or (II) controls all or substantially all of the business, operations or administration of such Person, and each of the
foregoing, is individually referred to herein as a “Subsidiary.” Each of Numbered company and Ample Organics
Australia PTY Ltd. (each, an “Excluded Subsidiary”) have no assets or liabilities as of the date hereof and as of
the Closing Date; provided, that any such entity shall cease to be an Excluded Subsidiary hereunder at any time such Excluded
Subsidiary incurs any liabilities or obtains any assets.


 


(b) Authorization;
Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations under this
Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof. Each
Subsidiary has the requisite power and authority to enter into and perform its obligations under the Transaction Documents to which
it is a party. The execution and delivery of this Agreement and the other Transaction Documents by the Company and its Subsidiaries,
and the consummation by the Company and its Subsidiaries of the transactions contemplated hereby and thereby (including, without
limitation, the issuance of the Notes and the reservation for issuance and issuance of the Conversion Shares issuable upon
conversion of the Notes) have been duly authorized by the Company’s board of directors and each of its Subsidiaries’
board of directors or other governing body, as applicable, and (other than the filing with the SEC of one or more Registration
Statements in accordance with the requirements of the Registration Rights Agreement, a Form D with the SEC and any other filings as
may be required by any state securities agencies) no further filing, consent or authorization is required by the Company, its
Subsidiaries, their respective boards of directors or their stockholders or other governing body. This Agreement has been, and the
other Transaction Documents to which it is a party will be prior to the Closing, duly executed and delivered by the Company, and
each constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its
respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state
securities law. Prior to the Closing, the Transaction Documents to which each Subsidiary is a party will be duly executed and
delivered by each such Subsidiary, and shall constitute the legal, valid and binding obligations of each such Subsidiary,
enforceable against each such Subsidiary in accordance with their respective terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating
to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and except as rights to
indemnification and to contribution may be limited by federal or state securities law. “Transaction Documents”
means, collectively, this Agreement, the Notes, the Security Documents, the Guarantees, the Registration Rights Agreement, the
Voting Agreement, the Irrevocable Transfer Agent Instructions (as defined below) and each of the other agreements and instruments
entered into or delivered by any of the parties hereto in connection with the transactions contemplated hereby and thereby, as may
be amended from time to time.


 






    6


    


    

 


(c)
Issuance of Securities. The issuance of the Notes has been duly authorized and, upon issuance in accordance with the terms of
the Transaction Documents, the Notes shall be validly issued, fully paid and non-assessable and free from all preemptive or similar rights,
mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances, security interests and other encumbrances
(collectively “Liens”) with respect to the issuance thereof, subject to Permitted Liens (under and as defined in the
Notes). As of the Closing, the Company shall have reserved from its duly authorized capital stock not less than 200% of the maximum number
of Conversion Shares issuable upon conversion of the Notes (assuming for purposes hereof that (x) the Notes are convertible at the Alternate
Conversion Price (as defined in the Notes) assuming an Alternate Conversion Date (as defined in the Note) as of the date hereof and (y)
any such conversion shall not take into account any limitations on the conversion of the Notes set forth in the Notes). Upon issuance
or conversion in accordance with the Notes, the Conversion Shares, when issued, will be validly issued, fully paid and nonassessable
and free from all preemptive or similar rights or Liens with respect to the issue thereof, with the holders being entitled to all rights
accorded to a holder of Common Stock. Subject to the accuracy of the representations and warranties of the Buyers in this Agreement,
and, assuming issuance of the Conversion Shares is in accordance with the terms and conditions of the Notes, the offer and issuance by
the Company of the Securities is exempt from registration under the 1933 Act.


 


(d)
No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and its Subsidiaries and the
consummation by the Company and its Subsidiaries of the transactions contemplated hereby and thereby (including, without limitation,
the issuance of the Notes and the Conversion Shares and the reservation for issuance of the Conversion Shares) will not (i) result in
a violation of the Certificate of Incorporation (as defined below) (including, without limitation, any certificate of designation contained
therein), Bylaws (as defined below), certificate of formation, memorandum of association, articles of association, bylaws or other organizational
documents of the Company or any of its Subsidiaries, or any capital stock or other securities of the Company or any of its Subsidiaries,
(ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) in any respect
under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument
to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment
or decree (including, without limitation, foreign, federal and state securities laws and regulations and the rules and regulations of
the Nasdaq Capital Market (the “Principal Market”) and including all applicable foreign, federal and state laws, rules
and regulations) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected, except in the case of (ii) and (iii) above, where such would not, either individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.


 


(e) Consents.
Neither the Company nor any Subsidiary is required to obtain any consent from, authorization or order of, or make any filing or
registration with (except for such consents, authorizations, orders, filings or registrations that (A) have already been obtained or
made or will be obtained or made prior to the Closing Date or (B) failure to obtain or make would not, either individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect and other than the filing with the SEC of one or more
Registration Statements in accordance with the requirements of the Registration Rights Agreement, the filing of a Form D with the
SEC and any other filings as may be required by any state securities agencies), any Governmental Entity (as defined below) or any
regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its respective
obligations under or contemplated by the Transaction Documents, in each case, in accordance with the terms hereof or thereof. All
consents, authorizations, orders, filings and registrations which the Company or any Subsidiary is required to obtain pursuant to
the preceding sentence have been or will be obtained or effected on or prior to the Closing Date, and neither the Company nor any of
its Subsidiaries are aware of any facts or circumstances which might prevent the Company or any of its Subsidiaries from obtaining
or effecting any of the registration, application or filings contemplated by the Transaction Documents. The Company is not in
violation of the requirements of the Principal Market and has no knowledge of any facts or circumstances which could reasonably lead
to delisting or suspension of the Common Stock in the foreseeable future. “Governmental Entity” means any nation,
state, county, city, town, village, district, or other political jurisdiction of any nature, federal, state, local, municipal,
foreign, or other government, governmental or quasi-governmental authority of any nature (including any governmental agency, branch,
department, official, or entity and any court or other tribunal), multi-national organization or body; or body exercising, or
entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any
nature or instrumentality of any of the foregoing, including any entity or enterprise owned or controlled by a government or a
public international organization or any of the foregoing.


 






    7


    


    

 


(f)
Acknowledgment Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that each Buyer is acting solely
in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby
and thereby and that no Buyer is (i) an officer or director of the Company or any of its Subsidiaries, (ii) to its knowledge, an “affiliate”
(as defined in Rule 144) of the Company or any of its Subsidiaries or (iii) to its knowledge, a “beneficial owner” of more
than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the
“1934 Act”)). The Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary of the
Company or any of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated
hereby and thereby, and any advice given by a Buyer or any of its representatives or agents in connection with the Transaction Documents
and the transactions contemplated hereby and thereby is merely incidental to such Buyer’s purchase of the Securities. The Company
further represents to each Buyer that the Company’s and each Subsidiary’s decision to enter into the Transaction Documents
to which it is a party has been based solely on the independent evaluation by the Company, each Subsidiary and their respective representatives.


 


(g) No
General Solicitation; Placement Agent’s Fees. Neither the Company, nor any of its Subsidiaries or affiliates, nor any
Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with the offer or sale of the Securities. The Company shall be responsible for the payment of any
placement agent’s fees, financial advisory fees, or brokers’ commissions (other than for Persons engaged by any Buyer or
its investment advisor) relating to or arising out of the transactions contemplated hereby. The Company shall pay, and hold each
Buyer harmless against, any liability, loss or expense (including, without limitation, attorney’s fees and out-of-pocket
expenses) arising in connection with any such claim. Neither the Company nor any of its Subsidiaries has engaged any placement agent
or other agent in connection with the offer or sale of the Securities.


 


(h)
No Integrated Offering. None of the Company, its Subsidiaries or any of their affiliates, nor any Person acting on their behalf
has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances
that would require registration of the issuance of any of the Securities under the 1933 Act, whether through integration with prior offerings
or otherwise, or cause this offering of the Securities to require approval of stockholders of the Company for purposes of the 1933 Act
or under any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of any exchange
or automated quotation system on which any of the securities of the Company are listed or designated for quotation. None of the Company,
its Subsidiaries, their affiliates nor any Person acting on their behalf will take any action or steps that would require registration
of the issuance of any of the Securities under the 1933 Act or cause the offering of any of the Securities to be integrated with other
offerings of securities of the Company.


 






    8


    


    

 


(i)
Dilutive Effect. The Company understands and acknowledges that the number of Conversion Shares will increase in certain circumstances.
The Company further acknowledges that its obligation to issue the Conversion Shares pursuant to the terms of the Notes in accordance
with this Agreement and the Notes is, in each case, absolute and unconditional regardless of the dilutive effect that such issuance may
have on the ownership interests of other stockholders of the Company.


 


(j)
Application of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action,
if any, in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including,
without limitation, any distribution under a rights agreement), stockholder rights plan or other similar anti-takeover provision under
the Certificate of Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its incorporation or otherwise
which is or could become applicable to any Buyer as a result of the transactions contemplated by this Agreement, including, without limitation,
the Company’s issuance of the Securities and any Buyer’s ownership of the Securities. The Company has not adopted a stockholder
rights plan or similar arrangement relating to accumulations of beneficial ownership of Common Stock or a change in control of the Company
or any of its Subsidiaries.


 


(k) SEC
Documents; Financial Statements. Except as set forth on Schedule 3(k) attached hereto, during the two (2) years prior to the
date hereof or such shorter period as the Company has been required to file reports with the SEC pursuant to the requirements of the
1934 Act, the Company has timely filed all reports, schedules, forms, proxy statements, statements and other documents required to
be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date
hereof and all exhibits and appendices included therein and financial statements, notes and schedules thereto and documents
incorporated by reference therein being hereinafter referred to as the “SEC Documents”). The Company has
delivered or has made available to the Buyers or their respective representatives true, correct and complete copies of each of the
SEC Documents not available on the EDGAR system. As of their respective filing dates, the SEC Documents complied in all material
respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC
Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the
Company included in the SEC Documents complied in all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto as in effect as of the time of filing. Such financial statements have been
prepared in accordance with generally accepted accounting principles (“GAAP”), consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of
unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present
in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash
flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments which will not
be material, either individually or in the aggregate). The reserves, if any, established by the Company or the lack of reserves, if
applicable, are reasonable based upon facts and circumstances known by the Company on the date hereof and there are no loss
contingencies that are required to be accrued by the Statement of Financial Accounting Standard No. 5 of the Financial Accounting
Standards Board which are not provided for by the Company in its financial statements or otherwise. No other information provided by
or on behalf of the Company to any of the Buyers which is not included in the SEC Documents (including, without limitation,
information referred to in Section 2(e) of this Agreement or in the disclosure schedules to this Agreement) contains any untrue
statement of a material fact or omits to state any material fact necessary in order to make the statements therein not misleading,
in the light of the circumstance under which they are or were made. The Company is not currently contemplating to amend or restate
any of the financial statements (including, without limitation, any notes or any letter of the independent accountants of the
Company with respect thereto) included in the SEC Documents (the “Financial Statements”), nor is the Company
currently aware of facts or circumstances which would require the Company to amend or restate any of the Financial Statements, in
each case, in order for any of the Financials Statements to be in compliance with GAAP and the rules and regulations of the SEC. The
Company has not been informed by its independent accountants that they recommend that the Company amend or restate any of the
Financial Statements or that there is any need for the Company to amend or restate any of the Financial Statements.


 






    9


    


    

 


(l) Absence
of Certain Changes. Since the date of the Company’s most recent audited financial statements contained in a Form 10-K,
there has been no adverse change and no adverse development in the business, assets, liabilities, properties, operations (including
results thereof), condition (financial or otherwise) or prospects of the Company or any of its Subsidiaries, except such as would
not be reasonably likely to cause a Material Adverse Effect. Except as set forth in the SEC Documents, since the date of the
Company’s most recent audited financial statements contained in a Form 10-K, neither the Company nor any of its Subsidiaries
has (i) declared or paid any dividends, (ii) sold any assets, individually or in the aggregate, outside of the ordinary course of
business, (iii) made any capital expenditures, individually or in the aggregate, outside of the ordinary course of business or (iv)
made any revaluation of any of their respective assets, including, without limitation, writing down the value of capitalized
inventory or writing off notes or accounts receivable or any sale of assets other than in the ordinary course of business. Neither
the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to any law or statute relating to
bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does the Company or any Subsidiary have any
knowledge or reason to believe that any of their respective creditors intend to initiate involuntary bankruptcy proceedings or any
actual knowledge of any fact which would reasonably lead a creditor to do so. The Company and its Subsidiaries, individually and on
a consolidated basis, are not as of the date hereof, and after giving effect to the transactions contemplated hereby to occur at the
Closing, will not be Insolvent (as defined below). For purposes of this Section 3(l), “Insolvent” means, (i) with
respect to the Company and its Subsidiaries, on a consolidated basis, (A) the present fair saleable value of the Company’s and
its Subsidiaries’ assets is less than the amount required to pay the Company’s and its Subsidiaries’ total
Indebtedness (as defined below), (B) the Company and its Subsidiaries are unable to pay their debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and matured or (C) the Company and its Subsidiaries intend to
incur or believe that they will incur debts that would be beyond their ability to pay as such debts mature; and (ii) with respect to
the Company and each Subsidiary, individually, (A) the present fair saleable value of the Company’s or such Subsidiary’s
(as the case may be) assets is less than the amount required to pay its respective total Indebtedness, (B) the Company or such
Subsidiary (as the case may be) is unable to pay its respective debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute and matured or (C) the Company or such Subsidiary (as the case may be) intends to incur
or believes that it will incur debts that would be beyond its respective ability to pay as such debts mature. Neither the Company
nor any of its Subsidiaries has engaged in any business or in any transaction, and is not about to engage in any business or in any
transaction, for which the Company’s or such Subsidiary’s remaining assets constitute unreasonably small capital with
which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted.


 


(m)
No Undisclosed Events, Liabilities, Developments or Circumstances. No event, liability, development or circumstance has occurred
or exists, or is reasonably expected to exist or occur with respect to the Company, any of its Subsidiaries or any of their respective
businesses, properties, liabilities, prospects, operations (including results thereof) or condition (financial or otherwise), that (i)
would be required to be disclosed by the Company under applicable securities laws on a registration statement on Form S-1 filed with
the SEC relating to an issuance and sale by the Company of its Common Stock and which has not been publicly announced, (ii) could have
a material adverse effect on any Buyer’s investment hereunder or (iii) could have a Material Adverse Effect.


 


(n) Conduct
of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term of or in default
under its Certificate of Incorporation, any certificate of designation, preferences or rights of any other outstanding series of
preferred stock of the Company or any of its Subsidiaries or Bylaws or their organizational charter, certificate of formation,
memorandum of association, articles of association, Certificate of Incorporation or certificate of incorporation or bylaws,
respectively. Neither the Company nor any of its Subsidiaries is in violation of any judgment, decree or order or any statute,
ordinance, rule or regulation applicable to the Company or any of its Subsidiaries, and neither the Company nor any of its
Subsidiaries will conduct its business in violation of any of the foregoing, except in all cases for possible violations which could
not, individually or in the aggregate, have a Material Adverse Effect. Without limiting the generality of the foregoing, the Company
is not in violation of any of the rules, regulations or requirements of the Principal Market and has no knowledge of any facts or
circumstances that could reasonably lead to delisting or suspension of the Common Stock by the Principal Market in the foreseeable
future. Since the date the Common Stock has been listed or designated for quotation on the Principal Market, (i) trading in the
Common Stock has not been suspended by the SEC or the Principal Market and (ii) the Company has received no communication, written
or oral, from the SEC or the Principal Market regarding the suspension or delisting of the Common Stock from the Principal Market.
The Company and each of its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate regulatory
authorities necessary to conduct their respective businesses, except where the failure to possess such certificates, authorizations
or permits would not have, individually or in the aggregate, a Material Adverse Effect, and neither the Company nor any such
Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization
or permit. There is no agreement, commitment, judgment, injunction, order or decree binding upon the Company or any of its
Subsidiaries or to which the Company or any of its Subsidiaries is a party which has or would reasonably be expected to have the
effect of prohibiting or materially impairing any business practice of the Company or any of its Subsidiaries, any acquisition of
property by the Company or any of its Subsidiaries or the conduct of business by the Company or any of its Subsidiaries as currently
conducted other than such effects, individually or in the aggregate, which have not had and would not reasonably be expected to have
a Material Adverse Effect on the Company or any of its Subsidiaries.


 






    10


    


    

 


(o)
Foreign Corrupt Practices. Neither the Company, any Subsidiary nor, to the Company’s knowledge, any director, officer, agent,
employee, nor any other person acting for or on behalf of the foregoing (individually and collectively, a “Company Affiliate”)
have violated the U.S. Foreign Corrupt Practices Act (the “FCPA”) or any other applicable anti-bribery or anti-corruption
laws, nor, to the Company’s knowledge, has any Company Affiliate offered, paid, promised to pay, or authorized the payment of any
money, or offered, given, promised to give, or authorized the giving of anything of value, to any officer, employee or any other person
acting in an official capacity for any Governmental Entity to any political party or official thereof or to any candidate for political
office (individually and collectively, a “Government Official”) or to any person under circumstances where such Company
Affiliate knew or was aware of a high probability that all or a portion of such money or thing of value would be offered, given or promised,
directly or indirectly, to any Government Official, for the purpose of:


 


(i)
(A) influencing any act or decision of such Government Official in his/her official capacity, (B) inducing such Government Official to
do or omit to do any act in violation of his/her lawful duty, (C) securing any improper advantage, or (D) inducing such Government Official
to influence or affect any act or decision of any Governmental Entity, or


 


(ii)
assisting the Company or its Subsidiaries in obtaining or retaining business for or with, or directing business to, the Company or its
Subsidiaries.


 


(p)
 Sarbanes-Oxley Act. The Company and each Subsidiary is in compliance with any and all applicable requirements of the Sarbanes-Oxley
Act of 2002, as amended, and any and all applicable rules and regulations promulgated by the SEC thereunder.


 


(q)
Transactions With Affiliates. No employee, director or officer or, to the knowledge of the Company, any affiliate of any thereof
is presently (i) a party to any transaction with the Company or its Subsidiaries (including any contract, agreement or other arrangement
providing for the furnishing of services by, or rental of real or personal property from, or otherwise requiring payments to, any such
director, officer or stockholder or such associate or affiliate or relative Subsidiaries (other than for ordinary course services as
employees, officers or directors of the Company or any of its Subsidiaries)) or (ii) the direct or indirect owner of an interest in any
corporation, firm, association or business organization which is a competitor, supplier or customer of the Company or its Subsidiaries
(except for a passive investment (direct or indirect) in less than 5% of the common stock of a company whose securities are traded on
or quoted through an Eligible Market (as defined in the Notes)), nor does any such Person receive income from any source other than the
Company or its Subsidiaries which relates to the business of the Company or its Subsidiaries or should properly accrue to the Company
or its Subsidiaries. No employee, officer, or director of the Company or any of its Subsidiaries or member of his or her immediate family
is indebted to the Company or its Subsidiaries, as the case may be, nor is the Company or any of its Subsidiaries indebted (or committed
to make loans or extend or guarantee credit) to any of them, other than (i) for payment of salary for services rendered, (ii) reimbursement
for reasonable expenses incurred on behalf of the Company, and (iii) for other standard employee benefits made generally available to
all employees or executives (including equity incentive agreements outstanding under any equity incentive plan approved by the Board
of Directors of the Company).


 






    11


    


    

 


(r)
Equity Capitalization. 


 


(i)
Definitions:


 


(A) “Common
Stock” means (x) the Company’s shares of common stock, $0.0001 par value per share, and (y) any capital stock into
which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.


 


(B) “Preferred
Stock” means (x) the Company’s blank check preferred stock, $0.0001 par value per share, the terms of which may be designated
by the board of directors of the Company in a certificate of designations and (y) any capital stock into which such preferred stock shall
have been changed or any share capital resulting from a reclassification of such preferred stock (other than a conversion of such preferred
stock into Common Stock in accordance with the terms of such certificate of designations).


 


(ii) Authorized
and Outstanding Capital Stock. As of the date hereof, the authorized capital stock of the Company consists of (A) 75,000,000
shares of Common Stock, of which, 27,080,487 are issued and outstanding and 7,197,855 shares are reserved for issuance pursuant to
Convertible Securities (as defined below) (other than the Notes) exercisable or exchangeable for, or convertible into, shares of
Common Stock and (B) 5,000,000 shares of Preferred Stock, of which one share of voting preferred stock is issued and outstanding
with voting power equivalent to 385,947 shares of Common Stock. No shares of Common Stock are held in the treasury of the Company.
“Convertible Securities” means any capital stock or other security of the Company or any of its Subsidiaries that
is at any time and under any circumstances directly or indirectly convertible into, exercisable or exchangeable for, or which
otherwise entitles the holder thereof to acquire, any capital stock or other security of the Company (including, without limitation,
Common Stock) or any of its Subsidiaries.


 






    12


    


    

 


(iii)  Valid Issuance; Available Shares; Affiliates. All of such outstanding shares are duly authorized and have been, or upon issuance
will be, validly issued and are fully paid and nonassessable. Schedule 3(r)(iii) sets forth the number of shares of Common Stock
that are (A) reserved for issuance pursuant to Convertible Securities (as defined below) (other than the Notes) and (B) that are, as
of the date hereof, owned by Persons who are “affiliates” (as defined in Rule 405 of the 1933 Act and calculated based on
the assumption that only officers, directors and holders of at least 10% of the Company’s issued and outstanding Common Stock are
“affiliates” without conceding that any such Persons are “affiliates” for purposes of federal securities laws)
of the Company or any of its Subsidiaries. Except as set forth on Schedule 3(r)(iii) attached hereto, to the Company’s knowledge,
no Person owns 10% or more of the Company’s issued and outstanding shares of Common Stock (calculated based on the assumption that
all Convertible Securities (as defined below), whether or not presently exercisable or convertible, have been fully exercised or
converted (as the case may be) taking account of any limitations on exercise or conversion (including “blockers”) contained
therein without conceding that such identified Person is a 10% stockholder for purposes of federal securities laws).


 


(iv) Existing
Securities; Obligations. Except as disclosed in Schedule 3(r)(iv) attached hereto: (A) none of the Company’s or any
Subsidiary’s shares, interests or capital stock is subject to preemptive rights or any other similar rights or Liens suffered
or permitted by the Company or any Subsidiary; (B) there are no outstanding options, warrants, scrip, rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable
for, any shares, interests or capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares, interests or capital
stock of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares,
interests or capital stock of the Company or any of its Subsidiaries; (C) there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act (except pursuant
to the Registration Rights Agreement); (D) there are no outstanding securities or instruments of the Company or any of its
Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of
its Subsidiaries; (E) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered
by the issuance of the Securities; and (F) neither the Company nor any Subsidiary has any stock appreciation rights or
“phantom stock” plans or agreements or any similar plan or agreement.


 






    13


    


    

 


(v)
Organizational Documents. The Company has furnished to the Buyers true, correct and complete copies of the Company’s Certificate
of Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and the Company’s
bylaws, as amended and as in effect on the date hereof (the “Bylaws”), and the terms of all Convertible Securities
and the material rights of the holders thereof in respect thereto.


 


(s)
  Indebtedness and Other Contracts. Neither the Company nor any of its Subsidiaries, (i) except as disclosed on Schedule 3(s),
has any outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments
evidencing Indebtedness of the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may
become bound, (ii) is a party to any contract, agreement or instrument, the violation of which, or default under which, by the other
party(ies) to such contract, agreement or instrument could reasonably be expected to result in a Material Adverse Effect, (iii) has
any financing statements securing obligations in any amounts filed in connection with the Company or any of its Subsidiaries; (iv)
is in violation of any term of, or in default under, any contract, agreement or instrument relating to any Indebtedness, except
where such violations and defaults would not result, individually or in the aggregate, in a Material Adverse Effect, or (v) is a
party to any contract, agreement or instrument relating to any Indebtedness, the performance of which, in the judgment of the
Company’s officers, has or is expected to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries have
any liabilities or obligations required to be disclosed in the SEC Documents which are not so disclosed in the SEC Documents, other
than those incurred in the ordinary course of the Company’s or its Subsidiaries’ respective businesses and which,
individually or in the aggregate, do not or could not have a Material Adverse Effect. For purposes of this Agreement: (x)
“Indebtedness” of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all
obligations issued, undertaken or assumed as the deferred purchase price of property or services (including, without limitation,
“capital leases” in accordance with GAAP) (other than trade payables entered into in the ordinary course of business
consistent with past practice), (C) all reimbursement or payment obligations with respect to letters of credit, surety bonds and
other similar instruments, (D) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations
so evidenced incurred in connection with the acquisition of property, assets or businesses, (E) all indebtedness created or arising
under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property
or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such
agreement in the event of default are limited to repossession or sale of such property), (F) all monetary obligations under any
leasing or similar arrangement which, in connection with GAAP, consistently applied for the periods covered thereby, is classified
as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or
become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations of
others of the kinds referred to in clauses (A) through (G) above; and (y) “Contingent Obligation” means, as to
any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any Indebtedness, lease,
dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the
primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or
that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in
part) against loss with respect thereto.


 






    14


    


    

 


(t)
Litigation. There is no action, suit, arbitration, proceeding, inquiry or investigation before or by the Principal Market, any
court, public board, other Governmental Entity, self-regulatory organization or body pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries, the Common Stock or any of the Company’s or its Subsidiaries’
officers or directors , whether of a civil or criminal nature or otherwise, in their capacities as such, except as set forth in Schedule
3(t) or such that would not result, individually or in the aggregate, in a Material Adverse Effect. No director, officer or employee
of the Company or any of its subsidiaries has willfully violated 18 U.S.C. §1519 or engaged in spoliation in reasonable anticipation
of litigation. Without limitation of the foregoing, there has not been, and to the knowledge of the Company, there is not pending or
contemplated, any investigation by the SEC involving the Company, any of its Subsidiaries or any current or former director or officer
of the Company or any of its Subsidiaries. The SEC has not issued any stop order or other order suspending the effectiveness of any registration
statement filed by the Company under the 1933 Act or the 1934 Act. Neither the Company nor any of its Subsidiaries is subject to any
order, writ, judgment, injunction, decree, determination or award of any Governmental Entity.


 


(u)
Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the
Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any insurance coverage sought
or applied for, and neither the Company nor any such Subsidiary has any reason to believe that it will be unable to renew its existing
insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect.


 


(v) Employee
Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any
member of a union. The Company and its Subsidiaries believe that their relations with their employees are good. No executive officer
(as defined in Rule 501(f) promulgated under the 1933 Act) or other key employee of the Company or any of its Subsidiaries has
notified the Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary or otherwise
terminate such officer’s employment with the Company or any such Subsidiary. To the Company’s knowledge, no executive
officer or other key employee of the Company or any of its Subsidiaries is, or is now expected to be, in violation of any material
term of any employment contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any
other contract or agreement or any restrictive covenant, and the continued employment of each such executive officer or other key
employee (as the case may be) does not subject the Company or any of its Subsidiaries to any liability with respect to any of the
foregoing matters, except where such violation would not, either individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect. The Company and its Subsidiaries are in compliance with all federal, state, local and foreign laws and
regulations respecting labor, employment and employment practices and benefits, terms and conditions of employment and wages and
hours, except where failure to be in compliance would not, either individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect.


 






    15


    


    

 


(w)
Title.


 


(i)
Real Property. Each of the Company and its Subsidiaries holds good title to all real property, leases in real property, facilities
or other interests in real property owned or held by the Company or any of its Subsidiaries (the “Real Property”)
owned by the Company or any of its Subsidiaries (as applicable). The Real Property is free and clear of all Liens and is not subject
to any rights of way, building use restrictions, exceptions, variances, reservations, or limitations of any nature except for (a) Permitted
Liens (as defined in the Notes), (b) Liens for current taxes not yet due and (c) zoning laws and other land use restrictions that do
not impair the present or anticipated use of the property subject thereto. Any Real Property held under lease by the Company or any of
its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and buildings by the Company or any of its Subsidiaries.


 


(ii)
Fixtures and Equipment. Each of the Company and its Subsidiaries (as applicable) has good title to, or a valid leasehold interest
in, the tangible personal property, equipment, improvements, fixtures, and other personal property and appurtenances that are used by
the Company or its Subsidiary in connection with the conduct of its business (the “Fixtures and Equipment”). The Fixtures
and Equipment are structurally sound, are in good operating condition and repair, are adequate for the uses to which they are being put,
are not in need of maintenance or repairs except for ordinary, routine maintenance and repairs and are sufficient for the conduct of
the Company’s and/or its Subsidiaries’ businesses (as applicable) in the manner as conducted prior to the Closing. Each of
the Company and its Subsidiaries owns all of its Fixtures and Equipment free and clear of all Liens except for (a) Permitted Liens (as
defined in the Notes), (b) liens for current taxes not yet due and (c) zoning laws and other land use restrictions that do not impair
the present or anticipated use of the property subject thereto.


 


(x)
Intellectual Property.


 


(i)
Except as set forth on Schedule 3(x)(i), the Company and its Subsidiaries own all right, title and interest in and to, or have a
valid and enforceable license to use all the Intellectual Property (as defined below) used by them in connection with their
respective businesses, which represents all intellectual property rights necessary to the conduct of their business as now
conducted. The Company and its Subsidiaries are in compliance with all contractual obligations relating to the protection of such of
the Intellectual Property as they use pursuant to license or other agreement, except where failure to be in compliance would not,
either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. The conduct of the business
of the Company and its Subsidiaries, to the knowledge of the Company, as currently conducted, or as reasonably be expected to be
conducted, does not, and is not reasonably expected to, conflict with or infringe any proprietary right or Intellectual Property
Rights of any third party, including, without limitation, the transmission, reproduction, use, display or modification of any
content or material (including framing, and linking web site content) on a web site, bulletin board or other like medium hosted by
or on behalf of the Company or any of its Subsidiaries, except for such infringements and conflicts which would not reasonably be
expected to have a Material Adverse Effect. There is no claim, suit, action or proceeding pending or, to the knowledge of the
Company, threatened against the Company or any Subsidiary: (i) alleging any such conflict or infringement with any third
party’s proprietary rights; or (ii) challenging the Company’s or any Subsidiary’s ownership or use of, or the
validity or enforceability of any Intellectual Property.


 






    16


    


    

 


(ii)
Schedule 3(x)(ii) sets forth a complete and current list of registered trademarks or copyrights, issued patents, applications therefor,
or other forms of Intellectual Property registration anywhere in the world that is owned by the Company or a Subsidiary (“Listed
Intellectual Property”) and the owner of record, date of application or issuance and relevant jurisdiction as to each. All
Listed Intellectual Property is owned by the Company or a Subsidiary, free and clear of security interests, liens, encumbrances or claims
of any nature. All Listed Intellectual Property is valid, subsisting, unexpired, in proper form and enforceable and all renewal fees
and other maintenance fees that have fallen due on or prior to the effective date of this Agreement have been paid except where such
failure would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. No Listed
Intellectual Property is the subject of any proceeding before any governmental, registration or other authority in any jurisdiction,
including any office action or other form of preliminary or final refusal of registration, except as noted on Schedule 3(x)(ii). The
consummation of the transactions contemplated hereby will not alter or impair any Intellectual Property that is owned or licensed by
the Company or a Subsidiary.


 


(iii)  Schedule 3(x)(iii) sets forth a complete list of all agreements relating to Intellectual Property to which the Company or a Subsidiary
is a party, subject or bound (the “Intellectual Property Contracts”) (other than agreements involving (A) the license
of the Company of standard, generally commercially available “off-the-shelf” third party products that are not and will not
to any extent be part of any product, service or intellectual property offering of the Company or (B) non-disclosure or non-use of information).
Each Intellectual Property Contract: (i) is valid and binding on the Company or a Subsidiary, as the case may be, and, to the Company’s
knowledge, the counterparties thereto, and is in full force and effect and (ii) upon consummation of the transactions contemplated hereby
shall continue in full force and effect without penalty or other adverse consequence, except in each case, where such would not, either
individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.


 


(iv)
The Company and its Subsidiaries are not under any obligation to pay royalties or other payments in connection with any agreement, nor
restricted from assigning their rights respecting Intellectual Property nor will the Company or any Subsidiary otherwise be, as a result
of the execution and delivery of this Agreement or the performance of the Company’s obligations under this Agreement, in breach
of any agreement relating to the Intellectual Property.


 




    17


    


    


 


(v)
 Except as set forth on Schedule 3(x)(v), no present or former employee, officer or director of the Company or any Subsidiary, or agent
or outside contractor of the Company or any Subsidiary, holds any right, title or interest, directly or indirectly, in whole or in part,
in or to any Intellectual Property that is owned or licensed by the Company or any Subsidiary.


 


(vi)
To the Company’s knowledge: (i) none of the Listed Intellectual Property has been used, disclosed or appropriated to the detriment
of the Company or any Subsidiary for the benefit of any Person other than the Company; and (ii) no employee, independent contractor or
agent of the Company or any Subsidiary has misappropriated any trade secrets or other confidential information of any other Person in
the course of the performance of his or her duties as an employee, independent contractor or agent of the Company or any Subsidiary.


 


(vii)
Any programs, modifications, enhancements or other inventions, improvements, discoveries, methods or works of authorship (“Works”)
that were created by employees of the Company or any Subsidiary were made in the regular course of such employees’ employment or
service relationships with the Company or its Subsidiary using the Company’s or the Subsidiary’s facilities and resources
and, as such, constitute either works made for hire or all rights and title to and in such Works have been fully assigned to the Company
or a Subsidiary, except such as would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse
Effect. Each such employee who has created Works or any employee who in the regular course of his employment may create Works and all
consultants have signed an assignment or similar agreement with the Company or the Subsidiary confirming the Company’s or the Subsidiary’s
ownership or, in the alternate, transferring and assigning to the Company or the Subsidiary all right, title and interest in and to such
programs, modifications, enhancements or other inventions including copyright and other intellectual property rights therein.


 


(viii)
For the purpose of this Agreement, “Intellectual Property” or “Intellectual Property Rights” shall
mean all of the following: (A) trademarks and service marks, trade dress, product configurations, trade names and other indications of
origin, applications or registrations in any jurisdiction pertaining to the foregoing and all goodwill associated therewith; (B) inventions,
discoveries, improvements, ideas, know-how, formula methodology, processes, technology, software (including password unprotected interpretive
code or source code, object code, development documentation, programming tools, drawings, specifications and data) and applications and
patents in any jurisdiction pertaining to the foregoing, including re-issues, continuations, divisions, continuations-in-part, renewals
or extensions; (C) trade secrets, including confidential information and the right in any jurisdiction to limit the use or disclosure
thereof; (D) copyrights in writings, designs software, mask works or other works, applications or registrations in any jurisdiction for
the foregoing and all moral rights related thereto; (E) database rights; (F) Internet Web sites, domain names and applications and registrations
pertaining thereto and all intellectual property used in connection with or contained in all versions of the Company’s Web sites;
(G) rights under all agreements relating to the foregoing; (H) books and records pertaining to the foregoing; and (I) claims or causes
of action arising out of or related to past, present or future infringement or misappropriation of the foregoing.


 






    18


    


    

 


(y)
Environmental Laws(i). (i) The Company and its Subsidiaries (A) are in compliance with any and all Environmental Laws (as defined
below), (B) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (C) are in compliance with all terms and conditions of any such permit, license or approval where, in each
of the foregoing clauses (A), (B) and (C), the failure to so comply could be reasonably expected to have, individually or in the aggregate,
a Material Adverse Effect. The term “Environmental Laws” means all federal, state, local or foreign laws relating
to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata), including, without limitation, 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.


 


(ii)
No Hazardous Materials:


 


(A)
have been disposed of or otherwise released from any Real Property of the Company or any of its Subsidiaries in violation of any Environmental
Laws; or


 


(B)
are present on, over, beneath, in or upon a Real Property or any portion thereof in quantities that would constitute a violation of any
Environmental Laws. No prior use by the Company or any of its Subsidiaries of any Real Property has occurred that violates any Environmental
Laws, which violation would have a material adverse effect on the business of the Company or any of its Subsidiaries.


 


(iii)
Neither the Company nor any of its Subsidiaries knows of any other person who or entity which has stored, treated, recycled, disposed
of or otherwise located on any Real Property any Hazardous Materials, including, without limitation, such substances as asbestos and
polychlorinated biphenyls.


 






    19


    


    

 


(iv)
None of the Real Properties are on any federal or state “Superfund” list or Liability Information System (“CERCLIS”)
list or any state environmental agency list of sites under consideration for CERCLIS, nor subject to any environmental related Liens.


 


(z)
Subsidiary Rights. The Company or one of its Subsidiaries 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 as owned by the Company or such
Subsidiary.


 


(aa)   Tax Status. The Company and each of its Subsidiaries (i) has timely made or filed (allowing for all lawful extensions) all foreign,
federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii)
has timely paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on
such returns, reports and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably
adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There
are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company
and its Subsidiaries know of no basis for any such claim. The Company is not operated in such a manner as to qualify as a passive foreign
investment company, as defined in Section 1297 of the Internal Revenue Code of 1986, as amended (the “Code”). The
net operating loss carryforwards (“NOLs”) for United States federal income tax purposes of the consolidated group
of which the Company is the common parent, if any, shall not be adversely effected by the transactions contemplated hereby. The transactions
contemplated hereby do not constitute an “ownership change” within the meaning of Section 382 of the Code, thereby preserving
the Company’s ability to utilize such NOLs.


 


(bb)
Internal Accounting and Disclosure Controls. Except for the current material weaknesses as disclosed in the SEC Documents, the
Company and each of its Subsidiaries maintains internal control over financial reporting (as such term is defined in Rule 13a-15(f) under
the 1934 Act) that is effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted accounting principles, including 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 and liability accountability, (iii) access to
assets or incurrence of liabilities is permitted only in accordance with management’s general or specific authorization and (iv)
the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and
appropriate action is taken with respect to any difference. Except for the current material weaknesses as disclosed in the SEC Documents,
the Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the 1934 Act) that are effective
in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is recorded,
processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, including, without limitation,
controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits
under the 1934 Act is accumulated and communicated to the Company’s management, including its principal executive officer or officers
and its principal financial officer or officers, as appropriate, to allow timely decisions regarding required disclosure. Except as set
forth on Schedule 3(bb) attached hereto, neither the Company nor any of its Subsidiaries has received any notice or correspondence from
any accountant, Governmental Entity or other Person relating to any potential material weakness or significant deficiency in any part
of the internal controls over financial reporting of the Company or any of its Subsidiaries.


 






    20


    


    

 


(cc)
 Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any
of its Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its 1934
Act filings and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.


 


(dd)
Investment Company Status. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment
company,” an affiliate of an “investment company,” a company controlled by an “investment company” or an
“affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company”
as such terms are defined in the Investment Company Act of 1940, as amended.


 


(ee)  Acknowledgement Regarding Buyers’ Trading Activity. It is understood and acknowledged by the Company that (i) following
the public disclosure of the transactions contemplated by the Transaction Documents, in accordance with the terms thereof, none of the
Buyers have been asked by the Company or any of its Subsidiaries to agree, nor has any Buyer agreed with the Company or any of its Subsidiaries,
to desist from effecting any transactions in or with respect to (including, without limitation, purchasing or selling, long and/or short)
any securities of the Company, or “derivative” securities based on securities issued by the Company or to hold any of the
Securities for any specified term; (ii) any Buyer, and counterparties in “derivative” transactions to which any such Buyer
is a party, directly or indirectly, presently may have a “short” position in the Common Stock which was established prior
to such Buyer’s knowledge of the transactions contemplated by the Transaction Documents; (iii) each Buyer shall not be deemed to
have any affiliation with or control over any arm’s length counterparty in any “derivative” transaction; and (iv) each
Buyer may rely on the Company’s obligation to timely deliver shares of Common Stock upon conversion or exchange, as applicable,
of the Securities as and when required pursuant to the Transaction Documents for purposes of effecting trading in the Common Stock of
the Company. The Company further understands and acknowledges that following the public disclosure of the transactions contemplated by
the Transaction Documents pursuant to the Press Release (as defined below) one or more Buyers may engage in hedging and/or trading activities
(including, without limitation, the location and/or reservation of borrowable shares of Common Stock) at various times during the period
that the Securities are outstanding, including, without limitation, during the periods that the value and/or number of the Conversion
Shares deliverable with respect to the Securities are being determined and such hedging and/or trading activities (including, without
limitation, the location and/or reservation of borrowable shares of Common Stock), if any, can reduce the value of the existing stockholders’
equity interest in the Company both at and after the time the hedging and/or trading activities are being conducted. The Company acknowledges
that such aforementioned hedging and/or trading activities do not constitute a breach of this Agreement, the Notes or any other Transaction
Document or any of the documents executed in connection herewith or therewith.


 






    21


    


    

 


(ff)
Manipulation of Price. Neither the Company nor any of its Subsidiaries has, and, to the knowledge of the Company, no Person acting
on their behalf has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or manipulation
of the price of any security of the Company or any of its Subsidiaries 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, (iii) paid or agreed to pay to
any Person any compensation for soliciting another to purchase any other securities of the Company or any of its Subsidiaries or (iv)
paid or agreed to pay any Person for research services with respect to any securities of the Company or any of its Subsidiaries.


 


(gg)
 U.S. Real Property Holding Corporation. Neither the Company nor any of its Subsidiaries is, or has ever been, and so long as any
of the Securities are held by any of the Buyers, shall become, a U.S. real property holding corporation within the meaning of Section 897
of the Code, and the Company and each Subsidiary shall so certify upon any Buyer’s request.


 


(hh)
Registration Eligibility. The Company is eligible to register the Registrable Securities (defined in the Registration Rights Agreement)
for resale by the Buyers using Form S-3 promulgated under the 1933 Act.


 


(ii)
Transfer Taxes. On the Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required
to be paid in connection with the issuance, sale and transfer of the Securities to be sold to each Buyer hereunder will be, or will have
been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.


 


(jj)
Bank Holding Company Act. Neither the Company nor any of its Subsidiaries 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 (25%) or more of the total equity of
a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries
or affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and
to regulation by the Federal Reserve.


 


(kk)
Illegal or Unauthorized Payments; Political Contributions. Neither the Company nor any of its Subsidiaries nor, to the best of
the Company’s knowledge (after reasonable inquiry of its officers and directors), any of the officers, directors, employees, agents
or other representatives of the Company or any of its Subsidiaries or any other business entity or enterprise with which the Company
or any Subsidiary is or has been affiliated or associated, has, directly or indirectly, made or authorized any payment, contribution
or gift of money, property, or services, whether or not in contravention of applicable law, (i) as a kickback or bribe to any Person
or (ii) to any political organization, or the holder of or any aspirant to any elective or appointive public office except for personal
political contributions not involving the direct or indirect use of funds of the Company or any of its Subsidiaries.


 


(ll)
Money Laundering. The Company and its Subsidiaries are in compliance with, and have not previously violated, the USA Patriot Act
of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, without limitation, the laws,
regulations and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including, but not
limited, to (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any regulations contained in 31 CFR,
Subtitle B, Chapter V.


 






    22


    


    

 


(mm) Management.
Except as set forth in Schedule 3(nn) hereto, during the past five year period, no current or former officer or director
or, to the knowledge of the Company, no current ten percent (10%) or greater stockholder of the Company or any of its Subsidiaries
has been the subject of:


 


(i)
a petition under bankruptcy laws or any other insolvency or moratorium law or the appointment by a court of a receiver, fiscal agent
or similar officer for such Person, or any partnership in which such person was a general partner at or within two years before the filing
of such petition or such appointment, or any corporation or business association of which such person was an executive officer at or
within two years before the time of the filing of such petition or such appointment;


 


(ii)
a conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations that do not relate
to driving while intoxicated or driving under the influence);


 


(iii)
any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining any such person from, or otherwise limiting, the following activities:


 


(1)
Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission or an associated person of
any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director
or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct
or practice in connection with such activity;


 


(2)
Engaging in any particular type of business practice; or


 


(3)
Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of
securities laws or commodities laws;


 


(iv)
any order, judgment or decree, not subsequently reversed, suspended or vacated, of any authority barring, suspending or otherwise limiting
for more than sixty (60) days the right of any such person to engage in any activity described in the preceding sub paragraph, or to
be associated with persons engaged in any such activity;


 


(v)
a finding by a court of competent jurisdiction in a civil action or by the SEC or other authority to have violated any securities law,
regulation or decree and the judgment in such civil action or finding by the SEC or any other authority has not been subsequently reversed,
suspended or vacated; or


 


(vi)
a finding by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any
federal commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended or vacated.


 




    23


    


    


 


(nn)
 Stock Option Plans(b). The Company has no outstanding stock options.


 


(oo)
No Disagreements with Accountants and Lawyers(c). There are no material disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company
and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability
to perform any of its obligations under any of the Transaction Documents. In addition, on or prior to the date hereof, the Company had
discussions with its accountants about its financial statements previously filed with the SEC. Based on those discussions, the Company
has no reason to believe that it will need to restate any such financial statements or any part thereof.


 


(pp)
No Disqualification Events(d). With respect to Securities to be offered and sold hereunder in reliance on Rule 506(b) under the
1933 Act (“Regulation D Securities”), none of the Company, any of its predecessors, any affiliated issuer, any director,
executive officer, other officer of the Company participating in the offering contemplated hereby, any beneficial owner of 20% or more
of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term
is defined in Rule 405 under the 1933 Act) connected with the Company in any capacity at the time of sale (each, an “Issuer
Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor”
disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act (a “Disqualification Event”), except
for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any
Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure
obligations under Rule 506(e), and has furnished to the Buyers a copy of any disclosures provided thereunder.


 


(qq)
Other Covered Persons(e). The Company is not aware of any Person that has been or will be paid (directly or indirectly) remuneration
for solicitation of Buyers or potential purchasers in connection with the sale of any Regulation D Securities.


 


(rr)
No Additional Agreements. The Company does not have any agreement or understanding with any Buyer with respect to the transactions
contemplated by the Transaction Documents other than as specified in the Transaction Documents.


 


(ss)
Public Utility Holding Act. None of the Company nor any of its Subsidiaries is a “holding company,” or an “affiliate”
of a “holding company,” as such terms are defined in the Public Utility Holding Act of 2005.


 


(tt)
Federal Power Act. None of the Company nor any of its Subsidiaries is subject to regulation as a “public utility”
under the Federal Power Act, as amended.


 


(uu)
Ranking of Notes. No Indebtedness of the Company, at the Closing, will be senior to, or pari passu with, the Notes in right
of payment, whether with respect to payment or redemptions, interest, damages, upon liquidation or dissolution or otherwise, except for
Permitted Indebtedness secured by Permitted Liens.


 






    24


    


    

 


(vv)
Cybersecurity. The Company and its Subsidiaries’ information technology assets and equipment, computers, systems, networks,
hardware, software, websites, applications, and databases (collectively, “IT Systems”) are adequate for, and operate
and perform in all material respects as required in connection with the operation of the business of the Company and its subsidiaries
as currently conducted, free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants
that would reasonably be expected to have a Material Adverse Effect on the Company’s business. The Company and its Subsidiaries
have implemented and maintained commercially reasonable physical, technical and administrative controls, policies, procedures, and safeguards
to maintain and protect their material confidential information and the integrity, continuous operation, redundancy and security of all
IT Systems and data, including “Personal Data,” used in connection with their businesses. “Personal Data”
means (i) a natural person’s name, street address, telephone number, e-mail address, photograph, social security number or tax
identification number, driver’s license number, passport number, credit card number, bank information, or customer or account number;
(ii) any information which would qualify as “personally identifying information” under the Federal Trade Commission Act,
as amended; (iii) “personal data” as defined by the European Union General Data Protection Regulation (“GDPR”)
(EU 2016/679); (iv) any information which would qualify as “protected health information” under the Health Insurance Portability
and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (collectively, “HIPAA”);
and (v) any other piece of information that allows the identification of such natural person, or his or her family, or permits the collection
or analysis of any data related to an identified person’s health or sexual orientation. There have been no breaches, violations,
outages or unauthorized uses of or accesses to same, except for those that have been remedied without material cost or liability or the
duty to notify any other person or such , nor any incidents under internal review or investigations relating to the same except in each
case, where such would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. The
Company and its Subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations
of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy
and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access,
misappropriation or modification except in each case, where such would not, either individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect.


 


(ww)
Compliance with Data Privacy Laws. The Company and its Subsidiaries are, and at all prior times were, in compliance with all applicable
state and federal data privacy and security laws and regulations, including without limitation HIPAA, and the Company and its Subsidiaries
have taken commercially reasonable actions to prepare to comply with, and since May 25, 2018, have been and currently are in compliance
with, the GDPR (EU 2016/679) (collectively, the “Privacy Laws”) except in each case, where such would not, either
individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. To ensure compliance with the Privacy
Laws, the Company and its Subsidiaries have in place, comply with, and take appropriate steps reasonably designed to ensure compliance
in all material respects with their policies and procedures relating to data privacy and security and the collection, storage, use, disclosure,
handling, and analysis of Personal Data (the “Policies”). The Company and its Subsidiaries have at all times made
all disclosures to users or customers required by applicable laws and regulatory rules or requirements, and none of such disclosures
made or contained in any Policy have, to the knowledge of the Company, been inaccurate or in violation of any applicable laws and regulatory
rules or requirements in any material respect. The Company further certifies that neither it nor any Subsidiary: (i) has received notice
of any actual or potential liability under or relating to, or actual or potential violation of, any of the Privacy Laws, and has no knowledge
of any event or condition that would reasonably be expected to result in any such notice; (ii) is currently conducting or paying for,
in whole or in part, any investigation, remediation, or other corrective action pursuant to any Privacy Law; or (iii) is a party to any
order, decree, or agreement that imposes any obligation or liability under any Privacy Law.


 






    25


    


    

 


(xx)
Disclosure. The Company confirms that neither it nor any other Person acting on its behalf has provided any of the Buyers or their
agents or counsel with any information that constitutes or could reasonably be expected to constitute material, non-public information
concerning the Company or any of its Subsidiaries, other than the existence of the transactions contemplated by this Agreement and the
other Transaction Documents. The Company understands and confirms that each of the Buyers will rely on the foregoing representations
in effecting transactions in securities of the Company. All disclosure provided to the Buyers regarding the Company and its Subsidiaries,
their businesses and the transactions contemplated hereby, including the schedules to this Agreement, furnished by or on behalf of the
Company or any of its Subsidiaries taken as a whole 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. All of the written information furnished after the date hereof by or on behalf of the Company or any
of its Subsidiaries to each Buyer pursuant to or in connection with this Agreement and the other Transaction Documents, taken as a whole,
will be true and correct in all material respects as of the date on which such information is so provided and will 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. No event or circumstance has occurred or information exists with respect
to the Company or any of its Subsidiaries or its or their business, properties, liabilities, prospects, operations (including results
thereof) or conditions (financial or otherwise), which, under applicable law, rule or regulation, requires public disclosure at or before
the date hereof or announcement by the Company but which has not been so publicly disclosed. All financial projections and forecasts
that have been prepared by or on behalf of the Company or any of its Subsidiaries and made available to each Buyer have been prepared
in good faith based upon reasonable assumptions and represented, at the time each such financial projection or forecast was delivered
to each Buyer, the Company’s best estimate of future financial performance (it being recognized that such financial projections
or forecasts are not to be viewed as facts and that the actual results during the period or periods covered by any such financial projections
or forecasts may differ from the projected or forecasted results). The Company acknowledges and agrees that no Buyer makes or has made
any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 2.


 


4.
COVENANTS.


 


(a)
Best Efforts. Each Buyer shall use its best efforts to timely satisfy each of the covenants hereunder and conditions to be satisfied
by it as provided in Section 6 of this Agreement. The Company shall use its best efforts to timely satisfy each of the covenants hereunder
and conditions to be satisfied by it as provided in Section 7 of this Agreement.


 




    26


    


    


 


(b)
 Form D and Blue Sky. The Company shall file a Form D with respect to the Securities as required under Regulation D and to provide
a copy thereof to each Buyer promptly after such filing. The Company shall, on or before the Closing Date, 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 Buyers at
the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States
(or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyers on or prior
to the Closing Date. Without limiting any other obligation of the Company under this Agreement, the Company shall timely make all filings
and reports relating to the offer and sale of the Securities required under all applicable securities laws (including, without limitation,
all applicable federal securities laws and all applicable “Blue Sky” laws), and the Company shall comply with all applicable
foreign, federal, state and local laws, statutes, rules, regulations and the like relating to the offering and sale of the Securities
to the Buyers.


 


(c)
Reporting Status. Until the date on which no Notes remain outstanding and the earlier to occur of (x) the second anniversary of
the Closing Date and (y) such time as the Buyers shall have sold all of the Underlying Securities (as defined below) (the “Reporting
Period”), the Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act, including the
timely filing of all quarterly reports on Form 10-Q and annual reports on Form 10-K, and the Company shall not terminate its status as
an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would no longer require
or otherwise permit such termination. “Underlying Securities” means (i) the Conversion Shares, and (ii) any capital
stock of the Company issued or issuable with respect to the Conversion Shares or the Notes respectively, including, without limitation,
(1) as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise and (2) shares of capital
stock of the Company into which the shares of Common Stock are converted or exchanged and shares of capital stock of a Successor Entity
(as defined in the Notes) into which the shares of Common Stock are converted, exercised or exchanged, in each case, without regard to
any limitations on conversion of the Notes.


 


(d)
Use of Proceeds. The Company will use the proceeds from the sale of the Securities for general corporate purposes, but not, directly
or indirectly, for (i) except for $3,332,353.20 of proceeds of this offering to be used to repay senior secured convertible notes previously
issued by the Company to the Buyers (the “Existing Notes”) in accordance with Schedule 4(d) attached hereto, the satisfaction
of any indebtedness of the Company or any of its Subsidiaries, (ii) the redemption or repurchase of any securities of the Company or
any of its Subsidiaries, or (iii) the settlement of any outstanding litigation.


 


(e)
Financial Information. The Company agrees to send the following to each holder of Notes (each, an “Investor”)
during the Reporting Period (i) unless the following are filed with the SEC through EDGAR and are available to the public through the
EDGAR system, within one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K and Quarterly
Reports on Form 10-Q, any interim reports or any consolidated balance sheets, income statements, stockholders’ equity statements
and/or cash flow statements for any period other than annual, any Current Reports on Form 8-K and any registration statements (other
than on Form S-8) or amendments filed pursuant to the 1933 Act, (ii) unless the following are either filed with the SEC through EDGAR
or are otherwise widely disseminated via a recognized news release
service (such as PR Newswire), on the same day as the release thereof, e-mail copies of all press releases issued by the Company or any
of its Subsidiaries and (iii) unless the following are filed with the SEC through EDGAR, copies of any notices and other information
made available or given to the stockholders of the Company generally, contemporaneously with the making available or giving thereof to
the stockholders.


 




    27


    


    





 


(f)
Listing. The Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Underlying
Securities upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is then listed
or designated for quotation (as the case may be) (subject to official notice of issuance) and shall maintain such listing or designation
for quotation (as the case may be) of all Underlying Securities from time to time issuable under the terms of the Transaction Documents
on such national securities exchange or automated quotation system. During the Reporting Period (as defined above), the Company shall
maintain the Common Stock’s listing or authorization for quotation (as the case may be) on the Principal Market, The New York Stock
Exchange, the NYSE American, the Nasdaq Global Market or the Nasdaq Global Select Market (each, an “Eligible Market”).
During the Reporting Period, neither the Company nor any of its Subsidiaries shall take any action which could be reasonably expected
to result in the delisting or suspension of the Common Stock on an Eligible Market. The Company shall pay all fees and expenses in connection
with satisfying its obligations under this Section 4(f).


 


(g)
Fees. The Company shall pay the lead Buyer a nonaccountable amount of $100,000 for all costs and expenses incurred by it or its
affiliates in connection with the structuring, documentation, negotiation and closing of the transactions contemplated by the Transaction
Documents (including, without limitation, as applicable, all reasonable legal fees of outside counsel and disbursements of Kelley Drye
& Warren LLP, counsel to the lead Buyer, any other reasonable fees and expenses in connection with the structuring, documentation,
negotiation and closing of the transactions contemplated by the Transaction Documents and due diligence and regulatory filings in connection
therewith) (the “Transaction Expenses”) and shall be withheld by the lead Buyer from its Purchase Price at the Closing,
less $75,000 previously paid by the Company to the lead Buyer; provided, that the Company shall promptly reimburse Kelley Drye &
Warren LLP on demand for all Transaction Expenses not so reimbursed through such withholding at the Closing. The Company shall be responsible
for the payment of any placement agent’s fees, financial advisory fees, Controlled Account Bank fees, transfer agent fees, DTC
(as defined below) fees or broker’s commissions (other than for Persons engaged by any Buyer) relating to or arising out of the
transactions contemplated hereby. The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including,
without limitation, reasonable attorneys’ fees and out-of-pocket expenses) arising in connection with any claim relating to any
such payment. Except as otherwise set forth in the Transaction Documents, each party to this Agreement shall bear its own expenses in
connection with the sale of the Securities to the Buyers.


 


(h) Pledge
of Securities. Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and agrees that
the Securities may be pledged by an Investor in connection with a bona fide margin agreement or other loan or financing arrangement
that is secured by the Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment of the
Securities hereunder, and no Investor effecting a pledge of Securities shall be required to provide the Company with any notice
thereof or otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction Document, including,
without limitation, Section 2(g) hereof; provided that an Investor and its pledgee shall be required to comply with the
provisions of Section 2(g) hereof in order to effect a sale, transfer or assignment of Securities to such pledgee. The Company
hereby agrees to execute and deliver such documentation as a pledgee of the Securities may reasonably request in connection with a
pledge of the Securities to such pledgee by a Buyer.


 






    28


    


    

 


(i)
Disclosure of Transactions and Other Material Information.


 


(i)
Disclosure of Transaction. The Company shall, on or before 9:30 a.m., New York time, on the date of this Agreement, issue
a press release (the “Press Release”) reasonably acceptable to the Buyers disclosing all the material terms of the
transactions contemplated by the Transaction Documents. On or before 9:30 a.m., New York time, on the date of this Agreement, the Company
shall file a Current Report on Form 8-K describing all the material terms of the transactions contemplated by the Transaction Documents
in the form required by the 1934 Act and attaching all the material Transaction Documents (including, without limitation, this Agreement
(and all schedules to this Agreement), the form of Notes, the form of Voting Agreement, the form of Security Documents the form of Registration
Rights Agreement and the form of Guaranty) (including all attachments, the “8-K Filing”). From and after the filing
of the 8-K Filing, the Company shall have disclosed all material, non-public information (if any) provided to any of the Buyers 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 filing of the 8-K Filing, 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, affiliates, employees or agents, on the one hand, and any of the Buyers
or any of their affiliates, on the other hand, shall terminate.


 


(ii) Limitations
on Disclosure. The Company shall not, and the Company shall cause each of its Subsidiaries and each of its and their respective
officers, directors, employees and agents not to, provide any Buyer with any material, non-public information regarding the Company
or any of its Subsidiaries from and after the date hereof without the express prior written consent of such Buyer (which may be
granted or withheld in such Buyer’s sole discretion). In the event of a breach of any of the foregoing covenants, or any of
the covenants or agreements contained in any other Transaction Document, by the Company, any of its Subsidiaries, or any of its or
their respective officers, directors, employees and agents (as determined in the reasonable good faith judgment of such Buyer), in
addition to any other remedy provided herein or in the Transaction Documents, such Buyer shall have the right to make a public
disclosure, in the form of a press release, public advertisement or otherwise, of such breach or such material, non-public
information, as applicable, without the prior approval by the Company, any of its Subsidiaries, or any of its or their respective
officers, directors, employees or agents. No Buyer shall have any liability to the Company, any of its Subsidiaries, or any of its
or their respective officers, directors, employees, affiliates, stockholders or agents, for any such disclosure. To the extent that
the Company delivers any material, non-public information to a Buyer without such Buyer’s consent, the Company hereby
covenants and agrees that such Buyer shall not have any duty of confidentiality with respect to, or a duty not to trade on the basis
of, such material, non-public information. Subject to the foregoing, neither the Company, its Subsidiaries nor any Buyer shall issue
any press releases or any other public statements with respect to the transactions contemplated hereby; provided, however, the
Company shall be entitled, without the prior approval of any Buyer, to make the Press Release and any press release or other public
disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and
(ii) as is required by applicable law and regulations (provided that in the case of clause (i) each Buyer shall be consulted by the
Company in connection with any such press release or other public disclosure prior to its release). Without the prior written
consent of the applicable Buyer (which may be granted or withheld in such Buyer’s sole discretion), the Company shall not (and
shall cause each of its Subsidiaries and affiliates to not) disclose the name of such Buyer in any filing, announcement, release or
otherwise. Notwithstanding anything contained in this Agreement to the contrary and without implication that the contrary would
otherwise be true, the Company expressly acknowledges and agrees that no Buyer shall have (unless expressly agreed to by a
particular Buyer after the date hereof in a written definitive and binding agreement executed by the Company and such particular
Buyer (it being understood and agreed that no Buyer may bind any other Buyer with respect thereto)), any duty of confidentiality
with respect to, or a duty not to trade on the basis of, any material, non-public information regarding the Company or any of its
Subsidiaries.


 






    29


    


    

 


(iii)
 Other Confidential Information. Disclosure Failures; Disclosure Delay Payments. In addition to other remedies set
forth in this Section 4(i), and without limiting anything set forth in any other Transaction Document, at any time after the Closing
Date if the Company, any of its Subsidiaries, or any of their respective officers, directors, employees or agents, provides any
Buyer with material non-public information relating to the Company or any of its Subsidiaries without such Buyers prior written
consent to receive material, non-public information (each, the “Confidential Information”), the Company shall, on
or prior to the applicable Required Disclosure Date (as defined below), publicly disclose such Confidential Information on a Current
Report on Form 8-K or otherwise (each, a “Disclosure”). From and after such Disclosure, the Company shall have
disclosed all Confidential Information provided to such Buyer 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 such Disclosure, the Company acknowledges and agrees that any and all confidentiality or similar obligations under
any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors,
affiliates, employees or agents, on the one hand, and any of the Buyers or any of their affiliates, on the other hand, shall
terminate. In the event that the Company fails to effect such Disclosure on or prior to the Required Disclosure Date and such Buyer
shall have possessed Confidential Information for at least ten (10) consecutive Trading Days (each, a “Disclosure
Failure”), then, as partial relief for the damages to such Buyer by reason of any such delay in, or reduction of, its
ability to buy or sell shares of Common Stock after such Required Disclosure Date (which remedy shall not be exclusive of any other
remedies available at law or in equity), the Company shall pay to such Buyer an amount in cash equal to the greater of (I) one
percent (1%) of the aggregate Purchase Price and (II) the applicable Disclosure Restitution Amount, on each of the following dates
(each, a “Disclosure Delay Payment Date”): (i) on the date of such Disclosure Failure and (ii) on every thirty
(30) day anniversary such Disclosure Failure until the earlier of (x) the date such Disclosure Failure is cured and (y) such time as
all such non-public information provided to such Buyer shall cease to be Confidential Information (as evidenced by a certificate,
duly executed by an authorized officer of the Company to the foregoing effect) (such earlier date, as applicable, a
“Disclosure Cure Date”). Following the initial Disclosure Delay Payment for any particular Disclosure Failure,
without limiting the foregoing, if a Disclosure Cure Date occurs prior to any thirty (30) day anniversary of such Disclosure
Failure, then such Disclosure Delay Payment (prorated for such partial month) shall be made on the second (2nd) Business Day after
such Disclosure Cure Date. The payments to which an Investor shall be entitled pursuant to this Section 4(bb) are referred to herein
as “Disclosure Delay Payments.” In the event the Company fails to make Disclosure Delay Payments in a timely
manner in accordance with the foregoing, such Disclosure Delay Payments shall bear interest at the rate of two percent (2%) per
month (prorated for partial months) until paid in full.


 






    30


    


    

 


(iv) For
the purpose of this Agreement the following definitions shall apply:


 


(1)
“Disclosure Failure Market Price” means, as of any Disclosure Delay Payment Date, the price computed as the quotient
of (I) the sum of the five (5) highest VWAPs (as defined in the Notes) of the Common Stock during the applicable Disclosure Restitution
Period (as defined below), divided by (II) five (5) (such period, the “Disclosure Failure Measuring Period”). All such
determinations to be appropriately adjusted for any share dividend, share split, share combination, reclassification or similar transaction
that proportionately decreases or increases the Common Stock during such Disclosure Failure Measuring Period.


 


(2) “Disclosure
Restitution Amount” means, as of any Disclosure Delay Payment Date, the product of (x) difference of (I) the Disclosure Failure
Market Price less (II) the lowest purchase price, per share of Common Stock, of any Common Stock issued or issuable to such Buyer pursuant
to this Agreement or any other Transaction Documents, multiplied by (y) 10% of the aggregate daily dollar trading volume (as reported
on Bloomberg (as defined in the Notes)) of the Common Stock on the Principal Market for each Trading Day (as defined in the Notes) either
(1) with respect to the initial Disclosure Delay Payment Date, during the period commencing on the applicable Required Disclosure Date
through and including the Trading Day immediately prior to the initial Disclosure Delay Payment Date or (2) with respect to each other
Disclosure Delay Payment Date, during the period commencing the immediately preceding Disclosure Delay Payment Date through and including
the Trading Day immediately prior to such applicable Disclosure Delay Payment Date (such applicable period, the “Disclosure Restitution
Period”).


 


(3) “Required
Disclosure Date” means (x) if such Buyer authorized the delivery of such Confidential Information, either (I) if the Company
and such Buyer have mutually agreed upon a date (as evidenced by an e-mail or other writing) of Disclosure of such Confidential Information,
such agreed upon date or (II) otherwise, the seventh (7th) calendar day after the date such Buyer first received any Confidential
Information or (y) if such Buyer did not authorize the delivery of such Confidential Information, the first (1st) Business
Day after such Buyer’s receipt of such Confidential Information.


 


(j) Additional
Registration Statements. During the Restricted Period (as defined below), the Company shall not file a registration statement or an
offering statement under the 1933 Act relating to securities that are not the Underlying Securities (other than (i) a registration statement
on Form S-8, (ii) such supplements or amendments to registration statements that are outstanding and have been declared effective by the
SEC as of the date hereof (solely to the extent necessary to keep such registration statements effective and available and not with respect
to any Subsequent Placement (other than a Permitted Public Offering (as defined below), which registration statement may be supplemented
or amended as necessary to effect such Permitted Public Offering)), (iii) a registration statement on appropriate form relating to the
resale of 3,571,429 shares of Common Stock by certain selling stockholders pursuant to the Company’s registration rights agreement
with the principals of The Nav People Inc. d/b/a “365 Cannabis” as amended through and including the date hereof; or (iv)
a registration statement on appropriate form relating to the resale of 83,000 shares of Common Stock by certain selling stockholders pursuant
to the Company’s asset purchase agreement with Guru Systems, Inc. as amended through and including the date hereof.


 






    31


    


    

 


(k) Additional
Issuance of Securities. So long as any Buyer beneficially owns any Securities, the Company will not, without the prior written consent
of the Required Holders, issue any Notes (other than to the Buyers as contemplated hereby) and the Company shall not issue any other securities
that would cause a breach or default under the Notes. The Company agrees that for the period commencing on the date hereof and ending
on the date immediately following the 90th calendar day after the Closing Date (the “Restricted Period”),
neither the Company nor any of its Subsidiaries shall directly or indirectly issue, offer, sell, grant any option or right to purchase,
or otherwise dispose of (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any
equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term
is defined under Rule 405 promulgated under the 1933 Act), any Convertible Securities (as defined below), any debt, any preferred stock
or any purchase rights) (any such issuance, offer, sale, grant, disposition or announcement (whether occurring during the Restricted Period
or at any time thereafter) is referred to as a “Subsequent Placement”). Notwithstanding the foregoing, this Section
4(k) shall not apply in respect of the issuance of (i) shares of Common Stock, restricted shares of Common Stock, restricted stock units
or standard stock options to purchase Common Stock to directors, officers or employees of the Company in their capacity as such pursuant
to an Approved Stock Plan (as defined below), provided that (1) all such issuances (taking into account the shares of Common Stock issuable
upon exercise of such options or vesting of restricted stock or restricted stock units) after the date hereof pursuant to this clause
(i) do not, in the aggregate, exceed more than 5% of the Common Stock issued and outstanding immediately prior to the date hereof and
(2) the exercise price of any stock options is not lowered, none of such stock options are amended to increase the number of shares issuable
thereunder and none of the terms or conditions of any such stock options are otherwise materially changed in any manner that adversely
affects any of the Buyers; (ii) shares of Common Stock issued upon the conversion or exercise of Convertible Securities (other than standard
options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) issued prior to the date
hereof, provided that the conversion, exercise or other method of issuance (as the case may be) of any such Convertible Security is made
solely pursuant to the conversion, exercise or other method of issuance (as the case may be) provisions of such Convertible Security that
were in effect on the date immediately prior to the date of this Agreement, the conversion, exercise or issuance price of any such Convertible
Securities (other than standard stock options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause
(i) above) is not lowered, none of such Convertible Securities (other than standard stock options to purchase Common Stock issued pursuant
to an Approved Stock Plan that are covered by clause (i) above) are amended to increase the number of shares issuable thereunder and none
of the terms or conditions of any such Convertible Securities (other than standard options to purchase Common Stock issued pursuant to
an Approved Stock Plan that are covered by clause (i) above) are otherwise materially changed in any manner that adversely affects any
of the Buyers; (iii) any shares of Common Stock issued or issuable in connection with any bona fide strategic or commercial alliances,
acquisitions, mergers, licensing arrangements, and strategic partnerships, provided, that (x) the primary purpose of such issuance is
not to raise capital as reasonably determined, and (y) the purchaser or acquirer or recipient of the securities in such issuance solely
consists of either (I) the actual participants in such strategic or commercial alliance, strategic or commercial licensing arrangement
or strategic or commercial partnership, (II) the actual owners of such assets or securities acquired in such acquisition or merger or
(III) the stockholders, partners, employees, consultants, officers, directors or members of the foregoing Persons, in each case, which
is, itself or through its subsidiaries, an operating company or an owner of an asset, in a business synergistic with the business of the
Company and shall provide to the Company additional benefits in addition to the investment of funds, and (z) the number or amount of securities
issued to such Persons by the Company shall not be disproportionate to each such Person’s actual participation in (or fair market
value of the contribution to) such strategic or commercial alliance or strategic or commercial partnership or ownership of such assets
or securities to be acquired by the Company, as applicable, including but not limited to, the Company’s issuance of Common Stock
issued or issuable pursuant to the Company’s stock purchase agreement with The Nav People Inc. d/b/a “365 Cannabis”
as amended through and including the date hereof (collectively the securities issuable under this clause (iii), the “Strategic
Acquisition Securities”); (iv) any Common Stock issued to the public pursuant to the terms of the Company’s equity distribution
agreement with Oppenheimer & Co. Inc. and A.G.P./Alliance Global Partners dated July 23, 2021, as amended through and including the
date hereof in compliance with the terms of the Notes then in effect and with a per share purchase price of not less than 90% of the Conversion
Price (as defined in the Notes) then in effect; (v) issuances of Common Stock in a bona fide public offering at a price per share of Common
Stock greater than 135% of the Conversion Price (as defined in the Notes) then in effect and with a pricing and consummation thereof occurring
after the 16th calendar day after the Effective Date (as defined in the Registration Rights Agreement) of the initial Registration
Statement (as defined in the Registration Rights Agreement) registering the Required Registration Amount (as defined in the Registration
Rights Agreement) of the Investors’ Registrable Securities (each, a “Permitted Public Offering”) or (vi) the
Conversion Shares (each of the foregoing in clauses (i) through (vi), collectively the “Excluded Securities”). “Approved
Stock Plan” means any employee benefit plan which has been approved by the board of directors of the Company prior to or subsequent
to the date hereof pursuant to which shares of Common Stock, restricted stock, restricted stock units and standard options to purchase
Common Stock may be issued to any employee, officer or director for services provided to the Company in their capacity as such.


 






    32


    


    

 


(l) Reservation
of Shares. So long as any of the Notes remain outstanding, the Company shall take all action necessary to at all times have authorized,
and reserved for the purpose of issuance, no less than 200% of the maximum number of shares of Common Stock issuable upon conversion of
all the Notes then outstanding (assuming for purposes hereof that (x) the Notes are convertible at the Alternate Conversion Price assuming
an Alternate Conversion Date as of such applicable date of determination, and (y) any such conversion shall not take into account any
limitations on the conversion of the Notes set forth in the Notes) (the “Required Reserve Amount”); provided that at
no time shall the number of shares of Common Stock reserved pursuant to this Section 4(l) be reduced other than proportionally in connection
with any conversion, exercise and/or redemption, as applicable of Notes. If at any time the number of shares of Common Stock authorized
and reserved for issuance is not sufficient to meet the Required Reserve Amount, the Company will promptly take all corporate action necessary
to authorize and reserve a sufficient number of shares, including, without limitation, calling a special meeting of stockholders to authorize
additional shares to meet the Company’s obligations pursuant to the Transaction Documents, in the case of an insufficient number
of authorized shares, obtain stockholder approval of an increase in such authorized number of shares, and voting the management shares
of the Company in favor of an increase in the authorized shares of the Company to ensure that the number of authorized shares is sufficient
to meet the Required Reserve Amount.


 


(m) Conduct
of Business. The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance or regulation
of any Governmental Entity, except where such violations would not reasonably be expected to result, either individually or in the aggregate,
in a Material Adverse Effect.


 


(n) Variable
Securities. So long as any Notes remain outstanding, the Company and each Subsidiary shall be prohibited from effecting or entering
into an agreement to effect any Subsequent Placement (as defined in the Notes) involving a Variable Rate Transaction. “Variable
Rate Transaction” means a transaction in which the Company or any Subsidiary (i) issues or sells any Convertible Securities
either (A) at a conversion, exercise 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 Convertible 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 Convertible Securities 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, other than pursuant to a customary “weighted average” anti-dilution provision or (ii) enters into any agreement (including,
without limitation, an equity line of credit, but excluding an “at-the-market” offering) whereby the Company or any Subsidiary
may sell securities at a future determined price (other than standard and customary “preemptive” or “participation”
rights). Each Buyer shall be entitled to obtain injunctive relief against the Company and its Subsidiaries to preclude any such issuance,
which remedy shall be in addition to any right to collect damages.


 


(o) Subsequent
Placements. For so long as any Notes remain outstanding, the Company shall not, in any manner, enter into or affect any Subsequent
Placement (as defined in the Notes) if the effect of such Subsequent Placement is to cause the Company to be required to issue upon conversion
of any Notes any shares of Common Stock in excess of that number of shares of Common Stock which the Company may issue upon conversion
of the Notes without breaching the Company’s obligations under the rules or regulations of the Principal Market.


 


(p) Passive
Foreign Investment Company. The Company shall conduct its business, and shall cause its Subsidiaries to conduct their respective businesses,
in such a manner as will ensure that the Company will not be deemed to constitute a passive foreign investment company within the meaning
of Section 1297 of the Code.


 


(q) Restriction
on Redemption and Cash Dividends. So long as any Notes are outstanding, the Company shall not, directly or indirectly, redeem, or
declare or pay any cash dividend or distribution on, any securities of the Company without the prior express written consent of the Buyers.


 


(r) Corporate
Existence. So long as any Buyer beneficially owns any Notes, the Company shall not be party to any Fundamental Transaction (as defined
in the Notes) unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Notes.


 






    33


    


    

 


(s) Stock
Splits. Until the Notes are no longer outstanding, the Company shall not effect any stock combination, reverse stock split or other
similar transaction (or make any public announcement or disclosure with respect to any of the foregoing) without the prior written consent
of the Required Holders (as defined below).


 


(t) Conversion
Procedures. Each of the form of Conversion Notice (as defined in the Notes) included in the Notes set forth the totality of the procedures
required of the Buyers in order to convert the Notes. Except as provided in Section 5(d), no additional legal opinion, other information
or instructions shall be required of the Buyers to convert their Notes. The Company shall honor conversions of the Notes and shall deliver
the Conversion Shares in accordance with the terms, conditions and time periods set forth in the Notes.


 


(u) Collateral
Agent. Each Buyer hereby (i) appoints HT Investments MA LLC, as the collateral agent hereunder and under the other Security Documents
(in such capacity, the “Collateral Agent”), and (ii) authorizes the Collateral Agent (and its officers, directors,
employees and agents) to take such action on such Buyer’s behalf in accordance with the terms hereof and thereof. The Collateral
Agent shall not have, by reason hereof or any of the other Security Documents, a fiduciary relationship in respect of any Buyer. Neither
the Collateral Agent nor any of its officers, directors, employees or agents shall have any liability to any Buyer for any action taken
or omitted to be taken in connection hereof or any other Security Document except to the extent caused by its own gross negligence or
willful misconduct, and each Buyer agrees to defend, protect, indemnify and hold harmless the Collateral Agent and all of its officers,
directors, employees and agents (collectively, the “Collateral Agent Indemnitees”) from and against any losses, damages,
liabilities, obligations, penalties, actions, judgments, suits, fees, costs and expenses (including, without limitation, reasonable attorneys’
fees, costs and expenses) incurred by such Collateral Agent Indemnitee, whether direct, indirect or consequential, arising from or in
connection with the performance by such Collateral Agent Indemnitee of the duties and obligations of Collateral Agent pursuant hereto
or any of the Security Documents. The Collateral Agent shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions
of the Required Holders, and such instructions shall be binding upon all holders of Notes; provided, however, that the Collateral Agent
shall not be required to take any action which, in the reasonable opinion of the Collateral Agent, exposes the Collateral Agent to liability
or which is contrary to this Agreement or any other Transaction Document or applicable law. The Collateral Agent shall be entitled to
rely upon any written notices, statements, certificates, orders or other documents or any telephone message believed by it in good faith
to be genuine and correct and to have been signed, sent or made by the proper Person, and with respect to all matters pertaining to this
Agreement or any of the other Transaction Documents and its duties hereunder or thereunder, upon advice of counsel selected by it.


 


(v) Successor
Collateral Agent.


 


(i) The
Collateral Agent may resign from the performance of all its functions and duties hereunder and under the other Transaction Documents at
any time by giving at least ten (10) Business Days’ prior written notice to the Company and each holder of Notes. Such resignation
shall take effect upon the acceptance by a successor Collateral Agent of appointment pursuant to clauses (ii) and (iii) below or as otherwise
provided below. If at any time the Collateral Agent (together with its affiliates) beneficially owns less than $100,000 in aggregate principal
amount of Notes, the Required Holders may, by written consent, remove the Collateral Agent from all its functions and duties hereunder
and under the other Transaction Documents.


 


(ii) Upon
any such notice of resignation or removal, the Required Holders shall appoint a successor collateral agent. Upon the acceptance of any
appointment as Collateral Agent hereunder by a successor agent, such successor collateral agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the collateral agent, and the Collateral Agent shall be discharged from its
duties and obligations under this Agreement and the other Transaction Documents. After the Collateral Agent’s resignation or removal
hereunder as the collateral agent, the provisions of this Section 4(v) shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was the Collateral Agent under this Agreement and the other Transaction Documents.


 






    34


    


    

 


(iii) If
a successor collateral agent shall not have been so appointed within ten (10) Business Days of receipt of a written notice of resignation
or removal, the Collateral Agent shall then appoint a successor collateral agent who shall serve as the Collateral Agent until such time,
if any, as the Required Holders appoint a successor collateral agent as provided above.


 


(iv) In
the event that a successor Collateral Agent is appointed pursuant to the provisions of this Section 4(v) that is not a Buyer or an affiliate
of any Buyer (or the Required Holders or the Collateral Agent (or its successor), as applicable, the Required Holders shall notify the
Company that they or it wants to appoint such a successor Collateral Agent pursuant to the terms of this Section 4(v)), the Company and
each Subsidiary thereof covenants and agrees to promptly take all actions reasonably requested by the Required Holders or the Collateral
Agent (or its successor), as applicable, from time to time, to secure a successor Collateral Agent satisfactory to the requesting part(y)(ies),
in their sole discretion, including, without limitation, by paying all reasonable and customary fees and expenses of such successor Collateral
Agent, by having the Company and each Subsidiary thereof agree to indemnify any successor Collateral Agent pursuant to reasonable and
customary terms and by each of the Company and each Subsidiary thereof executing a collateral agency agreement or similar agreement and/or
any amendment to the Security Documents reasonably requested or required by the successor Collateral Agent.


 


(w) Regulation
M. The Company will not take any action prohibited by Regulation M under the 1934 Act, in connection with the distribution of the
Securities contemplated hereby.


 


(x) General Solicitation.
None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act) or any person acting on behalf of the Company
or such affiliate will solicit any offer to buy or offer or sell the Securities by means of any form of general solicitation or general
advertising within the meaning of Regulation D, including: (i) any advertisement, article, notice or other communication published
in any newspaper, magazine or similar medium or broadcast over television or radio; and (ii) any seminar or meeting whose attendees have
been invited by any general solicitation or general advertising.


 


(y) Integration.
None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act), or any person acting on behalf of the Company
or such affiliate will sell, offer for sale, or solicit offers to buy or otherwise negotiate in respect of any security (as defined in
the 1933 Act) which will be integrated with the sale of the Securities in a manner which would require the registration of the Securities
under the 1933 Act or require stockholder approval under the rules and regulations of the Principal Market and the Company will take all
action that is appropriate or necessary to assure that its offerings of other securities will not be integrated for purposes of the 1933
Act or the rules and regulations of the Principal Market, with the issuance of Securities contemplated hereby.


 


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


 






    35


    


    

 


(aa) Subsidiary Guarantee.
For so long as any Notes remain outstanding, upon any entity becoming a direct, or indirect, Subsidiary of the Company, but only to the
extent that such Subsidiary is required to become a Grantor under the Security Agreement as required by Section 5(m) of the Security Agreement,
before such Subsidiary, directly or indirectly, owns, holds or otherwise is entitled to receive any assets or incurs any liabilities or
otherwise engages in any business, the Company shall cause each such Subsidiary to become party to the Guaranty by executing a joinder
to the Guaranty reasonably satisfactory in form and substance to the Required Holders.


 


(bb) Stockholder
Approval. The Company shall provide each stockholder entitled to vote at an annual or special meeting of stockholders of the
Company (the “Stockholder Meeting”), which shall be promptly called and held not later than June 30, 2022 (the
“Stockholder Meeting Deadline”), a proxy statement, in a form reasonably acceptable to the Buyers and Kelley Drye
& Warren LLP, at the expense of the Company, with the Company obligated to reimburse the expenses of Kelley Drye & Warren
LLP incurred in connection therewith in an amount not exceed $5,000, soliciting each such stockholder’s affirmative vote at
the Stockholder Meeting for approval of resolutions (“Stockholder Resolutions”) providing for the issuance of the
Securities in compliance with the rules and regulations of the Principal Market (the “Stockholder Approval”, and
the date the Stockholder Approval is obtained, the “Stockholder Approval Date”), and the Company shall use its
reasonable best efforts to solicit its stockholders’ approval of such resolutions and to cause the Board of Directors of the
Company to recommend to the stockholders that they approve such resolutions. The Company shall be obligated to seek to obtain the
Stockholder Approval by the Stockholder Meeting Deadline. If, despite the Company’s reasonable best efforts the Stockholder
Approval is not obtained on or prior to the Stockholder Meeting Deadline, the Company shall cause an additional Stockholder Meeting
to be held on or prior to September 30, 2022. If, despite the Company’s reasonable best efforts the Stockholder Approval is
not obtained after such subsequent stockholder meetings, the Company shall cause an additional Stockholder Meeting to be held
quarterly thereafter until such Stockholder Approval is obtained.


 


(cc) No Waiver of Voting
Agreement. The Company shall not amend, waive, modify or fail to use best efforts to enforce any provision of the Voting Agreement.


 


(dd) Payment of SBA
Loan. As soon as possible, but in no event later than the thirtieth (30) calendar day after the Closing Date (the “SBA Loan
Repayment Deadline”), the Company shall (i) repay in full all amounts outstanding under the SBA Loan Agreement and Note dated
July 21, 2020 (as in effect as of the date hereof, without regard to any subsequent amendment, modification or waiver, the “SBA
Loan”) of The NAV People Inc. (which as of the date hereof is $154,495.26), in an aggregate amount not to exceed $160,000, (ii)
terminate all Liens on The NAV People Inc.’s assets and properties (the “SBA Collateral”) secured in relation
to the SBA Loan and (iii) cause the Collateral Agent to have a first priority perfected security interest in the SBA Collateral.


 


(ee) Closing Documents.
On or prior to fourteen (14) calendar days after the Closing Date, the Company agrees to deliver, or cause to be delivered, to each Buyer
and Kelley Drye & Warren LLP a complete closing set of the executed Transaction Documents, Securities and any other document required
to be delivered to any party pursuant to Section 7 hereof or otherwise.


 






    36


    


    

 


5. REGISTER;
TRANSFER AGENT INSTRUCTIONS; LEGEND.


 


(a) Register.
The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate by notice
to each holder of Securities), a register for the Notes in which the Company shall record the name and address of the Person in whose
name the Notes have been issued (including the name and address of each transferee), the principal amount of the Notes held by such Person
and the number of Conversion Shares issuable pursuant to the terms of the Notes. The Company shall keep the register open and available
at all times during business hours for inspection of any Buyer or its legal representatives.


 


(b) Transfer
Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent and any subsequent transfer agent (as applicable,
the “Transfer Agent”) in a form acceptable to each of the Buyers (the “Irrevocable Transfer Agent Instructions”)
to issue certificates or credit shares to the applicable balance accounts at The Depository Trust Company (“DTC”),
registered in the name of each Buyer or its respective nominee(s), for the Conversion Shares in such amounts as specified from time to
time by each Buyer to the Company upon conversion of the Notes. The Company represents and warrants that no instruction other than the
Irrevocable Transfer Agent Instructions referred to in this Section 5(b), and stop transfer instructions to give effect to Section
2(g) hereof, will be given by the Company to its transfer agent with respect to the Securities, and that the Securities shall otherwise
be freely transferable on the books and records of the Company, as applicable, to the extent provided in this Agreement and the other
Transaction Documents. If a Buyer effects a sale, assignment or transfer of the Securities in accordance with Section 2(g), the Company
shall permit the transfer and shall promptly instruct its transfer agent to issue one or more certificates or credit shares to the applicable
balance accounts at DTC in such name and in such denominations as specified by such Buyer to effect such sale, transfer or assignment.
In the event that such sale, assignment or transfer involves Conversion Shares sold, assigned or transferred pursuant to an effective
registration statement or in compliance with Rule 144, the transfer agent shall issue such shares to such Buyer, assignee or transferee
(as the case may be) without any restrictive legend in accordance with Section 5(d) below. The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to a Buyer. Accordingly, the Company acknowledges that the remedy at law
for a breach of its obligations under this Section 5(b) will be inadequate and agrees, in the event of a breach or threatened breach
by the Company of the provisions of this Section 5(b), that a Buyer shall be entitled, in addition to all other available remedies,
to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic
loss and without any bond or other security being required. The Company shall cause its counsel to issue the legal opinion referred to
in the Irrevocable Transfer Agent Instructions to the Company’s transfer agent on each Effective Date (as defined in the Registration
Rights Agreement). Any fees (with respect to the transfer agent, counsel to the Company or otherwise) associated with the issuance of
such opinion or the removal of any legends on any of the Securities shall be borne by the Company.


 


(c) Legends.
Each Buyer understands that the Securities have been issued (or will be issued in the case of the Conversion Shares) pursuant to an exemption
from registration or qualification under the 1933 Act and applicable state securities laws, and except as set forth below, the Securities
shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend in substantially the following
form (and a stop-transfer order may be placed against transfer of such stock certificates):


 


NEITHER THE ISSUANCE AND SALE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE [NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE] HAVE BEEN OR WILL BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES
MAY BE OFFERED FOR SALE, SOLD, PLEDGED ASSIGNED OR TRANSFERRED, DIRECTLY OR INDIRECTLY, ONLY (A) TO THE COMPANY, (B) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, (C) IN COMPLIANCE
WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT IN ACCORDANCE WITH RULE (I) 144 OR (II) RULE 144A THEREUNDER,
IF AVAILABLE, AND IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS PROVIDED THAT THE HOLDER HAS FURNISHED TO THE COMPANY REASONABLE
ASSURANCES, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT, THAT REGISTRATION IS NOT REQUIRED UNDER
THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES
ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES PROVIDED THAT THE HOLDER HAS FURNISHED TO
THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, THAT REGISTRATION
IS NOT REQUIRED UNDER THE SECURITIES ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.


 






    37


    


    

 


(d) Removal
of Legends. Certificates evidencing Securities shall not be required to contain the legend set forth in Section 5(c) above or
any other legend (i) while a registration statement covering the resale of such Securities is effective under the 1933 Act, (ii) following
any sale of such Securities pursuant to Rule 144 (assuming the transferor is not an affiliate of the Company), (iii) if such Securities
are eligible to be sold, assigned or transferred under Rule 144 (provided that a Buyer duly executes and delivers to the Company a valid
144 Rep (which shall not include an opinion of Buyer’s counsel), (iv) in connection with a sale, assignment or other transfer (other
than under Rule 144), provided that such Buyer provides the Company with an opinion of counsel to such Buyer, in form and substance reasonable
acceptable to the Company and its transfer agent, to the effect that such sale, assignment or transfer of the Securities may be made without
registration under the applicable requirements of the 1933 Act or (v) if such legend is not required under applicable requirements of
the 1933 Act (including, without limitation, controlling judicial interpretations and pronouncements issued by the SEC) provided that
such Buyer provides the Company with an opinion of counsel to such Buyer, in form and substance reasonably acceptable to the Company and
its transfer agent, to the effect that such legend is no longer required. If a legend is not required pursuant to the foregoing, the Company
shall no later than two (2) Trading Days (or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation
for the settlement of a trade initiated on the date such Buyer delivers such legended certificate representing such Securities to the
Company) following the delivery by a Buyer to the transfer agent (with notice to the Company) of a legended certificate representing such
Securities (endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or
transfer, if applicable), together with any other deliveries from such Buyer as may be required above in this Section 5(d), as directed
by such Buyer, either: (A) provided that the Company’s transfer agent is participating in the DTC Fast Automated Securities Transfer
Program (“FAST”) and such Securities are Conversion Shares, credit the aggregate number of shares of Common Stock to
which such Buyer shall be entitled to such Buyer’s or its designee’s balance account with DTC through its Deposit/Withdrawal
at Custodian system or (B) if the Company’s transfer agent is not participating in FAST, issue and deliver (via reputable overnight
courier) to such Buyer, a certificate representing such Securities that is free from all restrictive and other legends, registered in
the name of such Buyer or its designee (the date by which such credit is so required to be made to the balance account of such Buyer’s
or such Buyer’s designee with DTC or such certificate is required to be delivered to such Buyer pursuant to the foregoing is referred
to herein as the “Required Delivery Date”, and the date such shares of Common Stock are actually delivered without
restrictive legend to such Buyer or such Buyer’s designee with DTC, as applicable, the “Share Delivery Date”).
The Company shall be responsible for any transfer agent fees or DTC fees with respect to any issuance of Securities or the removal of
any legends with respect to any Securities in accordance herewith.


 


(e) Failure
to Timely Deliver; Buy-In. If the Company fails, for any reason or for no reason, to issue and deliver (or cause to be delivered)
to a Buyer (or its designee) by the Required Delivery Date, either (I) if the Transfer Agent is not participating in FAST, a certificate
for the number of Conversion Shares to which such Buyer is entitled and register such Conversion Shares on the Company’s share register
or, if the Transfer Agent is participating in FAST, to credit the balance account of such Buyer or such Buyer’s designee with DTC
for such number of Conversion Shares submitted for legend removal by such Buyer pursuant to Section 5(d) above or (II) if the Registration
Statement covering the resale of the Conversion Shares submitted for legend removal by such Buyer pursuant to Section 5(d) above (the
“Unavailable Shares”) is not available for the resale of such Unavailable Shares and the Company fails to promptly,
but in no event later than as required pursuant to the Registration Rights Agreement (x) so notify such Buyer and (y) deliver the Conversion
Shares electronically without any restrictive legend by crediting such aggregate number of Conversion Shares submitted for legend removal
by such Buyer pursuant to Section 5(d) above to such Buyer’s or its designee’s balance account with DTC through its Deposit/Withdrawal
At Custodian system (the event described in the immediately foregoing clause (II) is hereinafter referred as a “Notice Failure”
and together with the event described in clause (I) above, (a “Delivery Failure”), then, in addition to all other remedies
available to such Buyer, the Company shall pay in cash to such Buyer on each day after the Share Delivery Date and during such Delivery
Failure an amount equal to 1% of the product of (A) the sum of the number of shares of Common Stock not issued to such Buyer on or prior
to the Required Delivery Date and to which such Buyer is entitled, and (B) any trading price of the Common Stock selected by such Buyer
in writing as in effect at any time during the period beginning on the date of the delivery by such Buyer to the Company of the applicable
Conversion Shares and ending on the applicable Share Delivery Date (each, a “Delivery Failure Payment”). In addition
to the foregoing, if on or prior to the Required Delivery Date either (I) if the Transfer Agent is not participating in FAST, the Company
shall fail to issue and deliver a certificate to a Buyer and register such shares of Common Stock on the Company’s share register
or, if the Transfer Agent is participating in FAST, credit the balance account of such Buyer or such Buyer’s designee with DTC for
the number of shares of Common Stock to which such Buyer submitted for legend removal by such Buyer pursuant to Section 5(d) above (ii)
below or (II) a Notice Failure occurs, and if on or after such Trading Day such Buyer purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by such Buyer of shares of Common Stock submitted for legend removal by such
Buyer pursuant to Section 5(d) above that such Buyer is entitled to receive from the Company (a “Buy-In”), then the
Company shall, within two (2) Trading Days after such Buyer’s request and in such Buyer’s discretion, either (i) pay cash
to such Buyer in an amount equal to such Buyer’s total purchase price (including brokerage commissions and other out-of-pocket expenses,
if any, for the shares of Common Stock so purchased) (the “Buy-In Price”), at which point the Company’s obligation
to so deliver such certificate or credit such Buyer’s balance account shall terminate and such shares shall be cancelled, or (ii)
promptly honor its obligation to so deliver to such Buyer a certificate or certificates or credit the balance account of such Buyer or
such Buyer’s designee with DTC representing such number of shares of Common Stock that would have been so delivered if the Company
timely complied with its obligations hereunder and pay cash to such Buyer in an amount equal to the excess (if any) of the Buy-In Price
over the product of (A) such number of shares of Conversion Shares that the Company was required to deliver to such Buyer by the Required
Delivery Date multiplied by (B) the lowest Closing Sale Price (as defined in the Notes) of the Common Stock on any Trading Day during
the period commencing on the date of the delivery by such Buyer to the Company of the applicable Conversion Shares and ending on the date
of such delivery and payment under this clause (ii) (each, a “Buy-In Payment Amount”). Nothing shall limit such Buyer’s
right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of
Common Stock (or to electronically deliver such shares of Common Stock) as required pursuant to the terms hereof. Notwithstanding anything
herein to the contrary, with respect to any given Notice Failure and/or Delivery Failure, this Section 5(e) shall not apply to the applicable
Buyer the extent the Company has already paid such Delivery Failure Payment or Buy-In Payment Amount, as applicable, in full to such Buyer
with respect to such Notice Failure and/or Delivery Failure, as applicable, pursuant to the analogous sections of the Note held by such
Buyer.


 


(f) FAST
Compliance. While any Notes remain outstanding, the Company shall maintain a transfer agent that participates in FAST.


 






    38


    


    

 


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


 


(a) The
obligation of the Company hereunder to issue and sell the Notes to each Buyer at the Closing is subject to the satisfaction, at or before
the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit and may
be waived by the Company at any time in its sole discretion by providing each Buyer with prior written notice thereof: 


 


(i) Such
Buyer shall have executed each of the other Transaction Documents to which it is a party and delivered the same to the Company.


 


(ii) Such
Buyer and each other Buyer shall have delivered to the Company the Purchase Price (less, in the case of any Buyer, the amounts withheld
pursuant to Section 4(g)) for the Note being purchased by such Buyer at the Closing and as further adjusted to reflect the net funding
required to effect the Company’s concurrent repayment of the Existing Notes) by wire transfer of immediately available funds in
accordance with the Flow of Funds Letter.


 


(iii) Such
Buyer shall have executed and delivered to the Company the 144 representation letter, in the form attached hereto as Exhibit E
(the “Standby 144 Representation Letter”).


 


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


 


7. CONDITIONS
TO EACH BUYER’S OBLIGATION TO PURCHASE.


 


(a) The
obligation of each Buyer hereunder to purchase its Note at the Closing is subject to the satisfaction, at or before the Closing Date,
of each of the following conditions, provided that these conditions are for each Buyer’s sole benefit and may be waived by such
Buyer at any time in its sole discretion by providing the Company with prior written notice thereof: 


 


(i) The
Company and each Subsidiary (as the case may be) shall have duly executed and delivered to such Buyer each of the Transaction Documents
to which it is a party and the Company shall have duly executed and delivered to such Buyer a Note in such original principal amount as
is set forth across from such Buyer’s name in column (3) of the Schedule of Buyers as being purchased by such Buyer at the Closing
pursuant to this Agreement.


 


(ii) Such
Buyer shall have received the opinion of Dorsey & Whitney LLP, the Company’s counsel, dated as of the Closing Date, in the form
acceptable to such Buyer.


 


(iii) The
Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form acceptable to such Buyer,
which instructions shall have been delivered to and acknowledged in writing by the Company’s transfer agent.


 


(iv) The
Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of the Company and each of its Subsidiaries
in each such entity’s jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction of
formation as of a date within ten (10) days of the Closing Date.


 






    39


    


    

 


(v) The
Company shall have delivered to such Buyer a certificate evidencing the Company’s and each Subsidiary’s qualification as a
foreign corporation and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which the Company
and each Subsidiary conducts business and is required to so qualify, as of a date within ten (10) days of the Closing Date.


 


(vi) The
Company shall have delivered to such Buyer a certified copy of the Certificate of Incorporation as certified by the Delaware Secretary
of State within ten (10) days of the Closing Date.


 


(vii) Each
Subsidiary shall have delivered to such Buyer a certified copy of its Certificate of Incorporation (or such equivalent organizational
document) as certified by the Secretary of State (or comparable office) of such Subsidiary’s jurisdiction of incorporation within
ten (10) days of the Closing Date.


 


(viii) The
Company and each Subsidiary shall have delivered to such Buyer a certificate, in the form acceptable to such Buyer, executed by the Secretary
of the Company and each Subsidiary and dated as of the Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted
by the Company’s and each Subsidiary’s board of directors in a form reasonably acceptable to such Buyer, (ii) the Certificate
of Incorporation of the Company and the organizational documents of each Subsidiary and (iii) the Bylaws of the Company and the bylaws
of each Subsidiary, each as in effect at the Closing.


 


(ix) Each
and every representation and warranty of the Company shall be true and correct as of the date when made and as of the Closing Date as
though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true and
correct as of such specific date) and the Company shall have performed, satisfied and complied in all respects with the covenants, agreements
and conditions required to be performed, satisfied or complied with by the Company at or prior to the Closing Date. Such Buyer shall have
received a certificate, duly executed by the Chief Executive Officer of the Company, dated as of the Closing Date, to the foregoing effect
and as to such other matters as may be reasonably requested by such Buyer in the form acceptable to such Buyer.


 


(x) The
Company shall have delivered to such Buyer a letter from the Company’s transfer agent certifying the number of shares of Common
Stock outstanding on the Closing Date immediately prior to the Closing.


 


(xi) The
Common Stock (A) shall be designated for quotation or listed (as applicable) on the Principal Market and (B) shall not have been suspended,
as of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension by the SEC or the
Principal Market have been threatened, as of the Closing Date, either (I) in writing by the SEC or the Principal Market or (II) by falling
below the minimum maintenance requirements of the Principal Market.


 


(xii) The
Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale of the
Securities, including without limitation, those required by the Principal Market, if any.


 


(xiii) No
statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by
any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by
the Transaction Documents.


 


(xiv) Since
the date of execution of this Agreement, no event or series of events shall have occurred that reasonably would have or result in a Material
Adverse Effect.


 


(xv) The
Company shall have obtained approval of the Principal Market to list or designate for quotation (as the case may be) the Conversion Shares.


 


(xvi) In
accordance with the terms of the Security Documents, the Company shall have delivered to the Collateral Agent (A) original certificates
(I) representing the Subsidiaries’ shares of capital stock to the extent such subsidiary is a corporation or otherwise has certificated
equity and (II) representing all other equity interests and all promissory notes required to be pledged thereunder, in each case, accompanied
by undated stock powers and allonges executed in blank and other proper instruments of transfer and (B) appropriate financing statements
on Form UCC-1 or Form UCC-3 to be duly filed in such office or offices as may be necessary or, in the opinion of the Collateral Agent,
desirable to perfect the security interests purported to be created by each Security Document (the “Perfection Certificate”).


 






    40


    


    

 


(xvii) Within
two (2) Business Days prior to the Closing, the Company shall have delivered or caused to be delivered to each Buyer and the Collateral
Agent (A) certified copies of requests for copies of information on Form UCC-11, listing all effective financing statements which name
as debtor the Company or any of its Subsidiaries and which are filed in such office or offices as may be necessary or, in the opinion
of the Collateral Agent or the Buyers, desirable to perfect the security interests purported to be created by the Security Agreement,
together with copies of such financing statements, none of which, except for Permitted Liens and as otherwise agreed in writing by the
Collateral Agent, shall cover any of the Collateral (as defined in the Security Agreement), and the results of searches for any tax Lien
and judgment Lien filed against such Person or its property, which results, except for Permitted Liens and as otherwise agreed to in writing
by the Collateral Agent and the Buyers, shall not show any such Liens; and (B) a perfection certificate, duly completed and executed by
the Company and each of its Subsidiaries, in form and substance satisfactory to the Buyers.


 


(xviii) The
Collateral Agent shall have received the Security Agreement, duly executed by the Company and each of its Subsidiaries, together with
the original stock certificates representing all of the equity interests and all promissory notes required to be pledged thereunder, accompanied
by undated stock powers and allonges executed in blank and other proper instruments of transfer.


 


(xix) With
respect to the Intellectual Property Rights, if any, of the Company or any of its Subsidiaries, the Company and/or such Subsidiaries,
as applicable, shall have duly executed and delivered to such Buyer each Assignment For Security for the Intellectual Property Rights
of the Company and its Subsidiaries, in the form attached as Exhibit A to the Security Agreement.


 


(xx) Each
Controlled Account Bank (as defined in the Notes) and the Collateral Agent shall have duly executed and delivered to such Buyer a Controlled
Account Agreement (as defined in the Notes) with respect to each account of the Company or any of its Subsidiaries held at such Controlled
Account Bank.


 


(xxi) Such
Buyer shall have received a letter on the letterhead of the Company, duly executed by the Chief Executive Officer of the Company, setting
forth the wire amounts of each Buyer and the wire transfer instructions of the Company (the “Flow of Funds Letter”)
and reflecting the repayment in full of the Existing Notes in connection therewith.


 


(xxii) The
Company shall have duly executed and delivered to such Buyer the voting agreement in the form of Exhibit G hereof (the “Voting
Agreement”), by and between the Company and the stockholders listed on Schedule 7(a)(xxii) attached hereto (the “Stockholders”)
and the Stockholders shall have duly executed and delivered to such Buyer the Voting Agreement.


 


(xxiii) The
Company and its Subsidiaries shall have delivered to such Buyer such other documents, instruments or certificates relating to the transactions
contemplated by this Agreement as such Buyer or its counsel may reasonably request.


 


8. TERMINATION.


 


In the event that the Closing
shall not have occurred with respect to a Buyer within five (5) days of the date hereof, then such Buyer shall have the right to terminate
its obligations under this Agreement with respect to itself at any time on or after the close of business on such date without liability
of such Buyer to any other party; provided, however, (i) the right to terminate this Agreement under this Section 8 shall not be
available to such Buyer if the failure of the transactions contemplated by this Agreement to have been consummated by such date is the
result of such Buyer’s breach of this Agreement and (ii) the abandonment of the sale and purchase of the Notes shall be applicable
only to such Buyer providing such written notice, provided further that no such termination shall affect any obligation of the Company
under this Agreement to reimburse such Buyer for the expenses described in Section 4(g) above. Nothing contained in this Section 8
shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or
the other Transaction Documents or to impair the right of any party to compel specific performance by any other party of its obligations
under this Agreement or the other Transaction Documents.


 






    41


    


    

 


9. MISCELLANEOUS.


 


(a) Governing
Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision
or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of New York. The Company 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 under
any of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.
Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof to such party at the address for such 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 manner permitted by law. Nothing contained herein shall be deemed or operate to preclude any Buyer from
bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations
to such Buyer or to enforce a judgment or other court ruling in favor of such Buyer. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT
IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT
OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.


 


(b) Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature
is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature
page, such signature page 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 signature page were an original thereof.


 


(c) Headings;
Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of,
this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine,
neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words
of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision in
which they are found.


 


(d) Severability;
Maximum Payment Amounts. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable
by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended
to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall
not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or
the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as
close as possible to that of the prohibited, invalid or unenforceable provision(s). Notwithstanding anything to the contrary contained
in this Agreement or any other Transaction Document (and without implication that the following is required or applicable), it is the
intention of the parties that in no event shall amounts and value paid by the Company and/or any of its Subsidiaries (as the case may
be), or payable to or received by any of the Buyers, under the Transaction Documents (including without limitation, any amounts that would
be characterized as “interest” under applicable law) exceed amounts permitted under any applicable law. Accordingly, if any
obligation to pay, payment made to any Buyer, or collection by any Buyer pursuant the Transaction Documents is finally judicially determined
to be contrary to any such applicable law, such obligation to pay, payment or collection shall be deemed to have been made by mutual mistake
of such Buyer, the Company and its Subsidiaries and such amount shall be deemed to have been adjusted with retroactive effect to the maximum
amount or rate of interest, as the case may be, as would not be so prohibited by the applicable law. Such adjustment shall be effected,
to the extent necessary, by reducing or refunding, at the option of such Buyer, the amount of interest or any other amounts which would
constitute unlawful amounts required to be paid or actually paid to such Buyer under the Transaction Documents. For greater certainty,
to the extent that any interest, charges, fees, expenses or other amounts required to be paid to or received by such Buyer under any of
the Transaction Documents or related thereto are held to be within the meaning of “interest” or another applicable term to
otherwise be violative of applicable law, such amounts shall be pro-rated over the period of time to which they relate.


 






    42


    


    

 


(e) Entire
Agreement; Amendments. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto and thereto
and the instruments referenced herein and therein supersede all other prior oral or written agreements between the Buyers, the Company,
its Subsidiaries, their affiliates and Persons acting on their behalf, including, without limitation, any transactions by any Buyer with
respect to Common Stock or the Securities, and the other matters contained herein and therein, and this Agreement, the other Transaction
Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein contain the entire
understanding of the parties solely with respect to the matters covered herein and therein; provided, however, nothing contained in this
Agreement or any other Transaction Document shall (or shall be deemed to) (i) have any effect on any agreements any Buyer has entered
into with, or any instruments any Buyer has received from, the Company or any of its Subsidiaries prior to the date hereof with respect
to any prior investment made by such Buyer in the Company or (ii) waive, alter, modify or amend in any respect any obligations of the
Company or any of its Subsidiaries, or any rights of or benefits to any Buyer or any other Person, in any agreement entered into prior
to the date hereof between or among the Company and/or any of its Subsidiaries and any Buyer, or any instruments any Buyer received from
the Company and/or any of its Subsidiaries prior to the date hereof, and all such agreements and instruments shall continue in full force
and effect. Except as specifically set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty,
covenant or undertaking with respect to such matters. For clarification purposes, the Recitals are part of this Agreement. No provision
of this Agreement may be amended other than by an instrument in writing signed by the Company and the Required Holders (as defined below),
and any amendment to any provision of this Agreement made in conformity with the provisions of this Section 9(e) shall be binding
on all Buyers and holders of Securities, as applicable; provided that no such amendment shall be effective to the extent that it (A) applies
to less than all of the holders of the Securities then outstanding or (B) imposes any obligation or liability on any Buyer without such
Buyer’s prior written consent (which may be granted or withheld in such Buyer’s sole discretion); and provided further that
the provisions of Sections 4(u) and 4(v) above cannot be amended or waived without the additional prior written approval of the Collateral
Agent or its successor. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving
party, provided that the Required Holders may waive any provision of this Agreement, and any waiver of any provision of this Agreement
made in conformity with the provisions of this Section 9(e) shall be binding on all Buyers and holders of Securities, as applicable,
provided that no such waiver shall be effective to the extent that it (1) applies to less than all of the holders of the Securities then
outstanding (unless a party gives a waiver as to itself only) or (2) imposes any obligation or liability on any Buyer without such Buyer’s
prior written consent (which may be granted or withheld in such Buyer’s sole discretion). No consideration (other than reimbursement
of legal fees) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction
Documents unless the same consideration also is offered to all of the parties to the Transaction Documents, all holders of the Notes.
From the date hereof and while any Notes are outstanding, the Company shall not be permitted to receive any consideration from a Buyer
or a holder of Notes that is not otherwise contemplated by the Transaction Documents in order to, directly or indirectly, induce the Company
or any Subsidiary (i) to treat such Buyer or holder of Notes in a manner that is more favorable than to other similarly situated Buyers
or holders of Notes, or (ii) to treat any Buyer(s) or holder(s) of Notes in a manner that is less favorable than the Buyer or holder of
Notes that is paying such consideration; provided, however, that the determination of whether a Buyer has been treated more or less favorably
than another Buyer shall disregard any securities of the Company purchased or sold by any Buyer. The Company has not, directly or indirectly,
made any agreements with any Buyers relating to the terms or conditions of the transactions contemplated by the Transaction Documents
except as set forth in the Transaction Documents. Without limiting the foregoing, the Company confirms that, except as set forth in this
Agreement, no Buyer has made any commitment or promise or has any other obligation to provide any financing to the Company, any Subsidiary
or otherwise. As a material inducement for each Buyer to enter into this Agreement, the Company expressly acknowledges and agrees that
(x) no due diligence or other investigation or inquiry conducted by a Buyer, any of its advisors or any of its representatives shall affect
such Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception to any of, the Company’s representations
and warranties contained in this Agreement or any other Transaction Document and (y) unless a provision of this Agreement or any other
Transaction Document is expressly preceded by the phrase “except as disclosed in the SEC Documents,” nothing contained in
any of the SEC Documents shall affect such Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception
to any of, the Company’s representations and warranties contained in this Agreement or any other Transaction Document. “Required
Holders” means (I) prior to the Closing Date, each Buyer entitled to purchase Notes at the Closing and (II) on or after the
Closing Date, High Trail Investments ON LLC (or any of its affiliates) (“HT”) as long as HT holds any of the Securities
or, thereafter, the holders of a majority of the Underlying Securities as of such time (excluding any Underlying Securities held by the
Company or any of its Subsidiaries as of such time) issued or issuable hereunder or pursuant to the Notes.


 


(f) Notices.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by electronic
mail (provided that such sent email is kept on file (whether electronically or otherwise) by the sending party and the sending party does
not receive an automatically generated message from the recipient’s email server that such e-mail could not be delivered to such
recipient); or (iii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, in each case,
properly addressed to the party to receive the same. The mailing addresses and e-mail addresses for such communications shall be:


 






    43


    


    

 


If to the Company:


 


Akerna Corp.

1550 Larimer Street, #246

Denver, Colorado 80202

Telephone: (720) 710-3146

Attention: Chief Financial Officer

E-Mail: john.fowle@akerna.com


 


With a copy (for informational purposes only) to:


 


Dorsey & Whitney LLP

1400 Wewatta Street, Suite 400

Denver, Colorado 80202

Telephone: (303) 352-1133

Attention: Jason K. Brenkert, Esq.

E-Mail: brenkert.jason@dorsey.com


 


If to the Transfer Agent:


 


Continental Stock Transfer & Trust Company


1 State Street, Floor 30


New York, NY 10004


Telephone: (212) 509-4000

Attention: Henry Farrell

E-Mail: hfarrell@continentalstock.com


 


If to a Buyer, to its mailing address and e-mail
address set forth on the Schedule of Buyers, with copies to such Buyer’s representatives as set forth on the Schedule of Buyers,


 


with a copy (for informational purposes only) to:


 


Kelley Drye & Warren LLP

3 World Trade Center

175 Greenwich Street

New York, NY 10007

Telephone: (212) 808-7540

Attention: Michael A. Adelstein, Esq.

E-mail: madelstein@kelleydrye.com


 


or to such other mailing address and/or e-mail
address and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party
five (5) days prior to the effectiveness of such change, provided that Kelley Drye & Warren LLP shall only be provided copies of notices
sent to the lead Buyer. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication,
(B) mechanically or electronically generated by the sender’s e-mail containing the time, date and recipient’s e-mail or (C)
provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by e-mail or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above, respectively.


 






    44


    


    

 


(g) Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns,
including any purchasers of any of the Notes. The Company shall not assign this Agreement or any rights or obligations hereunder without
the prior written consent of the Required Holders, including, without limitation, by way of a Fundamental Transaction (as defined in the
Notes) (unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Notes).
A Buyer may assign some or all of its rights hereunder in connection with any transfer of any of its Securities without the consent of
the Company, in which event such assignee shall be deemed to be a Buyer hereunder with respect to such assigned rights.


 


(h) No
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than the Indemnitees
referred to in Section 9(k).


 


(i) Survival.
The representations, warranties, agreements and covenants shall survive the Closing. Each Buyer shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.


 


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


 


(k) Indemnification.


 


(i) In
consideration of each Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities thereunder and in
addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect, indemnify
and hold harmless each Buyer and each holder of Notes and all of their stockholders, partners, members, officers, directors, employees
and direct or indirect investors and any of the foregoing Persons’ agents or other representatives (including, without limitation,
those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses
in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought),
and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee
as a result of, or arising out of, or relating to (i) any misrepresentation or breach of any representation or warranty made by the Company
or any Subsidiary in any of the Transaction Documents, (ii) any breach of any covenant, agreement or obligation of the Company or any
Subsidiary contained in any of the Transaction Documents or (iii) any cause of action, suit, proceeding or claim brought or made against
such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company or any Subsidiary)
or which otherwise involves such Indemnitee that arises out of or results from (A) the execution, delivery, performance or enforcement
of any of the Transaction Documents by the Company or its Subsidiaries, (B) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of the issuance of the Securities, (C) any disclosure properly made by such Buyer pursuant
to Section 4(i), or (D) the status of such Buyer or holder of the Notes either as an investor in the Company pursuant to the transactions
contemplated by the Transaction Documents or as a party to this Agreement (including, without limitation, as a party in interest or otherwise
in any action or proceeding for injunctive or other equitable relief); provided however that the Company will not be required to indemnify
any Indemnitees to the extent that such actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages,
and expenses finally determined by a court of competent jurisdiction to arise directly and primarily from the gross negligence, fraud
or willful misconduct of such Indemnitee or the Buyer or holder of the Notes to which such Indemnitee is related. To the extent that the
foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment
and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.


 






    45


    


    

 


(ii) Promptly
after receipt by an Indemnitee under this Section 9(k) of notice of the commencement of any action or proceeding (including any governmental
action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim in respect thereof is to be made against the
Company under this Section 9(k), deliver to the Company a written notice of the commencement thereof, and the Company shall have the right
to participate in, and, to the extent the Company so desires, to assume control of the defense thereof with counsel mutually satisfactory
to the Company and the Indemnitee; provided, however, that an Indemnitee shall have the right to retain its own counsel with the fees
and expenses of such counsel to be paid by the Company if: (A) the Company has agreed in writing to pay such fees and expenses; (B) the
Company shall have failed promptly to assume the defense of such Indemnified Liability and to employ counsel reasonably satisfactory to
such Indemnitee in any such Indemnified Liability; or (C) the named parties to any such Indemnified Liability (including any impleaded
parties) include both such Indemnitee and the Company, and such Indemnitee shall have been advised by counsel that a conflict of interest
is likely to exist if the same counsel were to represent such Indemnitee and the Company (in which case, if such Indemnitee notifies the
Company in writing that it elects to employ separate counsel at the expense of the Company, then the Company shall not have the right
to assume the defense thereof and such counsel shall be at the expense of the Company), provided further, that in the case of clause (C)
above the Company shall not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel for the Indemnitees.
The Indemnitee shall reasonably cooperate with the Company in connection with any negotiation or defense of any such action or Indemnified
Liability by the Company and shall furnish to the Company all information reasonably available to the Indemnitee which relates to such
action or Indemnified Liability. The Company shall keep the Indemnitee reasonably apprised at all times as to the status of the defense
or any settlement negotiations with respect thereto. The Company shall not be liable for any settlement of any action, claim or proceeding
effected without its prior written consent, provided, however, that the Company shall not unreasonably withhold, delay or condition its
consent. The Company shall not, without the prior written consent of the Indemnitee, consent to entry of any judgment or enter into any
settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnitee of a release from all liability in respect to such Indemnified Liability or litigation, and such settlement shall not include
any admission as to fault on the part of the Indemnitee. Following indemnification as provided for hereunder, the Company shall be subrogated
to all rights of the Indemnitee with respect to all third parties, firms or corporations relating to the matter for which indemnification
has been made. The failure to deliver written notice to the Company within a reasonable time of the commencement of any such action shall
not relieve the Company of any liability to the Indemnitee under this Section 9(k), except to the extent that the Company is materially
and adversely prejudiced in its ability to defend such action.


 


(iii) The
indemnification required by this Section 9(k) shall be made by periodic payments of the amount thereof during the course of the investigation
or defense, within ten (10) days after bills are received or Indemnified Liabilities are incurred.


 


(iv) The
indemnity agreement contained herein shall be in addition to (A) any cause of action or similar right of the Indemnitee against the Company
or others, and (B) any liabilities the Company may be subject to pursuant to the law.


 


(l) Construction.
The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules
of strict construction will be applied against any party. No specific representation or warranty shall limit the generality or applicability
of a more general representation or warranty. Each and every reference to share prices, shares of Common Stock and any other numbers in
this Agreement that relate to the Common Stock shall be automatically adjusted for any stock splits, stock dividends, stock combinations,
recapitalizations or other similar transactions that occur with respect to the Common Stock after the date of this Agreement. Notwithstanding
anything in this Agreement to the contrary, 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 Buyer (or its broker or other financial representative) to effect
short sales or similar transactions in the future.


 






    46


    


    

 


(m) Remedies.
Each Buyer and in the event of assignment by Buyer of its rights and obligations hereunder, each holder of Securities, shall have all
rights and remedies set forth in the Transaction Documents and all rights and remedies which such holders have been granted at any time
under any other agreement or contract and all of the rights which such holders have under any law. Any Person having any rights under
any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover
damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. Furthermore, the Company
recognizes that in the event that it or any Subsidiary fails to perform, observe, or discharge any or all of its or such Subsidiary’s
(as the case may be) obligations under the Transaction Documents, any remedy at law would inadequate relief to the Buyers. The Company
therefore agrees that the Buyers shall be entitled to specific performance and/or temporary, preliminary and permanent injunctive or other
equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without
posting a bond or other security. The remedies provided in this Agreement and the other Transaction Documents shall be cumulative and
in addition to all other remedies available under this Agreement and the other Transaction Documents, at law or in equity (including a
decree of specific performance and/or other injunctive relief).


 


(n) Withdrawal
Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents,
whenever any Buyer exercises a right, election, demand or option under a Transaction Document and the Company or any Subsidiary does not
timely perform its related obligations within the periods therein provided, then such Buyer may rescind or withdraw, in its sole discretion
from time to time upon written notice to the Company or such Subsidiary (as the case may be), any relevant notice, demand or election
in whole or in part without prejudice to its future actions and rights.


 


(o) Payment
Set Aside; Currency. To the extent that the Company makes a payment or payments to any Buyer hereunder or pursuant to any of the other
Transaction Documents or any of the Buyers enforce or exercise their rights hereunder or 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, foreign, 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.
Unless otherwise expressly indicated, all dollar amounts referred to in this Agreement and the other Transaction Documents are in United
States Dollars (“U.S. Dollars”), and all amounts owing under this Agreement and all other Transaction Documents shall
be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be converted into the U.S. Dollar equivalent amount
in accordance with the Exchange Rate on the date of calculation. “Exchange Rate” means, in relation to any amount of
currency to be converted into U.S. Dollars pursuant to this Agreement, the U.S. Dollar exchange rate as published in the Wall Street Journal
on the relevant date of calculation.


 


(p) Judgment
Currency.


 


(i) If
for the purpose of obtaining or enforcing judgment against the Company in connection with this Agreement or any other Transaction Document
in any court in any jurisdiction it becomes necessary to convert into any other currency (such other currency being hereinafter in this
Section 9(p) referred to as the “Judgment Currency”) an amount due in US Dollars under this Agreement, the conversion
shall be made at the Exchange Rate prevailing on the Trading Day immediately preceding:


 


(1) the
date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date: or


 


(2) the
date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of which
such conversion is made pursuant to this Section 9(p)(i)(2) being hereinafter referred to as the “Judgment Conversion Date”).


 






    47


    


    

 


(ii) If
in the case of any proceeding in the court of any jurisdiction referred to in Section 9(p)(i)(2) above, there is a change in the
Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable party shall
pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the Exchange Rate
prevailing on the date of payment, will produce the amount of US Dollars which could have been purchased with the amount of Judgment Currency
stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date.


 


(iii) Any
amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Agreement or any other Transaction Document.


 


(q) Independent
Nature of Buyers’ Obligations and Rights. The obligations of each Buyer under the Transaction Documents are several and not
joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations of
any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by
any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Company acknowledges that the Buyers do not
so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Buyers
are in any way acting in concert or as a group or entity, and the Company shall not assert any such claim with respect to such obligations
or the transactions contemplated by the Transaction Documents or any matters, and the Company acknowledges that the Buyers are not acting
in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or the transactions contemplated
by the Transaction Documents. The decision of each Buyer to purchase Securities pursuant to the Transaction Documents has been made by
such Buyer independently of any other Buyer. Each Buyer acknowledges that no other Buyer has acted as agent for such Buyer in connection
with such Buyer making its investment hereunder and that no other Buyer will be acting as agent of such Buyer in connection with monitoring
such Buyer’s investment in the Securities or enforcing its rights under the Transaction Documents. The Company and each Buyer confirms
that each Buyer has independently participated with the Company and its Subsidiaries in the negotiation of the transaction contemplated
hereby with the advice of its own counsel and advisors. Each Buyer shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be
necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose. The use of a single agreement to
effectuate the purchase and sale of the Securities contemplated hereby was solely in the control of the Company, not the action or decision
of any Buyer, and was done solely for the convenience of the Company and its Subsidiaries and not because it was required or requested
to do so by any Buyer. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction
Document is between the Company, each Subsidiary and a Buyer, solely, and not between the Company, its Subsidiaries and the Buyers collectively
and not between and among the Buyers.


 


[signature pages follow]


 









    48


    


    

 


IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written
above.


 


	 	COMPANY:
	 	 
	 	AKERNA CORP.
	 	 	 	 
	 	By:	/s/ John Fowle
	 	 	Name:	John Fowle
	 	 	Title:	Chief Financial Officer



 






     


     


    

 


IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written
above.


 


	 	BUYER:
	 	 
	 	High Trail Investments ON LLC
	 	 	 	 
	 	By:	/s/ Eric Helenek
	 	 	Name:	Eric Helenek
	 	 	Title:	Authorized Signatory



 






     


     


    

 


IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written
above.


 


	 	BUYER:
	 	 
	 	Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B
	 	 	 	 
	 	By:	/s/ Waqas Khatri
	 	 	Name:	Waqas Khatri
	 	 	Title:	Director



 






     


     


    

 


SCHEDULE OF BUYERS


 


	(1)

Buyer	 	(2)

Mailing Address and E-mail Address	 	 	(3)

Original Principal Amount of Notes	 	 	 	(4)

Purchase Price 
	 	 	(5)

Legal Representative’s
 Mailing Address and E-mail Address
	High Trail Investments ON LLC	 	c/o High Trail Capital LP 
221 River Street, 9th Floor 
Hoboken, NJ 07030 
Facsimile: (917)-905-9799
 E-mail: notices@hightrailcap.com
 Residence: Delaware	 	$	11,000,000	 	 	$	9,900,000	 	 	Kelley Drye & Warren LLP 
3 World Trade Center 
175 Greenwich Street 
New York, NY 10007 
Telephone: (212) 808-7540 
Attention: Michael A. Adelstein, Esq.
	Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B	 	c/o Ayrton Capital LLC 
222 Broadway, 19th Floor 
New York, NY 10038 
Attention Waqas Khatri
 E-mail: wk@ayrtonllc.com	 	$	9,000,000	 	 	$	8,100,000	 	 	N/A
	TOTAL	 	 	 	$	20,000,000	 	 	$	18,000,000