shmp_ex102





 





                                                         
Exhibit 10.2

 



SECURITIES PURCHASE AGREEMENT

 


This
Securities Purchase Agreement (this “Agreement”) is dated as
of June 28, 2021, between NaturalShrimp Incorporated, a Nevada
corporation (the “Company”), and the
purchaser identified on the signature page hereto (including its
successors and assigns, the “Purchaser”).

 


WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant
to an effective registration statement under the Securities Act of
1933, as amended (the “Securities Act”) as to
the Shares and Warrants, the Company desires to issue and sell to
each Purchaser, and Purchaser desires to purchase from the Company,
securities of the Company as more fully described in this
Agreement.

 


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

 



ARTICLE I.



DEFINITIONS

 


1.1           Definitions.
In addition to the terms defined elsewhere in this Agreement, the
following terms have the meanings set forth in this Section
1.1:

 


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

 


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

 


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

 


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

 


“Business Day” means any
day except any Saturday, any Sunday, any day which is a federal
legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by
law or other governmental action to close.

 


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

 


“Closing” means the
closing of the purchase and sale of the Securities pursuant to
Section 2.1(a), which shall occur on each Closing
Date.

 


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

 


“Common Stock” means the
common stock of the Company, par value $0.0001 per share, and any
other class of securities into which such securities may hereafter
be reclassified or changed.

 


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

 



 







 





 


“Company Counsel” means
Lucosky
Brookman LLP.

 


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

 


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


 


“Event of Default” means
any of the following events: (i) the suspension, cessation from
trading or delisting of the Company's Common Stock on the Principal
Market for a period of two (2) consecutive trading days or more;
(ii) the failure by the Company to timely comply with the reporting
requirements of the Exchange Act (including applicable extension
periods); (iii) the failure for any reason by the Company to issue
Shares or Warrant Shares to the Purchaser within the required time
periods; (iv) the Company breaches any representation, warranty,
covenant or other term of condition contained in the definitive
agreements between the parties; (v) the Company files or threatens
to file for Bankruptcy or receivership or any money judgment writ,
liquidation or a similar process is entered by or filed against the
Company for more than $50,000 and remains unvacated, unbonded or
unstayed for a period of twenty (20) calendar days; (vi) any
cessation of operations by the Company or failure by the Company to
maintain any assets, intellectual, personal or real property or
other assets which are necessary to conduct its business (vii) the
Company shall lose the "bid" price for its Common stock on the
Principal Market; or (viii) if at any time the Common Stock is no
longer eligible to be delivered electronically to
Purchaser.


 


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


 


“Exempt Issuance” means
the issuance of (a) shares of Common Stock or options to employees,
officers, directors, or consultants of the Company pursuant to any
stock or option plan duly adopted for such purpose, by a majority
of the Board of Directors or a majority of the members of a
committee of non-employee directors established for such purpose
for services rendered to the Company, (b) securities upon the
exercise or exchange of or conversion of any Securities issued
hereunder and/or other securities exercisable or exchangeable for
or convertible into shares of Common Stock issued and outstanding
on the date of this Agreement, provided that such securities have
not been amended since the date of this Agreement to increase the
number of such securities or to decrease the exercise price,
exchange price or conversion price of such securities (other than
in connection with stock splits or combinations) or to extend the
term of such securities, and (c) securities issued pursuant to
acquisitions or strategic transactions approved by a majority of
the disinterested directors of the Company, provided that any such
issuance shall only be to a Person (or to the equityholders of a
Person) which is, itself or through its subsidiaries, an operating
company or an owner of an asset in a business synergistic with the
business of the Company and shall provide to the Company additional
benefits in addition to the investment of funds, but shall not
include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose
primary business is investing in securities.


 


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


 


“GAAP” means generally
accepted accounting principles in the U.S.


 


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


 


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


 


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


 


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


 


“Per Share Purchase Price”
means $0.40.


 


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


 



 







 






 


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


 


“Prospectus” means the
final prospectus filed for the Registration Statement.

 


“Prospectus Supplement”
means the supplement to the Prospectus complying with Rule 424(b)
of the Securities Act that is filed with the Commission and
delivered by the Company to each Purchaser at the
Closing.


 


“Purchaser Party” shall
have the meaning ascribed to such term in Section 4.7.


 


“Registration Statement”
means the effective registration statement with Commission File No.
333-253953 which registers the sale of the Shares and Warrant
Shares to the Purchasers.


 


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


 


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


 


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


 


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


 


“Securities” means the
Common Stock, the Warrant and the Warrant Shares.


 


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


 


“Shares” means the shares
of Common Stock issued or issuable to Purchaser pursuant to this
Agreement.


 


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


 


“Subscription Amount”
shall mean the aggregate amount to be paid for the Common Stock and
Warrant purchased hereunder as specified on the signature page
under the heading “Subscription Amount,” in United States dollars and in immediately
available funds.


 


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


 


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


 


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


 


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


 


“Transfer Agent” means
Transhare Corporation the current transfer agent of the Company,
with a mailing address of 15500 Roosevelt Blvd., Suite 302,
Clearwater, FL 33760 and any successor transfer agent of the
Company.


 


“Warrants” means,
collectively, the pre-funded warrants in the form of Exhibit A to this Agreement.
delivered to the Purchaser at the Closing in accordance with
Section 2.1(b) hereof.


 


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

 



 







 





 



ARTICLE II.



PURCHASE AND SALE

 

2.1 (a) Closing. Upon the terms and
subject to the conditions set forth herein, substantially
concurrent with the execution and delivery of this Agreement by the
parties hereto, the Company agrees to sell, and the Purchaser
agrees to purchase, $3,000,000 worth of Common Stock at the Per
Share Purchase Price (the “Purchased Shares”) and
Warrants to purchase up to One Million One Hundred Thousand
(1,100,000) shares of Common Stock. The Purchaser shall deliver to
the Company, via wire transfer immediately available funds equal to
the Purchaser’s Subscription Amount as set forth on the
signature page hereto executed by the Purchaser, and the Company
shall deliver to the Purchaser such number of shares of the Common
Stock purchased and the Warrant, as determined pursuant to Section
2.1(a) and the Purchaser shall deliver the other items set forth in
Section 2.2 deliverable at the Closing. Upon satisfaction of the
covenants and conditions set forth in Sections 2.2, the Closing
shall occur at the offices of Pryor Cashman LLP, 7 Times Square,
New York, NY 10036, or such other location as the parties shall
mutually agree.

 


(b)           Deliveries.

 




(a)

On or prior to the
Closing Date (or as otherwise indicated below), the Company shall
deliver or cause to be delivered to the Purchaser the
following:





 




(i)

this Agreement duly
executed by the Company;





 




(ii)

a legal opinion of
Company Counsel;





 




(iii)

the Purchased
Shares, which shall be delivered electronically to Purchaser per
instructions provided to the Company by the Purchaser within 24
hours of receipt of the purchase price therefore;





 




(iv)

a Warrant
registered in the name of such Purchaser to purchase up to
1,100,000 shares of Common Stock, with an exercise price equal to
$0.01, subject to adjustment therein;





 




(v)

within 48 hours of
receipt of the purchase price therefore, an irrevocable letter of
instruction to the Company's Transfer Agent, instructing the
Transfer Agent to maintain for the benefit of the Purchaser, [ ]
shares of its common stock and at all times thereafter two times
(2x) the number of Warrants held by the Purchaser; and





 




(vi)

the Prospectus and
Prospectus Supplement (which may be delivered in accordance with
Rule 172 under the Securities Act).





 




(b)

On or prior to the
Closing Date, the Purchaser shall deliver or cause to be delivered
to the Company, as applicable, the following:





 




(i)

this Agreement duly
executed by the Purchaser; and





 



(ii)

the
Purchaser’s Subscription Amount by wire transfer to the
account specified in writing by the Company together with the
subscription form attached as an Exhibit below.





 




2.2

Closing
Conditions.





 

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

 




(i)

the accuracy in all
material respects on the applicable Closing Date of the
representations and warranties of the Purchaser contained herein
(unless as of a specific date therein in which case they shall be
accurate as of such date);





 




(ii)

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





 




(iii)

the delivery by the
Purchaser of the items set forth in Section 2.1(b) of this
Agreement.





 



 







 





 

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

 




(i)

the accuracy in all
material respects when made and on the applicable Closing Date of
the representations and warranties of the Company contained herein
(unless as of a specific date therein);





 




(ii)

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





 




(iii)

         the
delivery by the Company of the items set forth in Section 2.1(a) of
this Agreement;





 




(iv)

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





 




(v)

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





 



ARTICLE III.



REPRESENTATIONS AND WARRANTIES

 


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

 

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

 

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

 

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

 



 







 





 

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

 

(e) Filings, Consents and
Approvals. The Company has timely filed all quarterly and
annual reports required to be filed by it with the SEC pursuant to
the reporting requirements of the Securities Exchange Act of 1934,
as amended (the “1934 Act”) (all of the foregoing filed
prior to the date hereof and all exhibits included therein and
financial statements and schedules thereto and documents (other
than exhibits to such documents) incorporated by reference therein,
being hereinafter referred to herein as the “SEC Documents”). The
Company has delivered to Purchaser true and complete copies of the
SEC Documents, except for such exhibits and incorporated documents,
and except as such Documents are available EDGAR filings on the
SEC’s sec.gov website. As of their respective 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 light of the circumstances
under which they were made, not misleading. None of the statements
made in any such SEC Documents is, or has been, required to be
amended or updated under applicable law (except for such statements
as have been amended or updated in subsequent filings prior the
date hereof). As of their respective dates, the financial
statements of the Company included in the SEC Documents complied as
to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC
with respect thereto. Such financial statements have been prepared
in accordance with United States generally accepted accounting
principles, consistently applied, during the periods involved and
fairly present in all material respects the consolidated financial
position of the Company and its consolidated Subsidiaries as of the
dates thereof and the consolidated results of their operations and
cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). Except
as set forth in the financial statements of the Company included in
the SEC Documents, the Company has no liabilities, contingent or
otherwise, other than (i) liabilities incurred in the ordinary
course of business subsequent to December 31, 2020, and (ii)
obligations under contracts and commitments incurred in the
ordinary course of business and not required under generally
accepted accounting principles to be reflected in such financial
statements, which, individually or in the aggregate, are not
material to the financial condition or operating results of the
Company. The Company is subject to the reporting requirements of
the 1934 Act. For the avoidance of doubt, filing of the documents
required in this Section 3(e) via the SEC’s Electronic Data
Gathering, Analysis, and Retrieval system (“EDGAR”)
shall satisfy all delivery requirements of this Section
3(e).

 


The
Company is not required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing
or registration with, any court or other federal, state, local or
other governmental authority or other Person in connection with the
execution, delivery and performance by the Company of the
Transaction Documents, other than: (i) the filings required
pursuant to Section 4.4 of this Agreement, (ii) the notice and/or
application(s) to each applicable Trading Market for the issuance
and sale of the Securities, and (iii) such filings as are required
to be made under applicable state and federal securities laws
(collectively, the “Required
Approvals”).

 

(f) Issuance of the Securities. The
Securities are duly authorized and, when issued and paid for in
accordance with the applicable Transaction Documents, will be duly
and validly issued, fully paid and nonassessable, free and clear of
all Liens imposed by the Company other than restrictions on
transfer provided for in the Transaction Documents. The Warrant
Shares, when issued in accordance with the terms of the Warrant,
will be validly issued, fully paid and nonassessable, free and
clear of all Liens imposed by the Company. The Company shall
reserve from its duly authorized capital stock a number of shares
of Common Stock issuable pursuant to the Warrant equal to the
amount set forth in Section 2.1(b)(iv).

 

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

 

(h) Intentionally
omitted.

 

(i) Intentionally
omitted.

 



 







 





 

(j) Litigation. Except as disclosed
in Schedule 3.1(j),
there is no action, suit, inquiry, notice of violation, proceeding
or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any
of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an
“Action”) which (i)
adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the
Securities or (ii) could, if there were an unfavorable decision,
have or reasonably be expected to result in a Material Adverse
Effect. Neither the Company nor any Subsidiary, nor any director or
officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. There has
not been, and to the knowledge of the Company, there is not pending
or contemplated, any investigation by the Commission involving the
Company or any current or former director or officer of the
Company. The Commission has not issued any stop order or other
order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the Exchange Act or
the Securities Act.

 

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

 

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

 

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

 

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

 

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

 

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

 

(q) Transactions with Affiliates and
Employees. Except as set forth in the SEC Reports, none of
the officers or directors of the Company or any Subsidiary and, to
the knowledge of the Company, none of the employees of the Company
or any Subsidiary is presently a party to any transaction with the
Company or any Subsidiary (other than for services as employees,
officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from,
providing for the borrowing of money from or lending of money to or
otherwise requiring payments to or from any officer, director or
such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee, stockholder, member
or partner, in each case in excess of $120,000 other than for: (i)
payment of salary or consulting fees for services rendered, (ii)
reimbursement for expenses incurred on behalf of the Company and
(iii) other employee benefits, including stock option agreements
under any stock option plan of the Company. All employee salaries
and contractor fees have been paid to date and no such amounts are
outstanding or past due.

 



 







 





 

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

 

(s) Certain Fees. Except as set
forth on Schedule
3.1(s), no brokerage or finder’s fees or commissions
are or will be payable by the Company or any Subsidiary to any
broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the
transactions contemplated by the Transaction Documents. The
Purchaser shall have no obligation with respect to any fees or with
respect to any claims made by or on behalf of other Persons for
fees of a type contemplated in this Section that may be due in
connection with the transactions contemplated by the Transaction
Documents.

 

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

 

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

 

(v) Listing and Maintenance
Requirements. The Company has not in the twelve (12) months
preceding the date hereof, received notice from any Trading Market
on which the Common Stock is or has been listed or quoted to the
effect that the Company is not in compliance with the listing or
maintenance requirements of such Trading Market. The Company is and
has no reason to believe that it will not in the foreseeable future
continue to be, in compliance with all such listing and maintenance
requirements.

 

(w) [RESERVED]

 

(x) Disclosure. Except with respect
to the material terms and conditions of the transactions
contemplated by the Transaction Documents, the Company confirms
that neither it nor any other Person acting on its behalf has
provided the Purchaser or its agents or counsel with any
information that it believes constitutes or might constitute
material, non-public information. The Company understands and
confirms that the Purchaser will rely on the foregoing
representation in effecting transactions in securities of the
Company. All of the disclosure furnished by or on behalf of the
Company to the Purchaser regarding the Company and its
Subsidiaries, their respective businesses and the transactions
contemplated hereby, including the Disclosure Schedules to this
Agreement, is true and correct and does not contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of
the circumstances under which they were made, not misleading. The
press releases disseminated by the Company during the twelve months
preceding the date of this Agreement taken as a whole do not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under
which they were made and when made, not misleading. The Company
acknowledges and agrees that the Purchaser does not make and has
not made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set
forth in Section 3.2 hereof.

 

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

 

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

 



 







 





 

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

 

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

 

(cc) Acknowledgment
Regarding Purchaser’s Purchase of Securities. The
Company acknowledges and agrees that the Purchaser is acting solely
in the capacity of an arm’s length purchaser with respect to
the Transaction Documents and the transactions contemplated
thereby. The Company further acknowledges that the Purchaser is not
acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and
the transactions contemplated thereby and any advice given by the
Purchaser or any of its representatives or agents in connection
with the Transaction Documents and the transactions contemplated
thereby is merely incidental to the Purchaser’s purchase of
the Securities. The Company further represents to the Purchaser
that the Company’s decision to enter into this Agreement and
the other Transaction Documents has been based solely on the
independent evaluation of the transactions contemplated hereby by
the Company and its representatives.

 

(dd) Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein
to the contrary notwithstanding, it is understood and acknowledged
by the Company that: (i) the Purchaser has not been asked by the
Company to agree, nor has the Purchaser agreed, to desist from
purchasing or selling, securities of the Company, or
“derivative” securities based on securities issued by
the Company or to hold the Securities for any specified term, (ii)
past or future open market or other transactions by the Purchaser,
specifically including, without limitation,
“derivative” transactions, before or after a closing of
this or future private placement transactions, may negatively
impact the market price of the Company’s publicly-traded
securities (iii) Omit and (iv) the Purchaser shall not be deemed to
have any affiliation with or control over any arm’s length
counter-party in any “derivative” transaction.
The Company further understands and acknowledges that (y) the
Purchaser may engage in hedging activities at various times during
the period that the Securities are outstanding, including, without
limitation, during the periods that the value of the Warrant Shares
deliverable with respect to the Warrants are being determined, and
(z) such hedging activities (if any) could reduce the value of the
existing stockholders’ equity interests in the Company at and
after the time that the hedging activities are being
conducted.  The Company acknowledges that such aforementioned
hedging activities do not constitute a breach of any of the
Transaction Documents.

 

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

 

(ff) Reserved.

 

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

 

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

 

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

 

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

 

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

 



 







 





 


3.2           Representations
and Warranties of the Purchaser. The Purchaser hereby
represents and warrants as of the date hereof and as of the Closing
Dates to the Company as follows (unless as of a specific date
therein):

 


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

 


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

 


 (c)           Purchaser
Status. At the time the Purchaser was offered the
Securities, it was, and as of the date hereof it is and on each
date on which it exercised any Warrants, either: (i) an
“accredited investor” as defined in Rule 501(a)(1),
(a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a
“qualified institutional buyer” as defined in Rule
144A(a) under the Securities Act.

 


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

 


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


 



ARTICLE IV.



OTHER AGREEMENTS OF THE PARTIES

 




4.1

Legends. The Purchased Shares
and Warrant Shares shall be issued free of legends.





 




4.2

Acknowledgment of Dilution of Voting Power. The
Company acknowledges that the issuance of the Securities will
result in dilution of the voting power of the outstanding shares of
Common Stock, which dilution will be substantial.





 




4.3

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





 




4.4

Securities Laws Disclosure; Publicity. The
Company will publicly announce the material terms of the
transactions contemplated hereby prior to 9:00am (New York time) on
the Trading Day immediately following the date of this Agreement.
The Company and the Purchaser shall consult with each other in
issuing any other press releases with respect to the transactions
contemplated hereby, and neither the Company nor the Purchaser
shall issue any such press release nor otherwise make any such
public statement without the prior consent of the Company, with
respect to any press release of the Purchaser, or without the prior
consent of the Purchaser, with respect to any press release of the
Company, which consent shall not unreasonably be withheld or
delayed, except if such disclosure is required by law, in which
case the disclosing party shall promptly provide the other party
with prior notice of such public statement or communication.
Notwithstanding the foregoing, the Company shall not publicly
disclose the name of the Purchaser, or include the name of the
Purchaser in any filing with the Commission or any regulatory
agency or Trading Market, without the prior written consent of the
Purchaser, except: (a) as required by federal securities law in
connection with the filing of final Transaction Documents with the
Commission and (b) to the extent such disclosure is required by law
or Trading Market regulations, in which case the Company shall
provide the Purchaser with prior notice of such disclosure
permitted under this clause (b).





 




4.5

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





 



 







 





 




4.6


Non-Public Information. Except
with respect to the material terms and conditions of the
transactions contemplated by the Transaction Documents, the Company
covenants and agrees that neither it, nor any other Person acting
on its behalf, will provide the Purchaser or its agents or counsel
with any information that the Company believes constitutes material
non-public information, unless prior thereto the Purchaser shall
have entered into a written agreement with the Company regarding
the confidentiality and use of such information. The Company
understands and confirms that the Purchaser shall be relying on the
foregoing covenant in effecting transactions in securities of the
Company.





 




4.7


Indemnification of Purchaser.
Subject to the provisions of this Section 4.7, the Company will
indemnify and hold the Purchaser and their respective directors,
officers, shareholders, members, partners, employees and agents
(and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or
any other title), each Person who controls the Purchaser (within
the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with
a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such
controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable
attorneys’ fees and costs of investigation that any such
Purchaser Party may suffer or incur as a result of or relating to
(a) any breach of any of the representations, warranties, covenants
or agreements made by the Company in this Agreement or in the other
Transaction Documents or (b) any action instituted against the
Purchaser Parties in any capacity, or any of them or their
respective Affiliates, by any stockholder of the Company who is not
an Affiliate of such Purchaser Party, with respect to any of the
transactions contemplated by the Transaction Documents (unless such
action is based upon a breach of such Purchaser Party’s
representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party
may have with any such stockholder or any violations by such
Purchaser Party of state or federal securities laws or any conduct
by such Purchaser Party which constitutes fraud, gross negligence,
willful misconduct or malfeasance). If any action shall be brought
against any Purchaser Party in respect of which indemnity may be
sought pursuant to this Agreement, such Purchaser Party shall
promptly notify the Company in writing, and the Company shall have
the right to assume the defense thereof with counsel of its own
choosing reasonably acceptable to the Purchaser Party. Any
Purchaser Party shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such
Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing,
(ii) the Company has failed after a reasonable period of time to
assume such defense and to employ counsel or such defense once
started is subsequently delayed owing to lack of timely payment by
the Company of legal fees and expenses or (iii) in such action
there is, in the reasonable opinion of counsel, a material conflict
on any material issue between the position of the Company and the
position of such Purchaser Party, in which case the Company shall
be responsible for the reasonable fees and expenses of no more than
one such separate counsel. The Company will not be liable to any
Purchaser Party under this Agreement (y) for any settlement by a
Purchaser Party effected without the Company’s prior written
consent, which shall not be unreasonably withheld or delayed; or
(z) to the extent, but only to the extent that a loss, claim,
damage or liability is attributable to any Purchaser Party’s
breach of any of the representations, warranties, covenants or
agreements made by such Purchaser Party in this Agreement or in the
other Transaction Documents. The indemnification required by this
Section 4.7 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and
when bills are received or are incurred. The indemnity agreements
contained herein shall be in addition to any cause of action or
similar right of any Purchaser Party against the Company or others
and any liabilities the Company may be subject to pursuant to
law.





 




4.8


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






 




4.9


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





 




4.10


Subsequent Equity
Sales. From the date hereof
until thirty (30) days after the Closing Date, neither the Company
nor any Subsidiary shall issue, enter into any agreement to issue
or announce the issuance or proposed issuance of any shares of
Common Stock or Common Stock Equivalents, except for an Exempt
Issuance.





 




4.11


Blue Sky
Filings. The Company shall take
such action as the Company shall reasonably determine is necessary
in order to obtain an exemption for, or to qualify the Securities
for, sale to the Purchaser under applicable securities or
“Blue Sky” laws of the states of the United States, and
shall provide evidence of such actions promptly upon request of the
Purchaser.





 



 







 





 



ARTICLE V.



MISCELLANEOUS

 




5.1


Termination.  This
Agreement may be terminated by the Purchaser, as to the
Purchaser’s obligations hereunder, if the Closing has not
been consummated within five (5) Business Days of the date hereof;
provided,
however, that such
termination will not affect the right of any party to sue for any
breach by any other party (or parties).





 




5.2


Fees and Expenses. At the
Closing, the Company has agreed to reimburse the Purchaser $25,000
for its legal fees in connection with the transaction contemplated
by the Transaction Documents, which such amount may be withheld
from the Purchaser’s Subscription Amount deliverable at
Closing. Except as expressly set forth in the Transaction Documents
to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all
other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement.
The Company shall pay all Transfer Agent fees (including, without
limitation, any fees required for same-day processing of any
instruction letter delivered by the Company), stamp taxes and other
taxes and duties levied in connection with the delivery of any
Securities to the Purchaser.





 




5.3


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





 




5.4


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





 




5.5


Amendments; Waivers. No
provision of this Agreement may be waived, modified, supplemented
or amended except in a written instrument signed, in the case of an
amendment, by the Company and the holders of at least 75% in
interest of the Securities then outstanding or, in the case of a
waiver, by the party against whom enforcement of any such waived
provision is sought. No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any
subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of
any such right.





 




5.6


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





 




5.7


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





 




5.8


No Third-Party Beneficiaries.
This Agreement is intended for the benefit of the parties hereto
and their respective successors and permitted assigns and is not
for the benefit of, nor may any provision hereof be enforced by,
any other Person, except as otherwise set forth in Section 4.7 and
this Section 5.8.





 




5.9


Governing Law. All questions
concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of
the State of Nevada, without regard to the principles of conflicts
of law thereof. Each party agrees that all legal proceedings
concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or
its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced
exclusively in the state or federal courts sitting in the Borough
of Manhattan, New York, New York Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal
courts sitting in the Borough of Manhattan, New York, New York for
the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees
not to assert in any 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 improper or is an
inconvenient venue for such proceeding. Each party hereby
irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any other
manner permitted by law. If either party shall commence an action,
suit or proceeding to enforce any provisions of the Transaction
Documents, then, in addition to the obligations of the Company
under Section 4.7, the prevailing party in such action, suit or
proceeding shall be reimbursed by the other party for its
reasonable attorneys’ fees and other costs and expenses
incurred with the investigation, preparation and prosecution of
such action or proceeding.





 




5.10


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





 




5.11


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





 



 







 





 




5.12


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





 




5.13


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





 




5.14


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





 




5.15


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





 




5.16

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





 




5.17

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





 




5.18

Saturdays, Sundays, Holidays,
etc.     






 




5.19

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





 




5.20


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





 



(Signature Pages Follow)


 




 








 






 


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





	


NATURALSHRIMP INCORPORATED


 


 

	

Address
for Notice:


 


15150
Preston Road, Suite 300 Dallas, Texas 75248


 


	

By:__________________________________________


     Name:


     Title:


 


With a
copy to (which shall not constitute notice):

	
 


	

 


Lucosky
Brookman LLP


101
Wood Avenue South, 5th Floor


Woodbridge,
NJ 08830


Attn:
Joseph M. Lucosky, Esq.


Email:
jlucosky@lucbro.com

	
 







 


[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

 


 


 


 


 


 


 


 


 


 


 


 




 








 






 


[PURCHASER
SIGNATURE PAGE TO SHMP SECURITIES PURCHASE AGREEMENT]


 


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

 


Name of
Purchaser:


Signature of Authorized Signatory of
Purchaser: __________________________


Name of
Authorized Signatory:


Title
of Authorized Signatory:


Address
for Notice to Purchaser:


 


 


 


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


 


 


 


Facsimile
Number:


 


Subscription
Amount: $3,000,000


Subscription
Date: