Exhibit 10.1


 


EXCHANGE AGREEMENT


  


 THIS EXCHANGE AGREEMENT (the “Agreement”) is dated as of March 24, 2020, by and between ShiftPixy, Inc.,
a Wyoming corporation (the “Company”), and CVI Investments, Inc. (the “Investor”).


 


 WHEREAS:


 


A.  
 Pursuant to that certain Exchange Agreement dated as of December 6, 2019, by and among the Company and the Investor (the
 “December 2019 Exchange Agreement”), the Investor received Notes (the “Notes”) convertible
into shares of the Company’s Common Stock, par value $0.0001 per share (the “Common Stock”) as set forth
therein;


 


B.  
The Company and the Investor desire to enter into this Agreement, pursuant to which, among other things, at the Closing
(as defined below), the Company and the Investor shall exchange the Notes for (i) an Exchange Note in the form of Exhibit A
hereto (the “Exchange Notes”) and a Common Stock purchase warrant in the form annexed hereto as Exhibit
B (the “Exchange Warrant”). Collectively, the Exchange Note and Exchange Warrant are sometimes referred
to herein as the “Exchange Securities”; and


 


C.  
The exchange of the Notes for the Exchange Securities are being made in reliance upon the exemption from registration provided
by Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”).


 


D.  
Upper case terms employed herein, unless otherwise defined, shall have the meanings attributed to them in the December 2019
Exchange Agreement, Exchange Notes and Exchange Warrant, as applicable.


 


NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants hereinafter contained, the parties hereto agree
as follows:


 


		1.	EXCHANGE



 


(a) Exchange.
Subject to the satisfaction or waiver of the conditions with respect to the Closing set forth in Sections 4 and 5 below,
at the Closing, the Investor and the Company shall, pursuant to Section 3(a)(9) of the Securities Act, exchange the
Notes for (i) the Exchange Notes in the principal amount of $1,828,550.00 and the Exchange Warrant initially convertible into
260,719 Warrant Shares (as defined therein), (the “Exchange”). Upon consummation of the Exchange, the
Investor acknowledges and agrees that the Notes are hereby terminated and extinguished in their entirety with no further
force and effect.


 


i. Closing. The issuance of the Exchange Securities (the “Closing”) shall occur remotely via the
electronic exchange of documents and signatures, or at such other place as the Parties may agree in writing. The date and time
of the Closing shall be 10:00 a.m., New York time, on which the conditions to the Closing set forth in Sections 4 and 5 below
are satisfied or waived (or such later date as is mutually agreed to by the Company and Investor).


 


ii. Consideration. At the Closing, the Exchange Securities shall be issued to the Investor in exchange for the Notes
without the payment of any additional consideration.


 


iii. Delivery. In exchange for the Notes, the Company shall, at the Closing, deliver or cause to be delivered to the Investor
the original Exchange Notes and the original Exchange Warrant.


 


(b) Other Documents. The Company and the Investor shall execute and/or deliver such other documents and agreements as
are reasonably necessary to effectuate the Exchange.


 






     


     


    

 


		2.	REPRESENTATIONS AND WARRANTIES



 


(a) Investor Representations and Warranties. The Investor hereby represents and warrants to the Company as follows:


 


i. Organization; Authority. The Investor 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 capacity, right, corporate,
partnership, limited liability company or similar power and authority, as applicable, to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement
and performance by the Investor of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate,
partnership, limited liability company or similar action, as applicable, on the part of the Investor. This Agreement has been duly
executed by the Investor, and when delivered by the Investor in accordance with the terms hereof, will constitute the valid and
legally binding obligation of the Investor, 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.


 


ii. Understandings or Arrangements. The Investor is acquiring the Exchange Securities hereunder as principal for its
own account and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution
of such Exchange Securities and the Conversion Shares (as defined in the Exchange Notes) and the Warrant Shares (as defined in
the Exchange Warrants) (the Conversion Shares and Warrant Shares are sometimes referred to herein as “Underlying Shares”)
(this representation and warranty not limiting the Investor’s right to sell the Exchange Securities and Underlying Shares
pursuant to any effective registration statement or otherwise in compliance with applicable federal and state securities laws).
The Investor is acquiring the Exchange Securities hereunder in the ordinary course of its business.


 


iii. Reliance on Exemptions. The Investor understands that the Exchange Securities and Underlying Shares are being offered
and sold to in reliance upon specific exemptions from the registration requirements of the Securities Act and state securities
laws and that the Company is relying upon the truth and accuracy of, and the Investor’s compliance with, the representations,
warranties, covenants, agreements, acknowledgments and understandings of the Investor contained in this Agreement in order to determine
the availability of such exemptions and the eligibility of the Investor to acquire the Exchange Securities and Underlying Shares.


 


iv. Risk of Loss. The Investor understands that its investment in the Exchange Securities and Underlying Shares hereunder
involves a significant degree of risk, including a risk of total loss of the Investor’s investment, and the Investor has
full cognizance of and understands all of the risk factors related to its acquisition of the Exchange Securities and Underlying
Shares, including, but not limited to, those risk factors included in all reports, schedules, forms, statements and other documents
filed by the Company under the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof, including the exhibits thereto
and documents incorporated by reference therein (the “SEC Reports”). The Investor understands that no representation
is being made as to the future value of the Shares.


 


v. Investor Status. At the time the Investor was offered the Exchange Securities and Underlying Shares hereunder, it
was, and as of the date hereof it is either: (i) an “accredited investor” as defined in Rule 501 of Regulation D promulgated
under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A under the Securities Act.
The Investor is not required to be registered as a broker-dealer under Section 15 of the Exchange Act.


 


vi. Experience of the Investor. The Investor, 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 Exchange Securities and Underlying Shares, and has so evaluated the merits and risks of such investment. The
Investor is able to bear the economic risk of an investment in the Exchange Securities and Underlying Shares and, at the present
time, is able to afford a complete loss of such investment.


 






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vii. Information. The Investors and its advisors, if any, have been furnished with all materials relating to the business,
finances and operations of the Company and materials relating to the Exchange that have been requested by the Investor. The Investor
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 the Investor or its advisors, if any, or its representatives shall modify, amend or affect
the Investor’s right to rely on the Company’s representations and warranties contained herein.


 


viii. No Governmental Review. The Investor 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 Exchange Securities or the fairness or suitability
of the investment in the Exchange Securities nor have such authorities passed upon or endorsed the merits of the offering of the
Exchange Securities.


 


ix. Transfer or Resale. The Investor understands that: (i) the Exchange Securities have not been and are not being registered
under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless subsequently
registered thereunder; (ii) any sale of the Exchange Securities made in reliance on Rule 144 may be made only in accordance with
the terms of Rule 144 or Rule 144A promulgated under the Securities Act (or a successor rule thereto) (collectively, “Rule
144”), and further, if Rule 144 is not applicable, any resale of the Exchange 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 Securities
Act) may require compliance with some other exemption under the Securities 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 Exchange Securities under
the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. Notwithstanding
the foregoing, the Exchange Securities may be pledged in connection with a bona fide margin account or other loan or financing
arrangement secured by the Exchange Securities and such pledge of Exchange Securities shall not be deemed to be a transfer, sale
or assignment of the Exchange Securities hereunder, and the Investor shall not be required to provide the Company with any notice
thereof or otherwise make any delivery to the Company pursuant to this Agreement.


 


x. No Conflicts. The execution, delivery and performance by the Investor of this Agreement and the consummation by the
Investor of the transactions contemplated hereby will not (i) result in a violation of the organizational documents of the Investor,
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 the Investor 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 the Investor, 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 the Investor to perform its obligations hereunder.


 


(b) Company Representations and Warranties. The Company represents and warrants to the Investor that, as of the date
hereof and as of the Closing:


 


i. 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, operations (including results thereof), assets, business, prospects or condition (financial or otherwise)
or prospects of the Company or any Subsidiary, individually or taken as a whole, (ii) the transactions contemplated hereby or any
other agreements or instruments to be entered into in connection herewith 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 Shift Human Capital Management Inc. (dba Shiftable HR), the Company has no Subsidiaries. “Subsidiaries”
means any Person in which the Company, directly or indirectly, (I) owns any of the outstanding capital stock or holds any equity
or similar interest of such Person or (II) controls or operates all or any part of the business, operations or administration of
such Person, and each of the foregoing, is individually referred to herein as a “Subsidiary.”


 






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ii. 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 Exchange Securities in accordance with the
terms hereof and thereof. The execution and delivery of this Agreement and the Transaction Documents by the Company, and the consummation
by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Exchange
Notes and the reservation for issuance and issuance of the Conversion Shares issuable upon conversion of the Exchange Notes and
the issuance of the Exchange Warrant and the reservation for issuance and issuance of the Warrant Shares issuable upon exercise
of the Exchange Warrant) have been duly authorized by the Company’s board of directors and (other than the filing with the
U.S. Securities and Exchange Commission (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 the Principal Market or any other trading market 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. “Transaction Documents” means, collectively, this Agreement, the Exchange Notes,
the Exchange Warrant, 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.


 


iii. Issuance of Exchange Securities. The issuance of the Exchange Notes, Underlying Shares and the Exchange Warrant are
duly authorized and upon issuance in accordance with the terms of the Transaction Documents 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.


 


iv. No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Exchange
Notes, the Exchange Warrant, the Conversion Shares and the Warrant Shares and the reservation for issuance of the Conversion Shares
and the Warrant Shares) will not (i) result in a violation of the Articles 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) except as set forth on Schedule (iv),
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, cancellation, repricing, adjustment, reset, modification
or amendment 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; with or without notice, lapse
of time or both.


 


v. 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 (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), any Governmental Entity (as defined below) or any regulatory or self-regulatory agency or any other
Person in order for the Company to execute, deliver or perform any of its 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, 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.


 






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vi. Acknowledgment Regarding Investor’s Exchange of Exchange Securities. The Company acknowledges and agrees that
the Investor is not (i) an officer or director of the Company or any of its Subsidiaries, (ii) 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 the Investor is not 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 the Investor 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 Investor’s purchase
of the Exchange Securities.


 


vii. 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 Exchange Securities under the Securities Act, whether
through integration with prior offerings or otherwise, or cause this offering of the Exchange Securities to require approval of
stockholders of the Company for purposes of the Securities 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 Exchange Securities
under the Securities Act or cause the offering of any of the Exchange Securities to be integrated with other offerings of securities
of the Company.


 


viii. Dilutive Effect. The Company further acknowledges that its obligation to issue the Conversion Shares pursuant to the
terms of the Exchange Notes in accordance with this Agreement and the Exchange Notes and the Warrant Shares upon exercise of the
Exchange Warrant in accordance with this Agreement and the Exchange Warrant 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.


 


ix. SEC Reports; Financial Statements. Except as set forth on Schedule (ix), during the two (2) years prior to the
date hereof, the Company has timely filed all SEC Reports. As of their respective dates, except as set forth on Schedule (ix),
the SEC Reports 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 Reports, and none of the SEC Reports, 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. The SEC Reports 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 the Investor which is not included in the SEC Reports 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 Reports (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.


 






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x. Absence of Certain Changes. Except as set forth in the SEC Reports, since the date of the Company’s most recent
audited financial statements contained in a Form 10-K, there has been no material adverse change and no material 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. 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 or (iii) made any capital expenditures, individually
or in the aggregate, outside of 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 2(b)(x), “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.


 


xi. 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 the Investor’s investment hereunder or (iii) could have a Material
Adverse Effect.


 






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xii. Conduct of Business; Regulatory Permits. Except as set forth in the SEC Reports, neither the Company nor any of its
Subsidiaries is in violation of any term of or in default under its Articles 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, Articles 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. Except as set forth in the SEC Reports, during the two years prior to the date
hereof, (i) the Common Stock has been listed or designated for quotation on the Principal Market, (ii) trading in the Common Stock
has not been suspended by the SEC or the Principal Market and (iii) 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.


 


xiii. Foreign Corrupt Practices. None of the Company, any of its Subsidiaries or 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 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.



 


xiv. 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.


 






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xv. Transactions With Affiliates. No current or former employee, partner, director, officer or stockholder (direct or
indirect) of the Company or its Subsidiaries, or any associate, or, to the knowledge of the Company, any affiliate of any thereof,
or any relative with a relationship no more remote than first cousin of any of the foregoing, is presently, or has ever been, (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 Exchange 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, stockholder 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 stock option agreements
outstanding under any stock option plan approved by the board of directors of the Company).


 


xvi. 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) 750,000,000
shares of Common Stock, and (B) 50,000,000 shares of Preferred Stock, none of which are issued and outstanding. No shares of Common
Stock are held in the treasury of the Company.


 


(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 (ii) 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 Exchange
Notes and the Exchange Warrant) and (B) that are, as of the date hereof, owned by Persons who are “affiliates” (as
defined in Rule 405 of the Securities 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 (xvi), 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).


 






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(iv) Existing Securities; Obligations. Except as disclosed in the SEC Reports: (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 Securities 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 Exchange Securities that have not been waived; 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.


 


(v) Organizational
Documents. The Company has furnished to the Investor true, correct and complete copies of the Company’s Articles of Incorporation,
as amended and as in effect on the date hereof (the “Articles 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.


  


xvii. Indebtedness and Other Contracts. Neither the Company nor any of its Subsidiaries, (i) except as disclosed on Schedule
(xvii), 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 Reports which are not so disclosed in the SEC Reports,
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.


 






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xviii. 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
the SEC Reports or in Schedule (xviii). 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 Securities Act or the 1934 Act. After reasonable inquiry of its employees, the Company is not aware of any fact which
might result in or form the basis for any such action, suit, arbitration, investigation, inquiry or other proceeding. Neither the
Company nor any of its Subsidiaries is subject to any order, writ, judgment, injunction, decree, determination or award of any
Governmental Entity.


 


xix. 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.


 


xx. 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 Securities 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. 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. 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.


 


xxi. 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)
Liens for current taxes not yet due and (b) 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) liens for current taxes not yet due and (b) zoning laws and other land use restrictions that do not impair the present
or anticipated use of the property subject thereto.


 






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xxii. Intellectual Property Rights. The Company and its Subsidiaries own or possess adequate rights or licenses to use all
trademarks, trade names, service marks, service mark registrations, service names, original works of authorship, patents, patent
rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property
rights and all applications and registrations therefor (“Intellectual Property Rights”) necessary to conduct
their respective businesses as now conducted and presently proposed to be conducted. Each of patents owned by the Company or any
of its Subsidiaries is listed on Schedule 3(xxii). Except as set forth in Schedule 3(xxii), none of the Company’s
Intellectual Property Rights have expired or terminated or have been abandoned or are expected to expire or terminate or are expected
to be abandoned, within three years from the date of this Agreement. The Company does not have any knowledge of any infringement
by the Company or its Subsidiaries of Intellectual Property Rights of others. There is no claim, action or proceeding being made
or brought, or to the knowledge of the Company or any of its Subsidiaries, being threatened, against the Company or any of its
Subsidiaries regarding its Intellectual Property Rights. Neither the Company nor any of its Subsidiaries is aware of any facts
or circumstances which might give rise to any of the foregoing infringements or claims, actions or proceedings. The Company and
its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their Intellectual
Property Rights.


 


xxiii. Environmental Laws. 


 


(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 any 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.


 


(iv) None of the Real Property 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.


 


xxiv. 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.


 






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xxv. Tax Status. The Company and each of its Subsidiaries (i) has timely made or filed 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 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.


 


xxvi. Internal Accounting and Disclosure Controls. Except as set forth on Schedule (xxvi), 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. 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. 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.


 


xxvii. 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.


    


xxviii. Investment Company Status. The Company is not, and upon consummation of the sale of the Exchange 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.


   


xxix. 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 Exchange Securities, or (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the
Exchange Securities.


 


xxx. 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 Exchange Securities are held by the Investor, 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 the Investor’s request.


 






    	 	12	 



     


    

 


xxxi. [Reserved].


 


xxxii. Transfer Taxes. At the Closing, 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 Exchange Securities to be sold to the Investor 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.


 


xxxiii. 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.


 


xxxiv. Shell Company Status. The Company is not, and has never been, an issuer identified in, or subject to, Rule 144(i).


 


xxxv. 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.


 


xxxvi. 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.


 


xxxvii. Management. Except as set forth in the SEC Reports, during the past five year period, no current or former officer or
director 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;



 






    	 	13	 



     


    

 


		(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.


 


xxxviii. Stock Option Plans. Each stock option granted by the Company was
granted (i) in accordance with the terms of the applicable stock option plan of the Company 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 policy or practice of the Company 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.


 


xxxix. No Disagreements with Accountants and Lawyers. 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.


 


xl. No Disqualification Events. 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 Securities Act) connected with the Company in any capacity at the time of sale (each, an “Issuer
Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications
described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification
Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person
is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under
Rule 506(e), and has furnished to the Investor a copy of any disclosures provided thereunder.


 


xli. Other Covered Persons. The Company is not aware of any Person (other than the Placement Agent) that has been or will
be paid (directly or indirectly) remuneration for solicitation of the Investor in connection with the sale of the Exchange Securities.


 


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


 






    	 	14	 



     


    

 


xliii. 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.


 


xliv. 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.


 


xlv. Ranking of Exchange Notes. No Indebtedness of the Company, at the Closing, will be senior to the Exchange Notes in
right of payment, whether with respect to payment or redemptions, interest, damages, upon liquidation or dissolution or otherwise.


 


xlvi. Disclosure. The Company confirms that neither it nor any other Person acting on its behalf has provided any of the
Investor or its 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 the Investor will rely on the
foregoing representations in effecting transactions in securities of the Company. All disclosure provided to the Investor 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 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 the Investor 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. Each press release
issued by the Company or any of its Subsidiaries during the twelve (12) months preceding the date of this Agreement did not at
the time of release contain any untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the circumstances under which they are 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 you have been prepared in good faith based upon reasonable assumptions
and represented, at the time each such financial projection or forecast was delivered to the Investor, 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 the Investor does not make or has not made
any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth
in Section 2(a).


 


xlvii. 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, in each case, is or could become applicable to any Investor as a result of the transactions contemplated
by this Agreement, including, without limitation, the Company’s issuance of the Exchange Securities and any Investor’s
ownership of the Exchange Securities.


 






    	 	15	 



     


    

 


xlviii. Acknowledgement Regarding Investor’s 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, the Investor has not been asked by the Company or any of its Subsidiaries to agree, nor has the Investor 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 Exchange Securities for any specified term; (ii) any Investor, and counterparties in
 “derivative” transactions to which any such Investor is a party, directly or indirectly, presently may have a “short”
position in the Common Stock which was established prior to such Investor’s knowledge of the transactions contemplated by
the Transaction Documents; (iii) each Investor shall not be deemed to have any affiliation with or control over any arm’s
length counterparty in any “derivative” transaction; and (iv) each Investor may rely on the Company’s obligation
to timely deliver shares of Common Stock upon conversion, exercise or exchange, as applicable, of the Exchange 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 Investors 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 Exchange Securities are outstanding, including, without limitation, during the periods that the value and/or number of the
Warrant Shares or Conversion Shares, as applicable, deliverable with respect to the Exchange 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 Exchange Notes, the Exchange Warrants or any other Transaction
Document or any of the documents executed in connection herewith or therewith.


 


		3.	COVENANTS.



 


(a) Best Efforts. The Investor shall use its best efforts to timely satisfy each of the
covenants hereunder and conditions to be satisfied by it as provided in Section 4 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 5 of
this Agreement.


 


(b) Form D and Blue Sky. The Company shall file a Form D with respect to the Exchange Securities as required under Regulation
D and to provide a copy thereof to the Investor promptly after such filing. The Company shall, on or before the Closing, take such
action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to, qualify the Exchange
Securities for sale to the Investor 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 Investor on or prior to the Closing. 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 Exchange 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 Exchange Securities to the Investor.


 


(c) Reporting Status. Until the date on which the Investor shall have sold all of the shares of Common Stock issuable
in connection with this Agreement (the “Reporting Period”), the Company shall timely file all reports required
to be filed with the SEC pursuant to the 1934 Act, 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. The Company shall take all actions necessary to maintain its eligibility to register the shares of Common Stock
issuable in connection with this Agreement for resale by the Investor on Form S-3.


 


(d) Holding Period. For the purposes of Rule 144, the Company acknowledges that the holding period of the Exchange
Securities and Underlying Shares may be tacked onto the holding period of the Note, and the Company agrees not to take a position
contrary to this Section 3(d).


 


(e) Financial Information. The Company agrees to send the following to each Investor (as defined in the Registration
Rights Agreement) 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 Securities 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, facsimile 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.


 






    	 	16	 



     


    

 


(f) Listing. The Company shall promptly secure the listing or designation for quotation (as the case may be) of all of
the Underlying Shares 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 shares of Common Stock issuable in connection with this Agreement
from time to time issuable under the terms of the Transaction Documents on such national securities exchange or automated quotation
system. 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 Capital Market, the Nasdaq Global Market or the Nasdaq
Global Select Market (each, an “Eligible Market”). 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 3(f).


 


(g) [Reserved].


 


(h) Pledge of Exchange Securities. Notwithstanding anything to the contrary contained in
this Agreement, the Company acknowledges and agrees that the Exchange Securities may be pledged by the Investor in connection with
a bona fide margin agreement or other loan or financing arrangement that is secured by the Exchange Securities. The pledge of the
Exchange Securities shall not be deemed to be a transfer, sale or assignment of the Exchange Securities hereunder, and the Investor
shall not 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. 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 Exchange Securities to such pledgee by the Investor.


 


(i) Disclosure of Transactions and Other Material Information. 


 


(i) Disclosure of Transaction. The Company may, 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 Investors 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 Amendment Agreement, the form of Notes, the
form of the Warrants and the form of the Registration Rights Agreement) (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 Investors 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 Investors or any of their affiliates, on the other hand, shall terminate.


 






    	 	17	 



     


    

 


(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 the Investor 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 the
Investor (which may be granted or withheld in the Investor’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 the Investor), in addition to any other remedy provided herein or in the Transaction Documents, the Investor 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. The Investor shall not 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 the Investor without the Investor’s consent,
the Company hereby covenants and agrees that the Investor 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 the Investor 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 the Investor, 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)
the Investor 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 Investor (which may be granted or withheld in the Investor’s sole discretion),
the Company shall not (and shall cause each of its Subsidiaries and affiliates to not) disclose the name of the Investor 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 the Investor shall not have (unless
expressly agreed to by the Investor after the date hereof in a written definitive and binding agreement executed by the Company
and the Investor), 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.


 


(iii) Other Confidential Information. Disclosure Failures; Disclosure Delay Payments. In addition to other remedies set
forth in this Section 3(i), and without limiting anything set forth in any other Transaction Document, at any time after the Closing
if the Company, any of its Subsidiaries, or any of their respective officers, directors, employees or agents, provides the Investor
with material non-public information relating to the Company or any of its Subsidiaries (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 the Investor 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 the Investor or any of its 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 the Investor 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 the Investor 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 the Investor an amount in cash equal to the greater of (I) two
percent (2%) 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 the Investor 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 3(g)(ii) 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.


 






    	 	18	 



     


    

 


(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 Exchange Warrant) 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 the Investor pursuant to this Agreement or any other Transaction Document, multiplied by (y) 10% of the aggregate
daily dollar trading volume (as reported on Bloomberg (as defined in the Exchange Warrant)) of the Common Stock on the Principal
Market for each Trading Day (as defined in the Exchange Warrant) 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 the Investor authorized the delivery of such Confidential Information,
either (I) if the Company and the Investor 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 the Investor first received any Confidential Information or (y) if the Investor did not authorize the delivery of such Confidential
Information, the first (1st) Business Day after the Investor’s receipt of such Confidential Information.


 


(j) [Reserved].


 


(k) [Reserved]


 


(l) Reservation of Shares. So long as either the Exchange Notes or the Exchange Warrant
remains 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 (i) the maximum number of shares of Common Stock issuable upon conversion of all the Exchange
Notes then outstanding (assuming for purposes hereof that (x) the Exchange Notes is convertible at the Conversion Price then in
effect and (y) any such conversion shall not take into account any limitations on the conversion of the Exchange Notes set forth
in the Exchange Notes), and (ii) the maximum number of Warrant Shares issuable upon exercise of the Exchange Warrant then outstanding
(without regard to any limitations on the exercise of the Exchange Warrant set forth therein) (collectively, the “Required
Reserve Amount”); provided that at no time shall the number of shares of Common Stock reserved pursuant to this Section
3(l) be reduced other than proportionally in connection with any conversion, exercise and/or redemption, as applicable of Exchange
Notes and the Exchange Warrant. 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.


 






    	 	19	 



     


    

 


(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) [Reserved]


 


(o) 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.


 


(p) Restriction on Redemption and Cash Dividends. So long as the Exchange 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 Investors.


 


(q) Corporate Existence. So long as the Investor beneficially owns either the Exchange
Notes or the Exchange Warrant, the Company shall not be party to any Fundamental Transaction (as defined in the Amended Note) unless
the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Exchange Notes
and the Exchange Warrant.


 


(r) [Reserved].


 


(s) Conversion and Exercise Procedures. Each of the form of Exercise Notice (as defined in the Warrants) included in
the Warrants and the form of Conversion Notice (as defined in the Exchange Notes) included in the Exchange Notes set forth the
totality of the procedures required of the Investors in order to exercise the Warrants or convert the Exchange Notes. No additional
legal opinion, other information or instructions shall be required of the Investor to exercise the Exchange Warrant or convert
the Exchange Notes. The Company shall honor exercises of the Exchange Warrant and conversions of the Exchange Notes and shall deliver
the Conversion Shares and Warrant Shares in accordance with the terms, conditions and time periods set forth in the Exchange Notes
and the Exchange Warrant.


 


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


 


(u) General Solicitation(a). None of the Company, any of its affiliates
(as defined in Rule 501(b) under the Securities Act) or any person acting on behalf of the Company or such affiliate will solicit
any offer to buy or offer or sell the Exchange 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.


 


(v) Integration(b). None of the Company, any of its affiliates (as
defined in Rule 501(b) under the Securities 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 Securities Act) which will
be integrated with the sale of the Exchange Securities in a manner which would require the registration of the Exchange Securities
under the Securities 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 Securities Act or the rules and regulations of the Principal Market, with the issuance of Exchange Securities contemplated
hereby.


 






    	 	20	 



     


    

 


(w) Notice of Disqualification Events(a). The Company will notify
the Investor in writing, prior to the Closing 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.


 


		4.	CONDITIONS TO COMPANY’S OBLIGATIONS HEREUNDER.



 


The obligations of the Company to the Investor
hereunder are subject to the satisfaction 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 the Investor with prior written notice
thereof:


 


(a) The Investor shall have duly executed this Agreement and delivered the same to the Company.


 


(b) The representations and warranties of the Investor shall be true and correct in all material respects as of the date when
made and as of the Closing Date as though 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 specified date), and the Investor shall have performed, satisfied and complied
in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or
complied with by the Investor at or prior to the Closing Date.


 


		5.	CONDITIONS TO INVESTOR’S OBLIGATIONS HEREUNDER.



 


The obligations of the Investor hereunder
are subject to the satisfaction of each of the following conditions, provided that these conditions are for the Investor’s
sole benefit and may be waived by the Investor at any time in its sole discretion by providing the Company with prior written notice
thereof:


 


(a) The Company shall have duly executed and delivered this Agreement to the Investor.


 


(b) At the Closing, the Company shall have delivered the original Exchange Notes and Exchange Warrant.


 


(c) The Company shall have delivered to the Investor a certificate signed by the Chief Executive Officer of the Company with
the authorizing resolutions.


 


(d) The representations and warranties of the Company 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 date) and the Company shall have performed, satisfied and complied
in all material 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.


 


(e) No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions
contemplated by this Agreement.


 


		6.	TERMINATION.



 


In the event that the
Closing does not occur on or before May 31, 2020 due to the Company’s or the Investor’s failure to satisfy the
conditions set forth in Sections 4 and 5 hereof (and the nonbreaching party’s failure to waive such unsatisfied conditions(s)),
the nonbreaching party shall have the option to terminate this Agreement with respect to such breaching party at the close of business
on such date without liability of any party to any other party. Upon such termination, the terms hereof shall be null and void.


 






    	 	21	 



     


    

 


		7.	RELEASE



 


(a) Investor on behalf of itself and its past, present and future heirs, subsidiaries, affiliates or other entities, executors,
administrators, successors and assigns, shareholders, directors, officers, partners, employees, agents, attorneys, members, controlling
persons, advisors, representatives or other entities controlled by them (hereinafter, collectively referred to as the “Investor
Releasors”), and in consideration of the transactions contemplated by this Agreement, and other good and valuable consideration
received from the Company, receipt whereof is hereby acknowledged, releases and discharges the Company and the Company’s
past, present and future heirs, subsidiaries, affiliates or other entities, executors, administrators, successor and assigns, shareholders,
directors, officers, partners, employees, agents, attorneys, members, controlling persons, advisors, representatives or other entities
controlled by them (collectively, hereinafter referred to as the “Company Releasees”) from any and all actions,
causes of and action, suits, debts, dues, sums of money, accounts, reckonings, bonds, trespasses, damages, judgments, extents,
executions, agreements, claims and demands whatsoever, in law, admiralty, or equity, which against the Company Releasees the Investor
Releasors ever had, now have or hereafter can, shall or may have, from the beginning of the world to, and including, the date of
this Agreement, arising out of, based on, resulting from, with respect to or by reason of (i) that certain Securities Purchase
Agreement dated as of June 4, 2018 by and between the Company and the Investor, including, without limitation, any notes or warrants
issued pursuant thereto, and the transactions contemplated thereby (ii) that certain Limited Settlement Agreement dated as of December
20, 2018 by and between the Company and the Investor, including, without limitation, any notes issued pursuant thereto, and the
transactions contemplated thereby, (iii) that certain Securities Purchase Agreement dated as of March 11, 2019 by and between the
Company and the Investor, including, without limitation, any notes or warrants issued pursuant thereto, and the transactions contemplated
thereby, and (iv) that certain Exchange Agreement dated as of December 5, 2019 by and between the Company and the Investor, including,
without limitation, the Notes and Warrants issued pursuant thereto.


 


(b) The Company on behalf of itself and its past, present and future heirs, subsidiaries, affiliates or other entities, executors,
administrators, successors and assigns, shareholders, directors, officers, partners, employees, agents, attorneys, members, controlling
persons, advisors, representatives or other entities controlled by them (hereinafter, collectively referred to as the “Company
Releasors”), and in consideration of the transactions contemplated by this Agreement, and other good and valuable consideration
received from the Company, receipt whereof is hereby acknowledged, releases and discharges the Investor and the Investor’s
past, present and future heirs, subsidiaries, affiliates or other entities, executors, administrators, successor and assigns, shareholders,
directors, officers, partners, employees, agents, attorneys, members, controlling persons, advisors, representatives or other entities
controlled by them (collectively, hereinafter referred to as the “Investor Releasees”) from any and all actions,
causes of and action, suits, debts, dues, sums of money, accounts, reckonings, bonds, trespasses, damages, judgments, extents,
executions, agreements, claims and demands whatsoever, in law, admiralty, or equity, which against the Investor Releasees the Company
Releasors ever had, now have or hereafter can, shall or may have, from the beginning of the world to, and including, the date of
this Agreement, arising out of, based on, resulting from, with respect to or by reason of (i) that certain Securities Purchase
Agreement dated as of June 4, 2018 by and between the Company and the Investor, including, without limitation, any notes or warrants
issued pursuant thereto, and the transactions contemplated thereby (ii) that certain Limited Settlement Agreement dated as of December
20, 2018 by and between the Company and the Investor, including, without limitation, any notes issued pursuant thereto, and the
transactions contemplated thereby, (iii) that certain Securities Purchase Agreement dated as of March 11, 2019 by and between the
Company and the Investor, including, without limitation, any notes or warrants issued pursuant thereto, and the transactions contemplated
thereby and (iv) that certain Exchange Agreement dated as of December 5, 2019 by and between the Company and the Investor, including,
without limitation, the Notes and Warrants issued pursuant thereto.


 


		8.	MISCELLANEOUS.



 


		(a)	No Commissions. Neither the Company nor the Investor has paid or given, or will pay or give,
to any person, any commission or other remuneration, directly or indirectly, in connection with the transactions contemplated by
this Agreement.



 


		(b)	Security Interest. Investor is authorized to take actions necessary with respect to the
security interest granted to the Investor in order to memorialize the transactions described in this Agreement and protect such
security interest.



 


		(c)	Notice. All notices, demands, requests, consents, approvals, and other communications required
or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited
in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service
with charges prepaid, or (iv) transmitted via electronic mail, in each case addressed as set forth below or to such other address
as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to
be given hereunder shall be deemed effective (a) upon hand delivery at the address or number designated below (if delivered on
a business day during normal business hours where such notice is to be received), or the first business day following such delivery
(if delivered other than on a business day during normal business hours where such notice is to be received), (b) on the second
business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur or (c) on the date sent by e-mail of a PDF document (with confirmation of
transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business
hours of the recipient. The addresses for such communications shall be: (i) if to the Company, to: ShiftPixy, Inc., 1 Venture,
Suite 150, Irvine, CA 92618, Attn: Scott Absher, Chief Executive Officer, E-mail: scott.absher@shiftpixy.com, with a copy by electronic
mail only to (which shall not constitute notice): Daniel Bagliebter, Esq., 666 Third Avenue, New York, New York 10017, E-mail:
dabagliebter@mintz.com, and (ii) if to the Holder, to: the addresses indicated on the signature pages hereto.



 






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		(d)	Register; Transfer Agent Instructions; Legend. The Company and Investor hereby make and
incorporate herein by this reference the covenants made and undertaken in Article 5 of the Purchase Agreement, mutatis mutandum,
with respect to the Exchange Securities and Underlying Shares.



 


		(e)	Incorporation by Reference. Article 9 of the Purchase Agreement is incorporated herein by
this reference and made a part hereof with respect to this Agreement.



 


 


 


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left blank]


 






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


 


	 	COMPANY: SHIFTPIXY, INC.
	 	 	 
	 	By:  	
         

	 	 	Name:  	Scott Absher
	 	 	Title:  	Chief Executive Officer 


  




    	 	24	 



     


    

 


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


 


	 	INVESTOR: CVI INVESTMENTS, INC.
	 	 	 
	 	By:  	 
	 	 	Name:  	 
	 	 	Title:  	 
	 	 	 	 
	 	
        Address for Notice: 

	 	 
	 	
        E-mail Address for Notice: 

	 	 	 	 
	 	Facsimile Number for Notice:


  



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