SECURITIES
PURCHASE AGREEMENT


 


This
Securities Purchase Agreement (this “Agreement”) is dated as of August [  ], 2019, between Transportation
and Logistics Systems, Inc., a Nevada corporation (the “Company”), and each purchaser identified on the signature
pages hereto (each, including its successors and assigns, a “Purchaser” and collectively the “Purchasers”).


 


WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to an exemption from the registration requirements
of Section 5 of the Securities Act contained in Section 4(a)(2) thereof and/or Rule 506(b) thereunder, the Company desires to
issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities
of the Company as more fully described in this Agreement.


 


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


 


ARTICLE
I.

DEFINITIONS


 


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


 


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


 


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


 


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


 


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


 


“Charter”
means the Articles or Certificate of Incorporation of the Company.


 


“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.


 


“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii)
the Company’s obligations to deliver the Securities to be issued and sold, in each case, have been satisfied or waived,
but in no event later than the second Trading Day following the date hereof.


 




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“Common
Stock” means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.


 


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


 


“Company
Counsel” means Pryor Cashman LLP.


 


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


 


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


 


“Equity
Investment” means that certain contemplated offering whereby the Company shall raise at least $1 million from the sale of
common stock.


 


“Escrow
Agent” means Nason, Yeager, Gerson, Harris & Fumero, P.A.


 


“Escrow
Agreement” means the escrow agreement, in the form of Exhibit A.


 


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


 


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


 


“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company,
in an aggregate amount not to exceed 10% of shares of Common Stock outstanding pursuant to any stock or option plan duly adopted
for such purpose by the Board of Directors, (b) securities issuable upon the exercise or exchange of or conversion of any Securities
issued hereunder and/or other securities issuable pursuant to existing agreements, exercisable or exchangeable for or convertible
into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been
amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange
price or conversion price of such securities (other than in connection with stock dividends, stock splits or combinations) or
to extend the term of such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a
majority of the directors of the Company, provided that any such issuance shall only be to a Person (or to the equityholders of
a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic
with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds,
but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or
to an entity whose primary business is investing in securities, or (d) securities issued for bonafide services provided to the
Company not for the purpose of raising capital or to an entity whose primary business is investing in securities.


 




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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Lead
Investor” means [  ].


 


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


 


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


 


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


 


“MCA
Debt” means all of the outstanding amounts owed by the Company under secured merchant loans.


 




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“MCA
Debt Holders” means the Purchasers who received their Securities in exchange for the forgiveness of MCA Debt.


 


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


 


“Notes”
mean the Original Issue Discount Senior Secured Convertible Notes issued to the Purchasers, in the form of Exhibit B attached
hereto, which bear interest at the rate of 10% per annum, and shall be secured pursuant to a Security Agreement.


 


“Note
Conversion Price” means $2.50, subject to adjustment as provided in the Note.


 


“Participation
Maximum” shall have the meaning ascribed to such term in Section 4.11(a).


 


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


 


“Pre-Notice”
shall have the meaning ascribed to such term in Section 4.11(a).


 


“Pro
Rata Portion” shall have the meaning ascribed to such term in Section 4.11(d).


 


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


 


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


 


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


 


“Registration
Rights Agreement” means the registration rights agreement, in the form of Exhibit C.


 


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


 


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


 


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


 


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


 




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


 


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


 


“Securities”
means the Notes and the Warrants.


 


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


 


“Security
Agreement” means the security agreement, in the form of Exhibit D, providing the Purchasers with a first lien on
all of the assets of the Company.


 


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


 


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


 


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


 


“Subsequent
Financing” shall have the meaning ascribed to such term in Section 4.11(a).


 


“Subsequent
Financing Notice” shall have the meaning ascribed to such term in Section 4.11(a).


 


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


 


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


 


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


 




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


 


“Transfer
Agent” means ClearTrust, LLC, the transfer agent of the Company, with a mailing address of 16540 Pointe Village Drive, Suite
205, Lutz, Florida 33558, and a facsimile number of (813) 388-4549, and any successor transfer agent of the Company.


 


“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.12(a).


 


“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)) (or a similar organization or agency succeeding
to its functions of reporting prices), (b) if no volume weighted average price of the Common Stock can be ascertained from the
Trading Market, the average closing price of the Common Stock during the ten (10) Trading Days preceding such date, or (c) in
all other cases, the fair market value of a share of Common Stock as determined by the Board of Directors of the Company.


 


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


 


“Warrant
Exercise Price” means $3.50 per share.


 


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


 


ARTICLE
II.

PURCHASE AND SALE


 


2.1
Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with
the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and each Purchaser, severally
and not jointly, agrees to purchase an aggregate of up to (i) $2,580,952 face value of original issue discount Notes for a total
purchase price of $2,322,854, and (ii) 1,032,385 Warrants, which is equal to 100% of the Shares issuable upon conversion of the
Notes. Each Purchaser shall deliver to the Escrow Agent, via wire transfer immediately available funds equal to such Purchaser’s
Subscription Amount as set forth on the signature page hereto executed by such Purchaser, and the Company shall deliver to the
Escrow Agent each Purchaser’s respective Note and a Warrant as determined pursuant to Section 2.2(a), and the Company and
each Purchaser shall deliver the other items set forth in Section 2.2(b) deliverable at the Closing. Upon satisfaction of the
covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of Company Counsel or such
other location as the parties shall mutually agree. If a Closing is not held on or before August 31, 2019, the Escrow Agent will
return all Subscription Amounts, if any such amounts have been funded, without interest or deduction to each prospective Purchaser.


 




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2.2
Deliveries.


 


(a)
On or prior to Closing Date, the Company shall deliver or cause to be delivered to the Escrow Agent on behalf of each Purchaser
the following:


 


(i)
this Agreement duly executed by the Company;


 


(ii)
an original Note, convertible at the Note Conversion Price, registered in the name of such Purchaser;


 


(iii)
an original Warrant, exercisable at the Warrant Exercise Price, registered in the name of such Purchaser;


 


(iv)
a Security Agreement providing the Purchasers with a lien on all of the assets of the Company;


 


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


 


(vi)
the Escrow Agreement duly executed by the Company;


 


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


 


(viii)
a Board Consent approving the issuance of the Notes and the execution of the Transaction Documents on behalf of the Company.


 


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


 


(i)
this Agreement duly executed by such Purchaser;


 


(ii)
the Registration Rights Agreement duly executed by the Purchaser;


 


(iii)
the Escrow Agreement duly executed by such Purchaser; and


 


(iv)
such Purchaser’s Subscription Amount by wire transfer to the Escrow Agent.


 




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2.3
Closing Conditions.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(iii)
the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;


 


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


 


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


 




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(vi)
the Company shall have raised at least $1 million from the sale of equity either prior to or simultaneously with the Closing.


 


ARTICLE
III.

REPRESENTATIONS AND WARRANTIES


 


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


 


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


 


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


 




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


 


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


 


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


 




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


 


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


 




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


 


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


 




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


 


(k)
Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its
Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such
Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company
and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no effort
is underway to unionize or organize the employees of the Company or any Subsidiary. To the knowledge of the Company, no executive
officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement
or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not
subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and
its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment
and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance
could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. There is no workmen’s
compensation liability matter, employment-related charge, complaint, grievance, investigation, inquiry or obligation of any kind
pending, or to the Company’s knowledge, threatened, relating to an alleged violation or breach by the Company or its Subsidiaries
of any law, regulation or contract that could, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect. The Company has no reason to believe that any individual may commence an Action or file a claim with any governmental
authority against the Company alleging sexual harassment or any type of discrimination or violation of any Laws.


 




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(l)
Compliance. Except as set forth on Schedule 3.1(l), neither the Company nor any Subsidiary: (i) is in default under
or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result
in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it
is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument
to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived),
(ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or
has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation
all foreign, federal, state and local laws and regulations relating to taxes, securities, environmental protection, occupational
health and safety, product quality and safety, transportation, and employment and labor matters, except in each case as could
not have or reasonably be expected to result in a Material Adverse Effect.


 


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


 


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


 




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


 


(p)
Intellectual Property.


 


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


 


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


 


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


 




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


 


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


 


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


 


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


 


(v)
Registration Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the
Securities Act of any securities of the Company or any Subsidiary except for the investors in the Equity Investment. The Company
shall not file any registration statement for the investors in the Equity Investment prior to filing the registration statement
required hereunder.


 




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


 


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


 


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


 




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


 


(aa)
Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the
receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s
assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small
capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account
the particular capital requirements of the business conducted by the Company, consolidated and projected capital requirements
and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would
receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient
to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend
to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable
on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe that it will
file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the
Closing Date. Schedule 3.1(aa) set forth as of the time immediately following the Closing hereof all outstanding Permitted
Indebtedness of the Company or any Subsidiary. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities
for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of
business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or
not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties
by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business;
and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance
with GAAP. Except as set forth on Schedule 3.1(aa), neither the Company nor any Subsidiary is in default with respect to
any Indebtedness. Following the Closing, the Company shall have no Indebtedness except Permitted indebtedness.


 




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


 


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


 


(dd)
Accountants. The Company’s accounting firm is set forth in the SEC Reports. To the knowledge and belief of the Company,
such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) has expressed its opinion
with respect to the financial statements included in the Company’s Annual Report for the fiscal year ending December 31,
2018.


 


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


 




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(ff)
Acknowledgement Regarding Purchaser’s Trading Activity. Notwithstanding anything in this Agreement or elsewhere to
the contrary (except for Sections 3.2(f) and 4.13 hereof), it is understood and acknowledged by the Company that: (i) no Purchaser
has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short,
securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities
for any specified term; (ii) past or future open market or other transactions by any Purchaser, specifically including, without
limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement
transactions, may negatively impact the market price of the Company’s publicly-traded securities; (iii) any Purchaser, and
counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, presently
may have a “short” position in the Common Stock, and (iv) each Purchaser shall not be deemed to have any affiliation
with or control over any arm’s length counter-party in any “derivative” transaction. The Company further understands
and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during the period that the
Securities are outstanding, including, without limitation, during the periods that the value of the Warrant Shares deliverable
with respect to the Warrants are being determined, and (z) such hedging activities (if any) could reduce the value of the existing
shareholders’ equity interests in the Company at and after the time that the hedging activities are being conducted. The
Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.


 


(gg)
Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly
or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of the Common Stock
to facilitate the sale of the Securities, or (ii) paid or agreed to pay to any Person any compensation for soliciting another
to purchase the Securities or any other securities of the Company.


 


(hh)
Private Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2,
no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers
as contemplated hereby.


 


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


 


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


 




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


 


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


 


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


 


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


 


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


 


(pp)
Equity Investment. The Company hereby represents that it raised at least $1 million from the sale of equity in connection
with the Equity Investment.


 




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3.2
Representations and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents
and warrants to the Company as follows which representations and warranties shall be true and correct as of the date hereof and
as of the Closing Date:


 


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


 


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


 


(c)
Purchaser Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, an accredited
investor within the meaning of Rule 501 under the Securities Act. No Purchaser is subject to any of the “Bad Actor”
disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”),
except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3).


 




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


 


(e)
Access to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents
(including all exhibits and schedules thereto) and the SEC Reports and has been afforded, subject to Regulation FD, (i) the opportunity
to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the
terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to
information about the Company and its financial condition, results of operations, business, properties, management and prospects
sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company
possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with
respect to the investment. Such Purchaser acknowledges and agrees that neither the Company nor anyone else has provided such Purchaser
with any information or advice with respect to the Securities nor is such information or advice necessary or desired.


 


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


 




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(g)
Proceeds from the Offering. Such Purchaser acknowledges that certain Purchasers are purchasing their Securities in consideration
for the forgiveness of MCA Debt.


 


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


 


ARTICLE
IV.

OTHER AGREEMENTS OF THE PARTIES


 


4.1
Removal of Legends.


 


(a)
The Shares, the Warrants and Warrant Shares may only be disposed of in compliance with state and federal securities laws. In connection
with any transfer of the Shares, Warrants or Warrant Shares other than pursuant to an effective registration statement or Rule
144, to the Company or to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company
may require the transferor to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable
to the Company at the cost of the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company,
to the effect that such transfer does not require registration of such transferred Shares, Warrants or Warrant Shares under the
Securities Act.


 


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


 


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


 




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The
Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or all of the Shares or Warrant Shares to a financial institution
that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by
the provisions of this Agreement and, if required under the terms of such arrangement, such Purchaser may transfer pledged or
secured Shares or Warrant Shares to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval
of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection
therewith. Further, no notice shall be required of such pledge. At the appropriate Purchaser’s expense, the Company will
execute and deliver such reasonable documentation as a pledgee or secured party of Shares and Warrant Shares may reasonably request
in connection with a pledge or transfer of the Shares or Warrant Shares.


 


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


 




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(d)
In addition to such Purchaser’s other available remedies, (i) the Company shall pay to a Purchaser, in cash, as partial
liquidated damages and not as a penalty, for each $1,000 of the principal amount of the Notes being converted or the value of
the Warrant Shares for which a Warrant is being exercised (based on the Warrant Exercise Price), $10 per Trading Day for each
Trading Day after the Legend Removal Date (increasing to $20 per Trading Day after the fifth Trading Day) until such certificate
is delivered without a legend. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Company’s
failure to deliver certificates representing any Securities as required by the Transaction Documents, and such Purchaser shall
have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief, and (ii) if after the Legend Removal Date such Purchaser purchases (in an open market transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Purchaser of all or any portion of the number
of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number of shares
of Common Stock that such Purchaser anticipated receiving from the Company without any restrictive legend, then, the Company shall
pay to such Purchaser, in cash, an amount equal to the excess of such Purchaser’s total purchase price (including brokerage
commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including brokerage commissions
and other out-of-pocket expenses, if any) (the “Buy-In Price”) over the product
of (A) such number of Shares or Warrant Shares that the Company was required to deliver to such Purchaser by the Legend Removal
Date multiplied by (B) the highest closing sale price of the Common Stock on any Trading Day during the period commencing on the
date of the delivery by such Purchaser to the Company of the applicable Shares or Warrant Shares (as the case may be) and ending
on the date of such delivery and payment under this Section 4.1(d).


 


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


 




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4.2
Furnishing of Information.


 


(a)
Until the earliest of the time that (i) no Purchaser owns Shares and Warrant Shares or (ii) the Warrants have expired, the Company
covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required
to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting
requirements of the Exchange Act.


 


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


 




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4.3
Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in Section 2(a)(1) of the Securities Act) that would be integrated with the offer or sale of the Securities
for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing
of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.


 


4.4
Securities Laws Disclosure; Publicity. The Company shall file a Current Report on Form 8-K disclosing the material terms
of this Agreement, including the Transaction Documents as exhibits thereto, with the SEC within the time required by the Exchange
Act. From and after the filing of the Form 8-K as provided in the preceding sentence, the Company represents to each Purchaser
that it shall have publicly disclosed all material, non-public information delivered to each Purchaser by the Company or any of
its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated
by the Transaction Documents. In addition, effective upon the issuance of such Form 8-K, the Company acknowledges and agrees that
any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its
Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers
or any of their Affiliates on the other hand, shall terminate. The Company and each Purchaser shall consult with each other in
issuing any press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall
issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect
to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the
Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case
the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding
the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any
filing with the SEC or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (a)
as required by the staff of the SEC in connection with the filing of final Transaction Documents with the SEC and (b) to the extent
such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with
prior notice of such disclosure permitted under this clause (b).


 


4.5
Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other
Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter
adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue
of receiving Securities under the Transaction Documents or under any other agreement between the Company and any Purchaser.


 




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4.6
Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the
Transaction Documents, which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor
any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes,
or the Company reasonably believes constitutes, material non-public information (including providing any Pre-Notice or Subsequent
Financing Notice under Section 4.11), unless prior thereto such Purchaser shall have consented to the receipt of such information
and agreed with the Company to keep such information confidential. Prior to providing a Purchaser with any material non-public
information (including any Pre-Notice or Subsequent Financing provided for under Section 4.11), the Company shall provide the
Purchaser with a consent substantially in the form attached as Exhibit G (“Consent”) which shall not include
any material non-public information. The Company shall not provide the Purchaser with the material non-public information if the
Purchaser does not execute and return the Consent to the Company. The Company understands and confirms that each Purchaser shall
be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company delivers
any material, non-public information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees
that such Purchaser shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective
officers, directors, agents, employees or Affiliates, not to trade on the basis of, such material, non-public information, provided
that the Purchaser shall remain subject to applicable law. To the extent that any notice provided pursuant to any Transaction
Document or any other communications made by the Company, or information provided, to the Purchaser constitutes, or contains,
material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice
or other material information with the SEC pursuant to a Current Report on Form 8-K. The Company understands and confirms that
each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. In addition
to any other remedies provided by this Agreement or other Transaction Documents, if the Company provides any material, non-public
information to the Purchasers without their prior written consent, and it fails to immediately (no later than the next Trading
Day) file a Form 8-K disclosing this material, non-public information, it shall pay each Purchasers as partial liquidated damages
and not as a penalty a sum equal to $500 per day for each $100,000 of each Purchaser’s Subscription Amount beginning with
the day the information is disclosed to the Purchaser and ending and including the day the Form 8-K disclosing this information
is filed.


 


4.7
Use of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder for the repayment of
the MCA Debt and working capital purposes and shall not use such proceeds: (a) for the satisfaction of any other portion of the
Company’s debt (other than Permitted Indebtedness and payment of trade payables in the ordinary course of the Company’s
business and prior practices), (b) for the redemption of any Common Stock or Common Stock Equivalents, or (c) for the settlement
of any outstanding litigation, (d) in violation of FCPA or OFAC regulations, (e) to lend money, give credit, or make advances
to any officers, directors, employees or affiliates of the Company or (f) for the purchase of real estate.


 




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4.8
Indemnification of the Purchasers. Subject to the provisions of this Section 4.8, the Company will indemnify and hold the
Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls
such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser
Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation
(including local counsel, if retained) that any such Purchaser Party may suffer or incur as a result of or relating to (a) any
breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other
Transaction Documents, (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective
Affiliates, by any shareholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions
contemplated by the Transaction Documents (unless such action is based upon a breach of such Purchaser Party’s representations,
warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with
any such shareholder or any conduct by such Purchaser Party which constitutes willful misconduct or gross negligence) or (c) any
untrue or alleged untrue statement of a material fact contained in any registration statement, any prospectus or any form of prospectus
or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus
or supplement thereto, in light of the circumstances under which they were made) not misleading. If any action shall be brought
against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall
promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its
own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel
in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of
such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing,
(ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action
there is, in the reasonable opinion of the Purchaser Party, a material conflict on any material issue between the position of
the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and
expenses of no more than one such separate counsel (in addition to local counsel, if retained). The Company will not be liable
to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s prior
written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss,
claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants
or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. The Purchaser Parties shall
have the right to settle any action against any of them by the payment of money provided that they cannot agree to any equitable
relief and the Company, its officers, directors and Affiliates receive unconditional releases in customary form. The indemnification
required by this Section 4.8 shall be made by periodic payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any
cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject
to pursuant to law.


 




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4.9
Reservation of Common Stock. Immediately upon Closing, the Company shall reserve the number of shares of Common Stock issuable
upon conversion of the Notes and exercise of the Warrants. The initial reservation amount shall be 6,000,000 shares. As of the
date hereof, the Company does not have sufficient authorized but unissued Common Stock to reserve and keep available at all times
in favor of the Purchaser on a pro rata basis based on the Purchaser’s Subscription Amount, free of preemptive rights, a
number of shares of Common Stock equal to three times the number of shares of Common Stock issuable upon conversion of the Notes
and exercise of the Warrants (subject to adjustment for stock splits and dividends, combinations and similar events) (the “Reserve
Ratio”). The Company shall reserve and keep available at all times in favor of the Purchasers on a pro rata basis based
on each Purchaser’s Subscription Amount, free of preemptive rights, a number of shares of Common Stock equal to three times
the number of shares of Common Stock issuable upon conversion of the Notes and exercise of the Warrants (subject to adjustment
for stock splits and dividends, combinations and similar events). The Company shall execute and cause the Transfer Agent to execute
a reservation letter in the form attached as Exhibit F. In addition to any other remedies provided by this Agreement or
other Transaction Documents, if the Company at any time fails to meet this reservation of Common Stock requirement within 45 days
after written notice from the Holder, it shall pay the Purchaser as partial liquidated damages and not as a penalty a sum equal
to $500 per day for each $100,000 of the Purchaser’s Subscription Amount and it shall sell to the Lead Investor for $100
a series of preferred stock which contains the power to vote a number of votes equal to 51% of the number of votes eligible to
vote at any special or annual meeting of the Company’s shareholders (with the power to take action by written consent in
lieu of a shareholders meeting) for the sole purpose of amending the Company’s Charter to increase its authorized Common
Stock, which such preferred stock shall be automatically cancelled upon the effectuation of the resulting increased in the Company’s
authorized shares. The Company shall not enter into any agreement or file any amendment to its Charter (including the filing of
a Certificate of Designation) which conflicts with this Section 4.9 while the Notes and Warrants remain outstanding.


 


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


 




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4.11
Participation in Future Financing.


 


(a)
From the date hereof until the date that is the 12 month anniversary of the Closing Date, upon any issuance by the Company or
any of its Subsidiaries of Common Stock or Common Stock Equivalents for cash consideration, Indebtedness or a combination of the
foregoing in a transaction exempt from registration under the Securities Act (a “Subsequent Financing”), the Purchasers
on a pro rata basis based on their subscription Amount shall have the right to participate in up to an amount of the Subsequent
Financing equal to 25% of the Subsequent Financing (the “Participation Maximum”) on the same terms, conditions and
price provided for in the Subsequent Financing. At least 10 Trading Days prior to the closing of the Subsequent Financing, the
Company shall deliver to each Purchaser a written notice of its intention to effect a Subsequent Financing (“Pre-Notice”),
which Pre-Notice shall ask such Purchaser if it wants to review the details of such financing (such additional notice, a “Subsequent
Financing Notice”). Upon the request of a Purchaser, and only upon a request by such Purchaser, for a Subsequent Financing
Notice, the Company shall promptly, but no later than one Trading Day after such request, deliver a Subsequent Financing Notice
to such Purchaser. The Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing,
the amount of proceeds intended to be raised thereunder and the nature of the Person or Persons through or with whom such Subsequent
Financing is proposed to be effected and shall include a term sheet or similar document relating thereto as an attachment. At
least two Trading Days prior to sending the Pre-Notices, the Company shall provide the Purchasers with the Consent attached as
Exhibit G. No Pre-Notices or Subsequent Financing Notices will be sent to any Purchasers who do not return to the Company
executed Consents prior to the distribution of the Pre-Notices. Notwithstanding anything to the contrary in this Agreement, within
90 days of the Closing Date, any Subsequent Financing containing Indebtedness or any form of debt, shall require the prior written
consent of the Lead Investor. Thereafter, until such time as the Notes are no longer outstanding, the Purchasers shall have the
right to participate in 100% of any Subsequent Financing containing Indebtedness or any form of debt.


 


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


 


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


 


(d)
If by 5:30 p.m. (New York City time) on the fifth Trading Day after all of the Purchasers have received the Pre-Notice, the Company
receives responses to a Subsequent Financing Notice from Purchasers seeking to purchase more than the aggregate amount of the
Participation Maximum, each such Purchaser shall have the right to purchase its Pro Rata Portion (as defined below) of the Participation
Maximum. “Pro Rata Portion” means the ratio of (x) the Subscription Amount of Securities purchased on the Closing
Date by a Purchaser participating under this Section 4.11 and (y) the sum of the aggregate Subscription Amounts of Securities
purchased on the Closing Date by all Purchasers participating under this Section 4.11.


 




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(e)
The Company must provide the Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right
of participation set forth above in this Section 4.11, if the Subsequent Financing subject to the initial Subsequent Financing
Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within 30 Trading Days after
the date of the initial Subsequent Financing Notice.


 


(f)
The Company and each Purchaser agree that if any Purchaser elects to participate in the Subsequent Financing, the transaction
documents related to the Subsequent Financing shall not include any term or provision whereby such Purchaser shall be required
to agree to any restrictions on trading as to any of the Securities purchased hereunder or be required to consent to any amendment
to or termination of, or grant any waiver, release or the like under or in connection with, this Agreement, without the prior
written consent of such Purchaser.


 


(g)
Notwithstanding anything to the contrary in this Section 4.11 and unless otherwise agreed to by such Purchaser, the Company shall
either confirm in writing to such Purchaser that the transaction with respect to the Subsequent Financing has been abandoned or
shall publicly disclose its intention to issue the securities in the Subsequent Financing, in either case in such a manner such
that such Purchaser will not be in possession of any material, non-public information, by 30 Trading Days following delivery of
the Subsequent Financing Notice. If by such 30th Trading Day, no public disclosure regarding a transaction with respect
to the Subsequent Financing has been made, and no notice regarding the abandonment of such transaction has been received by such
Purchaser, such transaction shall be deemed to have been abandoned and such Purchaser shall not be deemed to be in possession
of any material, non-public information with respect to the Company or any of its Subsidiaries.


 


(h)
Notwithstanding the foregoing, this Section 4.11 shall not apply in respect of (i) an Exempt Issuance, (ii) after the date no
Notes are outstanding, or (iii) in a transaction involving the public offering of the Company’s securities.


 


4.12
Equal Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered
or paid to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the
same consideration is also offered to all of the parties to the Transaction Documents. For clarification purposes, this provision
constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended
for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or
as a group with respect to the purchase, disposition or voting of Securities or otherwise.


 




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4.13
Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants
that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or
sales, including Short Sales of any of the Company’s securities during the period commencing with the execution of this
Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to
the initial press release as described in Section 4.4. Each Purchaser, severally and not jointly with the other Purchasers, covenants
that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the
initial press release as described in Section 4.4, such Purchaser will maintain the confidentiality of the existence and terms
of this transaction and the information included in the Disclosure Schedules. Notwithstanding the foregoing and notwithstanding
anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes
any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company
after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press
release as described in Section 4.4, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any
securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated
by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4 and (iii) no
Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the Company to the Company or its Subsidiaries
after the issuance of the initial press release as described in Section 4.4. Notwithstanding the foregoing, in the case of a Purchaser
that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s
assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing
other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of
assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.


 


4.14
Capital Changes. Except as provided for under Section 4.9, until the one year anniversary of the Closing Date, the Company
shall not undertake a reverse or forward stock split or reclassification of the Common Stock without the prior written consent
of the Purchasers holding a majority in interest of the outstanding principal balance of the Notes unless such stock split is
necessary for purposes of having the Common Stock listed on the NYSE American or the Nasdaq Capital Market.


 


4.15
Conversion and Exercise Procedures. The forms of Conversion Notice and Notice of Exercise included in the Notes and Warrants
set forth the totality of the procedures required of the Purchasers in order to convert the Notes or to exercise the Warrants.
No additional legal opinion, other information or instructions shall be required of the Purchasers to convert their Notes or exercise
their Warrants. Without limiting the preceding sentences, no ink-original Conversion Notice or Notice of Exercise shall be required,
nor shall any medallion guarantee (or other type of guarantee or notarization) of any Conversion Notice or Notice of Exercise
form be required in order to convert the Notes or exercise the Warrants. The Company shall honor conversions of the Notes and
exercises of the Warrants and shall deliver Shares and Warrant Shares in accordance with the terms, conditions and time periods
set forth in the Transaction Documents.


 


4.16
DTC Program. For so long as any Warrants are outstanding, the Company will employ as the Transfer Agent for the Common
Stock and Warrant Shares a participant in the DTC Automated Securities Transfer Program and cause the Common Stock to be transferable
pursuant to such program.


 




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4.17
Maintenance of Property. The Company shall keep all of its property, which is necessary or useful to the conduct of its
business, in good working order and condition, ordinary wear and tear excepted.


 


4.18
Preservation of Corporate Existence. The Company shall preserve and maintain its corporate existence, rights, privileges
and franchises in the jurisdiction of its incorporation, and qualify and remain qualified, as a foreign corporation in each jurisdiction
in which such qualification is necessary in view of its business or operations and where the failure to qualify or remain qualified
might reasonably have a Material Adverse Effect upon the financial condition, business or operations of the Company taken as a
whole.


 


4.19
Collateral Agent. Each Purchaser hereby appoints [  ] as Collateral Agent under the Security Agreement.


 


4.20
D&O Insurance. Within 60 days of the Closing, the Company shall purchase director and officer insurance on behalf of
the Company and its officers and directors and maintain such coverage for 18 months after the Closing with respect to any losses,
claims, damages, liabilities, costs and expense in connection with any actual or threatened claim or proceeding that is based
on, or arises out of their status as a director or officer of the Company. The insurance policy shall cover SEC investigations
for the Company and its officers and directors and provide for two years of tail coverage.


 


4.21
Subsequent Equity Sales.


 


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


 




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(b)
From the date hereof until the Notes are no longer outstanding, in the event that the Company issues or sells any Common Stock
or Common Stock Equivalents, if a Purchaser then holding Securities purchased under this Agreement reasonably believes that any
of the terms and conditions appurtenant to such issuance or sale are more favorable to such investors than are the terms and conditions
granted to the Purchasers hereunder, upon notice to the Company by such Purchaser within five Trading Days after disclosure of
such issuance or sale, the Company shall amend the terms of this transaction as to such Purchaser only so as to give such Purchaser
the benefit of such more favorable terms or conditions.


 


(c)
Notwithstanding the foregoing, this Section 4.21 shall not apply in respect of an Exempt Issuance. The Company shall provide each
Purchaser with notice of any such issuance or sale in the manner for disclosure of Subsequent Financings set forth in Section
4.11.


 


4.22
No Registration of Securities. Except as disclosed on Schedule 4.22, while the Notes are outstanding, the Company
will not file any registration statements to register sales of Common Stock, including shares underlying any derivative securities.


 


4.23
Mandatory Payment. In the event the Company consummates a public offering while the Notes are outstanding, then 25% of
the net proceeds of such offering shall, within two business days of the closing of such public offering, be applied to reduce
the outstanding obligations pursuant to the Notes.


 


4.24
Lead Investor Buyout. The Lead Investor (or its designee(s)) shall have the right to buy the outstanding Notes and Warrants
held by the MCA Debt Holders existing as of the day immediately preceding this Agreement (the “Buy-Out”): (i) from
the Original Issuance Date until and through the day that falls on the third month anniversary of the Original Issue Date (the
“3 Month Anniversary”) at an amount equal to 105% of the aggregate of the outstanding principal balance of the Note
and accrued and unpaid interest, and (ii) after the 3 Month Anniversary at an amount equal to 115% of the aggregate of the outstanding
principal balance of the Note and accrued and unpaid interest. The MCA Debt Holders shall not have the right to convert the Note
or exercise the Warrants after receipt of the Buyout Notice. The MCA Debt Holder shall deliver the Notes and Warrants (and appropriate
assignments endorsing the Lead Investor) to a law firm designated by the Lead Investor (or its designee(s)) within three Trading
Days of receipt of the Buyout notice.


 


4.25
Transfer Agent. Within 45 days of the Closing, the Company shall appoint a new Transfer Agent whom: (i) will accept the
terms of the reserve letter in the form attached as Exhibit H and (ii) is approved in advance by the Lead Investor.


 




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ARTICLE
V.

MISCELLANEOUS


 


5.1
Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only
and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other
parties, if the Closing has not been consummated on or before August 31, 2019; provided, however, that no such termination
will affect the right of any party to sue for any breach by any other party (or parties).


 


5.2
Fees and Expenses. Except as expressly set forth below and in the Transaction Documents to the contrary, each party shall
pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by
such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall
pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter
delivered by the Company and any exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection
with the delivery of any Securities to the Purchasers. Upon the Closing, out of the escrowed funds, the Escrow Agent shall pay
counsel for the Lead Investor a total of up to $50,000 in fees (less any sum previously paid) together with reasonable costs,
including those necessary to provide the Purchasers with a lien on all of the assets of the Company, in an amount not to exceed
$800.


 


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


 


5.4
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall
be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication
is delivered via facsimile or email attachment at the facsimile number or email address as set forth on the signature pages attached
hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile or email attachment at the facsimile number or email address as set
forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on
any Trading Day, (c) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier
service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and
communications shall be as set forth on the signature pages attached hereto. To the extent that any notice provided pursuant to
any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries,
the Company shall simultaneously file such notice with the SEC pursuant to a Current Report on Form 8-K.


 




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5.5
Amendments; Waivers. Except as provided in the last sentence of this Section 5.5, no provision of this Agreement may be
waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and
the Purchasers who purchased at least a majority in interest of the initial Subscription Amounts hereunder or, in the case of
a waiver, by the party against whom enforcement of any such waived provision is sought; provided, that if any amendment,
modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately
impacted Purchaser (or group of Purchasers) shall also be required. No waiver of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default
or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately,
materially and adversely affects the rights and obligations of any Purchaser relative to the comparable rights and obligations
of the other Purchasers shall require the prior written consent of such adversely affected Purchaser, Any amendment effected in
accordance with accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the Company.
In order to amend the definition of Exempt Issuance, the written consent of the Company and each Purchaser must be obtained.


 


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


 


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


 


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


 


5.9
Governing Law; Exclusive Jurisdiction; Attorneys’ Fees. All questions concerning the construction, validity, enforcement
and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal
laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all Actions
concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction
Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members,
employees or agents) shall be commenced exclusively in the state and federal courts in New York County, New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York County, New York for the
adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not
to assert in any Action, any claim that it is not personally subject to the jurisdiction of any such court, that such Action is
improper or is an inconvenient venue for such Action. Each party hereby irrevocably waives personal service of process and consents
to process being served in any such Action by mailing a copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any other manner permitted by law. If any party shall commence an Action to enforce any
provisions of the Transaction Documents, then, in addition to the obligations of the Company elsewhere in this Agreement, the
prevailing party in such Action shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other
costs and expenses incurred with the investigation, preparation and prosecution of such Action.


 




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5.10
Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.


 


5.11
Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other
party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.


 


5.12
Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction
to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention
of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any
of such that may be hereafter declared invalid, illegal, void or unenforceable.


 


5.13
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar
provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under
a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then
such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant
notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however, that in
the case of a rescission of an exercise of a Warrant, the applicable Purchaser shall be required to return any shares of Common
Stock subject to any such rescinded exercise notice concurrently with the return to such Purchaser of the aggregate exercise price
paid to the Company for such shares and the restoration of such Purchaser’s right to acquire such shares pursuant to such
Purchaser’s Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).


 


5.14
Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation),
or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory
to the Company of such loss, theft or destruction without requiring the posting of any bond.


 




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5.15
Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of
damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The
parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations
contained in the Transaction Documents and hereby agree to waive and not to assert in any Action for specific performance of any
such obligation the defense that a remedy at law would be adequate.


 


5.16
Payment Set Aside. To the extent the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document
or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from,
disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person
under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.


 


5.17
Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction
Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way
for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained
herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto including any action
taken by the Collateral Agent as defined by the Security Agreement (whether under this Agreement or the Security Agreement), shall
be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create
a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions
contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights including,
without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary
for any other Purchaser to be joined as an additional party in any Proceeding for such purpose. Each Purchaser has been represented
by its own separate legal counsel in its review and negotiation of the Transaction Documents. The Company has elected to provide
all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required
or requested to do so by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement
and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers
collectively and not between and among the Purchasers.


 


5.18
Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under
the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated
damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial
liquidated damages or other amounts are due and payable shall have been canceled.


 




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5.19
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a Trading Day, then such action may be taken or such right may be exercised on the next
succeeding Trading Day.


 


5.20
Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity
to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to
be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments
thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be
subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement.


 


5.21
WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY,
THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVE FOREVER TRIAL BY JURY.


 


5.22
Non-Circumvention. The Company hereby covenants and agrees that the Company will not, by amendment of its Charter, including
any Certificates of Designation, or Bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of
arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Agreement, and will at all times in good faith carry out all of the provision of this
Agreement and take all action as may be required to protect the rights of all holders of the Securities. Without limiting the
generality of the foregoing or any other provision of this Agreement or the other Transaction Documents, the Company (a) shall
not increase the par value of any shares of Common Stock receivable upon conversion of the Note or exercise of the Warrants above
the Note Conversion Price, or Warrant Exercise Price, as applicable, then in effect and (b) shall take all such action as may
be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Shares upon the
conversion of the Note and Warrant Shares upon exercise of the Warrants. Notwithstanding anything herein to the contrary, if after
six months from the Original Issuance Date, a holder is not permitted to convert the Note or exercise the Warrants, in full, for
any reason, the Company shall use its best efforts to promptly remedy such failure, including, without limitation, obtaining such
consent or approvals as necessary to permit such conversion or exercise.


 


(Signature
Pages Follow)


 




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


 


 


	Transportation
    and Logistics Systems, Inc.	 	Address
    for Notice:
	 	 	 	 
	By:	 	 	 
	Name:	 	 	Email:
	Title:	Chief
    Executive Officer	 	 



 


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



 


___________________


___________________


___________________


___________________


 


Solely
with respect to Section 4.24:


 


[           ]


 


	By:
    	 	 
	Name:	 	 
	Title:	 	 


 


[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE
PAGE FOR PURCHASER FOLLOWS]


 




    	42



    	 



    

 


PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT


 


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


 


Name
of Purchaser: ________________________________________________________


Signature
of Authorized Signatory of Purchaser: _________________________________


Name
of Authorized Signatory: _______________________________________________


Title
of Authorized Signatory: ________________________________________________


Email
Address of Authorized Signatory: _________________________________________


Facsimile
Number of Authorized Signatory: ______________________________________


Address
for Notice to Purchaser:


 


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


 


Subscription
Amount: $_________________


 


Warrant
Shares: __________________


 


Additional
Subscription Amount: $_________________


 


Additional
Warrant Shares: __________________


 


EIN
Number: _______________________


 




    	43



    	 



    

 


EXHIBIT
A


Form
of Escrow Agreement


 




    	44



    	 



    

 


EXHIBIT
B


Form
of Note


 




    	45



    	 



    

 


EXHIBIT
C


Form
of Registration Rights Agreement


 




    	46



    	 



    

 


EXHIBIT
D


Form
of Security Agreement


 




    	47



    	 



    

 


EXHIBIT
E


Form
of Warrants


 




    	48



    	 



    

 


EXHIBIT
F


Reserve
Letter


 




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EXHIBIT
G


Form
of Information Consent


 


Transportation
and Logistics Systems, Inc. (the “Company”) has information or notice of a proposed event (collectively, the “Information”)
that it is either required to provide you pursuant to that certain Securities Purchase Agreement dated ______ ___, 2019 (“Agreement”)
between you and the Company or believes that you would be interested in obtaining.


 


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


 


If
the Company is not required to provide this Information to you under the Agreement, you acknowledge that this may
restrict you from trading in the Company’s securities until this Information is made public in accordance with the Agreement.
Provided, however, if the Company does not immediately file a Form 8-K publicly disclosing this Information, you shall be entitled
to remedies under the Agreement including liquidated damages under Section 4.6.


 


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


 


Please
sign below and check the appropriate box below.


  


	 	Sincerely,
	 	 
	 	TRANSPORTATION
    AND LOGISTICS, INC.
	 	 	 
	 	By:
    	 
	 	Name:
    	 
	 	Title:
    	Chief
    Executive Officer


 


___
Yes. Please provide we with the Information


 


___
No. Do not provide me with the Information


 


__________________________


__________________________


 




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EXHIBIT
H


Form
of Reserve Letter


 


Irrevocable
Transfer Agent Instructions


 


_________
___, 2019


 


___________,
Inc.


_________________


_________________


 


Ladies
and Gentlemen:


 


On
behalf of Transportation and Logistics Systems, Inc., a Nevada corporation (the “Company”), reference is made
to (i) that certain Securities Purchase Agreement dated ______ ___, 2019 (ii) the Original Issue Discount Senior Convertible Promissory
Notes with principal value of $__________ and consideration paid of $_____________issued as of _______ __, 2019 (the “Notes”)
and (iii) those certain Warrants issued as of _______ ___, 2019 (collectively referred to as the “Warrants”
and, collectively with the Notes and the Securities Purchase Agreement, collectively referred to as the “Agreements”),
by and between the Company and the investors listed on Schedule A (collectively the “Holders”). A copy
of each of the above Agreements is attached hereto. Pursuant to the terms of the Notes, the Holders are given the right to convert
all or any portion of the Notes into shares of Common Stock of the Company, par value $0.001 per share (the “Common Stock,”
and the shares issuable upon conversion of the Notes, the “Shares”), and pursuant to the terms of the Warrants,
the Holders are given the right to exercise all or any portion of the Warrants into shares of Common Stock (the “Warrant
Shares”). We ask that you familiarize yourself with your issuance and delivery obligations as Transfer Agent, contained
herein. Any capitalized terms used and not defined herein shall have the meanings ascribed to them in the Agreements. This Reserve
Letter does not replace or affect any other prior reserve letters previously provided to you.


 


You
are hereby irrevocably authorized and instructed to reserve and keep available at all times in favor of the Purchasers on a pro
rata basis based on each Holder’s Subscription Amount, free of preemptive rights, a number of shares of Common Stock equal
to three times the number of shares of Common Stock issuable upon conversion of the Notes and exercise of the Warrants (subject
to adjustment for stock splits and dividends, combinations and similar events) (the “Reserve Shares”). The
Company shall calculate and instruct the Transfer Agent as to the number of Reserve Shares (which initially shall be _________
shares).


 


The
Reserve Shares shall be equitably adjusted in the event of any stock dividend, stock split, combination or reserve split or other
similar event. In addition, you are hereby authorized to increase the share reserve in accordance with its obligations under the
Agreements as necessary in the event a reduction in the conversion price of the Notes causes additional shares to become issuable.


 




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The
ability to convert the Notes and exercise the Warrants in a timely manner is a material obligation of the Company pursuant to
the Notes and Warrants. Your firm is hereby irrevocably authorized and instructed to issue shares of Common Stock of the Company
to the Holders, and you should remove all stop-transfer instructions relating to such shares, upon (a) your receipt from the Holders
of a Notice executed by the Holders; and (b) your receipt from the Holders or their designated broker(s) of a transfer request
with an opinion of counsel of the Holders, in form, substance and scope customary for opinions of counsel in comparable transactions
(and satisfactory to the Transfer Agent) providing an exemption from the Securities Act of 1933.


 


The
Company hereby requests that your firm act immediately, without delay with respect to the issuance of Common Stock pursuant to
any Notices received from the Holders. Your firm will not delay in processing any Notices owing to the fact that the Company is
in arrears of its fees and other monies owed to your firm, provided that each time a Notice is delivered to your firm, the Holders
agree to pay the cost of processing each Notice at a sum not to exceed $150.00.


 


The
Company hereby directs you, upon request by the Holders or Holders’ broker dealer(s), to immediately provide any capitalization
structure information pertaining to the number of common shares of the Company that are issued and outstanding, authorized, reserved,
or in the public float without any further action or confirmation by the Company.


 


The
Company shall indemnify you and your officers, directors, principals, partners, agents and representatives, and hold each of them
harmless from and against any and all loss, liability, damage, claim or expense (including the reasonable fees and disbursements
of its attorneys) incurred by or asserted against you or any of them arising out of or in connection with the instructions set
forth herein, the performance of your duties hereunder and otherwise in respect hereof, including the costs and expenses of defending
yourself or themselves against any claim or liability hereunder, except that the Company shall not be liable hereunder as to matters
in respect of which it is determined that you have acted with gross negligence or in bad faith (which gross negligence, bad faith
or willful misconduct must be determined by a final, non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction). You shall have no liability to the Company in respect to any action taken or any failure to act in respect of this
if such action was taken or omitted to be taken in good faith, and you shall be entitled to rely in this regard on the advice
of counsel.


 


The
Board of Directors of the Company has approved the foregoing (irrevocable instructions) and does hereby extend the Company’s
irrevocable agreement to indemnify your firm for all loss, liability or expense in carrying out the authority and direction herein
contained on the terms herein set forth.


 


The
Company agrees that in the event that the Transfer Agent resigns as the Company’s Transfer Agent or the Company desires
to replace such Transfer Agent, the Company shall engage a suitable replacement Transfer Agent that will agree to serve as Transfer
Agent for the Company and be bound by the terms and conditions of these Irrevocable Instructions within five business days.


 


The
Holders are intended to be, and are, third party beneficiaries hereof, and no amendment or modification to the instructions set
forth herein may be made without the consent of the Holders.


 




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Please
execute this letter in the space indicated to acknowledge your agreement to act in accordance with these instructions and return
a copy of this agreement to the Company and to the Holders.


 


Very
truly yours,


 


Transportation
and Logistics Systems, Inc.


 


	By:
    	 	 
	Name:	 	 
	Title:	 	 


 


Acknowledged
and Agreed:


 


___________________,
INC.


 


	By:
    	 	 	Date: __________________
	 	 	 	 
	Name:
    	 	 	 
	 	 	 	 
	Title:
    	 	 	 


 




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