Exhibit 10.48 


 


SECURITIES
PURCHASE AGREEMENT


 


This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of July 28, 2022, by and between KONA GOLD BEVERAGE,
INC., a Delaware corporation, with headquarters located at 746 North Drive, Suite A, Melbourne, FL 32934 (the “Company”),
and MAST HILL FUND, L.P., a Delaware limited partnership, with its address at 48 Parker Road, Wellesley, MA 02482 (the “Buyer”).


 


WHEREAS:


 


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


 


B.
Buyer desires to purchase from the Company, and the Company desires to issue and sell to the Buyer, upon the terms and conditions
set forth in this Agreement, a senior secured promissory note of the Company, in the aggregate principal amount of $595,000.00 (as
the principal amount thereof may be increased pursuant to the terms thereof, and together with any note(s) issued in replacement
thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, in the form attached hereto
as Exhibit A, the “Note”), convertible into shares of common stock, $0.0001 par value per share, of the Company
(the “Common Stock”), upon the terms and subject to the limitations and conditions set forth in such Note;
and


 


C.
The Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such principal amount of the Note as is set
forth immediately below its name on the signature pages hereto; and


 


D.
The Company wishes to grant the Warrant (as defined below) to the Buyer as additional consideration for the purchase of the Note,
exercisable into shares of Common Stock, which shall be earned in full as of the Closing Date, as further provided
herein.


 


NOW
THEREFORE, in consideration of the foregoing and of the agreements and covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Buyer hereby agree as follows:


 


 1.  Purchase
and Sale of Note.




 


a. Purchase
of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer, and the Buyer agrees to purchase
from the Company, the Note, as further provided herein. As used in this Agreement, the term “business day” shall mean
any day other than a Saturday, Sunday, or a day on which commercial banks in the city of New York, New York are authorized or
required by law or executive order to remain closed.


 


b. Form
of Payment. On the Closing Date: (i) the Buyer shall pay the purchase price of $547,500.00 (the “Purchase Price”)
for the Note, to be issued and sold to it at the Closing (as defined below), by wire transfer of immediately available funds to the
Company, in accordance with the Company’s written wiring instructions, against delivery of the Note, and (ii) the Company
shall deliver such duly executed Note and Warrant on behalf of the Company, to the Buyer, against delivery of such Purchase Price.
On the Closing, the Buyer shall withhold a non-accountable sum of $6,500.00 from the Purchase Price to cover the Buyer’s legal
fees in connection with the transactions contemplated by this Agreement.


 


c. Closing
Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below, the
date and time of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be on the date
that the Purchase Price for the Note is paid by Buyer pursuant to terms of this Agreement.


 


d. Closing.
The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such
location as may be agreed to by the parties (including via exchange of electronic signatures).


 




    	1



     


    

 


e. Warrant. On
or before the Closing Date, the Company shall grant a common stock purchase warrant to Buyer to purchase 100,000,000 shares of the
Company’s common stock (the “Warrant”) upon the terms and subject to the limitations and conditions set forth in
such Warrant.


 


2. Buyer’s
Representations and Warranties. The Buyer represents and warrants to the Company as of the Closing Date that:


 


a. Investment
Purpose. As of the Closing Date, the Buyer is purchasing the Note and Warrant (the Note, Warrant, shares of Common Stock
issuable upon conversion of or otherwise pursuant to the Note (the “Conversion Shares”), and shares of Common Stock
issuable upon exercise of or otherwise pursuant to the Warrant (the “Exercise Shares”) shall collectively be referred to
herein as the “Securities”) for its own account and not with a present view towards the public sale or distribution
thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; provided, however,
that, by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific
term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or
an exemption under the 1933 Act.


 


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


 


c. Reliance
on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth
and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and
understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the
Buyer to acquire the Securities.


 


d. Information.
The Buyer and its advisors, if any, have been, and for so long as the Note remains outstanding will continue to be, furnished with
all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the
Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any, have been, and for so long as
the Note remains outstanding will continue to be, afforded the opportunity to ask questions of the Company regarding its business
and affairs. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information regarding
the Company or otherwise and will not disclose such information unless such information is disclosed to the public prior to or
promptly following such disclosure to the Buyer. Neither such inquiries nor any other due diligence investigation conducted by Buyer
or any of its advisors or representatives shall modify, amend or affect Buyer’s right to rely on the Company’s
representations and warranties contained in Section 3 below.


 


e. Governmental
Review. The Buyer understands that no United States federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities.


 


f. Transfer
or Re-sale. The Buyer understands that (i) the sale or resale of the Securities has not been and is not being registered under
the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities are sold
pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company, at the cost
of the Company, an opinion of counsel (which may be the Legal Counsel Opinion (as defined below)) that shall be in form, substance
and scope customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred
may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the Company, (c) the
Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a
successor rule) (“Rule 144”)) of the Buyer who agrees to sell or otherwise transfer the Securities only in accordance
with this Section 2(f) and who is an Accredited Investor, (d) the Securities are sold pursuant to Rule 144 or other applicable
exemption, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule) (“Regulation
S”), and the Buyer shall have delivered to the Company, at the cost of the Company, an opinion of counsel that shall be in
form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the
Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule
and further, if said Rule is not applicable, any re-sale of such Securities under circumstances in which the seller (or the person
through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance
with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor
any other person is under any obligation to register such Securities under the 1933 Act or any state securities laws or to comply
with the terms and conditions of any exemption thereunder (in each case). Notwithstanding the foregoing or anything else contained
herein to the contrary, the Securities may be pledged in connection with a bona fide margin account or other lending
arrangement secured by the Securities, and such pledge of Securities shall not be deemed to be a transfer, sale or assignment of the
Securities hereunder, and the Buyer in effecting such pledge of Securities shall be not required to provide the Company with any
notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or otherwise.


 




    	2



     


    

 


g. Legends. The
Buyer understands that, until such time as the Note, Warrant, Conversion Shares, and/or Exercise Shares, have been registered under
the 1933 Act or may be sold pursuant to Rule 144, Rule 144A under the 1933 Act, Regulation S, or other applicable exemption without
any restriction as to the number of securities as of a particular date that can then be immediately sold, the Securities may bear a
restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such
Securities):


 


“NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE/EXERCISABLE]
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE 144A, REGULATION S, OR OTHER APPLICABLE
EXEMPTION UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”


 


The
legend set forth above shall be removed and the Company shall issue a certificate or book entry statement for the applicable shares of
Common Stock without such legend to the holder of any Security upon which it is stamped or (as requested by such holder) issue the applicable
shares of Common Stock to such holder by electronic delivery by crediting the account of such holder’s broker with The Depository
Trust Company (“DTC”), if, unless otherwise required by applicable state securities laws, (a) such Security is registered
for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144, Rule 144A,
Regulation S, or other applicable exemption without any restriction as to the number of securities as of a particular date that can then
be immediately sold, or (b) the Company or the Buyer provides the Legal Counsel Opinion (as contemplated by and in accordance with Section
4(m) hereof) to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which
opinion shall be accepted by the Company so that the sale or transfer is effected. The Company shall be responsible for the fees of its
transfer agent and all DTC fees associated with any such issuance. The Buyer agrees to sell all Securities, including those represented
by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any. In
the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant
to an exemption from registration, such as Rule 144, Rule 144A, Regulation S, or other applicable exemption at the Deadline (as defined
in the Note), it will be considered an Event of Default pursuant to Section 3.2 of the Note.


 


h. Authorization;
Enforcement. This Agreement has been duly and validly authorized by the Buyer and has been duly executed and delivered on behalf
of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting
creditors’ rights generally and except as may be limited by the exercise of judicial discretion in applying principles of
equity.


 




    	3



     


    

 


3. Representations
and Warranties of the Company. The Company represents and warrants to the Buyer as of the Closing Date that:


 


a. Organization
and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority
(corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased,
used, operated and conducted. Schedule 3(a), if attached hereto, sets forth a list of all of the Subsidiaries of the Company and the
jurisdiction in which each is incorporated. The Company and each of its Subsidiaries is duly qualified as a foreign corporation to
do business and is in good standing in every jurisdiction in which its ownership or use of property or the nature of the business
conducted by it makes such qualification necessary except where the failure to be so qualified or in good standing would not have a
Material Adverse Effect. “Material Adverse Effect” means any material adverse effect on the business, operations,
assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions
contemplated hereby or by the agreements or instruments to be entered into in connection herewith. “Subsidiaries” means
any corporation or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly,
any equity or other ownership interest.


 


b. Authorization;
Enforcement. The Company has all requisite corporate power and authority to enter into and perform this Agreement, the Note, and
to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms hereof and
thereof, (ii) the execution and delivery of this Agreement, the Warrant, the Note, Conversion Shares, and the Exercise Shares by the
Company and the consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance
of the Note, Warrant, as well as the issuance and reservation for issuance of the Conversion Shares and Exercise Shares issuable
upon conversion of the Note and/or exercise of the Warrant) have been duly authorized by the Company’s Board of Directors and
no further consent or authorization of the Company, its Board of Directors, its stockholders, or its debt holders is required, (iii)
this Agreement and the Note (together with any other instruments executed in connection herewith or therewith) have been duly
executed and delivered by the Company by its authorized representative, and such authorized representative is the true and official
representative with authority to sign this Agreement, the Note and the other instruments documents executed in connection herewith
or therewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the Company
of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with their terms.


 


c. Capitalization;
Governing Documents. As of July 28, 2022, the authorized capital stock of the Company consists of: 2,500,000,000 authorized
shares of Common Stock, of which 1,709,122,945 shares were issued and outstanding, and 5,700,250 authorized shares of preferred
stock, of which 488,000 shares of Series A preferred stock and 500,000 shares of Series D preferred stock were issued and
outstanding. All of such outstanding shares of capital stock of the Company, the Conversion Shares and Exercise Shares are, or upon
issuance will be, duly authorized, validly issued, fully paid and non-assessable. No shares of capital stock of the Company are
subject to preemptive rights or any other similar rights of the stockholders of the Company or any liens or encumbrances imposed
through the actions or failure to act of the Company. As of the effective date of this Agreement, other than as publicly announced
prior to such date and reflected in the SEC Documents of the Company (i) there are no outstanding options, warrants, scrip, rights
to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any
character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of the
Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or arrangements under
which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act
and (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any
agreement providing rights to security holders) that will be triggered by the issuance of any of the Securities. The Company has
furnished to the Buyer true and correct copies of the Company’s Certificate of Incorporation as in effect on the date hereof
(“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the
“By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company and the
material rights of the holders thereof in respect thereto.


 




    	4



     


    

 


d. Issuance
of Conversion Shares and Exercise Shares. The Conversion Shares and Exercise Shares are duly authorized and reserved for
issuance and, upon conversion of the Note and/or exercise of the Warrant in accordance with its terms, will be validly issued, fully
paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be
subject to preemptive rights or other similar rights of stockholders of the Company and will not impose personal liability upon the
holder thereof.


 


e. Issuance
of Warrant. The issuance of the Warrant is duly authorized and will be validly issued, fully paid and non-assessable, and free
from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or
other similar rights of stockholders of the Company and will not impose personal liability upon the holder thereof.


 


f. Acknowledgment
of Dilution. The Company understands and acknowledges the potentially dilutive effect of the Conversion Shares and Exercise
Shares to the Common Stock upon the conversion of the Note and/or exercise of the Warrant. The Company further acknowledges that its
obligation to issue, upon conversion of the Note and/or exercise of the Warrant, the Conversion Shares and/or Exercise Shares, are
absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other
stockholders of the Company.


 


g. Ranking;
No Conflicts. The Note shall have priority in payment and performance over all indebtedness of the Company and its Subsidiaries
(except with respect to the Specified Secured Indebtedness (as defined in the Note)), as further provided in that certain security
agreement entered into between the Company, the Subsidiaries, and the Buyer on the date of this Agreement (the “Security
Agreement”), a form of which is attached hereto as Exhibit C. The Company represents and warrants that there are no security
interests in, or liens on, the Company’s assets as of the date of this Agreement except as created in favor of the Buyer
pursuant to the Security Agreement. The execution, delivery and performance of this Agreement and the Note by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and
reservation for issuance of the Conversion Shares and Exercise Shares) will not (i) conflict with or result in a violation of any
provision of the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision
of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any agreement, note, evidence of indebtedness, indenture,
patent, patent license or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of
any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations of
any self-regulatory organizations to which the Company or its securities is subject) applicable to the Company or any of its
Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected (except for such
conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the
aggregate, have a Material Adverse Effect), or (iv) trigger any anti-dilution and/or ratchet provision contained in any other
contract in which the Company is a party thereto or any security issued by the Company. Neither the Company nor any of its
Subsidiaries is in violation of its Certificate of Incorporation, By-laws or other organizational documents and neither the Company
nor any of its Subsidiaries is in default (and no event has occurred which with notice or lapse of time or both could put the
Company or any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries has taken any action or
failed to take any action that would give to others any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party or by which any property or assets of
the Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not, individually or in the
aggregate, have a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any, are not being conducted, and
shall not be conducted so long as the Buyer owns any of the Securities, in violation of any law, ordinance or regulation of any
governmental entity. Except as specifically contemplated by this Agreement and as required under the 1933 Act and any applicable
state securities laws, the Company is not required to obtain any consent, authorization or order of, or make any filing or
registration with, any court, governmental agency, regulatory agency, self-regulatory organization or stock market or any third
party in order for it to execute, deliver or perform any of its obligations under this Agreement and the Note in accordance with the
terms hereof or thereof or to issue and sell the Note in accordance with the terms hereof and, upon conversion of the Note and/or
exercise of the Warrant, issue Conversion Shares and/or Exercise Shares as applicable. All consents, authorizations, orders, filings
and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or
prior to the date hereof. The Company is not in violation of the listing requirements of the Principal Market (as defined herein)
and does not reasonably anticipate that the Common Stock will be delisted by the Principal Market in the foreseeable future. The
Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing. The
“Principal Market” shall mean the principal securities exchange or trading market where such Common Stock is listed or
traded, including but not limited to any tier of the OTC Markets Group Inc., any tier of the NASDAQ Stock Market (including NASDAQ
Capital Market), or the NYSE American, or any successor to such markets.


 




    	5



     


    

 


h. SEC
Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to
be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the
“1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial
statements and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being
hereinafter referred to herein as the “SEC Documents”). As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable
to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading. None of the statements made in any such SEC
Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have been amended
or updated in subsequent filings prior the date hereof). As of their respective dates, the financial statements of the Company
included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with United States
generally accepted accounting principles, consistently applied, during the periods involved and fairly present in all material
respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments). Except as set forth in the financial statements of the Company included in the SEC Documents,
the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business
subsequent to March 31, 2022, and (ii) obligations under contracts and commitments incurred in the ordinary course of business and
not required under generally accepted accounting principles to be reflected in such financial statements, which, individually or in
the aggregate, are not material to the financial condition or operating results of the Company. The Company is subject to the
reporting requirements of the 1934 Act. The Company has never been a “shell company” as described in Rule
144(i)(1)(i).


 


i. Absence
of Certain Changes. Since March 31, 2022, there has been no material adverse change and no material adverse development in the
assets, liabilities, business, properties, operations, financial condition, results of operations, prospects or 1934 Act reporting
status of the Company or any of its Subsidiaries.


 


j. Absence
of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries,
threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such,
that could have a Material Adverse Effect. The SEC Documents contain a complete list and summary description of any pending or, to
the knowledge of the Company, threatened proceeding against or affecting the Company or any of its Subsidiaries, without regard to
whether it would have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances which
might give rise to any of the foregoing.


 


k. Intellectual
Property. The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights to use all patents, patent
applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications, service marks, service names,
trade names and copyrights (“Intellectual Property”) necessary to enable it to conduct its business as now operated
(and, as presently contemplated to be operated in the future); there is no claim or action by any person pertaining to, or
proceeding pending, or to the Company’s knowledge threatened, which challenges the right of the Company or of a Subsidiary
with respect to any Intellectual Property necessary to enable it to conduct its business as now operated (and, as presently
contemplated to be operated in the future); to the best of the Company’s knowledge, the Company’s or its
Subsidiaries’ current and intended products, services and processes do not infringe on any Intellectual Property or other
rights held by any person; and the Company is unaware of any facts or circumstances which might give rise to any of the foregoing.
The Company and each of its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value
of their Intellectual Property.


 




    	6



     


    

 


l.
No Materially Adverse Contracts, Etc. Neither the Company nor any of its Subsidiaries is subject to any charter,
corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the
Company’s officers has or is expected in the future to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries is a party to any contract or agreement which in the judgment of the Company’s officers has or is expected to
have a Material Adverse Effect.


 


m. Tax
Status. The Company and each of its Subsidiaries has made or filed all federal, state and foreign income and all other tax
returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the
Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and 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, except those being contested in good faith and has set aside on its
books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns,
reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company know of no basis for any such claim. The Company has not executed a waiver with
respect to the statute of limitations relating to the assessment or collection of any foreign, federal, state or local tax. None of
the Company’s tax returns is presently being audited by any taxing authority.


 


n. Transactions
with Affiliates. Except for arm’s length transactions pursuant to which the Company or any of its Subsidiaries makes
payments in the ordinary course of business upon terms no less favorable than the Company or any of its Subsidiaries could obtain
from third parties and other than the grant of stock options described in the SEC Documents, none of the officers, directors, or
employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (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, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which
any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.


 


o. Disclosure. All
information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement and provided to the Buyer
pursuant to Section 2(d) hereof and otherwise in connection with the transactions contemplated hereby is true and correct in all
material respects and the Company has not omitted to state any material fact necessary in order to make the statements made herein
or therein, in light of the circumstances under which they were made, not misleading. No event or circumstance has occurred or
exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations or
financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but
which has not been so publicly announced or disclosed (assuming for this purpose that the Company’s reports filed under the
1934 Act are being incorporated into an effective registration statement filed by the Company under the 1933 Act).


 


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


 


q. No
Integrated Offering. 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 in any security or solicited any offers to buy any security under circumstances that would
require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer
will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes of any
stockholder approval provisions applicable to the Company or its securities.


 




    	7



     


    

 


r. No
Brokers; No Solicitation. Except with respect to J. H. Darbie & Co., Inc., a registered broker-dealer (CRD#: 43520), the
Company has taken no action which would give rise to any claim by any person for brokerage commissions, transaction fees or similar
payments relating to this Agreement or the transactions contemplated hereby. The Company acknowledges and agrees that neither the
Buyer nor its employee(s), member(s), beneficial owner(s), or partner(s) solicited the Company to enter into this Agreement and
consummate the transactions described in this Agreement.


 


s. Permits;
Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses,
permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its
properties and to carry on its business as it is now being conducted (collectively, the “Company Permits”), and there is
no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the Company
Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the Company
Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. Since March 31, 2022, neither the Company nor any of its Subsidiaries has received any
notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices relating to possible
conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse Effect.


 


 t.  
Environmental Matters.




 


(i)
There are, to the Company’s knowledge, with respect to the Company or any of its Subsidiaries or any predecessor of the
Company, no past or present violations of Environmental Laws (as defined below), releases of any material into the environment,
actions, activities, circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common law
environmental liability or any liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or
similar federal, state, local or foreign laws and neither the Company nor any of its Subsidiaries has received any notice with
respect to any of the foregoing, nor is any action pending or, to the Company’s knowledge, threatened in connection with any
of the foregoing. The term “Environmental Laws” means all federal, state, local or foreign laws relating to pollution or
protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface
or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of
chemicals, pollutants contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”)
into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions,
judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved
thereunder.


 


(ii)
Other than those that are or were stored, used or disposed of in compliance with applicable law, no Hazardous Materials are
contained on or about any real property currently owned, leased or used by the Company or any of its Subsidiaries, and no Hazardous
Materials were released on or about any real property previously owned, leased or used by the Company or any of its Subsidiaries
during the period the property was owned, leased or used by the Company or any of its Subsidiaries, except in the normal course of
the Company’s or any of its Subsidiaries’ business.


 


(iii)
There are no underground storage tanks on or under any real property owned, leased or used by the Company or any of its Subsidiaries
that are not in compliance with applicable law.


 


u.
Title to Property. The Company and its Subsidiaries have good and marketable title in fee simple to all real property and good
and marketable title to all personal property owned by them which is material to the business of the Company and its Subsidiaries, in
each case free and clear of all liens, encumbrances and defects except such as are described in Schedule 3(u), if attached hereto, or
such as would not have a Material Adverse Effect. Any real property and facilities held under lease by the Company and its Subsidiaries
are held by them
under valid, subsisting and enforceable leases with such exceptions as would not have a Material Adverse Effect.


 






    	8



     


    

 


v. Insurance. The
Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its
Subsidiaries are engaged. Neither the Company nor any such Subsidiary has 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 at a cost that would not have a Material Adverse Effect. Upon written request the Company will
provide to the Buyer true and correct copies of all policies relating to directors’ and officers’ liability coverage,
errors and omissions coverage, and commercial general liability coverage.


 


w. Internal
Accounting Controls. The Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient, in
the judgment of the Company’s board of directors, to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and
(iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.


 


x. Foreign
Corrupt Practices. Neither the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee or other person
acting on behalf of the Company or any Subsidiary has, in the course of his actions for, or on behalf of, the Company, used any
corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made
any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or
is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.


 


y. Solvency.
The Company (after giving effect to the transactions contemplated by this Agreement) is solvent (i.e., its assets have a fair
market value in excess of the amount required to pay its probable liabilities on its existing debts as they become absolute and
matured) and currently the Company has no information that would lead it to reasonably conclude that the Company would not, after
giving effect to the transaction contemplated by this Agreement, have the ability to, nor does it intend to take any action that
would impair its ability to, pay its debts from time to time incurred in connection therewith as such debts mature. The
Company’s financial statements for its most recent fiscal year end and interim financial statements have been prepared
assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business.


 


z. No
Investment Company. The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement will
not be an “investment company” required to be registered under the Investment Company Act of 1940 (an “Investment
Company”). The Company is not controlled by an Investment Company.


 


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


 


bb. No
Disqualification Events. None of the Company, any of its predecessors, any affiliated issuer, any director, executive officer,
other officer of the Company participating in the offering 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 1933 Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person”) is
subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act (a
“Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has
exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event.


 




    	9



     


    

 


cc. Manipulation
of Price. 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, or that could reasonably be expected to cause or result, in the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for,
purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any person
any compensation for soliciting another to purchase any other securities of the Company.


 


dd. Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries is subject to the Bank Holding Company Act of 1956, as
amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or affiliates owns or controls, directly or indirectly, five
percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total
equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of
its Subsidiaries or affiliates exercises a controlling influence over the management or policies of a bank or any entity that is
subject to the BHCA and to regulation by the Federal Reserve.


 


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


 


ff. Breach
of Representations and Warranties by the Company. The Company agrees that if the Company breaches any of the representations or
warranties set forth in this Section 3 and in addition to any other remedies available to the Buyer pursuant to this Agreement, it
will be considered an Event of Default under Section 3.4 of the Note.


 


4. ADDITIONAL
COVENANTS, AGREEMENTS AND ACKNOWLEDGEMENTS.




 


a. Best
Efforts. The parties shall use their best efforts to satisfy timely each of the conditions described in Section 6 and 7 of this
Agreement.


 


b. Form
D; Blue Sky Laws. The Company agrees to file a Form D with respect to the Securities if required under Regulation D and to
provide a copy thereof to the Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action
as the Company shall reasonably determine is necessary to qualify the Securities for sale to the Buyer at the applicable closing
pursuant to this Agreement under applicable securities or “blue sky” laws of the states of the United States (or to
obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyer on or prior to the
Closing Date.


 


c. Use
of Proceeds. The Company shall use the proceeds for business development, and not for any other purpose, including but not
limited to (i) the repayment of any indebtedness owed to officers, directors or employees of the Company or their affiliates in
excess of an aggregate amount of $200,000, (ii) the repayment of any debt issued in corporate finance transactions, (iii) any loan
to or investment in any other corporation, partnership, enterprise or other person (except in connection with the Company’s
currently existing operations), (iv) any loan, credit, or advance to any officers, directors, employees, or affiliates of the
Company, or (v) in violation or contravention of any applicable law, rule or regulation.


 


 d. Right of Participation and First Refusal.




 


(i) Other
than arrangements that are in place or disclosed in SEC Documents prior to the date of
this Agreement, from the date of this Agreement until the Note is extinguished in its entirety, the Company will not, (i) directly
or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option
to purchase or other disposition of) any of its or its Subsidiaries’ debt, equity, or equity equivalent securities, including
without limitation any debt, preferred shares or other instrument or security that is, at any time during its life and/or under any
circumstances, convertible into, exchangeable, or exercisable for Common Stock (any such offer, sale, grant, disposition or
announcement being referred to as a “Subsequent Placement”) or (ii) enter into any definitive agreement with regard to
the foregoing, in each case unless the Company shall have first complied with this Section 4(d).


 




    	10



     


    

 


(ii) The
Company shall deliver to the Buyer an irrevocable written notice (the “Offer Notice”) of any proposed or intended
Subsequent Placement, which shall (w) identify and describe the Subsequent Placement, (x) describe the price and other terms upon
which they are to be issued, sold or exchanged, and the number or amount of the securities in the Subsequent Placement to be issued,
sold, or exchanged and (y) offer to issue and sell to or exchange with the Buyer at least one hundred percent (100%) of the
securities in the Subsequent Placement (in each case, an “Offer”).


 


(iii) To
accept an Offer, in whole or in part, the Buyer must deliver a written notice (the “Notice of Acceptance”) to the
Company prior to the end of the fifth (5th) Trading Day (as defined in the Note) after the Buyer’s receipt of the
Offer Notice (the “Offer Period”), setting forth the amount that the Buyer elects to purchase (the “Subscription
Amount”). The Company shall complete the Subsequent Placement and issue and sell the Subscription Amount to the Buyer upon
terms and conditions (including, without limitation, unit prices and interest rates) set forth in the Offer Notice, unless a change
to such terms and conditions is agreed to in writing between the Company and Buyer.


 


(iv) Notwithstanding
anything to the contrary contained herein, if the Company desires to modify or amend the terms or conditions of a Subsequent
Placement at any time after the Offer Notice is given to Buyer (provided, however, that such modification or amendment to the terms
or conditions cannot occur during any Offer Period), the Company shall deliver to the Buyer a new Offer Notice and the Offer Period
of such new Offer shall expire at the end of the fifth (5th) Trading Day after the Buyer’s receipt of such new
Offer Notice.


 


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


 


f. Restriction
on Activities. Commencing as of the date first above written, and until the earlier of payment of the Note in full or full
conversion of the Note, the Company shall not, directly or indirectly, without the Buyer’s prior written consent, which
consent shall not be unreasonably withheld: (a) change the nature of its business; or (b) sell, divest, acquire, change the
structure of any material assets other than in the ordinary course of business.


 




    	11



     


    

 


g. Listing. The
Company will, so long as the Buyer owns any of the Securities, maintain the listing and trading of its Common Stock on the Principal
Market or any equivalent replacement exchange or electronic quotation system (including but not limited to the OTC
Link® ATS electronic quotation system) and will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority, Inc. (“FINRA”),
and such exchanges, as applicable. The Company shall promptly provide to the Buyer copies of any notices it receives from the
Principal Market and any other exchanges or electronic quotation systems on which the Common Stock is then traded regarding the
continued eligibility of the Common Stock for listing on such exchanges and quotation systems.


 


h. Corporate
Existence. The Company will, so long as the Buyer beneficially owns any of the Securities, maintain its corporate existence and
shall not sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation or sale of
all or substantially all of the Company’s assets, where the surviving or successor entity in such transaction (i) assumes the
Company’s obligations hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a
publicly traded corporation whose Common Stock is listed for trading or quotation on the Principal Market, any tier of the NASDAQ
Stock Market, the New York Stock Exchange or the NYSE American.


 


i. No
Integration. The Company shall not make any offers or sales of any security (other than the Securities) under circumstances that
would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the
Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval
provision applicable to the Company or its securities.


 


j. Breach
of Covenants. The Company acknowledges and agrees that if the Company breaches any of the covenants set forth in this Section 4,
in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of Default under
Section 3.3 of the Note.


 


k. Compliance
with 1934 Act; Public Information Failures. For so long as the Buyer beneficially owns the Note, Warrant, Conversion Shares, or
any Exercise Shares, the Company shall comply with the reporting requirements of the 1934 Act; and the Company shall continue to be
subject to the reporting requirements of the 1934 Act. During the period that the Buyer beneficially owns the Note, if the Company
shall (i) fail for any reason to satisfy the requirements of Rule 144(c)(1), including, without limitation, the failure to satisfy
the current public information requirements under Rule 144(c) or (ii) if the Company has ever been an issuer described in Rule
144(i)(1)(i) or becomes such an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule
144(i)(2) (each, a “Public Information Failure”) then, as partial relief for the damages to the Buyer by reason of any
such delay in or reduction of its ability to sell the Securities (which remedy shall not be exclusive of any other remedies
available pursuant to this Agreement, the Note, or at law or in equity), the Company shall pay to the Buyer an amount in cash equal
to three percent (3%) of the Purchase Price on each of the day of a Public Information Failure and on every thirtieth day (pro-rated
for periods totaling less than thirty days) thereafter until the date such Public Information Failure is cured. The payments to
which a holder shall be entitled pursuant to this Section 4(k) are referred to herein as “Public Information Failure
Payments.” Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during
which such Public Information Failure Payments are incurred and (iii) the third business day after the event or failure giving rise
to the Public Information Failure Payments is cured. In the event the Company fails to make Public Information Failure Payments in a
timely manner, such Public Information Failure Payments shall bear interest at the rate of 5% per month (prorated for partial
months) until paid in full.


 


l. Acknowledgement
Regarding Buyer’s Trading Activity. Until the Note is fully repaid or fully converted, the Buyer shall not effect any
“short sale” (as such term is defined in Rule 200 of Regulation SHO of the 1934 Act) of the Common Stock which
establishes a net short position with respect to the Common Stock.


 


m.
[Intentionally Omitted].


 


n. Legal
Counsel Opinions. Upon the request of the Buyer from to time to time, the Company shall be responsible (at its cost) for
promptly supplying to the Company’s transfer agent and the Buyer a customary legal opinion letter of its counsel (the
“Legal Counsel Opinion”) to the effect that the resale of the Conversion Shares and/or Exercise Shares by the Buyer or
its affiliates, successors and assigns is exempt from the registration requirements of the 1933 Act pursuant to Rule 144 (provided
the requirements of Rule 144 are satisfied and provided the Conversion Shares and/or Exercise Shares are not then registered under
the 1933 Act for resale pursuant to an effective registration statement) or other applicable exemption (provided the requirements of
such other applicable exemption are satisfied). In addition, the Buyer may (at the Company’s cost) at any time secure its own
legal counsel to issue the Legal Counsel Opinion, and the Company will instruct its transfer agent to accept such opinion. The
Company hereby agrees that it may never take the position that it is a “shell company” in connection with its
obligations under this Agreement or otherwise.


 




    	12



     


    

 


o. Piggyback
Registration Rights. The Company hereby grants to the Buyer the piggyback registration rights set forth on Exhibit B
hereto.


 


p. Most
Favored Nation. While the Note or any principal amount, interest or fees or expenses due thereunder remain outstanding and
unpaid, the Company shall not enter into any public or private offering of its securities (including securities convertible into
shares of Common Stock) with any individual or entity (an “Other Investor”) that has the effect of establishing rights
or otherwise benefiting such Other Investor in a manner more favorable in any material respect to such Other Investor than the
rights and benefits established in favor of the Buyer by this Agreement or the Note unless, in any such case, the Buyer has been
provided with such rights and benefits pursuant to a definitive written agreement or agreements between the Company and the
Buyer.


 


q. Subsequent
Variable Rate Transactions. From the date hereof until such time as the Note is fully converted or fully repaid, the Company
shall be prohibited from effecting or entering into an agreement involving a Variable Rate Transaction. “Variable Rate
Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible
into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion
price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations
for the shares of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion,
exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity
security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or
the market for the Common Stock or (ii) enters into any agreement whereby the Company may issue securities at a future determined
price (except with respect to an Equity Line of Credit (as defined in the Note)). The Buyer shall be entitled to obtain injunctive
relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect
damages.


 


 r. [Intentionally Omitted].




 


s. Non-Public
Information. The Company covenants and agrees that neither it, nor any other person acting on its behalf will provide the Buyer
or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes, material non-public
information, unless prior thereto the Buyer shall have consented to the receipt of such information and agreed with the Company to
keep such information confidential. The Company understands and confirms that the Buyer 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 the Buyer without such Buyer’s consent, the Company hereby covenants and agrees that such Buyer 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 Buyer shall remain subject to
applicable law. To the extent that any notice provided, information provided, or any other communications made by the Company, to
the Buyer, 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. In addition to
any other remedies provided by this Agreement or the related transaction documents, if the Company provides any material non-public
information to the Buyer without their prior written consent, and it fails to immediately (no later than that business day) file a
Form 8-K disclosing this material non-public information, it shall pay the Buyer as partial liquidated damages and not as a penalty
a sum equal to $3,000 per day beginning with the day the information is disclosed to the Buyer and ending and including the day the
Form 8-K disclosing this information is filed.


 


t. D&O
Insurance. Within 60 calendar days of the Closing, the Company shall purchase director and officer insurance on behalf of the
Company’s (including its subsidiary) officers and directors for a period of 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 provide for two years of
tail coverage.


 




    	13



     


    

 


5. Transfer
Agent Instructions. The Company shall issue irrevocable instructions to the Company’s transfer agent to issue certificates
and/or issue shares electronically at the Buyer’s option, registered in the name of the Buyer or its nominee, upon conversion
of the Note and/or exercise of the Warrant, the Conversion Shares and Exercise Shares, in such amounts as specified from time to
time by the Buyer to the Company in accordance with the terms thereof (the “Irrevocable Transfer Agent Instructions”).
In the event that the Company proposes to replace its transfer agent, the Company shall provide, prior to the effective date of such
replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to this Agreement
(including but not limited to the provision to irrevocably reserved shares of Common Stock in the Reserved Amount (as defined in the
Note)) signed by the successor transfer agent to the Company and the Company. Prior to registration of the Conversion Shares and/or
Exercise Shares under the 1933 Act or the date on which the Conversion Shares and/or Exercise Shares may be sold pursuant to Rule
144, Rule 144A, Regulation S, or other applicable exemption without any restriction as to the number of Securities as of a
particular date that can then be immediately sold, all such certificates or book entry shares shall bear the restrictive legend
specified in Section 2(g) of this Agreement. The Company warrants that: (i) no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 5 will be given by the Company to its transfer agent and that the Securities shall
otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the
Note; (ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring
(or issuing)(electronically or in certificated form) any certificate for Securities to be issued to the Buyer upon conversion of or
otherwise pursuant to the Note and/or upon exercise of or otherwise pursuant to the Warrant as and when required by the Note and
this Agreement; (iii) it will not fail to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its
transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any
certificate for any Securities issued to the Buyer upon conversion of or otherwise pursuant to the Note and/or upon exercise of or
otherwise pursuant to the Warrant as and when required by the Note, Warrant, and/or this Agreement and (iv) it will provide any
required corporate resolutions and issuance approvals to its transfer agent within 6 hours of each conversion of the Note and/or
exercise of the Warrant. Nothing in this Section shall affect in any way the Buyer’s obligations and agreement set forth in
Section 2(g) hereof to comply with all applicable prospectus delivery requirements, if any, upon re-sale of the Securities. If the
Buyer provides the Company, at the cost of the Company, with (i) an opinion of counsel in form, substance and scope customary for
opinions in comparable transactions, to the effect that a public sale or transfer of such Securities may be made without
registration under the 1933 Act and such sale or transfer is effected or (ii) the Buyer provides reasonable assurances that the
Securities can be sold pursuant to 144, Rule 144A, Regulation S, or other applicable exemption, the Company shall permit the
transfer, and, in the case of the Securities, promptly instruct its transfer agent to issue one or more certificates, free from
restrictive legend, in such name and in such denominations as specified by the Buyer. The Company acknowledges that a breach by it
of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the transactions
contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section
5 may be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section, that
the Buyer shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring
immediate transfer, without the necessity of showing economic loss and without any bond or other security being required.


 


6. Conditions
to the Company’s Obligation to Sell. The obligation of the Company hereunder to issue and sell the Note to the Buyer at
the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions thereto, provided
that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole
discretion:


 


a.
The Buyer shall have executed this Agreement, the Security Agreement, and delivered the same to the Company.


 


b.
The Buyer shall have delivered the Purchase Price in accordance with Section 1(b) above.


 


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


 




    	14



     


    

 


d.
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization
having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by
this Agreement.


 


7. Conditions
to The Buyer’s Obligation to Purchase. The obligation of the Buyer hereunder to purchase the Note, on the Closing Date, is
subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are
for the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole discretion:


 


a.
The Company shall have executed this Agreement, the Security Agreement, and the RRA, and delivered the same to the Buyer.


 


b.
The Company shall have delivered to the Buyer the duly executed Note in such denominations as the Buyer shall request and in
accordance with Section 1(b) above.


 


 c. The Company shall have delivered to the Buyer the Warrant.




 


d.
The Irrevocable Transfer Agent Instructions, in form and substance satisfactory to the Buyer, shall have been delivered to and
acknowledged in writing by the Company’s Transfer Agent.


 


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


 


f.
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization
having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by
this Agreement.


 


g.
No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not
limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act
reporting obligations.


 


h.
Trading in the Common Stock on the Principal Market shall not have been suspended by the SEC, FINRA or the Principal
Market.


 


i.
The Company shall have delivered to the Buyer (i) a certificate evidencing the formation and good standing of the Company and each
of its Subsidiaries in such entity’s jurisdiction of formation issued by the Secretary of State (or comparable office) of such
jurisdiction, as of a date within ten (10) days of the Closing Date and (ii) resolutions adopted by the Company’s Board of
Directors at a duly called meeting or by unanimous written consent authorizing this Agreement and all other documents, instruments
and transactions contemplated hereby.


 


 8. Governing Law; Miscellaneous.




 


a.
Governing Law; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of
Delaware without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the
transactions contemplated by this Agreement, the Note, or any other agreement, certificate, instrument or document contemplated
hereby shall be brought only in the state courts located in the Commonwealth of Massachusetts or in the federal courts located in
the Commonwealth of Massachusetts. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of
any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non
conveniens. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTIONS CONTEMPLATED
HEREBY. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs.
Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or
proceeding in connection with this Agreement, the Note, or any other agreement, certificate, instrument or document contemplated
hereby or thereby 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.


 




    	15



     


    

 


b. Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other
party. A facsimile or .pdf signature shall be considered due execution and shall be binding upon the signatory thereto with the same
force and effect as if the signature were an original, not a facsimile or .pdf signature. Delivery of a counterpart signature hereto
by facsimile or email/.pdf transmission shall be deemed validly delivery thereof.


 


c. Construction;
Headings. This Agreement shall be deemed to be jointly drafted by the Company and the Buyer and shall not be construed against
any person as the drafter hereof. The headings of this Agreement are for convenience of reference only and shall not form part of,
or affect the interpretation of, this Agreement.


 


d. Severability. In
the event that any provision of this Agreement, the Note, or any other agreement or instrument delivered in connection herewith is
invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent
that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which
may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this
Agreement, the Note, or any other agreement, certificate, instrument or document contemplated hereby or thereby.


 


e. Entire
Agreement; Amendments. This Agreement, the Note, and the instruments referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the
Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this
Agreement or any agreement or instrument contemplated hereby may be waived or amended other than by an instrument in writing signed
by the Buyer.


 


f. Notices. All
notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by
hand delivery, telegram, e-mail or facsimile, addressed as set forth below or to such other address as such party shall have
specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be
deemed effective (a) upon hand delivery or delivery by e-mail or facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such
notice is to be received), or the first business day following such delivery (if delivered other than on a business day during
normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first
occur. The addresses for such communications shall be:


 


If
to the Company, to:


 


KONA
GOLD BEVERAGE, INC.


746
North Drive, Suite A


Melbourne,
FL 32934


Attention:
Robert Clark


e-mail:
robert@konagoldbeverage.com


 




    	16



     


    

 


If
to the Buyer, to:


 


MAST
HILL FUND, L.P.


48
Parker Road


Wellesley,
MA 02482


Attention:
Patrick Hassani


e-mail:
admin@masthillfund.com


 


g. Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. The
Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Buyer. The
Buyer may assign its rights hereunder to any “accredited investor” (as defined in Rule 501(a) of the 1933 Act) in a
private transaction from the Buyer or to any of its “affiliates,” as that term is defined under the 1934 Act, without
the consent of the Company.


 


h. Third-Party
Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.


 


i. Survival. The
representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the closing
hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. The Company agrees to indemnify
and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage arising as a result of or
related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth in this
Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are
incurred.


 


j. Publicity. The
Company, and the Buyer shall have the right to review a reasonable period of time before issuance of any press releases, SEC,
Principal Market or FINRA filings, or any other public statements with respect to the transactions contemplated hereby; provided, however,
that the Company shall be entitled, without the prior approval of the Buyer, to make any press release or SEC, Principal Market (or
other applicable trading market) or FINRA filings with respect to such transactions as is required by applicable law and regulations
(although the Buyer shall be consulted by the Company in connection with any such press release prior to its release and shall be
provided with a copy thereof and be given an opportunity to comment thereon).


 


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


 


l. No
Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party.


 


m. Indemnification.
In consideration of the Buyer’s execution and delivery of this Agreement and acquiring the Securities hereunder, and in
addition to all of the Company’s other obligations under this Agreement or the Note, the Company shall defend, protect,
indemnify and hold harmless the Buyer and its stockholders, partners, members, officers, directors, employees and direct or indirect
investors and any of the foregoing persons’ agents or other representatives (including, without limitation, those retained in
connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any
and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by
any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or
warranty made by the Company in this Agreement, the Note or any other agreement, certificate, instrument or document contemplated
hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in this Agreement, the Note or
any other agreement, certificate, instrument or document contemplated hereby or thereby or (c) any cause of action, suit or claim
brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the
Company) and arising out of or resulting from (i) the execution, delivery, performance or enforcement of this Agreement, the Note or
any other agreement, certificate, instrument or document contemplated hereby or thereby, (ii) any transaction financed or to be
financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, or (iii) the status of
the Buyer or holder of the Securities as an investor in the Company pursuant to the transactions contemplated by this Agreement. To
the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified Liabilities that is permissible under applicable
law.


 




    	17



     


    

 


n. Remedies. The
Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the
intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach
of its obligations under this Agreement, the Note, the Warrant, or any other agreement, certificate, instrument or document
contemplated hereby or thereby will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the
provisions of this Agreement, the Note, the Warrant, or any other agreement, certificate, instrument or document contemplated hereby
or thereby, that the Buyer shall be entitled, in addition to all other available remedies at law or in equity, and in addition to
the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement, the
Note, the Warrant, or any other agreement, certificate, instrument or document contemplated hereby or thereby, and to enforce
specifically the terms and provisions hereof and thereof, without the necessity of showing economic loss and without any bond or
other security being required.


 


o. Payment
Set Aside. To the extent that the (i) Company makes a payment or payments to the Buyer hereunder, pursuant to the Note, pursuant
to the Warrant, or pursuant to any other agreement, certificate, instrument or document contemplated hereby or thereby, or (ii) the
Buyer enforces or exercises its rights hereunder, pursuant to the Note, pursuant to the Warrant, or pursuant to any other agreement,
certificate, instrument or document contemplated hereby or thereby, and such payment or payments or the proceeds of such enforcement
or exercise or any part thereof (including but not limited to the sale of the Securities) are for any reason (i) subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered from, or disgorged by the Buyer, or (ii) are required
to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person or entity under any law
(including, without limitation, any bankruptcy law, foreign, state or federal law, common law or equitable cause of action), then
(i) 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 and (ii) the
Company shall immediately pay to the Buyer a dollar amount equal to the amount that was for any reason (i) subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, or disgorged by the Buyer, or (ii) required to be refunded,
repaid or otherwise restored to the Company, a trustee, receiver or any other person or entity under any law (including, without
limitation, any bankruptcy law, foreign, state or federal law, common law or equitable cause of action).


 


p. Failure
or Indulgence Not Waiver. No failure or delay on the part of the Buyer in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privileges. All rights and remedies of the Buyer existing
hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.


 


[Signature
Page Follows]


 




    	18



     


    

 


IN
WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.


 


KONA
GOLD BEVERAGE, INC.


 


	By: 	 	 
	Name: 	ROBERT CLARK	 
	Title: 	CHIEF EXECUTIVE OFFICER	 


 


MAST
HILL FUND, L.P.


 


	By:	 	 
	Name: 	PATRICK HASSANI	 
	Title: 	CHIEF INVESTMENT OFFICER	 


 


SUBSCRIPTION
AMOUNT:


 


Principal
Amount of Note: $595,000.00


Actual
Amount of Purchase Price of Note: $547,500.00


 




    	19



     


    

 


EXHIBIT
A


 


FORM
OF NOTE


 


[attached
hereto]


 




    	20



     


    

 


EXHIBIT
B 


 


REGISTRATION
RIGHTS


 


All
of the Conversion Shares and Exercise Shares shall be deemed “Registrable Securities” subject to the provisions of this Exhibit
B. All capitalized terms used but not defined in this Exhibit B shall have the meanings ascribed to such terms in the Securities Purchase
Agreement to which this Exhibit is attached.


 


 1.  Piggy-Back
Registration.




 


1.1 Piggy-Back
Rights. If at any time on or after the date of the Closing, the Company proposes to file any Registration Statement under the
1933 Act (a “Registration Statement”) with respect to any offering of equity securities, or securities or other
obligations exercisable or exchangeable for, or convertible into, equity securities, by the Company for its own account or for
stockholders of the Company for their account (or by the Company and by stockholders of the Company), other than a Registration
Statement (i) filed in connection with any employee stock option or other benefit plan on Form S-8, (ii) for a dividend reinvestment
plan, (iii) filed solely for the registration of Common Stock (or units consisting of Common Stock and warrants to purchase Common
Stock) to be sold in an Uplist Offering (as defined below) or (iv) in connection with a merger or acquisition, then the Company
shall (x) give written notice of such proposed filing to the holders of Registrable Securities appearing on the books and records of
the Company as such a holder as soon as practicable but in no event less than ten (10) days before the anticipated filing date of
the Registration Statement, which notice shall describe the amount and type of securities to be included in such Registration
Statement, the intended method(s) of distribution, and the name of the proposed managing underwriter or underwriters, if any, of the
offering, and (y) offer to the holders of Registrable Securities in such notice the opportunity to register the sale of such number
of Registrable Securities as such holders may request in writing within three (3) days following receipt of such notice (a
“Piggy-Back Registration”). The Company shall cause such Registrable Securities to be included in such registration and
shall cause the managing underwriter or underwriters of a proposed underwritten offering to permit the Registrable Securities
requested to be included in a Piggy-Back Registration on the same terms and conditions as any similar securities of the Company and
to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution
thereof (with the understanding that the Company shall file the initial prospectus covering the Buyer’s sale of the
Registrable Securities at prevailing market prices on the same date that the Registration Statement is declared effective by the
SEC). “Uplist Offering” shall mean an offering of Common Stock (or units consisting of Common Stock and warrants to
purchase Common Stock) that will result in the immediate listing for trading of the Common Stock on the NYSE American, the Nasdaq
Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, or any other national
securities exchange (or any successors to any of the foregoing).


 


1.2 Withdrawal.
Any holder of Registrable Securities may elect to withdraw such holder’s request for inclusion of Registrable Securities in
any Piggy-Back Registration by giving written notice to the Company of such request to withdraw prior to the effectiveness of the
Registration Statement. The Company (whether on its own determination or as the result of a withdrawal by persons making a demand
pursuant to written contractual obligations) may withdraw a Registration Statement at any time prior to the effectiveness of such
Registration Statement. Notwithstanding any such withdrawal, the Company shall pay all expenses incurred by the holders of
Registrable Securities in connection with such Piggy-Back Registration as provided in Section 1.5 below.


 


1.3
The Company shall notify the holders of Registrable Securities at any time when a prospectus relating to such holder’s
Registrable Securities is required to be delivered under the 1933 Act, upon discovery that, or upon the happening of any event as a
result of which, the prospectus included in such Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing. At the request of such holder, the Company shall also prepare, file and
furnish to such holder a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of the Registrable Securities, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing. The holders of Registrable Securities shall not to offer or sell any
Registrable Securities covered by the Registration Statement after receipt of such notification until the receipt of such supplement
or amendment.


 


1.4
The Company may request a holder of Registrable Securities to furnish the Company such information with respect to such holder and
such holder’s proposed distribution of the Registrable Securities pursuant to the Registration Statement as the Company may
from time to time reasonably request in writing or as shall be required by law or by the SEC in connection therewith, and such
holders shall furnish the Company with such information.


 




    	21



     


    

 


1.5
All fees and expenses incident to the performance of or compliance with this Exhibit B by the Company shall be borne by the Company
whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the
foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and
expenses of the Company’s counsel and independent registered public accountants) (A) with respect to filings made with the
SEC, (B) with respect to filings required to be made with any trading market on which the Common Stock is then listed for trading,
(C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including,
without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of
the Registrable Securities) and (D) with respect to any filing that may be required to be made by any broker through which a holder
of Registrable Securities intends to make sales of Registrable Securities with the FINRA, (ii) printing expenses, (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) 1933 Act liability insurance, if the
Company so desires such insurance, (vi) fees and expenses of all other persons or entities retained by the Company in connection
with the consummation of the transactions contemplated by this Exhibit B and (vii) reasonable fees and disbursements of a single
special counsel for the holders of Registrable Securities (selected by holders of the majority of the Registrable Securities
requesting such registration). In addition, the Company shall be responsible for all of its internal expenses incurred in connection
with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses
of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. In no event
shall the Company be responsible for any broker or similar commissions of any holder of Registrable Securities.


 


1.6
The Company and its successors and assigns shall indemnify and hold harmless the Buyer, each holder of Registrable Securities, the
officers, directors, members, partners, agents and employees (and any other individuals or entities with a functionally equivalent
role of a person holding such titles, notwithstanding a lack of such title or any other title) of each of them, each individual or
entity who controls the Buyer or any such holder of Registrable Securities (within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act) and the officers, directors, members, stockholders, partners, agents and employees (and any other
individuals or entities with a functionally equivalent role of a person holding such titles, notwithstanding a lack of such title or
any other title) of each such controlling individual or entity (each, an “Indemnified Party”), to the fullest extent
permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without
limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of
or relating to (1) any untrue or alleged untrue statement of a material fact contained in a Registration Statement, any related
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 such prospectus or supplement thereto, in light of the circumstances under which they were made) not
misleading or (2) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act or any state securities law, or
any rule or regulation thereunder, in connection with the performance of its obligations under this Exhibit B, except to the extent,
but only to the extent, that (i) such untrue statements or omissions are based upon information regarding the Buyer or such holder
of Registrable Securities furnished to the Company by such party for use therein. The Company shall notify the Buyer and each holder
of Registrable Securities promptly of the institution, threat or assertion of any proceeding arising from or in connection with the
transactions contemplated by this Exhibit B of which the Company is aware.


 


1.7
If the indemnification under Section 1.6 is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party
harmless for any Losses, then the Company shall contribute to the amount paid or payable by such Indemnified Party, in such
proportion as is appropriate to reflect the relative fault of the Company and Indemnified Party in connection with the actions,
statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of
the Company and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including
any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made
by, or relates to information supplied by, the Company or the Indemnified Party, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a
party as a result of any Losses shall be deemed to include any reasonable attorneys’ or other fees or expenses incurred by
such party in connection with any proceeding to the extent such party would have been indemnified for such fees or expenses if the
indemnification provided for in Section 1.6 was available to such party in accordance with its terms. It is agreed that it would not
be just and equitable if contribution pursuant to this Section 1.7 were determined by pro rata allocation or by any other method of
allocation that does not take into account the equitable considerations referred to in the immediately preceding sentence.
Notwithstanding the provisions of this Section 1.7, neither the Buyer nor any holder of Registrable Securities shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such party from the
sale of all of their Registrable Securities pursuant to such Registration Statement or related prospectus exceeds the amount of any
damages that such party has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission.


 


[End
of Exhibit B]


 




    	22



     


    

 


EXHIBIT
C


 


FORM
OF SECURITY AGREEMENT


 


[attached
hereto]


 




    	23