Exhibit 10.1


 


SECURITIES
PURCHASE AGREEMENT


 


This
Securities Purchase Agreement (as amended, supplemented, restated and/or modified from time to time, this “Agreement”)
is entered into as of August 9, 2022, by and between FingerMotion, Inc., a Delaware corporation (the “Company”), and
Lind Global Fund II LP, a Delaware limited partnership (the “Investor”).


 


BACKGROUND


 


A.
The board of directors (the “Board of Directors”) of the Company has authorized the issuance to Investor of the Note
(as defined below) and the Warrant (as defined below).


 


B
The Investor desires to purchase the Note and the Warrant on the terms and conditions set forth in this Agreement.


 


NOW
THEREFORE, in consideration of the foregoing recitals and the covenants and agreements set forth herein, and intending hereby to be legally
bound, the Company and the Investor hereby agree as follows:


 


1.
DEFINITIONS. As used in this Agreement,
the following terms shall have the following meanings specified or indicated below, and such meanings shall be equally applicable to
the singular and plural forms of such defined terms:


 


“1933
Act” means the Securities Act of 1933, as amended.


 


“1934
Act” means the Securities Exchange Act of 1934, as amended.


 


“Acquisition”
means the acquisition by the Company or any direct or indirect Subsidiary of the Company of a majority of the Equity Interests or substantially
all of the assets and business of any Person, whether by direct purchase of Equity Interests, asset purchase, merger, consolidation or
like combination.


 


“Affiliate”
means a Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control
with, the Person specified.


 


“Agreement”
has the meaning set forth in the preamble.


 


“Blue
Sky Application” has the meaning set forth in Section 9.3(a).


 


“Board
of Directors” has the meaning set forth in the recitals.


 


“Business
Day” means any day other than a Saturday, Sunday or any other day on which banks are permitted or required to be closed in
New York City.


 


 


[Signature Page of
Securities Purchase Agreement]






    -1-


     


    

“Capital
Stock” means the Common Stock and any other classes of capital stock of the Company.


 


“Change
of Control” means, with respect to the Company, on or after the date of this Agreement:


 


		(a)	a
change in the composition of the Board of Directors of the Company at a single shareholder meeting where individuals who were directors
of the Company immediately prior to the start of such shareholder meeting no longer constitute the majority of the directors at the conclusion
of such meeting, without prior written consent of the Investor;



 


		(b)	a
change, without prior written consent of the Investor, in the composition of the Board of Directors of the Company prior to the termination
of this Agreement where individuals who were directors as of the date of this Agreement cease to constitute the majority of the directors
of the Company prior to the termination of this Agreement;



 


		(c)	other
than a shareholder that holds such a position at the date of this Agreement, if a Person comes to have beneficial ownership, control
or direction over more than forty percent (40%) of the voting rights attached to any class of voting securities of the Company; or



 


		(d)	the
sale or other disposition by the Company or any of its Subsidiaries in a single transaction, or in a series of transactions, of all or
substantially all of their respective assets.



 


“Closing”
has the meaning set forth in Section 2.2(b).


 


“Closing
Date” has the meaning set forth in Section 2.2(b).


 


“Commitment
Fee” means an amount equal to Three Percent (3%) of the applicable Funding Amount.


 


“Common
Stock” means the common stock of the Company, par value $0.001 per share.


 


“Company”
has the meaning set forth in the preamble.


 


“Conversion
Shares” means the Common Stock issuable upon the full or any partial conversion of the Note.


 


“Current
Public Information Failure” has the meaning set forth in Section 9.4.


 


“Disclosure
Letter” has the meaning set forth in Section 3.


 


“Effectiveness
Period” has the meaning set forth in Section 9.2(a).


 






    -2-


     


    

“Equity
Interests” means and includes capital stock, membership interests and other similar equity securities, and shall also include
warrants or options to purchase capital stock, membership interests or other equity interests.


 


“Event”
means any event, change, development, effect, condition, circumstance, matter, occurrence or state of facts.


 


“Event
of Default” has the meaning set forth in Section 7.1.


 


“Exempted
Indebtedness” means aggregate liabilities of less than $2,000,000 in respect of Indebtedness incurred in a transaction or series
of transactions; provided that such Indebtedness is subordinated in full to the obligations of the Company under the Transaction documents
and is on commercially reasonable terms.


 


“Exempted
Securities” means (a) shares of Common Stock or preferred shares or rights, warrants or options to purchase Common Stock or
preferred shares issued as consideration for any Acquisition, (b) equity securities issued by reason of a dividend, stock split, split-up
or other distribution on shares Common Stock, (c) shares of Common Stock or rights, warrants or options to purchase shares of Common
Stock issued to employees or directors of, or consultants or advisors to, the Company or any of its Subsidiaries pursuant to a plan,
agreement or arrangement approved by the Board of Directors (“Equity Plans”), or (d) shares of Common Stock issued
upon the exercise or conversion of options or warrants outstanding on the date hereof.


 


“Filing
Failure” has the meaning set forth in Section 9.4.


 


“Form
8-K” has the meaning set forth in Section 5.8.


 


“Funding
Amount” means an amount equal to Four Million Dollars ($4,000,000).


 


“GAAP”
means United States generally accepted accounting principles.


 


“HSR
Act” has the meaning set forth in Section 5.12.


 


“Investor”
has the meaning set forth in the preamble.


 


“Investor
Group” shall mean the Investor plus any other Person with which the Investor is considered to be part of a group under Section
13 of the 1934 Act or with which the Investor otherwise files reports under Sections 13 and/or 16 of the 1934 Act.


 


“Investor
Party” has the meaning set forth in Section 5.9(a).


 


“Investor
Shares” means the Conversion Shares, the Warrant Shares and any other shares issued or issuable to the Investor pursuant to
this Agreement, Note or the Warrant.


 


“IP
Rights” has the meaning set forth in Section 3.10.


 






    -3-


     


    

“Law”
means any law, rule, regulation, order, judgment or decree, including, without limitation, any federal and state securities Laws.


 


“Legend
Removal Date” shall have the meaning set forth in Section 5.1(c).


 


“Losses”
has the meaning set forth in Section 5.9(a).


 


“Maintenance
Failure” has the meaning set forth in Section 9.4.


 


“Material
Adverse Effect” means any material adverse effect on (i) the businesses, properties, assets, prospects, operations, results
of operations or financial condition of the Company, or the Company and the Subsidiaries, taken as a whole, or (ii) the ability of the
Company to consummate the transactions contemplated by this Agreement or to perform its obligations hereunder or under the Note or the
Warrant; provided, however, that none of the following shall be deemed either alone or in combination to constitute, and none
of the following shall be taken into account in determining whether there has been or would be, a Material Adverse Effect: (a) any
adverse effect resulting from or arising out of general economic conditions; (b) any adverse effect resulting from or arising out of
general conditions in the industries in which the Company and the Subsidiaries operate; (c) any adverse effect resulting from any changes
to applicable Law; or (d) any adverse effect resulting from or arising out of any natural disaster or any acts of terrorism, sabotage,
military action or war or any escalation or worsening thereof; provided, further, that any event, occurrence, fact, condition
or change referred to in clauses (a) through (d) immediately above shall be taken into account in determining whether a Material Adverse
Effect has occurred or could reasonably be expected to occur to the extent that such event, occurrence, fact, condition or change has
a disproportionate effect on the Company and/or the Subsidiaries compared to other participants in the industries in which the Company
and the Subsidiaries operate.


 


“Maximum
Percentage” means 4.99%; provided, that if at any time after the date hereof the Investor Group beneficially owns in
excess of 4.99% of any class of Equity Interests in the Company that is registered under the 1934 Act, then the Maximum Percentage shall
automatically increase to 9.99% so long as the Investor Group owns in excess of 4.99% of such class of Equity Interests (and shall, for
the avoidance of doubt, automatically decrease to 4.99% upon the Investor Group ceasing to own in excess of 4.99% of such class of Equity
Interests).


 


“Money
Laundering Laws” has the meaning set forth in Section 3.25.


 


“New
Securities” means, collectively, equity securities of the Company, whether or not currently authorized, as well as rights,
options, or warrants to purchase such equity securities, or securities of any type whatsoever that are, or may become convertible or
exchangeable into or exercisable for such equity securities; provided that, New Securities shall not include Common Stock issued in a
registered at the market offering as defined in Rule 415 promulgated under the 1933 Act.


 


“Note”
has the meaning set forth in Section 2.1.


 






    -4-


     


    

“Notice
Termination Time” has the meaning set forth in Section 10.2.


 


“OFAC”
has the meaning set forth in Section 3.23.


 


“Offer
Notice” has the meaning set forth in Section 10.1.


 


“Outstanding
Principal Amount” has the meaning set forth in the Note.


 


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


 


“Prepayment
Right” has the meaning set forth in Section 2.4.


 


“Press
Release” has the meaning set forth in Section 5.8.


 


“Principal
Amount” has the meaning set forth in Section 2.1.


 


“Proceedings”
has the meaning set forth in Section 3.6.


 


“Prohibited
Transaction” means a transaction with a third party or third parties in which the Company issues or sells (or arranges or agrees
to issue or sell) or enters into agreement with respect to the following:


 


(a)
any debt, equity or equity-linked securities (including options or warrants) that are convertible into, exchangeable or exercisable for,
or include the right to receive shares of the Company’s Capital Stock:


 


(i)
at a conversion, repayment, exercise or exchange rate or other price that is based on, and/or varies with, a discount to the future trading
prices of, or quotations for, shares of Common Stock; or


 


(ii)
at a conversion, repayment, exercise or exchange rate or other price that is subject to being reset at some future date after the initial
issuance of such debt, equity or equity-linked security or upon the occurrence of specified or contingent events (other than warrants
that may be repriced by the Company and warrants that contain standard and customary anti-dilution provisions);


 


(b)
any Indebtedness which is not Exempted Indebtedness; or


 


(c)
any securities in a capital or debt raising transaction or series of related transactions which grant to an investor the right to receive
additional securities based upon future transactions of the Company on terms more favorable than those granted to such investor in such
first transaction or series of related transactions;


 






    -5-


     


    

and
are deemed to include transactions generally referred to as equity lines of credit and stand-by equity distribution agreements, and convertible
securities and loans having a similar effect. Notwithstanding the foregoing, and for the avoidance of doubt, rights issuances, shareholder
purchase plans, Equity Plans, convertible securities, or Common Stock Shares on the Trading Market but each at a fixed price per share,
shall not be deemed to be a Prohibited Transaction.


 


“Prospectus”
means the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement, with respect to
the terms of the offering of any portion of the Investor Shares covered by such Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus, and
any “free writing prospectus” as defined in Rule 405 under the 1933 Act.


 


“register,”
“registered” and “registration” refer to a registration made by preparing and filing a Registration
Statement or similar document in compliance with the 1933 Act (as defined below), and the declaration or ordering of effectiveness of
such Registration Statement or document.


 


“Registration
Delay Payments” has the meaning set forth in Section 9.4.


 


“Registration
Statement” means any registration statement of the Company filed under the 1933 Act that covers the resale of any of the Investor
Shares pursuant to the provisions of this Agreement, including the Prospectus and amendments and supplements to such Registration Statement,
and including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.


 


“Required
Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable
in the future pursuant to the Transaction Documents, including any Warrant Shares issuable upon exercise in full of the Warrant or Conversion
Shares issuable upon conversion in full of the Note, ignoring any conversion or exercise limits set forth therein.


 


“Rule
144” means Rule 144 promulgated by the SEC pursuant to the 1933 Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such Rule.


 


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


 


“SEC
Documents” has the meaning set forth in Section 3.5(a).


 


“Securities”
means the Note, the Warrant and the Investor Shares.


 


“Securities
Termination Event” means either of the following has occurred:


 


(a)
trading in securities generally in the United States has been suspended or limited for a consecutive period of greater than three (3)
Business Days; or


 






    -6-


     


    

(b)
a banking moratorium has been declared by the United States or the New York State authorities and is continuing for a consecutive period
of greater than three (3) Business Days.


 


“Shareholder
Approval” shall mean the approval of the holders of a majority of the Company’s outstanding voting Common Stock: (a)
if and to the extent legally required, to amend the Company’s Certificate of Incorporation to increase the number of authorized
shares of Common Stock by at least the number of shares equal to the number of shares of Common Stock issuable under the Transaction
Documents, (b) to ratify and approve all of the transactions contemplated by the Transaction Documents, including the issuance of all
of the Investor Shares (as such term is defined in each of such documents) issued and potentially issuable to the Investor thereunder,
all as may be required by the applicable rules and regulations of the Trading Market (or any successor entity), and (c) to lower the
Floor Price (as defined in the Note) to $0.50 per share of Common Stock.


 


“Subsequent
Financing” has the meaning set forth in Section 10.1.


 


“Subsidiaries”
and “Subsidiary” have the meaning set forth in Section 3.4(b).


 


“Trading
Day” means a day on which the Common Stock is traded on a Trading Market.


 


“Trading
Market” means whichever of the New York Stock Exchange, NYSE American, or the Nasdaq Stock Market (including the Nasdaq Capital
Market), on which the Common Stock is listed or quoted for trading on the date in question.


 


“Transaction
Documents” means this Agreement, the Note, the Warrant and any other documents or agreements executed or delivered in connection
with the transactions contemplated hereunder.


 


“VWAP”
means, as of any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of one share of Common Stock trading in the ordinary course of
business at the applicable Trading Price for such date (or the nearest preceding date) on such Trading Market as reported by Bloomberg
Financial L.P.; (b) if the Common Stock is not then listed on a Trading Market and if the Common Stock traded in the over-the-counter
market, as reported by the OTCQX or OTCQB Markets, the volume weighted average price of one share of Common Stock for such date (or the
nearest preceding date) on the OTCQX or OTCQB Markets, as reported by Bloomberg Financial L.P.; (c) if the Common Stock is not then listed
or quoted on a Trading Market or on the OTCQX or OTCQB Markets and if prices for the Common Stock are then reported in the “Pink
Sheets” published by the OTC Markets Group (or a similar organization or agency succeeding to its functions of reporting prices),
the most recent bid price of one share of Common Stock so reported, as reported by Bloomberg Financial L.P.; or (d) in all other cases,
the fair market value of one share of Common Stock as determined by an independent appraiser selected in good faith by the Holder and
reasonably acceptable to the Company.


 


“Warrant”
has the meaning set forth in Section 2.1.


 






    -7-


     


    

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


 


2.
PURCHASE AND SALE OF THE NOTE AND THE WARRANT


 


2.1
Purchase and Sale of the Note and the Warrant. Subject to the terms and conditions set forth herein at the Closing, the Company
shall issue and sell to the Investor, and the Investor shall purchase from the Company, for the Funding Amount (a) a convertible promissory
note, in the form attached hereto as Exhibit A (the “Note”), in the principal amount of Four Million
Eight Hundred Thousand Dollars ($4,800,000) (the “Principal Amount”) and (b) a Common Stock purchase warrant, in the
form attached hereto as Exhibit B, registered in the name of the Investor, pursuant to which the Investor shall have the
right to acquire 3,478,261 shares of Common Stock (the “Warrant”), which amount shall be reduced by fifty percent
(50%) upon effectiveness of a Registration Statement (the date upon which such Registration Statement is declared effective, the “Effectiveness
Date”). For the avoidance doubt, the Company acknowledges and agrees (i) that the Holder shall not be required to return any
Warrant Shares into which the Warrant has been exercised prior to the Effectiveness Date unless the Investor shall have exercised the
Warrant prior to the date that is 180 days from the date hereof, and (ii) upon the Effectiveness Date, the amount of Warrant Shares into
which the Warrant shall not be reduced to less than 50% of the amount then exercisable pursuant to Section 2.6 of the Warrant whether
to account for exercises prior to the Effective Date or for any other reason.


 


2.2
Closing. The closing of the offer and sale of the Note and the Warrant shall take place remotely via the exchange of documents
and signature and shall occur no later than ten (10) Business Days following the execution and delivery of this Agreement, subject to
satisfaction or waiver of the conditions set forth in Section 6, or at such other time and place as the Company and the Investor
agree upon, orally or in writing (the “Closing”, and the date the Closing is completed being the “Closing
Date”).


 


2.3
Commitment Fee. At each Closing, as applicable, the Company shall pay to the Investor the Commitment Fee, in United States
dollars and in immediately available funds. The Commitment Fee shall be paid by being offset against the applicable Funding Amount payable
by the Investor at the Closing.


 


2.4
Prepayment Right. As set forth in the Note, following the date that is sixty (60) days following the date upon which the Conversion
Shares may be immediately resold under Rule 144 without restriction on the number of shares to be sold or manner of sale, in its sole
discretion and upon giving the prior written notice set forth in the Note, the Company will have the right to pre-pay the entire then
Outstanding Principal Amount at any time with a premium of five percent (5%) of the then Outstanding Principal Amount (the “Prepayment
Right”); provided, that in the event that the Company elects to exercise its Prepayment Right, the Investor will have
the option to convert up to one-third (1/3) of the Principal Amount of the Note, at a price per share equal to the lesser of the Repayment
Share Price or the Conversion Price (as each such term is defined in the Note).


 






    -8-


     


    

2.5
Senior Obligation. As an inducement for the Investor to enter into this Agreement and to purchase the Note, all obligations
of the Company pursuant to this Agreement and the Note shall be senior to all other existing Indebtedness and equity of the Company.
Upon any Liquidation Event (as defined in the Note), the Investor will be entitled to receive, before any distribution or payment is
made upon, or set apart with respect to, any Indebtedness of the Company or any class of capital stock of the Company, an amount equal
to the Outstanding Principal Amount.


 


2.6
20% Share Cap Restriction. Each of the Company and the Investor acknowledge and agree that there cannot, under any circumstances,
be more than 8,561,451 shares of Common Stock issued by the Company under the Note and the Warrant combined without first receiving shareholder
approval to issue more than 8,561,451 shares of Common Stock thereunder. In addition, the Investor understands and acknowledges that
any shares of Common Stock that may be issued to the Investor under the Note and/or the Warrant prior to the Company holding a shareholder
vote to approve and authorize the Company to issue more than 8,561,451 shares of Common Stock under the Note and the Warrant combined,
shall not be entitled to vote to approve such matter placed before the Company’s shareholders.


 


3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Investor and covenants with the Investor that as of the Closing Date, except as is set forth
in the Disclosure Letter being delivered to the Investor as of the date hereof and updated and delivered to the Investor as of the Second
Closing Date, as applicable (the “Disclosure Letter”), the following representations and warranties are true and correct:


 


3.1
Organization and Qualification. The Company is a corporation duly organized and validly existing in good standing under the Laws
of the State of Delaware and has the requisite corporate power and authority to own its properties and to carry on its business as now
being conducted. The Company is duly qualified to do business and is in good standing (if a good standing concept exists in such jurisdiction)
in every jurisdiction in which the ownership of its property or the nature of the business conducted by it makes such qualification necessary,
except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect.


 


3.2
Authorization; Enforcement; Compliance with Other Instruments. The Company has the requisite corporate power and authority to
execute the Transaction Documents, to issue and sell the Note and the Warrant pursuant hereto, and to perform its obligations under the
Transaction Documents, including issuing the Investor Shares on the terms set forth in this Agreement. The execution and delivery of
the Transaction Documents by the Company and the issuance and sale of the Securities pursuant hereto, including without limitation the
reservation of the Conversion Shares and the Warrant Shares for future insuance, have been duly and validly authorized by the Company’s
Board of Directors and no further consent or authorization is required by the Company, its Board of Directors, its shareholders or any
other Person in connection therewith. The Transaction Documents have been duly and validly executed and delivered by the Company and
constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except
as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar Laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies.


 






    -9-


     


    

3.3
No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the issuance and sale of
the Note and the Warrant hereunder will not (a) conflict with or result in a violation of the Company’s Certificate of Incorporation
or Amended and Restated Bylaws, (b) conflict with, or constitute a material default (or an event which, with notice or lapse of
time or both, would become a material default) under, or give to others any right of termination, amendment, acceleration or cancellation
of, any material agreement to which the Company or any of the Subsidiaries is a party, or (c) subject to the making of the filings referred
to in Section  5, violate in any material respect any Law or any rule or regulation of the Trading Market applicable to the
Company or any of the Subsidiaries or by which any of their properties or assets are bound or affected. Assuming the accuracy of the
Investor’s representations in Section 4 and subject to the making of the filings referred to in Section 5,
(i) no approval or authorization will be required from any governmental authority or agency, regulatory or self-regulatory agency or
other third party (including the Trading Market) in connection with the issuance of the Note and the Warrant and the other transactions
contemplated by this Agreement (including the issuance of the Conversion Shares upon conversion of the Note and the Warrant Shares upon
the exercise of the Warrant) and (ii) the issuance of the Note and the Warrant, and the issuance of the Conversion Shares upon the
conversion of the Note and the Warrant Shares upon exercise of the Warrant will be exempt from the registration and qualification requirements
under the 1933 Act and all applicable state securities Laws.


 


3.4
Capitalization and Subsidiaries.


 


(a)
The authorized Capital Stock of the Company consists of 200,000,000 shares of Common Stock and 1,000,000 shares of preferred stock. As
of the close of business on May 31, 2022, 42,777,260 shares of Common Stock and nil shares of preferred stock were issued and outstanding;
and since May 31, 2022, and through the date of this Agreement, the Company has issued 30,000 additional shares of Common Stock. As of
May 31, 2022, (i) an aggregate of 4,545,500 shares of Common Stock are issuable upon exercise of options granted under the 2021 Stock
Incentive Plan, of which 909,100 shares were exercisable as of May 31, 2022, and no additional shares are reserved for future issuance
thereunder and (ii) 1,846,168 shares of Common Stock are reserved for issuance upon exercise of outstanding warrants with exercise prices
ranging from $2.00 to $3.00 per share. The Company has duly reserved up to 5,083,190 shares of Common Stock for issuance upon conversion
of the Note and has duly reserved up to 3,478,261 shares of Common Stock for issuance upon exercise of the Warrant. The Conversion Shares,
when issued upon conversion of the Note in accordance with their terms, and the Warrant Shares, if and when issued upon exercise of the
Warrant in accordance with their terms, will be validly issued, fully paid and non-assessable and free from all taxes, liens and charges
with respect to the issuance thereof. No shares of the Company’s Capital Stock are subject to preemptive rights or any other similar
rights or any liens or encumbrances suffered or permitted by the Company. The Company’s Certificate of Incorporation and Amended
and Restated Bylaws on file on the SEC’s EDGAR website are true and correct copies of the Company’s Certificate of Incorporation
and Amended and Restated Bylaws as in effect as of the Closing Date. The Company is not in violation of any provision of its Certificate
of Incorporation or Amended and Restated Bylaws.


 






    -10-


     


    

(b)
Each direct and indirect subsidiary of the Company (each, a “Subsidiary” and collectively, the “Subsidiaries”)
is listed in Exhibit 21.1 to the Company’s Annual Report on Form 10-K under the 1934 Act for the fiscal year ended February 28,
2022, which comprise part of the SEC Documents. The Company owns, directly or indirectly, all of the capital stock or other equity interests
of each Subsidiary. No Subsidiary has any outstanding stock options, warrants or other instruments pursuant to which such Subsidiary
may at any time or under any circumstances be obligated to issue any shares of its capital stock or other Equity Interests. Each Subsidiary
is duly organized and validly existing in good standing under the laws of its jurisdiction of formation (if a good standing concept exists
in such jurisdiction) and has all requisite power and authority to own its properties and to carry on its business as now being conducted.


 


(c)
Neither the Company nor any Subsidiary is bound by any agreement or arrangement pursuant to which it is obligated to register the sale
of any securities under the 1933 Act. There are no outstanding securities of the Company or any of the Subsidiaries which contain any
redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to redeem or purchase any security of the Company or any Subsidiary. There are no outstanding securities
or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Note, the Warrant or the
Investor Shares. Neither the Company nor any Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements
or any similar plan or agreement, other than the Company’s 2021 Stock Incentive Plan.


 


(d)
The issuance and sale of any of the Securities will not obligate the Company to issue shares of Common Stock or other securities, or
to satisfy any related contractual obligations, to any other Person and will not result in the adjustment of the exercise, conversion,
exchange, or reset price of any outstanding securities.


 


(e)
As of the date of this Agreement, the Company has capacity under the rules and regulations of the Trading Market to issue up to 8,561,451
shares of Common Stock (or securities convertible into or exercisable for shares of Common Stock) without obtaining Shareholder Approval.


 


3.5
SEC Documents; Financial Statements.


 


(a)
As of the Closing Date, 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 1934 Act for the two years preceding the Closing Date (or such shorter period
as the Company was required by law or regulation to file such material) (all of the foregoing filed prior to the Closing Date and all
exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein being hereinafter
referred to as the “SEC Documents”). As of their respective filing dates, the SEC Documents complied in all material
respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC
Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.


 






    -11-


     


    

(b)
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 GAAP consistently applied , and audited by an independent registered public accounting
firm that is a member of the Public Companies Accounting Oversight Board, during the periods involved (except as may be otherwise indicated
in such financial statements or the notes thereto, or, in the case of unaudited interim statements, to the extent they may exclude footnotes
or may be condensed or summary statements) and fairly present in all material respects the consolidated financial position of the Company
as of the dates thereof and the consolidated results of its operations and consolidated cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments). No other written information provided by or on behalf of
the Company to the Investor in connection with the Investor’s purchase of the Note and the Warrant which is not included in the
SEC Documents contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein,
in the light of the circumstance under which they are or were made, not misleading.


 


(c)
Subject to certain material weaknesses disclosed in the SEC Documents, the Company and each of the Subsidiaries maintain a system of
internal accounting controls intended to provide reasonable assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity
with GAAP and to maintain asset accountability, (iii) reasonable controls to safeguard assets are in place, 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.


 


3.6
Litigation and Regulatory Proceedings. There are no material actions, causes of action, suits, claims, proceedings, inquiries
or investigations (collectively, “Proceedings”) before or by any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the executive officers of Company or any of the Subsidiaries, threatened against
or affecting the Company or any of the Subsidiaries, the Common Stock or any other class of issued and outstanding shares of the Company’s
Capital Stock, or any of the Company’s or the Subsidiaries’ officers or directors in their capacities as such and, to the
knowledge of the executive officers of the Company, there is no reason to believe that there is any basis for any such Proceeding.


 







3.7
No Undisclosed Events, Liabilities or Developments. No event, development or circumstance has occurred or exists, or to the knowledge
of the executive officers of the Company is reasonably anticipated to occur or exist that (a) would reasonably be anticipated to have
a Material Adverse Effect or (b) would be required to be disclosed by the Company under applicable securities Laws on a registration
statement filed with the SEC relating to an issuance and sale by the Company of its Common Stock and which has not been publicly announced.


 






    -12-


     


    

3.8
Compliance with Law. The Company and each of the Subsidiaries have conducted and are conducting their respective businesses in
compliance in all material respects with all applicable Laws and are in compliance in all material respects with the rules and regulations
of the Trading Market. The Company is not aware of any facts which could reasonably be anticipated to lead to have the effect of, delisting
the Common Stock from the Trading Market, nor has the Company received any notification that the Trading Market is currently contemplating
terminating such listing.


 


3.9
Employee Relations. Neither the Company nor any Subsidiary is involved in any union labor dispute nor, to the knowledge of the
Company, is any such dispute threatened. Neither the Company nor any Subsidiary is a party to any collective bargaining agreement. No
executive officer (as defined in Rule 3b-7 of the 1934 Act) has notified the Company that such officer intends to leave the Company’s
employ or otherwise terminate such officer’s employment with the Company.


 


3.10
Intellectual Property Rights. The Company and each Subsidiary owns or possesses adequate rights or licenses to use all trademarks,
trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals,
governmental authorizations, trade secrets and other intellectual property rights (collectively, “IP Rights”) necessary
to conduct their respective businesses as now conducted. None of the material IP Rights of the Company or any of the Subsidiaries are
expected to expire or terminate within three (3) years from the date of this Agreement. Neither the Company nor any Subsidiary is infringing,
misappropriating or otherwise violating any IP Rights of any other Person. No claim has been asserted, and no Proceeding is pending,
against the Company or any Subsidiary alleging that the Company or any Subsidiary is infringing, misappropriating or otherwise violating
the IP Rights of any other Person, and, to the Company’s knowledge, no such claim or Proceeding is threatened, and the Company
is not aware of any facts or circumstances which might give rise to any such claim or Proceeding. The Company and the Subsidiaries have
taken commercially reasonable security measures to protect the secrecy, confidentiality and value of all of their material IP Rights.


 


3.11
Environmental Laws. Except, in each case, as would not be reasonably anticipated to have a Material Adverse Effect, the Company
and the Subsidiaries (a) are in compliance with any and all applicable Laws relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or contaminants, (b) have received and hold all permits, licenses
or other approvals required of them under all such Laws to conduct their respective businesses and (c) are in compliance with all terms
and conditions of any such permit, license or approval.


 


3.12
Title to Assets. The Company and the Subsidiaries have good and marketable title to all personal property owned by them which
is material to their respective businesses, in each case free and clear of all liens, encumbrances and defects. Any real property and
facilities held under lease by the Company or any Subsidiary are held under valid, subsisting and enforceable leases with such exceptions
as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and
the Subsidiaries.


 






    -13-


     


    

3.13
Insurance. The Company and each of the Subsidiaries are insured or will be insured promptly following the date hereof by insurers
of recognized financial responsibility against such losses and risks and in such amounts as management of the Company reasonably believes
to be prudent and customary in the businesses in which the Company and the Subsidiaries are engaged. Neither the Company nor any of the
Subsidiaries has been refused any insurance coverage sought or applied for, and the Company has no reason to believe that it will not
be able to renew all existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers.


 


3.14
Regulatory Permits. The Company and the Subsidiaries have in full force and effect all certificates, approvals, authorizations
and permits from all regulatory authorities and agencies necessary to own, lease or operate their respective properties and assets and
conduct their respective businesses, and neither the Company nor any Subsidiary has received any notice of Proceedings relating to the
revocation or modification of any such certificate, approval, authorization or permit, except for such certificates, approvals, authorizations
or permits with respect to which the failure to hold would not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.


 


3.15
No Materially Adverse Contracts, Etc. Neither the Company nor any of the Subsidiaries is (a) subject to any charter, corporate
or other legal restriction, or any judgment, decree or order which in the judgment of the Company’s officers has or is expected
in the future to have a Material Adverse Effect or (b) a party to any contract or agreement which in the judgment of the Company’s
management has or would reasonably be anticipated to have a Material Adverse Effect.


 


3.16
Taxes. The Company and the Subsidiaries each has made or filed, or caused to be made or filed, all United States federal and other
material tax returns, reports and declarations required by any jurisdiction to which it is subject and has paid all taxes and other governmental
assessments and charges that are material in amount, required to be paid by it, regardless of whether such amounts are shown or determined
to be due on such returns, reports and declarations, except those being contested in good faith by appropriate proceedings and for which
it has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which
such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority
of any jurisdiction.


 


3.17
Solvency. After giving effect to the receipt by the Company of the proceeds from the transactions contemplated by this Agreement
(a) the Company’s fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of the
Company’s existing debts and other liabilities (including known contingent liabilities) as they mature; and (b) the current
cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking
into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts
are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances
which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction.


 






    -14-


     


    

3.18
Investment Company. The Company is not, and is not an Affiliate of, any company that is registered or required to be registered
as an “investment company” within the meaning of the Investment Company Act of 1940, as amended.


 


3.19
Certain Transactions. Other than as disclosed in the SEC Documents, there are no contracts, transactions, arrangements or understandings
between the Company or any of its Subsidiaries, on the one hand, and any director, officer or employee thereof on the other hand, that
would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC in the Company’s Form 10-K or proxy
statement pertaining to an annual meeting of stockholders.


 


3.20
No General Solicitation. Neither the Company, nor any of its Affiliates, nor any person acting on its behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of Regulation D of the 1933 Act) in connection with the offer
or sale of the Note or the Warrant pursuant to this Agreement.


 


3.21
Acknowledgment Regarding the Investor’s Purchase of the Note and the Warrant. The Company’s Board of Directors has
approved the execution of the Transaction Documents and the issuance and sale of the Note and the Warrant, based on its own independent
evaluation and determination that the terms of the Transaction Documents are reasonable and fair to the Company and in the best interests
of the Company and its stockholders. The Company is entering into this Agreement and is issuing and selling the each of the Note and
the Warrant voluntarily and without economic duress. The Company has had independent legal counsel of its own choosing review the Transaction
Documents and advise the Company with respect thereto. The Company acknowledges and agrees that the Investor is acting solely in the
capacity of an arm’s length purchaser with respect to the Note and the Warrant and the transactions contemplated hereby, and that
neither the Investor nor any person affiliated with the Investor is acting as a financial advisor to, or a fiduciary of, the Company
(or in any similar capacity) with respect to execution of the Transaction Documents or the issuance of the Note and the Warrant or any
other transaction contemplated hereby.


 


3.22
No Brokers’, Finders’ or Other Advisory Fees or Commissions. Other than a fee payable to The Benchmark Company,
LLC, no brokers, finders or other similar advisory fees or commissions will be payable by the Company or any Subsidiary or by any of
their respective agents with respect to the issuance of the Note or any of the other transactions contemplated by this Agreement.


 


3.23
OFAC. None of the Company nor any of the Subsidiaries nor, to the knowledge of the Company, any director, officer, agent,
employee, affiliate or person acting on behalf of the Company and/or any Subsidiary has been or is currently subject to any United States
sanctions administered by the Office of Foreign Assets Control of the United States Department of the Treasury (“OFAC”);
and the Company will not directly or indirectly use any proceeds received from the Investor, or lend, contribute or otherwise make available
such proceeds to its Subsidiaries or to any affiliated entity, joint venture partner or other person or entity, to finance any investments
in, or make any payments to, any country or person currently subject to any of the sanctions of the United States administered by OFAC.


 






    -15-


     


    

3.24
No Foreign Corrupt Practices. None of the Company or any of the Subsidiaries has, directly or indirectly: (a) made or authorized
any contribution, payment or gift of funds or property to any official, employee or agent of any governmental authority of any jurisdiction
except as otherwise permitted under applicable Law; or (b) made any contribution to any candidate for public office, in either case,
where either the payment or the purpose of such contribution, payment or gift was, is, or would be prohibited under the Foreign Corrupt
Practices Act or the rules and regulations promulgated thereunder or under any other legislation of any relevant jurisdiction covering
a similar subject matter applicable to the Company or its Subsidiaries and their respective operations and the Company has instituted
and maintained policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance
with such legislation.


 


3.25
Anti-Money Laundering. The operations of each of the Company and the Subsidiaries are and have been conducted at all times
in compliance with all applicable anti-money laundering Laws, regulations, rules and guidelines in its jurisdiction of incorporation
and in each other jurisdiction in which such entity, as the case may be, conducts business (collectively, the “Money Laundering
Laws”) and no action, suit or proceeding by or before any court or governmental authority involving the Company or its Subsidiaries
with respect to any of the Money Laundering Laws is, to the knowledge of the Company, pending, threatened or contemplated.


 


3.26
Disclosure. The Company confirms that neither it, nor to its knowledge, any other Person acting on its behalf has provided
the Investor or its agents or counsel with any information that the Company believes constitutes material, non-public information. The
Company understands and confirms that the Investor will rely on the foregoing representations and covenants in effecting transactions
in securities of the Company. All disclosures provided to the Investor regarding the Company, its business and the transactions contemplated
hereby, furnished by or on behalf of the Company (including the Company’s representations and warranties set forth in this Agreement)
are true and correct in all material respects and do not contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.


 


4.
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR.
The Investor represents and warrants to the Company as follows:


 


4.1
Organization and Qualification. The Investor is a limited partnership, duly organized and validly existing in good standing under
the laws of the State of Delaware.


 






    -16-


     


    

4.2
Authorization; Enforcement; Compliance with Other Instruments. The Investor has the requisite power and authority to enter into
this Agreement, to purchase the Note and the Warrant and to perform its obligations under the Transaction Documents. The execution and
delivery of the Transaction Documents to which it is a party have been duly and validly authorized by the Investor’s governing
body and no further consent or authorization is required. The Transaction Documents to which it is a party have been duly and validly
executed and delivered by the Investor and constitute valid and binding obligations of the Investor, enforceable against the Investor
in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’
rights and remedies.


 


4.3
No Conflicts. The execution, delivery and performance of the Transaction Documents to which it is a party by the Investor and
the purchase of the Note and the Warrant by the Investor will not (a) conflict with or result in a violation of the Investor’s
organizational documents, (b) conflict with, or constitute a material default (or an event which, with notice or lapse of time or both,
would become a material default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any
material agreement, contract, indenture mortgage, indebtedness or instrument to which the Investor is a party, or (c) violate in any
material respect any Law applicable to the Investor or by which any of the Investor’s properties or assets are bound or affected.
No approval or authorization will be required from any governmental authority or agency, regulatory or self-regulatory agency or other
third party in connection with the purchase of the Note and the Warrant and the other transactions contemplated by this Agreement.


 


4.4
Investment Intent; Accredited Investor. The Investor is purchasing the Note and the Warrant for its own account, for investment
purposes, and not with a view towards distribution. The Investor is an “accredited investor” as such term is defined in Rule
501(a) of Regulation D of the 1933 Act. The Investor has, by reason of its business and financial experience, such knowledge, sophistication
and experience in financial and business matters and in making investment decisions of this type that it is capable of (a) evaluating
the merits and risks of an investment in the Note, the Warrant and the Investor Shares and making an informed investment decision, (b)
protecting its own interests and (c) bearing the economic risk of such investment for an indefinite period of time.


 


4.5
No Other Representations. Except for the representations and warranties set forth in this Agreement and in other Transaction Documents,
the Investor makes no other representations or warranties to the Company.


 


5.
OTHER AGREEMENTS OF THE PARTIES.


 


5.1
Legends, etc.


 


(a)
Securities may only be disposed of pursuant to an effective registration statement under the 1933 Act, to the Company or pursuant to
an available exemption from or in a transaction not subject to the registration requirements of the 1933 Act, and in compliance with
any applicable state securities laws.


 






    -17-


     


    

(b)
Certificates evidencing the Securities will contain the following legend, so long as is required by this Section 5.1(b) or Section
5.1(c):


 


[NEITHER
THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED] [THESE SECURITIES HAVE NOT BEEN
REGISTERED] WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE
TO THE COMPANY. [THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES] [THESE SECURITIES] MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.


 


The
Company acknowledges and agrees that the Investor may from time to time pledge, and/or grant a security interest in some or all of the
Securities, in accordance with applicable securities Laws, pursuant to a bona fide margin agreement in connection with a bona fide margin
account and, if required under the terms of such agreement or account, the Investor may transfer pledged or secured Securities to the
pledgees or secured parties. Such a pledge or transfer would not be subject to approval or consent of the Company and no legal opinion
of legal counsel to the pledgee, secured party or pledgor shall be required in connection with the pledge, but such legal opinion may
be required in connection with a subsequent transfer following default by the Investor transferee of the pledge. No notice shall be required
of such pledge. At the Company’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured
party of Securities may reasonably request in connection with a pledge or transfer of the Securities including the preparation and filing
of any required prospectus supplement under Rule 424(b)(3) of the 1933 Act or other applicable provision of the 1933 Act to appropriately
amend the list of selling stockholders thereunder.


 






    -18-


     


    

(c)
Certificates evidencing the Investor Shares shall not contain any legend (including the legend set forth in Section 5.1(b)): (i)
while a Registration Statement is effective under the 1933 Act, (ii) following any sale of such Investor Shares pursuant to Rule 144,
(iii) while such Investor Shares are eligible for sale without restriction under Rule 144(b)(1), or (iv) if such legend is not required
under applicable requirements of the 1933 Act (including judicial interpretations and pronouncements issued by the Staff of the SEC).
The Company shall cause its counsel to issue any legal opinion or instruction required by the Company’s transfer agent to comply
with the requirements set forth in this Section. At such time as a legend is no longer required for the Investor Shares under this Section
5.1(c), the Company will, no later than three (3) Business Days following the delivery by the Investor to the Company or the Company’s
transfer agent of a certificate representing Investor Shares containing a restrictive legend (such third Business Day, the “Legend
Removal Date”), deliver or cause to be delivered to the Investor a certificate representing such Investor Shares that is free
from all restrictive and other legends and in connection with the foregoing the Company shall request that its transfer agent process
any issuance of Investor Shares on an expedited basis. In addition to any other remedies available to the Investor, the Company shall
pay to the Investor, in cash, as partial liquidated damages and not as a penalty, for each $1,000 of Investor Shares (based on the VWAP
of the Common Stock on the date such Investor Shares are submitted to the Company or the Company’s transfer agent) delivered for
removal of the restrictive or other legend, $5 per Trading Day for each Trading Day after the Legend Removal Date until such Investor
Shares are delivered without a legend, provided that the Investor has furnished to the Company and its legal counsel standard and customary
documentation required to facilitate removal of the restrictive legend, satisfactory to the Company’s legal counsel, acting reasonably.
The Company may not make any notation on its records or give instructions to any transfer agent of the Company that enlarge the restrictions
on transfer set forth in this Section except as it may reasonably determine are necessary or appropriate to comply or to ensure compliance
with those applicable Laws that are enacted or modified after the Closing.


 


5.2
Furnishing of Information. As long as the Investor owns the Securities, the Company covenants to timely file (or obtain extensions
in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof
pursuant to the 1934 Act. As long as the Investor owns the Securities, if the Company is not required to file reports pursuant to such
laws, it will prepare and furnish to the Investor and make publicly available in accordance with Rule 144(c) such information as is required
for the Investor to sell the Investor Shares under Rule 144. The Company further covenants that it will take such further action as any
holder of the Securities may reasonably request, all to the extent required from time to time to enable such Person to sell such Investor
Shares without registration under the 1933 Act within the limitation of the exemptions provided by Rule 144 or other applicable exemptions.


 


5.3
Integration. The Company shall not, and shall use its best efforts to ensure that no Affiliate of the Company shall, sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the 1933 Act) that
will be integrated with the offer or sale of the Securities in a manner that would require the registration under the 1933 Act of the
sale of the Securities to the Investor, or that will be integrated with the offer or sale of the Securities for purposes of the rules
and regulations of any Trading Market that would require, under the rules of the Trading Market, the Shareholder Approval.


 


5.4
Notification of Certain Events. The Company shall give prompt written notice to the Investor of (a) the occurrence or
non-occurrence of any Event, the occurrence or non-occurrence of which would render any representation or warranty of the Company contained
in this Agreement or any other Transaction Document, if made on or immediately following the date of such Event, untrue or inaccurate
in any material respect, (b) the occurrence of any Event that, individually or in combination with any other Events, has had or
could reasonably be expected to have a Material Adverse Effect, (c) any failure of the Company to comply with or satisfy any covenant
or agreement to be complied with or satisfied by it hereunder or any Event that would otherwise result in the nonfulfillment of any of
the conditions to the Investor’s obligations hereunder, (d) any written notice or other written communication from any Person
alleging that the consent of such Person is or may be required in connection with the consummation of the transactions contemplated by
this Agreement or any other Transaction Document, or (e) any Proceeding pending or, to the Company’s knowledge, threatened
against a party relating to the transactions contemplated by this Agreement or any other Transaction Document.


 






    -19-


     


    

5.5
Available Stock. The Company shall at all times keep authorized and reserved and available for issuance, free of preemptive rights,
such number of shares of Common Stock as are issuable upon repayment or conversion in full of the Note and exercise in full of the Warrant
at any time. If the Company determines at any time that it does not have a sufficient number of authorized Common Stock to reserve and
keep available for issuance as described in this Section 5.5, the Company shall use all commercially reasonable efforts to increase
the number of authorized Common Stock by seeking Shareholder Approval for the authorization of such additional shares.


 


5.6
Use of Proceeds. The Company will use the proceeds from the sale of the Note and the Warrant for general working capital purposes.


 


5.7
Repayment of Note. The Company shall not make any voluntary cash prepayments on any Indebtedness at any time while any amounts
are owing under the Note other than cash payments the Company is required to make pursuant to the express terms thereof existing on the
date hereof. If the Company or any Subsidiary issues any debt, including any subordinated debt or convertible debt (other than the Note),
or any preferred shares, other than Exempted Securities or Exempted Indebtedness, unless otherwise waived in writing by and at the discretion
of the Investor, the Company will immediately utilize the proceeds of such issuance (or cause such Subsidiary to immediately utilize
the proceeds of such issuance) to repay the Note. If the Company issues any Equity Interests, other than Exempted Securities, for aggregate
proceeds to the Company of greater than $10,000,000 during the term of the Agreement, excluding offering costs or other expenses, unless
otherwise waived in writing by and at the discretion of the Investor, the Company will direct 25% of such proceeds from such issuance
to repay the Note.


 


5.8
Intercreditor Agreement. In the event that the Company or any Subsidiary incurs debt or issues convertible debt securities
to a seller as partial consideration paid to such seller in connection with an Acquisition, unless otherwise waived in writing by the
Investor, as a condition to consummation of such Acquisition, the holder of such debt or convertible debt securities shall enter into
an intercreditor agreement with the Company and the Investor on terms reasonably satisfactory to the Investor.


 


5.9
Prohibited Transactions; Equity and Indebtedness Issuances.


 


(a)
The Company hereby covenants and agrees not to enter into any Prohibited Transactions without the Investor’s prior written consent,
until the thirty (30) days after such time as the Note have been repaid in full, as applicable, and/or have been converted into Conversion
Shares.


 






    -20-


     


    

(b)
Notwithstanding any other provisions set forth in the Transaction Documents, except for Exempted Indebtedness and Exempted Securities,
the Company hereby covenants and agrees not to issue any equity or debt securities, or otherwise incur any Indebtedness for a period
of ninety (90) days beginning on the date the Conversion Shares may be immediately resold under Rule 144 without restriction on the number
of shares to be sold or manner of sale.


 


5.10
Securities Laws Disclosure; Publicity. The Company shall, by 9:00 a.m. (New York City time) on the Trading Day immediately
following the date hereof, issue a press release disclosing the material terms of the transactions contemplated hereby (the “Press
Release”), and shall, within ten (10) days following the date hereof, file a Report on Form 8-K (the “Form 8-K”)
disclosing the material terms of the transactions contemplated hereby and including this Agreement as an exhibit thereto; provided, that
the Company may not issue the Press Release without the Investor’s prior written consent. The Company shall provide a copy of the
draft Form 8-K to the Investor for review prior to release and the Company shall incorporate the Investor’s reasonable comments.
The Company shall not issue any press release nor otherwise make any such public statement regarding the Investor or the Transaction
Documents without the prior written consent of the Investor, except if such disclosure is made in a manner consistent with the Press
Release or Form 8-K, or is required by law, in which case the Company shall (a) ensure that such disclosure is restricted and limited
in content and scope to the maximum extent permitted by Law to meet the relevant disclosure requirement and (b) provide a copy of the
proposed disclosure to the Investor for review prior to release and the Company shall incorporate the Investor’s reasonable comments.
Following the execution of this Agreement, the Investor and its Affiliates and/or advisors may place announcements on their respective
corporate websites and in financial and other newspapers and publications (including, without limitation, customary “tombstone”
advertisements) describing the Investor’s relationship with the Company under this Agreement in a manner consistent with the Press
Release or Form 8-K and including the name and corporate logo of the Company. Notwithstanding anything herein to the contrary, to comply
with United States Treasury Regulations Section 1.6011-4(b)(3)(i), each of the Company and the Investor, and each employee, representative
or other agent of the Company or the Investor, may disclose to any and all persons, without limitation of any kind, the U.S. federal
and state income tax treatment, and the U.S. federal and state income tax structure, of the transactions contemplated hereby and all
materials of any kind (including opinions or other tax analyses) that are provided to such party relating to such tax treatment and tax
structure insofar as such treatment and/or structure relates to a U.S. federal or state income tax strategy provided to such recipient.


 


5.11
Indemnification of the Investor.


 


(a)
The Company will indemnify and hold the Investor, its Affiliates and their respective directors, officers, managers, shareholders, members,
partners, employees and agents and permitted successors and assigns (each, an “Investor Party”) harmless from any
and all damages, losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation and defense (collectively, “Losses”)
that any such Investor Party may suffer or incur as a result of or relating to:


 


(i)
any breach or inaccuracy of any representation, warranty, covenant or agreement made by the Company in any Transaction Document;


 






    -21-


     


    

(ii)
any misrepresentation made by the Company in any Transaction Document or in any SEC Document;


 


(iii)
any omission to state any material fact necessary in order to make the statements made in any SEC Document, in light of the circumstances
under which they were made, not misleading;


 


(iv)
any Proceeding before or by any court, public board, government agency, self-regulatory organization or body based upon, or resulting
from the execution, delivery, performance or enforcement of any of the Transaction Documents or the consummation of the transactions
contemplated thereby, and whether or not the Investor is party thereto by claim, counterclaim, crossclaim, as a defendant or otherwise,
or if such Proceeding is based upon, or results from, any of the items set forth in clauses (i) through (iii) above.


 


(b)
In addition to the indemnity contained herein, the Company will reimburse each Investor Party for its reasonable legal and other expenses
(including the cost of any investigation, preparation and travel in connection therewith) incurred in connection therewith, as such expenses
are incurred.


 


(c)
The provisions of this Section 5.9 shall survive the termination or expiration of this Agreement.


 


5.12
Non-Public Information. The Company covenants and agrees that neither it nor any other Person acting on its behalf will provide
the Investor or its agents or counsel with any information that the Company believes constitutes material, non-public information. To
the extent the Company provides the Investor with material, non-public information, the Company shall publicly disclose such information
within forty-eight (48) hours of providing the information to the Investor; provided, however, in the event that such material non-public
information is provided to Investor pursuant to Section 10, the Company shall publicly disclose such information within five (5)
Business Days of providing the information to the Investor. The Company understands and confirms that the Investor shall be relying on
the foregoing representation in effecting transactions in securities of the Company.


 


5.13
Shareholder Approval. If required by the rules of the Trading Market, the Company shall hold a special meeting of shareholders
(which may also be at the annual meeting of shareholders) on or before the 60th calendar day following the date hereof for the purpose
of obtaining the Shareholder Approval; provided, however, such sixty (60) calendar days shall be increased to ninety (90) calendar days
in the event the Company receives comments to its proxy statement from the SEC, with the recommendation of the Board of Directors that
such proposal be approved, and the Company shall solicit proxies from its shareholders in connection therewith in the same manner as
all other management proposals in such proxy statement and all management-appointed proxyholders shall vote their proxies in favor of
such proposal. If the Company does not obtain Shareholder Approval at the first meeting, the Company shall call a meeting every four
months thereafter to seek Shareholder Approval until the date the Shareholder Approval is obtained.


 






    -22-


     


    

5.14
Listing of Securities. The Company shall: (a) in the time and manner required by each Trading Market on which the Common Stock
is listed, prepare and file with such Trading Market a Listing of Additional Shares form covering the Investor Shares, (b) take
all steps necessary to cause such shares to be approved for listing on each Trading Market on which the Common Stock is listed as soon
as possible thereafter, (c) provide to the Investor evidence of such Trading Market’s completion of review of the Listing of Additional
Shares form, and (d) use commercially reasonable best efforts to maintain the listing of such shares on each such Trading Market.


 


5.15
Antitrust Notification. If the Investor determines, in its sole judgment and upon the advice of counsel, that the issuance
of the Note, the Warrant or the Investor Shares pursuant to the terms hereof would be subject to the provisions of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the “HSR Act”), the Company shall file as soon as practicable after
the date on which the Company receives notice from the Investor of the applicability of the HSR Act and a request to so file with the
United States Federal Trade Commission and the United States Department of Justice the notification and report form required to be filed
by it pursuant to the HSR Act in connection with such issuance.


 


5.16
Future Agreements. The Company agrees that for a period of one year following the date that the Principal Amounts outstanding
under the Note have been repaid in full it shall not enter into any agreements or otherwise take any actions that would prevent it from
entering into a subsequent transaction with the Investor on the same or similar terms as provided for in the Transaction Documents.


 


5.17
Share Transfer Agent. The Company has informed the Investor of the name of its share transfer agent and represents and warrants
that the transfer agent participates in the Depository Trust Company Fast Automated Securities Transfer program. The Company shall not
change its share transfer agent without the prior written consent of the Investor.


 


5.18
Capital Changes. In the event that the Company’s common stock trades at a price less than $1.00 for sixty (60) Trading
Days, the Company shall immediately undertake a reverse stock split of the Common Stock to remain in compliance with all applicable listing
and other requirements of the Trading Market to maintain its listing thereon.


 


5.19
Set-Off.


 


(a)
The Investor may set off any of its obligations to the Company (whether or not due for payment), against any of the Company’s obligations
to the Investor (whether or not due for payment) under this Agreement and/or any other Transaction Document.


 






    -23-


     


    

(b)
The Investor may do anything necessary to effect any set-off undertaken in accordance with this Section 5.19 (including varying
the date for payment of any amount payable by the Investor to the Company).


 


6.
CLOSING CONDITIONS


 


6.1
Conditions Precedent to the Obligations of the Investor. The obligations of the Investor to fund the Note and acquire the
Warrant are subject to the satisfaction or waiver by the Investor, at or before the Closing of each of the following conditions:


 


(a)
Required Documentation. The Company must have delivered to the Investor (i) copies of all resolutions duly adopted by the Board
of Directors of the Company, or any such other documentation of the Company approving the Agreement, the Transaction Documents and any
of the transactions contemplated hereby or thereby;


 


(b)
Consents and Permits. The Company must have obtained and delivered to the Investor copies of all necessary permits, approvals,
and registrations necessary to effect this Agreement, the Transaction Documents and any of the transactions contemplated hereby or thereby,
including pursuant to Section 3.14 of this Agreement;


 


(c)
Trading Market Approval. The Company shall have either (i) obtained and delivered to the Investor copies of all necessary Trading
Market approvals for the issuance of the Note, the Warrant, and, upon the conversion of the Note, the Conversion Shares, and upon exercise
of the Warrant, the Warrant Shares, or (ii) submitted a Listing of Additional Shares Notification Form with the Trading Market relating
to the issuance of the Note, the Warrant, and, upon conversion of the Note, the Conversion Shares, and upon exercise of the Warrant,
the applicable Shares;


 


(d)
No Event(s) of Default. The Investor must be of the reasonable opinion that no Event of Default has occurred and no Event of Default
would result from the execution of this Agreement or any of the Transaction Documents or the transactions contemplated hereby or thereby;


 


(e)
Representations and Warranties. The representations and warranties of the Company contained herein shall be true and correct in
all material respects as of the date when made and as of the Closing Date as though made on and as of such date;


 


(f)
Performance. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements
and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to the Closing;


 


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


 






    -24-


     


    

(h)
No Suspensions of Trading in Common Stock; Listing. Trading in the Common Stock shall not have been suspended by the SEC or any
Trading Market (except for any suspensions of trading of not more than one day on which the Trading Market is open solely to permit dissemination
of material information regarding the Company) at any time since the date of execution of this Agreement, and the Common Stock shall
have been at all times since such date listed for trading on a Trading Market;


 


(i)
Limitation on Beneficial Ownership. The issuance of the Note and the Warrant shall not cause the Investor Group to become, directly
or indirectly, a “beneficial owner” (within the meaning of Section 13(d) of the 1934 Act and the rules and regulations promulgated
thereunder) of a number of Equity Interests of a class that is registered under the 1934 Act which exceeds the Maximum Percentage of
the Equity Interests of such class that are outstanding at such time;


 


(j)
Funds Flow Request. The Company shall have delivered to the Investor a flow of funds request, substantially in the form set out
in Exhibit F; and


 


(k)
Bonafied Offer of Insurance. The Company shall have received a bonafide offer of insurance, subject to the payment of premiums,
from an insurer of recognized financial responsibility insuring the Company against such losses and risks and in such amounts as management
of the Company reasonably believes to be prudent and customary in the businesses in which the Company and the Subsidiaries are engaged.


 


6.2
Conditions Precedent to the Obligations of the Company. The obligations of the Company to issue the Note and the Warrant are
subject to the satisfaction or waiver by the Company, at or before the Closing, of each of the following conditions:


 


(a)
Representations and Warranties. The representations and warranties of the Investor contained herein shall be true and correct
in all material respects as of the date when made and as of the Closing Date as though made on and as of such date;


 


(b)
Performance. The Investor shall have performed, satisfied and complied in all material respects with all covenants, agreements
and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Investor at or prior to the Closing;
and


 


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


 






    -25-


     


    

7.
EVENTS OF DEFAULT


 


7.1
Events of Default. The occurrence of any of the following events shall be an “Event of Default” under this
Agreement:


 


(a)
an Event of Default (as defined in the Note);


 


(b)
any of the representations or warranties made by the Company or any of its agents, officers, directors, employees or representatives
in any Transaction Document or public filing being inaccurate, false or misleading in any material respect, as of the date as of which
it is made or deemed to be made, including as of the Closing Date, or any certificate or financial or other written statements furnished
by or on behalf of the Company to the Investor or any of its representatives, is inaccurate, false or misleading, in any material respect,
as of the date as of which it is made or deemed to be made, including as of the Closing Date; or


 


(c)
a failure by the Company to comply with any of its covenants or agreements set forth in this Agreement, including those set forth in
Section 9.


 


7.2
Investor Right to Investigate an Event of Default. If in the Investor’s reasonable opinion, an Event of Default has
occurred, or is or may be continuing:


 


(a)
the Investor may notify the Company that is wishes to investigate such purported Event of Default;


 


(b)
the Company shall cooperate with the Investor in such investigation;


 


(c)
the Company shall comply with all reasonable requests made by the Investor to the Company in connection with any investigation by the
Investor and shall (i) provide all information requested by the Investor in relation to the Event of Default to the Investor; provided
that the Investor agrees that any materially price sensitive information and/or non-public information will be subject to confidentiality,
and (ii) provide all such requested information within three (3) Business Days of such request; and


 


(d)
the Company shall pay all reasonable costs incurred by the Investor in connection with any such investigation.


 


7.3
Remedies Upon an Event of Default


 


(a)
If an Event of Default occurs pursuant to Section 7.1(a), the Investor shall have such remedies as are set forth in the Note.


 


(b)
If an Event of Default occurs pursuant to Section 7.1(b) or Section 7.1(c) and is not remedied within (i) two (2)
Business Days for an Event of Default occurring by the Company’s failure to comply with Section 7.1(c), or (ii) five (5)
Business Days for an Event of Default occurring pursuant to Section 7.1(b), the Investor may declare, by notice to the Company,
effective immediately, all outstanding obligations by the Company under the Transaction Documents to be immediately due and payable in
immediately available funds and the Investor shall have no obligation to consummate the Closing or to accept the conversion of the Note
into Conversion Shares.


 






    -26-


     


    

(c)
If any Event of Default occurs and is not remedied within (i) two (2) Business Days for an Event of Default occurring by the Company’s
failure to comply with Section 7.1(c), or (ii) five (5) Business Days for an Event of Default occurring pursuant to Section
7.1(b), the Investor may, by written notice to the Company, terminate this Agreement effective as of the date set forth in the Investor’s
notice.


 


8.
TERMINATION


 


8.1
Events of Termination. This Agreement:


 


(a)
may be terminated:


 


(i)
by the Investor on the occurrence or existence of a Securities Termination Event or a Change of Control;


 


(ii)
by the mutual written consent of the Company and the Investor, at any time;


 


(iii)
by either Party, by written notice to the other Party, effective immediately, if the Closing has not occurred within ten (10) Business
Days of the date specified by this Agreement or such later date as the Company and the Investor agree in writing, provided that the right
to terminate this Agreement under this Section 8.1(a)(iii) is not available to any party that is in material breach of or material
default under this Agreement or whose failure to fulfill any obligation under this Agreement has been the principal cause of, or has
resulted in the failure of the Closing to occur; or


 


(iv)
by the Investor, in accordance with Section 7.3(c).


 


8.2
Reserved.


 


8.3
Effect of Termination.


 


(a)
Subject to Section 8.3(b), each party’s right of termination under Section 8.1 is in addition to any other rights
it may have under this Agreement or otherwise, and the exercise of a right of termination will not be an election of remedies.


 


(b)
If the Investor terminates this Agreement under Section 8.1(a)(i):


 


(i)
the Investor may declare, by notice to the Company, all outstanding obligations by the Company under the Transaction Documents to be
due and payable (including, without limitation, the immediate repayment of any Principal Amounts outstanding under the Note plus accrued
but unpaid interest) without presentment, demand, protest or any other notice of any kind all of which are expressly waived by the Company,
anything to the contrary contained in this Agreement or in any other Transaction Document notwithstanding; and


 






    -27-


     


    

(ii)
the Company must within forty-five (45) calendar days of such notice being received, pay to the Investor in immediately available funds
the outstanding Principal Amounts for the Note plus all accrued interest thereon (if any), unless the Investor terminates this Agreement
as a result of an Event of Default and provided that (A) subsequent to the termination under Section 8.1(a)(i), the Investor is
not prohibited by Law or otherwise from exercising its conversion rights pursuant to this Agreement or the Note, (B) the Investor actually
exercises its conversion rights under this Agreement or the Note, and (C) the Company otherwise complies in all respects with its obligation
to issue Conversion Shares in accordance with the Note (which obligation will survive termination).


 


(c)
Upon termination of this Agreement, the Investor will not be required to fund any further amount after the date of termination of the
Agreement, provided that termination will not affect any undischarged obligation under this Agreement, and any obligation of the Company
to pay or repay any amounts owing to the Investor hereunder and which have not been repaid at the time of termination.


 


(d)
Nothing in this Agreement will be deemed to release any party from any liability for any breach by such party of the terms and provisions
of this Agreement or to impair the right of any party to compel specific performance by any other Party of its obligations under this
Agreement nor shall the Company be released from its obligations in respect of any terms or provisions which by their terms survive the
termination of this Agreement, including but not limited to, the Company’s obligations under Sections 5.11, 9 or 10.


 


9.
REGISTRATION RIGHTS


 


9.1
Registration.


 


(a)
Registration Statement. Promptly, but in any event no later than thirty (30) days from the date of this Agreement (the “Filing
Deadline”), the Company shall prepare and file with the SEC a Registration Statement covering the resale of all of the Investor
Shares. The foregoing Registration Statement shall be filed on Form S-1 or any successor forms thereto. The Registration Statement (and
each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided to the Investor and
its counsel at least five (5) Business Days prior to its filing or other submission and the Company shall incorporate all reasonable
comments provided by the Investor or its counsel.


 


(b)
Expenses. Except as otherwise expressly provided herein, the Company will pay all fees and expenses incident to the performance
of or compliance with this Section 9, including all fees and expenses associated with effecting the registration of the Investor
Shares, including all filing and printing fees, the Company’s counsel and accounting fees and expenses, costs associated with clearing
the Investor Shares for sale under applicable state securities laws, listing fees, fees and expenses of one counsel to the Investor and
the Investor’s reasonable expenses in connection with the registration, but excluding discounts, commissions, fees of underwriters,
selling brokers, dealer managers or similar securities industry professionals with respect to the Investor Shares being sold.


 






    -28-


     


    

(c)
Effectiveness. The Company shall use its commercially reasonable efforts to have the Registration Statement declared effective
as soon as practicable after filing thereof. The Company shall notify the Investor by e-mail as promptly as practicable, and in any event,
within twenty-four (24) hours, after (i) the Registration Statement is declared effective and shall simultaneously provide the Investor
with copies of any related Prospectus to be used in connection with the sale or other disposition of the securities covered thereby,
or (ii) any notice or action of the SEC which shall or does render the Registration Statement to become ineffective.


 


(d)
Piggyback Registration Rights. If the Company at any time determines to file a registration statement under the 1933 Act to register
the offer and sale, by the Company, of Common Stock (other than (x) on Form S-4 or Form S-8 under the 1933 Act or any successor forms
thereto, (y) an at-the-market offering, or (z) a registration of securities solely relating to an offering and sale to employees or directors
of the Company pursuant to any employee stock plan or other employee benefit plan arrangement), the Company shall, as soon as reasonably
practicable, give written notice to the Investor of its intention to so register the offer and sale of Common Stock and, upon the written
request, given within five (5) Business Days after delivery of any such notice by the Company, of the Investor to include in such registration
the Investor Shares (which request shall specify the number of Investor Shares proposed to be included in such registration), the Company
shall use commercially reasonable efforts to cause all such Investor Shares to be included in such registration statement on the same
terms and conditions as the Common Stock otherwise being sold pursuant to such registered offering. If the Investor elects to have its
shares registered pursuant to this Section 9.1(d) and the registration involves an underwriting, the Investor will enter into such customary
documentation as may be reasonably required by the underwriter or underwriters. If in connection with a registration involving an underwriting,
the managing underwriter determines in good faith that marketing factors (including, without limitation, the managing underwriter’s
evaluation of the Company’s requirement for funds from the primary offering) require a limit on the number of shares of Common
Stock to be offered on a secondary basis, the underwriter may limit the number of Investor Shares to be included in the secondary offering
without first limiting the number of shares of Common Stock that may be distributed as a primary offering.


 


9.2
Company Obligations. The Company will use commercially reasonable efforts to effect the registration of the Investor Shares
in accordance with the terms hereof, and pursuant thereto the Company will, as expeditiously as possible:


 


(a)
cause the Registration Statement to become effective and to remain continuously effective for a period that will terminate upon the first
date on which all Investor Shares are either sold which are registered under the Registration Statement or may be sold without restriction,
including volume or manner-of-sale restrictions, pursuant to Rule 144 or have been sold by the Investor (the “Effectiveness
Period”) and advise the Investor in writing when the Effectiveness Period has expired;


 






    -29-


     


    

(b)
prepare and file with the SEC such amendments and post-effective amendments and supplements to the Registration Statement and the Prospectus
as may be necessary to keep the Registration Statement effective for the Effectiveness Period and to comply with the provisions of the
1933 Act and the 1934 Act with respect to the distribution of all of the Investor Shares covered thereby;


 


(c)
provide copies to and permit counsel designated by the Investor to review all amendments and supplements to the Registration Statement
no fewer than three (3) Business Days prior to its filing with the SEC and not file any document to which such counsel reasonably objects;


 


(d)
furnish to the Investor and its legal counsel, without charge, (i) promptly after the same is prepared and publicly distributed, filed
with the SEC, or received by the Company (but not later than two (2) Business Days after the filing date, receipt date or sending date,
as the case may be) one copy of the Registration Statement and any amendment thereto, each preliminary prospectus and Prospectus and
each amendment or supplement thereto, and each letter written by or on behalf of the Company to the SEC or the staff of the SEC, and
each item of correspondence from the SEC or the staff of the SEC, in each case relating to the Registration Statement (other than any
portion of any thereof which contains information for which the Company has sought confidential treatment), and (ii) such number of copies
of a Prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents as the Investor
may reasonably request in order to facilitate the disposition of the Investor Shares that are covered by the related Registration Statement;


 


(e)
immediately notify the Investor of any request by the SEC for the amending or supplementing of the Registration Statement or Prospectus
or for additional information;


 


(f)
use its commercially reasonable efforts to (i) prevent the issuance of any stop order or other suspension of effectiveness and, (ii)
if such order is issued, obtain the withdrawal of any such order at the earliest possible moment and notify the Company of the issuance
of any such order and the resolution thereof, or its receipt of notice of the initiation or threat of any proceeding for such purpose;


 


(g)
prior to any public offering of Investor Shares, register or qualify or cooperate with the Investor and its counsel in connection with
the registration or qualification of such Investor Shares for offer and sale under the securities or blue sky laws of such jurisdictions
requested by the Investor and do any and all other commercially reasonable acts or things necessary or advisable to enable the distribution
in such jurisdictions of the Investor covered by the Registration Statement and the Company shall promptly notify the Investor of any
notification with respect to the suspension of the registration or qualification of any of such Investor Shares for sale under the securities
or blue sky laws of such jurisdictions or its receipt of notice of the initiation or threat of any proceeding for such purpose;


 


(h)
immediately notify the Investor, at any time prior to the end of the Effectiveness Period, upon discovery that, or upon the happening
of any event as a result of which, the Registration Statement or Prospectus 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 the case of the
Prospectus, in light of the circumstances in which they were made), and promptly prepare, file with the SEC and furnish to such holder
a supplement to or an amendment of such Registration Statement or Prospectus as may be necessary so that such Registration Statement
or 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 the case of such Prospectus, in light of the circumstances in which they
were made);


 






    -30-


     


    

(i)
otherwise use its best efforts to comply with all applicable rules and regulations of the SEC under the 1933 Act and the 1934 Act;


 


(j)
hold in confidence and not make any disclosure of information concerning the Investor provided to the Company unless (i) disclosure of
such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to
complete the Registration Statement or to avoid or correct a misstatement or omission in the Registration Statement, (iii) the release
of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of this
Agreement or any other agreement, and upon learning that disclosure of such information concerning the Investor is sought in or by a
court or governmental body of competent jurisdiction or through other means, give prompt written notice to the Investor and allow the
Investor, at the Investor’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order
for, such information; and


 


(k)
take all other reasonable actions necessary to expedite and facilitate disposition by the Investor of all Investor Shares pursuant to
the Registration Statement.


 


9.3
Indemnification.


 


(a)
Indemnification by the Company. The Company will indemnify and hold harmless the Investor Parties, from and against any Losses
to which they may become subject under the 1933 Act or otherwise, arising out of, relating to or based upon: (i) any untrue statement
or alleged untrue statement of any material fact contained in any Registration Statement, any preliminary Prospectus, final Prospectus
or other document, including any Blue Sky Application (as defined below), or any amendment or supplement thereof or any omission or alleged
omission of a material fact required to be stated therein or, in the case of the Registration Statement, necessary to make the statements
therein not misleading or, in the case of any preliminary Prospectus, final Prospectus or other document, necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading; (ii) any Blue Sky Application or other document executed
by the Company specifically for that purpose or based upon written information furnished by the Company filed in any state or other jurisdiction
in order to qualify any or all of the Investor Shares under the securities laws thereof (any such application, document or information
herein called a “Blue Sky Application”); (iii) any violation or alleged violation by the Company or its agents of
the 1933 Act, the 1934 Act or any similar federal or state law or any rule or regulation promulgated thereunder applicable to the Company
or its agents and relating to any action or inaction required of the Company in connection with the registration or the offer or sale
of the Investor Shares pursuant to any Registration Statement; or (iv) any failure to register or qualify the Investor Shares included
in any such Registration Statement in any state where the Company or its agents has affirmatively undertaken or agreed in writing that
the Company will undertake such registration or qualification on the Investor’s behalf and will reimburse the Investor Indemnified
Parties for any legal or other expenses reasonably incurred by them in connection with investigating, preparing or defending any such
Losses; provided, however, that the Company will not be liable in any such case if and to the extent, but only to the extent,
that any such Losses arise out of or are based upon an untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by the Investor or any such controlling Person in writing specifically for use in such
Registration Statement or Prospectus.


 






    -31-


     


    

(b)
Conduct of Indemnification Proceedings. Any Person entitled to indemnification hereunder shall (i) give prompt notice to the indemnifying
party of any claim, action, suit or proceeding with respect to which it seeks indemnification following such Person’s receipt of,
or such Person otherwise become aware of, the commencement of such claim, action, suit or proceeding and (ii) permit such indemnifying
party to assume the defense of such claim, action, suit or proceeding with counsel reasonably satisfactory to the indemnified party;
provided, however, that any Person entitled to indemnification hereunder shall have the right to employ separate counsel
and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such Person unless
(A) the indemnifying party has agreed to pay such fees or expenses, (B) the indemnifying party shall have failed to assume the defense
of such claim and employ counsel reasonably satisfactory to such Person or (C) in the reasonable judgment of any such Person, based upon
written advice of its counsel, a conflict of interest exists between such Person and the indemnifying party with respect to such claims
(in which case, if the Person notifies the indemnifying party in writing that such Person elects to employ separate counsel at the expense
of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such Person);
and provided, further, that the failure or delay of any indemnified party to give notice as provided herein shall not relieve
the indemnifying party of its obligations hereunder, except to the extent that such failure or delay to give notice shall materially
adversely affect the indemnifying party in the defense of any such claim or litigation. It is understood that the indemnifying party
shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm
of attorneys at any time for all such indemnified parties. No indemnifying party will, except with the consent of the indemnified party,
consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation.


 


(c)
Contribution. If for any reason the indemnification provided for in the preceding paragraph (a) is unavailable to an indemnified
party or insufficient to hold it harmless, other than as expressly specified therein, the indemnifying party shall contribute to the
amount paid or payable by the indemnified party as a result of such Losses in such proportion as is appropriate to reflect the relative
fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations. No Person guilty of
fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution from any Person not
guilty of such fraudulent misrepresentation. The indemnity and contribution agreements contained in this Section are in addition to any
other rights or remedies that any indemnified party may have under applicable law, by separate agreement or otherwise.


 






    -32-


     


    

9.4
Effect of Failure to File and Maintain Effectiveness of any Registration Statement. In addition to any other remedies provided
under the Transaction Documents, if (i) the Registration Statement covering the resale of all of the Investor Shares required to be covered
thereby and required to be filed by the Company pursuant to Section 9.1 is not filed with the SEC on or before the Filing Deadline (a
“Filing Failure”), (ii) on any day after the effective date of a Registration Statement sales of all of the Registrable
Securities required to be included on such Registration Statement cannot be made pursuant to such Registration Statement (including,
without limitation, because of a failure to keep such Registration Statement effective, a failure to disclose such information as is
necessary for sales to be made pursuant to such Registration Statement, a suspension or delisting of (or a failure to timely list) the
shares of Common Stock on a Trading Market, or a failure to register a sufficient number of shares of Common Stock or by reason of a
stop order) or the prospectus contained therein is not available for use for any reason (a “Maintenance Failure”),
other than the period of time where the Registration Statement is not effective due to a post-effective amendment filing to the Registration
Statement after an Annual Report on Form 10-K is filed, or (iii) if the Company fails to file with the SEC any required reports under
Section 13 or 15(d) of the 1934 Act such that it is not in compliance with Rule 144(c)(1) (or Rule 144(i)(2), if applicable) (a “Current
Public Information Failure”) as a result of which the Investor is unable to sell those Investor Shares included in such Registration
Statement without restriction under Rule 144 (including, without limitation, volume restrictions), then, as partial relief for the damages
to any holder by reason of any such delay in, or reduction of, its ability to sell the underlying shares of Common Stock (which remedy
shall not be exclusive of any other remedies available at law or in equity), the Company shall pay to each holder of Investor Shares
relating to such Registration Statement an amount in cash equal to two percent (2.0%) of the Outstanding Principal Amount (I) on the
date of such Filing Failure, Maintenance Failure or Current Public Information Failure, as applicable, and (2) on every thirty (30) day
anniversary of (I) a Filing Failure until such Filing Failure is cured; (II) a Maintenance Failure until such Maintenance Failure is
cured; and (III) a Current Public Information Failure until the earlier of (i) the date such Current Public Information Failure is cured
and (ii) such time that such public information is no longer required pursuant to Rule 144 (in each case, pro rated for periods totaling
less than thirty (30) days). The payments to which a holder of Investor Shares shall be entitled pursuant to this Section 9.4 are referred
to herein as “Registration Delay Payments.” Following the initial Registration Delay Payment for any particular event
or failure (which shall be paid on the date of such event or failure, as set forth above), without limiting the foregoing, if an event
or failure giving rise to the Registration Delay Payments is cured prior to any thirty (30) day anniversary of such event or failure,
then such Registration Delay Payment shall be made on the third (3rd) Trading Day after such cure. Notwithstanding the foregoing, (i)
no single event or failure with respect to a particular Registration Statement shall give rise to more than one type of Registration
Delay Payment with respect to such Registration Statement, (ii) no Registration Delay Payments shall be owed to the Investor (with respect
to any period during which all of Investor Shares may be sold by the Investor without restriction under Rule 144 (including, without
limitation, volume restrictions) and without the need for current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if
applicable), and (iii) with respect to any Investor Shares excluded from a Registration Statement by election of the Investor.


 






    -33-


     


    

10.
Participation in Future Financing. 


 


10.1
From the date hereof until the date that is the 24 month anniversary of the Closing Date, upon any proposed issuance by the Company
to offer or sell any New Securities for cash consideration, Indebtedness or a combination of units thereof (a “Subsequent Financing”),
the Investor shall have the right to participate in up to an amount of the Subsequent Financing equal to 10% of the Subsequent Financing
(the “Participation Maximum”) on the same terms, conditions and price provided for in the Subsequent Financing.


 


10.2
Between the time period of 4:00 pm (New York City time) and 6:00 pm (New York City time) on the Trading Day immediately prior to
the Trading Day of the expected announcement of the Subsequent Financing (or, if the Trading Day of the expected announcement of the
Subsequent Financing is the first Trading Day following a holiday or a weekend (including a holiday weekend), between the time period
of 4:00 pm (New York City time) on the Trading Day immediately prior to such holiday or weekend and 2:00 pm (New York City time) on the
day immediately prior to the Trading Day of the expected announcement of the Subsequent Financing), the Company shall deliver to the
Investor a written notice of the Company’s intention to effect a Subsequent Financing (a “Subsequent Financing Notice”),
which notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to
be raised thereunder and subject to any confidentiality provisions and applicable privacy laws, the Person or Persons through or with
whom such Subsequent Financing is proposed to be effected and shall include a term sheet and transaction documents relating thereto as
an attachment.


 


10.3
The Investor must provide written notice to the Company by 6:30 am (New York City time) on the Trading Day following the date on
which the Subsequent Financing Notice is delivered to the Investor (the “Notice Termination Time”) that it is willing
to participate in the Subsequent Financing, the amount of the Investor’s participation, and representing and warranting that the
Investor has such funds ready, willing, and available for investment on the terms set forth in the Subsequent Financing Notice. If the
Company receives no such notice from the Investor as of such Notice Termination Time, the Investor shall be deemed to have notified the
Company that it does not elect to participate in such Subsequent Financing.


 


10.4
The Company must provide the Investor with a second Subsequent Financing Notice, and the Investor will again have the right of participation
set forth above in this Section 10, if the definitive agreement related to the initial Subsequent Financing Notice is not entered into
for any reason on the terms set forth in such Subsequent Financing Notice within two (2) Trading Days after the date of delivery of the
initial Subsequent Financing Notice.


 


10.5
The Company and the Investor agree that, in connection with a Subsequent Financing, the transaction documents related to the Subsequent
Financing shall include a requirement for the Company to issue a widely disseminated press release after market close if the transaction
documents are executed during trading hours on a Trading Day or prior to 9:30 am (New York City time) on the immediately following Trading
Day of execution of the transaction documents in such Subsequent Financing (or, if the date of execution is not a Trading Day, prior
to 9:30 am (New York City time) on the immediately following Trading Day) that discloses the material terms of the transactions contemplated
by the transaction documents in such Subsequent Financing.


 






    -34-


     


    

10.6
Notwithstanding anything to the contrary in this Section 10 and unless otherwise agreed to by the Investor, the Company shall either
confirm in writing to the Investor that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly
disclose its intention to issue the securities in the Subsequent Financing, in either case in such a manner such that the Investor will
not be in possession of any material, non-public information, by 9:30 am (New York City time) on the second (2nd) Trading Day following
date of delivery of the Subsequent Financing Notice.  If by 9:30 am (New York City time) on such second (2nd) Trading Day, no public
disclosure regarding a transaction with respect to the Subsequent Financing has been made, and no notice regarding the abandonment of
such transaction has been received by the Investor, such transaction shall be deemed to have been abandoned and Investor shall not be
deemed to be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries.


 


10.7
Notwithstanding the foregoing, this Section 10 shall not apply in respect of an issuance of Exempted Indebtedness or Exempted Securities.


 


11.
GENERAL PROVISIONS


 


11.1
Fees and Expenses. Prior to the date of this Agreement, the Company has paid Lucosky Brookman LLP $30,000. At the Closing, the
Company shall reimburse the Investor up to an additional $50,000 of due diligence costs and reasonable fees and disbursements of Lucosky
Brookman LLP in connection with the preparation of the Transaction Documents, it being understood that Lucosky Brookman LLP has not rendered
any legal advice to the Company in connection with the transactions contemplated hereby and that the Company has relied for such matters
on the advice of its own counsel. Except as specified above, each party shall pay the fees and expenses of its advisers, counsel, accountants
and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery
and performance of the Transaction Documents. The Company shall pay all stamp and other taxes and duties levied in connection with the
sale of the Note and the Warrant.


 


11.2
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be
in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is
delivered via email at the email address specified in this Section prior to 5:00 p.m. (New York time) on a Business Day, (b) the next
Business Day after the date of transmission, if such notice or communication is delivered via email at the email address specified in
this Section on a day that is not a Business Day or later than 5:00 p.m. (New York time) on any date and earlier than 11:59 p.m. (New
York time) on such date, (c) the Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier
service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications
shall be as follows:


 


If
to the Company:


 


Fingermotion,
Inc.

1460 Broadway

New York, New York 10036

Telephone: (604) 816-0788

Email: martin.shen@fingermotion.com

Attention: Martin Shen, CEO


 






    -35-


     


    

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


 


McMillan
LLP





1055
West Georgia St., Suite 1500 


Royal
Centre, P.O. Box 11117





Vancouver,
BC, Canada, V6E 4N7 


Telephone:
(604) 893-7638





Email:
michael.shannon@mcmillan.ca 


Attention:
Michael Shannon


 


If
to the Investor:


 


Lind
Global Fund II LP

c/o The Lind Partners LLC

444 Madison Avenue, Floor 41

New York, NY 10022

Telephone: (646) 395-3931

Email: jeaston@thelindpartners.com and


 


notice@thelindpartners.com

Attention: Jeff Easton


 


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


 


Lucosky
Brookman LLP

101 Wood Avenue South

Fifth Floor

Woodbridge, NJ

Telephone: (732) 395-4400

Email: sbrookman@lucbro.com

Attention: Seth Brookman


 






    -36-


     


    

or
such other address as may be designated in writing hereafter, in the same manner, by such Person.


 


11.3
Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be excessive in scope or otherwise
invalid or unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum
extent possible, and the validity and enforceability of the remaining provisions of this Agreement will not in any way be affected or
impaired thereby.


 


11.4
Governing Law. This Agreement shall be governed by and construed in accordance with the Laws of the State of New York, without
reference to principles of conflict of laws or choice of laws.


 


11.5
Jurisdiction and Venue. Any action, proceeding or claim arising out of, or relating in any way to this Agreement shall be brought
and enforced in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New
York. The Company and the Investor irrevocably submit to the jurisdiction of such courts, which jurisdiction shall be exclusive, and
hereby waive any objection to such exclusive jurisdiction or that such courts represent an inconvenient forum. The prevailing party in
any such action shall be entitled to recover its reasonable and documented attorneys’ fees and out-of-pocket expenses relating
to such action or proceeding.


 


11.6
WAIVER OF RIGHT TO JURY TRIAL. THE COMPANY AND THE INVESTOR HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER TRANSACTION
DOCUMENTS.


 


11.7
Survival. The representations, warranties, agreements and covenants contained herein shall survive the Closing and the delivery
of the Securities.


 


11.8
Entire Agreement. The Transaction Documents, together with the Exhibits and Schedules thereto, contain the entire understanding
of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with
respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.


 


11.9
Amendments; Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed by the Company
and the Investor. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed
to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement
hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such
right.


 






    -37-


     


    

11.10
Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed
to limit or affect any of the provisions hereof. 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. This Agreement shall be
construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement or any of the Transaction Documents.


 


11.11
Successors and Assigns. This Agreement shall be binding upon, and inure to the benefit of and be enforceable by, the Company and
the Investor and their respective successors and assigns. The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Investor. The Investor may assign any or all of its rights under this Agreement to any Person
to whom the Investor assigns or transfers any Securities, provided such transferee agrees in writing to be bound, with respect to the
transferred Securities, by the provisions hereof that apply to the “Investor” and such transferee is an accredited investor.


 


11.12
No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.


 


11.13
Further Assurances. Each party hereto 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.


 


11.14
Counterparts. This Agreement may be executed in two identical counterparts, both of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. Signature pages
delivered by facsimile or e-mail shall have the same force and effect as an original signature.


 


11.15
Specific Performance. The Company acknowledges that monetary damages alone would not be adequate compensation to the Investor
for a breach by the Company of this Agreement and the Investor may seek an injunction or an order for specific performance from a court
of competent jurisdiction if (a) the Company fails to comply or threatens not to comply with this Agreement or (b) the Investor has reason
to believe that the Company will not comply with this Agreement.


 


[Signature
Page Follows]


 









    -38-


     


    

IN
WITNESS WHEREOF, the undersigned have executed this Securities Purchase Agreement as of the date first set forth above.


 





	COMPANY:	 	INVESTOR:
	 	 	 	 	 
	FINGERMOTION, INC.	 	Lind GLOBAL FUND II LP
	 	 	 	 	 
	By:	/s/
    Martin J. Shen	 	By:	/s/
    Jeff Easton
		 	 	 	 
	Name:	Martin
    Shen	 	Name:
    	Jeff
    Easton
	 	 	 	 	 
	Title:	CEO		Title:	Managing
    Member of Lind Global Partners II LLC, General Partner


 












    -39-


     


    

EXHIBIT
A


 


FORM
OF NOTE


 


[See
attached]


 






    -40-


     


    

EXHIBIT
B


 


FORM
OF WARRANT


 


[See
attached]


 









    -41-


     


    

EXHIBIT
C


 


FLOW
OF FUNDS REQUEST


 


FingerMotion,
Inc. – Securities Purchase Agreement – Flow of Funds Request


 


In
connection with the Securities Purchase Agreement, dated August 9, 2022 (the “Agreement”) between FingerMotion, Inc., a Delaware
corporation (the “Company”) and Lind Global Fund II LP (the “Investor”), the Company irrevocably authorizes the
Investor to distribute such funds as set out below, in the manner set out below, at the Closing.


 


Capitalized
terms used but not otherwise defined in this letter will have the meaning given to such terms in the Agreement.


 


	Item	Amount
	Closing  	$[●]
	Commitment
    Fee	$[●]
	Total	$[●]


 





Please
transfer the net amount of US$[●] due at the Closing, to the following bank account:


 


		Routing #:	[●]



 


		Account #	[●]



 


		FBO:	[●]



 


[●]


 


[●]


 


		Bank:	[●]



 


[●]


 


[●]


 






    -42-


     


    




Yours
sincerely,


 


FINGERMOTION,
INC.


 


By:
                                                                              


 


Name:
Martin Shen


 


Title:
CEO


 



    -43-