Document:

ex_181399.htm

Exhibit 10.21

 

 

AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT

 

THIS AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT (this “Agreement”) is entered into as of March 30, 2020 among the parties identified as “Obligors” on the signature pages hereto and such other parties that may become Obligors hereunder after the date hereof (each individually an “Obligor” and collectively the “Obligors”), and REGIONS BANK, in its capacity as collateral agent (in such capacity, the “Collateral Agent”) for the holders of the Obligations.

 

RECITALS

 

WHEREAS, FutureFuel Corp., a Delaware corporation (the “Parent”), FutureFuel Chemical Company, a Delaware corporation (the “Company”, and together with the Parent and any Additional Borrowers party thereto, the “Borrowers” and each a “Borrower”), are parties to that certain Credit Agreement, dated as of April 16, 2015 (as amended or otherwise modified from time to time prior to the date hereof, the “Existing Credit Agreement”), with the guarantors party thereto, the lenders party thereto and Regions Bank, as administrative agent and the collateral agent, pursuant to which the Borrowers and the guarantors party thereto were required to execute that certain pledge and security agreement dated as of April 16, 2015 (as amended or otherwise modified from time to time prior to the date hereof, the “Existing Pledge and Security Agreement”);

 

WHEREAS, the Borrowers desire to amend and restate the Existing Credit Agreement pursuant to the terms of that certain Amended and Restated Credit Agreement (as amended, restated, increased, extended, supplemented or otherwise modified from time to time, the “Credit Agreement”) dated as of the date hereof among the Borrowers, the Guarantors identified therein, the Lenders identified therein and Regions Bank, as Administrative Agent, Collateral Agent, Issuing Bank and Swingline Lender, the Lenders have agreed to make Loans and the Issuing Bank has agreed to issue Letters of Credit upon the terms and subject to the conditions set forth therein; and

 

WHEREAS, this Agreement is required by the terms of the Credit Agreement.

 

NOW, THEREFORE, in consideration of these premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.     Definitions.

 

(a)     Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in the Credit Agreement, and the following terms which are defined in the UCC: Accession, Account, Adverse Claim, As-Extracted Collateral, Chattel Paper, Commercial Tort Claim, Consumer Goods, Deposit Account, Document, Electronic Chattel Paper, Equipment, Farm Products, Financial Asset, Fixtures, General Intangible, Goods, Instrument, Inventory, Investment Company Security, Investment Property, Letter-of-Credit Right, Manufactured Home, Payment Intangibles, Proceeds, Securities Account, Security Entitlement, Security, Software, Supporting Obligation and Tangible Chattel Paper.

 

(b)     In addition, the following terms shall have the meanings set forth below:

 

“Collateral” has the meaning provided in Section 2 hereof.

 

“Copyright License” means any written agreement, naming any Obligor as licensor, granting any right under any Copyright.

 

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“Copyrights” means (i) all registered United States copyrights in all Works, now existing or hereafter created or acquired, all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, registrations, recordings and applications in the United States Copyright Office, and (ii) all renewals thereof.

 

“Patent License” means any agreement, whether written or oral, providing for the grant by or to an Obligor of any right to manufacture, use or sell any invention covered by a Patent.

 

“Patents” means (i) all letters patent of the United States or any other country and all reissues and extensions thereof, and (ii) all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof.

“Pledged Equity” means, with respect to each Obligor, (i) one hundred percent (100%) of the issued and outstanding Equity Interests of each Domestic Subsidiary and (ii) sixty-five percent (65%) (or such greater percentage that (A) could not reasonably be expected to cause the undistributed earnings of such Foreign Subsidiary as determined for United States federal income tax purposes to be treated as a deemed dividend to such Foreign Subsidiary’s United States parent and (B) could not reasonably be expected to cause any material adverse tax consequences) of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and one hundred percent (100%) of the issued and outstanding Equity Interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in each Foreign Subsidiary that is directly owned by such Obligor, including the Equity Interests of the Subsidiaries owned by such Obligor as set forth on Schedule 1 hereto, in each case together with the certificates (or other agreements or instruments), if any, representing such Equity Interests, and all options and other rights, contractual or otherwise, with respect thereto, including, but not limited to, the following:

 

(1)     all Equity Interests representing a dividend thereon, or representing a distribution or return of capital upon or in respect thereof, or resulting from a stock split, revision, reclassification or other exchange therefor, and any subscriptions, warrants, rights or options issued to the holder thereof, or otherwise in respect thereof; and

 

(2)     in the event of any consolidation or merger involving the issuer thereof and in which such issuer is not the surviving Person, all shares of each class of the Equity Interests of the successor Person formed by or resulting from such consolidation or merger, to the extent that such successor Person is a direct Subsidiary of an Obligor.

 

“Trademark License” means any agreement, written or oral, providing for the grant by or to an Obligor of any right to use any Trademark.

 

“Trademarks” means (i) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers, and the goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state thereof or any other country or any political subdivision thereof, or otherwise and (ii) all renewals thereof.

 

“Work” means any work that is subject to copyright protection pursuant to Title 17 of the United States Code.

 

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2.     Grant of Security Interest in the Collateral. To secure the prompt payment and performance in full when due, whether by lapse of time, acceleration, mandatory prepayment or otherwise, of the Obligations, each Obligor hereby grants to the Collateral Agent, for the benefit of the holders of the Obligations, a continuing security interest in, and a right to set off against, any and all right, title and interest of such Obligor in and to all of the following, whether now owned or existing or owned, acquired, or arising hereafter (collectively, the “Collateral”): (a) all Accounts; (b) all cash and currency; (c) Chattel Paper; (d) those certain Commercial Tort Claims set forth on Schedule 2 hereto; (e) all Copyrights; (f) all Copyright Licenses; (g) all Deposit Accounts; (h) all Documents; (i) all Equipment; (j) all Fixtures; (k) all General Intangibles; (l) all Goods; (m) all Instruments; (n) all Inventory; (o) all Investment Property; (p) all Letter-of-Credit Rights; (q) all Patents; (r) all Payment Intangibles; (s) all Patent Licenses; (t) all Pledged Equity; (u) all Software; (v) all Supporting Obligations; (w) all Trademarks; (x) all Trademark Licenses; (y) all books and records related to any of the foregoing; and (z) all Accessions and all Proceeds of any and all of the foregoing.

 

Notwithstanding anything to the contrary contained herein, the following shall not be deemed Collateral hereunder and the security interests granted under this Agreement shall not extend to (i) the Excluded Property and (ii) any property for which the cost or other negative consequence to the applicable Obligor of granting a security interest therein has been determined by the Collateral Agent, in its reasonable discretion after consultation with the Borrowers, to be excessive in relation to the value of the collateral security afforded thereby; provided that such determination has been confirmed in writing from the Collateral Agent to the Obligors.

 

The Obligors and the Collateral Agent, on behalf of the holders of the Obligations, hereby acknowledge and agree that the security interest created hereby in the Collateral (A) constitutes continuing collateral security for all of the Obligations, whether now existing or hereafter arising and (B) is not to be construed as an assignment of any Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks or Trademark Licenses.

 

3.     Representations and Warranties. Each Obligor hereby represents and warrants to the Collateral Agent, for the benefit of the holders of the Obligations, that:

 

(a)     Ownership. Each Obligor is the legal and beneficial owner of its Collateral and has the right to pledge, sell, assign or transfer the same. There exists no Adverse Claim with respect to the Pledged Equity of such Obligor.

 

(b)     Security Interest/Priority. This Agreement creates a valid security interest in favor of the Collateral Agent, for the benefit of the holders of the Obligations, in the Collateral of such Obligor and, when properly perfected by filing, shall constitute a valid and perfected, first priority security interest in such Collateral (including all uncertificated Pledged Equity consisting of partnership or limited liability company interests that do not constitute Securities but excluding any Deposit Account for which no deposit account control agreement has been obtained), to the extent such security interest can be perfected by filing under the UCC, free and clear of all Liens except for Permitted Liens. The taking possession by the Collateral Agent of the certificated securities (if any) evidencing the Pledged Equity and all other Instruments constituting Collateral will perfect and establish the first priority of the Collateral Agent’s security interest in all the Pledged Equity evidenced by such certificated securities and such Instruments. With respect to any Collateral consisting of a Deposit Account, Security Entitlement or held in a Securities Account, upon execution and delivery by the applicable Obligor, the applicable Securities Intermediary and the Collateral Agent of an agreement granting control to the Collateral Agent over such Collateral, the Collateral Agent shall have a valid and perfected, first priority security interest in such Collateral.

 

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(c)     Types of Collateral. None of the Collateral consists of, or is the Proceeds of, As-Extracted Collateral, Consumer Goods, Farm Products, Manufactured Homes or standing timber.

 

(d)     Equipment and Inventory. With respect to any Equipment and/or Inventory of an Obligor, each such Obligor has exclusive possession and control of such Equipment and Inventory of such Obligor except for (i) Equipment leased by such Obligor as a lessee, (ii) Equipment or Inventory in transit with common carriers or on common carrier pipelines or (iii) Inventory held at third party locations, as to which (A) such Obligor promptly notifies the owner and operator of such location of the Collateral Agent’s security interest in such Inventory pursuant to a written notice in form and substance reasonably satisfactory to the Collateral Agent (“Lien Notice”) and (B) with respect to any third party Inventory location that is owned or controlled by an Affiliate of such Obligor, such Obligor promptly uses commercially reasonable efforts to obtain from the applicable owner or operator of such location a signed acknowledgment of receipt of the Lien Notice. No Inventory of an Obligor is held by a Person other than an Obligor pursuant to consignment, sale or return, sale on approval or similar arrangement.

 

(e)     Authorization of Pledged Equity. All Pledged Equity is duly authorized and validly issued, is fully paid and, to the extent applicable, nonassessable and is not subject to the preemptive rights, warrants, options or other rights to purchase of any Person, or equityholder, voting trust or similar agreements outstanding with respect to, or property that is convertible, into, or that requires the issuance and sale of, any of the Pledged Equity, except to the extent expressly permitted under the Credit Documents.

 

(f)     No Other Equity Interests, Instruments, Etc. As of the Effective Date, no Obligor owns any certificated Equity Interests in any Subsidiary that are required to be pledged and delivered to the Collateral Agent hereunder other than as set forth on Schedule 1 hereto, and all such certificated Equity Interests have been delivered to the Collateral Agent.

 

(g)     Partnership and Limited Liability Company Interests. Except as previously disclosed to the Collateral Agent in writing, none of the Collateral consisting of an interest in a partnership or a limited liability company (i) is dealt in or traded on a securities exchange or in a securities market, (ii) by its terms expressly provides that it is a Security governed by Article 8 of the UCC, (iii) is an Investment Company Security, (iv) is held in a Securities Account or (v) constitutes a Security or a Financial Asset, in each case (with respect to clauses (i) through (v)), except for Marketable Securities held in an account for which the Collateral Agent has received a duly executed and effective securities account control agreement in form and substance reasonably satisfactory to the Collateral Agent.

 

(h)     Contracts; Agreements; Licenses. To Obligor’s knowledge, the Obligors have no material contracts, agreements or licenses which prevent the granting of a security interest therein.

 

(i)     Consents; Etc. There are no restrictions in any Organization Document governing any Pledged Equity or any other document related thereto which would limit or restrict (i) the grant of a Lien pursuant to this Agreement on such Pledged Equity, (ii) the perfection of such Lien or (iii) the exercise of remedies in respect of such perfected Lien in the Pledged Equity as contemplated by this Agreement.

 

(j)     Commercial Tort Claims. As of the Effective Date, no Obligor has any Commercial Tort Claims seeking damages in excess of $100,000 other than as set forth on Schedule 2 hereto.

 

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4.     Covenants. Each Obligor covenants that until all Obligations have been paid in full and the Commitments have terminated, such Obligor shall:

 

(a)     Instruments/Chattel Paper/Pledged Equity/Control.

(i)     If any amount in excess of $100,000 payable under or in connection with any of the Collateral shall be or become evidenced by any Instrument or Tangible Chattel Paper, or if any property constituting Collateral shall be stored or shipped subject to a Document, ensure that such Instrument, Tangible Chattel Paper or Document is either in the possession of such Obligor at all times or, if requested by the Collateral Agent to perfect its security interest in such Collateral, is delivered to the Collateral Agent duly endorsed in a manner satisfactory to the Collateral Agent. Such Obligor shall ensure that any Collateral consisting of Tangible Chattel Paper is marked with a legend acceptable to the Collateral Agent indicating the Collateral Agent’s security interest in such Tangible Chattel Paper.

 

(ii)     Deliver to the Collateral Agent promptly upon the receipt thereof by or on behalf of an Obligor, all certificates and instruments constituting Pledged Equity. Prior to delivery to the Collateral Agent, all such certificates constituting Pledged Equity shall be held in trust by such Obligor for the benefit of the Collateral Agent pursuant hereto. All such certificates representing Pledged Equity shall be delivered in suitable form for transfer by delivery or shall be accompanied by duly executed instruments of transfer or assignment in blank, substantially in the form provided in Exhibit 4(a) hereto.

 

(iii)     Execute and deliver all agreements, assignments, instruments or other documents as reasonably requested by the Collateral Agent for the purpose of obtaining and maintaining control with respect to any Collateral consisting of (i) Investment Property, (ii) Letter-of-Credit Rights and (iii) Electronic Chattel Paper; provided that the Borrower shall not be required to enter into any deposit account control agreement or take any other action with respect to Deposit Accounts (except to the extent provided in Section 2.15 of the Credit Agreement and other provisions in the Credit Agreement regarding Cash Collateral).

 

(b)     Filing of Financing Statements, Notices, etc. Each Obligor shall execute and deliver to the Collateral Agent such agreements, assignments or instruments (including affidavits, notices, reaffirmations and amendments and restatements of existing documents, as the Collateral Agent may reasonably request) and do all such other things as the Collateral Agent may reasonably deem necessary or appropriate (i) to assure to the Collateral Agent its security interests hereunder, including (A) such instruments as the Collateral Agent may from time to time reasonably request in order to perfect and maintain the security interests granted hereunder in accordance with the UCC, (B) with regard to Copyrights, a Notice of Grant of Security Interest in Copyrights in the form of Exhibit 4(c)(i), (C) with regard to Patents, a Notice of Grant of Security Interest in Patents for filing with the United States Patent and Trademark Office in the form of Exhibit 4(c)(ii) hereto and (D) with regard to Trademarks, a Notice of Grant of Security Interest in Trademarks for filing with the United States Patent and Trademark Office in the form of Exhibit 4(c)(iii) hereto, (ii) to consummate the transactions contemplated hereby and (iii) to otherwise protect and assure the Collateral Agent of its rights and interests hereunder; provided that no Obligor shall be required to enter into any deposit account control agreement or take any other action with respect to deposit accounts (except to the extent provided in Section 2.15 of the Credit Agreement and other provisions in the Credit Agreement regarding Cash Collateral). Furthermore, each Obligor also hereby irrevocably makes, constitutes and appoints the Collateral Agent, its nominee or any other

 

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person whom the Collateral Agent may designate, as such Obligor’s attorney in fact with full power and for the limited purpose to sign in the name of such Obligor any financing statements, or amendments and supplements to financing statements, renewal financing statements, notices or any similar documents which in the Collateral Agent’s reasonable discretion would be necessary or appropriate in order to perfect and maintain perfection of the security interests granted hereunder, such power, being coupled with an interest, being and remaining irrevocable until all Obligations have been paid in full and the Commitments have terminated. Each Obligor hereby agrees that a carbon, photographic or other reproduction of this Agreement or any such financing statement is sufficient for filing as a financing statement by the Collateral Agent without notice thereof to such Obligor wherever the Collateral Agent may in its sole discretion desire to file the same.

 

(c)     Inventory Collateral Held by Warehouseman, Bailee, etc. If any Collateral consisting of Inventory is at any time in the possession or control of a warehouseman, bailee or any agent or processor of such Obligor, (i) promptly send a written Lien Notice to such Person, (ii) instruct such Person to refrain from issuing negotiable warehouse receipts or documents of title covering such Collateral unless such negotiable warehouse receipts or documents of title are endorsed to the order of, and delivered to, the Collateral Agent and (iii) if such Person is an Affiliate of an Obligor, use commercially reasonable efforts to obtain from such Person a signed acknowledgment of the Lien Notice.

 

(d)     Commercial Tort Claims. (i) Promptly forward to the Collateral Agent an updated Schedule 2 listing any and all Commercial Tort Claims by or in favor of such Obligor seeking damages in excess of $100,000 and (ii) execute and deliver such statements, documents and notices and do and cause to be done all such things as may be required by the Collateral Agent, or required by Applicable Law to create, preserve, perfect and maintain the Collateral Agent’s security interest in any Commercial Tort Claims initiated by or in favor of any Obligor.

 

(e)     Books and Records. Mark its books and records (and shall cause the issuer of the Pledged Equity of such Obligor to mark its books and records) to reflect the security interest granted pursuant to this Agreement.

 

(f)     Asset Sales. Nothing contained in this Agreement shall limit any Obligor’s right or ability to make Asset Sales of its property free and clear of the Collateral Agent’s security interest (and without the Collateral Agent’s consent) to the extent that any such Asset Sale is made in accordance with the terms of the Credit Agreement (including without limitation the terms of Section 8.9 of the Credit Agreement).

 

(g)     Issuance or Acquisition of Equity Interests in Partnership or Limited Liability Company. Not without executing and delivering, or causing to be executed and delivered, to the Collateral Agent such agreements, documents and instruments as the Collateral Agent may reasonably require, issue or acquire any Pledged Equity consisting of an interest in a partnership or a limited liability company that (i) is dealt in or traded on a securities exchange or in a securities market, (ii) by its terms expressly provides that it is a Security governed by Article 8 of the UCC, (iii) is an Investment Company Security, (iv) is held in a Securities Account or (v) constitutes a Security or a Financial Asset.

 

5.     Authorization to File Financing Statements. Each Obligor hereby authorizes the Collateral Agent to prepare and file such financing statements (including continuation statements) or amendments thereof or supplements thereto or other instruments as the Collateral Agent may from time to time deem necessary or appropriate in order to perfect and maintain the security interests granted hereunder in

 

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accordance with the UCC (including authorization to describe the Collateral as “all personal property”, “all assets” or words of similar meaning).

 

6.     Advances. On failure of any Obligor to perform any of the covenants and agreements contained herein, the Collateral Agent may, at its sole option and in its sole discretion, perform the same and in so doing may expend such sums as the Collateral Agent may reasonably deem advisable in the performance thereof, including, without limitation, the payment of any insurance premiums, the payment of any taxes, a payment to obtain a release of a Lien or potential Lien, expenditures made in defending against any adverse claim and all other expenditures which the Collateral Agent may make for the protection of the security hereof or which may be compelled to make by operation of law. All such sums and amounts so expended shall be repayable by the Obligors on a joint and several basis promptly upon timely notice thereof and demand therefor, shall constitute additional Obligations and shall bear interest from the date said amounts are expended at the Default Rate. No such performance of any covenant or agreement by the Collateral Agent on behalf of any Obligor, and no such advance or expenditure therefor, shall relieve the Obligors of any Default or Event of Default. The Collateral Agent may make any payment hereby authorized in accordance with any bill, statement or estimate procured from the appropriate public office or holder of the claim to be discharged without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax assessment, sale, forfeiture, tax lien, title or claim except to the extent such payment is being contested in good faith by an Obligor in appropriate proceedings and against which adequate reserves are being maintained in accordance with GAAP.

 

7.     Remedies.

 

(a)     General Remedies. Upon the occurrence of an Event of Default and during continuation thereof, the Collateral Agent shall have, in addition to the rights and remedies provided herein, in the Credit Documents, in any other documents relating to the Obligations, or by law (including, but not limited to, levy of attachment, garnishment and the rights and remedies set forth in the UCC of the jurisdiction applicable to the affected Collateral), the rights and remedies of a secured party under the UCC (regardless of whether the UCC is the law of the jurisdiction where the rights and remedies are asserted and regardless of whether the UCC applies to the affected Collateral), and further, the Collateral Agent may, with or without judicial process or the aid and assistance of others, (i) enter on any premises on which any of the Collateral may be located and, without resistance or interference by the Obligors, take possession of the Collateral, (ii) dispose of any Collateral on any such premises, (iii) require the Obligors to assemble and make available to the Collateral Agent at the expense of the Obligors any Collateral at any place and time designated by the Collateral Agent which is reasonably convenient to both parties, (iv) remove any Collateral from any such premises for the purpose of effecting sale or other disposition thereof, and/or (v) without demand and without advertisement, notice, hearing or process of law, all of which each of the Obligors hereby waives to the fullest extent permitted by Applicable Law, at any place and time or times, sell and deliver any or all Collateral held by or for it at public or private sale (which in the case of a private sale of Pledged Equity, shall be to a restricted group of purchasers who will be obligated to agree, among other things, to acquire such securities for their own account, for investment and not with a view to the distribution or resale thereof), at any exchange or broker’s board or elsewhere, by one or more contracts, in one or more parcels, for cash, upon credit or otherwise, at such prices and upon such terms as the Collateral Agent deems advisable, in its sole discretion (subject to any and all mandatory legal requirements). Each Obligor acknowledges that any such private sale may be at prices and on terms less favorable to the seller than the prices and other terms which might have been obtained at a public sale and, notwithstanding the foregoing, agrees that such private sale shall be deemed to have been made in a commercially reasonable manner and, in the case of a sale of Pledged Equity, that the Collateral Agent shall have no obligation to delay sale of any such securities for the period of time necessary to permit the issuer of such securities to register such securities for public sale under the Securities Act of 1933. Neither the Collateral Agent’s compliance with Applicable Law nor its disclaimer of warranties relating to the Collateral shall be considered to adversely affect the

 

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commercial reasonableness of any sale. To the extent the rights of notice cannot be legally waived hereunder, each Obligor agrees that any requirement of reasonable notice shall be met if such notice, specifying the place of any public sale or the time after which any private sale is to be made, is personally served on or mailed, postage prepaid, to the Obligors in accordance with the notice provisions of Section 11.1 of the Credit Agreement at least 10 days before the time of sale or other event giving rise to the requirement of such notice. The Collateral Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Obligor further acknowledges and agrees that any offer to sell any Pledged Equity which has been (A) publicly advertised on a bona fide basis in a newspaper or other publication of general circulation in the financial community of New York, New York (to the extent that such offer may be advertised without prior registration under the Securities Act of 1933), or (B) made privately in the manner described above shall be deemed to involve a “public sale” under the UCC, notwithstanding that such sale may not constitute a “public offering” under the Securities Act of 1933, and the Collateral Agent may, in such event, bid for the purchase of such securities. The Collateral Agent shall not be obligated to make any sale or other disposition of the Collateral regardless of notice having been given. To the extent permitted by Applicable Law, any holder of Obligations may be a purchaser at any such sale. To the extent permitted by Applicable Law, each of the Obligors hereby waives all of its rights of redemption with respect to any such sale. Subject to the provisions of Applicable Law, the Collateral Agent may postpone or cause the postponement of the sale of all or any portion of the Collateral by announcement at the time and place of such sale, and such sale may, without further notice, to the extent permitted by Applicable Law, be made at the time and place to which the sale was postponed, or the Collateral Agent may further postpone such sale by announcement made at such time and place.

 

(b)     Remedies relating to Accounts. During the continuation of an Event of Default, whether or not the Collateral Agent has exercised any or all of its rights and remedies hereunder, (i) each Obligor will promptly upon request of the Collateral Agent instruct all account debtors to remit all payments in respect of Accounts to a mailing location selected by the Collateral Agent and (ii) the Collateral Agent shall have the right to enforce any Obligor’s rights against its customers and account debtors, and the Collateral Agent or its designee may notify any Obligor’s customers and account debtors that the Accounts of such Obligor have been assigned to the Collateral Agent or of the Collateral Agent’s security interest therein, and may (either in its own name or in the name of an Obligor or both) demand, collect (including without limitation by way of a lockbox arrangement), receive, take receipt for, sell, sue for, compound, settle, compromise and give acquittance for any and all amounts due or to become due on any Account, and, in the Collateral Agent’s discretion, file any claim or take any other action or proceeding to protect and realize upon the security interest of the holders of the Obligations in the Accounts. Each Obligor acknowledges and agrees that the Proceeds of its Accounts remitted to or on behalf of the Collateral Agent in accordance with the provisions hereof shall be solely for the Collateral Agent’s own convenience and that such Obligor shall not have any right, title or interest in such Accounts or in any such other amounts except as expressly provided herein. Neither the Collateral Agent nor the holders of the Obligations shall have any liability or responsibility to any Obligor for acceptance of a check, draft or other order for payment of money bearing the legend “payment in full” or words of similar import or any other restrictive legend or endorsement or be responsible for determining the correctness of any remittance. Furthermore, during the continuation of an Event of Default, (i) the Collateral Agent shall have the right, but not the obligation, to make test verifications of the Accounts in any manner and through any medium that it reasonably considers advisable, and the Obligors shall furnish all such assistance and information as the Collateral Agent may require in connection with such test verifications, (ii) upon the Collateral Agent’s request and at the expense of the Obligors, the Obligors shall cause independent public accountants or others satisfactory to the Collateral Agent to furnish to the Collateral Agent reports showing reconciliations, aging and test verifications of, and trial balances for, the Accounts and (iii) the Collateral Agent in its own name or in the name of others may communicate with account debtors on the Accounts to verify with them to the Collateral Agent’s satisfaction the existence, amount and terms of any Accounts.

 

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(c)     Deposit Accounts and Securities Accounts. Upon the occurrence of an Event of Default and during continuation thereof, the Collateral Agent may prevent withdrawals or other dispositions of funds in Deposit Accounts maintained with the Collateral Agent. Upon the occurrence of an Event of Default and the during the continuation thereof, the Collateral Agent may (it is sole discretion) deliver a Notice of Exclusive Control (as defined in the Specified Securities Account Control Agreement) to the Intermediary (as defined in the Specified Securities Account Control Agreement).

 

(d)     Access. In addition to the rights and remedies hereunder, upon the occurrence of an Event of Default and during the continuance thereof, the Collateral Agent shall have the right to enter and remain upon the various premises of the Obligors without cost or charge to the Collateral Agent, and use the same, together with materials, supplies, books and records of the Obligors for the purpose of collecting and liquidating the Collateral, or for preparing for sale and conducting the sale of the Collateral, whether by foreclosure, auction or otherwise. In addition, the Collateral Agent may remove Collateral, or any part thereof, from such premises and/or any records with respect thereto, in order to effectively collect or liquidate such Collateral.

 

(e)     Nonexclusive Nature of Remedies. Failure by the Collateral Agent or the holders of the Obligations to exercise any right, remedy or option under this Agreement, any other Credit Document, any other document relating to the Obligations, or as provided by Applicable Law, or any delay by the Collateral Agent or the holders of the Obligations in exercising the same, shall not operate as a waiver of any such right, remedy or option. No waiver hereunder shall be effective unless it is in writing, signed by the party against whom such waiver is sought to be enforced and then only to the extent specifically stated, which in the case of the Collateral Agent or the holders of the Obligations shall only be granted as provided herein. To the extent permitted by Applicable Law, neither the Collateral Agent, the holders of the Obligations, nor any party acting as attorney for the Collateral Agent or the holders of the Obligations, shall be liable hereunder for any acts or omissions or for any error of judgment or mistake of fact or law other than their gross negligence or willful misconduct hereunder. The rights and remedies of the Collateral Agent and the holders of the Obligations under this Agreement shall be cumulative and not exclusive of any other right or remedy which the Collateral Agent or the holders of the Obligations may have.

 

(f)     Retention of Collateral. In addition to the rights and remedies hereunder, the Collateral Agent may, in compliance with Sections 9-620 and 9-621 of the UCC or otherwise complying with the requirements of Applicable Law of the relevant jurisdiction, accept or retain the Collateral in satisfaction of the Obligations. Unless and until the Collateral Agent shall have provided such notices, however, the Collateral Agent shall not be deemed to have retained any Collateral in satisfaction of any Obligations for any reason.

 

(g)     Deficiency. In the event that the proceeds of any sale, collection or realization are insufficient to pay all amounts to which the Collateral Agent or the holders of the Obligations are legally entitled, the Obligors shall be jointly and severally liable for the deficiency, together with interest thereon at the Default Rate, together with the costs of collection and the fees, charges and disbursements of counsel. Any surplus remaining after the full payment and satisfaction of the Obligations shall be returned to the Obligors or to whomsoever a court of competent jurisdiction shall determine to be entitled thereto. Notwithstanding any provision to the contrary contained herein, in any other of the Credit Documents or in any other documents relating to the Obligations, the obligations of each Obligor under the Credit Agreement and the other Credit Documents shall be limited to an aggregate amount equal to the largest amount that would not render such obligations subject to avoidance under Section 548 of the Bankruptcy Code of the United States or any other applicable Debtor Relief Law (including any comparable provisions of any applicable state law).

 

9

 

 

8.     Rights of the Collateral Agent.

 

(a)     Power of Attorney. In addition to other powers of attorney contained herein, each Obligor hereby designates and appoints the Collateral Agent, on behalf of the holders of the Obligations, and each of its designees or agents, as attorney-in-fact of such Obligor, irrevocably and with power of substitution, with authority to take any or all of the following actions upon the occurrence and during the continuance of an Event of Default:

 

(i)     to demand, collect, settle, compromise, adjust, give discharges and releases, all as the Collateral Agent may reasonably determine;

 

(ii)     to commence and prosecute any actions at any court for the purposes of collecting any Collateral and enforcing any other right in respect thereof;

 

(iii)     to defend, settle or compromise any action brought and, in connection therewith, give such discharge or release as the Collateral Agent may deem reasonably appropriate;

 

(iv)     to receive, open and dispose of mail addressed to an Obligor and endorse checks, notes, drafts, acceptances, money orders, bills of lading, warehouse receipts or other instruments or documents evidencing payment, shipment or storage of the goods giving rise to the Collateral of such Obligor on behalf of and in the name of such Obligor, or securing, or relating to such Collateral;

 

(v)     to sell, assign, transfer, make any agreement in respect of, or otherwise deal with or exercise rights in respect of, any Collateral or the goods or services which have given rise thereto, as fully and completely as though the Collateral Agent were the absolute owner thereof for all purposes;

 

(vi)     to adjust and settle claims under any insurance policy relating thereto;

 

(vii)     to execute and deliver all assignments, conveyances, statements, financing statements, renewal financing statements, security agreements, affidavits, notices and other agreements, instruments and documents that the Collateral Agent may determine necessary in order to perfect and maintain the security interests and liens granted in this Agreement and in order to fully consummate all of the transactions contemplated therein;

 

(viii)     to institute any foreclosure proceedings that the Collateral Agent may deem appropriate;

 

(ix)     to sign and endorse any drafts, assignments, proxies, stock powers, verifications, notices and other documents relating to the Collateral;

 

(x)     to exchange any of the Pledged Equity or other property upon any merger, consolidation, reorganization, recapitalization or other readjustment of the issuer thereof and, in connection therewith, deposit any of the Pledged Equity with any committee, depository, transfer agent, registrar or other designated agency upon such terms as the Collateral Agent may reasonably deem appropriate;

 

(xi)     to vote for a shareholder resolution, or to sign an instrument in writing, sanctioning the transfer of any or all of the Pledged Equity into the name of the Collateral Agent or one or more of the holders of the Obligations or into the name of any transferee to whom the Pledged Equity or any part thereof may be sold pursuant to Section 7 hereof;

 

10

 

 

(xii)     to pay or discharge taxes, liens, security interests or other encumbrances levied or placed on or threatened against the Collateral;

 

(xiii)     to direct any parties liable for any payment in connection with any of the Collateral to make payment of any and all monies due and to become due thereunder directly to the Collateral Agent or as the Collateral Agent shall direct;

 

(xiv)     to receive payment of and receipt for any and all monies, claims, and other amounts due and to become due at any time in respect of or arising out of any Collateral; and

 

(xv)     to do and perform all such other acts and things as the Collateral Agent may reasonably deem to be necessary, proper or convenient in connection with the Collateral.

 

This power of attorney is a power coupled with an interest and shall be irrevocable until all Obligations have been paid in full and the Commitments have terminated. The Collateral Agent shall be under no duty to exercise or withhold the exercise of any of the rights, powers, privileges and options expressly or implicitly granted to the Collateral Agent in this Agreement, and shall not be liable for any failure to do so or any delay in doing so. The Collateral Agent shall not be liable for any act or omission or for any error of judgment or any mistake of fact or law in its individual capacity or its capacity as attorney-in-fact except acts or omissions resulting from its gross negligence or willful misconduct. This power of attorney is conferred on the Collateral Agent solely to protect, preserve and realize upon its security interest in the Collateral.

 

(b)     Assignment by the Collateral Agent. The Collateral Agent may from time to time assign the Obligations to a successor Collateral Agent appointed in accordance with the Credit Agreement, and such successor shall be entitled to all of the rights and remedies of the Collateral Agent under this Agreement in relation thereto.

 

(c)     The Collateral Agent’s Duty of Care. Other than the exercise of reasonable care to assure the safe custody of the Collateral while being held by the Collateral Agent hereunder, the Collateral Agent shall have no duty or liability to preserve rights pertaining thereto, it being understood and agreed that the Obligors shall be responsible for preservation of all rights in the Collateral, and the Collateral Agent shall be relieved of all responsibility for the Collateral upon surrendering it or tendering the surrender of it to the Obligors. The Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which the Collateral Agent accords its own property, which shall be no less than the treatment employed by a reasonable and prudent agent in the industry, it being understood that the Collateral Agent shall not have responsibility for taking any necessary steps to preserve rights against any parties with respect to any of the Collateral. In the event of a public or private sale of Collateral pursuant to Section 7 hereof, the Collateral Agent shall have no responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relating to any Collateral, whether or not the Collateral Agent has or is deemed to have knowledge of such matters, or (ii) taking any steps to clean, repair or otherwise prepare the Collateral for sale.

(d)     Liability with Respect to Accounts. Anything herein to the contrary notwithstanding, each of the Obligors shall remain liable under each of the Accounts to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise to each such Account. Neither the Collateral Agent nor any holder of Obligations shall have any obligation or liability under any Account (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any holder of Obligations of any payment relating to such Account pursuant hereto, nor shall the Collateral Agent or any holder of Obligations be obligated in any

 

11

 

 

 

manner to perform any of the obligations of an Obligor under or pursuant to any Account (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party under any Account (or any agreement giving rise thereto), to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.

(e)     Voting and Payment Rights in Respect of the Pledged Equity.

 

(i)     So long as no Event of Default shall exist, each Obligor may (A) exercise any and all voting and other consensual rights pertaining to the Pledged Equity of such Obligor or any part thereof for any purpose not inconsistent with the terms of this Agreement or the Credit Agreement and (B) receive and retain any and all dividends (other than stock dividends and other dividends constituting Collateral which are addressed hereinabove), principal or interest paid in respect of the Pledged Equity to the extent they are allowed under the Credit Agreement; and

 

(ii)     During the continuance of an Event of Default, (A) all rights of an Obligor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant to clause (i)(A) above shall cease and all such rights shall thereupon become vested in the Collateral Agent which shall then have the sole right to exercise such voting and other consensual rights, (B) all rights of an Obligor to receive the dividends, principal and interest payments which it would otherwise be authorized to receive and retain pursuant to clause (i)(B) above shall cease and all such rights shall thereupon be vested in the Collateral Agent which shall then have the sole right to receive and hold as Collateral such dividends, principal and interest payments, and (C) all dividends, principal and interest payments which are received by an Obligor contrary to the provisions of clause (ii)(B) above shall be received in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of such Obligor, and shall be forthwith paid over to the Collateral Agent as Collateral in the exact form received, to be held by the Collateral Agent as Collateral and as further collateral security for the Obligations.

 

(f)     Releases of Collateral. (i) If any Collateral shall be sold, transferred or otherwise disposed of by any Obligor in a transaction permitted by the Credit Agreement, then the security interest of the Collateral Agent shall terminate automatically and, at the request and sole expense of such Obligor, the Collateral Agent shall promptly execute and deliver to such Obligor all releases and other documents, and take such other action, reasonably necessary for the release of the Liens created hereby or by any other Collateral Document on such Collateral. (ii) The Collateral Agent may release any of the Pledged Equity from this Agreement or may substitute any of the Pledged Equity for other Pledged Equity without altering, varying or diminishing in any way the force, effect, lien, pledge or security interest of this Agreement as to any Pledged Equity not expressly released or substituted, and this Agreement shall continue as a first priority lien on all Pledged Equity not expressly released or substituted.

 

9.     Application of Proceeds. Upon the acceleration of the Obligations pursuant to Section 9.2 of the Credit Agreement, any payments in respect of the Obligations and any proceeds of the Collateral, when received by the Collateral Agent or any holder of the Obligations in cash or its equivalent, will be applied in reduction of the Obligations in the order set forth in Section 9.3 of the Credit Agreement.

 

10.     Continuing Agreement. This Agreement shall continue to be effective or be automatically reinstated, as the case may be, if at any time payment, in whole or in part, of any of the Obligations is rescinded or must otherwise be restored or returned by the Collateral Agent or any holder of the Obligations as a preference, fraudulent conveyance or otherwise under any Debtor Relief Law, all as though such payment had not been made; provided that in the event payment of all or any part of the Obligations is

 

12

 

 

 

rescinded or must be restored or returned, all reasonable costs and expenses (including without limitation any reasonable legal fees and disbursements) incurred by the Collateral Agent or any holder of the Obligations in defending and enforcing such reinstatement shall be deemed to be included as a part of the Obligations.

 

11.     Amendments; Waivers; Modifications, etc. This Agreement and the provisions hereof may not be amended, waived, modified, changed, discharged or terminated except as set forth in Section 11.4 of the Credit Agreement; provided that any update or revision to Schedule 2 hereof delivered by any Obligor shall not constitute an amendment for purposes of this Section 11 or Section 11.4 of the Credit Agreement.

 

12.     Successors in Interest. This Agreement shall be binding upon each Obligor, its successors and assigns and shall inure, together with the rights and remedies of the Collateral Agent and the holders of the Obligations hereunder, to the benefit of the Collateral Agent and the holders of the Obligations and their successors and permitted assigns.

 

13.     Notices. All notices required or permitted to be given under this Agreement shall be in conformance with Section 11.1 of the Credit Agreement.

 

14.     Counterparts. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging means (e.g. “pdf” or “tif” format) shall be effective as delivery of a manually executed counterpart of this Agreement.

 

15.     Headings. The headings of the sections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.

 

16.     Governing Law; Submission to Jurisdiction; Venue; WAIVER OF JURY TRIAL. The terms of Sections 11.13 and 11.14 of the Credit Agreement with respect to governing law, submission to jurisdiction, venue and waiver of jury trial are incorporated herein by reference, mutatis mutandis, and the parties hereto agree to such terms.

 

17.     Severability. If any provision of this Agreement is determined to be illegal, invalid or unenforceable, such provision shall be fully severable and the remaining provisions shall remain in full force and effect and shall be construed without giving effect to the illegal, invalid or unenforceable provisions.

 

18.     Entirety. This Agreement, the other Credit Documents and the other documents relating to the Obligations represent the entire agreement of the parties hereto and thereto, and supersede all prior agreements and understandings, oral or written, if any, including any commitment letters or correspondence relating to the Credit Documents, any other documents relating to the Obligations, or the transactions contemplated herein and therein.

 

19.     Other Security. To the extent that any of the Obligations are now or hereafter secured by property other than the Collateral (including, without limitation, real property and securities owned by an Obligor), or by a guarantee, endorsement or property of any other Person, then the Collateral Agent shall have the right to proceed against such other property, guarantee or endorsement upon the occurrence and during the continuance of any Event of Default, and the Collateral Agent shall have the right, in its sole discretion, to determine which rights, security, liens, security interests or remedies the Collateral Agent shall at any time pursue, relinquish, subordinate, modify or take with respect thereto, without in any way modifying or affecting any of them or the Obligations or any of the rights of the Collateral Agent or the holders of the Obligations under this Agreement, under any other of the Credit Documents or under any other document relating to the Obligations.

 

13

 

 

20.     Joinder. At any time after the date of this Agreement, one or more additional Persons may become party hereto by executing and delivering to the Collateral Agent a Guarantor Joinder Agreement. Immediately upon such execution and delivery of such Guarantor Joinder Agreement (and without any further action), each such additional Person will become a party to this Agreement as an “Obligor” and have all of the rights and obligations of an Obligor hereunder and this Agreement and the schedules hereto shall be deemed amended by such Guarantor Joinder Agreement.

 

21.     Joint and Several Obligations of Obligors.

 

(a)     Subject to subsection (c) of this Section 21, each of the Obligors is accepting joint and several liability hereunder, in consideration of the financial accommodation to be provided by the holders of the Obligations, of each of the Obligors and in consideration of the undertakings of each of the Obligors to accept joint and several liability for the obligations of each of them.

 

(b)     Subject to subsection (c) of this Section 21, each of the Obligors jointly and severally hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Obligors with respect to the payment and performance of all of the Obligations arising under this Agreement, the other Credit Documents and any other documents relating to the Obligations, it being the intention of the parties hereto that all the Obligations shall be the joint and several obligations of each of the Obligors without preferences or distinction among them.

 

(c)     Notwithstanding any provision to the contrary contained herein, in any other of the Credit Documents or in any other documents relating to the Obligations, the obligations of each Obligor under the Credit Agreement, the other Credit Documents and the other documents relating to the Obligations shall be limited to an aggregate amount equal to the largest amount that would not render such obligations subject to avoidance under Section 548 of the United States Bankruptcy Code or any comparable provisions of any other Debtor Relief Law.

 

22.     Rights of Required Lenders. All rights of the Collateral Agent hereunder, if not exercised by the Collateral Agent, may be exercised by the Required Lenders.

 

23.     Consent of Issuers of Pledged Equity. Each issuer of Pledged Equity party to this Agreement hereby acknowledges, consents and agrees to the grant of the security interests in such Pledged Equity by the applicable Obligors pursuant to this Agreement, together with all rights accompanying such security interest as provided by this Agreement and Applicable Laws, notwithstanding any anti-assignment provisions in any Organizational Document of such issuer.

 

24.     Amendment and Restatement of Existing Pledge and Security Agreement. The parties to the Existing Pledge and Security Agreement each hereby agrees that the Existing Pledge and Security Agreement automatically shall be deemed amended and restated in its entirety by this Agreement. All Liens created by the Existing Pledge and Security Agreement shall continue unimpaired and in full force and effect, as amended and restated in this Agreement. This Agreement does not constitute a novation of the obligations and liabilities existing under the Existing Pledge and Security Agreement, and this Agreement evidences the obligations of the Obligors under the Existing Pledge and Security Agreement as continued and amended and restated hereby.

 

[SIGNATURE PAGES FOLLOW]

 

14

 

 

 

Each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written.

 

	
			OBLIGORS:

				
			FUTUREFUEL CORP.,

			

a Delaware corporation

 

By:          

Name:

Title:

 

FUTUREFUEL CHEMICAL COMPANY,

a Delaware corporation

 

By:          

Name:

Title:

 

[Additional obligors],

a [__________________]

 

By:          

Name:

Title:

 

 

 

 

Accepted and agreed to as of the date first above written.

 

REGIONS BANK, as Collateral Agent

 

By:                         

Name:

Title:

 

 

 

 

SCHEDULE 1

 

PLEDGED EQUITY

 

 

	
			Obligor

				
			Name of Subsidiary

				
			Number of Shares

				
			Certificate Number

				
			Percentage Ownership

			
	
			FutureFuel Corp.

				
			FutureFuel Chemical Company

				
			100

				
			2

				
			100%

			
	
			FutureFuel Chemical Company

				
			FutureFuel Warehouse Company, LLC

				
			N/A

				
			No Certificate

				
			100%

			
	
			FutureFuel Chemical Company

				
			FFC Grain, L.L.C.

				
			N/A

				
			No Certificate

				
			100%

			
	
			FutureFuel Chemical Company

				
			Legacy Regional Transport, L.L.C.

				
			N/A

				
			No Certificate

				
			100%

			

 

 

 

 

 

SCHEDULE 2

 

COMMERCIAL TORT CLAIMS

 

None.

 

 

 

 

EXHIBIT 4(a)

 

IRREVOCABLE STOCK POWER

 

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to _____________ the following equity interests of _____________________, a ____________ [corporation][limited liability company]:

               No. of Shares                    Certificate No.

 

 

 

and irrevocably appoints __________________________________ its agent and attorney-in-fact to transfer all or any part of such equity interests and to take all necessary and appropriate action to effect any such transfer. The agent and attorney-in-fact may substitute and appoint one or more persons to act for him.

 

_______________________________

 

                              By:                         

Name:

Title:

 

 

 

 

EXHIBIT 4(c)(i)

 

NOTICE

 

OF

 

GRANT OF SECURITY INTEREST

 

IN

 

COPYRIGHTS

 

 

United States Copyright Office

 

Ladies and Gentlemen:

 

Please be advised that pursuant to the Amended and Restated Pledge and Security Agreement dated as of March 30, 2020 (as the same may be amended, modified, extended or restated from time to time, the “Agreement”) by and among the Obligors party thereto (each an “Obligor” and collectively, the “Obligors”) and Regions Bank, as collateral agent (the “Collateral Agent”) for the holders of the Obligations referenced therein, the undersigned Obligor has granted a continuing security interest in, and a right to set off against, any and all right, title and interest of such Obligor in and to the copyrights and copyright applications set forth on Schedule 1 hereto to the Collateral Agent for the ratable benefit of the holders of the Obligations.

 

The undersigned Obligor and the Collateral Agent, on behalf of the holders of the Obligations, hereby acknowledge and agree that the security interest in the foregoing copyrights and copyright applications (i) may only be terminated in accordance with the terms of the Agreement and (ii) is not to be construed as an assignment of any copyright or copyright application.

 

Very truly yours,

 

__________________________________

[Obligor]

 

                              By:                         

Name:

Title:

 

[Address]

 

Acknowledged and Accepted:

 

REGIONS BANK, as Collateral Agent

 

By:                         

Name:

Title:

 

[Address]

 

 

 

 

EXHIBIT 4(c)(ii)

 

NOTICE

 

OF

 

GRANT OF SECURITY INTEREST

 

IN

 

PATENTS

 

 

United States Patent and Trademark Office

 

Ladies and Gentlemen:

 

Please be advised that pursuant to the Amended and Restated Pledge and Security Agreement dated as of March 30, 2020 (as the same may be amended, modified, extended or restated from time to time, the “Agreement”) by and among the Obligors party thereto (each an “Obligor” and collectively, the “Obligors”) and Regions Bank, as collateral agent (the “Collateral Agent”) for the holders of the Obligations referenced therein, the undersigned Obligor has granted a continuing security interest in, and a right to set off against, any and all right, title and interest of such Obligor in and to the patents and patent applications set forth on Schedule 1 hereto to the Collateral Agent for the ratable benefit of the holders of the Obligations.

 

The undersigned Obligor and the Collateral Agent, on behalf of the holders of the Obligations, hereby acknowledge and agree that the security interest in the foregoing patents and patent applications (i) may only be terminated in accordance with the terms of the Agreement and (ii) is not to be construed as an assignment of any patent or patent application.

 

Very truly yours,

 

__________________________________

[Obligor]

 

                              By:                         

Name:

Title:

 

[Address]

 

Acknowledged and Accepted:

 

REGIONS BANK, as Collateral Agent

 

By:                         

Name:

Title:

 

[Address]

 

 

 

 

EXHIBIT 4(c)(iii)

 

NOTICE

 

OF

 

GRANT OF SECURITY INTEREST

 

IN

 

TRADEMARKS

 

 

United States Patent and Trademark Office

 

Ladies and Gentlemen:

 

Please be advised that pursuant to the Amended and Restated Pledge and Security Agreement dated as of March 30, 2020 (as the same may be amended, modified, extended or restated from time to time, the “Agreement”) by and among the Obligors party thereto (each an “Obligor” and collectively, the “Obligors”) and Regions Bank, as collateral agent (the “Collateral Agent”) for the holders of the Obligations referenced therein, the undersigned Obligor has granted a continuing security interest in, and a right to set off against, any and all right, title and interest of such Obligor in and to the trademarks and trademark applications set forth on Schedule 1 hereto to the Collateral Agent for the ratable benefit of the holders of the Obligations.

 

The undersigned Obligor and the Collateral Agent, on behalf of the holders of the Obligations, hereby acknowledge and agree that the security interest in the foregoing trademarks and trademark applications (i) may only be terminated in accordance with the terms of the Agreement and (ii) is not to be construed as an assignment of any trademark or trademark application.

 

Very truly yours,

 

__________________________________

[Obligor]

 

                              By:                         

Name:

Title:

 

[Address]

 

Acknowledged and Accepted:

 

REGIONS BANK, as Collateral Agent

 

By:                         

Name:

Title:

 

[Address]Exhibit 10.1

 

SECURITIES PURCHASE
AGREEMENT

 

THIS SECURITIES PURCHASE
AGREEMENT (this “Agreement”), dated as of ______, 2020, (the “Execution Date”), is
entered into by and between QUANTUM COMPUTING INC., a Delaware corporation
(the “Company”), and OASIS CAPITAL, LLC, a Puerto Rico limited liability company (the “Buyer”).

 

WHEREAS, the Company
and the Buyer are executing and delivering this Agreement in reliance upon an exemption from securities registration afforded by
the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “Securities Act”); and

 

WHEREAS, the Buyer
desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement (i) an
8% convertible promissory note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount
of US$563,055.00 (together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto
in accordance with the terms thereof, the “Note”), convertible into shares (the “Conversion Shares”)
of common stock, $0.0001 par value per share, of the Company (the “Common Stock”) pursuant to the terms of the
Note; (ii) warrants to acquire up to that number of shares (the “Warrant Shares”) of Common Stock as set forth
on the schedule of buyers attached hereto (the “Schedule of Buyers”) in the form attached hereto as Exhibit
B (the “Warrants”), upon the terms and subject to the limitations and conditions set forth in the Warrants;
and (iii) that number of shares of Common Stock set forth on the Schedule of Buyers to be issued as an inducement to the Buyer
to enter into this Agreement (the “Inducement Shares”), on the terms set forth in this Agreement.

 

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

 

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

 

“Affiliate”
means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls,
or is controlled by, or is under common control with, such Person, and the term “control” (including the terms “controlled
by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or
cause the direction of the management policies of such Person, whether through ownership of voting securities, by contract or otherwise.

 

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

 

     

     

    

 

“Damages”
shall mean any loss, claim, damage, liability, cost and expense (including, without limitation, reasonable attorneys’ fees
and disbursements and costs and expenses of expert witnesses and investigation).

 

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

 

“Hazardous Material”
means and includes any hazardous, toxic or dangerous waste, substance or material, the generation, handling, storage, disposal,
treatment or emission of which is subject to any Environmental Law.

 

“Issuance Shares”
means, collectively, the Inducement Shares, Conversion Shares and the Warrant Shares.

 

“Knowledge”
including the phrase “to the Company’s Knowledge” shall mean the actual knowledge after reasonable investigation
of the Company’s officers and directors.

 

“Lien”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, pre-emptive right or any other restriction.

 

“Material Adverse
Effect” means any effect on the business, operations, properties, or financial condition of the Company and/or the Subsidiaries
that is material and adverse to the Company and/or the Subsidiaries and/or any condition, circumstance, or situation that prohibits
or otherwise materially interferes with the ability of the Company and/or the Subsidiaries to enter into and/or perform its obligations
under any Transaction Document.

 

“Person”
means an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.

 

“Securities”
means, collectively, the Note, the Warrant, the Inducement Shares, the Conversion Shares, and the Warrant Shares, and any other
securities of the Company issued in connection with or in exchange for any of the foregoing.

 

“Subsidiary”
or “Subsidiaries” means any Person the Company wholly-owns or controls, or in which the Company, directly or
indirectly, owns a majority of the voting stock or similar voting interest, in each case that would be disclosable pursuant to
Item 601(b)(21) of Regulation S-K promulgated under the Securities Act.

 

“Trading Day”
shall mean a day on which the NASDAQ stock market shall be open for business.

 

“Trading Market”
means the OTCQB market of the OTC-Markets.

 

“Transaction Documents”
shall mean this Agreement, the Note, the Warrant, the Transfer Agent Instruction Letter and all schedules and exhibits hereto and
thereto.

 

“Transfer Agent”
shall mean Worldwide Stock Transfer, LLC, the current transfer agent of the Company, and any successor transfer agent of the Company.

 

    2

     

    

 

“Transfer Agent
Instruction Letter” means the letter from the Company to the Transfer Agent in the form of Exhibit C attached
hereto.

 

2. PURCHASE
AND SALE OF SECURITIES.

 

(a) Purchase
of Securities. On the Closing Date (as defined below), the Company shall sell and issue to the Buyer and the Buyer shall purchase
and fund such amount as is set forth on the Schedule of Buyers (the “Investment”). On the Closing Date, the
Company shall issue to Buyer as a commitment fee, a Warrant to purchase the number of Warrant Shares set forth on the Schedule
of Buyers, subject to the terms of such Warrant. On the Closing Date, the Company shall also issue the number of Inducement Shares
as a commitment fee to Buyer set forth on the Schedule of Buyers.

 

(b) Closing
Date. Subject to the satisfaction (or written waiver) of the conditions set forth in Section 7 and Section 8
below, the date of the issuance and sale of the Securities constituting the Investment pursuant to this Agreement (the “Closing
Date”) shall be the Execution Date. The closing of the transactions contemplated by this Agreement (the “Closing”)
shall occur on the Closing Date at such location as may be agreed to by the parties.

 

(c) Form
of Payment. On the Closing Date, the Buyer shall pay the purchase price of $500,000.00 (the “Purchase Price”)
for the Investment of $563,055.00 (which amount includes an original issuance discount of $55,555.00 and a $7,500.00 credit for
the Buyer’s transaction expenses) evidenced by the Note, by wire transfer of immediately available funds, in accordance with
the Company’s written wiring instructions against delivery of the Note, pursuant to the terms of the Note.

 

3. REPRESENTATIONS
AND WARRANTIES OF THE BUYER. The Buyer represents and warrants to the Company that:

 

(a) Investment
Purpose. As of the Execution Date, the Buyer is purchasing the Securities for its own account for investment only and not with
a view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under
the Securities Act; provided, however, that by making the foregoing representation and warranty, the Buyer does not
agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities
at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act.

 

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

 

(c) Information.
The Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of
the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer or its advisors.
The Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the Company. Notwithstanding the foregoing,
the Company has not disclosed to the Buyer any material non-public information and will not disclose such information unless such
information is disclosed to the public prior to or promptly following such disclosure to the Buyer. Neither such inquiries nor
any other due diligence investigation conducted by Buyer or any of its advisors or representatives shall modify, amend or affect
Buyer’s right to rely on the Company’s representations and warranties contained in Section 4 below. The Buyer
understands that its investment in the Securities involves a significant degree of risk, including the risk of loss of the Buyer’s
entire investment. The Buyer is not aware of any facts that may constitute a breach of any of the Company’s representations
and warranties made herein.

 

    3

     

    

 

(d) Governmental
Review. The Buyer understands that no United States federal or state agency or any other government or governmental agency
has passed upon or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in
the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

(e) Transfer
or Re-sale. The Buyer understands that (i) the sale or re-sale of the Securities has not been and is not being registered under
the Securities Act or any applicable state securities laws and the Securities may not be transferred unless (a) the Securities
are sold pursuant to an effective registration statement under the Securities Act, (b) the Buyer shall have delivered to the Company,
at the cost of the Company, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel
in comparable transactions, to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to
an exemption from such registration, which opinion shall be accepted by the Company (c) the Securities are sold or transferred
to an “affiliate” (as defined in Rule 144 promulgated under the Securities Act (or a successor rule) (“Rule
144”)) of the Buyer who agrees to sell or otherwise transfer the Securities only in accordance with this Section 3(e)
and who is an Accredited Investor, (d) the Securities are sold pursuant to Rule 144, or (e) the Securities are sold pursuant to
Regulation S under the Securities Act (or a successor rule) (“Regulation S”), and the Buyer shall have delivered
to the Company, at the cost of the Company, an opinion of counsel that shall be in form, substance and scope customary for opinions
of counsel in comparable transactions, which opinion shall be accepted by the Company; (ii) any sale of such Securities made in
reliance on Rule 144 may be made only in accordance with the terms of said rule and further, if said rule is not applicable, any
re-sale of such Securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed
to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the
Securities Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under
any obligation to register such Securities under the Securities Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder (in each case). Notwithstanding the foregoing or anything else contained herein to the contrary,
the Securities may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.

 

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

 

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

 

    4

     

    

 

The legend set forth above
shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped,
if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective
registration statement filed under the Securities Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any
restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides
the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions,
to the effect that a public sale or transfer of such Security may be made without registration under the Securities Act, which
opinion shall be accepted by the Company so that the sale or transfer can be effected. The Buyer agrees to sell all Securities,
including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus
delivery requirements, if any. In the event that the Company does not accept the opinion of counsel provided by the Buyer in accordance
with the preceding sentence with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule
144 or Regulation S, at the Deadline (as defined in the Note) or at the Warrant Share Delivery Date (as defined in the Warrant),
it will constitute an Event of Default under the Note.

 

(g) Authorization;
Enforcement. This Agreement has been duly and validly authorized by the Buyer. This Agreement has been duly executed and delivered
on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with
its terms.

 

(h) Accredited
Investor Status. The Buyer is (i) an “accredited investor” as that term is defined in Rule 501 of the General Rules
and Regulations under the Securities Act by reason of Rule 501(a)(3) (an “Accredited Investor”), (ii) experienced
in making investments of the kind described in this Agreement and the related documents, (iii) able, by reason of the business
and financial experience of its officers (if an entity) and professional advisors (who are not affiliated with or compensated in
any way by the Company or any of its Affiliates or selling agents), to protect its own interests in connection with the transactions
described in this Agreement, and the related documents, and (iv) able to afford the entire loss of its investment in the Securities.

 

(i) Residency.
The Buyer is a limited liability company organized under the laws of the Territory of Puerto Rico.

 

    5

     

    

 

(j) General
Solicitation. The Buyer is not purchasing the Securities as a result of any advertisement, article, notice or other communication
regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented
at any seminar or any other general solicitation or general advertisement.

 

4. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY. The Company represents and warrants to the Buyer that:

 

(a) Organization
and Qualification. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of
the State of Delaware, with the requisite corporate power and authority to own and use its properties and assets and to carry on
its business as currently conducted. Each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite corporate power
and authority to own and use its properties and assets and to carry on its business as currently conducted. Each of the Company
and the Subsidiaries is not in violation or default of any of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have or reasonably be expected to result in a Material Adverse Effect and no proceeding has been instituted
in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

(b) Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and perform its obligations under this
Agreement and the other Transaction Documents. The execution and delivery of this Agreement and the other Transaction Documents
by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action, and no further consent or authorization of the Company or its Board of Directors or stockholders is
required. Each of this Agreement and the other Transaction Documents has been duly executed and delivered by the Company and constitutes
a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general application.

 

(c) Capitalization.
As of the Execution Date, the authorized capital stock of the Company is as set forth in the SEC Documents (as defined below).
Except as set forth on Schedule 4(c), the Company has not issued any capital stock since its most recently filed SEC Document,
other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares
of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or
exercise of Common Stock Equivalents outstanding as of the date of the most recently filed SEC Document. Except as disclosed in
the SEC Documents, no shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved
for issuance pursuant to the terms of any Common Stock Equivalents (other than the Note and the Warrant) exercisable for, or convertible
into or exchangeable for shares of Common Stock and sufficient shares are reserved for issuance upon conversion of the Note and
exercise of the Warrant (as required by the Note, the Warrant and Transfer Agent Instruction Letter). All of such outstanding shares
of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable. No shares of capital
stock of the Company are subject to preemptive rights or any other similar rights of the stockholders of the Company or any liens
or encumbrances imposed through the actions or failure to act of the Company. Except as disclosed in the SEC Documents, as of the
Execution Date, (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal,
agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by
which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company
or any of its Subsidiaries, (ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is
obligated to register the sale of any of its or their securities under the Securities Act and (iii) there are no anti-dilution
or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security
holders) that will be triggered by the issuance of the Securities. The Company has filed in its SEC Documents true and correct
copies of the Company’s Certificate of Incorporation as in effect on the Execution Date, the Company’s bylaws, as in
effect on the Execution Date, and the terms of all securities convertible into or exercisable for Common Stock of the Company and
the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer a certification of this representation
signed by the Company’s Chief Executive Officer on behalf of the Company as of each Closing Date.

 

    6

     

    

 

(d) Issuance
of Shares. The Inducement Shares have been duly authorized and on the Execution Date will be validly issued, fully paid and
non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof with the holders being
entitled to all rights accorded to a holder of Common Stock. The Conversion Shares and Warrant Shares have been duly authorized
and fully reserved for issuance and, upon conversion of the Note and 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, claims and encumbrances with respect to
the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. The Issuance Shares shall
not be subject to pre-emptive rights or other similar rights of stockholders of the Company (except to the extent already waived)
and will not impose personal liability upon the holder thereof, other than restrictions on transfer provided for in the Transaction
Documents and under the Securities Act.

 

(e) Acknowledgment
of Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common Stock upon the issuance
of the Conversion Shares upon conversion of the Note, and the Warrant Shares upon exercise of the Warrant. The Company further
acknowledges that its obligation to issue Conversion Shares upon conversion of the Note, and Warrant Shares upon exercise of the
Warrant in accordance with this Agreement, and the Note and Warrant are absolute and unconditional regardless of the dilutive effect
that such issuances may have on the ownership interests of other stockholders of the Company.

 

(f) No
Conflicts. The execution, delivery and performance of this Agreement and the other Transaction Documents by the Company and
the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance
and reservation for issuance of the Issuance Shares) will not (a) result in a violation of the Company’s or any Subsidiary’s
certificate or articles of incorporation, by-laws or other organizational or charter documents, (b) conflict with, or constitute
a material default (or an event that with notice or lapse of time or both would become a material default) under, result in the
creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture, instrument or any “lock-up” or similar provision
of any underwriting or similar agreement to which the Company or any Subsidiary is a party, or (c) result in a violation of any
federal, state or local law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations)
applicable to the Company or any Subsidiary or by which any property or asset of the Company or any Subsidiary is bound or affected
(except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually
or in the aggregate, have a Material Adverse Effect), nor is the Company otherwise in violation of, conflict with or in default
under any of the foregoing. The business of the Company is not being conducted in violation of any law, ordinance or regulation
of any governmental entity, except for possible violations that either singly or in the aggregate do not and will not have a Material
Adverse Effect. The Company is not required under federal, state or local law, rule or regulation to obtain any consent, authorization
or order of, or make any filing or registration with, any court or governmental agency in order for it to issue the Issuance Shares
or to execute, deliver or perform any of its obligations under this Agreement or the other Transaction Documents (other than any
SEC, FINRA or state securities filings that may be required to be made by the Company subsequent to Closing).

 

    7

     

    

 

(g) SEC
Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the one (1) year preceding the Execution Date (or such shorter period as the Company was required by law or regulation to file
such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC Documents”) on a timely basis or has received a valid extension
of such time of filing and has filed any such SEC Documents prior to the expiration of any such extension. As of their respective
dates, the SEC Documents complied in all material respects with the requirements of the Securities Act and the Exchange Act, as
applicable, and other federal laws, rules and regulations applicable to such SEC Documents, and none of the SEC Documents when
filed contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Documents (the “Financial Statements”) comply as to form and substance
in all material respects with applicable accounting requirements and the published rules and regulations of the SEC or other applicable
rules and regulations with respect thereto. Such Financial Statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved (except (a) as may be otherwise indicated in such
Financial Statements or the notes thereto or (b) in the case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the
Company as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments). The Company maintains a system of internal accounting
controls appropriate for its size. There is no transaction, arrangement, or other relationship between the Company and an unconsolidated
or other off balance sheet entity that is not disclosed by the Company in its Financial Statements or otherwise that would be reasonably
likely to have a Material Adverse Effect. Except with respect to the material terms and conditions of the transactions contemplated
by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided the Buyer
or its agents or counsel with any information that it believes constitutes or might constitute material, non-public information.
The Company understands and confirms that the Buyer will rely on the foregoing representation in effecting transactions in securities
of the Company.

 

    8

     

    

 

(h) Absence
of Certain Changes. No event has occurred that would have a Material Adverse Effect on the Company or any Subsidiary that has
not been disclosed in the SEC Documents. Without limiting the generality of the foregoing, except
as disclosed in the SEC Documents, neither the Company nor any of its Subsidiaries has:

 

(1) declared,
set aside or paid any dividend or other distribution with respect to any shares of capital stock of the Company or any of its Subsidiaries
or any direct or indirect redemption, purchase or other acquisition of any such shares;

 

(2) sold,
assigned, pledged, encumbered, transferred or otherwise disposed of any tangible asset of the Company or any of its Subsidiaries
(other than sales or the licensing of its products to customers in the ordinary course of business consistent with past practice),
or sold, assigned, pledged, encumbered, transferred or otherwise disposed of any Intellectual Property (as defined below), other
than licensing of products of the Company or its Subsidiaries in the ordinary course of business and on a non-exclusive basis;

 

(3) entered
into any licensing or other agreement with regard to the acquisition or disposition of any Intellectual Property other than licenses
in the ordinary course of business consistent with past practice or any amendment or consent with respect to any licensing agreement
filed or required to be filed with respect to any governmental authority;

 

(4) made
capital expenditures, individually or in the aggregate, in excess of $100,000;

 

(5) incurred
any obligation or liability (whether absolute, accrued, contingent or otherwise, and whether due or to become due) on the Company’s
behalf or any of its Subsidiaries, in excess of $100,000 individually, other than obligations under customer contracts, current
obligations and liabilities, in each case incurred in the ordinary course of business and consistent with past practice;

 

(6) had
any Lien on any property of the Company or any of its Subsidiaries except as disclosed in the SEC Documents or described on Schedule
4(h)(6);

 

(7) made
any payment, discharge, satisfaction or settlement of any suit, action, claim, arbitration, proceeding or obligation of the Company
or any of its Subsidiaries, except in the ordinary course of business and consistent with past practice;

 

(8) effected
any split, combination or reclassification of any equity securities;

 

(9) sustained
any material loss, destruction or damage to any property of the Company or any Subsidiary, whether or not insured;

 

(10) effected
any acceleration or prepayment of any indebtedness for borrowed money or the refunding of any such indebtedness;

 

(11) experienced
any labor trouble involving the Company or any Subsidiary or any material change in their personnel or the terms and conditions
of employment;

 

    9

     

    

 

(12) made
any waiver of any valuable right, whether by contract or otherwise;

 

(13) made
any loan or extension of credit to any officer or employee of the Company;

 

(14) made
any change in the independent public accountants of the Company or its Subsidiaries or any material change in the accounting methods
or accounting practices followed by the Company or its Subsidiaries, as applicable, or any material change in depreciation or amortization
policies or rates;

 

(15) experienced
any resignation or termination of any officer, key employee or group of employees of the Company or any of its Subsidiaries;

 

(16) effected
any change in any compensation arrangement or agreement with any employee, officer, director or stockholder that would result in
the aggregate compensation to such Person in such year to exceed $100,000, except as disclosed on Schedule 4(h)(16);

 

(17) effected
any material increase in the compensation of employees of the Company or its Subsidiaries (including any increase pursuant to any
written bonus, pension, profit sharing or other benefit or compensation plan, policy or arrangement or commitment), or any increase
in any such compensation or bonus payable to any officer, stockholder, director, consultant or agent of the Company or any of its
Subsidiaries having an annual salary or remuneration in excess of $100,000, except as disclosed on Schedule 4(h)(17);

 

(18) made
any revaluation of any of their respective assets, including, without limitation, writing down the value of capitalized inventory
or writing off notes or accounts receivable or any sale of assets other than in the ordinary course of business;

 

(19) made
any acquisition or disposition of any material assets (or any contract or arrangement therefor), or any other material transaction
by the Company or any Subsidiary otherwise than for fair value in the ordinary course of business;

 

(20) written-down
the value of any asset of the Company or its Subsidiaries or written-off as uncollectible of any accounts or notes receivable or
any portion thereof except in the ordinary course of business and in a magnitude consistent with historical practice;

 

(21) cancelled
any debts or claims or any material amendment, termination or waiver of any rights of the Company or its Subsidiaries; or

 

(22) entered
into any agreement, whether in writing or otherwise, to take any of the actions specified in the foregoing items (1) through
(21), except as disclosed on Schedule 4(h)(22).

 

(i) Absence
of Litigation. Except as disclosed in the SEC Documents or as set forth on Schedule 4(i), there are no actions, suits,
investigations, inquiries or proceedings pending or, to the Knowledge of the Company, threatened against or affecting the Company,
any Subsidiary or any of their respective properties, nor has the Company received any written or oral notice of any such action,
suit, proceeding, inquiry or investigation, which would have a Material Adverse Effect or would require disclosure under the Securities
Act or the Exchange Act. No judgment, order, writ, injunction or decree or award has been issued by or, to the Knowledge of the
Company, requested of any court, arbitrator or governmental agency which would have a Material Adverse Effect. Except as disclosed
in the SEC Documents or as set forth on Schedule 4(i) there has not been, and to the Knowledge of the Company, there is
not pending or contemplated, any investigation by the SEC involving the Company, any Subsidiary or any current or former director
or officer of the Company or any Subsidiary.

 

    10

     

    

 

(j) Patents,
Copyrights, etc. The Company and the Subsidiaries own or possess adequate rights or licenses to use all material
trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions,
licenses, approvals, governmental authorizations, trade secrets and rights necessary to conduct their respective businesses as
now conducted (“Intellectual Property”). None of the Company’s nor any Subsidiary’s Intellectual
Property rights have expired or terminated, or, by the terms and conditions thereof, could expire or terminate within two years
from the Execution Date. The Company does not have any Knowledge of any infringement by the Company and/or any Subsidiary of any
material trademark, trade name rights, patents, patent rights, copyrights, inventions, licenses, service names, service marks,
service mark registrations, trade secret or other similar rights of others, or of any such development of similar or identical
trade secrets or technical information by others, and there is no claim, action or proceeding being made or brought against, or
to the Company’s Knowledge, being threatened against, the Company and/or any Subsidiary regarding trademark, trade name,
patents, patent rights, invention, copyright, license, service names, service marks, service mark registrations, trade secret or
other infringement, which could reasonably be expected to have a Material Adverse Effect.

 

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

 

(l) Certain
Transactions. Except as set forth in the SEC Documents, none of the officers or directors of the Company or any Subsidiary,
and to the Knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction
with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement
or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or
from, or otherwise requiring payments to or from any officer, director or such employee or, to the Knowledge of the Company, any
entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner,
in each case in excess of the lesser of (i) $120,000 or (ii) one percent of the average of the Company’s total assets at
year end for the last two completed fiscal years, other than for (i) payment of salary or consulting fees for services rendered,
(ii) reimbursement for expenses incurred on behalf of the Company or any Subsidiary and (iii) other employee benefits, including
stock option agreements under any stock option plan of the Company.

 

    11

     

    

 

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

 

(n) Acknowledgment
Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby
and thereby and that the Buyer is neither (i) an officer or director of the Company or any of its Subsidiaries, nor (ii) an “affiliate”
(as defined in Rule 144) of the Company or any of its Subsidiaries. The Company further acknowledges that the Buyer is not acting
as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives
or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental
to the Buyer’s purchase of the Securities. The Company further represents to the Buyer that the Company’s decision
to enter into the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives.

 

(o) No
Integrated Offering. Neither the Company, nor any person acting on its or their behalf, has directly or indirectly made any
offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration
under the Securities Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer will not be
integrated with any other issuance of the Company’s securities (past, current or future) for purposes of any stockholder
approval provisions applicable to the Company or its securities.

 

(p) No
Brokers. No broker is entitled to a commission payable by the Company in connection with the transactions contemplated by this
transaction and the Company has taken no action which would give rise to any claim by any person for brokerage commissions, transaction
fees or similar payments relating to this Agreement or the transactions contemplated hereby.

 

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

 

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(r) Environmental
Matters. The Company is in compliance with all applicable Environmental Laws in all respects except where the failure to comply
does not have and could not reasonably be expected to have a Material Adverse Effect. For purposes of the foregoing: “Environmental
Laws” means, collectively, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended,
the Superfund Amendments and Reauthorization Act of 1986, the Resource Conservation and Recovery Act, the Toxic Substances Control
Act, as amended, the Clean Air Act, as amended, the Clean Water Act, as amended, any other “Superfund” or “Superlien”
law or any other applicable federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating,
relating to, or imposing liability or standards of conduct concerning, the environment or any Hazardous Material.

 

(s) Title
to Property. Except as disclosed in the SEC Documents, the Company and each Subsidiary has good and marketable title in fee
simple to all real property owned by it and good and marketable title in all personal property owned by it that is material to
the business of the Company and each Subsidiary, in each case free and clear of all Liens and, except for Liens as do not materially
affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by
the Company or any Subsidiary and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent
nor subject to penalties. Any real property and facilities held under lease by the Company or any Subsidiary is held under valid,
subsisting and enforceable leases with which the Company is in compliance with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the Company or any Subsidiary.

 

(t) Internal
Accounting Controls. Except as disclosed in the SEC Documents the Company and each of its Subsidiaries maintain a system of
internal accounting controls sufficient, in the judgment of the Company’s board of directors, to provide reasonable assurance
that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles
and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or
specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences. The Company is in compliance with all provisions of the Sarbanes-Oxley
Act of 2002, as amended, which are applicable to it.

 

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

 

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(v) Solvency.
The Company (after giving effect to the transactions contemplated by this Agreement) is solvent (i.e., its assets have a fair market
value in excess of the amount required to pay its probable liabilities on its existing debts as they become absolute and matured)
and currently the Company has no information that would lead it to reasonably conclude that the Company would not, after giving
effect to the transaction contemplated by this Agreement, have the ability to, nor does it intend to take any action that would
impair its ability to, pay its debts from time to time incurred in connection therewith as such debts mature. Except as disclosed
in the SEC Documents or on Schedule 4(v), the Company did not receive a qualified opinion from its auditors with respect
to its most recent fiscal year end and, after giving effect to the transactions contemplated by this Agreement, does not anticipate
or know of any basis upon which its auditors might issue a qualified opinion in respect of its current fiscal year. For the avoidance
of doubt any qualification of the auditors’ opinion relating to the Company’s ability to continue as a “going
concern” shall not, by itself, be a violation of this Section 4(v).

 

(w) Insurance.
The Company and each Subsidiary is insured by insurers of recognized financial responsibility against such losses and risks and
in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and each
Subsidiary is engaged. Neither the Company, nor any Subsidiary has been refused any insurance coverage sought or applied for, and
the Company has no reason to believe that it or any Subsidiary will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at
a cost that would not materially and adversely affect the condition, financial or otherwise, or the earnings, business or operations
of the Company, taken as a whole.

 

(x) Breach
of Representations and Warranties by the Company. If the Company breaches any of the representations or warranties set forth
in this Section 4, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered
an Event of Default under the Note.

 

(y) No
General Solicitation; Placement Agent. Neither the Company, nor any of its Subsidiaries or Affiliates, nor any Person acting
on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation
D) in connection with the offer or sale of the Securities. Neither the Company nor any of its Subsidiaries has engaged any placement
agent in connection with the sale of the Securities. In the event that a broker-dealer or other agent or advisory is engaged by
the Company subsequent to the initial Closing, the Company shall be responsible for the payment of any placement agent’s
fees, financial advisory fees, or brokers’ commissions (other than for persons engaged by any Buyer or its investment advisor)
relating to or arising out of the transactions contemplated hereby in connection with the sale of the Securities. The Company shall
pay, and hold the Buyer harmless against, any liability, loss or expense (including, without limitation, attorney’s fees
and out-of-pocket expenses) arising in connection with any such claim.

 

(z) No
Undisclosed Events, Liabilities, Developments or Circumstances. Except as set forth in the SEC Documents or on Schedule
4(z) hereto, the Company and its Subsidiaries have no liabilities or obligations of any nature (whether accrued, absolute,
contingent, unasserted or otherwise and whether due or to become due) other than those liabilities or obligations that are disclosed
in the Financial Statements or which do not exceed, individually in excess of $50,000 and in the aggregate in excess of $200,000.
The reserves, if any, established by the Company or the lack of reserves, if applicable, are reasonable based upon facts and circumstances
known by the Company on the Execution Date and there are no loss contingencies that are required to be accrued by the Statement
of Financial Accounting Standard No. 5 of the Financial Accounting Standards Board which are not provided for in the Financial
Statements.

 

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(aa) Management.
During the past five year period, no current or former officer or director or, to the Knowledge of the Company, stockholder of
the Company or any of its Subsidiaries has been the subject of any matter that would require disclosure under Paragraph (f) of
Rule 401 of Regulation S-K that has not been publicly disclosed.

 

(bb) Assets; Title.
Except as disclosed on Schedule 4(bb), each of the Company and its Subsidiaries has good and valid title to, or a valid
leasehold interest in, as applicable, all of its properties and assets, free and clear of all Liens except (i) any Lien for taxes
not yet due or delinquent or being contested in good faith by appropriate proceedings for which adequate reserves have been established
in accordance with GAAP, (ii) any statutory Lien arising in the ordinary course of business by operation of law with respect to
a liability that is not yet due or delinquent, (iii) any Lien created by operation of law, such as materialmen’s liens, mechanics’
liens and other similar liens, arising in the ordinary course of business with respect to a liability that is not yet due or delinquent
or that are being contested in good faith by appropriate proceedings, and (iv) such as have been disposed of in the ordinary course
of business. To the Company’s Knowledge, all tangible personal property owned by the Company and its Subsidiaries has been
maintained in good operating condition and repair, except (x) for ordinary wear and tear, and (y) where such failure would not
have a Material Adverse Effect. To the Company’s Knowledge, all assets leased by the Company or any of its Subsidiaries are
in the condition required by the terms of the lease applicable thereto during the term of such lease and upon the expiration thereof.
To the Company’s Knowledge, the Company and its Subsidiaries have good and marketable title in fee simple to all real property
and good and marketable title to all personal property owned by them which is material to the business of the Company and its Subsidiaries,
in each case free and clear of all liens, encumbrances and defects. Any real property and facilities held under lease by the Company
or any of its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material
and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries.

 

(cc) Subsidiary Rights.
Except as set forth on Schedule 4(cc), the Company or one of its Subsidiaries has the unrestricted right to vote, and to
receive dividends and distributions on, all equity securities of its Subsidiaries as owned by the Company or such Subsidiary.

 

(dd) Investment Company
Status. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment company,”
a company controlled by an “investment company” or an “affiliated person” of, or “promoter”
or “principal underwriter” for, an “investment company” as such terms are defined in the Investment Company
Act of 1940, as amended.

 

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

 

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(ff) Transfer Taxes.
On each Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required to be paid in connection
with the sale and transfer of the Securities to be sold to the Buyer hereunder will be, or will have been, fully paid or provided
for by the Company, and all laws imposing such taxes will be or will have been complied with.

 

(gg) Books and Records.
To the Company’s Knowledge, the books of account, ledgers, order books, records and documents of the Company and its Subsidiaries
accurately and completely reflect all information relating to the respective businesses of the Company and its Subsidiaries, the
nature, acquisition, maintenance, location and collection of each of their respective assets, and the nature of all transactions
giving rise to material obligations or accounts receivable of the Company or its Subsidiaries, as the case may be, except where
the failure to so reflect such information would not have a Material Adverse Effect. To the Company’s Knowledge, the minute
books of the Company and its Subsidiaries contain accurate records in all material respects of all meetings and accurately reflect
all other actions taken by the stockholders, boards of directors and all committees of the boards of directors, and other governing
Persons of the Company and its Subsidiaries, respectively.

 

(hh) Money Laundering.
The Company and its Subsidiaries are in compliance with, and have not previously violated, the USA PATRIOT ACT of 2001 and all
other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, but not limited to, the laws, regulations
and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including, but not limited,
to (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any regulations contained in
31 CFR, Subtitle B, Chapter V.

 

(ii) Shell
Company Status. The Company is not currently an issuer identified in Rule 144(i)(1)(i) under the Securities Act, and, if it
was at any time previously been such an issuer, then the Company is subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, has filed all reports and other materials required to be filed by Section 13 or 15(d) of the Exchange Act,
as applicable during the preceding 12 months, and, as of a date at least one year prior to the Execution Date, has filed current
“Form 10 information” with the SEC (as defined in Rule 144(i)(3) of the Securities Act) reflecting its status as an
entity that is no longer an issuer described in Rule 144(i)(1)(i) of the Securities Act.

 

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

 

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(kk) Other Covered
Persons. The Company is not aware of any Person (other than any Issuer Covered Person) that has been or will be paid (directly
or indirectly) remuneration for solicitation of buyers or potential purchasers in connection with the sale of any Regulation D
Securities.

 

(ll) Absence of Schedules.
In the event that at the First Closing Date, the Company does not deliver and attach hereto any disclosure schedule contemplated
by this Agreement, the Company hereby acknowledges and agrees that (i) each such undelivered disclosure schedule shall be deemed
to read as follows: “Nothing to Disclose”, and (ii) the Buyer has not otherwise waived delivery of such disclosure
schedule.

 

5. COVENANTS.

 

(a) Best
Efforts. The parties shall use their commercially reasonable best efforts to satisfy timely each of the conditions described
in Section 7 and 8 of this Agreement.

 

(b) Use
of Proceeds. The Company shall use the proceeds from the sale of the Note for:

 

(i) First,
the proceeds shall be used for the repayment in full of all promissory notes and convertible promissory notes issued by the Company
to Auctus Fund, LLC and any of such entity’s Affiliates (the “Auctus Repayment”);

 

(ii) Second, in the event
that the Auctus Repayment is satisfied, the proceeds shall be used for the Company’s costs related to its preparation and
filing of the registration statement required under the Company’s Registration Rights Agreement with the Buyer dated April
[___], 2020 (the “Registration Statement”); and

 

(iii) Last,
any remaining proceeds shall be used for working capital and other general corporate purposes and shall not, directly or indirectly,
use such proceeds for any loan to or investment in any other corporation, partnership, enterprise or other person.

 

(c) Financial
Information. The Company agrees to send or make available the following reports to the Buyer until the Buyer transfers, assigns,
or sells all of the Securities: (i) within ten (10) days after the filing with the SEC, a copy of its Annual Report on Form 10-K,
its Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K; (ii) within one (1) day after release, copies of all press
releases issued by the Company or any of its Subsidiaries relating to the transactions contemplated hereby; and (iii) contemporaneously
with the making available or giving to the stockholders of the Company, copies of any notices or other information the Company
makes available or gives to such stockholders. For the avoidance of doubt, filing the documents required in (i) above via EDGAR
or releasing any documents set forth in (ii) above via a recognized wire service shall satisfy the delivery requirements of this
Section 5(c).

 

(d) Listing.
The Company shall work in good faith to secure the listing of the Issuance Shares upon each national securities exchange or automated
quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long
as the Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing
of all Issuance Shares from time to time issuable upon exercise of the Warrant and Note. The Company will obtain and, so long as
the Buyer owns any of the Securities, maintain the listing and trading of its Common Stock on the Trading Market and will comply
in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Financial Industry
Regulatory Authority (“FINRA”) and such exchanges, as applicable.

 

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(e) Corporate
Existence. So long as the Buyer beneficially owns the Note, the Company shall maintain its corporate existence and shall not
sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation or sale of all or
substantially all of the Company’s assets, where the surviving or successor entity in such transaction (i) assumes the Company’s
obligations hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a publicly traded
corporation whose Common Stock is listed or quoted for trading on the Trading Market.

 

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

 

(g) Failure
to Comply with the Exchange Act. So long as the Buyer beneficially owns any of the Securities, the Company shall comply with
the reporting requirements of the Exchange Act; and the Company shall continue to be subject to the reporting requirements of the
Exchange Act.

 

(h) Breach
of Covenants. If the Company breaches any of the covenants set forth in this Section 5, then in addition to any other
remedies available to the Buyer pursuant to this Agreement, each such breach will be considered an “Event of Default”
under the Note.

 

(i) Reservation
of Shares. The Company covenants that while the Note and Warrant remain outstanding, the Company will reserve from its authorized
and unissued Common Stock, three times (300%) of the number of shares of Common Stock, free from pre-emptive rights, that would
be issuable upon full, unconditioned conversion of the Note and exercise of the Warrant calculated on the basis of the conversion
price and exercise price, respectively, in effect as the Closing Date, which such reserved amounts shall be increased by the Company
from time to time in accordance with its obligations under such Securities. In addition to all other rights in this Agreement and
Note, in the event that on any date (the “Reserve Depletion Date”) the Company does not have available enough
authorized shares of Common Stock to satisfy any conversion request regarding the Note, the Company shall repay all outstanding
amounts owed under the Note in full within sixty (60) days of the Reserve Depletion Date.

 

(j) Indemnification.
Each party hereto (an “Indemnifying Party”) agrees to indemnify and hold harmless the other party along with
its officers, directors, employees, and authorized agents, and each Person or entity, if any, who controls such party within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act or the rules and regulations thereunder (an “Indemnified
Party”) from and against any Damages, joint or several, and any action in respect thereof to which the Indemnified Party
becomes subject to, resulting from, arising out of or relating to any misrepresentation, breach of warranty or nonfulfillment of
or failure to perform any covenant or agreement on the part of the Indemnifying Party contained in this Agreement.

 

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(k) [RESERVED]

 

(l) Variable
Rate Transactions. The Company covenants and agrees that it will not, without the prior written consent of the Buyer, enter
into any equity line of credit agreement with any other party or enter into any transaction resulting in, or with, any Variable
Security Holders, excluding the Buyer, without the Buyer’s prior written consent, which consent may be granted or withheld
in the Buyer’s sole and absolute discretion unless the proceeds of such transaction are used first and primarily to repay
the Note in full; provided that such arrangements evidenced by written agreements that exist as of the Execution Date shall not
be subject to the provisions of this Section 5(l). “Variable Security Holder” means any holder of any
securities of the Company that are not subject to a conversion/exercise price having a floor price that is within 50% of the Company’s
then current market price, and (A) have or may have conversion rights of any kind, contingent, conditional or otherwise, in which
the number of shares that may be issued pursuant to such conversion right varies with the market price of the Common Stock, and/or
(B) are or may become convertible into Common Stock (including without limitation convertible debt, warrants or convertible preferred
stock), with a conversion price that varies with the market price of the Common Stock, even if such security only becomes convertible
following an event of default, the passage of time, or another trigger event or condition.

 

(m) Equity
Line Transactions.

 

(i) The
Company shall use its reasonable best efforts to have the Registration Statement and any amendment thereto declared effective by
the SEC by June 1, 2020.

 

(ii) During
the twenty four (24) months following the Execution Date, if the Company has a bona fide offer of capital or financing from any
3rd party via an “equity line” transaction, that the Company intends to act upon, then the Company must first offer
such opportunity to the Buyer to provide such capital or financing to the Company on the same or similar terms as each respective
3rd party’s terms, and the Buyer may in its sole discretion determine whether the Buyer will provide all or a portion of
such capital or financing. Should the Buyer be unwilling or unable to provide such capital or financing to the Company within five
(5) Trading Days from Buyer’s receipt of written notice of the offer (the “Offer Notice”) from the Company,
then the Company may obtain such capital or financing from that respective 3rd party upon the exact same terms and conditions offered
by the Company to the Buyer, which transaction must be completed within fifteen (15) Trading Days after expiry of the Offer Notice.
If the Company does not receive the capital or financing from the respective 3rd party within fifteen (15) Trading Days after expiry
of the respective Offer Notice, then the Company must again offer the capital or financing opportunity to the Buyer as described
above, and the process detailed above shall be repeated. The Offer Notice must be sent by electronic transmission via email to
adam@oasis-cap.com.

 

(n) Other
Offerings. During the twenty four (24) months following the Execution Date, if the Company has a bona fide offer of capital
or financing from any 3rd party comprised of any securities offering, not including that which is described in subsection (m)
above, that the Company intends to act upon, then the Company must first offer such opportunity to the Buyer to provide such capital
or financing to the Company on the same or similar terms as each respective 3rd party’s terms, and the Buyer may in its sole
discretion determine whether the Buyer will provide up to 25% of such capital or financing. Should the Buyer be unwilling or unable
to provide such capital or financing to the Company within 15 Trading Days from Buyer’s receipt of Offer Notice from the
Company, then the Company may obtain such capital or financing from that respective 3rd party upon the exact same terms and conditions
offered by the Company to the Buyer, which transaction must be completed within 15 days after the date of the Offer Notice. If
the Company does not receive the capital or financing from the respective 3rd party within 15 days after the date of the respective
Offer Notice, then the Company must again offer the capital or financing opportunity to the Buyer as described above, and the process
detailed above shall be repeated. The Offer Notice must be sent by electronic transmission via email to adam@oasis-cap.com. In
the event that the Company completes any offering or sale of securities after the Execution Date, in the sole discretion of, and
at the option of the Buyer, (i) the proceeds of the first such offering under any Form S-3 or other registration statement utilized
by the Company, shall first be applied to the repayment of the Note, and (ii) the proceeds of any additional such offering or sale
shall first be applied to the repayment of the Note until the same shall have been paid and satisfied in full.

 

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(o) Prohibition
on Certain Transactions. The Buyer covenants and agrees that neither it, nor any affiliate acting on its behalf or pursuant
to any understanding with it will execute any “short sales” of the Common Stock as defined in Rule 200 of Regulation
SHO under the Exchange Act.

 

(p) Piggyback
Registration Rights. The Company shall include on any registration statement filed with the SEC, all Inducement Shares. In
addition to all other remedies at law or in equity or otherwise under this Agreement, failure to do so will result in liquidated
damages of $25,000.00, being immediately due and payable to the Buyer at its election in the form of cash payment.

 

(q) Certain
Fees and Expenses. The Company shall pay all stamp taxes and other taxes and duties levied in connection with the delivery
of the Note to the Buyer. In addition, the Buyer shall receive a $7,500.00 credit for the Buyer’s transaction expenses which
shall be evidenced in the face value of the Note.

 

(r) Agreements
with Other Investors and Debt Holders. Within 24 hours after the Closing Date, with respect to any and all parties holding
debt obligations of the Company in any form (the “Debt Holders”), the Company (i) shall obtain executed extensions
of the maturity dates of all debt instruments held by the Debt Holders to dates that are later than the maturity date of the Note,
(ii) the Company shall enter into executed agreements with the Debt Holders evidencing that such Debt Holders will forbear and/or
waive all existing defaults under all debt instruments until the Note has been repaid in full, and (iii) the Company shall enter
into executed “lock up” agreements with the Debt Holders evidencing that the Debt Holders will not effect any conversions
or sales of their debt instruments until the Note has been repaid in full.

 

6. Transfer
Agent Instructions. Prior to registration of the Issuance Shares under the Securities Act or the date on which the Issuance
Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can
then be immediately sold, all such certificates shall bear the restrictive legend specified in Section 3(f) of this Agreement.
The Company warrants that: (i) no stop transfer instructions will be given by the Company to its Transfer Agent and that the Securities
shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement
and the Note and Warrant; (ii) it will not direct its Transfer Agent not to transfer or delay, impair, and/or hinder its Transfer
Agent in transferring (or issuing) (electronically or in certificated form) any certificate for Conversion Shares or Warrant Shares
to be issued to the Buyer upon conversion/exercise of or otherwise pursuant to the Note or Warrant as and when required by the
Note or Warrant or this Agreement; and (iii) it will not fail to remove (or direct its Transfer Agent not to remove or impairs,
delays, and/or hinders its Transfer Agent from removing) any restrictive legend (or to withdraw any stop transfer instructions
in respect thereof) on any certificate for any Issuance Shares as contemplated by the terms of this Agreement, the Note and the
Warrant. Nothing in this Section shall affect in any way the Buyer’s obligations and agreement to comply with all applicable
prospectus delivery requirements, if any, upon re-sale of the Securities. If the Buyer provides the Company (which shall be at
the cost of the Company), with (i) an opinion of counsel in form, substance and scope customary for opinions in comparable transactions,
to the effect that a public sale or transfer of such Securities may be made without registration under the Securities Act and such
sale or transfer is effected or (ii) the Buyer provides reasonable assurances that the Securities can be sold pursuant to Rule
144, the Company shall permit the transfer, and, in the case of the Issuance Shares, promptly instruct its Transfer Agent to issue
one or more certificates, free from restrictive legend, in such name and in such denominations as specified by the Buyer. The Company
acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating the intent
and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach
of its obligations under this Section may be inadequate and agrees, in the event of a breach or threatened breach by the Company
of the provisions of this Section, that the Buyer shall be entitled, in addition to all other available remedies, to an injunction
restraining any breach and requiring immediate transfer, without the necessity of showing economic loss and without any bond or
other security being required.

 

    20

     

    

 

7. CONDITIONS
PRECEDENT TO THE COMPANY’S OBLIGATIONS TO SELL. The obligation of the Company hereunder to issue and sell the Note, Warrant
and Inducement Shares to the Buyer at the Closing is subject to the satisfaction, at or before the Closing Date of each of the
following conditions thereto, provided that these conditions are for the Company’s sole benefit and may be waived by the
Company at any time in its sole discretion:

 

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

 

(b) The
Buyer shall have delivered the applicable Purchase Price in accordance with Section 2 above.

 

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

 

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

 

8. CONDITIONS
PRECEDENT TO THE BUYER’S OBLIGATION TO PURCHASE. The obligation of the Buyer hereunder to purchase the Note and fund
the Investment of the Note at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following
conditions, provided that these conditions are for the Buyer’s sole benefit and may be waived by the Buyer at any time in
its sole discretion:

 

(a) The
Company shall have executed this Agreement and delivered the same to the Buyer on the First Closing Date.

 

    21

     

    

 

(b) The
Company shall have delivered to the Buyer the duly executed Note in accordance with Section 2(a) above on the Closing Date.

 

(c) The
Company shall have delivered to the Buyer the duly executed Warrant in accordance with Section 2(a) above on the Closing
Date.

 

(d) The
Company shall have delivered to the Buyer the Inducement Shares on the Closing Date.

 

(e) The
Company shall have delivered to the Buyer the duly executed Transfer Agent Instruction Letter on the Closing Date.

 

(f) The
Company shall have delivered a copy of its Directors’ resolutions relating to the transactions contemplated hereby, the form
of which is attached hereto as Exhibit D, on the Closing Date.

 

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

 

(h) No
event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not
limited to a change in the Exchange Act reporting status of the Company or the failure of the Company to be timely in its Exchange
Act reporting obligations, as of the Closing Date.

 

(i) The
representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as
of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific date, which
shall be true and correct in all material respects as of such specific date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Closing Date. The Buyer shall have received a certificate or certificates, executed
by the chief executive officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters
as may be reasonably requested by the Buyer, in the form prescribed by the Buyer.

 

9. GOVERNING
LAW; MISCELLANEOUS.

 

(a) Governing
Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York without regard
to the principles of conflicts of law (whether of the State of New York or any other jurisdiction).

 

    22

     

    

 

(b) Arbitration.
Any disputes, claims, or controversies arising out of or relating to the Transaction Documents, or the transactions, contemplated
thereby, or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope
or applicability of this Agreement to arbitrate, shall be referred to and resolved solely and exclusively by binding arbitration
to be conducted before the Judicial Arbitration and Mediation Service (“JAMS” ), or its successor pursuant the
expedited procedures set forth in the JAMS Comprehensive Arbitration Rules and Procedures (the “Rules” ), including
Rules 16.1 and 16.2 of those Rules. The arbitration shall be held in New York, New York, before a tribunal consisting of three
(3) arbitrators each of whom will be selected in accordance with the “strike and rank” methodology set forth in Rule
15. Either party to this Agreement may, without waiving any remedy under this Agreement, seek from any federal or state court sitting
in the State of New York any interim or provisional relief that is necessary to protect the rights or property of that party, pending
the establishment of the arbitral tribunal. The costs and expenses of such arbitration shall be paid by and be the sole responsibility
of the Company, including but not limited to the Buyer’s attorneys’ fees and each arbitrator’s fees. The arbitrators’
decision must set forth a reasoned basis for any award of damages or finding of liability. The arbitrators’ decision and
award will be made and delivered as soon as reasonably possibly and in any case within sixty (60) days’ following the conclusion
of the arbitration hearing and shall be final and binding on the parties and may be entered by any court having jurisdiction thereof.
Notwithstanding the foregoing, the choice of arbitration shall not limit the Buyer’s exercise of remedies under the Uniform
Commercial Code.

 

(c) JURY
TRIAL WAIVER. THE COMPANY AND THE BUYER HEREBY WAIVE A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER
OF THE PARTIES HERETO AGAINST THE OTHER IN RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THE TRANSACTION DOCUMENTS.

 

(d) Counterparts;
Signatures by Electronic Mail. This Agreement may be executed in one or more counterparts, each of which shall be deemed an
original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed
by each party and delivered to the other party. This Agreement, once executed by a party, may be delivered to the other party hereto
by electronic mail transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

 

(e) Headings.
The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of,
this Agreement.

 

(f) Severability.
In the event that any provision of this Agreement or of any of the Transaction Documents is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith
and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable
under any law shall not affect the validity or enforceability of any other provision hereof.

 

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

 

    23

     

    

 

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

 

If to the Company, to:

 

QUANTUM COMPUTING INC.

215 Depot Court SE, Suite 215

Leesburg, VA 20175

Attention: Robert Liscouski, CEO

E-mail: 

Phone: 

 

If to the Buyer, to:

 

OASIS CAPITAL, LLC

208 Ponce de Leon Ave, Suite 1600

San Juan, PR 00918

E-mail: 

Attention: Adam Long, Managing Partner

Phone: 

 

Either party hereto may
from time to time change its address or e-mail for notices under this Section 9(h) by giving at least ten (10) days’
prior written notice of such changed address to the other party hereto.

 

(i) Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns.
Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written
consent of the other. Notwithstanding the foregoing, subject to Section 3(e), the Buyer may assign its rights hereunder
to any person that purchases Securities in a private transaction from the Buyer or to any of its “affiliates,” as that
term is defined under the Exchange Act, without the consent of the Company.

 

    24

     

    

 

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

 

(k) Survival.
The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the
Closings hereunder. The Company agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and
agents for loss or damage arising as a result of or related to any breach by the Company of any of its representations, warranties
and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of
expenses as they are incurred.

 

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

 

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

 

(n) Remedies.

 

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

 

(ii) In
addition to any other remedy provided herein or in any document executed in connection herewith, the Company shall pay the Buyer
for all costs, fees and expenses in connection with any arbitration, litigation, contest, dispute, suit or any other action to
enforce any rights of the Buyer against the Company in connection herewith, including, but not limited to, costs and expenses and
attorneys’ fees, and costs and time charges of counsel to the Buyer. In furtherance of the foregoing, the Company shall pay
an amount equal to $25,000 to the Buyer immediately upon the Buyer’s filing of any arbitration, litigation, contest, dispute,
suit or any other action to enforce any rights of the Buyer against the Company in connection herewith, which such amount shall
be used to pay the Buyer’s attorneys’ fees, cost and expenses. Additional amounts shall be paid by the Company to the
Buyer immediately upon the Company’s receipt of invoices from the Buyer’s attorney evidencing the charges and fees
assessed in connection with any such arbitration, litigation, contest, dispute, suit or any other action to enforce any rights
of the Buyer and, upon receiving such invoices which indicate outstanding fees in excess of $25,000 at any time, the Company shall
promptly pay an additional $25,000 to the Buyer to be used in satisfaction of additional attorneys’ fees, and costs and time
charges of counsel to the Buyer. Further, the Company agrees to save and hold the Buyer harmless from and against any and all liabilities
with respect to or resulting from any delay in paying or omission to pay such costs and expenses. In the event that the Company
is the prevailing party in any such action, Buyer shall refund all such amounts.

 

    25

     

    

 

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

 

** signature page follows **

 

    26

     

    

 

IN WITNESS WHEREOF,
the Buyer and the Company have caused their respective signature page to this Securities Purchase Agreement to be duly executed
as of the Execution Date.

 

 

	 	COMPANY:
	 	 	 
	 	QUANTUM COMPUTING INC.
	 	 	 
	 	By:	
	 	Name:	Robert Liscouski
	 	Title:	CEO
	 	 	 
	 	BUYER:
	 	 	 
	 	OASIS CAPITAL, LLC
	 	 	 
	 	By:	
	 	Name: 	Adam Long
	 	Title:	Managing Partner 

 

**
Signature Page to Securities Purchase Agreement **

 

     

     

    

 

SCHEDULE OF BUYERS

 

	 
(1)
	 	(2)	 	 	(3)		 	 	(4)		 	 	(5)		 	 	(6)	
	Buyer	 	Address and E-mail	 	 	Aggregate
                                         Note Face Value
	 	 	 	Number
                                         of 
 Warrant
                                         Shares
 
	 	 	 	Inducement
                                         Shares
	 	 	 	Purchase
                                         Price
	 
	Oasis Capital, LLC	 	208 Ponce de Leon Ave, Suite 1600 
San Juan, PR 00918 
E-mail: adam@oasis-cap.com 
Attn: Adam Long, Managing Partner 
E-mail: adam@oasis-cap.com	 	$	563,055.001	 	 	 	187,685	 	 	 	37,5372	 	 	$	500,000.00	 

 

		1.	Aggregate Note Face Value includes $7,500.00 for Oasis
Capital, LLC transaction expenses and a $55,555.00 OID.

 

		2.	$56,305.00 value of shares of Common Stock.

 

     

     

    

 

DISCLOSURE SCHEDULES

 

[Attached]

 

 

 

 

 

     

     

    

 

EXHIBITS

 

A - NOTE

 

B - WARRANT

 

C - TRANSFER AGENT INSTRUCTIONS

 

D - BOARD RESOLUTIONS

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