Document:

Exhibit 10.1

 

EXECUTION VERSION

 

 

 

STANDBY EQUITY DISTRIBUTION AGREEMENT

 

THIS STANDBY EQUITY
DISTRIBUTION AGREEMENT dated as of February 27, 2020 (this “Agreement”) is made by and between YAII PN,
LTD., a Cayman Islands exempt limited partnership (the “Investor”), and KULR TECHNOLOGY GROUP, INC.,
a company incorporated in the State of Delaware (the “Company”).

 

WHEREAS, the
parties desire that, upon the terms and subject to the conditions contained herein, the Company shall have the right to issue and
sell to the Investor, from time to time as provided herein, and the Investor shall purchase from the Company up to $8,000,000 of
shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”); and

 

WHEREAS, the
Common Stock are listed for trading on the OTC Markets OTCQB under the symbol “KULR;” and

 

WHEREAS, the
offer and sale of the Common Stock issuable hereunder shall be registered on the Company’s registration statement on Form
S-3 (File No. 333-232614), or otherwise, under Section 5 of the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the “Securities Act”).

 

NOW, THEREFORE,
the parties hereto agree as follows:

 

Article I. Certain
Definitions

 

Section 1.01       
 “Advance” shall mean the portion of the Commitment Amount requested by the Company in the Advance Notice.

 

Section 1.02       
“Advance Date” shall mean the 1st Trading Day after expiration of the applicable Pricing Period
for each Advance.

 

Section 1.03       
“Advance Notice” shall mean a written notice in the form of Exhibit A attached hereto to the Investor
executed by an officer of the Company and setting forth the Advance amount that the Company requests from the Investor.

 

Section 1.04       
“Advance Notice Date” shall mean each date the Company delivers (in accordance with Section 2.01(c) of
this Agreement) to the Investor an Advance Notice requiring the Investor to advance funds to the Company, subject to the terms
of this Agreement.

 

Section 1.05       
“Affiliate” shall have the meaning set forth in Section 3.07.

 

Section 1.06       
“Anti-Bribery Laws” shall mean of any provision of any applicable law or regulation implementing the
OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions or any applicable provision
of the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the U.K. Bribery Act 2010, or any
other similar law of any other jurisdiction in which the Company operates its business, including, in each case, the rules and
regulations thereunder.

 

     

     

    

 

Section 1.07       
“Anti-Money Laundering Laws” shall mean applicable financial recordkeeping and reporting requirements
and all other applicable U.S. and non-U.S. anti-money laundering laws, rules and regulations, including, but not limited to, those
of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the United States Bank Secrecy Act, as amended by the
USA PATRIOT Act of 2001, and the United States Money Laundering Control Act of 1986 (18 U.S.C. §§1956 and 1957), as amended,
as well as the implementing rules and regulations promulgated thereunder, and the applicable money laundering statutes of all applicable
jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered
or enforced by any governmental agency or self-regulatory.

 

Section 1.08       
“Applicable Laws” shall mean applicable laws, statutes, rules, regulations, orders, executive orders,
directives, policies, guidelines and codes having the force of law, whether local, national, or international, as amended from
time to time, including without limitation (i) Anti-Money Laundering Laws and all applicable laws that relate to money laundering,
terrorist financing, financial record keeping and reporting, (ii) Anti-Bribery Laws and applicable laws that relate to anti-bribery,
anti-corruption, books and records and internal controls, (iii) OFAC and any Sanctions or Sanctions Programs, and (iv) CAATSA and
any CAATSA Sanctions Programs.

 

Section 1.09       
 “Base Prospectus” shall mean the Company’s prospectus accompanying the Registration Statement.

 

Section 1.10       
“CAATSA” shall mean Public Law No. 115-44 The Countering America’s Adversaries Through Sanctions
Act.

 

Section 1.11       
“CAATSA Sanctions Programs” shall mean a country or territory that is, or whose government is, the subject
of sanctions imposed by CAATSA.

 

Section 1.12       
“Commitment Amount” shall mean the aggregate amount of up to $8,000,000.

 

Section 1.13       
“Commitment Period” shall mean the period commencing on the date hereof and expiring upon the date of
termination of this Agreement in accordance with Section 11.02.

 

Section 1.14       
“Common Stock” shall have meaning set forth in the Recitals.

 

Section 1.15       
“Company Indemnitees” shall have the meaning set forth in Section 5.02.

 

Section 1.16       
“Condition Satisfaction Date” shall have the meaning set forth in Section 7.01.

 

Section 1.17       
“Consolidation Event” shall have the meaning set forth in Section 6.08.

 

Section 1.18       
 “Environmental Laws” shall have the meaning set forth in Section 4.08.

 

Section 1.19       
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

 

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Section 1.20       
 “Indemnified Liabilities” shall have the meaning set forth in Section 5.01.

 

Section 1.21       
“Initial Registration Statement” shall have the meaning set forth in 6.01.

 

Section 1.22       
“Investor Indemnitees” shall have the meaning set forth in Section 5.01.

 

Section 1.23       
“Market Price” shall mean the lowest daily VWAP of the Common Stock during the relevant Pricing Period.

 

Section 1.24       
“Material Adverse Effect” shall mean any condition, circumstance, or situation that may result in, or
would reasonably be expected to result in (i) a material adverse effect on the legality, validity or enforceability of this Agreement
or the transactions contemplated herein, (ii) a material adverse effect on the results of operations, assets, business or condition
(financial or otherwise) of the Company and its Subsidiary, taken as a whole, or (iii) a material adverse effect on the Company’s
ability to perform in any material respect on a timely basis its obligations under this Agreement.

 

Section 1.25       
“Maximum Advance Amount” in respect of each Advance Notice shall not exceed $100,000, unless a greater
amount is mutually agreed to by the Investor and the Company.

 

Section 1.26       
 “OFAC” shall mean the U.S. Department of Treasury’s Office of Foreign Asset Control.

 

Section 1.27       
 “Ownership Limitation” shall have the meaning set forth in Section 2.01(a).

 

Section 1.28       
“Person” shall mean 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.

 

Section 1.29       
“Plan of Distribution” shall mean the section of a Registration Statement disclosing the plan of distribution
of the Shares

 

Section 1.30       
“Pricing Period” shall mean the 5 consecutive Trading Days commencing on the Trading Day immediately
following the Advance Notice Date.

 

Section 1.31       
“Principal Market” shall mean the OTC Markets OTCQB or such other market or exchange on which the Common
Stock is then listed, quoted or traded.

 

Section 1.32       
“Prospectus” shall mean the Base Prospectus, as supplemented by any Prospectus Supplement.

 

Section 1.33       
“Prospectus Supplement” shall mean any prospectus supplement to the Base Prospectus filed with the SEC
pursuant to Rule 424(b) under the Securities Act, including, without limitation, the Prospectus Supplement to be filed in accordance
with Section 6.01 hereof.

 

Section 1.34       
“Purchase Price” shall mean the price per share obtained by multiplying the Market Price by 80%.

 

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Section 1.35       
“Registration Limitation” shall have the meaning set forth in Section 2.01(c).

 

Section 1.36       
“Registration Period” shall have the meaning set forth in Section 6.01(c).

 

Section 1.37       
“Registration Statement” shall mean the Initial Registration Statement or another registration statement
on a form promulgated by the SEC for which the Company then qualifies for the registration of the offer and sale of the Shares
to be offered and sold by the Company to the Investor and the resale of such Shares by the Investor, as the same may be amended
and supplemented from time to time and including any information deemed to be a part thereof pursuant to Rule 430B under the Securities
Act and any successor registration statement filed by the Company with the SEC under the Securities Act on a form promulgated by
the SEC for which the Company then qualifies and which form shall be available for the registration of the transactions contemplated
hereunder.

 

Section 1.38       
“Regulation D” shall mean Regulation D promulgated under the Securities Act.

 

Section 1.39       
“Sanctions” shall mean any sanctions administered or enforced by OFAC or the U.S. Departments of State
or Commerce and including, without limitation, the designation as a “Specially Designated National” or on the “Sectoral
Sanctions Identifications List”, collectively “Blocked Persons”), the United Nations Security Council (“UNSC”),
the European Union, Her Majesty's Treasury (“HMT”) or any other relevant sanctions authority.

 

Section 1.40       
“Sanctioned Country” shall mean a country or territory that is the subject or target of a comprehensive
embargo or Sanctions Laws prohibiting trade with the country or territory, including, without limitation, Crimea, Cuba, Iran, North
Korea, Sudan and Syria.

 

Section 1.41       
“Sanctions Programs” shall mean any OFAC, HMT or UNSC economic sanction program including, without limitation,
programs related to a Sanctioned Country.

 

Section 1.42       
“SEC” shall mean the U.S. Securities and Exchange Commission.

 

Section 1.43       
“SEC Documents” shall have the meaning set forth in Section 4.04.

 

Section 1.44       
“Securities Act” shall have the meaning set forth in the recitals of this Agreement.

 

Section 1.45       
“Settlement Document” shall have the meaning set forth in Section 2.02(a).

 

Section 1.46       
“Shares” shall mean the Common Stock to be issued from time to time hereunder pursuant to Advances.

 

Section 1.47       
“Trading Day” shall mean any day during which the Principal Market shall be open for business.

 

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Section 1.48       
“VWAP” means, for any Trading Day, the daily volume weighted average price of the Common Stock for such
date on the Principal Market as reported by Bloomberg L.P. during regular trading hours.

 

Article II. Advances

 

Section 2.01       
Advances; Mechanics. Subject to the terms and conditions of this Agreement (including, without limitation, the provisions
of Article VII hereof), the Company, at its sole and exclusive option, may issue and sell to the Investor, and the Investor shall
purchase from the Company, Common Stock on the following terms:

 

		(a)	Advance Notice. At any time during the Commitment Period the Company may require the Investor
to purchase Shares by delivering an Advance Notice to the Investor, subject to the conditions set forth in Section 7.01, and in
accordance with the following provisions;

 

		(i)	The Company shall, in its sole discretion, select the Advance amount it desires to request in each
Advance Notice and the time it desires to deliver each Advance Notice, which amount shall not exceed the Maximum Advance Amount,
provided however, the Company acknowledges and agrees that the total Advance amount that the Company will receive in connection
with each Advance Notice may be less than the Advance amount requested in the Advance Notice due to reductions to the Advance amount
in accordance with Section 2.01(c).

 

		(ii)	There shall be no mandatory minimum Advances and no non-usages fee for not utilizing the Commitment
Amount or any part thereof.

 

		(b)	Date of Delivery of Advance Notice. Advance Notices shall be delivered in accordance with
the instructions set forth on the bottom of Exhibit A. An Advance Notice shall be deemed delivered on (i) the day it is received
by the Investor if such notice is received prior to 6:00 p.m. Eastern Time in
accordance with the instructions set forth on the bottom of Exhibit A, or (ii) the immediately succeeding day if it is received
after 6:00 p.m. Eastern Time, in each case in accordance with the instructions
set forth on the bottom of Exhibit A.

 

		(c)	Advance Limitations. Regardless of the Advance amount requested by the Company in the Advance
Notice, the final amount of the Advance shall be reduced in accordance with each of the following limitations:

 

		(i)	Ownership Limitation; Commitment Amount. In no event shall the number of Common Stock issuable
to the Investor pursuant to an Advance cause the aggregate number of Common Stock beneficially owned (as calculated pursuant to
Section 13(d) of the Exchange Act) by the Investor and its affiliates to exceed 4.99% of the then outstanding Common Stock (the
 “Ownership Limitation”). In connection with each Advance Notice delivered by the Company, any portion of an
Advance that would (i) cause the Investor to exceed the Ownership Limitation or (ii) cause the aggregate amount of Advances to
exceed the Commitment Amount shall automatically be withdrawn with no further action required by the Company, and such Advance
Notice shall be deemed automatically modified to reduce the aggregate amount of the requested Advance by an amount equal to such
withdrawn portion.

 

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		(ii)	Registration Limitation. In no event shall an Advance exceed the amount registered under
the Registration Statement then in effect (the “Registration Limitation”). In connection with each Advance Notice,
any portion of an Advance that would exceed the Registration Limitation shall automatically be withdrawn with no further action
required by the Company and such Advance Notice shall be deemed automatically modified to reduce the aggregate amount of the requested
Advance by an amount equal to such withdrawn portion in respect of each Advance Notice.

 

		(d)	Notwithstanding any other provision in this Agreement, the Company and the Investor acknowledge
and agree that upon the Investor’s receipt of a valid Advance Notice the parties shall be deemed to have entered into an
unconditional contract binding on both parties for the purchase and sale of Shares pursuant to such Advance Notice in accordance
with the terms of this Agreement and subject to applicable law and (ii) subject to Section 3.08 (Trading Activities), the
Investor may sell shares of Common Stock of the Company during the Pricing Period.

 

Section 2.02       
Closings. Each Closing shall take place as soon as practicable after each Advance Date in accordance with the procedures
set forth below. In connection with each Closing, the Company and the Investor shall fulfill each of its obligations as set forth
below:

 

		(a)	On each Advance Date, the Investor shall deliver to the Company a written document, in the form
attached hereto as Exhibit B (each a “Settlement Document”), setting forth the amount of the Advance (taking
into account any adjustments pursuant to Section 2.01), the Market Price, the Purchase Price, the number of Common Stock
to be purchased by the Investor, and a report by Bloomberg, L.P. indicating the VWAP for each of the Trading Days during the Pricing
Period (or, if not reported on Bloomberg, L.P., another reporting service reasonably agreed to by the parties), in each case in
accordance with the terms and conditions of this Agreement. The number of Shares to be purchased by the Investor at the Closing
for such Advance shall equal the sum of the Advance Amount divided by the Purchase Price, rounded to the nearest whole number of
Shares.

 

		(b)	Promptly after receipt of the Settlement Document with respect to each Advance (and, in any event,
not later than one Trading Days after such receipt), the Company will, or will cause its transfer agent to, electronically transfer
such number of shares of Common Stock to be purchased by the Investor (as set forth in the Settlement Document) by crediting the
Investor’s account or its designee’s account at the Depository Trust Company through its Deposit Withdrawal at Custodian
System or by such other means of delivery as may be mutually agreed upon by the parties hereto (which in all cases the resale of
such Common Stock shall be freely transferable by the Investor without restriction), and transmit notification to the Investor
that such share transfer has been requested. Promptly upon receipt of such notification (and, in any event, not later than one
Trading Day after such receipt), the Investor shall pay to the Company the aggregate amount of the Advance (as set forth in the
Closing Statement) in cash in immediately available funds to an account designated by the Company in writing and transmit notification
to the Company that such funds transfer has been requested. No fractional shares shall be issued, and any fractional amounts shall
be rounded to the next higher whole number of shares. Any certificates evidencing Common Stock delivered pursuant hereto shall
be free of restrictive legends. To facilitate the transfer of the Common Stock by the Investor, the Common Stock will not bear
any restrictive legends so long as there is an effective Registration Statement covering such Common Stock.

 

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		(c)	On or prior to the Advance Date, each of the Company and the Investor shall deliver to the other
all documents, instruments and writings required to be delivered by either of them pursuant to this Agreement in order to implement
and effect the transactions contemplated herein.

 

Section 2.03       
Hardship. In the event the Investor sells Common Stock after receipt of an Advance Notice and the Company fails to
perform its obligations as mandated in Section 2.02, the Company agrees that in addition to and in no way limiting the rights and
obligations set forth in Article V hereto and in addition to any other remedy to which the Investor is entitled at law or in equity,
including, without limitation, specific performance, it will hold the Investor harmless against any loss, claim, damage, or expense
(including reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Company and
acknowledges that irreparable damage may occur in the event of any such default. It is accordingly agreed that the Investor shall
be entitled to an injunction or injunctions to prevent such breaches of this Agreement and to specifically enforce (subject to
the Securities Act and other rules of the Principal Market), without the posting of a bond or other security, the terms and provisions
of this Agreement.

 

Section 2.04       
In the event the Investor fails to perform its obligations as mandated in Section 2.02, the Investor agrees that in addition
to and in no way limiting the rights and obligations set forth in Article V hereto and in addition to any other remedy to which
the Company is entitled at law or in equity, including, without limitation, specific performance, it will hold the Company harmless
against any loss, claim, damage, or expense (including reasonable legal fees and expenses), as incurred, arising out of or in connection
with such default by the Investor and acknowledges that irreparable damage may occur in the event of any such default. It is accordingly
agreed that the Company shall be entitled to an injunction or injunctions to prevent such breaches of this Agreement and to specifically
enforce (subject to the Securities Act and other rules of the Principal Market), without the posting of a bond or other security,
the terms and provisions of this Agreement.

 

Article III. Representations
and Warranties of Investor

 

Investor hereby represents
and warrants to, and agrees with, the Company that the following are true and correct as of the date hereof and as of each Advance
Date:

 

Section 3.01       
Organization and Authorization. The Investor is duly organized, validly existing and in good standing under the laws
of the Cayman Islands and has all requisite power and authority to execute, deliver and perform this Agreement, including all transactions
contemplated hereby. The decision to invest and the execution and delivery of this Agreement by the Investor, the performance by
the Investor of its obligations hereunder and the consummation by the Investor of the transactions contemplated hereby have been
duly authorized and require no other proceedings on the part of the Investor. The undersigned has the right, power and authority
to execute and deliver this Agreement and all other instruments on behalf of the Investor or its shareholders. This Agreement has
been duly executed and delivered by the Investor and, assuming the execution and delivery hereof and acceptance thereof by the
Company, will constitute the legal, valid and binding obligations of the Investor, enforceable against the Investor in accordance
with its terms.

 

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Section 3.02       
Evaluation of Risks. The Investor has such knowledge and experience in financial, tax and business matters as to
be capable of evaluating the merits and risks of, and bearing the economic risks entailed by, an investment in the Company and
of protecting its interests in connection with the transactions contemplated hereby. The Investor acknowledges and agrees that
its investment in the Company involves a high degree of risk, and that the Investor may lose all or a part of its investment.

 

Section 3.03       
No Legal, Investment or Tax Advice from the Company. The Investor acknowledges that it had the opportunity to review
this Agreement and the transactions contemplated by this Agreement with its own legal counsel and investment and tax advisors.
The Investor is relying solely on such counsel and advisors and not on any statements or representations of the Company or any
of the Company’s representatives or agents for legal, tax, investment or other advice with respect to the Investor’s
acquisition of Common Stock hereunder, the transactions contemplated by this Agreement or the laws of any jurisdiction and that
the Investor may lose all or a part of its investment.

 

Section 3.04       
Investment Purpose. The Common Stock purchased by the Investor hereunder are being or will be purchased for its own
account, for investment purposes, and without any view or intention to distribute such shares in violation of the Securities Act
or any other applicable securities laws. The Investor agrees not to assign or in any way transfer the Investor’s rights to
the securities or any interest therein or its obligations under this Agreement and acknowledges that the Company will not recognize
any purported assignment or transfer except in accordance with applicable Federal and state securities laws. No other Person has
or will have a direct or indirect beneficial interest in the securities. The Investor agrees not to sell, hypothecate or otherwise
transfer the Investor’s Common Stock unless such shares are registered under Federal and applicable state securities laws
or unless, in the opinion of counsel satisfactory to the Company, an exemption from such registration is available.

 

Section 3.05       
Accredited Investor. The Investor is an “Accredited Investor” as that term is defined in Rule
501(a)(3) of Regulation D.

 

Section 3.06       
Information. The Investor and its advisors (and its counsel), if any, have been furnished with all materials relating
to the business, finances and operations of the Company and information it deemed material to making an informed investment decision.
The Investor and its advisors, if any, have been afforded the opportunity to ask questions of the Company and its management and
has received answers to such questions. Neither such inquiries nor any other due diligence investigations conducted by such Investor
or its advisors, if any, or its representatives shall modify, amend or affect the Investor’s right to rely on the Company’s
representations and warranties contained in this Agreement. The Investor understands that its investment involves a high degree
of risk. The Investor has sought such accounting, legal and tax advice, as it has considered necessary to make an informed investment
decision with respect to the transactions contemplated hereby.

 

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Section 3.07       
Not an Affiliate. The Investor is not an officer, director or a person that directly, or indirectly through one or
more intermediaries, controls or is controlled by, or is under common control with the Company or any “affiliate”
of the Company (as that term is defined in Rule 405 promulgated under the Securities Act).

 

Section
3.08        Trading
Activities. The Investor’s trading activities with respect to the Common Stock shall
be in compliance with all applicable federal and state securities laws, rules and regulations and the rules and regulations of
the Principal Market. Neither the Investor nor its affiliates has any open short position in the Common Stock, nor
has the Investor entered into any hedging transaction that establishes a net short position with respect to the Common Stock,
and the Investor agrees that it shall not, and that it will cause its affiliates not to, engage in any short sales or hedging
transactions with respect to the Common Stock; provided that the Company acknowledges and agrees that upon receipt of an
Advance Notice the Investor has the right to sell (a) the Shares to be issued to the Investor pursuant to the Advance Notice prior
to receiving such shares, or (b) other Common Stock of the Company that it holds as a long position.

 

Section 3.09       
General Solicitation. Neither the Company, nor any
of its 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 Common Stock offered hereby.

 

Article IV. Representations
and Warranties of the Company

 

Except as set forth
in the SEC Documents, or in the Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof and shall qualify
any representation or warranty otherwise made herein to the extent of the disclosure contained in the corresponding section of
the Disclosure Schedules or in another Section of the Disclosure Schedules, to the extent that it is reasonably apparent on the
face of such disclosure that such disclosure is applicable to such Section, the Company represents and warrants to the Investor
that, as of the date hereof and as of each Advance Date (other than representations
and warranties which address matters only as of a certain date, which shall be true and correct as written as of such certain date),
that:

 

Section 4.01       
Organization and Qualification. Each of the Company and its Subsidiary (as defined below) is an entity duly organized
and validly existing under the laws of its state of organization or incorporation, and has the requisite power and authority to
own its properties and to carry on its business as now being conducted. Each of the Company and its Subsidiary is duly qualified
to do business and is in good standing (to the extent applicable) in every jurisdiction in which the nature of the business conducted
by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would
not have a Material Adverse Effect. “Subsidiaries” means any Person (as defined below) in which the Company,
directly or indirectly, (x) owns any of the outstanding capital stock or holds any equity or similar interest of such Person or
(y) controls or operates all or any part of the business, operations or administration of such Person, and each of the foregoing,
is individually referred to herein as a “Subsidiary.”

 

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Section 4.02       
Authorization, Enforcement, Compliance with Other Instruments. The Company has the requisite corporate power and
authority to enter into and perform its obligations under this Agreement and the other Transaction Documents and to issue the Securities
in accordance with the terms hereof and thereof. The execution and delivery by the Company of this Agreement and the other Transaction
Documents, and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation,
the issuance of the Common Stock) have been or (with respect to consummation) will be duly authorized by the Company’s board
of directors or other governing body and no further consent or authorization will be required by the Company, its board of directors
or its shareholders. This Agreement and the other Transaction Documents to which it is a party have been (or, when executed and
delivered, will be) duly executed and delivered by the Company and, assuming the execution and delivery thereof and acceptance
by the Investor, constitute (or, when duly executed and delivered, will be) the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or other laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and remedies and except as rights to indemnification
and to contribution may be limited by federal or state securities law. “Transaction Documents” means, collectively,
this Agreement and each of the other agreements and instruments entered into or delivered by any of the parties hereto in connection
with the transactions contemplated hereby and thereby, as may be amended from time to time.

 

Section 4.03       
No Conflict. The execution, delivery and performance of the Transaction Documents by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Common Stock)
will not (i) result in a violation of the articles of association or other organizational documents of the Company or its Subsidiary
(with respect to consummation, as the same may be amended prior to the date on which any of the transactions contemplated hereby
are consummated), (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become
a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture
or instrument to which the Company or its Subsidiary is a party, or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws and regulations) applicable to the Company or its Subsidiary or
by which any property or asset of the Company or its Subsidiary is bound or affected except, in the case of clause (ii) or (iii)
above, to the extent such violations that would not reasonably be expected to have a Material Adverse Effect.

 

Section 4.04       
SEC Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to Section 15(d) of the Exchange Act for the two years preceding the date hereof
(or such shorter period as the Company was required by law or regulation to file such material) (all of the foregoing filed within
two years preceding the date hereof or amended after the date hereof, or filed after the date hereof, and all exhibits included
therein and financial statements and schedules thereto and documents incorporated by reference therein, and all registration statements
filed by the Company under the Securities Act, being hereinafter referred to as the “SEC Documents”). The Company
has made available to the Investor through the SEC’s website at http://www.sec.gov, true and complete copies of the SEC Documents.
As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act or
the Securities Act, as applicable, and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company
included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally
accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in
such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the
Company as of the respective dates thereof and the results of its operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments).

 

    	 	- 10 -	 

     

    

 

Section 4.05       
Equity Capitalization. As of the date hereof there are 500,000,000 shares of Common Stock authorized, of which 81,071,831
are issued and outstanding. All of such outstanding shares are duly authorized, validly issued, fully paid and nonassessable.

 

Section 4.06       
Compliance with Applicable Laws. The operations of the Company and its subsidiaries are and have been conducted at
all times in compliance Applicable Laws and no action, suit or proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its Subsidiaries with respect to Applicable Laws is pending or, to the
knowledge of the Company, threatened.

 

Section 4.07       
Intellectual Property Rights. The Company and its Subsidiary 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, except as would not cause a Material Adverse Effect. The Company and its Subsidiary do not have any knowledge
of any infringement by the Company or its Subsidiary of trademark, trade name rights, patents, patent rights, copyrights, inventions,
licenses, service names, service marks, service mark registrations, or trade secrets, except as would not cause a Material Adverse
Effect. To the knowledge of the Company, there is no claim, action or proceeding being made or brought against, or to the Company’s
knowledge, being threatened against the Company or its Subsidiary regarding trademark, trade name, patents, patent rights, invention,
copyright, license, service names, service marks, service mark registrations, trade secret or other infringement; and, except as
would not cause a Material Adverse Effect, the Company is not aware of any facts or circumstances which might give rise to any
of the foregoing.

 

Section 4.08       
Employee Relations. Neither the Company nor any of its Subsidiary is involved in any labor dispute nor, to the knowledge
of the Company or any of its Subsidiary, is any such dispute threatened, in each case which is reasonably likely to cause a Material
Adverse Effect.

 

Section 4.09       
Environmental Laws. The Company and its Subsidiary (i) are in compliance in all material respects with all Environmental
Laws (as defined below), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental
Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license
or approval where, in each of the foregoing clauses (i), (ii) and (iii), the failure to so comply would be reasonably expected
to have, individually or in the aggregate, a Material Adverse Effect. The term “Environmental Laws” means all
applicable federal, state and local laws relating to pollution or protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating
to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances
or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations,
codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans
or regulations issued, entered, promulgated or approved thereunder.

 

    	 	- 11 -	 

     

    

 

Section 4.10       
Title. Except as set forth in the SEC Documents or except as would not cause a Material Adverse Effect, the Company
has good and marketable title to its properties and material assets owned by it, free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest other than such as are not material to the business of the Company. Any real property
and facilities held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as 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.

 

Section 4.11       
Insurance. The Company and each of its subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses
in which the Company and its subsidiaries are engaged. The Company has no reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have a Material Adverse Effect.

 

Section 4.12       
Regulatory Permits. Except as would not cause a Material Adverse Effect, the Company and its subsidiaries possess
all material certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities
necessary to conduct their respective businesses, and neither the Company nor any such subsidiary has received any notice of proceedings
relating to the revocation or modification of any such certificate, authorization or permits.

 

Section 4.13       
Internal Accounting Controls. The Company maintains a system of internal accounting controls sufficient 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.

 

    	 	- 12 -	 

     

    

 

Section 4.14       
Absence of Litigation. Except as set forth in the SEC Documents, there is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency, self-regulatory organization or body pending against or
affecting the Company, the Common Stock or any of the Company’s Subsidiary, wherein an unfavorable decision, ruling or finding
would have a Material Adverse Effect.

 

Section 4.15       
Subsidiaries. Except as disclosed in the SEC Documents, the Company does not presently own or control, directly or
indirectly, any interest in any other corporation, partnership, association or other business entity.

 

Section 4.16       
Tax Status. Each of the Company and its Subsidiary (i) has timely made or filed all foreign, federal and state income
and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely paid all
taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns,
reports and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably
adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers
of the Company and its Subsidiaries know of no basis for any such claim.

 

Section 4.17       
Certain Transactions. Except as set forth in the SEC Documents (or as not required to be disclosed pursuant to applicable
law) none of the officers or directors of the Company is presently a party to any transaction with the Company (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 or director, or to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer
or director has a substantial interest or is an officer, director, trustee or partner.

 

Section 4.18       
Fees and Rights of First Refusal. The Company is not obligated to offer the Common Stock offered hereunder on a right
of first refusal basis or otherwise to any third parties including, but not limited to, current or former shareholders of the Company,
underwriters, brokers, agents or other third parties.

 

Section 4.19       
Dilution. The Company is aware and acknowledges that issuance of Common Stock hereunder could cause dilution to existing
shareholders and could significantly increase the outstanding number of Common Stock.

 

Section 4.20       
Acknowledgment Regarding Investor’s Purchase of Shares. The Company acknowledges and agrees that the Investor
is acting solely in the capacity of an arm’s length investor with respect to this Agreement and the transactions contemplated
hereunder. The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to this Agreement and the transactions contemplated hereunder and any advice given by
the Investor or any of its representatives or agents in connection with this Agreement and the transactions contemplated hereunder
is merely incidental to the Investor’s purchase of the Shares hereunder. The Company is aware and acknowledges that it shall
not be able to request Advances under this Agreement if the Registration Statement is not effective or if any issuances of Common
Stock pursuant to any Advances would violate any rules of the Principal Market.

 

    	 	- 13 -	 

     

    

 

Section 4.21       
Neither the Company, nor any Subsidiary of the Company, nor, to the Company’s knowledge, any director, officer, agent,
employee or affiliate of the Company or any Subsidiary of the Company, is a Person that is, or is owned or controlled by a Person
that is:

 

		(a)	on the list of Specially Designated Nationals and Blocked Persons maintained by OFAC from time
to time;

 

		(b)	the subject of any Sanctions;

 

		(c)	has a place of business in, or is operating, organized, resident or doing business in a country
or territory that is, or whose government is, the subject of Sanctions Programs (including without limitation Crimea, Cuba, Iran,
North Korea, Sudan and Syria).

  

 

Article V. Indemnification

 

The Investor and the
Company represent to the other the following with respect to itself:

 

Section 5.01       
Indemnification by the Company. In consideration of the Investor’s execution and delivery of this Agreement,
and in addition to all of the Company’s other obligations under this Agreement, the Company shall defend, protect, indemnify
and hold harmless the Investor, and all of its officers, directors, partners, employees and agents (including, without limitation,
those retained in connection with the transactions contemplated by this Agreement) and each person who controls the Investor within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the “Investor Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages,
and reasonable and documented expenses in connection therewith (irrespective of whether any such Investor Indemnitee is a party
to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements
(the “Indemnified Liabilities”), incurred by the Investor Indemnitees or any of them as a result of, or arising
out of, or relating to (a) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement
for the registration of the Shares as originally filed or in any amendment thereof, or in any related prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading; provided, however, that
the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on behalf of the Investor specifically for inclusion
therein; (b) any material misrepresentation or breach of any material representation or material warranty made by the Company in
this Agreement or any other certificate, instrument or document contemplated hereby or thereby; (c) any material breach of any
material covenant, material agreement or material obligation of the Company contained in this Agreement or any other certificate,
instrument or document contemplated hereby or thereby; or (d) any cause of action, suit or claim brought or made against such Investor
Indemnitee not arising out of any action or inaction of an Investor Indemnitee, and arising out of or resulting from the execution,
delivery, performance or enforcement of this Agreement or any other instrument, document or agreement executed pursuant hereto
by any of the Investor Indemnitees. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason,
the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities, which is
permissible under applicable law.

 

    	 	- 14 -	 

     

    

 

Section 5.02       
Indemnification by the Investor. In consideration of the Company’s execution and delivery of this Agreement,
and in addition to all of the Investor’s other obligations under this Agreement, the Investor shall defend, protect, indemnify
and hold harmless the Company and all of its officers, directors, shareholders, employees and agents (including, without limitation,
those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Company Indemnitees”)
from and against any and all Indemnified Liabilities incurred by the Company Indemnitees or any of them as a result of, or arising
out of, or relating to (a) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement
for the registration of the Shares as originally filed or in any amendment thereof, or in any related prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading; provided, however, that
the Investor will only be liable for written information relating to the Investor furnished to the Company by or on behalf of the
Investor specifically for inclusion in the documents referred to in the foregoing indemnity, and will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished
to the Investor by or on behalf of the Company specifically for inclusion therein; (b) any misrepresentation or breach of any representation
or warranty made by the Investor in this Agreement or any instrument or document contemplated hereby or thereby executed by the
Investor; (c) any breach of any covenant, agreement or obligation of the Investor(s) contained in this Agreement or any other certificate,
instrument or document contemplated hereby or thereby executed by the Investor; or (d) any cause of action, suit or claim brought
or made against such Company Indemnitee not arising out of any action or inaction of a Company Indemnitee and arising out of or
resulting from the execution, delivery, performance or enforcement of this Agreement or any other instrument, document or agreement
executed pursuant hereto by any of the Company Indemnitees. To the extent that the foregoing undertaking by the Investor may be
unenforceable for any reason, the Investor shall make the maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities, which is permissible under applicable law.

 

Section 5.03       
Notice of Claim. Promptly after receipt by an Investor Indemnitee or Company Indemnitee of notice of the commencement
of any action or proceeding (including any governmental action or proceeding) involving an Indemnified Liability, such Investor
Indemnitee or Company Indemnitee, as applicable, shall, if a claim for an Indemnified Liability in respect thereof is to be made
against any indemnifying party under this Article V, deliver to the indemnifying party a written notice of the commencement thereof;
but the failure to so notify the indemnifying party will not relieve it of liability under this Article V except to the extent
the indemnifying party is prejudiced by such failure. The indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually reasonably satisfactory to the indemnifying party and the Investor Indemnitee or Company
Indemnitee, as the case may be; provided, however, that an Investor Indemnitee or Company Indemnitee shall have the right to retain
its own counsel with the reasonable fees and expenses of not more than one counsel for such Investor Indemnitee or Company Indemnitee
to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation
by such counsel of the Investor Indemnitee or Company Indemnitee and the indemnifying party would be inappropriate due to actual
or potential differing interests between such Investor Indemnitee or Company Indemnitee and any other party represented by such
counsel in such proceeding. The Investor Indemnitee or Company Indemnitee shall cooperate fully with the indemnifying party in
connection with any negotiation or defense of any such action or claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Investor Indemnitee or Company Indemnitee which relates to such action or claim.
The indemnifying party shall keep the Investor Indemnitee or Company Indemnitee fully apprised at all times as to the status of
the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any
action, claim or proceeding effected without its prior written consent, provided, however, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Investor
Indemnitee or Company Indemnitee, consent to entry of any judgment or enter into any settlement or other compromise which does
not include as an unconditional term thereof the giving by the claimant or plaintiff to such Investor Indemnitee or Company Indemnitee
of a release from all liability in respect to such claim or litigation. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the Investor Indemnitee or Company Indemnitee with respect to all third
parties, firms or corporations relating to the matter for which indemnification has been made. The indemnification required by
this Article V shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and
when bills are received and payment therefor is due.

 

    	 	- 15 -	 

     

    

 

Section
5.04       Remedies.
The remedies provided for in this Article V are not exclusive and shall not limit any right or remedies which may otherwise be
available to any indemnified person at law or in equity. The obligations of the parties to indemnify or
make contribution under this Article V shall survive expiration or termination of this Agreement for a period of three years.
Notwithstanding anything to the contrary under this Agreement or applicable law, the no party shall be entitled to any indemnification
pursuant to Section ‎‎5 (other than claims for any damages resulting from fraud) until the aggregate amount of all such
damages that would otherwise be indemnifiable to such party equals or exceeds $25,000 (the “Basket”), at which
time such party shall be entitled to indemnification for the full amount of all damages (including all damages incurred prior to
exceeding the Basket).

 

Section 5.05       
Limitation of liability. Notwithstanding the foregoing, no party shall be entitled to recover from the other party
for punitive, indirect, incidental or consequential damages.

 

Article VI.

Covenants of the Company

 

Section 6.01       
Registration Statement.

 

		(a)	The Company has filed a registration statement (with File Number 333-232614) (the “Initial
Registration Statement”) with the SEC under the Securities Act on Form S-3 with respect to the issuance and sale of securities
by the Company, including Common Stock, which contains, among other things a Plan of Distribution section disclosing the methods
by which the Company may sell the Common Stock. The Initial Registration Statement was declared effective on August 1, 2019 and
remains in effect on the date hereof.

 

    	 	- 16 -	 

     

    

 

		(b)	Promptly after the date hereof (and prior to the Company delivering an Advance Notice to the Investor
hereunder), the Company shall file with the SEC a report on Form 8-K or such other appropriate form as determined by counsel to
the Company, relating to the transactions contemplated by this Agreement and a Prospectus Supplement pursuant to Rule 424(b) of
the Securities Act disclosing all information relating to the transaction contemplated hereby required to be disclosed therein
and an updated Plan of Distribution, including, without limitation, the name of the Investor, if required, the number of Shares
being offered hereunder, the terms of the offering, the purchase price of the Shares, and other material terms of the offering,
and any other information or disclosure necessary to register the transactions contemplated herein (collectively, the “Initial
Disclosure”) and shall provide the Investor with 24 hours to review the Initial Disclosure prior to its filing.

 

		(c)	Maintaining a Registration Statement. The Company shall maintain the effectiveness of any
Registration Statement with respect to the Shares at all times during the Commitment Period (the “Registration Period”),
except for any time during which the SEC reviews any successor Registration Statement, post-effective amendment to any Registration
Statement, prospectus supplement to any Registration Statement or other filing necessary to register the offer and sale of the
Shares and resale of the Shares. Notwithstanding anything to the contrary contained in this Agreement, the Company shall ensure
that, when filed and at all times while effective, each Registration Statement (including, without limitation, all amendments and
supplements thereto) and the prospectus (including, without limitation, all amendments and supplements thereto) used in connection
with such Registration Statement shall not contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances
in which they were made) not misleading. During the Commitment Period, the Company shall notify the Investor promptly if (i) the
Registration Statement shall cease to be effective under the Securities Act, (ii) the Common Stock shall cease to be authorized
for listing on the Principal Market, (iii) the Common Stock ceases to be registered under Section 12(b) or Section 12(g) of
the Exchange Act or (iv) the Company fails to file in a timely manner all reports and other documents required of it as a reporting
company under the Exchange Act.

 

		(d)	Filing Procedures. Not less than one business days prior to the filing of a Registration
Statement and not less than one business day prior to the filing of any related amendments and supplements to all Registration
Statements (except for any amendments or supplements caused by the filing of any annual reports on Form 10-k, current reports on
Form 8-K, and any similar or successor reports), the Company shall furnish to the Investor electronic copies in portable document
format (“.pdf”) all such documents proposed to be filed, which documents (other than those incorporated or deemed
to be incorporated by reference) will be subject to the reasonable and prompt review of the Investor. The Investor shall furnish
comments on a Registration Statement and any related amendment and supplement to a Registration Statement to the Company within
24 hours of the receipt thereof. If the Investor fails to provide comments
to the Company within such 24-hour period, then the Registration Statement, related amendment or related supplement, as applicable,
shall be deemed accepted by the Investor in the form originally delivered by the Company to the Investor.

 

    	 	- 17 -	 

     

    

 

		(e)	Delivery of Final Documents. The Company shall furnish to the Investor without charge, (i)
at least one copy of each Registration Statement as declared effective by the SEC and any amendment(s) thereto, including financial
statements and schedules, all documents incorporated therein by reference, all exhibits and each preliminary prospectus, (ii) at
the request of the Investor, electronic copies in .pdf of the final prospectus included in such Registration Statement and all
amendments and supplements thereto (or such other number of copies in physical paper as the Investor may reasonably request) and
(iii) such other documents as the Investor may reasonably request from time to time in order to facilitate the disposition of the
Common Stock owned by the Investor pursuant to a Registration Statement. Filing of the forgoing with the SEC via its EDGAR system
shall satisfy the requirements of this section.

 

		(f)	Amendments and Other Filings. The Company agrees that on such dates as the Securities Act
shall require, the Company will file a Prospectus Supplement or other appropriate form as determined by counsel with the SEC under
the applicable paragraph of Rule 424(b) under the Securities Act, which Prospectus Supplement will set forth, within the relevant
period, the amount of Shares sold to the Investor, the net proceeds to the Company and the discount paid by the Investor with respect
to such Shares. The Company shall provide the Investor at least 24 hours to comment on a draft of each such Prospectus Supplement
(and shall give due consideration to all such comments) and shall deliver or make available to the Investor, without charge, an
electronic copy of each form of Prospectus Supplement, together with the Base Prospectus. The Company consents to the use of the
Prospectus (and of any Prospectus Supplement thereto) in accordance with the provisions of the Securities Act and with the securities
or “blue sky” laws of the jurisdictions in which the Shares may be sold by the Investor, in connection with the offering
and sale of the Shares and for such period of time thereafter as the Prospectus is required by the Securities Act to be delivered
in connection with sales of the Shares. If during such period of time any event shall occur that in the judgment of the Company
and its counsel is required to be set forth in the Prospectus or should be set forth therein in order to make the statements made
therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary to supplement or amend
the Prospectus to comply with the Securities Act or any other applicable law or regulation, the Company shall forthwith prepare
and file with the SEC an appropriate Prospectus Supplement to the Prospectus and shall promptly furnish or make available to the
Investor an electronic copy thereof. The Company shall (i) prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to a Registration Statement and the related prospectus used in connection with such Registration Statement,
which prospectus is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may be necessary to keep such Registration
Statement effective at all times during the Registration Period, except during the SEC’s review, if any, of such filing.

 

    	 	- 18 -	 

     

    

 

		(g)	Blue-Sky. The Company shall use its commercially reasonable efforts to, if applicable, (i)
register and qualify the Common Stock covered by a Registration Statement under such other securities or “blue sky”
laws of such jurisdictions in the United States as the Investor reasonably requests, (ii) prepare and file in those jurisdictions,
such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary
to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain
such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably
necessary or advisable to qualify the Common Stock for sale in such jurisdictions; provided, however, that the Company shall not
be required in connection therewith or as a condition thereto to (w) make any change to its Articles of Incorporation or Bylaws,
(x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 6.01(g),
(y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such
jurisdiction. The Company shall promptly notify the Investor of the receipt by the Company of any notification with respect to
the suspension of the registration or qualification of any of the Common Stock for sale under the securities or “blue sky”
laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threat of any proceeding for
such purpose.

 

Section 6.02       
Listing of Common Stock. The Company shall use its commercially reasonable efforts to maintain the authorization
for quotation of the Common Stock on the Principal Market and shall notify the Investor promptly if the Common Stock shall cease
to be authorized for quotation on the Principal Market.

 

Section 6.03       
Opinion of Counsel. Prior to the date of the first Advance Notice, the Investor shall have received an opinion letter
from counsel to the Company in form and substance reasonably satisfactory to the Investor.

 

Section 6.04       
Exchange Act Registration. The Company will file in a timely manner all reports and other documents required of it
as a reporting company under the Exchange Act and will not take any action or file any document (whether or not permitted by Exchange
Act or the rules thereunder) to terminate or suspend its reporting and filing obligations under the Exchange Act.

 

Section 6.05       
Transfer Agent Instructions. For any time while there is a Registration Statement in effect for this transaction,
the Company shall (if required by the transfer agent for the Common Stock) cause legal counsel for the Company to deliver to the
transfer agent for the Common Stock (with a copy to the Investor) instructions to issue Common Stock to the Investor free of restrictive
legends upon each Advance.

 

Section 6.06       
Corporate Existence. The Company will take all steps necessary to preserve and continue the corporate existence of
the Company during the Commitment Period.

 

    	 	- 19 -	 

     

    

 

Section 6.07       
Notice of Certain Events Affecting Registration; Suspension of Right to Make an Advance. The Company will immediately
notify the Investor, and confirm in writing, upon its becoming aware of the occurrence of any of the following events in respect
of a Registration Statement or related prospectus relating to an offering of Common Stock: (i) receipt of any request for additional
information by the SEC or any other Federal or state governmental authority during the period of effectiveness of the Registration
Statement for amendments or supplements to the Registration Statement or related prospectus; (ii) the issuance by the SEC or any
other Federal governmental authority of any stop order suspending the effectiveness of the Registration Statement or the initiation
of any proceedings for that purpose; (iii) receipt of any notification with respect to the suspension of the qualification or exemption
from qualification of any of the Common Stock for sale in any jurisdiction or the initiation or written threat of any proceeding
for such purpose; (iv) the happening of any event that makes any statement made in the Registration Statement or related prospectus
of any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires
the making of any changes in the Registration Statement, related prospectus or documents so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and that in the case of the related prospectus, it will not
contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they were made, not misleading, or of the necessity
to amend the Registration Statement or supplement a related prospectus to comply with the Securities Act or any other law; and
(v) the Company’s reasonable determination that a post-effective amendment to the Registration Statement would be appropriate;
and the Company will promptly make available to the Investor any such supplement or amendment to the related prospectus. The Company
shall not deliver to the Investor any Advance Notice, and the Investor shall not sell any Shares pursuant to a Registration Statement,
during the continuation of any of the foregoing events (each of the events described in the immediately preceding clauses (i) through
(v), inclusive, a “Material Outside Event”).

 

Section 6.08       
Consolidation. If an Advance Notice has been delivered to the Investor, then the Company shall not effect any consolidation
of the Company with or into, or a transfer of all or substantially all the assets of the Company to another entity before the transaction
contemplated in such Advance Notice has been closed in accordance with Section 2.02 hereof, and all Shares in connection with such
Advance have been received by the Investor. The Company shall not give an Advance Notice if a shareholder meeting, or the record
date for any shareholder meeting or any corporate action, would fall during the period beginning on the Advance Notice Date and
ending 10 Trading Days following the closing of such Advance.

 

Section 6.09       
Market Activities.The Company will not, directly or indirectly, take any action designed to cause or result in,
or that constitutes or might reasonably be expected to constitute, the stabilization or manipulation of the price of any security
of the Company under Regulation M of the Exchange Act.

 

Section 6.10       
Expenses. The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is
terminated, will pay all expenses incident to the performance of its obligations hereunder, including but not limited to (i) the
preparation, printing and filing of the Registration Statement and each amendment and supplement thereto, of each prospectus and
of each amendment and supplement thereto; (ii) the preparation, issuance and delivery of any Shares issued pursuant to this Agreement,
(iii) all fees and disbursements of the Company’s counsel, accountants and other advisors, (iv) the qualification of the
Shares under securities laws in accordance with the provisions of this Agreement, including filing fees in connection therewith,
(v) the printing and delivery of copies of any prospectus and any amendments or supplements thereto, (vi) the fees and expenses
incurred in connection with the listing or qualification of the Shares for trading on the Principal Market, or (vii) filing fees
of the SEC and the Principal Market.

 

    	 	- 20 -	 

     

    

 

Section 6.11       
Sales. Without the written consent of the Investor, the Company will not, directly or indirectly, offer to sell,
sell, contract to sell, grant any option to sell or otherwise dispose of any Common Stock (other than the Shares offered pursuant
to the provisions of this Agreement, the issuance of shares upon the exercise of outstanding options or warrants, and/or the issuance
of shares under publicly disclosed equity compensation plans of the Company) or securities convertible into or exchangeable for
Common Stock, warrants or any rights to purchase or acquire, Common Stock (other than the issuance of stock options and other equity
award under publicly disclosed equity compensation plans of the Company) during the period beginning on the 10th Trading Day immediately
prior to an Advance Notice Date and ending on the 10th Trading Day immediately following the corresponding Advance Date.

 

Section 6.12       
Current Report. The Company shall not, and the Company shall cause each its Subsidiary and each of its and their
respective officers, directors, employees and agents not to, provide the Investor with any material, non-public information regarding
the Company or any of its Subsidiaries without the express prior written consent of the Investor (which may be granted or withheld
in the Investor’s sole discretion). Notwithstanding anything contained in this Agreement to the contrary, the Company expressly
agrees that it shall publicly disclose, no later than four (4) Business Days following the date hereof, any information communicated
to the Investor by or, to the knowledge of the Company, on behalf of the Company in connection with the transactions contemplated
herein, which, following the date hereof would, if not so disclosed, constitute material, non-public information regarding the
Company or its Subsidiary.

 

Section 6.13       
Black-out Periods. Notwithstanding any other provision of this Agreement, the Company shall not deliver an Advance
Notice during any Company black-out periods or during any other period in which the Company is, or could be deemed to be, in possession
of material non-public information.

 

Section 6.14       
Use of Proceeds. The Company will use the proceeds from the sale of the Common Stock hereunder for working capital
and other general corporate purposes or, if different, in a manner consistent with the application thereof described in the Registration
Statement. Neither the Company nor any Subsidiary will, directly or indirectly, use the proceeds of the transactions contemplated
herein, or lend, contribute, facilitate or otherwise make available such proceeds to any Person (i) to fund, either directly
or indirectly, any activities or business of or with any Person that is identified on the list of Specially Designated Nationals
and Blocker Persons maintained by OFAC, or in any country or territory, that, at the time of such funding, is, or whose government
is, the subject of Sanctions or Sanctions Programs, (ii) or in any manner or in a country or territory, that, at the time of such
funding, is, or whose government is, the subject of CAATSA or CAATSA Sanctions Programs or (iii) in any other manner that will
result in a violation Applicable Laws.

 

    	 	- 21 -	 

     

    

 

Section 6.15       
Compliance with Applicable Laws. During the term of this Agreement the Company shall comply with all Applicable Laws
and will not take any action which will cause the Investor to be in violation of any such Applicable Laws.

 

Section 6.16       
The covenants set forth above shall be ongoing during the term of this Agreement. The Company shall promptly notify the
Investor in writing should it become aware during such period (a) of any changes to these covenants, or (b) if it cannot comply
with the covenants set forth herein. The Company shall also promptly notify the Investor in writing during such period should it
become aware of an investigation, litigation or regulatory action relating to an alleged or potential violation of Applicable Laws.
The Company shall provide such information and documentation it may have as the Investor or any of their affiliates may reasonably
request to satisfy compliance with Applicable Laws.

  

Article VII.

Conditions for Advance and Conditions to Closing

 

Section 7.01       
Conditions Precedent to the Right of the Company to Deliver an Advance Notice. The right of the Company to deliver
an Advance Notice and the obligations of the Investor hereunder with respect to an Advance is subject to the satisfaction by the
Company, on each Advance Notice Date (a “Condition Satisfaction Date”), of each of the following conditions:

 

		(a)	Accuracy of the Company’s Representations and Warranties. The representations and
warranties of the Company in this Agreement shall be true and correct in all material respects.

 

		(b)	Registration of the Common Stock with the SEC. There is an effective Registration Statement
pursuant to which the Investor is permitted to utilize the prospectus thereunder to resell all of the Common Stock issuable pursuant
to such Advance Notice. The Company shall have filed with the SEC all reports, notices and other documents required under the Exchange
Act and applicable SEC regulations during the twelve-month period immediately preceding the applicable Condition Satisfaction Date.

 

		(c)	Authority. The Company shall have obtained all permits and qualifications required by any
applicable state for the offer and sale of all the Common Stock issuable pursuant to such Advance Notice, or shall have the availability
of exemptions therefrom. The sale and issuance of such Common Stock shall be legally permitted by all laws and regulations to which
the Company is subject.

 

		(d)	No Material Outside Event. No Material Outside Event shall have occurred and be continuing.

 

		(e)	Performance by the Company. The Company shall have performed, satisfied and complied in
all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior the applicable Condition Satisfaction Date.

 

    	 	- 22 -	 

     

    

 

		(f)	No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction
shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that
prohibits or directly and adversely affects any of the transactions contemplated by this Agreement, and no proceeding shall have
been commenced that may have a Material Adverse Effect.

 

		(g)	No Suspension of Trading in or Delisting of Common Stock. The Common Stock are quoted trading
on the Principal Market and all of the shares issuable pursuant to such Advance Notice will be listed or quoted for trading on
the Principal Market and the Company believes, in good faith, that trading of the Common Stock on the Principal Market will continue
uninterrupted for the foreseeable future. The issuance of Common Stock with respect to the applicable Advance Notice will not violate
the shareholder approval requirements of the Principal Market. The Company shall not have received any notice threatening the continued
quotation of the Common Stock on the Principal Market.

 

		(h)	Authorized. There shall be a sufficient number of authorized but unissued and otherwise
unreserved Common Stock for the issuance of all of the shares issuable pursuant to such Advance Notice.

 

		(i)	Executed Advance Notice. The Investor shall have received the Advance Notice executed by
an officer of the Company and the representations contained in such Advance Notice shall be true and correct as of the applicable
Condition Satisfaction Date.

 

		(j)	Consecutive Advance Notices. Except with respect to the first Advance Notice, the Company
shall have delivered all Shares relating to all prior Advances, and, unless waived by the Investor, at least 5 Trading Days shall
have elapsed from the immediately preceding Advance Date.

 

Article VIII.

Non-Disclosure of Non-Public Information

 

The Company covenants
and agrees that it shall refrain from disclosing, and shall cause its officers, directors, employees and agents to refrain from
disclosing, any material non-public information (as determined under the Securities Act, the Exchange Act, or the rules and regulations
of the SEC) to the Investor without also disseminating such information to the public, unless prior to disclosure of such information
the Company identifies such information as being material non-public information and provides the Investor with the opportunity
to accept or refuse to accept such material non-public information for review. Unless specifically agreed to in writing, in no
event shall the Investor have a duty of confidentially, or be deemed to have agreed to maintain information in confidence, with
respect to (i) any information disclosed in violation of this provision or (ii) the delivery of any Advance Notices.

 

Article IX.

Non Exclusive Agreement

 

Notwithstanding anything
contained herein, this Agreement and the rights awarded to the Investor hereunder are non-exclusive, and, subject to the provisions
in Section 6.13, the Company may, at any time throughout the term of this Agreement and thereafter, issue and allot, or undertake
to issue and allot, any shares and/or securities and/or convertible notes, bonds, debentures, options to acquire shares or other
securities and/or other facilities which may be converted into or replaced by Common Stock or other securities of the Company,
and to extend, renew and/or recycle any bonds and/or debentures, and/or grant any rights with respect to its existing and/or future
share capital.

 

    	 	- 23 -	 

     

    

 

Article X.

Choice of Law/Jurisdiction

 

This Agreement shall
be governed by and interpreted in accordance with the laws of the State of New Jersey without regard to the principles of conflict
of laws. The parties further agree that any action between them shall be heard in New Jersey, and expressly consent to the jurisdiction
and venue of the Superior Court of the State of New Jersey, sitting in Union County, New Jersey and the United States District
Court for the District of New Jersey, sitting in Newark, New Jersey, for the adjudication of any civil action asserted pursuant
to this Agreement.

 

Article XI. Assignment;
Termination

 

Section 11.01   
Assignment. Neither this Agreement nor any rights of the parties hereto may be assigned to any other Person.

 

Section 11.02   
Termination.

 

		(a)	Unless earlier terminated as provided hereunder, this Agreement shall terminate automatically on
the earliest of (i) the first day of the month next following the 24-month anniversary of the date hereof or (ii) the date
on which the Investor shall have made payment of Advances pursuant to this Agreement in the aggregate amount of the Commitment
Amount.

 

		(b)	The Company may terminate this Agreement effective upon fifteen Trading Days’ prior written
notice to the Investor; provided that (i) there are no outstanding Advance Notices, the Common Stock under which have yet to be
issued, and (ii) the Company has paid all amounts owed to the Investor pursuant to this Agreement. This Agreement may be terminated
at any time by the mutual written consent of the parties, effective as of the date of such mutual written consent unless otherwise
provided in such written consent.

 

		(c)	Nothing in this Section 11.02 shall be deemed to release the Company or the Investor from any liability
for any breach under this Agreement, or to impair the rights of the Company and the Investor to compel specific performance by
the other party of its obligations under this Agreement. The indemnification provisions contained in Article V shall survive termination
hereunder.

 

    	 	- 24 -	 

     

    

 

Article XII. Notices

 

Any notices, consents,
waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will
be deemed to have been delivered upon: (i) receipt, when delivered personally, (ii) 1 Business Day after deposit with an overnight
courier service with next day delivery specified, in each case, properly addressed to the party to receive the same, or (iii) receipt,
when sent by electronic mail (provided that the electronic mail transmission is not returned in error or the sender is not otherwise
notified of any error in transmission. The addresses and email addresses for such communications shall be:

 

	If to the Company, to:	Kulr Technology Group, Inc.
	 	
        1999 Bascom Ave – Suite 700

        Campbell, CA 95008

	 	Attention:        Michael Mo
	 	
        Telephone:(408) 663-5247

        Email: michael.mo@kulrtechnology.com

	
         

        With a copy to (which shall not

        constitute notice or delivery of process) to:
	
         

         

        Sichenzia Ross Ference LLP

        1185 Avenue of the Americas, 37th Floor

        New York, NY 10036

	 	
        Attention: Jay Yamamoto, Esq.

        Telephone: (646) 810-0604

        Email: jyamamoto@srf.law

	 	
         

         

	If to the Investor(s):	YAII PN, Ltd.
	 	1012 Springfield Avenue
	 	Mountainside, NJ 07092
	 	Attention:Mark Angelo
	 	Portfolio Manager
	 	Telephone:(201) 985-8300
	 	
        Email:mangelo@yorkvilleadvisors.com

         

	 	 
	
        With a Copy (which shall not

        constitute notice or delivery of process) to:
	
        David Gonzalez, Esq.

        1012 Springfield Avenue

        Mountainside, NJ 07092

	 	Telephone:(201) 985-8300
	 	Email: dgonzalez@yorkvilleadvisors.com
	 	 
	 	 
	 	 
	 	 

or at such other address and/or electronic
email address and/or to the attention of such other person as the recipient party has specified by written notice given to each
other party 3 Business Days prior to the effectiveness of such change. Written confirmation of receipt (i) given by the recipient
of such notice, consent, waiver or other communication, (ii) mechanically or electronically generated by the sender’s computer
containing the time, date, recipient’s electronic mail address and the text of such electronic mail or (iii) provided by
a nationally recognized overnight delivery service, shall be rebuttable evidence of personal service, receipt by electronic mail
or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.

 

    	 	- 25 -	 

     

    

 

Article XIII. Miscellaneous

 

Section 13.01   
Counterparts. This Agreement may be executed in identical counterparts, both which shall be considered one and the
same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. Facsimile
or other electronically scanned and delivered signatures, including by e-mail attachment, shall be deemed originals for all purposes
of this Agreement.

 

Section 13.02   
Entire Agreement; Amendments. This Agreement supersedes all other prior oral or written agreements between the Investor,
the Company, their respective affiliates and persons acting on their behalf with respect to the matters discussed herein, and 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 Investor 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 party to be charged with enforcement.

 

Section 13.03   
Reporting Entity for the Common Stock. The reporting entity relied upon for the determination of the trading price
or trading volume of the Common Stock on any given Trading Day for the purposes of this Agreement shall be Bloomberg, L.P. or any
successor thereto. The written mutual consent of the Investor and the Company shall be required to employ any other reporting entity.

 

Section 13.04   
Structuring and Due Diligence Fee. Each of the parties shall pay its own fees and expenses (including the fees
of any attorneys, accountants, appraisers or others engaged by such party) in connection with this Agreement and the transactions
contemplated hereby, except that the Company shall pay to YA Global II SPV, LLC, a subsidiary of the Investor, a structuring fee
in the amount of $15,000, which has been received on or around February 20, 2020.

 

Section 13.05   
Commitment Fee.

 

(a)     
The Company shall pay a commitment fee to the Investor in an amount equal to 1.5% of the Commitment Amount as a commitment
fee (“Commitment Fee”) payable in shares of the Company’s Common Stock registered on the Company’s
registration statement on Form S-3 (File No. 333-232614) under Section 5 of the Securities Act in an amount equal to 95,847 shares
of the Company’s Common Stock (the “Commitment Fee Shares”).

 

(b)    
The Commitment Fee Shares shall be deemed fully earned as of the date here.

 

Section 13.06   
Brokerage. Each of the parties hereto represents that it has had no dealings in connection with this transaction
with any finder or broker who will demand payment of any fee or commission from the other party. The Company on the one hand, and
the Investor, on the other hand, agree to indemnify the other against and hold the other harmless from any and all liabilities
to any person claiming brokerage commissions or finder’s fees on account of services purported to have been rendered on behalf
of the indemnifying party in connection with this Agreement or the transactions contemplated hereby.

    	 	- 26 -	 

     

    

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK]

 

 

    	 	- 27 -	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Standby Equity Distribution Agreement to be executed by the undersigned, thereunto duly authorized,
as of the date first set forth above.

 

	 	COMPANY:
	 	KULR Technology Group, Inc.
	 	 	 	 
	 	By:	/s/ Michael Mo
	 	Name:	Michael Mo
	 	Title:	Chief Executive Officer and Chairman
	 	 	 	 
	 	 	 	 
	 	INVESTOR:
	 	YA II PN, Ltd.
	 	 	 	 
	 	By:	Yorkville Advisors Global, LP
	 	Its:	Investment Manager
	 	 	 	 
	 	 	By:	Yorkville Advisors Global, LLC
	 	 	Its:	General Partner
	 	 	 	 
	 	 	By:	/s/ David Gonzalez
	 	 	Name:	David Gonzalez
	 	 	Title:	Member and General Counsel

 

 

    	 	- 28 -	 

     

    

 

EXHIBIT A

ADVANCE NOTICE

 

KULR TECHNOLOGY GROUP, INC.

 

	Dated: ______________	Advance Notice Number: ____

 

The
undersigned, _______________________ hereby certifies, with respect to the sale of Common Stock of
KULR TECHNOLOGY GROUP, INC. (the “Company”) issuable in connection with this Advance Notice, delivered pursuant
to that certain Standby Equity Distribution Agreement, dated as of _______, 2020 (the “Agreement”), as follows:

 

1.       The
undersigned is the duly elected ______________ of the Company.

 

2.       There
are no fundamental changes to the information set forth in the Registration Statement which would require the Company to file a
post-effective amendment to the Registration Statement.

 

3.        The
Company has performed in all material respects all covenants and agreements to be performed by the Company and has complied in
all material respects with all obligations and conditions contained in this Agreement on or prior to the Advance Notice Date, and
shall continue to perform in all material respects all covenants and agreements to be performed by the Company through the applicable
Advance Date. All conditions to the delivery of this Advance Notice are satisfied as of the date hereof.

 

4.       The
Advance requested is _____________________.

 

5.       The
number of Common Stock of the Company outstanding as of the date hereof is ___________.

 

The undersigned has
executed this Advance Notice as of the date first set forth above.

 

 

	 	KULR TECHNOLOGY GROUP, INC.
	 	 
	 	By:	

 

 

 

Please deliver this Advance Notice by email
with a follow up phone call to:

Email: Trading@yorkvilleadvisors.com

Attention: Trading Department
and Compliance Officer

Confirmation Telephone
Number: (201) 985-8300.

 

    	 	- 29 -	 

     

    

 

 

EXHIBIT B

FORM OF SETTLEMENT DOCUMENT

VIA EMAIL

 

KULR TECHNOLOGY GROUP, INC.

Attn: 

Email:

 

	 	Below please find the settlement information with respect to the Advance Notice Date of:	 
	1.	Amount of Advance Notice	 
	2.	Market Price	 
	3.	Purchase Price (Market Price x 80%) per share	 
	4.	Number of Shares due to Investor	 

 

Please issue the number of Shares due to the Investor to the account of the Investor as follows:

 

Investor’s
DTC participant #:

 

ACCOUNT NAME:

ACCOUNT NUMBER:

ADDRESS:

CITY:

COUNTRY:

Contact person:

Number and/or email:

Sincerely, 

 

YA II PN, LTD.

 

 

 

Approved By KULR TECHNOLOGY GROUP, INC.:

 

 

	 	 

Name:Exhibit 10.2

 

EXECUTION VERSION

 

THIS NOTE HAS NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THIS NOTE HAS BEEN SOLD IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS.

 

KULR TECHNOLOGY GROUP, INC.

 

Note

 

	No. KULR-1	
        Original Principal Amount:$1,500,000

        Original Issue Discount:   6%

	Issuance Date:  February 27, 2020	 
	 	 

 

FOR VALUE RECEIVED,
KULR Technology Group, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Company”),
hereby promises to pay to the order of YAII PN, Ltd. or its registered assigns (the “Holder”) (i) the outstanding
portion of the amount set out above as the Original Principal Amount (as reduced pursuant to the terms hereof pursuant to scheduled
payment, redemption or otherwise, the “Principal”) when due, whether a regularly scheduled principal payment
or upon the Maturity Date (as defined below), acceleration, redemption or otherwise (in each case in accordance with the terms
hereof) and (ii) to pay interest (“Interest”) on any outstanding Principal at the applicable Interest (as set
forth below) from the Issuance Date written above (the “Issuance Date”) until the same is paid, whether a regularly
scheduled interest payment or upon the Maturity Date or acceleration, redemption or otherwise (in each case in accordance with
the terms hereof).

 

This Note (this “Note”)
is being issued pursuant to that certain Note Purchase Agreement dated as of February 27, 2020 (the “Note Purchase Agreement”)
between the Company and the Holder.

 

Certain capitalized terms
used herein but otherwise not defined herein are defined in Section 17 or in the Note Purchase Agreement.

 

(1)              
GENERAL TERMS

 

     

     

    

 

(a)              
Advance of Original Principal Amount. In consideration for the issuance of this Note on the Issuance Date by the
Company, the Holder shall advance and make available to the Company on the Issuance Date the Original Principal Amount minus an
Original Issue Discount (“OID”) of 6% by wire transfer of immediately available funds to the account indicated
by the Company on Schedule I attached hereto.

 

(b)              
Maturity Date. The term of this Note shall expire May 31, 2021 (the “Maturity Date”). On the Maturity
Date, the Company shall pay to the Holder an amount in cash representing all then outstanding Principal.

 

(c)              
Payments. On each of the Installment Dates, the Company shall pay to the Holder an amount equal to the relevant Installment
Amount due on such Installment Date as listed on Schedule II hereto. Provided however upon the mutual consent of
the Parties such Installment Amounts may be increased. Installment Amounts under this Note must be paid by wire transfer of immediately
available funds to the account listed on Schedule I hereto (or to any other account specified by the Holder to the
Company on or before the applicable Installment Date by notice given in accordance with Section 7 hereof).

 

(d)              
Interest. No Interest shall accrue on the outstanding Principal balance hereof.

 

(2)              
PREPAYMENT PREMIUM. The Company at its option shall have the right to prepay in cash (a “Prepayment”),
in part or in whole, any Installment Amount prior to such Installment Date or the outstanding Principal Amount under this Note
prior to the Maturity Date. The Company shall pay an amount equal to the amount being prepaid plus a Prepayment premium equal to
10% of the Installment Amount or outstanding Principal Amount being prepaid (“Prepayment Premium”). In order
to make a Prepayment pursuant to this Section, the Company shall provide 3 business days advanced written notice prior to such
Installment or Maturity Date to the Holder of its intention to make a Prepayment (the “Prepayment Notice”) setting
forth the amount it desires to prepay plus the applicable Prepayment Premium (the “Prepayment Amount”). On the
4th Business Day after the Prepayment Notice, the Company shall deliver to the Holder via wire transfer of immediately
available funds the Prepayment Amount with respect to the amount be prepaid by wire transfer of immediately available funds to
the account listed on Schedule I hereto (or to any other account specified by the Holder to the Company by notice
given in accordance with Section 7 hereof).

 

(3)              
DECREASE OF INSTALLMENT AMOUNTS. The Company shall have the right to decrease an Installment Amount by up to 50%
provided however such decreased amount shall be added to the final Installment Amount due on the Maturity Date. Provided however
the Company shall not have the ability to exercise such decrease of an Installment Amount more than 3 times during the term of
this Note. In order to decrease an Installment Amount pursuant to this Section, the Company shall first provide 3 business days
advance written notice prior to an Installment Date to the Holder of its intention to decrease an Installment Amount (the “Decrease
Notice”) setting forth the amount it desires to decrease and such amount that is being added to the Installment Amount
due on the Maturity Date (the “Decrease Amount”).

 

    	 	2	 

     

    

 

(4)              
REPRESENTATIONS AND WARRANTIES. The Company hereby represents and warrants to the Investor that the following are
true and correct as of the date hereof:

 

(a)  
The Company has the requisite corporate power and authority to enter into and perform its obligations under this Note and
any related agreements, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Note and any related
agreements by the Company and the consummation by it of the transactions contemplated hereby and thereby, have been duly authorized
by the Company’s Board of Directors and no further consent or authorization is required by the Company, its Board of Directors
or its shareholders, (iii) this Note has been duly executed and delivered by the Company, (iv) this Note (assuming the execution
and delivery thereof and acceptance by the Investor and the occurrence of the Issuance Date), constitutes the valid and binding
obligations of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited
by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating
to, or affecting generally, the enforcement of creditors’ rights and remedies.

 

(b)  
The execution, delivery and performance by the Company of its obligations under this Note will not (i) result in a violation
of the Company’s Certificate of Incorporation or (ii) conflict with or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or any of its subsidiaries is a party, or result in
a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations
and the rules and regulations of the Primary Market on which the Common Stock is quoted) applicable to the Company or any of its
subsidiaries or by which any material property or asset of the Company is bound or affected and which would cause a Material Adverse
Effect.

 

(5)              
EVENTS OF DEFAULT. 

 

(a)              
An “Event of Default”, wherever used herein, means any one of the following events (whatever the reason
and whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of
any court, or any order, rule or regulation of any administrative or governmental body) shall have occurred and be continuing:

 

(i)             
the Company’s failure to pay to the Holder any Installment Amount or Principal Amount when and as due and payable
under this Note, and such failure continues for five (5) days following the date upon which such payment was due;

 

(ii)          
the Company shall commence, or there shall be commenced against the Company under any applicable bankruptcy or insolvency
laws as now or hereafter in effect or any successor thereto, or the Company, or there shall be commenced against the Company, any
other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
or similar law of any jurisdiction whether now or hereafter in effect relating to the Company, which remains un-stayed or un-dismissed
for a period of 61 days; or the Company is adjudicated insolvent or bankrupt pursuant to a final, non-appealable order; or any
order of relief or other order approving any such case or proceeding is entered; or the Company suffers any appointment of any
custodian, private or court appointed receiver or the like for it or any substantial part of its property which continues un-discharged
or un-stayed for a period of 61 days; or the Company makes a general assignment for the benefit of creditors; or the Company shall
admit in writing that it is unable to pay its debts generally as they become due; or the Company shall call a meeting of its creditors
with a view to arranging a composition, adjustment or restructuring of its debts.

 

    	 	3	 

     

    

 

(iii)        
the Common Stock of the Company ceases to be quoted or listed for trading on the Principal Market and shall not again be
quoted or listed for trading on any Principal Market within fifteen Trading Days of such delisting;

 

(iv)         
the Company is a party to any agreement memorializing (1) the consummation of any transaction or event (whether by means
of a share exchange or tender offer applicable to its shares of common stock par value $0.0001 (the “Common Stock”),
a liquidation, consolidation, recapitalization, reclassification, combination or merger of the Company or a sale, lease or other
transfer of all or substantially all of the consolidated assets of the Company) or a series of related transactions or events pursuant
to which all of the outstanding Common Stock are exchanged for, converted into or constitute solely the right to receive, cash,
securities or other property, (2) a consolidation or merger in which the Company is not the surviving corporation, or (3) a sale,
assignment, transfer, conveyance or other disposal of all or substantially all of the properties or assets of the Company to another
person or entity (each of (1), (2) and (3) a “Change in Control”) unless in connection with such Change in Control,
all Principal and accrued and unpaid Interest due under this Note will be paid in full or the Holder consents to such Change in
Control;

 

(v)           
the Company shall fail to observe or perform any other material covenant, agreement or warranty contained in, or otherwise
commit any material breach or default of any provision of this Note or the Note Purchase Agreement.

 

(vi)         
 The Company shall fail to observe or perform any material covenant, agreement or warrant contained in, or otherwise commit
any material breach or default of any provision of the Standby Equity Distribution Agreement dated February __, 20201
between the Company and the Holders (the “SEDA”) which is not cured within the time prescribed in the SEDA,
as applicable, or if not so prescribed, within thirty days after notice to the Company by the Holder of such material failure,
breach or default;

 

(vii)      
The Company shall terminate the SEDA; or

 

(viii)    
an event of default by the Company under any other material obligation, instrument, note or agreement for borrowed money
occurring after the Issuance Date of this Note and continuing beyond any applicable notice and/or grace period, and as a result
of which the obligations of the Company, under such material obligation, instrument, note or agreement have been accelerated..

 

 

		1	Insert

 

    	 	4	 

     

    

 

(6)              
REMEDY UPON DEFAULT. During the time that any portion of this Note is outstanding, if any Event of Default has occurred,
the Holder, by notice in writing to the Company, may at any time and from time to time declare the full unpaid Principal of this
Note or any portion thereof, to be due and payable immediately without necessity of further action (the “Accelerated Amount”).

 

(7)              
REISSUANCE OF THIS NOTE. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of an indemnification undertaking
by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the
Company shall execute and deliver to the Holder a new Note representing the outstanding Principal which Note (i) shall be of like
tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding (iii)
shall have an issuance date, as indicated on the face of such new Note, which is the same as the Issuance Date of this Note, (iv)
shall have the same rights and conditions as this Note, and (v) shall represent accrued and unpaid Interest from the Issuance Date.

 

1.     
NOTICES. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered upon: (i) receipt, when delivered personally, (ii) 1 Business
Day after deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the
party to receive the same, or (iii) receipt, when sent by electronic mail (provided that the electronic mail transmission is not
returned in error or the sender is not otherwise notified of any error in transmission. The addresses and email addresses for
such communications shall be:

 

 

	If to the Company, to:	
        

        KULR Technology Group, Inc.

	 	1999 S. Bascom Avenue – Suite 700
	 	Campbell, CA 95008
	 	Attention:      Michael Mo, CEO
	 	Telephone:    (408)663-5247
	 	Email:  michael.mo@kulrtechnology.com
	
         

        With a copy to:
	
         

        Sichenzia Ross Ference LLP

        1185 Avenue of the Americas, 37th Floor

        New York, NY 10036

        Attention: Jay Yamamoto, Esq.

        Telephone: (646) 810-0604

        Email: jyamamoto@srf.law

 

    	 	5	 

     

    

 

	If to the Holder:	YAII PN, Ltd.
	 	1012 Springfield Ave
	 	Mountainside, New Jersey 07092
	 	Attention:Mark Angelo
	 	
        Telephone:(201) 985-8300

        Email:mangelo@yorkvilleadvisors.com

	 	 
	With a copy to:	David Gonzalez, Esq.
	 	1012 Springfield Ave
	 	Mountainside, New Jersey 07092
	 	Telephone:(201) 985-8300
	 	Email:dgonzalez@yorkvilleadvisors.com
	 	 

 

or at such other address and/or electronic
email address and/or to the attention of such other person as the recipient party has specified by written notice given to each
other party 3 Business Days prior to the effectiveness of such change. Written confirmation of receipt (i) given by the recipient
of such notice, consent, waiver or other communication, (ii) mechanically or electronically generated by the sender’s computer
containing the time, date, recipient’s electronic mail address and the text of such electronic mail or (iii) provided by
a nationally recognized overnight delivery service, shall be rebuttable evidence of personal service, receipt by electronic mail
or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.

 

(8)              
No provision of this Note shall alter or impair the obligations of the Company, which are absolute and unconditional, to
pay the Principal on, this Note at the time, place, and rate, and in the currency, herein prescribed. This Note is a direct obligation
of the Company. As long as this Note is outstanding, the Company shall not , without the consent of the Holder, (i) amend its articles
of Association or Memorandum of Association so as to adversely affect any rights of the Holder under this Note; or (ii) enter into
any agreement with respect to any of the foregoing.

 

(9)              
This Note shall not entitle the Holder to any of the rights of a shareholder of the Company, including without limitation,
the right to vote, to receive dividends and other distributions, or to receive any notice of, or to attend, meetings of shareholders
or any other proceedings of the Company.

 

(10)          
This Note shall be governed by and interpreted in accordance with the laws of the State of New Jersey, without regard to
the principles of conflict of laws. Each of the parties consents to the jurisdiction of the of the Superior Court of the State
of New Jersey, sitting in Union County, New Jersey and the United States District Court for the District of New Jersey, sitting
in Newark, New Jersey, in connection with any dispute arising under this Note and hereby waives, to the maximum extent permitted
by law, any objection, including any objection based on forum non conveniens to the bringing of any such proceeding in such jurisdictions.

 

(11)          
If an Event of Default has occurred, then the Company shall reimburse the Holder promptly for all out-of-pocket fees, costs
and expenses, including, without limitation, reasonable attorneys’ fees and expenses incurred by the Holder in any action
for the collecting of any sums which become due and payable to the Holder in accordance with the terms of this Note.

 

(12)          
Any waiver by the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of
any other breach of such provision or of any breach of any other provision of this Note. The failure of the Holder to insist upon
strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other term of this Note. Any waiver must be in writing.

 

    	 	6	 

     

    

 

(13)          
If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and
if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and
circumstances. If it shall be found that any interest or other amount deemed interest due hereunder shall violate applicable laws
governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate
of interest. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would
prohibit or forgive the Company from paying all or any portion of the Principal of or interest on this Note as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and
the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants
that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but
will suffer and permit the execution of every such as though no such law had been enacted.

 

(14)          
Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day.

 

(15)          
Assignment of this Note by the Company shall be prohibited without the prior written consent of the Holder. Prior to the
Maturity Date, the Holder shall not sell, transfer, negotiate or otherwise make any disposition of this Note or any portion thereof
without the prior written consent of the Company.

 

(16)          
THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES’
ACCEPTANCE OF THIS AGREEMENT.

 

(17)          
CERTAIN DEFINITIONS For purposes of this Note, the following terms shall have the following meanings:

 

(a)              
 “Business Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday
in the United States or a day on which banking institutions are authorized or required by law or other government action to close.

 

    	 	7	 

     

    

 

(b)              
“Installment Amount” means the principal and interest payment due on an Installment Date as set forth
on Schedule II hereto.

 

(c)              
“Installment Date” means each date on which Installment Amounts are due to be paid in accordance with
Schedule II hereto.

 

 

 

[Signature Page Follows]

 

 

    	 	8	 

     

    

 

IN WITNESS WHEREOF,
the Company has caused this Note to be duly executed by a duly authorized officer as of the date first set forth above.

  

	 	COMPANY:
	 	KULR TECHNOLOGY GROUP, INC.
	 	 	 
	 	 	 
	 	By:	/s/ Michael Mo
	 	Name:	Michael Mo
	 	Title:	Chief Executive Officer and Chairman 

 

 

     

     

    

 

Schedule I

 

 

(Company’s Account Information)

  

 

(Holder’s Account Information)

 

*Account Currency: USD

  

	Intermediary Bank:	The Bank of New York Mellon
	 	One Wall Street
	 	New York, NY10286

Routing # 021 000 018

Swift Code: IRVTUS3N

Account # 890 1050 210

	Beneficiary Bank:	 DMS Bank and Trust Ltd.
	 	20 Genesis Close
	 	Grand Cayman KY1-1104

Swift Code: CAYIKYKY

 

	Beneficiary Account Name: 	YA II PN, Ltd
	 	1012 Springfield Avenue
	 	Mountainside, NJ 07092

 

Beneficiary Account # 01680100

 

     

     

    

 

Schedule II

Repayment Schedule 

 

 

	March 15, 2020	$25,000
	April 1, 2020	$50,000
	May 1, 2020	$100,000
	June 1, 2020	$100,000
	July 1, 2020	$100,000
	August 1, 2020	$100,000
	September 1, 2020	$100,000
	October 1, 2020	$100,000
	November 1, 2020	$100,000
	December 1, 2020	$100,000
	January 1, 2021	$125,000
	February 1, 2021	$125,000
	March 1, 2021	$125,000
	April 1, 2021	$125,000
	May 31, 2021	$125,000

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