Document:

SECURITIES
PURCHASE AGREEMENT

 

This Securities Purchase Agreement
(this “Agreement”) is dated as of December 10, 2021, between Star Equity Holdings, Inc., a Delaware corporation (the
“Company”), and the purchaser identified on the signature pages hereto (including his successors, heirs and assigns,
the “Purchaser”).

 

WHEREAS, subject to the terms
and conditions set forth in this Agreement and pursuant to an exemption from the registration requirements of Section 5 of the Securities
Act of 1933, as amended (the “Securities Act”), contained in Section 4(a)(2) thereof and/or Regulation D thereunder,
the Company desires to issue and sell to the Purchaser, and the Purchaser desires to purchase from the Company, securities of the Company
as more fully described in this Agreement.

 

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

 

ARTICLE I.

DEFINITIONS

 

1.1             
Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following
terms have the meanings set forth in this Section 1.1:

 

“Acquiring Person”
shall have the meaning ascribed to such term in Section 4.3.

 

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

 

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

 

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

 

“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in the City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in the City of New York generally
are open for use by customers on such day.

 

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

 

“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties
thereto, and all conditions precedent to (i) the Purchaser’s obligations to pay the Subscription Amount and (ii) the Company’s
obligations to deliver the Securities, in each case, have been satisfied or waived.

 

     

     

    

 

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

 

“Common
Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.

 

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

 

“Company
Counsel” means Olshan Frome Wolosky LLP, with offices located at 1325 Avenue of the Americas, New York, New York 10019.

 

“Company
Covered Person” means, with respect to the Company as an “issuer” for purposes of Rule 506 promulgated under the
Securities Act, any Person listed in the first paragraph of Rule 506(d)(1).

 

“Disclosure
Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.

 

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

 

“DWAC”
shall have the meaning ascribed to such term in Section 2.2(a)(iv).

 

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

 

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

 

“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company pursuant
to any stock or option plan or arrangement duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors
or a majority of the members of a committee of non-employee directors established for such purpose for services rendered to the Company
and (b) securities to or with the consent of the Purchaser.

 

“Federal
Reserve” shall have the meaning ascribed to such term in Section 3.1(y).

 

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

 

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

 

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“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(n).

 

“Legend
Removal Date” shall have the meaning ascribed to such term in Section 4.1(c).

 

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

 

“Lock-Up
Agreement” shall have the meaning ascribed to such term in Section 2.2(a)(iv).

 

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

 

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

 

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

 

“Per Share
Purchase Price” equals $3.25, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations
and other similar transactions of the Common Stock that occur after the date of this Agreement.

 

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

 

“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition) pending or, to the Company’s knowledge, threatened in writing against or affecting the Company, any Subsidiary
or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign).

 

“Registration
Statement” means a registration statement filed by the Company covering the resale of the Shares by the Purchaser, which may
be accomplished through a piggyback onto a registration statement filed by the Company registering other shares of Common Stock (other
than a registration statement on Form S-4 or S-8 or any successor form thereto) and the registration of the Shares are included therein.

 

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

 

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

 

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

 

“Securities”
means the Shares.

 

“Securities
Act” shall have the meaning ascribed to such term in the preamble to this Agreement.

 

“Shares”
means the shares of Common Stock issued or issuable to the Purchaser pursuant to this Agreement.

 

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

 

“Standard
Settlement Period” shall have the meaning ascribed to such term in Section 4.1(c).

 

“Subscription
Amount” means the aggregate amount to be paid for the Shares purchased hereunder, equal to $2,112,500, in United States dollars
and in immediately available funds.

 

“Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1(a), and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof (but, for clarity, excluding any variable interest entities).

 

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

 

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

 

“Transaction
Documents” means this Agreement, the Lock-Up Agreement (as defined below), and any other documents or agreements executed in
connection with the transactions contemplated hereunder.

 

“Transfer
Agent” means American Stock Transfer & Trust Company, LLC, the current transfer agent of the Company, with a mailing address
of 6201 15th Avenue, Brooklyn, NY 11219, and any successor transfer agent of the Company.

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, or (c) if the Common Stock is
not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets”
published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent
bid price per share of the Common Stock so reported.

 

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ARTICLE II.

PURCHASE AND SALE

 

2.1             
Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell,
and the Purchaser agrees to purchase, an aggregate of 650,000 Shares. The Company shall deliver to the Purchaser his Shares as determined
pursuant to Section 2.2(a), and the Company and the Purchaser shall deliver the other items set forth in Section 2.2 deliverable
at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur
remotely via the electronic exchange of documents and signatures. On the Closing Date, the Company shall direct the Transfer Agent to
issue the Shares registered in the Purchaser’s name and address, upon payment by the Purchaser.

 

2.2             
Deliveries.

 

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

 

(i)                
this Agreement duly executed by the Company;

 

(ii)             
subject to the last sentence of Section 2.1, the Company shall have provided the Purchaser with the Company’s wire
instructions, in accordance with Company policies and procedures regarding the wiring of funds;

 

(iii)           
a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver on an expedited basis via
The Depository Trust Company Deposit and Withdrawal at Custodian system (“DWAC”), or other method acceptable to the
Purchaser, the Shares, registered in the name of the Purchaser; and

 

(iv)            
a lock-up agreement in the form of Exhibit A attached hereto executed and delivered by the Company (the “Lock-Up
Agreement”).

 

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

 

(i)               this
Agreement duly executed by the Purchaser;

 

(ii)             
the Subscription Amount; and

 

(iii)           
the Lock-Up Agreement duly executed by the Purchaser.

 

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2.3             
Closing Conditions.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(iv)            
from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s
principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall
not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such
service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities.

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

3.1             
Representations and Warranties of the Company. Except as set forth in the SEC Reports or the Disclosure Schedules, which
Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent of the
disclosure contained in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations
and warranties to the Purchaser as of the date hereof and as of the Closing Date to the Company:

 

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(a)              
Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a). The Company
owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, except
for Liens set forth in Schedule 3.1(a), and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued
and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.

 

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

 

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

 

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

 

(e)              
Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give
any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) application(s)
to each applicable Trading Market for the listing of the Shares for trading thereon in the time and manner required thereby, (ii) the
filing of a Form D with the Commission, and (iii) such filings as are required to be made under applicable state securities laws (collectively,
the “Required Approvals”).

 

(f)               
Issuance of the Securities; Registration. The Securities are duly authorized and, when issued and paid for in accordance
with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens
imposed by the Company, except as is required in compliance with applicable securities laws. The Company has reserved from its duly authorized
capital stock the number of shares of Common Stock issuable pursuant to this Agreement.

 

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

 

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

 

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(i)                
Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements
included within the SEC Reports, except as set forth on Schedule 3.1(i), (i) there has been no event, occurrence or development
that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP disclosed
in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) except with respect to the 10% Series
A Cumulative Perpetual Preferred Stock, the Company has not declared or made any dividend or distribution of cash or other property to
its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, and (v) the Company
has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans. The
Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of
the Securities contemplated by this Agreement or as set forth on Schedule 3.1(i), no event, liability, fact, circumstance, occurrence
or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their
respective businesses, properties, operations, assets or financial condition that would be required to be disclosed by the Company under
applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least one (1)
Trading Day prior to the date that this representation is made.

 

(j)                
Litigation. There is no Proceeding which (i) adversely affects or challenges the legality, validity or enforceability of
any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected
to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the
subject of any Proceeding involving a claim of violation of or liability under federal or state securities laws or a claim of breach of
fiduciary duty. To the knowledge of the Company, there is not pending or contemplated any investigation by the Commission involving the
Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.

 

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

 

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

 

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

 

(n)              
Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights
and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which
the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None
of, and neither the Company nor any Subsidiary has received a written notice that any of, the Intellectual Property Rights has expired,
terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement.
Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC
Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the
rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect.

 

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(o)              
Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable
requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations
promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries
maintain a system of internal accounting controls 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 GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s
general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such
disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits
under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules
and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company
and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date,
the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the
conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as
of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such
term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially
affect, the internal control over financial reporting of the Company and its Subsidiaries.

 

(p)              
Certain Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary
to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions
contemplated by the Transaction Documents. The Purchaser shall have no obligation with respect to any fees or with respect to any claims
made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions
contemplated by the Transaction Documents.

 

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

 

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(r)               
Registration Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the
Securities Act of any securities of the Company or any Subsidiary.

 

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

 

(t)                
Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided the Purchaser or his agents or
counsel with any information that it believes constitutes or might constitute material, non-public information which is not otherwise
disclosed in the SEC Reports. The Company understands and confirms that the Purchaser will rely on the foregoing representation in effecting
transactions in securities of the Company. All of the disclosure furnished by or on behalf of the Company to the Purchaser regarding the
Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including the Disclosure Schedules
to this Agreement, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The
press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain
any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made and when made, not misleading. The Company acknowledges and
agrees that the Purchaser does not make nor has made any representations or warranties with respect to the transactions contemplated hereby
other than those specifically set forth in Section 3.2 hereof.

 

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

 

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

 

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

 

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

 

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

 

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

 

(aa)           
No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the
Securities by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Purchaser.

 

(bb)          
No Disqualifying Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506 under the
Securities Act, none of the Company, any of its predecessors, any affiliated issuer, or any Company Covered Person is subject to any of
the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification
Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care
to determine whether any Company Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable,
with its disclosure obligations under Rule 506(e), and has furnished to the Purchaser a copy of any disclosures provided thereunder.

 

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3.2 
           Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants as of the date hereof
and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as of
such date):

 

(a)        
Organization; Authority. The Purchaser is an individual with full right and authority to enter into and to consummate the
transactions contemplated by the Transaction Documents and otherwise to carry out his obligations hereunder and thereunder. Each Transaction
Document to which he is a party has been duly executed by the Purchaser, and when delivered by
the Purchaser in accordance with the terms hereof, will constitute the valid and legally binding
obligation of the Purchaser, enforceable against him in accordance with its terms, except: (i)
as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies, and (iii) insofar as indemnification and contribution provisions may be limited
by applicable law.

 

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

 

(c)        Purchaser
Status. At the time the Purchaser was offered the Securities, he was, and as of the date hereof
he is an “accredited investor” as defined in Rule 501(a)(4) under the Securities Act.

 

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

 

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(e)        Access
to Information. The Purchaser acknowledges that he has had the opportunity to review the Transaction Documents (including all exhibits
and schedules thereto) and the SEC Reports and has been afforded, (i) the opportunity to ask such questions as he has deemed necessary
of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities
and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results
of operations, business, properties, management and prospects sufficient to enable him to evaluate his investment; and (iii) the opportunity
to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary
to make an informed investment decision with respect to the investment. 

 

(f) 
    Certain Transactions and Confidentiality. Other than (i) consummating the transactions contemplated hereunder and (ii)
as otherwise disclosed on Forms 4 filed with the Commission, the Purchaser has not, nor has any
Person acting on behalf of or pursuant to any understanding with the Purchaser, directly or indirectly
executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time
that the Purchaser and the Company or any other Person representing the Company first contemplated
a term sheet setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution
hereof. Other than to the Purchaser’s representatives, including, without limitation, his
legal and other advisors, employees, agents and Affiliates, the Purchaser has maintained the confidentiality
of all disclosures made to him in connection with this transaction (including the existence and terms of this transaction). Notwithstanding
the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty against, or a prohibition
of, any actions with respect to the borrowing of, arrangement to borrow, identification of the availability of, and/or securing of, securities
of the Company in order for the Purchaser (or his broker or other financial representative) to
effect Short Sales or similar transactions in the future.

 

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

 

(h)        No
Disqualifying Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506 under the Securities
Act, the Purchaser, at the time of sale, is not subject to any of the “Bad Actor” disqualifications
described in Rule 506(d)(1)(i) to (viii) under the Securities Act, except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3).

 

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ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1 
           Legends.

 

(a)              
The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of
the Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of the Purchaser,
the Company may require an opinion of counsel reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities
Act.

 

(b)              
The Purchaser agrees to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities
in the following form:

 

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

 

(c)              
Certificates or any book-entry notation evidencing the Shares shall not contain any legend (including the legend set forth in Section
4.1(b) hereof): (i) while a registration statement covering the resale of such security is effective under the Securities Act, or
(ii) following any sale of such Shares pursuant to Rule 144, (iii) if such Shares are eligible for sale under Rule 144, without any limitation
thereunder (including with respect to volume or manner of sale) or need for current public information, or (iv) if such legend is not
required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff
of the Commission). The Company shall cause its counsel to issue a legal opinion to the Transfer Agent or the Purchaser promptly if required
by the Transfer Agent to effect the removal of the legend hereunder, or if requested by the Purchaser, respectively. The Company agrees
that following such time as such legend is no longer required under this Section 4.1(c), the Company will, no later than the earlier
of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined below) following
the delivery by the Purchaser and acceptance by the Transfer Agent of an instruction letter requesting the removal of a restrictive legend
(such date, the “Legend Removal Date”), deliver or cause to be delivered to the Purchaser a certificate, or, if Shares
are held in book-entry form, a Transfer Agent statement, representing such shares that is free from all restrictive and other legends.
The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer
set forth in this Section 4. Shares subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchaser
by crediting the account of the Purchaser’s prime broker with the Depository Trust Company System as may be directed by the Purchaser.
As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading
Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of a certificate
representing Shares issued with a restrictive legend.

 

    17 

     

    

 

(d)              
The Purchaser agrees with the Company that the Purchaser will sell any Securities pursuant to either the registration requirements
of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities are
sold pursuant to a resale Registration Statement, they will be sold in compliance with the plan of distribution set forth therein and
any other applicable regulations, and acknowledges that the removal of the restrictive legend from certificates representing the Securities
as set forth in this Section 4.1 is predicated upon the Company’s reliance upon this understanding.

 

4.2 
           Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of
any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities for purposes
of the rules and regulations of any Trading Market such that it would require stockholder approval prior to the closing of such other
transaction unless stockholder approval is obtained before the closing of such subsequent transaction.

 

4.3 
          Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other
Person, that the Purchaser is an “Acquiring Person” under any control share
acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or
arrangement in effect or hereafter adopted by the Company, or that the Purchaser could be deemed
to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under
any other agreement between the Company and the Purchaser.

 

4.4            
Use of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder for working capital
purposes and shall not use such proceeds: (a) for the redemption of any Common Stock or Common Stock Equivalents, (b) for the settlement
of any outstanding litigation, or (c) in violation of FCPA or OFAC regulations.

 

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4.5 
           Indemnification of Purchaser. Subject to the provisions of this Section 4.5, the Company will indemnify and hold
the Purchaser harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including
all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that the Purchaser
may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made
by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser in any capacity,
or any of his Affiliates, by any stockholder of the Company who is not an Affiliate of the Purchaser, with respect to any of the transactions
contemplated by the Transaction Documents (unless such action is solely based upon a material breach of the Purchaser’s representations,
warranties or covenants under the Transaction Documents or any agreements or understandings the Purchaser may have with any such stockholder
or any violations by the Purchaser of state or federal securities laws or any conduct by the Purchaser which is finally judicially determined
to constitute fraud, gross negligence, bad faith or willful misconduct), or (c) in connection with the Registration Statement, the Company
will indemnify the Purchaser, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses, as incurred, arising out of or relating
to (i) any untrue or alleged untrue statement of a material fact contained in such registration statement, any prospectus or any form
of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus
or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent, but only to the
extent, that such untrue statements or omissions are based solely upon information regarding the Purchaser furnished in writing to the
Company by the Purchaser expressly for use therein, or (ii) any violation or alleged violation by the Company of the Securities Act, the
Exchange Act or any state securities law, or any rule or regulation thereunder in connection therewith. If any action shall be brought
against the Purchaser in respect of which indemnity may be sought pursuant to this Agreement, the Purchaser shall promptly notify the
Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable
to the Purchaser. The Purchaser shall have the right to employ separate counsel in any such action and participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of the Purchaser except to the extent that (x) the employment thereof
has been specifically authorized by the Company in writing, (y) the Company has failed after a reasonable period of time to assume such
defense and to employ counsel, or (z) in such action there is, in the reasonable opinion of counsel of the Company, a material conflict
on any material issue between the position of the Company and the position of the Purchaser, in which case the Company shall be responsible
for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to the Purchaser under
this Agreement (1) for any settlement by the Purchaser effected without the Company’s prior written consent, which shall not be
unreasonably withheld or delayed; or (2) to the extent, but only to the extent that a loss, claim, damage or liability is attributable
to the Purchaser’s breach of any of the representations, warranties, covenants or agreements made by the Purchaser in this Agreement
or in the other Transaction Documents. The indemnification required by this Section 4.5 shall be made by periodic payments of the
amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements
contained herein shall be in addition to any cause of action or similar right of the Purchaser against the Company or others and any liabilities
the Company may be subject to pursuant to law.

 

4.6 
          Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve
and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling
the Company to issue the Shares pursuant to this Agreement.

 

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4.7 
          Listing of Common Stock. The Company hereby agrees to use commercially reasonable efforts to maintain the listing or
quotation of the Common Stock on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall
apply to list or quote all of the Shares on such Trading Market and promptly secure the listing of all of the Shares on such Trading Market.
The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will then include in
such application all of the Shares, and will take such other action as is necessary to cause all of the Shares to be listed or quoted
on such other Trading Market as promptly as possible. The Company will then take all action reasonably necessary to continue the listing
and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing and other
obligations under the bylaws or rules of the Trading Market. For so long as the Company maintains a listing or quotation of the Common
Stock on a Trading Market, the Company agrees to maintain the eligibility of the Common Stock for electronic transfer through the Depository
Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to the Depository
Trust Company or such other established clearing corporation in connection with such electronic transfer.

 

4.8 
          Certain Transactions and Confidentiality. The Purchaser covenants that neither he nor any Affiliate acting on his behalf
or pursuant to any understanding with him will execute any purchases or sales, including Short Sales of any of the Company’s securities
other than those executed through a 10b5-1 plan previously filed with the Commission and accordingly disclosed on Forms 4 filed with the
Commission, during the period commencing with such time that the closing of the transactions contemplated by this Agreement were first
publicly announced and ending with the execution of this Agreement.

 

4.9 
           Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to
the Securities as required under Regulation D and to provide a copy thereof, promptly upon request of the Purchaser. The Company shall
take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities
for, sale to the Purchaser at the Closing under applicable securities or “Blue Sky” laws of the states of the United States,
and shall provide evidence of such actions promptly upon request of the Purchaser. In furtherance of the foregoing, the Purchaser shall,
simultaneously with the execution of this Agreement, furnish to the Company his state or jurisdiction of residence.

 

4.10       
   Registration Statement. Subject to the Purchaser’s reasonable cooperation, and provision of any required information,
the Company shall use commercially reasonable efforts to file a Registration Statement on Form S-3 (or other appropriate form). Any
resale Registration Statement shall be issued as soon as practicable following the issuance and
filing with the Commission of the Company’s audited financial statements for the fiscal year ending December 31, 2021 in connection
with the filing of its Annual Report on Form 10-K (and in any event prior to the expiration of the Lock-Up Period (as defined in
the Lock-Up Agreement)). The Company shall use commercially reasonable efforts to cause any resale Registration Statement to become effective
(i) as soon as practicable, in the event of no review by the Commission; (ii) otherwise, within 60 calendar days (or, in the event of
a full review, 90 calendar days) following the filing with the Commission of the resale Registration Statement, and to keep such the resale
Registration Statement effective at all times until the Purchaser no longer owns any Shares.

 

    20 

     

    

 

ARTICLE V.

MISCELLANEOUS

 

5.1 
          Termination.  This Agreement may be terminated by the Purchaser by written
notice to the Company, if the Closing has not been consummated on or before the fifth (5th) Trading Day following the date
hereof.

 

5.2            
Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay
the fees and expenses of its or his advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer
Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company
and any exercise notice delivered by the Purchaser), stamp taxes and other taxes and duties levied
in connection with the delivery of any Securities to the Purchaser.

 

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

 

5.4 
          Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall
be in writing and shall be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication
is delivered via email attachment at the email address as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New
York City time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such notice or communication is delivered
via email attachment at the email address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later
than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if
sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required
to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto. To the extent
that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the
Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a report on Form 8-K.

 

5.5 
          Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written
instrument signed by the Company and the Purchaser. Notwithstanding anything to the contrary contained herein, no amendment may be made
to this Agreement prior to the Closing Date without the consent of the Purchaser. No waiver of
any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay
or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

 

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

 

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

 

5.8 
          No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective
successors, heirs and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person,
except as otherwise set forth in Section 4.5.

 

5.9           
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction
Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without giving
effect to any laws, rules or provisions thereof that would cause the application of the laws, rules or provisions of any jurisdiction
other than those of the State of New York. Each party agrees that all legal proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto
or its or his respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively
in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any
of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any action or proceeding, any claim that it
is not personally subject to the jurisdiction of any such court, that such action or proceeding is improper or is an inconvenient venue
for such Proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such
action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such
party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any
other manner permitted by law. If any party shall commence an action or proceeding to enforce any provisions of the Transaction Documents,
then, in addition to the obligations of the Company under Section 4.5, the prevailing party in such action or proceeding shall
be reimbursed by the non-prevailing party for its or his reasonable attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.

 

5.10         
Survival. The representations and warranties contained herein shall survive until the first anniversary of the Closing.

 

    22 

     

    

 

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

 

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

 

5.13         
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar
provisions of) any of the other Transaction Documents, whenever the Purchaser exercises a right,
election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods
therein provided, then the Purchaser may rescind or withdraw, in his sole discretion from time
to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to his future
actions and rights.

 

5.14         
Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation),
or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to
the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also
pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.

 

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

 

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

 

    23 

     

    

 

5.17         
Counsel Clause. Each of the parties hereto acknowledges that Company Counsel has not represented any Person other than the
Company in connection with the preparation and negotiation of this Agreement. Purchaser acknowledges and agrees that he has consulted
with his own counsel, not the Company counsel, and is not relying on the Company’s counsel for legal advice in connection with this
Agreement. The Company acknowledges that Company Counsel has acted as counsel for Purchaser in other matters unrelated to this Agreement
and waives any conflict arising from such representations. Each of the parties consents to Company Counsel’s continued representation
of the Purchaser in matters unrelated to this Agreement and Company Counsel’s representation of the Company in matters related to
this Agreement following the date hereof.

 

5.18         
Saturdays, Sundays, Holidays, etc.If the last or appointed day for the taking of any action or the expiration of any
right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next
succeeding Business Day.

 

5.19         
Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to
revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition,
each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the
date of this Agreement.

 

5.20         
WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER
PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY. 

 

(Signature Pages Follow)

 

    24 

     

    

 

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

 

	STAR EQUITY HOLDINGS, INC.	 	Address for Notice:
	 	 	 	53 Forest Ave, Suite 101
	 	 	 	Old Greenwich, CT 06870
	 	 	 	 
	By:	/s/ David Noble	 	E-mail: legal@starequity.com
	 	Name: David Noble	 	 
	 	Title: CFO	 	 
	 	 	 	 
	 	 	 	 
	PURCHASER:	 	 
	 	 	 	 
	By:	/s/ Jeffrey E. Eberwein	 	 
	 	Name: Jeffrey E. Eberwein	 	 

 

Address for Notice to Purchaser:

 

E-mail: jeff.eberwein@starequity.com

 

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

 

    25 

     

    

 

Exhibit A - Form of Lock-Up Agreement

 

[See next page]Lock-Up Agreement

 

December 10, 2021

 

Star Equity Holdings, Inc.

53 Forest Ave, Suite 101

Old Greenwich, CT 06870

 

		Re:	Securities Purchase Agreement, dated as of December 10, 2021 (the “Purchase Agreement”),
between Star Equity Holdings, Inc. (the “Company”) and the purchaser signatory thereto (the “Purchaser”)

 

Ladies and Gentlemen:

 

Defined terms not otherwise defined in this letter
agreement (the “Letter Agreement”) shall have the meanings set forth in the Purchase Agreement. Pursuant to Section
2.2(a) of the Purchase Agreement and in satisfaction of a condition of the Company’s obligations under the Purchase Agreement, the
undersigned irrevocably agrees with the Company that, from the date hereof until six (6) months following the date hereof (such period,
the “Restriction Period”), the undersigned will not offer, sell, contract to sell, hypothecate, specifically pledge
or otherwise dispose of (or enter into any transaction which is designed to result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise) by the undersigned or any Affiliate of the undersigned or any person
in privity with the undersigned or any Affiliate of the undersigned), directly or indirectly, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), with respect to, any shares of common stock of the Company, $0.0001 par value per
share (the “Common Stock”), or securities convertible, exchangeable or exercisable into, Common Stock of the Company
beneficially owned, held or hereafter acquired by the undersigned (the “Securities”). Beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act. [In order to enforce this covenant, the Company shall impose irrevocable
stop-transfer instructions preventing the transfer agent of the Company from effecting any actions in violation of this Letter Agreement.]
1

 

Notwithstanding the foregoing, and subject to
the conditions below, the undersigned may transfer the Securities provided that (1) the Company receives a signed lock-up letter
agreement (in the form of this Letter Agreement) for the balance of the Restriction Period from each donee, trustee, distributee, or transferee,
as the case may be, prior to such transfer, (2) any such transfer shall not involve a disposition for value, (3) such transfer
is not required to be reported with the Securities and Exchange Commission in accordance with the Exchange Act and no report of such transfer
shall be made voluntarily, and (4) neither the undersigned nor any donee, trustee, distributee or transferee, as the case may be,
otherwise voluntarily effects any public filing or report regarding such transfers, with respect to transfer:

 

__________________________

1
Acceptable if shares remain unregistered. If shares registered, TA ability to execute to be confirmed.

     

     

    

 

	 	i)	as a bona fide gift or gifts;

 

	 	ii)	to any immediate family member or to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned (for purposes of this Letter Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin);

 

	 	iii)	to any corporation, partnership, limited liability company, or other business entity all of the equity holders of which consist of the undersigned and/or the immediate family of the undersigned;

 

	 	iv)	if the undersigned is a corporation, partnership, limited liability company, trust or other business entity (a) to another corporation, partnership, limited liability company, trust or other business entity that is an Affiliate of the undersigned or (b) in the form of a distribution to limited partners, limited liability company members or stockholders of the undersigned;

 

	 	v)	if the undersigned is a trust, to the beneficiary of such trust; or

 

	 	vi)	by will, other testamentary document or intestate succession to the legal representative, heir, beneficiary or a member of the immediate family of the undersigned.

 

In addition, notwithstanding the foregoing, this
Letter Agreement shall not restrict the delivery of Common Stock to the undersigned upon (i) exercise of any options granted under any
equity incentive plan of the Company; provided that any Common Stock or Securities acquired in connection with any such exercise will
be subject to the restrictions set forth in this Letter Agreement, or (ii) the exercise of warrants; provided that such Common Stock delivered
to the undersigned in connection with such exercise are subject to the restrictions set forth in this Letter Agreement. Furthermore, this
Letter Agreement shall not restrict the ability of the undersigned to effect sales of Common Stock or Securities pursuant to that certain
Rule 10b5-1 Sale Trading Plan dated June 10, 2021 between the undersigned and Clear Street LLC.

 

Furthermore, the undersigned may enter into any
new plan established in compliance with Rule 10b5-1 of the Exchange Act; provided that no sales of Common Stock are made pursuant to such
plan during the Restriction Period.

 

The undersigned acknowledges that the execution,
delivery and performance of this Letter Agreement is a material inducement to the Purchaser to complete the transactions contemplated
by the Purchase Agreement and the Company shall be entitled to specific performance of the undersigned’s obligations hereunder.
The undersigned hereby represents that the undersigned has the power and authority to execute, deliver and perform this Letter Agreement,
that the undersigned has received adequate consideration therefor and that the undersigned will indirectly benefit from the closing of
the transactions contemplated by the Purchase Agreement.

 

    2 

     

    

 

This Letter Agreement may not be amended or otherwise
modified in any respect without the written consent of each of the Company and the undersigned. This Letter Agreement shall be construed
and enforced in accordance with the internal laws of the State of New York, without giving effect to any laws, rules or provisions thereof
that would cause the application of the laws, rules or provisions of any jurisdiction other than those of the State of New York. The undersigned
hereby irrevocably submits to the exclusive jurisdiction of the United States District Court sitting in the Southern District of New York
and the courts of the State of New York located in Manhattan, for the purposes of any suit, action or proceeding arising out of or relating
to this Letter Agreement, and hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that (i) it is
not personally subject to the jurisdiction of such court, (ii) the suit, action or proceeding is brought in an inconvenient forum, or
(iii) the venue of the suit, action or proceeding is improper. The undersigned hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by receiving a copy thereof sent to the Company at the address
in effect for notices to it under the Purchase Agreement and agrees that such service shall constitute good and sufficient service of
process and notice thereof. The undersigned hereby waives any right to a trial by jury. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law. The undersigned agrees and understands that this Letter Agreement
does not intend to create any relationship between the undersigned and the Purchaser and that the Purchaser is not entitled to cast any
votes on the matters herein contemplated and that no issuance or sale of the Securities is created or intended by virtue of this Letter
Agreement.

 

This Letter Agreement shall be binding on successors
and assigns of the undersigned with respect to the Securities and any such successor or assign shall enter into a similar agreement for
the benefit of the Purchaser.

 

*** SIGNATURE PAGE FOLLOWS***

 

    3 

     

    

 

This Letter Agreement may be executed in two or
more counterparts, all of which when taken together may be considered one and the same agreement.

 

 

	/s/ Jeffrey E. Eberwein	 
	Jeffrey E. Eberwein	 

 

Address for Notice:

 

E-mail: jeff.eberwein@starequity.com

 

 

 

By signing below, the Company
agrees to enforce the restrictions on transfer set forth in this Letter Agreement.

 

STAR EQUITY HOLDINGS, INC. 

 

 

	By:	/s/ David Noble	 
	Name:	David Noble	 
	Title:	Chief Financial Officer	 

 

 

Address for Notice:

53 Forest Ave, Suite 101

Old Greenwich, CT 06870

 

E-mail: legal@starequity.com

 

[SIGNATURE PAGE TO STAR EQUITY HOLDINGS, INC.
LOCK-UP LETTER AGREEMENT]

 

4

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