Document:

Exhibit

Exhibit 10.1
tZERO GROUP, INC. 
2017 EQUITY INCENTIVE PLAN
Adopted December 24, 2017, as amended through May 13, 2019

Section 1.Purpose.  The purpose of this tZERO Group, Inc. 2017 Equity Incentive Plan is to encourage ownership of Common Stock or Tokens by eligible Employees, Directors and Consultants of the Company and to provide increased incentive for such Employees, Directors and Consultants to render services and to exert maximum effort for the business success of the Company.  In addition, the Company expects that this Plan will further strengthen the identification of Employees, Directors and Consultants with the shareholders and token holders.  Options to be granted under this Plan are not intended to qualify as incentive stock options pursuant to Section 422 of the Code.

Section 2.Definitions.
a.“Administrator” means the Committee or the Board, as administrator of the Plan.
b.“Affiliate” means, at the time of determination, any “parent” or “subsidiary” of the Company as such terms are defined in Rule 405.  The Board will have the authority to determine the time or times at which “parent” or “subsidiary” status is determined within the foregoing definition.
c.“Applicable Laws” means the requirements related to or implicated by the administration of the Plan under applicable state corporate law, United States federal and state securities laws, the Code and the applicable laws of any foreign country or jurisdiction where Awards are granted under the Plan.
d.“Award” means a Nonqualified Stock Option, Restricted Stock Award, Restricted Stock Unit Award or Token Award granted under the Plan.
e.“Award Agreement” means a written agreement, contract, certificate or other instrument or document evidencing the terms and conditions of an individual Award granted under the Plan which may, in the discretion of the Company, be transmitted electronically to any Participant.  Each Award Agreement shall be subject to the terms and conditions of the Plan.
f.“Board” means the Board of Directors of the Company, as constituted at any time.
g.“Cause” means, unless the applicable Award Agreement provides otherwise:
i.If the Employee is a party to an employment or service agreement with the Company and such agreement provides for a definition of Cause, the definition contained therein; or
ii.If no such agreement exists, or if such agreement does not define Cause: (A) failure to perform such duties as are reasonably requested by the Board; (B) material breach of any agreement with the Company, or a material violation of the Company’s code of conduct or other written policy; (C) commission of, or plea of guilty or no contest to, a felony or a crime involving moral turpitude or the commission of any other act involving willful malfeasance or material fiduciary breach with respect to the Company; (D) use of illegal drugs or abuse of alcohol that materially impairs the Participant’s ability to perform his or her duties to the Company; or (E) gross negligence or willful misconduct with respect to the Company.
h.“Change in Control” means:
i.Overstock.com, Inc., a Delaware corporation (“Overstock”), together with any entity or entities directly or indirectly controlled by Overstock, becomes the legal or beneficial owner of a number of shares of stock of the Company having less than a majority of the total voting power of the then outstanding stock of the Company; or
ii.a Qualified IPO.
Notwithstanding anything herein to the contrary, and only to the extent that an Award is subject to Section 409A of the Code and payment of the Award pursuant to the application of the definition of “Change in Control” above would cause such Award not to otherwise comply with Section 409A of the Code, payment of an Award may occur upon a “Change in Control” only to the extent that the event constitutes a “change in the ownership or effective control” of the Company or a “change in the ownership of a substantial portion of the assets” of the Company under Section 409A of the Code and the applicable Internal Revenue Service and Treasury Department regulations thereunder.
i.“Code” means the Internal Revenue Code of 1986, as it may be amended from time to time.  Any reference to a section of the Code shall be deemed to include a reference to any regulations promulgated thereunder.
j.“Committee” means a committee that may be appointed by the Board to administer the Plan in accordance with Section 3(d) and Section 3(e).
k.“Common Stock” means the common stock of the Company.
l.“Company” means tZERO Group Inc., a Delaware corporation, and any successor thereto.
m.“Consultant” means any individual who is engaged by the Company to render consulting or advisory services for the Company, whether or not compensated for such services.

n.“Continuous Service” means that the Participant’s service with the Company is not interrupted or terminated.  If any Award is subject to Section 409A of the Code, the determination of Continuous Service shall be made in a manner consistent with Section 409A of the Code.  The Administrator or its delegate, in its sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal or family leave of absence.
o.“Detrimental Activity” means any of the following: (i) unauthorized disclosure of any confidential or proprietary information of the Company; (ii) any activity that would be grounds to terminate the Participant’s employment or service with the Company for cause; (iii) the breach of any non-competition, non-solicitation, non-disparagement or other agreement containing restrictive covenants, with the Company; (iv) fraud or conduct contributing to any financial restatements or irregularities, as determined by the Administrator in its sole discretion; or (v) any other conduct or act determined to be materially injurious, detrimental or prejudicial to any interest of the Company, as determined by the Administrator in its sole discretion.
p.“Director” means a member of the Board.
q.“Effective Date” shall mean the date as of which this Plan is adopted by the Board.
r.“Employee” means any person, including an officer, employed by, and providing direct services to, the Company.
s.“Fair Market Value” means, on a given date, (i) if there is a public market for the shares of Common Stock or Tokens on such date, the closing price of the shares or tokens as reported on such date on the principal national securities exchange on which the shares or tokens are listed or, if no sales of shares or tokens have been reported on any national securities exchange, then the immediately preceding date on which sales of the shares or tokens have been so reported or quoted, and (ii) if there is no public market for the shares of Common Stock or Tokens on such date, then the fair market value shall be determined by the Administrator in good faith after taking into consideration all factors which it deems appropriate, including, without limitation, Section 409A of the Code, with the intention that Options granted under this Plan shall not constitute deferred compensation subject to Section 409A of the Code.
t.“Grant Date” means the date on which the Administrator adopts a resolution, or takes other appropriate action, expressly granting an Award to a Participant that specifies the key terms and conditions of the Award or, if a later date is set forth in such resolution, then such date as is set forth in such resolution.
u.“Option” means an option to purchase Common Stock granted pursuant to the Plan that by its terms does not qualify or is not intended to qualify as an incentive stock option under Section 422 of the Code.
v.“Option Exercise Price” means the price at which a share of Common Stock may be purchased upon the exercise of an Option.
w.“Participant” means an eligible person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Award.
x.“Plan” means this tZERO Group, Inc. 2017 Equity Incentive Plan, as amended and/or amended and restated from time to time.
y.“Qualified IPO” means a firm commitment underwritten public offering of the Company’s common stock pursuant to an effective registration statement filed under the Securities Act of 1933, as amended, with aggregate offering proceeds to the Company of not less than $20 million (net of underwriting discounts and commissions) and a listing of the Common Stock on a national securities exchange.
z.“Restricted Stock Award” means an award of shares of Common Stock which is granted pursuant to the terms and conditions of Section 7.
aa.“Restricted Stock Unit Award” means a right to receive shares of Common Stock which is granted pursuant to the terms and conditions of Section 8.
bb.    “Token Award” means an award of Tokens, or an award denominated in Tokens, which is granted pursuant to the terms and conditions of Section 9 and which may consist of a present grant of Tokens (with or without vesting restrictions) or the right to receive Tokens in the future (by grant of units convertible into Tokens).
cc.    “Tokens” means the Preferred Equity Tokens, Series A of the Company, each represented by a digital token.

Section 3.Administration.
a.Authority of Administrator.  The Plan shall be administered by the Administrator, which shall be the Committee or, in the Board’s sole discretion, the Board.  Subject to the terms of the Plan, the Committee’s charter and Applicable Laws, and in addition to other express powers and authorization conferred by the Plan, the Administrator shall have the authority:
i.to construe and interpret the Plan and apply its provisions;
ii.to promulgate, amend, and rescind rules and regulations relating to the administration of the Plan;
iii.to authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan;

iv.to delegate its authority to one or more officers of the Company;
v.to determine when Awards are to be granted under the Plan and the applicable Grant Date;
vi.from time to time to select, subject to the limitations set forth in this Plan, those Participants to whom Awards shall be granted;
vii.to determine the number of shares of Common Stock or Tokens to be made subject to each Award;
viii.to prescribe the terms and conditions of each Award, including, without limitation, the medium of payment and vesting provisions, and to specify the provisions of the Award Agreement relating to such grant;
ix.to amend any outstanding Awards, including for the purpose of modifying the time or manner of vesting, or the term of any outstanding Award; provided, however, that if any such amendment impairs a Participant’s rights or increases a Participant’s obligations under his or her Award or creates or increases a Participant’s federal income tax liability with respect to an Award, such amendment shall also be subject to the Participant’s consent;
x.to determine the duration and purpose of leaves of absences which may be granted to a Participant without constituting termination of their employment for purposes of the Plan, which periods shall be no shorter than the periods generally applicable to Employees under the Company’s employment policies;
xi.to make decisions with respect to outstanding Awards that may become necessary upon a change in corporate control or an event that triggers anti-dilution adjustments;
xii.to interpret, administer, reconcile any inconsistency in, correct any defect in and/or supply any omission in the Plan and any instrument or agreement relating to, or Award granted under, the Plan; and
xiii.to exercise discretion to make any and all other determinations which it determines to be necessary or advisable for the administration of the Plan.
b.Acquisitions and Other Transactions.  The Administrator may, from time to time, assume outstanding awards granted by another entity, whether in connection with an acquisition of such other entity or otherwise, by either (i) granting an Award under the Plan in replacement of or in substitution for the award assumed by the Company, or (ii) treating the assumed award as if it had been granted under the Plan if the terms of such assumed award could be applied to an Award granted under the Plan.  Such assumed award shall be permissible if the holder of the assumed award would have been eligible to be granted an Award hereunder if the other entity had applied the rules of this Plan to such grant.  The Administrator may also grant Awards under the Plan in settlement of or in substitution for outstanding awards or obligations to grant future awards in connection with the Company or an affiliate acquiring another entity, an interest in another entity, or an additional interest in an affiliate whether by merger, stock purchase, asset purchase or other form of transaction.
c.Administrator Decisions Final.  All decisions made by the Administrator pursuant to the provisions of the Plan shall be final and binding on the Company and the Participants, unless such decisions are determined by a court having jurisdiction to be arbitrary and capricious.
d.Delegation.  The Administrator shall have the power to delegate to a subcommittee any of the administrative powers the Administrator is authorized to exercise (and references in this Plan to the Administrator shall thereafter be to the committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board.  If a Committee serves as the Administrator, the Board may abolish such Committee at any time and revest in the Board the administration of the Plan.  The members of any Committee designated as Administrator shall be appointed by and serve at the pleasure of the Board.  From time to time, the Board may increase or decrease the size of the Committee, add additional members to, remove members (with or without cause) from, appoint new members in substitution therefor, and fill vacancies, however caused, in the Committee.  The Board or Committee, as applicable, shall act pursuant to a vote of the majority of its members or, in the case of a Committee comprised of only two members, the unanimous consent of its members, whether present or not, or by the written consent of the majority of its members and minutes shall be kept of all of its meetings and copies thereof shall be provided to the Board.  Subject to the limitations prescribed by the Plan and the Board, the Administrator may establish and follow such rules and regulations for the conduct of its business as it may determine to be advisable.
e.Committee Composition.  Except as otherwise determined by the Board, any Committee designated as Administrator shall consist solely of two or more members of the Board appointed to the Committee from time to time by the Board.

f.Indemnification.  In addition to such other rights of indemnification as they may have as members of the Board or the Committee, and to the extent allowed by Applicable Laws, the Administrator shall be indemnified by the Company against the reasonable expenses, including attorney’s fees, actually incurred in connection with any action, suit or proceeding or in connection with any appeal therein, to which the Administrator may be party by reason of any action taken or failure to act under or in connection with the Plan or any Award granted under the Plan, and against all amounts paid by the Administrator in settlement thereof (provided, however, that the settlement has been approved by the Company, which approval shall not be unreasonably withheld) or paid by the Administrator in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that the Administrator did not act in good faith and in a manner which such person reasonably believed to be in the best interests of the Company, or in the case of a criminal proceeding, had no reason to believe that the conduct complained of was unlawful; provided, however, that within 60 days after institution of any such action, suit or proceeding, the Administrator shall, in writing, offer the Company the opportunity at its own expense to handle and defend such action, suit or proceeding.

Section 4.Shares and Tokens Subject to the Plan.
a.Subject to adjustment in accordance with Section 13, (i) a total of 12,000,000 of the authorized shares of Common Stock shall be available for the grant of Awards under the Plan, and (ii) a total of 1,000,000 Tokens shall be available for the grant of Awards under the Plan. 
b.Shares of Common Stock available for distribution under the Plan may consist, in whole or in part, of authorized and unissued shares or treasury shares.  Tokens available for distribution under the Plan may consist, in whole or in part, of authorized and unissued digital tokens.
c.Shares of Common Stock or Tokens shall be deemed to have been issued under the Plan only to the extent actually issued and delivered pursuant to the exercise or settlement of an Award.  Any shares of Common Stock or Tokens subject to an Award that is cashed-out, canceled, forfeited or expires prior to exercise or realization, either in full or in part, shall again become available for issuance under the Plan.  Shares or Tokens subject to an Award under the Plan shall again be made available for issuance or delivery under the Plan if such shares or tokens are shares or tokens tendered in payment of an Award or if such shares or tokens are delivered or withheld by the Company to satisfy any tax withholding obligation.
d.If the Administrator authorizes the assumption of awards pursuant to Section 3(b) or Section 14 hereof, the assumption will reduce the number of shares or tokens available for issuance under the Plan in the same manner as if the assumed awards had been granted under the Plan.

Section 5.Eligibility.  Awards may be granted to Employees, Directors and Consultants.  A Participant must be an Employee, Director or Consultant at the time the Award is granted.  An Employee, Director or Consultant who has been granted an Award hereunder may be granted an additional Award or Awards, if the Administrator shall so determine.

Section 6.Option Provisions.  Each Option granted under the Plan shall represent an option to purchase Common Stock and shall be evidenced by an Award Agreement.  Each Option so granted shall be subject to the conditions set forth in this Section 6, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement.  The Company shall have no liability to any Participant or any other person if an Option is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code and the terms of such Option do not satisfy the requirements of Section 409A of the Code.  The provisions of separate Options need not be identical, but each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions:
a.Term.  The term of an Option granted under the Plan shall be determined by the Administrator; provided, however, no Option shall be exercisable after the expiration of 15 years from the Grant Date.
b.Option Exercise Price.  Unless otherwise determined by the Administrator, the Option Exercise Price of each Option shall be not less than 100% of the Fair Market Value of the Common Stock subject to the Option on the Grant Date.  Notwithstanding the foregoing, an Option may be granted with an Option Exercise Price lower than that set forth in the preceding sentence if such Option is granted in a manner satisfying the provisions of Section 409A of the Code or pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 409A of the Code.

c.Method of Exercise.  Options shall be exercised by the delivery by the Participant of written notice to the Secretary of the Company setting forth the number of shares of Common Stock with respect to which the Option is being exercised.  The Option Exercise Price shall be paid, to the extent permitted by Applicable Laws, either (i) in cash or by certified or bank check at the time the Option is exercised or (ii) by any of the following means:  (A) by delivery to the Company of other shares of Common Stock, duly endorsed for transfer to the Company, with a Fair Market Value on the date of delivery equal to the Option Exercise Price (or portion thereof) due for the number of shares being acquired; (B) by a “net exercise” procedure effected by withholding the minimum number of shares of Common Stock otherwise issuable in respect of an Option that are needed to pay the Option Exercise Price; (C) by any combination of the foregoing methods; or (D) in any other form of legal consideration that may be reasonably acceptable to the Administrator.  Unless otherwise specifically provided in the Option, the Option Exercise Price that is paid by delivery to the Company of other Common Stock acquired, directly or indirectly from the Company, shall be paid only by shares of Common Stock that have been held for more than six months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes).
Notice may also be delivered by fax provided that the Option Exercise Price of such shares is received by the Company via wire transfer on the same day the fax transmission is received by the Company.  The notice shall specify the address to which the certificates for such shares are to be mailed.  An Option shall be deemed to have been exercised immediately prior to the close of business on the date (i) written notice of such exercise and (ii) payment in full of the Option Exercise Price for the number of shares for which Options are being exercised, are both received by the Company and the Participant shall be treated for all purposes as the record holder of such shares of Common Stock as of such date.  As promptly as practicable after receipt of such written notice and payment, the Company shall deliver to the Participant certificates for the number of shares with respect to which such Option has been so exercised, issued in the Participant’s name or such other name as the Participant directs; provided, however, that such delivery shall be deemed effected for all purposes when a stock transfer agent of the Company shall have deposited such certificates in the United States mail, addressed to the Participant at the address specified pursuant to this Section 6(c).
d.Transferability of an Option.  An Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Participant only by the Participant.  Notwithstanding the foregoing, the Participant may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Participant, shall thereafter be entitled to exercise the Option.
e.Vesting of Options.  Each Option may, but need not, vest and therefore become exercisable in periodic installments that may, but need not, be equal.  The Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance or other criteria) as the Administrator may deem appropriate.  The vesting provisions of individual Options may vary.  No Option may be exercised for a fraction of a share of Common Stock.  The Administrator may, but shall not be required to, provide for an acceleration of vesting and exercisability in the terms of any Award Agreement upon the occurrence of a specified event.
f.Termination of Continuous Service.  Unless otherwise provided in an Award Agreement or in an employment agreement between a Participant and the Company, in the event a Participant’s Continuous Service terminates (other than upon the Participant’s death or disability), the Participant may exercise his or her Option (to the extent that such Option has vested and the Participant was entitled to exercise such Option as of the date of termination) but only within such period of time ending on the earlier of (i) the date that is three (3) years following the termination of the Participant’s Continuous Service or (ii) the expiration of the term of the Option as set forth in the Award Agreement; provided that, if the termination of Continuous Service is by the Company for Cause, all outstanding Options (whether or not vested) shall immediately terminate and cease to be exercisable.  If, after termination, the Participant does not exercise his or her Option within the time specified in the Award Agreement, the Option shall terminate.
g.Disability of Participant.  Unless otherwise provided in an Award Agreement, in the event that a Participant’s Continuous Service terminates as a result of the Participant’s Disability, the Participant may exercise his or her Option (to the extent that such Option has vested and the Participant was entitled to exercise such Option as of the date of termination), but only within such period of time ending on the earlier of (i) the date twelve (12) months following such termination or (ii) the expiration of the term of the Option as set forth in the Award Agreement.  If, after termination, the Participant does not exercise his or her Option within the time specified herein or in the Award Agreement, the Option shall terminate.
h.Death of Participant.  Unless otherwise provided in an Award Agreement, in the event a Participant’s Continuous Service terminates as a result of the Participant’s death, then the Option may be exercised (to the extent the Participant was entitled to exercise such Option as of the date of death) by the Participant’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the Option upon the Participant’s death, but only within the period ending on the earlier of (i) the date twelve (12) months following the date of death or (ii) the expiration of the term of such Option as set forth in the Award Agreement.  If, after the Participant’s death, the Option is not exercised within the time specified herein or in the Award Agreement, the Option shall terminate.

i.Detrimental Activity.  Unless otherwise provided in an Award Agreement, all outstanding Options (whether or not vested) shall immediately terminate and cease to be exercisable on the date on which a Participant engages in Detrimental Activity.
j.No Rights as Shareholder.  No Participant shall have any rights as a shareholder with respect to shares covered by an Option until the Option is exercised by written notice and accompanied by payment as provided in Section 6(c).

Section 7.Restricted Stock Awards.  Each Award Agreement will be in such form and will contain such terms and conditions as the Board deems appropriate.  To the extent consistent with the Company’s bylaws, at the Board’s election, shares of Common Stock may be (x) held in book entry form subject to the Company’s instructions until any restrictions relating to the Restricted Stock Award lapse; or (y) evidenced by a certificate, which certificate will be held in such form and manner as determined by the Board.  The terms and conditions of Award Agreements may change from time to time, and the terms and conditions of separate Award Agreements need not be identical.  Each Award Agreement will conform to (through incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:
a.Consideration.  A Restricted Stock Award may be awarded in consideration for (i) cash, check, bank draft, electronic funds, wire transfer or money order payable to the Company, (ii) past services to the Company or an Affiliate or (iii) any other form of legal consideration that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.
b.Vesting.  Shares of Common Stock awarded under the Restricted Stock Award may be subject to forfeiture to the Company in accordance with a vesting schedule (which may be referred to as a schedule for lapsing of the Company’s unvested share repurchase rights) to be determined by the Board.
c.Termination of Participant’s Continuous Service.  Except as otherwise provided in the applicable Award Agreement, the shares of Common Stock that have not vested will be forfeited on the Participant’s termination of Continuous Service, provided that if a Participant’s Continuous Service terminates, the applicable Award Agreement may provide that the Company may receive either through a forfeiture condition or a repurchase right any or all of the shares of Common Stock held by the Participant that have not vested as of the date of termination of Continuous Service under the terms of the Award Agreement.  
d.Transferability.  The right to acquire shares of Common Stock under a Restricted Stock Award will not be transferable by the Participant.  Once the shares of Common Stock are issued, such shares of Common Stock will not be transferable by the Participant, although the Board may allow the holder to transfer vested shares, but only on the terms and conditions in the Award Agreement, and only so long as the Common Stock awarded under the Award Agreement remains subject to the terms of the Award Agreement in the hands of the recipient.
e.Dividends.  In the absence of an Award Agreement expressly providing otherwise, any dividends paid on Restricted Stock will be subject to the same vesting and forfeiture restrictions as apply to the shares subject to the Restricted Stock Award to which they relate.

Section 8.Restricted Stock Unit Awards.  Each Award Agreement will be in such form and will contain such terms and conditions as the Board deems appropriate.  The terms and conditions of Award Agreements may change from time to time, and the terms and conditions of separate Award Agreements need not be identical.  Each Award Agreement will conform to (through incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:
a.Consideration.  At the time of grant of a Restricted Stock Unit Award, the Board will determine the consideration, if any, to be paid by the Participant on delivery of each share of Common Stock subject to the Restricted Stock Unit Award.  The consideration to be paid (if any) by the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid in any form of legal consideration that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.
b.Vesting.  At the time of the grant of a Restricted Stock Unit Award, the Board may impose such restrictions on or conditions to the vesting of the Restricted Stock Unit Award as it, in its sole discretion, deems appropriate.
c.Payment.  A Restricted Stock Unit Award may be settled by the delivery of shares of Common Stock, their cash equivalent, any combination thereof or in any other form of consideration, as determined by the Board and contained in the Award Agreement.
d.Additional Restrictions.  At the time of the grant of a Restricted Stock Unit Award, the Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the shares of Common Stock (or their cash equivalent) subject to a Restricted Stock Unit Award to a time after the vesting of such Restricted Stock Unit Award.

e.Dividend Equivalents.  Dividend equivalents may be credited on shares of Common Stock covered by a Restricted Stock Unit Award, as determined by the Board and contained in Award Agreement.  At the sole discretion of the Board, such dividend equivalents may be converted into additional shares of Common Stock covered by the Restricted Stock Unit Award in such manner as determined by the Board.  Any additional shares covered by the Restricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all of the same terms and conditions of the underlying Award Agreement to which they relate.
f.Termination of Participant’s Continuous Service.  Except as otherwise provided in the applicable Award Agreement, the unvested portion of the Restricted Stock Unit Award that has not vested will be forfeited on the Participant’s termination of Continuous Service.  

Section 9.Token Awards.  All terms and conditions contained in the Plan and Award Agreements related to Token Awards are subject to the Certificate of Designation of Preferred Equity Tokens, Series A of the Company (the “Certificate of Designation”).  Each Award Agreement related to Token Awards will be in such form and will contain such terms and conditions as the Board deems appropriate.  The terms and conditions of Award Agreements related to Token Awards may change from time to time, and the terms and conditions of separate Award Agreements related to Token Awards need not be identical.  Each Award Agreement related to Token Awards will conform to (through incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:
a.Consideration.  At the time of grant of a Token Award, the Board will determine the consideration, if any, to be paid by the Participant, including but not limited to (i) cash, check, bank draft, electronic funds, wire transfer or money order payable to the Company, (ii) past services to the Company or an Affiliate or (iii) any other form of legal consideration that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.
b.Vesting.  At the time of the grant of a Token Award, the Board may impose such restrictions on or conditions to the vesting of the Token Award, if any, as it, in its sole discretion, deems appropriate.
c.Payment.  In the case of a Token Award that is in the form of a grant of units convertible into Tokens, such Award may be settled by the delivery of Tokens, their cash equivalent, any combination thereof or in any other form of consideration, as determined by the Board and contained in the Award Agreement.  
d.Transferability and Additional Restrictions.  The right to acquire Tokens under a Token Award will not be transferable by the Participant.  Once the Tokens are issued, the Tokens will not be transferable by the Participant, although the Board may allow the holder to transfer unvested Tokens but only on the terms and conditions in the Award Agreement, and only so long as the Tokens awarded in the Award Agreement remain subject to the terms of the Award Agreement in the hands of the recipient.  In addition, at the time of grant of a Token Award that is in the form of a grant of units convertible into Tokens, the Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the Tokens (or their cash equivalent) subject to a Token Award to a time after the vesting of such Token Award.
e.Dividends or Dividend Equivalents.  All dividends or dividend equivalents in respect of Token Awards shall be governed by the terms of and paid in accordance with the Certificate of Designation.   In the absence of an Award Agreement expressly providing otherwise, any dividends paid on Token Awards will be subject to the same vesting and forfeiture restrictions as apply to the Tokens subject to the Token Award to which they relate.  Dividend equivalents may be credited on Tokens covered by a Token Award that are in the form of a grant of units convertible into Tokens, as determined by the Board and contained in Award Agreement.  At the sole discretion of the Board, such dividend equivalents may be converted into additional Tokens covered by the Token Award in such manner as determined by the Board.  Any additional Tokens covered by the Token Award credited by reason of such dividend equivalents will be subject to all of the same terms and conditions of the underlying Award Agreement to which they relate.
f.Termination of Participant’s Continuous Service.  Except as otherwise provided in the applicable Award Agreement, the portion of the Token Award that has not vested will be forfeited on the Participant’s termination of Continuous Service, provided that if a Participant’s Continuous Service terminates, the applicable Award Agreement may provide that the Company may receive either through forfeiture or a repurchase right the portion of the Token Award held by the Participant that have not vested as of the date of termination of Continuous Service under the terms of the Award Agreement.  

Section 10.Securities Law Compliance.
a.Securities Registration.  No Awards shall be granted and no shares of Common Stock or Tokens shall be issued and delivered under the Plan unless and until the Company and/or the Participant have complied with all applicable federal and state registration, listing and/or qualification requirements and all other requirements of law or of any regulatory agencies having jurisdiction.

b.Representations; Legends.  The Administrator may, as a condition to the grant of any Award and the issuance of any shares of Common Stock or Tokens, require a Participant to (i) represent in writing that the shares of Common Stock or Tokens received in connection with such Award are being acquired for investment and not with a view to distribution, and (ii) make such other representations and warranties as are deemed appropriate by counsel to the Company.  Each paper, electronic or digital certificate representing shares of Common Stock or Tokens acquired under the Plan shall bear a legend in such form as the Company reasonably deems appropriate.

Section 11.Use of Proceeds.  Proceeds from the sale of Common Stock or Tokens pursuant to Awards, or upon exercise thereof, shall constitute general funds of the Company.

Section 12.Miscellaneous.
a.Acceleration of Exercisability and Vesting.  The Administrator shall have the power to accelerate the time at which an Award may first be exercised or the time during which an Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Award stating the time at which it may first be exercised or the time during which it will vest.
b.Shareholder and Token Holder Rights.  Except as provided in the Plan or an Award Agreement, no Participant shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock or Tokens subject to an Award unless and until such Participant has satisfied all requirements for exercise or settlement of the Award pursuant to its terms and no adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions of other rights for which the record date is prior to the date such Common Stock certificate or digital token certificate is issued, except as provided in Section 13 hereof.
c.No Employment or Other Service Rights.  Nothing in the Plan or any instrument executed or Award granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company in the capacity in effect at the time the Award was granted or shall affect the right of the Company to terminate (i) the employment of an Employee with or without notice and with or without Cause or (ii) the service of a Director pursuant to the By-laws of the Company, and any applicable provisions of the corporate law of the state in which the Company is incorporated, as the case may be.  The cause of any termination of employment or service shall be determined by the Administrator, and its determination shall be final.
d.Approved Leave of Absence.  For purposes of the Plan, no termination of employment by an Employee shall be deemed to result from an approved leave of absence for military service or sickness, or for any other purpose approved by the Company, if the Employee’s right to reemployment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Administrator otherwise so provides in writing, in either case, except to the extent inconsistent with Section 409A of the Code if the applicable Award is subject thereto.
e.Withholding Obligations.  Subject to the discretion of the Administrator, a Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of Common Stock under an Award by any of the following means (in addition to the Company’s right to withhold from any amount paid to the Participant by the Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the Participant as a result of the exercise or acquisition of Common Stock under the Award, provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (iii) delivering to the Company previously owned and unencumbered shares of Common Stock of the Company.  Subject to the discretion of the Administrator, a Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of Tokens under an Award by any of the following means (in addition to the Company’s right to withhold from any amount paid to the Participant by the Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the Company to withhold Tokens from the Tokens otherwise issuable to the Participant as a result of the exercise or acquisition of Tokens under the Award, provided, however, that no Tokens are withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (iii) delivering to the Company previously owned and unencumbered Tokens.

Section 13.Adjustment Upon Changes in Stock or Tokens.
a.Adjustment Upon Changes in Stock.  In the event of changes in the outstanding Common Stock or in the capital structure of the Company by reason of any stock or extraordinary cash dividend, stock split, reverse stock split, an extraordinary corporate transaction such as any recapitalization, reorganization, merger, consolidation, combination, exchange, or other relevant change in capitalization occurring after the Grant Date of any Award, Awards granted under the Plan and any Award Agreements, the exercise price of Options and the maximum number of shares of Common Stock subject to Awards stated in Section 4 will be equitably adjusted or substituted, as to the number, price or kind of a share of Common Stock or other consideration subject to such Awards to the extent necessary to preserve the economic intent of such Award. In the case of adjustments made pursuant to this Section 13, unless the Administrator reasonably determines that such adjustment is in the best interests of the Company, the Administrator shall ensure that any adjustments under this Section 13 will not constitute a modification of Options within the meaning of Section 409A of the Code.  Except as hereinbefore expressly provided, (a) the issuance by the Company of shares of stock or any class of securities convertible into shares of stock of any class, for cash, property, labor or services, upon direct sale, upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, (b) the payment of a dividend in property other than Common Stock, or (c) the occurrence of any similar transaction, and in any case whether or not for fair value, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of shares of Common Stock subject to Awards theretofore granted or the purchase price per share, unless the Administrator shall reasonably determine, in its sole discretion, that an adjustment is necessary to provide equitable treatment to Participants.
b.Adjustment Upon Changes in Tokens.  In the event of changes in the outstanding Tokens or in the capital structure of the Company by reason of any token or extraordinary cash dividend, token split, reverse token split, an extraordinary corporate transaction such as any recapitalization, reorganization, merger, consolidation, combination, exchange, or other relevant change in capitalization occurring after the Grant Date of any Award, Awards granted under the Plan and any Award Agreements, the maximum number of Tokens subject to Awards stated in Section 4 may be equitably adjusted or substituted, as to the number, price or kind of a Token or other consideration subject to such Awards to the extent necessary to preserve the economic intent of such Award.  Except as hereinbefore expressly provided, (a) the issuance by the Company of tokens or any class of securities convertible into tokens of any class, for cash, property, labor or services, upon direct sale, upon the exercise of rights or warrants to subscribe therefor, or upon conversion of tokens or obligations of the Company convertible into such tokens or other securities, (b) the payment of a dividend in property other than Tokens, or (c) the occurrence of any similar transaction, and in any case whether or not for fair value, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of Tokens subject to Awards theretofore granted or the purchase price per token, unless the Administrator shall reasonably determine, in its sole discretion, that an adjustment is necessary to provide equitable treatment to Participants.

Section 14.Effect of Change in Control.
a.In the event of a Change in Control:   
i.the Administrator shall accelerate, vest or cause the restrictions to lapse with respect to all or any portion of any Award and the Award shall be deemed fully vested in accordance with the terms of the Plan as of immediately prior to the Change in Control; and 
ii.the Administrator may provide written notice to Participants that for a period as determined by the Administrator prior to the Change in Control, after accounting for the actions outlined in Section 14(a)(i), such Awards shall be exercisable, to the extent applicable, as to all shares of Common Stock subject thereto and upon the occurrence of the Change in Control, any Awards not so exercised shall terminate and be of no further force and effect.
b.The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to all or substantially all of the assets and business of the Company and its affiliates, taken as a whole.

Section 15.Amendment of the Plan and Awards.
a.Amendment of the Plan.  The Board at any time, and from time to time, may amend or terminate the Plan.  However, except as provided in Section 13 relating to adjustments upon changes in Common Stock or Tokens and Section 15(c), no amendment shall be effective unless approved by the shareholders of the Company to the extent shareholder approval is necessary to satisfy any Applicable Laws.  At the time of such amendment, the Board shall determine, upon advice from counsel, whether such amendment will be contingent on shareholder approval.
b.Shareholder Approval.  The Board may, in its sole discretion, submit any other amendment to the Plan for shareholder approval.

c.Contemplated Amendments.  It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible Employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to the nonqualified deferred compensation provisions of Section 409A of the Code and/or to bring the Plan and/or Awards granted under it into compliance therewith.
d.No Impairment of Rights. Rights under any Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless (i) the Company requests the consent of the Participant and (ii) the Participant consents in writing.
e.Amendment of Awards.  The Administrator at any time, and from time to time, may amend the terms of any one or more Awards; provided, however, that the Administrator may not affect any amendment which would otherwise constitute an impairment of the rights under any Award unless (i) the Company requests the consent of the Participant and (ii) the Participant consents in writing.

Section 16.General Provisions.
a.Clawback; Forfeiture.  Notwithstanding any other provisions in this Plan, the Administrator may, in its sole discretion, provide in an Award Agreement or otherwise that the Administrator may cancel such Award if the Participant has engaged in or engages in any Detrimental Activity.  The Administrator may, in its sole discretion, also provide in an Award Agreement or otherwise that (i) if the Participant has engaged in or engages in Detrimental Activity, the Participant will forfeit any gain realized on the vesting or settlement of any Award, and must repay the gain to the Company and (ii) if the Participant receives any amount in excess of what the Participant should have received under the terms of the Award for any reason (including, without limitation, by reason of a financial restatement, mistake in calculations or other administrative error), then the Participant shall be required to repay any such excess amount to the Company.  Without limiting the foregoing, all Awards shall be subject to reduction, cancellation, forfeiture or recoupment to the extent necessary to comply with Applicable Laws, government regulation or stock exchange listing requirement (or any policy adopted by the Company pursuant to any such law, government regulation or stock exchange listing requirement).
b.Sub-plans.  The Administrator may from time to time establish sub-plans under the Plan for purposes of satisfying blue sky, securities, tax or other laws of various jurisdictions in which the Company intends to grant Awards.  Any sub-plans shall contain such limitations and other terms and conditions as the Administrator determines are necessary or desirable.  All sub-plans shall be deemed a part of the Plan, but each sub-plan shall apply only to the Participants in the jurisdiction for which the sub-plan was designed.
c.Unfunded Plan.  The Plan shall be unfunded.  Neither the Company, the Board nor the Administrator shall be required to establish any special or separate fund or to segregate any assets to assure the performance of its obligations under the Plan.
d.Recapitalizations.  Each Award Agreement shall contain provisions required to reflect the provisions of Section 13.
e.Delivery.  Upon settlement of an Award granted under this Plan, the Company shall issue Common Stock or Tokens or pay any amounts due within a reasonable period of time thereafter.  Subject to any statutory or regulatory obligations the Company may otherwise have, for purposes of this Plan, 30 days shall be considered a reasonable period of time.
f.No Fractional Shares or Tokens.  No fractional shares of Common Stock or fractional Tokens shall be issued or delivered pursuant to the Plan.  The Administrator shall determine whether cash, additional Awards or other securities or property shall be issued or paid in lieu of fractional shares of Common Stock or fractional Tokens or whether any fractional shares or fractional Tokens should be rounded, forfeited or otherwise eliminated.
g.Other Provisions.  The Award Agreements authorized under the Plan may contain such other provisions not inconsistent with this Plan, including, without limitation, restrictions upon the exercise of the Awards, as the Administrator may deem advisable.

h.Section 409A.  Unless otherwise expressly provided for in an Award Agreement, the Plan and Award Agreements will be interpreted to the greatest extent possible in a manner that makes the Plan and the Awards granted hereunder exempt from Section 409A of the Code, and, to the extent not so exempt, in compliance with Section 409A of the Code.  Any payments described in the Plan that are due within the “short-term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless Applicable Laws require otherwise.  Notwithstanding anything to the contrary in the Plan, to the extent required to avoid accelerated taxation and tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to the Plan during the six (6) month period immediately following a Participant’s termination of Continuous Service shall instead be paid on the first payroll date after the six-month anniversary of the Participant’s separation from service (or the Participant’s death, if earlier).  Notwithstanding the foregoing, neither the Company nor the Administrator shall have any obligation to take any action to prevent the assessment of any additional tax or penalty on any Participant under Section 409A of the Code and neither the Company nor the Administrator will have any liability to any Participant for such tax or penalty.
i.Right of Repurchase.  An Award may include a provision whereby the Company may elect to repurchase all or any part of the shares of Common Stock or Tokens acquired by the Participant.  The terms of any repurchase option shall be specified in the Award Agreement.  Unless otherwise determined by the Board and subject to compliance with applicable laws, the repurchase price for vested shares of Common Stock or vested Tokens will be the Fair Market Value of the shares of Common Stock or Tokens on the date of repurchase and the repurchase price for unvested shares of Common Stock or unvested Tokens will be the lower of (i) the Fair Market Value of the shares of Common Stock or Tokens on the date of repurchase or (ii) their original purchase price. The Company will not exercise its repurchase option until at least six (6) months (or such longer or shorter period of time necessary to avoid classification of the Award as a liability for financial accounting purposes) have elapsed following delivery of shares of Common Stock or Tokens subject to the Award, unless otherwise specifically provided by the Board.  The Board reserves the right to assign the Company's right of repurchase. 
j.Right of First Refusal.  An Award may also include a provision whereby the Company may elect to exercise a right of first refusal following receipt of notice from the Participant of the intent to transfer all or any part of the shares of Common Stock or Tokens received under the Award.  Except as expressly provided in this paragraph or in the Award Agreement, such right of first refusal shall otherwise comply with any applicable provisions of the bylaws of the Company.  The Board reserves the right to assign the Company's right of first refusal. 
k.Beneficiary Designation.  Each Participant under the Plan may from time to time name any beneficiary or beneficiaries by whom any right under the Plan is to be exercised in case of such Participant’s death.  Each designation will revoke all prior designations by the same Participant, shall be in a form reasonably prescribed by the Administrator and shall be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime.
l.Expenses.  The costs of administering the Plan shall be paid by the Company.
m.Severability.  If any of the provisions of the Plan or any Award Agreement is held to be invalid, illegal or unenforceable, whether in whole or in part, such provision shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability and the remaining provisions shall not be affected thereby.
n.Plan Headings.  The headings in the Plan are for purposes of convenience only and are not intended to define or limit the construction of the provisions hereof.
o.Non-Uniform Treatment.  The Administrator’s determinations under the Plan need not be uniform and may be made by it selectively among persons who are eligible to receive, or actually receive, Awards.  Without limiting the generality of the foregoing, the Administrator shall be entitled to make non-uniform and selective determinations, amendments and adjustments, and to enter into non-uniform and selective Award Agreements.

Section 17.Termination or Suspension of the Plan.  The Plan shall terminate automatically on the date that is ten (10) years after the Effective Date.  No Award shall be granted pursuant to the Plan after such date, but Awards theretofore granted may extend beyond that date.  The Board may suspend or terminate the Plan at any earlier date pursuant to Section 15(a) hereof.  No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

Section 18.Liability of Company.  The Company and any affiliate which is in existence or hereafter comes into existence shall not be liable to a Participant or other persons as to:
a.The non‐issuance or sale of shares or Tokens as to which the Company has been unable to obtain from any regulatory body having jurisdiction the authority deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any shares or Tokens hereunder; and
b.Any tax consequence expected, but not realized, by any Participant or other person due to the exercise or settlement of any Award granted hereunder.

Section 19.Choice of Law.  The law of the State of New York shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to such state’s conflict of law rules.

As adopted by the Board of Directors of the Company on December 24, 2017, as amended on May 21, 2018, June 7, 2018, March 15, 2019 and May 13, 2019.Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES
PURCHASE AGREEMENT (the “Agreement”), dated as of May 13, 2019, by and among EDISON NATION, INC.,
a Nevada corporation, with headquarters located at 909 New Brunswick Ave., Phillipsburg, NJ 08865 (the “Company”),
and the buyers set forth on Schedule 1 attached hereto (collectively, the “Buyers” and each individually,
a “Buyer”).

 

WHEREAS:

 

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

 

B.           Buyers
desire to purchase from the Company, and the Company desires to issue and sell to the Buyers, upon the terms and conditions set
forth in this Agreement, Senior Convertible Promissory Notes of the Company, in the aggregate principal amount of $1,111,111.00
(as the principal amount thereof may be increased pursuant to the terms thereof, and together with any note(s) issued in replacement
thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, in the form attached hereto
as Exhibit A, the “Notes”), convertible into shares of common stock, $0.001 par value per share, of the
Company (the “Common Stock”), upon the terms and subject to the limitations and conditions set forth in such
Notes; and

 

C.           Each
Buyers wishes to purchase, upon the terms and conditions stated in this Agreement, such principal amount of the Notes as is set
forth on Schedule 1.

 

D.           The
Company wishes to issue 20,000 shares of the Company’s common stock (the “Commitment Shares”) to the Buyers
as additional consideration for the purchase of the Notes.

 

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

 

1.           Purchase
and Sale of Note.

 

a.           Purchase
of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Buyers, and the Buyers agrees to purchase
from the Company, the Note, as further provided herein.

 

b.           Form
of Payment. On the Closing Date: (i) the Buyers shall pay the aggregate purchase price of $1,000,000.00 (the “Purchase
Price”) for the Notes, to be issued and sold to them at the Closing (as defined below), by wire transfer of immediately
available funds to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Notes,
and (ii) the Company shall deliver such duly executed Notes on behalf of the Company, to the Buyers, against delivery of such Purchase
Price.

 

     

     

    

 

c.           Closing
Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section
7 below, the date and time of the issuance and sale of the Notes pursuant to this Agreement (the “Closing Date”)
shall be 4:00 PM, Eastern Time on the date first written above, or such other mutually agreed upon time.

 

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

 

2.          Commitment
Shares. On or before the Closing Date, the Company shall issue the Commitment Shares to the Buyers in the amounts set forth
on Schedule 1, which will be earned in full as of the Closing Date.

 

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

 

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

 

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

 

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

 

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

 

    	2

     

    

 

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

 

f.            Transfer
or Re-sale. Such Buyer understands that (i) the sale or resale of the Securities has not been and is not being registered under
the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities are sold
pursuant to an effective registration statement under the 1933 Act, (b) such Buyer shall have delivered to the Company, at the
cost of the Company, an opinion of counsel (which may be the Legal Counsel Opinion (as defined below)) that shall be in form, substance
and scope customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred
may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the Company, (c)
the Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or
a successor rule) (“Rule 144”)) of such Buyer who agrees to sell or otherwise transfer the Securities only in
accordance with this Section 3(f) and who is an Accredited Investor, (d) the Securities are sold pursuant to Rule 144, or
(e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule) (“Regulation S”),
and such Buyer shall have delivered to the Company, at the cost of the Company, an opinion of counsel that shall be in form, substance
and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any
sale of such Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if
said Rule is not applicable, any re-sale of such Securities under circumstances in which the seller (or the person through whom
the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some
other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other
person is under any obligation to register such Securities under the 1933 Act or any state securities laws or to comply with the
terms and conditions of any exemption thereunder (in each case). Notwithstanding the foregoing or anything else contained herein
to the contrary, the Securities may be pledged in connection with a bona fide margin account or other lending arrangement
secured by the Securities, and such pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and such Buyer in effecting such pledge of Securities shall be not required to provide the Company with any notice thereof
or otherwise make any delivery to the Company pursuant to this Agreement or otherwise.

 

g.           Legends.
Such Buyer understands that until such time as the Notes, and, upon conversion of the Notes in accordance with its respective terms,
the Conversion Shares, have been registered under the 1933 Act or may be sold pursuant to Rule 144, Rule 144A under the 1933 Act
or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold,
the Securities may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against
transfer of the certificates for such Securities):

 

    	3

     

    

 

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

 

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

 

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

 

    	4

     

    

 

i.            Residency.
Such Buyer is a resident of the jurisdiction set forth immediately below such Buyer’s name on the signature pages hereto.

 

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

 

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

 

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

 

    	5

     

    

 

c.           Capitalization;
Governing Documents. As of May 12, 2019, the authorized capital stock of the Company consists of: 250,000,000 authorized shares
of Common Stock, of which 5,680,330 shares were issued and outstanding, and 0 authorized shares of preferred stock, of which 0
were issued and outstanding. All of such outstanding shares of capital stock of the Company and the Conversion Shares, are, or
upon issuance will be, duly authorized, validly issued, fully paid and non-assessable. No shares of capital stock of the Company
are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed
through the actions or failure to act of the Company. As of the effective date of this Agreement, other than as publicly announced
prior to such date and reflected in the SEC filings of the Company (i) there are no outstanding options, warrants, scrip, rights
to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any
character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of the
Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or arrangements under
which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933
Act and (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in
any agreement providing rights to security holders) that will be triggered by the issuance of any of the Securities. The Company
will furnish to the Buyers true and correct copies of the Company’s Certificate of Incorporation as in effect on the date
hereof (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”),
and the terms of all securities convertible into or exercisable for Common Stock of the Company and the material rights of the
holders thereof in respect thereto, upon the written request of any Buyer.

 

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

 

e.           Acknowledgment
of Dilution. The Company understands and acknowledges the potentially dilutive effect of the Conversion Shares to the Common
Stock upon the conversion of the Notes. Subject to Section 1.7 of the Notes, the Company further acknowledges that its obligation
to issue, upon conversion of the Notes, the Conversion Shares, in accordance with this Agreement, and the Notes are absolute and
unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of
the Company.

 

    	6

     

    

 

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

 

    	7

     

    

 

g.           SEC
Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934
Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements
and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being hereinafter
referred to herein as the “SEC Documents”). As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable
to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of
a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading. None of the statements made in any such SEC
Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have been amended
or updated in subsequent filings prior the date hereof). As of their respective dates, the financial statements of the Company
included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with United States
generally accepted accounting principles, consistently applied, during the periods involved and fairly present in all material
respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). Except as set forth in the financial statements of the Company included in the SEC Documents, the
Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent
to September 30, 2018, and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not
required under generally accepted accounting principles to be reflected in such financial statements, which, individually or in
the aggregate, are not material to the financial condition or operating results of the Company. The Company is subject to the reporting
requirements of the 1934 Act. The Company has never been a “shell company” as described in Rule 144(i)(1)(i).

 

h.           Absence
of Certain Changes. Since September 30, 2018, there has been no material adverse change and no material adverse development
in the assets, liabilities, business, properties, operations, financial condition, results of operations, prospects or 1934 Act
reporting status of the Company or any of its Subsidiaries.

 

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

 

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

 

    	8

     

    

 

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

 

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

 

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

 

n.           Disclosure.
All information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement and provided to the
Buyers pursuant to Section 3(d) hereof and otherwise in connection with the transactions contemplated hereby is true and
correct in all material respects and the Company has not omitted to state any material fact necessary in order to make the statements
made herein or therein, in light of the circumstances under which they were made, not misleading. No event or circumstance has
occurred or exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations
or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company
but which has not been so publicly announced or disclosed (assuming for this purpose that the Company’s reports filed under
the 1934 Act are being incorporated into an effective registration statement filed by the Company under the 1933 Act).

 

    	9

     

    

 

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

 

p.           No
Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly
or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would
require registration under the 1933 Act of the issuance of the Securities to the Buyers. The issuance of the Securities to the
Buyers will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes
of any shareholder approval provisions applicable to the Company or its securities.

 

q.           No
Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage commissions, transaction
fees or similar payments relating to this Agreement or the transactions contemplated hereby.

 

r.            Permits;
Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses,
permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its
properties and to carry on its business as it is now being conducted (collectively, the “Company Permits”),
and there is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the
Company Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the
Company Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect. Since September 30, 2018, neither the Company nor any of its Subsidiaries has received
any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices relating to
possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse Effect.

 

    	10

     

    

 

s.          Environmental
Matters.

 

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

 

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

 

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

 

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

 

u.           Insurance.
The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company
and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has any reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have a Material Adverse Effect. Upon written request the
Company will provide to any Buyer true and correct copies of all policies relating to directors’ and officers’ liability
coverage, errors and omissions coverage, and commercial general liability coverage.

 

    	11

     

    

 

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

 

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

 

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

 

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

 

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

 

aa.          No
Disqualification Events. None of the Company, any of its predecessors, any affiliated issuer, any director, executive officer,
other officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s
outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule
405 under the 1933 Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person”)
is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act
(a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company
has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event.

 

    	12

     

    

 

bb.         Manipulation
of Price. The Company has not, and to its knowledge no one acting on its behalf has: (i) taken, directly or indirectly, any
action designed to cause or to result, or that could reasonably be expected to cause or result, in the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased,
or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any person any compensation
for soliciting another to purchase any other securities of the Company.

 

cc.         Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries is subject to the Bank Holding Company Act of 1956, as
amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or affiliates owns or controls, directly or indirectly, two
percent (2%) or more of the outstanding shares of any class of voting securities or twenty-two percent (22%) 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.

 

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

 

ee.         Breach
of Representations and Warranties by the Company. The Company agrees that if the Company breaches any of the representations
or warranties set forth in this Section 4 and in addition to any other remedies available to the Buyers pursuant to this
Agreement, it will be considered an Event of Default under Section 3.4 of the Notes.

 

5.          ADDITIONAL
COVENANTS, AGREEMENTS AND ACKNOWLEDGEMENTS.

 

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

 

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

 

    	13

     

    

 

c.           Use
of Proceeds. The Company shall use the proceeds for business development, and not for the repayment of any indebtedness owed
to officers, directors or employees of the Company or their affiliates or in violation or contravention of any applicable law,
rule or regulation.

 

d.           Right
of Participation in Subsequent Offerings. From the date first written above until the date which is eighteen (18) months after
the date first written above, the Company will not, (i) directly or indirectly, offer, sell, grant any option to purchase, or otherwise
dispose of any of its debt, equity or equity equivalent securities, including without limitation any debt, preferred shares or
other instrument or security that is, at any time during its life and under any circumstances, convertible into or exchangeable
or exercisable for Common Stock (any such offer, sale, grant, disposition or announcement being referred to as a “Subsequent
Placement”) or (ii) enter into any definitive agreement with regard to the foregoing, in each case unless the Company
shall have first delivered to the Buyer an irrevocable written notice (the “Offer Notice”) of any proposed or
intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered Securities”)
in a Subsequent Placement, which Offer Notice shall (w) identify and describe the Offered Securities, (x) describe the price and
other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued,
sold or exchanged, (y) identify the persons or entities (if known) to which or with which the Offered Securities are to be offered,
issued, sold or exchanged and (z) offer to issue and sell to or exchange with the Buyers at least $1,111,111.00 of the Offered
Securities (the “Subscription Amount”).

 

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

 

    	14

     

    

 

f.            Restriction
on Activities. Commencing as of the date first above written, and until the earlier of payment of the Notes in full or full
conversion of the Notes, the Company shall not, directly or indirectly, without the Buyers’ prior written consent, which
consent shall not be unreasonably withheld: (a) change the nature of its business; (b) sell, divest, acquire, change the structure
of any material assets other than in the ordinary course of business; or (c) solicit any offers for, respond to any unsolicited
offers for, or conduct any negotiations with any other person or entity in respect of any Variable Rate Transaction (as defined
herein), whether a transaction similar to the one contemplated hereby or any other investment.

 

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

 

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

 

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

 

j.            Breach
of Covenants. The Company acknowledges and agrees that if the Company breaches any of the covenants set forth in this Section
5, in addition to any other remedies available to the Buyers pursuant to this Agreement, it will be considered an Event of
Default under Section 3.4 of the Notes.

 

    	15

     

    

 

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

 

l.            Acknowledgement
Regarding Buyer’s Trading Activity. Each Buyer, its successors and assigns, agrees that so long as the Notes remains
outstanding, such Buyer shall not enter into or effect a Net Short Sale (as defined below) of the Common Stock of the Company.
The Company acknowledges and agrees that upon delivery of a notice of conversion under any Note by a Buyer, such Buyer immediately
owns the shares of Common Stock described in the notice of conversion and any sale of those shares issuable under such notice of
conversion would not be considered a Net Short Sale. A “Net Short Sale” by a Buyer shall mean a sale of Common
Stock by such Buyer that is marked as a short sale and that is made at a time where there is no equivalent offsetting long position
in Common Stock held by such Buyer. For purposes of determining whether there is an equivalent offsetting long position in Common
Stock held by a Buyer, any Common Stock underlying a Note held by such Buyer that have not yet been converted pursuant to such
Note, shall be deemed to be held long by such Buyer, and the amount of shares of Common Stock held in a long position shall be
all unconverted Conversion Shares (subject, however, to all conversion limitations included in the Note) issuable to such Buyer
on such date, plus any shares of Common Stock or Common Stock Equivalents otherwise then held by such Buyer.

 

    	16

     

    

 

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

 

n.           Piggyback
Registration Rights; Registration Requirement. The Company shall include the Commitment Shares and the Conversion Shares on
any registration statement on Form S-1 or S-3 filed by the Company prior to the date which is six (6) months after the date of
this Agreement.

 

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

 

p.           Subsequent
Variable Rate Transactions. From the date hereof until such time as the Buyers no longer hold the Notes or any of the Conversion
Shares, the Company shall be prohibited from effecting or entering into an agreement involving a Variable Rate Transaction. “Variable
Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are
convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock either (A)
at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices
of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities or (B)
with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of
such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business
of the Company or the market for the Common Stock or (ii) enters into any agreement, including, but not limited to, an equity line
of credit, whereby the Company may issue securities at a future determined price. Any Buyer shall be entitled to obtain injunctive
relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages.

 

    	17

     

    

 

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

 

r.            D&O
Insurance. Within 60 calendar days of the Closing, the Company shall purchase director and officer insurance on behalf of the
Company’s (including its subsidiary) officers and directors for a period of 18 months after the Closing with respect to any
losses, claims, damages, liabilities, costs and expense in connection with any actual or threatened claim or proceeding that is
based on, or arises out of their status as a director or officer of the Company. The insurance policy shall provide for two years
of tail coverage.

 

6.           Transfer
Agent Instructions. The Company shall issue irrevocable instructions to the Company’s transfer agent to issue certificates,
registered in the name of the Buyers or their nominee, upon conversion of the Notes, the Conversion Shares, in such amounts as
specified from time to time by any Buyer to the Company in accordance with the terms thereof (the “Irrevocable Transfer
Agent Instructions”). In the event that the Company proposes to replace its transfer agent, the Company shall provide,
prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially
delivered pursuant to this Agreement (including but not limited to the provision to irrevocably reserved shares of Common Stock
in the Reserved Amount (as defined in the Notes)) signed by the successor transfer agent to the Company and the Company. Prior
to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to
Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold, all
such certificates shall bear the restrictive legend specified in Section 3(g) of this Agreement. The Company warrants that:
(i) no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 6 will be given by
the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books and records of the
Company as and to the extent provided in this Agreement and the Note; (ii) it will not direct its transfer agent not to transfer
or delay, impair, and/or hinder its transfer agent in transferring (or issuing)(electronically or in certificated form) any certificate
for Securities to be issued to the Buyers upon conversion of or otherwise pursuant to the Notes as and when required by the Notes
and this Agreement; (iii) it will not fail to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders
its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on
any certificate for any Securities issued to the Buyers upon conversion of or otherwise pursuant to the Notes as and when required
by the Notes and this Agreement; and (iv) it will provide any required corporate resolutions and issuance approvals to its transfer
agent within 6 hours of each conversion of any Note. Nothing in this Section shall affect in any way the Buyers’ obligations
and agreement set forth in Section 3(g) hereof to comply with all applicable prospectus delivery requirements, if any, upon
re-sale of the Securities. If a Buyer provides the Company, at the cost of the Company, with (i) an opinion of counsel in form,
substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of such Securities
may be made without registration under the 1933 Act and such sale or transfer is effected; or (ii) such Buyer provides reasonable
assurances that the Securities can be sold pursuant to Rule 144, the Company shall permit the transfer, and, in the case of the
Securities, promptly instruct its transfer agent to issue one or more certificates, free from restrictive legend, in such name
and in such denominations as specified by such Buyer. The Company acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to the Buyers, by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly,
the Company acknowledges that the remedy at law for a breach of its obligations under this Section 6 may be inadequate and
agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section 6, that the Buyers
shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate
transfer, without the necessity of showing economic loss and without any bond or other security being required.

 

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

 

a.           Each
Buyer shall have executed this Agreement and delivered the same to the Company.

 

b.           Each
Buyer shall have delivered its portion of the Purchase Price in accordance with Section 1(b) above.

 

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

 

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

 

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

 

    	19

     

    

 

a.           The
Company shall have executed this Agreement and delivered the same to the Buyers.

 

b.           The
Company shall have delivered to the Buyers the duly executed Notes in such denominations as set forth on Schedule 1.

 

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

 

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

 

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

 

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

 

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

 

h.           The
Company shall have delivered to the Buyers resolutions adopted by the Company’s Board of Directors at a duly called meeting
or by unanimous written consent authorizing this Agreement and all other documents, instruments and transactions contemplated hereby.

 

    	20

     

    

 

9.          Governing
Law; Miscellaneous.

 

a.           Governing
Law; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without
regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated
by this Agreement, the Notes, or any other agreement, certificate, instrument or document contemplated hereby shall be brought
only in the state courts or in the federal courts located in the state and county of New York. The parties to this Agreement hereby
irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based
on lack of jurisdiction or venue or based upon forum non conveniens. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT
MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING
OUT OF THIS AGREEMENT OR ANY TRANSACTIONS CONTEMPLATED HEREBY. The prevailing party shall be entitled to recover from the other
party its reasonable attorney’s fees and costs. Each party hereby irrevocably waives personal service of process and consents
to process being served in any suit, action or proceeding in connection with this Agreement, the Notes, or any other agreement,
certificate, instrument or document contemplated hereby or thereby by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and
agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

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

 

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

 

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

 

e.           Entire
Agreement; Amendments. This Agreement, the Notes, 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 Buyers makes any representation, warranty, covenant or undertaking with respect to such matters. No provision
of this Agreement or any agreement or instrument contemplated hereby may be waived or amended other than by an instrument in writing
signed by the Buyer.

 

    	21

     

    

 

f.            Notices.
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be

 

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

 

If to the Company, to:

 

EDISON NATION, INC.

909 New Brunswick Ave.

Phillipsburg, NJ 08865

Attention: Christopher Ferguson

e-mail: cferguson@edisonnation.com

 

If to the Buyers:

 

c/o ALEXANDER CAPITAL, L.P.

17 State Street, 5th Floor

New York, NY 10004

Attn: Jonathan Gazdak

e-mail: jgazdak@alexandercapitallp.com

 

g.           Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns.
Neither the Company nor any Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written
consent of the other. Notwithstanding the foregoing, subject to Section 3(f), any Buyer may assign its rights hereunder
to any person that purchases Securities in a private transaction from such Buyer or to any of its “affiliates,” as
that term is defined under the 1934 Act, without the consent of the Company.

 

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

 

    	22

     

    

 

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

 

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

 

k.          Expense
Reimbursement; Further Assurances. At the Closing to occur as of the Closing Date, the Company shall pay on behalf of the Buyers
or reimburse the Buyers for their legal fees and expenses incurred in connection with this Agreement, pursuant to the disbursement
authorization signed by the Company of even date. Each party shall do and perform, or cause to be done and performed, all such
further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the
other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation
of the transactions contemplated hereby.

 

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

 

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

 

    	23

     

    

 

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

 

o.           Payment
Set Aside. To the extent that the Company makes a payment or payments to any Buyer hereunder or pursuant to the Notes, or any
Buyer enforces or exercises its rights hereunder or 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
or entity under any law (including, without limitation, any bankruptcy law, foreign, 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.

 

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

 

[Signature Page Follows]

 

    	24

     

    

 

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

 

	 	EDISON NATION, INC.
	 	 	 
	 	By:	 
	 	 	Christopher Ferguson
	 	 	Chief Executive Officer

 

[Company Signature Page to Securities Purchase
Agreement]

 

     

     

    

 

	 	For entities:
	 	 
	 	Buyer Name:
	 	 	 
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	Address:	 
	 	 	 
	 	 	 
	 	For individuals:

 

	 	 	 
	 	Buyer Name:	 

 

	 	Address:	 
	 	 	 

 

[Buyer Signature Page to Securities Purchase
Agreement]

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