Document:

Proof - ex10-27.htm

 

STANDBY
EQUITY DISTRIBUTION AGREEMENT

 

THIS
STANDBY EQUITY DISTRIBUTION AGREEMENT (this “Agreement”) dated as of April 16, 2018 is made by and between
YA II PN, LTD. (the “Investor”), a Cayman Islands exempted company, and SOLIS TEK INC. (the “Company”),
a Nevada corporation.

 

WHEREAS,
the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall have the right to issue
and sell to the Investor, from time to time as provided herein, and the Investor shall purchase from the Company up to $25,000,000
of the Company’s common stock, par value $0.001 per share (the “Common Stock”); and

 

WHEREAS,
the shares of Common Stock are listed for trading on the OTC Markets under the symbol “SLTK;” and

 

WHEREAS,
the offer and sale of the Common Stock issuable hereunder will be made in reliance upon the provisions of Regulation D (“Regulation
D”) promulgated under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the
“Securities Act”), or upon such other exemption from the registration requirements of the Securities Act as
may be available with respect to any or all of the transactions to be made hereunder.

 

NOW,
THEREFORE, the parties hereto agree as follows:

 

Article
I. Certain Definitions

 

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

 

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

 

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

 

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

 

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

 

Section
1.06 “Applicable Laws” shall mean all applicable laws, statutes, rules, regulations, orders, executive orders,
directives, policies, guidelines and codes having the force of law, whether local, national, or international, as amended from
time to time, including without limitation (i) all applicable laws that relate to money laundering, terrorist financing, financial
record keeping and reporting, (ii) all applicable laws that relate to anti-bribery, anti-corruption, books and records and internal
controls, including the United States Foreign Corrupt Practices Act of 1977, and (iii) any applicable Sanctions.

 

    	 	 	 

     

    

 

Section
1.07 “Commitment Amount” shall mean the aggregate amount of up to $25,000,000 provided that the Company
shall not affect any sales under this Agreement and the Investor shall not have the obligation to purchase shares of Common Stock
under this Agreement to the extent that after giving effect to such purchase and sale the Investor’s beneficial ownership
of the Shares would exceed the Ownership Limitation.

 

Section
1.08 “Commitment Fee” shall have the meaning set forth in Section 13.05.

 

Section
1.09 “Commitment Fee Shares” shall have the meaning set forth in Section 13.05.

 

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

 

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

 

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

 

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

 

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

 

Section
1.15 “Daily Value Traded” in respect of a particular Trading Day means the product obtained by multiplying
the daily trading volume of the Common Stock for that day on the Principal Market by the VWAP for such day.

 

Section
1.16 “Effective Date” shall mean the date on which the SEC first declares effective a Registration Statement
registering the resale of the Shares.

 

Section
1.17 “Environmental Laws” shall have the meaning set forth in Section 4.10.

 

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

 

Section
1.19 “Hazardous Materials” shall have the meaning set forth in Section 4.08.

 

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

 

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

 

Section
1.22 “Market Price” shall mean the lowest daily VWAP during the relevant Pricing Period, other than the daily
VWAP on any Excluded Days.

 

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

 

    	 	-2 -	 

     

    

 

Section
1.24 “Maximum Advance Amount” in respect of each Advance Notice means $1.0 million, but always subject to the
Ownership Limitation.

 

Section
1.25 “Material Outside Event” shall have the meaning set forth in Section 6.07.

 

Section
1.26 “Ownership Limitation” shall have the meaning set forth in Section 2.01(d)(i).

 

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

 

Section
1.28 “Plan of Distribution” shall have the meaning set forth in Section 6.01(a).

 

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

 

Section
1.30 “Principal Market” shall mean the OTCQX, the OTCQB, the New York Stock Exchange, the NYSE MKT, the NASDAQ
Global Select Market, the NASDAQ Global Market, or the NASDAQ Capital Market, whichever is at the time the principal trading exchange
or market for the Common Stock.

 

Section
1.31 “Purchase Price” shall mean the price per share obtained by multiplying the Market Price by 90%.

 

Section
1.32 “Registrable Securities” shall mean (i) the Shares, (ii) the Commitment Fee Shares, and (iii) any securities
issued or issuable with respect to any of the foregoing by way of exchange, stock dividend or stock split or in connection with
a combination of shares, recapitalization, consolidation or other reorganization or otherwise. As to any particular Registrable
Securities, once issued such securities shall cease to be Registrable Securities when (a) the Registration Statement has been
declared effective by the SEC and such Registrable Securities have been disposed of pursuant to the Registration Statement, (b)
such Registrable Securities have been sold under circumstances in which all of the applicable conditions of Rule 144 (or any similar
provision then in force) under the Securities Act (“Rule 144”) are met, or (c) such Registrable Securities
may be sold without any time, volume or manner limitations pursuant to Rule 144.

 

Section
1.33 “Registration Limitation” shall have the meaning set forth in Section 2.01(d)(ii).

 

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

 

Section
1.35 “Registration Statement” shall mean a registration statement on Form S-1 or Form S-3 or on such other
form promulgated by the SEC for which the Company then qualifies, and which form shall be available for the registration of the
resale by the Investor of the Registrable Securities under the Securities Act.

 

    	 	-3 -	 

     

    

 

Section
1.36 “Regulation D” shall have the meaning set forth in the recitals of this Agreement.

 

Section
1.37 “Sanctions” means any sanctions administered or enforced by U.S. Department of Treasury’s Office
of Office of Foreign Asset Control of the U.S. Department of Treasury from time to time (“OFAC”) or the U.S.
State Department, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions
authority.

 

Section
1.38 “Sanctions Programs” means any OFAC economic sanction program (including, without limitation, programs
related to Crimea, Cuba, Iran, North Korea, Sudan and Syria).

 

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

 

Section
1.40 “SEC Documents” shall have the meaning set forth in Section 4.05.

 

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

 

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

 

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

 

Section
1.44 “Subsidiary” and “Subsidiaries” shall have the respective meanings set forth in Section
4.01.

 

Section
1.45 “Transaction Documents” shall have the meaning set forth in Section 4.03.

 

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

 

Section
1.47 “VWAP” means, for any Trading Day, the daily volume weighted average price of the Common Stock for such
date on the Principal Market as reported by Bloomberg L.P. (or, if not reported on Bloomberg, L.P., another reporting service
reasonably agreed to by the parties) during regular trading hours.

 

Article
II. Advances

 

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

 

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

 

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

 

    	 	-4 -	 

     

    

 

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

 

		(b)	Date
                                         of Delivery of Advance Notice. Advance Notices shall be delivered in accordance with
                                         the instructions set forth on the bottom of Exhibit “A”
                                         hereto. An Advance Notice shall be deemed delivered on (i) the day it is received by
                                         the Investor if such notice is received prior to 8:00 a.m. Eastern Time in accordance
                                         with the instructions set forth on the bottom of Exhibit A or (ii) the immediately succeeding
                                         day if it is received after 8:00 a.m. Eastern Time, in each case in accordance with the
                                         instructions set forth on the bottom of Exhibit A.

 

		(c)	Reserved.

 

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

 

		(i)	Ownership
                                         Limitation; Commitment Amount. In no event shall the number of Shares issuable to
                                         the Investor pursuant to an Advance cause the aggregate number of shares of Common Stock
                                         beneficially owned (as calculated pursuant to Section 13(d) of the Exchange Act) by the
                                         Investor and its affiliates to exceed 9.99% of the then outstanding Common Stock (the
                                         “Ownership Limitation”). In connection with each Advance Notice delivered
                                         by the Company, any portion of an Adjusted Advance Amount that would (i) cause the Investor
                                         to exceed the Ownership Limitation or (ii) cause the aggregate amount of Advances (that
                                         is, the aggregate amount of prior Advances made to the Company plus such Adjusted Advance
                                         Amount) to exceed the Commitment Amount shall automatically be withdrawn with no further
                                         action required by the Company, and such Advance Notice shall be deemed automatically
                                         modified to reduce the Adjusted Advance Amount by an amount equal to such withdrawn portion.
                                         The Investor shall notify the Company promptly of any reduction of the Adjusted Advance
                                         Amount due to the Ownership Limitation, but failure to provide such notice shall have
                                         no effect on the operation or implementation of the other provisions of this Section
                                         2.01(d)(i).

 

		(ii)	Registration
                                         Limitation. In no event shall the aggregate number of Shares subject to an Advance
                                         Notice (as such number of Shares may be reduced pursuant to Section 2.01(d)(i)) cause
                                         the number of Shares purchased by the Investor pursuant to this Agreement to exceed the
                                         number of Shares registered for resale by the Investor under the Registration Statement(s)
                                         then in effect (the “Registration Limitation”). In connection with
                                         each Advance Notice, any portion of an adjusted Advance (after giving effect to any reduction
                                         in accordance with Section 2.01(d)(i)) that would exceed the Registration Limitation
                                         shall automatically be withdrawn with no further action required by the Company and such
                                         Advance Notice shall be deemed automatically modified to reduce the aggregate amount
                                         of the Advance Notice by an amount equal to such withdrawn portion in respect of each
                                         Advance Notice.

 

    	 	-5 -	 

     

    

 

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

 

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

 

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

 

		(b)	Promptly
                                         after receipt of the Settlement Document with respect to each Advance (and, in any event,
                                         not later than two Trading Days after such receipt), the Company will, or will cause
                                         its transfer agent to, electronically transfer such number of Shares to be purchased
                                         by the Investor (as set forth in the Settlement Document) by crediting the Investor’s
                                         account or its designee’s account at the Depository Trust Company through its Deposit
                                         Withdrawal at Custodian System or by such other means of delivery as may be mutually
                                         agreed upon by the parties hereto (which in all cases the resale of such Shares shall
                                         be covered by an effective Registration Statement), and transmit notification to the
                                         Investor that such Share transfer has been requested. Promptly upon receipt of such notification,
                                         the Investor shall pay to the Company the aggregate amount of the Advance (as set forth
                                         in the Closing Statement) in cash in immediately available funds to an account designated
                                         by the Company in writing and transmit notification to the Company that such funds transfer
                                         has been requested. No fractional shares of Common Stock shall be issued, and any fractional
                                         amounts shall be rounded to the nearest whole number of shares. Any certificates evidencing
                                         Common Stock delivered pursuant hereto (other than any Commitment Fee Shares) shall be
                                         free of restrictive legends. To facilitate the transfer of the shares of Common Stock
                                         (other than any Commitment Fee Shares) by the Investor, such shares of Common Stock will
                                         not bear any restrictive legends so long as there is an effective Registration Statement
                                         covering such Common Stock. Upon the request of the Investor at any time at which there
                                         is an effective Registration Statement covering the Commitment Fee Shares and subject
                                         to applicable law, the Company will use its commercially reasonable efforts to assist
                                         the Investor in exchanging the original stock certificate evidencing the Commitment Fee
                                         Shares for a certificate free of restrictive legends.

 

    	 	-6 -	 

     

    

 

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

 

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

 

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

 

    	 	-7 -	 

     

    

 

Article
III. Representations and Warranties of Investor

 

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

 

Section
3.01 Organization and Authorization. The Investor is duly organized, validly existing and in good standing under the laws
of the Cayman Islands and has all requisite power and authority to execute, deliver and perform this Agreement, including all
transactions contemplated hereby. The decision to invest, the execution and delivery by the Investor of this Agreement and the
other Transaction Documents to which the Investor is a party, the performance by the Investor of its obligations hereunder and
thereunder, and the consummation by the Investor of the transactions contemplated hereby and thereby have been duly authorized
and require no other proceedings on the part of the Investor. The undersigned has the right, power and authority to execute and
deliver this Agreement and the other Transaction Documents to which the Investor is a party, on behalf of the Investor or its
shareholders. This Agreement and such Transaction Documents have been (or, when executed and delivered, will be) duly executed
and delivered by the Investor and, assuming the execution and delivery hereof and acceptance thereof by the Company, will constitute
the legal, valid and binding obligations of the Investor, enforceable against the Investor in accordance with their respective
terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or other laws relating to, or affecting generally, the enforcement of applicable creditors’ rights
and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law.

 

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

 

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

 

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

 

    	 	-8 -	 

     

    

 

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

 

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

 

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

 

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

 

Section
3.09 General Solicitation. Neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf,
has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with
the offer or sale of the Common Stock offered hereby.

 

Article
IV. Representations and Warranties of the Company

 

Except
as set forth in the SEC Documents, or in the Disclosure Schedule, which Disclosure Schedules shall be deemed a part hereof and
shall qualify any representation or warranty otherwise made herein, the Company represents and warrants to the Investor that,
as of the date hereof and as of each Advance Date (other than representations and warranties which address matters only as of
a certain date, which shall be true and correct as written as of such certain date), that:

 

Section
4.01 Subsidiaries. A list of all of the Company’s Subsidiaries, direct and indirect, is set forth in Section 4.01
of the Disclosure Schedule.

 

    	 	-9 -	 

     

    

 

Section
4.02 Organization and Qualification. Each of the Company and the Subsidiaries (as defined below) is an entity duly organized
and validly existing under the laws of its state of organization or incorporation, and has the requisite power and authority to
own its properties and to carry on its business as now being conducted. Each of the Company and the Subsidiaries is duly qualified
to do business and is in good standing (to the extent applicable) in every jurisdiction in which the nature of the business conducted
by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would
not have a Material Adverse Effect. “Subsidiary” means a corporation, partnership, limited liability company,
or other business entity of which a majority of the shares of voting securities is at the time beneficially owned, or the management
of which is otherwise controlled, directly or indirectly, through one or more intermediaries, or both, by the Company, and all
of the foregoing are collectively referred to herein as the “Subsidiaries.”

 

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

 

    	 	-10 -	 

     

    

 

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

 

Section
4.05 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 under Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange
Act”) during the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation
to file such material) (all of the foregoing filed within the two years preceding the date hereof as amended after the date hereof
and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein,
being hereinafter referred to as the “SEC Documents”) on a timely basis or has received a valid extension of
such time of filing and has filed any such SEC Document prior to the expiration of any such extension (including pursuant to SEC
from 12b-25). The Company has delivered to the Investor or its representatives, or made available through the SEC’s website
at http://www.sec.gov, true and complete copies of the SEC Documents. As of their respective dates, the SEC Documents complied
in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates,
the financial statements of the Company (and its Subsidiaries) included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such
financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during
the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the
case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and
fairly present in all material respects the financial position of the Company and its Subsidiaries (on a consolidated basis) as
of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). No other information provided by or on behalf of the Company to the Investor
which is not included in the SEC Documents contains any untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the circumstance under which they are or were made, not misleading.

 

    	 	-11 -	 

     

    

 

Section
4.06 Capitalization. The authorized share capital of the Company consists of 20,000,000 shares of Preferred Stock, none
of which are outstanding, and 100,000,000 shares of Common Stock, of which 41,514,523 shares of Common Stock are outstanding as
of the date hereof. All of such outstanding shares or other securities of the Company and each Subsidiary are validly issued,
fully paid and non-assessable and have been issued in compliance with all foreign, federal and state securities laws and none
of such outstanding shares or other securities were issued in violation of any preemptive rights or similar rights to subscribe
for or purchase securities. As of the date hereof, no shares of capital stock or other securities of the Company or any Subsidiary
are subject to preemptive rights or any other similar rights or any claims, encumbrances, liens or security interests (“Encumbrances”)
suffered or permitted by the Company or any Subsidiary. Except for the Shares to be issued pursuant to this Agreement, as of the
date hereof: (i) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its Subsidiaries,
or contracts, commitments, understandings 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, or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares
of capital stock of the Company or any of its Subsidiaries; (ii) there are no outstanding debt securities, notes, credit agreements,
credit facilities or other contracts or instruments evidencing indebtedness of the Company or any of its Subsidiaries, or by which
the Company or any of its Subsidiaries is or may become bound; (iii) there are no outstanding registration statements with respect
to the Company or any Subsidiary or any of their respective securities; (iv) there are no agreements or arrangements under which
the Company or any of its Subsidiaries is obligated to register the sale of any of their securities under the Securities Act (except
pursuant to this Agreement); (v) there are no financing statements securing obligations filed in connection with the Company,
its Subsidiaries or any of their respective assets or properties; (vi) there are no securities or instruments containing anti-dilution
or similar provisions that will be triggered by this Agreement or any related agreement or the consummation of the transactions
described herein or therein; and (vii) there are no outstanding securities or instruments of the Company which contain any redemption
or similar provisions, and there are no contracts by which the Company is or may become bound to redeem a security of the Company.
The Company has furnished to the Buyer true, complete and correct copies of the Company’s and each Subsidiaries respective
articles of incorporation (including any certificates of designation, as applicable), bylaws, operating agreement, partnership
agreement, certificate of organization or similar organizational and governing documents (the “Organizational Documents”).
Except for the Organizational Documents, there are no other shareholder agreements, voting agreements or other contracts of any
nature or kind that restrict, limit or in any manner impose obligations on the governance of any the Company or any Subsidiary.

 

Section
4.07 No Default. None of the Company or any Subsidiary is in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, debenture, mortgage, deed of trust or other material instrument or
agreement to which it is a party or by which it or its property is bound and neither the execution, nor the delivery by the Company
or any Subsidiary, nor the performance by the Company or any Subsidiary of its respective obligations under this Agreement or
any of the Transaction Documents will conflict with or result in the breach or violation of any of the terms or provisions of,
or constitute a default or result in the creation or imposition of any lien or charge on any assets or properties of the Company
or any Subsidiary under its respective organizational documents, any material indenture, mortgage, deed of trust or other material
agreement applicable to the Company or any Subsidiary or instrument to which the Company or any Subsidiary is a party or by which
it is bound, or any statute, or any decree, judgment, order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any Subsidiary or its properties, in each case which default, lien or charge is likely to cause
a Material Adverse Effect

 

    	 	-12 -	 

     

    

 

Section
4.08 Intellectual Property Rights. The Company and the Subsidiaries own or possess adequate rights or licenses to use all
material trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets and rights necessary to conduct their respective businesses
as now conducted, except as would not cause a Material Adverse Effect. The Company and the Subsidiaries do not have any knowledge
of any infringement by the Company or any Subsidiaries of trademark, trade name rights, patents, patent rights, copyrights, inventions,
licenses, service names, service marks, service mark registrations, or trade secrets, except as would not cause a Material Adverse
Effect. To the knowledge of the Company, there is no claim, action or proceeding being made, brought or threatened, against the
Company or any Subsidiaries regarding trademark, trade name, patents, patent rights, invention, copyright, license, service names,
service marks, service mark registrations, trade secret or other infringement, except as would not reasonably be expected to cause
a Material Adverse Effect; and the Company is not aware of any facts or circumstances which might give rise to any of the foregoing.

 

Section
4.09 Issuance of Shares. The Shares (including, without limitation, the Commitment Fee Shares) are duly authorized and,
upon issuance in accordance with the terms hereof, shall be duly issued, fully paid and non-assessable, and free from all Encumbrances
with respect to the issue thereof, and will be issued in compliance with all applicable United States federal and state securities
laws.

 

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

 

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

 

    	 	-13 -	 

     

    

 

6.1
Absence of Litigation or Adverse Matters.
No condition, circumstance, event, agreement, document, instrument, restriction, litigation or proceeding (collectively, a “Proceeding”)
(or threatened litigation or proceeding or basis therefor) exists which: (i) could adversely affect the validity or priority of
the Encumbrances granted to the Investor under the Transaction Documents; (ii) could adversely affect the ability of the Company
to perform its obligations under the Transaction Documents; (iii) would constitute a default under any of the Transaction Documents;
(iv) would constitute such a default with the giving of notice or lapse of time or both; or (v) would constitute or give rise
to a Material Adverse Effect. In addition: (vi) there is no Proceeding before or by any governmental authority or any other Person,
pending, or to the best of Company’s knowledge, threatened or contemplated by, against or affecting the Company or any Subsidiary;
(vii) there is no outstanding judgment against or affecting the Company or any Subsidiary; and (viii) none of Company or any Subsidiary
is in breach or violation of any contract.

 

Section
4.12 Liabilities and Indebtedness of the Company. None of the Company or any Subsidiary has any obligations of any nature
whatsoever, except: (i) as disclosed in the Financial Statements; or (ii) obligations incurred in the ordinary course of business
since the date of the most recent Financial Statements; or (iii) obligations owed to the Investor.

 

Section
4.13 Title. Except as set forth in the SEC Documents, except as would not cause a Material Adverse Effect, the Company
has good and marketable title to its properties and material assets owned by it, free and clear of any Encumbrances other than
such as are not material to the business of the Company. Any real property and facilities held under lease by the Company and
the Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and buildings by the Company and the Subsidiaries.

 

Section
4.14 Insurance. The Company and each of the 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 the Subsidiaries are engaged. The Company has no reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a Material Adverse Effect.

 

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

 

    	 	-14 -	 

     

    

 

Section
4.16 Related Party Transactions. Except for arm’s length transactions pursuant to which the Company or any Subsidiary
make payments in the ordinary course of business upon terms no less favorable than the Company or any Subsidiary could obtain
from third parties, none of the officers, directors or employees of the Company or any Subsidiary, nor any stockholders who own,
legally or beneficially, five percent (5%) or more of the ownership interests of the Company or any Subsidiary (each a “Material
Shareholder”), is presently a party to any transaction with th the Company or any Subsidiary (other than for services
as employees, officers and directors), including any contract 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 Material Shareholder or, to the best knowledge of the Company or any Subsidiary, any other Person in which any officer, director,
or any such employee or Material Shareholder has a substantial or material interest in or of which any officer, director or employee
of the Company or any Subsidiary or Material Shareholder is an officer, director, trustee or partner. There are no claims or disputes
of any nature or kind between the Company or any Subsidiary and any officer, director or employee of the Company or any Subsidiary
or any Material Shareholder, or between any of them, relating to the Company or any Subsidiary.

 

Section
4.17 Internal Accounting Controls. The Company and each of the Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity
with 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.

 

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

 

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

 

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

 

    	 	-15 -	 

     

    

 

Section
4.21 No General Solicitation. Neither the Company nor any of its affiliates, nor any Person acting on its or their behalf,
has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with
the offer or sale of the Common Stock offered hereby. None of the Company or the Subsidiary, or any of its or their affiliates
or any other Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within
the meaning of Regulation D) in connection with the offer or sale of Common Stock hereunder. The Company shall be responsible
for the payment of any financial advisory fees or brokers’ commissions (other than for Persons engaged by or on behalf of
the Investor or its investment advisor) relating to or arising out of the transactions contemplated hereby based upon arrangements
made by or on behalf of the Company. Neither the Company nor any of the Subsidiaries has engaged any placement agent or other
agent in connection with the offer or sale of Common Stock hereunder.

 

Section
4.22 Acknowledgment Regarding Investor’s Purchase of Shares. The Company acknowledges and agrees that the Investor
is acting solely in the capacity of an arm’s length investor with respect to this Agreement and the transactions contemplated
hereunder. The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to this Agreement and the transactions contemplated hereunder and any advice given by
the Investor or any of its representatives or agents in connection with this Agreement and the transactions contemplated hereunder
is merely incidental to the Investor’s purchase of the Shares hereunder. The Company is aware and acknowledges that it shall
not be able to request Advances under this Agreement if the Registration Statement is not effective or if any issuances of Shares
pursuant to any Advances would violate any rules of the Principal Market. The Company further is aware and acknowledges that any
fees paid or Commitment Fee Shares issued pursuant to Section 13.05 hereunder shall be earned on the date hereof and are not refundable
or returnable under any circumstances.

 

Section
4.23 Foreign Corrupt Practices. None of the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary,
any agent or other person acting on behalf of the Company or any Subsidiary, has: (i) directly or indirectly, used any funds for
unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii)
made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties
or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made
by any person acting on its behalf of which the Company or any Subsidiary is aware) which is in violation of law or (iv) violated
in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended

 

Section
4.24 Sanctions. None of the Company or any Subsidiary, nor, to Company’s knowledge, any director, officer, agent,
employee or affiliate of any of the Company of any Subsidiary, is a Person that is, or is owned or controlled by a Person that
is:

 

(a)
on the list of Specially Designated Nationals and Blocked Persons maintained by the U.S. Department of Treasury’s Office
of Office of Foreign Asset Control (“OFAC”) from time to time;

 

    	 	-16 -	 

     

    

 

(b)
the subject of any sanctions administered or enforced by OFAC, the U.S. State Department, the United Nations Security Council,
the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”);

 

(c)
has a place of business in, or is operating, organized, resident or doing business in a country or territory that is, or whose
government is, the subject of OFAC economic sanction program (including, without limitation, programs related to Crimea, Cuba,
Iran, North Korea, Sudan and Syria).

 

Section
4.25 Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, all
of which shall be publicly disclosed by the Company as soon as possible after the date hereof, each of the Company and the Subsidiaries
hereby covenants and agrees that none of them, nor any other person acting on its behalf, will provide the Investor or its agents
or counsel with any information that the Company and the Subsidiaries believe constitute material non-public information, unless
prior thereto the Investor shall have entered into a written agreement with the Company regarding the confidentiality and use
of such information. Each of the Company and the Subsidiaries understands and confirms that the Investor shall be relying on the
foregoing covenant in effecting transactions in securities of the Company.

 

Article
V. Indemnification

 

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

 

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

 

    	 	-17 -	 

     

    

 

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

 

    	 	-18 -	 

     

    

 

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

 

Section
5.04 Remedies. The remedies provided for in this Article V are not exclusive and shall not limit any right or remedies
which may otherwise be available to any indemnified Person at law or in equity. The obligations of the parties to indemnify or
make contribution under this Article V shall survive expiration or termination of this Agreement.

 

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

 

    	 	-19 -	 

     

    

 

Article
VI.

Covenants of the Company

 

Section
6.01 Registration Statement.

 

		(a)	Filing
                                         of a Registration Statement. The Company shall prepare and file with the SEC an initial
                                         Registration Statement covering the resale of the Registrable Securities within 30 days
                                         of the date hereof. The Company shall not have the ability to request any Advances until
                                         the effectiveness of a Registration Statement. Each Registration Statement shall contain
                                         the “Plan of Distribution” section in substantially the form attached
                                         hereto as Exhibit “C” hereto. The Company shall use
                                         its commercially reasonable efforts to have such initial Registration Statement, and
                                         each other Registration Statement required to be filed pursuant to the terms of this
                                         Agreement, declared effective by the SEC as soon as practicable but in no event later
                                         than 120 days of the date hereof.

 

		(b)	Maintaining
                                         a Registration Statement. The Company shall use its commercially reasonably efforts
                                         to maintain the effectiveness of any Registration Statement with respect to Registrable
                                         Securities that has been declared effective at all times during the Commitment Period
                                         or, if earlier, until such time as no Registrable Securities registered thereunder remain
                                         outstanding (the “Registration Period”). Notwithstanding anything
                                         to the contrary contained in this Agreement, the Company shall ensure that, when filed
                                         and at all times while effective, each Registration Statement (including, without limitation,
                                         all amendments and supplements thereto) and the prospectus (including, without limitation,
                                         all amendments and supplements thereto) used in connection with such Registration Statement
                                         shall not contain any untrue statement of a material fact or omit to state a material
                                         fact required to be stated therein, or necessary to make the statements therein (in the
                                         case of prospectuses, in the light of the circumstances in which they were made) not
                                         misleading.

 

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

 

    	 	-20 -	 

     

    

 

		(d)	Delivery
                                         of Final Documents. The Company shall furnish to the Investor without charge, (i)
                                         at least one copy of each Registration Statement as declared effective by the SEC and
                                         any amendment(s) thereto, including financial statements and schedules, all documents
                                         incorporated therein by reference, all exhibits and each preliminary prospectus, (ii)
                                         at the request of the Investor, 10 copies of the final prospectus included in such Registration
                                         Statement and all amendments and supplements thereto (or such other number of copies
                                         as the Investor may reasonably request) and (iii) such other documents as the Investor
                                         may reasonably request from time to time in order to facilitate the disposition of the
                                         Registrable Securities owned by the Investor pursuant to a Registration Statement. Filing
                                         of the forgoing with the SEC via its EDGAR system shall satisfy the requirements of this
                                         section.

 

		(e)	Amendments
                                         and Other Filings. The Company shall (i) use its commercially reasonable efforts
                                         to keep a Registration Statement effective at all times during the Registration Period,
                                         and in furtherance thereof shall prepare and file with the SEC such amendments (including
                                         post-effective amendments) and supplements to a Registration Statement and the related
                                         prospectus used in connection with such Registration Statement, which prospectus is to
                                         be filed pursuant to Rule 424 promulgated under the Securities Act, and prepare and file
                                         with the SEC such additional Registration Statements in order to register for resale
                                         under the Securities Act all of the Registrable Securities; (ii) cause the related prospectus
                                         to be amended or supplemented by any required prospectus supplement (subject to the terms
                                         of this Agreement), and as so supplemented or amended to be filed pursuant to Rule 424;
                                         and (iii) provide the Investor copies of all correspondence from and to the SEC relating
                                         to a Registration Statement (provided that the Company may excise any information
                                         contained therein which would constitute material non-public information). In the case
                                         of amendments and supplements to a Registration Statement which are required to be filed
                                         pursuant to this Agreement (including pursuant to this Section 6.01(e)) by reason of
                                         the Company’s filing a report on Form 10-K, Form 10-Q, Form 8-K or any analogous
                                         report under the Exchange Act, the Company shall incorporate such report by reference
                                         into the Registration Statement, if applicable, or shall file such amendments or supplements
                                         with the SEC either on the day on which the Exchange Act report is filed which created
                                         the requirement for the Company to amend or supplement the Registration Statement, if
                                         feasible, or otherwise promptly thereafter.

 

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

 

    	 	-21 -	 

     

    

 

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

 

Section
6.03 Opinion of Counsel. Upon the signing of this Agreement, and in any event prior to the initial Registration Statement
is filed, the Company shall cause its securities counsel to deliver to the Investor an opinion in a form satisfactory to the Investor
for a transaction of this type confirming that the execution and delivery of this Agreement and the performance of this Agreement
by the Company does not conflict with or result in a violation of the Certificate of Incorporation of the Company or any agreement
or instrument to which the Company is a party.

 

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

 

Section
6.05 Transfer Agent Instructions. Upon effectiveness of the Registration Statement the Company shall (if required by the
transfer agent for the Common Stock) cause legal counsel for the Company to deliver to the transfer agent for the Common Stock
(with a copy to the Investor) confirmation that such Registration Statement has been declared effective by the SEC and instructions
to issue Common Stock to the Investor free of restrictive legends upon each Advance for so long as the Registration Statement
remains in effect.

 

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

 

    	 	-22 -	 

     

    

 

Section
6.07 Notice of Certain Events Affecting Registration; Suspension of Right to Make an Advance. The Company will immediately
notify the Investor, and confirm in writing, upon its becoming aware of the occurrence of any of the following events in respect
of a Registration Statement or related prospectus relating to an offering of Registrable Securities: (i) receipt of any request
for additional information by the SEC or any other Federal or state governmental authority during the period of effectiveness
of the Registration Statement for amendments or supplements to the Registration Statement or related prospectus; (ii) the issuance
by the SEC or any other Federal governmental authority of any stop order suspending the effectiveness of the Registration Statement
or the initiation of any proceedings for that purpose; (iii) receipt of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation
or written threat of any proceeding for such purpose; (iv) the happening of any event that makes any statement made in the Registration
Statement or related prospectus of any document incorporated or deemed to be incorporated therein by reference untrue in any material
respect or that requires the making of any changes in the Registration Statement, related prospectus or documents so that, in
the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the related
prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading,
or of the necessity to amend the Registration Statement or supplement a related prospectus to comply with the Securities Act or
any other law; and (v) the Company’s reasonable determination that a post-effective amendment to the Registration Statement
would be appropriate (other than, in the case of this clause (v), for routine post-effective amendments required in order to maintain
the effectiveness of a Registration Statement filed on Form S-1); and the Company will promptly make available to the Investor
any such supplement or amendment to the related prospectus. The Company shall not deliver to the Investor any Advance Notice,
and the Investor shall not sell any Registrable Securities pursuant to a Registration Statement, during the continuation of any
of the foregoing events (each of the events described in the immediately preceding clauses (i) through (v), inclusive, a “Material
Outside Event”).

 

Section
6.08 Consolidation. If an Advance Notice has been delivered to the Investor, then the Company shall not effect any consolidation
(a “Consolidation Event”) of the Company with or into, or a transfer of all or substantially all the assets
of the Company to an entity other than a Subsidiary before the transaction contemplated in such Advance Notice has been closed
in accordance with Section 2.02 hereof. The Company shall not give an Advance Notice if a shareholder meeting, or the record date
for any shareholder meeting, would fall during the period beginning on the Advance Notice Date and ending 5 Trading Days following
the closing of such Advance.

 

Section
6.09 Issuance of the Company’s Common Stock. Assuming the accuracy of the representations made by the Investor in
Section 2.04, the sale of the Shares and the Commitment Fee Shares hereunder shall be made in accordance with the provisions and
requirements of Regulation D and any applicable state securities laws.

 

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

 

Section
6.11 Opinion of Counsel Concerning Resales. Provided that the Investor’s resale of Common Stock received pursuant
to this Agreement may be freely sold by the Investor either pursuant to an effective Registration Statement, in accordance with
Rule 144, or otherwise, the Company shall obtain for the Investor, at the Company’s expense, any and all opinions of counsel
which may be required by any party including the Company’s transfer agent, to issue such shares free of restrictive legends,
or to remove legends from such shares.

 

    	 	-23 -	 

     

    

 

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

 

Section
6.13 Sales. Without the written consent of the Investor, the Company will not, directly or indirectly, offer to sell, sell,
contract to sell, grant any option to sell or otherwise dispose of any Common Stock (other than the Shares offered pursuant to
the provisions of this Agreement, the issuance of shares upon the exercise, conversion or exchange of outstanding options, warrants
or other securities of the Company or any of the Subsidiaries, and/or the issuance of shares under publicly disclosed equity compensation
plans of the Company) or securities convertible into or exchangeable for Common Stock, warrants or any rights to purchase or acquire,
Common Stock (other than the issuance of stock options and other equity award under publicly disclosed equity compensation plans
of the Company) during the period beginning on the 5th Trading Day immediately prior to an Advance Notice Date and ending on the
5th Trading Day immediately following the corresponding Advance Date.

 

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

 

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

 

Section
6.16 Use of Proceeds. The Company will use the proceeds from the sale of the Common Stock hereunder for working capital
and other general corporate purposes or, if different, in a manner consistent with the application thereof described in the Registration
Statement. The Company will not, directly or indirectly, use the proceeds of the transactions contemplated herein, or lend, contribute,
facilitate or otherwise make available such proceeds to any Person, (i) to fund, either directly or indirectly, any activities
or business of or with any Person that is identified on the list of Specially Designated Nationals and Blocker Persons maintained
by OFAC, or in any country or territory, that, at the time of such funding, is, or whose government is, the subject of Sanctions
or Sanctions Programs, or (ii) in any other manner that will result in a violation of Sanctions.

 

    	 	-24 -	 

     

    

 

Section
6.17 Compliance with Laws. The Company shall comply with all material Applicable Laws and will not take any action which
will cause the Investor to be in violation of any material Applicable Laws.

 

Article
VII.

Conditions for Advance and Conditions to Closing

 

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

 

		(a)	Accuracy
                                         of the Company’s Representations and Warranties. The representations and warranties
                                         of the Company in this Agreement and each other Transaction Document to which the Company
                                         is a party shall be true and correct in all material respects.

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	-25 -	 

     

    

 

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

 

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

 

		(j)	Consecutive
                                         Advance Notices. Except with respect to the first Advance Notice, the Company shall
                                         have delivered all Shares relating to all prior Advances.

 

Article
VIII.

Non-Disclosure of Non-Public Information

 

The
Company covenants and agrees that it shall refrain from disclosing, and shall cause its officers, directors, employees and agents
to refrain from disclosing, any material non-public information (as determined under the Securities Act or the Exchange Act) to
the Investor, unless prior to disclosure of such information the Company identifies such information as being material non-public
information and provides the Investor with the opportunity to accept or refuse to accept such material non-public information
for review. Unless specifically agreed to in writing, in no event shall the Investor have a duty of confidentially, or be deemed
to have agreed to maintain information in confidence, with respect to (i) any information disclosed in violation of this provision
or (ii) the delivery of any Advance Notices.

 

Article
IX.

Non Exclusive Agreement

 

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

 

    	 	-26 -	 

     

    

 

Article
X.

Choice of Law/Jurisdiction

 

GOVERNING
LAW; MANDATORY JURIDICTION. TO INDUCE INVESTOR TO ENTER INTO THIS AGREEMENT, THE COMPANY IRREVOCABLY AGREE THAT ANY DISPUTE
ARISING UNDER, RELATING TO, OR IN CONNECTION WITH, DIRECTLY OR INDIRECTLY, THIS AGREEMENT OR RELATED TO ANY MATTER WHICH IS THE
SUBJECT OF OR INCIDENTAL TO THIS AGREEMENT ANY OTHER TRANSACTION DOCUMENT (WHETHER OR NOT SUCH CLAIM IS BASED UPON BREACH OF CONTRACT
OR TORT) SHALL BE SUBJECT TO THE EXCLUSIVE JURISDICTION AND VENUE OF THE STATE AND/OR FEDERAL COURTS LOCATED IN UNION COUNTY,
NEW JERSEY; PROVIDED, HOWEVER, INVESTOR MAY, AT ITS SOLE OPTION, ELECT TO BRING ANY ACTION IN ANY OTHER JURISDICTION. THIS
PROVISION IS INTENDED TO BE A “MANDATORY” FORUM SELECTION CLAUSE AND GOVERNED BY AND INTERPRETED CONSISTENT WITH NEW
JERSEY LAW. THE COMPANY HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT HAVING ITS SITUS
IN SAID COUNTY, AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS. THE COMPANY HEREBY WAIVES PERSONAL SERVICE OF ANY AND
ALL PROCESS AND CONSENT THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO
THE COMPANY AS SET FORTH HEREIN IN THE MANNER PROVIDED BY APPLICABLE STATUTE, LAW, RULE OF COURT OR OTHERWISE.

 

Article
XI. Assignment; Termination

 

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

 

Section
11.02 Termination.

 

		(a)	Unless
                                         earlier terminated as provided hereunder, this Agreement shall terminate automatically
                                         on the earlier of (i) the third anniversary of the Effective Date, or (ii) the date on
                                         which the Investor shall have made payment of Advances pursuant to this Agreement in
                                         the aggregate amount of the Commitment Amount

 

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

 

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

 

    	 	-27 -	 

     

    

 

Article
XII. Notices

 

Any
notices, consents, waivers, or other communications required or permitted to be given under the terms of this Agreement must be
in writing and will be deemed to have been delivered (i) upon receipt, when delivered personally; (ii) upon receipt, when sent
by e-mail if sent on a Trading Day, or, if not sent on a Trading Day, on the immediately following Trading Day, provided a copy
is mailed by U.S. certified mail, return receipt requested or overnight carrier; (iii) 3 days after being sent by U.S. certified
mail, return receipt requested, or (iv) 1 day after deposit with a nationally recognized overnight delivery service, in each case
properly addressed to the party to receive the same. The addresses and email addresses for such communications, except for Advance
Notices which shall be delivered in accordance with Exhibit “A” hereof, shall be:

 

	If
    to the Company, to:	Solis
    Tek Inc.	 
	 	16926
    S. Keegan Ave, Suite A	 
	 	Carson,
    CA 90746	 
	 	Attention:
                                         Alan Lien

	 
	 	Telephone:	 	 
	 	Email:
    	 	 
	 	 	 	 
	 With
                                         a copy to:
	

	 
	 	 	 
	 	 	   
	 	Attention:
	 	 
	 	Telephone:	     	 
	 	Email:	 	 

 

	If
    to the Investor:	YA
    II PN, Ltd.
	 	1012
    Springfield Avenue
	 	Mountainside,
    NJ 07092
	 	Attention:
    	Mark Angelo
	 	Telephone:
                                         
	(201) 985-8300                                       
	 	Email:
    mangelo@yorkvilleadvisors.com
	 	 	 
	With
    a copy to:	David
    Gonzalez, Esq. 
	 	1012
    Springfield Avenue
	 	Mountainside,
    NJ 07092
	 	Telephone:
    	(201) 985-8300
	 	Email:
    dgonzalez@yorkvilleadvisors.com

 

Either
party may change its information contained in this Article XII by delivering notice to the other party as set forth herein.

 

Article
XIII. Miscellaneous

 

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

 

Section
13.02 Entire Agreement; Amendments. This Agreement supersedes all other prior oral or written agreements between the Investor,
the Company, their respective affiliates and persons acting on their behalf with respect to the matters discussed herein, and
this Agreement, and the instruments referenced herein contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Investor makes
any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived
or amended other than by an instrument in writing signed by the party to be charged with enforcement.

 

    	 	-28 -	 

     

    

 

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

 

Section
13.04 Structuring and Due Diligence Fee. Each of the parties shall pay its own fees and expenses (including the fees of
any attorneys, accountants, appraisers or others engaged by such party) in connection with this Agreement and the transactions
contemplated hereby.

 

Section
13.05 Commitment Fee. Within three (3) Trading Days of the date hereof, the Company shall pay the Commitment Fee to YA
Global II SPV, LLC by the issuance of warrants to purchase 1,000,000 shares of Common Stock (the “Commitment Fee Shares”)
at an exercise price of $0.01 per share.

 

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

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

    	 	-29 -	 

     

    

 

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

 

	 	COMPANY:	 
	 	SOLIS
    TEK INC., a Nevada corporation	 
	 	 	 	 	 
	 	By:	 	 
	 	Name: 	 	 
	 	Title:	 	 
	 	 	 	 	 
	 	INVESTOR:	 
	 	YA
    II PN, Ltd.	 
	 	 	 	 	 
	 	By:
    	Yorkville
    Advisors Global, LP	 
	 	Its:
    	Investment
    Manager	 
	 	 	 	 
	 	 	By:
    	Yorkville
    Advisors Global II, LLC	 
	 	 	Its:	General
    Partner	 
	 	 	 	 	 
	 	 	By:	 	 
	 	 	Name: 	 	 
	 	 	Title:	 	 

 

    	 	-30 -	 

     

    

 

EXHIBIT
A

ADVANCE NOTICE

 

SOLIS
TEK INC.

 

	Dated:
    ______________	Advance
    Notice Number: _____

 

The
undersigned, _______________________ hereby certifies, with respect to the sale of Common Stock of SOLIS TEK INC. (the “Company”)
issuable in connection with this Advance Notice, delivered pursuant to that certain Standby Equity Distribution Agreement, dated
as of April ___, 2018 (the “Agreement”), as follows:

 

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

 

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

 

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

 

4.
The Advance requested is _____________________.

 

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

 

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

 

	 	SOLIS
    TEK INC.
	 	 	 
	 	By:	    

 

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

Email:
Trading@yorkvilleadvisors.com

Attention:
Trading Department

Confirmation
Telephone Number: (201) 985-8300.

 

    	 	 	 

     

    

 

EXHIBIT
B

FORM
OF SETTLEMENT DOCUMENT

 

VIA
EMAIL

 

SOLIS
TEK INC.

Attn:

Email:

 

	 	Below
    please find the settlement information with respect to the Advance Notice Date of:	 
	 	 	 
	1.	Amount
    of Advance Notice	 
	2.	Adjusted
    Advance (after taking into account any adjustments pursuant to Section 2.01):	 
	3.	Market
    Price	 
	4.	Purchase
    Price (Market Price x 90%) per share	 
	5.	Number
    of Shares due to Investor (number 2 ÷ by number 4, rounded to nearest whole share)	 

 

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

Email:
Trading@yorkvilleadvisors.com

Attention:
Trading Department

Confirmation
Telephone Number: (201) 985-8300.

 

    	 	 	 

     

    

 

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

 

Investor’s
DTC participant #:

 

ACCOUNT
NAME:

ACCOUNT
NUMBER:

ADDRESS:

CITY:

COUNTRY:

Contact
person:

Number
and/or email: 

 

	 	Sincerely,
	 	YA
    II PN, LTD.

 

Approved
and agreed:

 

	SOLIS
    TEK INC.	 
	 	 	 
	By:	 	 
	Name: 	 	 
	Title:	 	 

 

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

Email:
Trading@yorkvilleadvisors.com

Attention:
Trading Department

Confirmation
Telephone Number: (201) 985-8300.

 

    	 	 	 

     

    

 

EXHIBIT
C

PLAN
OF DISTRIBUTION

 

The
Selling Stockholder and any of its pledgees, assignees and successors-in-interest may, from time to time, sell shares of common
stock offered by this prospectus, which we refer to as the resale shares, either on the OTCQB or any other stock exchange, market
or trading facility on which the common stock is then traded or in private transactions. These sales may be at fixed or negotiated
prices. The Selling Stockholder may use any one or more of the following methods when selling the resale shares:

 

		●	ordinary
                                         brokerage transactions and transactions in which a broker-dealer solicits purchasers;

 

		●	block
                                         trades in which a broker-dealer attempts to sell resale shares as agent but may position
                                         and resell a portion of the block as principal to facilitate the transaction;

 

		●	purchases
                                         by a broker-dealer as principal, for resale by the broker-dealer for its account;

 

		●	an
                                         exchange distribution in accordance with the rules of the applicable exchange;

 

		●	privately
                                         negotiated transactions;

 

		●	sale
                                         of a specified number of resale shares at a stipulated price per share, as a broker-dealer
                                         may agree upon with the Selling Stockholder from time to time;

 

		●	writing
                                         or settlement of options or other hedging transactions, whether through an options exchange
                                         or otherwise;

 

		●	a
                                         combination of any such methods of sale; or

 

		●	any
                                         other method permitted by applicable law.

 

The
Selling Stockholder may sell resale shares in accordance with Rule 144 under the Securities Act of 1933, or the Securities Act,
rather than under this prospectus.

 

Broker-dealers
engaged by the Selling Stockholder may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholder (or, if any broker-dealer acts as agent for the purchaser of resale shares, from the
purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency
transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2121.

 

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

Email:
Trading@yorkvilleadvisors.com

Attention:
Trading Department

Confirmation
Telephone Number: (201) 985-8300.

 

    	 	 	 

     

    

 

The
Selling Stockholder is, and any broker-dealer or agent that is involved in selling resale shares may be deemed to be, an “underwriter”
within the meaning of Section 2(a)(11) of the Securities Act in connection with such sales. In such event, any commissions received
by such a broker-dealer or agent and any profit on the resale of the resale shares purchased by the broker-dealer may be deemed
to be underwriting commissions or discounts under the Securities Act. There is no underwriter (other than the Selling Stockholder
and any broker-dealer or agent deemed to be an underwriter as described above) or coordinating broker acting in connection with
the proposed sale of the resale shares by the Selling Stockholder. The Selling Stockholder has informed us that it does not have
any written or oral agreement or understanding, directly or indirectly, with any person to distribute resale shares. In no event
shall any broker-dealer receive fees, commissions and markups that, in the aggregate, would exceed eight percent (8%) of gross
proceeds from a sale of resale shares.

 

Because
the Selling Stockholder is an “underwriter” within the meaning of the Securities Act, it is subject to the prospectus
delivery requirements of the Securities Act including Rule 172 thereunder.

 

We
have agreed to keep this prospectus effective until the earlier of (i) the date on which the resale shares may be resold by the
Selling Stockholders without registration and without regard to any time, volume or manner limitations by reason of Rule 144 under
the Securities Act or any other rule of similar effect or (ii) all of the resale shares have been sold pursuant to this prospectus
or Rule 144 under the Securities Act or any other rule of similar effect. The resale shares will be sold only through registered
or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale
shares may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the
registration or qualification requirement is available and is complied with.

 

Expenses,
Indemnification

 

We
will not receive any of the proceeds from the sale of resale shares by the Selling Stockholder and will bear all expenses related
to the registration of this offering, but will not pay for any commissions, fees or discounts, if any, relating to the sale of
resale shares by the Selling Stockholder. We have agreed to indemnify the Selling Stockholder against certain losses, claims,
damages and liabilities, including liabilities under the Securities Act.

 

Supplements

 

In
the event of a material change in the plan of distribution disclosed in this prospectus, the Selling Stockholder will not be able
to effect transactions in the resale shares pursuant to this prospectus until such time as a post-effective amendment to the registration
statement is filed with, and declared effective by, the SEC.

 

Regulation
M

 

We
have informed the Selling Stockholder that it is required to comply with Regulation M promulgated under the Securities Exchange
Act of 1934 with respect to any purchase or sale of our common stock. In general, Rule 102 under Regulation M prohibits any person
connected with a distribution of our common stock from directly or indirectly bidding for, or purchasing for any account in which
it has a beneficial interest, any of the resale shares or any right to purchase the resale shares, for a period of one trading
day before and after completion of its participation in the distribution.

 

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

Email:
Trading@yorkvilleadvisors.com

Attention:
Trading Department

Confirmation
Telephone Number: (201) 985-8300.

 

    	 	 	 

     

    

 

During
any distribution period, Regulation M prohibits the Selling Stockholder and any other persons engaged in the distribution from
engaging in any stabilizing bid or purchasing our common stock except for the purpose of preventing or retarding a decline in
the open market price of the common stock. None of these persons may affect any stabilizing transaction to facilitate any offering
at the market.

 

We
have also advised the Selling Stockholder that it should be aware that the anti-manipulation provisions of Regulation M under
the Exchange Act will apply to purchases and sales of common stock by the Selling Stockholder, and that there are restrictions
on market-making activities by persons engaged in the distribution of the resale shares. Under Regulation M, the Selling Stockholder
or its agents may not bid for, purchase, or attempt to induce any person to bid for or purchase, shares of our common stock while
the Selling Stockholder is distributing resale shares. Regulation M may prohibit the Selling Stockholder from covering short sales
by purchasing resale shares while the distribution is taking place, despite any contractual rights to do so under our agreement
with the Selling Stockholder. We have advised the Selling Stockholder that it should consult with its own legal counsel to ensure
compliance with Regulation M.

 

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

Email:
Trading@yorkvilleadvisors.com

Attention:
Trading Department

Confirmation
Telephone Number: (201) 985-8300.WARRANT

 

THE
SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN A FORM REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

 

SOLIS
TEK INC.

 

Warrant
To Purchase Common Stock

 

	Warrant
    No.: SLTK-1-2	Number
    of Shares:	1,000,000	 
	 	Warrant
    Exercise Price:	$0.01	 
	 	Expiration
    Date: 	April
    15, 2023	 

 

Date
of Issuance: April 16, 2018

 

Solis
Tek Inc., a Nevada corporation (the “Company”), hereby certifies that, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, YA Global II SPV, LLC (the “Holder”),
the registered holder hereof or its permitted assigns, is entitled, subject to the terms set forth below, to purchase from the
Company upon surrender of this Warrant, at any time or times on or after the date hereof, but not after 11:59 P.M. Eastern Time
on the Expiration Date (as defined herein) up to 1,000,000 fully paid and nonassessable shares of Common Stock (as defined herein)
of the Company (the “Warrant Shares”) at the exercise price per share provided in Section 1(b) below or as
subsequently adjusted; provided, however, that in no event shall the holder be entitled to exercise this Warrant for a number
of Warrant Shares in excess of that number of Warrant Shares which, upon giving effect to such exercise, would cause the aggregate
number of shares of Common Stock beneficially owned by the holder and its affiliates to exceed 9.99% of the outstanding shares
of the Common Stock following such exercise, except within sixty (60) days of the Expiration Date (however, such restriction may
be waived by Holder (but only as to itself and not to any other holder) upon not less than 65 days prior notice to the Company).
For purposes of the foregoing proviso, the aggregate number of shares of Common Stock beneficially owned by the holder and its
affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the
determination of such proviso is being made, but shall exclude shares of Common Stock which would be issuable upon (i) exercise
of the remaining, unexercised Warrants beneficially owned by the holder and its affiliates and (ii) exercise or conversion of
the unexercised or unconverted portion of any other securities of the Company beneficially owned by the holder and its affiliates
(including, without limitation, any convertible notes or preferred stock) subject to a limitation on conversion or exercise analogous
to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial
ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended. For purposes
of this Warrant, in determining the number of outstanding shares of Common Stock a holder may rely on the number of outstanding
shares of Common Stock as reflected in (1) the Company’s most recent Form 10-QSB or Form 10-KSB, as the case may be, (2)
a more recent public announcement by the Company or (3) any other notice by the Company or its transfer agent setting forth the
number of shares of Common Stock outstanding. Upon the written request of any holder, the Company shall promptly, but in no event
later than 1 Business Day following the receipt of such notice, confirm in writing to any such holder the number of shares of
Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving
effect to the exercise of Warrants (as defined below) by such holder and its affiliates since the date as of which such number
of outstanding shares of Common Stock was reported.

 

    	 	 	 

    	 

    

 

Section
1.

 

(a)
This Warrant is issued pursuant to the Securities Purchase Agreement (“Securities Purchase Agreement”) of even
date hereof between the Company and the Holder or issued in exchange or substitution thereafter or replacement thereof. Each Capitalized
term used, and not otherwise defined herein, shall have the meaning ascribed thereto in the Securities Purchase Agreement.

 

(b)
Definitions. The following words and terms as used in this Warrant shall have the following meanings:

 

(i)
“Approved Stock Plan” means a stock option plan that has been approved by the Board of Directors of the Company
prior to the date of the Securities Purchase Agreement, pursuant to which the Company’s securities may be issued only to
any employee, officer, director or third party service providers in the normal course of business, for services provided to the
Company.

 

(ii)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in the City
of New York are authorized or required by law to remain closed.

 

(iii)
“Closing Bid Price” means the closing bid price of Common Stock as quoted on the Principal Market (as reported
by Bloomberg, LP (“Bloomberg”) through its “Volume at Price” function).

 

(iv)
“Common Stock” means (i) the Company’s common stock, par value $0.001 per share, and (ii) any capital
stock into which such Common Stock shall have been changed or any capital stock resulting from a reclassification of such Common
Stock.

 

(v)
“Event of Default” means an event of default under the Securities Purchase Agreement or the Convertible Debenture
issued in connection therewith.

 

    	 	2	 

    	 

    

 

(vi)
“Excluded Securities” means, (a) shares issued or deemed to have been issued by the Company pursuant to an
Approved Stock Plan, (b) shares of Common Stock issued or deemed to be issued by the Company upon the conversion, exchange or
exercise of any right, option, obligation or security outstanding on the date prior to date of the Securities Purchase Agreement
as disclosed in Schedule 3(e) therein, provided that the terms of such right, option, obligation or security are not amended or
otherwise modified on or after the date of the Securities Purchase Agreement, and provided that the conversion price, exchange
price, exercise price or other purchase price is not reduced, adjusted or otherwise modified and the number of shares of Common
Stock issued or issuable is not increased (whether by operation of, or in accordance with, the relevant governing documents or
otherwise) on or after the date of the Securities Purchase Agreement, and (c) the shares of Common Stock issued or deemed to be
issued by the Company upon conversion of the Convertible Debenture or exercise of the Warrants and (d) Shares issued to employees,
officers, directors, or service providers consistent with past practices in the normal course of business.

 

(vii)
“Expiration Date” means the date set forth on the first page of this Warrant.

 

(viii)
“Issuance Date” means the date hereof.

 

(ix)
“Options” means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities.

 

(x)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization and a government or any department or agency thereof.

 

(xi)
“Primary Market” means the OTCQB–MKT .

 

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

 

(xiii)
“Warrant” means this Warrant and all Warrants issued in exchange, transfer or replacement thereof.

 

(xiv)
“Warrant Exercise Price” shall be $0.01 per share or as subsequently adjusted as provided in Section 8 hereof.

 

(c)
Other Definitional Provisions.

 

(i)
Except as otherwise specified herein, all references herein (A) to the Company shall be deemed to include the Company’s
successors and (B) to any applicable law defined or referred to herein shall be deemed references to such applicable law as the
same may have been or may be amended or supplemented from time to time.

 

(ii)
When used in this Warrant, the words “herein”, “hereof”, and “hereunder”
and words of similar import, shall refer to this Warrant as a whole and not to any provision of this Warrant, and the words
“Section”, “Schedule”, and “Exhibit” shall refer to Sections of, and
Schedules and Exhibits to, this Warrant unless otherwise specified.

 

    	 	3	 

    	 

    

 

(iii)
Whenever the context so requires, the neuter gender includes the masculine or feminine, and the singular number includes the plural,
and vice versa.

 

Section
2. Exercise of Warrant.

 

(a)
Subject to the terms and conditions hereof, this Warrant may be exercised by the holder hereof then registered on the books of
the Company, pro rata as hereinafter provided, at any time on any Business Day on or after the opening of business on such Business
Day, commencing with the first day after the date hereof, and prior to 11:59 P.M. Eastern Time on the Expiration Date (i) by delivery
of a written notice, in the form of the subscription notice attached as Exhibit A hereto (the “Exercise Notice”),
of such holder’s election to exercise this Warrant, which notice shall specify the number of Warrant Shares to be purchased,
payment to the Company of an amount equal to the Warrant Exercise Price(s) applicable to the Warrant Shares being purchased, multiplied
by the number of Warrant Shares (at the applicable Warrant Exercise Price) as to which this Warrant is being exercised (plus any
applicable issue or transfer taxes) (the “Aggregate Exercise Price”) in cash or wire transfer of immediately
available funds and the surrender of this Warrant (or an indemnification undertaking with respect to this Warrant in the case
of its loss, theft or destruction) to a common carrier for overnight delivery to the Company as soon as practicable following
such date (“Cash Basis”) or (ii) if at the time of exercise, the Warrant Shares are not subject to an effective
registration statement or if an Event of Default has occurred, by delivering an Exercise Notice and in lieu of making payment
of the Aggregate Exercise Price in cash or wire transfer, elect instead to receive upon such exercise the “Net Number”
of shares of Common Stock determined according to the following formula (the “Cashless Exercise”):

 

Net
Number = (A x B) – (A x C)

B

 

For
purposes of the foregoing formula:

 

A
= the total number of Warrant Shares with respect to which this Warrant is then being exercised.

 

B
= the Closing Bid Price of the Common Stock on the date of exercise of the Warrant.

 

C
= the Warrant Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

 

In
the event of any exercise of the rights represented by this Warrant in compliance with this Section 2, the Company shall on or
before the 3rd Business Day following the date of receipt of the Exercise Notice, the Aggregate Exercise Price and
this Warrant (or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction) and
the receipt of the representations of the holder specified in Section 6 hereof, if requested by the Company (the “Exercise
Delivery Documents”), and if the Common Stock is DTC eligible, credit such aggregate number of shares of Common Stock
to which the holder shall be entitled to the holder’s or its designee’s balance account with The Depository Trust
Company; provided, however, if the holder who submitted the Exercise Notice requested physical delivery of any or all of the Warrant
Shares, or, if the Common Stock is not DTC eligible then the Company shall, on or before the 3rd Business Day following
receipt of the Exercise Delivery Documents, issue and surrender to a common carrier for overnight delivery to the address specified
in the Exercise Notice, a certificate, registered in the name of the holder, for the number of shares of Common Stock to which
the holder shall be entitled pursuant to such request. Upon delivery of the Exercise Notice and Aggregate Exercise Price referred
to in clause (i) or (ii) above the holder of this Warrant shall be deemed for all corporate purposes to have become the holder
of record of the Warrant Shares with respect to which this Warrant has been exercised. In the case of a dispute as to the determination
of the Warrant Exercise Price, the Closing Bid Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly
issue to the holder the number of Warrant Shares that is not disputed and shall submit the disputed determinations or arithmetic
calculations to the holder via facsimile within 1 Business Day of receipt of the holder’s Exercise Notice.

 

    	 	4	 

    	 

    

 

(b)
If the holder and the Company are unable to agree upon the determination of the Warrant Exercise Price or arithmetic calculation
of the Warrant Shares within 1 day of such disputed determination or arithmetic calculation being submitted to the holder, then
the Company shall immediately submit via electronic mail (i) the disputed determination of the Warrant Exercise Price or the Closing
Bid Price to an independent, reputable investment banking firm or (ii) the disputed arithmetic calculation of the Warrant Shares
to its independent, outside accountant. The Company shall cause the investment banking firm or the accountant, as the case may
be, to perform the determinations or calculations and notify the Company and the holder of the results no later than 48 hours
from the time it receives the disputed determinations or calculations. Such investment banking firm’s or accountant’s
determination or calculation, as the case may be, shall be deemed conclusive absent manifest error.

 

(c)
Unless the rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, as soon
as practicable and in no event later than 5 Business Days after any exercise and at its own expense, issue a new Warrant identical
in all respects to this Warrant exercised except it shall represent rights to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under this Warrant exercised, less the number of Warrant Shares with respect to which such
Warrant is exercised.

 

(d)
No fractional Warrant Shares are to be issued upon any pro rata exercise of this Warrant, but rather the number of Warrant Shares
issued upon such exercise of this Warrant shall be rounded up or down to the nearest whole number.

 

(e)
If the Company or its Transfer Agent shall fail for any reason or for no reason to issue to the holder within 5 days of receipt
of the Exercise Delivery Documents, a certificate for the number of Warrant Shares to which the holder is entitled or to credit
the holder’s balance account with The Depository Trust Company for such number of Warrant Shares to which the holder is
entitled upon the holder’s exercise of this Warrant, the Company shall, in addition to any other remedies under this Warrant
or otherwise available to such holder, pay as additional damages in cash to such holder on each day the issuance of such certificate
for Warrant Shares is not timely effected an amount equal to 0.025% of the product of (A) the sum of the number of Warrant Shares
not issued to the holder on a timely basis and to which the holder is entitled, and (B) the Closing Bid Price of the Common Stock
for the trading day immediately preceding the last possible date which the Company could have issued such Common Stock to the
holder without violating this Section 2.

 

    	 	5	 

    	 

    

 

(f)
If within 5 days after the Company’s receipt of the Exercise Delivery Documents, the Company fails to deliver a new Warrant
to the holder for the number of Warrant Shares to which such holder is entitled pursuant to Section 2 hereof, then, in addition
to any other available remedies under this Warrant, or otherwise available to such holder, the Company shall pay as additional
damages in cash to such holder on each day after such 5th day that such delivery of such new Warrant is not timely
effected in an amount equal to 0.25% of the product of (A) the number of Warrant Shares represented by the portion of this Warrant
which is not being exercised and (B) the Closing Bid Price of the Common Stock for the trading day immediately preceding the last
possible date which the Company could have issued such Warrant to the holder without violating this Section 2.

 

Section
3. Covenants as to Common Stock. The Company hereby covenants and agrees as follows:

 

(a)
This Warrant is, and any Warrants issued in substitution for or replacement of this Warrant will upon issuance be, duly authorized
and validly issued.

 

(b)
All Warrant Shares which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly
issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue thereof.

 

(c)
During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized
and reserved at least 100% of the number of shares of Common Stock needed to provide for the exercise of the rights then represented
by this Warrant and the par value of said shares will at all times be less than or equal to the applicable Warrant Exercise Price.
If at any time the Company does not have a sufficient number of shares of Common Stock authorized and available, then the Company
shall call and hold a special meeting of its stockholders within 60 days of that time for the sole purpose of increasing the number
of authorized shares of Common Stock.

 

(d)
If at any time after the date hereof the Company shall file a registration statement, the Company shall include the Warrant Shares
issuable to the holder, pursuant to the terms of this Warrant and shall maintain, so long as any other shares of Common Stock
shall be so listed, such listing of all Warrant Shares from time to time issuable upon the exercise of this Warrant; and the Company
shall so list on each national securities exchange or automated quotation system, as the case may be, and shall maintain such
listing of, any other shares of capital stock of the Company issuable upon the exercise of this Warrant if and so long as any
shares of the same class shall be listed on such national securities exchange or automated quotation system.

 

    	 	6	 

    	 

    

 

(e)
The Company will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms to be observed or performed by it hereunder, but will at all times in good faith assist in the carrying out
of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant against dilution or other impairment, consistent
with the tenor and purpose of this Warrant. The Company will not increase the par value of any shares of Common Stock receivable
upon the exercise of this Warrant above the Warrant Exercise Price then in effect, and (ii) will take all such actions as may
be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common
Stock upon the exercise of this Warrant.

 

(f)
This Warrant will be binding upon any entity succeeding to the Company by merger, consolidation or acquisition of all or substantially
all of the Company’s assets.

 

Section
4. Taxes. The Company shall pay any and all taxes, except any applicable withholding, which may be payable with respect
to the issuance and delivery of Warrant Shares upon exercise of this Warrant.

 

Section
5. Warrant Holder Not Deemed a Stockholder. Except as otherwise specifically provided herein, no holder, as such, of this
Warrant shall be entitled to vote or receive dividends or be deemed the holder of shares of capital stock of the Company for any
purpose, nor shall anything contained in this Warrant be construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization,
issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive
dividends or subscription rights, or otherwise, prior to the issuance to the holder of this Warrant of the Warrant Shares which
he or she is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall
be construed as imposing any liabilities on such holder to purchase any securities (upon exercise of this Warrant or otherwise)
or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding
this Section 5, the Company will provide the holder of this Warrant with copies of the same notices and other information given
to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.

 

Section
6. Representations of Holder. The holder of this Warrant, by the acceptance hereof, represents that it is acquiring this
Warrant and the Warrant Shares for its own account for investment only and not with a view towards, or for resale in connection
with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under
the Securities Act; provided, however, that by making the representations herein, the holder does not agree to hold this Warrant
or any of the Warrant Shares for any minimum or other specific term and reserves the right to dispose of this Warrant and the
Warrant Shares at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act.
The holder of this Warrant further represents, by acceptance hereof, that, as of this date, such holder is an “accredited
investor” as such term is defined in Rule 501(a)(1) of Regulation D promulgated by the Securities and Exchange Commission
under the Securities Act (an “Accredited Investor”). Upon exercise of this Warrant the holder shall, if requested
by the Company, confirm in writing, in a form satisfactory to the Company, that the Warrant Shares so purchased are being acquired
solely for the holder’s own account and not as a nominee for any other party, for investment, and not with a view toward
distribution or resale and that such holder is an Accredited Investor. If such holder cannot make such representations because
they would be factually incorrect, it shall be a condition to such holder’s exercise of this Warrant that the Company receive
such other representations as the Company considers reasonably necessary to assure the Company that the issuance of its securities
upon exercise of this Warrant shall not violate any United States or state securities laws.

 

    	 	7	 

    	 

    

 

Section
7. Ownership and Transfer.

 

(a)
The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate
by notice to the holder hereof), a register for this Warrant, in which the Company shall record the name and address of the person
in whose name this Warrant has been issued, as well as the name and address of each transferee. The Company may treat the person
in whose name any Warrant is registered on the register as the owner and holder thereof for all purposes, notwithstanding any
notice to the contrary, but in all events recognizing any transfers made in accordance with the terms of this Warrant.

 

Section
8. Adjustment of Warrant Exercise Price. The Warrant Exercise Price of this Warrant shall be adjusted from time to time
as follows:

 

(a)
Adjustment of Warrant Exercise Price. If and whenever on or after the Issuance Date of this Warrant, the Company issues
or sells, or is deemed to have issued or sold, any shares of Common Stock (other than Excluded Securities) for a consideration
per share less than a price (the “Applicable Price”) equal to the Warrant Exercise Price in effect immediately
prior to such issuance or sale, then immediately after such issue or sale the Warrant Exercise Price then in effect shall be reduced
to an amount equal to such consideration per share..

 

(b)
Effect on Warrant Exercise Price of Certain Events. For purposes of determining the adjusted Warrant Exercise Price under
Section 8(a) above, the following shall be applicable:

 

(i)
Issuance of Options. If after the date hereof, the Company in any manner grants any Options and the lowest price per share
for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion or exchange of any convertible
securities issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall
be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option
for such price per share. For purposes of this Section 8(b)(i), the lowest price per share for which one share of Common Stock
is issuable upon exercise of such Options or upon conversion or exchange of such Convertible Securities shall be equal to the
sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common
Stock upon the granting or sale of the Option, upon exercise of the Option or upon conversion or exchange of any convertible security
issuable upon exercise of such Option. No further adjustment of the Warrant Exercise Price shall be made upon the actual issuance
of such Common Stock or of such convertible securities upon the exercise of such Options or upon the actual issuance of such Common
Stock upon conversion or exchange of such convertible securities.

 

    	 	8	 

    	 

    

 

(ii)
Issuance of Convertible Securities. If the Company in any manner issues or sells any convertible securities and the lowest
price per share for which one share of Common Stock is issuable upon the conversion or exchange thereof is less than the Applicable
Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the
time of the issuance or sale of such convertible securities for such price per share. For the purposes of this Section 8(b)(ii),
the lowest price per share for which one share of Common Stock is issuable upon such conversion or exchange shall be equal to
the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common
Stock upon the issuance or sale of the convertible security and upon conversion or exchange of such convertible security. No further
adjustment of the Warrant Exercise Price shall be made upon the actual issuance of such Common Stock upon conversion or exchange
of such convertible securities, and if any such issue or sale of such convertible securities is made upon exercise of any Options
for which adjustment of the Warrant Exercise Price had been or are to be made pursuant to other provisions of this Section 8(b),
no further adjustment of the Warrant Exercise Price shall be made by reason of such issue or sale.

 

(iii)
Change in Option Price or Rate of Conversion. If the purchase price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion or exchange of any convertible securities, or the rate at which any convertible securities
are convertible into or exchangeable for Common Stock changes at any time, the Warrant Exercise Price in effect at the time of
such change shall be adjusted to the Warrant Exercise Price which would have been in effect at such time had such Options or convertible
securities provided for such changed purchase price, additional consideration or changed conversion rate, as the case may be,
at the time initially granted, issued or sold and the number of Warrant Shares issuable upon exercise of this Warrant shall be
correspondingly readjusted. For purposes of this Section 8(b)(iii), if the terms of any Option or convertible security that was
outstanding as of the Issuance Date of this Warrant are changed in the manner described in the immediately preceding sentence,
then such Option or convertible security and the Common Stock deemed issuable upon exercise, conversion or exchange thereof shall
be deemed to have been issued as of the date of such change. No adjustment pursuant to this Section 8(b) shall be made if such
adjustment would result in an increase of the Warrant Exercise Price then in effect.

 

(iv)
Calculation of Consideration Received. If any Common Stock, Options or convertible securities are issued or sold or deemed
to have been issued or sold for cash, the consideration received therefore will be deemed to be the net amount received by the
Company therefore. If any Common Stock, Options or convertible securities are issued or sold for a consideration other than cash,
the amount of such consideration received by the Company will be the fair value of such consideration, except where such consideration
consists of marketable securities, in which case the amount of consideration received by the Company will be the market price
of such securities on the date of receipt of such securities. If any Common Stock, Options or convertible securities are issued
to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount
of consideration therefore will be deemed to be the fair value of such portion of the net assets and business of the non-surviving
entity as is attributable to such Common Stock, Options or convertible securities, as the case may be. The fair value of any consideration
other than cash or securities will be determined jointly by the Company and the holders of Warrants representing at least two-thirds
(b) of the Warrant Shares issuable upon exercise of the Warrants then outstanding. If such parties are unable to reach agreement
within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”), the fair
value of such consideration will be determined within five (5) Business Days after the tenth (10th) day following the
Valuation Event by an independent, reputable appraiser jointly selected by the Company and the holders of Warrants representing
at least two-thirds (b) of the Warrant Shares issuable upon exercise of the Warrants then outstanding. The determination of such
appraiser shall be final and binding upon all parties and the fees and expenses of such appraiser shall be borne jointly by the
Company and the holders of Warrants.

 

    	 	9	 

    	 

    

 

(v)
Integrated Transactions. In case any Option is issued in connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction in which no specific consideration is allocated to such Options by the parties
thereto, the Options will be deemed to have been issued for a consideration of $.01.

 

(vi)
Treasury Shares. The number of shares of Common Stock outstanding at any given time does not include shares owned or held
by or for the account of the Company, and the disposition of any shares so owned or held will be considered an issue or sale of
Common Stock.

 

(vii)
Record Date. If the Company takes a record of the holders of Common Stock for the purpose of entitling them (1) to receive
a dividend or other distribution payable in Common Stock, Options or in convertible securities or (2) to subscribe for or purchase
Common Stock, Options or convertible securities, then such record date will be deemed to be the date of the issue or sale of the
shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase, as the case may be.

 

(c)
Adjustment of Warrant Exercise Price upon Subdivision or Combination of Common Stock. If the Company at any time after
the date of issuance of this Warrant subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more
classes of its outstanding shares of Common Stock into a greater number of shares, any Warrant Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced and the number of shares of Common Stock obtainable upon exercise of
this Warrant will be proportionately increased. If the Company at any time after the date of issuance of this Warrant combines
(by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller
number of shares, any Warrant Exercise Price in effect immediately prior to such combination will be proportionately increased
and the number of Warrant Shares issuable upon exercise of this Warrant will be proportionately decreased. Any adjustment under
this Section 8(c) shall become effective at the close of business on the date the subdivision or combination becomes effective.

 

    	 	10	 

    	 

    

 

(d)
Distribution of Assets. If the Company shall declare or make any dividend or other distribution of its assets (or rights
to acquire its assets) to holders of Common Stock, by way of return of capital or otherwise (including, without limitation, any
distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate
rearrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant,
then, in each such case:

 

(i)
any Warrant Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination
of holders of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such
record date, to a price determined by multiplying such Warrant Exercise Price by a fraction of which (A) the numerator shall be
the Closing Sale Price of the Common Stock on the trading day immediately preceding such record date minus the value of the Distribution
(as determined in good faith by the Company’s Board of Directors) applicable to one share of Common Stock, and (B) the denominator
shall be the Closing Sale Price of the Common Stock on the trading day immediately preceding such record date; and

 

(ii)
either (A) the number of Warrant Shares obtainable upon exercise of this Warrant shall be increased to a number of shares equal
to the number of shares of Common Stock obtainable immediately prior to the close of business on the record date fixed for the
determination of holders of Common Stock entitled to receive the Distribution multiplied by the reciprocal of the fraction set
forth in the immediately preceding clause (i), or (B) in the event that the Distribution is of common stock of a company whose
common stock is traded on a national securities exchange or a national automated quotation system, then the holder of this Warrant
shall receive an additional warrant to purchase Common Stock, the terms of which shall be identical to those of this Warrant,
except that such warrant shall be exercisable into the amount of the assets that would have been payable to the holder of this
Warrant pursuant to the Distribution had the holder exercised this Warrant immediately prior to such record date and with an exercise
price equal to the amount by which the exercise price of this Warrant was decreased with respect to the Distribution pursuant
to the terms of the immediately preceding clause (i).

 

(e)
Certain Events. If any event occurs of the type contemplated by the provisions of this Section 8 but not expressly provided
for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other
rights with equity features), then the Company’s Board of Directors will make an appropriate adjustment in the Warrant Exercise
Price and the number of shares of Common Stock obtainable upon exercise of this Warrant so as to protect the rights of the holders
of the Warrants; provided, except as set forth in section 8(c),that no such adjustment pursuant to this Section 8(e) will increase
the Warrant Exercise Price or decrease the number of shares of Common Stock obtainable as otherwise determined pursuant to this
Section 8.

 

(f)
Voluntary Adjustments By Company. The Company may at any time during the term of this Warrant reduce the then current Exercise
Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.

 

    	 	11	 

    	 

    

 

(g)
Notices.

 

(i)
Immediately upon any adjustment of the Warrant Exercise Price, the Company will give written notice thereof to the holder of this
Warrant, setting forth in reasonable detail, and certifying, the calculation of such adjustment.

 

(ii)
The Company will give written notice to the holder of this Warrant at least ten (10) days prior to the date on which the Company
closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, (B) with respect to
any pro rata subscription offer to holders of Common Stock or (C) for determining rights to vote with respect to any Organic Change
(as defined below), dissolution or liquidation, provided that such information shall be made known to the public prior to or in
conjunction with such notice being provided to such holder.

 

(iii)
The Company will also give written notice to the holder of this Warrant at least 10 days prior to the date on which any Organic
Change, dissolution or liquidation will take place, provided that such information shall be made known to the public prior to
or in conjunction with such notice being provided to such holder.

 

Section
9. Purchase Rights; Reorganization, Reclassification, Consolidation, Merger or Sale.

 

(a)
In addition to any adjustments pursuant to Section 8 above, if at any time the Company grants, issues or sells any Options, convertible
securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of
Common Stock (the “Purchase Rights”), then the holder of this Warrant will be entitled to acquire, upon the
terms applicable to such Purchase Rights, the aggregate Purchase Rights which such holder could have acquired if such holder had
held the number of shares of Common Stock acquirable upon complete exercise of this Warrant immediately before the date on which
a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which
the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

 

(b)
Any recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially all of the Company’s
assets to another Person or other transaction in each case which is effected in such a way that holders of Common Stock are entitled
to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common
Stock is referred to herein as an “Organic Change.” Prior to the consummation of any (i) sale of all or substantially
all of the Company’s assets to an acquiring Person or (ii) other Organic Change following which the Company is not a surviving
entity, the Company will secure from the Person purchasing such assets or the successor resulting from such Organic Change (in
each case, the “Acquiring Entity”) a written agreement (in form and substance satisfactory to the holders of
Warrants representing at least two-thirds (iii) of the Warrant Shares issuable upon exercise of the Warrants then outstanding)
to deliver to each holder of Warrants in exchange for such Warrants, a security of the Acquiring Entity evidenced by a written
instrument substantially similar in form and substance to this Warrant and satisfactory to the holders of the Warrants (including
an adjusted warrant exercise price equal to the value for the Common Stock reflected by the terms of such consolidation, merger
or sale, and exercisable for a corresponding number of shares of Common Stock acquirable and receivable upon exercise of the Warrants
without regard to any limitations on exercise, if the value so reflected is less than any Applicable Warrant Exercise Price immediately
prior to such consolidation, merger or sale). Prior to the consummation of any other Organic Change, the Company shall make appropriate
provision (in form and substance satisfactory to the holders of Warrants representing a majority of the Warrant Shares issuable
upon exercise of the Warrants then outstanding) to insure that each of the holders of the Warrants will thereafter have the right
to acquire and receive in lieu of or in addition to (as the case may be) the Warrant Shares immediately theretofore issuable and
receivable upon the exercise of such holder’s Warrants (without regard to any limitations on exercise), such shares of stock,
securities or assets that would have been issued or payable in such Organic Change with respect to or in exchange for the number
of Warrant Shares which would have been issuable and receivable upon the exercise of such holder’s Warrant as of the date
of such Organic Change (without taking into account any limitations or restrictions on the exercisability of this Warrant).

 

    	 	12	 

    	 

    

 

Section
10. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company
shall promptly, on receipt of an indemnification undertaking (or, in the case of a mutilated Warrant, the Warrant), issue a new
Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.

 

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

 

	If
    to Holder:	YA
        Global II SPV, LLC.

        

        

	 	c/o
        Yorkville Advisors Global, LP
	 	1012
    Springfield Avenue
	 	Mountainside,
    NJ 07092
	 	Attention:
    Mark A. Angelo
	 	Telephone:
    (201) 536-5114
	 	Email:
    mangelo@yorkvilleadvisors.com
	 	 
	With
    Copy to:	David
    Gonzalez, Esq.
	 	1012
    Springfield Avenue 
	 	Mountainside,
    NJ 07092
	 	Telephone:
    (201) 536-5109
	 	Email:
    dgonzalez@yorkvilleadvisors.com

 

    	 	13	 

    	 

    

 

	If
    to the Company, to:	Solis
    Tek Inc.
	 	16926
    S. Keegan Ave. – Suite A
	 	Carson,
    CA 90746
	 	Attention:
    Alan Lien
	 	Telephone:
    (888)998-8881
	 	Email:
    alien@solit-tek.com
	 	 
	With
        a copy to:

        
	The
Bingham Law Group, APC

	 	1106
    Second Street, Suite 195
	 	Encinitas,
    CA 92024
	 	Attention:
    Stanley Moskowitz, Esq.
	 	Telephone:
    (858)523-0100
	 	Email:
    smoskowitz@san.rr.com

 

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

 

Section
12. Date. The date of this Warrant is set forth on page 1 hereof. This Warrant, in all events, shall be wholly void and
of no effect after the close of business on the Expiration Date, except that notwithstanding any other provisions hereof, the
provisions of Section 8(b) shall continue in full force and effect after such date as to any Warrant Shares or other securities
issued upon the exercise of this Warrant.

 

Section
13. Amendment and Waiver. Except as otherwise provided herein, the provisions of the Warrant may be amended and the Company
may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has
obtained the written consent of the holders of Warrants representing at least 2/3rds of the Warrant Shares issuable upon exercise
of the Warrants then outstanding; provided that, except for Section 8(d), no such action may increase the Warrant Exercise Price
or decrease the number of shares or class of stock obtainable upon exercise of any Warrant without the written consent of the
holder of such Warrant.

 

    	 	14	 

    	 

    

 

Section
14. Descriptive Headings; Governing Law. The descriptive headings of the several sections and paragraphs of this Warrant
are inserted for convenience only and do not constitute a part of this Warrant. The corporate laws of the State of New Jersey
shall govern all issues concerning the relative rights of the Company and its stockholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of
New Jersey, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New Jersey
or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New Jersey.
Each party hereby irrevocably submits to the exclusive jurisdiction of the Superior Court of the state courts sitting in Union
County New Jersey and the Federal District Court for the District of New Jersey sitting in Newark, New Jersey, for the adjudication
of any dispute hereunder or in connection herewith or therewith, or with any transaction contemplated hereby or discussed herein,
and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that
the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address
for such 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 manner permitted
by law.

 

Section
15. Remedies, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Warrant shall be cumulative
and in addition to all other remedies available under this Warrant, in any other agreement between the Company and the Holder,
at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit
the right of the Holder to pursue actual damages for any failure by the Company to comply with the terms of this Warrant. The
Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy
at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened
breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to an injunction restraining
any breach, without the necessity of showing economic loss and without any bond or other security being required.

 

Section
16. Waiver of Jury Trial. AS A MATERIAL INDUCEMENT FOR EACH PARTY HERETO TO ENTER INTO THIS WARRANT, THE PARTIES
HERETO HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY AND ALL OF
THE OTHER DOCUMENTS ASSOCIATED WITH THIS TRANSACTION.

 

REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

 

    	 	15	 

    	 

    

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be signed as of the date first set forth above.

 

	 	SOLIS TEK INC.
	 	 	 
	 	By:	 
	 	Name: 	Alan
    Lien
	 	Title:	Chief
    Executive Officer

 

    	 	16	 

    	 

    

 

 

EXHIBIT
A TO WARRANT

 

EXERCISE
NOTICE

 

TO
BE EXECUTED

BY
THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

 

SOLIS
TEK INC.

 

The
undersigned holder hereby exercises the right to purchase ______________ of the shares of Common Stock (“Warrant Shares”)
of Solis Tek Inc. (the “Company”), evidenced by the attached Warrant (the “Warrant”). Capitalized
terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

 

Specify
Method of exercise by check mark:

 

1.
___ Cash Exercise

 

(a)
Payment of Warrant Exercise Price. The holder shall pay the Aggregate Exercise Price of $______________ to the Company
in accordance with the terms of the Warrant.

 

(b)
Delivery of Warrant Shares. The Company shall deliver to the holder _________ Warrant Shares in accordance with
the terms of the Warrant.

 

2.
___ Cashless Exercise

 

(a)
Payment of Warrant Exercise Price. In lieu of making payment of the Aggregate Exercise Price, the holder elects to receive
upon such exercise the Net Number of shares of Common Stock determined in accordance with the terms of the Warrant.

 

(b)
Delivery of Warrant Shares. The Company shall deliver to the holder _________ Warrant Shares in accordance with
the terms of the Warrant.

 

Date:
_______________ __, ______

 

Name
of Registered Holder

 

	By:	 	 
	Name: 	 	 
	Title:	 	 

 

    	 	 	 

    	 

    

 

EXHIBIT
B TO WARRANT

 

FORM
OF WARRANT POWER

 

FOR
VALUE RECEIVED, the undersigned does hereby assign and transfer to ________________, Federal Identification No. __________,
a warrant to purchase ____________ shares of the capital stock of Solis Tek Inc. represented by warrant certificate no. _____,
standing in the name of the undersigned on the books of said corporation. The undersigned does hereby irrevocably constitute and
appoint ______________, attorney to transfer the warrants of said corporation, with full power of substitution in the premises.

 

	Dated:	 	 	 	 
	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	Name: 	 
	 	 	 	Title:	 

 

    	 	B-1

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