Document:

Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase
Agreement (this “Agreement”) is dated as of April 11, 2019, between Avalanche International, Corp., a Nevada
corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and collectively, the “Purchasers”).

 

WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended
(the “Securities Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Purchaser,
and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described
in this Agreement.

 

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

 

ARTICLE I.

DEFINITIONS

 

1.1          Definitions.
In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise defined herein have
the meanings given to such terms in the Notes (as defined herein), and (b) the following terms have the meanings set forth in this
Section 1.1:

 

“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.7.

 

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

 

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

 

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

 

“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which Federal Reserve Bank of New York is closed.

 

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

 

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

 

    	 	 	 

    	 

    

 

“Closing
Statement” means the Closing Statement in the form on Annex A attached hereto.

 

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

 

“Common
Stock” means the common stock of the Company, par value $0.001 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.

 

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

 

“Company
Counsel” means Sichenzia Ross Ference LLP.

 

“Conversion
Price” shall have the meaning ascribed to such term in the Notes.

 

“Conversion
Shares” shall have the meaning ascribed to such term in the Notes.

 

“Disclosure
Schedules” shall have the meaning ascribed to such term in Section 3.1.

 

“Disclosure
Time” means, (i) if this Agreement is signed prior to midnight on any Trading Day, 8:00 a.m. (New York City time) on
the Trading Day immediately following the date hereof, and (ii) if this Agreement is signed after midnight on any Trading Day,
8:00 a.m. (New York City time) on the date hereof.

 

“Effective
Date” means the earliest of the date that (a) the initial Registration Statement has been declared effective by the Commission,
(b) all of the Underlying Shares have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement
for the Company to be in compliance with the current public information required under Rule 144 and without volume or manner-of-sale
restrictions, (c) following the one year anniversary of the Closing Date provided that a holder of the Underlying Shares is not
an Affiliate of the Company or (d) all of the Underlying Shares may be sold pursuant to an exemption from registration under Section
4(a)(1) of the Securities Act without volume or manner-of-sale restrictions and Company Counsel has delivered to such holders a
standing written unqualified opinion that resales may then be made by such holders of the Underlying Shares pursuant to such exemption
which opinion shall be in form and substance reasonably acceptable to such holders.

 

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

 

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

 

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“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers, service providers such
as attorneys or bona-fide independent contractors of the Company, or directors of the Company pursuant to any stock or option plan
duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members
of a committee of non-employee directors established for such purpose for services rendered to the Company, or approved by a majority
of shareholders of the Company, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder
and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the
date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number
of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection
with stock splits or combinations) or to extend the term of such securities, (c) securities issued pursuant to acquisitions or
strategic transactions approved by a majority of the disinterested directors of the Company, provided that such securities are
issued as “restricted securities” (as defined in Rule 144) and carry no registration rights that require or permit
the filing of any registration statement in connection therewith during the prohibition period in Section 4.13(a) herein,
and provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through
its subsidiaries, an operating company or an owner of an asset in a business synergistic with, or complementary to, the business
of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include
a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary
business is investing in securities.

 

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

 

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

 

“Guarantee”
means the Guaranty, dated the date hereof, by each Subsidiary in favor of the Purchasers, in the form of Exhibit F attached
hereto.

 

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

 

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

 

“Intercreditor
Agreement” shall mean the Intercreditor Agreement, dated on or about the date hereof, by and among the Company, the Collateral
Agent (as defined therein), the Second Lien Collateral Agent (as defined therein), the Third Lien Collateral Agent (as defined
therein) and the Purchasers.

 

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

 

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

 

“Lock-up”
shall have the meaning ascribed to such term in Section 2.2(a)(viii).

 

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

 

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

 

“Maximum
Rate” shall have the meaning ascribed to such term in Section 5.17.

 

“Notes”
means the 10% Senior Secured Convertible Promissory Notes due, subject to the terms therein, twelve (12) months from their date
of issuance, issued by the Company to the Purchasers hereunder, in the form of Exhibit A attached hereto.

 

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

 

“Pledged
Securities” means any and all certificates and other instruments representing or evidencing all of the capital stock
and other equity interests of Restaurant Capital Group, LLC, a Subsidiary.

 

“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.

 

“Public
Information Failure” shall have the meaning ascribed to such term in Section 4.3(b).

 

“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.3(b).

 

“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.10.

 

“RB”
means Robinson Brog Leinwand Greene Genovese & Gluck PC.

 

“Registration
Rights Agreement” means the Registration Rights Agreement, dated on or about the date hereof, among the Company and the
Purchasers, in the form of Exhibit B attached hereto.

 

“Registration
Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and
covering the resale of the Underlying Shares by each Purchaser as provided for in the Registration Rights Agreement.

 

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

 

“Required
Minimum” means, as of any date, 200% of the maximum aggregate number of shares of Common Stock then issued or potentially
issuable in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon exercise in full of
all Warrants or conversion in full of all Notes (including Underlying Shares issuable as payment of interest on the Notes), ignoring
any conversion or exercise limits set forth therein, and assuming that the Conversion Price is at all times on and after the date
of determination 50% of the then Conversion Price on the Trading Day immediately prior to the date of determination; provided,
however, the Purchasers and the Company agree that initially, the Required Minimum shall be 10,352,941 shares of Common Stock to
cover the Underlying Shares.

 

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

 

“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.

 

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

 

“Securities”
means the Notes, the Warrants and the Underlying Shares.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Security
Agreement” means the Security Agreement, dated the date hereof, among the Company and the Purchasers, in the form of
Exhibit E attached hereto.

 

“Security
Documents” shall mean the Security Agreement, the Intercreditor Agreement, the Guaranty, the original Pledged Securities,
along with notarized executed blank stock powers to the Pledged Securities, and any other documents and filing required thereunder
in order to grant the Purchasers a first priority security interest in the assets of the Company and the Subsidiaries as provided
in the Security Agreement, including all UCC-1 filing receipts.

 

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

 

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“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for Notes and Warrants purchased hereunder as specified
below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.

 

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

 

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

 

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

 

“Transaction
Documents” means this Agreement, the Notes, the Warrants, the Lock-up, the Registration Rights Agreement, the Security
Agreement, the Intercreditor Agreement, the Guaranty, all exhibits and schedules thereto and hereto and any other documents or
agreements executed in connection with the transactions contemplated hereunder.

 

“Transfer
Agent” means Transfer Online, and any successor transfer agent of the Company.

 

“Underlying
Shares” means the Warrant Shares and shares of Common Stock issued and issuable pursuant to the terms of the Note, including
without limitation, shares of Common Stock issued and issuable in lieu of the cash payment of interest on the Notes in accordance
with the terms of the Notes, in each case without respect to any limitation or restriction on the conversion of the Notes or the
exercise of the Warrants.

 

“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.13(b).

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market,
the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then
reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding
to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all
other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith
by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.

 

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“Warrants”
means, collectively, the Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a)
hereof, which Warrants shall be exercisable immediately following their issuance and have a term of exercise equal to five (5)
years, in the form of Exhibit C attached hereto.

 

“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.

 

ARTICLE II.

PURCHASE AND SALE

 

2.1          Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution
and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly,
agree to purchase, up to an aggregate of $2,750,000 in principal amount of the Notes. Each Purchaser shall deliver to the Company,
via wire transfer or a certified check, immediately available funds equal to such Purchaser’s Subscription Amount as set
forth on the signature page hereto executed by such Purchaser, and the Company shall deliver to each Purchaser its respective Note
and a Warrant, as determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth
in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3,
the Closing shall occur at the offices of RB or such other location as the parties shall mutually agree.

 

2.2          Deliveries.

 

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

 

		(i)	  this Agreement duly executed by the Company;

 

(ii)           a
legal opinion of Company Counsel, substantially in the form of Exhibit D attached hereto;

 

(iii)          a
Note with a principal amount equal to such Purchaser’s Subscription Amount, registered in the name of such Purchaser equal
to the amount set forth opposite such Purchaser’s name in column (2) on the Schedule of Purchasers;

 

(iv)          a
Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to 50% of such Purchaser’s
Conversion Shares on the Closing Date, and recorded on column (3) of the Schedule of Purchasers with an exercise price equal to
$0.85, subject to adjustment therein;

 

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(v)           the
Company shall have provided each Purchaser with the Company’s wire instructions, on Company letterhead and executed by the
Chief Executive Officer or Chief Financial Officer

 

(vi)          the
Security Agreement, duly executed by the Company and each Subsidiary, along with all of the Security Documents, including the Intercreditor
Agreement and the Guaranty, each duly executed by the respective parties thereto, the original Pledged Securities and corresponding
stock powers;

 

(vii)         the
lock-up agreements from all officers, directors, and 5% or greater shareholders in a form of Exhibit G hereto (the “Lock-up”);
and

 

(viii)         the
Registration Rights Agreement duly executed by the Company.

 

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

 

		(i)	  this Agreement duly executed by such Purchaser;

 

(ii)           such
Purchaser’s Subscription Amount by wire transfer to the account specified in writing by the Company; and

 

(iii)          the
Security Agreement duly executed by such Purchaser; and

 

(iv)          the
Registration Rights Agreement duly executed by such Purchaser.

 

(c)           Within
(i) ten (10) days following the Closing Date, the Company shall deliver to each Purchaser the unaudited financial statements of
the Company, and the unaudited balance sheet of Ault & Company, Inc., each as of the fiscal year ended December 31, 2018 and
(ii) twenty-one (21) days following the Closing Date, the Company shall ensure the perfection of the Purchasers’ security
interest in MTIX Limited, a company formed under the laws of England and Wales.

 

2.3          Closing
Conditions.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(iv)          there
shall have been no Material Adverse Effect with respect to the Company since the date hereof; and

 

(v)           from
the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s
principal Trading Market and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P.
shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported
by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New
York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international
calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the
reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Securities at the Closing.

 

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ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

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

 

(a)          Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a). Except as set forth on Schedule
3.1(a), the Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free
and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and
are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. If the Company
has no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.

 

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

 

(c)          Authorization;
Enforcement.

 

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

 

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(ii)       With
respect to the Guaranty, each of the Subsidiaries has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by such agreement and otherwise to carry out its obligations thereunder. The execution and delivery
of the Guaranty and the consummation by the Company of the transactions contemplated thereby have been duly authorized by all necessary
action on the part of the Company, and no further action is required by the respective Subsidiary, its managers or its members
in connection therewith. The Guaranty has been (or upon delivery will have been) duly executed by the respective Subsidiaries and,
when delivered in accordance with the terms thereof, will constitute the valid and binding obligation of the respective Subsidiary
enforceable against such Subsidiary in accordance with its terms, except (A) as limited by general equitable principals and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’
rights generally, (B) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable
remedies and (C) insofar as indemnification and contribution provisions may be limited by applicable law.

 

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

 

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(e)          Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i)
the filings required pursuant to Section 4.6 of this Agreement, (ii) the filing with the Commission pursuant to the Registration
Rights Agreement, and (iii) the filing of Form D with the Commission and such filings as are required to be made under applicable
state securities laws (collectively, the “Required Approvals”).

 

(f)          Issuance
of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other
than restrictions on transfer provided for in the Transaction Documents. The Underlying Shares, when issued in accordance with
the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed
by the Company other than restrictions on transfer provided for in the Transaction Documents. The Company has reserved from its
duly authorized capital stock a number of shares of Common Stock for issuance of the Underlying Shares at least equal to the Required
Minimum on the date hereof.

 

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

 

    	 	12 	 

    	 

    

 

(h)          Reserved.

 

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

 

(j)           Litigation.
There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities
or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither
the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim
of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been,
and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company
or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities
Act.

 

    	 	13 	 

    	 

    

 

(k)          Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of
the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither
the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or
any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure
or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant
in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of
its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance
with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and
conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

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

 

(m)        Environmental
Laws.The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to
pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or
subsurface strata), including 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 (“Environmental
Laws”); (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 clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually
or in the aggregate, a Material Adverse Effect.

 

    	 	14 	 

    	 

    

 

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

 

(o)          Title
to Assets. Except as set forth on Schedule 3.1(o), the Company and the Subsidiaries have good and marketable title in
fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material
to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially
affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by
the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves
have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real
property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable
leases with which the Company and the Subsidiaries are in compliance.

 

(p)          Intellectual
Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights
and similar rights necessary or required for use in connection with their respective businesses and which the failure to so have
could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of, and neither
the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired,
terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this
Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included
within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate
or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect.
To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by
another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures
to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could
not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

    	 	15 	 

    	 

    

 

(q)          Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including,
but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount. Neither the
Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without
a significant increase in cost.

 

(r)          Transactions
with Affiliates and Employees. Except as set forth on Schedule 3.1(r), none of the officers or directors of the Company
or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party
to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including
any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or
personal property to or from providing for the borrowing of money from or lending of money to, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case
in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan
of the Company.

 

(s)          Reserved.

 

(t)           Certain
Fees. There are no brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiaries
to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to
the transactions contemplated by the Transaction Documents. Except as provided in this Section 3.1(t), the Purchasers shall have
no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated
in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.

 

(u)         Private
Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no registration
under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated
hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.

 

    	 	16 	 

    	 

    

 

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

 

(w)          Registration
Rights. Except as set forth on Schedule 3.1(w) and other  than each of the Purchasers, no Person has any right to cause
the Company or any Subsidiary to effect the registration under the Securities Act of any securities of the Company or any Subsidiaries.

 

(x)          Reserved.

 

(y)          Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s articles of incorporation (or similar charter documents) or
the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the
Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as
a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.

 

(z)          Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company
confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel
with any information that it believes constitutes or might constitute material, non-public information. The Company understands
and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the Company.
All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their
respective businesses and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true and
correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they were made, not misleading. The press releases disseminated
by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made and when made, not misleading. The Company acknowledges and
agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby
other than those specifically set forth in Section 3.2 hereof.

 

    	 	17 	 

    	 

    

 

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

 

(bb)       Solvency.
Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the
Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds
the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry
on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate
all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in
respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability
to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).
The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. Schedule 3.1(bb)
sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which
the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means (x)
any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary
course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether
or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties
by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business;
and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance
with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

 

    	 	18 	 

    	 

    

 

(cc)       Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in
a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local
income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject,
(ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due
on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of
all material 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 or
of any Subsidiary know of no basis for any such claim.

 

(dd)      No
General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Securities
by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Purchasers
and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.

 

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

 

(ff)        Accountants.
The Company’s accounting firm is set forth on Schedule 3.1(ff) of the Disclosure Schedules. To the knowledge and belief
of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall
express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal
year ending November 30, 2018.

 

(gg)      Seniority.
As of the Closing Date, no Indebtedness or other claim against the Company is senior to the Notes in right of payment, whether
with respect to interest or upon liquidation or dissolution, or otherwise, other than indebtedness secured by purchase money security
interests (which is senior only as to underlying assets covered thereby) and capital lease obligations (which is senior only as
to the property covered thereby).

 

(hh)      No
Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and
the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability
to perform any of its obligations under any of the Transaction Documents.

 

    	 	19 	 

    	 

    

 

(ii)          Acknowledgment
Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is acting
solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated
thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given
by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions
contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities. The Company further represents to
each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based
solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

 

(jj)         Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(except for Sections 3.2(f) and 4.15 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers
has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short,
securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities
for any specified term, (ii) past or future open market or other transactions by any Purchaser, specifically including, without
limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement
transactions, may negatively impact the market price of the Company’s publicly-traded securities, (iii) any Purchaser, and
counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, may presently
have a “short” position in the Common Stock and (iv) each Purchaser shall not be deemed to have any affiliation with
or control over any arm’s length counter-party in any “derivative” transaction. The Company further understands
and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during the period that the Securities
are outstanding, including, without limitation, during the periods that the value of the Underlying Shares deliverable with respect
to Securities are being determined, and (z) such hedging activities (if any) could reduce the value of the existing stockholders'
equity interests in the Company at and after the time that the hedging activities are being conducted.  The Company acknowledges
that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.

 

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

 

(ll)        [Reserved].

 

    	 	20 	 

    	 

    

 

(mm)      Stock
Option Plans. Each stock option granted by the Company under the Company’s stock option plan was granted (i) in accordance
with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value
of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted
under the Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has
been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock
options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their
financial results or prospects.

 

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

 

(oo)       U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the
meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s
request.

 

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

 

(qq)      Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with
applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money
Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any
arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of
the Company or any Subsidiary, threatened.

 

    	 	21 	 

    	 

    

 

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

 

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

 

(tt)        Notice
of Disqualification Events. The Company will notify the Purchasers in writing, prior to the Closing Date of (i) any Disqualification
Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification
Event relating to any Issuer Covered Person.

 

(uu)       Promotional
Stock Activities. Neither the Company, its officers, its directors, nor any affiliates or agents of the Company have engaged
in any stock promotional activity that could give rise to a complaint, inquiry, or trading suspension by the Securities and Exchange
Commission alleging (i) a violation of the anti-fraud provisions of the federal securities laws, (ii) violations of the anti-touting
provisions, (iii) improper “gun-jumping; or (iv) promotion without proper disclosure of compensation.

 

(vv)       Payments
of Cash.  Except as disclosed on Schedule 3.1(vv), neither the Company, its officers, or any affiliates or agents
of the Company have withdrawn or paid cash (not including a check or other similar negotiable instrument) to any vendor in an aggregate
amount that exceeds Five Thousand Dollars ($5,000) for any purpose.

 

3.2          Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as
of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they
shall be accurate as of such date):

 

(a)           Organization;
Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability
company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents
and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and
performance by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary
corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction
Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with
the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance
with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification
and contribution provisions may be limited by applicable law.

 

    	 	22 	 

    	 

    

 

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

 

(c)          Purchaser
Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on
which it exercises any Warrants or converts any Notes it will be an “accredited investor” as defined in Rule 501(a)(1),
(a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act.

 

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

 

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

 

    	 	23 	 

    	 

    

 

(f)           Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not,
nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any
purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such
Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth
the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. The Purchaser
covenants and agrees that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute
any Short Sales (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of the Common Stock or hedging transaction,
which establishes a net short position with respect to the Company’s Common Stock during the period commencing with the execution
of this Agreement and ending on the earlier Maturity Date (as defined in the Notes) of the Notes or the full repayment or conversion
of the Notes; provided that this provision shall not prohibit any sales made where a corresponding Notice of Conversion is tendered
to the Company and the shares received upon such conversion or exercise are used to close out such sale (a “Prohibited Short
Sale”); provided, further that this provision shall not operate to restrict a Purchaser’s trading under any prior securities
purchase agreement containing contractual rights that explicitly protects such trading in respect of the previously issued securities.

 

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1          Transfer
Restrictions.

 

(a)          The
Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in
connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company
an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred
Securities under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the
terms of this Agreement and the Registration Rights Agreement and shall have the rights and obligations of a Purchaser under this
Agreement and the Registration Rights Agreement.

 

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

 

[NEITHER] THIS SECURITY [NOR
THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE] [CONVERTIBLE]] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY [AND
THE SECURITIES ISSUABLE UPON [EXERCISE] [CONVERSION] OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED
IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

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The Company
acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered
broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, such Purchaser
may transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to
approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection
therewith. Further, no notice shall be required of such pledge. At the appropriate Purchaser’s expense, the Company will
execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection
with a pledge or transfer of the Securities, including, if the Securities are subject to registration pursuant to the Registration
Rights Agreement, the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act
or other applicable provision of the Securities Act to appropriately amend the list of Selling Stockholders (as defined in the
Registration Rights Agreement) thereunder.

 

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

 

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(d)          In
addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, (i) as partial liquidated
damages and not as a penalty, for each $1,000 of Underlying Shares (based on the VWAP of the Common Stock on the date such Securities
are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $10 per Trading
Day (increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after
the Legend Removal Date until such certificate is delivered without a legend and (ii) if the Company fails to (a) issue and deliver
(or cause to be delivered) to a Purchaser by the Legend Removal Date a certificate representing the Securities so delivered to
the Company by such Purchaser that is free from all restrictive and other legends and (b) if after the Legend Removal Date such
Purchaser purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by
such Purchaser of all or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal
to all or any portion of the number of shares of Common Stock that such Purchaser anticipated receiving from the Company without
any restrictive legend, then, an amount equal to the excess of such Purchaser’s total purchase price (including brokerage
commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including brokerage commissions
and other out-of-pocket expenses, if any) (the “Buy-In Price”) over the product of (A) such number of
Underlying Shares that the Company was required to deliver to such Purchaser by the Legend Removal Date multiplied by (B) the lowest
closing sale price of the Common Stock on any Trading Day during the period commencing on the date of the delivery by such Purchaser
to the Company of the applicable Underlying Shares (as the case may be) and ending on the date of such delivery and payment under
this clause (ii).

 

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(e)          Each
Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will sell any Securities
pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements,
or an exemption therefrom, and that if Securities are sold pursuant to a Registration Statement, they will be sold in compliance
with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates
representing Securities as set forth in this Section 4.1 is predicated upon the Company’s reliance upon this understanding.

 

4.2          Reserved.

 

4.3          Furnishing
of Information; Public Information.

 

(a)          Following
the effectiveness of the registration statement registering the Issuable Shares for resale pursuant to the Registration Rights
Agreement and until the earliest of the time that (i) no Purchaser owns Securities or (ii) the Warrants have expired, the Company
covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file
(or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company
after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the
Exchange Act.

 

(b)          At
any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all of
the Securities may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without
restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public information
requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144 (i)(1)(i) or becomes an issuer in the future,
and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public Information Failure”)
then, in addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial
liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Securities, an
amount in cash equal to two percent (2.0%) of the aggregate Subscription Amount of such Purchaser’s Securities on the day
of a Public Information Failure and on every thirtieth (30th) day (pro-rated for periods totaling less than thirty days)
thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time that such public information
is no longer required  for the Purchasers to transfer the Underlying Shares pursuant to Rule 144.  The payments to which
a Purchaser shall be entitled pursuant to this Section 4.3(b) are referred to herein as “Public Information Failure Payments.” 
Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Public
Information Failure Payments are incurred and (ii) the third (3rd) Business Day after the event or failure giving rise
to the Public Information Failure Payments is cured.  In the event the Company fails to make Public Information Failure Payments
in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per month (prorated for partial
months) until paid in full. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Public Information
Failure, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief.

 

    	 	27 	 

    	 

    

 

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

 

4.5          Conversion
and Exercise Procedures. Each of the form of Notice of Exercise included in the Warrants and the form of Notice of Conversion
included in the Notes set forth the totality of the procedures required of the Purchasers in order to exercise the Warrants or
convert the Notes. Without limiting the preceding sentences, no ink-original Notice of Exercise or Notice of Conversion shall be
required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise or Notice of
Conversion form be required in order to exercise the Warrants or convert the Notes. No additional legal opinion, other information
or instructions shall be required of the Purchasers to exercise their Warrants or convert their Notes. The Company shall honor
exercises of the Warrants and conversions of the Notes and shall deliver Underlying Shares in accordance with the terms, conditions
and time periods set forth in the Transaction Documents.

 

4.6          Securities
Laws Disclosure; Publicity. The Company shall file a Current Report on Form 8-K, including the Transaction Documents as exhibits
thereto, with the Commission within the time required by the Exchange Act. From and after the issuance of such press release, the
Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any
of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents
in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the issuance of such
press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement,
whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees
or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall terminate. The Company
and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated
hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement
without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each
Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except
if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice
of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any
Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without
the prior written consent of such Purchaser, except (a) as required by federal securities law in connection with (i) any registration
statement contemplated by the Registration Rights Agreement and (ii) the filing of final Transaction Documents with the Commission
and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide
the Purchasers with prior notice of such disclosure permitted under this clause (b).

 

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

 

4.8          Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
which shall be disclosed pursuant to Section 4.6, the Company covenants and agrees that neither it, nor any other Person acting
on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably
believes constitutes, material non-public information, unless prior thereto such Purchaser shall have consented to the receipt
of such information and agreed with the Company to keep such information confidential. The Company understands and confirms that
each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent
that the Company delivers any material, non-public information to a Purchaser without such Purchaser’s consent, the Company
hereby covenants and agrees that such Purchaser shall not have any duty of confidentiality to the Company, any of its Subsidiaries,
or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, any of its Subsidiaries
or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public
information, provided that the Purchaser shall remain subject to applicable law. To the extent that any notice provided pursuant
to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries,
the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Company understands
and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

 

4.9         Use
of Proceeds. Except as set forth on Schedule 4.9 attached hereto, the Company shall use the net proceeds from the sale
of the Securities hereunder for working capital purposes and shall not use such proceeds: (a) for the satisfaction of any portion
of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business and prior
practices), (b) for the redemption of any Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding litigation
or (d) in violation of FCPA or OFAC regulations.

 

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4.10       Indemnification
of Purchasers. Subject to the provisions of this Section 4.10, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser
Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or
agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the
Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not
an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless
such action is solely based upon a material breach of such Purchaser Party’s representations, warranties or covenants under
the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations
by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which is finally judicially
determined to constitute fraud, gross negligence or willful misconduct). If any action shall be brought against any Purchaser Party
in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company
in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable
to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate
in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the
extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed
after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable
opinion of counsel, a material conflict on any material issue between the position of the Company and the position of such Purchaser
Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel.
The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected
without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but
only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the
representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction
Documents. The indemnification required by this Section 4.10 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein
shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities
the Company may be subject to pursuant to law.

 

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4.11       Reservation
and Listing of Securities. 

 

(a)          The
Company shall maintain a reserve of the Required Minimum from its duly authorized shares of Common Stock for issuance pursuant
to the Transaction Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents.

 

(b)          If,
on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required
Minimum on such date, then the Board of Directors shall use commercially reasonable efforts to amend the Company’s certificate
or articles of incorporation to increase the number of authorized but unissued shares of Common Stock to at least the Required
Minimum at such time, as soon as possible and in any event not later than the 75th day after such date.

 

(c)          The
Company shall, if applicable: (i) in the time and manner required by the principal Trading Market, prepare and file with such Trading
Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required Minimum
on the date of such application, (ii) take all steps necessary to cause such shares of Common Stock to be approved for listing
or quotation on such Trading Market as soon as possible thereafter, (iii) provide to the Purchasers evidence of such listing or
quotation and (iv) maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum on
such date on such Trading Market or another Trading Market. The Company agrees to maintain the eligibility of the Common Stock
for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation,
by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such
electronic transfer.

 

4.12       Affiliate
Transactions. Except as set forth on Schedule 4.12, from the date hereof until the 15-month anniversary thereof, the
Company will not be a party to any transaction with any director, officer or stockholder or such associate or affiliate or relative)
for the extension of credit, compensation or a consulting agreement that is not in accordance with past practice, or the facilitation
of any sale or pledge against such affiliate’s shares of Common Stock in contravention of any lock-up agreement entered into
by such affiliate in connection with the sale of the Notes. Except as set forth on Schedule 4.12, the Company shall not,
so long as the Purchaser owns any Notes, permit employee, officer, stockholder or director of the Company or any of its Subsidiaries
or member of his or her immediate family is indebted to the Company or its Subsidiaries, as the case may be, to become indebted
(or committed to make loans or extend or guarantee credit) to any of them, other than (i) for payment of salary for services rendered,
(ii) reimbursement for reasonable expenses incurred on behalf of the Company, and (iii) for other standard employee benefits made
generally available to all employees or executives (including stock option agreements outstanding under any stock option plan approved
by the board of directors of the Company). The Company will honor and use commercially reasonable efforts to cause its affiliates
to honor all lock-up agreements entered into contemporaneously with this Agreement.

 

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4.13       Subsequent
Equity Sales.

 

(a)          From
the date hereof until the 15-month anniversary thereof, if the Company or any Subsidiary, as applicable, sells or grants any option
to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces any sale, grant or any option
to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling any Person (except as to any Person set
forth on Schedule 4.13 hereto) to acquire shares of Common Stock at an effective price per share that is lower than the then Conversion
Price or Exercise Price (such lower price, the “Base Price” and such issuances, collectively, a “Dilutive
Issuance”) (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation
of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants,
options or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at
an effective price per share that is lower than the Conversion Price or Exercise Price, such issuance shall be deemed to have occurred
for less than the Conversion Price or Exercise Price on such date of the Dilutive Issuance), then the Conversion Price or Exercise
Price shall be reduced to equal the Base Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents
are issued. The Company shall notify the Purchaser in writing, no later than the Trading Day following the issuance of any Common
Stock or Common Stock Equivalents subject to this Section 4.13(a), indicating therein the applicable issuance price, or applicable
reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”).
For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 4.13(a),
upon the occurrence of any Dilutive Issuance, the Purchaser is entitled to receive a number of Conversion Shares or Warrant Shares
based upon the Base Price on or after the date of such Dilutive Issuance, regardless of whether the Purchaser accurately refers
to the Base Price in the Notice of Conversion or Notice of Exercise. For the avoidance of doubt, this Section 4.13(a) shall apply
only so long as the Note has not been repaid

 

(b)          From
the date hereof until the 15-month anniversary thereof, the Company shall be prohibited from effecting or entering into an agreement
to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents (or a combination
of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in
which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for,
or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise price or exchange
rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock
at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that
is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence
of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock
or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit, whereby
the Company may issue securities at a future determined price. Any Purchaser shall be entitled to obtain injunctive relief against
the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages. For the avoidance
of doubt, the 15-month sunset on this Section 4.13(b) shall apply only so long as the Note is not in default or has otherwise been
repaid; provided, however, that in the event that the proceeds of such Variable Rate Transaction are being used in whole or in
part to defease any remaining balance due on the Note, then this provision shall not operate to prevent such Variable Rate Transaction.

 

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(c)           Notwithstanding
the foregoing, this Section 4.13 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall
be an Exempt Issuance.

 

4.14       Equal
Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid
to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration
is also offered to all of the parties to such Transaction Documents. Further, the Company shall not make any payment of principal
or interest on the Notes in amounts which are disproportionate to the respective principal amounts outstanding on the Notes at
any applicable time. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company
and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in
any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities
or otherwise.

 

4.15       Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither
it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including
Short Sales, of any of the Company’s securities during the period commencing with the execution of this Agreement and ending
at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release
as described in Section 4.6.  Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such
time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release
as described in Section 4.6, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and
the information included in the Disclosure Schedules. Notwithstanding the foregoing, and notwithstanding anything contained in
this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty
or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions
contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.6,
(ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance
with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly
announced pursuant to the initial press release as described in Section 4.6 and (iii) no Purchaser shall have any duty of confidentiality
or duty not to trade in the securities of the Company to the Company or its Subsidiaries after the issuance of the initial press
release as described in Section 4.6.  Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment
vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers
have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s
assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that
made the investment decision to purchase the Securities covered by this Agreement.

 

    	 	33 	 

    	 

    

 

4.16       Participation
in Future Financing. 

 

(a) From the date hereof
until the date that is the twelfth (12)-month anniversary of the Effective Date, upon any issuance by the Company or any of its
Subsidiaries of Common Shares, Common Shares Equivalents for cash consideration, Indebtedness or a combination of units thereof
(a “Subsequent Financing”), the Qualified Purchasers shall, in the aggregate, have the right to participate
in up to an amount of the Subsequent Financing equal to 35% of the amount of the Subsequent Financing (the “Participation
Maximum”) on the same terms, conditions and price provided for in the Subsequent Financing. A “Qualified Purchaser”
is a Purchaser hereunder with a Subscription Amount of at least $500,000.

 

(b) Approximately four
(4) Trading Days (or, in the case of a firm commitment underwritten public offering, approximately 12 hours) prior to the closing
of the Subsequent Financing, the Company shall deliver to each Qualified Purchaser a written notice of its intention to effect
a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such Qualified Purchaser if it wants to review
the details of such financing (such additional notice, a “Subsequent Financing Notice”). Upon the request of
a Qualified Purchaser, and only upon a request by such Qualified Purchaser, for a Subsequent Financing Notice, the Company shall
promptly, but no later than one (1) Trading Day (or, in the case of a firm commitment underwritten public offering, approximately
12 hours prior) after such request, deliver a Subsequent Financing Notice to such Qualified Purchaser. The Subsequent Financing
Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to
be raised thereunder and the Person or Persons through or with whom such Subsequent Financing is proposed to be effected and shall
include a term sheet or similar document relating thereto as an attachment.

 

(c) Any Qualified Purchaser
desiring to participate in such Subsequent Financing must provide written notice to the Company by not later than 5:30 p.m. (New
York City time) on the third (3rd) Trading Day (or, in the case of a firm commitment underwritten public offering, approximately
12 hours) after all of the Qualified Purchasers have received the Pre-Notice that the Qualified Purchaser is willing to participate
in the Subsequent Financing, the amount of such Qualified Purchaser’s participation, and representing and warranting that
such Qualified Purchaser has such funds ready, willing, and available for investment on the terms set forth in the Subsequent Financing
Notice. If the Company receives no such notice from a Qualified Purchaser as of such third (3rd) Trading Day (or, in the case of
a firm commitment underwritten public offering, such 12 hours), such Qualified Purchaser shall be deemed to have notified the Company
that it does not elect to participate.

 

    	 	34 	 

    	 

    

 

(d) If by 5:30 p.m.
(New York City time) on the third (3rd) Trading Day (or, in the case of a firm commitment underwritten public offering, after such
12 hour period) after all of the Qualified Purchasers have received the Pre-Notice, notifications by the Qualified Purchasers of
their willingness to participate in the Subsequent Financing (or to cause their designees to participate) is, in the aggregate,
less than the total amount of the Participation Maximum, then the Company may effect the remaining portion of such Participation
Maximum on the terms and with the Persons set forth in the Subsequent Financing Notice.

 

(e) If by 5:30 p.m.
(New York City time) on the third (3rd) Trading Day (or, in the case of a firm commitment underwritten public offering, after such
12 hour period) after all of the Qualified Purchasers have received the Pre-Notice, the Company receives responses to the Subsequent
Financing Notice from Qualified Purchasers seeking to purchase more than the aggregate amount of the Participation Maximum, each
such Qualified Purchaser shall have the right to purchase its Pro Rata Portion (as defined below) of the Participation Maximum.
“Pro Rata Portion” means the ratio of (x) the Subscription Amount of Securities purchased on the Closing Date by a
Qualified Purchaser participating under this Section 4.16 and (y) the sum of the aggregate Subscription Amounts of Securities purchased
on the Closing Date by all Qualified Purchasers participating under this Section 4.16.

 

(f) The Company must
provide the Qualified Purchasers with a second Subsequent Financing Notice, and the Qualified Purchasers will again have the right
of participation set forth above in this Section 4.16, if the Subsequent Financing subject to the initial Subsequent Financing
Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within thirty (30) Trading
Days after the date of the initial Subsequent Financing Notice.

 

(g) The Company and
each Qualified Purchaser agree that if any Qualified Purchaser elects to participate in the Subsequent Financing, the transaction
documents related to the Subsequent Financing shall not include any term or provision whereby such Qualified Purchaser shall be
required to agree to any restrictions on trading as to any of the Securities purchased hereunder or be required to consent to any
amendment to or termination of, or grant any waiver, release or the like under or in connection with, this Agreement, without the
prior written consent of such Qualified Purchaser.

 

(h) Notwithstanding
anything to the contrary in this Section 4.16 and unless otherwise agreed to by such Qualified Purchaser, the Company shall either
confirm in writing to such Qualified Purchaser that the transaction with respect to the Subsequent Financing has been abandoned
or shall publicly disclose its intention to issue the securities in the Subsequent Financing, in either case in such a manner such
that such Qualified Purchaser will not be in possession of any material, non-public information, by the sixth (6th) Business Day
following delivery of the Subsequent Financing Notice. If by such sixth (6th) Business Day, no public disclosure regarding a transaction
with respect to the Subsequent Financing has been made, and no notice regarding the abandonment of such transaction has been received
by such Qualified Purchaser, such transaction shall be deemed to have been abandoned and such Qualified Purchaser shall not be
deemed to be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries.

 

    	 	35 	 

    	 

    

 

4.17       Mandatory
Redemption of Note upon Subsequent Financing. Notwithstanding the right of a Qualified Purchaser to participate in a Subsequent
Financing pursuant to Section 4.16, if, at any time while the Note is outstanding, the Company shall effect a Subsequent Financing,
the Purchaser shall have the right to require the Company to first use 50% of the net proceeds of such Subsequent Financing to
redeem all or a portion of such Purchaser’s Note for an amount in cash equal to the Mandatory Redemption Amount (as defined
in the Note), which mandatory redemption terms and procedures shall be as set forth in the Note.

 

4.18       Exchange
Transactions. From the date hereof until the 15-month anniversary thereof, neither the Company nor any of its affiliates or
Subsidiaries, nor any of its or their respective officers, employees, directors, agents or other representatives, will, without
the prior written consent of the Purchaser (which consent may be withheld, delayed or conditioned in the Purchaser’s sole
discretion), directly or indirectly: (a) solicit, initiate, encourage or accept any other inquiries, proposals or offers from any
Person (other than the Purchaser) relating to any exchange (i) of any security of the Company or any of its Subsidiaries for any
other security of the Company or any of its Subsidiaries; or (ii) of any indebtedness or other securities of, or claim against,
the Company or any of its Subsidiaries relying on the exemption provided by Section 3(a)(10) of the Securities Act (any such transaction
described in clauses (i) or (ii), an “Exchange Transaction”); (b) enter into, effect, alter, amend, announce
or recommend to its stockholders any Exchange Transaction with any Person (other than the Purchaser); or (c) participate in any
discussions, conversations, negotiations or other communications with any Person (other than the Purchaser) regarding any Exchange
Transaction, or furnish to any Person (other than the Purchaser) any information with respect to any Exchange Transaction, or otherwise
cooperate in any way, assist or participate in, facilitate or encourage any effort or attempt by any Person (other than the Purchaser)
to seek an Exchange Transaction involving the Company or any of its Subsidiaries. In addition, for so long as any of the Securities
remain outstanding, neither the Company nor any of its affiliates or Subsidiaries, nor any of its or their respective officers,
employees, directors, agents or other representatives, will, without the prior written consent of the Purchaser (which consent
may be withheld, delayed or conditioned in the Purchaser’s sole discretion), directly or indirectly, cooperate in any way,
assist or participate in, facilitate or encourage any effort or attempt by any Person (other than the Purchaser) to effect any
acquisition of securities or indebtedness of, or claim against, the Company by such Person from an existing Purchaser of such securities,
indebtedness or claim in connection with a proposed exchange of such securities or indebtedness of, or claim against, the Company
(whether pursuant to Section 3(a)(9) or 3(a)(10) of the Securities Act or otherwise) (a “Third Party Exchange Transfer”).
The Company, its affiliates and Subsidiaries, and each of its and their respective officers, employees, directors, agents or other
representatives shall immediately cease and cause to be terminated all existing discussions, conversations, negotiations and other
communications with any Persons (other than the Purchaser) with respect to any of the foregoing. The Company shall promptly (and
in no event later than 24 hours after receipt) notify (which notice shall be provided orally and in writing and shall identify
the Person making the inquiry, request, proposal or offer and set forth the material terms thereof) the Purchaser after receipt
of any inquiry, request, proposal or offer relating to any Exchange Transaction or Third Party Exchange Transfer, and shall promptly
(and in no event later than 24 hours after receipt) provide copies to the Purchaser of any written inquiries, requests, proposals
or offers relating thereto. The Company agrees that it and its affiliates and Subsidiaries, and each of its and their respective
officers, employees, directors, agents or other representatives Subsidiaries will not enter into any agreement with any Person
subsequent to the date hereof which prohibits the Company from providing any information to the Purchaser in accordance with this
provision. For all purposes of this Agreement, violations of the restrictions set forth in this Section 3(h) by any Subsidiary
or affiliate of the Company, or any officer, employee, director, agent or other representative of the Company or any of its Subsidiaries
or affiliates shall be deemed a direct breach of this Section 4.18 by the Company.

 

    	 	36 	 

    	 

    

 

4.19       Form
D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation
D and to provide a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers
at the Closing under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide
evidence of such actions promptly upon request of any Purchaser.

 

ARTICLE V.

MISCELLANEOUS

 

5.1         Termination. 
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect
whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing
has not been consummated on or before the fifth (5th) Trading Day following the date hereof, provided, however,
that no such termination will affect the right of any party to sue for any breach by any other party (or parties).

 

5.2          Fees
and Expenses. At the Closing, the Company has agreed to reimburse _____________ the non-accountable sum of $25,000 for legal
expenses plus all filing fees and expenses in connection with the Security Documents, none of which has been paid prior to the
Closing. Accordingly, in lieu of the foregoing payments, the aggregate amount that _____________ is to pay for the Securities at
the Closing shall be reduced by $25,000 in lieu thereof. The Company shall deliver to each Purchaser, prior to the Closing, a completed
and executed copy of the Closing Statement, attached hereto as Annex A. Except as expressly set forth in the Transaction
Documents to the contrary, each party hereto shall pay the fees and expenses of its advisers, counsel, accountants and other experts,
if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance
of this Agreement. The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day
processing of any instruction letter delivered by the Company and any conversion or exercise notice delivered by a Purchaser),
stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.

 

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

 

    	 	37 	 

    	 

    

 

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

 

5.5          Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and Purchasers which purchased at least 80% in interest of the Notes based on the initial
Subscription Amounts hereunder or, in the case of a waiver, by the party against whom enforcement of any such waived provision
is sought, provided that if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or group
of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required. No waiver
of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver
in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall
any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. Any proposed
amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser relative
to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected
Purchaser. Any amendment effected in accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities
and the Company.

 

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

 

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

 

    	 	38 	 

    	 

    

 

5.8          No
Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise
set forth in Section 4.10.

 

5.9          Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action
or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding
is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and
agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an Action
or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under
Section 4.10, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable
attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action
or Proceeding.

 

5.10        Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.

 

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

 

    	 	39 	 

    	 

    

 

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

 

5.13        Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of)
any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser
may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand
or election in whole or in part without prejudice to its future actions and rights; provided, however, that, in the
case of a rescission of a conversion of a Note or exercise of a Warrant, the applicable Purchaser shall be required to return any
shares of Common Stock subject to any such rescinded conversion or exercise notice concurrently with the return to such Purchaser
of the aggregate exercise price paid to the Company for such shares and the restoration of such Purchaser’s right to acquire
such shares pursuant to such Purchaser’s Warrant (including, issuance of a replacement warrant certificate evidencing such
restored right).

 

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

 

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

 

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

 

    	 	40 	 

    	 

    

 

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

 

5.18        [Reserved].

 

5.19        Liquidated
Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction
Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other
amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages
or other amounts are due and payable shall have been canceled.

 

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

 

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

 

    	 	41 	 

    	 

    

 

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

 

 

 

(Signature Pages Follow)

 

    	 	42 	 

    	 

    

 

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

 

	
        Avalanche International,
        Corp.

         

         
	Address for Notice:
	
        By:__________________________________________

        Name: Philip Mansour

        Title: Chief Executive Officer

         

        With a copy to (which shall not constitute notice):
	
        Email:

        Fax:

	
        Sichenzia Ross Ference LLP

        1185 Avenue of the Americas, 37th Floor

        New York, NY 10036

        Telephone: (212) 930-9700

        Attn.: Marc J. Ross

         

         
	 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

    	 	43 	 

    	 

    

 

[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

 

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

 

 

Name of Purchaser: ________________________________________________________

 

Signature of Authorized Signatory of
Purchaser: _________________________________

 

Name of Authorized Signatory: _______________________________________________

 

Title of Authorized Signatory: ________________________________________________

 

Email Address of Authorized Signatory:
________________________________________

 

Facsimile Number of Authorized Signatory: _____________________________________

 

Address for Notice to Purchaser:

 

 

 

 

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

 

 

 

 

 

Subscription Amount: $_____________

 

Warrant Shares: _________________

 

EIN Number: _______________________

 

 

 

[SIGNATURE PAGES CONTINUE]

 

    	 	44 	 

    	 

    

SCHEDULE OF PURCHASERS

 

	(1)	(2)	(3)
	Buyer	
        Principal Amount of 

        Convertible Notes
	Warrants
	 	 	 
	 		
        1,617,647

        

	 	$2,750,000	 

 

 

45Exhibit 10.2

 

SECURITY AGREEMENT

 

This SECURITY AGREEMENT, dated as
of April 11, 2019 (this “Agreement”), is by and among Avalanche International, Corp., a Nevada corporation (the
“Company”), all of the Subsidiaries and/or Affiliates of the Company listed on the signature page hereto (such
affiliated entities, the “Guarantors” and, together with the Company, the “Debtors”) and
the holder of the Company’s 10% Senior Secured Convertible Promissory Notes due April 11, 2020, in the aggregate principal
amount of up to $2,750,000.00 (the “Notes”), signatories hereto, and their respective endorsees, transferees
and assigns (collectively, the “Secured Parties”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the Purchase
Agreement (as defined in the Notes), the Secured Parties have severally agreed to provide the loans to the Company evidenced by
the Notes;

 

WHEREAS, pursuant to a certain Guaranty
(as defined in the Purchase Agreement), dated as of the date hereof (the “Guaranty”), the Guarantors have
jointly and severally agreed to guarantee and act as surety for payment of such Notes; and

 

WHEREAS, in order to induce the Secured
Parties to provide the loans evidenced by the Notes, each Debtor has agreed to execute and deliver to the Secured Parties this
Agreement and to grant the Secured Parties, pari passu with each other Secured Party and through the
Agent (as defined in Section 18 hereof), a security interest in certain property of such Debtor to secure the prompt
payment, performance and discharge in full of all of the Company’s obligations under the Notes and the Guarantors’
obligations under the Guaranty.

 

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

 

1.       Certain
Definitions. As used in this Agreement, the following terms shall have the meanings set forth in this Section 1.  Terms
used but not otherwise defined in this Agreement that are defined in Article 9 of the UCC (such as “account”, “chattel
paper”, “commercial tort claim”, “deposit account”, “document”, “equipment”,
“fixtures”, “general intangibles”, “goods”, “instruments”, “inventory”,
“investment property”, “letter-of-credit rights”, “proceeds” and “supporting obligations”)
shall have the respective meanings given such terms in Article 9 of the UCC.

 

(a)       “Collateral”
means the collateral in which the Secured Parties are granted a security interest by this Agreement and which shall comprise all
the assets of the Debtors, including, without limitation, the following personal property of the Debtors, whether presently owned
or existing or hereafter acquired or coming into existence, wherever situated, and all additions and accessions thereto and all
substitutions and replacements thereof, and all proceeds, products and accounts thereof, including, without limitation, all proceeds
from the sale or transfer of the Collateral and of insurance covering the same and of any tort claims in connection therewith,
and all dividends, interest, cash, notes, securities, equity interest or other property at any time and from time to time acquired,
receivable or otherwise distributed in respect of, or in exchange for, any or all of the Pledged Securities (as defined below):

 

    	 	 	 

    	 

    

 

(i)       All
goods, including, without limitation, (A) all machinery, equipment, computers, motor vehicles, trucks, tanks, boats, ships, appliances,
furniture, special and general tools, fixtures, test and quality control devices and other equipment of every kind and nature and
wherever situated, together with all documents of title and documents representing the same, all additions and accessions thereto,
replacements therefor, all parts therefor, and all substitutes for any of the foregoing and all other items used and useful in
connection with any Debtor’s businesses and all improvements thereto; and (B) all inventory;

 

(ii)       All
contract rights and other general intangibles, including, without limitation, all partnership interests, membership interests,
stock or other securities of the Debtors, rights under any of the Organizational Documents (as defined below), agreements related
to the Pledged Securities, licenses, distribution and other agreements, computer software (whether “off-the-shelf”,
licensed from any third party or developed by any Debtor), computer software development rights, leases, franchises, customer lists,
quality control procedures, grants and rights, goodwill, Intellectual Property and income tax refunds;

 

(iii)       All
accounts, together with all instruments, all documents of title representing any of the foregoing, all rights in any merchandising,
goods, equipment, motor vehicles and trucks which any of the same may represent, and all right, title, security and guaranties
with respect to each account, including any right of stoppage in transit;

 

(iv)         All
documents, letter-of-credit rights, instruments and chattel paper;

 

(v)          All
commercial tort claims;

 

(vi)         All
deposit accounts and all cash (whether or not deposited in such deposit accounts);

 

(vii)        All
investment property;

 

(viii)       All
supporting obligations;

 

(ix)          All
files, records, books of account, business papers, and computer programs; and

 

(x)           the
products and proceeds of all of the foregoing Collateral set forth in clauses (i)-(ix) above.

 

Without limiting the generality of
the foregoing, the “Collateral” shall include all investment property and general intangibles respecting ownership
and/or other equity interests in each Guarantor, including, without limitation, the shares of capital stock and the other equity
interests listed on Schedule G hereto (as the same may be modified from time to time pursuant to the terms
hereof), and any other shares of capital stock and/or other equity interests of any other direct or indirect subsidiary of any
Debtor obtained in the future, and, in each case, all certificates representing such shares and/or equity interests and, in each
case, all rights, options, warrants, stock, other securities and/or equity interests that may hereafter be received, receivable
or distributed in respect of, or exchanged for, any of the foregoing and all rights arising under or in connection with the Pledged
Securities, including, but not limited to, all dividends, interest and cash.

 

    	 	2	 

    	 

    

 

Notwithstanding the foregoing, nothing
herein shall be deemed to constitute an assignment of any asset which, in the event of an assignment, becomes void by operation
of applicable law or the assignment of which is otherwise prohibited by applicable law (in each case to the extent that such applicable
law is not overridden by Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar applicable law); provided, however,
that, to the extent permitted by applicable law, this Agreement shall create a valid security interest in such asset and, to the
extent permitted by applicable law, this Agreement shall create a valid security interest in the proceeds of such asset.

 

(b)       “Intellectual
Property” means the collective reference to all rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, (i) all copyrights
arising under the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered
and whether published or unpublished, all registrations and recordings thereof, and all applications in connection therewith, including,
without limitation, all registrations, recordings and applications in the United States Copyright Office, (ii) all letters patent
of the United States, any other country or any political subdivision thereof, all reissues and extensions thereof, and all applications
for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof,
(iii) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade dress, service
marks, logos, domain names and other source or business identifiers, and all goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United
States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country
or any political subdivision thereof, or otherwise, and all common law rights related thereto, (iv) all trade secrets arising under
the laws of the United States, any other country or any political subdivision thereof, (v) all rights to obtain any reissues, renewals
or extensions of the foregoing, (vi) all licenses for any of the foregoing, and (vii) all causes of action for infringement of
the foregoing.

 

(c)       “Majority-in-Interest”
means, at any time of determination, the majority-in-interest (based on then-outstanding principal amounts of Notes at the time
of such determination) of the Secured Parties.

 

(d)       “Necessary
Endorsement” means undated stock powers endorsed in blank or other proper instruments of assignment duly executed and
such other instruments or documents as the Agent (as that term is defined below) may reasonably request.

 

    	 	3	 

    	 

    

 

(e)       “Obligations”
means all of the liabilities and obligations (primary, secondary, direct, contingent, sole, joint or several) due or to become
due, or that are now or may be hereafter contracted or acquired, or owing to, of any Debtor to the Secured Parties under this Agreement,
the Notes, the Guaranty and any other instruments, agreements or other documents executed and/or delivered in connection herewith
or therewith, in each case, whether now or hereafter existing, voluntary or involuntary, direct or indirect, absolute or contingent,
liquidated or unliquidated, whether or not jointly owed with others, and whether or not from time to time decreased or extinguished
and later increased, created or incurred, and all or any portion of such obligations or liabilities that are paid, to the extent
all or any part of such payment is avoided or recovered directly or indirectly from any of the Secured Parties as a preference,
fraudulent transfer or otherwise as such obligations may be amended, supplemented, converted, extended or modified from time to
time.  Without limiting the generality of the foregoing, the term “Obligations” shall include, without limitation:
(i) principal of, interest and any other amounts owed under the Notes as set forth in the Notes (ii) any and all obligations
due under the Transaction Documents (as defined in the Purchase Agreement); (iii) any and all other fees, indemnities, costs, obligations
and liabilities of the Debtors from time to time under or in connection with this Agreement, the Notes, the Transaction Documents,
the Guaranty and any other instruments, agreements or other documents executed and/or delivered in connection herewith or therewith;
and (iv) all amounts (including but not limited to post-petition interest) in respect of the foregoing that would be payable but
for the fact that the obligations to pay such amounts are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving any Debtor.

 

(f)       “Organizational
Documents” means, with respect to any Debtor, the documents by which such Debtor was organized (such as articles of incorporation,
certificate of incorporation, certificate of limited partnership or articles of organization, and including, without limitation,
any certificates of designation for preferred stock or other forms of preferred equity) and which relate to the internal governance
of such Debtor (such as bylaws, a partnership agreement or an operating, limited liability or members agreement).

 

(g)       “Permitted
Liens” means the following:

 

(i)         liens
(as defined in the Purchase Agreement) imposed by law for taxes that are not yet due or are being contested in good faith, which
in each case, have been appropriately reserved for;

 

(ii)        Carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like liens imposed by law, arising in
the ordinary course of business and securing obligations that are not overdue by more than thirty (30) days or are being contested
in good faith;

 

(iii)       Pledges
and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and
other social security laws or regulations;

 

(iv)       Deposits
to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of business;

 

(v)        liens
under this Agreement; and

 

(vi)       Any
other liens in favor of the Secured Parties.

 

    	 	4	 

    	 

    

 

(h)       “Pledged
Securities” shall have the meaning ascribed to such term in Section 4(j).

 

(i)       “UCC”
shall have the meaning ascribed to such term in the Purchase Agreement.  It is the intent of the parties that defined
terms in the UCC should be construed in their broadest sense so that the term “Collateral” will be construed in its
broadest sense.  Accordingly if there are, from time to time, changes to defined terms in the UCC that broaden the definitions,
they are incorporated herein and if existing definitions in the UCC are broader than the amended definitions, the existing ones
shall be controlling.

 

2.       Grant
of Security Interest in Collateral. As an inducement for the Secured Parties to extend the loans as evidenced by the Notes
and to secure the complete and timely payment, performance and discharge in full, as the case may be, of all of the Obligations,
(a) each Debtor hereby unconditionally and irrevocably pledges, grants and hypothecates to the Secured Parties a perfected, first
priority security interest in and to, a lien upon and a right of set-off against all of their respective right, title and interest
of whatsoever kind and nature in and to, the Collateral (a “Security Interest” and, collectively, the “Security
Interests”) and (b) within twenty-one (21) days of the date hereof, the Company agrees that it shall take such steps
to cause MTIX Limited to become an additional Guarantor to this Agreement and perfect the Secured Parties’ Security Interest
in MTIX Limited, and to use its commercially reasonable best efforts in accordance with the laws of England and Wales to cause
MTIX Limited to pledge its equity in favor of the Secured Parties.

 

3.       Delivery
of Certain Collateral.  Contemporaneously or prior to the execution of this Agreement, each Debtor shall deliver
or cause to be delivered to the Agent (a) any and all certificates and other instruments representing or evidencing the Pledged
Securities, and (b) any and all certificates and other instruments or documents representing any of the other Collateral, in each
case, together with all Necessary Endorsements.  The Debtors are, contemporaneously with the execution hereof, delivering
to Agent, or have previously delivered to Agent, a true and correct copy of each Organizational Document governing any of the Pledged
Securities.

 

4.       Representations,
Warranties, Covenants and Agreements of the Debtors. Except as set forth under the corresponding Section of the disclosure
schedules delivered to the Secured Parties concurrently herewith (the “Disclosure Schedules”), which Disclosure
Schedules shall be deemed a part hereof, each Debtor represents and warrants to, and covenants and agrees with, the Secured Parties
as follows:

 

(a)       Each
Debtor has the requisite corporate, partnership, limited liability company or other power and authority to enter into this Agreement
and otherwise to carry out its obligations hereunder. The execution, delivery and performance by each Debtor of this Agreement
and the filings contemplated herein have been duly authorized by all necessary action on the part of such Debtor and no further
action is required by such Debtor. This Agreement has been duly executed by each Debtor. This Agreement constitutes the legal,
valid and binding obligation of each Debtor, enforceable against each Debtor in accordance with its terms except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization and similar laws of general application relating to or affecting
the rights and remedies of creditors and by general principles of equity.

 

    	 	5	 

    	 

    

 

(b)       The
Debtors have no place of business or offices where their respective books of account and records are kept (other than temporarily
at the offices of its attorneys or accountants) or places where Collateral is stored or located, except as set forth on Schedule A attached
hereto.  Except as specifically set forth on Schedule A, each Debtor is the record owner of the real
property where such Collateral is located, and there exist no mortgages or other liens on any such real property except for Permitted
Liens as set forth on Schedule A.  Except as disclosed on Schedule A, none of such Collateral
is in the possession of any consignee, bailee, warehouseman, agent or processor.

 

(c)       Except
for Permitted Liens and as set forth on Schedule B attached hereto, the Debtors are the sole owners of the
Collateral (except for non-exclusive licenses granted by any Debtor in the ordinary course of business), free and clear of any
liens, security interests, encumbrances, rights or claims, and are fully authorized to grant the Security Interests.  Except
as set forth on Schedule C attached hereto, there is not on file in any governmental or regulatory authority,
agency or recording office an effective financing statement, security agreement, license or transfer or any notice of any of the
foregoing (other than those that will be filed in favor of the Secured Parties pursuant to this Agreement) covering or affecting
any of the Collateral.   Except as set forth on Schedule C attached hereto and except pursuant
to this Agreement, as long as this Agreement shall be in effect, the Debtors shall not execute and shall not knowingly permit to
be on file in any such office or agency any other financing statement or other document or instrument (except to the extent filed
or recorded in favor of the Secured Parties pursuant to the terms of this Agreement).

 

(d)       No
written claim has been received that any Collateral or any Debtor’s use of any Collateral violates the rights of any third
party. There has been no adverse decision to any Debtor’s claim of ownership rights in or exclusive rights to use the Collateral
in any jurisdiction or to any Debtor’s right to keep and maintain such Collateral in full force and effect, and there is
no proceeding involving said rights pending or, to the best knowledge of any Debtor, threatened before any court, judicial body,
administrative or regulatory agency, arbitrator or other governmental authority.

 

(e)       Each
Debtor shall at all times maintain its books of account and records relating to the Collateral at its principal place of business
and its Collateral at the locations set forth on Schedule A attached hereto and may not relocate such books
of account and records or tangible Collateral unless it delivers to the Secured Parties at least thirty (30) days prior to such
relocation (i) written notice of such relocation and the new location thereof (which must be within the United States) and (ii)
evidence that appropriate financing statements under the UCC and other necessary documents have been filed and recorded and other
steps have been taken to perfect the Security Interests to create in favor of the Secured Parties a valid, perfected and continuing
perfected first priority lien in the Collateral (to the extent such Collateral can be perfected by the filing of a UCC financing
statement).

 

    	 	6	 

    	 

    

 

(f)       This
Agreement creates in favor of the Secured Parties a valid first priority security interest in the Collateral, subject only to Permitted
Liens, securing the payment and performance of the Obligations. Upon making the filings described in the immediately following
paragraph, all security interests created hereunder in any Collateral which may be perfected by filing UCC financing statements
shall have been duly perfected. Except for (i) the filing of the UCC financing statements referred to in the immediately following
paragraph, (ii) the execution and delivery of deposit account control agreements satisfying the requirements of Section 9-104(a)(2)
of the UCC with respect to each deposit account of the Debtors, (iii) if there is any investment property or deposit account included
as Collateral that can be perfected by “control” through an account control agreement, the execution and delivery of
securities account control agreements satisfying the requirements of 9-106 of the UCC with respect to each such investment property
of the Debtors, and (iv) the delivery of the certificates and other instruments provided in Section 3, Section 4(aa) and Section
4(cc), no action is necessary to create, perfect or protect the security interests created hereunder. Without limiting the generality
of the foregoing, except for the foregoing, no consent of any third parties and no authorization, approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body is required for (x) the execution, delivery and
performance of this Agreement, (y) the creation or perfection of the Security Interests created hereunder in the Collateral
(to the extent such Collateral can be perfected by the filing of a UCC financing statement) or (z) the enforcement of the
rights of the Agent and the Secured Parties hereunder.

 

(g)       Each
Debtor hereby authorizes the Agent to file one or more financing statements under the UCC, with respect to the Security Interests,
with the proper filing and recording agencies in any jurisdiction deemed proper by it.

 

(h)       The
execution, delivery and performance of this Agreement by the Debtors does not (i) violate any of the provisions of any Organizational
Documents of any Debtor or any judgment, decree, order or award of any court, governmental body or arbitrator or any applicable
law, rule or regulation applicable to any Debtor or (ii) conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing any Debtor’s
debt or otherwise) or other understanding to which any Debtor is a party or by which any property or asset of any Debtor is bound
or affected. All required consents (including, without limitation, from stockholders or creditors of any Debtor), if any, for any
Debtor to enter into and perform its obligations hereunder have been obtained.

 

(i) The Pledged Securities (defined
below) by their express terms provide that they are securities governed by Article 8 of the UCC.

 

(j) The capital stock and other
equity interests listed on Schedule G hereto (the “Pledged Securities”) represent all
capital stock and other equity interests owned, directly or indirectly, by the Debtors.  All of the Pledged Securities
are validly issued, fully paid and nonassessable, and the Company is the legal and beneficial owner of the Pledged Securities,
free and clear of any lien, security interest or other encumbrance except for the security interests created by this Agreement
and other Permitted Liens.

 

    	 	7	 

    	 

    

 

(k)       Except
for Permitted Liens, each Debtor shall at all times maintain the liens and Security Interests provided for hereunder as valid and
perfected, first priority (to the extent that such liens and Security Interests can be perfected by the filing of a UCC financing
statement) liens and security interests in the Collateral in favor of the Secured Parties until this Agreement and the Security
Interest hereunder shall be terminated pursuant to Section 14 hereof.  Each Debtor hereby agrees to defend
the same against the claims of any and all persons and entities. Each Debtor shall safeguard and protect all Collateral for the
account of the Secured Parties.  At the request of the Agent, each Debtor will deliver to the Agent on behalf of the
Secured Parties at any time or from time to time one or more financing statements pursuant to the UCC in form reasonably satisfactory
to the Agent and will pay the cost of filing the same in all public offices wherever filing is, or is deemed by the Agent to be,
necessary or desirable to effect the rights and obligations provided for herein. Without limiting the generality of the foregoing,
each Debtor shall pay all fees, taxes and other amounts necessary to maintain the Collateral and the Security Interests hereunder,
and each Debtor shall obtain and furnish to the Agent from time to time, upon demand, such releases and/or subordinations of claims
and liens which may be required to maintain the priority of the Security Interests hereunder.

 

(l)        No
Debtor will transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose of any of the Collateral (except for Permitted
Liens or non-exclusive licenses granted by a Debtor in its ordinary course of business, sales of inventory by a Debtor in its ordinary
course of business and the replacement of worn-out or obsolete equipment by a Debtor in its ordinary course of business) without
the prior written consent of a Majority-in-Interest.

 

(m)       Each
Debtor shall keep and preserve its equipment, inventory and other tangible Collateral in good condition, repair and order and shall
not operate or locate any such Collateral (or cause to be operated or located) in any area excluded from insurance coverage.

 

(n)       Each
Debtor shall maintain with financially sound and reputable insurers, insurance with respect to the Collateral, including Collateral
hereafter acquired, against loss or damage of the kinds and in the amounts customarily insured against by entities of established
reputation having similar properties similarly situated and in such amounts as are customarily carried under similar circumstances
by other such entities and otherwise as is prudent for entities engaged in similar businesses but in any event sufficient to cover
the full replacement cost thereof.  If no Event of Default (as defined in the Note ) exists and if the proceeds arising
out of any claim or series of related claims do not exceed $100,000, loss payments in each instance will be applied by the applicable
Debtor to the repair and/or replacement of property with respect to which the loss was incurred to the extent reasonably feasible,
and any loss payments or the balance thereof remaining, to the extent not so applied, shall be payable to the applicable Debtor;
provided, however, that payments received by any Debtor after an Event of Default occurs and is continuing or in excess of $100,000
for any occurrence or series of related occurrences, upon approval by Agent, which approval shall not be unreasonably withheld,
delayed, denied or conditioned, loss payments in each instance will be applied by the applicable Debtor to the repair and/or replacement
of property with respect to which the loss was incurred to the extent reasonably feasible, and any loss payments or the balance
thereof remaining, to the extent not so applied, shall be paid to Agent on behalf of the Secured Parties and, if received by such
Debtor, shall be held in trust for the Secured Parties and immediately paid over to the Secured Parties unless otherwise directed
in writing by Agent. Copies of such policies or the related certificates, in each case, naming the Secured Parties as lender-loss-payee
and additional insured shall be delivered to the Secured Parties at least annually and at the time any new policy of insurance
is issued.

 

    	 	8	 

    	 

    

 

(o)       Each
Debtor shall, within ten (10) days of obtaining knowledge thereof, advise the Secured Parties, in sufficient detail, of any material
adverse change in the Collateral, and of the occurrence of any event that would have a material adverse effect on the value of
the Collateral or on the Secured Parties’ security interest, through the Agent, therein.

 

(p)       On
a continuing basis, each Debtor shall promptly execute and deliver to the Agent such further deeds, mortgages, assignments, security
agreements, financing statements or other instruments, documents, certificates and assurances, and take such further action as
the Agent may from time to time request and may in its sole discretion deem necessary, to perfect, protect or enforce the Secured
Parties’ security interest in the Collateral and otherwise to carry out the intent and purposes of this Agreement.

 

(q)    Upon reasonable prior notice
(so long as no Event of Default or breach of the Transaction Documents has occurred or continuing, which in either such event,
no prior notice is required), each Debtor shall permit the Agent and its representatives and agents to inspect the Collateral during
normal business hours and to make copies of records pertaining to the Collateral as may be reasonably requested by the Agent from
time to time.

 

(r)       Each
Debtor shall take all steps reasonably necessary to diligently pursue and seek to preserve, enforce and collect any rights, claims,
causes of action and accounts receivable in respect of the Collateral.

 

(s)     Each Debtor shall promptly notify
the Secured Parties in sufficient detail upon becoming aware of any attachment, garnishment, execution or other legal process levied
against any material portion of the Collateral and of any other information received by such Debtor that may materially affect
the value of the Collateral, the Security Interest or the rights and remedies of the Secured Parties hereunder.

 

(t)       All
information heretofore, herein or hereafter supplied to the Secured Parties by or on behalf of any Debtor with respect to the Collateral
is accurate and complete in all material respects as of the date furnished.

 

(u)       The
Debtors shall at all times preserve and keep in full force and effect their respective valid existence and good standing and any
rights and franchises material to its business.

 

(v) No Debtor will change its name,
type of organization, jurisdiction of organization, organizational identification number (if it has one), legal or corporate structure,
or identity, or add any new fictitious name unless it provides at least thirty (30) days’ prior written notice to the Secured
Parties of such change and, at the time of such written notification, such Debtor provides any financing statements or fixture
filings necessary to perfect and continue the perfection of the Security Interests granted and evidenced by this Agreement.

 

(w)       Except
in the ordinary course of business, no Debtor may consign any of its inventory or sell any of its inventory on bill-and-hold, sale-or-return,
sale-on-approval, or other conditional terms of sale without the consent of the Agent, which shall not be unreasonably withheld,
delayed, denied, or conditioned.

 

    	 	9	 

    	 

    

 

(x)       No
Debtor may relocate its chief executive office to a new location without providing thirty (30) days’ prior written notification
thereof to the Secured Parties and so long as, at the time of such written notification, such Debtor provides any financing statements
or fixture filings necessary to perfect and continue the perfection of the Security Interests granted and evidenced by this Agreement.

 

(y)       Each
Debtor was organized and remains organized solely under the laws of the state set forth next to such Debtor’s name in Schedule D attached
hereto, which Schedule D sets forth each Debtor’s organizational identification number or, if any Debtor
does not have one, states that one does not exist.

 

(z)       (i)
The actual name of each Debtor is the name set forth in Schedule D attached hereto; (ii) no Debtor has any
trade names except as set forth on Schedule E attached hereto; (iii) no Debtor has used any name other
than that stated in the preamble hereto or as set forth on Schedule E for the preceding five (5) years; and (iv)
no entity has merged into any Debtor or been acquired by any Debtor within the past five years except as set forth on Schedule E.

 

(aa)At any time and from time
to time that any Collateral consists of instruments, certificated securities or other items that require or permit possession by
the secured party to perfect the security interest created hereby, the applicable Debtor shall deliver such Collateral to the Agent.

 

(bb) Each Debtor, in its capacity
as issuer, hereby agrees to comply with any and all orders and instructions of Agent regarding the Pledged Securities consistent
with the terms of this Agreement without the further consent of any Debtor as contemplated by Section 8-106 (or any successor
section) of the UCC.  Further, each Debtor agrees that it shall not enter into a similar agreement (or one that would
confer “control” within the meaning of Article 8 of the UCC) with any other person or entity.

 

(cc)Each Debtor shall cause
all tangible chattel paper constituting Collateral to be delivered to the Agent, or, if such delivery is not possible, then to
cause such tangible chattel paper to contain a legend noting that it is subject to the security interest created by this Agreement.
To the extent that any Collateral consists of electronic chattel paper, the applicable Debtor shall cause the underlying chattel
paper to be “marked” within the meaning of Section 9-105 of the UCC (or successor Section thereto).

 

(dd)If there is any investment
property or deposit account included as Collateral that can be perfected by “control” through an account control agreement,
the applicable Debtor shall cause such an account control agreement, in form and substance in each case satisfactory to the Agent,
to be entered into and delivered to the Agent for the benefit of the Secured Parties.

 

(ee)To the extent that any Collateral
consists of letter-of-credit rights, the applicable Debtor shall cause the issuer of each underlying letter of credit to consent
to an assignment of the proceeds thereof to the Secured Parties.

 

(ff)To the extent that any Collateral
is in the possession of any third party, the applicable Debtor shall join with the Agent in notifying such third party of the Secured
Parties’ security interest in such Collateral and shall use its best efforts to obtain an acknowledgement and agreement from
such third party with respect to the Collateral, in form and substance reasonably satisfactory to the Agent.

 

    	 	10	 

    	 

    

 

(gg)If any Debtor shall at any
time hold or acquire a commercial tort claim, such Debtor shall promptly notify the Secured Parties in a writing signed by such
Debtor of the particulars thereof and grant to the Secured Parties in such writing a security interest therein and in the proceeds
thereof, all upon the terms of this Agreement, with such writing to be in form and substance satisfactory to the Agent.

 

(hh)Each Debtor shall immediately
provide written notice to the Secured Parties of any and all accounts which arise out of contracts with any governmental authority
and, to the extent necessary to perfect or continue the perfected status of the Security Interests in such accounts and proceeds
thereof, shall execute and deliver to the Agent an assignment of claims for such accounts and cooperate with the Agent in taking
any other steps required, in its judgment, under the Federal Assignment of Claims Act or any similar federal, state or local statute
or rule to perfect or continue the perfected status of the Security Interests in such accounts and proceeds thereof.

 

(ii) Each Debtor shall cause each
subsidiary of such Debtor to immediately become a party hereto (an “Additional Debtor”), by executing and delivering
an Additional Debtor Joinder in substantially the form of Annex A attached hereto and comply with the provisions
hereof applicable to the Debtors.  Concurrently therewith, the Additional Debtor shall deliver replacement schedules
for, or supplements to all other Disclosure Schedules to (or referred to in) this Agreement, as applicable, which replacement schedules
shall supersede, or supplements shall modify, the Disclosure Schedules then in effect.  The Additional Debtor shall also
deliver such authorizing resolutions, good standing certificates, incumbency certificates, organizational documents, financing
statements and other information and documentation as the Agent may reasonably request.  Upon delivery of the foregoing
to the Agent, the Additional Debtor shall be and become a party to this Agreement with the same rights and obligations as the Debtors,
for all purposes hereof as fully and to the same extent as if it were an original signatory hereto and shall be deemed to have
made the representations, warranties and covenants set forth herein as of the date of execution and delivery of such Additional
Debtor Joinder, and all references herein to the “Debtors” shall be deemed to include each Additional Debtor.

 

(jj)Each Debtor shall vote the
Pledged Securities to comply with the covenants and agreements set forth herein and in the Notes and all other Transaction Documents.

 

(kk)Each Debtor shall register
the pledge of the applicable Pledged Securities on the books of such Debtor.  Each Debtor shall notify each issuer of
Pledged Securities to register the pledge of the applicable Pledged Securities in the name of the Secured Parties on the books
of such issuer.  Further, except with respect to certificated securities delivered to the Agent, the applicable Debtor
shall deliver to Agent an acknowledgement of pledge (which, where appropriate, shall comply with the requirements of the relevant
UCC with respect to perfection by registration) signed by the issuer of the applicable Pledged Securities, which acknowledgement
shall confirm that: (a) it has registered the pledge on its books and records; and (b) at any time directed by Agent during the
continuation of an Event of Default, such issuer will transfer the record ownership of such Pledged Securities into the name of
any designee of Agent, will take such steps as may be necessary to effect the transfer, and will comply with all other instructions
of Agent regarding such Pledged Securities without the further consent of the applicable Debtor.

 

    	 	11	 

    	 

    

 

(ll)In the event that, upon
an occurrence of an Event of Default, Agent shall sell all or any of the Pledged Securities to another party or parties (herein
called the “Transferee”) or shall purchase or retain all or any of the Pledged Securities, each Debtor shall,
to the extent applicable: (i) deliver to Agent or the Transferee, as the case may be, the articles of incorporation, bylaws, minute
books, stock certificate books, corporate seals, deeds, leases, indentures, agreements, evidences of indebtedness, books of account,
financial records and all other Organizational Documents and records of the Debtors and their direct and indirect subsidiaries
(but not including any items subject to the attorney-client privilege related to this Agreement or any of the transactions hereunder);
(ii) use its best efforts to obtain resignations of the persons then serving as officers and directors of the Debtors and their
direct and indirect subsidiaries, if so requested; and (iii) use its best efforts to obtain any approvals that are required by
any governmental or regulatory body in order to permit the sale of the Pledged Securities to the Transferee or the purchase or
retention of the Pledged Securities by Agent and allow the Transferee or Agent to continue the business of the Debtors and their
direct and indirect subsidiaries.

 

(mm)Without limiting the generality
of the other obligations of the Debtors hereunder, each Debtor shall promptly (i) cause to be registered at the United States Copyright
Office all of its material copyrights, (ii) following an Event of Default, upon the written request of the Agent, cause the security
interest contemplated hereby with respect to all Intellectual Property registered at the United States Copyright Office or United
States Patent and Trademark Office to be duly recorded at the applicable office, and (iii) give the Agent notice whenever it acquires
(whether absolutely or by license) or creates any additional material Intellectual Property.

 

(nn)Each Debtor will from time
to time, at the joint and several expense of the Debtors, promptly execute and deliver all such further instruments and documents,
and take all such further action as may be necessary or desirable, or as the Agent may reasonably request, in order to perfect
(to the extent such security interest can be perfected by the filing of a UCC financing statement) and protect any security interest
granted or purported to be granted hereby or to enable the Secured Parties to exercise and enforce their rights and remedies hereunder
and with respect to any Collateral or to otherwise carry out the purposes of this Agreement.

 

(oo)       Schedule F attached
hereto lists all of the patents, patent applications, trademarks, trademark applications, registered copyrights, and domain names
owned by any of the Debtors as of the date hereof.  Schedule F lists all material licenses in favor
of any Debtor for the use of any patents, trademarks, copyrights and domain names as of the date hereof.  All material
patents and trademarks of the Debtors have been duly recorded at the United States Patent and Trademark Office and all material
copyrights of the Debtors have been duly recorded at the United States Copyright Office.

 

(pp)Until the Obligations shall
have been paid and performed in full, the Company covenants that it shall promptly direct any direct or indirect subsidiary of
the Company formed or acquired after the date hereof to enter into a Guaranty in favor of the Secured Party, in the form of attached
as an exhibit to the Purchase Agreement.

 

    	 	12	 

    	 

    

 

5.       Effect
of Pledge on Certain Rights.  If any of the Collateral subject to this Agreement consists of nonvoting equity or ownership
interests (regardless of class, designation, preference or rights) that may be converted into voting equity or ownership interests
upon the occurrence of certain events (including, without limitation, upon the transfer of all or any of the other stock or assets
of the issuer), it is agreed by Debtors that the pledge of such equity or ownership interests pursuant to this Agreement or the
enforcement of any of Agent’s rights hereunder shall not be deemed to be the type of event which would trigger such conversion
rights notwithstanding any provisions in the Organizational Documents or agreements to which any Debtor is subject or to which
any Debtor is party.

 

6.       Defaults.
The following events shall be “Events of Default”:

 

(a)       The
occurrence of an Event of Default under the Notes;

 

(b)       The
occurrence of an event of default or breach under any of the Transaction Documents;

 

(c)       Any
representation or warranty of any Debtor in this Agreement shall prove to have been incorrect in any material respect when made;

 

(d)       The
failure by any Debtor to observe or perform any of its obligations hereunder for thirty (30) days after delivery to such Debtor
of notice of such failure by or on behalf of a Secured Party unless such default is capable of cure but cannot be cured within
such time frame and such Debtor is using best efforts to cure same in a timely fashion; or

 

(e)       If
any provision of this Agreement shall at any time for any reason be declared to be null and void, or the validity or enforceability
thereof shall be contested by any Debtor, or a proceeding shall be commenced by any Debtor, or by any governmental authority having
jurisdiction over any Debtor, seeking to establish the invalidity or unenforceability thereof, or any Debtor shall deny that any
Debtor has any liability or obligation purported to be created under this Agreement.

 

7.       Duty
to Hold in Trust.

 

(a)       Upon
the occurrence and during the continuance of any Event of Default, each Debtor shall, upon receipt of any revenue, income, dividend,
interest or other sums subject to the Security Interests, whether payable pursuant to the Notes or otherwise, or of any check,
draft, note, trade acceptance or other instrument evidencing an obligation to pay any such sum, hold the same in trust for the
Secured Parties and shall forthwith endorse and transfer any such sums or instruments, or both, to the Agent, pro-rata in proportion
to their respective then-currently outstanding principal amount of Notes for application to the satisfaction of the Obligations
(and if any Notes is not outstanding, pro-rata in proportion to the initial purchases of the remaining Notes).

 

    	 	13	 

    	 

    

 

(b)       If
any Debtor shall become entitled to receive or shall receive any securities or other property (including, without limitation, shares
of Pledged Securities or instruments representing Pledged Securities acquired after the date hereof, or any options, warrants,
rights or other similar property or certificates representing a dividend, or any distribution in connection with any recapitalization,
reclassification or increase or reduction of capital, or issued in connection with any reorganization of such Debtor or any of
its direct or indirect subsidiaries) in respect of the Pledged Securities (whether as an addition to, in substitution of, or in
exchange for, such Pledged Securities or otherwise), such Debtor agrees to (i) accept the same as the agent of the Secured Parties;
(ii) hold the same in trust on behalf of and for the benefit of the Secured Parties; and (iii) to deliver any and all certificates
or instruments evidencing the same to Agent on or before the close of business on the fifth (5th) business day following
the receipt thereof by such Debtor, in the exact form received together with the Necessary Endorsements, to be held by Agent subject
to the terms of this Agreement as Collateral.

 

8.       Rights
and Remedies Upon Default.

 

(a)       Upon
the occurrence and during the continuance of any Event of Default, the Secured Parties, acting through the Agent, shall have the
right to exercise all of the remedies conferred hereunder and under the Notes, and the Secured Parties shall have all the rights
and remedies of a secured party under the UCC.  Without limitation, the Agent, for the benefit of the Secured Parties,
shall have the following rights and powers:

 

(i)       The
Agent shall have the right to take possession of the Collateral and, for that purpose, enter, with the aid and assistance of any
person, any premises where the Collateral, or any part thereof, is or may be placed and remove the same, and each Debtor shall
assemble the Collateral and make it available to the Agent at places which the Agent shall reasonably select, whether at such Debtor’s
premises or elsewhere, and make available to the Agent, without rent, all of such Debtor’s respective premises and facilities
for the purpose of the Agent taking possession of, removing or putting the Collateral in saleable or disposable form.

 

(ii)       Upon
written notice to the Debtors by Agent, all rights of each Debtor to exercise the voting and other consensual rights which it would
otherwise be entitled to exercise and all rights of each Debtor to receive the dividends and interest which it would otherwise
be authorized to receive and retain, shall cease.  Upon such written notice, Agent shall have the right to receive, for
the benefit of the Secured Parties, any interest, cash dividends or other payments on the Collateral and, at the option of Agent,
to exercise in such Agent’s discretion all voting rights pertaining thereto.  Without limiting the generality of
the foregoing, Agent shall have the right (but not the obligation) to exercise all rights with respect to the Collateral as it
were the sole and absolute owner thereof, including, without limitation, to vote and/or to exchange, at its sole discretion, any
or all of the Collateral in connection with a merger, reorganization, consolidation, recapitalization or other readjustment concerning
or involving the Collateral or any Debtor or any of its direct or indirect subsidiaries.

 

    	 	14	 

    	 

    

 

(iii)       The
Agent shall have the right to operate the business of each Debtor using the Collateral and shall have the right to assign, sell,
lease or otherwise dispose of and deliver all or any part of the Collateral, at public or private sale or otherwise, either with
or without special conditions or stipulations, for cash or on credit or for future delivery, in such parcel or parcels and at such
time or times and at such place or places, and upon such terms and conditions as the Agent may deem commercially reasonable, all
without (except as shall be required by applicable statute and cannot be waived) advertisement or demand upon or notice to any
Debtor or right of redemption of a Debtor, which are hereby expressly waived.  Upon each such sale, lease, assignment
or other transfer of Collateral, the Agent, for the benefit of the Secured Parties, may, unless prohibited by applicable law which
cannot be waived, purchase all or any part of the Collateral being sold, free from and discharged of all trusts, claims, right
of redemption and equities of any Debtor, which are hereby waived and released.

 

(iv)       The
Agent shall have the right (but not the obligation) to notify any account debtors and any obligors under instruments or accounts
to make payments directly to the Agent, on behalf of the Secured Parties, and to enforce the Debtors’ rights against such
account debtors and obligors.

 

(v)       The
Agent, for the benefit of the Secured Parties, may (but is not obligated to) direct any financial intermediary or any other person
or entity holding any investment property to transfer the same to the Agent, on behalf of the Secured Parties, or its designee.

 

(vi)       The
Agent may (but is not obligated to) transfer any or all Intellectual Property registered in the name of any Debtor at the United
States Patent and Trademark Office and/or Copyright Office into the name of the Secured Parties or any designee or any purchaser
of any Collateral.

 

(b)       The
Agent shall comply with any applicable law in connection with a disposition of Collateral and such compliance will not be considered
adversely to affect the commercial reasonableness of any sale of the Collateral.  The Agent may sell the Collateral without
giving any warranties and may specifically disclaim such warranties.  If the Agent sells any of the Collateral on credit,
the Debtors will only be credited with payments actually made by the purchaser.  In addition, each Debtor waives (except
as shall be required by applicable statute and cannot be waived) any and all rights that it may have to a judicial hearing in advance
of the enforcement of any of the Agent’s rights and remedies hereunder, including, without limitation, its right following
an Event of Default to take immediate possession of the Collateral and to exercise its rights and remedies with respect thereto.

 

(c)       For
the purpose of enabling the Agent to further exercise rights and remedies under this Section 8 or elsewhere provided
by agreement or applicable law, each Debtor hereby grants to the Agent, for the benefit of the Agent and the Secured Parties, an
irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to such Debtor) to use, license
or sublicense following an Event of Default, any Intellectual Property now owned or hereafter acquired by such Debtor, and wherever
the same may be located, and including in such license access to all media in which any of the licensed items may be recorded or
stored and to all computer software and programs used for the compilation or printout thereof.

 

    	 	15	 

    	 

    

 

9.       Applications
of Proceeds. The proceeds of any sale, lease or other disposition by the Agent of the Collateral hereunder or from payments
made to the Agent on account of any insurance policy insuring any portion of the Collateral shall be applied first, to the expenses
of retaking, holding, storing, processing and preparing for sale, selling, and the like (including, without limitation, any taxes,
fees and other costs incurred in connection therewith) of the Collateral, to the reasonable attorneys’ fees and expenses
incurred by the Agent in enforcing the Secured Parties’ rights hereunder and in connection with collecting, storing and disposing
of the Collateral, and then to satisfaction of the Obligations pro rata among the Secured Parties (based on then-outstanding principal
amounts of Notes at the time of any such determination), and to the payment of any other amounts required by applicable law, after
which the Secured Parties shall pay to the applicable Debtor any surplus proceeds. If, upon the sale, license or other disposition
of all of the Collateral, the proceeds thereof are insufficient to pay all amounts to which the Secured Parties are legally entitled,
the Debtors will be liable for the deficiency, together with interest thereon, at the rate of 18% per annum or the lesser amount
permitted by applicable law (the “Default Rate”), and the reasonable fees of any attorneys employed by the Secured
Parties to collect such deficiency.  To the extent permitted by applicable law, each Debtor waives all claims, damages
and demands against the Secured Parties arising out of the repossession, removal, retention or sale of the Collateral, unless due
solely to the gross negligence or willful misconduct of the Secured Parties as determined by a final judgment (not subject to further
appeal) of a court of competent jurisdiction.

 

10.       Securities
Law Provision.  Each Debtor recognizes that Agent may be limited in its ability to effect a sale to the public of
all or part of the Pledged Securities by reason of certain prohibitions in the Securities Act of 1933, as amended, or other federal
or state securities laws (collectively, the “Securities Laws”), and may be compelled to resort to one or more
sales to a restricted group of purchasers who may be required to agree to acquire the Pledged Securities for their own account,
for investment and not with a view to the distribution or resale thereof.  Each Debtor agrees that sales so made may
be at prices and on terms less favorable than if the Pledged Securities were sold to the public, and that Agent has no obligation
to delay the sale of any Pledged Securities for the period of time necessary to register the Pledged Securities for sale to the
public under the Securities Laws.  Each Debtor shall cooperate with Agent in its attempt to satisfy any requirements
under the Securities Laws (including, without limitation, registration thereunder if requested by Agent) applicable to the sale
of the Pledged Securities by Agent.

 

11.       Costs
and Expenses. Each Debtor agrees to pay all reasonable out-of-pocket fees, costs and expenses incurred in connection with any
filing required hereunder, including without limitation, any financing statements pursuant to the UCC, continuation statements,
partial releases and/or termination statements related thereto or any expenses of any searches reasonably required by the Agent.  The
Debtors shall also pay all other claims and charges which in the reasonable opinion of the Agent is reasonably likely to prejudice,
imperil or otherwise affect the Collateral or the Security Interests therein.  The Debtors will also, upon demand, pay
to the Agent the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and of any
experts and agents, which the Agent, for the benefit of the Secured Parties, may incur in connection with the creation, perfection,
protection, satisfaction, foreclosure, collection or enforcement of the Security Interest and the preparation, administration,
continuance, amendment or enforcement of this Agreement and pay to the Agent the amount of any and all reasonable expenses, including
the reasonable fees and expenses of its counsel and of any experts and agents, which the Agent, for the benefit of the Secured
Parties, and the Secured Parties may incur in connection with (i) the enforcement of this Agreement, (ii) the custody or preservation
of, or the sale of, collection from, or other realization upon, any of the Collateral, or (iii) the exercise or enforcement of
any of the rights of the Secured Parties under the Notes and the Transaction Documents. Until so paid, any fees payable hereunder
shall be added to the amounts owed under the Transaction Documents and shall bear interest at the Default Rate.

 

    	 	16	 

    	 

    

 

12.       Responsibility
for Collateral. The Debtors assume all liabilities and responsibility in connection with all Collateral, and the Obligations
shall in no way be affected or diminished by reason of the loss, destruction, damage or theft of any of the Collateral or its unavailability
for any reason.  Without limiting the generality of the foregoing and except as required by applicable law, (a) neither
the Agent nor any Secured Party (i) has any duty (either before or after an Event of Default) to collect any amounts in respect
of the Collateral or to preserve any rights relating to the Collateral, or (ii) has any obligation to clean-up or otherwise prepare
the Collateral for sale, and (b) each Debtor shall remain obligated and liable under each contract or agreement included in the
Collateral to be observed or performed by such Debtor thereunder.  Neither the Agent nor any Secured Party shall have
any obligation or liability under any such contract or agreement by reason of or arising out of this Agreement or the receipt by
the Agent or any Secured Party of any payment relating to any of the Collateral, nor shall the Agent or any Secured Party be obligated
in any manner to perform any of the obligations of any Debtor under or pursuant to any such contract or agreement, to make inquiry
as to the nature or sufficiency of any payment received by the Agent or any Secured Party in respect of the Collateral or as to
the sufficiency of any performance by any party under any such contract or agreement, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which may have been assigned to the Agent or to which
the Agent or any Secured Party may be entitled at any time or times.

 

13.       Security
Interests Absolute. All rights of the Secured Parties and all obligations of each Debtor hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement, the Notes or any agreement entered into in connection
with the foregoing, or any portion hereof or thereof, against any other Debtor or Guarantor; (b) any change in the time, manner
or place of payment or performance of, or in any other term of, all or any of the Obligations, or any other amendment or waiver
of or any consent to any departure from the Notes or any other agreement entered into in connection with the foregoing; (c) any
exchange, release or nonperfection of any of the Collateral, or any release or amendment or waiver of or consent to departure from
any other collateral for, or any guarantee, or any other security, for all or any of the Obligations; (d) any action by the Secured
Parties to obtain, adjust, settle and cancel in its sole discretion any insurance claims or matters made or arising in connection
with the Collateral; or (e) any other circumstance which might otherwise constitute any legal or equitable defense available to
a Debtor, or a discharge of all or any part of the Security Interests granted hereby.  Until the Obligations shall have
been paid and performed in full, the rights of the Secured Parties shall continue even if the Obligations are barred for any reason,
including, without limitation, the running of the statute of limitations.  Each Debtor expressly waives presentment,
protest, notice of protest, demand, notice of nonpayment and demand for performance. In the event that at any time any transfer
of any Collateral or any payment received by the Secured Parties hereunder shall be deemed by final order of a court of competent
jurisdiction to have been a voidable preference or fraudulent conveyance under the bankruptcy or insolvency laws of the United
States, or shall be deemed to be otherwise due to any party other than the Secured Parties, then, in any such event, each Debtor’s
obligations hereunder shall survive cancellation of this Agreement, and shall not be discharged or satisfied by any prior payment
thereof and/or cancellation of this Agreement, but shall remain a valid and binding obligation enforceable in accordance with the
terms and provisions hereof.  Each Debtor waives all right to require the Secured Parties to proceed against any other
person or entity or to apply any Collateral which the Secured Parties may hold at any time, or to marshal assets, or to pursue
any other remedy. Each Debtor waives any defense arising by reason of the application of the statute of limitations to any obligation
secured hereby.

 

    	 	17	 

    	 

    

 

14.       Term
of Agreement. This Agreement and the Security Interests shall terminate on the date on which all payments under the Notes have
been indefeasibly paid in full and all other Obligations have been paid or discharged; provided, however, that all
indemnities of the Debtors contained in this Agreement (including, without limitation, Annex B hereto) shall survive and remain
operative and in full force and effect regardless of the termination of this Agreement.

 

15.       Power
of Attorney; Further Assurances.

 

(a)       Each
Debtor authorizes the Agent, and does hereby make, constitute and appoint the Agent and its officers, agents, successors or assigns
with full power of substitution, as such Debtor’s true and lawful attorney-in-fact, with power, in the name of the Agent
or such Debtor, to, after the occurrence and during the continuance of an Event of Default, (i) endorse any note, checks, drafts,
money orders or other instruments of payment (including payments payable under or in respect of any policy of insurance) in respect
of the Collateral that may come into possession of the Agent; (ii) to sign and endorse any financing statement pursuant to the
UCC or any invoice, freight or express bill, bill of lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts, and other documents relating to the Collateral; (iii) to pay or discharge
taxes, liens, security interests or other encumbrances at any time levied or placed on or threatened against the Collateral; (iv)
to demand, collect, receipt for, compromise, settle and sue for monies due in respect of the Collateral; (v) to transfer any Intellectual
Property or provide licenses respecting any Intellectual Property; and (vi) generally, at the option of the Agent, and at the expense
of the Debtors, at any time, or from time to time, to execute and deliver any and all documents and instruments and to do all acts
and things which the Agent deems necessary to protect, preserve and realize upon the Collateral and the Security Interests granted
therein in order to effect the intent of this Agreement, the Notes and the other Transaction Documents all as fully and effectually
as the Debtors might or could do; and each Debtor hereby ratifies all that said attorney shall lawfully do or cause to be done
by virtue hereof.  This power of attorney is coupled with an interest and shall be irrevocable for the term of this Agreement
and thereafter as long as any of the Obligations shall be outstanding.  The designation set forth herein shall be deemed
to amend and supersede any inconsistent provision in the Organizational Documents or other documents or agreements to which any
Debtor is subject or to which any Debtor is a party.  Without limiting the generality of the foregoing, after the occurrence
and during the continuance of an Event of Default, each Secured Party is specifically authorized to execute and file any applications
for or instruments of transfer and assignment of any patents, trademarks, copyrights or other Intellectual Property with the United
States Patent and Trademark Office and the United States Copyright Office.

 

    	 	18	 

    	 

    

 

(b)       On
a continuing basis, each Debtor will make, execute, acknowledge, deliver, file and record, as the case may be, with the proper
filing and recording agencies in any jurisdiction, including, without limitation, the jurisdictions indicated on Schedule C
attached hereto, all such instruments, and take all such action as may reasonably be deemed necessary or advisable, or as reasonably
requested by the Secured Parties, to perfect the Security Interests granted hereunder and otherwise to carry out the intent and
purposes of this Agreement, or for assuring and confirming to the Secured Parties the grant or perfection of a perfected security
interest in all the Collateral under the UCC.

 

(c)       Each
Debtor hereby irrevocably appoints the Agent as such Debtor’s attorney-in-fact, with full authority in the place and instead
of such Debtor and in the name of such Debtor, from time to time in the Agent’s discretion, to take any action and to execute
any instrument which the Agent may deem necessary or advisable to accomplish the purposes of this Agreement, including the filing,
in its sole discretion, of one or more financing or continuation statements and amendments thereto, relative to any of the Collateral
without the signature of such Debtor where permitted by law, which financing statements may (but need not) describe the Collateral
as “all assets” or “all personal property” or words of like import, and ratifies all such actions taken
by the Agent.  This power of attorney is coupled with an interest and shall be irrevocable for the term of this Agreement
and thereafter as long as any of the Obligations shall be outstanding.

 

16.       Notices.
All notices, requests, demands and other communications hereunder shall be subject to the notice provision of the Purchase Agreement.

 

17.       Other
Security. To the extent that the Obligations are now or hereafter secured by property other than the Collateral or by
the Guaranty, endorsement or property of any other person, firm, corporation or other entity, then the Agent shall have the right,
in its sole discretion, to pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any
way modifying or affecting any of the Secured Parties’ rights and remedies hereunder.

 

18.       Appointment
of Agent.  If and as applicable, the Secured Parties hereby appoint ____________ to act as their agent (“Agent”)
for purposes of exercising any and all rights and remedies of the Secured Parties hereunder. Such appointment shall continue until
revoked in writing by a Majority-in-Interest, at which time a Majority-in-Interest shall appoint a new Agent, provided that _____________
may not be removed as Agent unless ____________ shall then hold less than $100,000 in principal amount of Notes; provided, further,
that such removal may occur only if each of the other Secured Parties shall then hold not less than an aggregate of $250,000 in
principal amount of Notes. The Agent shall have the rights, responsibilities and immunities set forth in Annex B hereto.

 

19.       Miscellaneous.

 

(a)       No
course of dealing between the Debtors and the Secured Parties, nor any failure to exercise, nor any delay in exercising, on the
part of the Secured Parties, any right, power or privilege hereunder or under the Notes or other Transaction Documents shall operate
as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or thereunder preclude
any other or further exercise thereof or the exercise of any other right, power or privilege.

 

    	 	19	 

    	 

    

 

(b)       All
of the rights and remedies of the Secured Parties with respect to the Collateral, whether established hereby or by the Securities
or the Transaction Documents or by any other agreements, instruments or documents or by law shall be cumulative and may be exercised
singly or concurrently.

 

(c)       This
Agreement, together with the exhibits and schedules hereto, contains the entire understanding of the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which
the parties acknowledge have been merged into this Agreement and the exhibits and schedules hereto. No provision of this Agreement
may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Debtors
and the Secured Parties holding two-thirds (2/3rds) or more of the principal amount of Notes then outstanding, or, in
the case of a waiver, by the party against whom enforcement of any such waived provision is sought.

 

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

 

(e)       No
waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof,
nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

 

(f)       This
Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.  The
Company and the Guarantors may not assign this Agreement or any rights or obligations hereunder without the prior written consent
of the Agent (other than by merger).  Any Secured Party may assign any or all of its rights under this Agreement to any
Person (as defined in the Purchase Agreement) to whom such Secured Party assigns or transfers any Obligations, provided such transferee
agrees in writing to be bound, with respect to the transferred Obligations, by the provisions of this Agreement that apply to the
“Secured Parties.”

 

(g)       Each
party shall take such further action and execute and deliver such further documents as may be necessary or appropriate in order
to carry out the provisions and purposes of this Agreement.

 

    	 	20	 

    	 

    

 

(h)       Except
to the extent mandatorily governed by the jurisdiction or situs where the Collateral is located, all questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the
internal laws of the State of New York, without regard to the principles of conflicts of law thereof.  Except to the
extent mandatorily governed by the jurisdiction or situs where the Collateral is located, each Debtor agrees that all proceedings
concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement, the Notes or the other
Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New
York, Borough of Manhattan.  Except to the extent mandatorily governed by the jurisdiction or situs where the Collateral
is located, each Debtor hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the
City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any proceeding, any claim that
it is not personally subject to the jurisdiction of any such court, that such proceeding is improper.   Each party hereto
hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated hereby.

 

(i)       This
Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and,
all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature
is executed) the same with the same force and effect as if such facsimile signature were the original thereof.

 

(j)       All
Debtors shall jointly and severally be liable for the obligations of each Debtor to the Secured Parties hereunder.

 

(k)       Each
Debtor agrees to indemnify, reimburse and hold harmless the Agent and the Secured Parties and their respective assignees and affiliates
and their respective officers, directors, employees, agents, consultants, auditors, and attorneys of any of them (collectively,
“Indemnitees”) from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including the reasonable fees relating to the
cost of investigating or defending any of the foregoing) imposed on, incurred by or asserted against such Indemnitee in any way
related to or arising from or alleged to arise from this Agreement or the Collateral, except any such losses, claims, liabilities,
damages, penalties, suits, costs and expenses which result from the gross negligence or willful misconduct of the Indemnitee as
determined by a final, nonappealable decision of a court of competent jurisdiction; provided that the Debtors shall not be obligated
to indemnify the Indemnitees, or have any liability, in excess of the aggregate Purchase Price (as defined in the Purchase Agreement).  This
indemnification provision is in addition to, and not in limitation of, any other indemnification provision in the Notes, the Purchase
Agreement or any other agreement, instrument or other document executed or delivered in connection herewith or therewith.

 

    	 	21	 

    	 

    

 

(l)        Nothing
in this Agreement shall be construed to subject Agent or any Secured Party to liability as a partner in any Debtor or any if its
direct or indirect subsidiaries that is a partnership or as a member in any Debtor or any of its direct or indirect subsidiaries
that is a limited liability company, nor shall Agent or any Secured Party be deemed to have assumed any obligations under any partnership
agreement or limited liability company agreement, as applicable, of any such Debtor or any of its direct or indirect subsidiaries
or otherwise, unless and until any such Secured Party exercises its right to be substituted for such Debtor as a partner or member,
as applicable, pursuant hereto.

 

(m)       To
the extent that the grant of the security interest in the Collateral and the enforcement of the terms hereof require the consent,
approval or action of any partner or member, as applicable, of any Debtor or any direct or indirect subsidiary of any Debtor or
compliance with any provisions of any of the Organizational Documents, the Debtors hereby represent that all such consents and
approvals have been obtained.

 

[SIGNATURE PAGE OF DEBTORS FOLLOWS]

 

    	 	22	 

    	 

    

 

IN WITNESS WHEREOF, the parties hereto
have caused this Security Agreement to be duly executed on the day and year first above written.

 

 

 

AVALANCHE INTERNATIONAL, CORP.

 

 

 

	By: 	 	 
	 	Name: 	Phil Mansour	 
	 	Title:	Chief Executive Officer	 

 

 

 

Restaurant
Capital Group, LLC

 

 

 

	By:	 	 
	 	Name:	 	 
	 	Title:	 	 

 

 

 

[SIGNATURE PAGE OF HOLDERS FOLLOWS]

 

 

 

 

 

 

[Security Agreement]

 

    	 		 

    	 

    

 

[SIGNATURE PAGE OF HOLDERS TO SECURITY AGREEMENT]

 

Name of Investing Entity: __________________________

 

Signature of Authorized Signatory of Investing entity:
_________________________

 

Name of Authorized Signatory: _________________________

 

Title of Authorized Signatory: __________________________

 

 

 

 

 

 

[Security Agreement]

 

    	 		 

    	 

    

 

ANNEX A

to

SECURITY AGREEMENT

 

FORM OF ADDITIONAL DEBTOR JOINDER

 

Security Agreement dated as of April [__], 2019 made
by Avalanche International, Corp. and its subsidiaries party thereto from time to time, as Debtors to and in favor of the Secured
Parties identified therein (the “Security Agreement”).

 

Reference is made to the Security
Agreement as defined above; capitalized terms used herein and not otherwise defined herein shall have the meanings given to such
terms in, or by reference in, the Security Agreement.

 

The undersigned hereby agrees that,
upon delivery of this Additional Debtor Joinder to the Secured Parties referred to above, the undersigned shall (a) be an Additional
Debtor under the Security Agreement, (b) have all the rights and obligations of the Debtors under the Security Agreement as fully
and to the same extent as if the undersigned was an original signatory thereto and (c) be deemed to have made the representations
and warranties set forth therein as of the date of execution and delivery of this Additional Debtor Joinder.  WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, THE UNDERSIGNED SPECIFICALLY GRANTS TO THE SECURED PARTIES A SECURITY INTEREST IN THE
COLLATERAL AS MORE FULLY SET FORTH IN THE SECURITY AGREEMENT AND ACKNOWLEDGES AND AGREES TO THE WAIVER OF JURY TRIAL PROVISIONS
SET FORTH THEREIN.

 

Attached hereto are supplemental
and/or replacement Disclosure Schedules to the Security Agreement, as applicable.

 

An executed copy of this Joinder
shall be delivered to the Secured Parties, and the Secured Parties may rely on the matters set forth herein on or after the date
hereof.  This Joinder shall not be modified, amended or terminated without the prior written consent of the Secured Parties.

 

IN WITNESS WHEREOF, the undersigned
has caused this Joinder to be executed in the name and on behalf of the undersigned.

 

 

 

[Name of Additional Debtor]

 

	By:	 	 
	 	Name:	 	 
	 	Title:	 	 
	 	Address:	 	 

Dated:

 

    	 	A-1	 

    	 

    

 

ANNEX B

to

SECURITY AGREEMENT

 

THE AGENT

 

1.       Appointment.
 The Secured Parties (all capitalized terms used herein and not otherwise defined shall have the respective meanings
provided in the Security Agreement to which this Annex B is attached (the “Agreement”)), by their acceptance
of the benefits of the Agreement, hereby designate [__________] (“Agent”) as the Agent to act as specified herein
and in the Agreement.  Each Secured Party shall be deemed irrevocably to authorize the Agent to take such action on its
behalf under the provisions of the Agreement and any other Transaction Document (as such term is defined in the Purchase Agreement)
and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of
the Agent by the terms hereof and thereof and such other powers as are reasonably incidental thereto.  The Agent may
perform any of its duties hereunder by or through its agents or employees.

 

2.       Nature
of Duties.  The Agent shall have no duties or responsibilities except those expressly set forth in the Agreement.  Neither
the Agent nor any of its partners, members, shareholders, officers, directors, employees or agents shall be liable for any action
taken or omitted by it as such under the Agreement or hereunder or in connection herewith or therewith, be responsible for the
consequence of any oversight or error of judgment or answerable for any loss, unless caused solely by its or their gross negligence
or willful misconduct as determined by a final judgment (not subject to further appeal) of a court of competent jurisdiction.  The
duties of the Agent shall be mechanical and administrative in nature; the Agent shall not have by reason of the Agreement or any
other Transaction Document a fiduciary relationship in respect of any Debtor or any Secured Party; and nothing in the Agreement
or any other Transaction Document (as defined in the Purchase Agreement), expressed or implied, is intended to or shall be so construed
as to impose upon the Agent any obligations in respect of the Agreement or any other Transaction Document except as expressly set
forth herein and therein.

 

3.       Lack
of Reliance on the Agent.  Independently and without reliance upon the Agent, each Secured Party, to the extent it
deems appropriate, has made and shall continue to make (i) its own independent investigation of the financial condition and affairs
of the Company and its subsidiaries in connection with such Secured Party’s investment in the Debtors, the creation and continuance
of the Obligations, the transactions contemplated by the Transaction Documents, and the taking or not taking of any action in connection
therewith, and (ii) its own appraisal of the creditworthiness of the Company and its subsidiaries, and of the value of the Collateral
from time to time, and the Agent shall have no duty or responsibility, either initially or on a continuing basis, to provide any
Secured Party with any credit, market or other information with respect thereto, whether coming into its possession before any
Obligations are incurred or at any time or times thereafter.  The Agent shall not be responsible to the Debtors or any
Secured Party for any recitals, statements, information, representations or warranties herein or in any document, certificate or
other writing delivered in connection herewith, or for the execution, effectiveness, genuineness, validity, enforceability, perfection,
collectability, priority or sufficiency of the Agreement or any other Transaction Document, or for the financial condition of the
Debtors or the value of any of the Collateral, or be required to make any inquiry concerning either the performance or observance
of any of the terms, provisions or conditions of the Agreement or any other Transaction Document, or the financial condition of
the Debtors, or the value of any of the Collateral, or the existence or possible existence of any default or Event of Default under
the Agreement, the Notes or any of the other Transaction Documents.

 

    	 	B-1	 

    	 

    

 

4.       Certain
Rights of the Agent.  The Agent shall have the right to take any action with respect to the Collateral, on behalf
of all of the Secured Parties.  To the extent practical, the Agent shall request instructions from the Secured Parties
with respect to any material act or action (including failure to act) in connection with the Agreement or any other Transaction
Document, and shall be entitled to act or refrain from acting in accordance with the instructions of a Majority-in-Interest; if
such instructions are not provided despite the Agent’s request therefor, the Agent shall be entitled to refrain from such
act or taking such action, and if such action is taken, shall be entitled to appropriate indemnification from the Secured Parties
in respect of actions to be taken by the Agent; and the Agent shall not incur liability to any person or entity by reason of so
refraining.  Without limiting the foregoing, (a) no Secured Party shall have any right of action whatsoever against the
Agent as a result of the Agent acting or refraining from acting hereunder in accordance with the terms of the Agreement or any
other Transaction Document, and the Debtors shall have no right to question or challenge the authority of, or the instructions
given to, the Agent pursuant to the foregoing and (b) the Agent shall not be required to take any action that the Agent believes
(i) could reasonably be expected to expose it to personal liability or (ii) is contrary to this Agreement, the Transaction Documents
or applicable law.

 

5.       Reliance.  The
Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, statement, certificate,
telex, teletype or facsimile message, cablegram, radiogram, order or other document or telephone message signed, sent or made by
the proper person or entity, and, with respect to all legal matters pertaining to the Agreement and the other Transaction Documents
and its duties thereunder, upon advice of counsel selected by it and upon all other matters pertaining to this Agreement and the
other Transaction Documents and its duties thereunder, upon advice of other experts selected by it.  Anything to the
contrary notwithstanding, the Agent shall have no obligation whatsoever to any Secured Party to assure that the Collateral exists
or is owned by the Debtors or is cared for, protected or insured or that the liens granted pursuant to the Agreement have been
properly or sufficiently or lawfully created, perfected, or enforced or are entitled to any particular priority.

 

6.       Indemnification.  To
the extent that the Agent is not reimbursed and indemnified by the Debtors, the Secured Parties will jointly and severally reimburse
and indemnify the Agent, in proportion to their initially purchased respective principal amounts of Notes, from and against any
and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted against the Agent in performing its duties hereunder
or under the Agreement or any other Transaction Document, or in any way relating to or arising out of the Agreement or any other
Transaction Document except for those determined by a final judgment (not subject to further appeal) of a court of competent jurisdiction
to have resulted solely from the Agent’s own gross negligence or willful misconduct.  Prior to taking any action
hereunder as Agent, the Agent may require each Secured Party to deposit with it sufficient sums as it determines in good faith
is necessary to protect the Agent for costs and expenses associated with taking such action.

 

    	 	B-2	 

    	 

    

 

7.       Resignation
by the Agent.

 

(a)       The
Agent may resign from the performance of all its functions and duties under the Agreement and the other Transaction Documents at
any time by giving 30 days’ prior written notice (as provided in the Agreement) to the Debtors and the Secured Parties.  Such
resignation shall take effect upon the appointment of a successor Agent pursuant to clauses (b) and (c) below.

 

(b)       Upon
any such notice of resignation, the Secured Parties, acting by a Majority-in-Interest, shall appoint a successor Agent hereunder.

 

(c)       If
a successor Agent shall not have been so appointed within said thirty (30)-day period, the Agent shall then appoint a successor
Agent who shall serve as Agent until such time, if any, as the Secured Parties appoint a successor Agent as provided above.  If
a successor Agent has not been appointed within such thirty (30)-day period, the Agent may petition any court of competent jurisdiction
or may interplead the Debtors and the Secured Parties in a proceeding for the appointment of a successor Agent, and all fees, including,
but not limited to, extraordinary fees associated with the filing of interpleader and expenses associated therewith, shall be payable
by the Debtors on demand.

 

8.       Rights
with respect to Collateral.  Each Secured Party agrees with all other Secured Parties and the Agent (i) that
it shall not, and shall not attempt to, exercise any rights with respect to its security interest in the Collateral, whether pursuant
to any other agreement or otherwise (other than pursuant to this Agreement), or take or institute any action against the Agent
or any of the other Secured Parties in respect of the Collateral or its rights hereunder (other than any such action arising from
the breach of this Agreement) and (ii) that such Secured Party has no other rights with respect to the Collateral other than as
set forth in this Agreement and the other Transaction Documents.  Upon the acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent and the retiring Agent shall be discharged from its duties and obligations under the Agreement. 
After any retiring Agent’s resignation or removal hereunder as Agent, the provisions of the Agreement including this Annex
B shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent.

 

    	 	A-3	 

    	 

    

 

ANNEX C

 

 

 

 

 

 

C-1

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