Document:

EXHIBIT 10.1

  

   

  

   

  

   

  

  
    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

    

    

    THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement’) is made and entered into as of the 10th  day of January 2020, by and between Eagle Financial Services, Inc., a Virginia
      corporation (the “Corporation”) and Kathleen J. Chappell (“Employee”).  This Agreement amends and restates the employment agreement entered into as of April 17, 2013.

    

    

    RECITALS

    

    

    WHEREAS, the Corporation is a bank holding company engaged in the operation of a bank;

    

    

    WHEREAS, Employee has been involved in the management of the business and affairs of the Corporation and, therefore, possesses managerial experience, knowledge, skills and expertise in such type of
      business; and

    

    

    WHEREAS, the Corporation wishes to retain your valuable services, and you wish to make your services available to the Corporation on the terms and subject to the conditions set forth herein.

    

    

    NOW, THEREFORE, the parties, intending to be legally bound, agree as follows:

    

    

    TERMS OF AGREEMENT

    

    

    NOW, THEREFORE, for and in consideration of the premises and of the mutual promises and undertakings of the parties as hereinafter set forth, the parties covenant and agree as follows:

    

    

    Section 1. Employment. (a) Employee shall be employed as Chief Financial Officer of the Corporation and Chief Financial Officer of the Corporation’s wholly-owned subsidiary, Bank of Clarke
      County (the “Bank”) and shall discharge such duties and as may be assigned to him by the Corporation or the Bank from time to time.

    

    

    (b) References in this Agreement to services rendered for the Corporation and compensation and benefits payable or provided by the Corporation shall include services rendered for and compensation and
      benefits payable or provided by any Affiliate. References in this Agreement to the “Corporation” also shall mean and refer to each Affiliate for which Employee performs services. References in this Agreement to “Affiliate” shall mean any business
      entity that, directly or indirectly, through one or more intermediaries, is controlled by the Corporation.

    

    

    Section 2. Term and Renewal. The initial term of this Agreement shall end on December 31, 2021 unless earlier terminated as provided herein. However, on December 31, 2021, and each December 31
      thereafter, the term of this Agreement shall be renewed and extended by one year, unless Employee or the Corporation gives notice to the other in writing, at least 90 days prior to the applicable December 31, that the term shall not be renewed and
      extended.

    

    

    Section 3. Exclusive Service. Employee shall devote his best efforts and full business time to rendering services on behalf of the Corporation in furtherance of its best interests. Employee
      shall comply with all policies, standards and regulations of the Corporation now or hereafter promulgated and shall perform his duties under this Agreement to the best of his abilities and in accordance with standards of conduct applicable to
      officers of banks.

    

    

    Section 4.  Compensation and Benefits.

    

    

    (a)  Salary. As compensation
        while employed hereunder, Employee, during his faithful performance of this Agreement, in whatever capacity rendered, shall receive an annual base salary of $230,000 payable in accordance with the normal payroll procedures and schedule of the
        Corporation, but no less frequently than monthly. The Board of Directors, in its discretion, may increase Employee’s base salary during the term of this Agreement.  The Corporation shall withhold from such salary payments amounts for state and
        federal income taxes, social security taxes, and such other payroll deductions as may from time to time be required by law.   Except as otherwise expressly set forth hereunder, no compensation shall be paid pursuant to this Agreement in respect of
        any month or portion thereof subsequent to any termination of Employee’s employment by the Corporation.

    

    

    (b) Corporate Benefit Plans.
        Employee shall be entitled to participate in or become a participant in all cash and non-cash employee benefit plans maintained by the Corporation for its executive officers.

    

    

    (c) Bonuses.  Employee shall
        receive only such bonuses as the Board of Directors, in its discretion, decides to pay to Employee. The Corporation shall withhold from such bonus payments amounts for state and federal income taxes, social security taxes, and such other payroll
        deductions as may from time to time be required by law

    

    

    (d) Expense Account. The
        Corporation shall reimburse Employee for reasonable and customary business expenses incurred in the conduct of the Corporation’s business. Such expenses will include business meals, out-of-town lodging and travel expenses and other items identified
        in written rules and policies of the Corporation. Employee agrees to timely submit records and receipts of reimbursable items and agrees that the Corporation can adopt reasonable rules and policies regarding such reimbursement. The Corporation
        agrees to make prompt payment to Employee following receipt and verification of such reports. No reimbursement provided under this Section 4(d) during one calendar year shall affect the expenses eligible for reimbursement during another calendar
        year.

    

    

    (e) Paid Time Off. Employee
        shall be entitled to the same paid time off policies as the Board of Directors may from time to time designate for all full-time employees of the Corporation.

     

      

    
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    Section 5. Termination.

      

    

    (a)  Notwithstanding the termination of
        Employee’s employment pursuant to any provision of this Agreement, the parties shall be required to carry out any provisions of this Agreement which contemplate performance by them subsequent to such termination. In addition, no termination shall
        affect any liability or other obligation of either party which shall have accrued prior to such termination, including, but not limited to, any liability, loss or damage on account of breach. No termination of employment shall terminate the
        obligation of the Corporation to make payments of any vested benefits provided hereunder or the obligations of Employee under Sections 6, 7 and 8.

    

    

    (b) Employee’s employment hereunder may
        be terminated by Employee upon thirty (30) days written notice to the Corporation or at any time by mutual agreement in writing.

    

    

    (c) This Agreement shall terminate upon
        death of Employee; provided, however, that in such event the Corporation shall pay to the estate of Employee the compensation including salary and accrued bonus, if any, which otherwise would be payable to Employee through the end of the month in
        which his death occurs.

    

    

    (d) (1) The Corporation may terminate
        Employee’s employment other than for “Cause”, as defined in Section 5(e), at any time upon written notice to Employee, which termination shall be effective immediately. Employee may resign thirty (30) days after notice to the Corporation for “Good
        Reason”, as hereafter defined, subject to the following. Employee must provide written notice to the Corporation of the existence of the event or condition constituting such Good Reason within ninety (90) days of the initial occurrence of the event
        or condition alleged to constitute Good Reason.  Upon delivery of such notice, the Corporation shall have a period of thirty (30) days during which it may remedy in good faith the event or condition constituting Good Reason, and Employee’s
        employment shall continue in effect during such time so long as the Corporation is making diligent efforts to cure.  In the event the Corporation shall remedy in good faith the event or condition constituting Good Reason, as determined by the
        Employee’s good faith and reasonable judgment, then such notice of termination shall be null and void, and the Corporation shall not be required to pay the amount due to Employee under this Section 5(d) (or under Section 5(i), if applicable.)  In
        the event Employee’s employment terminates pursuant to this Section 5(d), provided the Executive signs a release and waiver of claims in a form satisfactory to the Corporation, which the Corporation shall provide to Employee no later than the date
        of termination (the “Release”), and the Release has become effective within thirty (30) days of Employee’s date of termination:

    

    

    (i) Employee shall continue to receive his base salary at the rate in effect immediately preceding such termination, for twenty-four (24) months following Employee’s termination of employment (the
      “Severance Period”) such payments to be made at the times such payments would have been made in accordance with Section 4(a);

    

    

    (ii) Employee shall receive a payment in cash within thirty (30) days of Employee’s date of termination equal to the greater of (a) the amount of the highest cash bonus paid or payable to him in respect
      of any of the three (3) fiscal years of the Corporation prior to the fiscal year in which his employment terminates, and (b) the amount of cash bonus Employee was designated to receive under the Corporation’s annual incentive plan;

    

    

    (iii) Employee shall receive a welfare continuance benefit (the “Welfare Continuance Benefit”) in an amount equal to (x) eighteen (18) times (y) the excess of the premium that would apply as of Employee’s date of termination for continued health, dental and vision coverage for Employee and his “qualified beneficiaries” (as defined in Section 4980B of
      the Code), if COBRA continuation were elected for such coverage, over the amount that Employee paid for such coverage immediately before the termination of his employment. Employee may use the Welfare Continuance Benefit, as Employee wishes,
      including for payment of insurance premiums.  The Welfare Continuance Benefit will be paid in a lump sum cash payment within thirty (30) days of Employee’s date of termination.

    

    

    
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    (2) Notwithstanding anything in this Agreement to the contrary:

    

    

    (i) If Employee breaches Section 6 or 7, Employee will not thereafter be entitled to receive any further compensation or benefits pursuant to this Section 5(d); and

    

    

    (ii) If, while he is receiving payments under this Section 5(d), Employee engages in a Competitive Business within the area described in Section 7(a)(i) or otherwise engages in conduct described in
      Section 7(a) or Section 7(b), such payments will cease and he will not thereafter be entitled to receive any compensation or benefits pursuant to this Section 5(d) even though such conduct occurs after the covenants contained in Section 7 have
      expired.

    

    

    (3) Except as set forth in Section 5(d)(2), upon the timely execution and non-revocation of the Release, the Corporation’s obligation to pay Employee the compensation provided in Section 5(d)(1) shall be
      absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Corporation may have against him or anyone else. All amounts payable by
      the Corporation hereunder shall be paid without notice or demand. Each and every payment made hereunder by the Corporation shall be final and the Corporation will not seek to recover all or any part of such payment from Employee or from whosoever may
      be entitled thereto, for any reason whatsoever. Employee shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise.

    

    

    (4) For purposes of this Agreement, “Good Reason” shall mean:

    

    

    (i) Requiring Employee to maintain his principal office outside of a 25-mile radius of Clarke County, Virginia unless the Corporation moves its principal executive offices to the place to which Employee
      is required to move;

    

    

    (ii) A reduction by the Corporation of Employee’s base salary, as the same may have been increased from time to time;

    

    

    (iii) The failure of the Corporation to provide Employee with either substantially the same fringe benefits as provided to him at the inception of this Agreement or with in fringe benefits that are as
      least as favorable, in the aggregate, as fringe benefits provided to him at the inception of this Agreement;

    

    

    (iv) The Corporation’s failure to comply with any material term of this Agreement (other than a change in Employee’s duties or title, which shall not constitute Good Reason); or

    

    

    (v) The failure of the Corporation to obtain the assumption of and agreement to perform this Agreement by any successor as contemplated in Section 9 hereof.

    

    

    (e) The Corporation shall have the right to terminate Employee’s employment under this Agreement at any time for Cause, as defined herein, which termination shall be effective immediately. Termination
      for “Cause” shall include termination for Employee’s personal dishonesty, incompetence, willful misconduct, breach of a fiduciary duty involving personal profit, intentional failure to perform stated duties of Employee’s position, willful violation
      of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order, conviction of a felony or of a misdemeanor involving moral turpitude, misappropriation of the Corporation’s assets (determined on a
      reasonable basis) or those of its Affiliates, a material violation of the Corporation’s work rules, Code of Ethics or policies, or material breach of any other provision of this Agreement, in each case which is not remedied by Employee (if reasonably
      capable of remedy) within thirty (30) after the date the Corporation provides written notice to Employee of the issue. The term “Cause” also shall include the Employee’s failure for any reason within thirty (30) days after receipt by Employee of
      written notice from the Corporation to correct, cease, or otherwise alter any action or omission that could materially or adversely affect the Corporation’s profits, reputation or operations.

    

    

    In the event Employee’s employment under this Agreement is terminated for Cause, Employee shall thereafter have no right to receive compensation or other benefits under this Agreement.

    

    

    (f) The Corporation may terminate Employee’s employment under this Agreement, after having established Employee’s disability by giving to Employee written notice of its intention to terminate his
      employment for disability and his employment with the Corporation shall terminate effective on the ninetieth (90th) day, or at the end of accrued time off (sick, vacation, personal), after receipt of such notice if within ninety (90) days,
      or the number of available accrued days (sick, vacation, personal), after such receipt Employee shall fail to return to the full-time performance of the essential functions of his position (and if Employee’s disability has been established pursuant
      to the definition of “disability” set forth below). For purposes of this Agreement, “disability” means either (i) disability which after the expiration of more than thirteen (13) consecutive weeks after its commencement is determined to be total and
      permanent by a physician selected and paid for by the Corporation or its insurers, and acceptable to Employee or his legal representative, which consent shall not be unreasonably withheld or (ii) disability as defined in the policy of disability
      insurance maintained by the Corporation or its Affiliates for the benefit of Employee, whichever shall be more favorable to Employee. Notwithstanding any other provision of this Agreement, the Corporation shall comply with all requirements of the
      Americans with Disabilities Act, 42 U.S.C. § 12101 et. seq.

    

    

    (g) If Employee is suspended and/or temporarily prohibited from participating in the conduct of the Corporation’s affairs by a notice served pursuant to the Federal Reserve Act, the Bank Holding Company
      Act of 1956 or the Federal Deposit Insurance Act or the Code of Virginia, each as amended, the Corporation’s obligations under this Agreement shall be suspended as of the date of service unless stayed by appropriate proceedings. If the charges in the
      notice are dismissed, the Corporation may in its discretion (i) pay Employee all or part of the compensation withheld while its contract obligations were suspended, and (ii) reinstate (in whole or in part) any of its obligations which were suspended
      with any such payment made by March 15 following the calendar year in which such charges are dismissed.

    

    

    
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    (h) If Employee is removed and/or permanently prohibited from participating in the conduct of the Corporation’s affairs by an order issued under the Federal Reserve Act, the Bank Holding Company Act of
      1956 or the Federal Deposit Insurance Act or the Code of Virginia, each as amended, all obligations of the Corporation under this Agreement, and Employee’s obligations under Section 7(a) of this Agreement, shall terminate as of the effective date of
      the order, but vested rights of the parties shall not be affected.

    

    

    (i) (1) If Employee’s employment is
        terminated without Cause or if he resigns for Good Reason within one year after a Change of Control shall have occurred, then, provided the Executive signs the Release, and the Release has become effective within thirty (30) days of Employee’s date
        of termination, then on or within thirty (30) days following Employee’s last day of employment with the Corporation, the Corporation shall pay to Employee a lump sum cash amount (subject to any applicable payroll or other taxes required to be
        withheld) equal to the excess, if any, of 299% of Employee’s “annualized includable compensation for the base period,” as defined in Section 280G of Code, over the total amount payable to Employee under Section 5(d).

    

    

    (2) For purposes of this Agreement, a Change of Control occurs if, after the date of this Agreement, (i) any person, including a “group” as defined in Section 13(d)(3) of the Securities Exchange Act of
      1934, becomes the owner or beneficial owner of Corporation securities having 50% or more of the combined voting power of the then outstanding Corporation securities that may be cast for the election of the Corporation’s directors other than a result
      of an issuance of securities initiated by the Corporation, or open market purchases approved by the Board of Directors, as long as the majority of the Board of Directors approving the purchases is a majority at the time the purchases are made; or
      (ii) as the direct or indirect result of, or in connection with, a tender or exchange offer, a merger or other business combination, a sale of assets, a contested election of directors, or any combination of these events, the persons who were
      directors of the Corporation before such events cease to constitute a majority of the Corporation’s Board, or any successor’s board, within one year of the last of such transactions. For purposes of this Agreement, a Change of Control occurs on the
      date on which an event described in (i) or (ii) occurs. If a Change of Control occurs on account of a series of transactions or events, the Change of Control occurs on the date of the last of such transactions or events.

    

    

    (3) It is the intention of the parties that no payment be made or benefit provided to Employee pursuant to this Agreement that would constitute an “excess parachute payment” within the meaning of
      Section 280G of the Code and any regulations thereunder, thereby resulting in a loss of an income tax deduction by the Corporation or the imposition of an excise tax on Employee under Section 4999 of the Code. If the independent accountants serving
      as auditors for the Corporation on the date of a Change of Control (or any other accounting firm designated by the Corporation) determine that some or all of the payments or benefits scheduled under this Agreement, together with any other payments or
      benefits to which Employee is entitled under this Agreement or otherwise, would be nondeductible by the Corporation under Section 280G of the Code, then the payments scheduled under this Agreement will be reduced to one dollar less than the maximum
      amount which may be paid without causing any such payment or benefit to be nondeductible. The determination made as to the reduction of benefits or payments required hereunder by the independent accountants shall be binding on the parties.

    

    

    (j) Effective upon Employee’s termination of employment for any reason, Employee shall be deemed to have resigned from all positions that Employee holds as an officer, employee, or member of the Board of
      Directors (or committee thereof) of the Corporation or any of its Affiliates.

    

    

    Section 6. Confidentiality/Nondisclosure and Return of Property. Employee covenants and agrees that any and all proprietary information maintained as confidential by the Corporation concerning
      its  customers,  or  its businesses and services of which he has knowledge or access as a result of his association with the Corporation in any capacity, shall be deemed confidential in nature and shall not, without the proper written consent of the
      Corporation, be directly or indirectly used, disseminated, disclosed or published by Employee to third parties other than in connection with the usual conduct of the business of the Corporation. Such information shall expressly include, but shall not
      be limited to, information concerning the Corporation’s trade secrets within the meaning of the Virginia Trade Secrets Act, business operations, business records, customer lists or other customer information. Upon termination of employment for any
      reason, Employee shall deliver to the Corporation all originals and copies of documents, forms, records or other information, in whatever form it may exist, concerning the Corporation or its business, customers, products or services. This Section 6
      shall not be applicable to any information which, through no misconduct or negligence of Employee, has previously been disclosed to the public by anyone other than Employee.

    

    

    Section 7. Restrictive Covenants.

    

    

    (a) During the term of this Agreement and throughout any further period that he is an officer or employee of the Corporation, and for a period of twelve (12) months from and after the date that Employee
      is (for any reason) no longer employed by the Corporation or for a period of twelve (12) months from the date of entry by a court of competent jurisdiction of a final judgment enforcing this covenant in the event of a breach by Employee, whichever is
      later, Employee covenants and agrees that he will not, directly or indirectly, either as a principal, agent, employee, employer, stockholder, co-partner or in any other individual or representative capacity whatsoever: (i) engage in a Competitive
      Business anywhere within a fifty (50) mile radius of the principal executive offices of the Corporation on the date Employee’s employment terminates; or (ii) solicit, or assist any other person or business entity in soliciting, any depositors or
      other customers of the Corporation to make deposits in or to become customers of any other financial institution conducting a Competitive Business. As used in this Agreement, the term “Competitive Business” means all banking and financial products
      and services and any other products and services substantially similar to those offered by the Corporation on the date that Employee’s employment terminates. Employee’s obligations under this Section 7(a) shall terminate on the date a Change of
      Control occurs.

    

    

    (b) During the term of this Agreement and throughout any further period that he is an officer or employee of the Corporation, and for a period of twelve (12) months from and after the date that Employee
      is (for any reason) no longer employed by the Corporation or for a period of twelve (12) months from the date of entry by a court of competent jurisdiction of a final judgment enforcing this covenant in the event of a breach by Employee, whichever is
      later, Employee covenants and agrees that he will not, directly or indirectly, either as a principal, agent, employee, employer, stockholder, co-partner or in any other individual or representative capacity whatsoever induce any individuals to
      terminate their employment with the Corporation or the Bank.

    

    

    
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    Section 8. Injunctive Relief, Damages, Etc. Employee agrees that given the nature of the positions held by Employee with the Corporation, that each and every one of the covenants and
      restrictions set forth in Sections 6 and 7 above are reasonable in scope, length of time and geographic area and are necessary for the protection of the significant investment of the Corporation in developing, maintaining and expanding its business.
      Accordingly, the parties hereto agree that in the event of any breach by Employee of any of the provisions of Sections 6 or 7 that monetary damages alone will not adequately compensate the Corporation for its losses and, therefore, that it may seek
      any and all legal or equitable relief available to it, specifically including, but not limited to, injunctive relief and Employee shall be liable for all damages, including actual and consequential damages, costs and expenses incurred by the
      Corporation as a result of taking action to enforce, or recover for any breach of, Section 6 or Section 7. The covenants contained in Sections 6 and 7 shall be construed and interpreted in any judicial proceeding to permit their enforcement to the
      maximum extent permitted by law. Should a court of competent jurisdiction determine that any provision of the covenants and restrictions set forth in Section 7 above is unenforceable as being overbroad as to time, area or scope, if consistent with
      applicable public policy,  the court may strike the offending provision or reform such provision to substitute such other terms as are reasonable to protect the Corporation’s legitimate business interests.

    

    

    Section 9. Binding Effect/Assignability. This Agreement shall be binding upon and inure to the benefit of the Corporation and Employee and their respective heirs, legal representatives,
      executors, administrators, successors and assigns, but neither this Agreement, nor any of the rights hereunder, shall be assignable by Employee or any beneficiary or beneficiaries designated by Employee. The Corporation will require any successor
      (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business, stock or assets of the Corporation, by agreement in form and substance reasonably satisfactory to Employee, to expressly assume
      and agree to perform this Agreement in its entirety. Failure of the Corporation to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement. As used in this Agreement, “Corporation” shall include any
      successor to its business, stock or assets as aforesaid which executes and delivers the agreement provided for in this Section 9 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.

    

    

    Section 10. Governing Law. This Agreement shall be subject to and construed in accordance with the laws of the Commonwealth of Virginia.

    

    

    Section 11. Invalid Provisions. The invalidity or unenforceability of any particular provision of this Agreement shall not affect the validity or enforceability of any other provisions hereof,
      and this Agreement shall be construed in all respects as if such invalid or unenforceable provisions were omitted.

    

    

    Section 12. Notices. Any and all notices, designations, consents, offers, acceptance or any other communications provided for herein shall be given in writing and shall be deemed properly
      delivered if delivered in person or by registered or certified mail, return receipt requested, addressed in the case of the Corporation to its registered office or in the case of Employee to his last known address.

    

    

    Section 13. Entire Agreement.

    

    

    (a) This Agreement, as amended and restated hereby, constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes any and all other agreements, either oral
      or in writing, among the parties hereto with respect to the subject matter hereof.

    

    

    (b) This Agreement may be executed in one or more counterparts, each of which shall be considered an original copy of this Agreement, but all of which together shall evidence only one agreement.

    

    

    Section 14. Amendment and Waiver. This Agreement may not be amended except by an instrument in writing signed by or on behalf of each of the parties hereto. No waiver of any provision of this
      Agreement shall be valid unless in writing and signed by the person or party to be charged.

    

    

    Section 15. Case and Gender. Wherever required by the context of this Agreement, the singular or plural case and the masculine, feminine and neuter genders shall be interchangeable.

    

    

    Section 16. Captions. The captions used in this Agreement are intended for descriptive and reference purposes only and are not intended to affect the meaning of any Section hereunder.

    

    

    Section 17. Section 409A.  This Agreement is intended to comply with Section 409A of the Code or an exemption thereunder and shall be construed and administered accordingly.  Notwithstanding any
      other provision of this Agreement, payments provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A of the Code or an applicable exemption.  Any payments under this Agreement that may be excluded
      from Section 409A of the Code either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A of the Code to the maximum extent possible.  For purposes of Section 409A of the
      Code, each payment under this Agreement, including each installment payment under this Agreement, shall be treated as a separate payment.  Any payments to be made under this Agreement upon a termination of employment shall only be made upon a
      “separation from service” under Section 409A of the Code.  Notwithstanding the foregoing, the Corporation makes no representations that the payments and benefits provided under this Agreement comply with Section 409A of the Code and in no event shall
      the Corporation be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by Employee on account of non-compliance with Section 409A of the Code.

    

    

    
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    Notwithstanding any other provision of this Agreement, if any payment or benefit provided to Employee in connection with Employee’s termination of employment is determined to constitute “nonqualified
      deferred compensation” within the meaning of Section 409A of the Code and Employee is determined to be a “specified employee” as defined in Section 409A(a)(2)(b)(i) of the Code, then such payment or benefit shall not be paid until the first payroll
      date to occur following the six-month anniversary of the date of termination or, if sooner, the date of Employee’s death (the “Specified Employee Payment Date”).  The aggregate of any payments that would otherwise have been paid before the Specified
      Employee Payment Date shall be paid to Employee in a lump sum on the Specified Employee Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule.

    

    

    Any payment under Section 5 of this Agreement that is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code, and that is subject to a release’s
      becoming effective, and that would otherwise be paid in the first 30 days after your termination date shall be paid, if at all, on such 30th day (subject to any required delay under the preceding paragraph) and any remaining payments shall
      be made in accordance with their original schedule.

    

    

    Payments with respect to reimbursements of expenses or in-kind benefits shall be paid or provided in accordance with the Corporation’s applicable policy or benefit plan, but in all events reimbursements
      shall be paid no later than the last day of the calendar year following the calendar year in which the relevant expense is incurred.  The amount of expenses or benefits eligible for reimbursement, payment or provision during a calendar year shall not
      affect the expenses or benefits eligible for reimbursement or provision in any other calendar year.

    

    

    Section 18. Regulatory Prohibition.  Notwithstanding anything in this Agreement to the contrary, it is understood and agreed that the Corporation (or any of its successors in interest) shall
      not be required to make any payment or take any action under this Agreement if: (i) such payment or action is prohibited by any governmental agency having jurisdiction over the Corporation or any of its subsidiaries (a “Regulatory Authority”) because
      the Corporation or any of its subsidiaries is determined by such Regulatory Authority to be troubled, insolvent, in default or operating in an unsafe or unsound manner; or (ii) such payment or action (A) would be prohibited by or would violate any
      provision of state or federal law applicable to the Corporation or any of its subsidiaries, including, without limitation, the Federal Deposit Insurance Act and the regulations thereunder presently found at 12 C.F.R. Part 359, as now in effect or
      hereafter amended, (B) would be prohibited by or would violate any applicable rules, regulations, orders or statements of policy, whether now existing or hereafter promulgated, or any Regulatory Authority or (C) otherwise would be prohibited by any
      Regulatory Authority. If any payment hereunder is found by any Regulatory Authority, after a full and fair opportunity to be heard, to be in violation of the foregoing, any payment found to have been made in violation of the foregoing shall be
      immediately returned by Executive to the Corporation.

    

    

    

    

    

    

    [Signatures on next page]

    

    

    

    

    
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    IN WITNESS WHEREOF, the Corporation has caused this Agreement to be signed by its duly authorized officer and Employee has hereunto set his hand and seal on the day and year first above written.

     

    	 	 	 	 	 	 	 
	 	
             

          	 	
             

          	
            EAGLE FINANCIAL SERVICES, INC.

          
	 	 	 	 
	 	
             

          	 	
             

          	
            By:

          	
             

          	 
	 	
             

          	 	
             

          	
            Title:

          	
             

          	
            President and Chief Executive Officer

          
	 	 	 	 
	
            ATTEST:

          	
             

          	 	
             

          	 	
             

          	 
	 	 	 	 
	 	
             

          	 	
             

          	 	
             

          	 
	 	 	 
	 	
             

          	 	
             

          	
            EMPLOYEE

          
	 	 	 
	 	
             

          	 	
             

          	 
	 	
             

          	 	
             

          	
            Kathleen J. Chappell

          
	 	 	 	 
	
            ATTEST:

          	
             

          	 	
             

          	 	
             

          	 
	 	 	 	 
	 	
             

          	 	
             

          	 	
             

          	 

    

    

    

    

  

  7Exhibit
10.1

 

SECURITIES
PURCHASE AGREEMENT

 

This
Securities Purchase Agreement (this “Agreement”) is dated as of January 10, 2020 between Sylios Corp, a Florida
corporation and its predecessors (the “Company”), and the purchaser identified on the signature pages hereto
(each, including its successors and permitted 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(b) 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 Articles of Incorporation (as defined herein), and (b) the following terms have the meanings
set forth in this Section 1.1:

 

“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 banking institutions in the State of New York are authorized or required by law or other governmental action
to close.

 

“Closing”
means one or more Closings of the purchase and sale of the Securities pursuant to Section 2.1.

 

“Closing
Date” means the Business 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’ obligation to pay the Subscription Amount at such Closing,
and (ii) the Company’s obligations to deliver the Securities to be issued and sold at such Closing, in each case, have been
satisfied or waived.

 

“Closing
Form 8-K” shall have the meaning ascribed to such term in Section 4.10.

 

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

 

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

 

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“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 John E. Lux, Esq.

 

“Company
Financial Statements” means the Company’s financial statements contained in the SEC Documents.

 

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

 

“Conversion
Shares” means shares of the Company’s Common Stock issuable upon conversion of the Note and interest in accordance
with the terms of the Note.

 

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

 

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

 

“End
Date” shall mean the date no Purchaser owns any Securities.

 

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

 

“Exempt
Issuance” means the issuance of (a) shares of Common Stock and options to officers, directors, employees, or consultants
of the Company prior to and after the Closing Date, (b) securities upon the exercise or exchange of or conversion of Securities
issued hereunder (subject to adjustment for forward and reverse stock splits and the like that occur after the date hereof) 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 and any term thereof have not been amended since the date of this Agreement to
increase the number of such securities or to decrease the issue price, exercise price, exchange price or conversion price of such
securities and which securities, and (c) securities issued or issuable pursuant to this Agreement, the Notes, the Warrants and
other Transaction Documents, or upon exercise or conversion of any such securities.

 

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

 

“Financial
Statements” means the financial information regarding the Company filed with the Commission prior to the date hereof.

 

“GAAP”
shall mean United States generally accepted accounting principles applied on a consistent basis.

 

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

 

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

 

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

 

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

 

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

 

“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.

 

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

 

“Notes”
means the convertible notes, in the form of Exhibit A hereto.

 

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

 

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

 

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

 

“Regulation
D” means Regulation D under the Securities Act.

 

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

 

“Required
Minimum” means, as of any date three (3) times the maximum aggregate number of shares of Common Stock then issued or
potentially issuable in the future pursuant to the Transaction Documents, including but not limited to any Underlying Shares issuable
upon conversion in full of the Notes and the interest that could accrue through three years after the term thereof and the Warrant
Shares issuable upon exercise of the Warrants, ignoring any conversion or exercise limits set forth therein plus such additional
amounts as requested by the Purchaser pursuant to the TA Letter.

 

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

 

“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.

 

“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for the 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 with respect to any entity at any date, any direct or indirect corporation, limited or general partnership, limited liability
company, trust, estate, association, joint venture or other business entity of which (A) more than 25% of (i) the outstanding
capital stock having (in the absence of contingencies) ordinary voting power to elect a majority of the board of directors or
other managing body of such entity, (ii) in the case of a partnership or limited liability company, the interest in the capital
or profits of such partnership or limited liability company or (iii) in the case of a trust, estate, association, joint venture
or other entity, the beneficial interest in such trust, estate, association or other entity business is, at the time of determination,
owned or controlled directly or indirectly through one or more intermediaries, by such entity, or (B) is under the actual control
of the Company. Representations, undertakings and obligations set forth in this Agreement shall be applicable only to Subsidiaries
which exist or have existed at the applicable and relevant time.

 

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“TA
Letter” means the letter to the Company’s Transfer Agent in the form annexed hereto as Exhibit C.

 

“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: the NYSE MKT LLC, the Nasdaq Capital Market, the Nasdaq Global
Market, the Nasdaq Global Select Market, the New York Stock Exchange, the OTC Bulletin Board, the OTCQB, or the OTCQX (or any
successors to any of the foregoing).

 

“Transaction
Documents” means this Agreement, the Notes, the Warrants, all exhibits and schedules thereto and hereto, and any other
documents or agreements executed in connection with the transactions contemplated hereunder.

 

“Transfer
Agent” means the transfer agent for the Common Stock, and any successor transfer agent of the Company.

 

“Underlying
Shares” means the shares of Common Stock issued and issuable upon conversion of the Notes and payment of interest on
the Notes in accordance with the terms of the Notes and upon exercise of the Warrants in accordance with the terms of the Warrants.

 

“Unlegended
Shares” shall have the meaning ascribed to such term in Section 4.1(d).

 

“Warrants”
means the Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Article II hereof, in the
form of Exhibit B 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, the Company agrees to sell, and the Purchasers,
severally and not jointly, agree to purchase, an aggregate of up to $18,425.00 principal amount of Notes, and Warrants as determined
pursuant to Section 2.2(a), such purchase and sale being the “Closing.” Each Purchaser shall deliver to the
Company such Purchaser’s Subscription Amount, and the Company shall deliver to each Purchaser its respective Note and Warrants,
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 a 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 Company Counsel or such other location as the parties shall mutually agree.

 

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2.2 Deliveries.

 

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

 

(i) this
Agreement duly executed by the Company with the schedules and exhibits thereto current as of each such Closing Date;

 

(ii) a
Note in the principal amount of $18,425, which shall be equal to 110% of such Purchaser’s Subscription Amount registered
in the name of such Purchaser;

 

(iii) Warrants
registered in the names of such Purchaser to purchase 921,250 shares of Common Stock at a per share exercise price of $0.024,
subject to adjustment as provided therein; and

 

(iv) the
TA Letter executed by the Company and the Transfer Agent.

 

(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; and

 

(ii) such
Purchaser’s Subscription Amount by wire transfer.

 

2.3 Closing
Conditions.

 

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

 

(i) the
accuracy in all material respects (determined without regard to any materiality, Material Adverse Effect or other similar qualifiers
therein) on 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);

 

(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 a Purchaser hereunder to effect the Closing, unless waived by such Purchaser, are subject to the following
conditions being met:

 

(i) the
accuracy in all material respects (determined without regard to any materiality, Material Adverse Effect or other similar qualifiers
therein) 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
Purchaser shall have received executed signature pages to this Agreement with respect to the Subscription Amounts for which such
Closing is to occur;

 

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

 

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

 

(vi) from
the date hereof to the Closing Date, trading in securities in the United States generally as reported by Bloomberg L.P. shall
not have been suspended or limited, 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.

 

ARTICLE
III.

REPRESENTATIONS
AND WARRANTIES

 

3.1 Representations
and Warranties of the Company. Except as set forth in the Disclosure Schedules or the reports filed by the Company under the
Securities Exchange Act of 1934, as amended (the “1934 Act”) with the Securities and Exchange Commission in the two
years preceding the date hereof (the “SEC Documents”), the Company represents and warrants to each Purchaser as of
the date hereof and the Closing Date unless as of a specific date therein in which case they shall be accurate as of such date:

 

(a) Subsidiaries.
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 relevant to any component of this Agreement as of a particular date, then such reference shall not be applicable.

 

(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, (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, or (iv) the occurrence of a Disqualification Event (any of (i), (ii), (iii) or (iv), 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.

 

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(c) Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder
and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders
and creditors in connection herewith or therewith other than in connection with the Required Approvals except those filings requires
to be made with the Commission and state agencies after the Closing Date. 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 obligations of the Company enforceable against the Company
in accordance with their 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.

 

(d) No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents, the
issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby to which it
is a party 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) 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.

 

(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 filing of Form D with the Commission, and (ii) 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 other than those created
by the Purchaser. 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 the Required Minimum on the date hereof. In order to ensure such reservation the Company
shall have its Transfer Agent countersign the TA Letter, at the Closing. The failure to comply with the terms of this section
shall be a material breach of the agreement.

 

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(g) Capitalization.
As of the date hereof, the authorized capital stock of the Company consists of: (i) 750,000,000 shares of Common Stock, of which
approximately 49,209,761 shares are issued and outstanding; and (ii) 5,000,000 shares of preferred stock, of which 1,000,100 are
issued and outstanding. Except as disclosed in the SEC Documents, no shares are reserved for issuance pursuant to the Company’s
stock option plans, no shares are reserved for issuance pursuant to securities (other than the Note and any other convertible
promissory note issued to the Buyer) exercisable for, or convertible into or exchangeable for shares of Common Stock. All of such
outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable.
No shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of
the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. Except as disclosed in
the SEC Documents, as of the effective date of this Agreement, (i) there are no outstanding options, warrants, scrip, rights to
subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any
character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of
the Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound
to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or arrangements
under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the
1933 Act and (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or
in any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion Shares.

 

(h) Financial
Statements. The Financial Statements have been prepared in accordance with GAAP. The Financial Statements fairly present in
all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof
and the results of operations and cash flows for the periods then ended, subject to normal, immaterial adjustments and inclusion
of footnotes which would be required pursuant to generally accepted accounting principles.

 

(i) Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the most recently dated Financial Statements:
(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 material liabilities (contingent or otherwise) other than trade payables
and accrued expenses incurred in the ordinary course of business consistent with past practice, (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.

 

(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 have or reasonably be expected to result in a Material Adverse Effect. At no time, 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.

 

(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.

 

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(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) Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as presently conducted, and as
contemplated to be conducted, 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.

 

(n) Title
to Assets. The Company and the Subsidiaries have 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 and, the payment of which is neither delinquent nor subject to penalties. The Company and
Subsidiaries do not own any real property. 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.

 

(o) Intellectual
Property.

 

(i) The
term “Intellectual Property Rights” includes:

 

1.
the name of the Company and each Subsidiary, all fictional business names, trading names, registered and unregistered trademarks,
service marks, and applications of the Company and each Subsidiary (collectively, “Marks”);

 

2. all
patents, patent applications, and inventions and discoveries that may be patentable of the Company and each Subsidiary (collectively,
“Patents”);

 

3. all
copyrights in both unpublished works and published works of the Company and each Subsidiary (collectively, “Copyrights”);

 

4.
all rights in mask works of the Company and each Subsidiary (collectively, “Rights in Mask Works”);

 

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5.
all know-how, trade secrets, confidential information, customer lists, software, technical information, data, process technology,
plans, drawings, and blue prints (collectively, “Trade Secrets”); owned, used, or licensed by the Company and
each Subsidiary as licensee or licensor; and

 

6. the
license or right to directly or indirectly use any of the foregoing, whether perpetually or for a fixed term, whether or not subject
to defeasement, and whether or not reduced to writing or otherwise memorialized.

 

(ii) Know-How
Necessary for the Business. The Intellectual Property Rights are all those necessary for the operation of the Company’s
businesses as it is currently conducted or contemplated to be conducted. The Company is the owner of all right, title, and interest
in and to each of the Intellectual Property Rights, free and clear of all liens, security interests, charges, encumbrances, equities,
and other adverse claims, and has the right to use all of the Intellectual Property Rights. To the Company’s knowledge,
no employee of the Company has entered into any contract that restricts or limits in any way the scope or type of work in which
the employee may be engaged or requires the employee to transfer, assign, or disclose information concerning his work to anyone
other than of the Company.

 

(iii) Patents.
The Company is the owner of or licensee of all right, title and interest in and to each of the Patents, free and clear of all
Liens and other adverse claims. All of the issued Patents are currently in compliance with formal legal requirements (including
payment of filing, examination, and maintenance fees and proofs of working or use), are valid and enforceable, and are not subject
to any maintenance fees or taxes or actions falling due within ninety days after the Closing Date. No Patent has been or is now
involved in any interference, reissue, reexamination, or opposition proceeding. To the Company’s knowledge: (1) there is
no potentially interfering patent or patent application of any third party, and (2) no Patent is infringed or has been challenged
or threatened in any way. To the Company’s knowledge, none of the products manufactured and sold, nor any process or know-how
used, by the Company infringes or is alleged to infringe any patent or other proprietary right of any other Person.

 

(iv) Trademarks.
The Company is the owner of all right, title, and interest in and to each of the Marks, free and clear of all Liens and other
adverse claims. All Marks that have been registered with the United States Patent and Trademark Office are currently in compliance
with all formal legal requirements (including the timely post-registration filing of affidavits of use and incontestability and
renewal applications), are valid and enforceable, and are not subject to any maintenance fees or taxes or actions falling due
within ninety days after the Closing Date. No Mark has been or is now involved in any opposition, invalidation, or cancellation
and, to the Company’s knowledge, no such action is threatened with respect to any of the Marks. To the Company’s knowledge:
(1) there is no potentially interfering trademark or trademark application of any third party, and (2) no Mark is infringed or
has been challenged or threatened in any way. To the Company’s knowledge, none of the Marks used by the Company infringes
or is alleged to infringe any trade name, trademark, or service mark of any third party.

 

(v) Copyrights.
The Company is the owner of all right, title, and interest in and to each of the Copyrights, free and clear of all Liens and other
adverse claims. All the Copyrights have been registered and are currently in compliance with formal requirements, are valid and
enforceable, and are not subject to any maintenance fees or taxes or actions falling due within ninety days after the date of
the Closing. No Copyright is infringed or, to the Company’s knowledge, has been challenged or threatened in any way. To
the Company’s knowledge, none of the subject matter of any of the Copyrights infringes or is alleged to infringe any copyright
of any third party or is a derivative work based on the work of a third party. All works encompassed by the Copyrights have been
marked with the proper copyright notice.

 

    	 	10	 

    	 

    

 

(vi) Trade
Secrets. With respect to each Trade Secret, the documentation relating to such Trade Secret is current, accurate, and sufficient
in detail and content to identify and explain it and to allow its full and proper use without reliance on the knowledge or memory
of any individual. The Company has taken all reasonable precautions to protect the secrecy, confidentiality, and value of its
Trade Secrets. The Company has good title and an absolute (but not necessarily exclusive) right to use the Trade Secrets. The
Trade Secrets are not part of the public knowledge or literature, and, to the Company’s knowledge, have not been used, divulged,
or appropriated either for the benefit of any Person (other the Company) or to the detriment of the Company. No Trade Secret is
subject to any adverse claim or has been challenged or threatened in any way.

 

(p) 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. 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. The Company has valid and subsisting insurance in compliance with all applicable legal
requirements.

 

(q) Transactions
With Affiliates and Employees. Except as set forth in the Financial Statements and Transaction Documents, 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.

 

(r) Certain
Fees. No brokerage, finder’s fees, commissions or due diligence fees are or will be payable by the Company or any Subsidiary
to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect
to the transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation with respect to any such
fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section 3.1(r)
that may be due in connection with the transactions contemplated by the Transaction Documents.

 

(s) 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. The Company is not aware of any person that has been or
will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Regulation
D Securities.

 

    	 	11	 

    	 

    

 

(t) Application
of Takeover Protections. As of the Closing Date, the Company will have taken all necessary action, if any, in order to render
inapplicable as of the Closing Date and thereafter any control share acquisition, business combinations, poison pill (including
any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation
(or similar charter documents) or the laws of the State of Florida 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.

 

(u) Disclosure.
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, when taken
together as a whole, is true and correct in all material respects and does not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. The 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.

 

(v) 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.

 

(w) 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.

 

(x) 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.

 

    	 	12	 

    	 

    

 

(y) 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, suit 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.

 

(z) 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 is currently subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”).

 

(aa)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.

 

(bb)No
General Solicitation or Integration. To the best knowledge of the Company, 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. To the best
knowledge of the Company, 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.

 

(cc)No
Disqualification Events. None of the Company, any of its predecessors, any affiliated issuer, any director, executive officer,
other officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s
outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule
405 under the 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.
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.

 

(dd)Reporting
Company/Shell Company. The Company is a publicly-held company subject to reporting obligations pursuant to Sections 12(g)
and 13 of the Exchange Act. As of the Closing Date, the Company is not a “shell company” as that term is employed
in Rule 144 under the Securities Act. The Company is a former shell company but has met each of the requirements under Rule 144(i)(2).

 

(ee)Survival.
The foregoing representations and warranties shall survive the Closing Date.

 

    	 	13	 

    	 

    

 

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):

 

(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) to the extent
the indemnification provisions contained in this Agreement may be limited by applicable law.

 

(b) Understandings
or Arrangements. 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
a 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 converts a Note or exercises any Warrants, it will be either: (i) an “accredited investor” as defined in
Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer”
as defined in Rule 144A(a) under the Securities Act. Such Purchaser is not required to be registered as a broker-dealer under
Section 15 of the Exchange Act. Such Purchaser has the authority and is duly and legally qualified to purchase and own the Securities.
Such Purchaser is able to bear the risk of such investment for an indefinite period and to afford a complete loss thereof.

 

(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) Information
on Company. Purchasers are not deemed to have any knowledge of any information not included in the Financial Statements or
the Transaction Documents unless such information is delivered in the manner described in the next sentence. Each Purchaser was
afforded (i) the opportunity to ask such questions as such Purchaser deemed necessary of, and to receive answers from, representatives
of the Company concerning the merits and risks of acquiring the Securities; (ii) the right of access to information about the
Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable
such Purchaser to evaluate the Securities; and (iii) the opportunity to obtain such additional information that the Company possesses
or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to
acquiring the Securities. In addition, such Purchaser may have received in writing from the Company such other information concerning
its operations, financial condition and other matters as such Purchaser has requested, identified thereon as OTHER WRITTEN INFORMATION
(such other information is collectively, the “Other Written Information”), and considered all factors such
Purchaser deems material in deciding on the advisability of investing in the Securities.

 

    	 	14	 

    	 

    

 

(f) Compliance
with Securities Act; Reliance on Exemptions. Such Purchaser understands and agrees that the Securities have not been registered
under the 1933 Act or any applicable state securities laws, by reason of their issuance in a transaction that does not require
registration under the 1933 Act, and that such Securities must be held indefinitely unless a subsequent disposition is registered
under the 1933 Act or any applicable state securities laws or is exempt from such registration. Such Purchaser understands and
agrees that the Securities are being offered and sold to such Purchaser in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and regulations and that the Company is relying in part upon the
truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility
of such Purchaser to acquire the Securities.

 

(g) Communication
of Offer. Such Purchaser is not purchasing the Securities as a result of any “general solicitation” or “general
advertising,” as such terms are defined in Regulation D, which includes, but is not limited to, any advertisement, article,
notice or other communication regarding the Securities published in any newspaper, magazine or similar media or on the internet
or broadcast over television, radio or the internet or presented at any seminar or any other general solicitation or general advertisement.

 

(h) No
Governmental Review. Such Purchaser understands that no United States federal or state agency or any other governmental or
state agency has passed on or made recommendations or endorsement of the Securities or the suitability of the investment in the
Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

(i) No
Conflicts. The execution, delivery and performance of this Agreement and performance under the other Transaction Documents
and the consummation by such Purchaser of the transactions contemplated hereby and thereby or relating hereto or thereto do not
and will not (i) result in a violation of such Purchaser’s charter documents, bylaws or other organizational documents,
if applicable, (ii) conflict with nor constitute a default (or an event which with notice or lapse of time or both would become
a default) under any agreement to which such Purchaser is a party, nor (iii) result in a violation of any law, rule, or regulation,
or any order, judgment or decree of any court or governmental agency applicable to such Purchaser or its properties (except for
such conflicts, defaults and violations as would not, individually or in the aggregate, have a material adverse effect on such
Purchaser). Such Purchaser is not required to obtain any consent, authorization or order of, or make any filing or registration
with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement
or perform under the other Transaction Documents nor to purchase the Securities in accordance with the terms hereof, provided
that for purposes of the representation made in this sentence, such Purchaser is assuming and relying upon the accuracy of the
relevant representations and agreements of the Company herein.

 

(j) Survival.
The foregoing representations and warranties shall survive the Closing Date for 30 days.

 

3.3 Reliance.
The Company acknowledges and agrees that the representations contained in Section 3.2 shall not modify, amend or affect such Purchaser’s
right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties
contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this
Agreement or the consummation of the transaction contemplated hereby.

 

    	 	15	 

    	 

    

 

ARTICLE
IV.

OTHER
AGREEMENTS OF THE PARTIES

 

4.1 Transfer
Restrictions.

 

(a) Disposition
of Securities. 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 at the Company’s expense, 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 shall have the rights and obligations
of a Purchaser under the Transaction Documents and registration statement, if any.

 

(b) Legend.
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 AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE
TO THE COMPANY. 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.

 

(c) Pledge.
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 who agrees to be bound by the provisions
of this Agreement and, if required under the terms of such arrangement, such Purchaser may transfer pledge or secure 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. At such 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 statement, 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 thereunder.

 

    	 	16	 

    	 

    

 

(d) Legend
Removal. Certificates evidencing the Underlying Shares shall not contain any legend (“Unlegended Shares”)
(including the legend set forth in Section 4.1(b) hereof): (i) while a registration statement covering the resale of such security
is effective under the Securities Act, (ii) following any sale of such Underlying Shares pursuant to Rule 144, (iii) if such Underlying
Shares are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public
information required under Rule 144 as to such Underlying Shares and without volume or manner-of-sale restrictions 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 during
the time any of the aforedescribed conditions apply, to effect the removal of the legend hereunder. If all or any Notes are converted
or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the resale of the
corresponding Underlying Shares, or if such Underlying Shares may be sold under Rule 144 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(d), it will, no later than five Trading Days following the delivery
by the Purchaser to the Company or the Transfer Agent of a certificate representing Underlying Shares, as applicable, issued with
a restrictive legend (such fifth Trading Day, 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 (however, the Corporation
shall use reasonable best efforts to deliver such shares within three (3) Trading Days). 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
4.1. 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.

 

(e) Legend
Removal Default. In addition to such Purchaser’s other available remedies, provided the conditions for legend removal
set forth in Section 4.1(c) exist, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty,
for each $1,000 of Underlying Shares (based on the higher of the actual purchase price 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(d), $10 per Trading
Day for each Trading Day after the Legend Removal Date until such certificate is delivered without a legend. Nothing herein shall
limit such Purchaser’s right to pursue actual damages for the Company’s failure to deliver certificates representing
any Securities as required by the Transaction Documents, 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.

 

(f) DWAC.
Commencing after the Closing, in lieu of delivering physical certificates representing the Unlegended Shares, upon request of
a Purchaser, so long as the certificates therefor do not bear a legend and the Purchaser is not obligated to return such certificate
for the placement of a legend thereon, the Company shall cause its transfer agent to electronically transmit the Unlegended Shares
by crediting the account of Purchaser’s prime broker with the Depository Trust Company through its Deposit Withdrawal At
Custodian system, provided that the Company’s Common Stock is DTC eligible and the Company’s transfer agent participates
in the Deposit Withdrawal at Custodian system. Such delivery must be made on or before the Legend Removal Date.

 

(g) Resale
Requirements. Each Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser
will sell the 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.

 

    	 	17	 

    	 

    

 

(h) Remedies.
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, for each $1,000 of Conversion Shares or Warrant Shares delivered for removal of the restrictive
legend and Conversion Shares delivered for conversion into Shares, $10 per Trading Day for each Trading Day following the Legend
Removal Date or the date such Securities are to be delivered pursuant to the Note until such Common Stock certificate is delivered
without a legend pursuant to Section 4.1(c) or such Conversion Shares. Nothing herein shall limit such Purchaser’s right
to elect in lieu of the aforedescribed liquidated damages to pursue actual damages for the Company’s failure to deliver
certificates representing any Underlying Shares as required by the Transaction Documents, 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.

 

(i)
Injunction. In the event a Purchaser shall request delivery of Securities as described in this Section 4.1 or Common Stock
pursuant to the Note and the Company is required to deliver such Securities, the Company may not refuse to deliver Securities
based on any claim that such Purchaser or anyone associated or affiliated with such Purchaser has not complied with Purchaser’s
obligations under the Transaction Documents, or for any other reason, unless, an injunction or temporary restraining order from
a court, on notice, restraining and or enjoining delivery of such unlegended shares shall have been sought and obtained by the
Company and the Company has posted a surety bond for the benefit of such Purchaser in the amount of 120% of the amount of the
aggregate purchase price of the Securities intended to be subject to the injunction or temporary restraining order, which bond
shall remain in effect until the completion of arbitration/litigation of the dispute and the proceeds of which shall be payable
to such Purchaser to the extent Purchaser obtains judgment in Purchaser’s favor.

 

(j)
Buy-In. In addition to any other rights available to Purchaser, if the Company fails to deliver to a Purchaser Securities
as required pursuant to this Agreement or the Note and after the Legend Removal Date or required delivery date pursuant to the
Note the Purchaser, or a broker on the Purchaser’s behalf, purchases (in an open market transaction or otherwise) shares
of Common Stock to deliver in satisfaction of a sale by such Purchaser of the shares of Common Stock which the Purchaser was entitled
to receive in unlegended form from the Company (a “Buy-In”), then the Company shall promptly pay in cash to
the Purchaser (in addition to any remedies available to or elected by the Purchaser) the amount, if any, by which (A) the Purchaser’s
total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (B) the aggregate
purchase price of the shares of Common Stock delivered to the Company for reissuance as unlegended Shares or as are required to
be delivered pursuant to the Note, as the case may be, together with interest thereon at a rate of 15% per annum accruing until
such amount and any accrued interest thereon is paid in full (which amount shall be paid as liquidated damages and not as a penalty).
For example, if a Purchaser purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect
to $10,000 of purchase price of Shares delivered to the Company for reissuance as unlegended shares, the Company shall be required
to pay the Purchaser $1,000, plus interest, if any. The Purchaser shall provide the Company written notice indicating the amounts
payable to the Purchaser in respect of the Buy-In.

 

4.2 Acknowledgment
of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares
of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its
obligations under the Transaction Documents, including, without limitation, its obligation to issue the Underlying Shares pursuant
to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction,
regardless of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless of the dilutive
effect that such issuance may have on the ownership of the other stockholders of the Company.

 

    	 	18	 

    	 

    

 

4.3 Furnishing
of Information.

 

(a) At
any time commencing on the Closing Date and ending at the earliest of the time that no Purchaser owns Securities, the Company
covenants to file all periodic reports with the Commission pursuant to Section 15(d) of the Exchange Act and under Section 12(b)
or 12(g) of the 1934 Act, 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 commencing on the Closing Date 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 shall fail for any reason to satisfy the current public information requirement under Rule 144(c) (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 principal amount of Notes and accrued interest
held by such Purchaser 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 4.2(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.

 

4.4 Conversion
and Exercise Procedures. Each of the form of Notice of Conversion attached to the Note and form of Notice of Exercise included
in the Warrant sets forth the totality of the procedures required of the Purchasers in order to convert the Note or exercise the
Warrant. No additional legal opinion, other information or instructions shall be required of the Purchasers to convert their Note
or exercise their Warrant. The Company shall honor conversions of the Note and exercises of the Warrants and shall deliver Underlying
Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.

 

4.5 Reservation
and Listing of Securities.

 

(a) The
Company shall maintain a reserve 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, but not less than the
Required Minimum.

 

    	 	19	 

    	 

    

 

(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 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 60th day after such date. In the event of a shortfall in the Required
Minimum, any shares reserved for issuance to the Company’s officers and directors (not including Purchasers, if applicable)
will be made available for issuance to the Purchasers.

 

4.6 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 any of the Transaction Documents
unless the same or substantially similar consideration is also offered, mutatis mutandis, on a ratable basis to all of
the parties to this Agreement. 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.

 

4.7 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 or resale of the Securities.

 

4.8 Reimbursement.
If any Purchaser becomes involved in any capacity in any Proceeding by or against any Person who is a stockholder of the
Company (except as a result of sales, pledges, margin sales and similar transactions by such Purchaser to or with any current
stockholder), solely as a result of such Purchaser’s acquisition of the Securities under this Agreement, the Company
will reimburse such Purchaser for its reasonable legal and other expenses (including the cost of any investigation
preparation and travel in connection therewith) incurred in connection therewith, as such expenses are incurred. The
reimbursement obligations of the Company under this paragraph shall be in addition to any liability which the Company may
otherwise have, shall extend upon the same terms and conditions to any Affiliates of the Purchasers who are actually named in
such action, proceeding or investigation, and partners, directors, agents, employees and controlling persons (if any), as the
case may be, of the Purchasers and any such Affiliate, and shall be binding upon and inure to the benefit of any successors,
assigns, heirs and personal representatives of the Company, the Purchasers and any such Affiliate and any such Person. The
Company also agrees that neither the Purchasers nor any such Affiliates, partners, directors, agents, employees or
controlling persons shall have any liability to the Company or any Person asserting claims on behalf of or in right of the
Company solely as a result of acquiring the Securities under this Agreement.

 

4.9 Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the
Transaction Documents, 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 the Company believes constitutes material non-public
information, unless prior thereto such Purchaser shall have entered into a written agreement with the Company regarding the
confidentiality and use of such information. The Company understands and confirms that each Purchaser shall be relying on the
foregoing covenant in effecting transactions in securities of the Company.

 

4.10 Securities
Laws Disclosure; Publicity. The Company shall by 9:00 a.m. (New York City time) on day following the Closing Date, file a
Current Report on Form 8-K including the Transaction Documents as exhibits thereto (the “Closing Form 8-K”
mutatis mutandem).

 

4.11 Par
Value. In the event the Conversion Price of the Notes is reduced below the par value of the common stock, the Company shall
within 30 days thereafter, reduce the par value of its common stock so that the Conversion Price shall be greater than the par
value of the Common Stock.

 

    	 	20	 

    	 

    

 

4.12 Indemnification
of Purchasers. Subject to the provisions of this Section 4.6, 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 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 based upon a 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 constitutes fraud, gross negligence, willful
misconduct or malfeasance). 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 its representations, warranties or covenants
under the Transaction Documents. The indemnification required by this Section 4.6 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.

 

4.13 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.

 

4.14 Most
Favored Nation Provision. From the date hereof and for so long as a Purchaser holds any Securities, in the event that the
Company issues or sells any Common Stock or Common Stock Equivalents, if a Purchaser then holding outstanding Securities reasonably
believes that any of the terms and conditions appurtenant to such issuance or sale are more favorable to such investors than are
the terms and conditions granted to the Purchasers hereunder, upon notice to the Company by such Purchaser, the Company shall
amend the terms of this transaction as to such Purchaser only so as to give such Purchaser the benefit of such more favorable
terms or conditions. This Section shall not apply with respect to an Exempt Issuance. The Company shall provide each Purchaser
with notice of any such issuance or sale not later than ten (10) Trading Days before such issuance or sale.

 

    	 	21	 

    	 

    

 

4.15 Preservation
of Corporate Existence. Until the End Date, the Company shall preserve and maintain its corporate existence, rights, privileges
and franchises in the jurisdiction of its incorporation, and qualify and remain qualified, as a foreign corporation in each jurisdiction
in which such qualification is necessary in view of its business or operations and where the failure to qualify or remain qualified
might reasonably have a Material Adverse Effect upon the financial condition, business or operations of the Company taken as a
whole.

 

4.16 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.

 

4.17 Piggy-Back
Registrations. If at any time until two years after the Closing Date there is not an effective registration statement covering
all of the Conversion Shares and the Company shall determine to prepare and file with the Commission a registration statement
relating to an offering for its own account or the account of others under the 1933 Act of any of its equity securities, but excluding
Forms S-4 or S-8 and similar forms which do not permit such registration, then the Company shall send to each holder of any of
the Securities written notice of such determination and, if within fifteen calendar days after receipt of such notice, any such
holder shall so request in writing, the Company shall include in such registration statement all or any part of the Conversion
Shares such holder requests to be registered, subject to customary underwriter cutbacks applicable to all holders of registration
rights and any cutbacks in accordance with guidance provided by the Securities and Exchange Commission (including, but not limited
to, Rule 415). The obligations of the Company under this Section may be waived by any holder of any of the Securities entitled
to registration rights under this Section. The holders whose Conversion Shares are included or required to be included in such
registration statement are granted the same rights, benefits, liquidated or other damages and indemnification granted to other
holders of securities included in such registration statement. Notwithstanding anything to the contrary herein, the registration
rights granted hereunder to the holders of Securities shall not be applicable for such times as such Conversion Shares may be
sold by the holder thereof without restriction pursuant to Section 144(b)(1) of the 1933 Act. In no event shall the liability
of any holder of Securities or permitted successor in connection with any Conversion Shares included in any such registration
statement be greater in amount than the dollar amount of the net proceeds actually received by such Subscriber upon the sale of
the Conversion Shares sold pursuant to such registration or such lesser amount in proportion to all other holders of Securities
included in such registration statement. All expenses incurred by the Company in complying with this Section, including, without
limitation, all registration and filing fees, printing expenses (if required), fees and disbursements of counsel and independent
public accountants for the Company, fees and expenses (including reasonable counsel fees) incurred in connection with complying
with state securities or “blue sky” laws, fees of the NASD, transfer taxes, and fees of transfer agents and registrars,
are called “Registration Expenses.” All underwriting discounts and selling commissions applicable to the sale of registrable
securities are called “Selling Expenses.” The Company will pay all Registration Expenses in connection with the registration
statement under this Section. Selling Expenses in connection with each registration statement under this Section shall be borne
by the holder and will be apportioned among such holders in proportion to the number of Shares included therein for a holder relative
to all the Securities included therein for all selling holders, or as all holders may agree.

 

    	 	22	 

    	 

    

 

4.18 Subsequent
Equity Sales. From the date hereof until the Notes are no longer outstanding, the Company will not, without the consent of
the Purchasers, enter into any Equity Line of Credit or similar agreement nor issue nor agree to issue any common stock at a per
share price less than the then in effect Conversion Price, floating or Variable Priced Equity Linked Instruments nor any of the
foregoing or equity with price reset rights (subject to adjustment for stock splits, distributions, dividends, recapitalizations
and the like) (collectively, the “Variable Rate Transaction”). For purposes hereof, “Equity Line of Credit”
shall include any transaction involving a written agreement between the Company and an investor or underwriter whereby the Company
has the right to “put” its securities to the investor or underwriter over an agreed period of time and at an agreed
price or price formula, and “Variable Priced Equity Linked Instruments” shall include: (A) any debt or equity securities
which are convertible into, exercisable or exchangeable for, or carry the right to receive additional shares of Common Stock either
(1) at any conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or
quotations for Common Stock at any time after the initial issuance of such debt or equity security, or (2) with a fixed conversion,
exercise or exchange price that is subject to being reset at some future date at any time after the initial issuance of such debt
or equity security due to a change in the market price of the Company’s Common Stock since date of initial issuance, and
(B) any amortizing convertible security which amortizes prior to its maturity date, where the Company is required or has the option
to (or any investor in such transaction has the option to require the Company to) make such amortization payments in shares of
Common Stock which are valued at a price that is based upon and/or varies with the trading prices of or quotations for Common
Stock at any time after the initial issuance of such debt or equity security (whether or not such payments in stock are subject
to certain equity conditions). For purposes of determining the total consideration for a convertible instrument (including a right
to purchase equity of the Company) issued, subject to an original issue or similar discount or which principal amount is directly
or indirectly increased after issuance, the consideration will be deemed to be the actual net cash amount received by the Company
in consideration of the original issuance of such convertible instrument. Until thirty-six (36) months after the Closing Date,
the Company will not issue any Common Stock or Common Stock Equivalents to officers, directors, employees, consultants and service
providers of the Company except consistent with past practices. For so long as the Notes are outstanding, the Company will not
amend the terms of any securities or Common Stock Equivalents or of any agreement outstanding or in effect as of the date of this
Agreement or at any time thereafter, pursuant to which same were or may be acquired, if such issuance or the result of such amendment
would be at an effective price per share of Common Stock less than the Conversion Price in effect at the time of such amendment.

 

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 January 31, 2020; provided, however, that such termination will not affect
the right of any party to sue for any breach by any other party or parties.

 

5.2 Fees
and Expenses. Each party 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, stamp taxes and other taxes and duties levied in connection with
the delivery of any Securities to the Purchasers. The Company agrees to pay counsel to the Purchasers the amount of $1,000 (“Legal
Fees”), incurred in connection with the preparation, execution and delivery of the Transaction Documents and Closing.

 

    	 	23	 

    	 

    

 

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

 

5.4
Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder
shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered
or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid,
or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party
shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder
shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where
such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during
normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first
occur. The addresses for such communications shall be: (i) if to the Company, to: Sylios Corp, 501 1st Ave N., Suite 901, St.
Petersburg, FL 33701 Attn: Wayne Anderson, email: wa@sylios.com and (ii) if to the Purchasers, to: the addresses and fax
numbers indicated on the signature pages hereto, with an additional copy by fax only to (which shall not constitute notice): Grushko
& Mittman, P.C., 515 Rockaway Avenue, Valley Stream, New York 11581, Attn: Eliezer Drew, Esq., facsimile: (212) 697-3575.

 

5.5 Amendments;
Waivers. No provision of this Agreement nor any other Transaction Document may be waived, modified, supplemented or amended
nor consent obtained or approval deemed granted except in a written instrument signed, in the case of an amendment, by the Company
and the Purchasers or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought.
No waiver of any default with respect to any provision, condition or requirement of this Agreement nor any other Transaction Document
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 thereof, nor shall any delay or omission of any party to exercise any right thereunder in any manner
impair the exercise of any such right. Any Purchaser may waive in writing any right or benefit granted to or available to such
Purchaser pursuant to the Transaction Documents.

 

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). Following the Closing, 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”
and is able to make each and every representation made by Purchasers in this Agreement.

 

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.

 

    	 	24	 

    	 

    

 

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, suit or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such
suit, 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 suit, 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 either
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, suit or proceeding shall be reimbursed by
the other 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.

 

5.12 Severability.
If any term, provision, covenant or restriction of any Transaction Document 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.

 

    	 	25	 

    	 

    

 

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, at any time prior to the Company’s performance of such obligations, 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
Note or 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 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. 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.

 

5.16 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.

 

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 claim, 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.

 

    	 	26	 

    	 

    

 

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

 

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

 

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

 

5.21 Equitable
Adjustment. The Conversion Price trading volume amounts, price/volume amounts and similar figures in the Transaction Documents
shall be equitably adjusted (but without duplication) to offset the effect of stock splits, similar events and as otherwise described
in the Transaction Documents.

 

5.22 Post-Split.
All stock number used in the Transaction Documents are post the Company’s 4,000 for 1 reverse split of its common stock.

 

(Signature
Pages Follow)

 

    	 	27	 

    	 

    

 

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.

 

	SYLIOS CORP	 
	 	 	 
	By:	/s/
    Wayne Anderson	 
	Name:	Wayne
Anderson
	 
	Title:	CEO	 

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK;

SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

 

    	 	28	 

    	 

    

 

[PURCHASER
SIGNATURE PAGE TO SYLIOS CORP

SECURITIES
PURCHASE AGREEMENT]

 

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

 

Name
of Purchaser: Armada Investment Fund, LLC                                                                                                          

 

Signature
of Authorized Signatory of Purchaser:                                                                                                             

 

Name
of Authorized Signatory: Gabriel Berkowitz                                                                                                           

 

Title
of Authorized Signatory: Manager                                                                                                                            

 

Email
Address of Authorized Signatory: gabriel@armadacp.com                                                                                 

 

Facsimile
Number of Authorized Signatory:                                                                                                                       

 

Address
for Notice to Purchaser:

 

7703
Springfield Lake Drive

Lake
Worth, FL 33467

 

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

 

______________________________________________________________________________

 

______________________________________________________________________________

 

______________________________________________________________________________

 

Subscription
Amount: $16,750.00

 

Note
Principal (Subscription Amount *1.10): $18,425.00

 

Warrants:
921,250

 

EIN
Number, if applicable, will be provided under separate cover.

 

    	 	29	 

    	 

    

 

EXHIBITS

 

	Exhibit
    A	Form
    of Note
	Exhibit
    B	Form
    of Warrant
	Exhibit
    C	TA
    Letter

 

    	 	30

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